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U.S. Patent and Trademark Office U.S. Patent and Trademark Office Fiscal Year 2022 Congressional Justification May 2021 This Page is Intentionally Left Blank DEPARTMENT OF COMMERCE UNITED STATES PATENT AND TRADEMARK OFFICE Budget Estimates, Fiscal Year 2022 Congressional Justification Table of Contents Exhibit Number Exhibit Page Number 2 Organization Chart USPTO - 4 3 Executive Summary USPTO - 5 Patent and Trademark Businesses: Five-Year Horizon 3T Transfer Change Detail by Object Class USPTO - 19 4A Program Increases / Decreases / Terminations USPTO - 20 4T Transfer Summary Table USPTO - 22 5 Summary of Resource Requirements: Direct Obligations USPTO - 23 7 Summary of Financing USPTO - 25 8 Adjustments-to-Base USPTO - 26 Patent Program 10 Program and Performance: Direct Obligations USPTO - 28 12 Justification of Program and Performance (by Subactivity) USPTO - 29 13 Program Change for 2022 USPTO - 34 14 Program Change Personnel Detail USPTO - 35 15 Program Change Detail by Object Class USPTO - 41 Trademark Program 10 Program and Performance: Direct Obligations USPTO - 44 12 Justification of Program and Performance (by Subactivity) USPTO - 45 13 Program Change for 2022 USPTO - 50 14 Program Change Personnel Detail USPTO - 55 15 Program Change Detail by Object Class USPTO - 57 Intellectual Property Policy, Enforcement and Protection Program 10 Program and Performance: Direct Obligations USPTO - 60 12 Justification of Program and Performance (by Subactivity) USPTO - 61 Exhibit Number Exhibit Page Number 13 Program Change for 2022 USPTO - 65 14 Program Change Personnel Detail USPTO - 69 15 Program Change Detail by Object Class USPTO - 70 Mission Support Program 10 Program and Performance: Direct Obligations USPTO - 73 12 Justification of Program and Performance (by Subactivity) USPTO - 74 13 Program Change for 2022 USPTO - 79 14 Program Change Personnel Detail USPTO - 85 15 Program Change Detail by Object Class USPTO - 86 Exhibits 16-36 16 Summary of Requirements by Object Class USPTO - 89 16A Select Activities by Object Class USPTO - 90 32 Justification of Proposed Language Changes USPTO - 92 33 Appropriations Language and Code Citation USPTO - 93 34 Advisory and Assistance Services USPTO - 95 35 Periodicals, Pamphlets, and Audiovisual Services USPTO - 96 36 Average Grade and Salaries USPTO - 97 41 Implementation Status of GAO and OIG Recommendations USPTO - 98 Appendices Appendix I Budget and Performance at a Glance USPTO - 118 Appendix II Two Way Split by Business Line USPTO - 122 Appendix III USPTO IT Portfolio USPTO - 124 Appendix IV Multi-year Planning by Business Line USPTO - 130 Appendix V USPTO Fees Change from FY 2021 PB to FY 2022 PB USPTO - 136 Appendix VI Fee Collection Estimates and Assumptions USPTO - 143 Appendix VII USPTO 2019 Fee Report USPTO - 145 Appendix VIII Strategic Plan Framework USPTO - 170 Appendix IX Annual Performance Plan and Report USPTO - 171 INTRODUCTION USPTO - 1 This Page is Intentionally Left Blank USPTO - 2 Description/Scope of Responsibilities The United States Patent and Trademark Office (USPTO or Office) is an agency within the United States Department of Commerce (DOC). The Office is led by the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, who consults with the Patent Public Advisory Committee (PPAC) and the Trademark Public Advisory Committee (TPAC) on Office policies, goals, performance, budget, and user fees. The Patents organization is under the management of the Commissioner for Patents, and the Trademarks organization is under the management of the Commissioner for Trademarks. The Commissioners each enter into an annual performance agreement with the Secretary of Commerce that outlines the measurable organizational goals for which each is responsible. The USPTO fosters innovation, competitiveness, and job growth in the United States by conducting high-quality, timely patent and trademark examination and review proceedings to produce stable, reliable, and predictable intellectual property (IP) rights; guiding IP policy and improving IP rights protection; and delivering IP information and education across America and worldwide. Two distinct business lines, Patents and Trademarks, administer the patent and trademark laws that provide protection to inventors and businesses for their inventions and brands and encourage innovation and entrepreneurship in the United States through the preservation, classification, and dissemination of patent and trademark information. Issuing patents and registering trademarks, as well as providing domestic and global leadership on IP issues, are inherently governmental functions, with no private sector alternatives to carry out these activities. However, the USPTO routinely assesses its functions and relies heavily on the private sector