Setting and Adjusting Patent Fees During Fiscal Year 2017, 52780-52817 [2017-24390]

Download as PDF 52780 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 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 United States Patent and Trademark Office, Department of Commerce. ACTION: Final rule. AGENCY: The United States Patent and Trademark Office (Office or USPTO) sets or adjusts patent fees as authorized by the Leahy-Smith America Invents Act (Act or AIA). The USPTO operates like a business in that external and internal factors affect the demand for patent products and services. The 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. DATES: This rule is effective on January 16, 2018. The changes to § 1.18(b)(1) shall apply to those international design applications under the Hague Agreement having a date of international registration on or after January 16, 2018. FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director of the Office of Planning and Budget, by telephone at (571) 272–8966; or Dianne Buie, Office of Planning and Budget, by telephone at (571) 272–6301. SUPPLEMENTARY INFORMATION: This rule was proposed in a notice of proposed rulemaking published at 81 FR 68150 (Oct. 3, 2016) (hereinafter NPRM). SUMMARY: Table of Contents I. Executive Summary II. Legal Framework III. Rulemaking Goals and Strategies IV. Fee Setting Methodology V. Individual Fee Rationale VI. Discussion of Comments VII. Discussion of Specific Rule VIII. Rulemaking Considerations I. Executive Summary ethrower on DSK3G9T082PROD with RULES2 A. Purpose of This Action The Office issues this final 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 VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 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 implementing or revising fee regulations, such as public hearings and input from the Patent Public Advisory Committee (PPAC) and Congressional oversight. 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 targeted fee adjustments were necessary to continue to fund patent operations, enhance patent quality, continue to work toward patent pendency goals, support the Patent Trial and Appeal Board (PTAB)’s continued efforts to deliver high quality and timely decisions, fund general support costs necessary for patent operations (e.g., rent, utilities, legal, financial, human resources, and other administrative services), invest in strengthening 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 202 fee adjustments outlined in this rule align directly with the Office’s strategic goals and four key fee setting policy factors, discussed in detail in Part III. B. Summary of Provisions Impacted by This Action This final rule sets or adjusts 202 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 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 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. This final rule applies small entity discounts to two additional fees and applies micro entity discounts to six additional fees. In summary, the routine fees to obtain a patent (i.e., filing, search, examination, and issue fees) increase slightly under this final rule 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) of the Act. Additional information describing the fee adjustments is included in Part V. Individual Fee Rationale section of this rulemaking and in the ‘‘Table of Patent Fees—Current, Final Rule and Unit Cost’’ (hereinafter ‘‘Table of Patent Fees’’) available at http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. C. Summary of Costs and Benefits of This Action The final 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 a RIA to analyze the costs, benefits, and transfer payments of the final rule over a five-year period, FY 2017–FY 2021. The RIA includes a comparison of the final rule fee schedule to the current fee schedule (baseline) and to two other alternatives. The Office of Management and Budget (OMB) has determined that this rule involves a transfer payment from one group to another that does not affect the total resources available to society. 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 rulemaking, but found that the final rule has significant qualitative benefits with no identified costs. The qualitative costs and benefits that the RIA assesses are: (1) Fee schedule design—a measure of how well the fee schedule aligns to the Office’s key fee setting policy factors—and (2) securing aggregate revenue to cover aggregate E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations cost—a measure of whether the alternative provides adequate revenue to support the core mission and strategic priorities described in the final rule and FY 2018 Budget. For these costs and benefits, the fee schedule in this final rule offers the highest benefits, with no costs identified. As described throughout this document, the final rule fee schedule maintains the existing balance of setting entry fees (e.g., filing, search, and examination) below the costs to the Office to perform those services and setting maintenance fees above the cost to the Office, as one approach to foster innovation. Further, as detailed in Part V, the fee changes are targeted in support of one or more fee setting policy factors. Lastly, the final 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 final rule clearly outweigh those of the baseline and the other alternatives considered in the RIA. Table 1 summarizes the RIA results. TABLE 1—FINAL PATENT FEE SCHEDULE COSTS AND BENEFITS, CUMULATIVE FY 2017–FY 2021 Qualitative costs and benefits Costs: None identified ................... Benefits: Secure Aggregate Revenue to Cover Aggregate Cost. Fee Schedule Design ........ Net Benefit/Cost ................ Neutral. Significant. Significant. Significant Benefit. ethrower on DSK3G9T082PROD with RULES2 II. Legal Framework A. Leahy-Smith America Invents Act— Section 10 The Leahy-Smith America Invents Act was enacted into law on September 16, 2011. See Public Law 112–29, 125 Stat. 284. Section 10(a) of the Act authorizes the Director of the Office to set or adjust by rule any patent fee established, authorized, or charged under title 35, U.S.C., for any services performed by, or materials furnished by, the Office. Fees under 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 18:04 Nov 13, 2017 Jkt 244001 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 implement micro entity fees for additional services as appropriate. D. Patent Public Advisory Committee Role Additional details describing the costs and benefits are available at http:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. VerDate Sep<11>2014 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. 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 considers and analyzes any comments, advice, or recommendations PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 52781 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 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 published all comments on the Fee Setting Web site, available at 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 is available 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 the NPRM. Likewise, before issuing this final rule, the Office considered and analyzed all comments, advice, and recommendations received from the public during the 60-day comment period. The Office’s response to comments received is available in Part VI. Discussion of Comments. III. Rulemaking Goals and Strategies A. Fee Setting Strategy The overall strategy of this final rule 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 available financial resources, and to continue strategic E:\FR\FM\14NOR2.SGM 14NOR2 52782 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations improvements, such as progress on patent quality initiatives, continued reduction of the patent application backlog and pendency, continued delivery of high quality and timely PTAB decisions, and continued investment in modernization of IT systems and infrastructure. In addition to the overriding principles outlined above, the Office also assesses alignment with the 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. Each factor promotes a particular aspect of the U.S. patent system. Fostering innovation is an important policy factor to ensure that applicants can access the U.S. patent system 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-sizefits-all process and therefore, where feasible, the Office endeavors to fulfill its fourth policy factor of offering patent processing options to applicants. ethrower on DSK3G9T082PROD with RULES2 B. Fee Setting Considerations The balance of this sub-section presents the specific fee setting considerations the Office reviewed in developing the final 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 public and PPAC during the public comment period for the NPRM. Collectively, these considerations informed the Office’s chosen rulemaking strategy. VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 (1) Historical Cost. To ascertain how to best align fees with the full cost of products and services, the Office considers Activity Based Information. Using historical cost data and forecasted application demands, the Office can align fees to the costs of specific patent products and services. The document entitled USPTO Setting and Adjusting Patent Fees during Fiscal Year 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 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. The Office has made significant progress towards its strategic priorities 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 2016 Performance and Accountability Report, available at http://www.uspto.gov/sites/default/files/ documents/USPTOFY16PAR.pdf. (2) Projected Costs. The costs projected to meet the Office’s strategic goals can be found in the FY 2018 President’s Budget, which provides additional detail about the following performance and modernization efforts, among others: (a) Quality, backlog, and pendency for Patents and PTAB and (b) investing in modernizing the USPTO IT systems and infrastructure. (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 this final rule, the Office will continue to improve patent quality through ongoing efforts related to the three quality pillars: (1) Excellence in work products; (2) PO 00000 Frm 00004 Fmt 4701 Sfmt 4700 excellence in measuring patent quality; and (3) excellence in customer service. In addition to quality, the USPTO continues to focus on backlog and pendency reduction. First action and average total pendency in FY 2016 were 16.2 months and 25.3 months respectively compared to 21.9 months and 32.4 months in FY 2012. The patent application backlog was reduced from 608,283 in FY 2012 to 537,655 at the end of FY 2016. This rulemaking aims to 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. 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 by the end of FY 2016 was about 17,000. As of the end of fiscal year 2016, the average pendency for decided ex parte appeals was 25.5 months (as measured from appeal number assignment to decision date). 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. This 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 reexamination appeals; and ex parte appeals. (b) Information Technology. Revenue generated from the final fee structure will enable the USPTO to continue investing in modernizing the USPTO IT systems and infrastructure. 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 and modernization program, have already delivered value to examiners and customers alike. To date, the Docket & Application Viewer (DAV), a case management tool for examiners, was first released in March 2015. By the end of FY 2016, 100 percent of patent examiners were using DAV. The eDAN legacy system was retired in December 2016, as its full functionality was replaced by DAV. Other PE2E releases include pilots for Official Correspondence (replaces Office Action Correspondence System (OACS)), an authoring and workflow solution that offers DAV integration, and Examiner Search (replaces Examiner’s Automated Search Tool (EAST)), which supports modern, scalable enterprise searches; both represent significant advances in how E:\FR\FM\14NOR2.SGM 14NOR2 ethrower on DSK3G9T082PROD with RULES2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations the Office manages workload and delivers results to customers. PE2E relies on flexible, scalable, modern technology that is optimized to eliminate repetitive tasks and support analytics and automated processing. In April 2016, the USPTO released Financial Manager, its new online fee payment management tool. Financial Manager allows USPTO customers to store and manage payment methods online and generate custom transaction reports at any time. 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 and maintenance of a viable patent operating reserve that allows for effective management of the U.S. patent system and responsiveness to changes in the economy, unanticipated production workload, and revenue changes. As a fee-funded agency, 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 for Patents and PTAB). The USPTO’s annual budget delineates prospective spending levels (aggregate cost) to execute core mission activities and strategic initiatives. In the FY 2018 President’s Budget, the USPTO estimated that its aggregate patent operating cost for FY 2017, including administrative costs, would be $2.986 billion. After evaluating relevant risk factors, the Office determined that a minimum balance of $300 million in the operating reserve was adequate for FY 2017 and FY 2018, which is below the optimal balance of three months operating expenses, or about $746 million in FY 2017. Based on the latest estimates as shown in the FY 2018 President’s Budget, the spending requirement would exceed projected fee collections and other income of $2.876 billion and draw $110 million from the patent operating reserve, leaving a $245 million balance in the patent operating reserve, or $55 million less than the desired minimum of $300 million. This is partially due to the fact that these fee adjustments will only be in place for the last month of FY 2017. In FY 2018, when the fee adjustments will be fully implemented, the operating reserve is projected to rise above the desired minimum, with an end-of-year balance of $343 million. In FY 2019, budgetary requirements are projected to exceed VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 income, taking the operating reserve down to $341 million. Then the operating reserve is projected to continue growing, to $418 million at the end of FY 2020 and $501 million at the end of FY 2021. This exceeds the desired minimum, but falls short of the optimal level of $841 million in FY 2021. The operating reserve is not projected to reach its optimal level within the next five years. Fee setting authority allows the Office to align the fee schedule with the four fee setting policy factors discussed earlier in this document (i.e., foster innovation, align fees to full cost, set fees to facilitate the effective administration of the patent and trademark system, and offer application processing options). This rule assumes that the USPTO will retain the important business tool of fee setting authority to respond to environmental and operational factors in the out-years. 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. The ability to implement such fee adjustments is based on the assumption that the USPTO’s fee setting authority under the AIA will be renewed or made permanent after it expires in 2018. 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. C. Summary of Rationale and Purpose of the Final Rule The Office estimates that the final patent fee schedule will produce aggregate revenue to recover the aggregate cost 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 final rule should provide sufficient aggregate revenue to recover the aggregate cost of patent operations, including improving patent quality, reducing the patent application backlog, decreasing patent PO 00000 Frm 00005 Fmt 4701 Sfmt 4700 52783 application pendency, delivering high quality and timely PTAB decisions, investing in modernizing 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 final fee schedule: Step 1: Determine the prospective aggregate cost 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. Step 1: Determine Prospective Aggregate Cost Calculating prospective aggregate cost 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 OMB (www.omb.gov) in the Economic and Budget Analyses section of the Analytical Perspectives and each January by the Congressional E:\FR\FM\14NOR2.SGM 14NOR2 52784 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations Budget Office (CBO) (www.cbo.gov) in the Budget and Economic Outlook. A description of the Office’s methodology for using RGDP can be found in Appendix I—Multi-year Planning by Business Line and Cost Containment of the FY 2018 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 cost to execute the requirements. In developing its Budget, the Office first looks at the cost of status quo operations (the base requirements). The base requirements are adjusted for anticipated pay 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 2018 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 2018 President’s Budget identifies that, during FY 2017, patent operations will cost $2.986 billion, including $2.002 billion for patent examination activities; $180 million for IT systems and support contributing to direct patent operations; $87 million for activities related to patent appeals and AIA trial proceedings; $27 million for activities related to intellectual property protection, policy, and enforcement; and $688 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 to conduct audits of USPTO programs. The Office also estimates collecting $24 million in other income associated with recoveries and reimbursable agreements (offsets to spending). Since operations costs are projected to exceed collections, the Office estimates that $110 million will be withdrawn from the operating reserve during FY 2017. 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 adjustments contained in this final rule. 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 614,253 0.7% 647,700 485,300 8,375 627,274 2.1% 663,200 430,000 8,300 634,934 1.2% 667,700 378,200 8,097 639,878 0.8% 660,700 338,200 7,812 636,580 ¥0.5% 626,100 329,600 7,540 14.8 24.8 15.1 23.0 11.0 22.7 10.7 19.5 9.9 19.0 ethrower on DSK3G9T082PROD with RULES2 * 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 2018 President’s Budget. The USPTO continuously updates both patent fee collections projections and workload projections based on the latest data. Patent production workload projections have been updated since the NPRM was published in October 2016. The most recent projections are shown in Table 2. UPR filings growth projections were revised downward during the FY 2018 budget formulation process due to revised RGDP estimates and more conservative estimates of out year growth. Over the five year planning horizon budgetary requirements increased VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 compared to the prior NPRM outlook projections. The primary drivers of the requirements variance are investments to modernize IT systems and infrastructure and updated assumptions about the resources necessary to meet production commitments in the Patent Pendency Model and PTAB models. The FY 2018 Budget is based on a framework of continuous and comprehensive budget reviews designed to ensure that all operational and administrative costs are reviewed and funds are reallocated when necessary to PO 00000 Frm 00006 Fmt 4701 Sfmt 4700 focus on high-priority and effective programs—primarily core mission activities—and mitigate risk by retaining minimum operating reserve balances. In addition, the USPTO operates similarly to a business in that the Office makes a determined effort to monitor and adjust spending in response to changes in workload, income, and operating reserve balances. These activities are carried out as regular parts of the budget execution and budget formulation processes. E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 52785 TABLE 3—PLANNED OPERATING REQUIREMENTS—FY 2017–FY 2021 Dollars in millions Patent aggregate cost estimate FY 2017 ethrower on DSK3G9T082PROD with RULES2 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 2018 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, which influence application processing VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 FY 2018 2,986 2,852 24 ¥110 245 3,176 3,250 24 98 343 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 large enough decrease in patenting activities that overall revenues will decrease. When developing fee forecasts, the Office accounts for how applicant behavior will change at different fee amounts 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/performanceand-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, PO 00000 Frm 00007 Fmt 4701 Sfmt 4700 FY 2019 3,231 3,205 24 ¥2 341 FY 2020 3,273 3,326 24 77 418 FY 2021 3,365 3,423 24 82 501 PTAB fees, maintenance fees, PCT filings, and trademark filings. Additional detail about how the Office calculates aggregate revenue is discussed in the document entitled, ‘‘Setting and Adjusting Patent Fees during FY 2017—Aggregate Revenue Estimating Methodology.’’ Details about projected workloads for each of the fee setting alternatives considered are available in the aggregate revenue tables for each alternative. All of these documents are available at http:// www.uspto.gov/about-us/performanceand-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 issue and 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 E:\FR\FM\14NOR2.SGM 14NOR2 52786 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 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 fee rates will become effective on September 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). ethrower on DSK3G9T082PROD with RULES2 Step 3: Set Specific Fee Amounts Once the Office finalizes the annual requirements and aggregate prospective cost 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 cost 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 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 new patent fees will recover the prospective aggregate cost of its patent operations including contributions to the operating reserve per the strategic objective of implementing a sustainable funding VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 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 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 fees are set at, above, and below their unit costs to balance the four key fee setting policy factors discussed in Part III. For some fees in this final rule, the USPTO does not 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 fee 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. PO 00000 Frm 00008 Fmt 4701 Sfmt 4700 The Table of Patent Fees includes the current and final rule fees for large, small, and micro entities as well as unit costs for the last three fiscal years. Part VII. Discussion of Specific Rule contains a complete listing of fees that are set or adjusted in the final rule patent fee schedule. A. Fees With Changes Less Than Plus or Minus 10 Percent or 20 Dollars The Office is adjusting 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. 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 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 fee adjustments in this category are listed in the Table of Patent Fees. B. Fees With Changes of Greater Than Plus or Minus 10 Percent and 20 Dollars For those fees changing 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. Note: Three fees in this section have fee changes less than 10 percent but are included here because they met this criteria in either the NPRM (i.e., Plant Issue and Inter Partes Review Post-Institution Fee—Up to 15 Claims) or preliminary proposed fees (i.e., Request for Continued Examination (RCE)—1st Request). 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 rule. E:\FR\FM\14NOR2.SGM 14NOR2 52787 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 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 new fees. discussion of the rationale for each fee follows. (1) New and Significant Fees The following fees fall under the category of new and significant. A a) Mega-Sequence Listing Filing TABLE 4—MEGA-SEQUENCE LISTING FILING—FEE CHANGES AND UNIT COST Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity Submission of sequence listings of 300 MB to 800 MB. new Submission of sequence listings of more than 800 MB. new The Office sets 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 300 MB to 800 MB and Tier 2 for file sizes greater than 800 MB. 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 historical data, on average, less than 10 applications per year contained sequence listing files greater than 300 MB. Based on previously filed applications with lengthy sequence listings, the Office determined that some $1,000 ($500) [$250] $10,000 ($5,000) [$2,500] +$1,000 (+$500) [+$250] +$10,000 (+$5,000) [+$2,500] 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 FY 2015 unit cost n/a (n/a) [n/a] n/a (n/a) [n/a] n/a n/a described in such a way as to be required in a sequence listing. The 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. The fee would also apply to the submission of mega-sequence listings received in national stage applications under 35 U.S.C. 371, including megasequence listings received by the Office pursuant to PCT Article 20. 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 SEARCH, EXAMINATION, AND ISSUE AND PLANT SEARCH AND ISSUE FEES—FEE CHANGES Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity 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 ....................................................... ethrower on DSK3G9T082PROD with RULES2 Plant Issue Fee .......................................................... In the NPRM, the Office proposed a design issue fee of $800 and a plant issue fee of $1,000. In this final rule, after carefully considering comments from the PPAC and the public, the VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 $160 ($80) [$40] $420 ($210) [$105] $600 ($300) [$150] $700 ($350) [$175] $800 ($400) [$200] Office sets the design issue fee to $700 and the plant issue fee to $800, 13 percent and 20 percent less than the fees proposed in the NPRM respectively. Design and plant patents are unlike PO 00000 Frm 00009 Fmt 4701 Sfmt 4700 +$40 (+$20) [+$10] +$40 (+$20) [+$10] +$140 (+$70) [+$35] +$140 (+$70 [+$35] +$40 (+$20) [+$10] +33% (+33) [+33] +11 (+11) [+11] +30 (+30) [+30] +25 (+25) [+25] +5 (+5) [+5] FY 2015 unit cost $397 1,773 608 314 314 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 E:\FR\FM\14NOR2.SGM 14NOR2 52788 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 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 revised fees better align the fees with costs by bringing both application types closer to aggregate cost recovery while maintaining some subsidization. (c) Request for Continued Examination (RCE)—First and Second and Subsequent Request TABLE 6—REQUEST FOR CONTINUED EXAMINATION (RCE) FEE CHANGES Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity Request for Continued Examination (RCE)—1st Request (see 37 CFR 1.114) ..................................... $1,200 ($600) [$300] $1,300 ($650) [$325] +$100 (+$50) [+$25] +8 (+8) [+8] $2,187 $1,700 ($850) [$425] Request for Continued Examination (RCE)—2nd and Subsequent Request (see 37 CFR 1.114) ..... The moderate increases to RCE fees support the fee setting policy factor to align fees with costs. The 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 is increasing 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 with the increase in the first RCE fee rate significantly below FY 2015 unit cost, this service will continue to recover only a portion of the total cost in the future. The Office is increasing 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 FY 2015 unit cost $1,900 ($950) [$475] +$200 (+$100) [+$50] +12 (+12) [+12] 1,540 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 sets the second and subsequent RCE fee rate with a slightly larger increase. 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 Quick Path Information Disclosure Statement (QPIDS) pilot program (http:// www.uspto.gov/patent/initiatives/quickpath-information-disclosure-statementqpids) and the After Final Consideration Pilot 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) evaluates and strengthens work products, processes, and services at all stages of the patent process. (d) Information Disclosure Statements (IDS) TABLE 7—DS—FEE CHANGES AND UNIT COSTS Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity ethrower on DSK3G9T082PROD with RULES2 Submission of an Information Disclosure Statement The Office is increasing the submission fee for an Information Disclosure Statement (IDS) from $180 to $240. The adjustment is an effort to set VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 $180 ($90) [$45] $240 ($120) [$60] the fee optimally to encourage early submission of an IDS when possible while keeping the fee low enough to encourage timely filings during the time PO 00000 Frm 00010 Fmt 4701 Sfmt 4700 +$60 (+$30) [+$15] FY 2015 unit cost +33 (+33) [+33] n/a period (and under the conditions) when the fee would be required. (e) Certificate of Correction Fees E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 52789 TABLE 8—CERTIFICATE OF CORRECTION FEES—FEE CHANGES AND UNIT COSTS Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity Certificate of Correction ............................................. The Office is increasing the fee for a certificate of correction by $50 to $150. This adjustment will encourage applicants to submit accurate information initially, while at the same time not increasing the rate too much above unit cost recovery, which could discourage disclosure of needed $100 $150 +$50 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, +50 FY 2015 unit cost $93 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 TABLE 9—REQUEST FOR EX PARTE REEXAMINATION FEES—FEE CHANGES AND UNIT COSTS Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity Ex Parte Reexamination (§ 1.510(a)) Streamlined .... The Office is establishing a new fee for smaller, streamlined reexamination filings. The streamlined filings will reduce the cost to the USPTO, allowing the Office to pass on the cost savings to applicants. This fee will 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 new $6,000 ($3,000) [$1,500] +$6,000 (+$3,000) [+$1,500] 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 n/a FY 2015 unit cost n/a 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 Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity ethrower on DSK3G9T082PROD with RULES2 Forwarding an Appeal in an Application or Ex parte Reexamination Proceeding to the Board. Based on feedback on the NPRM, the Office has eliminated the proposed increase to the notice of appeal fee. The Notice of Appeal fees will remain at VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 $2,000 ($1000) [$500] $2,240 ($1,120) [$560] current rates (e.g., $800 for a large entity), and the Office has lowered the appeal forwarding fee from the proposed $2,500 (large entity) in the PO 00000 Frm 00011 Fmt 4701 Sfmt 4700 +$240 (+$120) [+$60] +12% (+12%) [+12%] FY 2015 unit cost $4,815 NPRM to $2,240 (large entity). At the current fee rate, the fees paid for an ex parte Notice of Appeal and Forwarding an Appeal only cover 58 percent of the E:\FR\FM\14NOR2.SGM 14NOR2 52790 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations Office’s cost for an appeal. The fee increase for Forwarding an Appeal will result in the combined ex parte appeal fees covering 63 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. 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 adjustment 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 TABLE 11—AIA TRIALS—FEE CHANGES AND UNIT COSTS Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description Large (Small) [Micro] Entity Large (Small) [Micro] Entity Large (Small) [Micro] Entity ethrower on DSK3G9T082PROD with RULES2 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 is adjusting 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 inter partes review 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 VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 $9,000 $15,500 +$6,500 +72% $22,165 14,000 15,000 +1,000 +7% 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 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 2016, the PTAB received nearly 1,700 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 PO 00000 FY 2015 unit cost Frm 00012 Fmt 4701 Sfmt 4700 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. In this final rule, the Office is setting the Inter Partes Review Request Fee—Up to 20 Claims at $15,500 and the Inter Partes Review Post-Institution Fee—Up to 15 Claims at $15,000. The total for the inter partes review (request and postinstitution) fees is $30,500. These individual fee rates have changed from the rates proposed in the NPRM, although the total remains the same. The fee rates proposed in the NPRM were $14,000 for the Inter Partes Review Request Fee—Up to 20 Claims and $16,500 for the Inter Partes Review PostInstitution Fee—Up to 15 Claims. The Office is revising the fee levels to more closely align fees and costs to the Office for performing these services. Unit costs for inter partes review requests have consistently outpaced the unit costs for inter partes review post-institutions. See the Table of Patent Fees. (i) Patent Cooperation Treaty (PCT)— International Stage E:\FR\FM\14NOR2.SGM 14NOR2 52791 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations TABLE 12—PATENT COOPERATION TREATY (PCT)—INTERNATIONAL STAGE—FEE CHANGES AND UNIT COSTS Current fees Final rule fees Dollar change Percent change Large (Small) [Micro] Entity Fee description 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. The Office sets 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 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 new $300 ($150) [$75] +$300 (+$150) [+$75] FY 2015 unit cost n/a n/a improve upon and further foster innovation. and scope to fees charged by other international intellectual property offices. (j) Maintenance Fee Payments—Reissue Patent Rule 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 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 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 (2) Office of Enrollment and Discipline Fees and Patent Practitioner Enrollment Fees The following fee adjustments are comprised of Office of Enrollment and Discipline (OED) fees and other patent practitioner enrollment fees. In addition to the fee rate changes, there are four new fees introduced 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 make these fee adjustments. No enrollment or disciplinary fees have been increased since 2008, and only two fees were adjusted that year. All other enrollment and discipline 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 PRACTITIONER ENROLLMENT—FEE CHANGES AND UNIT COSTS Current fees ethrower on DSK3G9T082PROD with RULES2 Final rule fees Dollar change Percent change Large (small) [micro] entity Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity 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 ............................. VerDate Sep<11>2014 19:10 Nov 13, 2017 Jkt 244001 PO 00000 FY 2015 unit cost $40 100 +$60 +$100 +150% +100% $225 493 10 40 +$30 +300% 39 20 50 +$30 +150% 49 130 400 +$270 +208% 2,044 130 100 Frm 00013 $100 200 400 200 +$270 +$100 +208% +100% 1,827 940 Fmt 4701 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 52792 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations TABLE 13—OED AND PATENT PRACTITIONER ENROLLMENT—FEE CHANGES AND UNIT COSTS—Continued Current fees Final rule fees Dollar change Percent change Large (small) [micro] entity Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity 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 ............................................................ ethrower on DSK3G9T082PROD with RULES2 The Office increases 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 § 11.9(b) or (c) is currently set at $100, and both transactions have the same fee code. This rule creates a new fee code for On Grant of Limited Recognition, allowing for a separate accounting of registration to practice or for a grant of limited recognition. Both Registration to Practice and Grant of Limited Recognition are increasing to $200, which is still below the estimated cost of performing these services. The Office is eliminating the reference to § 11.9(c) in the current provision. The Office does not presently impose a fee for an unregistered individual to prosecute an international patent application in the manner described in § 11.9(c). The Office is using the existing fee code for Registration to Practice fees and creating a new fee code for Grant of Limited Registration. The Office is increasing 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 is increasing the fee for both of these services to cost recovery, $40 and $50, respectively. The Office is increasing the fees for petitions to the OED Director regarding enrollment or recognition. However, the new fees are still significantly below cost recovery. Any petition from any VerDate Sep<11>2014 19:10 Nov 13, 2017 Jkt 244001 new $200 +$200 n/a n/a new 70 +$70 n/a n/a new 70 +$70 n/a n/a new 450 +$450 n/a 515 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 $400 fee. The Office is adjusting the fees for a review of the 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 new $400 fee. This is an increase from the current fee but is still set significantly below cost recovery. The Office is setting 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, helps to close the gap between the fee and the cost for performing this service. The Office is creating a fee for USPTO-assisted reset of user IDs and passwords for an OED Information System—Customer Interface (OEDIS–CI) account set 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. This fee would only be charged if it was requested that the USPTO perform this task instead of the self-service option. The Office is creating and setting 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. PO 00000 FY 2015 unit cost Frm 00014 Fmt 4701 Sfmt 4700 This fee would only be charged if it was requested that the USPTO perform this task instead of the self-service option. The Office is setting 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 USPTOprovided sessions and therefore increased the cost per registrant of USPTO-provided sessions. The Office is setting the fee for changing a practitioner’s registration status from agent to attorney. The Office currently charges $100 for this service. 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 set, 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 entity fees are provided. Providing these fee reductions for small and micro entity innovators continues the Office’s efforts to foster innovation across all patent system users. E:\FR\FM\14NOR2.SGM 14NOR2 52793 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations TABLE 14—AMENDED FEES TO INCLUDE DISCOUNTS FOR SMALL AND MICRO ENTITIES—FEE CHANGES AND UNIT COSTS Current fees Final rule fees Dollar change Percent change Large (small) [micro] entity Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Petition for the Delayed Payment of the Fee for Maintaining a Patent in Force ................................ $1,700 ($850) [$850] 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 $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18 (+18) [¥41] 244 $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18 (+18) [¥41] 244 $2,000 ($1,000) [$500] +$300 (+$150) [¥$350] +18 (+18) [¥41] n/a $180 ($90) [$45] $0 (¥$90) [¥$135] 0 (¥50) [¥75] n/a $120 ($120) [$120] Hague International Design Application Fees— Transmittal Fee ...................................................... $121 $180 ($180) [$180] Petition to Convert an International Design Application to a Design Application Under 35 U.S.C. Chapter 16 ............................................................. +18 (+18) [¥41] $1,700 ($850) [$850] Petition to Excuse Applicant’s Failure to Act Within Prescribed Time Limits in an International Design Application .............................................................. +$300 (+$150) [¥$350] $1,700 ($850) [$850] Petition for the Delayed Submission of a Priority or Benefit Claim .......................................................... $2,000 ($1,000) [$500] $1,700 ($850) [$850] 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 ................................................................... C. Discontinued or Replaced Fees FY 2015 unit cost $120 ($60) [$30] $0 (¥$60) [¥$90] 0 ¥50 ¥75 n/a 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 discontinued or new fees. (a) Discontinued and Replaced TABLE 15—DISCONTINUED FEES WITH NEW FEE REPLACEMENTS Current fees ethrower on DSK3G9T082PROD with RULES2 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 Patent-Related 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). VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 PO 00000 Final rule fees Dollar change Percent change Large (small) [micro] entity Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity FY 2015 unit cost $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 $55 ................... +$55 n/a n/a at cost new discontinue ....... $10,400 ............ at cost +$10,400 n/a n/a n/a n/a Frm 00015 Fmt 4701 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 52794 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations TABLE 15—DISCONTINUED FEES WITH NEW FEE REPLACEMENTS—Continued Current fees 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 allows 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 SinglePage TIFF Images, or Patent Application Publication Full-Text W/Embedded Images (52 week subscription); Copy of Patent Technology Monitoring Team (PTMT) Patent Bibliographic Extract Final rule fees Dollar change Percent change Large (small) [micro] entity Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity FY 2015 unit cost new $5,200 .............. +$5,200 n/a n/a new $50 ................... +$50 n/a n/a new new $100 ................. $30 ................... +$100 +$30 n/a n/a n/a n/a $40 discontinue ....... ¥$40 n/a n/a new new $40 ................... $160 ................. +$40 +$160 n/a n/a n/a n/a 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 provides 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 is now replaced with a set fee for ‘‘Overnight Delivery.’’ (b) Discontinued TABLE 16—DISCONTINUED FEES ethrower on DSK3G9T082PROD with RULES2 Current fees Final rule fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Self-Service Copy Charge, per Page ....................... Establish Deposit Account ........................................ Uncertified Statement Re: Status of Maintenance Fee Payments. $10 ............................................................................ 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 PatentRelated File Wrapper Contents as Specified in § 1.19(b)(2)(i)(A). $0.25 ................ $10 ................... discontinue ....... discontinue ....... ¥$0.25 ¥$10 n/a n/a n/a n/a discontinue ....... at cost .............. ¥$10 ............... discontinue ....... n/a at cost n/a n/a $10 n/a $55 ................... discontinue ....... ¥$55 n/a n/a $15 ................... discontinue ....... ¥$15 n/a n/a VerDate Sep<11>2014 19:10 Nov 13, 2017 Jkt 244001 PO 00000 Frm 00016 Fmt 4701 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 FY 2015 unit cost Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 52795 TABLE 16—DISCONTINUED FEES—Continued Current fees Final rule fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity 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. $55 ................... discontinue ....... 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 is retiring 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 Comments Comments and Responses ethrower on DSK3G9T082PROD with RULES2 The USPTO published a proposed rule on October 3, 2016 soliciting comments on the proposed fee schedule. In response, the USPTO received comments from five intellectual property organizations, one federal agency, and nineteen individual commenters representing law firms, corporations, or themselves. These comments are posted on the USPTO’s Web site at https://www.uspto.gov/ about-us/performance-and-planning/ fee-setting-and-adjusting. General Fee Setting Approach Comment 1: Two commenters expressed general support for the increases, and another expressed understanding of the fee increases and asked how a change will affect his particular patenting situation. VerDate Sep<11>2014 19:10 Nov 13, 2017 Jkt 244001 Response: The USPTO appreciates the endorsement from the commenters, and is committed to achieving the goals developed in consultation with the stakeholder community as set forth in the Strategic Plan. Comment 2: Three commenters objected to any increase in fees, as they believed such increases placed hardships on individual filers, smallbusiness owners, and federal agencies or, due to the resulting growing operating reserve, makes the USPTO an easy target for fee diversion. A United States Federal agency objects to the proposed fee increases citing a direct and negative impact on its ability to apply for, obtain, and maintain patents on its inventions due to flat annual budgets. In the opinion of the Federal agency, the proposed fee increases will limit its patenting activity thus making it more difficult to attract commercial licensees. Response: The USPTO appreciates the concern about rising fees, but points out the necessity of adjusting fees to recover the aggregate estimated cost to the Office for processing, activities, services, and materials relating to patents, including administrative costs of the Office with respect to such patent fees. As noted in the NPRM, FY 2018 President’s Budget, and the FY 2016 Performance and Accountability Report (PAR) among other publications, the USPTO has made significant progress towards financial sustainability as a result of the initial AIA fee setting effort, including building towards a threemonth optimal operating reserve for patents. 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. For small businesses and individual filers, 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. This final rule PO 00000 Frm 00017 Fmt 4701 Sfmt 4700 ¥$55 n/a FY 2015 unit cost n/a applies small entity discounts to two additional fees and applies micro entity discounts to six additional fees. Comment 3: One commenter cites operating reserve level estimates from the FY 2017 President’s Budget, as referred to in the NPRM, noting that the operating reserve level is estimated to exceed the optimal level in out years and that overfunding the operating reserve is unfair to applicants and could be a target for fee diversion. Response: In the intervening months since the FY 2017 President’s Budget, the Office’s budgetary requirements and fee collection estimates have evolved. The USPTO continuously updates both patent fee collections projections and workload projections based on the latest data. Since the NPRM publication in October 2016 there is a revised understanding of expected incoming fees and projected spending. Over the five year planning horizon budgetary requirements increased compared to the prior NPRM outlook projections. The primary drivers of the requirements variance are investments to modernize IT systems and infrastructure and updated assumptions about the resources necessary to meet production commitments in the Patent Pendency Model and PTAB model. In addition, UPR filings growth projections were revised downward during the FY 2018 budget formulation process due to revised RGDP estimates and more conservative estimates of out year growth. With the FY 2018 President’s Budget, and under the fee rates included in this final rule, the operating reserve level estimates do not reach the optimal level of three months of expenses in the five year budget horizon. As described in Part III. B. of the final rule, which summarizes the USPTO’s operating reserve policy, 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. A key assumption is that the USPTO will E:\FR\FM\14NOR2.SGM 14NOR2 52796 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations ethrower on DSK3G9T082PROD with RULES2 retain fee setting authority to adjust fee rates in the future as assumptions about the out years might change. For example, if the operating reserve balance is projected to exceed the optimal level by 10 percent for two consecutive years, the Office would consider using fee setting authority to reduce fees, per the operating reserve policy. Under the new fee structure, as in the past, the Office will remain a prudent steward of patent fees. The USPTO continues to communicate the importance of continued access to all fees collected as a critical component of sustainable funding strategy to the public, lawmakers, and the executive branch. While fee diversion remains a possibility without an explicit law eliminating the possibility, the Office will continue its educational efforts in this area. The financial outlook presented in this final rule reduces the trajectory of the estimated optimal operating reserve level because of changes in fees made in response to stakeholder feedback and in recognition of a changing outlook for Office operations and finances. PTAB Fees The Office received five comments regarding the proposed increases in PTAB fees, including two comments about fees for AIA trial proceedings. Comment 4: One commenter noted that the work performed by the PTAB in AIA trial proceedings is time consuming, and the commenter supports the increase in fee rates in those proceedings to ensure high quality decisions continue. Response: The Office appreciates the commenter’s general support for fee increases in AIA trial proceedings. The USPTO is committed to maintaining the PTAB’s ability to provide timely and high quality decisions. The AIA significantly affected the operations of the PTAB by establishing new types of trial proceedings. The AIA trial proceedings in the PTAB have been immensely popular (over 5,500 AIA trial proceedings filed through FY 2016) because they provide a less expensive and faster alternative to district court litigation. As a result, the PTAB workload has increased significantly. To accommodate the sudden growth in workload, the PTAB expanded its workforce and has continued to enhance its resources to meet the 12-month statutory requirement for completing each AIA trial proceeding. The fee rates in this final rule are the result of considering and analyzing historical data on the aggregate cost for conducting AIA trial proceedings, now VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 that the proceedings have been in place for three fiscal years. The increase in AIA trial proceeding fees will help the PTAB maintain the level of judicial, legal, and administrative staff necessary to sustain the quality and timeliness of PTAB decisions, and close the gap between the costs and the fees associated with AIA trial proceedings. Comment 5: One commenter sought small and micro entity discounts for AIA trial proceeding fees, and requested expansion of pro bono representation to small entities in AIA trial proceedings. Response: The authority to reduce fees or to charge additional fees for small and micro entities under the USPTO’s rulemaking authority is limited by the AIA to providing discounts to the six categories under Section 10(b) of the Act. AIA trial proceeding fees are outside of the six categories; therefore, absent a change in statutory authority, those fees are not eligible for discounts. The Office further notes that, in many cases, AIA trial proceedings serve as an alternative to more expensive litigation in the district court. The patent pro bono programs are individually run as regional programs available to assist inventors and small businesses in their state or region. Each program sets the standards for participation, performs the intake function, screens potential clients, screens potential volunteer patent attorneys, and attempts to match the client with the volunteer attorney. These programs may be comprised of bar associations, non-profits, universities, or others. The USPTO, as a federal agency, does not direct the pro bono activities of these programs, but rather, provides resources and expertise to help establish and expand the reach of the programs. Comment 6: Three commenters opposed the increase to appeal fees. One commenter specifically expressed concern over passing a large portion of the appeal unit costs as increased fee rates borne by an appellant. Thus, the commenter suggested eliminating, or substantially reducing, the notice of appeal fee. Another commenter questioned whether increasing appeal fees would discourage meritorious appeals, noting that, the reversal rate by the PTAB indicates that a large number of appeals are pursued to correct invalid rejections. Response: The Office appreciates the commenters’ concerns and, based on that feedback, has eliminated the proposed increase to the notice of appeal fee and reduced the proposed increase to the appeal forwarding fee. Thus, in this final rule, the Notice of PO 00000 Frm 00018 Fmt 4701 Sfmt 4700 Appeal fees will remain at current rates (e.g., $800 for a large entity), and the Office has lowered the appeal forwarding fee from the proposed $2,500 (large entity) in the NPRM to $2,240 (large entity). The Office believes that those fees strike the appropriate balance between the expressed concerns and the Office’s need to recover the costs for conducting an appeal. The Office notes that, even with the increase to the appeals forwarding fee, the true cost of an appeal is subsidized significantly. At the current rate, fees paid for an appeal cover 58 percent of the Office’s cost for conducting the appeal. The increase to the appeal forwarding fee, which occurs after an examiner’s answer, will result in total appeal fees covering approximately 63 percent of the cost for an appeal. Given the high cost of the appeals process to the Office, the appeal forwarding fee adjustment is necessary to decrease the gap between the total fees charged and the total costs in the aggregate for the appeals process. The Office recognizes that applicants may in some cases need to appeal an examiner’s decision. The appeal process, however, results in a high cost to the Office irrespective of whether the PTAB affirms or reverses the rejected claims on appeal because the PTAB must process, review, and decide the appeal on the merits. In addition, Office data show that more than 65 percent of the appeals decided on the merits by the PTAB result in an affirmance of at least some of the rejected claims (September 2016 Appeals and Interferences Statistics). The data demonstrate that the PTAB is affirming a larger percentage of rejected claims than it reverses. The fee increase also will allow the PTAB to continue to reduce the appeals inventory and improve pendency for appeals. Additionally, the Office notes that the notice of appeal fee provides an appellant two months to file a brief, and to have that brief reviewed by two examiners and a supervisor with a subsequent conference regarding the rejection, the brief, and whether the appellant will forward the case to the PTAB for consideration of the appeal on the merits. If the examiner decides to reopen the case or allow it, the cost to an appellant for filing the notice of appeal would be less than the appellant would incur in filing an RCE, which is the other option available when facing rejection. The Office considered the relationship between the options of an appeal, on the one hand, and requesting an RCE, on the other, when determining the appropriate fee rates in this rulemaking. E:\FR\FM\14NOR2.SGM 14NOR2 ethrower on DSK3G9T082PROD with RULES2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations Comment 7: A commenter suggested that the Office consider suspending the appeal forwarding fee until an application is taken up for review by PTAB, given the appeal backlog and the current state of flux of patent subject matter eligibility. Response: In the future, the USPTO may consider changes to the timing of appeal fee payments. However, the general rule is that fees payable to the USPTO are required to be paid in advance; that is, at the time of requesting any action by the Office (37 CFR 1.22). Comment 8: One commenter proposed a refund to an applicant for reversals by the PTAB. Response: At this time, the USPTO does not have the statutory authority to issue refunds on the basis of ex parte appeal outcome. Comment 9: One commenter expressed interest in seeing the increased fee data versus decrease in response time to determine if the fee increase resulted in increased productivity of the USPTO and PTAB. Response: The Office appreciates the suggestion to compare data regarding increases in fee versus decrease in response time. The Office will continue to explore whether and how such comparative data fit within the overall fee setting strategy of allowing the Office to recover the aggregate cost of patent operations, while implementing key strategic initiatives, including decreasing pendency. The Office notes that the PTAB has made significant strides in reducing the appeals inventory and pendency of appeals over the past several years. Appeal inventory reached over 27,000 in 2012 (prior to the last fee setting rule), and the PTAB reduced that inventory to about 17,000 by the end of FY 2016. Thus, the PTAB has maintained a high level of productivity despite an increase in workload. The additional fees set forth in this rule will provide funds necessary to allow the PTAB to continue to maintain the appropriate level of judicial and administrative resources needed to provide high quality and timely decisions for ex parte appeals. Between 2012 and 2016 the PTAB also received more than 5,500 petitions for AIA trial proceedings, and met all statutory deadlines in those proceedings. Despite the high demand for these services, the PTAB has continued to meet all AIA statutory deadlines. By targeting a fee increase to the AIA trial fees, the Office is addressing the subsidization of these proceedings in order to allow the PTAB to continue to maintain the appropriate level of judicial and administrative VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 resources to provide high quality and timely decisions for AIA trial proceedings. Examination Fees Comment 10: A commenter questions the USPTO’s statement that pendency has improved, noting that in the opinion of the commenter, at least a portion of the improvement is due to reduced quality. Specifically, the commenter questions whether examiners are properly incentivized to conduct adequate examinations; the comment describes several examples of rejections that allegedly illustrate poor quality examinations. The commenter closes by proposing that if the PTAB or the Court of Appeals reverses an examiner rejection, the fees paid or a multiple thereof would be refunded to the applicant and deducted from the bonus payments of the examiners who signed off on the rejection. Response: As part of its current strategic plan, the Office has a goal to optimize patent quality and timeliness. The aim of the Office’s processes for examiner oversight, review, and rewards, including the bonus payment program, is to provide high quality and timely examination at a reasonable cost. The Office