One of the top headlines this week is the possibility of an impending government shutdown – but how will this impact your patent or trademark application? In short, even if the Federal Government does shut down this week (or sometime in the future), the U.S. Patent and Trademark Office (“USPTO”) should be unaffected, at least for a while.

A division of the Department of Commerce, the USPTO is a “fully fee-funded agency,” and, as such, does not rely on funding from the federal government for day-to-day operations. According to the Department of Commerce's “Plan for Orderly Shutdown Due to Lapse of Congressional Appropriations,” (“DOC's Plan”) published on September 27, 2023:

In the event of a lapse in appropriations, the Department will immediately suspend regular agency operations. Certain functions and activities, however, may be continued even in the absence of an annual appropriations Act or continuing resolution…Accordingly, Department functions and activities that may be continued in the event of a lapse in appropriations are those that are:

1. 1. Financed by a resource other than current year annual appropriations;

   2. Expressly authorized by law to continue in the absence of appropriations;

   3. Authorized by necessary implication to continue in the absence of appropriations;

   4. Necessary to discharge the President's constitutional duties and powers; and

   5. Related to emergencies where there is a reasonable likelihood that the safety of human life or the protection of property would be compromised, in some significant degree, by delay in performance.

Because the USPTO is financed by fees related to patent and trademark matters (e.g., filing fees, issue fees, maintenance fees, etc.) rather than annual appropriations, the Office falls under the first exception on this list.

The DOC's Plan includes detailed contingency plans for each agency within the Department, including the USPTO. Though the USPTO claims to be “fully fee-funded,” the DOC acknowledges that, in the event of a prolonged shutdown, the USPTO could possibly reach “the point when funds from patent and trademark business operations can no longer sustain full operations.”[i] At that point, though most USPTO employees will need to be furloughed, minimal staffing will be retained to manage “the bare minimum set of activities necessary to protect against the actual loss of intellectual property (IP) rights.”[ii]

The functions that will continue within the Office of Patents include the following:[iii]

• Protect “mission critical intellectual property” and “review foreign activity;”
• Review all newly filed applications to ensure filing requirements are met so that filing dates can be secured;
• Review all newly filed applications for national security interests and ensure that Foreign Filing Licenses are not inappropriately granted;
• Receive and review requests for foreign filing licenses and issue licenses as appropriate; and
• Address questions related to patent term extension (35 U.S.C. §156).

Examination of patent applications will not continue in the event that the Office of Patents cannot sustain operations based on funds from patent business operations.

The functions that will continue within the Office of Trademarks include the following:[iv]

• Protect “mission critical Intellectual Property” and oversee “foreign activity;” and
• Provide technical and IT support “for systems necessary to meet legal obligations to the public and international treaties.”

Examination of trademark applications will not continue in the event that the Office of Trademarks cannot sustain operations based on funds from trademark business operations.

The DOC's Plan also notes the following:[v] “Given the nature of the USPTO's business operations, funds from patent operations and trademark operations may not expire at the same time. It is possible that one business unit will continue to operate at normal levels while the other will shut down.”

Bloomberg Law estimates that the USPTO's operating reserves are sufficient to fully fund three months of operating expenses for the Office of Patents and four months of operating expenses for the Office of Trademarks. Given that the longest government shutdown was just over one month (from December 2018-January 2019), these estimates haven't been “battle-tested” so to speak.

To date, the USPTO has weathered several government shutdowns while continuing business as usual. Accordingly, we don't anticipate any major issues in the event the government does shut down this week. However, if you have concerns and would like to speak with an IP professional, feel free to call us at 651-256-9480 or fill out this Contact Form.

*The information in this article is not legal advice and should not be relied on. The content of this article is for informational purposes only and is meant as a starting point in your search for answers to your legal questions.

[i] https://www.commerce.gov/sites/default/files/2023-09/DOC-Lapse-Plan-2023.pdf

[ii] IBID

[iii] IBID

[iv] IBID

[v] IBID