Patent Fee ProposalExecutive Summary

Presented to:

Patent Public Advisory Committee

November, 2015

2

Overview

• Section 10 of the Leahy‐Smith America Invents Act (AIA) authorizes the United States Patent and Trademark Office (USPTO) to, in part, “set or adjust by rule any fee established, authorized, or charged” under Title 35 of the United States Code provided that the aggregate patent fee revenue equals the aggregate estimated cost to for patent operations, including administrative costs.

• USPTO is exercising its fee setting authority to set and adjust patent fees to recover the aggregate estimated cost of the patent operation and USPTO administrative services that support patent operations.

• The fee structure summarized here is an initial proposal to enable the Patent Public Advisory Committee (PPAC) to hold public hearings, gather feedback from the public, and prepare a report for the USPTO as required by the AIA.

3

Overview (cont.)

• Following the PPAC hearing, the USPTO will publish the proposed fee schedule in a Federal Register Notice of Proposed Rulemaking, anticipated in May 2016, which will open a 60‐day comment period for the public to submit written feedback directly to the USPTO.

• The USPTO encourages public input about the proposed fee schedule to guide the Agency in making adjustments.

• To assist the PPAC and the public in providing input, the USPTO is including a comparison of the current fees in addition to its proposed fee schedule.

4

FY 2015 Biennial Fee Review

Proposals were developed to align with the USPTO Fee Structure Philosophy and the goal to provide sufficient financial resources to facilitate the effective administration of the United States intellectual property system.

The following objectives have been established in support of this goal:• Promote Administration innovation strategies• Align fees with the full cost of products and services• Set fees to facilitate the effective administration of the patent and

trademark systems• Offer application processing options

5

Investing in the Future

Adjusting the patent fee schedule allows the Agency to continue to implement the patent-related strategic goals and objectives as documented in the USPTO 2014 – 2018 Strategic Plan. For FY 2017 through FY 2021, this includes:

• Enhancing patent quality by focusing on three patent quality pillars• Provide the best work products and services at every stage of the patent

process• Provide excellence in measuring patent quality by ensuring that appropriate

quality metrics target examination issues requiring attention• Improve the customer experience with emphasis on excellent customer service

• Continuing progress toward achieving an optimal working level inventory of unexamined patent applications, and performance targets of 10 months for first action pendency and 20 months for total pendency

• Maintaining the Patent Trial and Appeal Board (PTAB)’s ability to provide high quality and timely decisions, particularly the new AIA trials, reexamination appeals and ex parte appeals

6

Investing in the Future (cont.)• Continuing to ensure optimal IT service delivery to all users, including continued

development and implementation of the Patent-End-to-End (PE2E) IT capability• Expand upon the initial end-to-end processing capability to include

specialized processing, thereby enabling the retirement of legacy systems and existing IT capabilities

• Expand the amount and use of intelligent data in end-to-end processing• Continue development of tools for sharing patent processes and work

products among global IP stakeholders

• Pursuing a 21st century globally harmonized patent system so American inventors and businesses can enjoy a predictable and level playing field when they do business worldwide

• Enhancing stakeholder and public outreach to promote the availability of educational resources for applicants and other users, particularly through the USPTO’s four regional offices

• Continuing the transition to a sustainable funding model, including fee setting authority, the establishment of the patent operating reserve, and efficient use of the Patent and Trademark Fee Reserve Fund

7

Benefits For StakeholdersImplementation of the USPTO fee proposal would benefit the IP community by enabling the USPTO to:

• Continue to enhance the quality of patent examinations via enhanced initiatives based on public feedback during patent quality forums

• Reach optimal examination times that will facilitate bringing valuable patent assets to market faster, and reducing congestion for all other applicants

• Provide more patent prosecution options to enhance applicant choice and agency efficiency

• Align PTAB fees with cost while maintaining high quality and efficient proceedings

