Setting and Adjusting Patent Fees During Fiscal Year 2017, 68150-68183 [2016-23093]

Download as PDF 68150 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules Patent and Trademark Office 37 CFR Parts 1, 41, and 42 [Docket No. PTO–P–2015–0056] RIN 0651–AD02 Setting and Adjusting Patent Fees During Fiscal Year 2017 United States Patent and Trademark Office, Department of Commerce. ACTION: Notice of proposed rulemaking. AGENCY: 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). The USPTO is a business-like operation where external factors affect the productivity of the workforce and the demand for patent products and services. The proposed fee adjustments are needed to provide the Office with a sufficient amount of aggregate revenue to recover its aggregate cost of patent operations (based on current projections), while maintaining momentum towards achieving strategic goals. This rulemaking represents the second iteration of patent fee rulemaking by the USPTO to set fees under the authority of the AIA; the first AIA patent fee setting rule was published in January 2013. This current rulemaking is a result of the USPTO assessing its costs and fees, as is consistent with federal fee setting standards. Following a biennial review of fees, costs, and revenues that began in 2015, the Office concluded that further targeted fee adjustments were necessary to continue funding patent operations, enhance patent quality, and continue to work toward patent pendency goals, strengthen the Office’s information technology (IT) capability and infrastructure, and achieve operating reserve targets. Further, in several instances, the fee change proposals offered during the biennial fee review process were enhanced by the availability of cost and workload data (e.g., the number of requests for a service) that was not available in 2013. As a result, the 205 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. DATES: The Office solicits comments from the public on this proposed rulemaking. Written comments must be received on or before December 2, 2016 to ensure consideration. sradovich on DSK3GMQ082PROD with PROPOSALS3 SUMMARY: VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 Comments should be sent by electronic mail message over the Internet addressed to: fee.setting@ uspto.gov. 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 http://www.regulations.gov. See the Federal eRulemaking Portal Web site 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 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 Web site (http://www.uspto.gov) and at http://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 the 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: ADDRESSES: DEPARTMENT OF COMMERCE I. Executive Summary A. Purpose of This Action The Office proposes this rule under section 10 of the AIA (Section 10), 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 PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 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. Parallel Rulemaking. In tandem with this notice of proposed rulemaking (NPRM) for patent related fees, the Office is undertaking a separate fee rulemaking action that proposes to adjust trademark related fees titled Trademark Adjustment Fees (RIN: 0651–AD08), published on May 27, 2016 (81 FR 33619) and available at http://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. B. Summary of Provisions Impacted by This Action The fee schedule in this rulemaking will recover the aggregate estimated costs of patent operations while achieving the Office’s strategic goals as detailed in the USPTO 2014–2018 Strategic Plan (Strategic Plan) that is available at http://www.uspto.gov/ about/stratplan/USPTO_2014-2018_ Strategic_Plan.pdf, as amended by Appendix III of the Budget, available at http://www.uspto.gov/sites/default/files/ documents/fy17pbr.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 fee setting rule supports the patent-related strategic goals to optimize patent quality and timeliness, which includes improving patent quality, reducing the backlog of unexamined applications and decreasing patent application pendency, and facilitating processing at the Patent Trial and Appeal Board (PTAB); and increasing international efforts to improve intellectual property policy, protection and enforcement. This proposed rule also supports the management goal to achieve organizational excellence, which includes leveraging IT investments and securing sustainable funding. The Office intends to issue a final rule on fee changes in FY 2017 after receipt and analysis of public comments. During a formal process closely tied to the annual budget process, the USPTO management and leadership teams reviewed and analyzed 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 E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules provide sufficient financial resources to facilitate the effective administration of the USPTO. Specifically, the Office assessed how well each proposal aligned with four key fee setting policy factors: Foster innovation, align fees with the full cost of products and services, set fees to facilitate the effective administration of the patent and trademark systems, and offer application processing options for applicants. In this rulemaking, the Office proposes to set or adjust 205 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. Micro entity fee eligibility is described in Section 10(g) of the Act. There are also 42 new fees being introduced or replacing one of the 14 fees that are being discontinued. In summary, the routine fees to obtain a patent (i.e., filing, search, examination, and issue fees) will increase slightly under this NPRM relative to the current fee schedule. 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 section of Supplementary Information in this rulemaking and in the ‘‘Table of Patent Fees—Current, Proposed and Unit Cost’’ (hereinafter ‘‘Table of Patent Fees’’) available at http://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. It is important to recognize the progress the Office has made since the first Section 10 patent fee setting effort in order to better understand the fee adjustments the Office is proposing in this iteration. The USPTO first used the authority provided in Section 10 to set and adjust patent fees based on the market factors at the time. That initial effort, which began in September 2011, aimed to provide sufficient revenue to recover the cost of patent operations, including improving patent quality, reducing the patent application backlog, decreasing patent application pendency, upgrading the patent business IT capability and infrastructure, and implementing a sustainable funding model. After two public hearings and a VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 public comment period, the final rule was published in the Federal Register on January 18, 2013 (78 FR 4212), with most fee changes effective on March 18, 2013, and the remainder effective on January 1, 2014. The Office has made considerable progress in reducing backlog and pendency: First action pendency went from 21.9 months in FY 2012 to 17.3 months in FY 2015; total average pendency was reduced from 32.4 months in FY 2012 to 26.6 months in FY 2015; and the patent application backlog was reduced from 608,283 in FY 2012 to 553,221 at the end of FY 2015. The USPTO was also able to complete the opening of three additional regional offices in Denver, Colorado; San Jose (Silicon Valley), California; and Dallas, Texas. With a regional office already in Detroit, and USPTO headquarters in the Washington DC metro area, the Office is better equipped to build and maintain a flexible, diverse, and engaged workforce that is prepared to support backlog reduction and pendency goals while better serving the intellectual property community across the nation. Similarly, the Office continues its efforts toward enhancing patent quality. As a result of the increased revenue from the inaugural AIA patent fee setting, the Office is better positioned to increase its quality focus because of significant reductions in the patent application backlog and pendency, improved patent operations and procedures, and more secure funding. High-quality patents enable certainty and clarity of rights, which fuels innovation and reduces needless litigation. The Office’s commitment to a renewed and enhanced focus on patent quality centers on three pillars: (1) Excellence in work products; (2) excellence in measuring patent quality; and (3) excellence in customer service. The three quality pillars are high priorities throughout the Office, in addition to the existing quality initiatives set forth by the USPTO-led White House Executive Actions on High-Tech Patent Issues (http:// www.uspto.gov/patent/initiatives/usptoled-executive-actions-high-tech-patentissues). The Office is strengthening work products, processes, services, and how it measures patent quality at all stages of the patent process. The recently implemented Enhanced Patent Quality Initiative (EPQI) aims to ensure that the Office continues issuing highquality patents well into the future. Stakeholder engagement is a critical component of the EPQI. Following a request for public comments on a set of potential quality proposals, the Office PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 68151 hosted a ‘‘Quality Summit’’ with the public to discuss the outlined proposals. By engaging the public on this topic, the Office received more than 1,200 comments on a wide array of possible patent quality initiatives and received even more feedback from both patent examiners and external stakeholders during the summit. Already the Office has created 11 programs under the umbrella of the EPQI in areas including pre-examination and search enhancement, prosecution enhancement, and evaluation enhancement. The Office held a patent quality community symposium in April 2016 featuring interactive segments and implementation updates on the EPQI. The goal of the symposium was to update the public on the USPTO’s progress on the 11 programs to improve clarity of the prosecution record, enhance examiner training, improve applicant-examiner interactions, and redefine ways to capture and measure data about quality. The symposium featured lectures on these topics, an interactive workshop demonstration on how the Master Review Form will be applied (see http://www.uspto.gov/blog/ director/entry/improvements_in_ measuring_patent_quality), and a panel discussion with experienced patent practitioners about ways applicants can contribute to the Agency’s efforts. The proposed fees will provide sufficient resources to permit the Office to maintain momentum for developing a new paradigm of patent quality at the USPTO. Likewise, since the last patent fee setting effort, the USPTO has made significant progress on IT tools, like the Patents End-to-End (PE2E) suite, a solution that will enable a new way of processing patent applications using a single software platform to manage examination activities and integrate with existing systems via user-oriented tools that help examiners process applications and support analytics and automated processing. See Part III of this rulemaking for more information on how PE2E will transform the Office. Other IT efforts are also underway to repair or replace the USPTO’s aging infrastructure. The Office is also working to ensure optimal IT service delivery to all users in PTAB, including 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 E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 68152 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules (CBMR) proceedings, and derivation (DER) proceedings. The PTAB will benefit greatly from enhanced system tools even as the organization has significantly strengthened capacity in recent years. A major component of the overall patent process is the work carried out by the PTAB. The PTAB received more than 4,700 petitions for AIA trial proceedings since 2012 and has met every deadline set by Congress for such trials. In the last iteration of patent fee setting, the Office had to estimate both demand (e.g., workload) and cost with little data available for the IPRs, PGRs, and CBMRs. Now, with three years of historical cost data, the Office has better insights into the full cost of services and can better estimate demand, which enables the USPTO to align fees more appropriately. 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, reexamination appeals, and ex parte appeals. The USPTO’s goal is to meet the statutory timeliness requirements for decisions in AIA proceedings and in appeals from reexamination proceedings. While no statutory timeliness requirement exists for appeals in regular ex parte applications, the Office is committed to reducing the inventory of appeals by hiring to the extent possible, clearing the oldest cases, and reassigning judges according to greatest need. The proposal includes an increase to the major PTAB fees including Filing a Notice of Appeal, Forwarding an Appeal to the Board, IPR, PGR, and CBMR fees. Lastly, the USPTO has made significant progress towards financial sustainability as a result of the initial AIA fee setting effort, including building towards a three-month optimal operating reserve for patents. As initially presented in the 2013 patent fee setting rule, funding an operating reserve as a part of the Office’s regular budgetary requirements aligns with the USPTO’s strategic priority to sustain long-term operational goals and prevent the USPTO from having to make shortterm crisis-based spending changes that affect the delivery of the USPTO’s performance commitments. For instance, the USPTO was able to continue operations during the October 2013 government-wide shut down by using available operating reserves carried over from FY 2013. More recently, the operating reserve allowed the Office to maintain progress on IT investments when patent filings (and subsequently revenue) decreased in FY VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 2015. In order to continue to provide effective service, the Office must proactively manage fiscal risks. The Office acutely recognizes that fees cannot simply increase for every improvement the Office deems desirable. Instead, for this rulemaking effort, the Office focused on prioritizing spending and gradually building the operating reserve in order to build resiliency against financial shocks. At optimal levels, the reserve will allow the Office to operate for three months in the event of interruptions in the ability to access collected fees such as during a government shutdown or during a period of unanticipated reductions in revenue or increases in operating expenses, such as during a domestic or global economic crisis, or major departures from the estimated number of patent applications received. In conclusion, the USPTO has made significant strides in realizing the goals set forth in 2011, in part due to the AIA authority to set fees. In order to continue building on the progress made over the last several years, and consistent with the USPTO’s biennial fee review policy, the USPTO proposes the fee schedule detailed herein to continue quality initiatives, maintain progress toward backlog and pendency reduction, continue IT improvements for both Patents and PTAB, and promote the sound fiscal management of the Office while answering stakeholder calls to continue to improve service. The fees proposed in this rulemaking intend to make the Office well positioned to deliver on known commitments, and address unknown risks in the future. 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 Office key fee setting policy factors; (2) securing aggregate revenue to cover aggregate cost—a measure of whether the alternative provides adequate revenue to support the core mission and strategic priorities described in the NPRM and FY 2017 Budget; and (3) aggregate increased user fee payments—a measure of the opportunity cost associated with paying additional fees to the Office. For these three costs and benefits, 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). In summary, the benefits of the proposed alternative clearly outweigh those of the baseline and the other alternatives considered in the RIA. Table 1 summarizes the RIA results. C. Summary of Costs and Benefits of This Action The proposed rule is significant and results in a need for a Regulatory Impact Analysis (RIA) under Executive Order 12866 Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993). The Office prepared an RIA to analyze the costs and benefits of the NPRM over a fiveyear period, FY 2017–FY 2021. The RIA includes a comparison of the proposed fee schedule to the current fee schedule (baseline) and to two other alternatives. 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 rulemaking, but found that the proposed rulemaking had qualitative benefits exceeding its qualitative costs. Costs Aggregate Increase in User Fee Payments. Benefits ................................... Secure Aggregate Revenue to Cover Aggregate Costs. Fee Schedule Design .......... Net Benefit ........................... PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 TABLE 1—PROPOSED PATENT FEE SCHEDULE COSTS AND BENEFITS, CUMULATIVE FY 2017–FY 2021 Qualitative Costs and Benefits Moderate. Total. Significant. Significant. Significant. Additional details describing the costs and benefits are available in the RIA at http://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-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 E:\FR\FM\03OCP3.SGM 03OCP3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules under 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 sevenyear period that began on September 16, 2011. B. 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. sradovich on DSK3GMQ082PROD with PROPOSALS3 C. Micro Entity Fee Reduction Section 10(g) of the AIA amended chapter 11 of title 35, U.S.C., to add 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. D. 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 VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 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 October 20, 2015, 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 http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. The PPAC held a public hearing in Alexandria, Virginia, on November 19, 2015. Transcripts of the hearing are available for review at http:// www.uspto.gov/sites/default/files/ documents/PPAC_Hearing_Transcript_ 20151119.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 Web site, http://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-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 February 29, 2016, and can be found online at http://www.uspto.gov/sites/default/files/ documents/PPAC_Fee%20_Setting_ Report_2016%20%28Final%29.pdf. The Office considered and analyzed all comments, advice, and recommendations received from the PPAC before publishing this NPRM. Before the final rule is issued, the public will have 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 rulemaking is to establish a fee schedule that generates sufficient multi-year revenue to recover the aggregate cost to maintain USPTO operations and accomplish the USPTO’s strategic goals in accordance with the authority granted to the USPTO by AIA Section 10. A similar strategy guided the initial AIA patent fee setting in 2013. The PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 68153 overriding principles behind this strategy are to operate within a sustainable funding model to avoid disruptions caused by fluctuations in financial operations, and to continue making strategic improvements, such as progress on patent quality initiatives, continued reduction of the patent application backlog and pendency, and modernization of IT systems. In addition to the overriding principles outlined above, as discussed earlier in this document, the Office also assesses alignment with the key fee setting policy factors. Each factor promotes a particular aspect of the U.S. patent system. Fostering innovation is an important policy factor to ensure that access to the U.S. patent system is without significant barriers to entry, 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 some 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 is important to influence 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 and 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) projected costs to meet the Office’s operational needs and strategic goals; and (3) sustainable funding. Additionally, the Office carefully considered 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 Activity Based Information. E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 68154 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules Using historical cost data and forecasted application demands, the Office can align fees to the costs of specific patent products and services. The Office has made significant progress towards its strategic goals for patent quality, backlog, pendency, and IT system modernization for several years now. For more information about the Office’s performance record and progress towards its strategic goals, see the FY 2015 Performance and Accountability Report, available at http:// www.uspto.gov/sites/default/files/ documents/USPTOFY15PAR.pdf. Each of the Office’s goals is directly aligned to the cost of delivering patent services. The document entitled USPTO Setting and Adjusting Patent Fees during Fiscal Year 2017—Activity Based Information and Patent Fee Unit Expense Methodology, available at http:// www.uspto.gov/about-us/performanceand-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 rulemaking details the Office’s methodology for establishing fees. Finally, 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. The costs projected to meet the Office’s strategic goals can be found in the FY 2017 President’s Budget, which provides additional detail about the following performance and modernization efforts, among others: (a) Quality, backlog, and pendency and (b) modernized IT systems. (a) Quality, Backlog, and Pendency. The Office developed the strategic goal of optimizing patent quality and timeliness in response to feedback from the intellectual property community and in recognition that a sound, efficient, and effective intellectual property system is essential for technological innovation and for patent holders to reap the benefits of patent protection. In addition to timeliness of patent protection, the quality of application review is critical to the value of an issued patent. Issuance of quality patents provides certainty in the market and allows businesses and innovators to make informed and timely decisions on product and service development. Under the proposed action, the Office will continue to improve patent quality through the three quality pillars identified in Part I. In addition to quality, the USPTO continues to focus on backlog and pendency reduction. First action pendency went from 21.9 months in FY VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 2012 to 17.3 months in FY 2015, total average pendency was reduced from 32.4 months in FY 2012 to 26.6 months in FY 2015, and the patent application backlog was reduced from 608,283 in FY 2012 to 553,221 at the end of FY 2015. This proposed rulemaking will produce revenues adequate to continue the USPTO’s progress towards attaining its strategic goals for patent backlog and pendency. Similarly, the PTAB manages pendency and inventory for appeals and trials. This proposed rulemaking will help the PTAB to maintain the appropriate level of judicial, legal, and administrative staff needed to provide high quality and timely decisions for AIA trials, reexamination appeals, and ex parte appeals. (b) Information Technology. Revenue generated from the proposed fee structure will enable the USPTO to continue modernizing its IT architecture and systems. Some current systems remain obsolete and difficult to maintain, leaving the USPTO vulnerable to potential disruptions in patent operations. However, the Office’s efforts on PE2E, the large-scale patent IT improvement program, have already delivered value to examiners and customers alike. One of the PE2E releases included an automated method to convert millions of image-based patent application papers into a fully automated extensible markup language (XML), so that images can be tagged with keywords to facilitate searching during the patent examination process. PE2E relies on flexible, scalable, modern technology that is optimized to eliminate repetitive tasks and support analytics and automated processing. Likewise, eCommerce Modernization (‘‘eMod’’) will improve the electronic patent application process by improving user interfaces, increasing functionality, and updating infrastructure—all aimed at enriching the user experience via more efficient system integration and expanding system usefulness. Modern IT tools benefit both USPTO employees and stakeholders by facilitating the effective administration of the patent system through effective application processing, better examination quality, and the ability to provide greater services via a nationwide workforce. (3) Sustainable Funding. A major component of sustainable funding is the creation 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, spending levels and revenue streams create volatility in PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 patent operations and threaten the Office’s ability to meet its designated performance levels (e.g., quality, backlog, and pendency). The USPTO’s annual budget delineates prospective spending levels (aggregate costs) to execute core mission activities and strategic initiatives. In the FY 2017 President’s Budget, the USPTO estimated that its aggregate patent operating costs for FY 2017, including administrative costs, would be $2.930 billion. After evaluating relevant risk factors, the Office determined that a minimum balance of $300 million in the operating reserve was adequate for FY 2016 and FY 2017, which is below the optimal balance of three months operating expenses, or about $730 million. Based on the proposed fee increase contained in the FY 2017 President’s Budget, the spending requirement would be offset by projected fee collections and other income of $3.005 billion and a deposit of $75 million to the patent operating reserve, leaving a $385 million balance in the patent operating reserve, or $85 million more than the desired minimum of $300 million for FY 2017. Because the FY 2017 President’s Budget was submitted prior to the USPTO making final decisions on the proposed fee adjustments, the operating reserve estimate in this NPRM differs from the estimate included in the Budget. Given that the Office reduced several fees from the initial proposal in response to comments from the PPAC and the public, the aggregate revenue collected from the proposed fee schedule is lower. In FY 2017, the proposed fees and other income are projected to collect $2.969 billion, with $39 million deposited in the operating reserve, resulting in a balance of $349 million at the end of the fiscal year, which is slightly more than the minimal level of $300 million for FY 2017. An optimal reserve balance of three months of operating expenses is projected to be $789 million in FY 2019. With the proposed fee increases, the Office projects the actual balance will reach $639 million at the end of FY 2019. Without the proposed fee changes, the Office projects that end of year FY 2019 operating reserve balance would fall below the minimum threshold of $300 million to approximately $264 million. With the proposed fee schedule, the Office projects to first reach the optimal operating reserve balance by the end of FY 2020, and FY 2021 would be the first year in which the optimal operating reserve balance would be in place at the beginning of the fiscal year. The FY 2021 optimal reserve balance is projected to be $818 E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules million, and the projected reserve level entering the fiscal year is $861 million. 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 target balance continues to be sufficient to provide the funding stability needed by the Office. Per the Office’s operating reserve policy, if the operating reserve balance is projected to exceed the optimal level by 10 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. (4) Comments, Advice, and Recommendations from the Patent Public Advisory Committee. In the report prepared in accordance with AIA fee setting authority, the PPAC expressed general support for an increase in fees to sustain quality and fund a sufficient operating reserve for the Office. Specifically, the report stated, ‘‘The PPAC agrees that the Office should set fees to establish an adequate revenue stream over a sustained period to fund the people and infrastructure essential for a high quality, low pendency examination process, and to fund its operating reserve.’’ However, the PPAC expressed concerns over some of the individual fee adjustments and their potential impacts on patent applicants and holders. To address these concerns and still generate the necessary aggregate revenue to meet the Office’s goals, the PPAC suggested several alternative fee adjustment approaches. The USPTO has reviewed the report and has amended the initial fee proposal in an effort to address these concerns, where possible, so as to remain consistent with the rulemaking goals. The USPTO has also included additional information in this NPRM to further address some of the PPAC’s concerns. The PPAC expressed general support for the stated goals and an increase in patent fees but proposed alternative approaches for certain fee adjustments. The report suggested that the USPTO could save money by improving quality and processes to maximize efficiency, thereby offsetting some fee increases. In general, the PPAC urged the Office to provide more detail and justification for some of the fee adjustments, including greater transparency in the allocation of costs and historical aspects of costs, better explanations for why certain fees increased and to what purposes the additional revenue would be used, and any practical implications of not VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 changing the current fee structure. This Part and Part V: Individual Fee Rationale offer this additional information. The PPAC expressed a lack of support for the proposal to increase Request for Continued Examination (RCE) fees. The advisory body questioned whether the fees are warranted and suggests instead that the USPTO consider ways to reduce the need for RCEs. In response to this concern, the USPTO proposes a reduction to the fee increases for both a first RCE and a second and subsequent RCE. The revised proposals include moderate increases that bring the fee rates closer to the cost of processing an RCE, as calculated using the most recently available cost data (FY 2015). Specifically, the first RCE fee rate is now proposed to increase from $1,200 to $1,300 for large entities, a $100 increase (8 percent). The initial proposal included a $300 increase for this fee. The FY 2015 full cost to examine a first RCE was $2,187. When factoring small and micro entity rates, first RCE fees collected 48.8 percent of the examination cost in FY 2015. The second and subsequent RCE fee rate is now proposed to increase from $1,700 to $1,900 for large entities, a $200 increase (12 percent). The initial proposal included a $300 increase for this fee. The FY 2015 full cost to examine a second and subsequent RCE was $1,540. When factoring small and micro entity rates, second and subsequent RCE fees collected 100 percent of the examination cost in FY 2015. At an aggregate level, first and second and subsequent RCE fees collected 62.5 percent of the examination costs for FY 2015. In order to approach cost recovery and limit the increase to the first RCE fee rate, the Office proposes a slightly larger increase for the second and subsequent RCE fee rate. Had this fee structure been in place in FY 2015, the Office would have recovered 68.6 percent of RCE costs as opposed to the 62.5 percent that was experienced. While this proposed fee structure will not achieve full cost recovery for RCEs, it will bring collections closer to cost and therefore reduce the subsidy for RCE filings currently provided by other patent fees. In addition to the proposed fee adjustments, the USPTO is committed to focusing on initiatives that will reduce the need for RCEs. Examples of initiatives the Office has already implemented to reduce the need for RCEs include the Quick Path Information Disclosure Statement (QPIDS) pilot program (http:// www.uspto.gov/patent/initiatives/quick- PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 68155 path-information-disclosure-statementqpids) and the After Final Consideration Pilot Program 2.0 (AFCP 2.0) (http:// www.uspto.gov/patent/initiatives/afterfinal-consideration-pilot-20). Additionally, the Enhanced Patent Quality Initiative (http:// www.uspto.gov/patent/initiatives/ enhanced-patent-quality-initiative-0) will be evaluating and strengthening work products, processes, and services at all stages of the patent process and may contribute to reducing the need for RCEs. The report noted opposition to the proposed increases for excess claim fees. The PPAC recommends a refund system in which excess claim fees are returned when claims are cancelled in response to a restriction requirement. Under this proposal, an applicant would only incur fees for the claims that are actually examined, not just filed. The USPTO appreciates the PPAC’s suggestion and has committed to undertaking a study to determine the feasibility of such a refund program, and at present the Office is proposing the increase for excess claim fees. Regarding the proposed change to the Information Disclosure Statement (IDS) model, the PPAC expressed concern about the negative effects of eliminating the certification requirement (under 37 CFR 1.97 (e)) and noted that the fee increase may discourage applicants from filing promptly when new prior art is discovered. In response to PPAC and public comments, the USPTO eliminated the proposed changes to IDS practice and instead is proposing a moderate increase to the IDS submission fee rate. The report stated that the substantial increase to the notice of appeal and appeal forwarding fees would likely result in discouraging patent holders’ invocation of appeal procedures, which are frequently used out of necessity rather than choice. In response, the Office notes that even with the proposed increases to the fees, the true cost of ex parte appeals is being significantly subsidized. That is, in FY 2015, ex parte appeal fees covered approximately 58 percent of the cost per appeal. The proposed fee increase will bring ex parte appeal fees up to cover approximately 72 percent of the cost per appeal. Since the implementation of the January 2013 Setting and Adjusting Patent Fees Final Rule, the increased ex parte appeal fees have enabled the PTAB to hire more judges. The PTAB has made great strides in reducing its appeals inventory, which reached over 27,000 (in 2012), to under 19,000 (in April 2016). The proposed increase in fees will help the Board further reduce E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 68156 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules the appeals inventory and improve pendency for appeals and trials. The PTAB is also working to reduce inventory with the implementation of the following two pilot programs: (i) Expedited Patent Appeal Pilot (EPAP) (see http://www.uspto.gov/patentsapplication-process/patent-trial-andappeal-board/expedited-patent-appealpilot) and (ii) Small Entity Pilot Program (see http://www.uspto.gov/patentsapplication-process/patent-trial-andappeal-board/uspto-announcesstreamlined-expedited). The PPAC report specifically expressed support for proposed fee adjustments for the IPR, PGR, and CBMR so that the PTAB has adequate resources to accomplish the mission of the AIA. However, the PPAC questioned the distribution of the fees between preand post-institution. The Office appreciates the observation and is currently assessing the matter. The PPAC suggested that it would be sensible for the USPTO to subdivide the AIA trial fees more finely (‘‘pay as you go’’). As the AIA review processes mature and become more certain, it may be appropriate to study the impact and feasibility of this proposal. Developing an understanding of the reasons driving settlements at various times in these proceedings will inform decision makers as to how and when to best structure fees. Because fees are intended to recapture aggregate agency patent costs over time, structuring of the fees will still require recapture of all costs unless the costs of the review proceedings are subsidized by other patent related revenue. The Office agrees with the PPAC’s characterization that the proceedings still contain significant uncertainties. Once the USPTO has had further experience with the proceedings to derive conclusions about settlement and other behaviors, the USPTO will reexamine the appropriateness of this proposal. Additionally, the PPAC suggested that the Office consider adopting a scaled petition fee schedule based on the petitioner’s annual revenue. However, the authority to discount fees or to charge additional fees for certain petitioners under the USPTO’s rulemaking authority is limited by the AIA to providing discounts to the six categories under section 10(b). As the administrative trial fees are outside of the six categories, the trial fees are not eligible for discounts. The report proposed a refund system for disciplinary proceeding fees associated with the Office of Enrollment and Discipline (OED). While the PPAC recognizes the importance of having an effective process for ensuring VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 compliance with the rules governing the Patent Bar, the advisory body also recognizes that some practitioners may be fully exonerated upon final determination. The Office would like to clarify that pursuant to 37 CFR 11.60(d)(2), the OED Director is currently authorized to recover expenses from a disciplined practitioner who seeks reinstatement. The purpose of listing this fee in 37 CFR 1.21 is simply to establish a new fee code by which to account for the receipt of these reimbursements. The fee is only imposed on practitioners who seek reinstatement after having been suspended or excluded. Thus, there should be no concern that a practitioner would be subject to this fee if he or she has been investigated and cleared or has been disciplined but not suspended or excluded. The PPAC also suggested that the proposed increases to design fees were excessive. In response, the USPTO has reduced the proposed increase to the design issue fee by $200 for large entities from the level that the Office initially proposed. The proposed large entity design issue fee rate is now $800 as opposed to $1,000. The minimum required fees to obtain a design patent (file/search/examination and issue) are proposed to increase slightly beyond cost recovery for large entities ($1,760 versus $1,596) to subsidize the substantial number (almost half in FY 2015) of small and micro entity applicants who pay lower fees despite similar costs to the Office. Further, design patentees do not pay maintenance fees, so there is no backend subsidy to support below-cost frontend fees. Overall, design fees are still proposed at rates that are below the Office’s aggregate processing costs even if the large entity design fee rates are slightly above cost. Therefore, even with the proposed fee increases, design application processing costs will continue to be subsidized by non-design specific fee revenues. The Office believes these proposed moderate fee increases in filing, search, examination, and issue are appropriately aligned to costs and the policy consideration to foster innovation. In the case of sequence listing fees, the report sought more information on the proposed fees to clarify the need for the increase. The level of effort associated with the handling of extremely lengthy sequence listings (hereafter referred to as mega-sequence listings) is significant because the Office’s systems require extra storage and special handling for sequence listing files beyond 300 Megabytes (MB). Actual cost data is not available since PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 these are newly proposed fees. However, based on historical data, on average, less than 10 applications per year contained sequence data that reached the 300 MB file levels of the proposed new fees. Based on previously filed applications with lengthy sequence listings, the Office determined that some applications disclosed sequence data that met the length thresholds for being included in the sequence listing, but that was neither invented by the applicants nor claimed. These sequence listings often included sequences that were available in the prior art, were not essential material, and could have been described instead, for example, by name and a publication or accession reference. Claims in such applications were frequently directed to the manipulation of sequence data rather than the substance of the sequences themselves. Submission of a megasequence listing in these applications would not have been necessary to complete the application if applicants limited the number of sequences that were described in such a way as to be required in a sequence listing. The proposed fee should encourage applicants to draft their specifications such that sequence data that is not essential material is not required to be included in a sequence listing, which should reduce the need for megasequence listings. A reduced number of mega-sequence listings will benefit the Office and the public by reducing large submissions of unnecessary sequences and, consequently, the search system load. The PPAC also requested additional information regarding the proposed fee for the late filing of sequence listings in international applications. This fee is being established pursuant to PCT Rule 13ter.1(c) and is similar in nature and proposed fee rate to fees charged by other international IP offices. Additional information regarding the authority and purpose of this rulemaking is available at http://www.wipo.int/pct/en/texts/ rules/r13ter.htm. The PPAC also requested additional information regarding copy fees, in particular those that appeared to be ‘‘very high charges.’’ Currently the fee schedule includes a catch-all fee of ‘‘Computer Records’’ priced ‘‘at cost.’’ The Office proposes to replace this fee code with five fees that encompass work currently performed and charged to this code. The five fee codes proposed to replace the ‘‘Computer Records’’ fee are: Copy of Patent Grant Single-Page TIFF Images (52 week subscription); Copy of Patent Grant Full-Text W/Embedded Images, Patent Application Publication E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules Single-Page TIFF Images, or Patent Application Publication Full-Text W/ Embedded Images (52 week subscription); Copy of Patent Technology Monitoring Team (PTMT) Patent Bibliographic Extract and Other DVD (Optical Disc) Products; Copy of U.S. Patent Custom Data Extracts; and Copy of Selected Technology Reports, Miscellaneous Technology Areas. The proposed fee codes explicitly state the service and fee to provide customers with clearer information to aid decision making. These specific fees recover the USPTO’s aggregate costs for processing, validating, packaging, and shipment of these products to customers worldwide. For the copy of Patent Grant Single-Page TIFF Images (52 week subscription) (which the Office proposes to set at $10,400), for example if a customer orders this service, each week the Office will expedite to him or her a package that contains, at a minimum, one Bluray and one DVD optical disc bearing the patent grant data for each Tuesday in the calendar year via United Parcel Service. The fee rate covers the cost of producing and delivering these items for each of the 52 weeks of the year. For the other three services proposed at $5,200, the expedited weekly packages (one for each Tuesday or Thursday in the calendar year) typically contain either a single Blu-ray or DVD optical disc. As an alternative to requesting and paying for these weekly services, the USPTO has provided customers the ability to download this information at no cost since June 2010. This information is currently provided in the following locations: Bulk Data Storage System (BDSS) available at https:// bulkdata.uspto.gov since October 2015 and Reed Tech Public Data Dissemination (PDD) available at http:// patents.reedtech.com since June 2013. The USPTO left maintenance fees untouched in the initial proposal. The PPAC report noted that this was an ‘‘attractive feature to many stakeholders given their already high level, especially at the third stage.’’ The PPAC also commented that there may be an opportunity to decrease the third stage fee and raise the maintenance fees at the first two stages or second maintenance fee only as a means to increase revenue. The USPTO appreciated the input and will continue to closely monitor renewal rates to determine if and when a change to the maintenance fee rates is warranted. In summary, the USPTO appreciates the PPAC’s overall support for an increase in patent fees to meet sufficient funding levels. After careful consideration of the comments, VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 concerns, and suggestions provided in the report, and keeping in mind the goals of this rulemaking, the USPTO elected to reduce several of the fee increases initially proposed to the PPAC. The newly proposed fee structure will result in lower aggregate revenue than that initially proposed to the PPAC. Nevertheless, the fee structure proposed herein will ultimately allow the USPTO to 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 Rulemaking The Office estimates that the proposed patent fee schedule will produce aggregate revenues to recover the aggregate costs of the USPTO, including for the implementation of its strategic and management goals, objectives, and initiatives in FY 2017 and beyond. Using the strategic goals (optimizing patent quality and timeliness and providing domestic and global leadership to improve intellectual property policy, protection, and enforcement worldwide) and the management goal of organizational excellence as a foundation, the proposed rule would provide sufficient aggregate revenue to recover the aggregate cost of patent operations, including improving patent quality, reducing the patent application backlog, decreasing patent application pendency, upgrading the patent business IT capability and infrastructure, and implementing a sustainable funding model. 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 fiveyear 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. PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 68157 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 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 depend on many factors, 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 to 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 Office of Management and Budget (OMB) (www.omb.gov) in the Economic and Budget Analyses section of the Analytical Perspectives and each January 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 at pages 143 and 144 of the FY 2017 President’s Budget (Congressional Justification). 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 http://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 E:\FR\FM\03OCP3.SGM 03OCP3 68158 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules anticipated pay raises and inflationary increases for the budget year and four out years (detailed calculations and assumptions for this adjustment can be found in the FY 2017 President’s 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 SubProgram’’ sections of the 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 2017 President’s Budget identifies that, during FY 2017, patent operations will cost $2.928 billion (see page 146 of the Budget), including $2.009 billion for patent examination activities; $162 million for IT systems, support, and infrastructure contributing to patent operations; $93 million for activities related to patent appeals and the AIA inter partes dispute actions; $27 million for activities related to intellectual property protection, policy, and enforcement; and $637 million for general support costs necessary for patent operations (e.g., 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 $28 million in other income associated with recoveries and reimbursable agreements (offsets to spending) and depositing $75 million during FY 2017 toward the cost of building the patent operating reserve to sustain operations. Because the FY 2017 President’s Budget was submitted prior to the USPTO making final decisions on the proposed fee adjustments, the operating reserve estimate in this NPRM is therefore different than the estimate included in the Budget. A detailed description of the operating requirements and related aggregate cost is located in the Budget. Table 2 below provides key underlying production workload projections and assumptions from the Budget used to calculate aggregate cost. Table 3 presents the total budgetary requirements (prospective aggregate cost) for FY 2017 through FY 2021 and the estimated collections and operating reserve balances that would result from the proposed adjustments contained in this NPRM. TABLE 2—PATENT PRODUCTION WORKLOAD PROJECTIONS—FY 2017–FY 2021 Utility, plant, and reissue (UPR) FY 2017 Applications * ........................................................................ Growth Rate ......................................................................... Production Units ................................................................... Unexamined Patent Application Backlog ............................. Examination Capacity ** ....................................................... Performance Measures (UPR) Avg. First Action Pendency (Months) ........................... Avg. Total Pendency (Months) ..................................... FY 2018 FY 2019 FY 2020 FY 2021 594,900 1.5% 616,200 434,700 8,087 606,800 2.0% 624,900 397,400 8,022 625,000 3.0% 628,700 374,000 7,937 650,000 4.0% 629,300 374,700 7,832 676,000 4.0% 628,500 401,600 7,777 13.7 22.9 12.2 22.1 10.9 20.6 10.3 19.5 10.2 19.1 * 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 2017 President’s Budget. TABLE 3—PLANNED OPERATING REQUIREMENTS—FY 2017–FY 2021 Dollars in millions Patent aggregate cost estimate FY 2017 sradovich on DSK3GMQ082PROD with PROPOSALS3 Patent Planned Operating Requirements ............................ Less: Planned Patent Fee Collections ......................... Less: Other Income ...................................................... To (¥)/From (+) Operating Reserve ................................... EOY Operating Reserve Balance ........................................ Step 2: Calculate Prospective Aggregate Revenue As described in ‘‘Step 1,’’ the USPTO’s FY 2017 requirements in the FY 2017 President’s 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 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 VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 FY 2018 2,930 2,951 18 39 349 3,114 3,260 18 164 513 indicators to calculate or determine prospective fee workload (e.g., number of applications and requests for services and products), growth, 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, as most recently exhibited in the recession of 2009 when incoming workloads and renewal rates declined. The Office considers economic activity when developing fee workloads and aggregate revenue forecasts for its products and services. Major economic PO 00000 Frm 00010 Fmt 4701 Sfmt 4702 FY 2019 3,157 3,265 18 127 639 FY 2020 3,208 3,412 18 222 861 FY 2021 3,272 3,599 18 344 1,206 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 2017 based on OMB and 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 intellectual property portfolios, E:\FR\FM\03OCP3.SGM 03OCP3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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 action 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 fees 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. Additional detail about the Office’s elasticity estimates is available in ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2017— Description of Elasticity Estimates,’’ available at http://www.uspto.gov/ about-us/performance-and-planning/ fee-setting-and-adjusting. sradovich on DSK3GMQ082PROD with PROPOSALS3 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, 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 2017— Aggregate Revenue Estimates Alternative 1: Proposed Alternative’’ available at http://www.uspto.gov/ VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 about-us/performance-and-planning/ fee-setting-and-adjusting. Summary Patent fees are collected for patentrelated 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, such as additional examining staff and overtime. The resulting reduction in production activities 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 given fiscal year, work it expects to process in a given fiscal year (an indicator for workload of patent issue fees), 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 fees 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 fees 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 April 1, 2017. 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). Step 3: Set Specific Fee Amounts Once the Office finalizes the annual requirements and aggregate prospective costs for a given year during the budget formulation process, the Office sets specific fee amounts that, together, will derive the aggregate revenue required to recover the estimated aggregate prospective costs during that time frame. Calculating individual fees is an iterative process that encompasses many variables. One variable that the USPTO PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 68159 considers to inform fee setting is the historical cost estimates associated with individual fees. The Office’s ActivityBased Information (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 2017— Activity-Based Information and Patent Fee Unit Expense Methodology’’ available at http://www.uspto.gov/ about-us/performance-and-planning/ fee-setting-and-adjusting. The USPTO provides data for FY 2013–FY 2015 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. 