On Tuesday, November 14th, the U.S. Patent and Trademark Office published a press release to announce that it had issued a final rule to set or adjust certain patent fees as the agency is authorized to do under the America Invents Act (AIA) of 2011. The fee increases, which include some significant increases to petitioners filing for inter partes review (IPR) proceedings, are ostensibly meant to cover costs for USPTO operations, Patent Trial and Appeal Board (PTAB) operations and administrative services as the USPTO attempts to achieve strategic goals including backlog reductions and “patent quality enhancements.”
The USPTO stated that the increased costs for AIA trial petitioners filing at the PTAB are meant to better alignment with the agency’s costs, providing it with the resources necessary to meet statutory deadlines laid out in the AIA. Request fees for IPR petitions challenging up to 20 claims will increase under the new rule up to $15,500, a $6,500 raise over the previous level. IPR post-institution fees for petitions challenging up to 15 claims increases by a more modest $1,000 up to $15,000. The agency notes that trial fees and associated costs still remain considerably less than court proceedings “for most stakeholders.”
Section 10(e)(1)(B) of the AIA requires the USPTO Director to include “the specific rationale and purpose for the proposal, including the possible expectations or benefits resulting from the proposed change.” The USPTO’s notice on the fee increases published in the Federal Register indicates that the Office of Management and Budget (OMB) determined that the new rule “involves a transfer payment from one group to another that does not affect the total resources available to society.”
The OMB’s determination of the new fees as a “transfer payment” means that the rule isn’t subject to the requirements of Executive Order 13771, titled Reducing Regulation and Controlling Regulatory Costs and signed on January 30th of this year. This executive order was signed by President Donald Trump to “manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulations.” This is the order by which President Trump sought to use to eliminate regulations by charging federal agencies to identify two regulations for elimination every time one new regulation is issued.
Patent owners will probably be somewhat pleased to hear that the costs for filing a petition for IPR proceedings at the PTAB have increased by thousands of dollars given the high percentage of challenged patents which are rendered defective by AIA trials. However, the “transfer payment” rationale seems to give the USPTO the freedom to increase fees using its AIA fee setting authority in a way that escapes the larger notice of the White House. Further, it gives the agency the freedom to pass the new fees without explaining the economic impacts of the new fees. Instead, patent system stakeholders are assured that the new fees will not “affect the total resources available to society.” Of course, those resources include the PTAB, whose activities cost legitimate patent owners attempting to protect their property millions of dollars, so it seems suspect that those available resources are actually a benefit to society at large.
The final fee setting rule issued by the USPTO differs from the fee proposals laid out in the agency’s notice of proposed rule making (NPRM) in a few key ways. The agency reduced the increases to patent applicants filing for plant or design patents although large entity plant patent application filing fees do increase by $40 up to $800 and large entity design patent applications increase by $140 up to $700. Small and micro entity fee reductions are available for both plant and design patent application filings. Also, in response to stakeholder feedback following the NPRM, the USPTO declined to increase notice of appeal fees, which will remain at $800. The USPTO also reduced the fee increase for forwarding an appeal to the PTAB to $240, leaving large entity appeal filing fees at $2,240 instead of the proposed $2,500.