• Modernize patent IT systems to increase efficiencies by providing a uniform platform for conducting business with the Office, including registering, entering, and updating information, and paying fees

• Stabilize USPTO operations to deliver quality patent examinations and avoid future patent application backlogs, even in times of financial fluctuations

• Deliver value to fee-paying customers and the public through a streamlined and more cost-based fee schedule

• Recruit and retain the highest quality employees to accomplish the work of the Office

8

Projected Outcome of Proposed Fee Structure

9

Aggregate Cost-Revenue Balance

• In the FY 2016 President’s Budget, the USPTO estimated that its aggregate patent operating costs for FY 2017, including administrative costs, would be $3.105 billion. This requirement would be offset by projected fee collections of $3.007 billion and a withdrawal from the patent operating reserve of $97 million, leaving a $45 million balance in the patent operating reserve [see Appendix J for details].

• During FY 2015, the USPTO focused on financial risk management, priorities for spending, revenue estimates and collections, and the size of operating reserves to mitigate financial and operational risk. This included: • Beginning a comprehensive review of all USPTO operating

requirements, • Initiating the biennial patent fee review process, and • Committing to maintaining a minimal patent operating reserve of $300

million for FY 2016 and FY 2017.

10

Aggregate Cost-Revenue Balance (cont.)

• The comprehensive funding review is currently under way and the results will be presented in the FY 2017 President’s Budget.

• The biennial fee review has resulted in the proposed fee schedule addressed in this briefing. Under this proposed schedule, targeted fees would be adjusted, as well as patent fee revenue [see Appendix F and Attachment – Table of Patent fee Adjustments for details].

• To ensure the USPTO’s core operations are shielded from financial shock, the USPTO has identified an optimal operating reserve balance that it wishes to maintain, and a minimum, or lower bound, operating reserve size in which the USPTO will operate while building the operating reserve to the optimal level [see Appendix J for details].

• The FY 2017 President’s Budget will provide the five year outlook of aggregated estimated resource needs, revenues and operating reserve levels.

11

Impact of Proposed Fee Schedule Operating Reserve• Based on the FY 2017 estimates in the FY 2016 President’s Budget, the

proposed fee structure begins to build the operating reserve to the minimal level of $300 million in FY 2016 and FY 2017, and provides momentum for achieving the optimal level of three months of operating expenses in the future [see Appendix J for details].

• An operating reserve increases the USPTO’s ability to address risk; and absorb and respond to unanticipated shocks and temporary changes in its environment or circumstances.

• Fee-funded operations are typically at high risk for cash flow stress and can be:• Forced to make expensive, short-term, crisis-based decisions in exchange

for strategic, long-term decisions; or• Left without the resources to continue the delivery of programs at

designated performance levels.• Without typical business tools, such as the ability to borrow money, the

operating reserve serves as a fiscally responsible internal line of credit to cover normal fluctuations in revenues and thereby sustain operations and execute on the goods and services requested by intellectual property stakeholders.

12

Impact of Maintaining Current Fee Schedule

• Projected costs necessary to support patent operations, commitments to strategic priorities, continued and promised investments in IT systems, IP policy and USPTO programs will exceed available revenues and operating reserve minimum balances by FY 2017.

• Lower than minimal operating reserve balances would put the USPTO in jeopardy of being unable to respond to emergency situations, such as unexpected economic downturns. It would also put the USPTO in the position of having to make short-term financial decisions, for example, stopping investment in IT plans that are crucial to operations and customer support; and in the event of a lapse in appropriation, having to shut down.

