Setting and Adjusting Patent Fees During Fiscal Year 2020

 
CONTENT
Federal Register, Volume 84 Issue 147 (Wednesday, July 31, 2019)
[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Proposed Rules]
[Pages 37398-37440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15727]
[[Page 37397]]
Vol. 84
Wednesday,
No. 147
July 31, 2019
Part II
Department of Commerce
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Patent and Trademark Office
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37 CFR Parts 1, 11, 41, et al.
Setting and Adjusting Patent Fees During Fiscal Year 2020; Proposed
Rule
Federal Register / Vol. 84 , No. 147 / Wednesday, July 31, 2019 /
Proposed Rules
[[Page 37398]]
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DEPARTMENT OF COMMERCE
Patent and Trademark Office
37 CFR Parts 1, 11, 41, and 42
[Docket No. PTO-P-2018-0031]
RIN 0651-AD31
Setting and Adjusting Patent Fees During Fiscal Year 2020
AGENCY: United States Patent and Trademark Office, Department of
Commerce.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The United States Patent and Trademark Office (Office or
USPTO) proposes to set or adjust patent fees as authorized by the
Leahy-Smith America Invents Act (Act or AIA), as amended by the Study
of Underrepresented Classes Chasing Engineering and Science Success Act
of 2018 (SUCCESS Act). The USPTO is a business-like operation where the
demand for patent products and services and the cost of our operations
are affected by external factors, such as the economy, legislation,
court decisions, and increases in the costs of supplies and contract
services, as well as internal factors, such as changes in patent
examination processes and procedures. The proposed fee adjustments are
needed to provide the Office with a sufficient amount of aggregate
revenue to recover the aggregate cost of patent operations in future
years (based on current projections) and to allow the Office to
continue progress towards achieving strategic goals.
DATES: The Office solicits comments from the public on this proposed
rule. Written comments must be received on or before September 30, 2019
to ensure consideration.
ADDRESSES: Comments should be sent by electronic mail message over the
internet addressed to: [email protected]. Comments may also be
submitted by postal mail addressed to: Mail Stop--Office of the Chief
Financial Officer, Director of the United States Patent and Trademark
Office, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the
attention of ``Brendan Hourigan.'' Comments may also be sent by
electronic mail message over the internet via the Federal eRulemaking
Portal at https://www.regulations.gov. See the Federal eRulemaking
Portal website for additional instructions on providing comments via
the Federal eRulemaking Portal.
    Although comments may be submitted by postal mail, the Office
prefers to receive comments by electronic mail message over the
internet, which allows the Office to more easily share comments with
the public. Electronic comments are preferred to be submitted in plain
text, but also may be submitted in portable document format (PDF) or a
word processing format. Comments not submitted electronically should be
submitted on paper in a format that facilitates convenient digital
scanning into portable document format.
    The comments will be available for public inspection via the
Office's internet website (https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting) and at https://www.regulations.gov. Because comments will be made available for public
inspection, information that the submitter does not desire to make
public, such as an address or phone number, should not be included in
the comments.
FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director of the
Office of Planning and Budget, by telephone at (571) 272-8966; or
Dianne Buie, Office of Planning and Budget, by telephone at (571) 272-
6301.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Purpose of This Action
    The Office proposes this rule under section 10 of the AIA (Section
10). Public Law 112-29, 125 Stat. 284, as amended by the SUCCESS Act
Public Law 115-273, 132 Stat. 4158, which authorizes the Director of
the USPTO to set or adjust by rule any patent fee established,
authorized, or charged under title 35 of the United States Code
(U.S.C.) for any services performed, or materials furnished, by the
Office. Section 10 prescribes that fees may be set or adjusted only to
recover the aggregate estimated costs to the Office for processing,
activities, services, and materials relating to patents, including
administrative costs of the Office with respect to such patent fees.
Section 10 authority includes flexibility to set individual fees in a
way that furthers key policy factors, while taking into account the
cost of the respective services. Section 10 also establishes certain
procedural requirements for setting or adjusting fee regulations, such
as public hearings and input from the Patent Public Advisory Committee
(PPAC) and congressional oversight.
B. Summary of Provisions Impacted by This Action
    Consistent with Federal fee setting standards, the Office conducted
a biennial review of fees, costs, and revenues that began in 2017, and
concluded that fee adjustments are necessary to provide the resources
needed to improve patent operations, including implementing the USPTO
2018-2022 Strategic Plan (Strategic Plan). As a result, the 295
proposed fee adjustments outlined in this proposed rule align directly
with the Office's strategic goals and four key fee setting policy
factors, discussed in detail in Part V.
    The fee schedule in this proposed rule will recover the aggregate
estimated costs of patent operations, including achieving the Office's
strategic goals as detailed in the Strategic Plan, available at https://www.uspto.gov/sites/default/files/documents/USPTO_2018-2022_Strategic_Plan.pdf. The Strategic Plan defines the USPTO's
mission, vision, and long-term goals and presents the actions the
Office will take to realize those goals. This proposed fee setting rule
supports the patent-related strategic goal to optimize patent quality
and timeliness, which includes optimizing patent application pendency
and examination timeframes, issuing highly reliable patents, fostering
innovation through business effectiveness, and enhancing the operations
of the Patent Trial and Appeal Board (PTAB). To the extent that the
aggregate revenue generated by this rule will be used to pay for all
patent-related costs of the USPTO, this proposed rule also supports
USPTO's goal to provide domestic and global leadership to improve
intellectual property (IP) policy protection and enforcement, as well
as the mission support goal to deliver organizational excellence, which
includes optimizing speed, quality, and cost-effectiveness of IT
delivery to achieve business value and ensuring financial
sustainability to facilitate effective USPTO operations. The Office
intends to issue a final rule on fee changes in FY 2020 after receipt
and analysis of public comments.
    During a formal process closely tied to the annual budget process,
the USPTO reviewed and analyzed the overall balance between the
Office's estimated revenue and costs over the next five years (based on
current projections), and also reviewed individual fee changes and new
fee proposals to assess their alignment with the Office's strategic
goals and fee structure philosophy, both of which aim to provide
sufficient financial resources to facilitate the effective
administration of patent operations. Specifically, the Office assessed
how well each proposal aligned with four key fee setting policy
factors: Promote innovation strategies, align fees with the full cost
of products
[[Page 37399]]
and services, set fees to facilitate the effective administration of
the patent systems, and offer processing options for applicants.
    In this proposed rule, the Office proposes to set or adjust 295
patent fees for large, small and micro entities (any reference herein
to ``large entity'' includes all entities other than those that have
established entitlement to either a small or micro entity fee
discount). The fees for small and micro entity rates are tiered with
small entities at a 50 percent discount and micro entities at a 75
percent discount. Small entity fee eligibility is based on the size or
certain non-profit status of the applicant's business and that of any
other party holding rights in the invention. Micro entity fee
eligibility is described in Section 10(g) of the AIA. The Office also
proposes introducing 11 new fees and discontinuing three fees.
    Overall, the routine fees to obtain a patent (i.e., filing, search,
examination, and issue fees) will increase under this Notice of
Proposed Rulemaking (NPRM) relative to the current fee schedule in
order to ensure financial sustainability and accommodate increases
needed to improve the predictability and reliability of patent IP
protection (which are discussed in detail below). Applicants who meet
the definition for small or micro entity discounts will continue to pay
a reduced fee for the fees eligible for a discount under Section 10(b).
Additional information describing the proposed fee adjustments is
included in Part V: Individual Fee Rationale in this rulemaking and in
the ``Table of Patent Fees--Current, Proposed and Unit Cost''
(hereinafter ``Table of Patent Fees'') available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    As background, Section 10 of the AIA changed the Office's fee
setting model and authorized the USPTO to set or adjust patent fees
within the regulatory process. Section 10 better equips the Office to
respond to changing circumstances. In FY 2013 and FY 2018, the USPTO
used the AIA's fee setting authority to achieve key fee setting policy
factors--to promote innovation strategies, align fees with the full
cost of products and services, set fees to facilitate the effective
administration of the patent systems, and offer patent processing
options for applicants--and to generate sufficient resources needed to
meet the Office's strategic patent priorities. With the additional fees
collected as a result of the January 2013 Setting and Adjusting Patent
Fees Final Rule (hereinafter ``the January 2013 Final Rule'') (78 FR
4212) and the January 2018, Setting and Adjusting Patent Fees in Fiscal
Year 2017 Final Rule (hereinafter ``the January 2018 Final Rule'') (82
FR 52780), the Office made considerable progress in reducing backlog
and pendency.
    Since the development of the USPTO fee schedule currently in
effect, a number of the assumptions on which the cost and revenue
projections supporting that rulemaking have changed. Notably, since the
January 2018 Final Rule was published, (a) USPTO's projected patent
examination costs have increased and (b) fee collections have been
lower than anticipated due to lower than expected application filings,
small declines in maintenance fee renewal rates, and a later than
planned implementation of the January 2018 Final Rule. The higher fees
proposed in this current rulemaking are needed as the Office continues
its efforts towards accomplishing its mission and responding to the
demands of both the domestic and international economies for robust and
timely IP products and services. The proposed fee adjustments account
for both the lower than anticipated revenue being generated under the
existing fee schedule and also keeping pace with the rising costs of
operations in the future, including growing the operating reserve.
    The Office continues its efforts towards accomplishing its mission
and responding to the demands of both the domestic and international
economies for robust and timely IP products and services. The USPTO
must continually challenge itself to reinforce the predictability,
reliability, and quality of those IP rights. The Office needs to foster
the utmost confidence in the legal durability of its products in order
to inspire greater innovation and further economic growth.
    The Office's strategic goal to optimize patent quality and
timeliness recognizes the importance of innovation as the foundation of
American economic growth and national competitiveness. Through this
goal, the Office diligently works to balance timely examination with
improvements in patent quality; particularly, the reliability of issued
patents. One of these improvements is a comprehensive analysis of
examination time, known as the Examiner Time Analysis (ETA). The last
comprehensive review of examination time was completed over 40 years
ago. Since then, significant changes to the examination process have
occurred, including the emergence of new, more complex technologies; a
growth of available prior art that must be searched; impacts of new
electronic tools on the examination process; the challenges of
transitioning to a new patent classification system; and changes in the
legal landscape or examination practices. As the USPTO plans for the
future, the Office considered how changes such as these impact the
amount of time it takes to examine an application.
    The USPTO is also working towards improving patent quality by
providing increased clarity on patentable subject matter eligibility
under section 101 of title 35 U.S.C. The Office continues to strive to
create consistency and increased clarity through this guidance. The
Office is also focusing efforts on improving the initial search and
availability of the best prior art to examiners. This aspect takes a
variety of forms and the Office is working on many possible approaches.
Overall, presenting more comprehensive search results to the examiners
initially will lead to more efficient examination, a decrease in the
information gap between the examination phase and the later challenge
or litigation phases during the life of a patent, and increase the
reliability of the patent grant overall. Effecting the changes in the
examination process needed to ensure the issuance of reliable patents,
while also issuing those patents in a timely manner, means recognizing
a potential increase in the core operating costs for future years.
    Another major component of the overall patent process is the work
carried out by the PTAB. On April 24, 2018, the U.S. Supreme Court
issued its decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348
(2018). Changes related to the SAS decision, along with other
implementations, will increase the average cost to conduct each
proceeding. These changes are discussed in detail in section V.
Individual Fee Rationale.
    As a production-oriented entity, the USPTO relies upon IT as a
mission-critical enabler for every aspect of its operation. The
quality, efficiency, and productivity of patent operations correlate to
the performance of IT systems. To accomplish its performance-based
strategies, the USPTO continuously engages in multi-year efforts to
upgrade its business systems and the IT infrastructure supporting those
systems in order to keep pace with emerging business, legislative, and
court needs and technology standards. Since the last patent fee setting
effort, the USPTO has made significant progress on IT tools, including
continued development and implementation of the Patent End-to-End
(PE2E) IT capability. For example, the Office continues to work on
releasing systems such as Patent Center
[[Page 37400]]
which will modernize the transaction systems by combining EFS Web and
PAIR in a single interface. The Office has also made progress on the
continued development and deployment of the PTAB-End-to-End (PTAB E2E)
IT capabilities, which will expand the use of intelligent data to
support appeal decisions and process inter partes review (IPR)
proceedings, post-grant review (PGR) proceedings, covered business
method review (CBM) proceedings, and derivation (DER) proceedings.
Other IT efforts are underway to stabilize, modernize, or replace the
USPTO's legacy systems and aging infrastructure. To this end, the
Office is conducting a wholesale review of all technology resources and
is in the process of changing over the oldest infrastructure.
Consequently, the Office is taking a fresh look at the IT systems from
top to bottom. This provides USPTO with the opportunity to
fundamentally transform the Office's IT systems with state-of-the art
technology.
    The Office invests a considerable amount of resources in IT
modernization and stabilization each year, and the FY 2020 Budget does
not anticipate that costs will increase beyond levels previously
foreseen. However, given updated revenue and spending projections, this
proposed fee increase is needed to support continuing IT investments at
previously planned levels. Without an increase in USPTO's aggregate
revenue, resources available for IT investment will inevitably be
curtailed.
    Lastly, the USPTO has taken steps to establish and maintain
operating reserves to facilitate execution of multi-year plans. Using
fee setting authority and other tools, the USPTO continuously refines
its multi-year planning and budgeting. The fee setting authority
prescribed in the AIA, as amended by the SUCCESS Act, allows the Office
to effectively engage the stakeholder community on proposed fee
adjustments; fully recover the aggregate costs of its planned
operations, including the development and maintenance of sufficient
operating reserves; invest in strategic agency initiatives; and respond
to changing market needs and other external factors.
    Research has shown that large fee-funded, business-like agencies
without an operating reserve are at risk of cash flow stress. USPTO's
operating reserves enable the Office to mitigate this risk. For
instance, earlier in FY 2019, certain federal government departments
and agencies, including the Department of Commerce, shut down as a
result of a lapse in appropriations. The USPTO received special
consideration to remain open using funds available from the operating
reserves. This allowed the USPTO to continue operations, thus
preventing a significant degradation in services levels, such as patent
pendency timeframes. This example provides an ongoing compelling case
for the operating reserves' significant value. The USPTO assesses risk
annually, and determines the minimum level of reserves necessary to
shield core operations against known financial risks. Based on current
cost and revenue assumptions, the FY 2020 Budget projects that the
USPTO's patent operating reserve will fall well below this minimum
level in FY 2019 and FY 2020. Both external factors and internal
decisions impacting the spending and revenue projections mentioned
above have impacted the Office's ability to grow the operating reserve
to the levels anticipated in the January 2018 Final Rule. Absent the
proposed fee increase, the USPTO's patent operating reserve will be
exhausted by FY 2024, which would leave the Office vulnerable to
changes in the economy that reduce annual revenue, government wide
fiscal events, unexpected cost increases, and a number of other
financial risks.
    The USPTO also acutely recognizes that fees cannot simply increase
for every improvement the Office deems desirable. The USPTO has a
responsibility to stakeholders to pursue strategic opportunities for
improvement in an efficient, cost-conscious manner. The Office's
Financial Advisory Board (FAB) focuses on financial risk management and
determining what expenses are truly necessary. Each year the FAB
reviews multiple scenarios to determine what level of fee collections
are expected and what the hiring and spending levels should be in order
to effectively carry out the Office's mission. The FAB also regularly
reviews USPTO activities to identify opportunities for cost savings and
resources that can be redirected to higher priority efforts. As a
result of the USPTO's careful financial management and prudent use of
fee setting authority, the Congress recognized the Office to be good
stewards of fee setting authority and extended that authority through
the SUCCESS Act.
    In order to continue building on the progress made over the past
seven years, and consistent with the USPTO's biennial fee review
policy, the Office proposes the fee schedule detailed herein to
continue to focus on the fundamental purpose of the USPTO, which is to
foster innovation, competitiveness, and job growth by recognizing and
securing IP rights, through the delivery of high quality and timely
patent examination and review proceedings in order to produce reliable
and predictable intellectual property rights. This proposed rule seeks
to provide the USPTO sufficient financial resources to facilitate the
effective administration of the U.S. IP system. The proposal includes
targeted fee adjustments in addition to an approximately five percent
across the board adjustment. This proposed rule is needed because
actual fee collections have not materialized as expected in the January
2018 Final Rule, projected fee collections have been lowered as a
result, and critical costs to the Office continue to increase. The
proposed fees set forth in this proposed rule will help replenish and
grow the patent operating reserve and stabilize USPTO's finances,
enabling the Office to deliver reliable and predictable service levels,
even in times of financial fluctuations. A more robust patent operating
reserve will also position the Office to identify and continue to
undertake capital improvements, such as adapting to an ever-increasing
technological future. The operating reserve will be managed carefully;
if the projected operating reserve were to exceed the targeted optimal
level by ten percent for two consecutive years, it is USPTO policy to
examine the contributing factors and determine whether it would be
advisable to lower fee rates. The fees proposed in this NPRM intend to
position the Office well to deliver on known commitments and address
unknown risks in the future.
C. Summary of Costs and Benefits of This Action
    The proposed rule is economically significant and results in a need
for a Regulatory Impact Analysis (RIA) under Executive Order 12866
Regulatory Planning and Review, (Sept. 30, 1993). The Office prepared a
RIA to analyze the costs and benefits of the NPRM over a five-year
period, FY 2020-FY 2024. The RIA includes an analysis of four
alternatives for how well they aligned to the Office's rulemaking
strategies and goals, which include strategic priorities (goals,
objectives, and initiatives) from the Strategic Plan and the Office's
fee setting policy factors. From this conceptual framework, the Office
assessed the absolute and relative qualitative costs and benefits of
each alternative. Consistent with OMB Circular A-4, ``Regulatory
Analysis,'' the rule involves a transfer payment from one group to
another. The Office recognizes that it is very difficult to precisely
monetize and quantify social costs and benefits resulting from
deadweight loss of a transfer rule such
[[Page 37401]]
as the proposed rule. The costs and benefits that the Office identifies
and analyzes in the RIA are strictly qualitative. Qualitative costs and
benefits have effects that are difficult to express in either dollar or
numerical values. Monetized costs and benefits, on the other hand, have
effects that can be expressed in dollar values. The Office did not
identify any monetized costs and benefits of the proposed rule, but
found that the proposed rule has significant qualitative benefits with
no identified costs.
    The qualitative costs and benefits that the RIA assesses are: (1)
Fee schedule design--a measure of how well the fee schedule aligns to
the key fee setting policy factors; and (2) securing aggregate revenue
to recover aggregate cost--a measure of whether the alternative
provides adequate revenue to support the core mission and strategic
priorities described in the NPRM, Strategic Plan, and FY 2020 Budget.
Based on the costs and benefits identified and analyzed in the RIA, the
fee schedule proposed in this NPRM offers the highest net benefits. As
described throughout this document, the proposed fee schedule maintains
the existing balance of below cost entry fees (e.g., filing, search,
and examination) and above cost maintenance fees as one approach to
foster innovation. Further, as detailed in Part V, the proposed fee
changes are targeted in support of one or more fee setting policy
factors. Lastly, the proposed rule secures the aggregate revenue needed
to achieve the strategic priorities encompassed in the rulemaking goals
and strategies (see Part III). The proposed fee schedule allows for
optimizing patent quality and timeliness. This significantly increases
the value of patents by advancing commercialization of new technologies
sooner and reduces uncertainty regarding the scope of patent rights,
which fosters innovation and has a positive effect on economic growth.
Table 1 summarizes the RIA results.
 Table 1--Proposed Patent Fee Schedule Costs and Benefits, Cumulative FY
                              2020-FY 2024
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      Qualitative costs and benefits
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Costs:
  None Identified.........................  Neutral.
Benefits:
  Secure Aggregate Revenue to Recover       Significant.
   Aggregate Costs.
  Fee Schedule Design.....................  Significant.
Net Benefit...............................  Significant Benefit.
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    Additional details describing the costs and benefits are available
in the RIA at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
II. Legal Framework
A. Leahy-Smith America Invents Act--Section 10
    The Leahy-Smith America Invents Act was enacted into law on
September 16, 2011. See Public Law 112-29, 125 Stat. 284. Section 10(a)
of the Act authorizes the Director of the Office to set or adjust by
rule any patent fee established, authorized, or charged under title 35,
U.S.C., for any services performed by, or materials furnished by, the
Office. Fees under title 35 U.S.C. may be set or adjusted only to
recover the aggregate estimated cost to the Office for processing,
activities, services, and materials related to patents, including
administrative costs to the Office with respect to such patent
operations. See 125 Stat. at 316. Provided that the fees in the
aggregate achieve overall aggregate cost recovery, the Director may set
individual fees under Section 10 at, below, or above their respective
cost. Section 10(e) of the Act requires the Director to publish the
final fee rule in the Federal Register and the Official Gazette of the
Patent and Trademark Office at least 45 days before the final fees
become effective. Section 10(i) terminates the Director's authority to
set or adjust any fee under Section 10(a) upon the expiration of the
seven-year period that began on September 16, 2011.
B. The Study of Underrepresented Classes Chasing Engineering and
Science Success Act of 2018
    The Study of Underrepresented Classes Chasing Engineering and
Science Success Act of 2018 (SUCCESS Act), was enacted into law on
October 31, 2018. See Public Law 115-273, 132 Stat. 4158. Section 4 of
the SUCCESS Act amended Section 10(i)(2) of the AIA by striking ``7-
year'' and inserting ``15-year'' in reference to the expiration of fee
setting authority. Therefore, the updated Section 10(i) of the AIA
terminates the Director's authority to set or adjust any fee under
Section 10(a) upon the expiration of the 15-year period that began on
September 16, 2011 and ends on September 16, 2026.
C. Small Entity Fee Reduction
    Section 10(b) of the AIA requires the Office to reduce by 50
percent the fees for small entities that are set or adjusted under
Section 10(a) for filing, searching, examining, issuing, appealing, and
maintaining patent applications and patents.
D. Micro Entity Fee Reduction
    Section 10(g) of the AIA amended chapter 11 of title 35, U.S.C., by
adding section 123 concerning micro entities. The Act provides that the
Office must reduce by 75 percent the fees for micro entities for
filing, searching, examining, issuing, appealing, and maintaining
patent applications and patents. Micro entity fees were implemented
through the previous patent fee rule, and the Office will maintain this
75 percent micro entity discount for the appropriate fees and proposes
to implement micro entity fees for additional services as appropriate.
E. Patent Public Advisory Committee Role
    The Secretary of Commerce established the PPAC under the American
Inventors Protection Act of 1999. 35 U.S.C. 5. The PPAC advises the
Under Secretary of Commerce for Intellectual Property and Director of
the USPTO on the management, policies, goals, performance, budget, and
user fees of patent operations.
    When adopting fees under Section 10 of the Act, the Director must
provide the PPAC with the proposed fees at least 45 days prior to
publishing the proposed fees in the Federal Register. The PPAC then has
at least 30 days within which to deliberate, consider, and comment on
the proposal, as well as hold public hearing(s) on the proposed fees.
The PPAC must make a written report available to the public of the
comments, advice, and recommendations of the committee regarding the
proposed fees before the Office issues any final fees. The Office will
consider and analyze any comments, advice, or recommendations received
from the PPAC before finally setting or adjusting fees.
    Consistent with this framework, on August 8, 2018, the Director
notified the PPAC of the Office's intent to set or adjust patent fees
and submitted a preliminary patent fee proposal with supporting
materials. The preliminary patent fee proposal and associated materials
are available at https://www.uspto.gov/about-us/performance-
[[Page 37402]]
and-planning/fee-setting-and-adjusting. The PPAC held a public hearing
in Alexandria, Virginia, on September 6, 2018. Transcripts of the
hearing are available for review at https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript_20180906.pdf. Members
of the public were invited to the hearing and given the opportunity to
submit written and/or oral testimony for the PPAC to consider. The PPAC
considered such public comments from this hearing and made all comments
available to the public via the Fee Setting website, https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC also provided a written report setting forth in
detail the comments, advice, and recommendations of the committee
regarding the preliminary proposed fees. The report regarding the
preliminary proposed fees was released on October 29, 2018, and can be
found online at https://www.uspto.gov/sites/default/files/documents/PPAC_Fee_Setting_Report_Oct2018_1.pdf. The Office considered and
analyzed all comments, advice, and recommendations received from the
PPAC before publishing this NPRM. Before a final rule is issued, this
proposed rule provides the public with a 60-day period during which to
provide comments to be considered by the USPTO.
III. Rulemaking Goals and Strategies
A. Fee Setting Strategy
    The overall strategy of this proposed rule is to establish a fee
schedule that generates sufficient multi-year revenue to recover the
aggregate cost of maintaining USPTO operations and accomplishing the
USPTO's strategic goals in accordance with the authority granted to the
USPTO by AIA Section 10, as amended by the SUCCESS Act. The overriding
principles behind this strategy are to operate within a sustainable
funding model to avoid disruptions caused by fluctuations in financial
operations, and to enable the USPTO to continue strategic improvements,
such as optimizing patent application pendency, issuing highly reliable
patents, fostering innovation through business effectiveness, enhancing
operations of the PTAB, and optimizing speed, quality, and cost
effectiveness of information technology delivery to achieve business
value.
    In addition to the overriding principles outlined above, as
discussed earlier in this document, the Office also assesses alignment
with the four key fee setting policy factors: Promoting innovation
strategies, aligning fees with the full cost of products and services,
facilitating the effective administration of the U.S. patent system,
and offering patent processing options to applicants. Each factor
promotes a particular aspect of the U.S. patent system. Promoting
innovation strategies seeks to ensure barriers to entry into the U.S.
patent system remain low, and innovation is incentivized by granting
inventors certain short-term exclusive rights to stimulate additional
inventive activity. Aligning fees with the full cost of products and
services recognizes that as a fully fee-funded entity, the Office must
account for all of its costs even as it elects to set certain fees
below, at, or above cost. This factor also recognizes that some
applicants may use particular services in a much more costly manner
than other applicants (e.g., patent applications cost more to process
when more claims are filed). Facilitating effective administration of
the patent system seeks to encourage patent prosecution strategies that
promote efficient patent prosecution, resulting in compact prosecution
and reduction in the time it takes to obtain a patent. Finally, the
Office recognizes that patent prosecution is not a one-size-fits-all
process; therefore, where feasible, the Office endeavors to fulfill its
fourth policy factor of offering patent processing options to
applicants.
B. Fee Setting Considerations
    The balance of this sub-section presents the specific fee setting
considerations the Office reviewed in developing the proposed patent
fee schedule. Specific considerations are: (1) Historical costs of
patent operations and investments to date in meeting the Office's
strategic goals; (2) the balance between projected costs to meet the
Office's operational needs and strategic goals and the projected future
year fee collections; (3) fee schedule design; (4) sustainable funding;
and (5) the comments, advice, and recommendations offered by the PPAC
on the Office's initial fee setting proposal. Collectively, these
considerations inform the Office's chosen rulemaking strategy.
    (1) Historical Cost. To ascertain how to best align fees with the
full cost of products and services, the Office considers unit cost data
provided by the USPTO's Activity Based Information (ABI) program. Using
historical cost data and forecasted application demands, the Office can
align fees to the costs of specific patent products and services. The
document entitled ``USPTO Setting and Adjusting Patent Fees during
Fiscal Year 2020--Activity Based Information and Patent Fee Unit
Expense Methodology,'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, provides detail on
the Office's costing methodology in addition to the last three years of
historical cost data. Part IV of this proposed rule details the
Office's methodology for establishing fees. Additionally, Part V
describes the reasoning for setting some fees at cost, below cost, or
above cost such that the Office recovers the aggregate cost of
providing services through fees.
    (2) Projected Costs and Revenue. In developing this NPRM, the USPTO
considered its most current estimates of future year workload demands,
fee collections, and costs to maintain core USPTO operations and meet
the Office's strategic goals, all of which can be found in the FY 2020
Budget. The FY 2020 Budget and the Strategic Plan highlight the
priorities of: Optimizing patent application pendency, issuing highly
reliable patents, fostering innovation through business effectiveness,
enhancing operations of the PTAB, optimizing speed, quality, and cost
effectiveness of IT delivery to achieve business value, and ensuring
financial sustainability to facilitate effective USPTO operations. This
also enables the USPTO to continue to leverage nationwide talent to
build, retain and effectively manage the highly educated and talented
workforce it needs to properly serve its stakeholder community and the
country.
    (a) Updated Revenue Estimates. As is discussed in more detail in
Part IV: Fee Setting Methodology, when setting fees at appropriate
levels to recover aggregate costs, the USPTO must estimate future year
demand for the USPTO's products and services through a careful analysis
of economic conditions, potential changes in the legal and policy
environment, and operational efficiency and productivity. Many of these
factors fall outside the USPTO's control. Since the time that the USPTO
published the January 2018 Final Rule, new information has become
available that has resulted in adjustments to several of the
assumptions underlying the Office's revenue projections. The result of
this change is a lowering of revenue expectations under the existing
fee schedule. This reduction is due to a number of factors, most
significant of which is a reduction in the estimates for application
filings and maintenance fee collections.
    Actual Utility, Plant, and Reissue (UPR) application filings in FYs
2017 and 2018 were less robust than
[[Page 37403]]
expected. In the FY 2020 Budget, given the lower than expected previous
year filings, and an analysis of domestic and global economic
forecasts, the USPTO has lowered future year filing projections from
what was expected when the January 2018 Final Rule was published. The
lower level of filings also affects the multi-year workloads of the
Office, and means that fixed costs, like those for IT development, get
spread across a smaller pool of patent applications, which contributes
to higher unit costs.
    Further, in the time since the January 2018 Final Rule was
published, the USPTO has refined its methodology for projecting
maintenance fees. In FYs 2017 and 2018 maintenance fee collections were
lower than expected. Based on the refined methodology and recent
trends, the refreshed forecast included in the FY 2020 Budget has been
lowered. Much of this reduction is due to a very slight downward
adjustment in expected third stage maintenance fee renewal rates.
    Absent the proposed increase in fees or an unsustainable reduction
in operating costs, the USPTO would be forced to draw down its
operating reserves and take on higher levels of financial risk.
    (b) Quality, Backlog, and Pendency. The strategic goal to
``optimize patent quality and timeliness'' recognizes the importance of
innovation as the foundation of American economic growth and national
competitiveness. Through this goal, the Office will continually improve
patent quality, particularly the predictability and reliability of
issued patents. The USPTO is also committed to improving pendency to
better ensure the timely delivery of innovative goods and services to
market and the related economic growth and creation of new or higher-
paying jobs.
    The Office will continue to diligently make progress toward
pendency targets and quality expectations to issue predictable and
reliable patents, while also addressing the anticipated growth in
application filings. The Office will work to optimize patent
examination timeframes within the framework of Patent Term Adjustment
(PTA) while continuing to monitor and report traditional pendency
measures. This includes engaging customers to identify optimal pendency
and examination timeframes, and making sure that the Office has the
appropriate number of examiners to generate the level of production to
meet those timeframes. This proposed rule will produce revenues
adequate to continue the USPTO's progress towards attaining its
strategic goal to optimize patent quality and timeliness.
    The Office recognizes the importance of issuing high quality
patents that provide reliable and predictable intellectual property
protection. If the USPTO is to achieve its strategic objective of
issuing highly reliable patents, patent examiners must be afforded
sufficient time to conduct a thorough and complete examination of each
application. In the time since fees were last adjusted, the USPTO has
completed a comprehensive analysis of examination time, known as ETA,
the result of which determined a need for updates to the allotment of
examination time.
    In the past, allotment of examination time for a particular
application was determined by the most comprehensive claim, and could
not account for multi-disciplinary inventions. Sometimes, patent
applications of similar technologies would receive disparate time for
examination as a result. This, together with significant changes in
patent prosecution that have occurred since examination time goals were
established over 40 years ago--such as advancements in the
technological complexities of applications, a growing volume of prior
art, and a changing legal landscape--have brought about the need for
updates to the allotment of examination time. The time examiners are
given to examine applications is the critical link between pendency and
quality. These updates reflect internal and external stakeholders'
priorities and experiences as it relates to examination time, quality,
and application complexity, and also enable optimal pendency and
quality levels.
    In addition to the changing legal landscape, increasing technical
complexities of applications and the growing volume of prior art to be
searched during examination, updates to examination time will also take
into account the full scope of technology recited in an application as
well as the particular attributes of the application, such as the
number of claims, the size of the specification, and the number of
references cited in any filed information disclosure statement. Based
on technology examined, examiners that currently receive the lowest
amount of time for examination will generally see the largest increases
in examination time, and conversely, examiners that currently receive
the highest amount of time may see little, if any, increase in
examination time. Further, all examiners will be provided additional
examination time based on the specific attributes of the application.
Together, these changes improve the calibration of the time needed to
conduct a thorough examination, position the Office to better adjust
time in the future as needed, and will stakeholders increased
confidence in the certainty of any resultant patent rights.
    Separate from the ETA findings, analysis of the Patent staffing
model indicates an incremental decrease in examiners' average net
output over time, resulting in higher core patent examination costs
than in previous estimates. One possible explanation for this reduction
in output may be that the percentage of examiners receiving production
awards has dropped, and a larger number of examiners are forgoing
promotions and staying at lower grades. Additionally, applicants'
increased use of programs like After Final Consideration Pilot (AFCP)
and interviews, along with increased training needs due to changes in
legal landscape and examination practices, has increased the amount of
non-examination time used by examiners, also leading to productivity
losses.
    Another area where essential operating costs have increased is the
PTAB. The PTAB, as it currently exists, was established by the AIA in
September 2012. The PTAB manages pendency for three different
activities: AIA trials which, by statute, must be adjudicated within
one year of filing; re-examination petitions which, by statute, must be
completed with ``special dispatch''; and ex parte appeals. The PTAB's
commitment is to timely resolve appeals and inter partes matters within
statutory or USPTO timeframes, while streamlining processes and
procedures throughout the PTAB. This entails retaining and leveraging
nationwide talent. As the Office institutes operational changes at the
PTAB to comply with the SAS decision and implement other improvements,
as detailed in Part V, the average workload associated with each trial
is increasing.
    (c) Business Effectiveness. Given the estimates of costs and
revenue in the FY 2020 Budget, absent efforts to boost future revenue,
funding for other USPTO and stakeholder priorities, like IT
modernization and other business improvement initiatives, would need to
be reduced to well below planned levels in the coming years. To this
end, revenue generated from the proposed fee structure will enable the
USPTO to focus on how the Patent organization operates to foster
business effectiveness. In fulfilling this objective, the Office will
listen to customers and employees and then take patent-specific actions
that will position the Office to meet expectations.
[[Page 37404]]
    The USPTO will provide the cutting-edge tools that employees and
customers need to efficiently and effectively accomplish their tasks,
particularly through the continued implementation of Patents End-to-
End. For example, this could entail the use of artificial intelligence
or machine-learning efforts. Another key initiative that will enhance
the work capabilities of both employees and customers is to improve
searchable (text) access to domestic and international patent
applications, including access to non-patent literature and prior art,
and office actions.
    (3) Fee Schedule Design. The proposed fee schedule was designed to
set individual fees to further key policy considerations while taking
into account the cost of the particular service. To encourage
innovators to take advantage of patent protection, the Office continues
its longstanding practice of setting basic ``front-end'' fees (e.g.,
filing, search, and examination) below the actual cost of carrying out
these activities. Additionally, new fees are set, and existing fees are
adjusted, in order to facilitate the effective administration of the
patent system. Part IV of this proposed rule details the Office's
methodology for establishing fees, and Part V describes the reasoning
for setting and adjusting individual fees, including fee schedule
design benefits. The RIA, available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, also discusses fee
schedule design benefits.
    (4) Sustainable Funding. A major component of sustainable funding
is the creation and maintenance of a viable patent operating reserve
that allows for effective management of the U.S. patent system and
responsiveness to changes in the economy, unanticipated production
workload, and revenue changes. As a fee-funded agency, the USPTO uses
its reserves to mitigate the variability in its spending and revenue
streams that can create volatility in patent operations and threaten
the Office's ability to support mission operations.
    The USPTO aims to manage the operating reserve within a range of
acceptable balances and assesses its options when projected balances
fall either below or above that range. Minimum planning targets are
assessed annually and are intended to address immediate unplanned
changes in the economic or operating environments as the Office builds
its reserve to the optimal level. The optimal reserve target, which is
reviewed at least biennially, is established based on an assessment of
the likelihood and severity of an array of financial risks. A recent
assessment of the Patent operating reserve relative to the current
financial risk environment revalidated the optimal reserve level of
three months' operating expenses as the appropriate long-range target
given various risk factors, such as the high percentage of fixed costs
in the Patent business and recent and potential changes in the legal,
judicial, and policy environments. For the Patent business line's
operating reserve, a minimum planning level of approximately $300
million--just over one month's operating expenses--has been
established. The USPTO's annual budget delineates prospective spending
levels (aggregate costs) to execute core mission activities and
strategic initiatives. In the FY 2020 Budget, the USPTO estimated that
its aggregate patent operating costs for FY 2020, including
administrative costs, would be $3.2 billion and aggregate estimated
patent fee collections and other income is $3.1 billion, with the
operating reserve making up the difference. The health of the operating
reserve, which is expected to be below the minimum target through FY
2021 as the USPTO continues investments in mission-critical areas, is a
key consideration as the USPTO sets its fees. Aided by the increased
fees proposed in the NPRM, future year projections are anticipated to
build the Patent operating reserve to an optimal level of three months
operating requirements. These projections are based on point-in-time
estimates and assumptions that are subject to change. For instance, the
Budget includes assumptions about filing levels, renewal rates, whether
or not the President will authorize or Congress will mandate employee
pay raises, the productivity of the workforce, and many other factors.
A change in any of these factors could have a significant cumulative
impact on reserve balances. The operating reserve estimates do not
reflect the 2019 1.9 percent pay raise as authorized in the
Consolidated Appropriation Act, 2019, Public Law 116-6, 133 Stat. 13,
which was passed after the cost estimates for the FY 2020 Budget were
finalized. This new requirement will increase the patent budgetary
requirements by approximately $31-$44 million per year. This will
result in a cumulative impact of $245 million over the budget horizon.
As seen in Table 3, set forth in Part IV: Fee Setting Methodology, over
a five-year planning horizon the operating reserve balance can change
significantly; underscoring the Office's financial vulnerability to
varying risk factors and the importance of fee setting authority.
    The USPTO will continue to assess the patent operating reserve
balance against its target balance annually, and at least every two
years, the Office will evaluate whether the optimal target balance
continues to be sufficient to provide the stable funding the Office
needs. Per the Office's operating reserve policy, if the operating
reserve balance is projected to exceed the optimal level by ten percent
for two consecutive years, the Office will consider fee reductions.
Under the new fee structure, as in the past, the Office will continue
to regularly review its operating budgets and long-range plans to
ensure the USPTO uses patent fees prudently.
    (5) Comments, Advice, and Recommendations from the PPAC. In the
report prepared in accordance with AIA fee setting authority, the PPAC
conveyed support for the USPTO in seeking the revenues it needs to
increase the reliability and certainty of patent rights, provide timely
examination, improve and secure its IT infrastructure and adequately
fund its operating reserve. Specifically, the report stated, ``As a
general matter, we believe that increased revenue for the USPTO will be
important to fulfill its Strategic Plan and implement the
recommendations of the PPAC.'' Patent Pub. Advisory Comm., Fee Setting
Report (2018). However, the PPAC expressed concerns over some of the
individual fee adjustments and their potential impacts on patent
applicants and holders. The USPTO has included additional information
in this NPRM to further address some of the concerns of PPAC and the
public.
    The PPAC expressed general support for the stated goals and an
increase in patent fees. In general, the PPAC urged the Office to
provide more detail and justification on how additional revenue will be
used to enhance patent quality. The PPAC also suggested the USPTO
should be clear as to how it will use revenues to modernize its IT
infrastructure to increase stability and scalability, and to strengthen
security, as well as to support more effective examination processes.
Both the FY 2020 Budget and Part III: Rulemaking Goals and Strategies,
and Part V: Individual Fee Rationale offer this additional information.
    Regarding the proposed changes to the issue and maintenance fees,
the PPAC expressed support for the rationale for weighting the
increases toward the issue fee and first stage maintenance fee. The
PPAC also suggested that the USPTO carefully consider elasticity for
first stage
[[Page 37405]]
maintenance fees and its potential impact on revenue. The Office's
elasticity study showed that first stage maintenance fees are among the
least elastic patent-related fees. For more information see ``USPTO
Setting and Adjusting Patent Fees during Fiscal Year 2020--Description
of Elasticity Estimates,'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    The PPAC supports the increases to the fees in post-grant
proceedings (post grant review (PGR), inter partes review (IPR) and
covered business methods (CBM) proceedings). The PPAC noted that they
understand the impact of the SAS Institute v. Iancu 138 S. Ct. 1348
(2018) and Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017)
decisions have on PTAB's workload and the additional resources needed
to manage that increased workload. In the report, the PPAC suggested
that the PTAB conduct data collection and analysis on the impact of
these decisions on its processes so stakeholders can better appreciate
the need for increased fees. The Office appreciates this suggestion and
is currently collecting data on the impact of these decisions and will
reevaluate the extent of the increase in costs once actual data become
available. The PPAC also expressed support for the new fee for pro hac
vice admissions noting, ``It makes sense to recover the costs of
processing these petitions from those in need of pro hac vice admission
rather than from overall trial fees'' PPAC, at 3.
    The PPAC supports the surcharge on non-DOCX filings. The report
expressed that ``the USPTO should have the flexibility to incentivize
applicants to use filing formats that maximize efficiency for both the
USPTO and its stakeholders'' PPAC, at 3.
    The report noted opposition to the proposed increases for the Fee
for Late Payment of a Maintenance Fee. The PPAC believes the magnitude
of increase of the surcharge for late maintenance fee payments may be
excessive. However, the PPAC agrees that it is desirable to have timely
payment of maintenance fees to make clear to the public when patent
rights will be extended and therefore agrees with a meaningful
incentive to encourage timely payment. In response, the USPTO has
reduced the proposed Maintenance Fee Surcharge from $1,000 to $500 for
large entities. The PPAC suggested, ``If the goal is to discourage late
payments, then perhaps the USPTO should provide services to individuals
and small businesses to make it simple to stay current on deadlines and
pay in a timely fashion'' PPAC, at 3. The USPTO appreciates the PPAC's
suggestion. The USPTO provides tools to help patent owners monitor due
dates, such as the Patent Maintenance Fees Storefront, https://fees.uspto.gov/MaintenanceFees, with which anyone can see the payment
windows for all patents. Additionally, customers with USPTO.gov
accounts (i.e., MyUSPTO) can create a ``patent docket'' and add patent
or application numbers in order to keep track of due dates. Also, the
weekly Official Gazette notices list the range of patents for which
maintenance fees are now payable. In addition, with the availability of
free electronic calendar applications, individuals are able to easily
set up reminders of when maintenance fee payments are eligible for
renewal (3, 7, 11 years from issue) and when they are due (3.5, 7.5,
11.5 years from issue).
    The PPAC expressed a lack of support for the proposal to increase
Request for Expedited Examination of a Design Application. The advisory
body requested sufficient justification for such a large increase. In
response to this concern, the USPTO has provided additional
justification and data. Part V: Individual Fee Rationale offers this
additional information.
    The PPAC supported the active patent practitioner fee to make
certain that the roll of registered practitioners is up-to-date and to
defray the patent related costs of operating the Office of Enrollment
and Discipline (OED). The PPAC noted that the proposed annual active
practitioner fee attracted numerous comments. In the report, the PPAC
requested further information from the USPTO about how the anticipated
fee collections will offset the cost of operations of the OED and to
what extent. The PPAC agreed that the annual active practitioner fee
would better align the costs of OED services with those who receive the
benefits. The PPAC believes that the OED fees would not create an
unreasonable burden. In response to the report, the USPTO has made
changes to the annual active practitioner fee.
    In particular, some of the comments received suggested that
offering a paper option would make the structure of the fee overly
complicated and administratively burdensome. In view of these comments,
the paper filing option has been removed. Only electronic payments will
be accepted. Additionally, several of the comments received in the
course of the PPAC hearing suggested that requiring practitioners to
either retake the registration examination or make a showing that they
continue to possess the qualifications necessary to practice before the
Office after they had been voluntarily inactive for two years, and to
retake the examination after they had been inactive for five years,
would be overly burdensome. Accordingly, the proposal has been changed;
practitioners who are endorsed on the roster as voluntarily inactive
will be liable for a fee of $70 per year to cover OED's administrative
costs in maintaining the register and updating their information, but
will neither be required to make a showing of their qualifications, nor
be required to take the examination. Practitioners may apply to become
active by paying the reinstatement fee and making their request to the
OED Director. In regards to the Continuing Legal Education (CLE)
discount, the PPAC supports the USPTO's goal to improve the services
provided by the patent bar to the public. The PPAC has requested more
information supporting the effectiveness of such a CLE incentive. Part
V: Individual Fee Rationale offers this additional justification for
the CLE discount.
    In summary, the USPTO appreciates the overall support for an
increase in patent fees to meet sufficient funding levels provided by
the PPAC and its stakeholders. After careful consideration of the
comments, concerns, and suggestions provided in the report, and keeping
in mind the goals of this proposed rule, the USPTO elected to make
changes to two of the fee proposals initially presented to the PPAC.
The fee structure proposed herein will ultimately allow the USPTO to
maintain patent operations and continue on its path towards achieving
the goals and objectives laid out in the Strategic Plan. The Office
looks forward to receiving additional comments on this revised proposal
during the public comment period.
C. Summary of Rationale and Purpose of the Proposed Rule
    The Office estimates that the proposed patent fee schedule will
produce aggregate revenues to recover the aggregate costs of patent
operations, including the implementation of its strategic and mission
support goals, objectives, and initiatives in FY 2021 and beyond. Using
the Strategic Plan as a foundation, the proposed rule will provide
sufficient aggregate revenue to recover the aggregate cost of patent
operations, including optimizing patent application pendency, issuing
highly reliable patents, fostering innovation through business
effectiveness, enhancing the operations of the PTAB, optimizing the
speed, quality, and cost-effectiveness of information technology
[[Page 37406]]
delivery to achieve business value, and ensuring financial
sustainability to facilitate effective operations.
IV. Fee Setting Methodology
    The Office carried out three primary steps in developing the
proposed fees:
    Step 1: Determine the prospective aggregate costs of patent
operations over the five-year period, including the cost of
implementing new initiatives to achieve strategic goals and objectives.
    Step 2: Calculate the prospective revenue streams derived from the
individual fee amounts (from Step 3) that will collectively recover the
prospective aggregate cost over the five-year period.
    Step 3: Set or adjust individual fee amounts to collectively
(through executing Step 2) recover projected aggregate cost over the
five-year period, while furthering key policy factors.
    These three steps are iterative and interrelated. The following is
a description of how the USPTO carries out these three steps.
Step 1: Determine Prospective Aggregate Costs
    Calculating prospective aggregate costs is accomplished primarily
through the annual USPTO budget formulation process. The budget is a
five-year plan (that the Office prepares annually) for carrying out
base programs and new initiatives to implement the USPTO's strategic
goals and objectives.
    The first activity performed to determine prospective aggregate
cost is to project the level of demand for patent products and
services. Demand for products and services depends on many factors that
are subject to change, including domestic and global economic activity.
The USPTO also takes into account overseas patenting activities,
policies and legislation, and known process efficiencies. Because
filing, search, and examination costs are the largest share of the
total patent operating cost, a primary production workload driver is
the number of patent application filings (i.e., incoming work to the
Office). The Office looks at indicators such as the expected growth in
Real Gross Domestic Product (RGDP), the leading indicator of incoming
patent applications, to estimate prospective workload. RGDP is reported
by the Bureau of Economic Analysis (www.bea.gov) and is forecasted each
February by the OMB (www.omb.gov) in the Economic and Budget Analyses
section of the Analytical Perspectives and twice annually by the
Congressional Budget Office (CBO) (www.cbo.gov) in the Budget and
Economic Outlook. A description of the Office's methodology for using
RGDP can be found in Appendix I--Multi-year Planning by Business Line
and Cost Containment of the FY 2020 Budget. The expected change in the
required production workload must then be compared to the current
examination production capacity to determine any required staffing and
operating cost (e.g., salaries, workload processing contracts, and
publication) adjustments. The Office uses a patent pendency model that
estimates patent production output based on actual historical data and
input assumptions, such as incoming patent applications and overtime
hours. An overview of the model, including a description of inputs,
outputs, key data relationships, and a simulation tool is available at
https://www.uspto.gov/patents/stats/patent_pend_model.jsp.
    The second activity is to calculate the aggregate costs to execute
the requirements. In developing its budget, the Office first looks at
the cost of status quo operations (the base requirements). The base
requirements are adjusted for anticipated pay increases and
inflationary increases for the budget year and four out years (detailed
calculations and assumptions for this adjustment can be found in the FY
2020 Budget). The Office then estimates the prospective cost for
expected changes in production workload and new initiatives over the
same period of time (refer to ``Program Changes by Sub-Program''
sections of the FY 2020 Budget). The Office reduces cost estimates for
completed initiatives and known cost savings expected over the same
five-year horizon. Finally, the Office estimates its three month target
operating reserve level based on this aggregate cost calculation for
the year to determine if operating reserve adjustments are necessary.
    The FY 2020 Budget identifies that, during FY 2020, patent
operations will cost $3.170 billion (see Appendix II of the FY 2020
Budget), including $2.153 billion for patent examining; $93 million for
patent trial and appeals; $161 million for patent information
resources; $28 million for activities related to IP protection, policy,
and enforcement; and $734 million for general support costs necessary
for patent operations (e.g., the patent share of rent, utilities,
legal, financial, human resources, other administrative services, and
Office-wide IT infrastructure and IT support costs). In addition, the
Office transfers $2 million to the DOC Inspector General for audit
support. The Office also estimates collecting $37 million in other
income associated with recoveries and reimbursable agreements (offsets
to spending).
    A detailed description of the operating requirements and related
aggregate cost is located in the FY 2020 Budget. Table 2 below provides
key underlying production workload projections and assumptions from the
FY 2020 Budget used to calculate aggregate cost. Table 3 (see Step 2)
presents the total budgetary requirements (prospective aggregate cost)
for FY 2020 through FY 2024 and the estimated collections and operating
reserve balances that would result from the proposed adjustments
contained in this NPRM. Table 3 does not reflect the 2019 1.9 percent
pay raise as authorized in the Consolidated Appropriation Act, 2019,
Public Law 116-6, 133 Stat. 13, which was passed after the cost
estimates for the FY 2020 Budget were finalized. This new requirement
will increase the patent budgetary requirements by approximately $31-
$44 million per year. This will result in a cumulative impact of $245
million over the budget horizon. As the Budget notes, these projections
are based on point-in-time estimates and assumptions that are subject
to change. There is considerable uncertainty in out-year budgetary
requirements. A number of risks could materialize over the next several
years (e.g., associated with recompetitions of major contracts, lease
renewals, changing assumptions about Presidentially authorized or
congressionally mandated employee pay raises, etc.) that could increase
the USPTO's budgetary requirements in the short- to medium-term. These
estimates are refreshed annually in the production of the USPTO's
Budget.
                                 Table 2--Patent Production Workload Projections
                                                [FY 2020-FY 2024]
----------------------------------------------------------------------------------------------------------------
   Utility, plant, and reissue
              (UPR)                   FY 2020         FY 2021         FY 2022         FY 2023         FY 2024
----------------------------------------------------------------------------------------------------------------
Applications *..................         611,158         612,614         621,450         629,204         636,625
Application Growth Rate.........            0.2%            0.2%            1.4%            1.2%            1.2%
[[Page 37407]]

