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What have we learned from the US government shutdown?

The most recent United States Federal Government shutdown from 22 December 2018 to 25 January 2019, the longest ever, is now fortunately a fading memory. The shutdown resulted in a partial lapse in funding for United States Federal Government departments, including the United States Patent and Trademark Office (USPTO), which is responsible for examining and granting United States patents and trade marks. However, the USPTO was able to continue operating as normal throughout the shutdown, which, as David Gwilliam explains, gave us an insight into how it operates and its contingency planning.

US government shutdown

The USPTO is a fee funded department, meaning the fees it collects from patent and trade mark applicants cover its operating costs, although it does not have the authority to spend the fees it collects without government approval. Accordingly, although the USPTO was still able to collect fees while it was operating during the government shutdown, it was not able to use these fees to cover its operating costs.

However, over the past few years, the USPTO has been allocating a proportion of its government-approved budget to an Operating Reserve, which is available for use at the discretion of the USPTO to maintain long-term financial stability as well as to assist in managing temporary changes in our cash flow. The USPTO was therefore able to continue its normal operations throughout the shutdown by using this Operating Reserve.

The Operating Reserve is intended to cover the USPTO’s operating costs for up to three months and the USPTO announced on 24 January 2019 (i.e. one day before the shutdown came to an end) that they expected to be able to continue to fund patent operations until the second week of February and trade mark operations until at least mid-April before the Operating Reserve was exhausted. The USPTO also confirmed that, in the event that the Operating Reserve became exhausted before the shutdown came to an end, the USPTO would have ceased normal operations but would have maintained a small staff (presumably working without pay) to receive new applications and other filings and fees, and hence ensure that applicants are able to observe time limits.

It is reassuring that the USPTO has robust measures in place to ensure it is able to continue operating and supporting businesses and innovation through difficult circumstances. This is especially welcome to us as the United States is amongst the most important jurisdictions for United Kingdom businesses to protect their intellectual property rights.

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