Proposed Rule2024-06250
Setting and Adjusting Patent Fees During Fiscal Year 2025
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Published
April 3, 2024
Issuing agencies
Commerce DepartmentPatent and Trademark Office
Abstract
The United States Patent and Trademark Office (USPTO) proposes to set or adjust patent fees as authorized by the Leahy-Smith America Invents Act (AIA), as amended by the Study of Underrepresented Classes Chasing Engineering and Science Success Act of 2018 (SUCCESS Act). The proposed fee adjustments are needed to provide the USPTO with sufficient aggregate revenue to recover the aggregate costs of patent operations in future years (based on assumptions and estimates found in the agency's Fiscal Year 2025 Congressional Justification (FY 2025 Budget)), including implementing the USPTO 2022-2026 Strategic Plan (Strategic Plan).
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[Federal Register Volume 89, Number 65 (Wednesday, April 3, 2024)]
[Proposed Rules]
[Pages 23226-23291]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06250]
[[Page 23225]]
Vol. 89
Wednesday,
No. 65
April 3, 2024
Part IV
Department of Commerce
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Patent and Trademark Office
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37 CFR Parts 1, 41, and 42
Setting and Adjusting Patent Fees During Fiscal Year 2025; Proposed
Rule
Federal Register / Vol. 89 , No. 65 / Wednesday, April 3, 2024 /
Proposed Rules
[[Page 23226]]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Parts 1, 41, and 42
[Docket No. PTO-P-2022-0033]
RIN 0651-AD64
Setting and Adjusting Patent Fees During Fiscal Year 2025
AGENCY: United States Patent and Trademark Office, Department of
Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The United States Patent and Trademark Office (USPTO) proposes
to set or adjust patent fees as authorized by the Leahy-Smith America
Invents Act (AIA), as amended by the Study of Underrepresented Classes
Chasing Engineering and Science Success Act of 2018 (SUCCESS Act). The
proposed fee adjustments are needed to provide the USPTO with
sufficient aggregate revenue to recover the aggregate costs of patent
operations in future years (based on assumptions and estimates found in
the agency's Fiscal Year 2025 Congressional Justification (FY 2025
Budget)), including implementing the USPTO 2022-2026 Strategic Plan
(Strategic Plan).
DATES: The USPTO solicits comments from the public on this proposed
rule. Written comments must be received on or before June 3, 2024 to
ensure consideration.
ADDRESSES: Written comments on proposed patent fees must be submitted
through the Federal eRulemaking Portal at <a href="https://www.regulations.gov">https://www.regulations.gov</a>.
To submit comments via the portal, commenters should go to <a href="https://www.regulations.gov/docket/PTO-P-2022-0033">https://www.regulations.gov/docket/PTO-P-2022-0033</a> or enter docket number PTO-
P-2022-0033 on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> homepage and select the
``Search'' button. The site will provide search results listing all
documents associated with this docket. Commenters can find a reference
to this document and select the ``Comment'' button, complete the
required fields, and enter or attach their comments. Attachments to
electronic comments will be accepted in Adobe portable document format
(PDF) or Microsoft Word format. Because comments will be made available
for public inspection, information that the submitter does not desire
to make public, such as an address or phone number, should not be
included in the comments.
Visit the Federal eRulemaking Portal for additional instructions on
providing comments via the portal. If electronic submission of comments
is not possible, please contact the USPTO using the contact information
below in the FOR FURTHER INFORMATION CONTACT section of this document
for special instructions.
FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director, Office of
Planning and Budget, at 571-272-8966, or <a href="/cdn-cgi/l/email-protection#d290a0b7bcb6b3bcfc9abda7a0bbb5b3bc92a7a1a2a6bdfcb5bda4"><span class="__cf_email__" data-cfemail="d391a1b6bdb7b2bdfd9bbca6a1bab4b2bd93a6a0a3a7bcfdb4bca5">[email protected]</span></a>; or
C. Brett Lockard, Director, Forecasting and Analysis Division, at 571-
272-0928, or <a href="/cdn-cgi/l/email-protection#713219031802051e011914035f3d1e121a10031531040201051e5f161e07"><span class="__cf_email__" data-cfemail="c182a9b3a8b2b5aeb1a9a4b3ef8daea2aaa0b3a581b4b2b1b5aeefa6aeb7">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Introduction
The USPTO publishes this notice of proposed rulemaking (NPRM or
proposed rule) under section 10 of the AIA (section 10), Public Law
112-29, 125 Stat. 284, as amended by the SUCCESS Act, Public Law 115-
273, 132 Stat. 4158, which authorizes the Under Secretary of Commerce
for Intellectual Property and Director of the USPTO to set or adjust by
rule any patent fee established, authorized, or charged under title 35
of the United States Code (U.S.C.) for any services performed, or
materials furnished, by the agency. Section 10 prescribes that fees may
be set or adjusted only to recover the aggregate estimated costs to the
USPTO for processing, activities, services, and materials relating to
patents, including administrative costs with respect to such patent
fees. Section 10 authority includes flexibility to set individual fees
in a way that furthers key policy factors, while considering the cost
of the respective services. Section 10 also establishes certain
procedural requirements for setting or adjusting fee regulations, such
as public hearings and input from the Patent Public Advisory Committee
(PPAC) and congressional oversight. PPAC held a public hearing on the
USPTO's preliminary patent fee proposals on May 18, 2023, and released
a report (PPAC Report) on August 14, 2023, containing its comments,
advice, and recommendations on the preliminary fee proposals. The USPTO
considered and analyzed the PPAC Report before publishing the fee
proposals in this NPRM.
B. Purpose of This Action
Based on a biennial review of fees, costs, and revenues that began
in fiscal year (FY) 2021, the USPTO concluded that fee adjustments are
necessary to provide the agency with sufficient financial resources to
facilitate the effective administration of the U.S. patent system,
including implementing the USPTO 2022-2026 Strategic Plan, available on
the agency website at <a href="https://www.uspto.gov/StrategicPlan">https://www.uspto.gov/StrategicPlan</a>. The USPTO
reviewed and analyzed the overall balance between the agency's
estimated revenue and costs over the next five years (based on current
projections) under this proposed rule. The proposed fees will help
stabilize the USPTO's finances by offsetting the forecasted increase in
aggregate costs and maintaining the patent operating reserve in the
desired operating range. The patent operating reserve mitigates
financing risk and enables the agency to deliver reliable and
predictable service levels, while positioning it to undertake
initiatives that encourage participation in the innovation ecosystem.
The individual fee proposals align with the USPTO's strategic goals
and its fee structure philosophy, including the agency's four key fee
setting policy factors: (1) promote innovation strategies; (2) align
fees with the full costs of products and services; (3) facilitate
effective administration of the U.S. patent system; and (4) offer
application processing options as discussed in detail in Part IV:
Rulemaking Goals and Strategies. The proposed fee adjustments will
enable the USPTO to accomplish its mission to drive U.S. innovation,
inclusive capitalism, and global competitiveness. The USPTO's goal is
to drive innovation, entrepreneurship, and creativity for the benefit
of all Americans and people around the world.
C. Summary of Provisions Impacted by This Action
The USPTO proposes to set or adjust 455 patent fees for
undiscounted, small, and micro entities (any reference herein to
``undiscounted entity'' includes all entities other than those with
established entitlement to either a small or micro entity fee discount,
see Part II: Legal Framework for more information), including the
introduction of 73 new fees.
Overall, the routine fees to obtain a patent (i.e., filing, search,
examination, and issue fees) will increase under this NPRM relative to
the current fee schedule to ensure financial sustainability and
accommodate increases needed to improve the predictability and
reliability of patent intellectual property (IP) protection (discussed
in detail below). Applicants who meet the eligibility criteria for
small or micro entity discounts will continue to pay a reduced fee for
the fees eligible for discount under AIA section 10(b). Additional
information describing the proposed fee adjustments is included in Part
V: Individual Fee Rationale in this rulemaking and in the
[[Page 23227]]
``Table of Patent Fees--Current, Proposed, and Unit Cost'' (Table of
Patent Fees) available on the fee setting section of the USPTO website
at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>.
D. Summary of Costs and Benefits of This Action
This proposed rule is economically significant and requires a
Regulatory Impact Analysis (RIA) under Executive Order 12866 Regulatory
Planning and Review, (Sept. 30, 1993). The USPTO prepared an RIA to
analyze the costs and benefits of the NPRM over a five-year period, FY
2025-2029. The RIA includes an analysis of how well the four
alternatives align with the rulemaking strategies and goals, which are
comprised of strategic priorities (goals, objectives, and key
performance strategies) from the Strategic Plan; and fee setting policy
factors. From this conceptual framework, the USPTO assessed the
absolute and relative qualitative costs and benefits of each
alternative. Consistent with OMB Circular A-4, ``Regulatory Analysis,''
this proposed rule involves a transfer payment from one group to
another. The USPTO recognizes that it is very difficult to precisely
monetize and quantify social costs and benefits resulting from
deadweight loss of a transfer rule such as this proposed rule. The
costs and benefits identified and analyzed in the RIA are strictly
qualitative. Qualitative costs and benefits have effects that are
difficult to express in either dollar or numerical values. Monetized
costs and benefits, on the other hand, have effects that can be
expressed in dollar values. The USPTO did not identify any monetized
costs and benefits of this proposed rule, but found this proposed rule
has significant qualitative benefits and only minimal costs.
The qualitative costs and benefits that the RIA assesses are: (1)
fee schedule design--a measure of how well the fee schedule aligns to
the key fee setting policy factors; and (2) securing aggregate revenue
to recover aggregate cost--a measure of whether the alternative
provides adequate revenue to support the core mission and strategic
priorities described in the NPRM, Strategic Plan, and FY 2025 Budget.
Based on the costs and benefits identified and analyzed in the RIA, the
fee schedule proposed in this NPRM offers the highest net benefits. As
described throughout this document, the proposed fee schedule maintains
the existing balance of below cost entry fees (e.g., filing, search,
and examination) and above cost maintenance fees as one approach to
foster innovation. Further, as detailed in Part V: Individual Fee
Rationale, the proposed fee changes are targeted in support of one or
more fee setting policy factors. Lastly, this proposed rule secures the
aggregate revenue needed to maintain patent operations and achieve the
strategic priorities encompassed in the rulemaking goals and strategies
(see Part IV: Rulemaking Goals and Strategies). The proposed fee
schedule produces sufficient aggregate revenue to fund the strategic
objectives to issue and maintain robust and reliable patents; improve
patent application pendency; optimize the patent application process to
enable efficiencies for applicants and other stakeholders; and enhance
internal processes to prevent fraudulent and abusive behaviors that do
not embody the USPTO's mission. Table 1 summarizes the RIA results.
Additional details describing the costs and benefits can be found in
the RIA, available on the fee setting section of the USPTO website at
<a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>.
Table 1--Proposed Patent Fee Schedule Costs and Benefits, Cumulative FY
2025-2029
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Qualitative costs and benefits
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Costs: ............................
Fee Schedule Design..................... Minimal.
Benefits: ............................
Secure Aggregate Revenue to Recover Significant.
Aggregate Costs.
Fee Schedule Design..................... Significant.
Net Benefit............................... Significant benefit.
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II. Legal Framework
A. Leahy-Smith America Invents Act--Section 10
The AIA was enacted into law on September 16, 2011. Public Law 112-
29, 125 Stat. 284. Section 10(a) of the AIA authorizes the Director of
the USPTO to set or adjust by rule any patent fee established,
authorized, or charged under 35 U.S.C. for any services performed or
materials furnished by the agency. Fees under 35 U.S.C. may be set or
adjusted only to recover the aggregate estimated costs to the USPTO for
processing, activities, services, and materials related to patents,
including administrative costs to the agency with respect to such
patent operations. See 125 Stat. at 316. Provided that fees in the
aggregate achieve overall aggregate cost recovery, the Director may set
individual fees under section 10 at, below, or above their respective
cost. Section 10(e) requires the Director to publish the final fee rule
in the Federal Register and the USPTO's Official Gazette at least 45
days before the final fees become effective.
Section 10 authorized the USPTO to set or adjust patent fees within
the regulatory process. The USPTO has used the AIA's fee setting
authority to achieve its key fee setting policy factors and to generate
the aggregate revenue needed to recover the aggregate costs of
operations and strategic patent priorities in final rules published in
FY 2013 (Setting and Adjusting Patent Fees, 78 FR 4212 (Jan. 18,
2013)), FY 2018 (Setting and Adjusting Patent Fees During Fiscal Year
2017, 82 FR 52780 (Nov. 14, 2017)), and FY 2020 (Setting and Adjusting
Patent Fees During Fiscal Year 2020, 85 FR 46932 (Aug. 3, 2020) (FY
2020 Final Rule)).
B. The Study of Underrepresented Classes Chasing Engineering and
Science Success Act of 2018
The SUCCESS Act was enacted into law on October 31, 2018. See
Public Law 115-273, 132 Stat. 4158. Section 4 of the SUCCESS Act
amended section 10(i)(2) of the AIA by striking ``7-year'' and
inserting ``15-year'' in reference to the expiration of fee setting
authority. Therefore, updated section 10(i) terminates the Director's
authority to set or adjust any fee under section 10(a) upon expiration
of the 15-year period that began on September 16, 2011, and ends on
September 16, 2026.
C. Unleashing American Innovators Act of 2022
On December 29, 2022, the President signed into law the
Consolidated Appropriations Act, 2023, which included the Unleashing
American Innovators Act (UAIA). The UAIA increased fee discounts for
small entities from 50% to 60% and fee discounts for micro entities
from 75% to 80% for fees for filing, searching, examining, issuing,
appealing, and maintaining patent applications and patents. The UAIA
also increased fee discounts for small entities from 75% to 80% for
filing a basic, nonprovisional utility application electronically. See
Consolidated Appropriations Act, 2023, Public Law 117-328; Reducing
Patent Fees for Small Entities and Micro Entities Under the Unleashing
American Innovators Act of 2022, 88 FR 17147 (Mar. 22, 2023).
D. Small Entity Fee Reduction
Section 10(b) of the AIA, as amended by the UAIA, requires the
USPTO to reduce by 60% the fees for small entities that are set or
adjusted under section 10(a) for filing, searching, examining, issuing,
appealing, and maintaining patent applications and patents.
[[Page 23228]]
E. Micro Entity Fee Reduction
Section 10(g) of the AIA amended 35 U.S.C. chapter 11, by adding
section 123 concerning micro entities. The AIA, as amended by the UAIA,
provides that the USPTO must reduce by 80% the fees for micro entities
for filing, searching, examining, issuing, appealing, and maintaining
patent applications and patents.
F. Patent Public Advisory Committee Role
The Secretary of Commerce established PPAC under the American
Inventors Protection Act of 1999. See 35 U.S.C. 5. PPAC advises the
Director of the USPTO on the management, policies, goals, performance,
budget, and user fees of patent operations.
When adopting fees under section 10, the Director must provide PPAC
the proposed fees at least 45 days prior to publishing in the Federal
Register. PPAC then has 30 days to deliberate, consider, and comment on
the proposal, as well as hold public hearing(s) on the proposed fees.
Then, before the USPTO issues any final fees, PPAC must make a written
report available to the public of the comments, advice, and
recommendations of the committee regarding the proposed fees. The USPTO
must consider and analyze any comments, advice, or recommendations
received from PPAC before finally setting or adjusting fees.
Consistent with this framework, on April 20, 2023, the Director
notified PPAC of the USPTO's intent to set or adjust patent fees and
submitted a preliminary patent fee proposal with supporting materials.
The preliminary patent fee proposal and associated materials are
available on the fee setting section of the USPTO website at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>. PPAC held a public hearing at the
USPTO's headquarters in Alexandria, Virginia, on May 18, 2023, where
members of the public were given an opportunity to provide oral
testimony. Transcripts of the hearing are available for review on the
USPTO website at <a href="https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript-20230518.pdf">https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript-20230518.pdf</a>. Members of the public were also
given an opportunity to submit written comments for PPAC to consider,
and these comments are available on <a href="http://Regulations.gov">Regulations.gov</a> at <a href="https://www.regulations.gov/document/PTO-P-2023-0017-0001">https://www.regulations.gov/document/PTO-P-2023-0017-0001</a>. On August 14, 2023,
PPAC issued a written report setting forth in detail their comments,
advice, and recommendations regarding the preliminary proposed fees.
The report is available on the USPTO website at <a href="https://www.uspto.gov/sites/default/files/documents/PPAC-Report-on-2023-Fee-Proposal.docx">https://www.uspto.gov/sites/default/files/documents/PPAC-Report-on-2023-Fee-Proposal.docx</a>.
The USPTO considered and analyzed all comments, advice, and
recommendations received from PPAC before publishing this NPRM. Further
discussion of the PPAC Report can be found in Part IV: Rulemaking Goals
and Strategies and Part V: Individual Fee Rationale.
III. Estimating Aggregate Costs and Revenues
Section 10 prescribes that patent fees may be set or adjusted only
to recover the aggregate estimated costs to the USPTO for processing,
activities, services, and materials relating to patents, including
administrative costs with respect to such patent fees. The following is
a description of how the USPTO calculates aggregate costs and revenue.
Step 1: Estimating Prospective Aggregate Costs
Estimating prospective aggregate costs is accomplished primarily
through the annual USPTO budget formulation process. The annual budget
is a five-year plan for carrying out base programs and new initiatives
to deliver on the USPTO's statutory mission and implement strategic
goals and objectives. First, the USPTO projects the level of demand for
patent products and services. Demand for products and services depends
on many factors that are subject to change, including domestic and
global economic activity. The USPTO also considers overseas patenting
activities, policies and legislation, and known process efficiencies.
Because filing, search, and examination costs are the largest share of
the total patent operating costs, a primary production workload driver
is the number of patent application filings (i.e., incoming work to the
USPTO). The USPTO looks at indicators such as the expected growth in
Real Gross Domestic Product (RGDP), a leading indicator of incoming
patent applications, to estimate prospective workload. RGDP is reported
by the Bureau of Economic Analysis (<a href="http://www.bea.gov">www.bea.gov</a>) and is forecasted each
February by the OMB (<a href="http://www.omb.gov">www.omb.gov</a>) in the Economic and Budget Analyses
section of the Analytical Perspectives and twice annually by the
Congressional Budget Office (CBO) (<a href="http://www.cbo.gov">www.cbo.gov</a>) in the Budget and
Economic Outlook.
