In an attempt to shed light on the impact of user-fee financing structures on the behavior of administrative agencies, we explore the relationship between the funding structure of the Patent and Trademark Office (PTO) and its examination practices. We suggest that the PTO’s reliance on prior grantees to subsidize current applicants exposes the Agency to a risk that its obligatory costs will surpass incoming fee collections. When such risks materialize, we hypothesize, and thereafter document, that the PTO will restore financial balance by extending preferential examination treatment—i.e., higher granting propensities and/or shorter wait times—to some technologies over others.
Michael D. Frakes & Melissa F. Wasserman, The Failed Promise of User Fees: Empirical Evidence from the United States Patent and Trademark Office, 11 Journal of Empirical Legal Studies 602-636 (2014)
Library of Congress Subject Headings
Patent laws and legislation, Patents--Economic aspects, User charges, Patent and Trademark Office