13

Proposed Fee Structure

Proposed Fee Structure

14

• Generally set fees to achieve cost recovery for service, but also set fees either below or above cost based on sound public policy, for example:• Subsidize filing, search, and exam fees to enable lower cost of

entry into patent system• Where appropriate, set fees so that, during patent prosecution, an

applicant pays individual fees at points in time where he/she has more information to make a decision about proceeding with the payment

• Recover aggregate cost from FY 2017 through FY 2021 [see Appendix E for details] to enable USPTO to meet its performance commitments to stakeholders, as outlined in the USPTO 2014 – 2018 Strategic Plan and the President’s FY 2016 Budget1

• Provide multiple processing options

Fee Structure Considerations

1 Assumptions related to costs, production and filing levels, and economic outlooks can be found at http://www.uspto.gov/about/stratplan/budget/index.jsp

15

• Relationships among individual fees and the cost of operational processes, including making some targeted adjustments to fees where the gap between cost and current fee rate is greatest

• Economic impact of patent fees and fee changes, and the relationship of fees to each other and to beneficial outcomes

• Fee changes that could administratively improve application processing;

• The purpose and size of an operating reserve necessary to provide sustainable funding [see Appendix J for details]

• Elasticity of demand related to paying fees [see Appendix I for details] as it impacts the amount of aggregate revenue required to fund the aggregate cost of operations over multiple years [see Appendix F and Attachment – Table of Patent Fee Adjustments].

Fee Structure Considerations (cont.)

Biennial Fee Review Process

16

17

The patent fee proposal rulemaking process assumes the following timeline:

• A draft Notice of Proposed Rulemaking (NPRM) will be transmitted to the Department of Commerce (DOC) and OMB no later than January 2016.

• The draft NPRM, along with additional requirements including: updated budget plans, workload and fee forecasting, regulatory and economic impact assessment, paperwork reduction act compliance; would be published in the Federal Register by the end of April.

• There will be a 60 day period to allow for comments to the NPRM and accompanying materials.

• A final rule, including responses to all comments received during the public comment period, will be transmitted to the DOC and OMB no later than August 2016

• The final rule will be published in the Federal Register no later than November 2016.

• Implementation of the final rule is expected for early January 2017.

Rulemaking Timeline Considerations

18

Proposed Fee Structure Changes

The USPTO proposes to set or adjust the fees contained in Attachment 1 – Table of Patent Fee Adjustments. The more notable changes impact the following fee categories [See Appendix G for more information]:

• Basic Filing, Search, and Examination and Excess Claims• Mega Sequence Submissions• Request for Continued Examination (RCE)• Information Disclosure Statements (IDS)• Issue Fees• Maintaining Multiple Reissue Patents• Streamlined Re-examinations• Late Filing of Sequence Listings in an International Application• PTAB: Appeal, Inter-Partes Review, Post-Grant Review, and Covered

Business Methods• Hague Agreement Fees• Office of Enrollment and Discipline Fees• Petition and Administrative Fees

19

Proposed Fee Structure Changes –Summary of Significant Changes

Fee Code 37 CFR Description

Current Fees Proposed Fees Increase/(Decrease) Percentage Change

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Patent Application Filing Fees

1011/2011/3011 1.16(a)Basic Filing fee - Utility (Paper Filing – Also Requires Non-Electronic Filing Fee under 1.16(t)) $280 $140 $70 $300 $150 $75 $20 $10 $5 7% 7% 7%

1011/4011†/3011 1.16(a) Basic Filing Fee - Utility (Electronic Filing) $280 $70 $70 $300 $75 $75 $20 $5 $5 7% 7% 7%1012/2012/3012 1.16(b) Basic Filing Fee - Design $180 $90 $45 $200 $100 $50 $20 $10 $5 11% 11% 11%1017/2017/3017 1.16(b) Basic Filing Fee - Design (CPA) $180 $90 $45 $200 $100 $50 $20 $10 $5 11% 11% 11%1013/2013/3013 1.16(c) Basic Filing Fee - Plant $180 $90 $45 $200 $100 $50 $20 $10 $5 11% 11% 11%1005/2005/3005 1.16(d) Provisional Application Filing Fee $260 $130 $65 $280 $140 $70 $20 $10 $5 8% 8% 8%1014/2014/3014 1.16(e) Basic Filing Fee - Reissue $280 $140 $70 $300 $150 $75 $20 $10 $5 7% 7% 7%1019/2019/3019 1.16(e) Basic Filing Fee - Reissue (CPA) $280 $140 $70 $300 $150 $75 $20 $10 $5 7% 7% 7%