The expected production workload must then be compared to the
current examination production capacity to determine any required
staffing and operating cost (e.g., salaries, workload processing
contracts, and publication) adjustments. The USPTO uses a patent
pendency model to estimate patent production output based on actual
historical data and input assumptions, such as incoming patent
applications and overtime hours. An overview of the model, including a
description of inputs, outputs, key data relationships, and a
simulation tool is available at <a href="https://www.uspto.gov/learning-and-resources/statistics/patent-pendency-model">https://www.uspto.gov/learning-and-resources/statistics/patent-pendency-model</a>.
Next, the USPTO calculates budgetary spending requirements based on
the prospective aggregate costs of patent operations. First, the USPTO
estimates the prospective costs of status quo operations (base
requirements). Then, the base requirements are adjusted for anticipated
pay increases and inflationary increases for the budget year and four
outyears. The USPTO then estimates the prospective costs for expected
changes in production workload and new initiatives over the same
period. The USPTO reduces cost estimates for completed initiatives and
known cost savings expected over the same five-year horizon. A detailed
description of the budgetary requirements, aggregate costs, and related
assumptions for the Patents program is available in the FY 2025 Budget.
The USPTO estimates that the Patents program will cost $3.973
billion in FY 2025, including $2.835 billion for patent examining; $90
million for patent trial and appeals; $159 million for patent
information resources; $24 million for activities related to IP
protection, policy, and enforcement; and $866 million for general
support costs necessary for patent operations (e.g., the patent share
of rent, utilities, legal, financial, human resources, other
administrative services, and Office-wide information technology (IT)
infrastructure and IT support costs). See Appendix II of the FY 2025
Budget. In addition, the USPTO will transfer $2 million to the
Department of Commerce Inspector General for audit support.
Table 2 below provides key underlying production workload
projections and assumptions from the FY 2025 Budget used to calculate
aggregate costs. Table 3 (see Step 2) presents the total budgetary
requirements (prospective aggregate costs) for FY 2025 through FY 2029
and the estimated collections and operating reserve balances that would
result from the proposed adjustments contained in this NPRM. These
projections are based on point-in-time estimates and assumptions that
are subject to change. There is considerable uncertainty in
[[Page 23229]]
out-year budgetary requirements. There are risks that could materialize
over the next several years (e.g., adjustments to examination capacity,
recompetition of contracts, changes in workload, inflationary
increases, etc.) that could increase the USPTO's budgetary requirements
in the short- to medium-term. These estimates are refreshed annually in
the production of the USPTO's budget.
Table 2--Patent Production Workload Projections, FY 2025-2029
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Utility, plant, and reissue (UPR) FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
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Applications *................................. 609,400 615,400 623,600 629,600 642,200
Application growth rate........................ 2.1% 1.0% 1.3% 1.0% 2.0%
Production units **............................ 557,000 577,300 602,300 621,100 639,000
Unexamined patent application backlog.......... 817,900 820,200 811,600 789,400 780,000
Examination capacity ***....................... 8,833 9,276 9,589 9,867 10,135
Performance measures (UPR):
Average first action pendency (Months)..... 20.7 20.7 21.0 20.6 21.3
Average total pendency (months)............ 26.1 27.2 26.6 26.4 25.7
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* In this table, the patent application filing data includes requests for continued examination.
** Each serial new (i.e., non-request for continued examination) application carries 1 production unit or 2.0
counts, a fraction of which is awarded for each major Office action type. In most but not all cases, requests
for continued examination carry a fraction of a production unit (e.g., 1.75 counts) and the credit for a first
action is reduced by a corresponding amount.
*** In this table, Examination Capacity is the UPR examiners onboard at end-of-year, as described in the FY 2025
Budget.
Step 2: Estimating Prospective Aggregate Revenue
As described above in Step 1, the USPTO's prospective aggregate
costs (as presented in the FY 2025 Budget) include budgetary
requirements related to planned production, anticipated new
initiatives, and a contribution to the patent operating reserve
required for the USPTO to maintain patent operations and realize its
strategic goals and objectives for the next five years. The prospective
aggregate costs become the target aggregate revenue level that the new
fee schedule must generate in a given year over the five-year planning
horizon. To estimate aggregate revenue, the USPTO references the
production models used to estimate aggregate costs and analyzes
relevant factors and indicators to calculate or determine prospective
fee workloads (e.g., number of applications and requests for services
and products).
Economic activity is an important consideration when developing
workload and revenue forecasts for patent products and services because
economic conditions affect patenting activity. Major economic
indicators include the overall condition of the U.S. and global
economies, spending on research and development activities, and
investments that lead to the commercialization of new products and
services. These indicators correlate with patent application filings,
which are a key driver of patent fees. Economic indicators also provide
insight into market conditions and the management of IP portfolios,
which influence application processing requests and post-issuance
decisions to maintain patent protection. When developing fee workload
forecasts, the USPTO considers other influential factors including
overseas activity, policies and legislation, court decisions, process
efficiencies, and anticipated applicant behavior.
Anticipated applicant behavior in response to fee changes is
measured using an economic principle known as elasticity, which for the
purpose of this proposal measures how sensitive applicants and
patentees are to changes in fee amounts. The higher the elasticity
measure (in absolute value), the greater the applicant response to the
relevant fee change. If elasticity is low enough (i.e., demand is
inelastic or the elasticity measure is less than one in absolute
value), a fee increase will lead to only a relatively small decrease in
patent activities, and overall revenues will still increase.
Conversely, if elasticity is high enough (i.e., demand is elastic or
the elasticity measure is greater than one in absolute value), a fee
increase will lead to a relatively large decrease in patenting
activities such that overall revenues will decrease. When developing
fee forecasts, the USPTO accounts for how applicant behavior will
change at different fee amounts projected for the various patent
services. The USPTO previously analyzed elasticity for nine broad
patent fee categories: filing/search/examination fees, excess
independent claims fees, excess total claims fees, application size
(excess page) fees, issue fees, request for continued examination (RCE)
fees, appeal fees, AIA trial fees, and maintenance fees, including
distinctions by entity size where applicable. Additional information
about how the USPTO estimates elasticity is provided in ``Setting and
Adjusting Patent Fees during Fiscal Year 2020--Description of
Elasticity Estimates,'' available on the USPTO website at <a href="https://www.uspto.gov/sites/default/files/documents/Elasticity_Appendix.docx">https://www.uspto.gov/sites/default/files/documents/Elasticity_Appendix.docx</a>.
Patent fees are collected for patent-related services and products
at different points in time within the patent application examination
process and over the life of the pending patent application and granted
patent. Maintenance fee payments account for about half of all patent
fee collections and subsidize the cost of filing, search, and
examination activities. Changes in application filing levels
immediately impact current year fee collections, because fewer patent
application filings mean the USPTO collects fewer fees. The resulting
reduction in production activities also creates an out-year revenue
impact because less production output in one year results in fewer
issue and maintenance fee payments in future years.
The USPTO's five-year estimated aggregate patent fee revenue (see
table 3) is based on the number of patent applications it expects to
receive for a given fiscal year, work it expects to process in a given
fiscal year (an indicator of patent issue fee workloads), expected
examination and process requests for the fiscal year, and the expected
number of post-issuance decisions to maintain patent protection over
that same fiscal year. Within the iterative process for estimating
aggregate revenue, the USPTO adjusts individual fee rates up or down
based on cost and policy decisions, estimates the effective dates of
new fee rates, and then multiplies the resulting fee rates by workload
volumes (including elasticity adjustments) to calculate a revenue
estimate for each fee. For the aggregate
[[Page 23230]]
revenue estimates shown below, the USPTO assumes that all proposed fee
rates will become effective on January 18, 2025. Using these figures,
the USPTO sums the individual fee revenue estimates, and the result is
a total aggregate revenue estimate for a given year (see table 3). The
aggregate revenue estimate also includes collecting $50 million
annually in other income associated with recoveries and reimbursable
agreements (offsets to spending).
Table 3--Patent Financial Outlook, FY 2025-2029
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Dollars in millions
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FY 2025 FY 2026 FY 2027 FY 2028 FY 2029
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Projected fee collections...................... 3,972 4,238 4,338 4,305 4,314
Other income................................... 50 50 50 50 50
Total projected fee collections and other 4,022 4,288 4,388 4,355 4,364
income........................................
Budgetary requirements......................... 3,975 4,102 4,268 4,431 4,600
Funding to (+) and from (-) operating reserve.. 47 186 120 (76) (236)
End-of-year operating reserve balance.......... 840 1,028 1,148 1,074 837
Over/(under) minimum level..................... 522 700 807 720 469
Over/(under) optimal level..................... (35) 126 209 99 (175)
----------------------------------------------------------------------------------------------------------------
IV. Rulemaking Goals and Strategies
A. Fee Setting Strategy
The strategy of this proposed rule is to establish a fee schedule
that generates sufficient multi-year revenue to recover the aggregate
costs of maintaining USPTO patent operations. The overriding principles
behind this strategy are to operate within a sustainable funding model
that supports the USPTO's strategic goals and objectives, such as
optimizing patent application pendency through the promotion of
efficient operations and filing behaviors, issuing robust and reliable
patents, and encouraging access to the patent system for all
stakeholders.
The USPTO assessed this proposed rule for alignment with four key
fee setting policy factors that promote a particular aspect of the U.S.
patent system: (1) Promoting innovation strategies seeks to ensure
barriers to entry into the U.S. patent system remain low, and
innovation is incentivized by granting inventors certain short-term
exclusive rights to stimulate additional inventive activity; (2)
Aligning fees with the full costs of products and services recognizes
that some applicants may use particular services in a more costly
manner than other applicants (e.g., patent applications cost more to
process when more claims are filed); (3) Facilitating the effective
administration of the U.S. patent system seeks to encourage patent
prosecution strategies that promote efficient patent prosecution,
resulting in compact prosecution and reduction in the time it takes to
obtain a patent; and (4) Recognizing that patent prosecution is not a
one-size-fits-all process and, where feasible, offering application
processing options. Part V: Individual Fee Rationale describes the
reasoning for setting and adjusting individual fees, including the
design benefits of the proposed fee schedule. The RIA, available on the
fee setting section of the USPTO website at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>, also discusses fee schedule design benefits.
B. Fee Setting Considerations
The balance of this sub-section presents the specific fee setting
considerations the USPTO reviewed in developing the proposed patent fee
schedule: (1) historical cost of providing individual services; (2) the
balance between projected costs and revenue to meet the USPTO's
operational needs and strategic goals; (3) ensuring sustainable
funding; and (4) PPAC's comments, advice, and recommendations on the
USPTO's initial fee setting proposal. Collectively, these
considerations inform USPTO's chosen rulemaking strategy.
1. Historical Cost of Providing Individual Services
The USPTO sets individual fee rates to further key policy
considerations while considering the cost of a particular service. For
instance, the USPTO has a longstanding practice of setting basic
filing, search, and examination (``front-end'') fees below the actual
cost of processing and examining applications to encourage innovators
to take advantage of patent rights and protections.
The USPTO considers unit cost data provided by its Activity Based
Information (ABI) program to decide how to best align fees with the
full cost of products and services. Using historical cost data and
forecasted application demands, the USPTO can align fees to the costs
of specific patent products and services. Additional information on the
USPTO's costing methodology in addition to the last three years of
historical cost data is provided in the document titled ``Setting and
Adjusting Patent Fees during Fiscal Year 2025--Activity Based
Information and Patent Fee Unit Expense Methodology,'' available on the
fee setting section of the USPTO website at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>. Part V: Individual Fee Rationale describes the
reasoning and anticipated benefits for setting some individual fees at
cost, below cost, or above cost such that the USPTO recovers the
aggregate costs of providing services through aggregate fee
collections.
2. Balancing Projected Costs and Revenue
In developing this proposed patent fee schedule, the USPTO
considered its current estimates of future year workload demands, fee
collections, and costs to maintain core USPTO operations and meet its
strategic goals, as found in the FY 2025 Budget and the Strategic Plan.
The USPTO's strategic goals include: (1) driving inclusive U.S.
innovation and global competitiveness, (2) promoting the efficient
delivery of reliable IP rights, (3) promoting the protection of IP
against new and persistent threats, (4) bringing innovation to impact,
and (5) generating impactful employee and customer experiences by
maximizing agency operations. The following subsections provide details
regarding updated revenue and cost estimates, cost-saving efforts taken
by the USPTO, and planned strategic improvements.
a. Updated Revenue and Cost Estimates
Projected revenue from the current fee schedule is insufficient to
meet future budgetary requirements (costs) due largely to unforeseen
economic and
[[Page 23231]]
policy factors since the USPTO last exercised its rulemaking authority
to set patent fees in the FY 2020 Final Rule. As further discussed
below, increased fee discounts for small and micro entities under the
UAIA have reduced revenue estimates. Higher-than-expected inflation in
the broader U.S. economy and government-wide pay raises have increased
the USPTO's forecasted operating costs. Also, the USPTO has undertaken
efforts to increase special pay rates and offer other incentives to
recruit and retain examiners and other employees in patent specific job
series in order to remain competitive in the job market for science,
technology, engineering, and mathematics (STEM) workers. Absent the
proposed increase in fees, the USPTO will be unable to collect
sufficient fees at current fee rates to recover aggregate operating
costs necessary to finance ongoing operations.
On December 29, 2022, the President signed into law the
Consolidated Appropriations Act, 2023, which included the UAIA. The law
reduced barriers to entry into the patent system by increasing small
entity discounts from 50% to 60% and micro entity discounts from 75% to
80%. The USPTO estimated as part of its Fiscal Year 2024 Congressional
Justification (FY 2024 Budget) that these discounts would reduce
projected fee collections by $74 million in FY 2023 (partial year
impact) and at least $100 million per year beginning in FY 2024 (full
year impact). In addition to increased entity discounts, the UAIA
increases costs through its provision that requires that the USPTO
establish a new Southeast Regional Office and four new community
outreach offices--including one in northern New England. The USPTO must
also conduct a study to determine whether additional offices are
required to achieve AIA mandates and to increase participation of
underrepresented inventors in the patent system.
Higher-than-expected inflation in 2021 and 2022 in the broader U.S.
economy increased the USPTO's operating costs above previous estimates
for labor and nonlabor activities such as benefits, service contracts,
and equipment. Salaries and benefits comprise 70% of all patent-related
costs, and employee pay raises enacted across all U.S. government
agencies--including the USPTO--in 2023 and 2024 were much larger than
previously budgeted. Federal General Schedule (GS) pay was raised by
4.6% in 2023 and 5.2% in 2024; before 2023 the last time GS pay was
raised by at least 4% was in 2004. The FY 2025 Budget includes an
estimated 2.0% civilian pay raise planned in calendar year (CY) 2025
and assumed 3.0% civilian pay raises in CY 2026-29, as well as
inflationary increases for other labor and nonlabor activities.
Similarly, the USPTO seeks to adjust the patent special rate table
(pay) for the first time since 2007. In 2007 the special rate table was
set 11.4% to 31.4% above the GS pay table for the Washington, DC area
because patent-related job fields require a highly educated and
technical STEM workforce. This specialization has historically posed
recruitment challenges for the agency, and the increased pay rates kept
the USPTO competitive with private sector compensation opportunities.
The differential above the general schedule has diminished over the
years--to 0.0% to 20.5% in 2023 because of cost-of-living-adjustments
to the GS pay scale that were not similarly applied to the special rate
table--reducing the USPTO's competitive edge amongst both private and
other Federal agencies. The objective of the special rate table change
is to provide competitive compensation to patent employees, thereby
reducing attrition and enhancing recruitment of qualified talent.
The USPTO's recruitment and retention efforts go beyond adjustments
to examiner pay. In support of its strategic goal of generating
impactful employee and customer experiences by maximizing agency
operations, the USPTO strives to be a model employer through its
diversity, equity, inclusion, and accessibility (DEIA) practices. The
agency will build upon its existing diversity and foster greater
inclusion to empower the USPTO workforce to serve the IP community
successfully. The USPTO will research and implement leading-edge
practices related to hiring, development, advancement, accessibility,
and retention, based on behavioral science research and data, to better
integrate DEIA practices throughout the agency.
b. Cost-Saving Measures
The USPTO recognizes that fees cannot simply increase for every
improvement deemed desirable. The USPTO has a responsibility to
stakeholders to pursue strategic opportunities for improvement in an
efficient, cost-conscious manner. Likewise, the USPTO recognizes its
obligation to gain operational efficiency and reduce spending when
appropriate.
The USPTO's FY 2025 Budget submission includes cost reducing
measures such as releasing leased space in Northern Virginia and a
moderate reduction in overall IT spending. In FY 2025, the USPTO
estimates $4,569 million in total spending for patent and trademark
operations. This is a $122 million net increase from the agency's FY
2024 estimated spending level of $4,447 million. The net increase
includes a $224 million upward adjustment for prescribed inflation and
other adjustments, and a $102 million downward adjustment in program
spending and other realized efficiencies. This estimate builds on the
$40 million in annual real estate savings assumed in the FY 2024 Budget
submission to include additional annual cost savings of $12 million
through releasing more leased space in Northern Virginia. The combined
reduction in real estate space amounts to almost 1 million square feet
and an estimated annual cost savings of approximately $52 million.
Also, the USPTO is actively pursuing IT cost containment. The FY 2025
budget includes a relatively flat IT spending profile despite upward
pressure from inflation, supply chain disruptions, and government-wide
pay raises; ongoing IT improvements that offer business value to fee-
paying customers; and data storage costs increasing proportionally with
the USPTO's forecasted growth in patent and trademark applications. The
USPTO will achieve this cost containment goal via modern equipment in a
new data center that will cost less to maintain and by retiring legacy
IT systems. Both of these cost containment measures will further
improve the USPTO's cybersecurity posture and increase system
resiliency.
c. Efficient Delivery of Reliable IP Rights: Quality, Backlog, and
Pendency
The USPTO continuously works to improve patent quality,
particularly the predictability, reliability, and robustness of issued
patents. See the USPTO's Quality Metrics web page, <a href="https://www.uspto.gov/patents/quality-metrics">https://www.uspto.gov/patents/quality-metrics</a>, for more information on patent
quality including (1) statutory compliance measures, (2) process
measures, and (3) perception measures. The USPTO's strategic goal to
``promote the efficient delivery of reliable IP rights'' recognizes the
importance of innovation as the foundation of American economic growth
and global competitiveness as well as the role the USPTO plays in
encouraging these principles. The USPTO is committed to improving
pendency to deliver timely, efficient services that help innovators
bring their ideas and products to impact more quickly and efficiently.