for those aspects of its operations that are not inherently governmental, such as contracting to third parties the processing of the administrative aspects of the patent and trademark examination processes, as well as certain mission-support activities. In fiscal year (FY) 2022, the USPTO expects to employ 13,723 federal employees, including patent examiners, trademark examining attorneys, computer scientists, attorneys, and administrative staff. Employee engagement is a core component of the Office’s business strategy, as it contributes to the recruitment and retention of a diverse, high-performing, nationwide workforce to execute the Office’s mission. The USPTO is a demand-driven, fee-funded, performance-based organization with a commitment to delivering reliable IP protection and information to its various stakeholders, including inventors, entrepreneurs, and businesses in the U.S. and around the world. Stakeholders also include IP organizations and international entities, such as the World Intellectual Property Organization. The USPTO is headquartered in Alexandria, Virginia, and has four regional offices in Detroit, Michigan; Denver, Colorado; San Jose, California; and Dallas, Texas, as well as an Eastern Regional Outreach Office based at the headquarters. The USPTO’s legislative authorities are included in Exhibit 32/33. USPTO - 3 Exhibit 2 Department of Commerce U.S. Patent and Trademark Office USPTO - 4 Exhibit 3 Department of Commerce U.S. Patent and Trademark Office Budget Estimates, Fiscal Year 2022 Executive Summary The USPTO’s FY 2022 President’s Budget Submission (Budget) seeks USPTO Operating Levels FY 2020-2022 $3.994 billion in spending authority to fund the agency’s FY 2022 ($ in millions) FY 2020 FY 2021 FY 2022 budgetary requirements ($3.550 billion for patents and $444 million for Operating Reserve Opening Balance 510 513 531 trademarks), which include 13,723 positions and provide for a transfer Total Projected Fee Collections and Other Income 3,724 3,617 4,111 Fee Collections (Prior Spending Authority) 3,683 3,564 4,058 of $2 million to DOC’s Office of Inspector General (OIG). User fee Other income 41 52 52 collections of $4,058 million, comprised of $3,608 million in patent fees Total Spending (i.e. Budgetary Requirements)* (FY 2022 Spending Authority) 3,518 3,830 3,994 and $450 million in trademark fees, and $52 million in other income, will Funding to (+) and f rom (-) Operating Reserve 3 18 52 offset total spending. The appropriation request is based on spending Operating Reserve Ending Balance 513 531 583 requirements, not fee collections; this is a change from prior requests in Ov er/(Under) Total Optimal Level (458) (530) (525) which the appropriation was based on fee collections. This results in an PTFRF Opening Balance 29 231 0 estimated deposit of $65 million into the Patent and Trademark Fee Funding to (+) and f rom (-) PTFRF 203 (231) 65 Reserve Fund (PTFRF) and $52 million into the USPTO operating PTFRF Ending Balance 231 0 65 reserves (ORs), resulting in a net appropriation of $0 for the USPTO. Authorized Positions 13,525 13,510 13,723 *Spending includes a transfer of $2 million to the DOC Office of the Inspector General. The Budget is predicated on workload demand and fee collection estimates derived from production and workload models and global and domestic indicators of economic and IP activity that inform the USPTO’s projections of application filings and patent and trademark renewals. The ORs discussed below, combined with the ability to access and spend all fees collected timely and the authority to adjust fees via the regulatory process, allow the Office to mitigate operational impacts caused by changes in the global IP environment and economic volatility. In FY 2022, demand for serialized (original) patent applications is forecasted to increase by 1.5%, whereas trademark workloads are expected to decrease by 11.4%. As a fully fee-funded agency, and consistent with standard private sector practices, the USPTO maintains ORs for both Patents and Trademarks to provide optimal resources to preserve planned operational capacity when the revenue stream or funding availability is uncertain; to operate when fee collections fall short of estimates; to match fee collections to budgetary requirements over time; and to provide supplemental funding when budgetary requirements grow due to unexpected increases in application filings, capital investment needs, or other factors. The USPTO remains committed to fiscal responsibility and makes prudent choices when aligning spending priorities with revenue projections. Maintaining the fee setting authority granted by the 2011 Leahy-Smith America Invents Act (AIA) (35 U.S.C. § 42(c)), as extended by the Study of Underrepresented Classes Chasing
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