by Dennis Crouch
The United States Patent and Trademark Office (USPTO) recently proposed a new fee structure for fiscal year 2025, which includes significant increases in various patent fees. [Read the Notice of Proposed Rulemaking] While incremental fee adjustments are common, the proposed changes for FY2025 are particularly noteworthy due to their magnitude in certain targeted areas and potential impact on applicant behavior. Many filers will likely change their practices based on the new higher fees. The USPTO appears to be using these fee adjustments as a tool to shape patent prosecution strategies, encouraging more compact patent applications and smaller patent families. However, the USPTO is also seeking ways to ensure that the agency remains financially solvent and able to perform its statutory duties in the face of inflation and the Unleashing American Innovators Act of 2022 which reduced patent fees for small and micro entity applicants. The USPTO’s proposed fee increases are largely unchanged from the plan announced last year.
One of the most striking changes in the proposed fee structure . . .
is the introduction of new fees for continuation applications. If an applicant files a continuation application more than five years after the earliest claimed priority or benefit date, they will be subject to a surcharge $2,200 fee. This fee increases to $3,500 if the continuation application is filed more than eight years after the earliest benefit date. These fees are clearly designed to discourage applicants from filing continuation applications long after the original priority date, pushing them to pursue more focused and timely prosecution. The USPTO does justify their approach on funding reasons — noting that continuations have a shorter patent-term and so the USPTO is unlikely to recoup the maintenance fee on the back end.
Another significant change is the substantial increase in fees for Request for Continued Examination (RCE) filings. The USPTO proposes a 25-80% increase for second and third RCEs, which is a clear indication that the office wants to reduce the number of RCEs filed by applicants. By making RCEs more expensive, the USPTO is encouraging applicants to prosecute their applications more efficiently and avoid multiple rounds of examination. At the same time, the USPTO has proposed a new fee of $500 for participating in the After Final Consideration Pilot Program 2.0 (AFCP 2.0). This program allows applicants to file a response after a final rejection, along with a request for consideration under the pilot program. The NPRM notes that the PPAC found this new fee problematic unless an interview was guaranteed or granted, but the USPTO rejected that modification after noting that much of the cost is reviewing the after final submission.
The proposed fee structure also includes a 100% increase in fees for claims in excess of 20, which is a direct push for applicants to file more concise patent applications with fewer claims. This fits with the ongoing trend that a patent should be of a particular size. This change, coupled with the increased fees for continuation applications and RCEs, suggests that the USPTO is trying to streamline the patent prosecution process by incentivizing applicants keep the application process focused and compact. The proposed fee increases for filing a Terminal Disclaimer after a final action or a notice of allowance moves that cost up to $800. It is unclear how this proposal benefits the USPTO. The NPRM would also hike design patent filing and issuance fees. The USPTO notes that no maintenance fees are owed on design patents and that the USPTO has been subsidizing design patent examination with revenue from the utility patent side.
These proposed fee changes, taken together, paint a clear picture of the USPTO’s intent to shape applicant behavior through financial incentives. The office appears to be using fees as a tool to achieve what it could not accomplish through rule changes alone.
Additional fees:
- Information Disclosure Statement (IDS) fees: The USPTO has proposed a new tiered fee structure for IDSs based on the number of references cited. This change aims to recover the costs associated with reviewing large IDSs and encourage applicants to file only the relevant documents. The fee structure is $200 for >50 references; $500 for >100 references and $800 for >200 references. I’m sure we’ll be seeing an increase AI tools facilitate the pairing down of submissions to those that appear to have relevance without being cumulative.
- PTAB trial fees: The USPTO has proposed increasing fees for inter partes review (IPR) and post-grant review (PGR) proceedings by 25%. These increases are account for the costs of conducting these proceedings.
- Small and Micro entity status: Almost all of the fees include discounts for applications associated with small and micro entity status.
It remains to be seen whether the USPTO will successfully implement these proposed fee changes and whether they will have the desired effect of shaping applicant behavior. According to the USPTO’s notice of proposed rulemaking (NPRM), the proposed fee changes are expected to take effect in fiscal year 2025, which begins on October 1, 2024. However, the exact implementation date may vary depending on the feedback received during the public comment period and the time required for the USPTO to review and address the comments.
Written comments must be received on or before June 3, 2024, to ensure consideration. Comments must be submitted through the Federal eRulemaking Portal at https://www.regulations.gov/docket/PTO-P-2022-0033.