Production Units................         607,252         597,025         612,487         624,005         625,527
Unexamined Patent Application            498,554         503,975         502,669         497,497         489,448
 Backlog........................
Examination Capacity **.........           8,313           8,686           9,046           9,174           9,297
Performance Measures (UPR):
    Avg. First Action Pendency              14.7            14.7            14.5            14.3            14.0
     (Months)...................
    Avg. Total Pendency (Months)            22.8            22.8            22.9            22.7            22.4
----------------------------------------------------------------------------------------------------------------
* In this table, the patent application filing data includes requests for continued examination (RCEs).
** In this table, Examination Capacity is the UPR Examiners On-Board at End-of-Year, as described in the FY 2020
  Budget.
Step 2: Calculate Prospective Aggregate Revenue
    As described above in Step 1, the USPTO's FY 2020 requirements in
the FY 2020 Budget include the aggregate prospective cost of planned
production, anticipated new initiatives, and a contribution to the
patent operating reserve required for the Office to maintain patent
operations and realize its strategic goals and objectives for the next
five years. The aggregate prospective cost becomes the target aggregate
revenue level that the new fee schedule must generate in a given year
and over the five-year planning horizon. To calculate the aggregate
revenue estimates, the Office first analyzes relevant factors and
indicators to calculate or determine prospective fee workloads (e.g.,
number of applications and requests for services and products), growth
in those workloads, and resulting fee workload volumes (quantities) for
the five-year planning horizon. Economic activity is an important
consideration when developing workload and revenue forecasts for the
USPTO's products and services because economic conditions affect
patenting activity.
    The Office considers economic activity when developing fee
workloads and aggregate revenue forecasts for its products and
services. Major economic indicators include the overall condition of
the U.S. and global economies, spending on research and development
activities, and investments that lead to the commercialization of new
products and services. The most relevant economic indicator that the
Office uses is the RGDP, which is the broadest measure of economic
activity and is anticipated to grow approximately two percent for FY
2020 based on CBO estimates.
    These indicators correlate with patent application filings, which
are a key driver of patent fees. Economic indicators also provide
insight into market conditions and the management of IP portfolios,
which influence application processing requests and post-issuance
decisions to maintain patent protection. When developing fee workload
forecasts, the Office considers other influential factors including
overseas activity, policies and legislation, court decisions, process
efficiencies, and anticipated applicant behavior.
    Anticipated applicant behavior in response to fee changes is
measured using an economic principle known as elasticity, which for the
purpose of this proposal measures how sensitive applicants and
patentees are to changes in fee amounts. The higher the elasticity
measure (in absolute value), the greater the applicant response to the
relevant fee change. If elasticity is low enough (i.e., demand is
inelastic or the elasticity measure is less than one in absolute
value), a fee increase will lead to only a relatively small decrease in
patent activities, and overall revenues will still increase.
Conversely, if elasticity is high enough (i.e., demand is elastic or
the elasticity measure is greater than one in absolute value), a fee
increase will lead to a relatively large decrease in patenting
activities such that overall revenues will decrease. When developing
fee forecasts, the Office accounts for how applicant behavior will
change at different fee amounts projected for the various patent
services. The Office analyzed elasticity for nine broad patent fee
categories: Filing/search/examination fees, excess independent claims
fees, excess total claims fees, application size (excess page) fees,
issue fees, request for continued examination (RCE) fees, appeal fees,
AIA trial fees, and maintenance fees, including distinctions by entity
size where applicable. Additional detail about the Office's elasticity
estimates is available in ``USPTO Setting and Adjusting Patent Fees
during Fiscal Year 2020--Description of Elasticity Estimates,''
available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Aggregate Revenue Estimate Ranges
    When estimating aggregate revenue, the USPTO prepares a high and a
low range of fee collection estimates. This range accounts for the
inherent uncertainty, sensitivity, and volatility of predicting
fluctuations in the economy and market environment; interpreting policy
and process efficiencies; and developing fee workload and fee
collection estimates from assumptions. The Office estimates a range for
all its major workload categories including application filings,
extensions of time, PTAB fees, maintenance fees, patent cooperation
treaty (PCT) filings, and trademark filings. Additional detail about
the Office's aggregate revenue, including projected workloads by fee,
is available in ``USPTO Setting and Adjusting Patent Fees during Fiscal
Year 2020--Aggregate Revenue Estimates Alternative 1: Proposed
Alternative'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Summary
    Patent fees are collected for patent-related services and products
at different points in time within the patent application examination
process and over the life of the pending patent application and granted
patent. Approximately half of all patent fee collections are from
maintenance fees, which subsidize the cost of filing, search, and
examination activities. Changes in application filing levels
immediately impact current year fee collections, because fewer patent
application filings means the Office collects fewer fees to devote to
production-related costs. The resulting reduction in production
activities also creates an out-year revenue impact because less
production output in one year results in fewer issue and maintenance
fee payments in future years.
    The USPTO's five-year estimated aggregate patent fee revenue (see
Table 3) is based on the number of patent applications it expects to
receive for a
[[Page 37408]]
given fiscal year, work it expects to process in a given fiscal year
(an indicator of future patent issue fee workload), expected
examination and process requests for the fiscal year, and the expected
number of post-issuance decisions to maintain patent protection over
that same fiscal year. Within the iterative process for estimating
aggregate revenue, the Office adjusts individual fee rates up or down
based on cost and policy decisions (see Step 3: Set Specific Fee
Amounts), estimates the effective dates of new fee rates, and then
multiplies the resulting fee rates by appropriate workload volumes to
calculate a revenue estimate for each fee. To calculate the aggregate
revenue, the Office assumes that all proposed fee rates will become
effective on January 1, 2021 except for the new Annual Active Patent
Practitioner Fees, which are assumed to become effective January 1,
2022. Using these figures, the USPTO sums the individual fee revenue
estimates, and the result is a total aggregate revenue estimate for a
given year (see Table 3). The financial outlook in Table 3 is different
from the numbers contained in the FY 2020 Budget. At the time the FY
2020 Budget was prepared, the proposed fee adjustments were not
finalized. Therefore, the revenue estimates in this NPRM and associated
documents do not exactly match what was assumed in the FY 2020 Budget.
Forecasted revenue for FY 2021 through FY 2024 is $2 million to $4
million lower per year, for a total impact of $12 million lower than
the estimates reported in the FY 2020 Budget.
                                        Table 3--Patent Financial Outlook
                                                [FY 2020-FY 2024]
----------------------------------------------------------------------------------------------------------------
                                                                Dollars in millions
                                 -------------------------------------------------------------------------------
                                      FY 2020         FY 2021         FY 2022         FY 2023         FY 2024
----------------------------------------------------------------------------------------------------------------
Projected Fee Collections.......           3,095           3,358           3,687           3,690           3,836
Other Income....................              37              37              37              37              37
Total Projected Fee Collections            3,132           3,395           3,724           3,727           3,873
 and Other Income...............
Budgetary Requirements..........           3,172           3,326           3,434           3,524           3,626
Funding to (+) and from (-)                 (40)              69             290             203             247
 Operating Reserve..............
EOY Operating Reserve Balance...             203             272             562             765           1,012
Over/(Under) $300M Minimum Level            (97)            (28)             262             465             712
Over/(Under) Optimal Level......           (589)           (559)           (296)           (116)             105
----------------------------------------------------------------------------------------------------------------
Step 3: Set Specific Fee Amounts
    Once the Office finalizes the annual requirements and aggregate
prospective costs through the budget formulation process, the Office
determines specific fee amounts that, together, will derive the
aggregate revenue required to recover the estimated aggregate
prospective costs during the five year budget horizon. Calculating
individual fees is an iterative process that encompasses many variables
and policy factors. These are discussed in greater detail in section V.
Individual Fee Rationale.
    One of the variables the USPTO considers to inform fee setting is
the historical cost estimates associated with individual fees. The
Office's ABI provides historical cost for an organization's activities
and outputs by individual fee using the activity-based costing (ABC)
methodology. ABC is commonly used for fee setting throughout the
Federal Government. Additional information about the methodology,
including the cost components related to respective fees, is available
in the document entitled ``USPTO Setting and Adjusting Patent Fees
during Fiscal Year 2020--Activity-Based Information and Patent Fee Unit
Expense Methodology'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The USPTO provides
data for FY 2016-FY 2018 because the Office finds that reviewing the
trend of ABI historical cost information is the most useful way to
inform fee setting. The underlying ABI data are available for public
inspection at the USPTO upon request.
    When the Office implements a new process or service, historical ABI
data is typically not available. However, the Office will use the
historical cost of a similar process or procedure as a starting point
to estimate the full cost of a new activity or service.
V. Individual Fee Rationale
    The Office projects that the aggregate revenue generated from the
proposed patent fees will recover the prospective aggregate cost of its
patent operations including contributions to the operating reserve per
the strategic initiative to ensure financial sustainability to
facilitate effective USPTO operations. As detailed previously, the PPAC
supports this approach, stating that ``The PPAC supports the USPTO in
seeking the revenues it needs to increase the reliability and certainty
of patent rights, provide timely examination, improve and secure its IT
infrastructure and adequately fund its operating reserve'' PPAC, at
[2].
    It is important to recognize that each individual proposed fee is
not necessarily set equal to the estimated cost of performing the
activities related to the fee. Instead, as described in Part III:
Rulemaking Goals and Strategies, some of the proposed fees are set at,
above, or below their unit costs to balance several key fee setting
policy factors: Promoting innovation strategies, aligning fees with the
full cost of products and services, facilitating effective
administration of the patent system, and offering patent processing
options to applicants. For example, many of the initial filing fees are
intentionally set below unit cost in order to promote innovation
strategies by removing barriers to entry for innovators. To balance the
aggregate revenue loss of fees set below cost, other fees must be set
above cost in areas where it is less likely to reduce inventorship
(e.g., maintenance).
    For some fees proposed in this NPRM, such as excess claims fees,
the USPTO does not typically maintain individual historical cost data
for the service provided. Instead, the Office considers the policy
factors described in Part III to inform fee setting. For example, by
setting fees at particular levels using the facilitating effective
administration of the patent system policy factor, the USPTO aims to:
(1) Foster an environment where examiners can provide and applicants
can receive prompt, quality interim and final decisions; (2) encourage
the prompt conclusion of prosecuting an application, resulting in
pendency reduction and the faster dissemination of patented
information; and (3) help
[[Page 37409]]
recover costs for activities that strain the patent system.
    The rationale for the proposed changes are grouped into three major
categories, discussed below: (A) Across the board adjustment to patent
fees; (B) targeted fees; and (C) discontinued fees. The purpose of the
categorization is to identify large fee changes for the reader and
provide an individual fee rationale for such changes. The
categorization is based on changes in large entity fee amounts because
percentage changes for small and micro entity fees that are in place
today would be the same as the percentage change for the large entity,
and the dollar change would be half or one quarter of the large entity
change.
    The Table of Patent Fees includes the current and proposed fees for
large, small, and micro entities as well as unit costs for the last
three fiscal years. Part VI: Discussion of Specific Rules contains a
complete listing of fees that are set or adjusted in the proposed
patent fee schedule.
A. Across the Board Adjustment to Patent Fees
    In order to both keep USPTO on a stable financial track and allow
for the advancement of policies and practices that enhance the
country's innovation ecosystem, the Office proposes to adjust all
patent fees not covered by the targeted adjustments as discussed in
section B, or proposed to be discontinued as discussed in section C, by
approximately five percent. Given that nearly three years will have
passed between the implementation date of the last fee adjustments and
when the proposed fees are expected to take effect, a five percent
increase is similar to fees increasing by 1.6 percent annually to help
USPTO keep up with inflationary cost increases. Proposed fees are
rounded to the nearest five dollars by applying standard arithmetic
rules. For fees that have small and micro entity fee reductions, the
large entity fee is rounded up or down to the nearest 20 dollars by
applying standard arithmetic rules. The resulting proposed fee amounts
are more convenient to patent users and permit the Office to set small
and micro entity fees at whole dollar amounts when applying the
applicable fee reduction. Therefore, some smaller fees will not be
changing, since a five percent increase would round down to the current
fee, while other fees would change by slightly more or less than five
percent, depending on rounding. The proposed fee adjustments in this
category are listed in the Table of Patent Fees.
    The five percent across the board adjustment strikes an appropriate
balance between projected aggregate revenue and aggregate cost based on
the assumptions used to develop the point-in-time estimates that
support this NPRM. As was discussed in Part IV: Fee Setting
Methodology, these assumptions are likely to change as new information
becomes available. Refreshed estimates for the FY 2021 Budget will be
available to the public before publication of the final rule. If
changes to the assumptions underlying the USPTO's cost and revenue
estimates result in significant changes in the FY 2021 Budget
projections, the Office will refine the size of the across the board
adjustment, either upward or downward, such that fees are set a level
that secures aggregate cost recovery while ensuring a reasonable pace
for operating reserve growth.
B. Targeted Fees
    For those fees targeted in this proposal, the individual fee
rationale discussion is divided into two categories: (1) Adjustments to
existing fees; and (2) new fees.
    Adjustments to existing fees are further divided into subcategories
according to the function of the fees, including: (a) Maintenance fee
surcharge; (b) request for the expedited examination of a design
application fee; (c) utility issue and maintenance fees; and (d) AIA
trial fees. New fees are further divided into subcategories according
to the function of the fees, including: (a) Non-DOCX filing surcharge
fee; (b) Pro Hac Vice; and (c) Annual Active Patent Practitioner fees.
    As discussed above, for purposes of comparing amounts in the
individual fee rationale discussion, the Office has included the
current fees as the baseline to calculate the dollar change and percent
change for proposed fees.
(1) Adjustments to Existing Fees
    The following fees are proposed to be increased by an amount other
than the five percent across the board increase proposed for most
patent-related fees. These targeted adjustments are made for a variety
of strategic reasons. A discussion of the rationale for each fee
follows.
(a) Maintenance Fee Surcharge
                              Table 4--Maintenance Fee Surcharge Fees--Fee Changes
----------------------------------------------------------------------------------------------------------------
                               Current fees    Proposed fees   Dollar change  Percent change
       Fee description         Large (small)   Large (small)   Large (small)   Large (small)   FY 2018 unit cost
                              [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Surcharge--3.5 year--Late               $160            $500           +$340           +213%  N/A
 payment within 6 months.              ($80)          ($250)         (+$170)         (+213%)
                                       [$40]          [$125]          [+$85]         [+213%]
Surcharge--7.5 year--Late               $160            $500           +$340           +213%  N/A
 payment within 6 months.              ($80)          ($250)         (+$170)         (+213%)
                                       [$40]          [$125]          [+$85]         [+213%]
Surcharge--11.5 year--Late              $160            $500           +$340           +213%  N/A
 payment within 6 months.              ($80)          ($250)         (+$170)         (+213%)
                                       [$40]          [$125]          [+$85]         [+213%]
----------------------------------------------------------------------------------------------------------------
    The Office proposes to increase the surcharge for a late
maintenance fee payment within six months following the due date. The
proposed fee of $500 for large entities has been reduced from the
$1,000 presented in the September 2018 PPAC hearing. It is the
responsibility of the patentee to ensure maintenance fees are paid
timely to prevent expiration of a patent. If a maintenance fee is not
paid within the first six months in the year in which it can be paid, a
Maintenance Fee Reminder notice is sent to the fee address or
correspondence address on record. Failure to receive the notice does
not shift the burden of monitoring the time for paying a maintenance
fee
[[Page 37410]]
from the patentee to the USPTO. At this point, a surcharge is required
in addition to the maintenance fee in order to maintain a patent. If
the maintenance fee and any applicable surcharge are not paid by the
end of the 4th, 8th, or 12th years after the date of issue, the patent
rights lapse and a Notice of Patent Expiration is sent to the fee
address or correspondence address on record. If a fee address has not
been established, the notices are sent to the correspondence address.
Over 95 percent of patent renewals are paid before the due date, but
some patents are renewed during the six month period following the due
date.
    While still below what other IP offices charge, increasing this
surcharge brings the USPTO more in line with its global counterparts.
The goal of increasing this surcharge is to encourage patent holders to
renew prior to the due date. Encouraging on-time renewals will benefit
the public by increasing the understanding of which patents remain in
force and which patent rights have been allowed to lapse.
    The USPTO provides tools to help patent owners monitor due dates,
such as the Patent Maintenance Fees Storefront, https://fees.uspto.gov/MaintenanceFees, where anyone can see the payment windows for all
patents. Additionally, customers with USPTO.gov accounts (i.e.,
MyUSPTO) can create a ``patent docket'' and add patent or application
numbers in order to keep track of due dates. Also, the weekly Official
Gazette notices list the range of patents for which maintenance fees
are now payable. In addition, as previously discussed in section III,
with the availability of free calendar apps, individuals can easily set
up their own reminders of when maintenance fee payments are eligible
for renewal (3, 7, 11 years from issue) and when they are due (3.5,
7.5, 11.5 years from issue).
(b) Request for Expedited Examination of a Design Application Fee
                     Table 5--Request for Expedited Examination of a Design Application Fee
----------------------------------------------------------------------------------------------------------------
                               Current fees    Proposed fees   Dollar change  Percent change
                              Large  (small)  Large  (small)  Large  (small)       Large
       Fee description            [micro]         [micro]         [micro]         (small)      FY 2018 unit cost
                                  entity          entity          entity      [micro] entity
----------------------------------------------------------------------------------------------------------------
Request for expedited                   $900          $2,000         +$1,100           +122%  $125
 examination of a design              ($450)        ($1,000)         (+$550)         (+122%)
 application.                         [$225]          [$500]         [+$225]         [+122%]
----------------------------------------------------------------------------------------------------------------
    The Office proposes to increase the fee to request expedited
examination of a design application. This fee was introduced at a fee
rate of $900 in November 2000. The Office is proposing to increase the
fee for the first time since its inception, to a rate of $2,000.
    Expedited examination is available to all design applicants who
first conduct a preliminary examination search and file a request for
expedited treatment accompanied by a fee for the expedited treatment
and handling (37 CFR 1.17(k)) in addition to the required filing,
search, and examination fees. This cost-based expedited treatment
fulfills a particular need by affording rapid design patent protection
that may be especially important where marketplace conditions are such
that new designs on articles are typically in vogue for limited periods
of time. The applications are individually examined with priority, and
the clerical processing is conducted and/or monitored by specially
designated personnel to achieve expeditious processing through initial
application processing and the Design Examining Group. For a patentable
design application, the expedited treatment is a streamlined filing-to-
issuance procedure. This procedure further expedites design application
processing by decreasing clerical processing time as well as the time
spent routing the application between processing steps. Specially
designated personnel are required to conduct and/or monitor the
expedited clerical processing. Also, expedited design applications may
be individually treated throughout the examination process where
necessary for expedited treatment, whereas normally, the search phase
of design application examination is conducted in groups.
    For the first few years following the introduction of this program,
requests for expedited examination of a design application were less
than one percent of total design filings. In recent years, requests
have increased to over two percent of total filings. This increase in
demand for this service has forced the Office to choose to cap the
program (i.e., impose limits on the number of expedited examinations it
will undertake in a given fiscal year), end the program, or increase
the fee. Increasing this optional fee will allow the USPTO to better
manage staffing to match demand for this service, while still keeping
the service available as an option for those who may benefit from this
program.
(c) Utility Patent Issue and Maintenance Fees
                               Table 6--Utility Patent Issue and Maintenance Fees
----------------------------------------------------------------------------------------------------------------
                               Current fees    Proposed fees   Dollar change  Percent change
                              Large  (small)  Large  (small)  Large  (small)       Large
       Fee description            [micro]         [micro]         [micro]         (small)      FY 2018 unit cost
                                  entity          entity          entity      [micro] entity
----------------------------------------------------------------------------------------------------------------
Utility Issue Fee...........          $1,000          $1,200           +$200            +20%  $325
                                      ($500)          ($600)         (+$100)          (+20%)
                                      [$250]          [$300]          [+$50]          [+20%]
Reissue Issue Fee...........          $1,000          $1,200           +$200            +20%  $325
                                      ($500)          ($600)         (+$100)          (+20%)
                                      [$250]          [$300]          [+$50]          [+20%]
[[Page 37411]]