1051/2051/3051 1.16(f)

Surcharge - Late Filing Fee, Search Fee, Examination Fee or Oath or Declaration, or Application Filed Without at least One Claim or by Reference $140 $70 $35 $160 $80 $40 $20 $10 $5 14% 14% 14%

1201/2201/3201 1.16(h) Each Independent Claim in Excess of Three $420 $210 $105 $460 $230 $115 $40 $20 $10 10% 10% 10%1204/2204/3204 1.16(h) Each Reissue Independent Claim in Excess of Three $420 $210 $105 $460 $230 $115 $40 $20 $10 10% 10% 10%1202/2202/3202 1.16(i) Each Claim in Excess of 20 $80 $40 $20 $100 $50 $25 $20 $10 $5 25% 25% 25%1205/2205/3205 1.16(i) Each Reissue Claim in Excess of 20 $80 $40 $20 $100 $50 $25 $20 $10 $5 25% 25% 25%1203/2203/3203 1.16(j) Multiple Dependent Claim $780 $390 $195 $820 $410 $205 $40 $20 $10 5% 5% 5%New Fee Code Submission of sequence listings of 300MB to 800MB $1,000 $500 $250 $1,000 $500 $250 New Fee Code Submission of sequence listings of more than 800 MB $10,000 $5,000 $2,500 $10,000 $5,000 $2,500

Patent Search Fees1111/2111/3111 1.16(k) Utility Search Fee $600 $300 $150 $660 $330 $165 $60 $30 $15 10% 10% 10%1112/2112/3112 1.16(l) Design Search Fee $120 $60 $30 $160 $80 $40 $40 $20 $10 33% 33% 33%1113/2113/3113 1.16(m) Plant Search Fee $380 $190 $95 $420 $210 $105 $40 $20 $10 11% 11% 11%1114/2114/3114 1.16(n) Reissue Search Fee $600 $300 $150 $660 $330 $165 $60 $30 $15 10% 10% 10%

Patent Examination Fees1311/2311/3311 1.16(o) Utility Examination Fee $720 $360 $180 $760 $380 $190 $40 $20 $10 6% 6% 6%1312/2312/3312 1.16(p) Design Examination Fee $460 $230 $115 $600 $300 $150 $140 $70 $35 30% 30% 30%1313/2313/3313 1.16(q) Plant Examination Fee $580 $290 $145 $620 $310 $155 $40 $20 $10 7% 7% 7%1314/2314/3314 1.16(r) Reissue Examination Fee $2,160 $1,080 $540 $2,200 $1,100 $550 $40 $20 $10 2% 2% 2%

20

Proposed Fee Structure Changes –Summary of Significant Changes (cont.)

Fee Code 37 CFR Description

Current Fees Proposed Fees Increase/(Decrease) Percentage ChangeLarge Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Patent Post-Allowance Fees1501/2501/3501 1.18(a)(1) Utility Issue Fee $960 $480 $240 $1,000 $500 $250 $40 $20 $10 4% 4% 4%1511/2511/3511 1.18(a)(1) Reissue Issue Fee $960 $480 $240 $1,000 $500 $250 $40 $20 $10 4% 4% 4%1502/2502/3502 1.18(b)(1) Design Issue Fee $560 $280 $140 $1,000 $500 $250 $440 $220 $110 79% 79% 79%1503/2503/3503 1.18(c)(1) Plant Issue Fee $760 $380 $190 $1,000 $500 $250 $240 $120 $60 32% 32% 32%