There is an analogous problem in CN. Partial designs are now allowed in CN, but partial designs cannot be claimed on the fly. So, Applicants have to identify which partial designs are likely to be the most commercially relevant over the next 15 years and file all the foreseeable, commercially relevant partial designs at the time of filing. The USPTO is emulating CN, i.e., requiring applicants to determine 20 years of foreseeable utility infringement and file all relevant claims between years 0-5. Never mind that PCT filers lose 2.5 of the proposed 5 years and prior art from JP and the EPO will not be available, in some cases, until year 7.
Let’s be honest, eventually they’re going to have to start cracking down one way or other, fees or whatever, on the patent books that are being filed. Nowadays it’s basically part for the course for the patent app to be like a hundred pages (with drawings included). This is up from like 4-10 pages total 30 years ago. If it keeps going up, you’re talking about literal bound treatise style “patent applications”, or “patent bookshelf shelf” “applications” being filed as avg. in like 30 years. The complication of my art is not going down anytime soon.
Re “the patent app to be like a hundred pages (with drawings included). ”
Curious what art that is, as in many other technologies corporate penny pinching of OC is resulting in shrinkage, not expansion?
It is a filing strategy that some of my clients have opted for.
Mostly mechanical arts, and often at the stage of opening into a new product area (it’s a bit of a shotgun approach, as market demand has not solidified, so a spectrum of protection is desired).
“The USPTO proposes a 25-80% increase for second and third RCEs, which is a clear indication that the office wants to reduce the number of RCEs filed by applicants. By making RCEs more expensive, the USPTO is encouraging applicants to prosecute their applications more efficiently and avoid multiple rounds of examination. At the same time, the USPTO has proposed a new fee of $500 for participating in the After Final Consideration Pilot Program 2.0 (AFCP 2.0). ”
Based but it won’t change my applicant’s behavior much I doubt. They love fishing through the best rejections to their fantasy claims so much they likely won’t stop.
“it could not accomplish through rule changes alone.”
I think you mean “did not”. They still probably can.
“The fee structure is $200 for >50 references; $500 for >100 references and $800 for >200 references. ”
Most of my applicants just file all the refs from the parent case when filing a DIV or CON. I should just start importing all 200+ refs I find that are relevant to the case. Should give me an hour or two extra to do the same review I’m otherwise expectedlol to do, and bring in 800$. Just based all the way around.
Only real issue with these fee structures is that for some reason they thing 20 claims is the magical number where claim number fees should start. Just give them a slight discount on the filing fee, but start the claim number fees immediately after 1, have them go up at slight exponential rate with maybe some plateaus if needed. Why nobody intos this I don’t understand.
There’s only one word for these proposed fee increases:
Obscene.
At the same time as Vidal and her leadership colleagues are rightly working hard to increase participation in the patent system . . . they’re concurrently pushing to materially increase fees?
Even with lower, still-too-expensive new and increased fees for small and micro entities, the effect will be to REDUCE the participation of those most in need of access to America’s patent system.
While the effect on myself will be minor given approaching retirement, if these fees go into effect, I feel very sorry indeed for those untold 100’s to 1,000’s per year of my fellow independent inventors who won’t be able to afford to become patent owners.
Obscene.
p.s. My fellow independent inventors (and indeed all those rightfully concerned that their innovative children and grandchildren may never be able to afford to obtain patents for their inventions), please join me in urging Patent Office leadership to not increase fees (via comments to the above link) for small and micro entities. They need to hear from us.
Raising PTO fees a lot for continuation applications to discourage delayed prosecution, prosecution laches, and avoid problems caused by those who do not abandon the parent sounds like a good idea for the PTO on first glance. It might accomplish something re some of many prosecution-penny-pinching corporations these days. [It might be unfair for some smaller applicants.]
However, as Lemelson, Hyatt and others repeatedly demonstrated, the real problem is the refusal of the PTO to properly docket and treat continuations by their true original filing dates.
As also noted below, others with strong tactical motives to keep applications pending, to be able to change claim coverage over later-launched products of others, especially pharmaceutical companies, will not be deterred by this cost increase for potentially valuable patents.
“As also noted below, others with strong tactical motives to keep applications pending, to be able to change claim coverage over later-launched products of others, especially pharmaceutical companies, will not be deterred by this cost increase for potentially valuable patents.”