For Maintaining an Original           $1,600          $2,000           +$400            +25%  n/a
 or Any Reissue Patent, Due           ($800)        ($1,000)          ($800)          (+25%)
 at 3.5 years.                        [$400]          [$500]          [$400]          [+25%]
For Maintaining an Original           $3,600          $3,760           +$160             +4%  n/a
 or Any Reissue Patent, Due         ($1,800)        ($1,880)           ($80)           (+4%)
 at 7.5 years.                        [$900]          [$940]           [$40]           [+4%]
For Maintaining an Original           $7,400          $7,700           +$300             +4%  n/a
 or Any Reissue Patent, Due         ($3,700)        ($3,850)          ($150)           (+4%)
 at 11.5 years.                      [$1,850        [$1,925]           [$75]           [+4%]
----------------------------------------------------------------------------------------------------------------
    In the September 2018 PPAC public hearing, the Office proposed
adjusting the issue fees by 20 percent and first stage maintenance fees
by 25 percent. These adjustments will mark the first time maintenance
fee rates have changed since 2013. Based on the support in the PPAC
report, the Office determined to move forward with the proposal to
increase the issue fee and maintenance fees as initially proposed. The
total package of fees proposed in this NPRM does not significantly
impact the balance between front-end and back-end fees. The USPTO
continues to set front-end fees below the cost to the Office to provide
those services, in order to encourage innovation. Under this proposal,
front-end fees for a utility patent with one RCE and lifetime
maintenance will continue to be about 18 percent of the total fees paid
over the life of a patent (see Table 7). However, as certain technology
lifecycles grow shorter, it is important that the USPTO not rely too
heavily on fees paid late in the life of a patent. Therefore, the
Office proposes to slightly rebalance the back-end fees to recover the
initial search and examination costs earlier in the life of the patent.
                                                       Table 7--Front-End and Back-End Fee Balance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Current                                Proposed
                                                                           -----------------------------------------------------------------------------
                 Fee group                         Detailed fee title                                   Group's                                Group's
                                                                               Large      Percent of   percent of     Large      Percent of   percent of
                                                                             entity fee   total  (%)   total (%)    entity fee   total  (%)   total (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Front End Fees.............................  Filing.......................         $300            2           18         $320            2           18
                                             Search.......................         $660            4                      $700            4
 Examination                                 $760.........................            5                      $800            4  ...........
 1st RCE                                     $1,300.......................            8                    $1,360            8  ...........
Back End Fees..............................  Issue........................       $1,000            6           16       $1,200            7           18
                                             1st Stage Maintenance........       $1,600           10  ...........       $2,000           11
                                             2nd Stage Maintenance........       $3,600           22           66       $3,760           21           64
                                             3rd Stage Maintenance........       $7,400           45                    $7,700           43
                                                                           -----------------------------------------------------------------------------
    Total..................................  .............................      $16,620          100          100      $17,840          100          100
--------------------------------------------------------------------------------------------------------------------------------------------------------
    The issue fee for utility and reissue patents is proposed to be
increased from $1,000 to $1,200, and the first stage maintenance fee is
proposed to be increased from $1,600 to $2,000. As a result, the
combined fees paid for issue and first stage maintenance would increase
from 16 percent to 18 percent of the total fees paid for a utility
patent with one RCE and lifetime maintenance. However, second and third
stage maintenance fees would only increase by 4 percent--less than the
across the board adjustment--with second stage increasing from $3,600
to $3,760 and third stage increasing from $7,400 to $7,700.
    The Office determined elasticity estimates for the three
maintenance payments for both large and small entities. For all point
estimates and confidence intervals, maintenance fees were found to be
inelastic, with the first stage being the least elastic of these fees.
More detailed information on elasticity estimates can be found at
https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting in the document entitled ``USPTO Setting and Adjusting
Patent Fees during Fiscal Year 2020--Description of Elasticity
Estimates''.
(d) AIA Trial Fees
                               Table 8--AIA Trial Fees--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent change
                                   Current fees    Proposed fees   Dollar change       Large
         Fee description          Large  (small)  Large  (small)  Large  (small)      (small)      FY 2018 unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Inter Partes Review Request Fee-         $15,500         $19,500         +$4,000            +26%         $15,016
 Up to 20 Claims................
[[Page 37412]]