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 goal of implementing a sustainable funding model. As detailed previously, the PPAC supports this approach, stating that it ‘‘agrees that the Office should set its fees to establish an adequate revenue stream over a sustained period to fund the people and infrastructure essential for a high quality, low pendency examination process, and to fund its operating reserve.’’ 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, and below their unit costs to balance several key fee setting policy factors: Fostering innovation, 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 foster innovation by removing barriers to entry for innovators. To balance the aggregate E:\FR\FM\03OCP3.SGM 03OCP3 68160 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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). The Office applied a similar rationale to set and adjust patent fees in the 2013 final rule, the initial patent fee setting rulemaking using AIA authority. 78 FR 4212 (January 18, 2013). For some fees proposed in this NPRM, the USPTO does not typically maintain individual historical cost data for the service provided, such as maintenance fees. Instead, the Office evaluates the policy factors described in Part III to inform fee setting. By setting fees at particular levels, 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 recover costs for activities that strain the patent system. The rationale for the proposed changes are grouped into three major categories, discussed below: (A) Fees where large entity amounts stayed the same or did not change by greater than plus or minus 10 percent or 20 dollars; (B) fees where large entity amounts changed from the current amount by greater than plus or minus 10 percent and 20 dollars; and (C) fees that are discontinued or replaced. 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. Therefore, the only time there will be a small or micro entity fee change that meets the greater than plus or minus 10 percent or 20 dollars criteria without a similar change for the large entity fee will be for those instances when the Office is introducing new small and micro entity fees where there was previously only a large entity fee. These types of changes are discussed separately. 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 IV: Discussion of Specific Rules contains a complete listing of fees that are set or adjusted in the proposed patent fee schedule. A. Fees With Proposed Changes Less Than Plus or Minus 10 Percent or 20 Dollars The Office proposes to adjust slightly (i.e., less than plus or minus 10 percent or 20 dollars) several fees not discussed in sections B or C below. The Table of Patent Fees demarcates which fees meet the dollar change and percent change thresholds and are included for discussion in Part V. 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 will be rounded to the nearest 20 dollars by applying standard arithmetic rules. The resulting proposed fee amounts will be 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. The slight increase in these fees helps the Office to recover higher costs of performing such services due to increased aggregate cost of doing business. The proposed fee adjustments in this category are listed in the Table of Patent Fees. B. Fees With Proposed Changes of Greater Than Plus or Minus 10 Percent and 20 Dollars For those fees that are proposed to change by greater than plus or minus 10 percent and 20 dollars, the individual fee rationale discussion is divided into three categories, including: (1) New and significant fees; (2) patent enrollment fees; and (3) fees adjusted and amended to include discounts for small and micro entities. New and significant fees are further divided into subcategories according to the function of the fees, including: (a) Mega-sequence listing filing; (b) design and plant search, examination, and issue; (c) request for continued examination (RCE); (d) information disclosure statements; (e) certificate of correction; (f) request for ex parte reexamination; (g) appeals; (h) AIA trials; (i) PCT- International Stage; and (j) reissue patent maintenance rules. 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) New and Significant Fees The following fees fall under the category of new and significant. A discussion of the rationale for each fee follows. (a) Mega-Sequence Listing Filing TABLE 4—MEGA-SEQUENCE LISTING FILING—FEE CHANGES AND UNIT COST Proposed fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Submission of sequence listings of 300MB to 800MB .......... new ............. Submission of sequence listings of more than 800 MB ........ sradovich on DSK3GMQ082PROD with PROPOSALS3 Current fees new ............. The Office proposes two new fees to manage handling of sequence listings of 300 MB or more. Pricing for this fee is divided into two tiers with Tier 1 for file VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 $1,000 ($500) [$250] $10,000 ($5,000) [$2,500] sizes 300MB to 800MB and Tier 2 for file sizes greater than 800MB. The level of effort associated with the handling of mega-sequence listings is significant, because the Office’s systems PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 +$1,000 (+$500) [+$250] +$10,000 (+$5,000) [+$2,500] n/a (n/a) [n/a] n/a (n/a) [n/a] FY 2015 Unit cost n/a n/a require extra storage and special handling for files beyond 300 MB. The Office has not yet collected actual cost data for sequence listings with file sizes of 300 MB or greater. However, based on E:\FR\FM\03OCP3.SGM 03OCP3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules historical data, on average, less than 10 applications per year contained sequence listing files greater than 300MB. Based on previously filed applications with lengthy sequence listings, the Office determined that some applications disclosed sequence data that met the length thresholds for being included in the sequence listing but that was neither invented by the applicants nor claimed. Mega-sequence listings, in particular, often included sequences that were available in the prior art, were not essential material, and could have been described instead, for example, by name and a publication or accession reference. Further, claims accompanying such applications were frequently directed to the manipulation of sequence data rather than the substance of the sequences themselves. Submission of a mega-sequence listing in these applications would not have been necessary to complete the application if applicants limited the number of sequences that were described in such a way as to be required in a sequence listing. The 68161 proposed fee should encourage applicants to draft their specifications such that sequence data that is not essential material is not required to be included in a sequence listing. A reduced number of mega-sequence listings will benefit the Office and the public by reducing the strain on Office resources, thus facilitating the effective administration of the patent system. (b) Design and Plant Search, Examination, and Issue TABLE 5—DESIGN AND PLANT SEARCH, EXAMINATION, AND ISSUE FEES—FEE CHANGES Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Design Search Fee .............................................................. $120 ($60) [$30] $380 ($190) [$95] $460 ($230) [$115] $560 ($280) [$140] $760 ($380) [$190] Plant Search Fee ................................................................. Design Examination Fee ...................................................... Design Issue Fee ................................................................. Plant Issue Fee .................................................................... Design and plant patents are unlike utility patents in that they do not pay maintenance fees after the patent has been granted. Under the current utility fee structure, entry costs (filing, search, and examination fees) are intentionally set below the full cost of performing this service as a means to foster innovation. Then, the full cost of examination is recovered through the payment of issue and maintenance fees. Given the lack of $160 ($80) [$40] $420 ($210) [$105] $600 ($300) [$150] $800 ($400) [$200] $1,000 ($500) [$250] maintenance fees and the fact that the majority of design applicants are small and micro entities who are eligible to pay reduced fees, the Office currently does not recover the costs to examine design and plant patent applications solely from design and plant application fees. Instead, these costs are being subsidized by other application types (e.g., utility) and processes. The proposed fees would better align the +$40 (+$20) [+$10] +$40 (+$20) [+$10] +$140 (+$70) [+$35] +$240 (+$120) [+$60] +$240 (+$120) [+$60] +33% (+33%) [+33%] +11% (+11%) [+11%] +30% (+30%) [+30%] +43% (+43%) [+43%] +32% (+32%) [+32%] FY 2015 Unit cost $397 $1,773 $608 $314 $314 fees with costs by bringing both application types closer to aggregate cost recovery while maintaining some subsidization. In an effort to limit costbased entry barriers for these application types, the Office proposes the largest increase, in terms of dollars, for the issue fee. (c) Request for Continued Examination (RCE)—First and Second and Subsequent Request TABLE 6—REQUEST FOR CONTINUED EXAMINATION (RCE) FEE CHANGES Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity sradovich on DSK3GMQ082PROD with PROPOSALS3 Fee description Request for Continued Examination (RCE)—1st Request (see 37 CFR 1.114) ......................................................... Request for Continued Examination (RCE)—2nd and Subsequent Request (see 37 CFR 1.114) ............................. VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 PO 00000 Frm 00013 FY 2015 Unit cost $1,200 ($600) [$300] $1,300 ($650) [$325] +$100 (+$50) [+$25] +8% (+8%) [+8%] $2,187 $1,700 ($850) [$425] $1,900 ($950) [$475] +$200 (+$100) [+$50] +12% (+12%) [+12%] $1,540 Fmt 4701 Sfmt 4702 E:\FR\FM\03OCP3.SGM 03OCP3 68162 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules The proposed moderate increases to RCE fees directly support the fee setting policy factor to align fees with costs. The Office’s proposed increase would more closely align the fee rates with the cost of processing RCEs, as calculated using the most recently available cost data (FY 2015). Specifically, the Office proposes to increase the first RCE fee rate from $1,200 to $1,300 for large entities, a $100 increase (8 percent). The FY 2015 cost to examine a first RCE was $2,187. When factoring in filings by small and micro entities, first RCE fees collected 48.8 percent of their aggregate examination costs in FY 2015. When discussing RCEs, it is helpful to recognize the impact of small entity discounts on the Office’s costs. Specifically, while small and micro entity fee rates are reduced by 50 percent and 75 percent respectively, the cost of processing these actions is not reduced accordingly. The Office proposes to increase the second and subsequent RCE fee rate from $1,700 to $1,900 for large entities, a $200 increase (12 percent). The FY 2015 cost to examine a second and subsequent RCE was $1,540. When factoring filings by small and micro entities, second and subsequent RCE fees fully collected the complete examination cost in FY 2015. When combined, first and second and subsequent RCE fees collected 62.5 percent of the examination costs. In order to approach cost recovery and limit the increase to the first RCE fee rate, the Office proposes a slightly larger increase for the second and subsequent RCE fee rate. Had this fee structure been in place in FY 2015, the Office would have recovered 68.6 percent of RCE costs as opposed to the 62.5 percent that was realized. In FY 2015, the Office collected fees for 112,634 first RCEs and for 57,931 second and subsequent RCEs. While this fee structure will not achieve full cost recovery for RCEs, it will bring collections closer to cost and therefore reduce the subsidy for RCE filings currently provided by other patent fees. In addition to the fee adjustments, the USPTO is committed to focusing on initiatives that will reduce the need for RCEs. Examples of initiatives the Office has already implemented to reduce the need for RCEs include the QPIDS pilot program (http://www.uspto.gov/patent/ initiatives/quick-path-informationdisclosure-statement-qpids) and the AFCP 2.0 (http://www.uspto.gov/patent/ initiatives/after-final-considerationpilot-20). Additionally, the recently announced Enhanced Patent Quality Initiative (http://www.uspto.gov/patent/ initiatives/enhanced-patent-qualityinitiative-0) will be evaluating and strengthening work products, processes, and services at all stages of the patent process. (d) Information Disclosure Statements (IDS) TABLE 7—IDS—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Submission of an Information Disclosure Statement .......... The Office proposed new procedural rules and fee rates for the Information Disclosure Statement practices in its initial proposal to PPAC. Based on the feedback received, the Office determined not to move forward with the changes to the IDS procedural rules. $180 ($90) [$45] $240 ($120) [$60] Instead, the Office proposes to increase the submission fee from $180 to $240. The Office proposes the adjustment in an effort to optimally set the fee to encourage early submission of an IDS when possible. However, based on stakeholder feedback offered in +$60 (+$30) [+$15] FY 2015 Unit cost +33% (+33%) [+33%] n/a response to the Office’s initial patent fee setting proposal, the Office aims to keep the fee rate low enough to encourage timely filings during the time period (and under the conditions) when the fee would be required. (e) Certificate of Correction Fees TABLE 8—CERTIFICATE OF CORRECTION FEES—FEE CHANGES AND UNIT COSTS Proposed fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity FY 2015 Unit cost Certificate of Correction ....................................................... sradovich on DSK3GMQ082PROD with PROPOSALS3 Current fees $100 $150 +$50 +50% $93 The Office proposes to increase the fee for a certificate of correction by $50 to $150. The Office proposes the adjustment in an effort to encourage applicants to submit accurate information initially, while at the same time not increasing the rate too much above unit cost recovery to discourage VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 disclosure of needed corrections when an error has been identified. Whenever a mistake of a clerical or typographical nature, or of minor character, which was not the fault of the USPTO, appears in a patent and a showing has been made that such mistake occurred in good faith, the Director may, upon payment PO 00000 Frm 00014 Fmt 4701 Sfmt 4702 of this fee, issue a certificate of correction, if the correction does not involve such changes in the patent as would constitute new matter or would require reexamination. (f) Request for Ex Parte Reexamination Fees E:\FR\FM\03OCP3.SGM 03OCP3 68163 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules TABLE 9—REQUEST FOR EX PARTE REEXAMINATION FEES—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Ex Parte Reexamination (§ 1.510(a)) Streamlined .............. The Office proposes to establish a new fee for smaller, streamlined reexamination filings. The streamlined filings would reduce the cost to the USPTO, allowing the Office to pass on the cost savings to applicants. The proposed fee would apply to ex parte reexamination requests having: (i) 40 Pages or less; (ii) lines that are doublespaced or one-and-a-half spaced; (iii) text written in a non-script type font such as Arial, Times New Roman, or Courier; (iv) a font size no smaller than 12 point; (v) margins which conform to the requirements of 37 CFR 1.52(a)(1)(ii); and (vi) sufficient clarity and contrast to permit direct reproduction and electronic capture by use of digital imaging and optical character recognition. The following parts of an ex parte reexamination request are excluded from (i) through (v) above: (a) The copies of every patent or new $6,000 ($3,000) [$1,500] printed publication relied upon in the request pursuant to 37 CFR 1.510(b)(3); (b) the copy of the entire patent for which reexamination is requested pursuant to 37 CFR 1.510(b)(4); and (c) the certifications required pursuant to 37 CFR 1.510(b)(5) and (6). Completed forms such as the Request for Ex Parte Reexamination Transmittal Form (PTO/ SB/57) or the information disclosure statement form (PTO/SB/08), or their equivalents, will also be excluded from (i) through (v). Claim charts will be considered part of the request and will be included in the page limit. Any paper containing argument directed to the patentability or unpatentability of the claims, such as an affidavit or declaration, will be included in the page limit and subject to the above requirements. If only a portion of the paper contains argument, the entire paper will be included in the page limit. +$6,000 (+$3,000) [+$1,500] FY 2015 Unit cost n/a n/a The Office deems conclusions and/or definitions to be argumentative. For example, a request that includes 40 pages of argument and a 41st page that includes conclusions or definitions would be deemed to be a request having greater than 40 pages. A page that consists solely of a signature will not be included in the page limit. The determination of whether a paper contains argument will be within the sole discretion of the Office. Note that micro entity status is only available to patent owner requesters, not to third party requesters. The change is consistent with the USPTO’s fee setting policy factors to align fees to costs, offer additional processing options, and facilitate the effective administration of the patent system, and is also consistent with the requirements of 35 U.S.C. 123. (g) Appeal Fees TABLE 10—APPEAL—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Notice of Appeal .................................................................. sradovich on DSK3GMQ082PROD with PROPOSALS3 Forwarding an Appeal in an Application or Ex parte Reexamination Proceeding to the Board ................................. At the current fee rate, the fee paid for an ex parte appeal only covers 58 percent of the Office’s cost for an appeal. The proposed fee increase will result in ex parte appeal fees covering 72 percent of the Office’s cost to conduct an ex parte appeal. In the past few years, the Office has made great strides in reducing the backlog and pendency for ex parte appeals. Appeal inventory reached over VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 $800 ($400) [$200] $1,000 ($500) [$250] +$200 (+$100) [+$50] +25% (+25%) [+25%] $45 $2,000 ($1000) [$500] $2,500 ($1,250) [$625] +$500 (+$250) [+$125] +25% (+25%) [+25%] $4,815 27,000 (in 2012) and has now fallen to under 19,000 (in April 2016). As of the end of fiscal year 2015, the average pendency for decided ex parte appeals was 30 months. The Office aspires to reach an appeals pendency goal of 12 months by the end of FY 2018 and to further reduce the existing inventory. As mentioned in Part III, the PTAB is working to reduce inventory via two pilot programs, EPAP and the Small PO 00000 Frm 00015 FY 2015 Unit cost Fmt 4701 Sfmt 4702 Entity Pilot Program. The proposal would allow the Office to better align fees to costs by reducing the gap between the amount paid by an appellant and the fully burdened cost of reviewing appeals by the Board. The additional revenue supports continued improvements to pendency and inventory via enhanced technology. (h) AIA Trials E:\FR\FM\03OCP3.SGM 03OCP3 68164 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules TABLE 11—AIA TRIALS—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Inter Partes Review Request Fee—Up to 20 Claims .......... Inter Partes Review Post-Institution Fee—Up to 15 Claims Inter Partes Review Request of Each Claim in Excess of 20 ...................................................................................... Inter Partes Post-Institution Request of Each Claim in Excess of 15 ......................................................................... Post-Grant or Covered Business Method Review Request Fee—Up to 20 Claims ...................................................... Post-Grant or Covered Business Method Review Post-Institution Fee—Up to 15 Claims ........................................ Post-Grant or Covered Business Method Review Request of Each Claim in Excess of 20 ......................................... Post-Grant or Covered Business Method Review Post-Institution Request of Each Claim in Excess of 15 ............ The AIA established two new trial proceedings: Inter partes review and post-grant review. Inter partes review is a trial proceeding created by the AIA that allows the Office to review the patentability of one or more claims in a patent only on a ground that could be raised under 35 U.S.C. 102 or 103, and only on the basis of prior art consisting of patents or printed publications. The inter partes review process begins with a third party filing a petition. An inter partes review may be instituted upon a showing that there is a reasonable likelihood that the petitioner would prevail with respect to at least one claim challenged. If the proceeding is instituted and not dismissed, a final determination by the Board will be issued within one year (extendable for good cause by six months). The Office proposes to increase all four separate fees for inter partes review, which are FY 2015 Unit cost $9,000 $14,000 $14,000 $16,500 +$5,000 +$2,500 +56 +18 $22,165 $12,674 $200 $300 +$100 +50 n/a $400 $600 +$200 +50 n/a $12,000 $16,000 +$4,000 +33 $16,213 $18,000 $22,000 +$4,000 +22 $23,060 $250 $375 +$125 +50 n/a $550 $825 +$275 +50 n/a due upon the filing of a petition. The USPTO will refund the post-institution fee if the IPR proceeding is not instituted by the PTAB. Post-grant review is a trial proceeding created by the AIA that allows the Office to review the patentability of one or more claims in a patent on any ground that could be raised under 35 U.S.C. 282(b)(2) and (b)(3) in effect on September 16, 2012. The post-grant review process begins when a third party files a petition within nine months of the grant of the patent. A post-grant review may be instituted upon a showing that it is more likely than not that at least one challenged claim is unpatentable or that the petition raises an unsettled legal question that is important to other patents or patent applications. If the trial is instituted and not dismissed, the Board will issue a final determination within one year of institution. This period can be extended for good cause for up to six months from the date of one year after instituting the review. In FY 2015, the PTAB received over 1,900 AIA trial filings and the Office expects that number to grow in the coming fiscal years. In order to keep up with demand and continue to provide high quality decisions within the statutory time limits, the Office needs to close the gap between the cost and the fees for performing these services. When the fees for these services were initially set, the Office had to estimate what the costs would be without the benefit of historical cost information. Now that the trials have been in place for three fiscal years, the Office has actual historical cost data available to more accurately set these fees and recover costs. (i) Patent Cooperation Treaty (PCT)— International Stage TABLE 12—PATENT COOPERATION TREATY (PCT)—INTERNATIONAL STAGE—FEE CHANGES AND UNIT COSTS Proposed fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Late Furnishing Fee for Providing a Sequence Listing in Response to an Invitation Under PCT Rule 13ter. sradovich on DSK3GMQ082PROD with PROPOSALS3 Current fees new ............. The Office proposes a new fee to encourage timely filing of sequence listings in international applications as another way to facilitate the effective administration of the patent system. When an applicant does not provide a VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 $300 ($150) [$75] sequence listing in searchable format with the international application or provides a defective sequence listing, the United States, acting as International Searching Authority (ISA/US) or as International Preliminary Examining PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 +$300 (+$150) [+$75] FY 2015 Unit cost n/a n/a Authority (IPEA/US), must issue an invitation to the applicant to provide the missing or corrected sequence listing. This additional process creates a delay in the issuance of the International Search Report (ISR) or E:\FR\FM\03OCP3.SGM 03OCP3 68165 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules International Preliminary Report on Patentability (Chapter II). The most recent data shows that the ISA/US issues ISRs within 16 months of the priority date for 75 percent of all international applications searched by the ISA/US. However, when the ISA/US issues an invitation to provide a sequence listing, the ISA/US issues ISRs within 16 months in only 28 percent of those international applications. The time limit for issuance of the ISR under PCT Rule 42 in most circumstances is 16 months from the priority date. This new fee will help compensate the Office for the extra work associated with issuing the invitation and handling the response, while better positioning the Office to meet applicable treaty timeframes. The fee is similar in size and scope to fees charged by other international intellectual property offices. (j) Maintenance Fee Payments—Reissue Patent Rules For each issued patent, the Office may grant one or more reissue patents. However, current practice dictates that only one maintenance fee is required for all of the possible reissue patents granted from a single patent. This proposed change of practice would require payment of maintenance fees for each reissue patent, instead of a single maintenance fee payment for the group of reissue patents. The large majority of reissue patents are granted after the first stage maintenance fee payment has already been paid on the initial patent. Over the last six years, approximately 150 reissue patents per year would have been subject to additional fees due to this proposed rule change. This is a significantly higher level than the Office experienced prior to FY 2010. For example, between FY 2003 and FY 2009, the average was 27 per year. The Office expects this change in practice to encourage patent owners to prioritize which reissue patents they want to maintain. If an owner wishes to maintain all reissue patents in force, he or she may do so by paying the appropriate maintenance fees. For reissue patents that are not maintained, subject matter previously covered by the patent would become available in the public domain to improve upon and further foster innovation. (2) Office of Enrollment and Discipline Fees and Patent Enrollment Fees The following proposed fee adjustments are comprised of Office of Enrollment and Discipline (OED) fees and other patent enrollment fees. In addition to the proposed fee rate changes, there are five new fees being proposed in this section. The purpose of amending the fees in this section is to better align fees with actual costs. During the previous patent fee setting effort, historical cost information for these activities was not available. Since then, the Office has developed cost information to more appropriately propose fee adjustments. No enrollment or disciplinary fees have been increased since 2008, and only two fees were adjusted that year. All other enrollment and disciplinary fees were last changed much earlier, specifically, between 1991 and 2004. In fact, one OED fee has been unchanged since 1982. As time passes, the difference between the fee charged by the Office and the cost to the Office to perform the service increases, resulting in greater subsidies by other patent fees. The increases to these fees will help to close the gap between the fee charged and the cost to perform the service. A discussion of the rationale for each fee change follows. TABLE 13—OED AND PATENT ENROLLMENT—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description sradovich on DSK3GMQ082PROD with PROPOSALS3 Application Fee (Non-Refundable) ...................................... On Registration to Practice Under § 11.6 ............................ Certificate of Good Standing as an Attorney or Agent, Standard ........................................................................... Certificate of Good Standing as an Attorney or Agent, Suitable for Framing ......................................................... Review of Decision by the Director of Enrollment and Discipline Under § 11.2(c) ..................................................... Review of Decision of the Director of Enrollment and Discipline Under § 11.2(d) ..................................................... Administrative Reinstatement Fee ....................................... On Grant of Limited Recognition Under § 11.9(b) ............... For USPTO-Assisted Recovery of ID or Reset of Password for the Office of Enrollment and Discipline Information System ....................................................................... For USPTO-Assisted Change of Address Within the Office of Enrollment and Discipline Information System ............ For USPTO-Administered Review of Registration Examination ............................................................................... The Office proposes to increase the application fee for admission to the examination for registration to practice from $40 to $100, about half of the historical cost of this service. The fee for registration to practice or for a grant of limited recognition under VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 $40 $100 $100 $200 +$60 +$100 +150% +100% $225 $493 $10 $40 +$30 +300% $39 $20 $50 +$30 +150% $49 $130 $400 +$270 +208% $2,044 $130 $100 $100 $400 $200 $200 +$270 +$100 +$100 +208% +100% +100% $1,827 $940 $493 new $70 +$70 n/a n/a new $70 +$70 n/a n/a new $450 +$450 n/a $515 § 11.9(b) or (c) is currently set at $100, and both transactions have the same fee code. The Office proposes to separate the fee for Registration to Practice from the fee for Grant of Limited Recognition and increase the fee for each to $200, PO 00000 Frm 00017 FY 2015 Unit cost Fmt 4701 Sfmt 4702 which is still below the historical cost of performing these services. The Office proposes eliminating the reference to § 11.9(c) in the current provision. The Office does not presently impose a fee for an unregistered individual to E:\FR\FM\03OCP3.SGM 03OCP3 68166 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules prosecute an international patent application in the manner described in § 11.9(c). The Office proposes to use the existing fee code for Registration to Practice fees and create a new fee code for Grant of Limited Registration. The Office is proposing an increase to the fee for the delivery of a certificate of good standing. A practitioner may also request a certificate of good standing as an attorney or agent that has been authentically signed by the Director of OED and crafted for framing. The Office proposes to increase the fee for both of these services to cost recovery, $40 and $50, respectively. The Office proposes to increase the fees for petitions to the OED Director regarding enrollment or recognition. However, the proposed fees are still significantly below cost recovery. Any petition from any action or requirement of the staff of OED reporting to the OED Director shall be taken to the OED Director accompanied by payment of the fee, proposed at $400. The Office proposes to adjust the fees for a review of OED Director’s decision regarding enrollment or recognition. A party dissatisfied with a final decision of the OED Director regarding enrollment or recognition may seek review of the decision upon petition to the USPTO Director accompanied by payment of the fee, proposed at $400. This fee is being increased, but is still set significantly below cost recovery. The Office proposes to set the fee for administrative reinstatement at $200. Reinstatement fees are imposed on practitioners seeking to be reinstated to active status. Raising the fee, while still set far below cost recovery, will help close the gap between the fee and the cost for performing this service. The Office proposes to create and set the fee for USPTO-assisted reset of user IDs and passwords for an OED Information System—Customer Interface (OEDIS–CI) account at $70. The enhancement of the OEDIS–CI was implemented in FY 2015. With this enhancement, customers are now able to perform this process on-line as a selfservice option free of charge. The proposed fee would only be charged if it was requested that the USPTO perform this task instead of the selfservice option. The Office proposes to create and set the fee for USPTO-assisted roster maintenance (change of address) in an OEDIS–CI account at $70. With the OEDIS–CI enhancement, customers are now able to perform this process on-line as a self-service method free of charge. The proposed fee would only be charged if it was requested that the USPTO perform this task instead of the self-service option. The Office proposes to set the fee for a registration examination review session at $450. Setting this fee at cost recovery relieves the administrative and cost burden of providing the review sessions. A private commercial entity currently provides this service to the public at a lower cost than the USPTO. The availability of the private-sector option has reduced demand for the USPTO-provided sessions and therefore increased the cost per registrant of USPTO-provided sessions. The Office proposes to set the fee for changing a practitioner’s registration status from agent to attorney. The Office currently charges $100 for this service. As proposed, the fee would remain unchanged; however, 37 CFR 1.21(a)(2)(iii) would specifically provide for this fee. (3) Fees Amended To Include Discounts for Small and Micro Entities Within this section, where new micro entity fees are proposed, it is expected that an applicant or patent holder would have paid the current small entity fee (or large entity in the event there is not a small entity fee) and dollar and percent changes are calculated from the current small entity fee amount (or large entity fee, where applicable). The following table lists fees where new small and/or micro entities are provided. Providing these fee reductions for small and micro entity innovators will continue the Office’s efforts to foster innovation across all patent system users. TABLE 14—AMENDED FEES TO INCLUDE DISCOUNTS FOR SMALL AND MICRO ENTITIES—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Petition for the Delayed Payment of the Fee for Maintaining a Patent in Force ........................................................ Petition for Revival of an Abandoned Application for a Patent, for the Delayed Payment of the Fee for Issuing Each Patent, or for the Delayed Response by the Patent Owner in any Reexamination Proceeding ................. sradovich on DSK3GMQ082PROD with PROPOSALS3 Petition for the Delayed Submission of a Priority or Benefit Claim ................................................................................ Petition to Excuse Applicant’s Failure to Act Within Prescribed Time Limits in an International Design Application .................................................................................... Petition to Convert an International Design Application to a Design Application Under 35 U.S.C. Chapter 16 ............ VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 PO 00000 Frm 00018 FY 2015 Unit cost $1,700 ($850) [$850] $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18% (+18%) [¥41%] $121 $1,700 ($850) [$850] $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18% (+18%) [¥41%] $244 $1,700 ($850) [$850] $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18% (+18%) [¥41%] $244 $1,700 ($850) [$850] $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18% (+18%) [¥41%] n/a $180 ($180) [$180] $180 ($90) [$45] $0 (¥$90) [¥$135] 0% (¥50%) [¥75%] n/a Fmt 4701 Sfmt 4702 E:\FR\FM\03OCP3.SGM 03OCP3 68167 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules TABLE 14—AMENDED FEES TO INCLUDE DISCOUNTS FOR SMALL AND MICRO ENTITIES—FEE CHANGES AND UNIT COSTS—Continued Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description Hague International Design Application Fees—Transmittal Fee ................................................................................... C. Discontinued or Replaced Fees This section describes fees that are being discontinued and replaced with new fees. The purpose of this action is to simplify the fee schedule, more $120 ($120) [$120] $120 ($60) [$30] clearly inform customers of costs upfront, and align with the Office’s new financial software for which fixed fee rates, not variable (e.g., at cost) are preferred. This section also includes $0 (¥$60) [¥$90] FY 2015 Unit cost 0% ¥50% ¥75% n/a fees that are being discontinued because of disuse. The Office does not capture historical cost information for these proposed discontinued or new fees. (a) Discontinued and Replaced TABLE 15—DISCONTINUED FEES WITH NEW FEE REPLACEMENTS Current fees Proposed fees Dollar change Percent change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description sradovich on DSK3GMQ082PROD with PROPOSALS3 Copy of Patent-Related File Wrapper and Contents of 400 or Fewer Pages, if Provided on Paper ............................ Additional Fee for Each Additional 100 Pages of PatentRelated File Wrapper and (Paper) Contents, or Portion Thereof ............................................................................. Copy Patent File Wrapper, Paper Medium, Any Number of Sheets .............................................................................. Copy of Patent-Related File Wrapper and Contents if Provided on a Physical Electronic Medium as Specified in 1.19(b)(1)(ii) ...................................................................... Copy of Patent-Related File Wrapper and Contents if Provided Electronically ........................................................... Additional Fee for Each Continuing Physical Electronic Medium in Single Order of 1.19(b)(1)(ii)(B) ..................... Copy Patent File Wrapper, Electronic Medium, Any Size or Provided Electronically ................................................. Computer Records ............................................................... Copy of Patent Grant Single-Page TIFF Images (52 week subscription) ..................................................................... Copy of Patent Grant Full-Text W/Embedded Images, Patent Application Publication Single-Page TIFF Images, or Patent Application Publication Full-Text W/Embedded Images (52 week subscription) ........................................ Copy of PTMT Patent Bibliographic Extract and Other DVD (Optical Disc) Products ............................................ Copy of U.S. Patent Custom Data Extracts ........................ Copy of Selected Technology Reports, Miscellaneous Technology Areas ............................................................ Labor Charges for Services, per Hour or Fraction Thereof Additional Fee for Overnight Delivery .................................. Additional Fee for Expedited Service .................................. There are currently pairs of fees for copying patent-related file wrappers: A base fee and an excess fee. For both paper copies and electronic copies, these pairs are replaced with a single fee irrespective of size. A single fee will VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 $200 discontinue ¥$200 n/a n/a $40 discontinue ¥$40 n/a n/a new $280 +$280 n/a n/a $55 discontinue ¥$55 n/a n/a $55 discontinue ¥$55 n/a n/a $15 discontinue ¥$15 n/a n/a new at cost $55 discontinue +$55 at cost n/a n/a n/a n/a new $10,400 +$10,400 n/a n/a new $5,200 +$5,200 n/a n/a new new $50 $100 +$50 +$100 n/a n/a n/a n/a new $40 new new $30 discontinue $40 $160 +$30 ¥$40 +$40 +$160 n/a n/a n/a n/a n/a n/a n/a n/a allow customers to more easily budget and plan expenses for this service. The catch-all fee of ‘‘Computer Records’’ currently priced ‘‘at cost’’ is being replaced by five fees that encompass the work currently performed using this code: Copy of PO 00000 Frm 00019 FY 2015 Unit cost Fmt 4701 Sfmt 4702 Patent Grant Single-Page TIFF Images (52 week subscription); Copy of Patent Grant Full-Text W/Embedded Images, Patent Application Publication SinglePage TIFF Images, or Patent Application Publication Full-Text W/Embedded Images (52 week subscription); Copy of E:\FR\FM\03OCP3.SGM 03OCP3 68168 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules Patent Technology Monitoring Team (PTMT) Patent Bibliographic Extract and Other DVD (Optical Disc); Copy of U.S. Patent Custom Data Extracts; and Copy of Selected Technology Reports, Miscellaneous Technology Areas. Explicitly stating the service and fee at the start will provide customers clearer information to aid decision making. These specific fees recover the USPTO’s costs for processing, validating, packaging, and shipping of these products to customers worldwide. For the copy of Patent Grant Single-Page TIFF Images, when a customer orders this service, the customer is sent expedited weekly packages (one for each Tuesday in the Calendar Year) via United Parcel Service. Each package contains at a minimum one Blu-ray and one DVD optical disc. For the other three services listed for $5,200, the expedited weekly packages (one for each Tuesday or Thursday in the Calendar Year) typically contain either a single Blu-ray or DVD optical disc. As an alternative to requesting and paying for these services, the USPTO has provided customers the ability to download this information at no cost since June 2010. This information is currently provided in the two locations referenced earlier, BDSS and PDD since October 2015 and June 2013 respectively. Similar to the single fee for copying Patent-Related File Wrappers, the ‘‘Labor Charge’’ per hour with its variable charges is replaced with a single fee for ‘‘Expedited Service.’’ Following the same theme, shorter than standard shipping is currently billed under a catch-all code but will now be replaced with a set fee for ‘‘Overnight Delivery.’’ (b) Discontinued TABLE 16—DISCONTINUED FEES Current fees Proposed fees Dollar change Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee description sradovich on DSK3GMQ082PROD with PROPOSALS3 Self-Service Copy Charge, per Page .................................. Establish Deposit Account ................................................... Uncertified Statement Re: Status of Maintenance Fee Payments .......................................................................... Petitions for documents in form other than that provided by this part, or in form other than that generally provided by Director, to be decided in accordance with merits. ............................................................................... Copy of Patent-Related File Wrapper Contents That Were Submitted and are Stored on Compact Disk or Other Electronic Form (e.g., Compact Disks Stored in Artifact Folder), Other Than as Available in 1.19(b)(1); First Physical Electronic Medium in a Single Order ................ Additional Fee for Each Continuing Copy of Patent-Related File Wrapper Contents as Specified in 1.19(b)(2)(i)(A) .................................................................. Copy of Patent-Related File Wrapper Contents That Were Submitted and are Stored on Compact Disk, or Other Electronic Form, Other Than as Available in 1.19(b)(1); if Provided Electronically Other Than on a Physical Electronic Medium, per Order .......................................... To comply with Presidential Executive Order 13681, Improving the Security of Consumer Financial Transactions, current self-service copiers will be discontinued and the USPTO will enter into a ‘‘No Cost’’ contract with a vendor who will keep all payments collected in exchange for providing this service. The USPTO’s new Financial Manager system allows users to create their own deposit accounts so the Office proposes to retire the ‘‘Establish Deposit Account’’ fee. The fee associated with ‘‘Uncertified Statement Re Status of Maintenance Fee Payments’’ is discontinued due to lack of use. Customers have had the ability to do VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 discontinue discontinue ¥$0.25 ¥$10 n/a n/a n/a n/a $10 discontinue ¥$10 n/a n/a at cost discontinue at cost n/a n/a $55 discontinue ¥$55 n/a n/a $15 discontinue ¥$15 n/a n/a $55 discontinue ¥$55 n/a n/a VI. Discussion of Specific Rules The following section shows the CFR proposed fee amendments. The List of Subjects includes all proposed fee Frm 00020 FY 2015 Unit cost Large (small) [micro] entity $0.25 $10 this online for more than 10 years. The fee associated with ‘‘Petitions for documents in form other than that provided by this part, or in form other than that generally provided by Director, to be decided in accordance with merits’’ is also discontinued due to lack of use. The remaining fees pertaining to Patent-Related File Wrapper copies have never been used since their inception many years ago and therefore are being discontinued. PO 00000 Percent change Fmt 4701 Sfmt 4702 amendments, all proposed fee discontinuations, and all proposed changes to the CFR text. Title 37 of the Code of Federal Regulations, Parts 1 and 41, are proposed to be amended as follows: Section 1.16: Section 1.16 is amended by revising paragraphs (a) through (f) and (h) through (r) 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 § 1.16 are shown in Table 17. E:\FR\FM\03OCP3.SGM 03OCP3 68169 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules TABLE 17—CFR SECTION 1.16 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1.16(a) ................. 1.16(a) ................. 1011/2011/3011 4011 ................... 1.16(b) ................. 1.16(b) ................. 1.16(c) ................. 1.16(d) ................. 1.16(e) ................. 1.16(e) ................. 1.16(f) .................. 1012/2012/3012 1017/2017/3017 1013/2013/3013 1005/2005/3005 1014/2014/3014 1019/2019/3019 1051/2051/3051 1.16(h) ................. 1201/2201/3201 1.16(h) ................. 1204/2204/3204 1.16(i) .................. 1.16(i) .................. 1.16(j) .................. 1.16(k) ................. 1.16(l) .................. 1.16(m) ................ 1.16(n) ................. 1.16(o) ................. 1.16(p) ................. 1.16(q) ................. 1.16(r) ................. 1202/2202/3202 1205/2205/3205 1203/2203/3203 1111/2111/3111 1112/2112/3112 1113/2113/3113 1114/2114/3114 1311/2311/3311 1312/2312/3312 1313/2313/3313 1314/2314/3314 Basic Filing Fee—Utility .................. Basic Filing Fee—Utility (electronic filing for small entities). Basic Filing Fee—Design ............... Basic Filing Fee—Design (CPA) .... Basic Filing Fee—Plant .................. Provisional Application Filing Fee ... Basic Filing Fee—Reissue .............. Basic Filing Fee—Reissue (CPA) ... Surcharge—Late Filing Fee, Search Fee, Examination Fee, Inventor’s Oath or Declaration, or Application Filed Without at Least One Claim or by Reference. Independent Claims in Excess of Three. Reissue Independent Claims in Excess of Three. Claims in Excess of 20 ................... Reissue Claims in Excess of 20 ..... Multiple Dependent Claim ............... Utility Search Fee ........................... Design Search Fee ......................... Plant Search Fee ............................ Reissue Search Fee ....................... Utility Examination Fee ................... Design Examination Fee ................. Plant Examination Fee .................... Reissue Examination Fee ............... Section 1.17: Section 1.17 is amended by revising paragraphs (e), (m), (p), and (t) to set forth the application processing Small Proposed fees (dollars) Micro Large Small Micro 280 n/a 140 70 70 n/a 300 n/a 150 75 75 n/a 180 180 180 260 280 280 140 90 90 90 130 140 140 70 45 45 45 65 70 70 35 200 200 200 280 300 300 160 100 100 100 140 150 150 80 50 50 50 70 75 75 40 420 210 105 460 230 115 420 210 105 460 230 115 80 80 780 600 120 380 600 720 460 580 2,160 40 40 390 300 60 190 300 360 230 290 1,080 20 20 195 150 30 95 150 180 115 145 540 100 100 820 660 160 420 660 760 600 620 2,200 50 50 410 330 80 210 330 380 300 310 1,100 25 25 205 165 40 105 165 190 150 155 550 fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.17 are shown in Table 18. TABLE 18—CFR SECTION 1.17 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1801/2801/3801 1.17(e) ................. 1820/2820/3820 1.17(m) ................ 1453/2453/3453 1.17(m) ................ 1454/2454/3454 1.17(m) ................ 1784/2784/3784 1.17(m) ................ 1558/2558/3558 1.17(p) ................. sradovich on DSK3GMQ082PROD with PROPOSALS3 1.17(e) ................. 1806/2806/3806 1.17(t) .................. 1783/2783/3783 Request for Continued Examination (RCE) (1st request) (see 37 CFR 1.114). Request for Continued Examination (RCE) (2nd and subsequent request). Petition for revival of an abandoned application for a patent, for the delayed payment of the fee for issuing each patent, or for the delayed response by the patent owner in any reexamination proceeding. Petition for the Delayed Submission of a Priority or Benefit Claim. Petition to Excuse Applicant’s Failure to Act Within Prescribed Time Limits in an International Design Application. Petition for the Delayed Payment of the Fee for Maintaining a Patent in Force. Submission of an Information Disclosure Statement. Petition to convert an international design application to a design application under 35 U.S.C. chapter 16. Section 1.18: Section 1.18 is amended by revising paragraphs (a)(1), (b)(1), and (c)(1) to set forth the patent issue fees as VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 Small Micro Frm 00021 Fmt 4701 Large Small Micro 1,200 600 300 1,300 650 325 1,700 850 425 1,900 950 475 1,700 850 850 2,000 1,000 500 1,700 850 850 2,000 1,000 500 1,700 850 850 2,000 1,000 500 1,700 850 850 2,000 1,000 500 180 90 45 240 120 60 180 180 180 180 90 45 authorized under Section 10 of the Act. The changes to the fee amounts PO 00000 Proposed fees (dollars) Sfmt 4702 indicated in § 1.18 are shown in Table 19. E:\FR\FM\03OCP3.SGM 03OCP3 68170 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules Section 1.18(b)(3) is proposed to be amended to provide that the issue fee for issuing an international design application designating the United States, where the issue fee is paid through the International Bureau, is the amount established in Swiss currency pursuant to Hague Agreement Rule 28 as of the date of mailing of the notice of allowance (§ 1.311). The proposed amendment would facilitate processing of the issue fee by the International Bureau and would maintain parity in the treatment of the amount of the issue fee due whether paid directly to the USPTO or through the International Bureau in the event the issue fee changes after the mailing of the notice of allowance. TABLE 19—CFR SECTION 1.18 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1.18(a)(1) 1.18(a)(1) 1.18(b)(1) 1.18(c)(1) ............ ............ ............ ............ 1501/2501/3501 1511/2511/3511 1502/2502/3502 1503/2503/3503 Utility Issue Fee .............................. Reissue Issue Fee .......................... Design Issue Fee ............................ Plant Issue Fee ............................... Section 1.19: Section 1.19 is amended by revising paragraphs (b)(1), (b)(2), and (b)(4); removing and reserving (b)(2), (e), Small 960 960 560 760 Proposed fees (dollars) Micro 480 480 280 380 and (g); and adding (i) through (m) to set forth the patent document supply fees as authorized under Section 10 of the Large 240 240 140 190 Small 1,000 1,000 800 1,000 Micro 500 500 400 500 250 250 200 250 Act. The changes to the fee amounts indicated in § 1.19 are shown in Table 20. TABLE 20—CFR SECTION 1.19 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large Small Proposed fees (dollars) Micro Large Small Micro 1.19(b)(1)(i)(A) and (ii)(A). 1.19(b)(1)(i)(B) .... 8007 ................... Copy of Patent Application as Filed 20 20 20 35 35 35 ............................. n/a n/a n/a 280 280 280 1.19(b)(1)(ii)(B) ... ............................. n/a n/a n/a 55 55 55 1.19(b)(4) ............ 8014 ................... 25 25 25 35 35 35 1.19(i) .................. ............................. n/a n/a n/a 10,400 10,400 10,400 1.19(j) .................. ............................. n/a n/a n/a 5,200 5,200 5,200 1.19(k) ................. ............................. n/a n/a n/a 50 50 50 1.19(l) .................. ............................. n/a n/a n/a 100 100 100 1.19(m) ................ ............................. Copy of Patent File Wrapper, Paper Medium, Any Number of Sheets. Copy Patent File Wrapper, Electronic Medium, Any Size or Provided Electronically. For Assignment Records, Abstract of Title and Certification, per Patent. Copy of Patent Grant Single-Page TIFF Images (52 week subscription). Copy of Patent Grant Full-Text W/ Embedded Images, Patent Application Publication Single-Page TIFF Images, or Patent Application Publication Full-Text W/Embedded Images (52 week subscription). Copy of PTMT Patent Bibliographic Extract and Other DVD (Optical Disc) Products. Copy of U.S. Patent Custom Data Extracts. Copy of Selected Technology Reports, Miscellaneous Technology Areas. n/a n/a n/a 30 30 30 Section 1.20: Section 1.20 is amended by revising paragraphs (a), (b), (c)(1) through (4), and (e) through (g) to set forth the reexamination excess claims fees, disclaimer fees, and maintenance fees as authorized under Section 10 of the Act and to provide a new fee for streamlined requests for reexamination. The changes to the fee amounts indicated in § 1.20 are shown in Table 21. sradovich on DSK3GMQ082PROD with PROPOSALS3 TABLE 21—CFR SECTION 1.20 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1.20(a) ................. 