The USPTO diligently works to balance timely examination with
improvements in patent quality; particularly, the
[[Page 23232]]
robustness and reliability of issued patents while remaining mindful
that patent applications are becoming increasingly more complex and
that technologies are converging. To address these challenges, the
USPTO must continue to develop and equip examiners with additional
guidance, training, tools, advanced technology, and procedural
resources.
The USPTO is pursuing initiatives to enhance patent quality and the
clarity and completeness of the official record during prosecution of
an application, including encouraging applicants to begin filing patent
applications in DOCX format, automating pre-examination procedures,
expanding examiner training, and working on additional guidance for
examiners and the PTAB. Current guidance initiatives include refresher
guidance on obviousness under 35 U.S.C. 103 and enablement under 35
U.S.C. 112, and new guidance on how examiners should analyze
inventorship issues for artificial intelligence (AI)-assisted
inventions. See Updated Guidance for Making a Proper Determination of
Obviousness, 89 FR 14449 (February 27, 2024); Guidelines for Assessing
Enablement in Utility Applications and Patents in View of the Supreme
Court Decision in Amgen Inc. et al. v. Sanofi et al., 89 FR 1563
(December 21, 2023); Inventorship Guidance for AI-Assisted Inventions,
89 FR 10043 (February 13, 2024). The USPTO is also increasing patent
examination quality and efficiency via initiatives such as the Global
Dossier Initiative (see <a href="https://www.uspto.gov/patents/basics/international-protection/global-dossier-initiative">https://www.uspto.gov/patents/basics/international-protection/global-dossier-initiative</a>), and by providing
examiners with advanced technologies and tools for identifying prior
art, such as the artificial intelligence (AI)-based ``More Like This''
and ``Similarity Search'' features in the Patents End-to-End (PE2E)
search suite (see 1494 Off. Gaz. Pat. Office 251 (January 11, 2022) and
1504 Off. Gaz. Pat. Office 359 (November 15, 2022)). More information
on the USPTO's AI initiatives, including the Artificial Intelligence
(AI) and Emerging Technologies Partnership, is available at <a href="https://www.uspto.gov/initiatives/artificial-intelligence">https://www.uspto.gov/initiatives/artificial-intelligence</a>.
The USPTO recognizes that optimal pendency helps inventors and
investors bring innovation to impact. The growing demand for patent
services requires that the USPTO embrace new ways of delivering these
critical IP services. Therefore, the USPTO is also working to identify
policies, process changes, and technologies to improve patent pendency.
Some of these efforts will focus on operational improvements to the
patent examination process, including aligning the patent workforce
with the incoming workload in the most efficient manner. Other efforts
will target improvements to how applicants and other customers engage
with the USPTO and navigate the prosecution process. For example, the
USPTO has enhanced its website to increase access to our resources and
enhance customer service for inventors and practitioners, including
modernizing and updating the Patent Basics and Patents Petitions pages,
adding a Virtual Assistant on select pages, and providing an updated
and modern general website search tool. The USPTO has also upgraded its
computer systems, including transitioning from legacy systems to Patent
Center for the electronic filing and management of patent applications
in November 2023. Patent Center, a web-based platform that allows users
to file and manage patent applications and requests, provides improved
system performance and a more intuitive user interface for an enhanced
user experience. The USPTO is committed to continuously improving the
customer experience on our websites to enhance and modernize
accessibility, design, and overall satisfaction in our digital space.
For information on additional enhancements to our online services,
visit our web improvements page at <a href="https://www.uspto.gov/about-us/website-improvements">https://www.uspto.gov/about-us/website-improvements</a>. Effecting the changes in the examination process
needed to ensure the issuance of reliable patents, while also issuing
those patents in a timely manner, means recognizing a potential
increase in the core operating costs for future years.
Another major component of the overall patent process that has seen
an increase in operating costs is the work carried out by the Patent
Trial and Appeal Board (PTAB) and the Central Reexamination Unit (CRU).
These units play a key role in providing an efficient system for
amending or voiding any patent claims that overreach and stunt
innovation, inclusive capitalism, and global competitiveness. To ensure
that post-issuance challenges to patent rights through the PTAB and the
CRU help protect innovation and investments to commercialize
innovation, the USPTO will invest in new tools and resources that
increase communication, knowledge sharing, and collective problem
solving. These strategic investments will enable the USPTO to identify
and continue to implement guidelines and best practices to serve the
patent system.
3. Sustainable Funding
All aspects of estimating the five-year forecast for aggregate
cost, aggregate revenue, and the patent operating reserve are
inherently uncertain because they are based on numerous, multifaceted
planning assumptions predicated on external indicators of economic IP
activity to forecast demand, as well as internal workload drivers
derived from production models. Maintaining a viable operating reserve
is a key consideration as the USPTO sets patent fees. To mitigate the
risk of uncertain demand, the USPTO maintains a patent operating
reserve. The U.S. Government Accountability Office (GAO) considers
operating reserves a best practice for user fee-funded government
agencies like the USPTO. The patent operating reserve enables the USPTO
to align fees and costs over a longer horizon and to improve its
preparation for, and adjustment to, fluctuations in actual fee
collections and spending.
The USPTO manages the operating reserve within a range of
acceptable balances and assesses its options when projected balances
fall either below or above that range. Minimum planning targets are
intended to address immediate, unplanned changes in the economic or
operating environments as the reserve builds to the optimal level. The
minimum and optimal planning targets are reviewed every three years to
ensure the reserve operating range (between minimum and optimal
targets) mitigates the severity of an array of financial risks. Based
on the current risk environment, including various risk factors such as
economic and funding uncertainty and the high percentage of fixed costs
in the Patents program, the USPTO established a minimum planning level
of 8% of total spending--about one month's operating expenses
(estimated at $318 million and $368 million between FY 2025 through FY
2029)--and an optimal long-range target of 22% of total spending--about
three months' operating expenses (estimated at $875 million and $1,012
million between FY 2025 through FY 2029).
Based on current cost and revenue assumptions in the FY 2025
Budget, the USPTO forecast that in FY 2024 estimated aggregate costs
will exceed aggregate revenue and the operating reserve will be used to
maintain operations. The fee proposals contained in this NPRM are
projected to increase patent fee collections to the point that they
exceed spending requirements, and forecasted excess fee collections
will replenish the patent operating reserve each year from FY 2025
through FY
[[Page 23233]]
2027. Based on this forecast, the USPTO will achieve its optimal level
of three months operating requirements for the patent operating reserve
in FY 2026. The USPTO then expects to use the patent operating reserve
to fund operating expenses in FY 2028 and FY 2029 as the current
projection for fee collection growth slows but projected patent
spending requirements continue to increase.
These projections are based on point-in-time estimates and
assumptions that are subject to change. For instance, the budget
includes assumptions about filing levels, renewal rates, whether the
President will authorize or Congress will mandate employee pay raises,
the productivity of the workforce, and many other factors. A change in
any of these factors could have a significant cumulative impact on
reserve balances. As seen in table 3, set forth in Part III: Estimating
Aggregate Costs and Revenue, the operating reserve balance can change
significantly over a five-year planning horizon, underscoring the
USPTO's financial vulnerability to varying risk factors and the
importance of fee setting authority.
The USPTO will continue to evaluate long-term planning assumptions
to determine the appropriate course of action beyond FY 2027 to ensure
the Patents program is not vulnerable to changes in the economy that
reduce annual revenue, unexpected cost increases, and other financial
risks. The USPTO will also continue to assess the patent operating
reserve balance against its target balance annually, and at least every
three years, the USPTO will evaluate whether the minimum and optimal
target balance remain sufficient to provide the stable funding the
USPTO needs. Per the USPTO's operating reserve policy, if the operating
reserve balance is projected to exceed the optimal level by 10% for two
consecutive years, the USPTO will consider fee reductions. The USPTO
will continue to regularly review its operating budgets and long-range
plans to ensure the prudent use of patent fees.
4. Comments, Advice, and Recommendations From PPAC
In the report prepared in accordance with the AIA fee setting
authority (available on the USPTO website at <a href="https://www.uspto.gov/sites/default/files/documents/PPAC-Report-on-2023-Fee-Proposal.docx">https://www.uspto.gov/sites/default/files/documents/PPAC-Report-on-2023-Fee-Proposal.docx</a>)
PPAC supports the USPTO in seeking adequate revenue to recover the
costs for the USPTO fulfill its role in supporting the country's
innovation ecosystem. In addition, PPAC recognizes that ``the USPTO is
in the best position to assess its own needs and balance the tradeoffs
in setting individual fees.'' PPAC Report at 6. PPAC expressed general
support for the increase in patent fees, noting that timely, high-
quality search and examination requires an appropriately compensated
work force with adequate time to complete the search and examination
process, as well as reliable, state of the art IT infrastructure.
However, PPAC expressed concerns over some of the individual proposed
fee adjustments and their potential impacts on patent applicants and
holders. In general, PPAC urged the USPTO to provide more detail and
justification on how additional revenue will be used to increase patent
quality and reliability. The USPTO has included additional information
in this NPRM to further address some of the concerns of PPAC and the
public. See Part V: Individual Fee Rationale.
Regarding the proposed changes to fees for excess claims, PPAC
expressed support for the proposed fee increases. However, they also
emphasized their belief that the public wants more certainty that the
revenue generated from an increased fee will go toward examination and
giving examiners additional time to evaluate such cases. The USPTO
appreciates this concern and the current patent examination production
time approach provides examiners with additional time to review excess
claims. The proposed fees would contribute to recovering the costs to
the USPTO for this additional examination time.
PPAC expressed support for the proposed decreases to fees for
extensions of time for provisional applications. PPAC also expressed
support for the proposals to increase suspension of action fees and
fees for unintentional delay petitions. Part V: Individual Fee
Rationale provides more details on these proposals.
In general, PPAC expressed support for the USPTO's proposal to
implement a tiered fee structure for information disclosure statements
(IDSs). PPAC recommended a legislative proposal to clarify inequitable
conduct rules, which may have a significant impact on applicant
behavior. They noted that under the current inequitable conduct case
law, there is increased pressure on practitioners to cite every
possible reference if they do not want to risk the practitioner's right
to practice or the enforceability of the patent. The USPTO appreciates
this suggestion and will give it further consideration. PPAC also
recommended that if any additional fees are paid, the additional money
should go to allowing examiners more time to consider the additional
references. The USPTO notes that it is current USPTO policy to provide
examiners with additional time to review large IDSs and the proposed
fees would pay for this additional time. Only 13% of applications
contain 50 or more applicant-provided citations, and thus would incur
one of these proposed fees. The proposal would place the service costs
of large IDSs on those applicants who file them.
PPAC supports the proposal to create a third tier for requests for
continued examination (RCEs). PPAC notes that the proposed increases
would ``allow the costs of continued examinations to be recovered
directly from those applicants requesting multiple RCEs, instead of
relying on other fees to subsidize the costs.'' PPAC Report at 4.
The report noted opposition to the proposed fee for electronically
submitted assignments. PPAC argues that transparency of patent
ownership is key to patent data integrity and a fee for assignment
recordation would be an impediment to keeping assignment data up to
date. The USPTO's initial fee proposal was designed to reduce the
number of frivolous assignment submissions. However, the USPTO agrees
with PPAC's assessment that keeping up-to-date assignment data
outweighs the processing efficiency gains the USPTO expects from the
proposal. Therefore, the USPTO is dropping its proposal to raise the
recordation fee for an electronically submitted assignment. PPAC
expressed conditional support for the continuing applications proposal
if the USPTO drops the year three provision and only requires the
proposed fee for year seven or after. PPAC's rationale for this
modification is that three years is too short of a period, as there may
not be an Office action at this point in prosecution, particularly if
the application is in the national stage of an international
application filed under the Patent Cooperation Treaty (PCT) or is
classified in an art area with significant backlog. In response to
these concerns the USPTO notes that as of April 2023, traditional total
pendency is 2.1 years, which is below the three-year threshold for the
first tier of the proposal. However, in view of PPAC's concerns about
pendency, and the admittedly longer pendency for PCT applications, the
USPTO proposes to modify the tiers to slide the threshold dates later
in time. This NPRM therefore proposes the first tier at five years and
the second tier at eight years. See Parts V: Individual Fee Rationale
and VI: Discussion of Specific Rules for further details regarding the
modification of this proposal.
[[Page 23234]]
Regarding the proposed fee for the After Final Consideration Pilot
Program (AFCP 2.0), PPAC expressed the view that this proposal is
problematic as it requires paying a fee with no guarantee of an
interview. PPAC offered support for an AFCP 2.0 fee if: (1) the program
is changed such that the applicant is guaranteed an interview; or (2)
under the current program, a fee is assessed only if the interview is
granted. The USPTO recognizes PPAC's concern but notes that the AFCP
2.0 program is costly to the agency and is heavily used by applicants;
more than half of after-final responses come via this program. The
costs of this program are currently subsidized by other fees. While the
USPTO appreciates that some applicants may be unwilling to pay for a
program that may not result in a favorable outcome or an interview with
the examiner, the USPTO must make its patentability decisions in
accordance with the appropriate legal standards that govern the USPTO
and incurs costs to provide the service regardless of the outcome. The
USPTO notes that a significant portion of the cost for AFCP 2.0 comes
from the initial consideration of the request by the patent examiner.
If the USPTO is unable to recover the cost of the AFCP 2.0 program from
participants, it will need to consider terminating the program due to
its cost. See Part V: Individual Fee Rationale for additional details
regarding this proposal.
PPAC expressed a lack of support for the proposal to increase fees
for design applications, recommending the USPTO prioritize addressing
pendency issues before applying increased fees, as many design
applicants are already paying expedited fees beyond the basic filing,
search, and examination fees, given the current pendency. PPAC also
suggests that the USPTO's concerns about recovering its costs in the
design area could be addressed by a change in the law that allows for
the implementation of maintenance fees for design patents. The USPTO
acknowledges PPAC's concern regarding design application pendency and
recognizes that some design applicants are paying expedited fees.
Recovering more of the design costs from design applicants better
aligns fees to the cost of services performed by the USPTO, and it also
incents design applicants to make more appropriate economic decisions.
With respect to PPAC's concern about expedited fees, in FY 2022 about
19% of design applicants requested expedited handling. See Part V:
Individual Fee Rationale for additional details regarding the rationale
for increasing design patent fees.
Regarding the patent term adjustment (PTA) proposal, PPAC offered
support for increasing the fee if the proposal is modified such that no
fee is assessed by the USPTO if a PTA adjustment is made due to a USPTO
calculation error. The USPTO notes that a fee for this applicant-
requested service has been in place since calendar year 2000 and has
only increased $10 since enacted. Moreover, this fee helps recover a
portion of the costs for applicant-requested manual redeterminations of
PTA under 35 U.S.C. 154(b). While there are about 500 service requests
each year, many concern the IDS safe harbor under 37 Code of Federal
Regulations (CFR) 1.704(d)(1) and thus could have been avoided if the
applicant had used the USPTO-provided form (PTO/SB/133) to invoke the
safe harbor. With respect to PPAC's suggestion of adding a refund
component to the proposal, the USPTO's rationale for this fee increase
is to recover a greater percentage of the costs associated with the
service that are incurred regardless of the outcome.
PPAC expressed general support for the patent term extension (PTE)
proposal but suggested the USPTO consider if such a large increase in
the fees is optimal, particularly the initial fee given start-up
companies may be resource constrained. By law, this service is only
available to owners of patents on certain human drugs, food or color
additives, medical devices, animal drugs, and veterinary biological
products, and is designed to restore some patent term that was lost
while awaiting premarket government approval from a regulatory agency.
Because such development and premarketing activities are extremely
expensive, it is unlikely that any resource-constrained companies would
qualify for PTE services.
PPAC expressed a lack of support for the terminal disclaimer
proposal, noting disagreement with the USPTO's justification and
suggesting that the fee will place an unfair burden on filers with
limited resources who may be tempted to give up patent term in exchange
for a less expensive and more compact prosecution. While the USPTO
appreciates PPAC's concerns, the agency believes that under-resourced
applicants are unlikely to be affected by these fees, as a double
patenting rejection necessitating a terminal disclaimer would not be
made unless they had sufficient resources to file multiple applications
with closely-related subject matter. This presumption is supported by
data collected by the USPTO that shows only about 1% of terminal
disclaimers are filed by micro entities.
PPAC expressed a lack of support for the proposed fee for
requesting additional words in an inter partes or post-grant petition,
noting that it may favor well-resourced petitioners given the added
expense to prepare longer papers. After careful consideration of the
comments and recommendations provided in the PPAC Report and in
testimony at the public hearing, the USPTO has decided to withdraw this
proposal.
PPAC expressed a lack of support for the proposal to establish a
new fee for parties requesting a review of a PTAB decision by the
Director. PPAC felt a fee was not warranted because a review by the
Director ensures the PTAB decisions are consistent. PPAC also expressed
concern that adding a fee for this previously free service may
adversely affect individual inventors and small company applicants. In
response to these concerns, the USPTO has provided additional
justification and data. Part V: Individual Fee Rationale offers this
additional information.
In summary, the USPTO appreciates the general support by PPAC and
its stakeholders for an increase in patent fees sufficient for
aggregate fees to recover aggregate costs. After careful consideration
of the comments, concerns, and suggestions provided in the report, and
keeping in mind the goals of this proposed rule, the USPTO elected to
make changes to three of the fee proposals initially presented to PPAC.
The fee structure proposed herein will ultimately allow the USPTO to
maintain patent operations and continue its path towards achieving the
goals and objectives laid out in the Strategic Plan. The USPTO looks
forward to receiving additional comments on this revised proposal
during the public comment period.
C. Summary of Rationale and Purpose of the Proposed Rule
The USPTO estimates that the proposed patent fee schedule will
produce sufficient aggregate revenues to recover the aggregate costs of
patent operations and ensure financial sustainability for effective
administration of the patent system. This proposed rule aligns with the
USPTO's four key fee setting policy factors and supports the USPTO's
mission-focused strategic goals.
V. Individual Fee Rationale
The USPTO projects that aggregate revenue generated from the
proposed patent fees will recover the prospective
[[Page 23235]]
aggregate costs of patent operations as laid out in the FY 2025 Budget.
