Rebutting the Myth that Patents Last Too Long

One of the main criticisms of patents by those who are not intimately familiar with patent law, or on the periphery of the industry, is that patents last too long.  The reality, if any generalizations could be made at all, is that the overwhelming majority of patents do not last “too long,” but if anything last for only a fleeting moment in the greater scheme of life. So while it is completely true to say that software and certain other high tech innovations should not be locked up for 20 years, the reality is that no patent provides 20 years of protection.  As a general rule the patent term can extend all the way to 20 years after the filing of a patent application, but you obtain no exclusive rights until a patent is issued, which is usually a minimum of several years after filing, sometimes much longer, as in the case of the recently issued TiVo patent that was issued more than 10 years after it was filed.  On top of that, to keep a patent in force you need to make additional payments over the course of the life of the patent, which is frequently not done.

Before June of 1995, the term of a utility or plant patent ended 17 years from the date of patent grant. To comply with Article 33 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement resulting from the Uruguay Round Agreements of the General Agreement on Tariffs and Trade (GATT), the United States was required to establish a minimum term for patent protection ending no earlier than 20 years from the date the application was filed. As a result, utility and plant patent applications filed on or after June 8, 1995, have a potential term that begins on the date the patent issues and ends on the date that is 20 years from the date on which the application for the patent was filed in the United States.  If the application that ultimately issues contains a specific reference to an earlier filed US or international application, the term potentially ends 20 years from the filing date of the earliest such application.  But this does not mean patents remain in force for 20 years.  As with so many things in patent law it is quite complicated and not susceptible to general rules.

It might come as a surprise to many, but the patent term is not necessarily always measured by 20 years from the date of the earliest applicable filing date.  With respect to utility patents issued on applications filed on or after December 12, 1980, maintenance fees are required to be paid in order to keep the patent term running.  Notice that maintenance fees are only due with respect to utility patents; maintenance fees are not required for plant patents and design patents. Likewise, maintenance fees are not required for a reissue patent if the patent being reissued did not require maintenance fees in the first place.

There are three maintenance fee payments that must be made in order to ensure the patent term remains in force and does not fall into the public domain.  These due dates are defined in 35 U.S.C. 41(b) and are 3 ½ years after the date of issuance, 7 ½ years after the date of issuance and 11 ½ years after the date of issuance.  37 CFR 1.362(d) sets forth the time periods when the maintenance fees for a utility patent can be paid without a surcharge. These periods are the 6-month periods preceding each due date.  If you miss this period you can pay the maintenance fee up to 6 months late, but you must pay both the maintenance fee and a surcharge.  So it is sometimes said that the window for payment of the first maintenance fee opens at 3 years after issuance and closes at 4 years after issuance.  Similarly the second window is between 7 to 8 years and the final window is between 11 and 12 years.  You can never pay a maintenance fee before the window opens, and if you miss the window the patent has gone abandoned and fallen into the public domain.  If you miss paying a maintenance fee through unavoidable or unintentional delay you can revive the patent, at least as a general rule, although there may be some lapse of rights.  So it is always best to not miss paying a maintenance fee if you want to keep the patent in force.

37 CFR 1.20(e)-(h) sets forth the payment required for the various maintenance fees. The maintenance fee amounts are also subject to a 50% reduction for small entities pursuant to 35 U.S.C. 41(h).  Currently, the maintenance fees are as follows:

First maintenance payment:            $980
Second maintenance payment:       $2,480
Third maintenance payment:           $4,110

The corresponding small entity reductions are as follows:

First maintenance payment:            $490
Second maintenance payment:       $1240
Third maintenance payment:           $2055

If a maintenance payment is not made by the due date the patent term is not necessarily over, as already discussed.  The surcharge for paying the maintenance fee in the grace period is $130, but small entities get a reduction to $65.

As you can see, the maintenance fees rise quickly, so if you are not making money on the patent you have to ask yourself whether it makes financial sense to continue to pay to keep the patent in force.  For this reason an extremely large number of patents fall into the public domain without enjoying the full term.  In fact, every week the USPTO publishes the Official Gazette and it includes notice of the patents that have expired for failure to pay maintenance fees.  For example, on February 16, 2010 the OG reported those patents that fell into the public domain between December 25 – 30, 2009 for failure to pay the appropriate maintenance fee.  There are 20 pages of patents that expired over that span for failure to pay the maintenance fee, and this is not at all uncommon.

So the next time you hear that the primary reason patents are bad is because they last too long, you will know that the truth and that such a statement is way over broad and really a mischaracterization of reality. Those patents that last for 12 years or more are the ones that are the most commercially relevant.  So the patents that enjoy the full available term are for those inventions that are the ones that we want most, and the very reason we have a patent system in the first place.