1.20(b) ................. 1811 ................... 1816 ................... 1.20(c)(1) ............ ............................. VerDate Sep<11>2014 19:25 Sep 30, 2016 Certificate of Correction .................. Processing Fee for Correcting Inventorship in a Patent. Ex Parte Reexamination (§ 1.510(a)) Streamlined. Jkt 241001 PO 00000 Frm 00022 Fmt 4701 Small Proposed fees (dollars) Micro Large Small Micro 100 130 100 130 100 130 150 150 150 150 150 150 n/a n/a n/a 6,000 3,000 1,500 Sfmt 4702 E:\FR\FM\03OCP3.SGM 03OCP3 68171 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules TABLE 21—CFR SECTION 1.20 FEE CHANGES—Continued CFR section Fee code Current fees (dollars) Description Large 1.20(c)(2) ............ 1812/2812/3812 1.20(c)(3) ............ 1821/2821/3821 1.20(c)(4) ............ Ex Parte Reexamination (§ 1.510(a)) Non-Streamlined. Reexamination Independent Claims in Excess of Three and also in Excess of the Number of Such Claims in the Patent Under Reexamination. Reexamination Claims in Excess of 20 and Also in Excess of the Number of Claims in the Patent Under Reexamination. 1822/2822/3822 Section 1.21: Section 1.21 is amended by revising paragraphs (a), (h)(2), and (i); removing and reserving paragraphs Small Proposed fees (dollars) Micro Large Small Micro 12,000 6,000 3,000 12,000 6,000 3,000 420 210 105 460 230 115 80 40 20 100 50 25 (g) and (j); and adding paragraphs (o), (p), 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 § 1.21 are shown in Table 22. TABLE 22—CFR SECTION 1.21 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 9001 ................... 9010 ................... 1.21(a)(1)(ii)(B) ... 9011 ................... 1.21(a)(1)(iii) ....... ............................. 1.21(a)(2)(i) ......... 9003 ................... 1.21(a)(2)(ii) ........ ............................. 1.21(a)(2)(iii) ....... 9025 ................... 1.21(a)(4)(i) ......... 9005 ................... 1.21(a)(4)(ii) ........ 9006 ................... 1.21(a)(5)(i) ......... 9012 ................... 1.21(a)(5)(ii) ........ 9013 ................... 1.21(a)(6)(i) ......... ............................. 1.21(a)(6)(ii) ........ ............................. 1.21(a)(9)(ii) ........ 1.21(a)(10) .......... 9004 ................... 9014 ................... 1.21(h)(2) ............ sradovich on DSK3GMQ082PROD with PROPOSALS3 1.21(a)(1)(i) ......... 1.21(a)(1)(ii)(A) ... 8021 ................... 1.21(o)(1) ............ ............................. 1.21(o)(2) ............ ............................. 1.21(p) ................. ............................. 1.21(q) ................. ............................. VerDate Sep<11>2014 19:25 Sep 30, 2016 Application Fee (non-refundable) ... For Test Administration by Commercial Entity. For Test Administration by the USPTO. For USPTO-Administered Review of Registration Examination. On Registration to Practice Under § 11.6. On Grant of Limited Recognition under § 11.9(b). On change of registration from agent to attorney. Certificate of Good Standing as an Attorney or Agent, Standard. Certificate of Good Standing as an Attorney or Agent, Suitable for Framing. Review of Decision by the Director of Enrollment and Discipline under § 11.2(c). Review of Decision of the Director of Enrollment and Discipline under § 11.2(d). For USPTO-Assisted Recovery of ID or Reset of Password for the Office of Enrollment and Discipline Information System. For USPTO-Assisted Change of Address Within the Office of Enrollment and Discipline Information System. Administrative Reinstatement Fee .. On petition for reinstatement by a person excluded or suspended on ethical grounds, or excluded on consent from practice before the Office. Recording Each Patent Assignment, Agreement or Other Paper, per Property if not Submitted Electronically. Submission of sequence listings ranging in size of 300MB to 800MB. Submission of sequence listings exceeding 800MB. Additional Fee for Overnight Delivery. Additional Fee for Expedited Service. Jkt 241001 PO 00000 Frm 00023 Fmt 4701 Small Proposed fees (dollars) Micro Large Small Micro 40 200 40 200 40 200 100 200 100 200 100 200 450 450 450 450 450 450 n/a n/a n/a 450 450 450 100 100 100 200 200 200 n/a n/a n/a 200 200 200 100 100 100 100 100 100 10 10 10 40 40 40 20 20 20 50 50 50 130 130 130 400 400 400 130 130 130 400 400 400 n/a n/a n/a 70 70 70 n/a n/a n/a 70 70 70 100 1,600 100 1,600 100 1,600 200 1,600 200 1,600 200 1,600 40 40 40 50 50 50 n/a n/a n/a 1,000 1,000 1,000 n/a n/a n/a 10,000 10,000 10,000 n/a n/a n/a 40 40 40 n/a n/a n/a 160 160 160 Sfmt 4702 E:\FR\FM\03OCP3.SGM 03OCP3 68172 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules Section 1.445: Section 1.445 is amended by adding paragraph (a)(5) to set a processing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter. The changes to the fee amounts indicated in § 1.445 are shown in Table 23. TABLE 23—CFR SECTION 1.445(a)(5) FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1.445(a)(5) .......... ............................. Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter. Section 1.482: Section 1.482 is revised by changing the title and adding paragraph (c) to set a processing fee for Small n/a Proposed fees (dollars) Micro n/a providing a sequence listing in response to an invitation under PCT Rule 13ter. The changes to the fee amounts Large n/a 300 Small Micro 150 75 indicated in § 1.482 are shown in Table 24. TABLE 24—CFR SECTION 1.482(c) FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1.482(c) ............... ............................. Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter. Small n/a Micro n/a claims, search, and examination fees for international patent applications entering the national stage as authorized Section 1.492: Section 1.492 is amended by revising (a) through (f) to set forth the application filing, excess Proposed fees (dollars) Large n/a 300 Small Micro 150 75 under Section 10 of the Act. The changes to the fee amounts indicated in § 1.492 are shown in Table 25. TABLE 25—CFR SECTION 1.492 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1631/2631/3631 1641/2641/3641 1.492(b)(3) .......... 1642/2642/3642 1.492(b)(4) .......... 1632/2632/3632 1.492(c)(2) .......... 1633/2633/3633 1.492(d) ............... 1614/2614/3614 1.492(e) ............... 1615/2615/3615 1.492(f) ................ sradovich on DSK3GMQ082PROD with PROPOSALS3 1.492(a) ............... 1.492(b)(2) .......... 1616/2616/3616 Basic PCT National Stage Fee ....... PCT National Stage Search Fee— U.S. was the ISA. PCT National Stage Search Fee— Search Report Prepared and Provided to USPTO. PCT National Stage Search Fee— All Other Situations. National Stage Examination Fee— All Other Situations. PCT National Stage Claims—Extra Independent (over three). PCT National Stage Claims—Extra Total (over 20). PCT National Stage Claims—Multiple Dependent. Section 1.1031: Section 1.1031 is amended by revising paragraph (a) to set forth the international design application transmittal fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.031 are shown in Table 26. VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 Small Micro Frm 00024 Fmt 4701 Large Small Micro 280 120 140 60 70 30 300 140 150 70 75 35 480 240 120 520 260 130 600 300 150 660 330 165 720 360 180 760 380 190 420 210 105 460 230 115 80 40 20 100 50 25 780 390 195 820 410 205 Section 1.1031 is also proposed to be amended by adding paragraph (f) concerning the designation fee for the United States. As § 1.1031 concerns international design application fees, the Office believes it appropriate to include a provision therein regarding the U.S. designation fee. The proposed PO 00000 Proposed fees (dollars) Sfmt 4702 amendment is consistent with the U.S. designation fee currently in effect. See ‘‘Individual Fees under the Hague Agreement,’’ available on the WIPO Web site at http://www.wipo.int/hague/ en/fees/individ-fee.html, and § 1.18(b). E:\FR\FM\03OCP3.SGM 03OCP3 68173 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules TABLE 26—CFR SECTION 1.1031(a) FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 1.1031(a) ............. 1781/2781/3781 International Design Transmittal Fee. Section 41.20: Section 41.20 is amended by revising paragraph (b)(1) and (b)(4) to set forth the appeal fees as Application Small 120 Proposed fees (dollars) Micro 120 authorized under Section 10 of the Act. The changes to the fee amounts Large 120 Small 120 Micro 60 30 indicated in § 41.20 are shown in Table 27. TABLE 27—CFR SECTION 41.20 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 41.20(b)(1) .......... 41.20(b)(4) .......... 1401/2401/3401 1413/2413/3413 Notice of Appeal ............................. Forwarding an Appeal in an Application or Ex Parte Reexamination Proceeding to the Board. Section 42.15: Section 42.15 is amended by revising paragraphs (a) and (b) to set forth the inter partes review Small 800 2,000 Proposed fees (dollars) Micro 400 1,000 and post-grant review or covered business method patent review of patent fees as authorized under Section 10 of Large 200 500 1,000 2,500 Small 500 1,250 Micro 250 625 the Act. The changes to the fee amounts indicated in § 42.15 are shown in Table 28. TABLE 28—CFR SECTION 42.15 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large 42.15(a)(1) .......... 42.15(a)(2) .......... 1406 ................... 1414 ................... 42.15(a)(3) .......... 1407 ................... 42.15(a) (4) ......... 1415 ................... 42.15(b)(1) .......... 1408 ................... 42.15(b)(2) .......... 1416 ................... 42.15(b)(3) .......... 1409 ................... 42.15(b)(4) .......... 1417 ................... Inter Partes Review Request Fee .. Inter Partes Review Post-Institution Fee. In Addition to the Inter Partes Review Request Fee, for Requesting Review of Each Claim in Excess of 20. In addition to the Inter Partes PostInstitution Fee, for Requesting Review of Each Claim in Excess of 15. Post-Grant or Covered Business Method Patent Review Request Fee. Post-Grant or Covered Business Method Patent Review Post-Institution Fee. In Addition to the Post-Grant or Covered Business Method Patent Review Request Fee, for Requesting Review of Each Claim in Excess of 20. In Addition to the Post-Grant or Covered Business Method Patent Review Post-Institution Fee, for Requesting Review of Each Claim in Excess of 15. sradovich on DSK3GMQ082PROD with PROPOSALS3 VII. Rulemaking Considerations A. America Invents Act This rulemaking proposes to set and adjust fees under section 10(a) of the AIA. 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 United States Code (U.S.C.) for any services performed, or VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 Small Frm 00025 Fmt 4701 Micro Large Small Micro 9,000 14,000 9,000 14,000 9,000 14,000 14,000 16,500 14,000 16,500 14,000 16,500 200 200 200 300 300 300 400 400 400 600 600 600 12,000 12,000 12,000 16,000 16,000 16,000 18,000 18,000 18,000 22,000 22,000 22,000 250 250 250 375 375 375 550 550 550 825 825 825 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 PO 00000 Proposed fees (dollars) Sfmt 4702 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 E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 68174 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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 will consider and analyze any comments, advice, or recommendations received from the PPAC before finally setting or adjusting fees. Consistent with this framework, on October 20, 2015, 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 http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. The PPAC held a public hearing in Alexandria, Virginia, on November 19, 2015. Transcripts of the hearing are available for review at http:// www.uspto.gov/sites/default/files/ documents/PPAC_Hearing_Transcript_ 20151119.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 Web site, http://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-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 February 29, 2016, and can be found online at http://www.uspto.gov/sites/default/files/ documents/PPAC_Fee%20_Setting_ Report_2016%20%28Final%29.pdf. The Office considered and analyzed all comments, advice, and recommendations received from the PPAC before publishing this NPRM. VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 Before the final rule is issued, the public will have at least a 45-day period during which to provide comments to be considered 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 agency must prepare and make available for public comment an IRFA, unless the agency certifies under 5 U.S.C. 605(b) that the proposed rule, if implemented, will not have a significant impact on a substantial number of small entities. 5 U.S.C. 603, 605. Given that the proposed fee schedule is projected to result in $710.8 million in additional aggregate revenue over the current fee schedule (baseline) for the period including FY 2017 to FY 2021, 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 $710.8 million in additional aggregate revenue results from an additional $73.2 million in FY 2017, $150.0 million in FY 2018, $155.7 million in FY 2019, $162.4 million in FY 2020, and $169.5 million in FY 2021. 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. PO 00000 Frm 00026 Fmt 4701 Sfmt 4702 1. A Description of the Reasons Why the Action by the Agency Is Being Considered Section 10 of the 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 http:// www.uspto.gov/sites/default/files/ documents/USPTO_2014-2018_ Strategic_Plan.pdf. Additional information on the Office’s goals and operating requirements may be found in the ‘‘USPTO FY 2017 President’s Budget,’’ available at http:// www.uspto.gov/sites/default/files/ documents/fy17pbr.pdf. The legal basis for the proposed rule is Section 10 of the Act. E:\FR\FM\03OCP3.SGM 03OCP3 68175 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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. Unlike SBA’s generally applicable small business size standards, the size standard for the USPTO is not industryspecific. 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. 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 29 presents a summary of such small entity filings by type of application (utility, reissue, plant, design) over the last five years. TABLE 29—NUMBER OF PATENT APPLICATIONS FILED IN LAST FIVE YEARS * FY 2015 ** FY 2014 FY 2013 FY 2012 FY 2011 Average *** Utility All ............................................... Small .......................................... % Small ..................................... Micro .......................................... % Micro ...................................... 578,321 142,845 24.7 28,916 5.0 579,782 133,930 23.1 18,553 3.2 564,007 136,490 24.2 7,896 1.4 530,915 132,198 24.9 N/A N/A 504,663 127,175 25.2 N/A N/A 551,538 134,528 24.4 18,455 3.2 All ............................................... Small .......................................... % Small ..................................... Micro .......................................... % Micro ...................................... 887 200 22.6 10 1.1 1,208 280 23.2 24 2.0 1,074 229 21.3 9 0.8 1,212 278 22.9 N/A N/A 1,158 240 20.7 N/A N/A 1,108 245 22.1 14 1.3 All ............................................... Small .......................................... % Small ..................................... Micro .......................................... % Micro ...................................... 1,119 673 60.1 4 0.4 1,124 581 51.7 22 2.0 1,318 655 49.7 3 0.2 1,181 576 48.8 N/A N/A 1,103 257 23.3 N/A N/A 1,169 548 46.7 10 0.9 All ............................................... Small .......................................... % Small ..................................... Micro .......................................... % Micro ...................................... 36,889 14,645 39.7 3,910 10.6 36,216 14,740 40.7 3,622 10.0 35,065 15,814 45.1 1,683 4.8 32,258 15,806 49.0 N/A N/A 30,247 14,700 48.6 N/A N/A 34,135 15,141 44.6 3,072 8.5 Reissue Plant sradovich on DSK3GMQ082PROD with PROPOSALS3 Design * The patent application filing data in this table includes RCEs. ** FY 2015 application filing data are preliminary and will be finalized in the FY 2016 Performance and Accountability Report (PAR). *** The micro entity average is from FY 2013 to FY 2015. All other averages are for all time periods shown. 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 VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 application types in order to estimate future filing rates by small and micro entities. Those average rates appear in the last column of Table 29. The Office estimates that small entity filing rates PO 00000 Frm 00027 Fmt 4701 Sfmt 4702 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 E:\FR\FM\03OCP3.SGM 03OCP3 68176 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules a combination of historical data, economic analysis, and subject matter expertise. The Office estimates that utility, plant, and reissue (UPR) patent application filings will grow by 1.5 percent in FY 2017, 2.0 percent in FY 2018, 3.0 percent in FY 2019, and 4.0 percent in FY 2020 and FY 2021. 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 30 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 patent applicants and patentees are 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 regardless of entity size and determined that, as none of the proposed fee changes are large enough to create a sizable change in demand for products and services, elasticity impacts are negligible and therefore not included in this iteration of fee adjustments. Additional information about elasticity estimates is available at http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2017—Description of Elasticity Estimates.’’ TABLE 30—ESTIMATED NUMBERS OF PATENT APPLICATIONS IN FY 2017–FY 2021 FY 2017 (Current) FY 2018 FY 2019 FY 2020 FY 2021 Utility: All .............................................................................. Reissue: All .......................................................................... Plant: All ............................................................................... Design: All ............................................................................ 592,844 1,048 1,008 41,191 604,711 1,105 984 43,614 622,874 1,166 960 46,183 647,833 1,229 938 48,905 673,788 1,296 915 51,791 Total: All ........................................................................ 636,091 650,414 671,183 698,905 727,791 sradovich on DSK3GMQ082PROD with PROPOSALS3 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, this 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 this NPRM. The proposed fee schedule sets or adjusts 205 patent fees in total. This includes 14 fees that will be discontinued and 42 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 United States Government responsible for administering the provisions of title VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 35, United States Code, 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 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 the proposal, discussed below, including full cost recovery for individual services, an across the board adjustment to fees, and the baseline (status quo). The discussion here begins with a description of the proposal selected for this rulemaking. PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 i. Alternative 1: Proposed Alternative— Set and Adjust Patent Fees The alternative proposed herein secures the Office’s required revenue to cover its aggregate costs, while progressing towards the strategic goals of quality enhancements and patent application backlog and pendency optimization that 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 and adds new discounts where applicable. Compared to the current patent fee schedule, small entities will benefit from the establishment of two new small entity fee rates, while micro entities will benefit from the establishment of six new micro entity fee rates for existing services. Given that most micro entities would have paid large or small entity fee rates (depending on what was available), the establishment of micro entity fee rates represents significant savings to these entities. Further, all entities will benefit from the Office’s proposal to discontinue 14 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. As discussed throughout this document, the fee changes proposed in E:\FR\FM\03OCP3.SGM 03OCP3 sradovich on DSK3GMQ082PROD with PROPOSALS3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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). However, the fees are not as high as those initially proposed to PPAC. In the current fee proposal, the Office decided to slow the growth of the operating reserve and lower key fee amounts in response to comments and feedback the PPAC received from intellectual property stakeholders and other interested members of the public during and following the PPAC fee setting hearings during Fall 2015. In summary, the fees to obtain a patent will increase slightly. For example, fees for both tiers of RCEs will increase slightly, but still less than those initially proposed to PPAC. Maintenance fee rates will remain unchanged at all three stages; however, all reissue patents will now be subject to maintenance fee payments if the patent owner wishes to maintain them. In an effort to continue reducing the inventory of ex parte appeals and help recapture a portion of the cost of providing these services, fees will increase for both Notice of Appeal and Appeal Forwarding. Fees will also increase for inter partes reviews based on updated cost data and the need to provide adequate resources to support the Office’s ongoing compliance with AIA deadlines for these actions. Similarly, fees for both post-grant reviews and covered-business-method reviews will increase based on FY 2015 cost data and resources needed to sustain compliance with AIA deadlines. Finally, in response to feedback from the PPAC and members of the public, the proposed fee increase for design issues is $240, from $560 to $800. Under the original proposal to the PPAC, the fee would have increased by $440 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. Specifically, this fee setting rule supports the patent-related strategic goals to optimize patent quality and timeliness, which includes improving patent quality, reducing the backlog of unexamined applications and decreasing patent application pendency, and facilitating processing at the Patent Trial and Appeal Board (PTAB); and increasing international efforts to improve intellectual property policy, protection, and enforcement. This proposed rule also supports the VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 Strategic Plan’s management goal to achieve organizational excellence, which includes leveraging IT investments to better support compact prosecution and securing sustainable funding via a sufficient operating reserve. 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. The proposed fee schedule for this rulemaking, as compared to existing fees (labeled Alternative 1—Proposed Alternative—Set and Adjust Patent Fees) is available at http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting, in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2017—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 June 2016. 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 proposed revenue derived by each alternative scenario. The proposed fees and their corresponding revenue tables are available at http://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 rulemaking; other scenarios are shown only to demonstrate the Office’s analysis of other options. a. Alternative 2: Unit Cost Recovery The USPTO considered setting most individual large entity fees at the historical cost of performing the activities related to the particular service in FY 2015. This alternative continues existing and offers new small and micro entity discounts where eligible under AIA authority. Aside from maintenance fees, fees for which there is no FY 2015 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. Thus, for this alternative, maintenance fees are set at levels sufficient to generate enough revenue to cover the Office’s anticipated budgetary requirements over the five- PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 68177 year period. 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 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 2017 through FY 2021 on FY 2015 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. 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. However, the Office asserts that Alternative 2 does not align well with the strategic and policy goals of this rulemaking. Both the current and proposed fee schedules are structured to collect more fees at the back-end (i.e. issue fees and maintenance fees), where the patent owner has the best information about a patent’s value, rather than at the front-end (i.e. filing fees, search fees, and examination fees), when applicants are most uncertain 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), even with small and micro entity fee reductions. The Office has not attempted to estimate the quantitative elasticity impacts for application filings (e.g., filing, search, and examination fees) or maintenance renewals (all stages) due to a lack of historical data that could inform such a significant shift in the Office’s fee setting methodology. However, the Office suspects that the high costs of entry into the patent system could lead to a significant decrease in the incentives to invest in innovative activities among all entities and especially for small and micro entities. Under the current fee schedule, maintenance fees subsidize all E:\FR\FM\03OCP3.SGM 03OCP3 68178 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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 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 are likely to stifle innovation. Similarly, the Office suspects that renewal rates could change as well, given significant 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 status quo). In the aggregate, patents that are maintained beyond their useful life weaken the intellectual property system by slowing the rate of public accessibility and follow-on inventions, which is contrary to the Office’s policy factor of fostering innovation. In sum, this alternative is inadequate to accomplish the goals and strategies as stated in Part III of this rulemaking. The fee schedule for Alternative 2: Unit Cost Recovery is available at http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting, in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2017—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 June 2016. This column is used to calculate dollar and percent fee change compared to proposed fees. sradovich on DSK3GMQ082PROD with PROPOSALS3 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 5.0 percent, across the board inflationary increase to the baseline (status quo) beginning in FY 2017. Five percent represents the change in revenue needed to achieve the VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 aggregate revenue needed to cover budgetary requirements. As estimated by the Congressional Budget Office, projected CPI rates by fiscal year are: 2.17 percent in FY 2017, 2.39 percent in FY 2018, 2.38 percent in FY 2019, and 2.42 percent in both FY 2020 and FY 2021. The Office elected not to apply the estimated cumulative inflationary adjustment (9.96 percent), from FY 2017 through FY 2021, 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 unilaterally higher fees, this alternative does not adequately support the Office’s policy factor to foster innovation for all. The fee schedule for Alternative 3: Across the Board Adjustment is available at http://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 2017—IRFA Tables.’’ For the comparison between proposed (across the board) fees and current fees, the ‘‘current fees’’ column displays the fees that are in effect as of June 2016. 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 Congress provided in Section 10 of the Act and maintain fees as of June 2016. 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 strategic improvement activities would continue, but at a slower rate due to funding limitations. Likewise, without a fee increase, the USPTO would meet slightly less than the minimal operating reserve in FY 2017 through FY 2019 and only slightly more in FY 2020, with an increase in FY 2021. 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 PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 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. Differing Requirements As discussed above, the changes proposed in this rulemaking 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 pay 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 rulemaking 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 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 rulemaking does not take any actions beyond setting or adjusting patent fees; therefore, there are no clarifications, consolidations, or simplifications subject to discussion here. Performance Standards Performance standards do not apply to the current rulemaking. E:\FR\FM\03OCP3.SGM 03OCP3 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules 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 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 patent fees. C. Executive Order 12866 (Regulatory Planning and Review) This rulemaking has been determined to be significant for purposes of Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order 13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007). The Office has developed a RIA as required for rulemakings deemed to be significant. The complete RIA is available at http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. sradovich on DSK3GMQ082PROD with PROPOSALS3 D. Executive Order 13563 (Improving Regulation and Regulatory Review) The Office has complied with Executive Order 13563. Specifically, the Office has, to the extent feasible and applicable: (1) Made a reasoned determination that the benefits justify the costs of the rule; (2) tailored the 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. VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 E. 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). F. Congressional Review Act Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801–808), prior to issuing any final rule, the USPTO will submit a report containing the final rule and other required information to the U.S. Senate, the U.S. 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 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 foreignbased enterprises in domestic and export markets. Therefore, this proposed rule is expected to result in a ‘‘major rule’’ as defined in 5 U.S.C. 804(2). G. Unfunded Mandates Reform Act of 1995 The changes proposed in this notice 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 (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 (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. 1501–1571. H. Paperwork Reduction Act This proposed rule involves information collection requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The collection of information involved in this rulemaking has been reviewed and previously approved by OMB under control numbers 0651–0016, 0651–0024, 0651–0031, 0651–0032, 0651–0033, 0651–0059, 0651–0064, and 0651–0069. You may send comments regarding the collection of information associated with this rulemaking, including suggestions for reducing the burden, to the Commissioner for Patents, by mail to PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 68179 P.O. Box 1451, Alexandria, VA 22313– 1451, attention Dianne Buie; or by electronic mail message via the Federal eRulemaking Portal. All comments submitted directly to the USPTO or provided on the Federal eRulemaking Portal should include the docket number (RIN 0651–AD02). Notwithstanding any other provision of law, no person is required to respond to nor shall a 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, Courts, Freedom of information, Inventions and patents, Reporting and record keeping requirements, Small businesses. 37 CFR Part 41 Administrative practice and procedure, Inventions and patents, Lawyers. 37 CFR Part 42 Trial practice before the Patent Trial and Appeal Board. For the reasons set forth in the preamble, 37 CFR parts 1, 41, and 42 are proposed to be amended as follows: PART 1—RULES OF PRACTICE IN PATENT CASES 1. The authority citation for part 1 continues to read as follows: ■ Authority: 35 U.S.C. 2(b)(2), unless otherwise noted. 2. Section 1.16 is amended by revising paragraphs (a) through (f) and (h) through (r) to read as follows: ■ § 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: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By a small entity (§ 1.27(a)) if the application is submitted in compliance with the Office electronic filing system (§ 1.27(b)(2)) By other than a small or micro entity ...................... $75.00 150.00 75.00 300.00 (b) Basic fee for filing each application under 35 U.S.C. 111 for an original design patent: E:\FR\FM\03OCP3.SGM 03OCP3 68180 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $50.00 100.00 200.00 By other than a small or micro entity ...................... application, that contains, or is amended to contain, a multiple dependent claim, per application: * * * * * 3. Section 1.17 is amended by revising $205.00 paragraphs (e), (m), (p) and (t) to read as 410.00 follows: ■ (c) Basic fee for filing each application for an original plant patent: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... (k) Search fee for each application filed under 35 U.S.C. 111 for an original patent, except design, plant, or provisional applications: $50.00 100.00 200.00 (d) Basic fee for filing each provisional application: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $70.00 140.00 280.00 (e) Basic fee for filing each application for the reissue of a patent: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $75.00 150.00 300.00 (f) Surcharge for filing the basic filing fee, search fee, examination fee, or the inventor’s oath or declaration on a date later than the filing date of the application, an application that does not contain at least one claim on the filing date of the application, or an application filed by reference to a previously filed application under § 1.57(a), except provisional applications: 2,200.00 By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... 820.00 * * * * (e) To request continued examination pursuant to § 1.114: (1) For filing a first request for continued examination pursuant to $165.00 330.00 § 1.114 in an application: 660.00 (l) Search fee for each application under 35 U.S.C. 111 for an original design patent: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... § 1.17 Patent application and reexamination processing fees. * By a micro entity ................. By a small entity (§ 1.27(a) By other than a small or micro entity ...................... $325.00 650.00 1,300.00 (2) For filing a second or subsequent request for continued examination $40.00 80.00 pursuant to § 1.114 in an application: 160.00 (m) Search fee for each application for an original plant patent: By a micro entity ................. By a small entity (§ 1.27(a) By other than a small or micro entity ...................... $475.00 950.00 1,900.00 * * * * By a micro entity (§ 1.29(a)) $105.00 (m) For filing a petition for the revival By a small entity (§ 1.27(a)) 210.00 of an abandoned application for a By other than a small or micro entity ...................... 420.00 patent, for the delayed payment of the fee for issuing each patent, for the (n) Search fee for each application for delayed response by the patent owner in the reissue of a patent: any reexamination proceeding, for the delayed payment of the fee for By a micro entity (§ 1.29(a)) $165.00 maintaining a patent in force, for the By a small entity (§ 1.27(a)) 330.00 delayed submission of a priority or By other than a small or By a micro entity (§ 1.29(a)) $40.00 micro entity ...................... 660.00 benefit claim, or the extension of the By a small entity (§ 1.27(a)) 80.00 twelve-month (six-month for designs) (o) Examination fee for each By other than a small or period for filing a subsequent micro entity ...................... 160.00 application filed under 35 U.S.C. 111 for application (§§ 1.55(c), 1.55(e), 1.78(b), an original patent, except design, plant, 1.78(c), 1.78(e), 1.137, 1.378, and * * * * * or provisional applications: 1.452)), or for filing a petition to excuse (h) In addition to the basic filing fee applicant’s failure to act within in an application, other than a By a micro entity (§ 1.29(a)) $190.00 prescribed time limits in an provisional application, for filing or By a small entity (§ 1.27(a)) 380.00 international design application later presentation at any other time of By other than a small or (§ 1.1051): each claim in independent form in micro entity ...................... 760.00 excess of 3: (p) Examination fee for each By a micro entity (§ 1.29(a)) $500.00 By a small entity (§ 1.27(a)) 1,000.00 By a micro entity (§ 1.29(a)) $115.00 application under 35 U.S.C. 111 for an By other than a small or By a small entity (§ 1.27(a)) 230.00 original design patent: sradovich on DSK3GMQ082PROD with PROPOSALS3 By other than a small or micro entity ...................... micro entity ...................... 460.00 (i) 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 (whether dependent or independent) in excess of 20 (note that § 1.75(c) indicates how multiple dependent claims are considered for fee calculation purposes): By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... 19:25 Sep 30, 2016 By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $150.00 300.00 600.00 (q) Examination fee for each application for an original plant patent: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $155.00 310.00 2,000.00 * * * * * (p) For an information disclosure statement under § 1.97(c) or (d): By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $60.00 120.00 240.00 $25.00 50.00 (r) Examination fee for each application for the reissue of a patent: * * * * (t) For filing a petition to convert an international design application to a design application under 35 U.S.C. chapter 16 (§ 1.1052): 100.00 By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) (j) In addition to the basic filing fee in an application, other than a provisional VerDate Sep<11>2014 * Jkt 241001 PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 620.00 $550.00 1,100.00 * E:\FR\FM\03OCP3.SGM 03OCP3 $45.00 90.00 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules By other than a small or micro entity ...................... (D) Individual application documents, other than application as filed, per document: $25.00 ■ 4. Section 1.18 is amended by revising (ii) If provided on compact disc or paragraphs (a), (b), and (c) to read as other physical electronic medium in follows: single order or if provided electronically § 1.18 Patent post allowance (including (e.g., by electronic transmission) other issue) fees. than on a physical electronic medium: (A) Application as filed: $35.00 (a)(1) Issue fee for issuing each (B) File wrapper and contents: $55.00 original patent, except a design or plant (C) [Reserved] patent, or for issuing each reissue (iii) [Reserved] patent: (iv) If provided to a foreign By a micro entity (§ 1.29(a)) $250.00 intellectual property office pursuant to By a small entity (§ 1.27(a)) 500.00 a bilateral or multilateral agreement (see By other than a small or § 1.14(h)): $0.00. micro entity ...................... 1,000.00 (2) [Reserved] * * * * * (2) [Reserved] (4) For assignment records, abstract of (b)(1) Issue fee for issuing an original title and certification, per patent: $35.00 design patent: * * * * * By a micro entity (§ 1.29(a)) $200.00 (h) Copy of Patent Grant Single-Page By a small entity (§ 1.27(a)) 400.00 TIFF Images (52 week subscription): By other than a small or $10,400.00 micro entity ...................... 800.00 (i) Copy of Patent Grant Full-Text W/ (2) [Reserved] Embedded Images, Patent Application (3) Issue fee for issuing an Publication Single-Page TIFF Images, or international design application Patent Application Publication Fulldesignating the United States, where the Text W/Embedded Images (52 week issue fee is paid through the subscription): $5,200.00 (j) Copy of Patent Technology International Bureau (Hague Agreement Rule 12(3)(c)) as an alternative to paying Monitoring Team (PTMT) Patent Bibliographic Extract and Other DVD the issue fee under paragraph (b)(1) of (Optical Disc) Products: $50.00 this section: The amount established in (k) Copy of U.S. Patent Custom Data Swiss currency pursuant to Hague Extracts: $100.00 Agreement Rule 28 as of the date of (l) Copy of Selected Technology mailing of the notice of allowance Reports, Miscellaneous Technology (§ 1.311). Areas: $30.00 (c)(1) Issue fee for issuing an original ■ 6. Section 1.20 is amended by revising plant patent: paragraphs (a) through (c) and (e) By a micro entity (§ 1.29(a)) $250.00 through (g) to read as follows: By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... 180.00 500.00 (2) [Reserved] * * * * ■ 5. Section 1.19 is amended by revising paragraphs (b)(1), (2), and (4); removing and reserving paragraphs (e) and (g); and adding paragraphs (h) through (l) to read as follows: Document supply fees. sradovich on DSK3GMQ082PROD with PROPOSALS3 * * * * * (b) * * * (1) Copy of a patent application as filed, or a patent-related file wrapper and contents, stored in paper in a paper file wrapper, in an image format in an image file wrapper, or if color documents, stored in paper in an Artifact Folder: (i) If provided on paper: (A) Application as filed: $35.00 (B) File wrapper and contents: $280.00 (C) [Reserved] VerDate Sep<11>2014 19:25 Sep 30, 2016 Post issuance fees. 1,000.00 * § 1.19 § 1.20 Jkt 241001 (a) For providing a certificate of correction for applicant’s mistake (§ 1.323) (b) Processing fee for correcting inventorship in a patent (§ 1.324) ................. $150.00 150.00 (c) In reexamination proceedings: (1)(A) For filing a request for ex parte reexamination (§ 1.510(a)) having: (i) Forty (40) or fewer pages; (ii) Lines that are double-spaced or one-and-a-half spaced; (iii) Text written in a non-script type font such as Arial, Times New Roman, or Courier; (iv) A font size no smaller than 12 point; (v) Margins which conform to the requirements of § 1.52(a)(1)(ii); and (vi) Sufficient clarity and contrast to permit direct reproduction and electronic capture by use of digital imaging and optical character recognition. PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... 68181 $1,500.00 3,000.00 6,000.00 (B) The following parts of an ex parte reexamination request are excluded from paragraphs (c)(1)(A)(i) through (v) of this section: (i) The copies of every patent or printed publication relied upon in the request pursuant to § 1.510(b)(3); (ii) The copy of the entire patent for which reexamination is requested pursuant to § 1.510(b)(4); and (iii) The certifications required pursuant to § 1.510(b)(5) and (6). (2) For filing a request for ex parte reexamination (§ 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:: By a micro entity (§ 1.29) .... By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $3,000.00 6,000.00 12,000.00 (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: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $115.00 230.00 460.00 (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 § 1.75(c) indicates how multiple dependent claims are considered for fee calculation purposes): By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $25.00 50.00 100.00 * * * * * (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: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) E:\FR\FM\03OCP3.SGM 03OCP3 $400.00 800.00 68182 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules sradovich on DSK3GMQ082PROD with PROPOSALS3 By other than a small or micro entity ...................... (i) By the Director of Enrollment and Discipline under § 11.2(c) of this chapter: $400.00 (f) For maintaining an original or any (ii) Of the Director of Enrollment and reissue patent, except a design or plant patent, based on an application filed on Discipline under § 11.2(d) of this chapter: $400.00 or after December 12, 1980, in force (6) Recovery/Retrieval of OED beyond eight years, the fee being due by Information System Customer Interface seven years and six months after the account by USPTO: original grant: (i) For USPTO-assisted recovery of ID or reset of password: $70.00 By a micro entity (§ 1.29(a)) $900.00 (ii) For USPTO-assisted change of By a small entity (§ 1.27(a)) 1,800.00 address: $70.00 By other than a small or (7) and (8) Reserved micro entity ...................... 3,600.00 (9)(i) Delinquency fee: $50.00 (g) For maintaining an original or any (ii) Administrative reinstatement fee: reissue patent, except a design or plant $200.00 patent, based on an application filed on (10) On application by a person for or after December 12, 1980, in force recognition or registration after beyond twelve years, the fee being due disbarment or suspension on ethical by eleven years and six months after the grounds, or resignation pending original grant: disciplinary proceedings in any other jurisdiction; on application by a person By a micro entity (§ 1.29(a)) $1,850.00 for recognition or registration who is By a small entity (§ 1.27(a)) 3,700.00 asserting rehabilitation from prior By other than a small or conduct that resulted in an adverse micro entity ...................... 7,400.00 decision in the Office regarding the * * * * * person’s moral character; and on ■ 7. Amend § 1.21 by: application by a person for recognition ■ a. Revising paragraph (a); or registration after being convicted of a ■ b. Removing and reserving paragraph felony or crime involving moral (g); turpitude or breach of fiduciary duty; on ■ c. Revising paragraph (h) introductory petition for reinstatement by a person text and paragraphs (h)(2) and (i); excluded or suspended on ethical ■ d. Removing and reserving paragraph grounds, or excluded on consent from (j); and practice before the Office: $1,600.00 ■ e. Adding paragraphs (o) through (q). * * * * * The revisions and additions read as (h) For recording each assignment, follows: agreement, or other paper relating to the property in a patent or application, per § 1.21 Miscellaneous fees and charges. property: * * * * * * * * * * (a) Registration of attorneys and (2) If not submitted electronically: agents: $50.00 (l) For admission to examination for (i) Publication in Official Gazette: For registration to practice: publication in the Official Gazette of a (i) Application Fee (non-refundable): notice of the availability of an $100.00 application or a patent for licensing or (ii) Registration examination fee. sale: Each application or patent: $25.00 (A) For test administration by * * * * * commercial entity: $200.00 (o) The submission of very lengthy (B) For test administration by the sequence listings (mega-sequence USPTO: $450.00 listings) are subject to the following (iii) For USPTO-administered review fees: of registration examination: $450.00 (1) Submission of sequence listings (2) On registration to practice or grant ranging in size from 300MB to 800MB: of limited recognition: $1,000.00 (i) On registration to practice under (2) Submission of sequence listings § 11.6 of this chapter: $200.00 exceeding 800MB in size: $10,000.00 (ii) On grant of limited recognition (p) Additional Fee for Overnight under § 11.9(b) of this chapter: $200.00 Delivery: $40.00 (iii) On change of registration from (q) Additional Fee for Expedited agent to attorney: $100.00 Service: $160.00 (3) [Reserved] ■ 8. Section 1.362 is amended by (4) For certificate of good standing as revising paragraph (b) to read as follows: an attorney or agent: § 1.362 Time for payment of maintenance (i) Standard: $40.00 fees. (ii) Suitable for framing: $50.00 (5) For review of decision: * * * * * VerDate Sep<11>2014 19:25 Sep 30, 2016 1,600.00 Jkt 241001 PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 (b) Maintenance fees are not required for any plant patents or for any design patents. * * * * * ■ 9. Section 1.445 is amended by adding paragraph (a)(5) to read as follows: § 1.445 International application filing, processing and search fees. (a) * * * (5) Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $75.00 150.00 300.00 * * * * * ■ 10. Section 1.482 is amended by revising the section heading and adding paragraph (c) to read as follows: § 1.482 International preliminary examination and processing fees. * * * * * (c) Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $75.00 150.00 300.00 11. Section 1.492 is amended by revising paragraphs (a), (b)(2) through (4), (c)(2), and (d) through (f) to read as follows: ■ § 1.492 National stage fees. * * * * * (a) The basic national fee for an international application entering the national stage under 35 U.S.C. 371: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $75.00 150.00 300.00 (b) * * * (2) If the search fee as set forth in § 1.445(a)(2) has been paid on the international application to the United States Patent and Trademark Office as an International Searching Authority: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $35.00 70.00 140.00 (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: By a micro entity (§ 1.29(a)) E:\FR\FM\03OCP3.SGM 03OCP3 $130.00 Federal Register / Vol. 81, No. 191 / Monday, October 3, 2016 / Proposed Rules By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... 260.00 520.00 (4) In all situations not provided for in paragraph (b)(1), (2), or (3) of this section: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $30.00 60.00 PART 42—TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD 120.00 ■ * * * * (f) The designation fee for the United By a micro entity (§ 1.29(a)) $165.00 By a small entity (§ 1.27(a)) 330.00 States shall consist of: By other than a small or (1) A first part established in Swiss micro entity ...................... 660.00 currency pursuant to Hague Rule 28 based on the combined amounts of the (c) * * * (2) In all situations not provided for basic filing fee (§ 1.16(b)), search fee in paragraph (c)(1) of this section: (§ 1.16(l)), and examination fee (§ 1.16(p)) for a design application. The By a micro entity (§ 1.29(a)) $190.00 first part is payable at the time of filing By a small entity (§ 1.27(a)) 380.00 the international design application; By other than a small or and micro entity ...................... 760.00 (2) A second part (issue fee) as (d) In addition to the basic national provided in § 1.18(b). The second part is fee, for filing or on later presentation at payable within the period specified in a any other time of each claim in notice of allowance (§ 1.311). independent form in excess of 3: PART 41—PRACTICE BEFORE THE By a micro entity (§ 1.29(a)) $115.00 PATENT TRIAL AND APPEAL BOARD By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... * 230.00 460.00 (e) In addition to the basic national fee, for filing or on later presentation at any other time of each claim (whether dependent or independent) in excess of 20 (note that § 1.75(c) indicates how multiple dependent claims are considered for fee calculation purposes): 13. The authority citation for 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 Public Law 112–29. 14. Section 41.20 is amended by revising paragraphs (b)(1) and (4) to read as follows: ■ § 41.20 By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $25.00 50.00 100.00 (f) In addition to the basic national fee, if the application contains, or is amended to contain, a multiple dependent claim, per application: By a micro entity (§ 1.29(a)) By a small entity (§ 1.27(a)) By other than a small or micro entity ...................... $205.00 410.00 820.00 International design application sradovich on DSK3GMQ082PROD with PROPOSALS3 (a) International design applications filed through the Office as an office of indirect filing are subject to payment of a transmittal fee (35 U.S.C. 382(b) and article 4(2)) in the amount of VerDate Sep<11>2014 19:25 Sep 30, 2016 Jkt 241001 * * * * (b) * * * (1) For filing a notice of appeal from the examiner to the Patent Trial and Appeal Board: $250.00 500.00 1,000.00 * 12. Section 1.1031 is amended by revising paragraph (a) and adding paragraph (f) to read as follows: ■ § 1.1031 fees. Fees. * By a micro entity (§ 1.29 of this chapter) ..................... By a small entity (§ 1.27(a) of this chapter) ................. By other than a small or micro entity ...................... * * * * (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: By a micro entity (§ 1.29(a) of this chapter) ................. By a small entity (§ 1.27(a) of this chapter) ................. By other than a small or micro entity ...................... PO 00000 Frm 00035 Fmt 4701 Sfmt 9990 68183 $625.00 1,250.00 15. The authority citation for 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. 16. Section 42.15 is amended by revising paragraphs (a) and (b) to read as follows: ■ § 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: $14,000.00 (2) Inter Partes Review PostInstitution fee: $16,500.00 (3) In addition to the Inter Partes Review request fee, for requesting review of each claim in excess of 20: $300.00 (4) In addition to the Inter Partes PostInstitution request fee, for requesting review of each claim in excess of 15: $600.00 (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: $16,000.00 (2) Post-Grant or Covered Business Method Patent Review Post-Institution fee: $22,000.00 (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: $375.00 (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 15: $825.00 * * * * * Dated: September 20, 2016. Michelle K. Lee, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. [FR Doc. 2016–23093 Filed 9–30–16; 8:45 am] BILLING CODE 3510–16–P 2,500.00 E:\FR\FM\03OCP3.SGM 03OCP3

