The growing chorus of concern about funding levels at the U.S. Patent and Trademark Office (USPTO) has been joined by several of the nation’s prominent patent lawyers who worry about the impact of sequestration on the patent office.

The American Intellectual Property Law Association (AIPLA) and several patent attorneys in private practice say the reassigning of patent office revenue from patent fees would hurt the progress of needed improvements at the patent office – which were supposed to reduce the backlog of cases.

The patent office is in the process of hiring new examiners, deploying new IT systems, and setting up new procedures and proceedings – in an effort to improve operations.

It was reported that the patent office cut spending by $176 million last month in large part because of the government sequester. The cuts include $60 million less for technology and $28 million less for the hiring of more staff, according to a report from Law 360. As a result, the patent office will be adding fewer examiners than hoped, with the latest estimate being it will likely add not more than the 209 examiners already hired. The office expected to add a total of 1,000 examiners in 2013 to help with the backlog of cases.

"These are significant cuts and they're going to have significant implications for operations; there's no doubt about it," one patent attorney, Robert Gerstein, told Law360. "They will certainly hurt the long-term efficiency of the USPTO and its ability to function at a high level of quality."

"The bottom line is that the quality of patents is going to suffer," agreed Kyril Talanov, another patent attorney, Law360 reported. "Some effects will be felt today, but there will be more significant effects in the future as the quality of the personnel at the patent office will diminish."

"In the long run, there's a risk that it will extend the process and it will take longer to get patents," added patent attorney Michael Bednarek in a statement to Law360. "That would really diminish the value of patents because in some industries, if it takes too long to get a patent, there's no reason to get it."

Meanwhile, the AIPLA is urging that the government not take away the patent office’s revenue which was collected from fees.

“The USPTO is a unique agency in that its operations budget depends solely on user fee collections for the services it provides,” AIPLA President Jeff Lewis explained in a recent letter to the Office of Management and Budget, which was obtained by TMCnet. “It is vitally important for the USPTO to have full access to all its fee collections, to be able to do the best job possible to help secure and maintain our intellectual property system as a key economic driver to attract and protect investment in new technology.”   

Also, sequestration “promises to severely interfere,” with the goals of the Leahy-Smith America Invents Act (AIA), the AIPLA said. It was approved some 20 months ago and was supposed to create more efficient operations in the patent office. 

As part of the AIA, Congress set up a Patent and Trademark Fee Reserve Fund.  Any fees collected in excess of the appropriated amount for a given fiscal year were to be deposited in the Reserve Fund, and only the USPTO would have access to those funds.

The law also set up a 15 percent surcharge on patent fees, and a new patent fee schedule went into effect on March 19, 2013.  There were several fee increases.

Also, Lewis – who is a prominent patent lawyer in New York City – said he has “serious doubts that the USPTO is lawfully subject to sequestration in the first place because it is funded through fee collections, not through government spending.”

“A plain reading of the statute suggests that this exemption should apply to the fees collected by the USPTO since they are from voluntary users in exchange for patent and trademark examination and review,” he adds in the letter.

He also recommends that if any USPTO funds are sequestered, “they be reserved in the Patent and Trademark Fee Reserve Fund where they would have the same effect as…placing them in the General Treasury, but would be available later to the USPTO when the sequestration requirements have been eliminated.” 

Given the reality of politics, some observers are not surprised that the government is not allowing the patent office to keep the fees. 

“Those of us who followed the AIA debate and passage knew that it would only be a matter of time before the government reneged on its assurances that the USPTO would be allowed to keep 100 percent of the fees it collected,” Gene Quinn, a patent attorney and the founder of IPWatchdog.com, said in a recent blog post. “Senator Tom Coburn (R-OK) championed an amendment that ultimately failed, which would put into the Statute the requirement that 100 percent of fees collected be allowed to be used by the USPTO. That was rejected by Republican House leaders, who in turn promised in a letter that they would still provide 100 percent funding. A promise in a letter is, of course, worthless in Washington, DC.”