Reduced Average Patent Life


The chart above shows a time series for the average “life” of US utility patents.

Prior to 1980, the term of U.S. patents was fairly standard at 17-years from the issue date. The primary caveat related to terminal disclaimers used to avoid double-patenting rejections.  In 1980, Congress added maintenance fees that created a market incentive for patentees to reduce their patent term when the cost of the fees-due was more than the patent value.  After issuance, three additional maintenance fees are due.  Today, those fees are set at: $1,600 at 3.5 years after issue; $3,600 at 7.5 years after issue; and $7,400 at 11.5 years after issue.  In 1995, Congress again changed the patent term by eliminating the 17-year-from-issue calculation and replacing it with a term running for 20-years-from-priority-filing (not counting foreign-national or provisional priority).  In 2000, patent-term-adjustments began that now add substantial term to most issued patents (this replaced the largely ineffective extension regime).

The chart above look groups all the patents according to their year of expiration and then reports the average patent term for each group of expired patents.

The drop in term in this chart is largely due to implementation of maintenance fees. Going forward, the shape of the chart will largely depend upon the fee structure (higher fees => lower terms).



9 thoughts on “Reduced Average Patent Life

  1. 5

    Another factor may be continuation patents which typically have a shorter life (issue to expire).

    Continuation strategy may vary over time with judicial uncertainties, …?

    1. 5.1

      This comment is correct. From about 1985 to 2005, continuations (of various types, including RCEs) rose from about 10% of issued patents to over 30%. Since the change in the date from which term is calculated, they should have had an increasing effect on the aggregate life of patents in force.

  2. 4

    The confusingly different patent term calculations for old, long-pending, patent applications when they finally issue is yet another reason why the PTO failure to fully enforce proper docket mangenment over such “submarine” applications is inexcusable.
    After generations of processing delay neglect the PTO finally recently transferred pending reissues to the CRU, and they should do to same for any application claiming an original filing date more than 14 years old.

  3. 3

    Dennis, I hope this and your prior study are read by economists expounding on patents. Just a few years ago I tried to explain to one of them that his paper was erroniously based on a greatly exagerated number of U.S. “patents in force.”

  4. 2

    Although apparently it has rarely been used, a US. patent can also have a retroactive term extension effect for infringements from application publication to issuance under 35 USC 154:
    (1) IN GENERAL.- In addition to other rights provided by this section, a patent shall include the right to obtain a reasonable royalty from any person who, during the period beginning on the date of publication of the application..

    had actual notice of the published patent application..” [and presumably infringed final claims essentially the same as published application claims]

  5. 1

    How many ways can an issued patent “expire” before reaching full term?
    I presume that one particular way (failure to pay a mainenance fee) accounts for 99% of such expiry events.

    Dennis, I find the terminology a bit confusing. For me, the “expiry date” is exclusively the date at the end of the patent term.

    I doubt there is much in the way of comparison data from other jurisdictions, because elsewhere the base date for setting the due dates for maintenance fees is the filing not the issue date. But my gut feeling is that circa 11 years from issue is a surprisingly long average “life” for an issued patent. Could it be that the 4 year gap between the 2nd and 3rd maintenance fee (unique to the USA) is the cause of the longer life expectancy? Longevity is OK when all owners of issued US patents are domestic, but perhaps not so helpful to US industry when Johnny Foreigner is the majority owner? In this context, I am reminded of Robin Jacob’s description of many RTM’s (maintenance fee due every 10 years) as “abandoned vessels in the shipping lanes of trade”

    1. 1.1

      Yes, the third (11.5 year from isssuance) maintenance fee is considerably more expensive. It also tends to cooincide with increased costs for maintaining foriegn equivalents, and/or confirmable obsolecence, and thus does have a higher abandonment rate for non-payment of maintenance fees, among patent owners paying close attention to avoidable costs. $7,400 is more than what many applications cost to be prepared and filed.

    2. 1.2

      Max: I agree with your comments.

      Terminology: I prefer “lapsed” for patents that are no longer enforceable on account of maintenance fee non-payment.

      Analogy: Perhaps the SCOTUS

      1. 1.2.1

        Analogy: Perhaps each SCOTUS decision can be considered a new naval mine added to the shipping lanes.

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