Agencies

[Federal Register Volume 81, Number 191 (Monday, October 3, 2016)]
[Proposed Rules]
[Pages 68150-68183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23093]



[[Page 68149]]

Vol. 81

Monday,

No. 191

October 3, 2016

Part III





 Department of Commerce





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Patent and Trademark Office





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37 CFR Parts 1, 41, and 42





Setting and Adjusting Patent Fees During Fiscal Year 2017; Proposed 
Rule

Federal Register / Vol. 81 , No. 191 / Monday, October 3, 2016 / 
Proposed Rules

[[Page 68150]]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1, 41, and 42

[Docket No. PTO-P-2015-0056]
RIN 0651-AD02


Setting and Adjusting Patent Fees During Fiscal Year 2017

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). The USPTO is a business-
like operation where external factors affect the productivity of the 
workforce and the demand for patent products and services. The proposed 
fee adjustments are needed to provide the Office with a sufficient 
amount of aggregate revenue to recover its aggregate cost of patent 
operations (based on current projections), while maintaining momentum 
towards achieving strategic goals. This rulemaking represents the 
second iteration of patent fee rulemaking by the USPTO to set fees 
under the authority of the AIA; the first AIA patent fee setting rule 
was published in January 2013. This current rulemaking is a result of 
the USPTO assessing its costs and fees, as is consistent with federal 
fee setting standards. Following a biennial review of fees, costs, and 
revenues that began in 2015, the Office concluded that further targeted 
fee adjustments were necessary to continue funding patent operations, 
enhance patent quality, and continue to work toward patent pendency 
goals, strengthen the Office's information technology (IT) capability 
and infrastructure, and achieve operating reserve targets. Further, in 
several instances, the fee change proposals offered during the biennial 
fee review process were enhanced by the availability of cost and 
workload data (e.g., the number of requests for a service) that was not 
available in 2013. As a result, the 205 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.

