For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Tuesday, 1 October 2013

US budget crisis: how long will USPTO remain open?

It is all over the news, and it seems quite unrealistic from a European perspective. For the first time since President Clinton struggled to reach an agreement with Republicans in 1995, US have entered into a federal state shutdown phase. This is the equivalent of a "sorry, we're closed!" sign you may find at your local theatre during summer, except that it applies to the entire federal state.

Since the US federal budget runs from October first to September 30, every year, the congress must approve an agreed budget, which later goes to the President of the United States for signature. If an opposition rises between the two, the situation is locked and the new budget is not voted. Then comes the shutdown. The opposition is currently based on the funding of the Obamacare, signed on march 2010. Reason is that the Republican-controlled House has passed a spending bill that maintains spending levels but does not provide funding to implement the Obamacare.
Since the budget has not been voted, the federal government cannot pay for most of the State costs. Result is simple: without any right to expense, you cease to operate, just like a company would. Even if agencies have money to cover their costs,  they are bound to not spend anything. Indeed, spending taxpayer money without a specific congress law being voted is considered as a felony

Before today, the United States Federal Government had shutdown on 17 occasions, the longest being 21 days in 1995.The most significant consequences on everyday life are:

-     More than 800,000 federal employees face unpaid leave with no guarantee of back pay once the deadlock is over and are sent home with the interdiction to work. If they enter into any paid activity, the are facing important penalty fees
-     Economists estimate that a three-week shutdown could shave as much as 0.9% from US GDP this quarter.
-     Department of education will still distribute $22bn (£13.6bn) to public schools, but staffing is expected to be severely hit
-     Department of health and human services expected to send home more than half of staff
-     Smithsonian institutions, museums, zoos and many national parks will close. However, the animals should still be fed.
-     Rubbish could pile up in Washington.

A snapshot from the current debate at the US congress .
From a legal perspective, a shutdown is different of a debt crisis in which the government do not have the legal authority to borrow money. Here, the government is forbidden to spend money on non-essential services.
However, the two notions become related by time. Thus, the government may also run out of borrowing authority on October 17, unless congress raises the  $16.7 trillion debt limit. Another nice fight to come...

What about the USPTO?
The patent office is responsible for collecting IPR applications, performing examination, granting rights, collecting fees etc.... One could easily see the consequences if this institution happened to shut down  Fortunately, the USPTO financial structure differs from the classical federal agencies. Therefore, it is not in immediate danger.

The office published a statement available on the USPTO home page:
In the event of a general government shutdown on October 1, 2013, the United States Patent and Trademark Office will remain open, using prior year reserve fee collections to operate as usual for approximately four weeks. We continue to assess our fee collections compared to our operating requirements to determine how long we will be able to operate in this capacity during a general government shutdown. We will provide an update as more definitive information becomes available.Should we exhaust these reserve funds before a general government shutdown comes to an end, USPTO would shut down at that time, although a very small staff would continue to work to accept new applications and maintain IT infrastructure, among other functions. Should it become necessary for USPTO to shut down, details of the agency’s plan for an orderly shutdown are available on page 78 of the United States Department of Commerce’s shutdown plan, available here. Any new or updated public information related to USPTO operations during a potential government shutdown will be placed on this page.
Therefore, USPTO activities will remain stable during the next four weeks. This should be sufficient to not suspend any crucial activity since the longest shutdown lasted 21 days. But what if it continues? 
This GuestKat concerns are aimed at the patent backlog. USPTO has been struggling to reduce it over the past years. If all the 7.800 examiners are not doing any job for such a long period of time, how long will it take to recover from it?
Let's do some quick Katmath: The number of patent filed before USPTO last year was 576,763. It represents around 48.000 applications per month. Considering that the back log is around 591,665 applications waiting to be granted or rejected, adding a month application to this would represents a 8% increase.This is quite a lot.

Although it is unlikely that the shutdown will last considering the average duration (less than 3 days), this GuestKat wonders if any reader shares concerns over this.

Ps: This GuestKat wish to express kind thoughts for one if his friend currently visiting national parks in California. Good luck Pal!

2 comments:

Anonymous said...

The fact that it may close down the developed world's most incompetent and most dishonest patent office must be a plus point!

Miri Frankel said...

If anyone is interested in what other offices or government employee groups will work through the shut down or will be furloughed, the New York Times has a handy infographic:
http://www.nytimes.com/interactive/2013/09/27/us/who-goes-to-work-during-government-shutdown.html?hp

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