Inter Partes Review Post-                 15,000             n/a             n/a             n/a          24,490
 Institution Fee--Up to 15
 Claims *.......................
Inter Partes Review Post-                    n/a          18,750             n/a             n/a             n/a
 Institution Fee--Up to 20
 Claims *.......................
Inter Partes Review Request of               300             375             +75             +25             n/a
 Each Claim in Excess of 20.....
Inter Partes Post-Institution                600             n/a             n/a             n/a             n/a
 Request of Each Claim in Excess
 of 15 *........................
Inter Partes Post-Institution                n/a             750             n/a             n/a             n/a
 Request of Each Claim in Excess
 of 20 *........................
Post-Grant or Covered Business            16,000          20,000          +4,000             +25          21,465
 Method Review Request Fee--Up
 to 20 Claims...................
Post-Grant or Covered Business            22,000             n/a             n/a             n/a          29,842
 Method Review Post-Institution
 Fee--Up to 15 Claims *.........
Post-Grant or Covered Business               n/a          27,500             n/a             n/a             n/a
 Method Review Post-Institution
 Fee--Up to 20 Claims *.........
Post-Grant or Covered Business               375             475            +100             +27             n/a
 Method Review Request of Each
 Claim in Excess of 20..........
Post-Grant or Covered Business               825             n/a             n/a             n/a             n/a
 Method Review Post-Institution
 Request of Each Claim in Excess
 of 15 *........................
Post-Grant or Covered Business               n/a           1,050             n/a             n/a             n/a
 Method Review Post-Institution
 Request of Each Claim in Excess
 of 20 *........................
----------------------------------------------------------------------------------------------------------------
* The post-institutional threshold for paying claims fees will increase from 15 to 20.
    On April 24, 2018, the U.S. Supreme Court issued its decision in
SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). As required by the
decision, the PTAB will institute a trial as to all claims or none.
Previously, the PTAB has instituted a trial on just some claims. This
has increased the amount of time spent per case post-institution. The
Office has also modified its pre-institution practice to take into
account the impacts of the SAS decision. For example, prior to SAS, the
PTAB did not generally address all arguments at institution. Post SAS,
for purposes of deciding whether to institute trial on a petition, the
Office's policy is to provide details to the parties to the extent
practicable, including responding to arguments in a patent owner's
preliminary response that were not the basis for the decision whether
or not to institute. This has increased the amount of time spent per
case pre-institution. These changes related to the SAS decision will
increase the average cost to conduct each proceeding.
    Other implementations, such as providing automatic sur-replies and
pre-hearing conferences, were made to help provide additional fairness
and certainty to the parties and public while continuing the PTAB's
practice of rendering high quality decisions within the statutory time
limits applicable to AIA trial proceedings; however, these changes,
too, have increased the average cost of conducting each proceeding.
    The Office proposes that the post-institutional threshold for
paying excess claim fees will increase from 15 to 20 so as to match the
PTAB's request threshold, reflecting the fact that, following the
Supreme Court decision in SAS, PTAB is required to institute all claims
or none. The Office notes that the fee increases proposed in the NPRM
are based on estimates. At this time, best estimates indicate that the
average expense attributable to the institution stage of inter partes
reviews has increased more than 20 percent between the second quarter
of FY 2018 (before the SAS decision) and the fourth quarter of FY 2018
(following the SAS decision), and that the average expense attributable
to the final decision stage of inter partes reviews has also increased
more than 20 percent during the same period. Also, note that the FY
2018 unit costs shown in Table 8 are annual costs, and the PTAB was
only operating under the SAS decision for part of the year. When the
final rule is prepared, USPTO will have more data on how the SAS
decision has impacted the costs of AIA trials, and the fee rates in the
final rule may differ from what is proposed here, in response to the
updated information. Additionally, the fee increases the Office is
considering are not expected to be implemented until 2021, and the new
fees are expected to be in place for several years beyond that; as
such, increases of greater than 20 percent are necessary to account for
cost increases already experienced as well as future inflationary cost
growth. This proposed rulemaking will help the PTAB continue to
maintain the appropriate level of judicial and administrative resources
to continue to provide high quality and timely decisions for AIA
trials.
(2) New Fees
(a) Non-DOCX Filing Surcharge Fee
[[Page 37413]]
                        Table 9--Non-DOCX Filing Surcharge Fee--Fee Changes and Unit Cost
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent change   FY 2018  unit
                                 Current fees      Proposed fees   Dollar change       Large        cost  Large
       Fee description          Large  (small)    Large  (small)  Large  (small)      (small)         (small)
                                [micro]  entity       [micro]         [micro]         [micro]         [micro]
                                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Non-DOCX Filing Surcharge...  New...............            $400           +$400             n/a             n/a
                                                           (200)          (+200)           (n/a)
                                                           [100]          [+100]           [n/a]
----------------------------------------------------------------------------------------------------------------
    The Office proposes a new fee to be charged for utility non-
provisional applications filed under 35 U.S.C. 111 submitted in a
format other than DOCX (structured text). This surcharge will apply to
filings that are submitted in an electronic document, such as a PDF,
that is not saved in the DOCX format. It will also apply to filings
that are submitted non-electronically, in addition to the existing
paper filing surcharge. The surcharge is proposed to be introduced for
specifications, claims, and abstracts. The submission in DOCX format
will facilitate improvements in the efficiency of patent operations.
    Using EFS-Web, anyone with a Web-enabled computer can file patent
applications and documents without downloading special software or
changing document preparation tools and processes. Registering as an
EFS-Web eFiler allows enhanced filing, follow-on processing, saved
submissions, and more. EFS-Web registered eFilers have been able to
file specification, abstract, and claims in DOCX for utility non-
provisional filings since August 2017.
    Launched in 2015, the eCommerce Modernization (eMod) Project aims
to improve the electronic application process for patent applicants by
modernizing the USPTO's filing and viewing systems. Recent improvements
include implementing structured text functionalities. Structured text
allows applicants to more easily submit their documents in text-based
documents, rather than having to create PDF documents. This streamlines
the application and publication processes for both the applicants and
examiners. The Office tested the capabilities of structured text within
EFS-Web and PAIR with the eMod Text Pilot Program, which ran from
August 2016 until September 2017. The pilot was successful and many
improvements were made based on feedback from applicants, which
included independent inventors, law firms, and corporations. Structured
text features are now available to all EFS-Web registered and Private
PAIR users, and include the ability for applicants to file structured
text via EFS-Web, and access structured text submissions, structured
text office actions, and XML downloads via Private PAIR. Additional
information can be found in the associated Submit DOCX and Retrieve
DOCX guides. For more information on filing in DOCX, please visit
https://www.uspto.gov/patent/docx.
    To encourage the filing of more applications in structured text, a
required fee surcharge is proposed for applications that do not include
DOCX format. This will accelerate the adoption of DOCX to realize a
variety of benefits. Both the USPTO and applicants will see increased
efficiencies from encouraging DOCX filings. Based on a USPTO survey,
over 80 percent of applicants author their patent applications in DOCX
in the normal course of business. Filing in structured text allows
applicants to submit their specifications, claims, and abstracts in
text-based format, and eliminates the need to convert structured text
into a PDF for filing. Applicants can access examiner Office actions in
text-based format which makes it easy to copy and paste when drafting
responses. The availability of structured text also improves
accessibility for sight-impaired customers, who use screen reading
technology.
    DOCX filing provides opportunities to increase efficiency in the
Office. It enables development of software to provide automated initial
reviews of applicant submissions to help reduce effort required by the
Office. The automated reviews can tell applicants up-front if potential
problems exist and allow them to make changes prior to or at the time
of submission. This also improves validation based on content, such as
claims validation for missing claim numbering or abstract validation
for word count and paragraph count.
    Increased DOCX filing will also lead to higher data quality, by
reducing system conversion errors. It provides a flexible format with
no template constraints. This also improves data quality by supporting
original formats for chemical formulas, mathematical equations, and
tables. DOCX filing also improves document identification by automatic
detection, allows for greater reuse of content, and provides improved
searching for patent applications and submissions. The originally
submitted structured text document is available within Private PAIR,
allowing easy retrieval of original DOCX files after transfer of cases
between users.
    Structured text usage also helps streamline the application process
and provides benefits for the USPTO. The Office converts image-based
filings (e.g., PDF documents) into text-based format for internal
processing. Text-based filings will allow the Office to skip this time-
consuming and costly step. Optical character recognition of image-based
filings costs the Office approximately $3.15 per new submission.
Encouraging text-based filings has the potential to save the Office up
to $1.6 million annually. If, in the future, the program were extended
to additional application documents besides specifications, claims, and
abstracts, the potential savings could reach as much as $9.0 million
annually.
    Extensible Markup Language (XML) generated from DOCX files complies
with the international World Intellectual Property Office (WIPO)
Standard ST.96 from intake through display and use in examination
tools. Receiving filings through structured text makes documents
automatically available to examiners in almost real-time. DOCX filing
also improves examination consistency by using automated tools to
analyze text, increases the accuracy of examiner formalities reviews
and tools (i.e. claims tree generators, document comparison), and
improves results in automated pre-search and future analytics (i.e.,
section 112(b) and (f) evaluations) by using text supplied by
applicants. DOCX submission contributes to the USPTO's plan to begin
the automation of publication processes, which will lead to large cost
reductions in production of patent artifacts (grants and pre grant
publications), and contributes to the USPTO's plan to begin the
automation of processes to assist in formalities reviews,
classification, and routing
[[Page 37414]]
which leads to improved patent quality, reduced pendency and greater
consistency.
(b) Pro Hac Vice Fees
                               Table 10--Pro Hac Vice--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                 Current fees      Proposed fees   Dollar change  Percent change
                             --------------------------------------------------------------------
       Fee description                            Large  (small)  Large  (small)  Large  (small)   FY 2018  unit
                                Large  (small)        [micro]         [micro]         [micro]          cost
                                [micro]  entity       entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Fee for non-registered        New...............            $250           +$250             n/a             n/a
 practitioners to appear
 before the Patent Trial and
 Appeal Board.
----------------------------------------------------------------------------------------------------------------
    The Office proposes to charge a fee to appear pro hac vice in an
AIA trial proceeding. The proposed non-registered practitioner fee is
for each proceeding that a non-registered practitioner requests
admission to practice. If a non-registered practitioner requests
admission to multiple AIA trial proceedings, multiple requests and fees
would be required, one for each proceeding. Once a request is granted,
the counsel is admitted for the entire duration of a proceeding, which
may extend for several years, (e.g., when an inter partes review
proceeds to final written decision, and, after appeal to the Federal
Circuit, is remanded back to PTAB for further proceedings). By
instituting the pro hac vice fee, the Office will be able to shift the
cost of this service of processing these requests from the overall AIA
trial fees to the requesting, non-USPTO registered counsel.
(c) Annual Active Patent Practitioner Fee
                         Table 11--OED and Patent Enrollment--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                 Current fees      Proposed fees   Dollar change  Percent change
                             --------------------------------------------------------------------
       Fee description                            Large  (small)  Large  (small)  Large  (small)   FY 2018  unit
                                Large  (small)        [micro]         [micro]         [micro]          cost
                                [micro]  entity       entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Annual Active Patent          New...............            $340           +$340             n/a             n/a
 Practitioner Fee without
 certifying continuing legal
 education (CLE) completion.
Annual Active Patent          New...............            $240           +$240             n/a             n/a
 Practitioner Fee with
 certifying continuing legal
 education (CLE) completion.
Annual Voluntarily Inactive   New...............             $70            +$70             n/a             n/a
 Fee.
----------------------------------------------------------------------------------------------------------------
    The Office proposes to implement an annual active patent
practitioner fee under 37 CFR 1.21 and 11.8.
    Currently, the costs of OED's disciplinary and other functions are
paid by patent applicants and owners. The Office proposes these fees so
that practitioners, who directly benefit from registration, should bear
the costs associated with maintaining the integrity of their
profession, including the costs of OED's register maintenance and
disciplinary functions. This parallels the way many state bars operate
where the services of maintaining the bar are often paid by the
attorneys who are members of that bar. Accordingly, these fee
collections are proposed to shift the costs of the services OED
provides practitioners in administering the disciplinary system and
register maintenance from patent applicants and owners to the
practitioners.
    The intent of the proposed annual active patent practitioner fee is
to offset the portion of costs of OED's disciplinary and register
maintenance operations currently paid by patent applicants and owners.
The fees would also serve to fund the Patent Pro Bono Program and the
Law School Clinic Certification Program, which increase public access
to competent legal representation in IP matters, help enhance the IP
legal profession for its members, and serve to make the patent
examination process more efficient by decreasing the number of pro se
applicants. In addition, the fee would help to cover the costs of
increased outreach efforts, including speaking engagements and
providing additional training opportunities to help patent
practitioners receive the CLE discount, as discussed below.
    The fee, as proposed, would not cover services provided to
trademark practitioners and applicants, and therefore, the amount
collected from patent practitioners would only be used to cover OED's
patent-related functions. To determine the appropriate annual fee
rates, the USPTO engaged in an analysis of OED's costs currently paid
by patent applicants and owners, as well as the expected costs of
implementing the annual fee. The calculation of the annual fee rates
was based upon the annual OED budget after subtracting contributions
from trademark operations and contributions from enrollment fee
collections, and adding in the costs of implementing the fee and the
costs of outreach programs. The calculation was also based on
amortizing the IT costs of the implementation of the annual fee over
the first three years the fee is collected. In determining the proper
fee amount to offset these costs, OED estimated its annual fee
collections based on the projected number of registered practitioners
who will pay each fee (or be removed from the register) during the year
the annual fee is first collected. The estimated collections are based
on the current number of registered practitioners and an estimation of
how many practitioners are expected to be added to the register between
now and when the fee is implemented.
    Furthermore, increasing the predictability and reliability of
patents
[[Page 37415]]
is critical to incentivizing innovation. CLE serves to enhance
practitioners' legal skills. Ideally, when practitioners are well-
trained and well-educated in patent law and practice, higher quality
applications are filed, prosecution is more efficient, and patent
grants become stronger, more reliable, and more predictable. It is also
critical that patent examiners be able to maintain the pace of their
examination process while ensuring that patent quality is preserved.
Accordingly, through the encouragement of practitioner CLE by offering
a $100 annual fee discount as well as recognition on OED's public
practitioner search page, the patent system should benefit greatly.
    The USPTO intends to coordinate the delivery of CLE programs,
assess whether third party CLE programs are adequate, and make the
completion of CLE--whether offered by the USPTO or third parties--as
convenient as possible for practitioners to complete, while ensuring
that practitioners receive the training necessary to stay up to date
with current ethics and patent law and practice.
Annual Active Patent Practitioner Fee
    Each year, registered practitioners, as well as individuals granted
limited recognition under 37 CFR 11.9(b), will be, on or before a date
to be set by the OED Director, required to pay to the OED Director an
annual active patent practitioner fee. Adequate notice will be
published and sent to practitioners in advance of the due date for
payment of the fee. Payment will be for the calendar year in which the
annual active patent practitioner fee is assessed. Practitioners will
be required to pay the fee electronically through the USPTO's online
payment system.
    Persons newly registered or granted limited recognition will not be
liable for the annual active practitioner fee during the calendar year
in which they are first registered or granted limited recognition.
Practitioners who are endorsed on the register as administratively
inactive or in emeritus status will not be liable for the annual active
practitioner fee. Law school students participating in the USPTO Law
School Clinic Certification Program who are granted limited recognition
to practice before the Office in patent matters pursuant to 37 CFR
11.16(d) will not be liable for the annual active practitioner fee.
Practitioners who are endorsed on the register as voluntarily inactive
will be liable for a fee of $70 per year to cover OED's administrative
costs in maintaining the register and updating their information.
Practitioners may apply to become active by paying the reinstatement
fee and making their request to the OED Director, as set forth below.
Emeritus Status
    The USPTO proposes to create a new emeritus status for
practitioners. The new emeritus status would allow active patent
practitioners who have been registered for ten or more years to elect
emeritus status, provided they are not under investigation at the time
they elect such a status. Emeritus practitioners may not practice in
patent matters, with the exception of pro bono matters through the
USPTO Patent Pro Bono Program in which they do not receive
compensation. A practitioner in emeritus status will not be required to
pay the annual fee, but will remain under the disciplinary jurisdiction
of the OED Director.
Continuing Legal Education (CLE)
    The USPTO proposes to provide a $100 discount for registered
practitioners or persons granted limited recognition who certify
completion of six hours of continuing legal education in the twenty
four months preceding payment of the fee, including five hours of
patent law and practice and one hour of ethics credit. Practitioners
would be asked to certify whether or not they have completed the
recommended number of CLE hours over the past twenty four months at the
time they pay their annual active patent practitioner fee, as set forth
below.
    The USPTO proposes that a registered practitioner or person granted
limited recognition may earn up to two of the five hours of CLE in
patent law and practice toward the CLE discount by participating in the
USPTO Patent Pro Bono Program. For every three hours of pro bono
service, a patent practitioner may earn one hour of CLE credit toward
the annual active patent practitioner fee discount.
Late Payment
    Failure to pay the annual fee by the due date may result in the
practitioner being charged a delinquency fee and being subject to
administrative suspension. Specifically, if a registered practitioner,
or person granted limited recognition pursuant to 37 CFR 11.9(b), fails
to pay the annual fee by the due date, the OED Director will publish
and send a notice to the practitioner advising him or her of the
nonpayment, the consequence of being administratively suspended, and
the requirements for reinstatement. The notice will request payment of
the annual fee and a $50 delinquency fee, as set forth in 37 CFR
1.21(a)(9)(i), within 60 days after the date of such notice.
    If a practitioner fails to comply with the notice within the time
allowed, the OED Director will then publish and send to the
practitioner a Rule to Show Cause why his or her registration should
not be administratively suspended. The OED Director shall file a copy
of the Rule to Show Cause with the USPTO Director. The practitioner
will be given 30 days from the date of the Rule to Show Cause to file a
response with the USPTO Director. The response should address any
factual and legal bases why the practitioner should not be
administratively suspended. Within ten days of receiving a copy of the
response, the OED Director may file a reply with the USPTO Director.
The USPTO Director will enter an order either dismissing the Rule to
Show Cause or administratively suspending the registered practitioner.
Administratively suspended practitioners will continue to be assessed
the annual active patent practitioner fee during the period of their
suspension.
Reinstatement
    The sections referring to reinstatement from administratively
inactive status remain unchanged. The reinstatement sections relating
to other statuses are set forth below.
Administratively Suspended
    Pursuant to 37 CFR 11.11(f)(1), any registered practitioner, or
person granted limited recognition, who has been administratively
suspended for less than five years may be reinstated on the register
provided the practitioner is not a party to a disciplinary proceeding.
To apply for reinstatement, the practitioner will need to submit an
application form supplied by the OED, demonstrate compliance with the
provisions of Sec.  11.7(a)(2)(i) and submit a declaration or affidavit
attesting to the fact that the practitioner has read the most recent
revisions of the patent laws and the rules of practice before the
Office; and pay the fees set forth in Sec.  1.21(a)(9)(ii), and all
outstanding fees as set forth in Sec.  1.21(a)(8), as well as any
applicable delinquency fees as set forth in Sec.  1.21(a)(9)(i), for
each year the practitioner is administratively suspended.
    Any administratively suspended registered practitioner or person
granted limited recognition who fails to make these complete payments
within five years of the effective date of the suspension for
nonpayment shall be required to file a petition to the OED Director
requesting reinstatement and providing objective evidence that they
[[Page 37416]]
continue to possess the necessary legal qualifications to render
valuable service to patent applicants.
Voluntary Inactive
    Any registered practitioner whose name has been endorsed as
voluntarily inactive may be reinstated on the register provided the
practitioner: (i) Is not a party to a disciplinary proceeding; (ii) has
applied for reinstatement on an application form supplied by the OED
Director; (iii) has demonstrated compliance with the provisions of
Sec.  11.7(a)(2)(i) and (iii); (iv) submits a declaration or affidavit
attesting to the fact that the practitioner has read the most recent
revisions of the patent laws and the rules of practice before the
Office; (v) has paid the fees set forth in Sec.  1.21(a)(9)(ii); (vi)
is not currently administratively suspended; and (vii) has paid all
outstanding fees as set forth in Sec.  1.21(a)(7), as well as any
applicable delinquency fees as set forth in 37 CFR 1.21(a)(9)(i), for
each year the practitioner is voluntarily inactive. A practitioner will
be subject to investigation and discipline for his or her conduct that
occurred prior to, during, or after the period of his or her voluntary
inactivation.
Emeritus
    Practitioners who have elected emeritus status may be restored to
active status by filing a request for reinstatement with the OED
Director and paying the $210 reinstatement fee and the $70 inactive fee
for each year they were in emeritus status.
C. Discontinued Fees
    This section describes fees that are proposed to be discontinued.
The purpose of this proposed action is to help streamline the patent
fee schedule, while also focusing USPTO workforce efforts on producing
products that benefit the general public, rather than producing outputs
for individual customers. The Office does not capture historical cost
information for these proposed discontinued fees.
                                                               Table 12--Discontinued Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Current fees                                 Dollar change
           Fee description              Large (small)  Proposed fees Large (small)   Large (small)     Percent change Large         FY 2018 unit cost
                                       [micro] entity         [micro] entity        [micro] entity     (small) [micro entity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copy of Patent Technology Monitoring              $50  Discontinue................            -$50  n/a.......................  n/a
 Team (PTMT) patent bibliographic
 extract and other DVD (optical disc)
 (currently at Sec.   1.19(j)).
Copy of U.S. patent custom data                  $100  Discontinue................           -$100  n/a.......................  n/a
 extracts (currently at Sec.
 1.19(k)).
Copy of selected technology reports,              $30  Discontinue................            -$30  n/a.......................  n/a
 miscellaneous technology areas
 (currently at Sec.   1.19(l)).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    In January 2018, to comply with Presidential Executive Order 13681,
Improving the Security of Consumer Financial Transactions, select
computer service fees were discontinued and the services made free.
These proposed changes follow that trend. The above proposed service
fees will be eliminated and the Office will instead provide these
services, in a slightly modified form (i.e., electronic), for free.
    The first fee proposed for discontinuation is the current 37 CFR
1.19(j) fee for a copy of Patent Technology Monitoring Team, or PTMT,
patent bibliographic extract and other DVDs. PTMT patent bibliographic
data is currently available online for free, curtailing the need for
USPTO to send out extracts on disc.
    The second fee proposed for discontinuation is the current 37 CFR
1.19(k) fee for a copy of U.S. patent custom data extracts. With the
elimination of this service fee, USPTO would create the common
customizations and release them online, free to the public, at the same
time the data is released. Further customizations would be
discontinued. Additionally, PatentsView (http://www.patentsview.org),
while not an official USPTO data source, meets many of the needs for
those requesting custom data extracts, at no charge to the consumer.
    The third fee proposed for discontinuation is the current 37 CFR
1.19(l) fee for a copy of selected technology reports in miscellaneous
technology areas. Selected technology reports are currently available
online for free, curtailing the need for USPTO to send out paper copies
of the reports.
VI. Discussion of Specific Rules
    The following section shows the Code of Federal Regulations (CFR)
proposed fee amendments. The discussion below includes all proposed fee
amendments, all proposed fee discontinuations, and all proposed changes
to the CFR text.
    Title 37 of the CFR, parts 1, 11, 41, and 42, are proposed to be
amended as follows:
    Section 1.16 is proposed to be amended by revising paragraphs (a)
through (e), (h), (j), (k), and (m) through (s) and adding paragraph
(u) to set forth the application filing, excess claims, search, and
examination fees for patent applications filed as authorized under
Section 10 of the Act. The changes to the fee amounts indicated in
Sec.  1.16 are shown in Table 13.
                                                         Table 13--CFR Section 1.16 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.16(a)............................  1011/2011/3011.....................  Basic Filing Fee--            300      150       75      320      160       80
                                                                           Utility.
1.16(a)............................  4011...............................  Basic Filing Fee--            n/a       75      n/a      n/a       80      n/a
                                                                           Utility (electronic
                                                                           filing for small
                                                                           entities).
1.16(b)............................  1012/2012/3012.....................  Basic Filing Fee--Design      200      100       50      220      110       55
1.16(b)............................  1017/2017/3017.....................  Basic Filing Fee--Design      200      100       50      220      110       55
                                                                           (CPA).
1.16(c)............................  1013/2013/3013.....................  Basic Filing Fee--Plant.      200      100       50      220      110       55
[[Page 37417]]

1.16(d)............................  1005/2005/3005.....................  Provisional Application       280      140       70      300      150       75
                                                                           Filing Fee.
1.16(e)............................  1014/2014/3014.....................  Basic Filing Fee--            300      150       75      320      160       80
                                                                           Reissue.
1.16(e)............................  1019/2019/3019.....................  Basic Filing Fee--            300      150       75      320      160       80
                                                                           Reissue (Design CPA).
1.16(h)............................  1201/2201/3201.....................  Independent Claims in         460      230      115      480      240      120
                                                                           Excess of Three.
1.16(h)............................  1204/2204/3204.....................  Reissue Independent           460      230      115      480      240      120
                                                                           Claims in Excess of
                                                                           Three.
1.16(j)............................  1203/2203/3203.....................  Multiple Dependent Claim      820      410      205      860      430      215
1.16(k)............................  1111/2111/3111.....................  Utility Search Fee......      660      330      165      700      350      175
1.16(m)............................  1113/2113/3113.....................  Plant Search Fee........      420      210      105      440      220      110
1.16(n)............................  1114/2114/3114.....................  Reissue Search Fee......      660      330      165      700      350      175
1.16(o)............................  1311/2311/3311.....................  Utility Examination Fee.      760      380      190      800      400      200
1.16(p)............................  1312/2312/3312.....................  Design Examination Fee..      600      300      150      640      320      160
1.16(q)............................  1313/2313/3313.....................  Plant Examination Fee...      620      310      155      660      330      165
1.16(r)............................  1314/2314/3314.....................  Reissue Examination Fee.    2,200    1,100      550    2,320    1,160      580
1.16(s)............................  1081/2081/3081.....................  Utility Application Size      400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Design Application Size       400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Plant Application Size        400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Reissue Application Size      400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Provisional Application       400      200      100      420      210      105
                                                                           Size Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(u)............................  NEW................................  Non-DOCX Filing               n/a      n/a      n/a      400      200      100
                                                                           Surcharge Fee.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 1.17: Section 1.17 is proposed to be amended by revising
paragraphs (a), (c) through (g), (i)(2), (k), (m), (p), (r), and (s) to
set forth the application processing fees as authorized under Section
10 of the Act. The changes to the fee amounts indicated in Sec.  1.17
are shown in Table 14.
                                                         Table 14--CFR Section 1.17 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.17(a)(1).........................  1251/2251/3251.....................  Extension for Response        200      100       50      220      110       55
                                                                           Within First Month.
1.17(a)(2).........................  1252/2252/3252.....................  Extension for Response        600      300      150      640      320      160
                                                                           Within Second Month.
1.17(a)(3).........................  1253/2253/3253.....................  Extension for Response      1,400      700      350    1,480      740      370
                                                                           Within Third Month.
1.17(a)(4).........................  1254/2254/3254.....................  Extension for Response      2,200    1,100      550    2,320    1,160      580
                                                                           Within Fourth Month.
1.17(a)(5).........................  1255/2255/3255.....................  Extension for Response      3,000    1,500      750    3,160    1,580      790
                                                                           Within Fifth Month.
1.17(c)............................  1817/2817/3817.....................  Request for Prioritized     4,000    2,000    1,000    4,200    2,100    1,050
                                                                           Examination.
1.17(d)............................  1819/2819/3819.....................  Correction of                 600      300      150      640      320      160
                                                                           Inventorship After
                                                                           First Action on Merits.
1.17(e)(1).........................  1801/2801/3801.....................  Request for Continued       1,300      650      325    1,360      680      340
                                                                           Examination (RCE) (1st
                                                                           request) (see 37 CFR
                                                                           1.114).
1.17(e)(2).........................  1820/2820/3820.....................  Request for Continued       1,900      950      475    2,000    1,000      500
                                                                           Examination (RCE) (2nd
                                                                           and subsequent request).
1.17(f)............................  1462/2462/3462.....................  Petitions Requiring the       400      200      100      420      210      105
                                                                           Petition Fee Set Forth
                                                                           in 37 CFR 1.17(f)
                                                                           (Group I).
1.17(g)............................  1463/2463/3463.....................  Petitions Requiring the       200      100       50      220      110       55
                                                                           Petition Fee Set Forth
                                                                           in 37 CFR 1.17(g)
                                                                           (Group II).
[[Page 37418]]

1.17(i)(2).........................  1803/2803/3803.....................  Request for voluntary         130      130      130      140      140      140
                                                                           publication or
                                                                           republication.
1.17(i)(2).........................  1808/2808/3808.....................  Other Publication             130      130      130      140      140      140
                                                                           Processing Fee.
1.17(k)............................  1802/2802/3802.....................  Request for Expedited         900      450      225    2,000    1,000      500
                                                                           Examination of a Design
                                                                           Application.
1.17(m)............................  1453/2453/3453.....................  Petition for revival of     2,000    1,000      500    2,100    1,050      525
                                                                           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.
1.17(m)............................  1454/2454/3454.....................  Petition for the Delayed    2,000    1,000      500    2,100    1,050      525
                                                                           Submission of a
                                                                           Priority or Benefit
                                                                           Claim.
1.17(m)............................  1784/2784/3784.....................  Petition to Excuse          2,000    1,000      500    2,100    1,050      525
                                                                           Applicant's Failure to
                                                                           Act Within Prescribed
                                                                           Time Limits in an
                                                                           International Design
                                                                           Application.
1.17(m)............................  1558/2558/3558.....................  Petition for the Delayed    2,000    1,000      500    2,100    1,050      525
                                                                           Payment of the Fee for
                                                                           Maintaining a Patent in
                                                                           Force.
1.17(p)............................  1806/2806/3806.....................  Submission of an              240      120       60      260      130       65
                                                                           Information Disclosure
                                                                           Statement.
1.17(r)............................  1809/2809/3809.....................  Filing a Submission           840      420      210      880      440      220
                                                                           After Final Rejection
                                                                           (see 37 CFR 1.129(a)).
1.17(s)............................  1810/2810/3810.....................  For Each Additional           840      420      210      880      440      220
                                                                           Invention to be
                                                                           Examined (see 37 CFR
                                                                           1.129(b)).
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 1.18: Section 1.18 is proposed to be amended by revising
paragraphs (a) through (f) to set forth the patent issue fees as
authorized under Section 10 of the Act. The changes to the fee amounts
indicated in Sec.  1.18 are shown in Table 15.
                                                         Table 15--CFR Section 1.18 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.18(a)(1).........................  1501/2501/3501.....................  Utility Issue Fee.......    1,000      500      250    1,200      600      300
1.18(a)(1).........................  1511/2511/3511.....................  Reissue Issue Fee.......    1,000      500      250    1,200      600      300
1.18(b)(1).........................  1502/2502/3502.....................  Design Issue Fee........      700      350      175      740      370      185
1.18(c)(1).........................  1503/2503/3503.....................  Plant Issue Fee.........      800      400      200      840      420      210
1.18(d)(3).........................  1505/2505/3505.....................  Publication Fee for           300      300      300      320      320      320
                                                                           Republication.
1.18(e)............................  1455/2455/3455.....................  Filing an Application         200      200      200      210      210      210
                                                                           for Patent Term
                                                                           Adjustment.
1.18(f)............................  1456/2456/3456.....................  Request for                   400      400      400      420      420      420
                                                                           Reinstatement of Term
                                                                           Reduced.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 1.19: Section 1.19 is proposed to be amended by revising
paragraphs (b)(1)(i)(B) and (b)(1)(ii)(B), and by removing and
reserving paragraphs (j) through (l) to set forth the patent document
supply fees as authorized under Section 10 of the Act. The changes to
the fee amounts indicated in Sec.  1.19 are shown in Table 16.
                                                         Table 16--CFR Section 1.19 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Current fees (dollars)          Proposed fees (dollars)
          CFR section                        Fee code                  Description     -----------------------------------------------------------------
                                                                                         Large    Small    Micro      Large        Small        Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.19(b)(1)(i)(B)...............  8051...........................  Copy Patent File          280      280      280          290          290          290
                                                                   Wrapper, Paper
                                                                   Medium, Any Number
                                                                   of Sheets.
[[Page 37419]]

1.19(b)(1)(ii)(B)..............  8052...........................  Copy Patent File           55       55       55           60           60           60
                                                                   Wrapper, Electronic
                                                                   Medium, Any Size or
                                                                   Provided
                                                                   Electronically.
1.19(j)........................  8057...........................  Copy of Patent             50       50       50          (1)          (1)          (1)
                                                                   Technology
                                                                   Monitoring Team
                                                                   (PTMT) patent
                                                                   bibliographic
                                                                   extract and other
                                                                   DVD (optical disc).
1.19(k)........................  8058...........................  Copy of U.S. patent       100      100      100          (1)          (1)          (1)
                                                                   custom data
                                                                   extracts.
1.19(l)........................  8059...........................  Copy of selected           30       30       30          (1)          (1)          (1)
                                                                   technology reports,
                                                                   miscellaneous
                                                                   technology areas.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 discontinue.
    Section 1.20: Section 1.20 is proposed to be revised to set forth
post issuance fees as authorized under Section 10 of the Act. The
changes to the fee amounts indicated in Sec.  1.20 are shown in Table
17.
                                                         Table 17--CFR Section 1.20 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.20(a)............................  1811/2811/3811.....................  Certificate of                150      150      150      160      160      160
                                                                           Correction.
1.20(b)............................  1816/2816/3816.....................  Processing Fee for            150      150      150      160      160      160
                                                                           Correcting Inventorship
                                                                           in a Patent.
1.20(c)(1).........................  1831/2831/3831.....................  Ex Parte Reexamination      6,000    3,000    1,500    6,300    3,150    1,575
                                                                           (Sec.   1.510(a)) in
                                                                           forty (40) or fewer
                                                                           pages.
1.20(c)(2).........................  1812/2812/3812.....................  Ex Parte Reexamination     12,000    6,000    3,000   12,600    6,300    3,150
                                                                           (Sec.   1.510(a)) in
                                                                           forty-one (41) or more
                                                                           pages.
1.20(c)(7).........................  1812/2812/3812.....................  Refused request for ex      3,600    1,800      900    3,780    1,890      945
                                                                           parte Reexamination.
1.20(c)(3).........................  1821/2821/3821.....................  Reexamination                 460      230      115      480      240      120
                                                                           Independent Claims in
                                                                           Excess of Three and
                                                                           also in Excess of the
                                                                           Number of Such Claims
                                                                           in the Patent Under
                                                                           Reexamination.
1.20(c)(5).........................  1824/2824/3824.....................  Petitions in a              1,940      970      485    2,040    1,020      510
                                                                           Reexamination
                                                                           Proceeding, Except for
                                                                           those Specifically
                                                                           Enumerated in 37 CFR
                                                                           1.550(i) and 1.937(d).
1.20(d)............................  1814/2814/3814.....................  Statutory Disclaimer,         160      160      160      170      170      170
                                                                           Including Terminal
                                                                           Disclaimer.
1.20(e)............................  1551/2551/3551.....................  For Maintaining an          1,600      800      400    2,000    1,000      500
                                                                           Original or Any Reissue
                                                                           Patent, Due at 3.5
                                                                           years.
1.20(f)............................  1552/2552/3552.....................  For Maintaining an          3,600    1,800      900    3,760    1,880      940
                                                                           Original or Any Reissue
                                                                           Patent, Due at 7.5
                                                                           years.
1.20(g)............................  1553/2553/3553.....................  For Maintaining an          7,400    3,700    1,850    7,700    3,850    1,925
                                                                           Original or Any Reissue
                                                                           Patent, Due at 11.5
                                                                           years.
1.20(h)............................  1554/2554/3554.....................  Surcharge--3.5 year--         160       80       40      500      250      125
                                                                           Late Payment Within 6
                                                                           Months.
1.20(h)............................  1555/2555/3555.....................  Surcharge--7.5 year--         160       80       40      500      250      125
                                                                           Late Payment Within 6
                                                                           Months.
1.20(h)............................  1556/2556/3556.....................  Surcharge--11.5 year--        160       80       40      500      250      125
                                                                           Late Payment Within 6
                                                                           Months.
1.20(j)(1).........................  1457/2457/3457.....................  Extension of Term of        1,120    1,120    1,120    1,180    1,180    1,180
                                                                           Patent.
1.20(j)(2).........................  1458/2458/3458.....................  Initial Application for       420      420      420      440      440      440
                                                                           Interim Extension (see
                                                                           37 CFR 1.790).
[[Page 37420]]

