Union’s views on the operation and proposed budget of the U.S. Patent and Trademark Office (PTO).

4/11/2002

U.S. House of Representatives Judiciary Subcommittee on Courts and Intellectual Property

Good morning Chairman Coble, Representative Berman and members of the House Judiciary Subcommittee on Courts and Intellectual Property. My name is Colleen Kelley. I am the National President of the National Treasury Employees Union (NTEU). I very much appreciate the Committee’s invitation to be here today to present our Union’s views on the operation and proposed budget of the U.S. Patent and Trademark Office (PTO).

NTEU represents more than 2,300 employees in two bargaining units at the U.S. Patent and Trademark Office. The employees at NTEU Chapter 243 are involved in all phases of the patent and trademark application process -- from handling mail, to other tasks directly related to the adjudication of the patent and trademark applications. The Trademark Society, NTEU Chapter 245, represents the attorneys who process trademark applications. In the audience today, are Amy Perkins, Vice-President and Legislative Coordinator of NTEU Chapter 243, and Howard Friedman, President of NTEU Chapter 245, our two units at PTO.

As the Subcommittee is well aware, the Patent and Trademark Office plays a critical role in the development of new industries in our economy. PTO’s employees perform the quasi-judicial function of adjudicating patent and trademark applications -- an inherently governmental function that appropriately belongs in the public domain and is of Constitutional authority. The American public and business community place great importance on the registration of patents and trademarks in the United States as a key to the protection of valuable intellectual property rights.

The PTO’s employees are vital to the successful operation of the Office and can and should play an important role in increasing efficiency and productivity. Agency management and the American public are very fortunate to have the young, progressive and innovative workforce represented in NTEU’s bargaining units. They are extremely computer literate, professionally savvy and open to new ideas.

Mr. Chairman, two years ago I testified before this subcommittee. At that time I told you that PTO was an agency in crisis. I stated that the Office was grossly understaffed for the growing workload it bears, that pendency for applications was at unacceptable levels and that turnover was at an intolerable magnitude. You may wonder what I think today.

Let me first speak to the trademark side. Thanks to cooperative labor-management relations, the leadership of the current and past directors Todd Dickinson and James Rogan, and the poking and prodding of you and Mr. Berman, the situation is much improved at the Trademark Office. Staff turnover is down and customer satisfaction is heading in the right direction. Further, greater efficiency is being achieved thanks to labor-management initiatives such as electronic filing, flexiplace, and flexible work schedules.

I believe the Trademark Office has turned the corner. But having turned the corner, let us not reverse course. Pendency in trademarks is starting to creep up. With the resources proposed in the President’s budget, we have a chance to reduce trademark pendency. This is the right step, but many challenges remain. One example of a near future challenge is the proposed Madrid Protocol, which, if adopted, will require significant changes at the Trademark Office. Resources need to be allocated so that employees can be trained and prepared for these changes. Another challenge is the need to retain experienced and skilled staff and for the agency to invest for the long term in its human capital. Additionally, with the advances the Trademark Office has had on some fronts, it needs to direct resources to improving the quality of trademark registrations. Mr. Chairman, let us move to address these challenges now. As the national economy improves, even greater numbers of trademark applications are likely. Let us put into place systems to improve quality and efficiency before the Trademark Office is overwhelmed with new work.

While on the trademark side, things are getting better presuming PTO stays the course, I cannot say the same on the patent side. Pendency will continue to climb next year even with the increased resources in the President’s proposed budget. American inventors deserve better. Patents are the institutional protection of intellectual property rights. The ability to lay claim to the fruit of one’s intellect is a basic right and one of the examples of positive rights mentioned in our Constitution. The federal government has a fundamental and Constitutional obligation to see that inventors receive patents in a timely manner. I would emphasize that the Constitution gives this obligation to the government. For reasons of privacy and accountability work at the PTO should not be contracted out to private, commercial entities.

Let me also point out an issue that may be otherwise overlooked. The PTO will be moving to new facilities in Alexandria in 2003. NTEU is in a partnership relationship with PTO management regarding space allocation and other issues concerning new space PTO will occupy after the move. We are confident the new facilities will provide an environment in which our members can work efficiently, productively and safely. We have already come to agreement with management on important issues such as space allocation and look forward to the many benefits this new site will offer. As much as I think the issues around the move have been a model of labor-management cooperation in the federal sector, even in the best of circumstances, office moves are disruptive to employees. Commuting patterns change and car pools dissolve. We must make sure that this does not result in the loss of productive and experienced PTO employees.

Finally, I would like to address the issue of the proposed surcharge on patent and trademark application fees. NTEU certainly supports setting the fee for patent and trademark applications at a level which produces the needed revenues to run the agency properly. I must note however, that under the President’s proposal, $163 million of the revenue from these fees will be diverted into general revenue. NTEU has objected to this diversion in the past and we object to it today. We believe that PTO should keep all of the revenue from the fees it collects. The Administration has said these monies are needed for homeland security. NTEU fully supports every authentic initiative for homeland security at the border, in our airports, through the movement of currency or any other means. But to be honest, this surcharge is simply deposited into general revenue and is not dedicated to any particular program. It is unfair to the inventors that they pay a fee for a service they are not getting the full benefit from. With the resources from these diverted fees, our members could give the customer speedier and higher quality service, more staff could be hired, better training could be implemented and improved retention incentives could be developed. Mr. Coble, you and Mr. Berman have been very outspoken on this. We need your continued leadership.

Mr. Chairman, I appreciate the opportunity to testify today. I am happy to answer any questions you or the members of the committee may have. Thank you.