It is advantageous for emerging companies to highlight their patent portfolio when seeking to attract investment, forge strategic partnerships, enter into collaborations, prepare for acquisition, enhance marketing, and otherwise strengthen their business. However, some companies fail to strengthen and grow their portfolios based on concerns about fees charged by the Patent Office. Further, failing to appropriately position applications often results in long prosecution times, which can stunt attempts to drum up investment.
Beyond the legal aspects of patent law, there are additional procedures and pilot programs governing how patent applications make their way through the United States Patent & Trademark Office (“USPTO”). Some of these procedures and pilot programs are designed to help proactive applicants, and taking advantage of these procedures can save money and help founders secure patent rights sooner in their company’s growth cycle.
This post provides a non-exhaustive overview of such advantageous procedures and USPTO pilot programs to provide founders with an initial framework for maximizing success while prosecuting patent applications before the USPTO.
Small Entity Status
Those who qualify for “Small Entity Status” at the USPTO enjoy a fifty-percent reduction for a variety of fees, including the basic filing fee, search fee, and examination fee. However, it should be noted that certain fees are not reduced, such as international application fees.
Individuals, small business concerns, and non-profit organizations may all qualify for small entity status, regardless of the country in which they are located. Small business concerns are those who have fewer than 500 employees and affiliates, and also have not assigned, granted, conveyed, or licensed any rights in the relevant invention to those who would not qualify as a small entity. Additionally, universities and other institutions of higher education qualify as nonprofits for purposes of small entity status.
Note that one may assert small entity status by filing in writing with the USPTO, or, upon determining that one qualifies as a small entity, one may simply assert small entity status by paying the reduced basic filing fee for small entities. Furthermore, small entity status needs to be established only once, although small entities must promptly inform the USPTO if they no longer qualify for small entity status.
Micro Entity Status
Those who qualify for “Micro Entity Status” at the USPTO may enjoy a seventy-five percent reduction for a variety of fees, including the basic filing fee, the search fee, and the examination fee. To qualify for micro entity status, one needs to first qualify for small entity status. Then, the applicant must certify that neither the applicant, the inventor, nor the joint inventor:
- Is named as the inventor (or joint inventor) of more than four previously filed utility, design, or plant patent applications;
- Had a gross income in the preceding calendar year that exceeds three times the median household income for that preceding calendar year (currently listed as $206,109 on the USPTO’s website; and
- Is obliged to assign, grant, or convey a license or ownership interest to an entity that would not qualify as a micro entity.
COVID-19 Deferred-fee Provisional Patent Application Pilot Program
Beginning September 17, 2020, the USPTO enacted a new pilot program permitting applicants to defer payment of their provisional application filing fee until the filing of a corresponding nonprovisional application if the applicants agree the technical subject matter disclosed in their provisional applications will be made available to the public. Additionally, the application must concern a product or process related to COVID-19. Although there are several other requirements under the pilot program, it is worth consideration by companies that may wish to defer the provisional application filing fee.
Expediting Patent Prosecution
Petition to Make Special
Generally, patent examiners prioritize patent applications having the oldest effective U.S. filing date, with priority for reissue applications and reexamination proceedings. However, applicants may file a “Petition to Make Special” to expedite examination, with the goal being to complete examination within 12 months.
A petition to make special may be filed without a fee if:
- At least one named inventor is 65 or older;
- The health of at least one named inventor is such that at least one named inventor might not be able to assist in prosecution of the application were the application not expedited;
- The invention will materially enhance the quality of the environment;
- The invention will contribute to the development or conservation of energy; or
- The invention will contribute to counterterrorism.
According to the Patent Office’s most recent data, petitions to make special on grounds of age of or health are granted in 94% of cases.
Petition to make special even expedites appeal proceedings. For example, while the normal time for an appeal is 14 months, for US Patent Application No. 15/154,458 (now US Patent No. 10,208,241), we obtained a PTAB decision on appeal about two months after our reply brief based on the application’s special status.
Essentially, “Accelerated Examination” applies to petitions to make special not filed on the basis of the above reasons, and a fee will be required. This fee will be reduced for those qualifying as small or micro entities, discussed above.
The MPEP lays out a long list of requirements for accelerated examination. However, the following crucial points are the ones most applicants should keep in mind:
- The application may not contain more than three independent claims, twenty total claims, or any multiple dependent claims;
- Applicant must provide a statement that a fairly extensive preexamination search was conducted; and
- Applicant must provide a “support document” including an information disclosure statement identifying and explaining in detail cited references deemed to be most closely related to the claimed subject matter.
