February 11, 1997 CONGRESSIONAL RECORD Ð Extensions of Remarks E201 EXTENSIONS OF REMARKS PATENT AND TRADEMARK OFFICE creasingly redirected a larger share of the sur- SUNSHINE ON THE FEDERAL OPEN SURCHARGE EXTENSION ACT charge revenue, reaching a record level of MARKET COMMITTEE ACT $54 million in the current year. In total, over HON. HOWARD COBLE the past 6 fiscal years, over $142 million has HON. JAMES A. TRAFICANT, JR. OF NORTH CAROLINA been diverted from the PTO. OF OHIO IN THE HOUSE OF REPRESENTATIVES This, of course, has had a debilitating im- IN THE HOUSE OF REPRESENTATIVES Tuesday, February 11, 1997 pact on the Patent and Trademark Office. The Tuesday, February 11, 1997 Mr. COBLE. Mr. Speaker, today, I am effort to reclassify the patent search file to Mr. TRAFICANT. Mr. Speaker, in 1995 the pleased to introduce a bill which responds to keep it current with developing technologies Chairman of the Federal Reserve clarified that an aspect of the budget proposed by the ad- had to be eliminated. The efforts to provide transcripts of its Federal Open Market Com- ministration last Thursday and to congres- technological training for patent examiners and mittee [FOMC] meetings will be disclosed to sional practice over the past 6 fiscal years. to expose them to the latest developments in the publicÐafter 30 years. The administration's budget proposal would di- their fields has been reduced. The support of Enough is enough. I urge my colleagues to vert $92 million in fiscal year 1998 from the legal training for patent examiners has been once again cosponsor my Sunshine on the U.S. Patent and Trademark Office, which re- cut 50 percent. One of the most promising Federal Open Market Committee Act, which ceives no taxpayer dollars, to other tax-funded cost-saving steps contemplated by the PTO, will apply the Government-in-the-Sunshine Act areas of the Government. In 1999, the admin- allowing applicants to file their applications to FOMC meetings. istration proposes that $119 million be di- electronically, has been postponed indefinitely. The Fed is charged with duty of not only verted. In fiscal year 1997, Congress diverted Since the diversion of $54 million this year, conducting the day-to-day banking for the en- $54 million, a significant increase over pre- the Office has been forced to reduce the hiring tire Nation, but regulating the economy vious diversions. This legislation would correct of patent examiners 50 percent at a time when through the formulation of monetary policy. this serious and growing problem, without patent application filings are increasing by Needless to say, it wields immense power. In harming the budget, so that the PTO can con- nearly 10 percent annually. In the budget de- a typical month, it pumps anywhere between tinue to be the engine that fuels the creation livered to this body by the administration last $1 and $4 billion into the economy while dan- of competitive American technology. Thursday, the President is proposing that we gling the threat of higher interest rates over Last month, Representatives GOODLATTE, continue to increase these diversions in the the American public. Even more intimidating, CONYERS, LOFGREN, and I introduced H.R. amount of $92 million in fiscal year 1998 and Mr. Speaker, is that half of all the banks in the 400, the 21st Century Patent System Improve- $119 million, the amount of the entire sur- country are members of the Federal Reserve ment Act, a bipartisan bill which will make criti- charge, in each of the succeeding years System; all national banks must belong. All cal reforms to our Nation's patent laws and to through fiscal year 2002. In anticipation of this told, the Fed has holdings of over $300 bil- the PTO for America's high-technology indus- denial of user fees, the PTO has canceled to- lionÐaccounting for nearly 7 percent of the tries. However, unless we move quickly to pre- tally all plans for hiring patent examiners this national debt. serve and stabilize the finances of the PTO, year because it would not have sufficient The entity within the Fed responsible for de- these improvements and the patent system it- funds to pay for them next year. We cannot termining the country's monetary policy is the self will be in jeopardy. afford to allow this dismantling of our patent FOMC, which consists of the 7 member Board The Patent and Trademark Office is funded system to occur. of Governors and 5 of the 12 district bank totally through the payment of application and presidents. The FOMC meets every 6 weeks user fees. Taxpayer support for the operations The legislation I am introducing today is rev- but, unfortunately for the general public, they of the Office was eliminated in 1990 with the enue neutral. It