1.20(j)(3).........................  1459/2459/3459.....................  Subsequent Application        220      220      220      230      230      230
                                                                           for Interim Extension
                                                                           (see 37 CFR 1.790).
1.20(k)(1).........................  1826/2826/3826.....................  Request for Supplemental    4,400    2,200    1,100    4,620    2,310    1,155
                                                                           Examination.
1.20(k)(2).........................  1827/2827/3827.....................  Reexamination Ordered as   12,100    6,050    3,025   12,700    6,350    3,175
                                                                           a Result of
                                                                           Supplemental
                                                                           Examination.
1.20(k)(3)(ii).....................  1829/2829/3829.....................  Supplemental Examination      280      140       70      300      150       75
                                                                           Document Size Fee--for
                                                                           Each Additional 50
                                                                           Sheets or a Fraction
                                                                           Thereof in a Nonpatent
                                                                           Document.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 1.21: Section 1.21 is proposed to be amended by adding
paragraphs (a)(7) and (8) and revising paragraphs (a)(1), (2), and (5),
(a)(9)(ii), (a)(10), (k), (n), (o), and (q) to set forth miscellaneous
fees and charges as authorized under Section 10 of the Act. The changes
to the fee amounts indicated in Sec.  1.21 are shown in Table 18.
    The USPTO proposes to add paragraph (a)(7) to Sec.  1.21 to create
a voluntary inactive fee of $70, to be paid by registered practitioners
and persons granted limited recognition who are endorsed on the
register as voluntarily inactive.
    The USPTO proposes to add paragraph (a)(8) to Sec.  1.21 to create
an annual active patent practitioner fee. Paragraph (a)(8)(i) of Sec.
1.21 is proposed to set a discounted fee of $240 for registered
practitioners and persons granted limited recognition under 37 CFR
11.9(b) who certify to the OED Director that they have completed six
hours of continuing legal education within the past 24 months.
Paragraph (a)(8)(ii) of Sec.  1.21 is proposed to set a fee of $340 for
registered practitioners and persons granted limited recognition under
37 CFR 11.9(b) who do not certify to the OED Director that they have
completed six hours of continuing legal education within the past 24
months.
    The USPTO proposes to amend paragraph (o) of Sec.  1.21 to clarify
the applicability of its provisions. The USPTO proposes to specify that
the mega-sequence listing fee applies to applications filed under 35
U.S.C. 111 and 371 to clarify that the fee applies to provisional
applications, nonprovisional applications, and national stage
applications; the fee does not apply to international applications
filed with the U.S. Receiving Office (RO/US). Furthermore, because a
sequence listing in a national stage application may be received by the
USPTO from the International Bureau in accordance with PCT Article 20,
rather than directly submitted to the USPTO by the applicant, the USPTO
proposes to specifically provide that the mega-sequence listing fee
applies to such receipt. The USPTO further proposes to clarify that the
fee applies to only the first submission or receipt of a sequence
listing in electronic form having a size ranging from 300 MB to 800 MB
and to the first submission or receipt of a sequence listing in
electronic form having a size over 800 MB. Thus, an applicant will not
be charged the mega-sequence listing fee for the submission of a
substitute or replacement electronic form of the sequence listing (see
37 CFR 1.825) unless the size of the substitute or replacement
electronic form sequence listing is subject to the provisions of a
different paragraph of Sec.  1.21(o) (e.g., the first sequence listing
in an application is between 300 MB and 800 MB, and a replacement
sequence listing is greater than 800 MB). Finally, the USPTO proposes
to specify that for purposes of determining the fee required under
Sec.  1.21(o), the size of the electronic form of the sequence listing
is measured without file compression.
                                                         Table 18--CFR Section 1.21 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.21(a)(1)(i)......................  9001...............................  Application Fee (non-         100      100      100      110      110      110
                                                                           refundable).
1.21(a)(1)(ii)(A)..................  9010...............................  For Test Administration       200      200      200      210      210      210
                                                                           by Commercial Entity.
1.21(a)(1)(ii)(B)..................  9011...............................  For Test Administration       450      450      450      470      470      470
                                                                           by the USPTO.
1.21(a)(1)(iii)....................  9029...............................  For USPTO-Administered        450      450      450      470      470      470
                                                                           Review of Registration
                                                                           Examination.
1.21(a)(2)(i)......................  9003...............................  On Registration to            200      200      200      210      210      210
                                                                           Practice Under Sec.
                                                                           11.6.
1.21(a)(2)(ii).....................  9026...............................  On Grant of Limited           200      200      200      210      210      210
                                                                           Recognition under Sec.
                                                                            11.9(b).
1.21(a)(2)(iii)....................  9025...............................  On change of                  100      100      100      110      110      110
                                                                           registration from agent
                                                                           to attorney.
1.21(a)(5)(i)......................  9012...............................  Review of Decision by         400      400      400      420      420      420
                                                                           the Director of
                                                                           Enrollment and
                                                                           Discipline under Sec.
                                                                           11.2(c).
1.21(a)(5)(ii).....................  9013...............................  Review of Decision of         400      400      400      420      420      420
                                                                           the Director of
                                                                           Enrollment and
                                                                           Discipline under Sec.
                                                                           11.2(d).
1.21(a)(7).........................  NEW................................  Inactive Patent               n/a      n/a      n/a       70       70       70
                                                                           Practitioner Fee.
[[Page 37421]]

1.21(a)(8)(i)......................  NEW................................  Annual Active                 n/a      n/a      n/a      240      240      240
                                                                           Practitioner Fee with
                                                                           certifying continuing
                                                                           legal education
                                                                           completion.
1.21(a)(8)(ii).....................  NEW................................  Annual Active                 n/a      n/a      n/a      340      340      340
                                                                           Practitioner Fee
                                                                           without certifying
                                                                           continuing legal
                                                                           education completion.
1.21(a)(9)(ii).....................  9004...............................  Administrative                200      200      200      210      210      210
                                                                           Reinstatement Fee.
1.21(a)(10)........................  9014...............................  On petition for             1,600    1,600    1,600    1,680    1,680    1,680
                                                                           reinstatement by a
                                                                           person excluded or
                                                                           suspended on ethical
                                                                           grounds, or excluded on
                                                                           consent from practice
                                                                           before the Office.
1.21(k)............................  9024...............................  Unspecified other           (\1\)    (\1\)    (\1\)    (\1\)    (\1\)    (\1\)
                                                                           services, excluding
                                                                           labor.
1.21(n)............................  8026...............................  Handling Fee for              130      130      130      140      140      140
                                                                           Incomplete or Improper
                                                                           Application.
1.21(o)(1).........................  1091/2091/3091.....................  Submission of sequence      1,000      500      250    1,060      530      265
                                                                           listings ranging in
                                                                           size of 300 MB to 800
                                                                           MB.
1.21(o)(2).........................  1092/2092/3092.....................  Submission of sequence     10,000    5,000    2,500   10,500    5,250    2,625
                                                                           listings exceeding 800
                                                                           MB.
1.21(q)............................  8054...............................  Additional Fee for            160      160      160      170      170      170
                                                                           Expedited Service.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ No Cost.
    Section 1.27: Section 1.27 is proposed to be amended by revising
the introductory text of paragraph (a)(3) to provide that the payment,
by any party, of the exact amount of the small entity transmittal fee
set forth in Sec.  1.1031(a) will be treated as a written assertion of
entitlement to small entity status. The proposed change to Sec.
1.27(a)(3) will make it easier for applicants filing an international
design application through the USPTO as an office of indirect filing to
establish small entity status.
    Section 1.431: Section 1.431 is proposed to be amended by revising
paragraph (c) to remove reference to the late payment fee calculation
under PCT Rule 16bis.2. The late payment fee pursuant to PCT Rule
16bis.2 is proposed to be added to Sec.  1.445, as that provision
concerns international application filing, processing and search fees.
    Section 1.445: Section 1.445 is proposed to be amended by revising
paragraphs (a) to set forth international filing, processing, and
search fees and charges as authorized under Section 10 of the Act. The
changes to the fee amounts indicated in 37 CFR 1.445 are shown in Table
19. Section 1.445(a) is also proposed to be amended to include the late
payment fee pursuant to PCT Rule 16bis.2. See discussion of Sec.
1.431, supra.
                                                         Table 19--CFR Section 1.445 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.445(a)(1)(i)(A)..................  1601/2601/3601.....................  Transmittal Fee.........      240      120       60      260      130       65
1.445(a)(2)(i).....................  1602/2602/3602.....................  Search Fee--Regardless      2,080    1,040      520    2,180    1,090      545
                                                                           of Whether There is a
                                                                           Corresponding
                                                                           Application (see 35
                                                                           U.S.C. 361(d) and PCT
                                                                           Rule 16).
1.445(a)(3)(i).....................  1604/2604/3604.....................  Supplemental Search Fee     2,080    1,040      520    2,180    1,090      545
                                                                           When Required, per
                                                                           Additional Invention.
1.445(a)(4)(i).....................  1621/2621/3621.....................  Transmitting Application      240      120       60      260      130       65
                                                                           to Intl. Bureau to Act
                                                                           as Receiving Office.
1.445(a)(5)........................  1627/2627/3627.....................  Late Furnishing Fee for       300      150       75      320      160       80
                                                                           Providing a Sequence
                                                                           Listing in Response to
                                                                           an Invitation Under PCT
                                                                           Rule 13ter.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 1.482: Section 1.482 is proposed to be amended by revising
paragraphs (a) and (c) to read as set out in the regulatory text at the
end of this document. The changes to the fee amounts indicated in Sec.
1.482 are shown in Table 20.
[[Page 37422]]
                                                         Table 20--CFR Section 1.482 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.482(a)(1)(i).....................  1605/2605/3605.....................  Preliminary Examination       600      300      150      640      320      160
                                                                           Fee--U.S. Was the ISA.
1.482(a)(1)(ii)....................  1606/2606/3606.....................  Preliminary Examination       760      380      190      800      400      200
                                                                           Fee--U.S. Was Not the
                                                                           ISA.
1.482(a)(2)(i).....................  1607/2607/3607.....................  Supplemental Examination      600      300      150      640      320      160
                                                                           Fee per Additional
                                                                           Invention.
1.482(c)...........................  1627/2627/3627.....................  Late Furnishing Fee for       300      150       75      320      160       80
                                                                           Providing a Sequence
                                                                           Listing in Response to
                                                                           an Invitation Under PCT
                                                                           Rule 13ter.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 1.492: Section 1.492 is proposed to be amended by revising
paragraphs (a), (b)(3) and (4), (c)(2), (d), (f), (h), and (j) to set
forth the application filing, excess claims, search, and examination
fees for international patent applications entering the national stage
as authorized under Section 10 of the Act. The changes to the fee
amounts indicated in Sec.  1.492 are shown in Table 21.
                                                         Table 21--CFR Section 1.492 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                           Fee  code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.492(a)...........................  1631/2631/3631.....................  Basic PCT National Stage      300      150       75      320      160       80
                                                                           Fee.
1.492(b)(3)........................  1642/2642/3642.....................  PCT National Stage            520      260      130      540      270      135
                                                                           Search Fee--Search
                                                                           Report Prepared and
                                                                           Provided to USPTO.
1.492(b)(4)........................  1632/2632/3632.....................  PCT National Stage            660      330      165      700      350      175
                                                                           Search Fee--All Other
                                                                           Situations.
1.492(c)(2)........................  1633/2633/3633.....................  National Stage                760      380      190      800      400      200
                                                                           Examination Fee--All
                                                                           Other Situations.
1.492(d)...........................  1614/2614/3614.....................  PCT National Stage            460      230      115      480      240      120
                                                                           Claims--Extra
                                                                           Independent (over
                                                                           three).
1.492(f)...........................  1616/2616/3616.....................  PCT National Stage            820      410      205      860      430      215
                                                                           Claims--Multiple
                                                                           Dependent.
1.492(h)...........................  1617/2617/3617.....................  Search fee, examination       140       70       35      160       80       40
                                                                           fee or oath or
                                                                           declaration after the
                                                                           date of commencement of
                                                                           the national stage.
1.492(j)...........................  1681/2681/3681.....................  National Stage                400      200      100      420      210      105
                                                                           Application Size Fee--
                                                                           for Each Additional 50
                                                                           Sheets That Exceeds 100
                                                                           Sheets.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 11.8: The USPTO proposes to add paragraph (d) to Sec.  11.8
to establish a new fee to be paid annually by practitioners. Paragraph
(d)(1) of Sec.  11.8 is proposed to require registered practitioners
and persons granted limited recognition under Sec.  11.9(b) to pay the
fee to the OED Director each year, beginning the year after they are
registered or granted limited recognition. Paragraph (d)(2) of Sec.
11.8 is proposed to explain that failure to comply with paragraph
(d)(1) may result in being charged a delinquency fee, administrative
suspension as set forth in Sec.  11.11(b), or both.
    The USPTO proposes to add paragraph (d)(3)(i) to Sec.  11.8 to
provide for a discount for registered practitioners or persons granted
limited recognition who certify completion of six hours of continuing
legal education credit in the preceding twenty-four months, including
five hours of patent law and practice and one hour of ethics. To
receive the discount, practitioners would be asked to certify that they
completed the recommended number of CLE hours at the time they pay
their annual active patent practitioner fee. Generally, the same types
of courses and activities that qualify for CLE credit in another state
will qualify for credit for purposes of the CLE certification discount,
so long as it covers the appropriate topics. For patent law and
practice, any course that covers any of the topics included in 37 CFR
11.5(b)(1) would be accepted. For ethics credit, any ethics course
hosted by the USPTO, or any course accepted for ethics CLE credit in
any U.S. state or territory would be accepted. The USPTO considered
that CLE may not be equally available to practitioners in all
geographic areas, and therefore, has proposed that live or pre-recorded
material would be accepted for purposes of obtaining the CLE discount.
The USPTO is also seeking comments on whether the public would like the
option to request that OED ``pre-certify'' courses for a fee if they
comply with OED's guidelines for accepted CLE courses. The USPTO
considered requiring patent examiners to complete similar training, but
is not proposing to do so at this time. Patent examiners are already
required to complete rigorous training as part of their job duties.
Further, patent practitioners are not, at this time, required to
complete CLE, but the USPTO is proposing to merely offer a discount on
the annual fee for doing so. Patent examiners would not be required to
pay the annual active patent
[[Page 37423]]
practitioner fee under this proposal, and therefore would not receive a
discount to the fee.
    The USPTO also considered that patent agents and some patent
attorneys are not currently subject to any CLE requirements, so
requiring CLE to receive a discount may be viewed as more burdensome
for these groups. However, all patent agents and attorneys are provided
the same services in maintaining the integrity of their profession, and
granted the same rights to practice before the USPTO, and therefore,
the USPTO proposes charging the same fee for all patent practitioners.
Again, the USPTO is not requiring any practitioner to complete CLE, but
merely offering a discount for doing so.
    The USPTO proposes to add paragraph (d)(3)(ii) of Sec.  11.8 to
provide that a registered practitioner or person granted limited
recognition may earn up to two of the five hours of CLE in patent law
and practice by participating in the USPTO Patent Pro Bono Program. For
every three hours of pro bono service, a patent practitioner may earn
one hour of CLE credit toward the annual active patent practitioner fee
discount.
    Section 11.11: The USPTO proposes to redesignate paragraph (a)(1)
as paragraph (a), and to amend the paragraph to provide that the OED
Director may publish a practitioner's CLE certification status.
    The USPTO proposes to remove paragraph (a)(2) of Sec.  11.11, as
its provisions relate to the mandatory survey, which would no longer be
conducted by the OED Director if the annual fee is implemented.
    The USPTO proposes to amend paragraph (b)(1) of Sec.  11.11 to
apply to those failing to comply with Sec.  11.8(d)(1), which refers to
the annual active patent practitioner fee, rather than Sec.
11.11(a)(2), which refers to the mandatory survey.
    The USPTO proposes to add paragraph (b)(4) of Sec.  11.11 to
provide that the annual active patent practitioner fee will continue to
be assessed for those practitioners who are administratively suspended
during the period of administrative suspension.
    The USPTO proposes to amend paragraph (d)(1) of Sec.  11.11 to
remove the exception set forth in paragraph (d)(4), as there is
currently no paragraph (d)(4). The addition of paragraph (d)(4) is
being proposed in these Rules, but does not refer to an exception to
(d)(1).
    The USPTO proposes to add paragraph (d)(4) of Sec.  11.11 to
require registered practitioners and persons granted limited
recognition under Sec.  11.9(b), who are endorsed on the register as
voluntarily inactive to pay an annual voluntary inactive fee of $70 to
the OED Director each year.
    The USPTO proposes to amend paragraph (d)(6) of Sec.  11.11 to
remove the current process for a practitioner in voluntary inactive
status to request reinstatement, and instead, refer the practitioner to
paragraph (f)(3), which contains a new proposed process for
reinstatement of practitioners in voluntary inactive status.
    The USPTO proposes to redesignate paragraph (e) of Sec.  11.11 as
paragraph (e)(1) and add paragraph (e)(2) to create a new emeritus
status for practitioners. The new emeritus status would allow active
practitioners who have been registered for ten or more years to elect
emeritus status, provided they are not under investigation at the time
they elect such a status. Emeritus practitioners may not practice in
patent matters, with the exception of pro bono matters through the
USPTO Patent Pro Bono Program in which they do not receive
compensation. A practitioner in emeritus status will not be required to
pay the annual fee, but will remain under the disciplinary jurisdiction
of the OED Director.
    The USPTO proposes to amend paragraph (f)(1) of Sec.  11.11 to
remove any references to resigned practitioners, remove the requirement
that a practitioner who was administratively suspended for two or more
years before the date the Office receives a completed application from
the person must also pass the registration examination under Sec.
11.7(b)(1)(ii), and add the requirement that any practitioner who
remains administratively suspended for more than five years shall be
required to file a petition to the OED Director requesting
reinstatement and providing objective evidence that the practitioner
continues to possess the necessary legal qualifications to render
applicants valuable service to patent applicants.
    The USPTO proposes to add paragraph (f)(3) which would set forth
the process by which voluntarily inactive practitioners may be
reinstated on the register in active status.
    The USPTO proposes to add paragraph (f)(4) of Sec.  11.11, which
sets forth the process by which a practitioner who has resigned may
apply to be reinstated to the register in active status.
    The USPTO proposes to add paragraph (f)(5) of Sec.  11.11 which
sets forth the process by which a practitioner who has elected emeritus
status may apply to be reinstated to the register in active status.
    Section 41.20: Section 41.20 is proposed to be amended by revising
paragraph (a), (b)(1), (b)(2)(ii), and (b)(3) and (4) to set forth the
appeal fees as authorized under Section 10 of the Act. The changes to
the fee amounts indicated in Sec.  41.20 are shown in Table 22.
                                                         Table 22--CFR Section 41.20 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
41.20(a)...........................  1405/2405/3405.....................  Petitions to the Chief        400      400      400      420      420      420
                                                                           Administrative Patent
                                                                           Judge Under 37 CFR 41.3.
41.20(b)(1)........................  1401/2401/3401.....................  Notice of Appeal........      800      400      200      840      420      210
41.20(b)(2)(ii)....................  1404/2404/3404.....................  Filing a Brief in           2,000    1,000      500    2,100    1,050      525
                                                                           Support of an Appeal in
                                                                           an Inter Partes
                                                                           Reexamination
                                                                           Proceeding.
41.20(b)(3)........................  1403/2403/3403.....................  Request for Oral Hearing    1,300      650      325    1,360      680      340
41.20(b)(4)........................  1413/2413/3413.....................  Forwarding an Appeal in     2,240    1,120      560    2,360    1,180      590
                                                                           an Application or Ex
                                                                           Parte Reexamination
                                                                           Proceeding to the Board.
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Section 42.15: Section 42.15 is proposed to be amended by revising
paragraphs (a) through (e) to set forth the inter partes review and
post-grant review or covered business method patent review of patent
fees as authorized under Section 10 of the Act. The changes to the fee
amounts
[[Page 37424]]
indicated in Sec.  42.15 are shown in Table 23.
                                                         Table 23--CFR Section 42.15 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
42.15(a)(1)........................  1406...............................  Inter Partes Review        15,500   15,500   15,500   19,500   19,500   19,500
                                                                           Request Fee--Up to 20
                                                                           Claims.
42.15(a)(2)........................  1414...............................  Inter Partes Review Post-  15,000   15,000   15,000      n/a      n/a      n/a
                                                                           Institution Fee--Up to
                                                                           15 Claims.
42.15(a)(2)........................  1414...............................  Inter Partes Review Post-     n/a      n/a      n/a   18,750   18,750   18,750
                                                                           Institution Fee--Up to
                                                                           20 Claims.
42.15(a)(3)........................  1407...............................  In Addition to the Inter      300      300      300      375      375      375
                                                                           Partes Review Request
                                                                           Fee, for Requesting
                                                                           Review of Each Claim in
                                                                           Excess of 20.
42.15(a)(4)........................  1415...............................  In addition to the Inter      600      600      600      750      750      750
                                                                           Partes Post-Institution
                                                                           Fee, for Requesting
                                                                           Review of Each Claim in
                                                                           Excess of 20.
42.15(b)(1)........................  1408...............................  Post-Grant or Covered      16,000   16,000   16,000   20,000   20,000   20,000
                                                                           Business Method Patent
                                                                           Review Request Fee--Up
                                                                           to 20 Claims.
42.15(b)(2)........................  1416...............................  Post-Grant or Covered      22,000   22,000   22,000      n/a      n/a      n/a
                                                                           Business Method Patent
                                                                           Review Post-Institution
                                                                           Fee--Up to 15 Claims.
42.15(b)(2)........................  1416...............................  Post-Grant or Covered         n/a      n/a      n/a   27,500   27,500   27,500
                                                                           Business Method Patent
                                                                           Review Post-Institution
                                                                           Fee--Up to 20 Claims.
42.15(b)(3)........................  1409...............................  In Addition to the Post-      375      375      375      475      475      475
                                                                           Grant or Covered
                                                                           Business Method Patent
                                                                           Review Request Fee, for
                                                                           Requesting Review of
                                                                           Each Claim in Excess of
                                                                           20.
42.15(b)(4)........................  1417...............................  In Addition to the Post-      825      825      825    1,050    1,050    1,050
                                                                           Grant or Covered
                                                                           Business Method Patent
                                                                           Review Post-Institution
                                                                           Fee, for Requesting
                                                                           Review of Each Claim in
                                                                           Excess of 20.
42.15(c)(1)........................  1412...............................  Petition for a                400      400      400      420      420      420
                                                                           Derivation Proceeding.
42.15(d)...........................  1411...............................  Request to Make a             400      400      400      420      420      420
                                                                           Settlement Agreement
                                                                           Available and Other
                                                                           Requests Filed in a
                                                                           Patent Trial Proceeding.
42.15(e)...........................  NEW................................  Pro Hac Vice Admission        n/a      n/a      n/a      250      250      250
                                                                           Fee.
--------------------------------------------------------------------------------------------------------------------------------------------------------
VII. Rulemaking Considerations
A. AIA: America Invents Act
    This proposed rule seeks to set and adjust fees under Section 10(a)
of the AIA as amended by the SUCCESS Act, Public Law 115-273, 132 Stat.
4158. Section 10(a) of the AIA authorizes the Director of the USPTO to
set or adjust by rule any patent fee established, authorized, or
charged under title 35 of the U.S.C. for any services performed, or
materials furnished, by the Office. The SUCCESS Act extends the USPTO
fee setting authority until September 2026. Section 10 prescribes that
fees may be set or adjusted only to recover the aggregate estimated
cost to the Office for processing, activities, services, and materials
relating to patents, including administrative costs of the Office with
respect to such patent fees. Section 10 authority includes flexibility
to set individual fees in a way that furthers key policy factors, while
taking into account the cost of the respective services. Section 10(e)
of the AIA sets forth the general requirements for rulemakings that set
or adjust fees under this authority. In particular, Section 10(e)(1)
requires the Director to publish in the Federal Register any proposed
fee change under Section 10, and include in such publication the
specific rationale and purpose for the proposal, including the possible
expectations or benefits resulting from the proposed change. For such
rulemakings, the AIA requires that the Office provide a public comment
period of not less than 45 days.
    The PPAC advises the Under Secretary of Commerce for Intellectual
Property and Director of the USPTO on the management, policies, goals,
performance, budget, and user fees of patent operations. When proposing
fees under Section 10 of the Act, the Director must provide the PPAC
with the proposed fees at least 45 days prior to publishing the
proposed fees in the Federal Register. The PPAC then has at least 30
days within which to deliberate, consider, and comment on the proposal,
as well as hold public hearing(s) on the proposed fees. The PPAC must
make a written report available to the public of the comments, advice,
and recommendations of the committee regarding the proposed fees before
the Office issues any final fees. The Office considers and analyzes any
comments, advice, or recommendations received from the PPAC before
finally setting or adjusting fees.
    Consistent with this framework, on August 8, 2018, the Director
notified the PPAC of the Office's intent to set or
[[Page 37425]]
adjust patent fees and submitted a preliminary patent fee proposal with
supporting materials. The preliminary patent fee proposal and
associated materials are available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC held a
public hearing in Alexandria, Virginia, on September 6, 2018.
Transcripts of the hearing are available for review at https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript_20180906.pdf. Members of the public were
invited to the hearing and given the opportunity to submit written and/
or oral testimony for the PPAC to consider. The PPAC considered such
public comments from this hearing and made all comments available to
the public via the Fee Setting website, https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC also
provided a written report setting forth in detail the comments, advice,
and recommendations of the committee regarding the preliminary proposed
fees. The report regarding the preliminary proposed fees was released
on October 29, 2018, and can be found online at https://www.uspto.gov/sites/default/files/documents/PPAC_Fee_Setting_Report_Oct2018.pdf. The
Office considered and analyzed all comments, advice, and
recommendations received from the PPAC before publishing this NPRM.
Further discussion of the PPAC report can be found in the section
titled ``Fee Setting Considerations.'' Before the final rule is issued,
this proposed rule provides the public with a 60-day period during
which comments may be submitted for consideration by the USPTO.
B. Regulatory Flexibility Act
    The USPTO publishes this Initial Regulatory Flexibility Analysis
(IRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C.
601 et seq.) to examine the impact on small entities of the Office's
proposed rule implementing changes to patent fees. Under the RFA,
whenever an agency is required by 5 U.S.C. 553 (or any other law) to
publish an NPRM, the Office must prepare and make available for public
comment an IRFA, unless the Office certifies under 5 U.S.C. 605(b) that
the proposed rule, if implemented, will not have a significant economic
impact on a substantial number of small entities. Given that the
proposed fee schedule is projected to result in $1,061.3 million in
additional aggregate revenue over the current fee schedule (baseline)
for the period including FY 2021 to FY 2024, the Office acknowledges
that the fee adjustments proposed will impact all entities seeking
patent protection and could have a significant impact on small and
micro entities. The $1,061.3 million in additional aggregate revenue
results from an additional $167.0 million in FY 2021, $294.9 million in
FY 2022, $294.6 million in FY 2023, and $304.9 million in FY 2024.
    While the Office welcomes all comments on this IRFA, it
particularly seeks comments describing the type and extent of the
impact of the proposed patent fees on commenters' specific businesses.
In describing the impact, the Office requests biographic detail about
the impacted businesses or concerns, including the size, average annual
revenue, past patent activity (e.g., applications submitted, contested
cases pursued, maintenance fees paid, patents abandoned, etc.), and
planned patent activity of the impacted business or concern, where
feasible. The Office will use this information to further assess the
impact of the proposed rule on small entities. Where possible, comments
should also describe any recommended alternative methods of setting and
adjusting patent fees that would further reduce the impact on small
entities.
    Items 1-5 below discuss the five items specified in 5 U.S.C.
603(b)(1)-(5) to be addressed in an IRFA. Item 6 below discusses
alternatives to this proposal that the Office considered.
1. A Description of the Reasons Why the Action by the Office Is Being
Considered
    Section 10 of the AIA, as amended by SUCCESS Act, authorizes the
Director of the USPTO to set or adjust by rule any patent fee
established, authorized, or charged under title 35, U.S.C., for any
services performed, or materials furnished, by the Office. Section 10
prescribes that patent fees may be set or adjusted only to recover the
aggregate estimated costs to the Office for processing, activities,
services, and materials relating to patents, including administrative
costs to the Office with respect to such patent fees. The proposed fee
schedule will recover the aggregate cost of patent operations while
facilitating the effective administration of the U.S. patent system.
The reasons why the rulemaking is being considered are further
discussed in section 6.i below and elsewhere in this IRFA and the NPRM.
2. The Objectives of, and Legal Basis for, the Proposed Rule
    The objective of the proposed rule is to implement the fee setting
provisions of Section 10 of the Act by setting or adjusting patent fees
to recover the aggregate cost of patent operations, including
administrative costs, while facilitating the effective administration
of the U.S. patent system. Since its inception, the Act strengthened
the patent system by affording the USPTO the ``resources it requires to
clear the still sizeable backlog of patent applications and move
forward to deliver to all American inventors the first rate service
they deserve.'' H.R. Rep. No. 112-98(I), at 163 (2011). In setting and
adjusting fees under the Act, the Office seeks to secure a sufficient
amount of aggregate revenue to recover the aggregate cost of patent
operations, including revenue needed to achieve strategic and
operational goals. Additional information on the Office's strategic
goals may be found in the Strategic Plan available at https://www.uspto.gov/sites/default/files/documents/USPTO_2018-2022_Strategic_Plan.pdf. Additional information on the Office's goals
and operating requirements may be found in the ``USPTO FY 2020
President's Budget Request,'' available at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information. The legal
basis for the proposed rule is Section 10 of the Act.
3. A Description of and, Where Feasible, an Estimate of the Number of
Small Entities to Which the Proposed Rule Will Apply
SBA Size Standard
    The Small Business Act (SBA) size standards applicable to most
analyses conducted to comply with the RFA are set forth in 13 CFR
121.201. These regulations generally define small businesses as those
with less than a specified maximum number of employees or less than a
specified level of annual receipts for the entity's industrial sector
or North American Industry Classification System (NAICS) code. As
provided by the RFA, and after consulting with the Small Business
Administration, the Office formally adopted an alternate size standard
for the purpose of conducting an analysis or making a certification
under the RFA for patent-related regulations. See Business Size
Standard for Purposes of United States Patent and Trademark Office
Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR
67109, 67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 37, 60 (Dec.
12, 2006). The Office's alternate small business size standard consists
of SBA's previously established size standard for entities entitled to
pay reduced patent fees. See 13 CFR 121.802.
[[Page 37426]]
    Unlike SBA's generally applicable small business size standards,
the size standard for the USPTO is not industry-specific. The Office's
definition of a small business concern for RFA purposes is a business
or other concern that: (1) Meets the SBA's definition of a ``business
concern or concern'' set forth in 13 CFR 121.105 and (2) meets the size
standards set forth in 13 CFR 121.802 for the purpose of paying reduced
patent fees, namely, an entity: (a) Whose number of employees,
including affiliates, does not exceed 500 persons and (b) which has not
assigned, granted, conveyed, or licensed (and is under no obligation to
do so) any rights in the invention to any person who made it and could
not be classified as an independent inventor, or to any concern that
would not qualify as a nonprofit organization or a small business
concern under this definition. See Business Size Standard for Purposes
of United States Patent and Trademark Office Regulatory Flexibility
Analysis for Patent-Related Regulations, 71 FR 67109, 67109 (Nov. 20,
2006), 1313 Off. Gaz. Pat. Office 37, 60 (Dec. 12, 2006).
    If a patent applicant self-identifies on a patent application as
qualifying as a small entity, or provides certification of micro entity
status for reduced patent fees under the Office's alternative size
standard, the Office captures this data in the Patent Application
Location and Monitoring (PALM) database system, which tracks
information on each patent application submitted to the Office.
Small Entity Defined
    The Act provides that fees set or adjusted under Section 10(a)
``for filing, searching, examining, issuing, appealing, and maintaining
patent applications and patents shall be reduced by 50 percent'' with
respect to the application of such fees to any ``small entity'' (as
defined in 37 CFR 1.27) that qualifies for reduced fees under 35 U.S.C.
41(h)(1). In turn, 125 Stat. at 316-17. 35 U.S.C. 41(h)(1) provides
that certain patent fees ``shall be reduced by 50 percent'' for a small
business concern as defined by section 3 of the SBA, and to any
independent inventor or nonprofit organization as defined in
regulations described by the Director.
Micro Entity Defined
    Section 10(g) of the Act created a new category of entity called a
``micro entity.'' 35 U.S.C. 123; see also 125 Stat. at 318-19. Section
10(b) of the Act provides that the fees set or adjusted under Section
10(a) ``for filing, searching, examining, issuing, appealing, and
maintaining patent applications and patents shall be reduced by 75
percent with respect to the application of such fees to any micro
entity as defined by 35 U.S. Code 123.'' 125 Stat. at 315-17. 35 U.S.C.
123(a) defines a ``micro entity'' as an applicant who makes a
certification that the applicant: (1) Qualifies as a small entity as
defined in 37 CFR 1.27; (2) has not been named as an inventor on more
than 4 previously filed patent applications, other than applications
filed in another country, provisional applications under 35 U.S.C.
111(b), or Patent Cooperation Treaty (PCT) applications for which the
basic national fee under 35 U.S.C. 41(a) was not paid; (3) did not, in
the calendar year preceding the calendar year in which the applicable
fee is being paid, have a gross income, as defined in section 61(a) of
the Internal Revenue Code of 1986 (26 U.S.C. 61(a)), exceeding three
times the median household income for that preceding calendar year, as
most recently reported by the Bureau of the Census; \1\ and (4) has not
assigned, granted, or conveyed, and is not under an obligation by
contract or law, to assign, grant, or convey, a license or other
ownership interest in the application concerned to an entity exceeding
the income limit set forth in (3) above. See 125 Stat. at 318. 35
U.S.C. 123(d) also defines a ``micro entity'' as an applicant who
certifies that: (1) The applicant's employer, from which the applicant
obtains the majority of the applicant's income, is an institution of
higher education as defined in section 101(a) of the Higher Education
Act of 1965 (20 U.S.C. 1001(a)); or (2) the applicant has assigned,
granted, conveyed, or is under an obligation by contract or law, to
assign, grant, or convey, a license or other ownership interest in the
particular applications to such an institution of higher education.
---------------------------------------------------------------------------
    \1\ For more information, see https://www.uspto.gov/patent/laws-and-regulations/micro-entity-status-gross-income-limit.
---------------------------------------------------------------------------
Estimate of Number of Small Entities Affected
    The changes in the proposed rule will apply to any entity,
including small and micro entities, which pays any patent fee set forth
in the NPRM. The reduced fee rates (50 percent for small entities and
75 percent for micro entities) will continue to apply to any small
entity asserting small entity status and to any micro entity certifying
micro entity status for filing, searching, examining, issuing,
appealing, and maintaining patent applications and patents.
    The Office reviews historical data to estimate the percentages of
application filings asserting small entity status. Table 24 presents a
summary of such small entity filings by type of application (utility,
reissue, plant, design) over the last five years.
                                           Table 24--Number of Patent Applications Filed in Last Five Years *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            ** FY 2018        FY 2017         FY 2016         FY 2015         FY 2014         Average
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility:
    All.................................................         596,484         604,292         608,778         579,174         580,596         593,865
    Small...............................................         136,246         136,350         133,304         127,819         128,377         132,419
    % Small.............................................            22.8            22.6            21.9            22.1            22.1            22.3
    Micro...............................................          20,140          20,417          20,695          19,119          18,142          19,703
    % Micro.............................................             3.4             3.4             3.4             3.3             3.1             3.3
Reissue:
    All.................................................             985           1,049           1,088           1,090           1,215           1,085
    Small...............................................             208             246             230             211             228             225
    % Small.............................................            21.1            23.5            21.1            19.4            18.8            20.8
    Micro...............................................              18              19              21              12              22              18
    % Micro.............................................             1.8             1.8             1.9             1.1             1.8             1.7
Plant:
    All.................................................           1,047           1,071           1,187           1,105           1,110           1,104
    Small...............................................             467             534             567             514             527             522
[[Page 37427]]

