USPTO Performance and Accountability Report - U.S. Patent and ...

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MANAGEMENT’S DISCUSSION AND ANALYSIS
The Statement of Net Cost compares fees earned to
costs incurred during a specific period of time. It is
not necessarily an indicator of net income or net cost
over the life of a patent or trademark. Net income or
net cost for the fiscal year is dependent upon work
that has been completed over the various phases of
the production life cycle. The net income calculation
is based on fees earned during the fiscal year being
reported, regardless of when those fees were
collected. Maintenance fees also play a large part
in whether a total net income or net cost is recognized.
Maintenance fees collected in FY 2012 are a
reflection of patent issue levels 3.5, 7.5, and 11.5 years
ago, rather than a reflection of patents issued in
FY 2012. Therefore, maintenance fees can have a
significant impact on matching costs and revenue.
During FY 2012, the number of patent filings increased
by 5.3 percent over the prior year. Despite this
increase, the Patent organization disposed
7.7 percent more applications than were disposed
of during FY 2011. This resulted in a decrease in
patent deferred revenue and an increase in earned
revenue.
During FY 2012, with the number of trademark applications
increasing by 4.1 percent over the prior year,
the Trademark organization was able to continue to
address the existing inventory and maintain pendency
between 2.5 and 3.5 months during FY 2012.
The Trademark organization was able to do this while
recognizing a slight increase in deferred revenue and
corresponding decrease in revenue earned.
Earned Revenue
The USPTO’s earned revenue is derived from the fees
collected for patent and trademark products and
services. Fee collections are recognized as earned
revenue when the activities to complete the work
associated with the fee are completed. The earning
process is the same for all collections even though a
certain portion of the fees may not be made
available to the USPTO for spending. Temporarily
unavailable fee collections occur when the USPTO is
not appropriated the authority to spend all fees
collected during a given year. During FY 2012, the
USPTO did not collect any fee collections that were
designated as temporarily unavailable.
PERFORMANCE AND ACCOUNTABILITY REPORT: FISCAL YEAR 2012
Earned revenue totaled $2,427.1 million for FY 2012,
an increase of $190.7 million, or 8.5 percent, over
FY 2011 earned revenue of $2,236.4 million. Of revenue
earned during FY 2012, $558.7 million related to fee
collections that were deferred for revenue recognition
in prior fiscal years, $697.9 million related to maintenance
fees collected during FY 2012, which were
considered earned immediately, $1,165.3 million
related to work performed for fees collected during
FY 2012, and $5.2 million were not fee-related.
For fees collected and earned during FY 2012, there
was an increase of $129.5 million over these same
fees earned during FY 2011. This increase can
primarily be attributed to $66.1 million in earned
patent issue fees, $18.9 million in patent filing fees,
$12.9 million in trademark post-registration fees, and
$39.2 million in patent and trademark fees considered
earned immediately, offset by a decrease of
$5.4 million in PTAB fees.
Patent
Traditionally, the major components of earned
revenue derived from patent operations are maintenance
fees, initial application fees for filing, search,
and examination, and issue fees. These fees account