DATES: The Office solicits comments from the public on this proposed 
rulemaking. Written comments must be received on or before December 2, 
2016 to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the 
Internet addressed to: fee.setting@uspto.gov. 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 http://www.regulations.gov. See the Federal eRulemaking 
Portal Web site 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 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 Web site (http://www.uspto.gov) and at http://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 the 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), 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.
    Parallel Rulemaking. In tandem with this notice of proposed 
rulemaking (NPRM) for patent related fees, the Office is undertaking a 
separate fee rulemaking action that proposes to adjust trademark 
related fees titled Trademark Adjustment Fees (RIN: 0651-AD08), 
published on May 27, 2016 (81 FR 33619) and available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

B. Summary of Provisions Impacted by This Action

    The fee schedule in this rulemaking will recover the aggregate 
estimated costs of patent operations while achieving the Office's 
strategic goals as detailed in the USPTO 2014-2018 Strategic Plan 
(Strategic Plan) that is available at http://www.uspto.gov/about/stratplan/USPTO_2014-2018_Strategic_Plan.pdf, as amended by Appendix 
III of the Budget, available at http://www.uspto.gov/sites/default/files/documents/fy17pbr.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 fee setting rule supports 
the patent-related strategic goals to optimize patent quality and 
timeliness, which includes improving patent quality, reducing the 
backlog of unexamined applications and decreasing patent application 
pendency, and facilitating processing at the Patent Trial and Appeal 
Board (PTAB); and increasing international efforts to improve 
intellectual property policy, protection and enforcement. This proposed 
rule also supports the management goal to achieve organizational 
excellence, which includes leveraging IT investments and securing 
sustainable funding. The Office intends to issue a final rule on fee 
changes in FY 2017 after receipt and analysis of public comments.
    During a formal process closely tied to the annual budget process, 
the USPTO management and leadership teams reviewed and analyzed 
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

[[Page 68151]]

provide sufficient financial resources to facilitate the effective 
administration of the USPTO. Specifically, the Office assessed how well 
each proposal aligned with four key fee setting policy factors: Foster 
innovation, align fees with the full cost of products and services, set 
fees to facilitate the effective administration of the patent and 
trademark systems, and offer application processing options for 
applicants.
    In this rulemaking, the Office proposes to set or adjust 205 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. Micro entity fee 
eligibility is described in Section 10(g) of the Act. There are also 42 
new fees being introduced or replacing one of the 14 fees that are 
being discontinued.
    In summary, the routine fees to obtain a patent (i.e., filing, 
search, examination, and issue fees) will increase slightly under this 
NPRM relative to the current fee schedule. 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 section of Supplementary 
Information in this rulemaking and in the ``Table of Patent Fees--
Current, Proposed and Unit Cost'' (hereinafter ``Table of Patent 
Fees'') available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    It is important to recognize the progress the Office has made since 
the first Section 10 patent fee setting effort in order to better 
understand the fee adjustments the Office is proposing in this 
iteration. The USPTO first used the authority provided in Section 10 to 
set and adjust patent fees based on the market factors at the time. 
That initial effort, which began in September 2011, aimed to provide 
sufficient revenue to recover the cost of patent operations, including 
improving patent quality, reducing the patent application backlog, 
decreasing patent application pendency, upgrading the patent business 
IT capability and infrastructure, and implementing a sustainable 
funding model. After two public hearings and a public comment period, 
the final rule was published in the Federal Register on January 18, 
2013 (78 FR 4212), with most fee changes effective on March 18, 2013, 
and the remainder effective on January 1, 2014.
    The Office has made considerable progress in reducing backlog and 
pendency: First action pendency went from 21.9 months in FY 2012 to 
17.3 months in FY 2015; total average pendency was reduced from 32.4 
months in FY 2012 to 26.6 months in FY 2015; and the patent application 
backlog was reduced from 608,283 in FY 2012 to 553,221 at the end of FY 
2015. The USPTO was also able to complete the opening of three 
additional regional offices in Denver, Colorado; San Jose (Silicon 
Valley), California; and Dallas, Texas. With a regional office already 
in Detroit, and USPTO headquarters in the Washington DC metro area, the 
Office is better equipped to build and maintain a flexible, diverse, 
and engaged workforce that is prepared to support backlog reduction and 
pendency goals while better serving the intellectual property community 
across the nation.
    Similarly, the Office continues its efforts toward enhancing patent 
quality. As a result of the increased revenue from the inaugural AIA 
patent fee setting, the Office is better positioned to increase its 
quality focus because of significant reductions in the patent 
application backlog and pendency, improved patent operations and 
procedures, and more secure funding. High-quality patents enable 
certainty and clarity of rights, which fuels innovation and reduces 
needless litigation. The Office's commitment to a renewed and enhanced 
focus on patent quality centers on three pillars: (1) Excellence in 
work products; (2) excellence in measuring patent quality; and (3) 
excellence in customer service. The three quality pillars are high 
priorities throughout the Office, in addition to the existing quality 
initiatives set forth by the USPTO-led White House Executive Actions on 
High-Tech Patent Issues (http://www.uspto.gov/patent/initiatives/uspto-led-executive-actions-high-tech-patent-issues). The Office is 
strengthening work products, processes, services, and how it measures 
patent quality at all stages of the patent process. The recently 
implemented Enhanced Patent Quality Initiative (EPQI) aims to ensure 
that the Office continues issuing high-quality patents well into the 
future.
    Stakeholder engagement is a critical component of the EPQI. 
Following a request for public comments on a set of potential quality 
proposals, the Office hosted a ``Quality Summit'' with the public to 
discuss the outlined proposals. By engaging the public on this topic, 
the Office received more than 1,200 comments on a wide array of 
possible patent quality initiatives and received even more feedback 
from both patent examiners and external stakeholders during the summit. 
Already the Office has created 11 programs under the umbrella of the 
EPQI in areas including pre-examination and search enhancement, 
prosecution enhancement, and evaluation enhancement. The Office held a 
patent quality community symposium in April 2016 featuring interactive 
segments and implementation updates on the EPQI. The goal of the 
symposium was to update the public on the USPTO's progress on the 11 
programs to improve clarity of the prosecution record, enhance examiner 
training, improve applicant-examiner interactions, and redefine ways to 
capture and measure data about quality. The symposium featured lectures 
on these topics, an interactive workshop demonstration on how the 
Master Review Form will be applied (see http://www.uspto.gov/blog/director/entry/improvements_in_measuring_patent_quality), and a panel 
discussion with experienced patent practitioners about ways applicants 
can contribute to the Agency's efforts. The proposed fees will provide 
sufficient resources to permit the Office to maintain momentum for 
developing a new paradigm of patent quality at the USPTO.
    Likewise, since the last patent fee setting effort, the USPTO has 
made significant progress on IT tools, like the Patents End-to-End 
(PE2E) suite, a solution that will enable a new way of processing 
patent applications using a single software platform to manage 
examination activities and integrate with existing systems via user-
oriented tools that help examiners process applications and support 
analytics and automated processing. See Part III of this rulemaking for 
more information on how PE2E will transform the Office. Other IT 
efforts are also underway to repair or replace the USPTO's aging 
infrastructure. The Office is also working to ensure optimal IT service 
delivery to all users in PTAB, including 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

[[Page 68152]]

(CBMR) proceedings, and derivation (DER) proceedings.
    The PTAB will benefit greatly from enhanced system tools even as 
the organization has significantly strengthened capacity in recent 
years. A major component of the overall patent process is the work 
carried out by the PTAB. The PTAB received more than 4,700 petitions 
for AIA trial proceedings since 2012 and has met every deadline set by 
Congress for such trials. In the last iteration of patent fee setting, 
the Office had to estimate both demand (e.g., workload) and cost with 
little data available for the IPRs, PGRs, and CBMRs. Now, with three 
years of historical cost data, the Office has better insights into the 
full cost of services and can better estimate demand, which enables the 
USPTO to align fees more appropriately. 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, reexamination appeals, and ex parte 
appeals. The USPTO's goal is to meet the statutory timeliness 
requirements for decisions in AIA proceedings and in appeals from re-
examination proceedings. While no statutory timeliness requirement 
exists for appeals in regular ex parte applications, the Office is 
committed to reducing the inventory of appeals by hiring to the extent 
possible, clearing the oldest cases, and reassigning judges according 
to greatest need. The proposal includes an increase to the major PTAB 
fees including Filing a Notice of Appeal, Forwarding an Appeal to the 
Board, IPR, PGR, and CBMR fees.
    Lastly, the USPTO has made significant progress towards financial 
sustainability as a result of the initial AIA fee setting effort, 
including building towards a three-month optimal operating reserve for 
patents. As initially presented in the 2013 patent fee setting rule, 
funding an operating reserve as a part of the Office's regular 
budgetary requirements aligns with the USPTO's strategic priority to 
sustain long-term operational goals and prevent the USPTO from having 
to make short-term crisis-based spending changes that affect the 
delivery of the USPTO's performance commitments. For instance, the 
USPTO was able to continue operations during the October 2013 
government-wide shut down by using available operating reserves carried 
over from FY 2013. More recently, the operating reserve allowed the 
Office to maintain progress on IT investments when patent filings (and 
subsequently revenue) decreased in FY 2015. In order to continue to 
provide effective service, the Office must proactively manage fiscal 
risks. The Office acutely recognizes that fees cannot simply increase 
for every improvement the Office deems desirable. Instead, for this 
rulemaking effort, the Office focused on prioritizing spending and 
gradually building the operating reserve in order to build resiliency 
against financial shocks. At optimal levels, the reserve will allow the 
Office to operate for three months in the event of interruptions in the 
ability to access collected fees such as during a government shutdown 
or during a period of unanticipated reductions in revenue or increases 
in operating expenses, such as during a domestic or global economic 
crisis, or major departures from the estimated number of patent 
applications received.
    In conclusion, the USPTO has made significant strides in realizing 
the goals set forth in 2011, in part due to the AIA authority to set 
fees. In order to continue building on the progress made over the last 
several years, and consistent with the USPTO's biennial fee review 
policy, the USPTO proposes the fee schedule detailed herein to continue 
quality initiatives, maintain progress toward backlog and pendency 
reduction, continue IT improvements for both Patents and PTAB, and 
promote the sound fiscal management of the Office while answering 
stakeholder calls to continue to improve service. The fees proposed in 
this rulemaking intend to make the Office well positioned 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 significant and results in a need for a 
Regulatory Impact Analysis (RIA) under Executive Order 12866 Regulatory 
Planning and Review, 58 FR 51735 (Oct. 4, 1993). The Office prepared an 
RIA to analyze the costs and benefits of the NPRM over a five-year 
period, FY 2017-FY 2021. The RIA includes a comparison of the proposed 
fee schedule to the current fee schedule (baseline) and to two other 
alternatives. 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 rulemaking, 
but found that the proposed rulemaking had qualitative benefits 
exceeding its qualitative 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 Office key fee setting policy factors; (2) securing aggregate 
revenue to cover aggregate cost--a measure of whether the alternative 
provides adequate revenue to support the core mission and strategic 
priorities described in the NPRM and FY 2017 Budget; and (3) aggregate 
increased user fee payments--a measure of the opportunity cost 
associated with paying additional fees to the Office. For these three 
costs and benefits, 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). In summary, the benefits of the proposed alternative clearly 
outweigh those of the baseline and the other alternatives considered in 
the RIA. Table 1 summarizes the RIA results.

 Table 1--Proposed Patent Fee Schedule Costs and Benefits, Cumulative FY
                              2017-FY 2021
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                     Qualitative Costs and Benefits
------------------------------------------------------------------------
Costs                                      .............................
  Aggregate Increase in User Fee Payments  Moderate.
Benefits.................................  Total.
  Secure Aggregate Revenue to Cover        Significant.
   Aggregate Costs.
  Fee Schedule Design....................  Significant.
  Net Benefit............................  Significant.
------------------------------------------------------------------------

    Additional details describing the costs and benefits are available 
in the RIA at http://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

[[Page 68153]]

under 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. 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.

C. Micro Entity Fee Reduction

    Section 10(g) of the AIA amended chapter 11 of title 35, U.S.C., to 
add 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.

D. 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 October 20, 2015, 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 http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC held a public hearing in 
Alexandria, Virginia, on November 19, 2015. Transcripts of the hearing 
are available for review at http://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript_20151119.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 Web site, http://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 February 29, 2016, and can be found online at http://www.uspto.gov/sites/default/files/documents/PPAC_Fee%20_Setting_Report_2016%20%28Final%29.pdf. The Office 
considered and analyzed all comments, advice, and recommendations 
received from the PPAC before publishing this NPRM. Before the final 
rule is issued, the public will have 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 rulemaking is to establish a 
fee schedule that generates sufficient multi-year revenue to recover 
the aggregate cost to maintain USPTO operations and accomplish the 
USPTO's strategic goals in accordance with the authority granted to the 
USPTO by AIA Section 10. A similar strategy guided the initial AIA 
patent fee setting in 2013. 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 
continue making strategic improvements, such as progress on patent 
quality initiatives, continued reduction of the patent application 
backlog and pendency, and modernization of IT systems.
    In addition to the overriding principles outlined above, as 
discussed earlier in this document, the Office also assesses alignment 
with the key fee setting policy factors. Each factor promotes a 
particular aspect of the U.S. patent system. Fostering innovation is an 
important policy factor to ensure that access to the U.S. patent system 
is without significant barriers to entry, 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 some 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 is important to influence 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 and 
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) projected costs to meet the Office's operational 
needs and strategic goals; and (3) sustainable funding. Additionally, 
the Office carefully considered 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 Activity Based 
Information.

[[Page 68154]]

Using historical cost data and forecasted application demands, the 
Office can align fees to the costs of specific patent products and 
services. The Office has made significant progress towards its 
strategic goals for patent quality, backlog, pendency, and IT system 
modernization for several years now. For more information about the 
Office's performance record and progress towards its strategic goals, 
see the FY 2015 Performance and Accountability Report, available at 
http://www.uspto.gov/sites/default/files/documents/USPTOFY15PAR.pdf. 
Each of the Office's goals is directly aligned to the cost of 
delivering patent services. The document entitled USPTO Setting and 
Adjusting Patent Fees during Fiscal Year 2017--Activity Based 
Information and Patent Fee Unit Expense Methodology, available at 
http://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 rulemaking details the Office's methodology for establishing fees. 
Finally, 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. The costs projected to meet the Office's 
strategic goals can be found in the FY 2017 President's Budget, which 
provides additional detail about the following performance and 
modernization efforts, among others: (a) Quality, backlog, and pendency 
and (b) modernized IT systems.
    (a) Quality, Backlog, and Pendency. The Office developed the 
strategic goal of optimizing patent quality and timeliness in response 
to feedback from the intellectual property community and in recognition 
that a sound, efficient, and effective intellectual property system is 
essential for technological innovation and for patent holders to reap 
the benefits of patent protection. In addition to timeliness of patent 
protection, the quality of application review is critical to the value 
of an issued patent. Issuance of quality patents provides certainty in 
the market and allows businesses and innovators to make informed and 
timely decisions on product and service development. Under the proposed 
action, the Office will continue to improve patent quality through the 
three quality pillars identified in Part I.
    In addition to quality, the USPTO continues to focus on backlog and 
pendency reduction. First action pendency went from 21.9 months in FY 
2012 to 17.3 months in FY 2015, total average pendency was reduced from 
32.4 months in FY 2012 to 26.6 months in FY 2015, and the patent 
application backlog was reduced from 608,283 in FY 2012 to 553,221 at 
the end of FY 2015. This proposed rulemaking will produce revenues 
adequate to continue the USPTO's progress towards attaining its 
strategic goals for patent backlog and pendency.
    Similarly, the PTAB manages pendency and inventory for appeals and 
trials. This proposed rulemaking will help the PTAB to maintain the 
appropriate level of judicial, legal, and administrative staff needed 
to provide high quality and timely decisions for AIA trials, 
reexamination appeals, and ex parte appeals.
    (b) Information Technology. Revenue generated from the proposed fee 
structure will enable the USPTO to continue modernizing its IT 
architecture and systems. Some current systems remain obsolete and 
difficult to maintain, leaving the USPTO vulnerable to potential 
disruptions in patent operations. However, the Office's efforts on 
PE2E, the large-scale patent IT improvement program, have already 
delivered value to examiners and customers alike. One of the PE2E 
releases included an automated method to convert millions of image-
based patent application papers into a fully automated extensible 
markup language (XML), so that images can be tagged with keywords to 
facilitate searching during the patent examination process. PE2E relies 
on flexible, scalable, modern technology that is optimized to eliminate 
repetitive tasks and support analytics and automated processing. 
Likewise, eCommerce Modernization (``eMod'') will improve the 
electronic patent application process by improving user interfaces, 
increasing functionality, and updating infrastructure--all aimed at 
enriching the user experience via more efficient system integration and 
expanding system usefulness. Modern IT tools benefit both USPTO 
employees and stakeholders by facilitating the effective administration 
of the patent system through effective application processing, better 
examination quality, and the ability to provide greater services via a 
nationwide workforce.
    (3) Sustainable Funding. A major component of sustainable funding 
is the creation 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, spending levels and revenue streams 
create volatility in patent operations and threaten the Office's 
ability to meet its designated performance levels (e.g., quality, 
backlog, and pendency).
    The USPTO's annual budget delineates prospective spending levels 
(aggregate costs) to execute core mission activities and strategic 
initiatives. In the FY 2017 President's Budget, the USPTO estimated 
that its aggregate patent operating costs for FY 2017, including 
administrative costs, would be $2.930 billion. After evaluating 
relevant risk factors, the Office determined that a minimum balance of 
$300 million in the operating reserve was adequate for FY 2016 and FY 
2017, which is below the optimal balance of three months operating 
expenses, or about $730 million. Based on the proposed fee increase 
contained in the FY 2017 President's Budget, the spending requirement 
would be offset by projected fee collections and other income of $3.005 
billion and a deposit of $75 million to the patent operating reserve, 
leaving a $385 million balance in the patent operating reserve, or $85 
million more than the desired minimum of $300 million for FY 2017. 
Because the FY 2017 President's Budget was submitted prior to the USPTO 
making final decisions on the proposed fee adjustments, the operating 
reserve estimate in this NPRM differs from the estimate included in the 
Budget. Given that the Office reduced several fees from the initial 
proposal in response to comments from the PPAC and the public, the 
aggregate revenue collected from the proposed fee schedule is lower. In 
FY 2017, the proposed fees and other income are projected to collect 
$2.969 billion, with $39 million deposited in the operating reserve, 
resulting in a balance of $349 million at the end of the fiscal year, 
which is slightly more than the minimal level of $300 million for FY 
2017. An optimal reserve balance of three months of operating expenses 
is projected to be $789 million in FY 2019. With the proposed fee 
increases, the Office projects the actual balance will reach $639 
million at the end of FY 2019. Without the proposed fee changes, the 
Office projects that end of year FY 2019 operating reserve balance 
would fall below the minimum threshold of $300 million to approximately 
$264 million. With the proposed fee schedule, the Office projects to 
first reach the optimal operating reserve balance by the end of FY 
2020, and FY 2021 would be the first year in which the optimal 
operating reserve balance would be in place at the beginning of the 
fiscal year. The FY 2021 optimal reserve balance is projected to be 
$818

[[Page 68155]]

million, and the projected reserve level entering the fiscal year is 
$861 million.
    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 target balance continues to 
be sufficient to provide the funding stability needed by the Office. 
Per the Office's operating reserve policy, if the operating reserve 
balance is projected to exceed the optimal level by 10 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.
    (4) Comments, Advice, and Recommendations from the Patent Public 
Advisory Committee. In the report prepared in accordance with AIA fee 
setting authority, the PPAC expressed general support for an increase 
in fees to sustain quality and fund a sufficient operating reserve for 
the Office. Specifically, the report stated, ``The PPAC agrees that the 
Office should set fees to establish an adequate revenue stream over a 
sustained period to fund the people and infrastructure essential for a 
high quality, low pendency examination process, and to fund its 
operating reserve.'' However, the PPAC expressed concerns over some of 
the individual fee adjustments and their potential impacts on patent 
applicants and holders. To address these concerns and still generate 
the necessary aggregate revenue to meet the Office's goals, the PPAC 
suggested several alternative fee adjustment approaches. The USPTO has 
reviewed the report and has amended the initial fee proposal in an 
effort to address these concerns, where possible, so as to remain 
consistent with the rulemaking goals. The USPTO has also included 
additional information in this NPRM to further address some of the 
PPAC's concerns.
    The PPAC expressed general support for the stated goals and an 
increase in patent fees but proposed alternative approaches for certain 
fee adjustments. The report suggested that the USPTO could save money 
by improving quality and processes to maximize efficiency, thereby 
offsetting some fee increases. In general, the PPAC urged the Office to 
provide more detail and justification for some of the fee adjustments, 
including greater transparency in the allocation of costs and 
historical aspects of costs, better explanations for why certain fees 
increased and to what purposes the additional revenue would be used, 
and any practical implications of not changing the current fee 
structure. This Part and Part V: Individual Fee Rationale offer this 
additional information.
    The PPAC expressed a lack of support for the proposal to increase 
Request for Continued Examination (RCE) fees. The advisory body 
questioned whether the fees are warranted and suggests instead that the 
USPTO consider ways to reduce the need for RCEs. In response to this 
concern, the USPTO proposes a reduction to the fee increases for both a 
first RCE and a second and subsequent RCE. The revised proposals 
include moderate increases that bring the fee rates closer to the cost 
of processing an RCE, as calculated using the most recently available 
cost data (FY 2015). Specifically, the first RCE fee rate is now 
proposed to increase from $1,200 to $1,300 for large entities, a $100 
increase (8 percent). The initial proposal included a $300 increase for 
this fee. The FY 2015 full cost to examine a first RCE was $2,187. When 
factoring small and micro entity rates, first RCE fees collected 48.8 
percent of the examination cost in FY 2015. The second and subsequent 
RCE fee rate is now proposed to increase from $1,700 to $1,900 for 
large entities, a $200 increase (12 percent). The initial proposal 
included a $300 increase for this fee. The FY 2015 full cost to examine 
a second and subsequent RCE was $1,540. When factoring small and micro 
entity rates, second and subsequent RCE fees collected 100 percent of 
the examination cost in FY 2015. At an aggregate level, first and 
second and subsequent RCE fees collected 62.5 percent of the 
examination costs for FY 2015. In order to approach cost recovery and 
limit the increase to the first RCE fee rate, the Office proposes a 
slightly larger increase for the second and subsequent RCE fee rate. 
Had this fee structure been in place in FY 2015, the Office would have 
recovered 68.6 percent of RCE costs as opposed to the 62.5 percent that 
was experienced. While this proposed fee structure will not achieve 
full cost recovery for RCEs, it will bring collections closer to cost 
and therefore reduce the subsidy for RCE filings currently provided by 
other patent fees. In addition to the proposed fee adjustments, the 
USPTO is committed to focusing on initiatives that will reduce the need 
for RCEs. Examples of initiatives the Office has already implemented to 
reduce the need for RCEs include the Quick Path Information Disclosure 
Statement (QPIDS) pilot program (http://www.uspto.gov/patent/initiatives/quick-path-information-disclosure-statement-qpids) and the 
After Final Consideration Pilot Program 2.0 (AFCP 2.0) (http://www.uspto.gov/patent/initiatives/after-final-consideration-pilot-20). 
Additionally, the Enhanced Patent Quality Initiative (http://www.uspto.gov/patent/initiatives/enhanced-patent-quality-initiative-0) 
will be evaluating and strengthening work products, processes, and 
services at all stages of the patent process and may contribute to 
reducing the need for RCEs.
    The report noted opposition to the proposed increases for excess 
claim fees. The PPAC recommends a refund system in which excess claim 
fees are returned when claims are cancelled in response to a 
restriction requirement. Under this proposal, an applicant would only 
incur fees for the claims that are actually examined, not just filed. 
The USPTO appreciates the PPAC's suggestion and has committed to 
undertaking a study to determine the feasibility of such a refund 
program, and at present the Office is proposing the increase for excess 
claim fees.
    Regarding the proposed change to the Information Disclosure 
Statement (IDS) model, the PPAC expressed concern about the negative 
effects of eliminating the certification requirement (under 37 CFR 1.97 
(e)) and noted that the fee increase may discourage applicants from 
filing promptly when new prior art is discovered. In response to PPAC 
and public comments, the USPTO eliminated the proposed changes to IDS 
practice and instead is proposing a moderate increase to the IDS 
submission fee rate.
    The report stated that the substantial increase to the notice of 
appeal and appeal forwarding fees would likely result in discouraging 
patent holders' invocation of appeal procedures, which are frequently 
used out of necessity rather than choice. In response, the Office notes 
that even with the proposed increases to the fees, the true cost of ex 
parte appeals is being significantly subsidized. That is, in FY 2015, 
ex parte appeal fees covered approximately 58 percent of the cost per 
appeal. The proposed fee increase will bring ex parte appeal fees up to 
cover approximately 72 percent of the cost per appeal. Since the 
implementation of the January 2013 Setting and Adjusting Patent Fees 
Final Rule, the increased ex parte appeal fees have enabled the PTAB to 
hire more judges. The PTAB has made great strides in reducing its 
appeals inventory, which reached over 27,000 (in 2012), to under 19,000 
(in April 2016). The proposed increase in fees will help the Board 
further reduce

[[Page 68156]]

the appeals inventory and improve pendency for appeals and trials. The 
PTAB is also working to reduce inventory with the implementation of the 
following two pilot programs: (i) Expedited Patent Appeal Pilot (EPAP) 
(see http://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/expedited-patent-appeal-pilot) and (ii) Small Entity Pilot 
Program (see http://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/uspto-announces-streamlined-expedited).
    The PPAC report specifically expressed support for proposed fee 
adjustments for the IPR, PGR, and CBMR so that the PTAB has adequate 
resources to accomplish the mission of the AIA. However, the PPAC 
questioned the distribution of the fees between pre- and post-
institution. The Office appreciates the observation and is currently 
assessing the matter.
    The PPAC suggested that it would be sensible for the USPTO to 
subdivide the AIA trial fees more finely (``pay as you go''). As the 
AIA review processes mature and become more certain, it may be 
appropriate to study the impact and feasibility of this proposal. 
Developing an understanding of the reasons driving settlements at 
various times in these proceedings will inform decision makers as to 
how and when to best structure fees. Because fees are intended to 
recapture aggregate agency patent costs over time, structuring of the 
fees will still require recapture of all costs unless the costs of the 
review proceedings are subsidized by other patent related revenue. The 
Office agrees with the PPAC's characterization that the proceedings 
still contain significant uncertainties. Once the USPTO has had further 
experience with the proceedings to derive conclusions about settlement 
and other behaviors, the USPTO will reexamine the appropriateness of 
this proposal.
    Additionally, the PPAC suggested that the Office consider adopting 
a scaled petition fee schedule based on the petitioner's annual 
revenue. However, the authority to discount fees or to charge 
additional fees for certain petitioners under the USPTO's rulemaking 
authority is limited by the AIA to providing discounts to the six 
categories under section 10(b). As the administrative trial fees are 
outside of the six categories, the trial fees are not eligible for 
discounts.
    The report proposed a refund system for disciplinary proceeding 
fees associated with the Office of Enrollment and Discipline (OED). 
While the PPAC recognizes the importance of having an effective process 
for ensuring compliance with the rules governing the Patent Bar, the 
advisory body also recognizes that some practitioners may be fully 
exonerated upon final determination. The Office would like to clarify 
that pursuant to 37 CFR 11.60(d)(2), the OED Director is currently 
authorized to recover expenses from a disciplined practitioner who 
seeks reinstatement. The purpose of listing this fee in 37 CFR 1.21 is 
simply to establish a new fee code by which to account for the receipt 
of these reimbursements. The fee is only imposed on practitioners who 
seek reinstatement after having been suspended or excluded. Thus, there 
should be no concern that a practitioner would be subject to this fee 
if he or she has been investigated and cleared or has been disciplined 
but not suspended or excluded.
    The PPAC also suggested that the proposed increases to design fees 
were excessive. In response, the USPTO has reduced the proposed 
increase to the design issue fee by $200 for large entities from the 
level that the Office initially proposed. The proposed large entity 
design issue fee rate is now $800 as opposed to $1,000. The minimum 
required fees to obtain a design patent (file/search/examination and 
issue) are proposed to increase slightly beyond cost recovery for large 
entities ($1,760 versus $1,596) to subsidize the substantial number 
(almost half in FY 2015) of small and micro entity applicants who pay 
lower fees despite similar costs to the Office. Further, design 
patentees do not pay maintenance fees, so there is no back-end subsidy 
to support below-cost front-end fees. Overall, design fees are still 
proposed at rates that are below the Office's aggregate processing 
costs even if the large entity design fee rates are slightly above 
cost. Therefore, even with the proposed fee increases, design 
application processing costs will continue to be subsidized by non-
design specific fee revenues. The Office believes these proposed 
moderate fee increases in filing, search, examination, and issue are 
appropriately aligned to costs and the policy consideration to foster 
innovation.
    In the case of sequence listing fees, the report sought more 
information on the proposed fees to clarify the need for the increase. 
The level of effort associated with the handling of extremely lengthy 
sequence listings (hereafter referred to as mega-sequence listings) is 
significant because the Office's systems require extra storage and 
special handling for sequence listing files beyond 300 Megabytes (MB). 
Actual cost data is not available since these are newly proposed fees. 
However, based on historical data, on average, less than 10 
applications per year contained sequence data that reached the 300 MB 
file levels of the proposed new fees. Based on previously filed 
applications with lengthy sequence listings, the Office determined that 
some applications disclosed sequence data that met the length 
thresholds for being included in the sequence listing, but that was 
neither invented by the applicants nor claimed. These sequence listings 
often included sequences that were available in the prior art, were not 
essential material, and could have been described instead, for example, 
by name and a publication or accession reference. Claims in such 
applications were frequently directed to the manipulation of sequence 
data rather than the substance of the sequences themselves. Submission 
of a mega-sequence listing in these applications would not have been 
necessary to complete the application if applicants limited the number 
of sequences that were described in such a way as to be required in a 
sequence listing. The proposed fee should encourage applicants to draft 
their specifications such that sequence data that is not essential 
material is not required to be included in a sequence listing, which 
should reduce the need for mega-sequence listings. A reduced number of 
mega-sequence listings will benefit the Office and the public by 
reducing large submissions of unnecessary sequences and, consequently, 
the search system load. The PPAC also requested additional information 
regarding the proposed fee for the late filing of sequence listings in 
international applications. This fee is being established pursuant to 
PCT Rule 13ter.1(c) and is similar in nature and proposed fee rate to 
fees charged by other international IP offices. Additional information 
regarding the authority and purpose of this rulemaking is available at 
http://www.wipo.int/pct/en/texts/rules/r13ter.htm.
    The PPAC also requested additional information regarding copy fees, 
in particular those that appeared to be ``very high charges.'' 
Currently the fee schedule includes a catch-all fee of ``Computer 
Records'' priced ``at cost.'' The Office proposes to replace this fee 
code with five fees that encompass work currently performed and charged 
to this code. The five fee codes proposed to replace the ``Computer 
Records'' fee are: Copy of Patent Grant Single-Page TIFF Images (52 
week subscription); Copy of Patent Grant Full-Text W/Embedded Images, 
Patent Application Publication

[[Page 68157]]

Single-Page TIFF Images, or Patent Application Publication Full-Text W/
Embedded Images (52 week subscription); Copy of Patent Technology 
Monitoring Team (PTMT) Patent Bibliographic Extract and Other DVD 
(Optical Disc) Products; Copy of U.S. Patent Custom Data Extracts; and 
Copy of Selected Technology Reports, Miscellaneous Technology Areas. 
The proposed fee codes explicitly state the service and fee to provide 
customers with clearer information to aid decision making.
    These specific fees recover the USPTO's aggregate costs for 
processing, validating, packaging, and shipment of these products to 
customers worldwide. For the copy of Patent Grant Single-Page TIFF 
Images (52 week subscription) (which the Office proposes to set at 
$10,400), for example if a customer orders this service, each week the 
Office will expedite to him or her a package that contains, at a 
minimum, one Blu-ray and one DVD optical disc bearing the patent grant 
data for each Tuesday in the calendar year via United Parcel Service. 
The fee rate covers the cost of producing and delivering these items 
for each of the 52 weeks of the year. For the other three services 
proposed at $5,200, the expedited weekly packages (one for each Tuesday 
or Thursday in the calendar year) typically contain either a single 
Blu-ray or DVD optical disc. As an alternative to requesting and paying 
for these weekly services, the USPTO has provided customers the ability 
to download this information at no cost since June 2010. This 
information is currently provided in the following locations: Bulk Data 
Storage System (BDSS) available at https://bulkdata.uspto.gov since 
October 2015 and Reed Tech Public Data Dissemination (PDD) available at 
http://patents.reedtech.com since June 2013.
    The USPTO left maintenance fees untouched in the initial proposal. 
The PPAC report noted that this was an ``attractive feature to many 
stakeholders given their already high level, especially at the third 
stage.'' The PPAC also commented that there may be an opportunity to 
decrease the third stage fee and raise the maintenance fees at the 
first two stages or second maintenance fee only as a means to increase 
revenue. The USPTO appreciated the input and will continue to closely 
monitor renewal rates to determine if and when a change to the 
maintenance fee rates is warranted.
    In summary, the USPTO appreciates the PPAC's overall support for an 
increase in patent fees to meet sufficient funding levels. After 
careful consideration of the comments, concerns, and suggestions 
provided in the report, and keeping in mind the goals of this 
rulemaking, the USPTO elected to reduce several of the fee increases 
initially proposed to the PPAC. The newly proposed fee structure will 
result in lower aggregate revenue than that initially proposed to the 
PPAC. Nevertheless, the fee structure proposed herein will ultimately 
allow the USPTO to 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 Rulemaking

    The Office estimates that the proposed patent fee schedule will 
produce aggregate revenues to recover the aggregate costs of the USPTO, 
including for the implementation of its strategic and management goals, 
objectives, and initiatives in FY 2017 and beyond. Using the strategic 
goals (optimizing patent quality and timeliness and providing domestic 
and global leadership to improve intellectual property policy, 
protection, and enforcement worldwide) and the management goal of 
organizational excellence as a foundation, the proposed rule would 
provide sufficient aggregate revenue to recover the aggregate cost of 
patent operations, including improving patent quality, reducing the 
patent application backlog, decreasing patent application pendency, 
upgrading the patent business IT capability and infrastructure, and 
implementing a sustainable funding model.