continually assesses its operational strategies with respect to these processes to take into account changing circumstances, and the Office’s efforts to reduce pendency have resulted in first action and average total pendency dropping from a high of 21.9 months and 32.4 months, respectively, in FY 2012 to 16.2 months and 25.3 months today. As pendency continues to decline, the Office’s ability to test programs that may further enhance quality grows stronger, as demonstrated by the establishment of the Enhanced Patent Quality Initiative (EPQI) (https:// www.uspto.gov/patent/initiatives/ enhanced-patent-quality-initiative-0) in FY 2015. As part of the EPQI, the USPTO solicited stakeholder feedback through various outreach efforts and used this feedback to develop and refine multiple programs to improve quality. One of these programs is the Increasing Clarity and Reasoning in Office Action program in which the Office included tips and techniques for drafting clear Office actions as part of examiner training. For example, as part of the Office’s training on 35 U.S.C. 101, the USPTO not only taught the relevant changes in the law, but also included examples on how to write clear rejections as well as tips for responding to arguments. As a result of this training, there was a statistically significant improvement in the correctness and clarity of 35 U.S.C. 101 PO 00000 Frm 00019 Fmt 4701 Sfmt 4700 52797 rejections. As part of the Quality Metrics program, the Office overhauled its quality metrics for work products and for examination processes. With respect to work products, the Office used data from the new Master Review Form to create clarity and correctness metrics on a per statute basis, which will allow the Office to better assess how to improve Office action quality. With respect to examination processes, the Office is evaluating certain types of transactions, such as rework and reopenings, to identify trends and examiner behaviors indicative of either best practices or potential quality concerns. Rather than setting targets for the particular transactions, the Office is conducting a root-cause analysis to allow for reopenings and rework where appropriate while providing training to ensure examiners have the necessary skills and resources to be as efficient as possible. These programs highlight only a couple of the programs that the Office is currently implementing to improve quality. While providing refunds or deducting base or bonus pay from examiners is beyond the scope of this rulemaking, the Office continues to review new and revised approaches to determine what approaches may better incentivize the patent workforce to achieve its strategic goals. Comment 11: One commenter expressed concerns regarding the proposed increased fee rates for excess claims in reexaminations. Response: The large entity fee for a reexamination with unlimited pages is set at $12,000. The unit cost for performing this service was $23,288 in FY 2015. When fewer claims are filed, the time required for the assigned reexamination specialist to review the request and examine the requested claims is reduced, which translates to a reduced overall cost of conducting the proceeding. The excess claims fees charges help to subsidize the overall cost for performing a reexamination. Comment 12: One commenter suggested that the Office should consider expanding the situations for which a portion of reexamination fees may be refunded. For example, a partial refund of the reexamination fees may be merited where a reexamination is ordered, but an examiner does not make any new art-based rejections. Response: The USPTO is required to go through the entire reexamination process and the costs are calculated on the time an examiner spends on the reexamination. Whether the examiner makes a new rejection or not does not factor into how the Office calculates the cost of a reexamination proceeding. The E:\FR\FM\14NOR2.SGM 14NOR2 52798 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations ethrower on DSK3G9T082PROD with RULES2 addition of claims by patent owner during an ex parte reexamination ordered pursuant to 35 U.S.C. 303 require the examiner to examine those claims during the proceeding, which includes making decisions which may be either adverse or favorable to patentability. Thus, even when the examiner does not make new art based rejections to new claims (e.g. makes a decision favorable to patentability with respect to the new claims to newly added claims), the addition of new claims by patent owner during the proceeding necessarily requires additional time by the examiner to fully search and examine those new claims. Further, even when the art cited by requester under 35 U.S.C. 301 is applicable to the newly added claims presented by the patent owner during the proceeding, the examiner will still need to search and examine the new claims to ensure the best art is presented with respect to those new claims. Thus, the time and cost of completing a reexamination proceeding is not necessarily predicated on whether or not new art based rejections are made by the examiner during the proceeding, but rather the amount of time needed to make decisions as to patentability. Accordingly, relating a fee refund to whether additional art rejections are made during the proceeding is not necessarily merited. Design Fees Comment 13: The Office received three comments concerning the increase in design patent issue fee rates. Commenters noted that design patent issue fees were being increased by a large percentage and significantly more than utility patent issue fees were being increased. Response: As discussed in Part V. B., the increase to the design patent issue fee has been lowered twice from the initial proposal made in October 2015 based on stakeholder feedback. The final design patent issue fee is $700, an increase of $140 (25 percent) for large entities. The minimum required fees to obtain a design patent (filing, search, examination and issue) are set to increase slightly beyond cost recovery for large entities ($1,660 versus $1,596 in FY 2015) to subsidize the substantial number (almost half in FY 2015) of small and micro entity applicants who pay lower fee rates despite similar costs to the Office. Further, given the lack of maintenance fees to subsidize front-end costs for design patents, the new fee rates aim to more closely align designrelated fees with their costs. Even with the increased fee rates, design VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 application processing costs will continue to be subsidized by non-design specific fee revenues. Still, the Office believes the moderate fee rate increases in filing, search, examination, and issue are more appropriately aligned to costs and support the policy factor to foster innovation. Comment 14: Two commenters suggest that the increase of design patent fee rates are comparatively greater than similar fees charged by other national/regional IP offices. Response: Substantive examination of design patent applications are conducted at the USPTO whereas most other national/regional IP offices do not conduct substantive examination of design patent applications. Substantive examination of design patent applications requires significant time from a highly trained patent examiner. Additionally, most other national/ regional IP offices require design patent holders to pay renewal fees to maintain their property rights. As previously noted, in the United States, design patents are not subject to renewal fees. Comment 15: Two commenters suggested allowing applicants to submit design patent applications with multiple designs per application instead of a single design per application, as required under current practice. Response: Changes to design application practice are beyond the scope of the Office’s fee setting authority. Currently, more than one embodiment of a design may be claimed so long as such embodiments involve a single inventive concept according to the obviousness-type double patenting practice for designs. Comment 16: Three commenters questioned the calculation of the costs of filing, search, examination, and issuance of design patents. Response: For detailed information about how the Office calculates these costs please see the appendix entitled ‘‘Activity Based Information and Patent Fee Unit Expense Methodology,’’ available at https://www.uspto.gov/sites/ default/files/documents/ ABI%20Cost%20Supplement.docx. Comment 17: Three commenters pointed out that the costs of filing and issuance are the same for design patent applications as they are for utility, plant, and reissue patent applications. Response: The pre-examination and issuance processing for all of these patent application types are similar, and vary little between types. Therefore, the costs for these services are the same among the different patent types. Comment 18: Two commenters noted that the cost of search and examination of design patent applications is PO 00000 Frm 00020 Fmt 4701 Sfmt 4700 relatively high compared to other national/regional IP offices. Response: As mentioned previously, this is because a substantive examination is required under U.S. statute, which is a costly process. Substantive examination of design patents is not common in other national/regional IP offices. Plant Fees Comment 19: The Office received ten comments from persons concerned with the increase in plant patent issue fee rates. These comments generally touched on the many years of development that go into new plant varieties, and noted that the resulting products are not sold in high volumes nor at high costs per unit, and therefore it can be difficult to recuperate costs. Response: As first discussed in Part V. B., the increase to the plant patent issue fee has been lowered from the rate proposed in the NPRM based on stakeholder feedback. The final plant patent issue fee is $800, an increase of $40 (5 percent) for large entities. In both the current and final rule fee structure, front-end fees are set below the Office’s costs to foster innovation, per the fee setting policy factor. In the case of utility patents, the Office recovers these costs at the end of the process through maintenance fees. Similar to design patents (discussed earlier), plant patent holders are not required to pay maintenance fees. Additionally, similar to design patents, a significant proportion of applicants are provided small or micro entity discounts. While the fee rates in this rule will allow plant patent fees to recover a greater share of plant patent related costs, the balance will continue to be subsidized by other types of patent fees. However, in response to stakeholder concerns, specifically those regarding the potential impacts on small entities and individual inventors, the Office determined that a smaller fee rate increase was acceptable. For more information on costs please see the Regulatory Impact Analysis, Table of Patent Fees, and Activity Based Information and Patent Fee Unit Expense Methodology, all available at https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. Request for Continued Examination (RCE) Fees Comment 20: Four commenters had concerns about the proposed increased fees for RCEs, though two of these commenters did express appreciation that the proposed rates were lower than the original October 2015 proposal. One E:\FR\FM\14NOR2.SGM 14NOR2 ethrower on DSK3G9T082PROD with RULES2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations commenter believed that an examiner should be familiar with the application, prior art, and issues when handling an RCE, and interpreted the increase of RCE fee rates as an attempt to dissuade applicants from filing RCEs, rather than a means to recoup costs. Response: The Office appreciates the comments related to RCE costs. In setting the fee rates, the Office’s goal is not to dissuade RCE filings, but to more closely align the fee rates with the cost of processing RCEs, as calculated using the most recently available cost data (FY 2015). The first RCE fee ($1,300 for large entities) has been set at a rate lower than both the cost of performing the services associated with an RCE ($2,187) and the fees for filing a continuing application ($1,720 for large entities), as well as much lower than the average historic cost of services associated with examining a new patent application ($4,255). Because the Office set the fee for the first RCE below the cost to process, the Office must recoup the costs elsewhere. Since most applicants that file one or more RCE resolve all remaining issues with a first RCE, the Office determined that applicants that file more than one RCE are using the patent system more extensively than those who file none or only one RCE. The fee set for the second and subsequent RCE ($1,900 for large entities) is above the cost of the Office processing those RCEs ($1,540). However, this does not fully recoup the costs associated with the first RCE, and the Office still must recoup the costs elsewhere for large entity applicants filing more than one RCE ($3,200 in RCE fees, $3,727 in costs). Comment 21: Another commenter believed the process used to arrive at the unit cost estimates for RCE processing is opaque and unreliable, citing inconsistencies in reported data. This commenter also questioned the use of a survey to allocate expenses. The commenter believed that a more focused look at the unit cost estimates is necessary before increasing fee rates. Response: The differences in the reported RCE costs from the initial proposal to PPAC and the NPRM are due to an improvement in the costing methodology. The approach was updated in FY 2015, and the data in more recent documents reflect the improved methodology, including updated historical data. Previously, the RCE cost was determined using the Total Activity Unit Expense Adjusted for Frequency of Occurrence approach, which based the cost of the RCE on activities performed only during the RCE process and summed the unit costs to obtain a final unit cost of an RCE. The VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 updated methodology, the Incremental Expense approach, improves upon this by also capturing the increased cost of search and exam activities that occur prior to RCE filings. For those applications that reach an RCE, the initial cost of getting to that stage is greater than for an application that does not reach an RCE. When calculating the historical cost of standard search and examination fees, the Office uses the cost of only applications that do not undergo an RCE. By using the incremental costing approach, the increased initial cost for applications that reach an RCE is captured within the RCE fee expense number. The patent examiner survey captures an average level of effort for the various examination activities. However, the survey does not isolate RCEs and therefore does not capture the level of effort specific to an RCE. Year-to-year variations in results have been small, but because survey data is applied to approximately $2 billion worth of expense, very small changes in the survey responses could result in large dollar changes to various activity costs. The survey instrument and the associated burdening and factoring of workloads is the Office’s best estimate for costs given available information. The $411 increase in the RCE expense shown from FY 2014 to FY 2015 comes from an increase in cost for RCE specific work. Total Adjusted Activity expense for the activities ‘Prepare All Subsequent Actions’ and ‘Perform Subsequent Search’ increased the most for applications with RCE activities both before and during the RCE itself. No material changes were made in overhead allocations; however, overhead costs increased, specifically related to investment in Information Technology associated with the Patent End to End System. Comment 22: A commenter expressed appreciation for the Office’s efforts to reduce the need for RCEs, but noted that many RCE filings are due to the current final rejection and after final practices, and urged the Office to eliminate these policies. The commenter argued that allowing every response to be entered will improve quality and lower pendency. The commenter believes that, before increasing RCE fee rates, the Office should determine the cost of after final responses and advisory actions. Response: The Office appreciates the comments on the various efforts to reduce the need for RCEs. These comments are outside the scope of this rulemaking, however, the Office looks forward to working with stakeholders as it continues efforts related to the Enhanced Patent Quality Initiative and PO 00000 Frm 00021 Fmt 4701 Sfmt 4700 52799 any potential revisions to final rejection and after final policies. The AFCP 2.0— extended through September 30, 2017— is part of the USPTO’s on-going efforts towards compact prosecution and increased collaboration between examiners and stakeholders. Regarding the cost of after final responses and advisory actions, the estimated the cost of these activities are calculated and included in the unit cost of other associated activities provided by the Office. For detailed information about how the Office calculates these costs please see the appendix entitled ‘‘Activity Based Information and Patent Fee Unit Expense Methodology’’ available at https://www.uspto.gov/sites/ default/files/documents/ ABI%20Cost%20Supplement.docx. Comment 23: Another commenter also interpreted the fee rate increase as a way to discourage RCEs, but stated that the applicant community views RCEs as a necessity due to inefficiencies in the examination process. This commenter cited the Alice Corp. v. CLS Bank International and the Mayo Collaborative Services v. Prometheus Laboratories, Inc. decisions, and argued that RCEs allow applicants more time to await court decisions that may assist the applicant’s case. Therefore the commenter believes RCEs should be encouraged, not discouraged. The commenter worries that small businesses and independent inventors would be unable or unwilling to pay increased RCE fees, and instead would abandon their patent applications. Response: While the Office recognizes that recent court decisions have impacted patent-eligibility requirements, it disagrees with the commenter that the Office should incentivize RCE filings through lower fee rates. This would be in direct conflict with the current compact prosecution goals and would in effect increase the RCE subsidy. The Office would almost certainly need to charge higher issue and/or maintenance fees to offset the cost of processing increased RCEs at lower fee rates. Increasing the issue and/or maintenance fees to offset decreased cost recovery of RCEs would also cause filers who do not seek RCEs to more heavily subsidize services provided to the filers who seek RCEs. The Office does not believe such subsidization would be an optimal result. The Office also notes that small and micro entity fee discounts are available for RCEs. Application Filing Fees Comment 24: A commenter suggested that the Office consider specific increases only for continuation E:\FR\FM\14NOR2.SGM 14NOR2 52800 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations applications filed late enough that third stage maintenance fees would not be applicable, due to the end of the patent term. Response: In the future, the Office will evaluate the feasibility and potential impacts of implementing a change to continuation fees based on associated patent terms. ethrower on DSK3G9T082PROD with RULES2 Information Disclosure Statement Fees Comment 25: A commenter believes the Office should not increase the Information Disclosure Statement (IDS) submission fee rate until the issues raised in 81 FR 59197 (Aug. 29, 2016) ‘‘Request for Comments and Notice of Roundtable Event on Leveraging Electronic Resources To Retrieve Information From Applicant’s Other Applications and Streamline Patent Issuance’’ have been considered and implemented. The commenter further suggested that the Office consider lengthening the time period set in 37 CFR 