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Acting U.S. patent office chief tops list to be made permanent

By Diane Bartz

WASHINGTON (Reuters) - The current acting head of the U.S. Patent and Trademark Office, Teresa Stanek Rea, is the frontrunner to be named to the post permanently, according to patent experts and people briefed on the matter.

The patent office, part of the U.S. Department of Commerce, is a primary steward of U.S. intellectual property. It has about 13,000 federal employees.

"I do not know anybody else that's competing for it and anybody who is positioned for it (other) than Terri Rea," said one person familiar with the process, who asked not to be named to protect business relationships.

A nomination for Rea - or a dark-horse choice - could come more quickly now that President Barack Obama has rounded out his cabinet-level appointments with Chicago businesswoman and Hyatt Hotels heiress Penny Pritzker as Commerce Secretary and Michael Froman, currently a top Obama advisor, to be U.S. Trade Representative.

Obama also this week nominated Thomas Wheeler to be the next chairman of the Federal Communications Commission.

If nominated, Rea would replace David Kappos, a former IBM Corp executive who departed earlier this year after more than three years in the post and is now in private practice.

Kappos, with Rea among his deputies, was popular because of his efforts to upgrade technology for examiners, reduce the backlog of applications, in part by adding examiners, and improve the quality of patents that are issued.

The patent office currently has a backlog of 607,482 applications, according to data from March 2013. As recently as December 2011, the unexamined patent backlog was almost 722,000 patents.

The number of patent examiners on staff in March totaled 7,842 compared with 6,420 in December 2011, an increase of 22 percent. The current 31.1 months it takes, on average, to examine a patent application has eased during that time from 34.9 months.

Rea is a past president of the American Intellectual Property Law Association and of the National Inventors Hall of Fame. She was formerly a partner at Crowell and Moring LLP and is a licensed pharmacist, according to her biography on the patent office website.

One challenge that Rea would face has to do with the ongoing federal budget crunch and the requirement that agencies reduce spending.

The patent office, unlike most of the federal government, is designed to be funded by fees paid by patent owners and applicants.

The president's fiscal 2014 budget appropriates no money for the office, but requests that it be allowed to spend the $3 billion that it collects in fees. Excess fees are supposed to go into a reserve fund, according to the budget request.

Instead, 5 percent of fees, or about $148 million, are being returned to the general fund under the sequester, according to a report by the Office of Management and Budget dated March 1.

This has angered the patent community. The patent office and Capitol Hill have been fighting for years over whether the agency should be allowed to keep all the money that it collects for patent applications and other fees.

"The sequester people won't hear that the PTO is exempt. They're (the patent office) trying to ramp up training and technical improvements and being cut off at the knees," said a patent expert who also requested anonymity to protect business relationships.

Rea declined to comment for this story.

(Reporting by Diane Bartz; editing by Ros Krasny, G Crosse)

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