Why does this need to be deterred? It is not prohibited by law, as long as there is support for the claims in the application as filed.
It does not need to be deterred.
At all.
But Paul is merely showing his anti-patent bias (he may be retired now, but had forsaken the path of protecting innovators and had become a full time litigator only prior to his retirement and cemented his bias at that stage.
… ask him how he felt about the Tafas case…
This is related to the Guest Post on judge-shopping.
Please remove my response limits, Dennis. It leaves me at a disadvantage to respond to personal attacks. If you are going to allow personal attacks, you need to allow responses to them.
Thank you.
PM – there are several different filters.
You may have hit the “count” filter (there is an inconsistent number of posts allowed per login).
You may have the George Carlin filter (along with the “seven words,” there is a host of words that have been banned – some merely because they accurately describe behavior of other posters with no “bad” words in and of themselves).
You likely did Not hit the multi-link filter. Sometimes when more than two hy0perlinks are provided, the filter kicks in.
I had thought that the USPTO actually brings in enough fees to operate. Can we get clarification on this point?
Not sure what needs clarification – neither the funding mechanism nor the “not for profit” nature of the USPTO has changed for decades now.
It was just over a decade that some limited fee setting power was provided in the AIA – with strings attached. But even that did not remove the Tafas legal restraints on the Patent Office.
The USPTO can set fees as follows:
1. For a $200K application fee you are guaranteed to have your application allowed in the FOA. For another $100K you are guaranteed to win every IPR.
2. For a $1K application fee you are guaranteed that you will never have anything in your application allowed and your application will be published immediately upon filing.
3. For issued patents the maintenance fee per year will be $10K starting this year and go up 10% each succeeding year.
We have to get independent inventors and small companies to keep inventing new and useful things that they will have no hope of ever making money from and so that Big Companies can benefit from their work.
One more thing.
If you give Ginny Thomas $1M you are guaranteed that Justice Thomas and the other contemptible Conservative creatures on SCOTUS will give you the result you want in an appeal.
They will certainly approve of the USPTO’s new fees because a fish rots from the head back.
There are 2 reasons for everything. A good reason, and a real reason. Sometimes the reasons are the same. I would buy the USPTO funding argument if there were not proposed rule changes last year seeking to gut continuation practice in the US.
As I noted – this is a sham.
And $2200 and $3500 surcharges are not going to deter corporate patent filers. Maybe $22K or $35K surcharges, but not tens of Benjamins. Even then, $35K is nothing compared to many marketing budgets, upfront license fee income, royalty stream income, margins, market share protection, etc. This nonsense is only going to hurt startups and independent inventors without deep pockets, i.e. folks who were not going to sue FAANG anyway.
If the USPTO does not want us to file patent applications, just tell us and we will find something else to do for a living. These proposals would choke off patent prosecution.
I suggest that instead of punishing applicants, the USPTO hire better examiners…examiners who speak and understand English, who understand science, and who understand the patent system. Until then, do not punish patent attorneys and their clients for the incompetence of the patent office.
“the USPTO hire better examiners”
The PTO is losing examiners at current pay and quality requirements.
Are you going to pay these better examiners more? If not, why would anyone better show up?
Ben – people are leaving?
What happened to that stellar union of yours?
+1
>At the same time, the USPTO has proposed a new fee of $500 for participating in the After Final Consideration Pilot Program 2.0 (AFCP 2.0).
Well, that will kill the program. I mostly file the AFCP2.0 form in exchange for examiner good-will.
>The proposed fee increases for filing a Terminal Disclaimer after a final action or a notice of allowance moves that cost up to $800.
That seems kinda punitive given the questionable state of the obvious-type double patenting doctrine nowadays.
Besides, what does processing one of these actually entail? I’ve had to deal with mistaken ones over the years, so it seems like is a pure registration process.
>The USPTO proposes a 25-80% increase for second and third RCEs,
Exactly – the fees are punitive with no (stated) relation to any costs or prior accepted benefits (i.e., prompting small entities to partake).
These are clearly a sham to put in effect the types of ‘rule changes’ that Tafas (which is still binding) outlawed.
These simply are not within the bounds, loosened as they were, in the AIA.
I’ll bet the fee for the Terminal Disclosure is so the Examiner doesn’t have to reject the claims.
Agreed. The only way this fee structure conveniences the PTO is that it encourages applicants to file terminal disclaimers before double patenting rejections are made or finalized.
