Reinstating Patents After Failure to Pay Maintenance Fee

In a prior post, I discussed payment of maintenance fees. Ordinarily, three post-issuance maintenance fees must be paid in order to keep the patent in force for its entire term. A large entity pays $980 3.5 years after issuance; $2,480 7.5 years after issuance; and $4,110 11.5 after issuance. If the fee is not paid then the patent will expire at the next 4, 8, or 12 year mark. In that 6-month interim (e.g., between the 3.5 year due date and the 4 year expiration date), the fee can still be paid with a $130 surcharge. Once the patent expires, it can still be reinstated if the fee is paid along with an additional surcharge for either unavoidable failure to pay the fee ($700) or unintentional failure to pay the fee ($1,640). In addition, the Patent Office (PTO) must accept your explanation for the delay. Under 35 U.S.C. 41(c), revival for unintentional expiry is only available within two years of the expiration date. Later revival requires proof that the failure to pay the fee was unavoidable - a difficult standard to meet.

The PTO publishes reinstated patents each week in the Official Gazette. Using those publications, I compiled the following table showing the number of patents being reinstated each year. As the chart show, the number of reinstated patents has risen over time. The absolute number of issued patents is also rising, but at a slower rate. Thinking about this as an applicant's 'error rate' - for the past decade, about 2.5 percent of patents that expire due to non-payment of maintenance fees are later reinstated. This is an incredibly high error rate for a purely ministerial function of paying a fee.

I pulled Patent No. 6,798,824 from the list of reinstated patents that was published in the February 24, 2009 Official Gazette. That patent originally was assigned to InterDigital and is directed to a particular type of spread spectrum communications device. The patent issued on September 28, 2004 and expired four yeas later due to failure to pay the maintenance fees. Realizing its problem, the patent holder filed a petition to accept late payment of maintenance fees on December 19, 2008 and the petition was granted on January 30, 2009. (Note - the petition is not available in PAIR).

Note:

14 thoughts on “Reinstating Patents After Failure to Pay Maintenance Fee

  1. Patent term of 20 years is a long time. A lot of things may go wrong with the patent owners during the term. Companies go bust. Owners go bankrupt. New staff fail to understand the gravity of missing a renewal deadline. Repeated reminders to patent owners remain unanswered. Further, unlike other jurisdictions, patent owners in the US are not required to look at their patents annually from the perspective of paying renewal fee. On the other hand, patent owners in other jurisdictions need to renew their patents annually, and therefore are bound to look at it and decide on paying of the renewal fee. After all money matters matter. I would take a view that just like the other matters related to patent prosecution, patent maintenance too needs active participation from all involved. The process of renewing patents should not be viewed as a purely administrative exercise to be monitored, decided, and executed by someone often not quite connected with the commercial aspects (if any) of patents.

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  2. Patent term of 20 years is a long time. A lot of things may go wrong with the patent owners during the term. Companies go bust. Owners go bankrupt. New staff fail to understand the gravity of missing a renewal deadline. Repeated reminders to patent owners remain unanswered. Further, unlike other jurisdictions, patent owners in the US are not required to look at their patents from the perspective of paying renewal fee. On the other hand, patent owners in other jurisdictions need to renew their patents annually, and therefore are bound to look at it and decide on paying of the renewal fee. After all money matters matter. I would take a view that just like the other matters related to patent prosecution. Patent maintenance too needs active participation from all involved. The process of renewaing patents should not be viewed as a purely administrative step to be done by monitored and executed by someone often not quite connected with the commercial aspects (if any) of patents.

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  3. Hi All

    I have a completely unrelated question.

    If a PCT filing deadline (ie. the 12 month anniversary from the filing date of the priority application) falls on a weekend, do you have until Monday to file the PCT application? The priority app is a provisional.

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  4. You are right, Malcolm, I don’t write too well when I am angry. Here’s what I meant:
    The legal definition of unavoidable delay permits reliance on well trained and reliable staff to carry out routine clerical functions, such as docketing. If reasonably prudent steps are taken to docket a due date, and in spite of these steps, the well trained docket clerk commits an unforeseen error resulting in a missed deadline, the legal standard of unavoidable delay is met. What the PTO is doing, however, in recent decisions, is to insist that no mistakes be made. Of course, if no mistakes were made, there would never be a need for filing a petition.

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  5. “There seems to be an insistence on an error-proof monitoring system, a system where well trained and reliable staff makes no mistakes, which of course goes counter to the legal definision of “unavoidable delay” and the entire concept of establishing a petition practice that addresses remedies where an oversight or human error occurs.”

    You lost me, bro’.

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  6. Dennis,
    Do you have a handle on the percentage of grants versus denials of petitions filed for reinstating a patent under the unavoidable standard (preferbaly an annual report)? I have a sense that the PTO has become stricter and stricter in recent years, to the point that they have lost sight of the proper legal standard for unavoidable delay. There seems to be an insistence on an error-proof monitoring system, a system where well trained and reliable staff makes no mistakes, which of course goes counter to the legal definision of “unavoidable delay” and the entire concept of establishing a petition practice that addresses remedies where an oversight or human error occurs. Additionally, the PTO staff handling these matters has insulated itself from patent owners and their representatives by refusing to conduct a meaningful exchange as to how the deadline was missed and ultimately looking to grant relief.

    To make matters worse, the Courts continue to give deference to the expertise within the Agency because they have not gotten wind of this deterioration in the correct application of the unavoidable standard which came about as a result of retirements of knowledgeable staff and the loss of institutional memory over the last few years.

    It is quite a pity that an Agency charged with issuing patents refuses to recognize the purpose of the maintenance fee system that was placed in effect for utility patents issued after December 12, 1980, i.e., generating income for the Agency so as to enable it to keep down filing fees and prosecution fees. As we all know, most patents have no commercial value. The ones that are subject to reinstatement under the unavoidable standard are highly valuable to their owners. If the Agency only exercised half of the due care and diligence that is exercised by the good number of patent owners who, in spite of the careful steps taken to pay their maintenance fees in a timely fashion, miss a deadline due to unforesen circumstances, and fail to learn about the oversight within two years of expiration of the patent, we’d all be in good shape.

    If anyone else out there is as frustrated as I am with the PTO relative to this issue, I would like to hear about it. Perhaps if enough voices are heard, the Agency will decide to look into this matter.

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  7. Using EFS-Web, it appears that petitions to revive for unintentional failure to pay the maintenance fee are granted automatically. The petition is “granted” by the system upon filing, and there does not appear to be any official review.

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  8. I thought decisions on petitions were delayed–but this took just over a month. Are maintenance fee payment petitions in a different pool??? I have a petition that was filed before this one and is still awaiting decision.

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  9. As the US renewal period is different from most other places it would be interesting to see how often the US patents is not renewed when the others are. As the US market is very large for most technologies this could be an indication that the strangeness of the renewal period caused the payment to be overlooked. This theory would be further supported if the US patent was subsequently revived

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  10. Dennis, your citation isn’t quite in Bluebook format…

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  11. As a number of companies use a patent maintenance company to pay these fees, it would be interesting to see a breakdown of what percentage of these errors are from the companies themselves and what percentage are from patent maintenance companies. In addition, a graph of # patents owned vs. reinstatements for those companies that handle their own payments may be useful.

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