Results of Operations
The USPTO generated a net cost of $33.9
million in FY 2007, compared to net income in FY 2006 of $80.2 million,
a decrease of $114.1 million. This significant variation is the result
of a few factors, explained in more detail in the Statement of Net Cost
discussion. The primary factor was increased costs in FY 2007 —
costs for FY 2007 increased significantly from FY 2006 primarily due to
increased staffing levels hired in late FY 2006 and throughout FY 2007.
Due to the increase in pendency, the amount of time an application is
waiting before a patent is issued or trademark is registered, the USPTO
has been recognizing a steadily increasing deferred revenue liability
for fees received prior to the revenue being earned. From FY 2004 through
FY 2007, unearned patent fees increased 53.5 percent. In FY 2007, for
each month patent pendency to first action increased, deferred revenue
increased approximately $30.3 million per pendency month, with a corresponding
decrease in earned revenue. From FY 2004 through FY 2007, unearned trademark
fees decreased 9.2 percent, a result of the increased staffing to address
the backlog and the decrease in pendency. In addition to the 1,215 patent
examiners hired during FY 2007, the USPTO plans to continue hiring at
least 1,200 new patent examiners each fiscal year through FY 2012, as
well as implementing new operating practices, to reduce the backlog of
unprocessed applications and reduce pendency.
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