The patent office runs on fees alone — and a backlog five years in the making

The U.S. Patent and Trademark Office does not run on your taxes.▸ Every dollar it spends comes from the fees inventors and companies pay to file and prosecute applications, and by law the agency can only spend what it collects. That structure was supposed to insulate patent examination from the usual budget fights. Instead, between 2020 and early 2025, it presided over the worst backlog in the agency's modern history — and the same fee-funded machine is now the one working it down.

There is no general-fund check written to the USPTO.▸ Congress sets fee schedules and grants the agency spending authority against what it takes in; the FY2026 Congressional Budget Justification estimates $4,996 million in total collections — $4,326 million from patent fees, $670 million from trademark fees — against a requested $4,680 million in program spending. The difference in each program is banked in that program's own reserve fund, not returned or redirected. Under this request, "the USPTO's FY 2026 net appropriation is $0."

That fee-only design cuts both ways.▸ It means patent examination isn't hostage to appropriations riders or shutdowns — the agency ran through the October 2025 lapse in government funding on its own reserves. But it also means the agency's capacity to examine applications is capped by how much applicants pay in, and for years that capacity fell behind demand.

The backlog is the ledger of that gap.▸ Per the USPTO's FY2025 Agency Financial Report, the inventory of unexamined utility, plant, and reissue applications rose from 576,103 in 2020 to a peak of 837,928 in January 2025 — an increase of almost 262,000 applications in four years. First-action pendency, the time between filing and an examiner's first response, "ballooned by 39 percent to 20.5 months by January 2025 from 14.8 months at the end of 2020," the report states.

The turn came from staffing, not a change in fee law.▸ The new leadership that took over in FY2025 cut examiners' non-examination duties by 75%, reassigned nearly 66 former examiners back into the examining corps, and hired 800 new patent examiners over the course of the year — on top of a staff the agency describes as "over 9,000 patent examiners." That effort cut the backlog by 49,699 applications (5.9%) by the close of FY2025, "the agency's first linear, year-over-year decrease in the unexamined patent application inventory in six years," per the AFR. It kept falling into 2026: by April 6, per the USPTO's own April 10, 2026 press release, the backlog stood at 776,995 — the lowest level in two years, and the first time in nearly a decade that first office actions issued within a fiscal year outnumbered new applications filed within it.

The FY2026 budget bets more of the same lever will keep working: it funds hiring 1,500 new patent examiners, offset by an estimated 655 attritions, alongside a smaller trademark-side hiring push of 75 new examining attorneys against 48 projected attritions.

Backlog and pendency figures are reported by the USPTO on different dates (calendar-year snapshots for 2020 and January 2025, fiscal-year close for September 2025, and a specific date in April 2026); they are not perfectly contemporaneous with each other or with the FY2026 budget estimates, which are agency projections, not audited actuals.