On October 3rd, the Federal Register printed a notice of proposed rulemaking from the U.S. Patent and Trademark Office regarding increased fees for patent application filings and petitions filed with the Patent Trial and Appeal Board (PTAB). As proposed, the rules would increase fees for filing, search and examination on both design and utility patent applications by at most $140. Much larger increases were seen for filing petitions with PTAB for inter partes review (IPR), covered business method (CBM) and post-grant review (PGR) proceedings, such as an increase of $5,000 for IPR petitions seeking to challenge the validity of up to 20 claims.
According to the USPTO, the fee increases are designed to better cover the costs of the USPTO’s main patent operations as well as PTAB operations and administrative services. This would be the first major change in fees pursued by the USPTO under their authority to set fees since March 2013; that fee-setting authority is allowed under terms of the America Invents Act (AIA) of 2011.
Nobody enjoys paying more money for a similar level of service but an interesting collection of government agencies and industry organizations filed comments during the public comment period, which expired on December 2nd, to raise concerns about various aspects of the new fee levels. One of these was the National Aeronautics and Space Administration (NASA), the U.S. federal government’s space agency which files patent applications with the USPTO to protect innovations it develops during the course of its space programs. NASA’s innovations have proven to have a wide range of commercial applications from flame-retardant materials to baby formula to safe drinking water technologies.
According to NASA, the fee increase as proposed by the USPTO would directly and negatively impact NASA’s ability to file patent applications, leaving many of the agency’s innovations to languish without any way to be commercialized. NASA’s public comment on USPTO’s proposed new fee setting notes that the 125 patent applications filed by the agency each year is only a sliver of the more than 1,500 new invention disclosures that NASA receives annually from its engineers. Budgeting concerns because of patent application fees already constrains NASA’s patent application filing activities to about 10 percent of its new invention disclosures.
“The fee increase will exacerbate an already existing issue in determining which of these new invention disclosures should be patented,” NASA’s comment reads. “We understand the basis for the upward fee adjustments, but as a Federal Agency subjected to the Congressional Appropriations process, NASA wishes to point out the dichotomy of one Federal Agency’s ability to generate fees at the expense of others.” The direct impact that the fee increases will have on NASA’s patenting activities creates tension with NASA’s federal statutory mandates on technology transfer. “Without patents, NASA, and other Federal R&D agencies, lose the ability to attract commercial licensees who can exploit their inventions, and limits the ability ‘to use the patent system to promote the utilization of inventions arising from federally supported research or development.’”
More concerns over fee increases were included in a public comment filed by the American Intellectual Property Law Association (AIPLA). While AIPLA’s public comment commends USPTO for balancing its own need to collect enough revenues with the public’s need for cost-effective public access, it expressed concern about the level of the fee increases, especially in the face of how those increased fees would in turn increase budgeted reserves. “AIPLA is concerned that these fee increases are being set to permit the USPTO to set aside money in the reserve at a level higher than even they acknowledge as optimal,” the public comment reads. “This is unfair to patent applicants and moreover, provides an easy target for fee diversion to other agencies as has occurred in the past.”
More specifically, AIPLA brought up concerns over increased fees for excess claims, “especially when one considers how high they currently are.” AIPLA questioned the increase by noting that a patent’s many claims are often closely related to each other and so do not require a great deal of extra work on the part of an examiner. It also fails to take into account instances in which applicants unilaterally cancel excess claims before any examination, AIPLA said. AIPLA’s comment comes out in support of recommendations made by the Patent Public Advisory Committee (PPAC) to implement a refund process for excess claims which are cancelled or a system that credits excess claim fees to cover fees for a divisional application directed to the cancelled claims.
AIPLA also suggested alternatives to the proposed increased fees for utility patent application filings, namely specific increases only for continuation applications filed at the end of the patent term. “An applicant often pursues a number of continuation applications because the disclosed inventions are especially important to applicant, i.e. there is a higher likelihood that patents issuing from continuations will be asserted in litigation,” AIPLA’s comment reads. “Because the Office might not recoup all costs from these later-filed continuations, higher filing fees might be appropriate to offset this loss.” AIPLA also remarked that the design patent application fee increases were too high and it questioned fee increases for ex parte appeals paid by appellants as office examiners are only affirmed in 57.4 percent of such cases. “Thus, in a significant number of cases, appellants’ are subjected to appeal fees that could have been avoided if a correct decision was made at the examination level,” AIPLA’s comment reads.
Other issues with fee increases were raised in a public comment filed by the Intellectual Property Owners Association (IPO) over a new kind of fee for mega-sequence listing filings. Sequence listings in excess of 300 megabytes (MB) would cost up to an additional $1,000, while filings in excess of 800 MB would cost up to an additional $10,000. USPTO proposed rulemaking notes that filings with such large amounts of data require the agency to provide extra storage and special handling. IPO’s comment indicates that the organization doesn’t believe that the USPTO has provided adequate justification for those particular fee increases. Instead of the increases, the IPO argues that the USPTO could revise current sequence listing rules to exclude sequences which aren’t required by examiners to examine claimed subject matter, such as prior art sequences. IPO also questioned USPTO’s justifications for a new fee for late submissions of sequence listings in Patent Cooperation Treaty (PCT) application filings.
Appeal fees were one aspect of the USPTO’s proposed fee setting which the IPO found would be raised too much under the proposed rulemaking. The IPO argued that a 25 percent increase in appeal fees in light of the large number of ex parte appeals which are pursued in order to correct invalid rejections. “Moreover, many appeals never reach the PTAB because the examiner withdraws the final rejection upon receipt of the Appeal Brief to reopen prosecution or issue a Notice of Final Allowance,” IPO’s comment reads. IPO also raised objections to a 33.3 percent increase in the minimum fees required for a design patent application to issue as well as a 43 percent increase in issue fees for design patents. “Design patents typically contain fewer pages than utility patents, requiring less pre-printing formatting work and lower printing costs,” IPO notes. “If cost recovery is the goal, then a modest increase should achieve it.”