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 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 depend on many factors, 
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 to 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 
Office of Management and Budget (OMB) (www.omb.gov) in the Economic and 
Budget Analyses section of the Analytical Perspectives and each January 
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 at pages 143 and 144 of the FY 2017 President's 
Budget (Congressional Justification). 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 
http://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

[[Page 68158]]

anticipated pay raises and inflationary increases for the budget year 
and four out years (detailed calculations and assumptions for this 
adjustment can be found in the FY 2017 President's 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 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 2017 President's Budget identifies that, during FY 2017, 
patent operations will cost $2.928 billion (see page 146 of the 
Budget), including $2.009 billion for patent examination activities; 
$162 million for IT systems, support, and infrastructure contributing 
to patent operations; $93 million for activities related to patent 
appeals and the AIA inter partes dispute actions; $27 million for 
activities related to intellectual property protection, policy, and 
enforcement; and $637 million for general support costs necessary for 
patent operations (e.g., 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 $28 million in other income associated with 
recoveries and reimbursable agreements (offsets to spending) and 
depositing $75 million during FY 2017 toward the cost of building the 
patent operating reserve to sustain operations.
    Because the FY 2017 President's Budget was submitted prior to the 
USPTO making final decisions on the proposed fee adjustments, the 
operating reserve estimate in this NPRM is therefore different than the 
estimate included in the Budget. A detailed description of the 
operating requirements and related aggregate cost is located in the 
Budget. Table 2 below provides key underlying production workload 
projections and assumptions from the Budget used to calculate aggregate 
cost. Table 3 presents the total budgetary requirements (prospective 
aggregate cost) for FY 2017 through FY 2021 and the estimated 
collections and operating reserve balances that would result from the 
proposed adjustments contained in this NPRM.

                        Table 2--Patent Production Workload Projections--FY 2017-FY 2021
----------------------------------------------------------------------------------------------------------------
   Utility, plant, and reissue
              (UPR)                   FY 2017         FY 2018         FY 2019         FY 2020         FY 2021
----------------------------------------------------------------------------------------------------------------
Applications *..................         594,900         606,800         625,000         650,000         676,000
Growth Rate.....................            1.5%            2.0%            3.0%            4.0%            4.0%
Production Units................         616,200         624,900         628,700         629,300         628,500
Unexamined Patent Application            434,700         397,400         374,000         374,700         401,600
 Backlog........................
Examination Capacity **.........           8,087           8,022           7,937           7,832           7,777
Performance Measures (UPR)
    Avg. First Action Pendency              13.7            12.2            10.9            10.3            10.2
     (Months)...................
    Avg. Total Pendency (Months)            22.9            22.1            20.6            19.5            19.1
----------------------------------------------------------------------------------------------------------------
* 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 2017
  President's Budget.


                            Table 3--Planned Operating Requirements--FY 2017-FY 2021
----------------------------------------------------------------------------------------------------------------
                                                                Dollars in millions
 Patent aggregate cost estimate  -------------------------------------------------------------------------------
                                      FY 2017         FY 2018         FY 2019         FY 2020         FY 2021
----------------------------------------------------------------------------------------------------------------
Patent Planned Operating                   2,930           3,114           3,157           3,208           3,272
 Requirements...................
    Less: Planned Patent Fee               2,951           3,260           3,265           3,412           3,599
     Collections................
    Less: Other Income..........              18              18              18              18              18
To (-)/From (+) Operating                     39             164             127             222             344
 Reserve........................
EOY Operating Reserve Balance...             349             513             639             861           1,206
----------------------------------------------------------------------------------------------------------------

Step 2: Calculate Prospective Aggregate Revenue

    As described in ``Step 1,'' the USPTO's FY 2017 requirements in the 
FY 2017 President's 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 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 workload (e.g., number of applications and 
requests for services and products), growth, 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, as most recently 
exhibited in the recession of 2009 when incoming workloads and renewal 
rates declined.
    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 
2017 based on OMB and 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 intellectual 
property portfolios,

[[Page 68159]]

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 action 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 fees 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. Additional detail about the Office's 
elasticity estimates is available in ``USPTO Setting and Adjusting 
Patent Fees during Fiscal Year 2017--Description of Elasticity 
Estimates,'' available at http://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, 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 2017--Aggregate 
Revenue Estimates Alternative 1: Proposed Alternative'' available at 
http://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, such as additional examining staff and 
overtime. The resulting reduction in production activities 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 given fiscal year, work it expects to process in a given 
fiscal year (an indicator for workload of patent issue fees), 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 fees 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 fees 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 April 1, 
2017. 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).

Step 3: Set Specific Fee Amounts

    Once the Office finalizes the annual requirements and aggregate 
prospective costs for a given year during the budget formulation 
process, the Office sets specific fee amounts that, together, will 
derive the aggregate revenue required to recover the estimated 
aggregate prospective costs during that time frame. Calculating 
individual fees is an iterative process that encompasses many 
variables. One variable that the USPTO considers to inform fee setting 
is the historical cost estimates associated with individual fees. The 
Office's Activity-Based Information (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 2017--Activity-Based 
Information and Patent Fee Unit Expense Methodology'' available at 
http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The USPTO provides data for FY 2013-FY 2015 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.
    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 goal of implementing a sustainable funding model. As 
detailed previously, the PPAC supports this approach, stating that it 
``agrees that the Office should set its fees to establish an adequate 
revenue stream over a sustained period to fund the people and 
infrastructure essential for a high quality, low pendency examination 
process, and to fund its operating reserve.'' 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, and below 
their unit costs to balance several key fee setting policy factors: 
Fostering innovation, 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 foster innovation by removing barriers to 
entry for innovators. To balance the aggregate

[[Page 68160]]

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). The Office applied a similar rationale to set and adjust 
patent fees in the 2013 final rule, the initial patent fee setting 
rulemaking using AIA authority. 78 FR 4212 (January 18, 2013).
    For some fees proposed in this NPRM, the USPTO does not typically 
maintain individual historical cost data for the service provided, such 
as maintenance fees. Instead, the Office evaluates the policy factors 
described in Part III to inform fee setting. By setting fees at 
particular levels, 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 recover 
costs for activities that strain the patent system.
    The rationale for the proposed changes are grouped into three major 
categories, discussed below: (A) Fees where large entity amounts stayed 
the same or did not change by greater than plus or minus 10 percent or 
20 dollars; (B) fees where large entity amounts changed from the 
current amount by greater than plus or minus 10 percent and 20 dollars; 
and (C) fees that are discontinued or replaced. 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. Therefore, the only time there will be a small or micro entity 
fee change that meets the greater than plus or minus 10 percent or 20 
dollars criteria without a similar change for the large entity fee will 
be for those instances when the Office is introducing new small and 
micro entity fees where there was previously only a large entity fee. 
These types of changes are discussed separately.
    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 IV: Discussion of Specific Rules contains a 
complete listing of fees that are set or adjusted in the proposed 
patent fee schedule.

A. Fees With Proposed Changes Less Than Plus or Minus 10 Percent or 20 
Dollars

    The Office proposes to adjust slightly (i.e., less than plus or 
minus 10 percent or 20 dollars) several fees not discussed in sections 
B or C below. The Table of Patent Fees demarcates which fees meet the 
dollar change and percent change thresholds and are included for 
discussion in Part V. 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 will be rounded 
to the nearest 20 dollars by applying standard arithmetic rules. The 
resulting proposed fee amounts will be 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. The slight increase 
in these fees helps the Office to recover higher costs of performing 
such services due to increased aggregate cost of doing business. The 
proposed fee adjustments in this category are listed in the Table of 
Patent Fees.

B. Fees With Proposed Changes of Greater Than Plus or Minus 10 Percent 
and 20 Dollars

    For those fees that are proposed to change by greater than plus or 
minus 10 percent and 20 dollars, the individual fee rationale 
discussion is divided into three categories, including: (1) New and 
significant fees; (2) patent enrollment fees; and (3) fees adjusted and 
amended to include discounts for small and micro entities.
    New and significant fees are further divided into subcategories 
according to the function of the fees, including: (a) Mega-sequence 
listing filing; (b) design and plant search, examination, and issue; 
(c) request for continued examination (RCE); (d) information disclosure 
statements; (e) certificate of correction; (f) request for ex parte 
reexamination; (g) appeals; (h) AIA trials; (i) PCT- International 
Stage; and (j) reissue patent maintenance rules.
    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) New and Significant Fees
    The following fees fall under the category of new and significant. 
A discussion of the rationale for each fee follows.
(a) Mega-Sequence Listing Filing

                        Table 4--Mega-Sequence Listing Filing--Fee Changes and Unit Cost
----------------------------------------------------------------------------------------------------------------
                                  Current fees     Proposed fees   Dollar change  Percent change
                              -------------------------------------------------------------------
       Fee description                            Large  (small)  Large  (small)  Large  (small)   FY 2015 Unit
                                 Large  (small)       [micro]         [micro]         [micro]          cost
                                [micro]  entity       entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Submission of sequence         new..............          $1,000         +$1,000             n/a             n/a
 listings of 300MB to 800MB.                              ($500)         (+$500)           (n/a)
                                                          [$250]         [+$250]           [n/a]
Submission of sequence         new..............         $10,000        +$10,000             n/a             n/a
 listings of more than 800 MB.                          ($5,000)       (+$5,000)           (n/a)
                                                        [$2,500]       [+$2,500]           [n/a]
----------------------------------------------------------------------------------------------------------------

    The Office proposes two new fees to manage handling of sequence 
listings of 300 MB or more. Pricing for this fee is divided into two 
tiers with Tier 1 for file sizes 300MB to 800MB and Tier 2 for file 
sizes greater than 800MB.
    The level of effort associated with the handling of mega-sequence 
listings is significant, because the Office's systems require extra 
storage and special handling for files beyond 300 MB. The Office has 
not yet collected actual cost data for sequence listings with file 
sizes of 300 MB or greater. However, based on

[[Page 68161]]

historical data, on average, less than 10 applications per year 
contained sequence listing files greater than 300MB. Based on 
previously filed applications with lengthy sequence listings, the 
Office determined that some applications disclosed sequence data that 
met the length thresholds for being included in the sequence listing 
but that was neither invented by the applicants nor claimed. Mega-
sequence listings, in particular, often included sequences that were 
available in the prior art, were not essential material, and could have 
been described instead, for example, by name and a publication or 
accession reference. Further, claims accompanying such applications 
were frequently directed to the manipulation of sequence data rather 
than the substance of the sequences themselves. Submission of a mega-
sequence listing in these applications would not have been necessary to 
complete the application if applicants limited the number of sequences 
that were described in such a way as to be required in a sequence 
listing. The proposed fee should encourage applicants to draft their 
specifications such that sequence data that is not essential material 
is not required to be included in a sequence listing. A reduced number 
of mega-sequence listings will benefit the Office and the public by 
reducing the strain on Office resources, thus facilitating the 
effective administration of the patent system.
(b) Design and Plant Search, Examination, and Issue

                   Table 5--Design and Plant Search, Examination, and Issue Fees--Fee Changes
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------
         Fee description          Large  (small)  Large  (small)  Large  (small)  Large  (small)   FY 2015 Unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Design Search Fee...............            $120            $160            +$40            +33%            $397
                                           ($60)           ($80)          (+$20)          (+33%)
                                           [$30]           [$40]          [+$10]          [+33%]
Plant Search Fee................            $380            $420            +$40            +11%          $1,773
                                          ($190)          ($210)          (+$20)          (+11%)
                                           [$95]          [$105]          [+$10]          [+11%]
Design Examination Fee..........            $460            $600           +$140            +30%            $608
                                          ($230)          ($300)          (+$70)          (+30%)
                                          [$115]          [$150]          [+$35]          [+30%]
Design Issue Fee................            $560            $800           +$240            +43%            $314
                                          ($280)          ($400)         (+$120)          (+43%)
                                          [$140]          [$200]          [+$60]          [+43%]
Plant Issue Fee.................            $760          $1,000           +$240            +32%            $314
                                          ($380)          ($500)         (+$120)          (+32%)
                                          [$190]          [$250]          [+$60]          [+32%]
----------------------------------------------------------------------------------------------------------------

    Design and plant patents are unlike utility patents in that they do 
not pay maintenance fees after the patent has been granted. Under the 
current utility fee structure, entry costs (filing, search, and 
examination fees) are intentionally set below the full cost of 
performing this service as a means to foster innovation. Then, the full 
cost of examination is recovered through the payment of issue and 
maintenance fees. Given the lack of maintenance fees and the fact that 
the majority of design applicants are small and micro entities who are 
eligible to pay reduced fees, the Office currently does not recover the 
costs to examine design and plant patent applications solely from 
design and plant application fees. Instead, these costs are being 
subsidized by other application types (e.g., utility) and processes. 
The proposed fees would better align the fees with costs by bringing 
both application types closer to aggregate cost recovery while 
maintaining some subsidization. In an effort to limit cost-based entry 
barriers for these application types, the Office proposes the largest 
increase, in terms of dollars, for the issue fee.
(c) Request for Continued Examination (RCE)--First and Second and 
Subsequent Request

                          Table 6--Request for Continued Examination (RCE) Fee Changes
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------  FY 2015 Unit
         Fee description           Large (small)   Large (small)   Large (small)   Large (small)       cost
                                  [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Request for Continued                     $1,200          $1,300           +$100             +8%          $2,187
 Examination (RCE)--1st Request           ($600)          ($650)          (+$50)           (+8%)
 (see 37 CFR 1.114).............          [$300]          [$325]          [+$25]           [+8%]
Request for Continued                     $1,700          $1,900           +$200            +12%          $1,540
 Examination (RCE)--2nd and               ($850)          ($950)         (+$100)          (+12%)
 Subsequent Request (see 37 CFR           [$425]          [$475]          [+$50]          [+12%]
 1.114).........................
----------------------------------------------------------------------------------------------------------------


[[Page 68162]]

    The proposed moderate increases to RCE fees directly support the 
fee setting policy factor to align fees with costs. The Office's 
proposed increase would more closely align the fee rates with the cost 
of processing RCEs, as calculated using the most recently available 
cost data (FY 2015). Specifically, the Office proposes to increase the 
first RCE fee rate from $1,200 to $1,300 for large entities, a $100 
increase (8 percent). The FY 2015 cost to examine a first RCE was 
$2,187. When factoring in filings by small and micro entities, first 
RCE fees collected 48.8 percent of their aggregate examination costs in 
FY 2015. When discussing RCEs, it is helpful to recognize the impact of 
small entity discounts on the Office's costs. Specifically, while small 
and micro entity fee rates are reduced by 50 percent and 75 percent 
respectively, the cost of processing these actions is not reduced 
accordingly.
    The Office proposes to increase the second and subsequent RCE fee 
rate from $1,700 to $1,900 for large entities, a $200 increase (12 
percent). The FY 2015 cost to examine a second and subsequent RCE was 
$1,540. When factoring filings by small and micro entities, second and 
subsequent RCE fees fully collected the complete examination cost in FY 
2015. When combined, first and second and subsequent RCE fees collected 
62.5 percent of the examination costs. In order to approach cost 
recovery and limit the increase to the first RCE fee rate, the Office 
proposes a slightly larger increase for the second and subsequent RCE 
fee rate. Had this fee structure been in place in FY 2015, the Office 
would have recovered 68.6 percent of RCE costs as opposed to the 62.5 
percent that was realized. In FY 2015, the Office collected fees for 
112,634 first RCEs and for 57,931 second and subsequent RCEs.
    While this fee structure will not achieve full cost recovery for 
RCEs, it will bring collections closer to cost and therefore reduce the 
subsidy for RCE filings currently provided by other patent fees. In 
addition to the fee adjustments, the USPTO is committed to focusing on 
initiatives that will reduce the need for RCEs. Examples of initiatives 
the Office has already implemented to reduce the need for RCEs include 
the QPIDS pilot program (http://www.uspto.gov/patent/initiatives/quick-path-information-disclosure-statement-qpids) and the AFCP 2.0 (http://www.uspto.gov/patent/initiatives/after-final-consideration-pilot-20). 
Additionally, the recently announced Enhanced Patent Quality Initiative 
(http://www.uspto.gov/patent/initiatives/enhanced-patent-quality-initiative-0) will be evaluating and strengthening work products, 
processes, and services at all stages of the patent process.
(d) Information Disclosure Statements (IDS)

                                    Table 7--IDS--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------  FY 2015 Unit
         Fee description           Large (small)   Large (small)   Large (small)   Large (small)       cost
                                  [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Submission of an Information                $180            $240            +$60            +33%             n/a
 Disclosure Statement...........           ($90)          ($120)          (+$30)          (+33%)
                                           [$45]           [$60]          [+$15]          [+33%]
----------------------------------------------------------------------------------------------------------------

    The Office proposed new procedural rules and fee rates for the 
Information Disclosure Statement practices in its initial proposal to 
PPAC. Based on the feedback received, the Office determined not to move 
forward with the changes to the IDS procedural rules. Instead, the 
Office proposes to increase the submission fee from $180 to $240. The 
Office proposes the adjustment in an effort to optimally set the fee to 
encourage early submission of an IDS when possible. However, based on 
stakeholder feedback offered in response to the Office's initial patent 
fee setting proposal, the Office aims to keep the fee rate low enough 
to encourage timely filings during the time period (and under the 
conditions) when the fee would be required.
(e) Certificate of Correction Fees

                                           Table 8--Certificate of Correction Fees--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees    Proposed fees    Dollar change    Percent change
                                                                    --------------------------------------------------------------------   FY 2015 Unit
                          Fee description                             Large (small)    Large (small)    Large (small)    Large (small)         cost
                                                                      [micro] entity   [micro] entity   [micro] entity   [micro] entity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Certificate of Correction..........................................            $100             $150             +$50             +50%              $93
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Office proposes to increase the fee for a certificate of 
correction by $50 to $150. The Office proposes the adjustment in an 
effort to encourage applicants to submit accurate information 
initially, while at the same time not increasing the rate too much 
above unit cost recovery to discourage disclosure of needed corrections 
when an error has been identified. Whenever a mistake of a clerical or 
typographical nature, or of minor character, which was not the fault of 
the USPTO, appears in a patent and a showing has been made that such 
mistake occurred in good faith, the Director may, upon payment of this 
fee, issue a certificate of correction, if the correction does not 
involve such changes in the patent as would constitute new matter or 
would require reexamination.
(f) Request for Ex Parte Reexamination Fees

[[Page 68163]]



                  Table 9--Request for Ex Parte Reexamination Fees--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------  FY 2015 Unit
         Fee description           Large (small)   Large (small)   Large (small)   Large (small)       cost
                                  [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Ex Parte Reexamination (Sec.                 new          $6,000         +$6,000             n/a             n/a
 1.510(a)) Streamlined..........                        ($3,000)       (+$3,000)
                                                        [$1,500]       [+$1,500]
----------------------------------------------------------------------------------------------------------------

    The Office proposes to establish a new fee for smaller, streamlined 
reexamination filings. The streamlined filings would reduce the cost to 
the USPTO, allowing the Office to pass on the cost savings to 
applicants. The proposed fee would apply to ex parte reexamination 
requests having: (i) 40 Pages or less; (ii) lines that are double-
spaced or one-and-a-half spaced; (iii) text written in a non-script 
type font such as Arial, Times New Roman, or Courier; (iv) a font size 
no smaller than 12 point; (v) margins which conform to the requirements 
of 37 CFR 1.52(a)(1)(ii); and (vi) sufficient clarity and contrast to 
permit direct reproduction and electronic capture by use of digital 
imaging and optical character recognition. The following parts of an ex 
parte reexamination request are excluded from (i) through (v) above: 
(a) The copies of every patent or printed publication relied upon in 
the request pursuant to 37 CFR 1.510(b)(3); (b) the copy of the entire 
patent for which reexamination is requested pursuant to 37 CFR 
1.510(b)(4); and (c) the certifications required pursuant to 37 CFR 
1.510(b)(5) and (6). Completed forms such as the Request for Ex Parte 
Reexamination Transmittal Form (PTO/SB/57) or the information 
disclosure statement form (PTO/SB/08), or their equivalents, will also 
be excluded from (i) through (v). Claim charts will be considered part 
of the request and will be included in the page limit. Any paper 
containing argument directed to the patentability or unpatentability of 
the claims, such as an affidavit or declaration, will be included in 
the page limit and subject to the above requirements. If only a portion 
of the paper contains argument, the entire paper will be included in 
the page limit. The Office deems conclusions and/or definitions to be 
argumentative. For example, a request that includes 40 pages of 
argument and a 41st page that includes conclusions or definitions would 
be deemed to be a request having greater than 40 pages. A page that 
consists solely of a signature will not be included in the page limit. 
The determination of whether a paper contains argument will be within 
the sole discretion of the Office.
    Note that micro entity status is only available to patent owner 
requesters, not to third party requesters. The change is consistent 
with the USPTO's fee setting policy factors to align fees to costs, 
offer additional processing options, and facilitate the effective 
administration of the patent system, and is also consistent with the 
requirements of 35 U.S.C. 123.
(g) Appeal Fees

                                  Table 10--Appeal--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------  FY 2015 Unit
         Fee description           Large (small)   Large (small)   Large (small)   Large (small)       cost
                                  [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Notice of Appeal................            $800          $1,000           +$200            +25%             $45
                                          ($400)          ($500)         (+$100)          (+25%)
                                          [$200]          [$250]          [+$50]          [+25%]
Forwarding an Appeal in an                $2,000          $2,500           +$500            +25%          $4,815
 Application or Ex parte                 ($1000)        ($1,250)         (+$250)          (+25%)
 Reexamination Proceeding to the          [$500]          [$625]         [+$125]          [+25%]
 Board..........................
----------------------------------------------------------------------------------------------------------------

    At the current fee rate, the fee paid for an ex parte appeal only 
covers 58 percent of the Office's cost for an appeal. The proposed fee 
increase will result in ex parte appeal fees covering 72 percent of the 
Office's cost to conduct an ex parte appeal.
    In the past few years, the Office has made great strides in 
reducing the backlog and pendency for ex parte appeals. Appeal 
inventory reached over 27,000 (in 2012) and has now fallen to under 
19,000 (in April 2016). As of the end of fiscal year 2015, the average 
pendency for decided ex parte appeals was 30 months. The Office aspires 
to reach an appeals pendency goal of 12 months by the end of FY 2018 
and to further reduce the existing inventory. As mentioned in Part III, 
the PTAB is working to reduce inventory via two pilot programs, EPAP 
and the Small Entity Pilot Program. The proposal would allow the Office 
to better align fees to costs by reducing the gap between the amount 
paid by an appellant and the fully burdened cost of reviewing appeals 
by the Board. The additional revenue supports continued improvements to 
pendency and inventory via enhanced technology.
(h) AIA Trials

[[Page 68164]]



                                Table 11--AIA Trials--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------  FY 2015 Unit
         Fee description           Large (small)   Large (small)   Large (small)   Large (small)       cost
                                  [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Inter Partes Review Request Fee--         $9,000         $14,000         +$5,000             +56         $22,165
 Up to 20 Claims................
Inter Partes Review Post-                $14,000         $16,500         +$2,500             +18         $12,674
 Institution Fee--Up to 15
 Claims.........................
Inter Partes Review Request of              $200            $300           +$100             +50             n/a
 Each Claim in Excess of 20.....
Inter Partes Post-Institution               $400            $600           +$200             +50             n/a
 Request of Each Claim in Excess
 of 15..........................
Post-Grant or Covered Business           $12,000         $16,000         +$4,000             +33         $16,213
 Method Review Request Fee--Up
 to 20 Claims...................
Post-Grant or Covered Business           $18,000         $22,000         +$4,000             +22         $23,060
 Method Review Post-Institution
 Fee--Up to 15 Claims...........
Post-Grant or Covered Business              $250            $375           +$125             +50             n/a
 Method Review Request of Each
 Claim in Excess of 20..........
Post-Grant or Covered Business              $550            $825           +$275             +50             n/a
 Method Review Post-Institution
 Request of Each Claim in Excess
 of 15..........................
----------------------------------------------------------------------------------------------------------------

    The AIA established two new trial proceedings: Inter partes review 
and post-grant review. Inter partes review is a trial proceeding 
created by the AIA that allows the Office to review the patentability 
of one or more claims in a patent only on a ground that could be raised 
under 35 U.S.C. 102 or 103, and only on the basis of prior art 
consisting of patents or printed publications. The inter partes review 
process begins with a third party filing a petition. An inter partes 
review may be instituted upon a showing that there is a reasonable 
likelihood that the petitioner would prevail with respect to at least 
one claim challenged. If the proceeding is instituted and not 
dismissed, a final determination by the Board will be issued within one 
year (extendable for good cause by six months). The Office proposes to 
increase all four separate fees for inter partes review, which are due 
upon the filing of a petition. The USPTO will refund the post-
institution fee if the IPR proceeding is not instituted by the PTAB.
    Post-grant review is a trial proceeding created by the AIA that 
allows the Office to review the patentability of one or more claims in 
a patent on any ground that could be raised under 35 U.S.C. 282(b)(2) 
and (b)(3) in effect on September 16, 2012. The post-grant review 
process begins when a third party files a petition within nine months 
of the grant of the patent. A post-grant review may be instituted upon 
a showing that it is more likely than not that at least one challenged 
claim is unpatentable or that the petition raises an unsettled legal 
question that is important to other patents or patent applications. If 
the trial is instituted and not dismissed, the Board will issue a final 
determination within one year of institution. This period can be 
extended for good cause for up to six months from the date of one year 
after instituting the review.
    In FY 2015, the PTAB received over 1,900 AIA trial filings and the 
Office expects that number to grow in the coming fiscal years. In order 
to keep up with demand and continue to provide high quality decisions 
within the statutory time limits, the Office needs to close the gap 
between the cost and the fees for performing these services. When the 
fees for these services were initially set, the Office had to estimate 
what the costs would be without the benefit of historical cost 
information. Now that the trials have been in place for three fiscal 
years, the Office has actual historical cost data available to more 
accurately set these fees and recover costs.
(i) Patent Cooperation Treaty (PCT)--International Stage

           Table 12--Patent Cooperation Treaty (PCT)--International Stage--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                  Current fees     Proposed fees   Dollar change  Percent change
                              -------------------------------------------------------------------
       Fee description                            Large  (small)  Large  (small)  Large  (small)   FY 2015 Unit
                                 Large  (small)       [micro]         [micro]         [micro]          cost
                                [micro]  entity       entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Late Furnishing Fee for        new..............            $300           +$300             n/a             n/a
 Providing a Sequence Listing                             ($150)         (+$150)
 in Response to an Invitation                              [$75]          [+$75]
 Under PCT Rule 13ter.
----------------------------------------------------------------------------------------------------------------

    The Office proposes a new fee to encourage timely filing of 
sequence listings in international applications as another way to 
facilitate the effective administration of the patent system. When an 
applicant does not provide a sequence listing in searchable format with 
the international application or provides a defective sequence listing, 
the United States, acting as International Searching Authority (ISA/US) 
or as International Preliminary Examining Authority (IPEA/US), must 
issue an invitation to the applicant to provide the missing or 
corrected sequence listing. This additional process creates a delay in 
the issuance of the International Search Report (ISR) or

[[Page 68165]]

International Preliminary Report on Patentability (Chapter II). The 
most recent data shows that the ISA/US issues ISRs within 16 months of 
the priority date for 75 percent of all international applications 
searched by the ISA/US. However, when the ISA/US issues an invitation 
to provide a sequence listing, the ISA/US issues ISRs within 16 months 
in only 28 percent of those international applications. The time limit 
for issuance of the ISR under PCT Rule 42 in most circumstances is 16 
months from the priority date. This new fee will help compensate the 
Office for the extra work associated with issuing the invitation and 
handling the response, while better positioning the Office to meet 
applicable treaty timeframes. The fee is similar in size and scope to 
fees charged by other international intellectual property offices.
(j) Maintenance Fee Payments--Reissue Patent Rules
    For each issued patent, the Office may grant one or more reissue 
patents. However, current practice dictates that only one maintenance 
fee is required for all of the possible reissue patents granted from a 
single patent. This proposed change of practice would require payment 
of maintenance fees for each reissue patent, instead of a single 
maintenance fee payment for the group of reissue patents. The large 
majority of reissue patents are granted after the first stage 
maintenance fee payment has already been paid on the initial patent. 
Over the last six years, approximately 150 reissue patents per year 
would have been subject to additional fees due to this proposed rule 
change. This is a significantly higher level than the Office 
experienced prior to FY 2010. For example, between FY 2003 and FY 2009, 
the average was 27 per year. The Office expects this change in practice 
to encourage patent owners to prioritize which reissue patents they 
want to maintain. If an owner wishes to maintain all reissue patents in 
force, he or she may do so by paying the appropriate maintenance fees. 
For reissue patents that are not maintained, subject matter previously 
covered by the patent would become available in the public domain to 
improve upon and further foster innovation.
(2) Office of Enrollment and Discipline Fees and Patent Enrollment Fees
    The following proposed fee adjustments are comprised of Office of 
Enrollment and Discipline (OED) fees and other patent enrollment fees. 
In addition to the proposed fee rate changes, there are five new fees 
being proposed in this section. The purpose of amending the fees in 
this section is to better align fees with actual costs. During the 
previous patent fee setting effort, historical cost information for 
these activities was not available. Since then, the Office has 
developed cost information to more appropriately propose fee 
adjustments. No enrollment or disciplinary fees have been increased 
since 2008, and only two fees were adjusted that year. All other 
enrollment and disciplinary fees were last changed much earlier, 
specifically, between 1991 and 2004. In fact, one OED fee has been 
unchanged since 1982. As time passes, the difference between the fee 
charged by the Office and the cost to the Office to perform the service 
increases, resulting in greater subsidies by other patent fees. The 
increases to these fees will help to close the gap between the fee 
charged and the cost to perform the service. A discussion of the 
rationale for each fee change follows.

