On January 24 2019 the U.S. Patent and Trademark Office (USPTO) admitted it would have to cease patent operations in the second week of February should the partial shutdown of the U.S government continue.
President Donald Trump's standoff with Democrats over funding for his proposed border wall resulted in the longest government shutdown in U.S. history. More than a quarter of the federal government was unfunded for 35 days and the political gridlock impacted criminal, counter-terrorism and intelligence work. While the USPTO largely operated as usual – four weeks after the shutdown began the intellectual property office revealed its reserve funding was running low and a partial closure could be imminent.
Just a day later, President Donald Trump signed a measure to reopen the government – for now. With funding only promised until February 15, what lessons can be learned from the USPTO coming perilously close to ceasing patent operations?
No time to wait
Part of the Commerce Department, the USPTO is funded entirely by user fees and does not receive tax dollars. However, the office does require an appropriation from U.S. Congress to spend the money it collects. In 2018, it had a budget of $3.3 billion and requested $3.5 billion for 2019. The patent office sets aside authorised funds for “temporary changes in cash flow”, a stopgap that proved critical for keeping the office afloat during the shutdown.
In early January the USPTO issued a statement saying; “the agency has access to prior-year fee collections, which enables the USPTO to continue normal operations for a few weeks. Should the USPTO exhaust these funds before a partial government shutdown comes to an end, the agency would have to shut down at that time, although a small staff would continue to work to accept new applications and maintain IT infrastructure, among other functions.”
A month later and the USPTO faced the reality of ceasing patent operations. An average of 3500 patents are published by the USPTO every week, but with no financial support and reduced staff, there was a threat of significant delays in reviewing those filed since the shutdown began. With just “small staff” expected to stay in the event of a partial-shutdown, it became increasingly unclear how long it would take for new filings and payments to be received, and how well the information technology infrastructure could be maintained.
Advice for innovators
The U.S. government re-opened on January 25th and the USPTO declared it was “back to normal operating status”. However, the government could shut down again as early as mid-February when the stopgap funding bill is set to expire.
It is important to remember, the USPTO’s electronic filing systems will always remain up and running. Parties will be able to continue business with the USPTO even if the office closes. Deadlines can still be met to keep applications, patents, and other registrations moving forward. In addition, the U.S. Postal Service has its own revenue stream and will therefore remain open in any shutdown. If necessary, IP correspondence can be carried out by mail.
However, innovators and companies looking to file patent applications should remain proactive and resilient. If they have any critical applications - they should consider moving them to the top of their to-do list.Find out more about the CPA Global File app how you can change your international IP filing management forever