    % Small.............................................            44.6            49.9            47.8            46.5            47.5            47.3
    Micro...............................................               9              17              11               8              17              12
    % Micro.............................................             0.9             1.6             0.9             0.7             1.5             1.1
Design:
    All.................................................          46,010          44,072          42,324          38,225          36,220          41,370
    Small...............................................          18,945          18,126          16,791          14,783          14,354          16,600
    % Small.............................................            41.2            41.1            39.7            38.7            39.6            40.1
    Micro...............................................           5,448           5,006           4,289              24             n/a           3,692
    % Micro.............................................            11.8            11.4            10.1             0.1             n/a             8.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The patent application filing data in this table includes RCEs.
** FY 2018 application filing data are preliminary and will be finalized in the FY 2019 Performance and Accountability Report (PAR).
    Because the percentage of small entity filings varies widely
between application types, the Office has averaged the small entity
filing rates over the past five years for those application types in
order to estimate future filing rates by small and micro entities.
Those average rates appear in the last column of Table 24. The Office
estimates that small entity filing rates will continue for the next
five years at these average historic rates.
    The Office forecasts the number of projected patent applications
(i.e., workload) for the next five years using a combination of
historical data, economic analysis, and subject matter expertise. The
Office estimates that serialized UPR patent application filings will
grow by 1.5 percent in FY 2019 and 1.0 percent in FYs 2020-2024. The
Office forecasts design patent applications independently of UPR
applications because they exhibit different behavior.
    Using the estimated filings for the next five years, and the
average historic rates of small entity filings, Table 25 presents the
Office's estimates of the number of patent application filings by all
applicants, including small and micro entities, over the next five
fiscal years by application type.
    The Office has undertaken an elasticity analysis to examine if fee
adjustments may impact small entities and, in particular, whether
increases in fees would result in some such entities not submitting
applications. Elasticity measures how sensitive demand for services by
patent applicants and patentees is to fee changes. If elasticity is low
enough (demand is inelastic), then fee increases will not reduce
patenting activity enough to negatively impact overall revenues. If
elasticity is high enough (demand is elastic), then increasing fees
will decrease patenting activity enough to decrease revenue. The Office
analyzed elasticity at the overall filing level across all patent
applicants with regard to entity size and estimated the potential
impact to patent application filings across entities. Additional
information about elasticity estimates is available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting in the document entitled ``USPTO Setting and Adjusting Patent
Fees during Fiscal Year 2020--Description of Elasticity Estimates.''
                                          Table 25--Estimated Numbers of Patent Applications in FY 2019-FY 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              FY 2019
                                                             (current)        FY 2020         FY 2021         FY 2022         FY 2023         FY 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility...........................  All.................         609,639         611,158         612,614         621,450         629,204         636,625
Reissue...........................  All.................             750             750             750             750             750             750
Plant.............................  All.................           1,050           1,050           1,050           1,050           1,050           1,050
Design............................  All.................          49,118          52,283          55,649          59,262          63,156          67,255
                                   ---------------------------------------------------------------------------------------------------------------------
    Total.........................  All.................         660,557         665,241         670,063         682,512         694,160         705,680
--------------------------------------------------------------------------------------------------------------------------------------------------------
4. A Description of the Projected Reporting, Recordkeeping, and Other
Compliance Requirements of the Proposed Rule, Including an Estimate of
the Classes of Small Entities Which Will Be Subject to the Requirement
and Type of Professional Skills Necessary for Preparation of the Report
or Record
    If implemented, the proposed rule will not change the burden of
existing reporting and recordkeeping requirements for payment of fees.
The current requirements for small and micro entities will continue to
apply. Therefore, the professional skills necessary to file and
prosecute an application through issue and maintenance remain unchanged
under this proposal. This action proposes only to adjust patent fees
and not to set procedures for asserting small entity status or
certifying micro entity status, as previously discussed.
    The full proposed fee schedule (see Part VI: Discussion of Specific
Rules) is set forth in the NPRM. The proposed fee schedule sets or
adjusts 295 patent fees in total. This includes three fees that will be
discontinued and 11 new fees.
    5. Identification, to the Extent Practicable, of All Relevant
Federal Rules Which May Duplicate, Overlap, or Conflict With the
Proposed Rules
    The USPTO is the sole agency of the U.S. Government responsible for
administering the provisions of title 35, U.S.C., pertaining to
examining and granting patents. It is solely responsible for issuing
rules to comply with Section 10 of the AIA. No other Federal, state, or
local entity has jurisdiction over the examination and granting of
patents.
    Other countries, however, have their own patent laws, and an entity
desiring a patent in a particular country must make an application for
patent in that country, in accordance with the applicable law. Although
the potential for overlap exists internationally, this cannot be
avoided except by treaty (such as the Paris Convention for the
Protection of Industrial Property, or the PCT). Nevertheless, the USPTO
believes
[[Page 37428]]
that there are no other duplicative or overlapping rules.
6. Description of Any Significant Alternatives to the Proposed Rules
Which Accomplish the Stated Objectives of Applicable Statutes and Which
Minimize Any Significant Economic Impact of the Proposed Rules on Small
Entities
    The USPTO considered several alternative approaches to this
proposed rule, discussed below, including full cost recovery for
individual services, an across the board adjustment to fees, and a
baseline (current fee rates). The discussion here begins with a
description of the fee schedule adopted for this proposed rule.
i. Alternative 1: Proposed Alternative--Set and Adjust Patent Fees
    The alternative proposed herein secures the Office's required
revenue to recover its aggregate costs, while progressing towards high
quality and timely patent examination and review proceedings in order
to produce reliable and predictable IP rights. This will benefit all
applicants, including small and micro entities, without undue burden to
patent applicants and holders, barriers to entry, or reduced incentives
to innovate. This alternative maintains small and micro entity
discounts. Compared to the current fee schedule, there are no new small
or micro entity fee codes being extended to existing large entity fee
rates and none are being eliminated. All entities will benefit from the
Office's proposal to discontinue three fees related to goods and
services found to be of limited value based on the ability to obtain
these services at zero cost or more efficiently from non-Office
sources. The Office will instead provide these services, in a slightly
modified form (i.e. electronic), for free.
    As discussed throughout this document, the fee changes proposed in
this alternative are moderate compared to other alternatives. Given
that the proposed fee schedule will result in increased aggregate
revenue under this alternative, small and micro entities would pay some
higher fees when compared to the current fee schedule (Alternative 4).
    In summary, the fees to obtain a patent will increase. All fees are
subject to the 5.0 percent across the board increase. In addition to
the across the board increase, some fees will be subject to a larger
increase. For example, the issue fee and first stage maintenance fee
rate will increase by 20.0 and 25.0 percent respectively. However,
second and third stage maintenance fees will only increase by 4.0
percent, less than the across the board increase. This alternative
includes a new surcharge fee for applications not filed in DOCX format,
which aims to improve the electronic application process for patent
applicants by modernizing the USPTO's filing and viewing systems. This
streamlines application and publication processes, which benefits both
the applicants and examiners. In an effort to enable PTAB to continue
high quality, timely, and efficient proceedings with the expected
increase in work following the Supreme Court decision in SAS Institute
Inc. v. Iancu, 138 S. Ct. 1348 (2018), AIA trial fees will increase
25.0 percent. Finally, in response to feedback from the PPAC and
members of the public, the proposed fee increase for Maintenance Fee
Surcharge--Late Payment within Six Months, has been changed to $500.
Under the original proposal to the PPAC, the fee would have increased
by $840 to $1,000.
    Adjusting the patent fee schedule as proposed in this NPRM allows
the Office to implement the patent-related strategic goals and
objectives documented in the Strategic Plan and to carry out
requirements as described in the FY 2020 Budget. Specifically, this
proposed fee setting rule is estimated to generate sufficient revenue
to support increases in core examination costs that are necessary to
implement strategic initiatives to issue highly reliable patents, such
as increasing the time examiners are provided to work on each
application. This proposed rule also supports the Strategic Plan's
mission support goal to deliver organizational excellence (which
includes optimizing speed, quality, and cost-effectiveness of IT
delivery to achieve business value and ensuring financial
sustainability to facilitate effective USPTO operations) by allowing
the Office to continue to make necessary business improvements. While
all of the other alternatives discussed facilitate progress toward some
of the Office's goals, the proposed alternative is the only one that
does so in a way that does not impose undue costs on patent applicants
and holders.
    A comparison between the proposed fee schedule for this proposed
rule, and existing fees (labeled Alternative 1--Proposed Fee Schedule--
Setting and Adjusting Patent Fees during Fiscal Year 2020) is available
at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, in the document entitled ``USPTO Setting and Adjusting
Patent Fees during Fiscal Year 2020--IRFA Tables.'' Fee changes for
small and micro entities are included in the tables. For the comparison
between proposed fees and current fees, as noted above, the ``current
fees'' column displays the fees that were in effect as of January 2018.
ii. Other Alternatives Considered
    In addition to the proposed fee schedule set forth in Alternative
1, above, the Office considered several other alternative approaches.
For each alternative considered, the Office calculated proposed fees
and the resulting revenue derived by each alternative scenario. The
proposed fees and their corresponding revenue tables are available at
https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. Please note, only the fees outlined in Alternative 1 are
proposed in this NPRM; other scenarios are shown only to demonstrate
the Office's analysis of other options.
a. Alternative 2: Unit Cost Recovery
    It is common practice in the Federal Government to set individual
fees at a level sufficient to recover the cost of that single service.
In fact, official guidance on user fees, as cited in OMB Circular A-25:
User Charges, states that user charges (fees) should be sufficient to
recover the full cost to the Federal Government of providing the
particular service, resource, or good, when the government is acting in
its capacity as sovereign.
    As such, the USPTO considered setting most individual large entity
fees at the historical cost of performing the activities related to the
particular service in FY 2018. There are several complexities in
achieving individual fee unit cost recovery for the patent fee
schedule. The most significant is the AIA requirement to provide a 50
percent discount on fees to small entities and a 75 percent discount on
fees to micro entities. To account for this requirement, this
alternative continues existing small and micro entity discounts where
eligible under AIA authority. Thus, in order to continue the small and
micro entity discounts and generate sufficient revenue to recover the
Office's anticipated budgetary requirements over the five-year period,
for this alternative, maintenance fees must be set significantly above
unit cost.
    With the exception of maintenance fees, fees for which there is no
FY 2018 cost data would be set at current rates under this alternative.
The Office no longer collects activity-based information for
maintenance fees, and previous year unit costs were negligible. For the
small number of services that have a variable fee, the aggregate
revenue table does not list a fee. Instead, for those services with an
estimated workload, the workload is listed in
[[Page 37429]]
dollars rather than units to develop revenue estimates. Fees without
either a fixed fee rate or a workload estimate are assumed to provide
zero revenue to the Office. Note, this alternative bases fee rates for
FY 2020 through FY 2024 on FY 2018 historical costs. The Office
recognizes that this approach does not account for inflationary factors
that would likely increase costs and necessitate higher fees in the
out-years.
    Alternative 2 does not align well with the strategic and policy
goals of this proposed rule. Both the current and proposed fee
schedules are structured to collect more fees further along in the
process (i.e. issue fees and maintenance fees), where the patent owner
has better information about a patent's value, rather than up front
(i.e., filing fees, search fees, and examination fees), when applicants
are less certain about the value of their art, even though the front-
end services are costlier to the Office. This alternative presents
significant barriers to those seeking patent protection, because if the
Office were to immediately shift from the current front-end/back-end
balance to a unit cost recovery structure, front-end fees would
increase significantly, nearly tripling in some cases (e.g., search
fees).
    The Office has estimated the potential quantitative elasticity
impacts for application filings (e.g., filing, search, and examination
fees), maintenance renewals (all stages), and other major fee
categories. Results of this analysis indicate that a high cost of entry
into the patent system could lead to a significant decrease in the
incentives to invest in innovative activities among all entities,
especially for small and micro entities. Under the current fee
schedule, maintenance fees subsidize all applications, including those
applications for which no claims are allowed. By insisting on unit cost
payment at each point in the application process, the Office is
effectively charging high fees for every attempted patent, meaning
those applicants who have less information about the patentability of
their claims or the market value of their invention may be less likely
to pursue initial prosecution (e.g., filing, search, and examination)
or subsequent actions to continue prosecution (e.g., RCE). The ultimate
effect of these changes in behavior is likely to stifle innovation.
    Similarly, the Office suspects that renewal rates could change as
well, given fee reductions for maintenance fees at each of the three
stages. While some innovators and firms may choose to file fewer
applications given the higher front-end costs, others, whose claims are
allowed or upheld, may seek to fully maximize the benefits of obtaining
a patent by keeping those patents in force for longer than they would
have previously (i.e., under the baseline). In the aggregate, patents
that are maintained beyond their useful life weaken the IP system by
slowing the rate of public accessibility and follow-on inventions,
which is contrary to the Office's policy factor of promoting innovation
strategies. In sum, this alternative is inadequate to accomplish the
goals and strategies as stated in Part III of this proposed rule.
    The fee schedule for Alternative 2: Unit Cost Recovery is available
at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, in the document entitled ``USPTO Setting and Adjusting
Patent Fees during Fiscal Year 2020--IRFA Tables.'' For the comparison
between proposed (unit cost recovery) fees and current fees, the
``current fees'' column displays the fees that are in effect as of
January 2018. This column is used to calculate dollar and percent fee
change compared to proposed fees.
b. Alternative 3: Across the Board Adjustment
    In years past, the USPTO used its authority to adjust statutory
fees annually according to increases in the consumer price index (CPI),
which is a commonly used measure of inflation. Building on this prior
approach and incorporating the additional authority under the AIA to
set small and micro entity fees, Alternative 3 would set fees by
applying a one-time 10.0 percent, across the board inflationary
increase to the baseline (current fees) beginning in FY 2021. Ten
percent represents the change in revenue needed to achieve the
aggregate revenue needed to cover future budgetary requirements.
    As estimated by the CBO, projected CPI rates by fiscal year are:
2.4 percent in FY 2020, 2.5 percent in FY 2021, 2.5 percent in FY 2022,
and 2.4 percent in both FY 2023 and FY 2024. The Office elected not to
apply the estimated cumulative inflationary adjustment (12.2 percent),
from FY 2020 through FY 2024, because doing so would result in
significantly more fee revenue than needed to meet the Office's core
mission and strategic priorities. Under this alternative, nearly every
existing fee would be increased and no fees would be discontinued or
reduced. Given that all entities (large, small, and micro) would pay 10
percent higher fees for every product and service, especially the fees
due at the time of filing, this alternative does not adequately support
the Office's policy factor to promote innovation strategies.
    The fee schedule for Alternative 3: Across the Board Adjustment is
available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, in the document entitled ``USPTO Setting and
Adjusting Patent Fees during Fiscal Year 2020--IRFA Tables.'' For the
comparison between proposed (across the board adjustment) fees and
current fees, the ``current fees'' column displays the fees that are in
effect as of July 2018.
c. Alternative 4: Baseline (Current Fee Schedule)
    The Office considered a no-action alternative. This alternative
would retain the status quo, meaning that the Office would continue the
small and micro entity discounts that the Congress provided in Section
10 of the Act and maintain fees as of January 2018.
    This approach would not provide sufficient aggregate revenue to
accomplish the Office's rulemaking goals, as set forth in Part III of
this NPRM or the Strategic Plan. IT improvement, progress on backlog
and pendency, and other improvement activities would continue, but at a
significantly slower rate as increases in core patent examination costs
that are necessary to implement strategic initiative to issue highly
reliable patents--such as increasing the time examiners are provided to
work on each application--crowd out funding for other improvements.
Likewise, without a fee increase, the USPTO would deplete its operating
reserves, leaving the Office vulnerable to fiscal and economic events.
This would expose core operations to unacceptable levels of financial
risk and would position the Office to have to return to making
inefficient, short-term funding decisions.
iii. Alternatives Specified by the RFA
    The RFA provides that an agency also consider four specified
``alternatives'' or approaches, namely: (1) Establishing different
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) clarifying,
consolidating, or simplifying compliance and reporting requirements
under the rule for small entities; (3) using performance rather than
design standards; and (4) exempting small entities from coverage of the
rule, or any part thereof. 5 U.S.C. 604(c). The USPTO discusses each of
these specified alternatives or approaches below and describes how this
NPRM is adopting these approaches.
[[Page 37430]]
Differing Requirements
    As discussed above, the changes proposed in this proposed rule
would continue existing fee discounts for small and micro entities that
take into account the reduced resources available to them as well as
offer new discounts when applicable under AIA authority. Specifically,
micro entities would continue to receive a 75 percent reduction in
patent fees under this proposal and non-micro, small entities would
continue to pay 50 percent of the fee.
    This proposed rule sets fee levels but does not set or alter
procedural requirements for asserting small or micro entity status. To
pay reduced patent fees, small entities must merely assert small entity
status to pay reduced patent fees. The small entity may make this
assertion by either checking a box on the transmittal form, ``Applicant
claims small entity status,'' or by paying the basic filing or basic
national small entity fee exactly. The process to claim micro entity
status is similar in that eligible entities need only submit a written
certification of their status prior to or at the time a reduced fee is
paid. This proposed rule does not change any reporting requirements for
any small or micro entity. For both small and micro entities, the
burden to establish their status is nominal (making an assertion or
submitting a certification) and the benefit of the fee reductions (50
percent for small entities and 75 percent for micro entities) is
significant.
    This proposed rule makes the best use of differing requirements for
small and micro entities. It also makes the best use of the redesigned
fee structure, as discussed further below.
Clarification, Consolidation, or Simplification of Requirements
    This proposed rule pertains to setting or adjusting patent fees.
Any compliance or reporting requirements proposed in this rule are de
minimis and necessary to implement lower proposed fees. Therefore, any
clarifications, consolidations, or simplifications to compliance and
reporting requirements for small entities are not applicable or would
not achieve the objectives of this rulemaking.
Performance Standards
    Performance standards do not apply to the current proposed rule.
Exemption for Small and Micro Entities
    The proposed changes here maintain a 50 percent reduction in fees
for small entities and a 75 percent reduction in fees for micro
entities. The Office considered exempting small and micro entities from
paying increased patent fees, but determined that the USPTO would lack
statutory authority for this approach. Section 10(b) of the Act
provides that ``fees set or adjusted under subsection (a) for filing,
searching, examining, issuing, appealing, and maintaining patent
applications and patents shall be reduced by 50 percent [for small
entities] and shall be reduced by 75 percent [for micro entities]''
(emphasis added). Neither the AIA nor any other statute authorizes the
USPTO simply to exempt small or micro entities, as a class of
applicants, from paying increased patent fees.
    C. Executive Order 12866 (Regulatory Planning and Review): This
proposed rule has been determined to be economically significant for
purposes of Executive Order 12866 (Sept. 30, 1993). The Office has
developed a RIA as required for rulemakings deemed to be economically
significant. The complete RIA is available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    D. Executive Order 13563 (Improving Regulation and Regulatory
Review): The Office has complied with Executive Order 13563 (Jan. 18,
2011). Specifically, the Office has, to the extent feasible and
applicable: (1) Made a reasoned determination that the benefits justify
the costs of the proposed rule; (2) tailored the proposed rule to
impose the least burden on society consistent with obtaining the
regulatory objectives; (3) selected a regulatory approach that
maximizes net benefits; (4) specified performance objectives; (5)
identified and assessed available alternatives; (6) involved the public
in an open exchange of information and perspectives among experts in
relevant disciplines, affected stakeholders in the private sector, and
the public as a whole, and provided on-line access to the rulemaking
docket; (7) attempted to promote coordination, simplification, and
harmonization across government agencies and identified goals designed
to promote innovation; (8) considered approaches that reduce burdens
and maintain flexibility and freedom of choice for the public; and (9)
ensured the objectivity of scientific and technological information and
processes.
    E. Executive Order 13771 (Reducing Regulation and Controlling
Regulatory Costs): This proposed rule is not expected to be subject to
the requirements of Executive Order 13771 (Jan. 30, 2017) because this
proposed rule is expected to involve a transfer payment.
    F. Executive Order 13132 (Federalism): This rulemaking does not
contain policies with federalism implications sufficient to warrant
preparation of a Federalism Assessment under Executive Order 13132
(Aug. 4, 1999).
    G. Executive Order 13175 (Tribal Consultation): This rulemaking
will not: (1) Have substantial direct effects on one or more Indian
tribes; (2) impose substantial direct compliance costs on Indian tribal
governments; or (3) preempt tribal law. Therefore, a tribal summary
impact statement is not required under Executive Order 13175 (Nov. 6,
2000).
    H. Executive Order 13211 (Energy Effects): This rulemaking is not a
significant energy action under Executive Order 13211 because this
proposed rulemaking is not likely to have a significant adverse effect
on the supply, distribution, or use of energy. Therefore, a Statement
of Energy Effects is not required under Executive Order 13211 (May 18,
2001).
    I. Executive Order 12988 (Civil Justice Reform): This rulemaking
meets applicable standards to minimize litigation, eliminate ambiguity,
and reduce burden as set forth in sections 3(a) and 3(b)(2) of
Executive Order 12988 (Feb. 5, 1996).
    J. Executive Order 13045 (Protection of Children): This rulemaking
does not concern an environmental risk to health or safety that may
disproportionately affect children under Executive Order 13045 (Apr.
21, 1997).
    K. Executive Order 12630 (Taking of Private Property): This
rulemaking will not affect a taking of private property or otherwise
have taking implications under Executive Order 12630 (Mar. 15, 1988).
    L. Congressional Review Act: Under the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the
United States Patent and Trademark Office will submit a report
containing the rule and other required information to the United States
Senate, the United States House of Representatives, and the Comptroller
General of the Government Accountability Office. The changes in this
proposed rule are expected to result in an annual effect on the economy
of 100 million dollars or more, a major increase in costs or prices, or
significant adverse effects on competition, employment, investment,
productivity, innovation, or the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets. Therefore, this proposed rule is a ``major rule'' as
defined in 5 U.S.C. 804(2).
[[Page 37431]]
    M. Unfunded Mandates Reform Act of 1995: The proposed changes set
forth in this rulemaking do not involve a Federal intergovernmental
mandate that will result in the expenditure by State, local, and tribal
governments, in the aggregate, of 100 million dollars (as adjusted) or
more in any one year, or a Federal private sector mandate that will
result in the expenditure by the private sector of 100 million dollars
(as adjusted) or more in any one year, and will not significantly or
uniquely affect small governments. Therefore, no actions are necessary
under the provisions of the Unfunded Mandates Reform Act of 1995. See 2
U.S.C. 1501 et seq.
    N. National Environmental Policy Act: This rulemaking will not have
any effect on the quality of the environment and is thus categorically
excluded from review under the National Environmental Policy Act of
1969. See 42 U.S.C. 4321 et seq.
    O. National Technology Transfer and Advancement Act: The
requirements of section 12(d) of the National Technology Transfer and
Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because
this rulemaking does not contain provisions which involve the use of
technical standards.
    P. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.) requires that the Office consider the impact of
paperwork and other information collection burdens imposed on the
public. This proposed rule involves information collection requirements
which are subject to review by the OMB under the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501-3549). The collection of information
involved in this proposed rule has been reviewed and previously
approved by OMB under control numbers 0651-0012, 0651-0016, 0651-0020,
0651-0021, 0651-0031, 0651-0032, 0651-0033, 0651-0059, 0651-0063, 0651-
0064, 0651-0069, and 0651-0075.
    Notwithstanding any other provision of law, no person is required
to respond to nor shall any person be subject to a penalty for failure
to comply with a collection of information subject to the requirements
of the Paperwork Reduction Act unless that collection of information
displays a currently valid OMB control number.
List of Subjects
37 CFR Part 1
    Administrative practice and procedure, Biologics, Courts, Freedom
of information, Inventions and patents, Reporting and recordkeeping
requirements, Small businesses.
37 CFR Part 11
    Administrative practice and procedure, Inventions and patents,
Lawyers, Reporting and recordkeeping requirements.
37 CFR Part 41
    Administrative practice and procedure, Inventions and patents,
Lawyers, Reporting and recordkeeping requirements.
37 CFR Part 42
    Administrative practice and procedure, Inventions and patents,
Lawyers.
    For the reasons set forth in the preamble, 37 CFR parts 1, 11, 41,
and 42 are proposed to be amended as follows:
PART 1--RULES OF PRACTICE IN PATENT CASES
0
1. The authority citation for 37 CFR part 1 continues to read as
follows:
    Authority:  35 U.S.C. 2(b)(2), unless otherwise noted.
0
2. Section 1.16 is amended by:
0
a. Revising paragraphs (a) through (e);
0
b. Adding table headings in paragraphs (f) and (g);
0
c. Revising paragraph (h);
0
d. Adding a table heading in paragraph (i);
0
e. Revising paragraphs (j) and (k);
0
f. Adding a table heading in paragraph (l);
0
g. Revising paragraphs (m) through (s);
0
h. Adding a table heading in paragraph (t); and
0
i. Adding paragraph (u).
    The revisions and additions read as follows:
Sec.  1.16  National application filing, search, and examination fees.
    (a) Basic fee for filing each application under 35 U.S.C. 111 for
an original patent, except design, plant, or provisional applications:
                        Table 1 to Paragraph (a)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $80.00
By a small entity (Sec.   1.27(a)).........................      $160.00
By a small entity (Sec.   1.27(a)) if the application is          $80.00
 submitted in compliance with the Office electronic filing
 system (Sec.   1.27(b)(2))................................
By other than a small or micro entity......................      $320.00
------------------------------------------------------------------------
    (b) Basic fee for filing each application under 35 U.S.C. 111 for
an original design patent:
                        Table 2 to Paragraph (b)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................      $110.00
By other than a small or micro entity......................      $220.00
------------------------------------------------------------------------
    (c) Basic fee for filing each application for an original plant
patent:
                        Table 3 to Paragraph (c)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................      $110.00
By other than a small or micro entity......................      $220.00
------------------------------------------------------------------------
    (d) Basic fee for filing each provisional application:
                        Table 4 to Paragraph (d)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $75.00
By a small entity (Sec.   1.27(a)).........................      $150.00
By other than a small or micro entity......................      $300.00
------------------------------------------------------------------------
    (e) Basic fee for filing each application for the reissue of a
patent:
                        Table 5 to Paragraph (e)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $80.00
By a small entity (Sec.   1.27(a)).........................      $160.00
By other than a small or micro entity......................      $320.00
------------------------------------------------------------------------
    (f) * * *
                        Table 6 to Paragraph (f)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (g) * * *
                        Table 7 to Paragraph (g)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (h) In addition to the basic filing fee in an application, other
than a provisional application, for filing or later presentation at any
other time of each claim in independent form in excess of 3:
                        Table 8 to Paragraph (h)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $120.00
By a small entity (Sec.   1.27(a)).........................      $240.00
By other than a small or micro entity......................      $480.00
------------------------------------------------------------------------
    (i) * * *
                        Table 9 to Paragraph (i)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (j) In addition to the basic filing fee in an application, other
than a provisional application, that contains, or is amended to
contain, a multiple dependent claim, per application:
                        Table 10 to Paragraph (j)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $215.00
[[Page 37432]]

