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Continued: Budget cuts hijack medical device and patent fees

  • Article by: JIM SPENCER , Star Tribune
  • Last update: August 4, 2013 - 9:04 PM

“I believe they’re acting contrary to the statute,” intellectual property association executive director Q. Todd Dickinson, a former director of the USPTO, said in an interview. “I don’t think it would be a bad thing for someone to bring a lawsuit.”

Maryland’s Kettl thinks OMB is acting within its legal purview even if its actions don’t seem to make sense.

“The fact that it’s the private sector giving the money doesn’t protect them from reductions [because of sequestration],” Kettl said. “What look to be good solid deals may not be.

“It’s nuts. It’s insane. But it comes with how the budget process has gone so far.”

Minnesota Sen. Amy Klobuchar favors replacing the sequester with targeted cuts, but Congress has not been able to agree to a plan.

“I strongly believe that medical device and patent user fees as well as funding for critical programs like the [National Institutes of Health] should not be subject to these across-the-board cuts,” Klobuchar said.

In May, the Coalition for 21st Century Patent Reform, which includes 3M, wrote to the chairmen of the Senate and House Judiciary Committees begging for a Congressional reprieve from sequestration.

“The OMB decision to apply the sequester to the [patent office] is not only shortsighted, but creates unacceptable long-term repercussions for the patent system,” the group’s chairman wrote.

The 2011 America Invents Act established a special fund to pay for improvements in an understaffed office with a 30-year-old computer system that had a backlog of 750,000 patent applications each taking, on average, 30 months to process.

With the sequester seizing money that otherwise would have gone to make that system better, “We’re back to where we were before [reform],” 3M’s Rhodes said.

Device makers have used a version of the same argument to make their case for relief: User fees paid by the industry to the FDA should not be treated the same way as taxpayer dollars, Ubl said. Device makers made a deal with Congress and the FDA to help get products to market more quickly by agreeing to increase user fees for that specific purpose.

Not releasing those funds does not help pay down the national deficit, Ubl maintained, it just puts the money “in a black hole.” Sequestering the money also “violates the compact we reached with Congress,” Ubl added.

The question of whether Congress can hold up its end of the bargain remains unanswered.

The intellectual property association’s Dickinson says Congress “absolutely” reneged on its promises to patent reformers. Patent applicants “paid for a service from the government,” he said, “and they expect to get that service in return.”

 

Jim Spencer • 202-383-6123

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