SAN JOSE, Calif. (AP) — Silicon Valley's high-tech firms are fighting what they consider a deeply personal federal cut this summer that shelves a planned patent office in this innovation-fueled region.
While most of the country is feeling some pinch from the automatic budget cuts known as sequestration, tech leaders say this one is unique and unfair, because the Commerce Department's promised satellite patent offices were never going to be funded by taxpayers. Instead, they're supported by the $2.8 billion in annual patent fees collected from inventors, entrepreneurs and companies.
"We were really upset," said Emily Lam, a director at the Silicon Valley Leadership Group, an association representing local high tech firms. "It makes absolutely no sense that an office funded almost entirely by fees would be subject to sequester."
But U.S. Patent and Trademark Office chief financial officer Tony Scardino said the government's across-the-board austerity policy doesn't make exceptions for fee-supported programs. And if there's a "continuing budgetary stalemate" this fall, he said that could cause further delays.
Silicon Valley firms seek more U.S. patents than any other region in the world, and San Jose is the nation's top patent-producing city, with 7,074 patents last year. And California is the nation's patent leader, with seven of the top 10 patent-producing cities.
The U.S. Patent Office currently has a backlog of 590,000 nationwide, and it can take more than two years to have an application reviewed.
Until two years ago, the only U.S. Patent and Trademark Office was in Arlington, Va. Silicon Valley companies often would have to send a chief scientist to Arlington for a few days to meet with examiners, losing valuable time and money.
Then a 2011 law raised patent fees in exchange for promises from officials to use those new revenues to speed up the patent process and establish four satellite offices for the first time in the agency's 200-plus year history.
But that's not exactly what happened.
With budget cuts came a federal decision that 8.6 percent of all patent fees are immediately diverted from the Patent Office into the U.S. Treasury; in total, the U.S. Patent and Trademark Office will lose between $120 million and $130 million in patent fees it collects this year.
There are three satellite office projects underway: the first opened in Detroit in July, 2012, and permanent locations for others were selected in Denver and Dallas before sequestration.
Last month, the General Services Administration — which owns and operates federal properties — said it was suspending its search for permanent patent office space in Silicon Valley, dashing hopes of local startups.
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