                         Table 13--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)  Large  (small)   FY 2015 Unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Application Fee (Non-Refundable)             $40            $100            +$60           +150%            $225
On Registration to Practice                 $100            $200           +$100           +100%            $493
 Under Sec.   11.6..............
Certificate of Good Standing as              $10             $40            +$30           +300%             $39
 an Attorney or Agent, Standard.
Certificate of Good Standing as              $20             $50            +$30           +150%             $49
 an Attorney or Agent, Suitable
 for Framing....................
Review of Decision by the                   $130            $400           +$270           +208%          $2,044
 Director of Enrollment and
 Discipline Under Sec.   11.2(c)
Review of Decision of the                   $130            $400           +$270           +208%          $1,827
 Director of Enrollment and
 Discipline Under Sec.   11.2(d)
Administrative Reinstatement Fee            $100            $200           +$100           +100%            $940
On Grant of Limited Recognition             $100            $200           +$100           +100%            $493
 Under Sec.   11.9(b)...........
For USPTO-Assisted Recovery of               new             $70            +$70             n/a             n/a
 ID or Reset of Password for the
 Office of Enrollment and
 Discipline Information System..
For USPTO-Assisted Change of                 new             $70            +$70             n/a             n/a
 Address Within the Office of
 Enrollment and Discipline
 Information System.............
For USPTO-Administered Review of             new            $450           +$450             n/a            $515
 Registration Examination.......
----------------------------------------------------------------------------------------------------------------

    The Office proposes to increase the application fee for admission 
to the examination for registration to practice from $40 to $100, about 
half of the historical cost of this service.
    The fee for registration to practice or for a grant of limited 
recognition under Sec.  11.9(b) or (c) is currently set at $100, and 
both transactions have the same fee code. The Office proposes to 
separate the fee for Registration to Practice from the fee for Grant of 
Limited Recognition and increase the fee for each to $200, which is 
still below the historical cost of performing these services. The 
Office proposes eliminating the reference to Sec.  11.9(c) in the 
current provision. The Office does not presently impose a fee for an 
unregistered individual to

[[Page 68166]]

prosecute an international patent application in the manner described 
in Sec.  11.9(c). The Office proposes to use the existing fee code for 
Registration to Practice fees and create a new fee code for Grant of 
Limited Registration.
    The Office is proposing an increase to the fee for the delivery of 
a certificate of good standing. A practitioner may also request a 
certificate of good standing as an attorney or agent that has been 
authentically signed by the Director of OED and crafted for framing. 
The Office proposes to increase the fee for both of these services to 
cost recovery, $40 and $50, respectively.
    The Office proposes to increase the fees for petitions to the OED 
Director regarding enrollment or recognition. However, the proposed 
fees are still significantly below cost recovery. Any petition from any 
action or requirement of the staff of OED reporting to the OED Director 
shall be taken to the OED Director accompanied by payment of the fee, 
proposed at $400.
    The Office proposes to adjust the fees for a review of OED 
Director's decision regarding enrollment or recognition. A party 
dissatisfied with a final decision of the OED Director regarding 
enrollment or recognition may seek review of the decision upon petition 
to the USPTO Director accompanied by payment of the fee, proposed at 
$400. This fee is being increased, but is still set significantly below 
cost recovery.
    The Office proposes to set the fee for administrative reinstatement 
at $200. Reinstatement fees are imposed on practitioners seeking to be 
reinstated to active status. Raising the fee, while still set far below 
cost recovery, will help close the gap between the fee and the cost for 
performing this service.
    The Office proposes to create and set the fee for USPTO-assisted 
reset of user IDs and passwords for an OED Information System--Customer 
Interface (OEDIS-CI) account at $70. The enhancement of the OEDIS-CI 
was implemented in FY 2015. With this enhancement, customers are now 
able to perform this process on-line as a self-service option free of 
charge. The proposed fee would only be charged if it was requested that 
the USPTO perform this task instead of the self-service option.
    The Office proposes to create and set the fee for USPTO-assisted 
roster maintenance (change of address) in an OEDIS-CI account at $70. 
With the OEDIS-CI enhancement, customers are now able to perform this 
process on-line as a self-service method free of charge. The proposed 
fee would only be charged if it was requested that the USPTO perform 
this task instead of the self-service option.
    The Office proposes to set the fee for a registration examination 
review session at $450. Setting this fee at cost recovery relieves the 
administrative and cost burden of providing the review sessions. A 
private commercial entity currently provides this service to the public 
at a lower cost than the USPTO. The availability of the private-sector 
option has reduced demand for the USPTO-provided sessions and therefore 
increased the cost per registrant of USPTO-provided sessions.
    The Office proposes to set the fee for changing a practitioner's 
registration status from agent to attorney. The Office currently 
charges $100 for this service. As proposed, the fee would remain 
unchanged; however, 37 CFR 1.21(a)(2)(iii) would specifically provide 
for this fee.
(3) Fees Amended To Include Discounts for Small and Micro Entities
    Within this section, where new micro entity fees are proposed, it 
is expected that an applicant or patent holder would have paid the 
current small entity fee (or large entity in the event there is not a 
small entity fee) and dollar and percent changes are calculated from 
the current small entity fee amount (or large entity fee, where 
applicable). The following table lists fees where new small and/or 
micro entities are provided. Providing these fee reductions for small 
and micro entity innovators will continue the Office's efforts to 
foster innovation across all patent system users.

      Table 14--Amended Fees To Include Discounts for Small and Micro Entities--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------
         Fee description          Large  (small)  Large  (small)  Large  (small)  Large  (small)   FY 2015 Unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Petition for the Delayed Payment          $1,700          $2,000           +$300            +18%            $121
 of the Fee for Maintaining a             ($850)        ($1,000)         (+$150)          (+18%)
 Patent in Force................          [$850]          [$500]         [-$350]          [-41%]
Petition for Revival of an                $1,700          $2,000           +$300            +18%            $244
 Abandoned Application for a              ($850)        ($1,000)         (+$150)          (+18%)
 Patent, for the Delayed Payment          [$850]          [$500]         [-$350]          [-41%]
 of the Fee for Issuing Each
 Patent, or for the Delayed
 Response by the Patent Owner in
 any Reexamination Proceeding...
Petition for the Delayed                  $1,700          $2,000           +$300            +18%            $244
 Submission of a Priority or              ($850)        ($1,000)         (+$150)          (+18%)
 Benefit Claim..................          [$850]          [$500]         [-$350]          [-41%]
Petition to Excuse Applicant's            $1,700          $2,000           +$300            +18%             n/a
 Failure to Act Within                    ($850)        ($1,000)         (+$150)          (+18%)
 Prescribed Time Limits in an             [$850]          [$500]         [-$350]          [-41%]
 International Design
 Application....................
Petition to Convert an                      $180            $180              $0              0%             n/a
 International Design                     ($180)           ($90)          (-$90)          (-50%)
 Application to a Design                  [$180]           [$45]         [-$135]          [-75%]
 Application Under 35 U.S.C.
 Chapter 16.....................

[[Page 68167]]

 
Hague International Design                  $120            $120              $0              0%             n/a
 Application Fees--Transmittal            ($120)           ($60)          (-$60)            -50%
 Fee............................          [$120]           [$30]          [-$90]            -75%
----------------------------------------------------------------------------------------------------------------

C. Discontinued or Replaced Fees

    This section describes fees that are being discontinued and 
replaced with new fees. The purpose of this action is to simplify the 
fee schedule, more clearly inform customers of costs upfront, and align 
with the Office's new financial software for which fixed fee rates, not 
variable (e.g., at cost) are preferred. This section also includes fees 
that are being discontinued because of disuse. The Office does not 
capture historical cost information for these proposed discontinued or 
new fees.
(a) Discontinued and Replaced

                              Table 15--Discontinued Fees With New Fee Replacements
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------
         Fee description          Large  (small)  Large  (small)  Large  (small)  Large  (small)   FY 2015 Unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Copy of Patent-Related File                 $200     discontinue           -$200             n/a             n/a
 Wrapper and Contents of 400 or
 Fewer Pages, if Provided on
 Paper..........................
Additional Fee for Each                      $40     discontinue            -$40             n/a             n/a
 Additional 100 Pages of Patent-
 Related File Wrapper and
 (Paper) Contents, or Portion
 Thereof........................
Copy Patent File Wrapper, Paper              new            $280           +$280             n/a             n/a
 Medium, Any Number of Sheets...
Copy of Patent-Related File                  $55     discontinue            -$55             n/a             n/a
 Wrapper and Contents if
 Provided on a Physical
 Electronic Medium as Specified
 in 1.19(b)(1)(ii)..............
Copy of Patent-Related File                  $55     discontinue            -$55             n/a             n/a
 Wrapper and Contents if
 Provided Electronically........
Additional Fee for Each                      $15     discontinue            -$15             n/a             n/a
 Continuing Physical Electronic
 Medium in Single Order of
 1.19(b)(1)(ii)(B)..............
Copy Patent File Wrapper,                    new             $55            +$55             n/a             n/a
 Electronic Medium, Any Size or
 Provided Electronically........
Computer Records................         at cost     discontinue         at cost             n/a             n/a
Copy of Patent Grant Single-Page             new         $10,400        +$10,400             n/a             n/a
 TIFF Images (52 week
 subscription)..................
Copy of Patent Grant Full-Text W/            new          $5,200         +$5,200             n/a             n/a
 Embedded Images, Patent
 Application Publication Single-
 Page TIFF Images, or Patent
 Application Publication Full-
 Text W/Embedded Images (52 week
 subscription)..................
Copy of PTMT Patent                          new             $50            +$50             n/a             n/a
 Bibliographic Extract and Other
 DVD (Optical Disc) Products....
Copy of U.S. Patent Custom Data              new            $100           +$100             n/a             n/a
 Extracts.......................
Copy of Selected Technology                  new             $30            +$30             n/a             n/a
 Reports, Miscellaneous
 Technology Areas...............
Labor Charges for Services, per              $40     discontinue            -$40             n/a             n/a
 Hour or Fraction Thereof.......
Additional Fee for Overnight                 new             $40            +$40             n/a             n/a
 Delivery.......................
Additional Fee for Expedited                 new            $160           +$160             n/a             n/a
 Service........................
----------------------------------------------------------------------------------------------------------------

    There are currently pairs of fees for copying patent-related file 
wrappers: A base fee and an excess fee. For both paper copies and 
electronic copies, these pairs are replaced with a single fee 
irrespective of size. A single fee will allow customers to more easily 
budget and plan expenses for this service.
    The catch-all fee of ``Computer Records'' currently priced ``at 
cost'' is being replaced by five fees that encompass the work currently 
performed using this code: Copy of Patent Grant Single-Page TIFF Images 
(52 week subscription); Copy of Patent Grant Full-Text W/Embedded 
Images, Patent Application Publication Single-Page TIFF Images, or 
Patent Application Publication Full-Text W/Embedded Images (52 week 
subscription); Copy of

[[Page 68168]]

Patent Technology Monitoring Team (PTMT) Patent Bibliographic Extract 
and Other DVD (Optical Disc); Copy of U.S. Patent Custom Data Extracts; 
and Copy of Selected Technology Reports, Miscellaneous Technology 
Areas. Explicitly stating the service and fee at the start will provide 
customers clearer information to aid decision making.
    These specific fees recover the USPTO's costs for processing, 
validating, packaging, and shipping of these products to customers 
worldwide. For the copy of Patent Grant Single-Page TIFF Images, when a 
customer orders this service, the customer is sent expedited weekly 
packages (one for each Tuesday in the Calendar Year) via United Parcel 
Service. Each package contains at a minimum one Blu-ray and one DVD 
optical disc. For the other three services listed for $5,200, the 
expedited weekly packages (one for each Tuesday or Thursday in the 
Calendar Year) typically contain either a single Blu-ray or DVD optical 
disc. As an alternative to requesting and paying for these services, 
the USPTO has provided customers the ability to download this 
information at no cost since June 2010. This information is currently 
provided in the two locations referenced earlier, BDSS and PDD since 
October 2015 and June 2013 respectively.
    Similar to the single fee for copying Patent-Related File Wrappers, 
the ``Labor Charge'' per hour with its variable charges is replaced 
with a single fee for ``Expedited Service.'' Following the same theme, 
shorter than standard shipping is currently billed under a catch-all 
code but will now be replaced with a set fee for ``Overnight 
Delivery.''
(b) Discontinued

                                           Table 16--Discontinued Fees
----------------------------------------------------------------------------------------------------------------
                                   Current fees    Proposed fees   Dollar change  Percent change
                                 ----------------------------------------------------------------
         Fee description          Large  (small)  Large  (small)  Large  (small)  Large  (small)   FY 2015 Unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Self-Service Copy Charge, per              $0.25     discontinue          -$0.25             n/a             n/a
 Page...........................
Establish Deposit Account.......             $10     discontinue            -$10             n/a             n/a
Uncertified Statement Re: Status             $10     discontinue            -$10             n/a             n/a
 of Maintenance Fee Payments....
Petitions for documents in form          at cost     discontinue         at cost             n/a             n/a
 other than that provided by
 this part, or in form other
 than that generally provided by
 Director, to be decided in
 accordance with merits.........
Copy of Patent-Related File                  $55     discontinue            -$55             n/a             n/a
 Wrapper Contents That Were
 Submitted and are Stored on
 Compact Disk or Other
 Electronic Form (e.g., Compact
 Disks Stored in Artifact
 Folder), Other Than as
 Available in 1.19(b)(1); First
 Physical Electronic Medium in a
 Single Order...................
Additional Fee for Each                      $15     discontinue            -$15             n/a             n/a
 Continuing Copy of Patent-
 Related File Wrapper Contents
 as Specified in
 1.19(b)(2)(i)(A)...............
Copy of Patent-Related File                  $55     discontinue            -$55             n/a             n/a
 Wrapper Contents That Were
 Submitted and are Stored on
 Compact Disk, or Other
 Electronic Form, Other Than as
 Available in 1.19(b)(1); if
 Provided Electronically Other
 Than on a Physical Electronic
 Medium, per Order..............
----------------------------------------------------------------------------------------------------------------

    To comply with Presidential Executive Order 13681, Improving the 
Security of Consumer Financial Transactions, current self-service 
copiers will be discontinued and the USPTO will enter into a ``No 
Cost'' contract with a vendor who will keep all payments collected in 
exchange for providing this service.
    The USPTO's new Financial Manager system allows users to create 
their own deposit accounts so the Office proposes to retire the 
``Establish Deposit Account'' fee. The fee associated with 
``Uncertified Statement Re Status of Maintenance Fee Payments'' is 
discontinued due to lack of use. Customers have had the ability to do 
this online for more than 10 years. The fee associated with ``Petitions 
for documents in form other than that provided by this part, or in form 
other than that generally provided by Director, to be decided in 
accordance with merits'' is also discontinued due to lack of use.
    The remaining fees pertaining to Patent-Related File Wrapper copies 
have never been used since their inception many years ago and therefore 
are being discontinued.

VI. Discussion of Specific Rules

    The following section shows the CFR proposed fee amendments. The 
List of Subjects includes all proposed fee amendments, all proposed fee 
discontinuations, and all proposed changes to the CFR text.
    Title 37 of the Code of Federal Regulations, Parts 1 and 41, are 
proposed to be amended as follows:
    Section 1.16: Section 1.16 is amended by revising paragraphs (a) 
through (f) and (h) through (r) 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 17.

[[Page 68169]]



                                                         Table 17--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--              280          140           70          300          150           75
                                                     Utility.
1.16(a)........................  4011.............  Basic Filing Fee--              n/a           70          n/a          n/a           75          n/a
                                                     Utility (electronic
                                                     filing for small
                                                     entities).
1.16(b)........................  1012/2012/3012...  Basic Filing Fee--              180           90           45          200          100           50
                                                     Design.
1.16(b)........................  1017/2017/3017...  Basic Filing Fee--              180           90           45          200          100           50
                                                     Design (CPA).
1.16(c)........................  1013/2013/3013...  Basic Filing Fee--              180           90           45          200          100           50
                                                     Plant.
1.16(d)........................  1005/2005/3005...  Provisional                     260          130           65          280          140           70
                                                     Application Filing
                                                     Fee.
1.16(e)........................  1014/2014/3014...  Basic Filing Fee--              280          140           70          300          150           75
                                                     Reissue.
1.16(e)........................  1019/2019/3019...  Basic Filing Fee--              280          140           70          300          150           75
                                                     Reissue (CPA).
1.16(f)........................  1051/2051/3051...  Surcharge--Late Filing          140           70           35          160           80           40
                                                     Fee, Search Fee,
                                                     Examination Fee,
                                                     Inventor's Oath or
                                                     Declaration, or
                                                     Application Filed
                                                     Without at Least One
                                                     Claim or by Reference.
1.16(h)........................  1201/2201/3201...  Independent Claims in           420          210          105          460          230          115
                                                     Excess of Three.
1.16(h)........................  1204/2204/3204...  Reissue Independent             420          210          105          460          230          115
                                                     Claims in Excess of
                                                     Three.
1.16(i)........................  1202/2202/3202...  Claims in Excess of 20           80           40           20          100           50           25
1.16(i)........................  1205/2205/3205...  Reissue Claims in                80           40           20          100           50           25
                                                     Excess of 20.
1.16(j)........................  1203/2203/3203...  Multiple Dependent              780          390          195          820          410          205
                                                     Claim.
1.16(k)........................  1111/2111/3111...  Utility Search Fee....          600          300          150          660          330          165
1.16(l)........................  1112/2112/3112...  Design Search Fee.....          120           60           30          160           80           40
1.16(m)........................  1113/2113/3113...  Plant Search Fee......          380          190           95          420          210          105
1.16(n)........................  1114/2114/3114...  Reissue Search Fee....          600          300          150          660          330          165
1.16(o)........................  1311/2311/3311...  Utility Examination             720          360          180          760          380          190
                                                     Fee.
1.16(p)........................  1312/2312/3312...  Design Examination Fee          460          230          115          600          300          150
1.16(q)........................  1313/2313/3313...  Plant Examination Fee.          580          290          145          620          310          155
1.16(r)........................  1314/2314/3314...  Reissue Examination           2,160        1,080          540        2,200        1,100          550
                                                     Fee.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.17: Section 1.17 is amended by revising paragraphs (e), 
(m), (p), and (t) 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 18.

                                                         Table 18--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(e)........................  1801/2801/3801...  Request for Continued         1,200          600          300        1,300          650          325
                                                     Examination (RCE)
                                                     (1st request) (see 37
                                                     CFR 1.114).
1.17(e)........................  1820/2820/3820...  Request for Continued         1,700          850          425        1,900          950          475
                                                     Examination (RCE)
                                                     (2nd and subsequent
                                                     request).
1.17(m)........................  1453/2453/3453...  Petition for revival          1,700          850          850        2,000        1,000          500
                                                     of an abandoned
                                                     application for a
                                                     patent, for the
                                                     delayed payment of
                                                     the fee for issuing
                                                     each patent, or for
                                                     the delayed response
                                                     by the patent owner
                                                     in any reexamination
                                                     proceeding.
1.17(m)........................  1454/2454/3454...  Petition for the              1,700          850          850        2,000        1,000          500
                                                     Delayed Submission of
                                                     a Priority or Benefit
                                                     Claim.
1.17(m)........................  1784/2784/3784...  Petition to Excuse            1,700          850          850        2,000        1,000          500
                                                     Applicant's Failure
                                                     to Act Within
                                                     Prescribed Time
                                                     Limits in an
                                                     International Design
                                                     Application.
1.17(m)........................  1558/2558/3558...  Petition for the              1,700          850          850        2,000        1,000          500
                                                     Delayed Payment of
                                                     the Fee for
                                                     Maintaining a Patent
                                                     in Force.
1.17(p)........................  1806/2806/3806...  Submission of an                180           90           45          240          120           60
                                                     Information
                                                     Disclosure Statement.
1.17(t)........................  1783/2783/3783...  Petition to convert an          180          180          180          180           90           45
                                                     international design
                                                     application to a
                                                     design application
                                                     under 35 U.S.C.
                                                     chapter 16.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.18: Section 1.18 is amended by revising paragraphs 
(a)(1), (b)(1), and (c)(1) 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 19.

[[Page 68170]]

    Section 1.18(b)(3) is proposed to be amended to provide that the 
issue fee for issuing an international design application designating 
the United States, where the issue fee is paid through the 
International Bureau, is the amount established in Swiss currency 
pursuant to Hague Agreement Rule 28 as of the date of mailing of the 
notice of allowance (Sec.  1.311). The proposed amendment would 
facilitate processing of the issue fee by the International Bureau and 
would maintain parity in the treatment of the amount of the issue fee 
due whether paid directly to the USPTO or through the International 
Bureau in the event the issue fee changes after the mailing of the 
notice of allowance.

                                                         Table 19--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.....          960          480          240        1,000          500          250
1.18(a)(1).....................  1511/2511/3511...  Reissue Issue Fee.....          960          480          240        1,000          500          250
1.18(b)(1).....................  1502/2502/3502...  Design Issue Fee......          560          280          140          800          400          200
1.18(c)(1).....................  1503/2503/3503...  Plant Issue Fee.......          760          380          190        1,000          500          250
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.19: Section 1.19 is amended by revising paragraphs 
(b)(1), (b)(2), and (b)(4); removing and reserving (b)(2), (e), and 
(g); and adding (i) through (m) 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 20.

                                                         Table 20--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)(A) and (ii)(A)...  8007.............  Copy of Patent                   20           20           20           35           35           35
                                                     Application as Filed.
1.19(b)(1)(i)(B)...............  .................  Copy of Patent File             n/a          n/a          n/a          280          280          280
                                                     Wrapper, Paper
                                                     Medium, Any Number of
                                                     Sheets.
1.19(b)(1)(ii)(B)..............  .................  Copy Patent File                n/a          n/a          n/a           55           55           55
                                                     Wrapper, Electronic
                                                     Medium, Any Size or
                                                     Provided
                                                     Electronically.
1.19(b)(4).....................  8014.............  For Assignment                   25           25           25           35           35           35
                                                     Records, Abstract of
                                                     Title and
                                                     Certification, per
                                                     Patent.
1.19(i)........................  .................  Copy of Patent Grant            n/a          n/a          n/a       10,400       10,400       10,400
                                                     Single-Page TIFF
                                                     Images (52 week
                                                     subscription).
1.19(j)........................  .................  Copy of Patent Grant            n/a          n/a          n/a        5,200        5,200        5,200
                                                     Full-Text W/Embedded
                                                     Images, Patent
                                                     Application
                                                     Publication Single-
                                                     Page TIFF Images, or
                                                     Patent Application
                                                     Publication Full-Text
                                                     W/Embedded Images (52
                                                     week subscription).
1.19(k)........................  .................  Copy of PTMT Patent             n/a          n/a          n/a           50           50           50
                                                     Bibliographic Extract
                                                     and Other DVD
                                                     (Optical Disc)
                                                     Products.
1.19(l)........................  .................  Copy of U.S. Patent             n/a          n/a          n/a          100          100          100
                                                     Custom Data Extracts.
1.19(m)........................  .................  Copy of Selected                n/a          n/a          n/a           30           30           30
                                                     Technology Reports,
                                                     Miscellaneous
                                                     Technology Areas.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.20: Section 1.20 is amended by revising paragraphs (a), 
(b), (c)(1) through (4), and (e) through (g) to set forth the 
reexamination excess claims fees, disclaimer fees, and maintenance fees 
as authorized under Section 10 of the Act and to provide a new fee for 
streamlined requests for reexamination. The changes to the fee amounts 
indicated in Sec.  1.20 are shown in Table 21.

                                                         Table 21--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.............  Certificate of                  100          100          100          150          150          150
                                                     Correction.
1.20(b)........................  1816.............  Processing Fee for              130          130          130          150          150          150
                                                     Correcting
                                                     Inventorship in a
                                                     Patent.
1.20(c)(1).....................  .................  Ex Parte Reexamination          n/a          n/a          n/a        6,000        3,000        1,500
                                                     (Sec.   1.510(a))
                                                     Streamlined.

[[Page 68171]]

 
1.20(c)(2).....................  1812/2812/3812...  Ex Parte Reexamination       12,000        6,000        3,000       12,000        6,000        3,000
                                                     (Sec.   1.510(a)) Non-
                                                     Streamlined.
1.20(c)(3).....................  1821/2821/3821...  Reexamination                   420          210          105          460          230          115
                                                     Independent Claims in
                                                     Excess of Three and
                                                     also in Excess of the
                                                     Number of Such Claims
                                                     in the Patent Under
                                                     Reexamination.
1.20(c)(4).....................  1822/2822/3822...  Reexamination Claims             80           40           20          100           50           25
                                                     in Excess of 20 and
                                                     Also in Excess of the
                                                     Number of Claims in
                                                     the Patent Under
                                                     Reexamination.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.21: Section 1.21 is amended by revising paragraphs (a), 
(h)(2), and (i); removing and reserving paragraphs (g) and (j); and 
adding paragraphs (o), (p), 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 22.

                                                         Table 22--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-            40           40           40          100          100          100
                                                     refundable).
1.21(a)(1)(ii)(A)..............  9010.............  For Test                        200          200          200          200          200          200
                                                     Administration by
                                                     Commercial Entity.
1.21(a)(1)(ii)(B)..............  9011.............  For Test                        450          450          450          450          450          450
                                                     Administration by the
                                                     USPTO.
1.21(a)(1)(iii)................  .................  For USPTO-Administered          n/a          n/a          n/a          450          450          450
                                                     Review of
                                                     Registration
                                                     Examination.
1.21(a)(2)(i)..................  9003.............  On Registration to              100          100          100          200          200          200
                                                     Practice Under Sec.
                                                     11.6.
1.21(a)(2)(ii).................  .................  On Grant of Limited             n/a          n/a          n/a          200          200          200
                                                     Recognition under
                                                     Sec.   11.9(b).
1.21(a)(2)(iii)................  9025.............  On change of                    100          100          100          100          100          100
                                                     registration from
                                                     agent to attorney.
1.21(a)(4)(i)..................  9005.............  Certificate of Good              10           10           10           40           40           40
                                                     Standing as an
                                                     Attorney or Agent,
                                                     Standard.
1.21(a)(4)(ii).................  9006.............  Certificate of Good              20           20           20           50           50           50
                                                     Standing as an
                                                     Attorney or Agent,
                                                     Suitable for Framing.
1.21(a)(5)(i)..................  9012.............  Review of Decision by           130          130          130          400          400          400
                                                     the Director of
                                                     Enrollment and
                                                     Discipline under Sec.
                                                       11.2(c).
1.21(a)(5)(ii).................  9013.............  Review of Decision of           130          130          130          400          400          400
                                                     the Director of
                                                     Enrollment and
                                                     Discipline under Sec.
                                                       11.2(d).
1.21(a)(6)(i)..................  .................  For USPTO-Assisted              n/a          n/a          n/a           70           70           70
                                                     Recovery of ID or
                                                     Reset of Password for
                                                     the Office of
                                                     Enrollment and
                                                     Discipline
                                                     Information System.
1.21(a)(6)(ii).................  .................  For USPTO-Assisted              n/a          n/a          n/a           70           70           70
                                                     Change of Address
                                                     Within the Office of
                                                     Enrollment and
                                                     Discipline
                                                     Information System.
1.21(a)(9)(ii).................  9004.............  Administrative                  100          100          100          200          200          200
                                                     Reinstatement Fee.
1.21(a)(10)....................  9014.............  On petition for               1,600        1,600        1,600        1,600        1,600        1,600
                                                     reinstatement by a
                                                     person excluded or
                                                     suspended on ethical
                                                     grounds, or excluded
                                                     on consent from
                                                     practice before the
                                                     Office.
1.21(h)(2).....................  8021.............  Recording Each Patent            40           40           40           50           50           50
                                                     Assignment, Agreement
                                                     or Other Paper, per
                                                     Property if not
                                                     Submitted
                                                     Electronically.
1.21(o)(1).....................  .................  Submission of sequence          n/a          n/a          n/a        1,000        1,000        1,000
                                                     listings ranging in
                                                     size of 300MB to
                                                     800MB.
1.21(o)(2).....................  .................  Submission of sequence          n/a          n/a          n/a       10,000       10,000       10,000
                                                     listings exceeding
                                                     800MB.
1.21(p)........................  .................  Additional Fee for              n/a          n/a          n/a           40           40           40
                                                     Overnight Delivery.
1.21(q)........................  .................  Additional Fee for              n/a          n/a          n/a          160          160          160
                                                     Expedited Service.
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 68172]]

    Section 1.445: Section 1.445 is amended by adding paragraph (a)(5) 
to set a processing fee for providing a sequence listing in response to 
an invitation under PCT Rule 13ter. The changes to the fee amounts 
indicated in Sec.  1.445 are shown in Table 23.

                                                      Table 23--CFR Section 1.445(a)(5) Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Current fees (dollars)                Proposed fees (dollars)
          CFR section                 Fee code            Description      -----------------------------------------------------------------------------
                                                                               Large        Small        Micro        Large        Small        Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.445(a)(5)....................  .................  Late furnishing fee             n/a          n/a          n/a          300          150           75
                                                     for providing a
                                                     sequence listing in
                                                     response to an
                                                     invitation under PCT
                                                     Rule 13ter.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.482: Section 1.482 is revised by changing the title and 
adding paragraph (c) to set a processing fee for providing a sequence 
listing in response to an invitation under PCT Rule 13ter. The changes 
to the fee amounts indicated in Sec.  1.482 are shown in Table 24.

                                                       Table 24--CFR Section 1.482(c) Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Current fees (dollars)                Proposed fees (dollars)
          CFR section                 Fee code            Description      -----------------------------------------------------------------------------
                                                                               Large        Small        Micro        Large        Small        Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.482(c).......................  .................  Late furnishing fee             n/a          n/a          n/a          300          150           75
                                                     for providing a
                                                     sequence listing in
                                                     response to an
                                                     invitation under PCT
                                                     Rule 13ter.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.492: Section 1.492 is amended by revising (a) through (f) 
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 25.

                                                         Table 25--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              280          140           70          300          150           75
                                                     Stage Fee.
1.492(b)(2)....................  1641/2641/3641...  PCT National Stage              120           60           30          140           70           35
                                                     Search Fee--U.S. was
                                                     the ISA.
1.492(b)(3)....................  1642/2642/3642...  PCT National Stage              480          240          120          520          260          130
                                                     Search Fee--Search
                                                     Report Prepared and
                                                     Provided to USPTO.
1.492(b)(4)....................  1632/2632/3632...  PCT National Stage              600          300          150          660          330          165
                                                     Search Fee--All Other
                                                     Situations.
1.492(c)(2)....................  1633/2633/3633...  National Stage                  720          360          180          760          380          190
                                                     Examination Fee--All
                                                     Other Situations.
1.492(d).......................  1614/2614/3614...  PCT National Stage              420          210          105          460          230          115
                                                     Claims--Extra
                                                     Independent (over
                                                     three).
1.492(e).......................  1615/2615/3615...  PCT National Stage               80           40           20          100           50           25
                                                     Claims--Extra Total
                                                     (over 20).
1.492(f).......................  1616/2616/3616...  PCT National Stage              780          390          195          820          410          205
                                                     Claims--Multiple
                                                     Dependent.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.1031: Section 1.1031 is amended by revising paragraph (a) 
to set forth the international design application transmittal fees as 
authorized under Section 10 of the Act. The changes to the fee amounts 
indicated in Sec.  1.031 are shown in Table 26.
    Section 1.1031 is also proposed to be amended by adding paragraph 
(f) concerning the designation fee for the United States. As Sec.  
1.1031 concerns international design application fees, the Office 
believes it appropriate to include a provision therein regarding the 
U.S. designation fee. The proposed amendment is consistent with the 
U.S. designation fee currently in effect. See ``Individual Fees under 
the Hague Agreement,'' available on the WIPO Web site at http://www.wipo.int/hague/en/fees/individ-fee.html, and Sec.  1.18(b).

[[Page 68173]]



                                                       Table 26--CFR Section 1.1031(a) Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Current fees (dollars)                Proposed fees (dollars)
          CFR section                 Fee code            Description      -----------------------------------------------------------------------------
                                                                               Large        Small        Micro        Large        Small        Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.1031(a)......................  1781/2781/3781...  International Design            120          120          120          120           60           30
                                                     Application
                                                     Transmittal Fee.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 41.20: Section 41.20 is amended by revising paragraph 
(b)(1) and (b)(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 27.

                                                         Table 27--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(b)(1)....................  1401/2401/3401...  Notice of Appeal......          800          400          200        1,000          500          250
41.20(b)(4)....................  1413/2413/3413...  Forwarding an Appeal          2,000        1,000          500        2,500        1,250          625
                                                     in an Application or
                                                     Ex Parte
                                                     Reexamination
                                                     Proceeding to the
                                                     Board.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 42.15: Section 42.15 is amended by revising paragraphs (a) 
and (b) 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 indicated 
in Sec.  42.15 are shown in Table 28.

                                                         Table 28--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           9,000        9,000        9,000       14,000       14,000       14,000
                                                     Request Fee.
42.15(a)(2)....................  1414.............  Inter Partes Review          14,000       14,000       14,000       16,500       16,500       16,500
                                                     Post-Institution Fee.
42.15(a)(3)....................  1407.............  In Addition to the              200          200          200          300          300          300
                                                     Inter Partes Review
                                                     Request Fee, for
                                                     Requesting Review of
                                                     Each Claim in Excess
                                                     of 20.
42.15(a) (4)...................  1415.............  In addition to the              400          400          400          600          600          600
                                                     Inter Partes Post-
                                                     Institution Fee, for
                                                     Requesting Review of
                                                     Each Claim in Excess
                                                     of 15.
42.15(b)(1)....................  1408.............  Post-Grant or Covered        12,000       12,000       12,000       16,000       16,000       16,000
                                                     Business Method
                                                     Patent Review Request
                                                     Fee.
42.15(b)(2)....................  1416.............  Post-Grant or Covered        18,000       18,000       18,000       22,000       22,000       22,000
                                                     Business Method
                                                     Patent Review Post-
                                                     Institution Fee.
42.15(b)(3)....................  1409.............  In Addition to the              250          250          250          375          375          375
                                                     Post-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              550          550          550          825          825          825
                                                     Post-Grant or Covered
                                                     Business Method
                                                     Patent Review Post-
                                                     Institution Fee, for
                                                     Requesting Review of
                                                     Each Claim in Excess
                                                     of 15.
--------------------------------------------------------------------------------------------------------------------------------------------------------

VII. Rulemaking Considerations

A. America Invents Act

    This rulemaking proposes to set and adjust fees under section 10(a) 
of the AIA. 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 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(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

[[Page 68174]]

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 will consider and analyze 
any comments, advice, or recommendations received from the PPAC before 
finally setting or adjusting fees.
    Consistent with this framework, on October 20, 2015, 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 http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC held a public hearing in 
Alexandria, Virginia, on November 19, 2015. Transcripts of the hearing 
are available for review at http://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript_20151119.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 Web site, http://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 February 29, 2016, and can be found online at http://www.uspto.gov/sites/default/files/documents/PPAC_Fee%20_Setting_Report_2016%20%28Final%29.pdf. The Office 
considered and analyzed all comments, advice, and recommendations 
received from the PPAC before publishing this NPRM. Before the final 
rule is issued, the public will have at least a 45-day period during 
which to provide comments to be considered 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 agency must prepare and make available for public 
comment an IRFA, unless the agency certifies under 5 U.S.C. 605(b) that 
the proposed rule, if implemented, will not have a significant impact 
on a substantial number of small entities. 5 U.S.C. 603, 605. Given 
that the proposed fee schedule is projected to result in $710.8 million 
in additional aggregate revenue over the current fee schedule 
(baseline) for the period including FY 2017 to FY 2021, 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 $710.8 million in additional aggregate revenue 
results from an additional $73.2 million in FY 2017, $150.0 million in 
FY 2018, $155.7 million in FY 2019, $162.4 million in FY 2020, and 
$169.5 million in FY 2021.
    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 Agency Is Being 
Considered
    Section 10 of the 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 http://www.uspto.gov/sites/default/files/documents/USPTO_2014-2018_Strategic_Plan.pdf. Additional information on the Office's goals 
and operating requirements may be found in the ``USPTO FY 2017 
President's Budget,'' available at http://www.uspto.gov/sites/default/files/documents/fy17pbr.pdf. The legal basis for the proposed rule is 
Section 10 of the Act.

