More on USPTO's Proposed New Fees

By Donald Zuhn --

Last week, the U.S. Patent and Trademark Office published a notice of proposed rulemaking in the Federal Register (77 Fed. Reg. 55028) presenting its proposal for setting and adjusting patent fees.  In proposing new fees, the Office is exercising the fee setting authority conferred upon it by § 10 of the Leahy-Smith America Invents Act.  The 59-page notice states that:

The proposed fees will provide the Office with a sufficient amount of aggregate revenue to recover its aggregate cost of patent operations, while helping the Office implement a sustainable funding model, reduce the current patent application backlog, decrease patent pendency, improve patent quality, and upgrade the Office’s patent business information technology (IT) capability and infrastructure.

The notice also states that "[t]he proposed fees also will further key policy considerations," pointing to multipart and staged fees for requests for continued examination and appeals, which the notice indicates "aim to increase patent prosecution options for applicants" (emphasis in notice).

As the Office's notice is one of proposed rulemaking, the Office is soliciting comments from the public regarding the proposed new fees.  Written comments must be submitted by November 5, 2012 to be considered.  Comments can be sent by e-mail to [email protected]; by regular mail to Mail Stop -- Office of the Chief Financial Officer, Director of the United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313–1450, marked to the attention of "Michelle Picard"; or via the Federal eRulemaking Portal.

Pursuant to § 10 of the AIA, the Director is allowed to set or adjust any fee established, authorized, or charged under Title 35 (but "only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents").  AIA § 10 specifies that the Director submit proposed fee changes to the Patent Public Advisory Committee (PPAC) not less than 45 days before publishing the proposed fees in the Federal Register (which the Office did last February; see "USPTO Proposes Fees Changes"), after which the PPAC shall have 30 days to deliberate, consider, and comment on the proposal as well as hold a public hearing on the proposal (the Office held two public hearings on fees in February).  Pursuant to § 10, the Director shall then consider and analyze PPAC's comments, advice, or recommendations before setting or adjusting the fee (which last week's notice of proposed rulemaking does).  AIA § 10 also requires that the Director provide the public with a 45-day period in which to comment on any fee change (thus the November 5, 2012 deadline to submit comments), and specifies that fee changes shall not become effective until 45 days after the final rule regarding such change is published in the Federal Register (in order to give Congress an opportunity to enact a law disapproving of the fee change).

With regard to the impact of the proposed fees on patent pendency, the notice states that:

The Office estimates that the additional aggregate revenue derived from the proposed fee schedule will enable a decrease in total patent pendency by 12 months for the five-year planning horizon (FY 2013–FY 2017), thus permitting a patentee to obtain a patent sooner than he or she would have under the status quo fee schedule.

The notice also indicates that implementation of the Office's proposed fee structure would mean that "for all applicants the routine fees to obtain a patent (i.e., filing, search, examination, publication, and issue fees) will decrease by at least 22 percent relative to the current fee schedule."

The proposed fees in the current notice differ from the fee increase proposed last week to reflect fluctuations in the Consumer Price Index (CPI) under 35 U.S.C. § 41(f) (see "USPTO Proposes New Patent Fees and CPI Adjustments to Certain Fees"), and fee proposals made earlier this year for new patent-related services that must be in place one year from the AIA's enactment (the Office notes that such fees could not be in place by September 16, 2012 given the requirements under § 10).  With respect to the CPI-based increase, the notice explains that it "is planned as a bridge to provide resources until the instant section 10 rulemaking (this NPRM) becomes final (at which time the anticipated section 10 fees would supersede the fees in the CPI rulemaking)."  The fee proposals made earlier this year are also viewed by the Office as being "needed on a temporary basis, from September 16, 2012, until this rulemaking becomes final."

In the last week's notice, the Office sets or adjusts 352 patent fees, 94 of which apply to large entities, 94 to small entities, 93 to micro entities, and 71 of which are not entity-specific.  The Office notes that there were three primary steps involved in setting or adjusting fees:

Step 1: Determine the prospective aggregate costs of patent operations over the five-year period [FY 2013-FY 2017], including the cost of implementing new initiatives to achieve strategic goals and objectives.
Step 2: Calculate the prospective revenue streams derived from the individual fee amounts (from Step 3) that will collectively recover the prospective aggregate cost over the five-year period.
Step 3: Set or adjust individual fee amounts to collectively (through executing Step 2) recover projected aggregate cost over the five-year period, while furthering key policy considerations.

Patent Docs will provide additional analysis of the Office's proposed new fees -- including a list of the highest proposed utility fees, the utility fees that would increase the most under the proposed fee structure, and a comparison with the fees proposed last spring -- in a subsequent post.

Comments

[Les]

There has been, and it appears there will continue to be, an inherent unfairness in the fees that are charged for claims.

Currently, for the basic filing, examination and search fees an applicant may present for examination 20 total claims with 3 of those claims being independent. Exceeding either of those thresholds triggers the requirement to pay additional fees, ostensibly to cover the cost of examining additional claims.

This fee policy leads to the following unfair absurdity.

Consider the applicant that files an application with 3 independent claims and 17 dependent claims, with each dependent claim depending directly from an independent claim.

After prosecution, an examiner may find that all 17 of the dependent claims are allowable but that the 3 original independent claims read on the prior art and are rejected.

In order to accept the allowed subject matter, rather than argue for the allowability of the 3 original independent claims through filing an RCE or Appeal and to receive the protection that the office agrees she is entitled, the applicant must place all 17 claims in independent form. This means she must pay excess independent claim fees for 14 claims, even though no further examination will be done on those claims other than verifying that the presented amendments do actually simply place the dependent claims in independent form.

At the large entity fee of the subject proposal, that amounts to 14 x $420 or $5,880. Even at the micro entity rate, the applicant would be required to pay 14 x $105 or $1470! The Office has not justified these outrageous charges for placing already identified as allowable claims in independent form. Indeed, it is respectfully submitted that there can be no justification for such charges.

Moreover, wont such charges increase the burden on the examining corp and the Board of Appeals as applicants find the relative cost of Appeal or continued prosecution to be low compared to excess claim fees?

We respectfully submit that this is inherently unfair and respectfully suggest that the fee schedule be changed to indicate that there is never a claim fee charged for simply placing an already allowable dependent claim in independent form. Alternatively, we would ask that the Office justify a $5880 fee for placing allowable claims in independent form.

We would also ask that you estimate and consider how much it would cost or costs a micro entity or small entity to determine that one could rightly claim such status.