The United States Patent & Trademark Office (USPTO or PTO) recently announced proposed changes to certain fees it charges with respect to patent applications, design patents, and America Invents Act (AIA) trials. These changes may significantly increase costs associated with building a robust patent portfolio for New Chemical Entities (NCEs) and Biologics, and to challenge patents at the PTAB. An oral hearing on the proposed changes will be held on May 18, 2023, and the USPTO is accepting written comments until May 25, 2023.
Rationale for Proposed Changes
Unlike many US government agencies, the USPTO’s activities are financed by the fees it collects and its operating reserve. The operating reserve includes fees not used during the fiscal year in which they were collected. Congress has authorized the USPTO to set or adjust by rule all patent fees established, authorized, or charged under Title 35 of the US Code. The patent fees set or adjusted by rule may only recover the aggregate estimated costs to the USPTO for processing, activities, services, and materials relating to patents and trademarks, including administrative costs of the office.
To ensure that the USPTO continues to operate at a net-zero cost to general taxpayers, the USPTO biennially reviews the fees it collects. If the PTO proposes changes, Congress mandates a public hearing regarding the proposed fees. The USPTO recently completed a review of the fees it charges. The required oral hearing on the proposed changes will be held on May 18, 2023 and written comments are accepted until May 25, 2023.
According to the USPTO, the proposed changes to the fees focus on promoting efficient prosecution, recovering costs, and increasing access to the patent system. Almost all proposed changes would result in increased fees.
To promote efficient prosecution, the USPTO is proposing to:
- Tier the fees associated with citations that applicants submit via Information Disclosure Statements (IDSs). Filing an IDS that causes the cumulative citations to exceed 50 will result in a fee of $200. Filing an IDS that causes the cumulative citations to exceed 100 will result in a fee of $300. Filing an IDS that causes the cumulative citations to exceed 200 will also result in a fee of $300.
- Tier the fees for continuing applications based on pendency of the patent family. A continuation filed between three years to seven years from the earliest priority will be subject to an additional fee of $1,500. A continuation filed more than seven years from the earliest priority will be subject to an additional fee of $3,000.
- Increase fees for Requests for Continued Examination (RCEs). A first RCE will generate a fee of $1,500 (up from $1,360). A second RCE will generate a fee of $2,500 (up from $2,000). A third RCE will generate a fee of $3,600 (up from $2,000).
- Tier fees associated with filing terminal disclaimers based on when the terminal disclaimer is filed. The current charge for a terminal disclaimer filed at any time during prosecution is $170. Going forward, the USPTO proposes to charge a $200 fee if the terminal disclaimer is filed prior to the first action on the merits. If the terminal disclaimer is filed prior to a final action or allowance, the USPTO proposes to charge a $500 fee. If the terminal disclaimer is filed after a final action or allowance, the USPTO proposes to charge a $800 fee. If the terminal disclaimer is filed on or after a notice of appeal, the USPTO proposes to charge a $1,100 fee. If the terminal disclaimer is filed in a patented case, the USPTO proposes to charge a $1,400 fee.
To improve cost recovery, the USPTO is proposing to:
- Charge a $500 fee for After-Final Consideration Pilot (AFCP) requests (there is currently no filing charge for these requests).
- Increase the fee for each claim over 20 to $200 (from $100); increase the fee for each independent claim over three to $600 (from $480).
- Increase the fee for extension of term of patent (PTE) from $1,180 to $6,700 and increase the fee for an initial application for interim extension from $440 to $1,320. A subsequent application for interim extension would be charged a $680 fee (up from $230).
- Increase filing, search, and examination fees by 5%. A further 5% increase will be used to account for inflation. A filing fee, for example, would be $350, increased from $320; a search fee would be $770, increased from $700; an examination fee would be $880, increased from $800.
- Increase fees for filing, search, examination, and issuance of design patents. Increases will range from 9% to 88%, for an overall increase of 48%.
With respect to AIA trials, the USPTO is proposing a 25% increase of all fees to improve cost recovery. The USPTO is also proposing to establish new fees for Inter Partes Review (IPR) and Post Grant Review (PGR) petitions that exceed word count limits. The goal is to reduce the number of parallel petitions filed by allowing filers to exceed the current limits for a fee. For example:
- The USPTO proposes to increase the fee for an IPR from $19,000 to $23,750. IPR petitions are currently limited to 14,000 words. An IPR request with up to 7,000 words beyond the set limit will incur an additional fee of $11,875. An IPR request with up to 14,000 words beyond that limit will incur an additional fee of $23,750.
- The USPTO proposes to increase the fee for a PGR from $20,000 to $25,000. A PGR petition is currently limited to 18,700 words. A PGR request with up to 9,350 words beyond the current limit will incur an additional fee of $12,500. An IPR request with up to 18,700 words beyond the current limit will incur an additional fee of $25,000.
In both cases, the added fees increase if the additional words are added post-institution.
The USPTO is also proposing to decrease extension-of-time (EOT) fees for provisional applications. The fee decreases range from 75% to 86% with the goal of reducing financial and entry barriers and fostering inclusive innovation.
Timeline for the Changes
Following the public hearing and the period for public comments, the USPTO anticipates that the notice of proposed rulemaking will publish in January to March 2024. Following a 60-day comment period, the final rule is anticipated to publish in October to December 2024. The fee changes are expected to take effect in January 2025.
Per the Federal Register, speaking slots at the public hearing are limited. The deadline for requesting to speak at the hearing closed on May 11, 2023, but the USPTO will accept written comments until May 25, 2023. Anyone wishing to submit written comments on the proposed changes should visit the Federal eRulemaking Portal at www.regulations.gov. To submit comments via the portal, commenters should enter docket number PTO–P–2023–0017 on the homepage.