As detailed previously, PPAC recognizes the importance of ensuring the
USPTO's financial sustainability, stating that, ``[t]o support its role
in the country's innovation system, the USPTO requires adequate
funding.'' PPAC Report at 5. PPAC also acknowledges the need to fund
additional strategic investments, commenting that ``[t]imely, high-
quality search and examination require an appropriately compensated
work force with adequate time to complete the same, supported by state
of the art and reliable IT infrastructure.'' PPAC Report at 5-6.
The USPTO did not set each individual proposed fee necessarily
equal to the estimated costs of performing activities related to the
fee. Instead, as described in Part IV: Rulemaking Goals and Strategies,
some proposed fees are set at, above, or below their unit costs to
balance four key fee setting policy factors: (1) promoting innovation
strategies; (2) aligning fees with the full costs of products and
services; (3) facilitating effective administration of the U.S. patent
system; and (4) offering application processing options. For example,
the agency sets many initial filing fees below unit cost to promote
innovation strategies by removing barriers to entry to the patent
system. To balance the aggregate revenue loss of fees set below cost,
the USPTO must set other fees above cost in areas less likely to reduce
inventorship (e.g., maintenance).
For some fees proposed in this NPRM, such as extension of time
fees, the USPTO does not maintain individual historical cost data for
services provided; instead, the agency considers the policy factors
described in Part IV: Rulemaking Goals and Strategies to inform fee
setting. For example, facilitating effective administration of the U.S.
patent system enables the USPTO to: (1) foster an environment where
USPTO personnel can provide and applicants can receive prompt, quality
interim and final decisions; (2) encourage the prompt conclusion of
prosecuting an application, resulting in pendency reduction and faster
dissemination of patented information; and (3) help recover costs for
activities that strain the patent system.
The proposed fee changes are grouped into three categories: (A) an
across-the board-adjustment to patent fees; (B) an adjustment to front-
end fees; and (C) targeted fees. Part VI: Discussion of Specific Rules
contains a complete listing of fees set or adjusted in the proposed
patent fee schedule, including small and micro entity fees. This
information is also listed in the Table of Patent Fees available on the
fee setting section of the USPTO website at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>.
This proposed rule includes one procedural amendment (D) expanding
the applicability of the rule allowing applicants to obtain a refund of
search and excess claims fees paid in an application through express
abandonment.
A. Across-the-Board Adjustment to Patent Fees
The broader U.S. economy has experienced higher-than-expected
inflation the last two years and, in turn, increased USPTO operating
costs relative to baseline estimates for labor and nonlabor activities
such as benefits, service contracts, and equipment. Also, the agency's
estimates of future costs in the FY 2025 Budget include a 2.0% civilian
pay raise planned in CY 2025 and an assumption of 3.0% civilian pay
raises in CY 2026-29, as well as inflationary increases for other labor
and nonlabor activities. To keep the USPTO on a stable financial track
sufficient to recover the aggregate costs of patent operations and to
support the agency's strategic objectives, the USPTO proposes
adjusting, by approximately 5%, all patent fees not covered by the
targeted adjustments discussed in section C. The USPTO estimates that
new fees would not be implemented until FY 2025, more than four years
after the agency's last fee adjustment in October 2020. A 5% across-
the-board increase in 2025 would be equivalent to just a 1.2% annual
increase, well below the prevailing inflation rate the last few years.
The agency is not proposing a larger across-the-board increase in line
with inflation because the across-the-board adjustment is intended to
supplement the additional revenue collected from the targeted
adjustments. Also, the USPTO will continue its ongoing efforts to
improve operational efficiency and reduce spending when appropriate.
The 5% across-the-board adjustment strikes an appropriate balance
between projected aggregate revenue and aggregate costs based on the
assumptions used to develop the point-in-time estimates that support
this NPRM. If changes to the assumptions underlying the USPTO's cost
and revenue estimates result in significant changes to the financial
outlook, the agency will refine the size of the across-the-board
adjustment, either upward or downward, such that fees are set at a
level that secures aggregate cost recovery and ensures a reasonable
pace for operating reserve growth to the optimal level.
For patent fees with small and micro entity fee reductions, the
proposed undiscounted fee is rounded up or down to the nearest $5 by
applying standard arithmetic rules. The resulting proposed fee amounts
are more convenient to patent users and permit the USPTO to set small
and micro entity fees at whole dollar amounts when applying applicable
fee reductions. Therefore, some smaller fees will not change since a 5%
increase would round down to the current fee, while other fees would
change by slightly more or less than 5%, depending on rounding. For
patent fees that do not have small and micro entity fee reductions, the
proposed fees are rounded to the nearest dollar by applying standard
arithmetic rules. The proposed fee adjustments in this category are
listed in the Table of Patent Fees available on the fee setting section
of the USPTO website at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>.
B. Adjustment to Front-End Patent Fees
The USPTO proposes to adjust all filing, search, and examination
fees not covered by the targeted adjustments as discussed in section C
by an additional 5% on top of the 5% across-the-board adjustment, for a
total front-end increase of 10%. The current fee schedule, implemented
by the FY 2020 Final Rule, set filing, search, and examination fees
below the costs of performing these services to achieve low barriers to
entry into the innovation ecosystem. These front-end fees are
subsidized by other fee collections, primarily maintenance fees. This
proposal will marginally recover some, but not all, additional filing,
search, and examination costs earlier in the patent life cycle, thus
mitigating the risk of potentially lower maintenance fee payments in
the future while remaining consistent with a low barrier to entry
policy.
Similar to the across-the-board adjustment, for fees that have
small and micro entity fee reductions, the undiscounted fee is rounded
up or down to the nearest $5 by applying standard arithmetic rules.
Therefore, the proposed fee rates may not be precisely 10% higher than
the current fee rates. The proposed fee adjustments in this category
are listed in the Table of Patent Fees available on the fee setting
section of the USPTO website at <a href="https://www.uspto.gov/FeeSettingAndAdjusting">https://www.uspto.gov/FeeSettingAndAdjusting</a>.
[[Page 23236]]
C. Targeted Adjustments to Patent Fees
The USPTO proposes the following fee adjustments for the reasons
stated below. The proposed fees are based on changes in undiscounted
fee amounts; the percentage changes for small and micro entity fees
would be the same as the percentage change for the undiscounted fee
rate, and the dollar change would be 40% or 20% of the undiscounted
change. A discussion of the rationale for each fee is divided into 14
categories according to function, as follows:
1. After Final Consideration Pilot Program 2.0
Table 4--After Final Consideration Pilot Program 2.0 Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Consideration of AFCP 2.0 request....... Undiscounted.................... New..................... $500 n/a n/a n/a
Consideration of AFCP 2.0 request....... Small........................... New..................... 200 n/a n/a n/a
Consideration of AFCP 2.0 request....... Micro........................... New..................... 100 n/a n/a n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO proposes a new fee for participation in the AFCP 2.0. The
agency created this program in May 2013 and has renewed it repeatedly.
There is currently no fee for participation in this program. See After
Final Consideration Pilot Program 2.0, 78 FR 29117 (May 17, 2013), and
the program's section of the USPTO website at <a href="https://www.uspto.gov/patents/initiatives/after-final-consideration-pilot-20">https://www.uspto.gov/patents/initiatives/after-final-consideration-pilot-20</a>.
Under customary examination practice, after the close of
prosecution, amendments that will place the application either in
condition for allowance or in better form for appeal may be entered,
and the applicant may also hold an interview with the examiner. See 37
CFR 1.116(b) and section 714.12 of Manual of Patent Examining Procedure
(MPEP) (9th ed., Rev. 07.2022, February 2023), which may be viewed on
or downloaded from the USPTO website at <a href="https://www.uspto.gov/MPEP">https://www.uspto.gov/MPEP</a> or
<a href="https://mpep.uspto.gov">https://mpep.uspto.gov</a>. The AFCP 2.0 was designed to encourage
continued collaboration between examiners and applicants after close of
prosecution and reduce pendency by avoiding RCEs and continued
prosecution applications (CPA). The program requires that applicants
submit a response with a nonbroadening amendment to at least one
independent claim, and in return, affords the examiner additional time
to consider the response. See Guidelines for Consideration of Responses
After Final Rejection under 37 CFR 1.116(b) under the AFCP 2.0,
available on the USPTO website at <a href="https://www.uspto.gov/sites/default/files/patents/init_events/afcp_guidelines.pdf">https://www.uspto.gov/sites/default/files/patents/init_events/afcp_guidelines.pdf</a>. If the response will
require further search and/or consideration that would take longer than
the allotted time, the examiner will not admit the request under the
program. Otherwise, if the response meets the program requirements, the
examiner will consider the response, and will either: (1) mail a notice
of allowance if the application is in condition for allowance or (2)
contact the applicant to schedule an interview to discuss the amendment
if the application is not in condition for allowance.
The AFCP 2.0 program offers several benefits to participating
applicants. Under customary practice, after a final rejection,
applicants have no right to unrestricted further prosecution. The AFCP
2.0 provides a participating applicant an opportunity to potentially
have the examiner consider an amendment that would otherwise not be
considered at this stage, possibly precluding the need to file an RCE
or a CPA. This consideration saves applicants the higher fees
associated with those filings and, in the case of the RCEs, saves
applicants from patent term adjustment consequences. See MPEP section
2731 for more information on patent term adjustment. Moreover,
participation in the program is not necessary to hold an interview
after final rejection, or to have an amendment filed and entered after
close of prosecution, see MPEP sections 713.09 and 714.13. An AFCP 2.0
request should be filed only when an applicant would like to file a
substantive amendment after close of prosecution that may require
additional time for an examiner to consider and/or search.
The AFCP 2.0 is a popular program; since 2016, applicants have
filed more than 60,000 requests annually. These requests make up over
half of the USPTO's after-final responses during this time. Due to its
popularity, costs to administer the AFCP 2.0 are significant. In FY
2022, the USPTO estimates more than $15 million in incurred costs
associated with examiners considering the AFCP 2.0 submissions. This
cost is in addition to the cost for examiners to initially consider the
AFCP 2.0 request and any consultation costs with supervisors and
primary examiners. These examination costs represent time that could
otherwise be used to examine new applications.
The USPTO is reconsidering the policy choice of continuing to offer
the AFCP 2.0 program for free without recouping costs from applicants
utilizing it. As noted by the Government Accountability Office (GAO) in
Federal User Fees: A Design Guide, Report No. GAO-08-386SP (May 2008),
available at <a href="https://www.gao.gov/products/gao-08-386sp">https://www.gao.gov/products/gao-08-386sp</a>:
If those benefiting from a service do not bear the full social
cost of the service, they may seek to have the government provide
more of the service than is economically efficient. User fees may
also foster production efficiency by increasing awareness of the
costs of publicly provided services and therefore increasing
incentives to reduce costs where possible.
Thus, without a fee to recover the cost of the program, the agency
is considering not renewing (i.e., terminating) the program. A large
part of the AFCP 2.0's popularity is due to economic inefficiencies
where participants receive program benefits for only a fraction of the
program's costs (because applicants pay only indirectly via future
maintenance fees). That said, the USPTO also recognizes that the
program has some indirect benefits to the patent system by reducing
overall pendency. If there is sufficient public support for the
proposed fees, the improved economic efficiencies of aligning fees with
direct beneficiaries (program participants), together with indirect
benefits, would favor continuing the program. Accordingly, the USPTO is
proposing to charge fees for filing a request for consideration under
the AFCP 2.0: $500 for undiscounted applications, $200 for applications
receiving a small entity discount, and $100 for applications receiving
a micro entity discount.
At this time, the USPTO is not proposing any further changes to the
AFCP 2.0. For example, the agency will not change the program to
guarantee an
[[Page 23237]]
examiner interview if an AFCP 2.0 request is admitted under the
program. The USPTO appreciates that some applicants may be unwilling to
pay for a program that might not result in a favorable outcome or
guarantee an examiner interview. Regardless of the outcome, the agency
incurs costs to provide the service and must make its patentability
decisions in accordance with appropriate legal standards. A significant
portion of the AFCP 2.0's cost is initial consideration of the request
by the patent examiner. Moreover, as noted previously, applicants may
file amendments and participate in interviews after a final rejection
without filing an AFCP 2.0 request. Further, a majority of the AFCP 2.0
requests (60% for utility and 80% for design) meet program
requirements, meaning that either the application is allowed or an
interview is granted.
The USPTO expects the percentage of compliant AFCP 2.0 requests to
increase as applicants become more selective with the amendments filed,
due to the fee. Accordingly, the agency does not expect a significant
percentage of applicants to pay the fee without an opportunity for
either allowance of the application or an interview with an examiner.
Also, since undiscounted entities have historically filed 83% of all
AFCP 2.0 requests, the USPTO does not anticipate the proposed fees
having a disproportionate impact on small or micro entities.
2. Continuing Application Fees
Table 5--Continuing Application Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Filing an application or presentation of Undiscounted.................... New..................... $2,200 n/a n/a n/a
benefit claim more than five years
after earliest benefit date.
Filing an application or presentation of Small........................... New..................... 880 n/a n/a n/a
benefit claim more than five years
after earliest benefit date.
Filing an application or presentation of Micro........................... New..................... 440 n/a n/a n/a
benefit claim more than five years
after earliest benefit date.
Filing an application or presentation of Undiscounted.................... New..................... 3,500 n/a n/a n/a
benefit claim more than eight years
after earliest benefit date.
Filing an application or presentation of Small........................... New..................... 1,400 n/a n/a n/a
benefit claim more than eight years
after earliest benefit date.
Filing an application or presentation of Micro........................... New..................... 700 n/a n/a n/a
benefit claim more than eight years
after earliest benefit date.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO is proposing new fees in Sec. 1.17(w) for presenting
certain benefit claims in nonprovisional applications. These new fees
would apply to nonprovisional applications (``later-filed''
applications) that have an actual filing date more than five years, or
more than eight years, later than the earliest filing date for which
benefit is claimed under 35 U.S.C. 120, 121, 365(c), or 386(c), and
Sec. 1.78(d) (the ``Earliest Benefit Date'' (EBD)). When the later-
filed application is a utility or plant patent application, the EBD is
also the date from which the 20-year patent term is calculated under 35
U.S.C. 154(a)(2). The EBD is also known as the ``patent term filing
date.'' For more information about benefit claims, see MPEP 210 and 211
et seq., for more information about the patent term filing date see
MPEP 804 subsection I.B.1(a), and for more information about patent
term, see MPEP 2701.
The proposed fee set forth in Sec. 1.17(w)(1) would be due when
the later-filed application's EBD is more than five years, and no more
than eight years, earlier than its actual filing date, and would be
$2,200 for undiscounted applications, $880 for applications receiving a
small entity discount, and $440 for applications receiving a micro
entity discount. The proposed fee set forth in Sec. 1.17(w)(2) would
be due when the later-filed application's EBD is more than eight years
earlier than its actual filing date, and would be $3,500 for
undiscounted applications, $1,400 for applications receiving a small
entity discount, and $700 for applications receiving a micro entity
discount.
Payment of these fees would be required at the time a prompting
benefit claim (i.e., a benefit claim that causes the EBD of the later-
filed application to be more than five or eight years earlier than its
actual filing date) is presented in the later-filed application. If the
prompting benefit claim is presented at the time of filing the later-
filed application, the applicable Sec. 1.17(w) fee would be due at
filing. If the prompting benefit claim is presented at a later time,
the applicable Sec. 1.17(w) fee would be due concurrently with the
presentation of the prompting benefit claim. If the later presentation
of the prompting benefit claim is by way of a petition for acceptance
of an unintentionally delayed benefit claim under Sec. 1.78(e), the
applicable Sec. 1.17(w) fee would be due in addition to the petition
fee under Sec. 1.17(m).
Because the proposed fees in Sec. 1.17(w) are based on the
application's EBD, presenting multiple benefit claims at the same time
will not incur multiple fees. However, if benefit claims are presented
at multiple times during an application's pendency, a second fee may be
due if the later-presented benefit claim changes the application's EBD
to be more than eight years earlier than the actual filing date. In
this situation, the amount due under Sec. 1.17(w)(2) for the later
presentation will reflect any prior payment under Sec. 1.17(w)(1) for
the earlier presentation. For instance, if the fee under Sec.
1.17(w)(1) was paid at the time of filing, and a prompting benefit
claim requiring payment of the Sec. 1.17(w)(2) fee is presented at a
later time, the additional amount owed is the difference between the
current fee amount stated in Sec. 1.17(w)(2) and the amount of the
previous payment under Sec. 1.17(w)(1).
The following examples illustrate the most common situations
anticipated to require payment of the proposed fees under Sec.
1.17(w). For purposes of these examples, the agency assumes that all
requirements for claiming benefit under 35 U.S.C. 119, 120, 121,
365(c), or 386(c), and Sec. 1.78 are satisfied, and that all fees are
paid at the undiscounted rates listed in table 5, supra.
Example 1: Application A is a nonprovisional application filed on
July 7, 2025. The Application Data Sheet (ADS) present upon A's filing
contains a benefit claim under 35 U.S.C. 120 to nonprovisional
application N filed on February 3, 2020, which is the only benefit
claim in the application. A's EBD is February 3, 2020, which is more
than five years, and no more than eight
[[Page 23238]]
years, earlier than A's actual filing date of July 7, 2025. In this
example, the Sec. 1.17(w)(1) fee of $2,200 is due upon A's filing.
Example 2: Application B is a nonprovisional application filed on
July 8, 2025. The ADS present upon B's filing contains a benefit claim
under 35 U.S.C. 120 to nonprovisional application O filed on February
4, 2021, and a benefit claim under 35 U.S.C. 119(e) to provisional
application P filed on March 11, 2020. The USPTO's records indicate
that O also contains a benefit claim under 35 U.S.C. 119(e) to
provisional application P. In this situation, P's filing date is not
the EBD, because Sec. 1.17(w) does not encompass benefit claims under
35 U.S.C. 119(e). Instead, B's EBD is February 4, 2021, which is less
than five years earlier than B's actual filing date of July 8, 2025. In
this example, no fee would be due under Sec. 1.17(w).
Example 3: Application C is a nonprovisional application filed on
July 9, 2025. The ADS present upon C's filing contains benefit claims
under 35 U.S.C. 120 to nonprovisional application Q filed on February
5, 2020, and to nonprovisional application R filed on March 12, 2019.
C's EBD is March 12, 2019, which is more than five years, and no more
than eight years, earlier than C's actual filing date of July 9, 2025.