[[Page 68175]]

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.
    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.
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 29 presents a 
summary of such small entity filings by type of application (utility, 
reissue, plant, design) over the last five years.

                                           Table 29--Number of Patent Applications Filed in Last Five Years *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            FY 2015 **        FY 2014         FY 2013         FY 2012         FY 2011       Average ***
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility
        All.............................................         578,321         579,782         564,007         530,915         504,663         551,538
        Small...........................................         142,845         133,930         136,490         132,198         127,175         134,528
        % Small.........................................            24.7            23.1            24.2            24.9            25.2            24.4
        Micro...........................................          28,916          18,553           7,896             N/A             N/A          18,455
        % Micro.........................................             5.0             3.2             1.4             N/A             N/A             3.2
Reissue
        All.............................................             887           1,208           1,074           1,212           1,158           1,108
        Small...........................................             200             280             229             278             240             245
        % Small.........................................            22.6            23.2            21.3            22.9            20.7            22.1
        Micro...........................................              10              24               9             N/A             N/A              14
        % Micro.........................................             1.1             2.0             0.8             N/A             N/A             1.3
Plant
        All.............................................           1,119           1,124           1,318           1,181           1,103           1,169
        Small...........................................             673             581             655             576             257             548
        % Small.........................................            60.1            51.7            49.7            48.8            23.3            46.7
        Micro...........................................               4              22               3             N/A             N/A              10
        % Micro.........................................             0.4             2.0             0.2             N/A             N/A             0.9
Design
        All.............................................          36,889          36,216          35,065          32,258          30,247          34,135
        Small...........................................          14,645          14,740          15,814          15,806          14,700          15,141
        % Small.........................................            39.7            40.7            45.1            49.0            48.6            44.6
        Micro...........................................           3,910           3,622           1,683             N/A             N/A           3,072
        % Micro.........................................            10.6            10.0             4.8             N/A             N/A             8.5
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The patent application filing data in this table includes RCEs.
** FY 2015 application filing data are preliminary and will be finalized in the FY 2016 Performance and Accountability Report (PAR).
*** The micro entity average is from FY 2013 to FY 2015. All other averages are for all time periods shown.

    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 29. 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

[[Page 68176]]

a combination of historical data, economic analysis, and subject matter 
expertise. The Office estimates that utility, plant, and reissue (UPR) 
patent application filings will grow by 1.5 percent in FY 2017, 2.0 
percent in FY 2018, 3.0 percent in FY 2019, and 4.0 percent in FY 2020 
and FY 2021. 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 30 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 patent applicants and 
patentees are 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 
regardless of entity size and determined that, as none of the proposed 
fee changes are large enough to create a sizable change in demand for 
products and services, elasticity impacts are negligible and therefore 
not included in this iteration of fee adjustments. Additional 
information about elasticity estimates is available at http://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 2017--Description of Elasticity Estimates.''

                      Table 30--Estimated Numbers of Patent Applications in FY 2017-FY 2021
----------------------------------------------------------------------------------------------------------------
                                      FY 2017
                                     (Current)        FY 2018         FY 2019         FY 2020         FY 2021
----------------------------------------------------------------------------------------------------------------
Utility: All....................         592,844         604,711         622,874         647,833         673,788
Reissue: All....................           1,048           1,105           1,166           1,229           1,296
Plant: All......................           1,008             984             960             938             915
Design: All.....................          41,191          43,614          46,183          48,905          51,791
                                 -------------------------------------------------------------------------------
    Total: All..................         636,091         650,414         671,183         698,905         727,791
----------------------------------------------------------------------------------------------------------------

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, this 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 this NPRM. The proposed fee schedule sets or 
adjusts 205 patent fees in total. This includes 14 fees that will be 
discontinued and 42 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 United States Government 
responsible for administering the provisions of title 35, United States 
Code, 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 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 the 
proposal, discussed below, including full cost recovery for individual 
services, an across the board adjustment to fees, and the baseline 
(status quo). The discussion here begins with a description of the 
proposal selected for this rulemaking.
i. Alternative 1: Proposed Alternative--Set and Adjust Patent Fees
    The alternative proposed herein secures the Office's required 
revenue to cover its aggregate costs, while progressing towards the 
strategic goals of quality enhancements and patent application backlog 
and pendency optimization that 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 and adds new 
discounts where applicable. Compared to the current patent fee 
schedule, small entities will benefit from the establishment of two new 
small entity fee rates, while micro entities will benefit from the 
establishment of six new micro entity fee rates for existing services. 
Given that most micro entities would have paid large or small entity 
fee rates (depending on what was available), the establishment of micro 
entity fee rates represents significant savings to these entities. 
Further, all entities will benefit from the Office's proposal to 
discontinue 14 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.
    As discussed throughout this document, the fee changes proposed in

[[Page 68177]]

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). 
However, the fees are not as high as those initially proposed to PPAC. 
In the current fee proposal, the Office decided to slow the growth of 
the operating reserve and lower key fee amounts in response to comments 
and feedback the PPAC received from intellectual property stakeholders 
and other interested members of the public during and following the 
PPAC fee setting hearings during Fall 2015.
    In summary, the fees to obtain a patent will increase slightly. For 
example, fees for both tiers of RCEs will increase slightly, but still 
less than those initially proposed to PPAC. Maintenance fee rates will 
remain unchanged at all three stages; however, all reissue patents will 
now be subject to maintenance fee payments if the patent owner wishes 
to maintain them. In an effort to continue reducing the inventory of ex 
parte appeals and help recapture a portion of the cost of providing 
these services, fees will increase for both Notice of Appeal and Appeal 
Forwarding. Fees will also increase for inter partes reviews based on 
updated cost data and the need to provide adequate resources to support 
the Office's ongoing compliance with AIA deadlines for these actions. 
Similarly, fees for both post-grant reviews and covered-business-method 
reviews will increase based on FY 2015 cost data and resources needed 
to sustain compliance with AIA deadlines. Finally, in response to 
feedback from the PPAC and members of the public, the proposed fee 
increase for design issues is $240, from $560 to $800. Under the 
original proposal to the PPAC, the fee would have increased by $440 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. Specifically, this fee 
setting rule supports the patent-related strategic goals to optimize 
patent quality and timeliness, which includes improving patent quality, 
reducing the backlog of unexamined applications and decreasing patent 
application pendency, and facilitating processing at the Patent Trial 
and Appeal Board (PTAB); and increasing international efforts to 
improve intellectual property policy, protection, and enforcement. This 
proposed rule also supports the Strategic Plan's management goal to 
achieve organizational excellence, which includes leveraging IT 
investments to better support compact prosecution and securing 
sustainable funding via a sufficient operating reserve. 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.
    The proposed fee schedule for this rulemaking, as compared to 
existing fees (labeled Alternative 1--Proposed Alternative--Set and 
Adjust Patent Fees) is available at http://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 
2017--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 June 2016.
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 proposed revenue derived by each alternative scenario. The proposed 
fees and their corresponding revenue tables are available at http://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 rulemaking; other scenarios are shown only to 
demonstrate the Office's analysis of other options.
a. Alternative 2: Unit Cost Recovery
    The USPTO considered setting most individual large entity fees at 
the historical cost of performing the activities related to the 
particular service in FY 2015. This alternative continues existing and 
offers new small and micro entity discounts where eligible under AIA 
authority. Aside from maintenance fees, fees for which there is no FY 
2015 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. Thus, 
for this alternative, maintenance fees are set at levels sufficient to 
generate enough revenue to cover the Office's anticipated budgetary 
requirements over the five-year period. 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 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 2017 through FY 2021 on FY 2015 
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.
    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.
    However, the Office asserts that Alternative 2 does not align well 
with the strategic and policy goals of this rulemaking. Both the 
current and proposed fee schedules are structured to collect more fees 
at the back-end (i.e. issue fees and maintenance fees), where the 
patent owner has the best information about a patent's value, rather 
than at the front-end (i.e. filing fees, search fees, and examination 
fees), when applicants are most uncertain 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), even with small and micro entity fee 
reductions.
    The Office has not attempted to estimate the quantitative 
elasticity impacts for application filings (e.g., filing, search, and 
examination fees) or maintenance renewals (all stages) due to a lack of 
historical data that could inform such a significant shift in the 
Office's fee setting methodology. However, the Office suspects that the 
high costs of entry into the patent system could lead to a significant 
decrease in the incentives to invest in innovative activities among all 
entities and especially for small and micro entities. Under the current 
fee schedule, maintenance fees subsidize all

[[Page 68178]]

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 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 are likely to stifle innovation.
    Similarly, the Office suspects that renewal rates could change as 
well, given significant 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 status quo). In the 
aggregate, patents that are maintained beyond their useful life weaken 
the intellectual property system by slowing the rate of public 
accessibility and follow-on inventions, which is contrary to the 
Office's policy factor of fostering innovation. In sum, this 
alternative is inadequate to accomplish the goals and strategies as 
stated in Part III of this rulemaking.
    The fee schedule for Alternative 2: Unit Cost Recovery is available 
at http://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 2017--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 June 
2016. 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 5.0 percent, across the board inflationary increase 
to the baseline (status quo) beginning in FY 2017. Five percent 
represents the change in revenue needed to achieve the aggregate 
revenue needed to cover budgetary requirements.
    As estimated by the Congressional Budget Office, projected CPI 
rates by fiscal year are: 2.17 percent in FY 2017, 2.39 percent in FY 
2018, 2.38 percent in FY 2019, and 2.42 percent in both FY 2020 and FY 
2021. The Office elected not to apply the estimated cumulative 
inflationary adjustment (9.96 percent), from FY 2017 through FY 2021, 
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 unilaterally higher fees, this 
alternative does not adequately support the Office's policy factor to 
foster innovation for all.
    The fee schedule for Alternative 3: Across the Board Adjustment is 
available at http://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 2017--IRFA Tables.'' For the 
comparison between proposed (across the board) fees and current fees, 
the ``current fees'' column displays the fees that are in effect as of 
June 2016.
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 Congress provided in Section 10 
of the Act and maintain fees as of June 2016.
    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 strategic improvement activities would 
continue, but at a slower rate due to funding limitations. Likewise, 
without a fee increase, the USPTO would meet slightly less than the 
minimal operating reserve in FY 2017 through FY 2019 and only slightly 
more in FY 2020, with an increase in FY 2021.
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.
Differing Requirements
    As discussed above, the changes proposed in this rulemaking 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 pay 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 rulemaking 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 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 rulemaking does not take any actions beyond setting or 
adjusting patent fees; therefore, there are no clarifications, 
consolidations, or simplifications subject to discussion here.
Performance Standards
    Performance standards do not apply to the current rulemaking.

[[Page 68179]]

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 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 
patent fees.

C. Executive Order 12866 (Regulatory Planning and Review)

    This rulemaking has been determined to be significant for purposes 
of Executive Order 12866 (Sept. 30, 1993), as amended by Executive 
Order 13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007). 
The Office has developed a RIA as required for rulemakings deemed to be 
significant. The complete RIA is available at http://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. Specifically, 
the Office has, to the extent feasible and applicable: (1) Made a 
reasoned determination that the benefits justify the costs of the rule; 
(2) tailored the 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 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).

F. Congressional Review Act

    Under the Congressional Review Act provisions of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801-808), prior 
to issuing any final rule, the USPTO will submit a report containing 
the final rule and other required information to the U.S. Senate, the 
U.S. 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 
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 expected to result in a ``major rule'' 
as defined in 5 U.S.C. 804(2).

G. Unfunded Mandates Reform Act of 1995

    The changes proposed in this notice 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 (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 (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. 1501-1571.

H. Paperwork Reduction Act

    This proposed rule involves information collection requirements 
that are subject to review by the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). The 
collection of information involved in this rulemaking has been reviewed 
and previously approved by OMB under control numbers 0651-0016, 0651-
0024, 0651-0031, 0651-0032, 0651-0033, 0651-0059, 0651-0064, and 0651-
0069.
    You may send comments regarding the collection of information 
associated with this rulemaking, including suggestions for reducing the 
burden, to the Commissioner for Patents, by mail to P.O. Box 1451, 
Alexandria, VA 22313-1451, attention Dianne Buie; or by electronic mail 
message via the Federal eRulemaking Portal. All comments submitted 
directly to the USPTO or provided on the Federal eRulemaking Portal 
should include the docket number (RIN 0651-AD02).
    Notwithstanding any other provision of law, no person is required 
to respond to nor shall a 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, Courts, Freedom of 
information, Inventions and patents, Reporting and record keeping 
requirements, Small businesses.

37 CFR Part 41

    Administrative practice and procedure, Inventions and patents, 
Lawyers.

37 CFR Part 42

    Trial practice before the Patent Trial and Appeal Board.

    For the reasons set forth in the preamble, 37 CFR parts 1, 41, and 
42 are proposed to be amended as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

0
1. The authority citation for 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 revising paragraphs (a) through (f) and 
(h) through (r) to 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:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $75.00
By a small entity (Sec.   1.27(a))......................          150.00
By a small entity (Sec.   1.27(a)) if the application is           75.00
 submitted in compliance with the Office electronic
 filing system (Sec.   1.27(b)(2))......................
By other than a small or micro entity...................          300.00
 

    (b) Basic fee for filing each application under 35 U.S.C. 111 for 
an original design patent:

[[Page 68180]]



 
 
 
By a micro entity (Sec.   1.29(a))......................          $50.00
By a small entity (Sec.   1.27(a))......................          100.00
By other than a small or micro entity...................          200.00
 

    (c) Basic fee for filing each application for an original plant 
patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $50.00
By a small entity (Sec.   1.27(a))......................          100.00
By other than a small or micro entity...................          200.00
 

    (d) Basic fee for filing each provisional application:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $70.00
By a small entity (Sec.   1.27(a))......................          140.00
By other than a small or micro entity...................          280.00
 

    (e) Basic fee for filing each application for the reissue of a 
patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $75.00
By a small entity (Sec.   1.27(a))......................          150.00
By other than a small or micro entity...................          300.00
 

    (f) Surcharge for filing the basic filing fee, search fee, 
examination fee, or the inventor's oath or declaration on a date later 
than the filing date of the application, an application that does not 
contain at least one claim on the filing date of the application, or an 
application filed by reference to a previously filed application under 
Sec.  1.57(a), except provisional applications:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $40.00
By a small entity (Sec.   1.27(a))......................           80.00
By other than a small or micro entity...................          160.00
 

* * * * *
    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $115.00
By a small entity (Sec.   1.27(a))......................          230.00
By other than a small or micro entity...................          460.00
 

    (i) 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 (whether dependent or independent) in excess 
of 20 (note that Sec.  1.75(c) indicates how multiple dependent claims 
are considered for fee calculation purposes):

 
 
 
By a micro entity (Sec.   1.29(a))......................          $25.00
By a small entity (Sec.   1.27(a))......................           50.00
By other than a small or micro entity...................          100.00
 

    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $205.00
By a small entity (Sec.   1.27(a))......................          410.00
By other than a small or micro entity...................          820.00
 

    (k) Search fee for each application filed under 35 U.S.C. 111 for 
an original patent, except design, plant, or provisional applications:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $165.00
By a small entity (Sec.   1.27(a))......................          330.00
By other than a small or micro entity...................          660.00
 

    (l) Search fee for each application under 35 U.S.C. 111 for an 
original design patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $40.00
By a small entity (Sec.   1.27(a))......................           80.00
By other than a small or micro entity...................          160.00
 

    (m) Search fee for each application for an original plant patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $105.00
By a small entity (Sec.   1.27(a))......................          210.00
By other than a small or micro entity...................          420.00
 

    (n) Search fee for each application for the reissue of a patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $165.00
By a small entity (Sec.   1.27(a))......................          330.00
By other than a small or micro entity...................          660.00
 

    (o) Examination fee for each application filed under 35 U.S.C. 111 
for an original patent, except design, plant, or provisional 
applications:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $190.00
By a small entity (Sec.   1.27(a))......................          380.00
By other than a small or micro entity...................          760.00
 

    (p) Examination fee for each application under 35 U.S.C. 111 for an 
original design patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $150.00
By a small entity (Sec.   1.27(a))......................          300.00
By other than a small or micro entity...................          600.00
 

    (q) Examination fee for each application for an original plant 
patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $155.00
By a small entity (Sec.   1.27(a))......................          310.00
By other than a small or micro entity...................          620.00
 

    (r) Examination fee for each application for the reissue of a 
patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $550.00
By a small entity (Sec.   1.27(a))......................        1,100.00
By other than a small or micro entity...................        2,200.00
 

* * * * *
0
3. Section 1.17 is amended by revising paragraphs (e), (m), (p) and (t) 
to read as follows:


Sec.  1.17  Patent application and reexamination processing fees.

* * * * *
    (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:

 
 
 
By a micro entity.......................................         $325.00
By a small entity (Sec.   1.27(a).......................          650.00
By other than a small or micro entity...................        1,300.00
 

    (2) For filing a second or subsequent request for continued 
examination pursuant to Sec.  1.114 in an application:

 
 
 
By a micro entity.......................................         $475.00
By a small entity (Sec.   1.27(a).......................          950.00
By other than a small or micro entity...................        1,900.00
 

* * * * *
    (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, or the extension of the twelve-month (six-month for 
designs) period for filing a subsequent application (Sec. Sec.  
1.55(c), 1.55(e), 1.78(b), 1.78(c), 1.78(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):

 
 
 
By a micro entity (Sec.   1.29(a))......................         $500.00
By a small entity (Sec.   1.27(a))......................        1,000.00
By other than a small or micro entity...................        2,000.00
 

* * * * *
    (p) For an information disclosure statement under Sec.  1.97(c) or 
(d):

 
 
 
By a micro entity (Sec.   1.29(a))......................          $60.00
By a small entity (Sec.   1.27(a))......................          120.00
By other than a small or micro entity...................          240.00
 

* * * * *
    (t) For filing a petition to convert an international design 
application to a design application under 35 U.S.C. chapter 16 (Sec.  
1.1052):

 
 
 
By a micro entity (Sec.   1.29(a))......................          $45.00
By a small entity (Sec.   1.27(a))......................           90.00

[[Page 68181]]

 
By other than a small or micro entity...................          180.00
 

0
4. Section 1.18 is amended by revising paragraphs (a), (b), and (c) to 
read as follows:


Sec.  1.18  Patent post allowance (including issue) fees.

    (a)(1) Issue fee for issuing each original patent, except a design 
or plant patent, or for issuing each reissue patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $250.00
By a small entity (Sec.   1.27(a))......................          500.00
By other than a small or micro entity...................        1,000.00
 

    (2) [Reserved]
    (b)(1) Issue fee for issuing an original design patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $200.00
By a small entity (Sec.   1.27(a))......................          400.00
By other than a small or micro entity...................          800.00
 

    (2) [Reserved]
    (3) Issue fee for issuing an international design application 
designating the United States, where the issue fee is paid through the 
International Bureau (Hague Agreement Rule 12(3)(c)) as an alternative 
to paying the issue fee under paragraph (b)(1) of this section: The 
amount established in Swiss currency pursuant to Hague Agreement Rule 
28 as of the date of mailing of the notice of allowance (Sec.  1.311).
    (c)(1) Issue fee for issuing an original plant patent:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $250.00
By a small entity (Sec.   1.27(a))......................          500.00
By other than a small or micro entity...................        1,000.00
 

    (2) [Reserved]
* * * * *
0
5. Section 1.19 is amended by revising paragraphs (b)(1), (2), and (4); 
removing and reserving paragraphs (e) and (g); and adding paragraphs 
(h) through (l) to read as follows:


Sec.  1.19  Document supply fees.

* * * * *
    (b) * * *
    (1) Copy of a patent application as filed, or a patent-related file 
wrapper and contents, stored in paper in a paper file wrapper, in an 
image format in an image file wrapper, or if color documents, stored in 
paper in an Artifact Folder:
    (i) If provided on paper:
    (A) Application as filed: $35.00
    (B) File wrapper and contents: $280.00
    (C) [Reserved]
    (D) Individual application documents, other than application as 
filed, per document: $25.00
    (ii) If provided on compact disc or other physical electronic 
medium in single order or if provided electronically (e.g., by 
electronic transmission) other than on a physical electronic medium:
    (A) Application as filed: $35.00
    (B) File wrapper and contents: $55.00
    (C) [Reserved]
    (iii) [Reserved]
    (iv) If provided to a foreign intellectual property office pursuant 
to a bilateral or multilateral agreement (see Sec.  1.14(h)): $0.00.
    (2) [Reserved]
* * * * *
    (4) For assignment records, abstract of title and certification, 
per patent: $35.00
* * * * *
    (h) Copy of Patent Grant Single-Page TIFF Images (52 week 
subscription): $10,400.00
    (i) Copy of Patent Grant Full-Text W/Embedded Images, Patent 
Application Publication Single-Page TIFF Images, or Patent Application 
Publication Full-Text W/Embedded Images (52 week subscription): 
$5,200.00
    (j) Copy of Patent Technology Monitoring Team (PTMT) Patent 
Bibliographic Extract and Other DVD (Optical Disc) Products: $50.00
    (k) Copy of U.S. Patent Custom Data Extracts: $100.00
    (l) Copy of Selected Technology Reports, Miscellaneous Technology 
Areas: $30.00
0
6. Section 1.20 is amended by revising paragraphs (a) through (c) and 
(e) through (g) to read as follows:


Sec.  1.20  Post issuance fees.

 
 
 
(a) For providing a certificate of correction for                $150.00
 applicant's mistake (Sec.   1.323).....................
(b) Processing fee for correcting inventorship in a               150.00
 patent (Sec.   1.324)..................................
 

    (c) In reexamination proceedings:
    (1)(A) For filing a request for ex parte reexamination (Sec.  
1.510(a)) having:
    (i) Forty (40) or fewer pages;
    (ii) Lines that are double-spaced or one-and-a-half spaced;
    (iii) Text written in a non-script type font such as Arial, Times 
New Roman, or Courier;
    (iv) A font size no smaller than 12 point;
    (v) Margins which conform to the requirements of Sec.  
1.52(a)(1)(ii); and
    (vi) Sufficient clarity and contrast to permit direct reproduction 
and electronic capture by use of digital imaging and optical character 
recognition.

 
 
 
By a micro entity (Sec.   1.29(a))......................       $1,500.00
By a small entity (Sec.   1.27(a))......................        3,000.00
By other than a small or micro entity...................        6,000.00
 

    (B) The following parts of an ex parte reexamination request are 
excluded from paragraphs (c)(1)(A)(i) through (v) of this section:
    (i) The copies of every patent or printed publication relied upon 
in the request pursuant to Sec.  1.510(b)(3);
    (ii) The copy of the entire patent for which reexamination is 
requested pursuant to Sec.  1.510(b)(4); and
    (iii) 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::

 
 
 
By a micro entity (Sec.   1.29).........................       $3,000.00
By a small entity (Sec.   1.27(a))......................        6,000.00
By other than a small or micro entity...................       12,000.00
 

    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $115.00
By a small entity (Sec.   1.27(a))......................          230.00
By other than a small or micro entity...................          460.00
 

    (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):

 
 
 
By a micro entity (Sec.   1.29(a))......................          $25.00
By a small entity (Sec.   1.27(a))......................           50.00
By other than a small or micro entity...................          100.00
 

* * * * *
    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $400.00
By a small entity (Sec.   1.27(a))......................          800.00

[[Page 68182]]

 
By other than a small or micro entity...................        1,600.00
 

    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $900.00
By a small entity (Sec.   1.27(a))......................        1,800.00
By other than a small or micro entity...................        3,600.00
 

    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................       $1,850.00
By a small entity (Sec.   1.27(a))......................        3,700.00
By other than a small or micro entity...................        7,400.00
 

* * * * *
0
7. Amend Sec.  1.21 by:
0
a. Revising paragraph (a);
0
b. Removing and reserving paragraph (g);
0
c. Revising paragraph (h) introductory text and paragraphs (h)(2) and 
(i);
0
d. Removing and reserving paragraph (j); and
0
e. Adding paragraphs (o) through (q).
    The revisions and additions read as follows:


Sec.  1.21  Miscellaneous fees and charges.

* * * * *
    (a) Registration of attorneys and agents:
    (l) For admission to examination for registration to practice:
    (i) Application Fee (non-refundable): $100.00
    (ii) Registration examination fee.
    (A) For test administration by commercial entity: $200.00
    (B) For test administration by the USPTO: $450.00
    (iii) For USPTO-administered review of registration examination: 
$450.00
    (2) On registration to practice or grant of limited recognition:
    (i) On registration to practice under Sec.  11.6 of this chapter: 
$200.00
    (ii) On grant of limited recognition under Sec.  11.9(b) of this 
chapter: $200.00
    (iii) On change of registration from agent to attorney: $100.00
    (3) [Reserved]
    (4) For certificate of good standing as an attorney or agent:
    (i) Standard: $40.00
    (ii) Suitable for framing: $50.00
    (5) For review of decision:
    (i) By the Director of Enrollment and Discipline under Sec.  
11.2(c) of this chapter: $400.00
    (ii) Of the Director of Enrollment and Discipline under Sec.  
11.2(d) of this chapter: $400.00
    (6) Recovery/Retrieval of OED Information System Customer Interface 
account by USPTO:
    (i) For USPTO-assisted recovery of ID or reset of password: $70.00
    (ii) For USPTO-assisted change of address: $70.00
    (7) and (8) Reserved
    (9)(i) Delinquency fee: $50.00
    (ii) Administrative reinstatement fee: $200.00
    (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: $1,600.00
* * * * *
    (h) For recording each assignment, agreement, or other paper 
relating to the property in a patent or application, per property:
* * * * *
    (2) If not submitted electronically: $50.00
    (i) Publication in Official Gazette: For publication in the 
Official Gazette of a notice of the availability of an application or a 
patent for licensing or sale: Each application or patent: $25.00
* * * * *
    (o) The submission of very lengthy sequence listings (mega-sequence 
listings) are subject to the following fees:
    (1) Submission of sequence listings ranging in size from 300MB to 
800MB: $1,000.00
    (2) Submission of sequence listings exceeding 800MB in size: 
$10,000.00
    (p) Additional Fee for Overnight Delivery: $40.00
    (q) Additional Fee for Expedited Service: $160.00
0
8. Section 1.362 is amended by revising paragraph (b) to read as 
follows:


Sec.  1.362  Time for payment of maintenance fees.

* * * * *
    (b) Maintenance fees are not required for any plant patents or for 
any design patents.
* * * * *
0
9. Section 1.445 is amended by adding paragraph (a)(5) to read as 
follows:


Sec.  1.445  International application filing, processing and search 
fees.

    (a) * * *
    (5) Late furnishing fee for providing a sequence listing in 
response to an invitation under PCT Rule 13ter:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $75.00
By a small entity (Sec.   1.27(a))......................          150.00
By other than a small or micro entity...................          300.00
 

* * * * *
0
10. Section 1.482 is amended by revising the section heading and adding 
paragraph (c) to read as follows:


Sec.  1.482  International preliminary examination and processing fees.

* * * * *
    (c) Late furnishing fee for providing a sequence listing in 
response to an invitation under PCT Rule 13ter:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $75.00
By a small entity (Sec.   1.27(a))......................          150.00
By other than a small or micro entity...................          300.00
 

0
11. Section 1.492 is amended by revising paragraphs (a), (b)(2) through 
(4), (c)(2), and (d) through (f) to read as follows:


Sec.  1.492  National stage fees.

* * * * *
    (a) The basic national fee for an international application 
entering the national stage under 35 U.S.C. 371:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $75.00
By a small entity (Sec.   1.27(a))......................          150.00
By other than a small or micro entity...................          300.00
 

    (b) * * *
    (2) If the 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 Office as an International Searching Authority:

 
 
 
By a micro entity (Sec.   1.29(a))......................          $35.00
By a small entity (Sec.   1.27(a))......................           70.00
By other than a small or micro entity...................          140.00
 

    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $130.00

[[Page 68183]]

 
By a small entity (Sec.   1.27(a))......................          260.00
By other than a small or micro entity...................          520.00
 

    (4) In all situations not provided for in paragraph (b)(1), (2), or 
(3) of this section:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $165.00
By a small entity (Sec.   1.27(a))......................          330.00
By other than a small or micro entity...................          660.00
 

    (c) * * *
    (2) In all situations not provided for in paragraph (c)(1) of this 
section:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $190.00
By a small entity (Sec.   1.27(a))......................          380.00
By other than a small or micro entity...................          760.00
 

    (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:

 
 
 
By a micro entity (Sec.   1.29(a))......................         $115.00
By a small entity (Sec.   1.27(a))......................          230.00
By other than a small or micro entity...................          460.00
 

    (e) In addition to the basic national fee, for filing or on later 
presentation at any other time of each claim (whether dependent or 
independent) in excess of 20 (note that Sec.  1.75(c) indicates how 
multiple dependent claims are considered for fee calculation purposes):

 
 
 
By a micro entity (Sec.   1.29(a))......................          $25.00
By a small entity (Sec.   1.27(a))......................           50.00
By other than a small or micro entity...................          100.00
 

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

 
 
 
By a micro entity (Sec.   1.29(a))......................         $205.00
By a small entity (Sec.   1.27(a))......................          410.00
By other than a small or micro entity...................          820.00
 

0
12. Section 1.1031 is amended by revising paragraph (a) and adding 
paragraph (f) to read as follows:


Sec.  1.1031  International design application fees.

    (a) International design applications filed through the Office as 
an office of indirect filing are subject to payment of a transmittal 
fee (35 U.S.C. 382(b) and article 4(2)) in the amount of

 
 
 
By a micro entity (Sec.   1.29(a))......................          $30.00
By a small entity (Sec.   1.27(a))......................           60.00
By other than a small or micro entity...................          120.00
 

* * * * *
    (f) The designation fee for the United States shall consist of:
    (1) A first part established in Swiss currency pursuant to Hague 
Rule 28 based on the combined amounts of the basic filing fee (Sec.  
1.16(b)), search fee (Sec.  1.16(l)), and examination fee (Sec.  
1.16(p)) for a design application. The first part is payable at the 
time of filing the international design application; and
    (2) A second part (issue fee) as provided in Sec.  1.18(b). The 
second part is payable within the period specified in a notice of 
allowance (Sec.  1.311).

PART 41--PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

0
13. The authority citation for 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 Public Law 112-29.

0
14. Section 41.20 is amended by revising paragraphs (b)(1) and (4) to 
read as follows:


Sec.  41.20  Fees.

* * * * *
    (b) * * *
    (1) For filing a notice of appeal from the examiner to the Patent 
Trial and Appeal Board:

 
 
 
By a micro entity (Sec.   1.29 of this chapter).........         $250.00
By a small entity (Sec.   1.27(a) of this chapter)......          500.00
By other than a small or micro entity...................        1,000.00
 

* * * * *
    (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:

 
 
 
By a micro entity (Sec.   1.29(a) of this chapter)......         $625.00
By a small entity (Sec.   1.27(a) of this chapter)......        1,250.00
By other than a small or micro entity...................        2,500.00
 

PART 42--TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD

0
15. The authority citation for 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
16. Section 42.15 is amended by revising paragraphs (a) and (b) 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: $14,000.00
    (2) Inter Partes Review Post-Institution fee: $16,500.00
    (3) In addition to the Inter Partes Review request fee, for 
requesting review of each claim in excess of 20: $300.00
    (4) In addition to the Inter Partes Post-Institution request fee, 
for requesting review of each claim in excess of 15: $600.00
    (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: $16,000.00
    (2) Post-Grant or Covered Business Method Patent Review Post-
Institution fee: $22,000.00
    (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: $375.00
    (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 15: $825.00
* * * * *

    Dated: September 20, 2016.
Michelle K. Lee,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2016-23093 Filed 9-30-16; 8:45 am]
 BILLING CODE 3510-16-P