1.97(e)(1) for communications received from a foreign patent office in a counterpart application from three months to five months. Response: In the future, the Office will continue to pursue efforts to improve IDS practice including the leverage of electronic resources to both increase Office efficiency and to provide additional services to applicants. Changes to 37 CFR 1.97(e)(1) are outside the scope of this rulemaking. Excess Claims Fees Comment 26: A commenter expressed concern with the increases for excess claim fee rates and questioned the fee set for excess claims. Additionally, this commenter recommended a refund system in which excess claim fees are returned when claims are canceled in response to a restriction requirement or when claims are canceled by an applicant before examination. Response: There is excess burden associated with examining excess claims. The number of claims impact the complexity of the request and increases the demands placed on the examiner. The excess claims fee rates are aimed to permit applicants to include excess claims when necessary to obtain an appropriate scope of coverage for an invention, while deterring applicants from routinely presenting a copious number of claims for merely tactical reasons. Filing applications with the most prudent number of unambiguous claims will enable prompt conclusion of application processing, because more succinct applications facilitate faster examination with an expectation of fewer errors. Therefore, the Office is VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 increasing excess claim fee rates to facilitate an efficient and compact application examination process, which benefits the applicant and the USPTO through more effective administration of patent prosecution. In addition to helping the Office meet its policy goals of reducing application processing time, application pendency, and examination burden, the increase in excess claims fee rates is also justified because fees paid by applicants filing a large number of claims will help establish the EPQI based on stakeholder feedback to provide better services and products as well as enhance customer service, and continue to provide patent examiners detailed training in efficient interview techniques and in compact prosecution. The revenue from excess claim fees also supports the front-end subsidies built into the fee rates for filing, search, and examination. The Office already has a practice to refund excess claim fees when the application is abandoned prior to examination. See 37 CFR 1.138(d) and MPEP 607.02, Subsection V & 711.01, Subsection III. However, as noted in the NPRM, the Office is committed to undertaking a study to determine the feasibility of a refund program in which excess claim fees are returned when claims are cancelled in response to a restriction requirement. However, cancelling claims on restriction impacts applicants rights to rejoinder. In addition, letting applicants obtain a refund if they cancel claims after rejoinder is considered requires the Office to consider rejoinder as to the withdrawn claims which can be costly. Mega-Sequence Listings Fees Comment 27: One commenter expressed concern with the proposed mega-sequence fees without historical cost information and suggests non-fee alternatives. Response: The proposed fee for megasequence listings is based on data available at this time. The Office will collect activity based cost information if needed and will share this information with the public when available. The final rule fee is structured to fulfill the AIA authority to set fees so that aggregate revenue from patent fees recovers the aggregate estimated cost of patent operations. Streamlined ex parte Reexamination Fees Comment 28: One commenter favors the reduced fee for streamlined reexamination proceedings but questions the forty page limit. Response: The streamlined ex parte reexamination option has been created to promote efficiency and cost PO 00000 Frm 00022 Fmt 4701 Sfmt 4700 reduction, while making it financially less burdensome for requesters with limited resources and encouraging focused submissions from all petitioners. As part of the Office’s FY 2015 fee review process, the length of ex parte reexamination requests were studied. It was determined that, in many cases, clear, concise and focused requests can be written in fewer than forty pages (including claim charts). Further, the study demonstrated that when requests were less than forty pages, on average, the time required for the assigned Reexamination Specialist to review the request and examine the requested claims was reduced, which translates to a reduced overall cost of conducting the proceeding. Disciplinary Proceeding Fees Comment 29: One commenter applauds the USPTO for dropping the previously proposed new fee code for imposing costs of disciplinary proceedings on practitioners. Additionally this commenter states that disciplinary fees should not be imposed on practitioners when OED determines that no disciplinary action is warranted. If the USPTO were to attempt to assess a disciplinary fee again in the future, the commenter suggests that that fee should be outcome-dependent. Response: 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 § 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. Broader Comments Comment 30: One commenter notes that the FederalRegister.gov search query did not categorize the rule as significant, and therefore it may have been overlooked. Response: OMB is responsible for making significance determinations for rulemakings pursuant to Executive Order 12866. OMB determined this rule to be ‘‘Economically Significant,’’ a subset of ‘‘Significant,’’ pursuant to the EO, and this designation was reflected in the preamble to the proposed rule. While the Office of the Federal Register provides a convenient source for the E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations public to search and identify pending rules that have been deemed Significant under EO 12866, the primary Web site designated by OMB for identifying such rulemakings is at Reginfo.gov, which is jointly maintained by OMB/U.S. General Services Administration (GSA). An entry for the proposed rule was posted on that Web site (https:// www.reginfo.gov/public/do/eo Details?rrid=126564), as well as published in the United Agenda of Regulatory and Deregulatory Actions properly designated as an ‘‘Economically Significant’’ rule (https://www.reginfo.gov/public/do/ eAgenda ViewRule?pubId=201610&RIN=0651AD02). Comment 31: Two commenters sought more elasticity information. One commenter suggested that the assumption that demand for patent services is inelastic may be less true for design patents and another commenter noted that the elasticity supplement does not address elasticity separately for large, small, and micro entities. Response: In this rule, the Office assumes that the fee rate adjustments are not substantial enough to create a significant and measurable change in demand for existing products and services regardless of entity size. For more information please refer to the Elasticity Supplement, available at https://www.uspto.gov/sites/default/ files/documents/ Elasticity%20Supplement.pdf. Comment 32: One commenter notes that the Regulatory Impact Analysis (RIA) should have included more costs to the American economy. Specifically, the commenter suggested that patent applications, patent issues, and maintenance fees would decrease, all of which would lead to lost jobs, lost wages, and an increased trade deficit. Response: The Office appreciates the attention paid to the costs and benefits detailed in the RIA. The OMB Office of Information and Regulatory Affairs has indicated that it considers the final rule to be a transfer rule, concerning payments from one group to another that does not affect the total resources available to society. The Office recognizes that innovation has become a principal driver of the modern economy by stimulating economic growth and creating high-paying jobs. However, monetizing and quantifying certain impacts of patent fees on the economy and the rate of innovation are inherently difficult due to the number of variables involved, the difficulty in predicting economic activity, and the availability of data, especially data on private sector behavior. The Office does provide some quantitative and qualitative data in the RIA to assist the reader in measuring the cost and benefits of the rulemaking. The Office follows the guidance set forth in Circular A–4 in determining which data to provide in this final rule. Comment 33: One commenter suggested that the rule should be resubmitted under the current presidential administration. Response: The USPTO recognizes the timing of the rule and confirms that the final rule has undergone review, discussion, and feedback from the current presidential administration via the Office of Management and Budget. This final rule has the approval of the current administration. Comment 34: One commenter recommended that the USPTO increase fees from foreign firms that file in the United States. Response: Charging higher fees to foreign applicants would likely be contrary to the USPTO’s treaty obligations including those under Article 3 of the Agreement on TradeRelated Aspects of Intellectual Property Rights (TRIPS) and Article 2 of the Paris Convention. The USPTO has a strong commitment to the global IP community. The USPTO engages in international patent cooperation through various treaties, agreements, and programs to increase the certainty 52801 of IP rights while reducing stakeholder costs and moving towards a harmonized global patent system. By providing discounted fees for small businesses and independent inventors regardless of national origin, the USPTO takes an impartial fee setting approach that supports innovation by even the smallest economic interests. This promotes strong global IP rights which, in turn, helps American businesses. Comment 35: One commenter sought more information about support for independent inventors. Response: To support small and medium sized enterprises (SMEs), the USPTO has offered discounts for many patent fees since 1982. Initially, the discount was fifty percent of eligible patent fees. The AIA expanded the number of fees eligible for small entity discounts and created a sub-class of small entities, ‘‘micro entities’’, that are eligible for even greater discounts— seventy five percent. Fees set or adjusted for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents are subject to this discounting. The fee adjustments in this final rule include the expansion of the micro entity discount to greater numbers of fees. Additionally, the USPTO offers other assistance to SMEs, such as: The patent Pro Bono program, the patent Pro Se Assistance program, various outreach programs, the Inventors Assistance Center, the Patent and Trademark Resource Centers, and partnerships with law firms. More information about these programs are available at https:// www.uspto.gov/learning-and-resources/ inventors-entrepreneurs-resources. VII. Discussion of Specific Rule In this section the Office provides tables of all fees set or adjusted in the final rule. Section 1.16: The changes to the fee amounts indicated in § 1.16 are shown in Table 17. TABLE 17—CFR SECTION 1.16 FEE CHANGES CFR section Fee code Current fees (dollars) Description Large ethrower on DSK3G9T082PROD with RULES2 1.16(a) ............ 1011/2011/ 3011. 1.16(a) ............ 4011 ............... 1.16(b) ............ 1012/2012/ 3012. 1017/2017/ 3017. 1013/2013/ 3013. 1.16(b) ............ 1.16(c) ............ VerDate Sep<11>2014 18:04 Nov 13, 2017 Basic Filing Fee—Utility (paper filing also requires non-electronic filing fee under 1.16(t)). Basic Filing Fee—Utility (electronic filing for small entities). Basic Filing Fee—Design ................ Small Final rule fees (dollars) Micro Large Small Micro 280 140 70 300 150 75 n/a 70 n/a n/a 75 n/a 180 90 45 200 100 50 Basic Filing Fee—Design (CPA) ..... 180 90 45 200 100 50 Basic Filing Fee—Plant ................... 180 90 45 200 100 50 Jkt 244001 PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 52802 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations TABLE 17—CFR SECTION 1.16 FEE CHANGES—Continued CFR section Fee code Current fees (dollars) Description Large 1.16(d) ............ 1.16(e) ............ 1.16(e) ............ 1.16(f) ............. 1.16(h) ............ 1.16(h) ............ 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) ............ 1005/2005/ 3005. 1014/2014/ 3014. 1019/2019/ 3019. 1051/2051/ 3051. 1201/2201/ 3201. 1204/2204/ 3204. 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. Small Final rule fees (dollars) Micro Large Small Micro Provisional Application Filing Fee ... 260 130 65 280 140 70 Basic Filing Fee—Reissue .............. 280 140 70 300 150 75 Basic Filing Fee—Reissue (CPA) ... 280 140 70 300 150 75 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 ................... 140 70 35 160 80 40 420 210 105 460 230 115 420 210 105 460 230 115 80 40 20 100 50 25 Reissue Claims in Excess of 20 ..... 80 40 20 100 50 25 Multiple Dependent Claim ............... 780 390 195 820 410 205 Utility Search Fee ............................ 600 300 150 660 330 165 Design Search Fee ......................... 120 60 30 160 80 40 Plant Search Fee ............................ 380 190 95 420 210 105 Reissue Search Fee ........................ 600 300 150 660 330 165 Utility Examination Fee ................... 720 360 180 760 380 190 Design Examination Fee ................. 460 230 115 600 300 150 Plant Examination Fee .................... 580 290 145 620 310 155 Reissue Examination Fee ............... 2,160 1,080 540 2,200 1,100 550 Section 1.17: 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) ........... ethrower on DSK3G9T082PROD with RULES2 1.17(e) ............ 1453/2453/ 3453. 1.17(m) ........... 1454/2454/ 3454. 1784/2784/ 3784. 1.17(m) ........... VerDate Sep<11>2014 18:04 Nov 13, 2017 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. Jkt 244001 PO 00000 Frm 00024 Fmt 4701 Small Final rule fees (dollars) Micro 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 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 52803 TABLE 18—CFR SECTION 1.17 FEE CHANGES—Continued CFR section Fee code Current fees (dollars) Description Large 1.17(m) ........... 1558/2558/ 3558. 1.17(p) ............ 1806/2806/ 3806. 1783/2783/ 3783. 1.17(t) ............. 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: The changes to the fee amounts indicated in § 1.18 are shown in Table 19. Section 1.18(b)(3) is being amended to provide that the issue fee for issuing an international design application designating the United States, where the Final rule fees (dollars) Small Micro Large Small Micro 1,700 850 850 2,000 1,000 500 180 90 45 240 120 60 180 180 180 180 90 45 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 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. Small Final rule fees (dollars) Micro Large Small Micro Utility Issue Fee ............................... 960 480 240 1,000 500 250 Reissue Issue Fee .......................... 960 480 240 1,000 500 250 Design Issue Fee ............................ 560 280 140 700 350 175 Plant Issue Fee ............................... 760 380 190 800 400 200 Section 1.19: 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 Final rule fees (dollars) Micro Large Small Micro 8007 ............... Copy of Patent Application as Filed 20 20 20 35 35 35 ........................ n/a n/a 280 280 280 n/a n/a n/a 55 55 55 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) ............. ........................ 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). n/a 1.19(b)(4) ....... ethrower on DSK3G9T082PROD with RULES2 1.19(b)(1) (i)(A) and (ii)(A). 1.19(b)(1) (i)(B). 1.19(b)(1) (ii)(B). n/a n/a n/a 5,200 5,200 5,200 VerDate Sep<11>2014 ........................ 18:04 Nov 13, 2017 Jkt 244001 PO 00000 Frm 00025 Fmt 4701 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 52804 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations TABLE 20—CFR SECTION 1.19 FEE CHANGES—Continued CFR section Fee code Current fees (dollars) Description Large 1.19(k) ............ ........................ 1.19(l) ............. ........................ 1.19(m) ........... ........................ 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. Small Final rule fees (dollars) Micro Large Small Micro n/a n/a n/a 50 50 50 n/a n/a n/a 100 100 100 n/a n/a n/a 30 30 30 Section 1.20: The changes to the fee amounts indicated in § 1.20 are shown in Table 21. 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) ....... ........................ 1.20(c)(2) ....... 1812/2812/ 3812. 1821/2821/ 3821. 1.20(c)(3) ....... 1.20(c)(4) ....... 1822/2822/ 3822. Certificate of Correction .................. Processing Fee for Correcting Inventorship in a Patent. Ex Parte Reexamination (§ 1.510(a)) Streamlined. 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. Small Final rule 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 12,000 6,000 3,000 12,000 6,000 3,000 420 210 105 460 230 115 80 40 20 100 50 25 Section 1.21: 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) ... ethrower on DSK3G9T082PROD with RULES2 1.21(a)(1)(i) .... 1.21(a)(1)(ii)(A) ........................ 1.21(a)(2)(iii) .. 9025 ............... 1.21(a)(4)(i) .... 9005 ............... 1.21(a)(4)(ii) ... 9006 ............... VerDate Sep<11>2014 18:04 Nov 13, 2017 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. Jkt 244001 PO 00000 Frm 00026 Fmt 4701 Small Final rule 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 450 450 450 100 100 100 200 200 200 100 100 100 200 200 200 100 100 100 100 100 100 10 10 10 40 40 40 20 20 20 50 50 50 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 52805 TABLE 22—CFR SECTION 1.21 FEE CHANGES—Continued CFR section Fee code Current fees (dollars) Description Large 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) ....... 8021 ............... 1.21(o)(1) ....... ........................ 1.21(o)(2) ....... ........................ 1.21(p) ............ ........................ 1.21(q) ............ ........................ 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 300 MB to 800 MB. Submission of sequence listings exceeding 800 MB. Additional Fee for Overnight Delivery. Additional Fee for Expedited Service. Small Final rule fees (dollars) Micro Large Small Micro 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 Section 1.445: 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. n/a Small Final rule fees (dollars) Micro n/a Large n/a 300 Small Micro 150 75 Section 1.482: The changes to the fee amounts indicated in § 1.482 are shown in Table 24. TABLE 24—CFR SECTION 1.482(C) FEE CHANGES ethrower on DSK3G9T082PROD with RULES2 CFR section Fee code Current fees (dollars) Description Large 1.482(c) .......... VerDate Sep<11>2014 ........................ 18:04 Nov 13, 2017 Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter. Jkt 244001 PO 00000 Frm 00027 Fmt 4701 n/a Sfmt 4700 Small Final rule fees (dollars) Micro n/a E:\FR\FM\14NOR2.SGM Large n/a 14NOR2 300 Small 150 Micro 75 52806 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations Section 1.492: 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 1.492(a) .......... 1.492(b)(2) ..... 1.492(b)(3) ..... 1.492(b)(4) ..... 1.492(c)(2) ..... 1.492(d) .......... 1.492(e) .......... 1.492(f) ........... 1631/2631/ 3631. 1641/2641/ 3641. 1642/2642/ 3642. 1632/2632/ 3632. 1633/2633/ 3633. 1614/2614/ 3614. 1615/2615/ 3615. 1616/2616/ 3616. Small Final rule fees (dollars) Micro Large Small Micro Basic PCT National Stage Fee ....... 280 140 70 300 150 75 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. 120 60 30 140 70 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: The changes to the fee amounts indicated in § 1.031 are shown in Table 26. Section 1.1031 is being 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 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). 