September 30, 2020

USPTO Director Andrei Iancu speaks on pandemic’s effect on intellectual property

The U.S. Patent and Trademark Office was hit hard by COVID-19, as both patent and trademark filings saw significant declines in the early months of the pandemic, according to Andrei Iancu, undersecretary of Commerce for Intellectual Property and director of the USPTO. But Iancu says he sees signs of a turnaround as the economy begins to pick up.

“Trademark filings are much more related in time with the general economy and we have seen an unbelievable rate of growth in the past few months,” Iancu said during a one-on-one conversation with Dorian Daley, executive vice president and general counsel of the Oracle Corp. in Redwood City, California, to kick off the ABA Section of Intellectual Property Law’s four-day virtual IP Fall Institute held Sept. 29-Oct. 2. “Following a steep decline in trademark filings at the start of the pandemic when we all went into the lockdown in March, April and May, July 2020 was higher than July 2019 and August was the highest month ever for trademark filings in the history of the United States Trademark Patent Office.” And September, Iancu said, is on track “to be very robust.”

Iancu, who discussed the importance of innovation and technology, entrepreneurship and the current state of intellectual property law, said that despite the heavy decline in the spring, fiscal year 2020, which closed at the end of September, “will be a record year in terms of trademark filings.”

“It expresses a level of optimism, I think,” said Iancu, who was nominated to his position by President Donald Trump in 2017. “Companies seek trademarks usually because you are about to release a product or future products.”

Patent filings, on the other hand, have not rebounded. Iancu explained that patent filings are usually a lagging indicator of general economic conditions. While patent filings did not fall off as steeply as trademark filings at the start of the pandemic, filings for 2020 fiscal year are about even and maybe 1.2% or 1.3% higher than in fiscal year 2019, he said.

“But this is still lower than planned. Usually every year we have growth in patent filings and this year we anticipated a 2.5% growth,” Iancu said. “But we’re seeing basically 0 percent growth or very close to it and that is a direct result of the pandemic.”

The slow growth, he said, is expected to continue into the first quarter fiscal year 2021, which began Oct. 1. “Usually patent filings are about a 12- to 18-month lag with the general economy, so I do expect this to continue for a bit.”

It goes without saying that pandemic-induced slowdown in patent and trademark filings has impacted the revenue of the USTPO, which is funded through user fees. Aside from filing fees, the USPTO charges a maintenance fee or renewal fees on patents after they are issued. Actually, there are three maintenance fees throughout the life of the patent, according to Iancu.

“We have seen a significant decrease in the past six months in the renewal fees when it comes to the patent maintenance fees and we have also seen declines in that respect on the trademark side as well,” Iancu said. “All in all, we have lower revenues than expected in 2020, but that is what we have a reserve for — to help make sure we can weather these ups and downs.”

A long-planned patent fee increase is set to take effect Oct. 1, the first fee hike in three years, according to Iancu. “That should help us a little bit come 2021,” he said.