Patent Maintenance FeesRule Change Revise Rules to Require Maintenance Fee Payments for All Reissue Patents

1558/2558 1.17(m)Petition for the Delayed Payment of the Fee for Maintaining a Patent in Force $1,700 $850 $2,000 $1,000 $500 $300 $150 ($350) 18% 18% -41%

Miscellaneous Patent Fees

1801/2801/3801 1.17(e)(1)Request for Continued Examination (RCE) - 1st Request (see 37 CFR 1.114) $1,200 $600 $300 $1,500 $750 $375 $300 $150 $75 25% 25% 25%

1820/2820/3820 1.17(e)(2)Request for Continued Examination (RCE) - 2nd and Subsequent Request (see 37 CFR 1.114) $1,700 $850 $425 $2,000 $1,000 $500 $300 $150 $75 18% 18% 18%

1806/2806/3806 1.17(p)Submission of an Information Disclosure Statement after FAOM, before Allowance $180 $90 $45 $300 $150 $75 $120 $60 $30 67% 67% 67%

New Fee Code Submission of an Information Disclosure Statement after Allowance

$600 $300 $150 $600 $300 $150 Post Issuance Fees1811 1.20(a) Certificate of Correction $100 $150 $50 50%1816 1.20(b) Processing Fee for Correcting Inventorship in a Patent $130 $150 $20 15%New Fee Code Request for Ex Parte Reexamination (< 40 pages) $6,000 $3,000 1,500* $6,000 $3,000 $1,500

1821/2821/3821 1.20(c)(3)

Each Reexamination Independent Claim in Excess of Three and Also in Excess of the Number of Such Claims in the Patent Under Reexamination $420 $210 $105 $460 $230 $115 $40 $20 $10 10% 10% 10%

1822/2822/3822 1.20(c)(4)

Each Reexamination Claim in Excess of 20 and Also in Excess of the Number of Claims in the Patent Under Reexamination

$80 $40 $20 $100 $50 $25 $20 $10 $5 25% 25% 25%* Third-Party Filers Are Not Eligible for the Micro Entity Fee.

21

Proposed Fee Structure Changes –Summary of Significant Changes (cont.)Fee Code 37 CFR Description

Current Fees Proposed Fees Increase/(Decrease) Percentage ChangeLarge Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

FeePatent Trial and Appeal Fees1401/2401/3401 41.20(b)(1) Notice of Appeal $800 $400 200* $1,000 $500 250* $200 $100 $50 25% 25% 25%

1413/2413/3413 41.20(b)(4)Forwarding an Appeal in an Application or Ex Parte Reexamination Proceeding to the Board $2,000 $1,000 500* $2,500 $1,250 625* $500 $250 $125 25% 25% 25%

1406 42.15(a)(1) Inter Partes Review Request Fee - Up to 20 Claims $9,000 $14,000 $5,000 56%1414 42.15(a)(2) Inter Partes Review Post-Institution Fee - Up to 15 Claims $14,000 $16,500 $2,500 18%1407 42.15(a)(3) Inter Partes Review Request of Each Claim in Excess of 20 $200 $300 $100 50%

1415 42.15(a)(4)Inter Partes Post-Institution Request of Each Claim in Excess of 15 $400 $600 $200 50%

1408 42.15(b)(1)Post-Grant or Covered Business Method Review Request Fee - Up to 20 Claims $12,000 $16,000 $4,000 33%

1416 42.15(b)(2)Post-Grant or Covered Business Method Review Post-Institution Fee - Up to 15 Claims $18,000 $22,000 $4,000 22%

1409 42.15(b)(3)Post-Grant or Covered Business Method Review Request of Each Claim in Excess of 20 $250 $375 $125 50%

1417 42.15(b)(4)Post-Grant or Covered Business Method Review Post-Institution Request of Each Claim in Excess of 15 $550 $825 $275 50%

* Third-Party Filers Are Not Eligible for the Micro Entity Fee.