That seems kinda punitive given the questionable state of the obvious-type double patenting doctrine nowadays.
Also, Terminal Disclaimers are automatically granted when electronically filed. What is the justification for that increase?
This change aims to recover the costs associated with reviewing large IDSs and encourage applicants to file only the relevant documents.
Applicants file an IDS with a large amount references because that is what is demanded by the Federal Circuit.
The fee increases look to change applicant behavior but are applicants getting a better examination product?
If they are going to make RCEs more expensive, then look to see more appeals filed.
+1
Good comments. What are the unintended consequences going to be?
Maybe fight the obvious-type double patenting? Maybe appeal and file a continuation rather than an RCE.
Continuations are targeted as well.
Eliminate inequitable conduct and the number of references will go down significantly.
In the biotech and similar spaces, we have to be concerned about NPLs, as well as poster presentations and slide presentations, on top of patents/applications. So, the number of references is naturally greater than for a mechanical invention.
No one wants to be the one to say “we can leave out this reference because…”
Biotech and chemical is also impacted by continuation applications because such applications often get 10-way restriction requirements. They want applicants to file all at once?
The USPTO also increased the Patent Term Extension application fee from $ 1180 to $ 6700. That is an increase of over 500%!!!!
As others have observed, this is essentially legislation through fee increases.
+1
Re: “Biotech and chemical is also impacted by continuation applications because such applications often get 10-way restriction requirements.” ? [Those should normally lead to divisional applications rather than continuations.] I did not see a mention above of fee increases for divisionals, but I bet the PTO would like that suggestion, as it would also reduce prosecution times.
By the way, another PTO problem with lengthy prosecutions is that a new examiner may well have to take over before it ends.
Your excuses do not wash, as any examination load for divisionals would be the same for continuations.
Heck, even Continuations-In-Part are less of a load than a full new application.
Many lengthy prosecutions are a result of the examiners.
Too many follow the “second rejection must be a final” rule and force applicants to have to file an RCE or continuation. Most times an RCE is chosen because it takes less time and is before the same examiner.
Even if an allowance can be achieved with a minor amendment, and an AFCP is filed, they will claim it would require a new search and take too much time, forcing an RCE. Once an RCE is filed, the examiners know that their delay after that will not be counted against the three years to issue for PTA determination, so they often take more time than the would have if that were not the case.
I have even had some examiners seemingly try to run out the “clock” when approaching the 20 years from filing deadline.
Some keep adding rejections upon appeal, so it gets bounced back. Who would to try and address a brand new rejection on appeal?
I just looked at the notice more closely. The increased fees apply to all continuing applications, including divisional applications.
Applicants file an IDS with a large amount references because that is what is demanded by the Federal Circuit.
Exactly. The CAFC has given us an awkward legal rule, and applicants are responding to it with awkward responses.
I feel sorry for the examiners who have to deal with the nonsensical results, but the fees will have to be truly absurd (to the extent that they would never survive an arbitrary-&-capricious challenge) before my clients will start to say “let’s not disclose this reference.” The costs of litigating inequitable conduct dwarf even these proposed IDS fees.
For prior publications or patents being cited merely for inequitable conduct defense insurance [even though rarely successful these days], not of any known material relevance, has anyone considered putting those into the specification itself as background material to avoid these large IDS fees for long IDS lists?
Well, that is a horrible idea.
You have been absent from prosecution for much too long to try to making suggestions like this.
Even in your day, you should have been aware of the trap of applicant admitted prior art (versus the fact that an IDS item is explicitly exempt from that trap).
Maybe do something else in your retirement.
Part of the point of accelerating fees for later-filed TDs is because much of the TD traffic comes from applicants getting their first application to allowance by going along with everything the examiner says, and then filing a continuation where they strip the claims back down to the stated reasons for allowance. This is obviously going to require an ODP rejection, so the fee structure incentivizes applicants to file the TD pre-emptively and save the examiner some time in having to write up an ODP when the attorney knew all along that they were probably going to have to file the TD anyway.
The reason you don’t like to file the TD up-front is because: (i) it costs money; and (ii) you aren’t sure you’ll actually get said broader claims.
The better way would be to just table the whole issue (i.e., the Examiner doesn’t need to do anything either) until something is actually found allowable over the art. Then, process the routine paperwork via AFCP2.0
That would be good, but it would contradict the Office’s God of Compact Prosecution.
