Earlier this year, the U.S. Patent and Trademark Office (USPTO) proposed a sweeping set of rules imposing new requirements on terminal disclaimers filed to overcome obviousness-type double patenting (OTDP) rejections, and separately proposed to impose new terminal disclaimer fees that would increase exponentially over the course of examination. The USPTO has since dropped both proposals, but Congressional concern about so-called patent thickets remain, and could lead to legislative action.

Withdrawal of Proposed Rules Imposing New Terminal Disclaimer Conditions

In May 2024, the USPTO proposed to impose new conditions on terminal disclaimers requiring the application/patent owner to agree that the subject patentĀ will not be enforceableĢż¾±“ŚĢżany claimĀ in the cited patent has been finally held unpatentable or invalid as anticipated or obvious by a federal court in a civil action or by the USPTO, or if any claim in the cited patent has been statutorily disclaimed after any prior art challenge has been made. The USPTO accepted public comments on the proposed rules submitted by July 9, 2024. While not all commenters were opposed, most patent bar associations submitted strong comments against the proposed rules, and five former USPTO directors and deputy directors wrote a letter to USPTO Director Kathi Vidal in May 2024 urging her to withdraw the rulemaking.

The USPTO formally announced that it is indeed . The announcement explains the reasons as follows:

Reason for Withdrawal

During the proposed rule’s 60-day comment period, the USPTO received more than 300 comments from a variety of stakeholders, including commenters both supporting and opposing the proposal. The comments are publicly available at the Federal eRulemaking Portal at . Of the comments received on the proposed rule, 256 comments were unique.

In light of resource constraints, the USPTO has decided not to move forward with the proposed rule at this time and to withdraw the proposed rule.

Despite the decision not to move forward with the proposed rule at this time, the USPTO appreciates and takes seriously the thoughtful perspectives raised by commenters. The USPTO will continue engaging with its stakeholders as it works to foster a balanced, robust, and reliable intellectual property system.

While the USPTO cited ā€œresource constraints,ā€ the significant amount of opposition to the proposal likely caused reconsideration at the USPTO. In addition, many commenters questioned the USPTOā€™s authority to implement the types of rules proposed, and the recent Supreme Court decision overturning Chevron deference to government agencies in rulemaking meant the USPTO would have a harder time defending the new rules in court. Further, with the upcoming change in administration and Director Vidalā€™s recent resignation from the USPTO, this would not be the time to push through a controversial rules package that might not be supported by new leadership.

Withdrawal of Proposed Escalating Terminal Disclaimer Fees

A further retreat from changes to terminal disclaimer practice is evident in the USPTOā€™s final fee package, which takes effect in mid-January 2025. Although the initial fee proposal included escalating fees for filing a terminal disclaimer at later points during the patent examination process, the final fee package maintained the current practice of charging the same fee no matter when the terminal disclaimer is filed.

Together, these recent updates from the USPTO maintain the status quo on USPTO terminal disclaimer practice and will allow stakeholders to focus on evolving case law, not patent office rules, in determining their options for addressing double patenting issues. Nevertheless, stakeholders should keep in mind that the proposed rules were responsive to Congressional concern about so-called patent thickets, and new rules or legislative action could be proposed during the next administration.

The U.S. Patent and Trademark Office (USPTO) has published its final rule setting patent fees that will take effect January 19, 2025. The final rule steps back from some of the new fee structures proposed in April 2024, but still could have a significant impact on design patent practice, continuing application practice, and Information Disclosure Statement practice, among other areas.

Final Fee Adjustments

Detailed information on the proposed fee adjustments are available on the USPTOā€™s  and in the November 20, 2024 .

The following summary lists fees at the undiscounted (large entity) rate.

Significantly Higher Fees

Examples of significantly higher fees include:

• The aggregate of filing, search, examination, and issue fees for design patents will increase by about 48%
• Excess claim fees will double to US$200 for each claim over 20 and increase 25% to US$600 for each independent claim over three

• Request for Continued Examination (RCE) fees will increase, but instead of adopting a new higher tier for third and subsequent RCEs, the USPTO decided to increase the fee for second and subsequent RCE by 43%.
  • First RCE: US$1,500 (+10% over current fee)
  • Second and subsequent RCE: US$2,860 (+43% over current fee)

• Petitions associated with unintentional delay of > 2 years: US$3000

• The fee for a Patent Term Extension application (e.g., based on FDA review of a regulated product) will more than double to US$2,500, but this is less than the proposed 468% increase to US$6,700. The USPTO also will impose a new US$1,440 fee for requesting a supplemental redetermination of patent term extension after a notice of final determination has been issued (e.g., based on the filing of a terminal disclaimer).

