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[Congressional Record Volume 141, Number 82 (Wednesday, May 17, 1995)]
[Extensions of Remarks]
[Page E1060]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  INTRODUCTION OF PATENT AND TRADEMARK OFFICE CORPORATION ACT OF 1995

                                 ______

                        HON. CARLOS J. MOORHEAD

                             of california

                    in the house of representatives

                        Wednesday, May 17, 1995
  Mr. MOORHEAD. Mr. Speaker, today, I am pleased to introduce the 
Patent and Trademark Office Corporation Act of 1995, a bill that will 
enable the U.S. Patent and Trademark Office to improve the services it 
provides to the public. I am pleased to have as an original cosponsor 
the gentlewoman from Colorado [Mrs. Schroeder] the ranking Democrat on 
the Intellectual Property Subcommittee. Our legislation will convert 
the Patent and Trademark Office [PTO] to a freestanding Government 
corporation, giving it the operating and financial flexibility it lacks 
today as a regular Government bureau in the Department of Commerce. 
This added flexibility should allow the PTO to operate more like a 
private business and provide better service to its customers at lower 
cost.
  The idea of making the PTO a Government corporation is not new. As 
early as 1989, the National Academy of Public Administration, a 
nonprofit organization that studies ways to improve the effectiveness 
of Government, recommended corporation status for the Patent and 
Trademark Office. The National Academy reported that flexibility in 
budgetary and other management matters would give the Office the 
capacity needed to respond more quickly and efficiently to its 
customers.
  The PTO does not use any general tax revenues to support its 
operations. It collects fee revenues from the sale of products and 
services to inventors, companies, and other customers that support the 
entire cost of its operations. It expects to employ more than 5,100 
people and collect and spend $643 million in 1996. As a large, fully 
self-supporting organization, the PTO is well-suited for Government 
corporation status.
  The Judiciary Subcommittee on courts and Intellectual Property, which 
I chair, has received testimony in support of converting the Patent and 
Trademark Office to a Government corporation. Several user groups 
support this concept including the American Bar Association section of 
Intellectual Property Law, the American Intellectual Property Law 
Association, and the Intellectual Property Owners, Inc.
  I understand the administration is also reviewing legislation that 
will recommend converting the Patent and Trademark Office to a 
Government corporation. In order to encourage dialogue on the specifics 
of this issue, we are, today, introducing legislation, which gives the 
authority to the Commissioner of Patents and Trademarks to manage the 
PTO in a business-like manner. The bill also establishes a Management 
Advisory Committee that will afford users a voice in how the PTO is 
operated. The bill maintains tight congressional oversight of the 
operation and requires annual reports to Congress. The proposal, while 
not modeled closely after any existing Government corporation, is 
designed to meet the unique needs of the Patent and Trademark Office 
and its user community. The administration's bill will be introduced at 
a later date.
  Under our bill, the Commissioner would be appointed for a fixed 6-
year term by the President, by and with the advice and consent of the 
Senate. The management of the PTO would be vested in the Commissioner, 
and the Commissioner would appoint all other employees, including a 
Deputy Commissioner for Patents, a Deputy Commissioner for Trademarks, 
and an inspector general. The PTO would be exempt from administrative 
or statutorily imposed limits on the number or grade of Government 
employees. The Patent and Trademark Office would become an independent
 agency outside of the Department of Commerce. There are differing 
views on whether the PTO benefits from being kept under the Department 
of Commerce, and I believe the subcommittee should explore the 
advantages and disadvantages of an independent agency. The fiscal year 
1996 budget resolution, before Congress now, assumes the elimination of 
the Department of Commerce, which could have a substantial impact on 
the future of the Patent and Trademark Office.

  Specific authority within the Patent and Trademark Office corporation 
would include the power to purchase, lease, construct, and manage 
property, the power to award contracts for facilities, services, and 
printing, the power to use its revenues without apportionment by the 
Office of Management and Budget, the power to invest and earn interest 
on its money, and the power to issue bonds to finance its activities. 
Under existing law, long-term capital improvements, including the 
expensive program to automate the massive patent search files, must be 
paid for by current PTO users, who will not necessarily receive any 
benefits from capital improvements. Under the bill, such improvements 
could be supported by bond issues.
  Our bill would eliminate the practice of withholding several million 
dollars from the Patent and Trademark Office each year that users have 
paid into the patent surcharge fund. It gives the PTO access to all of 
its revenues, including those in the Patent and Trademark Office 
surcharge fund established by section 10101 of the Omnibus Budget 
Reconciliation Act of 1990. The authority to set the levels of major 
patent fees would be retained by Congress, subject to the authority of 
the Commissioner to adjust fees annually in response to increases in 
the Consumer Price Index, as under existing law.
  Officers and employees of the Patent and Trademark Office would 
continue to be employees of the Federal Government. Our proposal 
specifies the features of the Federal personnel statutes, including 
those covering retirement and other benefits, that would continue to 
apply. The Commissioner would have authority to set the compensation 
levels for officers and employees. Present law would be retained and 
employees would still not have the right to strike or to bargain over 
wages. Transition provisions in the bill would govern the shift to 
corporate status.
  The Commissioner would receive advice from a management advisory 
committee of 18 members, 6 of whom would be appointed by each of the 
President, the Speaker of the House, and the President pro tempore of 
the Senate. Committee members, appointed for 6-year terms, would 
represent diverse users of the Patent and Trademark Office. The board 
would be assisted by a staff, and would submit an annual report to the 
President and the House and Senate Judiciary Committees.
  If this legislation is to achieve its objectives, it must be crafted 
very carefully, to ensure the necessary checks and balances. A public 
interest is involved, and this office is the only place the public can 
go to obtain a patent or register a trademark. The PTO is not subject 
to the performance pressure that arises out of corporate competition. 
The bill, therefore, does not privatize the PTO by giving it all of the 
freedom of a private company.
  The PTO would continue to be a Government agency under the direction 
and oversight of the President and the Congress. However, the added 
management flexibility provided by the bill should improve the PTO's 
efficiency and responsiveness to the public. I look forward to working 
with all interested parties as we move this legislation through the 
Congress.

                          ____________________
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