A solution that wouldn’t disturb their holy cow would be to make TDs filed prior to first action free.
Any filing of a TD prior to actual claims allowed is a possible sacrifice of different coverage and different term.
This is yet another move by the Office to penalize my clients for p00r examination.
“This is obviously going to require an ODP rejection”
I find that mine often do not. That’s usually due to a different limitation being present that cannot be addressed in an ODP rejection. Did two cases like this last bi week (first in a long time tho).
I am a bit shocked that the instant reaction is not one of credulousness at the Office’s apparent lack of providing anything close to the required full analysis that accompanied their “improved” ability to set fees for anything and that analysis tied to the proposed budget.
In shorter words, the AIA did NOT give the Office unlimited ‘power of the purse.’
Exactly.
But the President’s EO on drug costs did instruct the USPTO to work with the FDA to help with that. And we are seeing some of the results.
They are addressing the alleged patent thickets and evergreening through exorbitant continuation fees.
There’s also the new escalating fee structure for terminal disclaimers. If you don’t expect an OTDP rejection and dare try to argue against it but then opt to file a TD when the rejection is maintained in a final Office Action, the TD fee will be $800 instead of $200 if you voluntarily file it up front (before any Office Action).
$200 before allowed claims are actually clear?
Are you going to try to bill the client for that?
$200 before any rejection…
More baloney from the office of Kathy Vidal.
If her examiners understood their role in encouraging innovation and would do their jobs, viz. work with applicants to identify patentable subject matter, instead of being mindless bureaucrats who think their duty is to reject everything, there wouldn’t be a need for continuations or RCEs. In essence the PTO now wants to punish applicants for examiner incompetence or recalcitrance. How about reducing examiner pay every time a continuation or RCE is filed? That’s certainly one way to reduce costs.
Also seems like an attempt to gouge applicants who go via the PCT route, since typically they don’t enter national stage in the USA until 30 months after the earliest priority date, and the PTO is super slow to process incoming national stage applications. So their cons will already be filed later.
If they think the problem is less maintenance fee revenue, then why not get Congress to revise the maintenance fee structure? Maintenence fees were instituted when patent term was 17 years from grant, so it made sense to time the fees in accordance with issue date. That should have been changed when they moved to 20 years from earliest filing.
+1
This is the typical socialist d*ath spiral. They have made patents less desirable and there are fewer being filed and maintained. But the bureaucrats need to be fed. So, they jack up fees, which will reduce filings. A d*ath spiral.
Excellent point about national phase applications!
If they think the problem is less maintenance fee revenue, then why not get Congress to revise the maintenance fee structure?
I do not disagree with any of your complaints, but this question misses the bigger picture in two respects:
1) This is not really about raising revenue. This is a slantwise means of setting policy. The Biden administration has gotten it in their heads that U.S. patent practice drives up drug costs. This is nonsense, but they believe it. They are committed to lowering drug costs, and they are (fairly ineffectively) tugging at every lever that they believe to be at their disposal to make that happen. This is about changing patent practice more than raising revenue.
2) Congress has grown so dysfunctional that the executive branch—regardless of party—has had to become increasingly aggressive about executive actions as a way to get things done. This is really bad, but it also hard to solve. How does one get Congress members to take their job as legislators more seriously than the job as media personalities that so many of them seem to want? We this executive cludge approach to policy making across all the agencies of late. This is how it looks in the patent context, but it is even worse in the immigration context or the student loan forgiveness debacle.
>fairly ineffectively
Completely ineffictively. Big pharma won’t care about any of this. Ironically, the biggest loser from these changes will be big tech…
“ the biggest loser from these changes will be big tech…”
Awww, that’s so sad.😭
Completely ineffictively
I do not think that this is entirely fair. Insulin prices really are down, although the intervention that achieved that had nothing to do with patent law.
They are not, however, making nearly as much progress on this issue as they had meant to achieve, largely because they are pulling on levers that are not actually connected to any relevant machinery. The administration is mostly flailing on this front.
That’s because (in no short supply), the push back against “Equity” in the good ol Martha Vineyards ‘not in my backyard‘ style.
“for many”
I’m guessing the patients that require the good stuff still have to pay out the bottom.
“2) Congress has grown so dysfunctional that the executive branch—regardless of party—has had to become increasingly aggressive about executive actions as a way to get things done. ”
Sure, Chevron is in the sights of being chopped back.