In this example, the Sec. 1.17(w)(1) fee of $2,200 is due upon C's
filing.
Example 4: Application D is a nonprovisional application filed on
August 10, 2028. The ADS present upon D's filing does not contain any
benefit claims. Two months after D's filing, the applicant files a
second ADS containing a benefit claim under 35 U.S.C. 120 to
nonprovisional application S filed on February 6, 2020, which is the
only benefit claim in the application. Because this newly added benefit
claim causes D's EBD to become February 6, 2020, which is more than
eight years earlier than D's actual filing date of August 10, 2028, the
Sec. 1.17(w)(2) fee of $3,500 is due upon filing of the second ADS.
Example 5: Application E is a nonprovisional application filed on
August 11, 2028. The ADS present upon E's filing does not contain any
benefit claims. Eighteen months after E's filing, the applicant files a
second ADS containing a benefit claim under 35 U.S.C. 120 to
nonprovisional application T filed on February 7, 2020, which is the
only benefit claim in the application. Because this newly added benefit
claim causes E's EBD to become February 7, 2020, which is more than
eight years earlier than E's actual filing date of August 11, 2028, the
Sec. 1.17(w)(2) fee of $3,500 is due upon filing of the second ADS. In
addition, because this benefit claim is delayed (not submitted within
the required time period in Sec. 1.78(d)), a petition for acceptance
of an unintentionally delayed benefit claim under Sec. 1.78(e) and the
petition fee under Sec. 1.17(m) are also required.
Example 6: Application F is a nonprovisional application filed on
August 14, 2028. The ADS present upon F's filing contains a benefit
claim under 35 U.S.C. 120 to nonprovisional application U filed on
April 18, 2023, which is the only benefit claim in the application. F's
EBD is April 18, 2023, which is more than five years, and no more than
eight years, earlier than F's actual filing date of August 14, 2028.
Accordingly, the Sec. 1.17(w)(1) fee of $2,200 is due upon F's filing.
Two months after F's filing, the applicant files a second ADS
containing a benefit claim under 35 U.S.C. 120 nonprovisional
application V filed on February 10, 2020. This newly added benefit
claim causes F's EBD to become February 10, 2020, which is more than
eight years earlier than F's actual filing date of August 14, 2028, and
thus prompts the fee in Sec. 1.17(w)(2). Because the fee in Sec.
1.17(w)(1) was previously paid, the previous payment is subtracted from
the amount now due under Sec. 1.17(w)(2). Accordingly, the amount due
upon filing of the second ADS is $1,300 (the current fee amount of
$3,500 set forth in Sec. 1.17(w)(2) less the $2,200 previously paid
under Sec. 1.17(w)(1)).
The proposed fees will recover more costs related to continuing
applications from filers of such applications, encourage more efficient
filing and prosecution behaviors, and partially offset foregone
maintenance fee revenue resulting from later-filed continuing
applications.
Continuing applications, which include continuation, divisional,
and continuation-in-part applications filed under the conditions
specified in 35 U.S.C. 120, 121, 365(c), or 386(c) and Sec. 1.78,
represent a large and increasing share of patent applications. From FY
2010 to FY 2022, total serialized filings rose about 44%, including a
moderate increase in noncontinuing applications (about 25%) and a large
increase in continuing applications (about 100%), due almost entirely
to increased continuation filings. Since FY 2010, divisional and
continuation-in-part applications remained flat at annual levels of
about 22,000 and 19,000, respectively. However, continuation
applications have tripled, from about 40,000 in FY 2010 to about
122,800 in FY 2022, and now represent about 34% of serialized filings.
The volume and rapid increase of continuing applications negatively
impacts the USPTO's workload and docketing practices. For example, it
is difficult for the agency to balance patent resources between the
examination of ``new'' (i.e., noncontinuing) applications disclosing
new technology and innovations, and continuing applications, which, in
some cases, are a repetition of previously examined applications either
issued as patents or that have become abandoned. See e.g., FY 2021
pendency statistics review presented at the PPAC quarterly meeting on
Nov. 18, 2021, available on the USPTO website at <a href="https://www.uspto.gov/sites/default/files/documents/20211115-PPAC-FY21-pendency-stats-review.pdf">https://www.uspto.gov/sites/default/files/documents/20211115-PPAC-FY21-pendency-stats-review.pdf</a> (note that about 80% of continuations have a patented
parent).
Continuing applications filed long after their EBD are less likely
to have a patent term long enough for the USPTO to recover the costs of
its search and examination. The patent fee structure is designed to
encourage innovation by maintaining low barriers to entry, which the
agency accomplishes by keeping initial filing fees for utility, plant,
and design applications below the costs for preexamination, search, and
examination. The USPTO recovers the remaining cost of performing the
work from maintenance fee payments made after issuance of a utility
patent. See e.g., the FY 2022 Agency Financial Report at 45-46,
available on the USPTO website at <a href="https://www.uspto.gov/AnnualReport">https://www.uspto.gov/AnnualReport</a>.
Maintenance fees are due 3.5 years, 7.5 years, and 11.5 years from the
issue date of a utility patent. See 35 U.S.C. 41(b)(1). During FY 2022,
maintenance fees collected from utility patentees represented 53.8% of
patent revenue, about one-third of which derived from payment of the
11.5-year fee. This revenue is vital to providing the necessary
aggregate financing to fund patent operations. Thus, the fees proposed
in this NPRM help compensate the USPTO for foregone maintenance fee
revenue from continuing applications filed long enough after their EBD
for their term to be less than 11.5 years.
If future workloads for continuing applications were to remain
steady at FY 2022 levels, about 16% of continuing applications
(approximately 22,000) would pay the proposed Sec. 1.17(w)(1) fee, and
an additional 11% of continuing applications (approximately 15,000)
would pay the proposed Sec. 1.17(w)(2) fee. Based on FY
[[Page 23239]]
2022 data, of the applications that would be affected by this proposal,
about 69% are undiscounted, about 30% receive a small entity discount,
and about 1% receive a micro entity discount. The USPTO also
anticipates that the proposed fees will be relatively technology-
neutral, with the most affected area being Technology Center 3700
(which examines technologies including mechanical engineering,
manufacturing, gaming, and medical devices/processes) because it
receives a much higher proportion of late-filed continuing applications
than other areas.
3. Design Application Fees
Table 6--Design Application Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Basic filing fee--Design....................... Undiscounted.......................... $220 $300 $80 36 $250
Basic filing fee--Design....................... Small................................. 88 120 32 36 250
Basic filing fee--Design....................... Micro................................. 44 60 16 36 250
Basic filing fee--Design CPA................... Undiscounted.......................... 220 300 80 36 930
Basic filing fee--Design CPA................... Small................................. 88 120 32 36 930
Basic filing fee--Design CPA................... Micro................................. 44 60 16 36 930
Design search fee or Design CPA search fee..... Undiscounted.......................... 160 300 140 88 574
Design search fee or Design CPA search fee..... Small................................. 64 120 56 88 574
Design search fee or Design CPA search fee..... Micro................................. 32 60 28 88 574
Design examination fee or Design CPA Undiscounted.......................... 640 700 60 9 835
examination fee.
Design examination fee or Design CPA Small................................. 256 280 24 9 835
examination fee.
Design examination fee or Design CPA Micro................................. 128 140 12 9 835
examination fee.
Design issue fee............................... Undiscounted.......................... 740 1,300 560 76 574
Design issue fee............................... Small................................. 296 520 224 76 574
Design issue fee............................... Micro................................. 148 260 112 76 574
Hague design issue fee......................... Undiscounted.......................... 740 1,300 560 76 n/a
Hague design issue fee......................... Small................................. 296 520 224 76 n/a
Hague design issue fee......................... Micro................................. 148 260 112 76 n/a
International Design Application First Part Undiscounted.......................... 1,020 1,300 280 27 n/a
U.S. Designation Fee.
International Design Application First Part Small................................. 408 520 112 27 n/a
U.S. Designation Fee.
International Design Application First Part Micro................................. 204 260 56 27 n/a
U.S. Designation Fee.
(Part II Designation Fee) Issue Fee Paid Undiscounted.......................... 740 1,300 560 76 n/a
Through the International Bureau in an
International Design Application.
(Part II Designation Fee) Issue Fee Paid Small................................. 296 520 224 76 n/a
Through the International Bureau in an
International Design Application.
(Part II Designation Fee) Issue Fee Paid Micro................................. 148 260 112 76 n/a
Through the International Bureau in an
International Design Application.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO is proposing increases in the fees for filing, search,
examination, and issuance of design patent applications. These
proposals adjust the fees to account for inflationary cost increases,
and to recover a larger portion of design costs from design applicants.
The proposed design fee increases will affect national design
application filings and international design application filings that
designate the United States under the Geneva Act of the Hague Agreement
Concerning the International Registration of Industrial Designs, July
2, 1999 (``Hague Agreement'').
As shown in the table above, the combined total of filing, search,
examination, and issue fees for a design application that proceeds to
issuance would increase from $1,760 to $2,600 for undiscounted
applications, from $704 to $1,040 for applications receiving a small
entity discount, and from $352 to $520 for applications receiving a
micro entity discount. Note that under the Hague Agreement and its
implementing regulations in the United States, including Sec. 1.1031,
the required fees (known as ``designation fees'') for international
design application filings that designate the United States are set by
reference to the national fees. Thus, the first part of the designation
fee corresponds to the sum of the filing fee, search fee, and
examination fee, and the second part of the designation fee corresponds
to the issue fee. See MPEP 2910 for more information about
international design application fees.
Despite these increases, the proposed fees will not achieve full
recovery of design costs. On an individual basis, the proposed fees
including the issue fee do not fully recover the cost of examining and
issuing a design application even when the applicant paid the
undiscounted rate. On an aggregate basis, design fee payments will not
fully recover design costs because most design applications qualify for
discounted fees. For example, of the design applications filed in FY
2023, 28% paid the micro entity fee amount, 38% paid the small entity
fee amount, and only 34% paid the undiscounted fee amounts. The USPTO
is required by law to reduce most patent fees by 60% for small entities
and by 80% for micro entities. See Part II: Legal Framework, supra. As
a result of the heavy use of these discounts by design applicants, the
USPTO's collections from design fees have been significantly below
design costs for more than 10 years. For example, based on the most
recently
[[Page 23240]]
available cost data (FY 2022), the unit cost for a design application
was $2,233, and for a design Continued Prosecution Application, $2,913.
The collections (in the same year) from design fees averaged only
$1,125 per application, resulting in an average shortfall of about
$1,108 per application. Assuming the unit cost remains the same in FY
2023, the average shortfall would increase to about $1,220 per
application based on FY 2023 collections from design fees, which
averaged only $1,013 per application.
Because USPTO operations are financed solely by user fees, the
agency must make up the shortfall in the design area through fees set
in other patent areas. While the USPTO has raised design fees twice in
the last 10 years, those increases were not large enough to eliminate
the shortfall over the long term. Thus, design costs continue to be
subsidized by other fees, primarily utility patent maintenance fees.
This subsidy has grown in recent years, as shown in figure 1. The graph
depicts average fee collections per design application (``average
collections'') in dark gray, and the average shortfall or subsidy per
design application (``average subsidy'') in light gray. The average
subsidy in FY 2022 was $1,108, and in FY 2023 was $1,220 (estimated
based on FY 2022 unit cost).
Figure 1: Subsidization of Design Applications Over Time
[GRAPHIC] [TIFF OMITTED] TP03AP24.044
The patent fee structure is designed to encourage innovation by
maintaining low barriers to entry into the patent system. The USPTO
accomplishes this goal by keeping initial filing fees for utility,
plant, and design applications below the agency's costs for
preexamination, search, and examination, and by recovering remaining
costs of performing the work from maintenance fee payments made after
issuance of a utility patent. See e.g., the FY 2022 Agency Financial
Report at 45-46, available on the USPTO website at <a href="https://www.uspto.gov/AnnualReport">https://www.uspto.gov/AnnualReport</a>. Although the USPTO is not permitted to
establish maintenance fees for design or plant patents (see 35 U.S.C.
41(b)(3)), the maintenance fees it collects from utility patentees
represented 53.8% of patent revenue in FY 2022. This revenue is vital
to providing the necessary aggregate revenue to recover the aggregate
cost of patent operations.
Because design fee payors do not bear the full costs of design
services, a disconnect between fees and costs, as currently exists in
the design patent area, can lead to overuse of discounted services. See
e.g., Federal User Fees: A Design Guide, Report No. GAO-08-386SP (May
2008), available at <a href="https://www.gao.gov/products/gao-08-386sp">https://www.gao.gov/products/gao-08-386sp</a>, and the
Patent and Trademark Office: New User Fee Design Presents Opportunities
to Build on Transparency and Communication Success, Report No. GAO-12-
514R (April 2012), available at <a href="https://www.gao.gov/products/gao-12-514r">https://www.gao.gov/products/gao-12-514r</a>.
Historically, this difference between design fees and design costs
did not result in a significant subsidy because the annual volume of
design applications was much lower than the annual volume of issued
utility patents. Since 2014, however, the number of design applications
has surged 50% (from 36,254 in FY 2014 to 54,476 in FY 2022) while the
number of issued utility patents (and thus the volume of potential
future maintenance fees) has increased only 7% (from 303,930 in FY 2014
to 325,455 in FY 2022). See e.g., FY 2022 Workload Table 1, available
on the USPTO website at <a href="https://www.uspto.gov/AnnualReport">https://www.uspto.gov/AnnualReport</a>. Moreover,
virtually all growth in design application filings is attributable to
applications in which discounted fees are paid. From FY 2014 to FY
2022, the number of undiscounted design applications filed did not
increase, but the number of small entity applications increased 24%,
and the number of micro entity applications increased 313%. As a
result, the entity spread for design applications changed dramatically.
For example, in FY 2014, the entity spread for design applications was
50% undiscounted, 40% small
[[Page 23241]]
entity, and 10% micro entity; during FY 2022, the entity spread for
design applications was 35% undiscounted, 35% small entity, and 30%
micro entity. In contrast, the entity spread in utility application
filings has remained the same from FY 2014 to FY 2022, at about 72%
undiscounted, 24% small entity, and 4% micro entity.
The combination of these factors makes it challenging for the USPTO
to balance the setting of design fees that appropriately encourage
innovation while also incenting design applicants to make appropriate
economic decisions and not overuse design services. For example, based
on the FY 2022 unit cost and assuming that filing volume and entity
spread remain stable, recovering the full cost of design services from
design applicants would require total fees of about $4,000 for
undiscounted applications. Abruptly raising fees to these levels could
discourage innovation, so the USPTO is proposing a more moderate
increase to $2,600 for undiscounted applications. After considering all
relevant factors, the agency believes the proposed design fee increases
strike a balance that still encourages innovation while bringing in
increased revenue to recover more design costs.
4. Excess Claims Fees
Table 7--Excess Claims Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Each independent claim in excess of three...... Undiscounted.......................... $480 $600 $120 25 n/a
Each independent claim in excess of three...... Small................................. 192 240 48 25 n/a
Each independent claim in excess of three...... Micro................................. 96 120 24 25 n/a
Each reissue independent claim in excess of Undiscounted.......................... 480 600 120 25 n/a
three.
Each reissue independent claim in excess of Small................................. 192 240 48 25 n/a
three.
Each reissue independent claim in excess of Micro................................. 96 120 24 25 n/a
three.
Each claim in excess of 20..................... Undiscounted.......................... 100 200 100 100 n/a
Each claim in excess of 20..................... Small................................. 40 80 40 100 n/a
Each claim in excess of 20..................... Micro................................. 20 40 20 100 n/a
Each reissue claim in excess of 20............. Undiscounted.......................... 100 200 100 100 n/a
Each reissue claim in excess of 20............. Small................................. 40 80 40 100 n/a
Each reissue claim in excess of 20............. Micro................................. 20 40 20 100 n/a
Each reexamination independent claim in excess Undiscounted.......................... 480 600 120 25 n/a
of three and also in excess of the number of
such claims in the patent under reexamination.
Each reexamination independent claim in excess Small................................. 192 240 48 25 n/a
of three and also in excess of the number of
such claims in the patent under reexamination.
Each reexamination independent claim in excess Micro................................. 96 120 24 25 n/a
of three and also in excess of the number of
such claims in the patent under reexamination.
Each reexamination claim in excess of 20 and Undiscounted.......................... 100 200 100 100 n/a
also in excess of the number of claims in the
patent under reexamination.
Each reexamination claim in excess of 20 and Small................................. 40 80 40 100 n/a
also in excess of the number of claims in the
patent under reexamination.
Each reexamination claim in excess of 20 and Micro................................. 20 40 20 100 n/a
also in excess of the number of claims in the
patent under reexamination.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Under Sec. 1.16(h) and (i), the USPTO charges a fee for filing, or
later presenting at any other time, each independent claim in excess of
three, as well as each claim (whether dependent or independent) in
excess of 20. The agency proposes to increase the Sec. 1.16(h) and (i)
excess claims fees. The Sec. 1.16(j) multiple dependent claim fee is
part of the across-the-board adjustment and not included in this
targeted proposal as well as the counterpart excess claims fees
applicable to reexamination proceedings and applications that are the
national stage of an international application filed under the Patent
Cooperation Treaty. These changes would provide more revenue to help
recover the additional search and examination costs associated with
excess claims, as well as prosecution costs not covered by front-end
fees. These changes would also promote compact prosecution, and the
USPTO believes applicants motivated by costs would be incentivized to
not file excess claims. In FY 2021, only about 15% of applications
contained more than 20 total claims, and about 8% of applications
contained more than three independent claims.
The USPTO has increased excess claim fees several times during the
last 20 years, which has been very effective at reducing excess claims
from their peak in the early 2000s. A high frequency of applications
filed with exactly 20 claims and a very low frequency of applications
with claim counts exceeding 20 to help promote compact prosecution. In
absence of the agency's proposed increases to excess claims fees, it
anticipates that excess claims numbers would increase in response to
proposed fees for certain continuing applications discussed previously
in this proposal.
Continuing application and excess claim fees are naturally linked
and likely to have counterbalancing effects. For example, an increase
in continuing applications could result from raising only excess claims
fees, and an increase in excess claims could result from raising only
the fee for continuing applications (even in specific, lesser-occurring
situations). The proposed increases in excess claims fees are intended
to avert the latter scenario.
