USPTO Proposes 80% Fee Increase to Continue Patent Examination, 724% Fee Increase to File Terminal Disclaimer
Also: new $3,500 fee to file a continuing application as part of 20 new fees and 38 fee increases of 25% or more proposed for 2025
Voice of IP usually doesn’t send out updates on Wednesdays. However, we had to break that short tradition when we discovered that the USPTO is issuing a proposal today with significant, unprecedented fee increases.
Quick take: proposed fees will make it more expensive for applicants to obtain adequate patent protection, including to voluntarily fix errors that occur during the examination process.
Background: to keep up with changing costs, the USPTO semiregularly1 proposes to set or adjust fees as part of a formal process that usually leads to more constrained changes being put in place.
Perspective
Last fee increases in 2020: the USPTO set only 1 new fee and increased 8 fees by 25% or more.2
The 1 new fee was a $400 surcharge for choosing to file in the non-DOCX format. That fee was only finally put in place on January 17, 2024, after several delays.
The 8 fee increases included increasing 3 surcharges related to late payment of maintenance fees by 213%, increasing 1 fee for requesting expedited examination of a design application by 78%, and increasing 4 post-grant proceeding fees by only 27% or less. None of those 8 fee increases related to increasing costs for an applicant going through the examination process or seeking to correct issues afterwards.
Proposal for 2025
For undiscounted entities alone, the USPTO is proposing setting 20 new fees and increasing 38 fees by 25% or more.
The 20 new fees include a $500 fee for filing an AFCP request regardless of whether the application is allowed an AFCP interview is granted; a $2,200 fee for filing a continuing application more than 5 years after earliest benefit date, a $3,500 fee for filing a continuing application more than 8 years after earliest benefit date; and new fees of $200-800 for filing IDS that causes cumulative number of items to exceed 50.
The 38 fee increases include:
increasing the fee for filing a Terminal Disclaimer (TD) in a patented case or in an application for reissue by 724% from $170 to $1,400
increasing the fee for filing a TD on or after a notice of appeal by 547% from $170 to $1,110
increasing the fee for filing a TD prior to a final action or allowance by 194% from $170 to $500
increasing the fee to apply for an extension of term of a drug-related patent by 468% from $1,180 to $6,700
increasing the fee to apply for a patent term adjustment by 43% from $210 to $300 regardless of whether the USPTO made a mistake that needed to be adjusted
increasing the fee for each claim in excess of 20 by 100% from $100 to $200
increasing the fee for 3rd and subsequent request for continued examination (RCE) by 80% from
increasing design search fee by 88% from $160 to $300
increasing design issue fee by 76% from $740 to $1,300
increasing various post-grant proceeding fees by 25%, which is in line with the 2020 fee increases
Fee changes driven by policy goals unrelated to actual related examination activities
The proposal explicitly states that the proposed fee changes do not actually equal the estimated costs of performing related activities. Instead, the changes seem to be chiefly driven by “promoting innovation strategies.” The proposal does not actually define what that means but seems to encompass (1) making it more expensive for applicants - especially those in the pharma space - to obtain patent rights that they think are proper and (2) funding new programs that the USPTO has created or is planning to create that aren't directly related to examination or post-grant proceedings.
The first part explains the most dramatic - 724% - fee increase for filing a Terminal Disclaimer (TD) in a patented case or in an application for reissue. That change makes it more expensive for an applicant to voluntarily restrict their own patent rights after obtaining a patent.
Voice of IP tried to get the answer to the question of how much of the fees collected because of these changes would go towards the actual costs of performing activities related to the fees versus unrelated programs. However, the proposal does not contain such information and USPTO’s link for “Activity Based Information and Patent Fee Unit Expense Methodology” for this proposal led to the 404 page pictured above. Voice of IP is also waiting to hear back from the USPTO regarding the answer and will share that if they provide one.