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. Application 120 Small Final rule fees (dollars) Micro 120 Large 120 Small 120 Micro 60 30 Section 41.20: The changes to the fee amounts 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)(4) ..... 1413/2413/ 3413. Forwarding an Appeal in an Application or Ex Parte Reexamination Proceeding to the Board. 2,000 Small Final rule fees (dollars) Micro 1,000 Large 500 ethrower on DSK3G9T082PROD with RULES2 Section 42.15: The changes to the fee amounts indicated in § 42.15 are shown in Table 28. VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 PO 00000 Frm 00028 Fmt 4701 Sfmt 4700 E:\FR\FM\14NOR2.SGM 14NOR2 2,240 Small 1,120 Micro 560 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 52807 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. VIII. Rulemaking Considerations ethrower on DSK3G9T082PROD with RULES2 A. America Invents Act This final rule sets and adjusts 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 cost to the Office for processing, activities, services, and materials relating to patents, including administrative costs of the Office with respect to such patent fees. Section 10 authority includes flexibility to set individual fees in a way that furthers key policy factors, while taking into account the cost of the respective services. Section 10(e) of the AIA sets forth the general requirements for rulemakings that set or adjust fees under this authority. In particular, Section 10(e)(1) requires the Director to publish in the Federal Register any proposed fee change under Section 10, and include in such publication the specific rationale and purpose for the proposal, including the possible expectations or benefits resulting from the proposed change. For such rulemakings, the AIA requires that the VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 Small Frm 00029 Fmt 4701 Micro Large Small Micro 9,000 14,000 9,000 14,000 9,000 14,000 15,500 15,000 15,500 15,000 15,500 15,000 200 200 200 300 300 300 400 400 400 600 600 600 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 Office provide a public comment period of not less than 45 days. The PPAC advises the Under Secretary of Commerce for Intellectual Property and Director of the USPTO on the management, policies, goals, performance, budget, and user fees of patent operations. When proposing fees under Section 10 of the Act, the Director must provide the PPAC with the proposed fees at least 45 days prior to publishing the proposed fees in the Federal Register. The PPAC then has at least 30 days within which to deliberate, consider, and comment on the proposal, as well as hold public hearing(s) on the proposed fees. The PPAC must make a written report available to the public of the comments, advice, and recommendations of the committee regarding the proposed fees before the Office issues any final fees. The Office considers and analyzes any comments, advice, or recommendations received from the PPAC before finally setting or adjusting fees. Consistent with this framework, on 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. PO 00000 Final rule fees (dollars) Sfmt 4700 The PPAC held a public hearing in Alexandria, Virginia, on November 19, 2015. Transcripts of the hearing are available 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, available at http:// www.uspto.gov/about-us/performanceand-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 is available 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 the NPRM on October 3, 2016 (81 FR 68150). The public was then provided a 60-day period during which to provide comments to be considered by the USPTO. The NPRM comment period E:\FR\FM\14NOR2.SGM 14NOR2 52808 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations closed on December 2, 2016. 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. Pursuant to this requirement, this rule is effective on January 16, 2018. B. Regulatory Flexibility Act The USPTO publishes this Final Regulatory Flexibility Analysis (FRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601, et seq.) to examine the impact of the Office’s rule to implement the fee setting provisions of the Leahy-Smith America Invents Act (Pub. L. 112–29, 125 Stat. 284) (the Act) on small entities. 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 Initial Regulatory Flexibility Analysis (IRFA), unless the agency certifies under 5 U.S.C. 605(b) that the rule, if implemented, will not have a significant impact on a substantial number of small entities. 5 U.S.C. 603, 605. The Office published an IRFA, along with the NPRM, on October 3, 2016 (81 FR 68150). The Office received no comments from the public directly applicable to the IRFA. ethrower on DSK3G9T082PROD with RULES2 1. A Statement of the Need for, and Objectives of, the Rule The objective of the 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 effective administration of the U.S. patent system. In setting fees under the Act, the Office seeks to secure a sufficient amount of aggregate revenue to recover the aggregate cost of patent operations, including for achieving strategic and operational goals, such as enhancing patent quality, optimizing the timeliness of patent processing (through reducing patent backlog and pendency), delivering high quality and timely PTAB decisions, invest in modernizing the Patent business IT systems and infrastructure, and implementing a sustainable funding model. Additional information on the Office’s strategic goals may be found in the Strategic Plan, available at https:// www.uspto.gov/about-us/performanceand-planning/strategy-and-reporting. Additional information on the Office’s goals and operating requirements may be found in the annual budgets, available at https://www.uspto.gov/ VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 about-us/performance-and-planning/ budget-and-financial-information. 2. A Statement of the Significant Issues Raised by the Public Comments in Response to the Initial Regulatory Flexibility Analysis, a Statement of the Assessment of the Agency of Such Issues, and a Statement of Any Changes Made in the Final Rule as a Result of Such Comments The Office did not receive any public comments in response to the IRFA. The Office received comments about fees in general as well as particular fees. Details of those comments are discussed and analyzed above in Part VI. Discussion of Comments. 3. The Response of the Agency to Any Comments Filed by the Chief Counsel for Advocacy of the Small Business Administration in Response to the Proposed Rule, and a Detailed Statement of Any Change Made to the Proposed Rule in the Final Rule as a Result of the Comments The Office did not receive any comments filed by the Chief Counsel for Advocacy of the Small Business Administration in response to the proposed rule. 4. A Description of and an Estimate of the Number of Small Entities To Which the Rule Will Apply or an Explanation of Why No Such Estimate Is Available 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 SBA, 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 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). The Office’s alternate small business size standard consists of the SBA’s previously established size standard for entities entitled to pay reduced patent fees. See 13 CFR 121.802. Unlike the SBA’s generally applicable small business size standards, the size standard for the USPTO is not industry PO 00000 Frm 00030 Fmt 4701 Sfmt 4700 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 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office at 63 (Dec. 12, 2006). If a patent applicant self-identifies on a patent application as qualifying as a small entity for reduced patent fees under the Office’s alternative size standard, the Office captures this data in the Patent Application Location and Monitoring (PALM) database system, which tracks information on each patent application submitted to the Office. Small Entities Affected by This Rule Small Entity Defined The Act provides that fees set or adjusted under Section 10(a) ‘‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 50 percent’’ with respect to the application of such fees to any ‘‘small entity’’ (as defined in 37 CFR 1.27) that qualifies for reduced fees under 35 U.S.C. 41(h)(1). 125 Stat. at 316–17. 35 U.S.C. 41(h)(1), in turn, provides that certain patent fees ‘‘shall be reduced by 50 percent’’ for a small business concern as defined by Section 3 of the SBA, and to any independent inventor or nonprofit organization as defined in regulations described by the Director. Micro Entity Defined Section 10(g) of the Act creates a new category of entity called a ‘‘micro entity.’’ 35 U.S.C. 123; see also 125 Stat. at 318–19. Section 10(b) of the Act provides that the fees set or adjusted under Section 10(a) ‘‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 75 percent with respect to E:\FR\FM\14NOR2.SGM 14NOR2 52809 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations the application of such fees to any micro entity as defined by 35 U.S. Code § 123.’’ 125 Stat. at 315–17. 35 U.S.C. 123(a) defines a ‘‘micro entity’’ as an applicant who certifies that the applicant: (1) Qualifies as a small entity as defined in 37 CFR 1.27; (2) has not been named as an inventor on more than four previously filed patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111(b), or Patent Cooperation Treaty (PCT) applications for which the basic national fee under 35 U.S.C. 41(a) was not paid; (3) did not, in the calendar year preceding the calendar year in which the applicable fee is being paid, have a gross income, as defined in Section 61(a) of the Internal Revenue Code of 1986 (26 U.S.C. 61(a)), exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; and (4) has not assigned, granted, conveyed, and is not under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity exceeding the income limit set forth in (3) above. See 125 Stat. at 318. 35 U.S.C. 123(d) also defines a ‘‘micro entity’’ as an applicant who certifies that: (1) The applicant’s employer, from which the applicant obtains the majority of the applicant’s income, is an institution of higher education as defined in Section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); or (2) the applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular applications to such an institution of higher education. Estimate of Number of Small Entities Affected The changes in the rule apply to any entity, including a small or micro entity that pays any patent fee set forth in the final rule. The reduced fee rates (50 percent for small entities and 75 percent for micro entities) 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 and micro 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 2016 ** Utility ................................. Reissue ............................. Plant .................................. Design ............................... All ...................................... Small ................................. % Small ............................ Micro ................................. % Micro ............................ All ...................................... Small ................................. % Small ............................ Micro ................................. % Micro ............................ All ...................................... Small ................................. % Small ............................ Micro ................................. % Micro ............................ All ...................................... Small ................................. % Small ............................ Micro ................................. % Micro ............................ 607,753 147,076 24.2 30,995 5.1 1,072 258 24.1 19 1.8 1,180 589 49.9 9 0.8 40,406 16,890 41.8 4,364 10.8 FY 2015 FY 2014 578,121 142,796 24.7 28,906 5.0 1,087 246 22.6 12 1.1 1,119 673 60.1 4 0.4 37,735 14,981 39.7 4,000 10.6 579,873 133,930 23.1 18,553 3.2 1,207 280 23.2 24 2.0 1,123 581 51.7 22 2.0 36,254 14,740 40.7 3,622 10.0 FY 2013 564,007 136,490 24.2 7,896 1.4 1,074 229 21.3 9 0.8 1,318 655 49.7 3 0.2 35,065 15,814 45.1 1,683 4.8 FY 2012 Average *** 530,915 132,198 24.9 N/A N/A 1,212 278 22.9 N/A N/A 1,181 576 48.8 N/A N/A 32,258 15,806 49.0 N/A N/A 572,134 138,498 24.2 21,588 3.7 1,130 258 22.8 16 1.4 1,184 615 52.0 10 0.9 36,344 15,646 43.3 3,417 9.1 ethrower on DSK3G9T082PROD with RULES2 * The patent application filing data in this table includes RCEs. ** FY 2016 application filing data are preliminary and will be finalized in the FY 2017 Performance and Accountability Report (PAR). *** The micro entity average is from FY 2013 to FY 2016. 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 a combination of historical data, economic analysis, and subject matter expertise. The Office estimates that VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 utility, plant, and reissue (UPR) patent application filings will grow by 0.7 percent in FY 2017, 2.1 percent in FY 2018, 1.2 percent in FY 2019, 0.8 percent in FY 2020, and decline by 0.5 percent in 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. PO 00000 Frm 00031 Fmt 4701 Sfmt 4700 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 E:\FR\FM\14NOR2.SGM 14NOR2 52810 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations regardless of entity size and determined that, as none of the 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) Utility ............................................. Reissue ......................................... Plant .............................................. Design ........................................... Total ....................................... All All All All FY 2018 625,296 823 1,155 43,548 632,975 829 1,130 46,013 637,937 834 1,107 48,620 634,657 840 1,083 51,379 All .................................................. 655,471 670,822 680,947 688,498 687,959 5. A Description of the Projected Reporting, Recordkeeping and Other Compliance Requirements of the 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 ethrower on DSK3G9T082PROD with RULES2 FY 2021 612,255 818 1,180 41,218 6. A Description of the Steps the Agency Has Taken To Minimize the Significant Economic Impact on Small Entities Consistent With the Stated Objectives of Applicable Statutes, Including a Statement of the Factual, Policy, and Legal Reasons for Selecting the Alternative Adopted in the Final Rule and why Each one of the Other Significant Alternatives to the Rule Considered by the Agency Which Affect the Impact on Small Entities Was Rejected The USPTO considered several alternative approaches to this rule, discussed below, including full cost recovery for individual services, an across the board adjustment to fees, and a baseline (current fee rates). The discussion here begins with a description of the fee schedule adopted for this final rule. When 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. This action is 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 fee schedule (see Part VII. Discussion of Specific Rule) is set forth in the final rule. The fee schedule sets or adjusts 202 patent fees in total. This includes 14 fees that are discontinued and 42 new fees, including small entity discounts to two additional fees and micro entity discounts to six additional fees. i. Alternative 1: Final Rule Fee Schedule—Setting and Adjusting Patent Fees During Fiscal Year 2017 18:04 Nov 13, 2017 FY 2020 .................................................. .................................................. .................................................. .................................................. The USPTO continuously updates both patent fee collections projections and workload projections based on the latest data. The estimated number of patent applications have been updated since the NPRM was published in October 2016. UPR filings growth projections were revised downward during the FY 2018 budget formulation process due to revised RGDP estimates and more conservative estimates of out year growth. The most recent projections are shown in Table 30. VerDate Sep<11>2014 FY 2019 Jkt 244001 The USPTO chose the patent fee schedule in this final rule because it will enable the Office to achieve its goals effectively and efficiently without unduly burdening small entities, erecting barriers to entry, or stifling incentives to innovate. The alternative selected here achieves the aggregate revenue needed for the Office to offset aggregate cost, and is therefore beneficial to all entities that seek patent protection. Also, the alternative selected here benefits from improvements in the design of the fee schedule. This alternative offers small entities a 50 percent fee reduction and micro entities a 75 percent fee reduction. Under this selected alternative, small and micro entities will pay some higher fees than under some of the other alternatives considered. However, the fees are not as high as those initially proposed to PPAC or in the NPRM. PO 00000 Frm 00032 Fmt 4701 Sfmt 4700 In summary, the fees to obtain a patent will increase slightly. For example, fees for both tiers of RCEs will increase slightly. Maintenance fee rates remain unchanged at all three stages; however, all reissue patents are now 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 forwarding an appeal, but not as high as proposed in the NPRM. The fee increase proposed in the NPRM for notice of appeal has been removed. Two of the fees for inter partes reviews have changed from the NPRM. The Inter Partes Review Request Fee—Up to 20 Claims Final Rule rate is $15,500; the NRPM rate was $14,000. The Inter Partes Review Post-Institution Fee—Up to 15 Claims Final Rule rate is $15,000; the NPRM rate was $16,500. These adjustments are made to better align AIA trial fee rates and costs. ABI costing data since the inception of AIA trial fees shows that the unit costs to the Office for Inter Partes Review requests have consistently outpaced unit costs for Inter Partes Review post-institutions. Fee increases for both post-grant reviews and covered-business-method reviews are based on FY 2015 cost data and resources needed to sustain compliance with AIA deadlines. Finally, in response to feedback from members of the public, the design and plant issue fees are increasing by less than proposed in the NPRM. Design issues will increase to $700 instead of $800 and plant issues will increase to $800 instead of $1,000. The final fee schedule for this rule, as compared to existing fees (labeled Alternative 1—Final Rule Fee Schedule—Setting and Adjusting Patent Fees during Fiscal Year 2017) is available at http://www.uspto.gov/ about-us/performance-and-planning/ E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations fee-setting-and-adjusting, in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2017—FRFA Tables.’’ Fee changes for small and micro entities are included in the tables. For the comparison between final fees and current fees, as noted above, the ‘‘current fees’’ column displays the fees that were in effect as of January 14, 2017. ethrower on DSK3G9T082PROD with RULES2 ii. Other Alternatives Considered In addition to the fee schedule set forth in Alternative 1, above, the Office considered several other alternative approaches. 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. This alternative sets maintenance fees at approximately half of the amount of current maintenance fee rates. 