Member Article

The United States Patent and Trademark Office (USPTO) has released its long-anticipated final rule on patent fee adjustments (“Final Rule”). Set to take effect January 19, 2025, these changes represent the most significant fee restructuring since 2020. The changes aim to generate sufficient revenue to recover the USPTO's operational costs, while promoting efficient patent prosecution practices. Here's what patent applicants and owners need to understand about the upcoming changes.

Overview

This Final Rule sets forth an across-the-board increase of 7.5% for all patent fees not covered by targeted adjustments (discussed in more detail below). Additionally, the USPTO is further increasing front-end patent costs (e.g., filing, search, and examination fees) not covered by the targeted adjustments by another 2.5%, for a total front-end increase of 10%. Additionally, the Final Rule officially sets the expiration of the After Final Consideration Pilot Program 2.0 (AFCP 2.0) for December 14, 2024.

In the short term, Dinsmore recommends advancing any planned filings before January 19, 2025, where possible, to avoid new or increased fees.

Below is a breakdown of the targeted adjustments promulgated in the Final Rule, presented in three categories: (1) new fees; (2) increased fees; and (3) reduced fees, followed by (4) strategic considerations to mitigate the impact of these fee changes.

1. New Fees Target Prolonged Prosecution Practices

A notable change is how the new fees are designed to discourage prolonged prosecution of patent families through continuing application practice.

New Time-Based Increased Continuing Application Fees

The USPTO has introduced new, increased time-based fees for continuing applications, reflecting concerns about prolonged prosecution timelines.

New Quantity-Based Information Disclosure Statement (IDS) Fees

Responding to the growing complexity of prior art submissions, the USPTO has implemented a tiered fee structure for IDSs based on the number of references submitted.

Note that these fees apply cumulatively – meaning if you eventually submit over 200 references, you'll pay $800 less than any amounts previously paid under the lower tiers. Critically, references cited in parent applications will not count toward these thresholds unless resubmitted in child applications. However, it still remains that any references not submitted in any application will not appear on the face of the issued patent.

Director Review Request Fee

An interim process for procuring a Director Review was developed in response to United States v. Arthrex, Inc.[1] Following the Supreme Court's Arthrex decision, the USPTO formalized the Director Review process and instituted a new $452 fee for requesting a Director Review of Patent Trial and Appeal Board (PTAB) decisions.

2. Increased Fees to Address Rising Operational Costs

Design Patents

The USPTO found that design applications have historically been largely subsidized by utility patent fees, with current design fees covering only about 45% of actual costs. Accordingly, the Final Rule increases combined fees for filing, searching, examining and issuing a design patent from $1,760 to $2,600. Additionally, Hague and International design (U.S. designation) fees have also increased by 27-76%.

Excess Claims

The Final Rule further increases excess claims fees to encourage more focused claim sets and to address the additional examination burden for applications with excess claims.

Request for Continued Examination (RCE)

To encourage more compact prosecution, the USPTO has increased RCE fees by the following amounts:

America Invents Act (AIA) Trial Proceedings

All AIA trial fees will increase by 25%, including inter partes and post-grant review fees.

Suspension of Action Requests

Under § 1.103(a) applicants are able to request a suspension of action for a period not exceeding six months for good and sufficient cause. The Final Rule creates a new tiered fee structure for these requests.

Unintentional Delay Petitions

As part of the Clarification of the Practice for Requiring Additional Information in Petitions Filed in Patent Applications and Patents Based on Unintentional Delay (85 FR 12222; “2020 Notice”), applicants are required to provide additional information for petitions seeking revival of an abandoned application, petitions seeking acceptance of a delayed maintenance fee payment, and petitions seeking acceptance of a delayed priority or benefit claim. The Final Rule sets higher, time-based fees for these petitions.

3. Fee Reductions

Fortunately, the USPTO has implemented some fee reductions aimed at reducing financial barriers to accessing the patent system and fostering more inclusive innovation.

Provisional Application Extensions

The USPTO has reduced the extension of time fees for provisional applications by 75% to 86%. For example, some micro-entity may need additional time to comply with certain requirements associated with filing provisional applications (e.g., formalities for establishing their micro-entity status).

Patent Term Extension Applications

In response to public feedback, especially from the pharmaceutical and medical device industries, the Final Rule reduces Patent Term Extension Applications fees from $6,700 to $2,500. Patent term extensions under 35 U.S.C. 156 allow patents owners to recoup some of the patent term life that may have been lost while waiting for regulatory market approval of certain products.

4. Strategic Considerations for Patent Applicants to Mitigate Impact of Fee Changes

• Continuations: Pursue continuation applications earlier (e.g., in parallel rather than in serial) to advance overall patent family prosecution and to avoid new time-based increased fees.

• IDS Practices: For new applications: increase consideration of materiality and cumulativeness of prior art to avoid unnecessary citation. For continuing applications, assess the value of re-citing art to place references on front page of an issued patent and consider avoiding such citation per MPEP § 609.02.

• Entity Status: Small and micro entity discounts (60% and 80% respectively) continue to apply to most fees. Verify your entity status to ensure your clients are taking advantage of discounted fees where appropriate.

The Bottom Line

The fee changes promulgated in the Final Rule reflect the USPTO's efforts to maintain a sustainable operational model while promoting efficient patent prosecution practices in view of stakeholder feedback. Clients should consult with their Dinsmore attorney to manage the budget impact of the fee changes, especially in the transitional year of 2025. The fee changes unambiguously encourage a compact overall patent family prosecution in terms of both time and quantity of claims.

Your Dinsmore patent attorneys are standing by to discuss further strategies to address these fee changes, while maintaining a robust patenting practice.

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[1]See “Rules Governing Director Review of Patent Trial and Appeal Board Decisions” 89 FR 26807 (April 16, 2024).

 

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