Patent Petition Fees

1453/2453 1.17(m)

Petition for Revival of an Abandoned Application for a Patent, for the Delayed Payment of the Fee for Issuing Each Patent, or for the Delayed Response by the Patent Owner in any Reexamination Proceeding $1,700 $850 $850 $2,000 $1,000 $500 $300 $150 ($350) 18% 18% -41%

1454/2454/3454 1.17(m)Petition for the Delayed Submission of a Priority or Benefit Claim, or to Restore the Right of Priority or Benefit $1,700 $850 $850 $2,000 $1,000 $500 $300 $150 ($350) 18% 18% -41%

1781 1.1031(a)Hague International Design Application Fees - Transmittal Fee

$120 $120 $60 $30 $0 ($60) ($90) 0% -50% -75%

1783 1.17(t)Petition to convert an international design application to a design application under 35 U.S.C. chapter 16 $180 $180 $90 $45 $0 ($90) ($135) 0% -50% -75%

1784/2784 1.17(m)

Petition to Excuse Applicant's Failure to Act Within Prescribed Time Limits in an International Design Application $1,700 $850 $850 $2,000 $1,000 $500 $300 $150 ($350) 18% 18% -41%

* Third-Party Filers Are Not Eligible for the Micro Entity Fee.

22

Proposed Fee Structure Changes –Summary of Significant Changes (cont.)Fee Code 37 CFR Description

Current Fees Proposed Fees Increase/(Decrease) Percentage ChangeLarge Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

Fee

Large Entity

Fee

Small Entity

Fee

Micro Entity

FeePCT Fees - National Stage1631/2631/3631 1.492(a) Basic National Stage Fee $280 $140 $70 $300 $150 $75 $20 $10 $5 7% 7% 7%1641/2641/3641 1.492(b)(2) National Stage Search Fee - U.S. Was the ISA $120 $60 $30 $140 $70 $35 $20 $10 $5 17% 17% 17%

1642/2642/3642 1.492(b)(3)National Stage Search Fee - Search Report Prepared and Provided to USPTO $480 $240 $120 $520 $260 $130 $40 $20 $10 8% 8% 8%

1632/2632/3632 1.492(b)(4) National Stage Search Fee - All Other Situations $600 $300 $150 $660 $330 $165 $60 $30 $15 10% 10% 10%1633/2633/3633 1.492(c)(2) National Stage Examination Fee - All Other Situations $720 $360 $180 $760 $380 $190 $40 $20 $10 6% 6% 6%1614/2614/3614 1.492(d) Each Independent Claim in Excess of Three $420 $210 $105 $460 $230 $115 $40 $20 $10 10% 10% 10%1615/2615/3615 1.492(e) Each Claim in Excess of 20 $80 $40 $20 $100 $50 $25 $20 $10 $5 25% 25% 25%1616/2616/3616 1.492(f) Multiple Dependent Claim $780 $390 $195 $820 $410 $205 $40 $20 $10 5% 5% 5%PCT Fees - International StageNew Fee Code Late Filing of Sequence Listing $300 $150 $75 $300 $150 $75

Patent Enrollment Fees9001 1.21(a)(1)(i) Application Fee (Non-Refundable) $40 $100 $60 150%

9003 1.21(a)(2)Registration to Practice or Grant of Limited Recognition Under §11.9(b) or (c) $100 $200 $100 100%

New Fee Code 1.21(a)(2) Grant of Limited Recognition Under §11.9(b) or (c) $200 $200 9005 1.21(a)(4) Certificate of Good Standing as an Attorney or Agent $10 $40 $30 300%

9006 1.21(a)(4)(I)Certificate of Good Standing as an Attorney or Agent, Suitable for Framing $20 $50 $30 150%

9012 1.21(a)(5)(I)Review of Decision by the Director of Enrollment and Discipline Under §11.2(c) $130 $400 $270 208%