An applicant who files a nonprovisional utility application having
three independent claims and 40 claims total--double the Sec. 1.16(i)
total claim-count threshold--is required to pay the Sec. 1.16(i) fee
for 20 excess claims.
[[Page 23242]]
Under the USPTO's proposed fee rates, an application with double the 20
total claim-count threshold would require an excess claims fee payment
that equals the combined proposed fee amounts for filing, search, and
examination. In other words, a double-sized application (three
independent claims and 40 claims total) would require double the
combined total in applicable fees for filing, search, and examination.
5. Extension of Time for Provisional Application Fees
Table 8--Extension of Time for Provisional Application Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Extension for response within first month, Undiscounted.......................... $220 $50 -$170 -77 n/a
provisional application.
Extension for response within first month, Small................................. 88 20 -68 -77 n/a
provisional application.
Extension for response within first month, Micro................................. 44 10 -34 -77 n/a
provisional application.
Extension for response within second month, Undiscounted.......................... 640 100 -540 -84 n/a
provisional application.
Extension for response within second month, Small................................. 256 40 -216 -84 n/a
provisional application.
Extension for response within second month, Micro................................. 128 20 -108 -84 n/a
provisional application.
Extension for response within third month, Undiscounted.......................... 1,480 200 -1,280 -86 n/a
provisional application.
Extension for response within third month, Small................................. 592 80 -512 -86 n/a
provisional application.
Extension for response within third month, Micro................................. 296 40 -256 -86 n/a
provisional application.
Extension for response within fourth month, Undiscounted.......................... 2,320 400 -1,920 -83 n/a
provisional application.
Extension for response within fourth month, Small................................. 928 160 -768 -83 n/a
provisional application.
Extension for response within fourth month, Micro................................. 464 80 -384 -83 n/a
provisional application.
Extension for response within fifth month, Undiscounted.......................... 3,160 800 -2,360 -75 n/a
provisional application.
Extension for response within fifth month, Small................................. 1,264 320 -944 -75 n/a
provisional application.
Extension for response within fifth month, Micro................................. 632 160 -472 -75 n/a
provisional application.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO proposes a separate extension of time (EOT) fee structure
for provisional applications in which fees would be decreased from
current amounts by an average of 81%. Under EOT practice, if an
applicant is required to reply within a nonstatutory or shortened
statutory time period, the applicant may normally petition to extend
the time period for reply with the requisite fee. The time extension
may be up to the earlier of the expiration of any maximum period set by
statute or five months after the time period set for reply, if a
petition for an EOT under Sec. 1.136(a), including the EOT fee set in
Sec. 1.17(a), is filed.
Currently, the EOT fees specified in Sec. 1.17(a) apply equally to
both provisional and nonprovisional applications. The USPTO proposes an
average 81% EOT fee decrease in provisional applications under a new
paragraph (u) of Sec. 1.17, with an additional proposal that Sec.
1.136(a) be amended to refer to EOT fees under both Sec. 1.17(a) and
new Sec. 1.17(u). For patent applications other than provisional
applications, the EOT fee structure retained under Sec. 1.17(a) would
be increased by 5%, in accordance with the across-the-board proposal.
With fees reduced by 81% on average, the proposed separate EOT fee
structure for provisional applications would benefit filers in all
entity status categories. The agency envisions that micro entity
provisional application filers would benefit most. As explained in the
Director's April 20, 2023, letter to PPAC:
``The USPTO's fee review concluded that applicants who have
certified micro entity status in provisional applications are more
than twice as likely to request EOT as compared to other applicants.
Thus, we are proposing reduced EOT fees for provisional applications
by an average of 81% to reduce financial and entry barriers and
further foster inclusive innovation.''
Some micro entity applicants need time extensions to accommodate
attempts to meet additional formality requirements associated with
establishing micro entity status. Another consideration favoring this
proposal is that provisional applications are not examined; therefore,
there is less urgency to expedite processing.
6. Information Disclosure Statement Size Fees
[[Page 23243]]
Table 9--Information Disclosure Statement Size Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dollar Percent FY 2022
Description Entity type Current fee Proposed fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Filing an Information Disclosure Undiscounted................ New................. $200................... n/a n/a n/a
Statement that causes the
cumulative number of applicant-
provided items of information to
exceed 50 but not exceed 100.
Filing an Information Disclosure Undiscounted................ New................. $500, less any amount n/a n/a n/a
Statement that causes the previously paid.
cumulative number of applicant-
provided items of information to
exceed 100 but not exceed 200.
Filing an Information Disclosure Undiscounted................ New................. $800, less any amounts n/a n/a n/a
Statement that causes the previously paid.
cumulative number of applicant-
provided items of information to
exceed 200.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sections 1.97 and 1.555 provide applicants and patent owners the
opportunity to submit an information disclosure statement (IDS)
containing items of information for consideration by the examiner. In a
patent application, to be considered, the IDS must meet the timing
requirements of Sec. 1.97 and the content requirements of Sec. 1.98.
In a reexamination proceeding, the IDS must meet the content
requirements of Sec. 1.98(a). There are no specific regulatory limits
to the number of items of information that may be included in an IDS.
Most applications contain relatively few items of information submitted
by applicants for consideration. Approximately 77% of applications have
fewer than 25 applicant-cited items of information submitted during
prosecution.
The USPTO receives large IDS submissions in a small percentage of
applications. Based on the agency's most recent data, in approximately
13% of applications applicants submit over 50 total items of
information and in 8% of applications applicants submit over 100 items
of information. In an even smaller subset of applications, the number
of applicant-submitted items can be quite large, sometimes in the
thousands or even tens of thousands.
In many instances, these large IDS submissions contain clearly
irrelevant, marginally relevant, or cumulative information. It is
onerous for examiners and hinders the USPTO's statutory obligation to
timely examine applications under 35 U.S.C. 154 to consider large
numbers of clearly irrelevant, marginally relevant, or cumulative
information. Additionally, large IDS submissions are costly for the
agency to consider. Therefore, the USPTO suggests, as a best practice,
that applicants and patent owners avoid filing large IDS submissions by
eliminating clearly irrelevant, marginally relevant, or cumulative
information. See MPEP 2004, item 13.
In 2006, the USPTO attempted to address large IDS submissions by
proposing new requirements, including that IDSs with more than twenty
citations be accompanied by an explanation of relevance. See Changes To
Information Disclosure Statement Requirements and Other Related
Matters, 71 FR 38808 (July 10, 2006). The proposal was not adopted;
instead, to provide some relief for examiners burdened with large IDS
submissions, the agency began providing examiners additional time to
consider large IDS submissions in applications.
On average, the USPTO provides examiners approximately 80,000
additional hours each year to consider large IDS submissions in
applications, costing the agency $10 million annually. As there is
currently no fee for large IDS submissions, this cost is subsidized
generally by patent fees, primarily maintenance fees collected for
patents that resulted from applications that did not contain large IDS
submissions.
Accordingly, to have applicants and patent owners filing large IDS
submissions cover more of the associated costs, the USPTO proposes to
amend Sec. 1.17 to implement a new IDS size fee based on the
cumulative number of items of information submitted by an applicant or
patent owner during the pendency of the application or reexamination
proceeding. The proposed IDS size fee sets forth: (1) a first amount
($200) for a cumulative number of applicant-provided or patent-owner
provided items of information in excess of 50; (2) a second amount
($500) for a cumulative number of applicant-provided or patent-owner
provided items of information in excess of 100 but not exceeding 200,
less any amount previously paid; and (3) a third amount ($800) for a
cumulative number of applicant-provided or patent owner provided items
of information in excess of 200, less any amounts previously paid.
For example, if an applicant submits a single IDS during
prosecution with 101 items of information, the applicant would pay $500
under the proposed new Sec. 1.17(v)(2) for exceeding 100 items of
information, but not exceeding 200. In another example, if an applicant
files a first IDS with 51 items of information, they would pay $200
under proposed new Sec. 1.17(v)(1) for exceeding 50 items of
information, but not exceeding 100. Subsequently, in that same
application, if the applicant files a second IDS with 50 items of
information, the cumulative number of items of information in the
application would be 101. The applicant would then pay $500 under
proposed new Sec. 1.17(v)(2) for exceeding 100 items of information,
but not exceeding 200, less the $200 previously paid under proposed new
Sec. 1.17(v)(1), for a total of $300.
Further, in that same application, if the applicant files a third
IDS with 100 items of information, the cumulative number of items of
information in the application would be 201. The applicant would then
pay $800 under proposed new Sec. 1.17(v)(3) for exceeding 200 items of
information, less the $200 previously paid under proposed new Sec.
1.17(v)(1) and less the $300 previously paid under proposed new Sec.
1.17(v)(2), for a total of $300. Thus, in this example, the applicant
would pay a combined IDS size fee of $800 for the three IDSs filed
during the pendency of the application.
Additionally, the USPTO is proposing to amend Sec. 1.98(a) to
include a new content requirement for an IDS that will facilitate
implementation of the proposed IDS size fee. Specifically, the USPTO is
proposing to require that an IDS contain a clear written assertion by
applicant and patent owner that the IDS is accompanied by the
appropriate IDS size fee, or that no IDS size fee is required. This
assertion is necessary because it ensures the record is clear as
[[Page 23244]]
to which fee the applicant or patent owner believes may be due (or that
no fee may be due), with the IDS so the examiner can promptly ascertain
whether the IDS is compliant. There would be no specific language
required for the written assertion, but it should be readily
identifiable on the IDS and clearly convey the applicable IDS size fee.
The agency envisions modifying USPTO Form PTO/SB/08 to include the
requisite written assertion stylized as a set of check boxes
corresponding to each potential IDS size fee, along with an additional
box indicating that no IDS size fee is due. Since the form must be
signed in accordance with Sec. 1.33(b), certifications under
Sec. Sec. 1.4 and 11.18 apply. Applicants and patent owners would be
strongly advised to use the PTO/SB/08 form, but it will not be
required. The USPTO does not foresee general authorizations to charge
fees or a specific authorization to charge any applicable IDS size fee
as a compliant written assertion under the proposed requirement. It
would be the applicant's and patent owner's responsibility to track the
cumulative number of items of information submitted in the application
and provide a written assertion of any applicable IDS size fee due. In
accordance with Sec. 1.97(i), an IDS filed in an application without
the written assertion or the necessary IDS size fee will be placed in
the file, but not considered by the agency. The applicant may then file
a new IDS accompanied by the written assertion or necessary IDS size
fee, but the date the new IDS is filed will be the date of the IDS for
purposes of determining compliance with Sec. 1.97. See MPEP 609.05(a).
An IDS filed in a reexamination proceeding without the written
assertion or the necessary IDS size fee will be placed in the file and
will remain of record, but the IDS will not be considered.
Applicants are reminded that the duty of disclosure under
Sec. Sec. 1.56 and 1.555 only requires the submission of information
material to patentability to the USPTO. Material information is
described in Sec. Sec. 1.56(b) and 1.555(b) as information that is not
cumulative to information already of record and (1) establishes, by
itself or in combination with other information, a prima facie case of
unpatentability of a claim; or (2) it refutes, or is inconsistent with,
a position the applicant takes in: (i) opposing an argument of
unpatentability relied on by the USPTO, or (ii) asserting an argument
of patentability. The United States Court of Appeals for the Federal
Circuit uses an even higher standard for materiality than the Sec.
1.56(b) and 1.555(b) standards by requiring ``but-for'' materiality,
such that the USPTO would not have allowed a claim had it been aware of
the undisclosed information. Neither the Sec. 1.56(b) and 1.555(b)
standards nor the Federal Circuit's ``but-for'' standard require the
submission of clearly irrelevant or marginally relevant information.
The USPTO does not believe the proposed IDS size fee will have a
large impact on patent applicants or owners. As stated previously, a
majority of applicants do not submit large amounts of information for
consideration. Based on current IDS filing volume, only 13% of
applications will require the first-tier IDS size fee for submitting
over 50 items of information. Even fewer applications will be subject
to the succeeding two tiers, as only approximately 8% of applications
contain over 100 items of information, and about 4% contain over 200
items of information. Additionally, the fee should not
disproportionately impact small and micro entities. During FY 2022,
small entities accounted for only 25% of applications that would incur
a fee, while micro entities made up less than 1%. By placing more of
the service costs for considering IDS submissions totaling over 50
items of information on the applicants who file such IDS submissions,
less costs will be borne across the patent system.
7. Patent Term Adjustment Fees
Table 10--Patent Term Adjustment Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dollar Percent FY 2022 unit
Description Entity type Current fee Proposed fee change change cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Filing an application for patent term Undiscounted........................ $210 $300 $90 43 $745
adjustment.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO is proposing a fee increase from $210 to $300 for filing
an application for patent term adjustment under Sec. 1.705(b), which
allows patentees of utility and plant patents to request
reconsideration of the patent term adjustment indicated on the face of
the patent. This proposal adjusts the fee for inflation and supports
the USPTO's fee setting policy of aligning fees with costs.
This service and fee were introduced in September 2000 as part of a
rule package implementing the patent term adjustment provisions of 35
U.S.C. 154(b), which were created by the Uruguay Round Agreements Act
(Pub. L. 103-465, 108 Stat. 4809 (1994)) and amended by the American
Inventors Protection Act of 1999 (Pub. L. 106-113, 113 Stat. 1501,
1501A-552 through 1501A-591 (1999)). See Changes to Implement Patent
Term Adjustment Under Twenty-Year Patent Term, 65 FR 56366 (Sept. 18,
2000). Under 35 U.S.C. 154(b), patent term adjustment is a complex
statutory scheme that compensates utility and plant patent owners for
certain application processing delays that would otherwise reduce a
patent's term. See MPEP 2730 through 2732 for more information
regarding grounds for adjustment, the adjustment period, and reductions
in the adjustment period due to applicant failures to engage in
reasonable efforts to conclude prosecution of an application.
In accordance with these laws and their implementing regulations,
the USPTO determines applicable patent term adjustment at the time of
issuing each utility and plant patent and indicates such adjustment on
the face of the patent. These determinations are performed using a
computer program that relies upon information in the agency's patent
application data repository--formerly Patent Application Locating and
Monitoring, now the One Patent Service Gateway (OPSG). This information
includes the type of document (e.g., an amendment or a notice of
allowance) and the relevant date (e.g., for an amendment, the date of
receipt in the USPTO). Applicants may use Patent Center to check the
accuracy of the data entered in the OPSG throughout the examination
process and are encouraged to notify the agency of any detected errors
prior to allowance. See e.g., MPEP 2733 for guidance about checking
records and reporting errors (note, Patent Center replaced the Patent
Application Information Retrieval system discussed in the MPEP).
If the patentee disagrees with the adjustment indicated on the
patent, they may file a request for reconsideration of patent term
adjustment under Sec. 1.705(b) which must filed within two months of
the date the patent was granted. The
[[Page 23245]]
request (also called an application) must include the patentee's
requested patent term adjustment and a supporting statement of facts
and be accompanied by the fee specified in Sec. 1.18(e). In response
to a request, the USPTO will conduct a manual redetermination of the
patent term adjustment, which may result in (1) an amount of patent
term adjustment that is the amount of patent term adjustment requested
by the applicant; (2) the same amount of patent term adjustment as
indicated in the patent (i.e., no change); or (3) a different amount of
patent term adjustment that may be higher or lower than the patent term
adjustment indicated on the patent. More information regarding
determination and reconsideration of patent term adjustment is
available in MPEP 2733 and 2734.
When introduced in 2000, the agency set the fee for requests for
reconsideration of patent term adjustment at $200, and since then has
increased this fee only $10. See Changes To Implement Patent Term
Adjustment Under Twenty-Year Patent Term, 65 FR 56366 (Sep. 18, 2000);
FY 2020 Final Rule. If the agency had adjusted the fee for inflation as
measured by the Consumer Price Index since the fee's introduction, it
would be $351 as of June 2023. The USPTO's proposed increase to $300 is
15% below the inflation-adjusted original fee. Thus, the proposed fee
represents a partial recovery of the inflation-adjusted original fee.
Moreover, the proposed fee will remain significantly less than the unit
cost of this service ($745 in FY 2022). While this fee does not qualify
for entity discounts, the proposed increase will not disproportionately
impact small and micro entities. Based on data from FY 2021 and FY
2022, small entities file about 19% of PTA reconsideration requests,
and micro entities only 1%.
This service has a low volume of about 500 requests each year,
meaning that patentees are requesting reconsideration of patent term
adjustment in only 0.15% of issued patents (since FY 2019, the USPTO
has issued over 325,000 utility and plant patents annually). This low
volume is due partly to the USPTO's improvements to its computer
program over the years, and partly to applicant diligence when
submitting and reviewing papers. For example, as described previously,
applicants are encouraged to bring any detected errors in OPSG data to
the agency's attention before allowance. In addition, applicants can
improve the accuracy of the USPTO's records (which, in turn, improves
the accuracy of the computer program's determinations) by using the
proper document codes when filing papers. See e.g., Standardization of
the Patent Term Adjustment Statement Regarding Information Disclosure
Statements, 88 FR 39172 (Jun. 15, 2023), which explains how using the
agency's form and document code when filing a ``safe harbor'' statement
for an IDS enhances the accuracy of the USPTO's automated process for
calculating patent term adjustment when the ``safe harbor'' provisions
of Sec. 1.704(d) are involved.
8. Patent Term Extension Fees
Table 11--Patent Term Extension Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Application for extension of term of patent.... Undiscounted.......................... $1,180 $6,700 $5,520 468 $2,581
Initial application for interim extension (see Undiscounted.......................... 440 1,320 880 200 2,347
37 CFR 1.790).
Subsequent application for interim extension Undiscounted.......................... 230 680 450 196 2,347
(see 37 CFR 1.790).
Supplemental redetermination after notice of Undiscounted.......................... New 1,440 n/a n/a n/a
final determination.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO is proposing fee increases for filing applications for
patent term extension and applications for interim extensions under 35
U.S.C. 156, and is also proposing a new fee for requesting a
supplemental redetermination of the patent term extension in a pending
application for patent term extension. These proposals adjust fees for
inflation and reflect the full cost of these services and also supports
the agency's fee setting policy of aligning fees with costs.