By a small entity (Sec.   1.27(a)).........................      $430.00
By other than a small or micro entity......................      $860.00
------------------------------------------------------------------------
    (k) Search fee for each application filed under 35 U.S.C. 111 for
an original patent, except design, plant, or provisional applications:
                        Table 11 to Paragraph (k)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $175.00
By a small entity (Sec.   1.27(a)).........................      $350.00
By other than a small or micro entity......................      $700.00
------------------------------------------------------------------------
    (l) * * *
                        Table 12 to Paragraph (l)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (m) Search fee for each application for an original plant patent:
                        Table 13 to Paragraph (m)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $110.00
By a small entity (Sec.   1.27(a)).........................      $220.00
By other than a small or micro entity......................      $440.00
------------------------------------------------------------------------
    (n) Search fee for each application for the reissue of a patent:
                        Table 14 to Paragraph (n)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $175.00
By a small entity (Sec.   1.27(a)).........................      $350.00
By other than a small or micro entity......................      $700.00
------------------------------------------------------------------------
    (o) Examination fee for each application filed under 35 U.S.C. 111
for an original patent, except design, plant, or provisional
applications:
                        Table 15 to Paragraph (o)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $200.00
By a small entity (Sec.   1.27(a)).........................      $400.00
By other than a small or micro entity......................      $800.00
------------------------------------------------------------------------
    (p) Examination fee for each application filed under 35 U.S.C. 111
for an original design patent:
                        Table 16 to Paragraph (p)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................      $320.00
By other than a small or micro entity......................      $640.00
------------------------------------------------------------------------
    (q) Examination fee for each application for an original plant
patent:
                        Table 17 to Paragraph (q)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $165.00
By a small entity (Sec.   1.27(a)).........................      $330.00
By other than a small or micro entity......................      $660.00
------------------------------------------------------------------------
    (r) Examination fee for each application for the reissue of a
patent:
                        Table 18 to Paragraph (r)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $580.00
By a small entity (Sec.   1.27(a)).........................    $1,160.00
By other than a small or micro entity......................    $2,320.00
------------------------------------------------------------------------
    (s) Application size fee for any application filed under 35 U.S.C.
111 for the specification and drawings which exceed 100 sheets of
paper, for each additional 50 sheets or fraction thereof:
                        Table 19 to Paragraph (s)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $105.00
By a small entity (Sec.   1.27(a)).........................      $210.00
By other than a small or micro entity......................      $420.00
------------------------------------------------------------------------
    (t) * * *
                        Table 20 to Paragraph (t)
------------------------------------------------------------------------

------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (u) Additional fee for any application filed under 35 U.S.C. 111
for an original patent, except design, plant, or provisional
applications where the application is not submitted in DOCX format:
                        Table 21 to Paragraph (u)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $100.00
By a small entity (Sec.   1.27(a)).........................       200.00
By a small entity (Sec.   1.27(a)) if the application is          200.00
 submitted in compliance with the Office electronic filing
 system (Sec.   1.27(b)(2))................................
By other than a small or micro entity......................       400.00
------------------------------------------------------------------------
* * * * *
0
3. Section 1.17 is amended by:
0
a. Revising paragraph (a);
0
b. Revising paragraphs (c) through (g);
0
c. Adding a table heading in paragraph (h);
0
d. Adding a table heading in paragraph (i)(1);
0
e. Revising paragraphs (i)(2) and (k);
0
f. Revising paragraph (m);
0
g. Adding a table heading in paragraph (o);
0
h. Revising paragraphs (p) through (s); and
0
i. Adding a table heading in paragraph (t).
    The revisions and additions read as follows:
Sec.  1.17   Patent application and reexamination processing fees.
    (a) Extension fees pursuant to Sec.  1.136(a):
    (1) For reply within first month:
                       Table 1 to Paragraph (a)(1)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................       110.00
By other than a small or micro entity......................       220.00
------------------------------------------------------------------------
    (2) For reply within second month:
                       Table 2 to Paragraph (a)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................      $320.00
By other than a small or micro entity......................      $640.00
------------------------------------------------------------------------
    (3) For reply within third month:
                       Table 3 to Paragraph (a)(3)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $370.00
By a small entity (Sec.   1.27(a)).........................       740.00
By other than a small or micro entity......................     1,480.00
------------------------------------------------------------------------
    (4) For reply within fourth month:
                       Table 4 to Paragraph (a)(4)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $580.00
By a small entity (Sec.   1.27(a)).........................     1,160.00
By other than a small or micro entity......................     2,320.00
------------------------------------------------------------------------
    (5) For reply within fifth month:
                       Table 5 to Paragraph (a)(5)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $790.00
By a small entity (Sec.   1.27(a)).........................     1,580.00
By other than a small or micro entity......................     3,160.00
------------------------------------------------------------------------
* * * * *
    (c) For filing a request for prioritized examination under Sec.
1.102(e):
                        Table 6 to Paragraph (c)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,050.00
By a small entity (Sec.   1.27(a)).........................     2,100.00
By other than a small or micro entity......................     4,200.00
------------------------------------------------------------------------
    (d) For correction of inventorship in an application after the
first action on the merits:
                        Table 7 to Paragraph (d)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................      $320.00
By other than a small or micro entity......................       640.00
------------------------------------------------------------------------
    (e) To request continued examination pursuant to Sec.  1.114:
    (1) For filing a first request for continued examination pursuant
to Sec.  1.114 in an application:
                       Table 8 to Paragraph (e)(1)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $340.00
By a small entity (Sec.   1.27(a)).........................       680.00
[[Page 37433]]

By other than a small or micro entity......................     1,360.00
------------------------------------------------------------------------
    (2) For filing a second or subsequent request for continued
examination pursuant to Sec.  1.114 in an application:
                       Table 9 to Paragraph (e)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $500.00
By a small entity (Sec.   1.27(a)).........................     1,000.00
By other than a small or micro entity......................     2,000.00
------------------------------------------------------------------------
    (f) For filing a petition under one of the sections in paragraphs
(f)(1) through (6) of this section which refers to this paragraph (f):
                        Table 10 to Paragraph (f)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $105.00
By a small entity (Sec.   1.27(a)).........................       210.00
By other than a small or micro entity......................       420.00
------------------------------------------------------------------------
    (1) Section 1.36(a)--for revocation of a power of attorney by fewer
than all of the applicants.
    (2) Section 1.53(e)--to accord a filing date.
    (3) Section 1.182--for decision on a question not specifically
provided for in an application for patent.
    (4) Section 1.183--to suspend the rules in an application for
patent.
    (5) Section 1.741(b)--to accord a filing date to an application
under Sec.  1.740 for extension of a patent term.
    (6) Section 1.1023--to review the filing date of an international
design application.
    (g) For filing a petition under one of the sections in paragraphs
(g)(1) through (15) of this section which refers to this paragraph (g):
                        Table 11 to Paragraph (g)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................       110.00
By other than a small or micro entity......................       220.00
------------------------------------------------------------------------
    (1) Section 1.12--for access to an assignment record.
    (2) Section 1.14--for access to an application.
    (3) Section 1.46--for filing an application on behalf of an
inventor by a person who otherwise shows sufficient proprietary
interest in the matter.
    (4) Section 1.55(f)--for filing a belated certified copy of a
foreign application.
    (5) Section 1.55(g)--for filing a belated certified copy of a
foreign application.
    (6) Section 1.57(a)--for filing a belated certified copy of a
foreign application.
    (7) Section 1.59--for expungement of information.
    (8) Section 1.103(a)--to suspend action in an application.
    (9) Section 1.136(b)--for review of a request for extension of time
when the provisions of Sec.  1.136(a) are not available.
    (10) Section 1.377--for review of decision refusing to accept and
record payment of a maintenance fee filed prior to expiration of a
patent.
    (11) Section 1.550(c)--for patent owner requests for extension of
time in ex parte reexamination proceedings.
    (12) Section 1.956--for patent owner requests for extension of time
in inter partes reexamination proceedings.
    (13) Section 5.12 of this chapter--for expedited handling of a
foreign filing license.
    (14) Section 5.15 of this chapter--for changing the scope of a
license.
    (15) Section 5.25 of this chapter--for retroactive license.
    (h) * * *
                        Table 12 to Paragraph (h)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (i) * * *
    (1) * * *
                      Table 13 to Paragraph (i)(1)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (2) For taking action under one of the sections in paragraphs
(i)(2)(i) and (ii) of this section which refers to this paragraph
(i)(2):
                      Table 14 to Paragraph (i)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $140.00
By a small entity (Sec.   1.27(a)).........................       140.00
By other than a small or micro entity......................       140.00
------------------------------------------------------------------------
    (i) Section 1.217--for processing a redacted copy of a paper
submitted in the file of an application in which a redacted copy was
submitted for the patent application publication.
    (ii) Section 1.221--for requesting voluntary publication or
republication of an application.
* * * * *
    (k) For filing a request for expedited examination under Sec.
1.155(a):
                        Table 15 to Paragraph (k)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $500.00
By a small entity (Sec.   1.27(a)).........................     1,000.00
By other than a small or micro entity......................     2,000.00
------------------------------------------------------------------------
* * * * *
    (m) For filing a petition for the revival of an abandoned
application for a patent, for the delayed payment of the fee for
issuing each patent, for the delayed response by the patent owner in
any reexamination proceeding, for the delayed payment of the fee for
maintaining a patent in force, for the delayed submission of a priority
or benefit claim, for the extension of the twelve-month (six-month for
designs) period for filing a subsequent application (Sec. Sec.  1.55(c)
and (e), 1.78(b), (c), and (e), 1.137, 1.378, and 1.452)), or for
filing a petition to excuse applicant's failure to act within
prescribed time limits in an international design application (Sec.
1.1051):
                        Table 16 to Paragraph (m)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $525.00
By a small entity (Sec.   1.27(a)).........................     1,050.00
By other than a small or micro entity......................     2,100.00
------------------------------------------------------------------------
* * * * *
    (o) * * *
                        Table 17 to Paragraph (o)
------------------------------------------------------------------------

------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (p) For an information disclosure statement under Sec.  1.97(c) or
(d):
                        Table 18 to Paragraph (p)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $65.00
By a small entity (Sec.   1.27(a)).........................       130.00
By other than a small or micro entity......................       260.00
------------------------------------------------------------------------
    (q) Processing fee for taking action under one of the sections in
paragraphs (q)(1) through (3) of this section which refers to this
paragraph (q): $50.00.
    (1) Section 1.41--to supply the name or names of the inventor or
inventors after the filing date without a cover sheet as prescribed by
Sec.  1.51(c)(1) in a provisional application.
    (2) Section 1.48--for correction of inventorship in a provisional
application.
    (3) Section 1.53(c)(2)--to convert a nonprovisional application
filed under Sec.  1.53(b) to a provisional application under Sec.
1.53(c).
    (r) For entry of a submission after final rejection under Sec.
1.129(a):
                        Table 19 to Paragraph (r)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $220.00
By a small entity (Sec.   1.27(a)).........................       440.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------
    (s) For each additional invention requested to be examined under
Sec.  1.129(b):
[[Page 37434]]
                        Table 20 to Paragraph (s)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29.............................      $220.00
By a small entity (Sec.   1.27(a)).........................       440.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------
    (t) * * *
                        Table 21 to Paragraph (t)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
0
4. Section 1.18 is amended by revising paragraphs (a), (b)(1), (c),
(d)(3), (e) and (f) to read as follows:
Sec.  1.18   Patent post allowance (including issue) fees.
    (a) Issue fee for issuing each original patent, except a design or
plant patent, or for issuing each reissue patent:
                        Table 1 to Paragraph (a)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $300.00
By a small entity (Sec.   1.27(a)).........................       600.00
By other than a small or micro entity......................     1,200.00
------------------------------------------------------------------------
    (b)(1) Issue fee for issuing an original design patent:
                       Table 2 to Paragraph (b)(1)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $185.00
By a small entity (Sec.   1.27(a)).........................       370.00
By other than a small or micro entity......................       740.00
------------------------------------------------------------------------
* * * * *
    (c) Issue fee for issuing an original plant patent:
                        Table 3 to Paragraph (c)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $210.00
By a small entity (Sec.   1.27(a)).........................       420.00
By other than a small or micro entity......................       840.00
(d) * * *
(3) Republication fee (Sec.   1.221(a))....................       320.00
(e) For filing an application for patent term adjustment          210.00
 under Sec.   1.705:.......................................
(f) For filing a request for reinstatement of all or part         420.00
 of the term reduced pursuant to Sec.   1.704(b) in an
 application for patent term adjustment under Sec.   1.705:
------------------------------------------------------------------------
0
5. Section 1.19 is amended by revising paragraphs (b)(1)(i)(B) and
(b)(1)(ii)(B) and removing and reserving paragraphs (j) through (l) to
read as follows:
Sec.  1.19   Document supply fees.
* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) Copy Patent File Wrapper, Paper Medium, Any Number of Sheets:
$290.00.
* * * * *
    (ii) * * *
    (B) Copy Patent File Wrapper, Electronic, Any Medium, Any Size:
$60.00.
* * * * *
0
6. Section 1.20 is revised to read as follows:
Sec.  1.20   Post issuance fees.
    (a) For providing a certificate of correction for applicant's
mistake (Sec.  1.323): $160.00.
    (b) Processing fee for correcting inventorship in a patent (Sec.
1.324): $160.00.
    (c) In reexamination proceedings:
    (1)(i) For filing a request for ex parte reexamination (Sec.
1.510(a)) having:
    (A) Forty (40) or fewer pages;
    (B) Lines that are double-spaced or one-and-a-half spaced;
    (C) Text written in a non-script type font such as Arial, Times New
Roman, or Courier;
    (D) A font size no smaller than 12 point;
    (E) Margins which conform to the requirements of Sec.
1.52(a)(1)(ii); and
    (F) Sufficient clarity and contrast to permit direct reproduction
and electronic capture by use of digital imaging and optical character
recognition.
                     Table 1 to Paragraph (c)(1)(i)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,575.00
By a small entity (Sec.   1.27(a)).........................     3,150.00
By other than a small or micro entity......................     6,300.00
------------------------------------------------------------------------
    (ii) The following parts of an ex parte reexamination request are
excluded from paragraphs (c)(1)(i)(A) through (F) of this section:
    (A) The copies of every patent or printed publication relied upon
in the request pursuant to Sec.  1.510(b)(3);
    (B) The copy of the entire patent for which reexamination is
requested pursuant to Sec.  1.510(b)(4); and
    (C) The certifications required pursuant to Sec.  1.510(b)(5) and
(6).
    (2) For filing a request for ex parte reexamination (Sec.
1.510(b)) which has sufficient clarity and contrast to permit direct
reproduction and electronic capture by use of digital imaging and
optical character recognition, and which otherwise does not comply with
the provisions of paragraph (c)(1) of this section:
                       Table 2 to Paragraph (c)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $3,150.00
By a small entity (Sec.   1.27(a)).........................     6,300.00
By other than a small or micro entity......................    12,600.00
------------------------------------------------------------------------
    (3) For filing with a request for reexamination or later
presentation at any other time of each claim in independent form in
excess of three and also in excess of the number of claims in
independent form in the patent under reexamination:
                       Table 3 to Paragraph (c)(3)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $120.00
By a small entity (Sec.   1.27(a)).........................       240.00
By other than a small or micro entity......................       480.00
------------------------------------------------------------------------
    (4) For filing with a request for reexamination or later
presentation at any other time of each claim (whether dependent or
independent) in excess of 20 and also in excess of the number of claims
in the patent under reexamination (note that Sec.  1.75(c) indicates
how multiple dependent claims are considered for fee calculation
purposes):
                       Table 4 to Paragraph (c)(4)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $25.00
By a small entity (Sec.   1.27(a)).........................        50.00
By other than a small or microentity.......................       100.00
------------------------------------------------------------------------
    (5) If the excess claims fees required by paragraphs (c)(3) and (4)
of this section are not paid with the request for reexamination or on
later presentation of the claims for which the excess claims fees are
due, the fees required by paragraphs (c)(3) and (4) must be paid or the
claims canceled by amendment prior to the expiration of the time period
set for reply by the Office in any notice of fee deficiency in order to
avoid abandonment.
    (6) For filing a petition in a reexamination proceeding, except for
those specifically enumerated in Sec. Sec.  1.550(i) and 1.937(d):
                       Table 5 to Paragraph (c)(6)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $510.00
By a small entity (Sec.   1.27(a)).........................     1,020.00
By other than a small or micro entity......................     2,040.00
------------------------------------------------------------------------
    (7) For a refused request for ex parte reexamination under Sec.
1.510 (included in the request for ex parte reexamination fee at Sec.
1.20(c)(1) or (2)):
                       Table 6 to Paragraph (c)(7)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $945.00
By a small entity (Sec.   1.27(a)).........................     1,890.00
By other than a small or microentity.......................     3,780.00
------------------------------------------------------------------------
    (d) For filing each statutory disclaimer (Sec.  1.321): $170.00.
    (e) For maintaining an original or any reissue patent, except a
design or plant patent, based on an application filed on or after
December 12, 1980, in force beyond four years, the fee being due by
three years and six months after the original grant:
[[Page 37435]]
                        Table 7 to Paragraph (e)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $500.00
By a small entity (Sec.   1.27(a)).........................     1,000.00
By other than a small or micro entity......................     2,000.00
------------------------------------------------------------------------
    (f) For maintaining an original or any reissue patent, except a
design or plant patent, based on an application filed on or after
December 12, 1980, in force beyond eight years, the fee being due by
seven years and six months after the original grant:
                        Table 8 to Paragraph (f)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $940.00
By a small entity (Sec.   1.27(a)).........................     1,880.00
By other than a small or micro entity......................     3,760.00
------------------------------------------------------------------------
    (g) For maintaining an original or any reissue patent, except a
design or plant patent, based on an application filed on or after
December 12, 1980, in force beyond twelve years, the fee being due by
eleven years and six months after the original grant:
                        Table 9 to Paragraph (g)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,925.00
By a small entity (Sec.   1.27(a)).........................     3,850.00
By other than a small or micro entity......................     7,700.00
------------------------------------------------------------------------
    (h) Surcharge for paying a maintenance fee during the six-month
grace period following the expiration of three years and six months,
seven years and six months, and eleven years and six months after the
date of the original grant of a patent based on an application filed on
or after December 12, 1980:
                        Table 10 to Paragraph (h)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $125.00
By a small entity (Sec.   1.27(a)).........................       250.00
By other than a small or micro entity......................       500.00
------------------------------------------------------------------------
    (i) [Reserved]
    (j) For filing an application for extension of the term of a
patent.
                        Table 11 to Paragraph (j)
------------------------------------------------------------------------