9013 1.21(a)(5)(ii)Review of Decision of the Director of Enrollment and Discipline Under §11.2(d) $130 $400 $270 208%

9004 1.21(a)(9)(ii) Administrative Reinstatement Fee $100 $200 $100 100%

New Fee Code Establish OED Information System Customer Interface Account (ID & Password) - Performed by OED $70 $70

New Fee Code Roster Maintenance in OED Information System Customer Interface (Change of Address) - Performed by OED $70 $70

New Fee Code Registration Examination Review Session $450 $450 New Fee Code Disciplinary Proceeding at cost

23

Proposed Fee Structure for a Basic Patent – Compared to Current

• The fees to obtain a basic patent (file/search/ exam and issue) will increase slightly.

• Maintenance fee rates will remain unchanged for all 3 stages.

Current (Alter-native)

Proposed $-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$1,600 $1,720

$960 $1,000

Current vs. Proposed -F/S/E & Issue for Large Entities

Issue

File, Search, Exam

Fee A

mount

($)

Total: $2,560Total: $2,720

24

Proposed Fee Structure for RCEs – Compared to Current

Current (Al-ternative)

Proposed $-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$1,200 $1,500

$1,700

$2,000

Current vs. Proposed -RCEs for Large Entities

2nd and Sub-sequent1st RCE

Fee A

mount

($)

Total: $2,900

Total: $3,500

• Fees for both RCE tiers will increase slightly.

• The Office has implemented several initiatives to reduce the need to file RCEs.

• IDS proposal also aimed at reducing the need to file RCEs.

25

Proposed Fee Structure for IDS – Compared to Current

Current (Al-ternative)

Proposed $-

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

$180 $300

$180

$600

Current vs. Proposed -IDS for Large Entities

IDS - 2nd Tier

IDS - 1st Tier

Fee A

mount

($)

• No fee if submitted before FAOM or within 3 months after the filing date, whichever is later.

• Eliminates certification of IDS.• Provides fees for all IDS

submissions after FAOM.• 1st tier for IDS submitted after

FAOM but before notice of allowance.

• 2nd tier for IDS submitted after notice of allowance. Must be accompanied with petition to withdraw if filed after issue payment.

• Applicants no longer need to use QPIDS or file an RCE to obtain consideration of an IDS.

26

Proposed Fee Structure for Appeals – Compared to Current

Current (Alterna-

tive)

Proposed $-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$800 $1,000

$2,000

$2,500

Current vs. Proposed -Appeals for Large Entities

Appeal Forwarding

Notice of Appeal

Fee A

mount

($)

Total: $2,800

Total: $3,500

• Fees will increase for both Notice of Appeal and Appeal Forwarding fee.

• Better align fees with cost, and allow continued progress on reducing the backlog of ex parte appeals.

27

Proposed Fee Structure for IPRs – Compared to Current

• Fees will increase for Inter Parte Reviews.

• Better align fees with cost, and continue to meet deadlines required in the America Invents Act.

• Initial fee setting required estimating potential cost. Actual, historical cost is now available.

Current (Alterna-

tive)

Proposed $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$9,000 $14,000

$14,000

$16,500

Current vs. Proposed -IPRs for Large Entities

Post-InstitutionRequest

Fee A

mount

($)

Total: $23,000

Total: $30,500

28

Proposed Fee Structure for PGRs/CBMs – Compared to Current

• Fees will increase for both Post Grant Reviews (PGRs) and Covered Business Method Reviews (CBMs).

• Better align fees with cost, and continue to meet deadlines required in the America Invents Act.

• Initial fee setting required estimating potential cost. Actual, historical cost is now available.