The patent term extension service and fee were introduced in
October 1984 as part of initial operating guidelines established after
enactment of the patent term extension provisions of 35 U.S.C. 156 in
the Drug Price Competition and Patent Term Restoration Act of 1984
(Pub. L. 98-417, 98 Stat. 1585 (1984)) (Hatch-Waxman Act). See
Guidelines for Extension of Patent Term under 35 U.S.C. 156, 1047 OG 16
(Oct. 9, 1984). In brief, patent term extensions under 35 U.S.C. 156
enable owners of patents claiming certain products subject to premarket
regulatory review to restore to the terms of those patents some of the
time lost while awaiting premarket government approval for the products
from a regulatory agency. The products eligible for patent term
extension services under 35 U.S.C. 156 include human drug products,
medical devices, animal drugs, and food or color additive products, all
of which are regulated by the FDA, and veterinary biological products,
which are regulated by the United States Department of Agriculture
(USDA). See MPEP 2750 for more information regarding the legislative
history and scope of the Hatch-Waxman Act with respect to patent term
extensions.
In accordance with this law and its implementing regulations, the
patent owner must file an application for patent term extension with
the USPTO within a short time after the product receives permission for
commercial marketing or use from the applicable regulatory agency (the
FDA or USDA). See MPEP 2754 et seq. Upon receipt, the USPTO reviews the
application, the applicant, the patent, and the claimed product or
process and then works with the applicable regulatory agency to
evaluate compliance with the statutory requirements for a patent term
extension under 35 U.S.C. 156. While it is the USPTO's responsibility
to decide whether an applicant has satisfied statutory requirements and
whether the patent qualifies for patent term extension, the applicable
regulatory agency possesses expertise and records regarding some
statutory requirements and has certain direct responsibilities under 35
U.S.C. 156 for determining length of the regulatory review period. See
MPEP 2756 for a more detailed explanation of how the USPTO works with
these regulatory agencies to determine a patent's eligibility for
patent term extension under 35 U.S.C. 156. Once the USPTO has received
the necessary information from the regulatory agency, it determines the
[[Page 23246]]
applicable patent term extension (if any) and formulates a Notice of
Final Determination or determination of ineligibility, reviews any
responses or reconsideration requests received from the patent owner,
and then prepares a Final Determination or certificate as appropriate.
See MPEP 2755 through 2759 for an explanation of this process. Because
of the coordination and communication required between the USPTO and
the appropriate regulatory agency, and the complexity of the legal
determinations involved, it often takes two or more years to reach a
Final Determination or determination of ineligibility. The time
required varies greatly depending on the individual circumstances of
each application.
When introduced in 1984, the fee for this service was set at $750
and since then has increased to only $1,180. See e.g., Guidelines for
Extension of Patent Term Under 35 U.S.C. 156, 1047 OG 16 (Oct. 9,
1984), Rules for Extension of Patent Term, 52 FR 9386 (Mar. 24, 1987),
and FY 2020 Final Rule. If the original fee were adjusted for inflation
as measured by the CPI, it would be $2,173 as of June 2023. Moreover,
the complexity and cost of this service has increased over time due to
the subject matter and legal expertise required to evaluate the
statutory requirements. Thus, the USPTO is proposing to raise the fee
for this service from $1,180 to $6,700.
While the proposed fee is greater than the reported unit cost, the
USPTO did not begin formally tracking the unit cost of this service (as
a separate service through the ABI program) until midway through FY
2021. Prior to FY 2018 the service volume was quite low at about 42
applications each year. Since then, volume has averaged 100-plus
applications each year. Accordingly, because the ABI for patent term
extension is based on limited data, the currently reported unit cost is
believed to be significantly lower than the actual cost of providing
the service. As the amount of service information increases with time,
the USPTO expects that the unit cost determined by the ABI program will
more closely align with the actual cost.
The USPTO is also proposing a new service fee that would apply to
the approximate one-third of applications for patent term extension in
which the user files a response that includes a terminal disclaimer
after receiving the Notice of Final Determination. The submission of
terminal disclaimers at this late stage in the review process affects
the patent term, requiring the USPTO to engage in a substantial amount
of rework to recalculate the applicable patent term extension and make
a supplemental redetermination of the appropriate extension in view of
the disclaimer. These submissions became more common after the Federal
Circuit's decision in Gilead Sciences, Inc. v. Natco Pharma Ltd., 753
F.3d 1208 (Fed. Cir. 2014), which made it clear that the extended term
of a patent can be affected by a terminal disclaimer filed against a
later-issued but earlier-expiring reference patent, and after a 2015
presentation by USPTO personnel at a public meeting discussing the
Gilead decision. See Safekeeping of 35 U.S.C. 156 Extensions
presentation from the USPTO Biotechnology/Chemical/Pharmaceutical
Customer Partnership Meeting on April 7, 2015, available at <a href="https://www.aipla.org/docs/default-source/committee-documents/bcp-files/pte-for-4-7-15-bcp.pdf?sfvrsn=868807b4_2">https://www.aipla.org/docs/default-source/committee-documents/bcp-files/pte-for-4-7-15-bcp.pdf?sfvrsn=868807b4_2</a>. These submissions are expected to
become more common in the future, because of In re Cellect, 81 F.4th
1216, 2023 U.S.P.Q.2d 1011 (Fed. Cir. 2023), in which the Federal
Circuit explained that patent term adjustment and patent term extension
are treated differently with respect to nonstatutory double patenting
and terminal disclaimers. Currently, beneficiaries of this rework
receive this additional service for free because the cost is subsidized
by other users (e.g., by unrelated fee collections from other patent
applicants and owners). In accordance with user fee design principles,
the USPTO is proposing a new fee of $1,440 to cover the costs of this
service, to be paid by users who benefit from it.
The USPTO is also proposing to increase the fees for filing
applications for interim patent term extensions under Sec. 1.790. This
service and fees were introduced in 1994 in response to an amendment of
the Hatch-Waxman Act that added 35 U.S.C. 156(d)(5). See MPEP 2750 and
Guidelines for Interim Extension Under 35 U.S.C. 156(d)(5) of a Patent
Term Prior To Regulatory Approval of a Product for Commercial Marketing
or Use--Public Law 103-179 (Dec. 3, 1993), 1159 OG 12 (Feb. 1, 1994).
Interim patent extension under 35 U.S.C. 156(d)(5) is available for a
patent claiming a product which is undergoing the approval phase of
regulatory review as defined in 35 U.S.C. 156(g), if the patent is
expected to expire before approval is granted. The application of an
interim patent extension is very similar to an application for patent
term extension, with a similar evaluation process, except the USPTO is
not required to seek the advice of the regulatory agency. See MPEP
2755.02 for more information regarding this service.
The interim extension service has a very low volume of about 20 or
fewer applications each year, but it is costly and requires special
handling due to the subject matter and legal expertise required to
evaluate the statutory requirements. The USPTO is proposing to raise
the fees from $440 to $1,320 for the initial (first) application for an
interim extension of patent term, and from $230 to $680 for each
subsequent application. This fee increase will help recover the
agency's costs of performing this service. Upon its introduction in
1993, the fees for this service were set at $400 for an initial
application and $200 for subsequent applications, and have increased by
only $40 and $30, respectively, since. See FY 2020 Final Rule. The
proposed fee amounts remain significantly less than the agency's costs
of providing the service; as of FY 2022, the unit cost was $2,347.
No patent term extension-related fees are eligible for entity
discounts. The users of these services are typically large
pharmaceutical and medical device companies due to the expense required
to develop and obtain marketing approval for such inventions, in
addition to limits on service availability set forth in 35 U.S.C. 156.
For example, over the last 40 years, 81% of applications for patent
term extension concerned human drug products, 15% concerned medical
devices, 3% concerned animal drugs, and about 1% concerned food or
color additive products or veterinary biological products. See e.g.,
the USPTO website at <a href="https://www.uspto.gov/patents/laws/patent-term-extension/patent-terms-extended-under-35-usc-156">https://www.uspto.gov/patents/laws/patent-term-extension/patent-terms-extended-under-35-usc-156</a>, which provides a list
of patents that have been extended via this service. Additionally, the
costs for regulatory approval of these products are extremely high. For
example, as reported by the CBO, three recent studies estimated the
average research and development costs per new drug to range from $0.8
billion to $2.3 billion. See Congressional Budget Office, Research and
Development in the Pharmaceutical Industry, Report No. 57126 pp. 15 and
16 (April 2021), available at <a href="https://www.cbo.gov/publication/57126">https://www.cbo.gov/publication/57126</a>. It
is not clear whether the figures reported in these studies included FDA
user fees, which are currently between $1.6 million and $3.2 million as
a one-time sum, with an additional annual program fee of $393,933. See
e.g., the FDA's user fee page for prescription drugs at <a href="https://www.fda.gov/industry/fda-user-fee-programs/prescription-drug-user-fee-amendments">https://www.fda.gov/industry/fda-user-fee-programs/prescription-drug-user-fee-amendments</a>. Thus, when compared to
[[Page 23247]]
either FDA user fees or the research and development costs required to
develop a new drug and obtain marketing approval, the proposed fees to
obtain a patent term extension for the patent covering such a new drug
are quite small.
9. Request for Continued Examination Fees
Table 12--Request for Continued Examination Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Request for continued examination (RCE)--1st Undiscounted.......................... $1,360 $1,500 $140 10 $3,059
request (see 37 CFR 1.114).
Request for continued examination (RCE)--1st Small................................. 544 600 56 10 3,059
request (see 37 CFR 1.114).
Request for continued examination (RCE)--1st Micro................................. 272 300 28 10 3,059
request (see 37 CFR 1.114).
Request for continued examination (RCE)--2nd Undiscounted.......................... 2,000 2,500 500 25 2,191
request (see 37 CFR 1.114).
Request for continued examination (RCE)--2nd Small................................. 800 1,000 200 25 2,191
request (see 37 CFR 1.114).
Request for continued examination (RCE)--2nd Micro................................. 400 500 100 25 2,191
request (see 37 CFR 1.114).
Request for continued examination (RCE)--3rd Undiscounted.......................... 2,000 3,600 1,600 80 2,169
and subsequent request (see 37 CFR 1.114).
Request for continued examination (RCE)--3rd Small................................. 800 1,440 640 80 2,169
and subsequent request (see 37 CFR 1.114).
Request for continued examination (RCE)--3rd Micro................................. 400 720 320 80 2,169
and subsequent request (see 37 CFR 1.114).
--------------------------------------------------------------------------------------------------------------------------------------------------------
For utility and plant applications where prosecution is closed
(e.g., a final rejection has been mailed), the applicant may file an
RCE and pay a specified fee within the requisite time period.
Applicants typically file an RCE when they choose to continue
prosecution before an examiner, rather than appeal a rejection or
abandon the application. Prior to application abandonment, applicants
may also file a continuing application to extend prosecution rather
than file an RCE. The USPTO's proposal would split the existing RCE
fees into three parts--a fee for a first RCE, a higher fee for a second
RCE, and a still higher fee for third and subsequent RCEs filed in a
single patent application.
Since FY 2013, the USPTO has split RCE fees into two parts: (1) a
fee for a first RCE; and (2) a second, higher fee for a second or
subsequent RCE. See Setting and Adjusting Patent Fees, 78 FR 4212 (Jan.
18, 2013). The USPTO's FY 2017 fee setting rulemaking maintained the
undiscounted fee for a first RCE well below cost but set the
undiscounted fee for second and subsequent RCEs at 19% above cost. See
Setting and Adjusting Patent Fees During Fiscal Year 2017, 82 FR 52780
(Nov. 14, 2017). The initial RCE fee from FY 2017 would have required
an applicant without any entity status discount to file four RCEs to
mostly recover the USPTO's costs for treating all RCE filings.
These costs have increased annually since FY 2017. In fact, the
current undiscounted fee for second and subsequent RCEs is set so far
below cost that no amount of RCE filings would recapture the USPTO's
costs of providing the service. Under this proposal to trifurcate the
RCE fee structure, the undiscounted fee for a first RCE would be more
than 50% below cost, and the undiscounted fee for a second RCE would be
just above cost. The undiscounted fee for third and subsequent RCEs
would be enough above cost that a third RCE from an applicant with no
entity status discount, combined with the fees for filing the first two
RCEs, would cover agency costs for treating all three RCEs.
Of course, applicants do not file multiple RCEs all at once, and
the USPTO's costs typically rise over time due to inflationary factors.
Under the proposed new trifurcated fee structure, by the time an
applicant pays the third and subsequent RCE fee, it--when combined with
the first two RCE fees--would likely not cover the USPTO's costs for
treating all three RCEs. In addition, RCEs filed by applicants with an
established entitlement to an entity status discount would never
approach covering the agency's costs, regardless of the number of RCEs
filed.
During FY 2011, when the agency's fee schedule set only one RCE
fee, RCE filings comprised about 30% of all RCE and utility patent
application filings collectively. In FY 2018, RCE filings comprised 29%
of the total despite the bifurcated fee structure introduced in FY
2013. The RCE filing percentage declined to 25% in FY 2021 and 23% in
FY 2022. It is unlikely these recent decreases resulted from the
bifurcated fee structure, as the RCE filing percentage was hardly
affected in the years immediately following FY 2013.
By reducing RCE filings in favor of appeal or reaching agreement
with an examiner, the proposed higher fee for RCEs filed subsequent to
the first RCE should help promote more compact prosecutions. Higher
fees for successively filed RCEs also address the inequities of
providing further subsidies to those who make greater use of the patent
system. As explained in the USPTO's FY 2013 rulemaking at 78 FR 4212,
4245 (Jan. 18, 2013), because the USPTO set the fee for the first RCE
below the cost to process it, the agency must recoup that cost
elsewhere. Since most applicants resolve their issues with the first
RCE, the agency determined that applicants that file more than one RCE
are using the patent system more extensively than those who file zero
or only one RCE. Therefore, the USPTO determined that the cost to
review applications with multiple RCEs should not be subsidized with
other back-end fees to the same extent as applications with a first
RCE, newly filed applications, or other continuing applications. This
proposal would promote compact prosecution and more appropriately
dispense the low barrier to entry feature of below cost front end fees.
In FY 2011, around 70% of RCE applications were for first RCEs,
with
[[Page 23248]]
the remaining 30% for a second or subsequent RCE. Based on FY 2021 and
FY 2022 data, approximately 72% of current RCE filings are first RCEs,
19% are second RCEs, and the remaining 9% are third or subsequent RCEs.
If this proposal has its intended effect, less than 9% of RCE filings
would qualify for the highest fee tier for third and subsequent RCEs.
As previously described, the undiscounted fee for a first RCE would
be more than 50% below cost, and the undiscounted fee for a second RCE
would be above cost. Accordingly, undiscounted fees paid for two RCEs
would be 24% below cost for treating two RCEs. Under this proposal, it
is not until the third and subsequent undiscounted RCEs, combined with
fees for the first two RCEs, that the USPTO would recover its costs.
An applicant in a position to file a third RCE likely has undergone
years of patent prosecution, and they could avoid the higher fee by
appealing the examiner's rejection(s) should no agreement be reached to
put the application in condition for allowance. Prolonged, years-long
prosecution could result in patent expiration prior to maintenance fee
payment, especially the third scheduled maintenance fee--another factor
in the USPTO's proposal to limit excessive RCE filings.
That said, some applicants may see value in prolonged prosecution.
Whereas the scope of an issued patent is fixed and avoiding patent
infringement can be assessed by competitors, a patent that may result
in the future from a pending application is harder to assess in that
regard. Accordingly, the USPTO does not expect to eliminate third and
subsequent RCE filings but envisions that the higher fee will help
reduce their number.
10. Suspension of Action Fees
Table 13--Suspension of Action Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
First request for suspension of action......... Undiscounted.......................... $220 $300 $80 36 n/a
First request for suspension of action......... Small................................. 88 120 32 36 n/a
First request for suspension of action......... Micro................................. 44 60 16 36 n/a
Subsequent request for suspension of action.... Undiscounted.......................... 220 450 230 105 n/a
Subsequent request for suspension of action.... Small................................. 88 180 92 105 n/a
Subsequent request for suspension of action.... Micro................................. 44 90 46 105 n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO proposes to create a new tiered fee structure for
requests for suspension of action under Sec. 1.103(a). Specifically,
the agency seeks to increase the undiscounted fee for a first
suspension request to $300 and establish a new fee of $450
(undiscounted) for the second or subsequent requests in the same
application. The fee increase for the first request is targeted at
shifting the cost of the service to those applicants requesting
suspensions, thereby reducing subsidization from other fees. This
increase will not affect fees for suspensions of action requested at
the time of filing CPA under Sec. 1.103(b) or an RCE under Sec.
1.103(c).
Currently, Sec. 1.103(a) permits applicants to request a
suspension of action for a period not exceeding six months for good and
sufficient cause. The patent examiner typically decides the first
request for suspension. Second and subsequent requests require
Technology Center director approval. Due to the heightened approval
level, these requests cost the USPTO more to process. As such, in order
to recoup the additional cost of the second and subsequent requests,
the agency is proposing to charge a higher fee for these requests.
Additionally, as more requests for suspension are requested and
granted, the longer the pendency of the application.
The USPTO receives approximately 2,500 requests for suspension
under Sec. 1.103(a) each year. Of those requests, 86% are filed by
undiscounted entities, 12% by small entities, and 2% by micro entities.
Given the availability of entity discounts, the USPTO believes this fee
increase will generally have a negligible impact on small and micro
entities.
11. Terminal Disclaimer Fees
Table 14--Terminal Disclaimer Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Terminal disclaimer, filed prior to the first Undiscounted.......................... $170 $200 $30 18 n/a
action on the merits.
Terminal disclaimer, filed prior to a final Undiscounted.......................... 170 500 330 194 n/a
action or allowance.
Terminal disclaimer, filed after final or Undiscounted.......................... 170 800 630 371 n/a
allowance.
Terminal disclaimer, filed on or after a notice Undiscounted.......................... 170 1,100 930 547 n/a
of appeal.
Terminal disclaimer, filed in a patented case Undiscounted.......................... 170 1,400 1,230 724 n/a
or in an application for reissue.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO proposes to create a new tiered fee structure for
terminal disclaimers, specifically splitting Sec. 1.20(d) into two
parts.
The first part, in proposed Sec. 1.20(d)(1), would apply only to
statutory disclaimers under 35 U.S.C. 253(a) and Sec. 1.321(a). As
explained in MPEP 1490, a statutory disclaimer is a statement in which
a patent owner relinquishes legal rights to one or more claims of a
patent. The proposed fee for filing such a statutory disclaimer would
be increased slightly (from $170 to $179) as part of the across-the-
board fee increase.