------------------------------------------------------------------------
(1) Application for extension under Sec.   1.740...........    $1,180.00
(2) Initial application for interim extension under Sec.          440.00
 1.790.....................................................
(3) Subsequent application for interim extension under Sec.       230.00
   1.790...................................................
------------------------------------------------------------------------
    (k) In supplemental examination proceedings:
    (1) For processing and treating a request for supplemental
examination:
                      Table 12 to Paragraph (k)(1)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,155.00
By a small entity (Sec.   1.27(a)).........................     2,310.00
By other than a small or micro entity......................     4,620.00
------------------------------------------------------------------------
    (2) For ex parte reexamination ordered as a result of a
supplemental examination proceeding:
                      Table 13 to Paragraph (k)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $3,175.00
By a small entity (Sec.   1.27(a)).........................     6,350.00
By other than a small or micro entity......................    12,700.00
------------------------------------------------------------------------
    (3) For processing and treating, in a supplemental examination
proceeding, a non-patent document over 20 sheets in length, per
document:
    (i) Between 21 and 50 sheets:
                     Table 14 to Paragraph (k)(3)(i)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $45.00
By a small entity (Sec.   1.27(a)).........................        90.00
By other than a small or microentity.......................       180.00
------------------------------------------------------------------------
    (ii) For each additional 50 sheets or a fraction thereof:
                    Table 15 to Paragraph (k)(3)(ii)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $75.00
By a small entity (Sec.   1.27(a)).........................       150.00
By other than a small or micro entity......................       300.00
------------------------------------------------------------------------
0
7. Section 1.21 is amended by revising paragraphs (a)(1), (2), and (5),
adding paragraphs (a)(7) and (8), revising paragraphs (a)(9)(ii) and
(a)(10), adding paragraph (k), and revising paragraphs (n), (o), and
(q) to read as follows:
Sec.  1.21   Miscellaneous fees and charges.
* * * * *
    (a) * * *
    (l) For admission to examination for registration to practice:
    (i) Application Fee (non-refundable): $110.00.
    (ii) Registration examination fee.
    (A) For test administration by commercial entity: $210.00.
    (B) For test administration by the USPTO: $470.00.
    (iii) For USPTO-administered review of registration examination:
$470.00.
    (2) On registration to practice or grant of limited recognition:
    (i) On registration to practice under Sec.  11.6 of this chapter:
$210.00.
    (ii) On grant of limited recognition under Sec.  11.9(b) of this
chapter: $210.00.
    (iii) On change of registration from agent to attorney: $110.00.
* * * * *
    (5) For review of decision:
    (i) By the Director of Enrollment and Discipline under Sec.
11.2(c) of this chapter: $420.00.
    (ii) Of the Director of Enrollment and Discipline under Sec.
11.2(d) of this chapter: $420.00.
* * * * *
    (7) Annual Voluntary Inactive Fee: $70.00.
    (8) For the Annual Active Practitioner Fee:
    (i) With certification of continuing legal education completion
pursuant to Sec.  11.8(d)(3) of this chapter: $240.00.
    (ii) Without certification of continuing legal education completion
pursuant to Sec.  11.8(d)(3) of this chapter: $340.00.
    (9) * * *
    (ii) Administrative reinstatement fee: $210.00.
    (10) On application by a person for recognition or registration
after disbarment or suspension on ethical grounds, or resignation
pending disciplinary proceedings in any other jurisdiction; on
application by a person for recognition or registration who is
asserting rehabilitation from prior conduct that resulted in an adverse
decision in the Office regarding the person's moral character; and on
application by a person for recognition or registration after being
convicted of a felony or crime involving moral turpitude or breach of
fiduciary duty; on petition for reinstatement by a person excluded or
suspended on ethical grounds, or excluded on consent from practice
before the Office: $1,680.00.
* * * * *
    (k) For items and services that the Director finds may be supplied,
for which fees are not specified by statute or by this part, such
charges as may be determined by the Director with respect to each such
item or service: Actual cost.
* * * * *
    (n) For handling an application in which proceedings are terminated
pursuant to Sec.  1.53(e): $140.00.
    (o) The receipt of a very lengthy sequence listing (mega-sequence
listing) in an application under 35 U.S.C. 111 or 371 is subject to the
following fee:
    (1) First receipt by the Office of a sequence listing in electronic
form ranging in size from 300MB to 800MB (without file compression):
                       Table 1 to Paragraph (o)(1)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $265.00
By a small entity (Sec.   1.27(a)).........................       530.00
By other than a small or micro entity......................     1,060.00
------------------------------------------------------------------------
    (2) First receipt by the Office of a sequence listing in electronic
form exceeding 800MB in size (without file compression):
                       Table 2 to Paragraph (o)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $2,625.00
By a small entity (Sec.   1.27(a)).........................     5,250.00
By other than a small or micro entity......................    10,500.00
------------------------------------------------------------------------
* * * * *
[[Page 37436]]
    (q) Additional Fee for Expedited Service: $170.00.
0
8. Section 1.27 is amended by revising paragraph (c)(3) introductory
text as follows:
Sec.  1.27  Definition of small entities and establishing status as a
small entity to permit payment of small entity fees; when a
determination of entitlement to small entity status and notification of
loss of entitlement to small entity status are required; fraud on the
Office.
* * * * *
    (c) * * *
    (3) Assertion by payment of the small entity basic filing, basic
transmittal, basic national fee, international search fee, or
individual designation fee in an international design application. The
payment, by any party, of the exact amount of one of the small entity
basic filing fees set forth in Sec.  1.16(a), (b), (c), (d), or (e),
the small entity transmittal fee set forth in Sec.  1.445(a)(1) or
Sec.  1.1031(a), the small entity international search fee set forth in
Sec.  1.445(a)(2) to a Receiving Office other than the United States
Receiving Office in the exact amount established for that Receiving
Office pursuant to PCT Rule 16, or the small entity basic national fee
set forth in Sec.  1.492(a), will be treated as a written assertion of
entitlement to small entity status even if the type of basic filing,
basic transmittal, or basic national fee is inadvertently selected in
error. The payment, by any party, of the small entity first part of the
individual designation fee for the United States to the International
Bureau (Sec.  1.1031) will be treated as a written assertion of
entitlement to small entity status.
* * * * *
0
9. Section 1.431 is amended by revising paragraph (c) to read as
follows:
Sec.  1.431  International application requirements.
* * * * *
    (c) Payment of the international filing fee (PCT Rule 15.2) and the
transmittal and search fees (Sec.  1.445) may be made in full at the
time the international application papers required by paragraph (b) of
this section are deposited or within one month thereafter. The
international filing, transmittal, and search fee payable is the
international filing, transmittal, and search fee in effect on the
receipt date of the international application. If the international
filing, transmittal and search fees are not paid within one month from
the date of receipt of the international application and prior to the
sending of a notice of deficiency which imposes a late payment fee
(Sec.  1.445(a)(6)), applicant will be notified and given a one month
non-extendable time limit within which to pay the deficient fees plus
the late payment fee.
* * * * *
0
10. Section 1.445 is amended by revising paragraph (a) to read as
follows:
Sec.  1.445  International application filing, processing and search
fees.
    (a) The following fees and charges for international applications
are established by law or by the Director under the authority of 35
U.S.C. 376:
    (1) A transmittal fee (see 35 U.S.C. 361(d) and PCT Rule 14)
consisting of:
    (i) A basic portion:
    (A) For an international application having a receipt date that is
on or after [EFFECTIVE DATE OF FINAL RULE]:
                    Table 1 to Paragraph (a)(1)(i)(A)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $65.00
By a small entity (Sec.   1.27(a)).........................       130.00
By other than a small or micro entity......................       260.00
------------------------------------------------------------------------
    (B) For an international application having a receipt date that is
on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]:
                    Table 2 to Paragraph (a)(1)(i)(B)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $60.00
By a small entity (Sec.   1.27(a)).........................       120.00
By other than a small or micro entity......................       240.00
------------------------------------------------------------------------
    (C) For an international application having a receipt date that is
before January 1, 2014: $240.00.
    (ii) A non-electronic filing fee portion for any international
application designating the United States of America that is filed on
or after November 15, 2011, other than by the Office electronic filing
system, except for a plant application:
                     Table 3 to Paragraph (a)(1)(ii)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a small entity (Sec.   1.27(a)).........................      $200.00
By other than a small entity...............................       400.00
------------------------------------------------------------------------
    (2) A search fee (see 35 U.S.C. 361(d) and PCT Rule 16):
    (i) For an international application having a receipt date that is
on or after [EFFECTIVE DATE OF FINAL RULE]:
                     Table 4 to Paragraph (a)(2)(i)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $545.00
By a small entity (Sec.   1.27(a)).........................     1,090.00
By other than a small or micro entity......................     2,180.00
------------------------------------------------------------------------
    (ii) For an international application having a receipt date that is
on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]:
                     Table 5 to Paragraph (a)(2)(ii)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $520.00
By a small entity (Sec.   1.27(a)).........................     1,040.00
By other than a small or micro entity......................    $2,080.00
------------------------------------------------------------------------
    (iii) For an international application having a receipt date that
is before January 1, 2014: $2,080.00.
    (3) A supplemental search fee when required, per additional
invention:
    (i) For an international application having a receipt date that is
on or after [EFFECTIVE DATE OF FINAL RULE]:
                     Table 6 to Paragraph (a)(3)(i)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $545.00
By a small entity (Sec.   1.27(a)).........................     1,090.00
By other than a small or micro entity......................     2,180.00
------------------------------------------------------------------------
    (ii) For an international application having a receipt date that is
on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]:
                     Table 7 to Paragraph (a)(3)(ii)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $520.00
By a small entity (Sec.   1.27(a)).........................     1,040.00
By other than a small or micro entity......................     2,080.00
------------------------------------------------------------------------
    (iii) For an international application having a receipt date that
is before January 1, 2014: $2,080.00.
    (4) A fee equivalent to the transmittal fee in paragraph (a)(1) of
this section that would apply if the USPTO was the Receiving Office for
transmittal of an international application to the International Bureau
for processing in its capacity as a Receiving Office (PCT Rule 19.4).
    (5) Late furnishing fee for providing a sequence listing in
response to an invitation under PCT Rule 13ter:
                       Table 8 to Paragraph (a)(5)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $75.00
By a small entity (Sec.   1.27(a)).........................       150.00
By other than a small or micro entity......................       300.00
------------------------------------------------------------------------
    (6) Late payment fee pursuant to PCT Rule 16bis.2
* * * * *
0
11. Section 1.482 is revised to read as follows:
Sec.  1.482  International preliminary examination and processing fees.
    (a) The following fees and charges for international preliminary
examination are established by the Director under the authority of 35
U.S.C. 376:
    (1) The following preliminary examination fee is due on filing the
Demand:
    (i) If an international search fee as set forth in Sec.
1.445(a)(2) has been paid on the international application to the
United States Patent and Trademark
[[Page 37437]]
Office as an International Searching Authority:
                     Table 1 to Paragraph (a)(1)(i)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................       320.00
By other than a small or micro entity......................       640.00
------------------------------------------------------------------------
    (ii) If the International Searching Authority for the international
application was an authority other than the United States Patent and
Trademark Office:
                     Table 2 to Paragraph (a)(1)(ii)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $200.00
By a small entity (Sec.   1.27(a)).........................       400.00
By other than a small or micro entity......................       800.00
------------------------------------------------------------------------
    (2) An additional preliminary examination fee when required, per
additional invention:
                       Table 3 to Paragraph (a)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................       320.00
By other than a small or micro entity......................       640.00
------------------------------------------------------------------------
    (b) The handling fee is due on filing the Demand and shall be as
prescribed in PCT Rule 57.
    (c) Late furnishing fee for providing a sequence listing in
response to an invitation under PCT Rule 13ter:
                        Table 4 to Paragraph (c)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1 .29)...........................       $80.00
By a small entity (Sec.   1.27(a)).........................       160.00
By other than a small or micro entity......................       320.00
------------------------------------------------------------------------
0
12. Section 1.492 is amended by:
0
a. Revising paragraph (a);
0
b. Adding table headings in paragraphs (b)(1) and (2);
0
c. Revising paragraphs (b)(3) and (4);
0
d. Adding a table heading in paragraph (c)(1);
0
e. Revising paragraphs (c)(2) and (d);
0
f. Adding a table heading in paragraph (e);
0
g. Revising paragraphs (f) and (h);
0
h. Adding a table heading in paragraph (i); and
0
i. Revising paragraph (j).
    The revisions and additions read as follows:
Sec.  1.49  2 National stage fees.
* * * * *
    (a) The basic national fee for an international application
entering the national stage under 35 U.S.C. 371:
                        Table 1 to Paragraph (a)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $80.00
By a small entity (Sec.   1.27(a)).........................       160.00
By other than a small or micro entity......................       320.00
------------------------------------------------------------------------
    (b) * * *
    (1) * * *
                       Table 2 to Paragraph (b)(1)
------------------------------------------------------------------------

---------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (2) * * *
                       Table 3 to Paragraph (b)(2)
------------------------------------------------------------------------

---------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (3) If an international search report on the international
application has been prepared by an International Searching Authority
other than the United States International Searching Authority and is
provided, or has been previously communicated by the International
Bureau, to the Office:
                       Table 4 to Paragraph (b)(3)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $135.00
By a small entity (Sec.   1.27(a)).........................       270.00
By other than a small or micro entity......................       540.00
------------------------------------------------------------------------
    (4) In all situations not provided for in paragraph (b)(1), (2), or
(3) of this section:
                       Table 5 to Paragraph (b)(4)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $175.00
By a small entity (Sec.   1.27(a)).........................       350.00
By other than a small or micro entity......................       700.00
------------------------------------------------------------------------
    (c) * * *
    (1) * * *
                       Table 6 to Paragraph (c)(1)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (2) In all situations not provided for in paragraph (c)(1) of this
section:
                       Table 7 to Paragraph (c)(2)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $200.00
By a small entity (Sec.   1.27(a)).........................       400.00
By other than a small or micro entity......................       800.00
------------------------------------------------------------------------
    (d) In addition to the basic national fee, for filing or on later
presentation at any other time of each claim in independent form in
excess of 3:
                        Table 8 to Paragraph (d)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $120.00
By a small entity (Sec.   1.27(a)).........................       240.00
By other than a small or micro entity......................       480.00
------------------------------------------------------------------------
    (e) * * *
                        Table 9 to Paragraph (e)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (f) In addition to the basic national fee, if the application
contains, or is amended to contain, a multiple dependent claim, per
application:
                        Table 10 to Paragraph (f)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $215.00
By a small entity (Sec.   1.27(a)).........................       430.00
By other than a small or micro entity......................       860.00
------------------------------------------------------------------------
* * * * *
    (h) Surcharge for filing any of the search fee, the examination
fee, or the oath or declaration after the date of the commencement of
the national stage (Sec.  1.491(a)) pursuant to Sec.  1.495(c):
                        Table 11 to Paragraph (h)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $40.00
By a small entity (Sec.   1.27(a)).........................        80.00
By other than a small or micro entity......................       160.00
------------------------------------------------------------------------
    (i) * * *
                        Table 12 to Paragraph (i)
------------------------------------------------------------------------

-------------------------------------------------------------------------

                                * * * * *
------------------------------------------------------------------------
    (j) Application size fee for any international application, the
specification and drawings of which exceed 100 sheets of paper, for
each additional 50 sheets or fraction thereof:
                        Table 13 to Paragraph (j)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $105.00
By a small entity (Sec.   1.27(a)).........................       210.00
By other than a small or micro entity......................       420.00
------------------------------------------------------------------------
PART 11--REPRESENTATION OF OTHERS BEFORE THE UNITED STATES PATENT
AND TRADEMARK OFFICE
0
13. The authority citation for 37 CFR part 11 continues to read as
follows:
    Authority: 5 U.S.C. 500; 15 U.S.C. 1123; 35 U.S.C. 2(b)(2), 32,
41; sec. 1, Pub. L. 113-227, 128 Stat. 2114.
0
14. Section 11.8 is amended by adding paragraph (d) to read as follows:
Sec.  11.8   Oath and registration fee.
* * * * *
    (d)(1) Each registered practitioner, as well as individuals granted
limited recognition under Sec.  11.9(b), shall each year, on or before
a date to be set by the OED Director, pay to the OED Director an annual
active patent practitioner fee as set forth in Sec.  1.21(a)(8) of this
chapter. Adequate notice shall be published and sent to practitioners
in
[[Page 37438]]
advance of the due date for payment of the annual active patent
practitioner fee. Payment shall be for the calendar year in which the
annual active patent practitioner fee is assessed. Practitioners shall
not be liable for the annual active practitioner fee during the
calendar year in which they are first registered or granted limited
recognition. Practitioners who are endorsed on the register as
administratively inactive pursuant to Sec.  11.11(c) or in emeritus
status pursuant to Sec.  11.11(e)(2) shall not be liable for the annual
active patent practitioner fee. Practitioners who have been
disciplinarily suspended, excluded, or who have resigned shall not be
liable for the annual active patent practitioner fee during the time
period in which they are suspended, excluded, or have resigned.
    (2) Failure to comply with the provisions of paragraph (d)(1) of
this section may result in the registered practitioner, or individual
granted limited recognition under Sec.  11.9(b), being charged a
delinquency fee as set forth in Sec.  1.21(a)(9)(i) of this chapter and
may subject a practitioner to administrative suspension as set forth in
Sec.  11.11(b). An administratively suspended registered practitioner,
or person granted limited recognition, may be reinstated or reactivated
on the register pursuant to Sec.  11.11(f)(1).
    (3)(i) A registered practitioner, or person granted limited
recognition under Sec.  11.9(b), who certifies to the OED Director that
the practitioner has completed, in the past 24 months, five hours of
continuing legal education credits in patent law and practice and one
hour of continuing legal education credit in ethics, shall pay an
annual active patent practitioner fee in the amount set forth in Sec.
1.21(a)(8)(i) of this chapter. All other registered practitioners, or
persons granted limited recognition under Sec.  11.9(b), shall pay an
annual active patent practitioner fee in the amount set forth in Sec.
1.21(a)(8)(ii) of this chapter.
    (ii) A registered practitioner, or person granted limited
recognition under Sec.  11.9(b), may earn up to two of the five hours
of continuing legal education credit in patent law and practice as set
forth in paragraph (a) of this section by providing patent pro bono
legal services through the USPTO Patent Pro Bono Program. One hour of
continuing legal education credit in patent law and practice may be
earned for every three hours of patent pro bono legal service.
0
15. Section 11.11 is amended by revising the section heading and
paragraphs (a) and (b)(1), adding paragraph (b)(4), revising paragraph
(d)(1), adding paragraph (d)(4), revising paragraphs (d)(6), (e), and
(f)(1), and adding paragraphs (f)(3) through (5) to read as follows:
Sec.  11.11  Administrative suspension, inactivation, resignation,
reinstatement, and revocation.
    (a) Contact information. A registered practitioner must notify the
OED Director of his or her postal address for his or her office, at
least one and up to three email addresses where he or she receives
email, and a business telephone number, as well as every change to any
of said addresses or telephone number within thirty days of the date of
the change. A registered practitioner shall, in addition to any notice
of change of address and telephone number filed in individual patent
applications, separately file written notice of the change of address
or telephone number to the OED Director. A registered practitioner who
is an attorney in good standing with the bar of the highest court of
one or more States shall provide the OED Director with the State bar
identification number associated with each membership. The OED Director
shall publish from the register a list containing the name, postal
business addresses, business telephone number, registration number, and
registration status as an attorney or agent of each registered
practitioner recognized to practice before the Office in patent
matters. The OED Director may also publish from the register the
continuing legal education certification status of each registered
practitioner.
    (b) * * *
    (1) Whenever it appears that a registered practitioner, or person
granted limited recognition under Sec.  11.9(b) has failed to comply
with Sec.  11.8(d)(1), the OED Director shall publish and send a notice
to the registered practitioner or person granted limited recognition
advising of the noncompliance, the consequence of being
administratively suspended set forth in paragraph (b)(6) of this
section if noncompliance is not timely remedied, and the requirements
for reinstatement under paragraph (f) of this section. The notice shall
be published and sent to the registered practitioner or person granted
limited recognition by mail to the last postal address furnished under
paragraph (a) of this section or by email addressed to the last email
addresses furnished under paragraph (a) of this section. The notice
shall demand compliance and payment of a delinquency fee set forth in
Sec.  1.21(a)(9)(i) of this chapter within sixty days after the date of
such notice.
* * * * *
    (4) An administratively suspended registered practitioner or person
granted limited recognition will continue to be assessed the annual
active patent practitioner fee as set forth in Sec.  11.8(d) during the
period of administrative suspension.
* * * * *
    (d) * * *
    (1) Any active registered practitioner may voluntarily enter
inactive status by filing a request, in writing, that his or her name
be endorsed on the register as voluntarily inactive. Upon acceptance of
the request, the OED Director shall endorse the name as voluntarily
inactive.
* * * * *
    (4) Each registered practitioner, as well as individuals granted
limited recognition under Sec.  11.9(b), endorsed on the register as
voluntarily inactive, shall each year, on or before a date to be set by
the OED Director, pay to the OED Director an annual voluntary inactive
fee as set forth in Sec.  1.21(a)(7) of this chapter. Adequate notice
shall be published and sent to practitioners in advance of the due date
for payment of the annual voluntary inactive fee. Payment shall be for
the calendar year in which the annual voluntary inactive fee is
assessed.
* * * * *
    (6) A voluntarily inactive practitioner may request reinstatement
by complying with paragraph (f)(3) of this section.
    (e) Resignation and emeritus status. (1) A registered practitioner
or a practitioner recognized under Sec.  11.14(c), who is not under
investigation under Sec.  11.22 for a possible violation of the USPTO
Rules of Professional Conduct, subject to discipline under Sec.  11.24
or Sec.  11.25, or a practitioner against whom probable cause has been
found by a panel of the Committee on Discipline under Sec.  11.23(b),
may resign by notifying the OED Director in writing that he or she
desires to resign. Upon acceptance in writing by the OED Director of
such notice, that registered practitioner or practitioner under Sec.
11.14 shall no longer be eligible to practice before the Office in
patent matters but shall continue to file a change of address for five
years thereafter in order that he or she may be located in the event
information regarding the practitioner's conduct comes to the attention
of the OED Director or any grievance is made about his or her conduct
while he or she engaged in practice before the Office. The name of any
registered practitioner whose resignation is accepted shall be removed
from the active register, endorsed as resigned, and notice thereof
[[Page 37439]]
published in the Official Gazette. Upon acceptance of the resignation
by the OED Director, the registered practitioner must comply with the
provisions of Sec.  11.116.
    (2) A registered practitioner who has been registered for 10 or
more years and who is currently in active status may request emeritus
status in writing from the OED Director, unless such practitioner is
under investigation under Sec.  11.22 for a possible violation of the
USPTO Rules of Professional Conduct, is a practitioner against whom
probable cause has been found by a panel of the Committee on Discipline
under Sec.  11.23(b), or is a respondent in a pending proceeding
instituted under Sec.  11.24, Sec.  11.25, or Sec.  11.29. Upon
acceptance in writing by the OED Director of such request, the
practitioner shall no longer be eligible to practice before the Office
in patent matters, except to provide patent pro bono legal services
through the USPTO Patent Pro Bono Program. An emeritus practitioner
performing pro bono legal services may neither ask for nor receive any
compensation of any kind from the client, except for out-of-pocket
expenses, for the patent legal services rendered by the emeritus
practitioner. The name of any individual whose emeritus status is
accepted shall be endorsed as emeritus. Upon acceptance of the emeritus
status by the OED Director, the emeritus practitioner shall comply with
the provisions of Sec.  11.116 and shall continue to file a change of
address for the period of their emeritus status.
    (f) * * *
    (1)(i) Any administratively suspended registered practitioner, or
person granted limited recognition under Sec.  11.9(b) may be
reinstated on the register provided the practitioner:
    (A) Is not a party to a disciplinary proceeding;
    (B) Has applied for reinstatement on an application form supplied
by the OED Director;
    (C) Has demonstrated compliance with the provisions of Sec.
11.7(a)(2)(i) and (iii);
    (D) Has submitted a declaration or affidavit attesting to the fact
that the practitioner has read the most recent revisions of the patent
laws and the rules of practice before the Office;
    (E) Has paid the fees set forth in Sec.  1.21(a)(9)(ii) of this
chapter; and
    (F) Has paid all outstanding fees as set forth in Sec.  1.21(a)(8)
of this chapter, as well as any applicable delinquency fees as set
forth in Sec.  1.21(a)(9)(i) of this chapter, for each year the
practitioner is administratively suspended.
    (ii) Practitioners who certify to the OED Director that they have
completed six hours of continuing legal education over the past twenty
four months, comprising five hours in the area of patent law and one
hour in ethics, may receive a $100 discount on the annual fee for each
year in which they are administratively suspended. A practitioner will
be subject to investigation and discipline for his or her conduct that
occurs prior to, during, or after the period of his or her
administrative suspension. Any administratively suspended registered
practitioner or person granted limited recognition who fails to make
these complete payments within five years of the effective date of the
suspension for nonpayment shall be required to file a petition to the
OED Director requesting reinstatement and providing objective evidence
that they continue to possess the necessary legal qualifications to
render applicants valuable service to patent applicants.
* * * * *
    (3)(i) Any registered practitioner whose name has been endorsed as
voluntarily inactive pursuant to paragraph (d)(1) of this section may
be reinstated on the register provided the practitioner:
    (A) Is not a party to a disciplinary proceeding;
    (B) Has applied for reinstatement on an application form supplied
by the OED Director;
    (C) Has demonstrated compliance with the provisions of Sec.
11.7(a)(2)(i) and (iii);
    (D) Submits a declaration or affidavit attesting to the fact that
the practitioner has read the most recent revisions of the patent laws
and the rules of practice before the Office;
    (E) Paid the reinstatement fee set forth in Sec.  1.21(a)(9)(ii) of
this chapter; and
    (F) Paid the fee set forth in Sec.  1.21(a)(7) of this chapter for
each year the practitioner was voluntarily inactive.
    (ii) A practitioner is subject to investigation and discipline for
his or her conduct that occurred prior to, during, or after the period
of his or her voluntary inactivation.
    (4) Any registered practitioner who has been endorsed as resigned
pursuant to paragraph (e) of this section may be reinstated on the
register provided the practitioner has applied for reinstatement on an
application form supplied by the OED Director, demonstrated compliance
with the provisions of Sec.  11.7(a)(2)(i) and (iii), paid the
reinstatement fee set forth in Sec.  1.21(a)(9)(ii) of this chapter,
and paid the fees set forth in Sec.  1.21(a)(7) of this chapter for
each year the practitioner was resigned. A practitioner who has
resigned for two or more years before the date the Office receives a
completed application from the person who resigned must also pass the
registration examination under Sec.  11.7(b)(1)(ii). Any reinstated
practitioner is subject to investigation and discipline for his or her
conduct that occurred prior to, during, or after the period of his or
her resignation.
    (5) Any registered practitioner in emeritus status may be
reinstated on the register provided the practitioner has applied for
reinstatement on an application form supplied by the OED Director, paid
the reinstatement fee set forth in Sec.  1.21(a)(9)(ii) of this
chapter, and paid the fee set forth in Sec.  1.21(a)(7) of this chapter
for each year the practitioner was in emeritus status. Any reinstated
practitioner is subject to investigation and discipline for his or her
conduct that occurred prior to, during, or after emeritus status being
conferred.
PART 41--PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
0
16. The authority citation for 37 CFR part 41 continues to read as
follows:
    Authority: 35 U.S.C. 2(b)(2), 3(a)(2)(A), 21, 23, 32, 41, 134,
135, and Pub. L. 112-29.
0
17. Section 41.20 is amended by revising paragraphs (a), (b)(1),
(b)(2)(ii), and (b)(3) and (4) to read as follows:
Sec.  41.20  Fees.
    (a) Petition fee. The fee for filing a petition under this part is:
$420.00.
    (b) * * *
    (1) For filing a notice of appeal from the examiner to the Patent
Trial and Appeal Board:
                       Table 1 to Paragraph (b)(1)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $210.00
By a small entity (Sec.   1.27(a)).........................       420.00
By other than a small or micro entity......................       840.00
------------------------------------------------------------------------
    (2) * * *
    (ii) In addition to the fee for filing a notice of appeal, for
filing a brief in support of an appeal in an inter partes reexamination
proceeding:
                     Table 2 to Paragraph (b)(2)(ii)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $525.00
By a small entity (Sec.   1.27(a)).........................     1,050.00
By other than a small or micro entity......................     2,100.00
------------------------------------------------------------------------
    (3) For filing a request for an oral hearing before the Board in an
appeal under 35 U.S.C. 134:
[[Page 37440]]
                       Table 3 to Paragraph (b)(3)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $340.00
By a small entity (Sec.   1.27(a)).........................       680.00
By other than a small or micro entity......................     1,360.00
------------------------------------------------------------------------
    (4) In addition to the fee for filing a notice of appeal, for
forwarding an appeal in an application or ex parte reexamination
proceeding to the Board:
                       Table 4 to Paragraph (b)(4)
------------------------------------------------------------------------

------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $590.00
By a small entity (Sec.   1.27(a)).........................     1,180.00
By other than a small or micro entity......................     2,360.00
------------------------------------------------------------------------
PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD
0
18. The authority citation for 37 CFR part 42 continues to read as
follows:
    Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 316,
321-326; Pub. L. 112-29, 125 Stat. 284; and Pub. L. 112-274, 126
Stat. 2456.
0
19. Section 42.15 is revised to read as follows:
Sec.  42.15  Fees.
    (a) On filing a petition for inter partes review of a patent,
payment of the following fees are due:
    (1) Inter Partes Review request fee: $19,500.00.
    (2) Inter Partes Review Post-Institution fee: $18,750.00.
    (3) In addition to the Inter Partes Review request fee, for
requesting review of each claim in excess of 20: $375.00.
    (4) In addition to the Inter Partes Post-Institution request fee,
for requesting review of each claim in excess of 20: $750.00.
    (b) On filing a petition for post-grant review or covered business
method patent review of a patent, payment of the following fees are
due:
    (1) Post-Grant or Covered Business Method Patent Review request
fee: $20,000.00.
    (2) Post-Grant or Covered Business Method Patent Review Post-
Institution fee: $27,500.00.
    (3) In addition to the Post-Grant or Covered Business Method Patent
Review request fee, for requesting review of each claim in excess of
20: $475.00.
    (4) In addition to the Post-Grant or Covered Business Method Patent
Review Post-Institution fee, for requesting review of each claim in
excess of 20: $1,050.00.
    (c) On the filing of a petition for a derivation proceeding,
payment of the following fees is due:
    (1) Derivation petition fee: $420.00.
    (2) [Reserved]
    (d) Any request requiring payment of a fee under this part,
including a written request to make a settlement agreement available:
$420.00.
    (e) Fee for non-registered practitioners to appear before the
Patent Trial and Appeal Board: $250.00.
    Dated: July 18, 2019.
Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office.
[FR Doc. 2019-15727 Filed 7-30-19; 8:45 am]
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