New Fees That Could Change Applicant Behaviorā€”Continuing Application Surcharge

The USPTO moved forward with its proposal to impose a surcharge for filing continuing applications ā€œlateā€ in their 20-year term, but adjusted the timing at which each surcharge will be incurred:

• Continuing Application Surcharge, filed ā‰„ 6 years after earliest benefit date: US$2,700
• Continuing Application Surcharge, filed ā‰„ 9 years after earliest benefit date: US$4,000

The Federal Register Notice defines ā€œearliest benefit dateā€ as the earliest priority date claimed under 35 USC Ā§ 120, 121, 365(c) or 386(c) and 37 CFR Ā§ 1.78(d), also known as the ā€œpatent term filing dateā€ (e.g., the date from which the 20-year patent term is calculated), and not including priority claims to provisional applications.

The Federal Register Notice expressly includes divisional applications in the category of ā€œcontinuingā€ applications that could be encompassed by these fees.

The Federal Register Notice estimates from current data that about 20% of continuing applications (about 6.5% of all applications) would incur a continuing application fee, with about 11% incurring the first surcharge and about 9% incurring the second surcharge.

New Fees That Will Complicate Examinationā€”IDS Size Fees

The USPTO moved forward with its proposal to impose new IDS size fees based on the cumulative number of references cited and to impose a related IDS certification requirement.

• > 50 items: US$200
• > 100 items: US$500 (less any amount previously paid)
• > 200 items: US$800 (less any amount previously paid)

Each IDS must ā€œcontain a clear written assertionā€ that the IDS is accompanied by the appropriate IDS size fee or that no IDS size fee is required. The Federal Register Notice states that ā€œ[t]here is no specific language required for the written assertion, but it should be readily identifiable on the IDS and clearly convey the applicable IDS size fee by specifying the particular paragraph in Ā§ 1.17(v) that applies (e.g., ā€œthe fee due under 1.17(v)(2)ā€), if any.ā€ The Federal Register Notice warns that authorization to charge fees to a deposit account is not a compliant written assertion under the new requirement unless it specifically refers to the particular IDS fee that should be charged.

PTAB Trial Fees

• Petition fees for PTAB trials will increase by about 25%

• There will be a new US$452 fee for a Request for Director review of a PTAB decision

How Can Stakeholders Prepare For the New Fees?

The new fees will take effect in less than two months, so stakeholders may want to review their portfolios and determine whether action can be taken now to avoid higher fees that will be due on or after January 19, 2025. For example, stakeholders with pending final Office Actions could consider filing any planned RCEs early, especially if it will be a second or subsequent RCE.Ā  Stakeholders considering filing additional applications could avoid higher application fees ā€” and possibly the new continuing application surcharges ā€” by filing the applications before January 19, 2025. Stakeholders planning to file new design applications could save 48% in filing, search, examination, and issue fees if they can be filed before the new fees take effect. Patent practitioners will want to consider how they will ensure compliance with the new IDS size fees and related IDS certification requirement.

The U.S. Patent and Trademark Officeā€™s (USPTOā€™s) proposed rulemaking that focuses on ā€œfee adjustmentsā€ for 2025 includes a trap for the unwary related to Information Disclosure Statements (IDSs) that could complicate compliance with the Duty of Disclosure. If adopted, practitioners may want to update their IDS forms but still will have to take care when submitting IDSs to ensure compliance with the new requirements.

New Escalating Cumulative IDS Fees

In my summary of new fees in the proposed rulemaking, I flagged the proposed new escalating IDS fees that would be based on the cumulative number of references cited:

> 50 items: US$200

> 100 items: US$300

> 200 items: US$300

I did not flag the related requirement to include a statement with every IDS to the effect that ā€œthe IDS is accompanied by the appropriate IDS fee, or that no IDS size fee is required.ā€

This new requirement may seem innocuous, but the USPTOā€™s states that any IDS filed without the required statement ā€œwill not be consideredā€ unless resubmitted with the required statement. The Federal Register Notice states further that the resubmitted IDS would have to comply with the timing requirements of 37 C.F.R. Ā§ 1.97 as of the date of resubmission.