The second part, in proposed Sec. 1.20(d)(2), would apply only to
[[Page 23249]]
terminal disclaimers under 35 U.S.C. 253(b) and Sec. 1.321. As
explained in MPEP 1490, a terminal disclaimer is a statement in which a
patentee or applicant disclaims or dedicates to the public the entire
term or any terminal part of the term of a patent, or of a patent to be
granted when filed in an application. The proposed fees for filing such
terminal disclaimers would be increased as described in this section
and would vary depending on the stage of examination of the application
in which the terminal disclaimer is filed. In particular, proposed
Sec. 1.20(d)(2) would create five tiers of fees for filing terminal
disclaimers, beginning at $200 for the first tier and increasing by
$300 for each subsequent tier.
1. The first-tier fee of $200 is set forth in proposed Sec.
1.20(d)(2)(i), and would be required upon the filing of a terminal
disclaimer in a non-reissue application before the mailing of a first
Office action on the merits.
2. The second-tier fee of $500 is set forth in proposed Sec.
1.20(d)(2)(ii) and would be required upon the filing of a terminal
disclaimer in a non-reissue application after the period specified in
Sec. 1.20(d)(2)(i) and before the mailing date of any final action
under Sec. 1.113, a notice of allowance under Sec. 1.311, or an
action that otherwise closes prosecution in the application.
3. The third-tier fee of $800 is set forth in proposed Sec.
1.20(d)(2)(iii) and would be required upon the filing of a terminal
disclaimer in a non-reissue application after the period specified in
Sec. 1.20(d)(2)(ii) and before any submission of a notice of appeal
under Sec. 41.31.
4. The fourth-tier fee of $1,100 is set forth in proposed Sec.
1.20(d)(2)(iv) and would be required upon the filing of a terminal
disclaimer in a non-reissue application on or after the submission of a
notice of appeal under Sec. 41.31.
5. The fifth-tier fee of $1,400 is set forth in proposed Sec.
1.20(d)(2)(v) and would be required upon the filing of a terminal
disclaimer in a patent, or in an application for reissue of a patent.
These fee increases and the tiered structure in proposed Sec.
1.20(d)(2) are focused on encouraging applicants to promptly address
double patenting issues that arise during prosecution, which will then
promote more efficient patent examination by reducing unnecessary
costs. The proposals will also foster greater public certainty by
providing earlier notice of when the patent term will end.
Patent applications and patents are subject to the doctrine of
nonstatutory double patenting to prevent both the unjust timewise
extension of the right to exclude and multiple infringement suits by
different parties. These situations may arise from the granting of
multiple patents with patentably indistinct claims where the patents
have a common owner, applicant, or inventor, or where the patents are
not commonly owned but are subject to a joint research agreement. See
MPEP 804 for a more extensive discussion of the doctrine of
nonstatutory double patenting. An applicant may avoid or overcome a
nonstatutory double patenting rejection by filing a terminal disclaimer
in the application or proceeding in which the rejection is anticipated
or actually made. As explained in MPEP 804.02, the use of a terminal
disclaimer in overcoming a nonstatutory double patenting rejection is
in the public interest because it encourages the disclosure of
additional developments, the earlier filing of applications, and the
earlier expiration of patents whereby the inventions covered become
freely available to the public.
Filing terminal disclaimers early in prosecution reduces the amount
of time examiners must spend on nonstatutory double patenting analyses.
Because double patenting rejections are made on a claim-by-claim basis,
an examiner must compare each claim of the application being examined
against each claim of the reference patent or application. As explained
in MPEP 804 subsection II.B, this comparison includes construing the
reference claims and determining whether an anticipation analysis or
obviousness analysis is appropriate for each examined claim. Examiners
may spend a substantial amount of time on these analyses and must
repeat the process for each reference patent or application used in a
double patenting rejection. If an applicant files terminal disclaimers
prior to the first action on the merits, the examiner can avoid the
time-intensive double patenting analyses that would otherwise be
required. Further, if an applicant does not file a terminal disclaimer
after a rejection has been made, the examiner will often have to repeat
the analysis one or more times. Double patenting rejections may need to
be modified throughout prosecution based on amendments to the claims
under examination and, in the case of a provisional rejection,
amendments to the claims of the reference application. If a terminal
disclaimer is not promptly filed, the examiner may have to repeat the
analysis in a final rejection and at appeal, and the time spent
repeating this analysis detracts from the total time available to
review the application for other issues such as patentability over the
art and compliance with 35 U.S.C. 112.
Terminal disclaimers filed in patents and applications for reissue
are subject to the highest fee tier in proposed Sec. 1.20(d)(2)(v) to
more strongly encourage the earlier filing of such disclaimers given
the public interest in knowing exactly when the term will end,
particularly as disclaimer filings during this time period are often
motivated by the patent owner's plans to assert the patent. Relatively
few disclaimers are filed during this time period (approximately 40 to
80 a year, or about 1% of all terminal disclaimers). Moreover, terminal
disclaimers in patented cases require additional processing such as
printing the terminal disclaimer data in the Official Gazette; and
incorporating the notice of the terminal disclaimer published in the
Official Gazette into the specification of the patent as required by
Sec. 1.321(a). See MPEP 1490(IV) for more information about this
additional processing by the USPTO's Certificates of Correction Branch.
Other than requiring payment of the fifth-tier fee in Sec.
1.20(d)(2)(v), this proposed rule will not change the processing of
terminal disclaimers after issuance or the conditions under which a
terminal disclaimer may be filed in a patent when the patent is
involved in a post-grant proceeding at the USPTO such as a
reexamination or a proceeding before the Patent Trial and Appeal Board
under part 42 of 37 CFR (e.g., inter partes review). See MPEP 1490(III)
for more information about filing a disclaimer in a patent or
reexamination proceeding.
Based on workload numbers from the last five full fiscal years (FY
2018 through FY 2022), about 63,000 terminal disclaimers are filed
annually. Of these, about 6% would incur the first-tier fee in Sec.
1.20(d)(2)(i), about 65% would incur the second-tier fee in Sec.
1.20(d)(2)(ii), about 28% would incur the third-tier fee in Sec.
1.20(d)(2)(iii), slightly less than 1% would incur the fourth-tier fee
in Sec. 1.20(d)(2)(iv), and approximately 0.1% would incur the fifth-
tier fee in proposed Sec. 1.20(d)(2)(v). After implementation of the
proposed fees, the USPTO anticipates that applicants will file earlier
terminal disclaimers, particularly those currently filed in the time
periods that fall into the third and fourth tiers.
While these fees do not qualify for entity discounts, the proposed
fees are not expected to disproportionately impact small and micro
entities based on current trends in filing continuation applications
and terminal disclaimers. For instance, because about 80% of
[[Page 23250]]
continuation applications have a patented parent, in general they may
be more likely than non-continuing applications to raise double
patenting issues requiring filing of a terminal disclaimer. Thus, it is
reasonable to expect that terminal disclaimer filings would be somewhat
proportional to continuation filings (the correlation is not exact,
because double patenting may also arise in noncontinuing applications,
as explained in MPEP 804). This expectation is supported by the USPTO's
workload data for FY 2021 and FY 2022, which indicate that small
entities file about 25% of continuation applications and about 26% of
terminal disclaimers each year. Micro entities are much less affected,
in that they file about 8% of continuation applications but only about
1% of terminal disclaimers each year. Thus, the anticipated impact of
the proposed terminal disclaimer fees on small entities is the same as
what would be expected based on their respective share of continuation
application filings, and micro entities are much less likely to be
impacted.
The USPTO also anticipates that the proposed fees will be
relatively technology-neutral. Slightly higher impacts may occur in
technology areas examined in Technology Center 1600 (biotechnology and
organic chemistry) and Technology Center 2400 (computer networks,
multiplex, cable, and cryptography/security).
12. Unintentional Delay Petition Fees
Table 15--Unintentional Delay Petition Fees
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Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Petition for the delayed payment of the fee for Undiscounted.......................... $2,100 $2,200 $100 5 $161
maintaining a patent in force, delay less than
or equal to two years.
Petition for the delayed payment of the fee for Small................................. 840 880 40 5 161
maintaining a patent in force, delay less than
or equal to two years.
Petition for the delayed payment of the fee for Micro................................. 420 440 20 5 161
maintaining a patent in force, delay less than
or equal to two years.
Petition for the delayed payment of the fee for Undiscounted.......................... 2,100 3,000 900 43 n/a
maintaining a patent in force, delay greater
than two years.
Petition for the delayed payment of the fee for Small................................. 840 1,200 360 43 n/a
maintaining a patent in force, delay greater
than two years.
Petition for the delayed payment of the fee for Micro................................. 420 600 180 43 n/a
maintaining a patent in force, delay greater
than two years.
Petition for revival of an abandoned Undiscounted.......................... 2,100 2,200 100 5 376
application for a patent, for the delayed
payment of the fee for issuing each patent, or
for the delayed response by the patent owner
in any reexamination proceeding, delay less
than or equal to two years.
Petition for revival of an abandoned Small................................. 840 880 40 5 376
application for a patent, for the delayed
payment of the fee for issuing each patent, or
for the delayed response by the patent owner
in any reexamination proceeding, delay less
than or equal to two years.
Petition for revival of an abandoned Micro................................. 420 440 20 5 376
application for a patent, for the delayed
payment of the fee for issuing each patent, or
for the delayed response by the patent owner
in any reexamination proceeding, delay less
than or equal to two years.
Petition for revival of an abandoned Undiscounted.......................... 2,100 3,000 900 43 n/a
application for a patent, for the delayed
payment of the fee for issuing each patent, or
for the delayed response by the patent owner
in any reexamination proceeding, delay greater
than two years.
Petition for revival of an abandoned Small................................. 840 1,200 360 43 n/a
application for a patent, for the delayed
payment of the fee for issuing each patent, or
for the delayed response by the patent owner
in any reexamination proceeding, delay greater
than two years.
Petition for revival of an abandoned Micro................................. 420 600 180 43 n/a
application for a patent, for the delayed
payment of the fee for issuing each patent, or
for the delayed response by the patent owner
in any reexamination proceeding, delay greater
than two years.
Petition for the delayed submission of a Undiscounted.......................... 2,100 2,200 100 5 376
priority or benefit claim, delay less than or
equal to two years.
Petition for the delayed submission of a Small................................. 840 880 40 5 376
priority or benefit claim, delay less than or
equal to two years.
[[Page 23251]]
Petition for the delayed submission of a Micro................................. 420 440 20 5 376
priority or benefit claim, delay less than or
equal to two years.
Petition for the delayed submission of a Undiscounted.......................... 2,100 3,000 900 43 n/a
priority or benefit claim, delay greater than
two years.
Petition for the delayed submission of a Small................................. 840 1,200 360 43 n/a
priority or benefit claim, delay greater than
two years.
Petition for the delayed submission of a Micro................................. 420 600 180 43 n/a
priority or benefit claim, delay greater than
two years.
Petition to excuse applicant's failure to act Undiscounted.......................... 2,100 2,200 100 5 n/a
within prescribed time limits in an
international design application, delay less
than or equal to two years.
Petition to excuse applicant's failure to act Small................................. 840 880 40 5 n/a
within prescribed time limits in an
international design application, delay less
than or equal to two years.
Petition to excuse applicant's failure to act Micro................................. 420 440 20 5 n/a
within prescribed time limits in an
international design application, delay less
than or equal to two years.
Petition to excuse applicant's failure to act Undiscounted.......................... 2,100 3,000 900 43 n/a
within prescribed time limits in an
international design application, delay
greater than two years.
Petition to excuse applicant's failure to act Small................................. 840 1,200 360 43 n/a
within prescribed time limits in an
international design application, delay
greater than two years.
Petition to excuse applicant's failure to act Micro................................. 420 600 180 43 n/a
within prescribed time limits in an
international design application, delay
greater than two years.
--------------------------------------------------------------------------------------------------------------------------------------------------------
During FY 2020, the USPTO issued a notice to clarify when
additional information is required to support a petition for
unintentional delay. See Clarification of the Practice for Requiring
Additional Information in Petitions Filed in Patent Applications and
Patents Based on Unintentional Delay, 85 FR 12222 (March 2, 2020) (2020
Notice). Petitions based on unintentional delay include petitions
seeking revival of an abandoned application, acceptance of a delayed
maintenance fee payment, and acceptance of a delayed priority or
benefit claim. The 2020 Notice clarified that ``any applicant filing a
petition to revive an abandoned application under Sec. 1.137 more than
two years after the date of abandonment, any patentee filing a petition
to accept a delayed maintenance fee under Sec. 1.378 more than two
years after the date of expiration for nonpayment of a maintenance fee,
and any applicant or patent owner filing a petition to accept a delayed
priority or benefit claim under Sec. 1.55(e) or Sec. 1.78(c) and (e)
more than two years after the due date of the priority or benefit claim
should expect to be required to provide an additional explanation of
the circumstances surrounding the delay that establishes that the
entire delay was unintentional.'' Id at 12223.
As the evidentiary requirements for these petitions have increased,
the costs to review and treat these petitions have also increased due
to the higher level of review needed to consider the additional
explanation. Accordingly, the USPTO seeks to create a new higher fee
for petitions based on unintentional delay over two years to recover
their additional associated costs. The higher fee should encourage
timely petition filings and avoid delays in the examination process.
The new higher fee would apply to petitions under Sec. 1.78(c) and (e)
to accept a delayed benefit claim submitted more than two years after
the date the benefit claim was due; under Sec. 1.55(e) to accept a
delayed priority claim more than two years after the date the foreign
priority claim was due; under Sec. 1.137 to revive an abandoned
application or reexamination proceeding more than two years after the
date of abandonment; under Sec. 1.378 to seek reinstatement of an
expired patent more than two years after the date of expiration for
nonpayment of a maintenance fee; and under Sec. 1.1051 to excuse an
applicant's failure to act within prescribed time limits in an
international design application.
The USPTO receives approximately 12,000 petitions each year based
upon the unintentional standard (FY 2021, 12,752 petitions; FY 2022,
11,755 petitions). About 10% of these petitions (1,200) have a delay of
more than two years. Therefore, the higher cost for petitions having a
delay of greater than two years should not have a significant impact on
patent applicants overall. The increased fee will help ensure those
applicants requesting the service pay its costs, thereby reducing
subsidization from other patent applicants.
13. America Invents Act Trial Fees
Table 16--AIA Trial Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Inter partes review request fee--Up to 20 Undiscounted.......................... $19,000 $23,750 $4,750 25 $21,980
claims.
Inter partes review post-institution fee--Up to Undiscounted.......................... 22,500 28,125 5,625 25 37,563
20 claims.
[[Page 23252]]
Inter partes review request of each claim in Undiscounted.......................... 375 470 95 25 n/a
excess of 20.
Inter partes post-institution request of each Undiscounted.......................... 750 940 190 25 n/a
claim in excess of 20.
Post-grant or covered business method review Undiscounted.......................... 20,000 25,000 5,000 25 37,683
request fee--Up to 20 claims.
Post-grant or covered business method review Undiscounted.......................... 27,500 34,375 6,875 25 49,198
post-institution fee--Up to 20 claims.
Post-grant or covered business method review Undiscounted.......................... 475 595 120 25 n/a
request of each claim in excess of 20.
Post-grant or covered business method review Undiscounted.......................... 1,050 1,315 265 25 n/a
post-institution request of each claim in
excess of 20.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO proposes increasing existing fees for AIA trial
proceedings by 25%. Under 35 U.S.C. 311(a) and 321(a), the USPTO
Director must establish reasonable fees for inter partes and post-grant
review in relation to their aggregate costs. The proposed fee increases
will better align the fee rates charged to petitioners with the actual
costs borne by the USPTO in providing these proceedings. This proposed
change will help the PTAB maintain the appropriate level of judicial
and administrative resources to continue providing high-quality and
timely decisions for AIA trials.
14. Request for Review of a PTAB Decision by the Director
Table 17--Request for Review of a PTAB Decision by the Director Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Dollar Percent FY 2022
Description Entity type Current fee fee change change unit cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Request for review of a PTAB decision by the Undiscounted.......................... New $440 n/a n/a n/a
Director.
--------------------------------------------------------------------------------------------------------------------------------------------------------
The USPTO proposes to charge a new fee in AIA trial proceedings
under part 42 to parties requesting Director Review of the PTAB's: (1)
decision whether to institute a trial; (2) final written decision; or
(3) decision granting a request for rehearing from either the Board's
decision whether to institute trial or the Board's final written
decision. The proposed fee is set at the same rate as a petition to the
Chief Judge in ex parte appeals and is designed to partially recover
the USPTO's costs for conducting Director Reviews. The proposed fee is
part of the agency's ongoing efforts to formalize the Director Review
process developed in response to the Supreme Court's decision in United
States v. Arthrex, Inc. and furthers the USPTO's goals of promoting
innovation through consistent, transparent decision-making and the
issuance and maintenance of reliable patents.
More specifically, the Director of the USPTO is a statutory member
of the PTAB. See 35 U.S.C. 6(a). On June 21, 2021, the Supreme Court
issued a decision in United States v. Arthrex, Inc., and explained that
``constitutional principles chart a clear course: Decisions by
[administrative patent judges (APJs)] must be subject to review by the
Director.'' See 141 S. Ct. 1970, 1986 (2021). Following the statutory
authority provided to the Director by Congress and the constitutional
principles explained by the Supreme Court, the USPTO set forth an
interim process for Director Review, which has been updated
periodically. The agency sought public feedback on the interim process
and is using feedback to promulgate rules.
As a part of the interim process, when the USPTO receives a
Director Review request from a party to an AIA proceeding, the request
is processed and routed to an advisory committee that assists with
Director Review. The committee includes at least 11 representatives
from various USPTO business units who serve at the Director's
discretion. Members independently review each request and associated
case materials, and the committee meets regularly to recommend which
requests for review should be granted. The Director considers each
request, its case materials, and the committee's recommendation in
determining whether to grant or deny review. When the Director
determines to grant review, personnel from various USPTO business units
assist in case processing and in issuing and publicizing the Director
Review decision.
Given the number of agency personnel involved in Director Review,
the USPTO expects its costs to be significantly higher than the
proposed fee. The agency plans to formally capture and evaluate these
costs in the future.
D. Amendment to Obtaining a Refund Through Express Aband
[…truncated; see source link]Indexed from Federal Register on April 3, 2024.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.