Current (Alterna-

tive)

Proposed $-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

$12,000 $16,000

$18,000

$22,000

Current vs. Proposed -PGRs and CBMS for Large

Entities

Post-InstitutionRequest

Fee A

mount

($)

Total: $30,000

Total: $38,000

29

Benefits of Proposed Fee Structure by Major Fee Category

Filing/Search/Exam Fee Increases • Additional revenue generated from the proposed increases in the

filing/search/exam fees will permit the USPTO to continue pursuing improvements in patent examination quality, backlog reduction, and compact prosecution. • For example, giving examiners time to initiate interviews with

applicants to resolve issues earlier in prosecution makes the Office more efficient and saves applicants money. The USPTO has found that interview time per examiner is on the rise and the actions needed to complete prosecution have been reduced.

30

Benefits of Proposed Fee Structure by Major Fee Category (cont.)

Request for Continued Examination (RCE) Fee Increase• Fee set to recover cost• The USPTO previously received feedback from the public that there are

situations in which some applicants may feel compelled to file an RCE. The USPTO has addressed this feedback by implementing several processing options to address these types of situations, such as: • Ways to improve the ability to submit an information disclosure

statement (IDS) in a manner other than through an RCE; and• Ways to incentivize examiners for more consideration on

amendments after final rejection for the purpose of identifying and working out allowable subject matter.

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Benefits of Proposed Fee Structure by Major Fee Category (cont.)

Information Disclosure Statement (IDS) Restructure• Eliminating certification simplifies the process for both the Office and

applicants.• Ability to submit IDS after allowance should reduce the need to file an

RCE.

Streamlined Re-examination• A smaller, streamlined re-examination filing reduces the cost to the

USPTO, allowing the Office to pass on the cost savings to applicants.

Appeal Fees• Better aligning costs with fees will allow PTAB to continue to make

progress on lowering the backlog of Ex Parte Appeals.

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Benefits of Proposed Fee Structure by Major Fee Category (cont.)

Inter Partes Review, Post Grant Review, Covered Business Method Review Fees

• Initial fee setting required estimating potential cost. Now have actual, historical cost available.

• Better aligning costs with fees will allow PTAB to continue to provide these services in the timeline required in the America Invents Act.

Office of Enrollment and Discipline Fees• Better aligning costs with fees (as actual, historical cost information

was not available for these fees in the last fee setting rulemaking).

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Conclusion

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Summary

Investing in the goals and objectives of the FY 2014 – 2018 Strategic Plan has put the USPTO on the right path to success – patent quality enhancements are being implemented in response to stakeholder needs; patent pendency and backlog of unexamined cases are trending downward; the transition to next generation IT systems is under way; and global collaboration on patent processing enhancements is advancing.

If the USPTO is forced to stop this forward momentum, the future cost of restarting these activities could be prohibitive.

Success also promotes increased demand, and the USPTO must be positioned to respond to this demand for quality and timely services that benefit the American business community.

The aggregate revenue for the proposed fee structure provides sufficient funds to continue fulfilling the USPTO’s goals in a financially prudent and stable manner.

Fees are reviewed and assessed on a biannual basis to ensure the USPTO is making progress on its goals and commitments and the fees are set at an appropriate level.

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Path Forward

The proposed fee structure and current fee structure are intended to provide two perspectives of information to the public to assist in considering this proposal.

The proposal is far from final and we look forward to your insight, ideas, and suggestions for improvement that is beneficial for all – stakeholders, the USPTO, and our country.

As you provide input, it is useful to frame it in goals, time periods, and which realignments within the proposed fee structure are favorable and which are not.

With this type of information, the Office would be armed to prepare a proposal for a notice of proposed rulemaking that achieves mutual objectives.

We look forward to a productive dialog over the next couple of months – thank you.

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Additional Information

The following additional documents, presented separately, provide background information and further details related to the proposed fee structure in this summary document and are integral part of the proposal:

Transmittal letter

Patent Fee Proposal Detailed Appendices

Attachment 1 - Table of Patent Fee Adjustments

Attachment 2 – Table of Patent Fees – Current, Proposed and Unit Cost