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. Alternative 2 would not generate enough aggregate revenue to sufficiently cover the aggregate cost of patent operations and support the Office’s VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 strategic priorities to optimize the quality and timeliness of patent processing, deliver high quality and timely PTAB decisions, continue investing in modernizing the USPTO IT systems and infrastructure, or implement a sustainable funding model for operations (this alternative produces enough revenue to meet the minimum patent operating reserve level by the end of FY 2019, but does not keep building towards the optimal patent operating reserve level). It is important for the Office to balance accomplishing the priorities together so that it has sufficient resources to maintain them. Both the current and final 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 frontend (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 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. PO 00000 Frm 00033 Fmt 4701 Sfmt 4700 52811 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 current fee schedule). 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—FRFA Tables.’’ For the comparison between unit cost recovery fees and current fees, the ‘‘current fees’’ column displays the fees that are in effect as of January 14, 2017. 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 (current fees) beginning in FY 2017. Five percent represents the change in 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, E:\FR\FM\14NOR2.SGM 14NOR2 52812 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 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—FRFA Tables.’’ For the comparison between across the board fees and current fees, the ‘‘current fees’’ column displays the fees that are in effect as of January 14, 2017. ethrower on DSK3G9T082PROD with RULES2 c. Alternative 4: Baseline (Current Fee Schedule) The Office considered a no-action alternative. This alternative would retain the current fee schedule, 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 January 14, 2017. This approach would not provide sufficient aggregate revenue to accomplish the Office’s rulemaking goals, as set forth in the FY 2018 President’s Budget or the Strategic Plan. Optimizing patent quality and timeliness, delivering high quality and timely PTAB decisions and investing in modernizing the USPTO IT systems and infrastructure would continue, but at a slower rate due to funding limitations. Sustainable funding would not be achieved. Without a fee increase, the USPTO would draw the operating reserve down to nothing by FY 2020, and have to cut expenditures. 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 rule is adopting these approaches. Differing Requirements As discussed above, the changes in this rule would continue existing fee discounts for small and micro entities that take into account the reduced resources available to them as well as VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 offer new discounts when applicable under AIA authority. Specifically, micro entities would continue to pay a 75 percent reduction in patent fees and non-micro, small entities would continue to pay 50 percent of the fee. This rule sets fee levels but does not set or alter procedural requirements for asserting small or micro entity status. To pay reduced patent fees, small entities must merely assert small entity status to pay reduced patent fees. The small entity may make this assertion by either checking a box on the transmittal form, ‘‘Applicant claims small entity status,’’ or by paying the 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 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 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 rule 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 rule. Exemption for Small and Micro Entities This rule maintains 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 PO 00000 Frm 00034 Fmt 4701 Sfmt 4700 class of applicants, from paying patent fees. 7. Identification, to the Extent Practicable, of All Relevant Federal Rules Which May Duplicate, Overlap, or Conflict With the Rule 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. C. Executive Order 12866 (Regulatory Planning and Review) This rule 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. D. Executive Order 13563 (Improving Regulation and Regulatory Review) The Office has complied with Executive Order 13563 (Jan. 18, 2011). Specifically, the Office has, to the extent feasible and applicable: (1) Made a reasoned determination that the benefits justify the costs of the 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 online access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across government agencies and E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes. E. Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs) This final rule is not subject to the requirements of Executive Order 13771 (82 FR 9339, February 3, 2017) because this rule involves a transfer payment. F. Executive Order 13132 (Federalism) This rule does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999). 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 final 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 final rule is expected to result in a ‘‘major rule’’ as defined in 5 U.S.C. 804(2). ethrower on DSK3G9T082PROD with RULES2 H. Unfunded Mandates Reform Act of 1995 The changes in this rule 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. 18:04 Nov 13, 2017 This 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. 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 G. Congressional Review Act VerDate Sep<11>2014 I. Paperwork Reduction Act Jkt 244001 37 CFR Part 1 Administrative practice and procedure, Courts, Freedom of information, Inventions and patents, Reporting and record keeping requirements, Small businesses. 37 CFR Parts 41 and 42 Administrative practice and procedure, Inventions and patents, Lawyers. For the reasons set forth in the preamble, 37 CFR parts 1, 41, and 42 are to be amended as follows: PART 1—RULES OF PRACTICE IN PATENT CASES 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: $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: By a micro entity (§ 1.29) .................. PO 00000 Frm 00035 Fmt 4701 Sfmt 4700 $50.00 100.00 200.00 (c) Basic fee for filing each application for an original plant patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $50.00 100.00 200.00 (d) Basic fee for filing each provisional application: By a micro entity (§ 1.29) .................. 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) .................. 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: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $40.00 80.00 160.00 * * * * * (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 (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity 1. The authority citation for part 1 continues to read as follows: ■ By a micro entity (§ 1.29) .................. 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 By a small entity (§ 1.27(a)) ............... By other than a small or micro entity 52813 $115.00 230.00 460.00 (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) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $25.00 50.00 100.00 (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 (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $205.00 410.00 820.00 (k) Search fee for each application filed under 35 U.S.C. 111 for an original E:\FR\FM\14NOR2.SGM 14NOR2 52814 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations patent, except design, plant, or provisional applications: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $165.00 330.00 660.00 (l) Search fee for each application under 35 U.S.C. 111 for an original design patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $40.00 80.00 160.00 (m) Search fee for each application for an original plant patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $105.00 210.00 420.00 (n) Search fee for each application for the reissue of a patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $165.00 330.00 660.00 (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 (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $190.00 380.00 760.00 (p) Examination fee for each application under 35 U.S.C. 111 for an original design patent: By a micro entity (§ 1.29) .................. 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) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $155.00 310.00 620.00 (r) Examination fee for each application for the reissue of a patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $475.00 950.00 1,900.00 * * * * * (h) For filing a petition under one of the following sections which refers to this paragraph (h): By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $35.00 70.00 140.00 § 1.84—for accepting color drawings or photographs. § 1.91—for entry of a model or exhibit. § 1.102(d)—to make an application special. § 1.138(c)—to expressly abandon an application to avoid publication. § 1.313—to withdraw an application from issue. § 1.314—to defer issuance of a patent. * * * * * (m) For filing a petition for the revival of an abandoned application for a patent, for the delayed payment of the fee for issuing each patent, for the delayed response by the patent owner in any reexamination proceeding, for the delayed payment of the fee for maintaining a patent in force, for the delayed submission of a priority or benefit claim, for the extension of the twelve-month (six-month for designs) period for filing a subsequent application (§§ 1.55(c) and (e), 1.78(b), (c), and (e), 1.137, 1.378, and 1.452), or for filing a petition to excuse applicant’s failure to act within prescribed time limits in an international design application (§ 1.1051): By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $500.00 1,000.00 2,000.00 * $550.00 1,100.00 2,200.00 * * * * * ■ 3. Section 1.17 is amended by revising paragraphs (e), (h), (m), (p) and (t) to read as follows: § 1.17 Patent application and reexamination processing fees. By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $60.00 120.00 240.00 * * * * * (t) For filing a petition to convert an international design application to a design application under 35 U.S.C. chapter 16 (§ 1.1052): * ethrower on DSK3G9T082PROD with RULES2 * * * * (e) To request continued examination pursuant to § 1.114: (1) For filing a first request for continued examination pursuant to § 1.114 in an application: * * * * (p) For an information disclosure statement under § 1.97(c) or (d): By a micro entity (§ 1.29) .................. 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 pursuant to § 1.114 in an application: VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $45.00 90.00 180.00 4. Section 1.18 is amended by revising paragraphs (a), (b), and (c) to read as follows: ■ § 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: PO 00000 Frm 00036 Fmt 4701 Sfmt 4700 By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $250.00 500.00 1,000.00 (2) [Reserved] (b)(1) Issue fee for issuing an original design patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $175.00 350.00 700.00 (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 (§ 1.311). (c)(1) Issue fee for issuing an original plant patent: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $200.00 400.00 800.00 (2) [Reserved] * * * * ■ 5. Section 1.19 is amended by revising paragraphs (b) introductory text and (b)(1), removing and reserving paragraph (b)(2), revising paragraphs (b)(4) and (c), removing and reserving paragraphs (d) and (e), revising paragraph (f), removing and reserving paragraph (g), and adding paragraphs (h) through (l) to read as follows: * § 1.19 Document supply fees. * * * * * (b) Copies of Office documents to be provided in paper, or in electronic form, as determined by the Director (for other patent-related materials see § 1.21(k)): (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. E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations (C) [Reserved] (iii) [Reserved] (iv) If provided to a foreign intellectual property office pursuant to a bilateral or multilateral agreement (see § 1.14(h)): $0.00. * * * * * (4) For assignment records, abstract of title and certification, per patent: $35.00. (c) Library service (35 U.S.C. 13): For providing to libraries copies of all patents issued annually, per annum: $50.00. * * * * * (f) Uncertified copy of a non-United States patent document, per document: $25.00. * * * * * (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 FullText 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. ■ 6. Section 1.20 is amended by revising paragraphs (a) through (c) and (e) through (g) to read as follows: § 1.20 Post issuance fees. ethrower on DSK3G9T082PROD with RULES2 (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)(i) For filing a request for ex parte reexamination (§ 1.510(a)) having: (A) Forty (40) or fewer pages; (B) Lines that are double-spaced or one-and-a-half spaced; (C) Text written in a non-script type font such as Arial, Times New Roman, or Courier; (D) A font size no smaller than 12 point; (E) Margins which conform to the requirements of § 1.52(a)(1)(ii); and (F) Sufficient clarity and contrast to permit direct reproduction and electronic capture by use of digital imaging and optical character recognition. By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... VerDate Sep<11>2014 18:04 Nov 13, 2017 $1,500.00 3,000.00 Jkt 244001 By other than a small or micro entity 6,000.00 (ii) The following parts of an ex parte reexamination request are excluded from paragraphs (c)(1)(i)(A) through (F) of this section: (A) The copies of every patent or printed publication relied upon in the request pursuant to § 1.510(b)(3); (B) The copy of the entire patent for which reexamination is requested pursuant to § 1.510(b)(4); and (C) 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) .................. 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) .................. 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) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $400.00 800.00 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: PO 00000 Frm 00037 Fmt 4701 Sfmt 4700 52815 By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $900.00 1,800.00 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 (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $1,850.00 3,700.00 7,400.00 * * * * * 7. Section 1.21 is revised to read as follows: ■ § 1.21 Miscellaneous fees and charges. The Patent and Trademark Office has established the following fees for the services indicated: (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 § 11.6 of this chapter: $200.00. (ii) On grant of limited recognition under § 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 § 11.2(c) of this chapter: $400.00. (ii) Of the Director of Enrollment and Discipline under § 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) [Reserved] (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 E:\FR\FM\14NOR2.SGM 14NOR2 ethrower on DSK3G9T082PROD with RULES2 52816 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations 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. (b) Deposit accounts: (1) [Reserved] (2) Service charge for each month when the balance at the end of the month is below $1,000: $25.00. (3) Service charge for each month when the balance at the end of the month is below $300 for restricted subscription deposit accounts used exclusively for subscription order of patent copies as issued: $25.00. (c) [Reserved] (d) [Reserved] (e) International type search reports: For preparing an international type search report of an international type search made at the time of the first action on the merits in a national patent application: $40.00. (f) [Reserved] (g) [Reserved] (h) For recording each assignment, agreement, or other paper relating to the property in a patent or application, per property: (1) If submitted electronically, on or after January 1, 2014: $0.00. (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. (j) [Reserved] (k) [Reserved] (l) [Reserved] (m) For processing each payment refused (including a check returned ‘‘unpaid’’) or charged back by a financial institution: $50.00. (n) For handling an application in which proceedings are terminated pursuant to § 1.53(e): $130.00. (o) The submission of very lengthy sequence listings (mega-sequence listings) are subject to the following fees: (1) Submission of sequence listings in electronic form ranging in size from 300 MB to 800 MB: By a micro entity (§ 1.29) .................. VerDate Sep<11>2014 18:04 Nov 13, 2017 $250.00 Jkt 244001 By a small entity (§ 1.27(a)) ............... By other than a small or micro entity 500.00 1,000.00 (2) Submission of sequence listings in electronic form exceeding 800 MB in size: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $2,500.00 5,000.00 10,000.00 (p) Additional Fee for Overnight Delivery: $40.00. (q) Additional Fee for Expedited Service: $160.00. ■ 8. Section 1.362 is amended by revising paragraph (b) to read as follows: § 1.362 fees. Time for payment of maintenance * * * * * (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) .................. 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: By a micro entity (§ 1.29) .................. 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) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $130.00 260.00 520.00 (4) In all situations not provided for in paragraph (b)(1), (2), or (3) of this section: By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $165.00 330.00 660.00 (c) The examination fee for an international application entering the national stage under 35 U.S.C. 371: * * * * * (2) In all situations not provided for in 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 $190.00 380.00 760.00 (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: ■ § 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) .................. 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) introductory text, (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) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $115.00 230.00 460.00 (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): By a micro entity (§ 1.29) .................. 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) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $205.00 410.00 820.00 * * * * * 12. Section 1.1031 is amended by revising paragraph (a) and adding paragraph (f) to read as follows: ■ By a micro entity (§ 1.29) .................. 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: PO 00000 Frm 00038 Fmt 4701 Sfmt 4700 § 1.1031 fees. International design application (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: E:\FR\FM\14NOR2.SGM 14NOR2 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Rules and Regulations By a micro entity (§ 1.29) .................. By a small entity (§ 1.27(a)) ............... By other than a small or micro entity $30.00 60.00 120.00 * * * * * (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 (§ 1.16(b)), search fee (§ 1.16(l)), and examination fee (§ 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 § 1.18(b). The second part is payable within the period specified in a notice of allowance (§ 1.311). PART 41—PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD 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 paragraph (b)(4) to read as follows: ■ § 41.20 Fees. * * * * (b) * * * (4) In addition to the fee for filing a notice of appeal, for forwarding an ethrower on DSK3G9T082PROD with RULES2 * VerDate Sep<11>2014 18:04 Nov 13, 2017 Jkt 244001 appeal in an application or ex parte reexamination proceeding to the Board: 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 $560.00 1,120.00 2,240.00 PART 42—TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD 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: $15,500.00. (2) Inter Partes Review PostInstitution fee: $15,000.00. (3) In addition to the Inter Partes Review request fee, for requesting review of each claim in excess of 20: $300.00. PO 00000 Frm 00039 Fmt 4701 Sfmt 9990 52817 (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. * * * * * Joseph Matal, Associate Solicitor, performing the functions and duties of the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. [FR Doc. 2017–24390 Filed 11–13–17; 8:45 am] BILLING CODE 3510–16–P E:\FR\FM\14NOR2.SGM 14NOR2