This would mean that by the time the new ā€œdefectā€ in the original IDS is identified, it is likely that at least an IDS fee if not an RCE and RCE fee would be required to obtain consideration of the IDS. Not only would this complicate and delay the examination process for a trivial reason, it would drive up the costs of obtaining consideration of an IDS, especially in view of the proposed RCE fee increases.

1st RCE: US$1,500 (+10% over current fee)

2nd RCE: US$2,500 (+25% over current fee)

3rd RCE: US$3,600 (+80% over current fee)

Although the new IDS fees may seem minimal when considered in isolation, the USPTOā€™s proposal to also require a new statement in every IDS and deny consideration of IDSs that omit the statement could have the effect of placing a high burden on complying with the Duty of Disclosure.

This burden is particularly troubling in view of the USPTOā€™s statement that only about 13% of patent applications would be subject to even the first IDS reference fee (because ā‰„ 50 items are submitted in only about 13% of patent applications). Imposing a new requirement on all IDS submissions when fewer than 15% of patent applications would even be subject to the new fees creates an unjustifiable trap for the unwary trying to comply with the Duty of Disclosure.

If you share these concerns or have others about the USPTOā€™s proposed fee increases, you still have time to submit written comments through the Federal eRulemaking Portal by June 3, 2024.

If the U.S. Patent and Trademark Office (USPTO) is going to implement fee changes in January 2025, we should see a Federal Register Notice detailing the proposed fees soon. The USPTO started this round of fee-setting in April 2023, publishing its initial proposed fee schedule and supporting information for consideration by the Patent Public Advisory Committee (PPAC). The PPACā€™s feedback on the proposed fee changes may provide insight as to which new fees are likely to be implemented and which may be shelved.

The USPTO Fee-Setting Process

The USPTO fee-setting process is a multi-step process that requires input from the PPAC, a public hearing, and a public notice and comment period. The fee changes that took effect in October 2020 began their journey in August 2018, with a Notice of Proposed Rulemaking (NPRM) issued in July 2019 and the final fees published in August 2020. If the USPTO is going to implement fee adjustments in January 2025, it is leaving much less time for consideration of public comments on any NPRM issued in the coming months.

PPAC Comments On Proposed Fee Adjustments

I summarized the most significant proposed fee adjustments in this article ā€” the full proposed fee schedule and justifications are available on the USPTOā€™s . Here, I review the PPACā€™s comments on the proposed adjustments as stated in the ā€” which increases did PPAC support and which did it disagree with?

(Any fees noted below are at the Large Entity rate)

Mixed Support for Across the Board Fee Increases

The PPAC supported the proposed 5% across-the-board fee increase justified as an inflation adjustment, but opposed the second 5% across-the-board fee increase ā€œdesigned to front load fees in order to reduce the reliance on maintenance fee renewals.ā€ The PPAC found that would place ā€œan undue burden on individual inventors and small businesses.ā€ 

The PPAC also did not support the significantly increased fees for design patent applications and suggested the USPTO instead consider seeking legislative changes that would impose maintenance fees for design patents.

Opposed New Assignment Recordation Fees

The PPAC opposed the proposed new fees (US$40/US$60) for assignment recordation, which the USPTO had justified to discourage ā€œfrivolousā€ submissions. The PPAC noted that ā€œensuring transparency of ownership is key to patent data integrity,ā€ and so does not recommend ā€œa fee that would provide an impediment to keeping assignment data up to date.ā€

Support for Increased Excess Claim Fees

The PPAC supported the proposed increases in excess claim fees (doubling to US$200 for each claim over 20 and increasing 25% to US$600 for each independent claim over 3), but agreed with public comments that the increased fees should be ā€œspent on examination and/or giving the Examiners additional time to evaluate such cases.ā€

It would be interesting if the USPTO adopted a fee structure that would provide at least a partial refund of excess claim fees if claims are canceled in response to a restriction requirement. That would permit applicants to benefit from the divisional application protections of 35 USC Ā§ 121 without having to pay inordinate excess claim fees for claims that are not examined on the merits.

Support for New Escalating IDS Fees

The PPAC supported the proposed new escalating Information Disclosure Statement (IDS) fees, which would be based on the cumulative number of references cited (>50 items: US$200; >100 items: US$300; >200 items: US$300), but suggested ā€œthe additional money should go towards allowing Examinerā€™s [sic] more time to consider the additional references.ā€

With regard to the IDS burden, the PPAC also stated:

[I]f Congress would reform inequitable conduct rules, this by itself may largely affect applicant behavior. With current inequitable conduct case law, there is undue pressure on practitioners to cite every possible reference or risk the practitioners right to practice or the enforceability of the case. The PPAC recommends a legislative proposal to change this pressure.