Although the hurdles for obtaining special status may be substantial, once an application is granted special status, the application will be acted on in a matter of weeks. Furthermore, the fees for the petition are much lower than those for the prioritized patent examination program discussed next.
Prioritized Patent Examination Program (“Track One”)
An alternative to petitions to make special/accelerated examination, the “Prioritized Patent Examination Program,” has slightly different requirements and an increased fee (reduced for small and micro entities), but a similar goal of completing examination within 12 months.
One advantage of Prioritized Examination over Accelerated Examination, is that an applicant does not need to conduct an extensive preexamination search. The fee for prioritized examination is currently $4,200 ($2,100 for small entities and $1,050 for micro entities). Additionally, the application may not contain more than four independent claims, thirty total claims, or any multiple dependent claims.
The up-front cost of Track One filings is often well-worth it for the advantage of significantly expediting examination. Further, according to the Office’s most recent data, Track One applications in the past 12 months are granted in 95% of cases and have resulted in allowance in more than 50% of cases (6854 allowances). Further, the most recent Patent Office statistics show the average time from the granting of a Track One petition to the mailing date of a Notice of Allowance is 5.5 months.
Fig. 1: Number of Final Dispositions in Track One Applications in the Last 12 Months. Source: USPTO.
Patent Prosecution Highway – Fast Track Examination
The Patent Prosecution Highway (PPH) is an option available to applicants who have corresponding applications filed in participating intellectual property offices (e.g., Canada, Germany, Japan, and the European Patent Office, to name just a few). PPH allows applicants who have had at least one claim allowed in a participating jurisdiction to apply for “fast track” examination of the corresponding claim (or claims).
Applicants should be aware, though, that just because a participating jurisdiction indicated a claim is allowable does not mean the USPTO will not conduct its own substantive examination. However, the time to allowance for fast track applications may be significantly expedited, and, according to the Patent Office’s most recent data, 77% of petitions to join PPH are granted. Further, there is no fee for the PPH program.
Fig. 2: Patent Prosecution Highway Visualized. Source: USPTO.
Full First Action Interview Pilot Program
The Full First Action Interview Pilot Program (FAIP) is another way to potentially expedite one’s application. Eligible applicants wishing to participate will receive a “Pre-Interview Communication” including citations to prior art references the Examiner found. Upon receipt, an applicant may schedule the interview and file a proposed amendment or remarks within one month or thirty days (whichever is longer) from the mailing of the notice. Then, if the Examiner and the applicant reach agreement on all claims during the interview, a Notice of Allowability will be promptly issued.
There are several other requirements for the FAIP that can be found here, but perhaps the most crucial for applicants is the application must contain no more than three independent claims and twenty total claims, and the application also cannot contain any multiple dependent claims.
The FAIP is not an isolated program and can be used in conjunction with other programs, such as prioritized examination. For a recent example, see US Patent Application No. 16/009,760, now US Patent No. 10,093,145 in which we secured allowance of the application for our client within three months of filing in an art unit where the traditional total pendency for an application is more than 26 months.
The FAIP offers an excellent way to expedite review and obtain early feedback on a patent application. This additional pathway to speedily obtain a patent can be an important tool for start-up companies looking to attract investors.
Fig. 3: First Action Allowance Rate – FAIP vs. All New Cases. Source: USPTO.
Fast-Track Appeals Pilot Program
Using the Fast-Track Appeals Pilot Program, applicants can use to advance their ex-parte appeals advanced out of turn, with the goal of the program to issue a decision within six months. Applicants need only file the petition and pay a $420 fee. Note that the PTAB will grant only 125 petitions in a quarter, but, at time of writing, 98 slots remain for the second quarter, which began on October 1, 2020.
Cancer Immunotherapy Pilot Program
The Cancer Immunotherapy Pilot Program is another way to potentially expedite one’s application. The goal is to issue final decisions within a year of the application’s receipt. To qualify, an application must contain at least one claim to a method of using immunotherapy to treat cancer. Further, the Pilot Program has no additional fee required. This is a fairly specific category for expediting an application, but it may offer a much speedier allowance process for those who qualify.
All figures sourced from the USPTO’s website.