Elimination of USPTO fee diversion

(a) Funding Section 42 of title 35, United States Code, is amended— (1) in subsection (a), by striking All fees and inserting the following: (a) Fees for service by PTO All fees; (2) in subsection (b)— (A) by striking All fees paid to the Director and all appropriations and inserting the following: (b) Innovation Promotion Fund All fees paid to the Director; and (B) by striking Patent and Trademark Office Appropriation Account and inserting United States Patent and Trademark Office Innovation Promotion Fund; (3) by striking subsection (c) and inserting the following: (c) Collection of funds for PTO activities (1) In general Fees authorized in this title or any other Act to be charged or established by the Director shall be collected by the Director and shall be available to the Director until expended to carry out the activities of the Patent and Trademark Office. (2) Use of fees (A) Patent fees Any fees that are collected under this title, and any surcharges on such fees, may only be used for expenses of the Office relating to the processing of patent applications and for other activities, services, and materials relating to patents and to cover a proportionate share of the administrative costs of the Office. (B) Trademark fees Any fees that are collected under section 31 of the Trademark Act of 1946 (as defined in subsection (d)(1)) (15 U.S.C. 1113), and any surcharges on such fees, may only be used for expenses of the Office relating to the processing of trademark registrations and for other activities, services, and materials relating to trademarks and to cover a proportionate share of the administrative costs of the Office.; (4) by redesignating subsections (d) and (e) as subsections (e) and (f), respectively; (5) by inserting after subsection (c) the following: (d) Revolving fund (1) Definitions In this subsection— (A) the term Fund means the United States Patent and Trademark Office Innovation Promotion Fund established under paragraph (2); and (B) the term Trademark Act of 1946 means the Act entitled An Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes, approved July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to as the Trademark Act of 1946 or the Lanham Act). (2) Establishment There is established in the Treasury a revolving fund to be known as the United States Patent and Trademark Office Innovation Promotion Fund. (3) Derivation of resources There shall be deposited into the Fund any fees collected under— (A) this title; or (B) the Trademark Act of 1946. (4) Expenses Amounts deposited into the Fund under paragraph (3) shall be available, without fiscal year limitation, to cover— (A) to the extent consistent with the limitation on the use of fees under subsection (c), all expenses, including all administrative and operating expenses, determined by the Director to be ordinary and reasonable, incurred by the Director for the continued operation of all services, programs, activities, and duties of the Office relating to patents and trademarks, as such services, programs, activities, and duties are described under— (i) this title; and (ii) the Trademark Act of 1946; and (B) all expenses incurred pursuant to any obligation, representation, or other commitment of the Office.; (6) in subsection (e), as so redesignated, by striking The Director and inserting the following: (e) Refunds The Director; and (7) in subsection (f), as so redesignated, by striking The Secretary and inserting the following: (f) Report The Secretary. (b) Effective date; transfer from and termination of obsolete funds (1) Effective date The amendments made by subsection (a) shall take effect on the first day of the first fiscal year that begins on or after the date of enactment of this Act. (2) Remaining balances On the effective date described in paragraph (1), there shall be deposited in the United States Patent and Trademark Office Innovation Promotion Fund established under section 42(d)(2) of title 35, United States Code (as added by subsection (a)), any available unobligated balances remaining in the Patent and Trademark Office Appropriation Account, and in the Patent and Trademark Fee Reserve Fund established under section 42(c)(2) of title 35, United States Code, as in effect on the day before that effective date. (3) Termination of reserve fund Upon the payment of all obligated amounts in the Patent and Trademark Fee Reserve Fund under paragraph (2), the Patent and Trademark Fee Reserve Fund shall be terminated.