IPO Submits Comments on Proposed Fees

[author: Donald Zuhn]

IPO #2In September, 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.  According to the notice, the Office's proposal would set or adjust 352 patent fees.  Given that the notice was one of proposed rulemaking, the Office invited the public to submit comments regarding the proposed new fees, with such comments due by November 5, 2012.  The Intellectual Property Owners Association (IPO) recently published its letter providing comments on the Office's proposed fee schedule.

The IPO notes that after reviewing the proposed fee schedule, the organization "generally agree[s] with the PTO's overall objectives and goals," and that the proposed fee schedule "includes a number of improvements over the PTO's preliminary fee setting proposal that was published in the Federal Register on January 30, 2012" (see "USPTO Proposes Fees Changes").  The IPO also noted that it had reviewed the Patent Public Advisory Committee's (PPAC) Fee Setting Report (see "PPAC Issues Report on USPTO Patent Fees Proposal"), and that the group "concur[red] with many of the PPAC's findings and recommendations."

Despite agreeing with the Office's overall objectives and goals in proposing the new schedule -- in particular, the letter notes that the "IPO continues to support the PTO's goals for lower pendency and improved quality" -- the letter states that "[t]he fee increases being proposed will cost our members hundreds of millions of dollars and will require difficult spending choices within many companies."  Although the Office's notice of proposed rulemaking suggests that "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 IPO points out that:

The effects of the Fee Schedule would be very different for a patent owner who paid the routine fees to obtain a patent plus the three maintenance fees to keep the patent in force for its full term.  We calculate that a patent owner who paid all of those fees would face an overall fee increase of 26.3 percent at the fee levels proposed for 2013.

As a result, the IPO "urge[s] the PTO to reduce the proposed fee levels as much as possible without sacrificing its pendency and quality goals," and "questions whether applicants should pay such a significant percentage of collected fees to build an operating reserve at the same time that applicants are paying increased fees to achieve the PTO's pendency and quality goals."  The organization argues that "[t]he pursuit of all of these initiatives at the same time imposes a heavy fee burden on IPO members, especially during difficult economic times that continue to include work-force reductions."

In the latter half of its letter, the IPO offers comments on nine classes of fees that "warrant reevaluation."  These classes (with some of the IPO's comments) include:

• Maintenance fees -- The IPO is "concerned . . . that the Fee Schedule raises maintenance fees so high that too many patent owners will be unable or unwilling to pay the fees."  In addition, the IPO "urge[s] the Director to  . . . eliminate the 75 percent micro entity discount for maintenance fees," stating that "[m]icro entities that successfully license or otherwise commercialize a patented invention should be expected to pay a fair share of maintenance fees, which are not due until 3-1/2 years and later after they obtain their patent."

• Appeal fees -- The IPO notes that "[a]ccording to recent PTO statistics, almost 50 percent of the decisions on appeal reverse an examiner's final rejection," which "suggests that a significant number of appeals are pursued to correct improper final rejections."  The IPO argues that the 242% increase for appealing a final rejection therefore "fails to take into account the practical realities facing applicants."

• Post-grant and inter partes review fees -- Noting that "no historical cost information exists" for these new proceedings, the IPO expresses the "hope[] that the cost calculations for these proceedings will be reevaluated when information from actual proceedings becomes available."

• Supplemental examination fees -- The IPO "encourage[s] the PTO to consider further reducing supplemental examination fees so that the procedure will be used by stakeholders."

• Ex parte reexamination fees -- The IPO notes that "[t]he Fee Schedule proposes a fee of $15,000 for ex parte reexamination, which is almost six times more than the fee for the same proceeding at the beginning of 2012," and declares that "[i]n comparison to other examination fees, IPO believes the proposed ex parte reexamination fee is far too high."  The IPO suggests that "an ex parte reexamination generally requires the same PTO resources as a typical patent application," and notes that "[a]ccording to the Federal Register notice, in 2011 the estimated total cost to examine an application was $3,569."

• Excess claims fees -- Noting that cost of independent claims rises by almost 70% under the Office's proposal, the IPO points out that "[w]hile many independent claims directed to different inventions in one application would increase an examiner's burden, such claims would be removed from the application through restriction."

• Fees for correction of inventorship -- The IPO "questions whether this fee is warranted in all cases," noting that "[i]n cases where claims are limited by restriction after the first action on the merits or by amendments during examination, inventors are almost always removed from the application."  As a result, the IPO "believes this fee should be eliminated, or at least reduced, and apply only in situations where an inventor is added to the application after the first action on the merits."

• Fee reductions delayed until 2014 -- The IPO "suggest[s] that the PTO consider implementing these reductions [i.e., for patent issuance, publication, and electronic assignment recordation] earlier."

• RCE fees -- The IPO states that it "do[es] not believe raising filing fees is the solution to the RCE problem."  According to the IPO, the proposed RCE fees "are unduly high and, like appeal fees, fail to take into account prosecution realities."

For additional information regarding this topic, please see:

• "PPAC Issues Report on USPTO Patent Fees Proposal," October 9, 2012
• "More on USPTO's Proposed New Fees - Part II," September 19, 2012
• "More on USPTO's Proposed New Fees," September 11, 2012
• "USPTO Proposes New Patent Fees and CPI Adjustments to Certain Fees," September 6, 2012
• "USPTO News Briefs," September 5, 2012
• "USPTO Posts Comments on Proposed Fees Changes," March 19, 2012
• "A Glimpse under the Hood: How the USPTO Proposes to Adjust Patent Fees," March 14, 2012
• "USPTO Proposes Fees Changes," March 1, 2012
• "USPTO News Briefs," February 20, 2012
• "PPAC to Hold Public Hearings on Proposed Fee Schedule," February 1, 2012