Those with a keen eye trained on the patent reform bill now under consideration in the House of Representatives might universally hold a dim view of fee diversion even if they see first-to-file and the prior user defense through profoundly different lenses. The problem is that the manager's mark for H.R. 1249 as of June 20 includes language that will put the fees paid by patent, trademark and copyright applicants right back into the hands of appropriators, who will have a tough time avoiding the urge to raid the cookie jar in a fiscal environment in which cookies are increasingly scarce.

The newest iteration of H.R. 1249 includes the language, “there is established in the Treasury a Patent and Trademark Fee Reserve Fund,” which will be filled with the proceeds collected in excess of the amounts appropriated to the U.S. Patent and Trademark Office in a given fiscal year. This new feature of H.R. 1249 provides that the monies in question “shall be made available until expended only for obligation and expenditure by” PTO “to the extent and in the amounts provided in appropriations Acts.”

So as the saying goes, the Appropriator giveth and the Appropriator taketh away. Or as some on Capitol Hill like to say, “there are legislators and then there are appropriators.”

It's not hard to understand why the House Appropriations Committee wants to avoid the appearance of favoritism, but the conceptual construct underlying the idea of ending diversion of PTO's fees into the Treasury's general fund is that innovation creates job and PTO needs more money to clear the patent backlog, which is presumed to be chock-full of job-creating innovation. Therefore, you have to let PTO keep the fees it collects from inventors if you want intellectual property to play a meaningful role in bringing the economy back to life. I have not heard the argument that the $50 million the Treasury would lose to PTO would be at least offset by an increase in tax revenues, but any such effect might not be felt for a couple of years, which might seem like an eternity to those trying to keep the U.S. government from ending up with the kind of credit rating now enjoyed by Greece and Ireland.

Still, the casual observer has to wonder how many small cuts to the corpus will yield a corpse. First-to-file is not universally popular, and the purportedly offsetting prior user defense is obnoxious to a far greater number. Is there any need for this bill if it allows appropriators to dive into the PTO piggy bank any time they want?