U.S. Patent Operations May Shut Down in Second Week of February

(Bloomberg) -- The U.S. Patent and Trademark Office said it may have to cease patent operations in the second week of February if the partial government shutdown continues, though it has money for trademark work through mid-April.

Any furlough of staff could mean significant delays in reviewing the tens of thousands of applications on inventions for things like telecommunications hardware and the next cutting-edge medical treatments. Now it takes on average 15.8 months before a patent applicant can expect a preliminary response from an examiner. More than 640,000 patent applications were filed in fiscal 2018.

The patent office, part of the Commerce Department, is funded entirely by user fees and gets no tax dollars, but it requires an appropriation from Congress to spend the money it collects. In fiscal 2018, it had a budget of $3.3 billion and has asked for $3.5 billion for fiscal 2019.

The patent office sets aside authorized money in what’s called an operating reserve to account for “temporary changes in our cash flow” and that’s what it has been using to stay open since the partial shutdown began Dec. 22. At the end of the fiscal year on Sept. 30, it said it had 1.3 months of operating expenses for patent operations and 4.9 months of expenses for trademark operations.

“The agency continues to evaluate options for conserving funds to lengthen the time those operations can continue for as long as possible,” the agency said in a statement.

The agency had 12,579 employees -- including 8,185 patent examiners and 579 trademark examining lawyers -- as of Sept. 30, according to its annual report. It’s unknown how many of those workers might be furloughed. The agency said it would keep a “small staff” to receive new applications and filings, to receive payments and maintain the information technology infrastructure.

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