Inside the United States Patent and Trademark Office

united states patent and trademark officeThe USPTO is The United States Patent and Trademark Office, an agency of the Department of Commerce that is responsible for patent and trademark rules, regulation, and oversight.   Located in Alexandria, Virginia, the five interconnected buildings that comprise the office employ over 8,900 workers (www.uspto.gov).  Recently, the USPTO opened a satellite office in Detroit, Michigan.  There are also new plans to open four regional U.S. patent offices in Dallas, Denver, and Silicon Valley to spur on growth in the American economy as well as to create jobs.  The opening off these satellite offices will also help to speed up the process of obtaining patents and trademarks.

The U.S. Patent System

To start a discussion of the U.S. Patent System, it is important to understand how the process of obtaining a patent works.  There are three types of patents for which an applicant can file.  These include: Design patent (ornamental characteristics), utility patent (useful process, machine, article of manufacture, composition of matter), and a plant patent (new variety of asexually produced plant) (www.uspto.gov).  If the invention has not been patented, the correct application is filled out.  If international protection is needed, the inventor will file globally.  Paperwork for the United States is then filled out, and an inventor can either file by themselves or use the recommended route of using a registered attorney or agent.  Electronic filing is also an option.  From this point, the United States Patent and Trademark Office will review the patent application.  If the patent is allowed, the applicant will be charged an issue and publication fee, the USPTO will grant the patent, and there are maintenance fees due 3 ½, 7 ½, and 11 ½ years after the patent is granted.

The maintenance fees that will be incurred must be paid in full in order for an inventor to keep their patent.  These fees are subject to any patents that were filed on December 12, 1980 and after.  If an inventor fails to pay the maintenance fee, they will receive a Notice of Expiration and their expired patent will be posted online under Official Gazette Notices and “Notice of Expiration of Patents Due to Failure to Pay Maintenance Fee.”  Maintenance fees can be paid online, by mail, or by fax by using a credit card, deposit account, or EFT account (or check/money order if by mail).

USPTO Revenue

The USPTO’s earned revenue is “derived from the fees collected for patent and trademark products and services” (www.uspto.gov).  There has been a steady incline of earned revenue for the USPTO, as seen from the yearly figures from 2004-2007.  In 2007, the total earned revenue was $1,735.7 million, whereas in 2004, it was $1,230 million.  The percentage charge in patent earned revenue has fluctuated, from 8.8% in 2004, 9.6% in 2005, 15.6% in 2006, and 8.9% in 2007.  The percentage of change in trademark earned revenue has also varied during that time.  It was 7.2% in 2004, 19.5% in 2005, 20.1% in 2006, and 8.8% in 2007.

Ideally, the more patents that are filed, the more revenue the USPTO will receive each year.  Since inventors have to pay for their patents initially and at three other marked intervals, the USPTO is capitalizing heavily off of inventors in the States.  Below is the USPTO’s table for 2007 Patent Revenue by fee type (www.uspto.gov).

One can see from the chart that the maintenance of patents is the largest slice of revenue for the USPTO.  Together, maintenance fees, initial application fees, search and examination fees, and issue fees make up over 83% of total patent income (www.uspto.gov).  In 2007, maintenance fees were up 10.4%, or $51.1 million more than they were in 2006.  The USPTO notes that due to patent renewal rates slightly increasing from years 2004 to 2007, the increased revenue trend is likely to continue.

With the rise in USPTO total revenue, it is also no surprise that the number of patent applications filed in the U.S. have raised steadily over the past decade.  For example, in 2001, 345,732 patent applications were received by the USPTO.  By 2010, that number skyrocketed to 520,277 filed patent applications.  From year to year, there has been a steady increase of applications, but there was an especially high increase from years 2009 to 2010, where numbers of applications jumped from 482,871 to 520,277 (www.inventionstatistics.com).

Patents Issued by the USPTO

Of course, the number of patents issued by the USPTO is not the same as the number of patents applied for by inventors.  As of February 2006, a total of 7 million patents have been issued by the USPTO . To put this in perspective, 244,341 patents were issued of the 520,277 applied for in 2010.  This figure is under half of the filed applications that the USPTO received.  Patent applications can be turned down for a variety of reasons—copyright infringement standing high atop the list.  However, there is a steady gain in the amount of applicants and patents.  The USPTO is in the process of opening satellite offices in hopes of reaching out to more inventors and making their services more accessible.

The number of patents created in the United States varies from state to state.  For example, California’s inventors have had a grand total of 60,830 patents between the years 2010 and 2011, with a 2.2% increase in patent numbers (www.uspto.gov).  Smaller in number is South Dakota, with 188 total patents in the two year span, but with a 29.3% increase in the number of patents issued.  Vermont had 668 patents in 2010 and 536 in 2011, showing a 19.8% decrease in the number of patents obtained.  These are just a few examples to show the largely uneven distribution of patents that occur from state to state.

The USPTO has a well-developed website, where inventors have access to a wealth of patent and trademark information.  There is everything from public users’ meeting minutes, web fillable forms, to intellectual property law and policy information.  Perhaps one of the most useful tools is the website’s ability to search for patents and trademarks.  This is invaluable for inventors and can help them tweak or rethink their inventions before spending money on the patenting process.  In the long run, this feature will save inventors money, but may make create less revenue for the USPTO.  However, it will also boost the efficiency of the ever-expanding organization.

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