Impact on underesourced applicants
Although the specific fees are discussed above for undiscounted entities, the USPTO is proposing similar fee changes for micro and small entities. The proposal fittingly repeats policy goal of “promot[ing] innovation strategies by removing barriers to entry to the patent system.” The proposed fees are likely to help reduce costs for micro and small entities to enter the patent system by filing application but they will decrease the likelihood of underesourced applicants being able to obtain adequate patent protection to survive the patent system.
USPTO’s Patent Public Advisory Committee (PPAC) voices opposition to many fee changes
The PPAC is a diverse group of members selected by directors of the USPTO to theoretically represent views from across the patent community. As part of the fee setting process, the PPAC issued a report regarding the proposed fees before this proposal was finalized.
In it, the PPAC indicates support for increasing fees for post-grant proceedings, RCEs, excess claims, and unintentional delay petitions. However, the rest of the report mostly focuses on the problems with the other proposed changes. The PPAC indicates that the new fee for the AFCP is “problematic” because “it requires paying the fee without any guarantee of an interview”; opposes fee changes for assignments, design patents, terminal disclaimers, word count, and director review of PTAB decisions; and suggests modifying the fee proposals for continuing applications, patent term adjustment, and patent term extension.
The USPTO proposal mentions the PPAC’s views repeatedly but seems to have only slightly modified the proposals for continuing applications as a result.
Other Fee Increases
In addition to the increases discussed above, the USPTO now also “proposes adjusting, by approximately 5%, all patent fees not covered by the targeted adjustments.”
Thirty-eight other fees are also increased by 6-18%.
Eli’s View
Assuming there are no other motives at play, many of the proposed fee changes and the explanations for those changes seem to not fully appreciate the reality and history of how the examination process actually functions. For example, as the proposal describes, “[t]he AFCP 2.0 provides a participating applicant an opportunity to potentially have the examiner consider an amendment that would otherwise not be considered at this stage, possibly precluding the need to file an RCE.”
The USPTO put the program in place in 2013 specifically to give the examiner an incentive to avoid unnecessarily prolonging prosecution when it shouldn’t be prolonged into another round of prosecution. However, the proposal cites a 2008 GAO report to argue that somehow the applicant is receiving some free benefit by participating in the program. In reality, to participate in the program and have the chance to end up with allowance like the applicant should have already obtained during that round of prosecution, the applicant has to make a non-broadening amendment.
Historical data actually indicates a relatively modest 14.6% difference in allowance from using the AFCP program after final (42.3% allowance) versus not using it after final (33.6%). Adding an additional fee to potentially not even see that modest benefit would make filing an AFCP 2.0 request a much less attractive proposition. On a system-wide basis, the fee would drive down the popularity of the program but that would only exacerbate the issue that it was put into place to solve (e.g., wrongly prolonging prosecution).
Flashback to Tafas v. Dudas
On April 1, 2008, Judge James Cacheris of the Eastern District of Virginia sided with Dr. Triantafyllos Tafas and GlaxoSmithKline (“GSK”) by stopping the USPTO from putting into place a package of rules that limited continuing applications, RCEs, and claims. He wrote that the rules “constitute a drastic departure from the terms of the Patent Act” because “requirement[s] effectively impose[ ] a hard limit on additional applications.”
Almost exactly 16 years later, today’s USPTO seems to be looking for a backdoor of accomplishing similar goals - without running afoul of that ruling - by proposing these fee changes. The reality is that independent inventors and entrepreneurs like Dr. Tafas will be most impacted by these increases, not deep-pocketed entities like GSK that these fee proposals seem to be targeting.
Are you Sherry Knowles and want to share what you learned from your successful effort to oppose the Dudas rules as GSK’s Chief IP Counsel? Were you involved in the White House discussions regarding these fee changes?
If so, please email me at eli@VoiceOfIP.com or find me on Signal at eli.92.
This occurs when there’s a confirmed USPTO Director in place. “Section 10 of the AIA authorizes the Director of the USPTO to set or adjust…”
For large (undiscounted) entities