I find this comment interesting because it is the USPTO that has not revised the contours of ā€œmaterialityā€ set forth in 37 CFR Ā§ 1.56 since the Federal Circuit adopted a ā€œbut forā€ standard for inequitable conduct in 2011. The USPTOā€™s own rule and guidance require disclosure of more information than current inequitable conduct case law.

Opposed New Escalating Terminal Disclaimer Fees

The PPAC opposed the proposed new escalating Terminal Disclaimer fees, which would increase from US$200 to as much as US$1,400 depending on when the Terminal Disclaimer is filed. The PPAC noted that the proposal would ā€œplace an unfair burden to filers with limited resourcesā€ who would face ā€œpressureā€¦to give up patent term in exchange for a less expensive more compact prosecution while those with more resources can wait to see if they need to file a terminal disclaimer.ā€

Conditional Support for New After-Final Consideration Program Fee

The PPAC opposed the proposed US$500 fee for the after-final consideration program unless applicants are guaranteed an examiner interview, or unless the fee is only collected if an interview is granted.

If the USPTO adopts this approach, it should implement safeguards requiring a meaningful interview. In my experience, some examiners conduct two-minute AFCP ā€œinterviewsā€ that only advise the applicant that the proposed amendments are being denied entry under the program because they require a new search or more than the allotted time to consider. 

Support for Revised RCE Fee Structure

The PPAC supported the revised fee structure for Requests for Continued Examination (RCEs), with a new higher tier for third and subsequent RCEs (1st RCE: US$1,500; 2nd RCE: US$2,500; 3rd RCE: US$3,600).

Before the USPTO adopts this new structure, it should consider the impact of its IDS rules on RCE filings. For example, the rule that permits filing of an IDS after a final Office Action or Notice of Allowance only applies to IDSs filed to submit items cited by a ā€œforeign patent office in a counterpart foreign applicationā€ or items not previously known to any individual encompassed by the duty of disclosure. It does not apply to IDSs filed to submit items recently cited in a co-pending U.S. application, even if the co-pending U.S. application is a parent or child of the application at issue. To obtain consideration of such an IDS after a final Office Action or Notice of Allowance requires an RCE.

Mixed Support for New Continuing Application Fees

The PPAC opposed the proposed new fee for filing a continuing application between three and seven years after the initial application but supported the proposed new US$3,000 fee for filing a continuing application after seven years or more.

If the USPTO adopts this surcharge, divisional applications should be excluded. Imposing an additional fee for filing a divisional application could be inconsistent with 35 USC Ā§ 121, which offers protection to divisional applications filed any time before issuance of the application in which a Restriction Requirement was made.

Conditional Support for Increased Patent Term Adjustment Reconsideration Fee

The PPAC supported the proposed increase in the fee for requesting reconsideration of a patent term adjustment (PTA) award from US$210 to US$300, but only if the USPTO did not make an error in its PTA calculation. I agree with the PPACā€™s comment that ā€œ[i]f the USPTO made the adjustment mistake, then the applicant shouldnā€™t have to pay.ā€

Qualified Support for Increased Patent Term Extension Application Fee

The PPAC supported increasing the fee for an application for FDA review-based patent term extension (PTE), but suggested the USPTO reconsider the magnitude of the increase (from US$1,180 to US$6,700) given its potential impact on ā€œstart-up companies [who] may be resource constrained.ā€

Mixed Support for PTAB Trial Fees

The PPAC supported the increased petition fees for PTAB trials, but opposed proposed fixed fees for exceeding prescribed page limits because they would favor ā€œwell-resourced petitioners.ā€  The PPAC also opposed the proposed new US$440 fee for requesting Director review of a PTAB decision, noting that ā€œ[d]irector review should be encouraged to ensure that all PTAB decisions are consistent,ā€ and that imposing a fee ā€œmay adversely affect individual inventors and small company applicants.ā€

Will These Fees Change Applicant Behavior?

Many of the new fees and significantly higher fees are intended to change applicant behavior, but will they do so in a manner that promotes the grant of reliable patent rights and supports innovation and investment in new technologies?