does not increase an expendi- meet in relative secrecy. I say relative be- passage of the Omnibus Budget Reconcili- ture of taxpayer revenues which would in- cause, in the wake of a FOMC meeting, mem- ation Act. The act imposed a massive fee in- crease the deficit. It would merely permit the bers of the committee give speeches to busi- creaseÐreferred to as a ``surcharge''Ðon PTO to use all of the patent and trademark ness groups where, with a wink and a nod, America's inventors and industry in order to fees it receives to examine patent and trade- they may reveal specifics of the new policy. replace taxpayer support the Office was then mark applications, to grant patents and to reg- Meanwhile, the ordinary American gets a con- receiving. The revenues generated by this sur- ister trademarks. It does this by placing the voluted synopsis of the policy immediately charge, $119 million, which constitute approxi- fees generated by the surcharge mandated by after the meeting, an edited transcript 6 weeks mately 20 percent of the PTO's operating the Omnibus Budget Reconciliation Act of later, and the full story 30 years later. It is time budget, are placed into a surcharge account. 1990 into the same category as the other user to open these meetings up to all. The PTO is required to request of the Appro- fees paid by patent and trademark applicants. Mr. Speaker, the Government-in-the-Sun- priations Committees that they be allowed to Specifically, it would characterize these fees shine Act, passed in 1976 to increase ac- use these surcharge revenues in this account as ``offsetting collections'' rather than ``offset- countability of over 50 Federal agencies, to support the 20 percent of its operations ting receipts'' so that all of the fees collected opens closed meetings to private scrutiny. It these revenues represent. It was anticipated in could be used for the purposes for which they requires that every portion of every meeting of 1990 that Congress would routinely grant the were paid. an agency that is headed by a collegial body PTO permission to use the surcharge revenue must be open to public observation. There are We must stop this unwarranted tax on inno- since it was generated originally from fees exceptions to the law, however, and the Fed paid by users of the patent and trademark vation. Our Patent and Trademark Office can- has massaged the English language to the systems to support the cost of those systems. not operate effectively on 80 percent of its op- point where the Supreme Court overruled the Unfortunately, experience has shown us that erating budgetÐall of which is paid for not by lower courts and allowed one such exemption the user fees paid into the surcharge account you and me, but by the applicants who use it. to apply to the FOMC meetings. Con- have become a target of opportunity to fund I look forward to working with all interested sequently, the Fed has the extraordinary time- other, unrelated, taxpayer-funded Government parties to reverse this potential decline in the table for disclosure that I mentioned. programs. The temptation to use the sur- services offered by the PTO. In this increas- Mr. Speaker, I understand the sensitivity charge, and thus a significant portion of the ingly competitive world, the economic survival with which the Fed must treat monetary policy. operating budget of the PTO, has proven in- of the United States will be dependent upon I also understand the need for apolitical deci- creasingly irresistible, to the detriment and high technology products and services. We sionmaking during the FOMC meetings. But sound functioning of our Nation's patent and cannot allow the pillar upon which our com- when a governmental entity can wield a $300 trademark systems. Beginning with the diver- petitiveness in the global economy rests to be billion bludgeoning tool at will in the market- sion of $8 million in 1992, Congress has in- destroyed. place, it should be held accountable. As such, · This ``bullet'' symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. E202 CONGRESSIONAL RECORD Ð Extensions of Remarks February 11, 1997 I am reintroducing the Sunshine on the Fed- of Commerce; the Irvine-Ravenna Kiwanis deavor. Put simply, it means this: Nothing eral Open Market Committee Act to ensure Club; the Community Development Foundation should be done at a higher level of organiza- the FOMC is held accountable for its policies. Council; the Natural Bridge Park Association; tion than is necessary to accomplish the pur- I urge my colleagues to once again support pose involved. Or, conversely, whatever the Council of the National Rifle Association; F needs to be done should be done at the lowest and cosponsor this important measure.