Agencies

[Federal Register Volume 82, Number 218 (Tuesday, November 14, 2017)]
[Rules and Regulations]
[Pages 52780-52817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24390]



[[Page 52779]]

Vol. 82

Tuesday,

No. 218

November 14, 2017

Part II





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; Final Rule

Federal Register / Vol. 82 , No. 218 / Tuesday, November 14, 2017 / 
Rules and Regulations

[[Page 52780]]


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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: Final rule.

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SUMMARY: The United States Patent and Trademark Office (Office or 
USPTO) sets or adjusts patent fees as authorized by the Leahy-Smith 
America Invents Act (Act or AIA). The USPTO operates like a business in 
that external and internal factors affect the demand for patent 
products and services. The 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.

DATES: This rule is effective on January 16, 2018. The changes to Sec.  
1.18(b)(1) shall apply to those international design applications under 
the Hague Agreement having a date of international registration on or 
after January 16, 2018.

FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director of the 
Office of Planning and Budget, by telephone at (571) 272-8966; or 
Dianne Buie, Office of Planning and Budget, by telephone at (571) 272-
6301.

SUPPLEMENTARY INFORMATION: This rule was proposed in a notice of 
proposed rulemaking published at 81 FR 68150 (Oct. 3, 2016) 
(hereinafter NPRM).

Table of Contents

I. Executive Summary
II. Legal Framework
III. Rulemaking Goals and Strategies
IV. Fee Setting Methodology
V. Individual Fee Rationale
VI. Discussion of Comments
VII. Discussion of Specific Rule
VIII. Rulemaking Considerations

I. Executive Summary

A. Purpose of This Action

    The Office issues this final 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 implementing or 
revising fee regulations, such as public hearings and input from the 
Patent Public Advisory Committee (PPAC) and Congressional oversight.
    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 targeted fee adjustments were necessary to 
continue to fund patent operations, enhance patent quality, continue to 
work toward patent pendency goals, support the Patent Trial and Appeal 
Board (PTAB)'s continued efforts to deliver high quality and timely 
decisions, fund general support costs necessary for patent operations 
(e.g., rent, utilities, legal, financial, human resources, and other 
administrative services), invest in strengthening 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 202 fee adjustments outlined in this rule align directly 
with the Office's strategic goals and four key fee setting policy 
factors, discussed in detail in Part III.

B. Summary of Provisions Impacted by This Action

    This final rule sets or adjusts 202 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. This final 
rule applies small entity discounts to two additional fees and applies 
micro entity discounts to six additional fees.
    In summary, the routine fees to obtain a patent (i.e., filing, 
search, examination, and issue fees) increase slightly under this final 
rule 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) of 
the Act. Additional information describing the fee adjustments is 
included in Part V. Individual Fee Rationale section of this rulemaking 
and in the ``Table of Patent Fees--Current, Final Rule and Unit Cost'' 
(hereinafter ``Table of Patent Fees'') available at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

C. Summary of Costs and Benefits of This Action

    The final 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 a 
RIA to analyze the costs, benefits, and transfer payments of the final 
rule over a five-year period, FY 2017-FY 2021. The RIA includes a 
comparison of the final rule fee schedule to the current fee schedule 
(baseline) and to two other alternatives.
    The Office of Management and Budget (OMB) has determined that this 
rule involves a transfer payment from one group to another that does 
not affect the total resources available to society. 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 rulemaking, but found that the 
final rule has significant qualitative benefits with no identified 
costs.
    The qualitative costs and benefits that the RIA assesses are: (1) 
Fee schedule design--a measure of how well the fee schedule aligns to 
the Office's key fee setting policy factors--and (2) securing aggregate 
revenue to cover aggregate

[[Page 52781]]

cost--a measure of whether the alternative provides adequate revenue to 
support the core mission and strategic priorities described in the 
final rule and FY 2018 Budget. For these costs and benefits, the fee 
schedule in this final rule offers the highest benefits, with no costs 
identified. As described throughout this document, the final rule fee 
schedule maintains the existing balance of setting entry fees (e.g., 
filing, search, and examination) below the costs to the Office to 
perform those services and setting maintenance fees above the cost to 
the Office, as one approach to foster innovation. Further, as detailed 
in Part V, the fee changes are targeted in support of one or more fee 
setting policy factors. Lastly, the final 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 final rule clearly outweigh those of the baseline and 
the other alternatives considered in the RIA. Table 1 summarizes the 
RIA results.

  Table 1--Final Patent Fee Schedule Costs and Benefits, Cumulative FY
                              2017-FY 2021
------------------------------------------------------------------------
      Qualitative costs and benefits
------------------------------------------------------------------------
Costs:
  None identified.........................  Neutral.
 
Benefits:
  Secure Aggregate Revenue to Cover         Significant.
   Aggregate Cost.
  Fee Schedule Design.....................  Significant.
  Net Benefit/Cost........................  Significant Benefit.
------------------------------------------------------------------------

    Additional details describing the costs and benefits are available 
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 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 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 
considers and analyzes 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 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 published all comments on the Fee 
Setting Web site, available at 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 is available 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 the NPRM. Likewise, before 
issuing this final rule, the Office considered and analyzed all 
comments, advice, and recommendations received from the public during 
the 60-day comment period. The Office's response to comments received 
is available in Part VI. Discussion of Comments.

III. Rulemaking Goals and Strategies

A. Fee Setting Strategy

    The overall strategy of this final rule 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 available financial resources, and to continue 
strategic

[[Page 52782]]

improvements, such as progress on patent quality initiatives, continued 
reduction of the patent application backlog and pendency, continued 
delivery of high quality and timely PTAB decisions, and continued 
investment in modernization of IT systems and infrastructure.
    In addition to the overriding principles outlined above, the Office 
also assesses alignment with the 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. Each factor promotes a particular aspect of the U.S. 
patent system. Fostering innovation is an important policy factor to 
ensure that applicants can access the U.S. patent system 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 final 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 public and PPAC during the public comment period for the NPRM. 
Collectively, these considerations informed 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. Using historical cost data and forecasted application 
demands, the Office can align fees to the costs of specific patent 
products and services. The document entitled USPTO Setting and 
Adjusting Patent Fees during Fiscal Year 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 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.
    The Office has made significant progress towards its strategic 
priorities 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 2016 Performance and Accountability Report, available at 
http://www.uspto.gov/sites/default/files/documents/USPTOFY16PAR.pdf.
    (2) Projected Costs. The costs projected to meet the Office's 
strategic goals can be found in the FY 2018 President's Budget, which 
provides additional detail about the following performance and 
modernization efforts, among others: (a) Quality, backlog, and pendency 
for Patents and PTAB and (b) investing in modernizing the USPTO IT 
systems and infrastructure.
    (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 this final 
rule, the Office will continue to improve patent quality through 
ongoing efforts related to the three quality pillars: (1) Excellence in 
work products; (2) excellence in measuring patent quality; and (3) 
excellence in customer service.
    In addition to quality, the USPTO continues to focus on backlog and 
pendency reduction. First action and average total pendency in FY 2016 
were 16.2 months and 25.3 months respectively compared to 21.9 months 
and 32.4 months in FY 2012. The patent application backlog was reduced 
from 608,283 in FY 2012 to 537,655 at the end of FY 2016. This 
rulemaking aims to 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. 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 by the end of FY 2016 was about 17,000. As of 
the end of fiscal year 2016, the average pendency for decided ex parte 
appeals was 25.5 months (as measured from appeal number assignment to 
decision date). 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. This 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 reexamination appeals; 
and ex parte appeals.
    (b) Information Technology. Revenue generated from the final fee 
structure will enable the USPTO to continue investing in modernizing 
the USPTO IT systems and infrastructure. 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 and 
modernization program, have already delivered value to examiners and 
customers alike. To date, the Docket & Application Viewer (DAV), a case 
management tool for examiners, was first released in March 2015. By the 
end of FY 2016, 100 percent of patent examiners were using DAV. The 
eDAN legacy system was retired in December 2016, as its full 
functionality was replaced by DAV. Other PE2E releases include pilots 
for Official Correspondence (replaces Office Action Correspondence 
System (OACS)), an authoring and workflow solution that offers DAV 
integration, and Examiner Search (replaces Examiner's Automated Search 
Tool (EAST)), which supports modern, scalable enterprise searches; both 
represent significant advances in how

[[Page 52783]]

the Office manages workload and delivers results to customers. PE2E 
relies on flexible, scalable, modern technology that is optimized to 
eliminate repetitive tasks and support analytics and automated 
processing. In April 2016, the USPTO released Financial Manager, its 
new online fee payment management tool. Financial Manager allows USPTO 
customers to store and manage payment methods online and generate 
custom transaction reports at any time. 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 and maintenance of a viable patent operating reserve 
that allows for effective management of the U.S. patent system and 
responsiveness to changes in the economy, unanticipated production 
workload, and revenue changes. As a fee-funded agency, 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 for Patents and PTAB).
    The USPTO's annual budget delineates prospective spending levels 
(aggregate cost) to execute core mission activities and strategic 
initiatives. In the FY 2018 President's Budget, the USPTO estimated 
that its aggregate patent operating cost for FY 2017, including 
administrative costs, would be $2.986 billion. After evaluating 
relevant risk factors, the Office determined that a minimum balance of 
$300 million in the operating reserve was adequate for FY 2017 and FY 
2018, which is below the optimal balance of three months operating 
expenses, or about $746 million in FY 2017. Based on the latest 
estimates as shown in the FY 2018 President's Budget, the spending 
requirement would exceed projected fee collections and other income of 
$2.876 billion and draw $110 million from the patent operating reserve, 
leaving a $245 million balance in the patent operating reserve, or $55 
million less than the desired minimum of $300 million. This is 
partially due to the fact that these fee adjustments will only be in 
place for the last month of FY 2017. In FY 2018, when the fee 
adjustments will be fully implemented, the operating reserve is 
projected to rise above the desired minimum, with an end-of-year 
balance of $343 million. In FY 2019, budgetary requirements are 
projected to exceed income, taking the operating reserve down to $341 
million. Then the operating reserve is projected to continue growing, 
to $418 million at the end of FY 2020 and $501 million at the end of FY 
2021. This exceeds the desired minimum, but falls short of the optimal 
level of $841 million in FY 2021. The operating reserve is not 
projected to reach its optimal level within the next five years.
    Fee setting authority allows the Office to align the fee schedule 
with the four fee setting policy factors discussed earlier in this 
document (i.e., foster innovation, align fees to full cost, set fees to 
facilitate the effective administration of the patent and trademark 
system, and offer application processing options). This rule assumes 
that the USPTO will retain the important business tool of fee setting 
authority to respond to environmental and operational factors in the 
out-years. 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. The 
ability to implement such fee adjustments is based on the assumption 
that the USPTO's fee setting authority under the AIA will be renewed or 
made permanent after it expires in 2018. 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.

C. Summary of Rationale and Purpose of the Final Rule

    The Office estimates that the final patent fee schedule will 
produce aggregate revenue to recover the aggregate cost 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 final 
rule should 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, delivering high quality and timely PTAB 
decisions, investing in modernizing 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 final 
fee schedule:
    Step 1: Determine the prospective aggregate cost 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 Cost

    Calculating prospective aggregate cost 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 
OMB (www.omb.gov) in the Economic and Budget Analyses section of the 
Analytical Perspectives and each January by the Congressional

[[Page 52784]]

Budget Office (CBO) (www.cbo.gov) in the Budget and Economic Outlook. A 
description of the Office's methodology for using RGDP can be found in 
Appendix I--Multi-year Planning by Business Line and Cost Containment 
of the FY 2018 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 cost to execute 
the requirements. In developing its Budget, the Office first looks at 
the cost of status quo operations (the base requirements). The base 
requirements are adjusted for anticipated pay 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 2018 
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 2018 President's Budget identifies that, during FY 2017, 
patent operations will cost $2.986 billion, including $2.002 billion 
for patent examination activities; $180 million for IT systems and 
support contributing to direct patent operations; $87 million for 
activities related to patent appeals and AIA trial proceedings; $27 
million for activities related to intellectual property protection, 
policy, and enforcement; and $688 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 to conduct audits of 
USPTO programs. The Office also estimates collecting $24 million in 
other income associated with recoveries and reimbursable agreements 
(offsets to spending). Since operations costs are projected to exceed 
collections, the Office estimates that $110 million will be withdrawn 
from the operating reserve during FY 2017.
    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 
adjustments contained in this final rule.

                        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 *..................         614,253         627,274         634,934         639,878         636,580
Growth Rate.....................            0.7%            2.1%            1.2%            0.8%           -0.5%
Production Units................         647,700         663,200         667,700         660,700         626,100
Unexamined Patent Application            485,300         430,000         378,200         338,200         329,600
 Backlog........................
Examination Capacity **.........           8,375           8,300           8,097           7,812           7,540
Performance Measures (UPR):
    Avg. First Action Pendency              14.8            15.1            11.0            10.7             9.9
     (Months)...................
    Avg. Total Pendency (Months)            24.8            23.0            22.7            19.5            19.0
----------------------------------------------------------------------------------------------------------------
* 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 2018
  President's Budget.

    The USPTO continuously updates both patent fee collections 
projections and workload projections based on the latest data. Patent 
production workload projections have been updated since the NPRM was 
published in October 2016. The most recent projections are shown in 
Table 2. UPR filings growth projections were revised downward during 
the FY 2018 budget formulation process due to revised RGDP estimates 
and more conservative estimates of out year growth.
    Over the five year planning horizon budgetary requirements 
increased compared to the prior NPRM outlook projections. The primary 
drivers of the requirements variance are investments to modernize IT 
systems and infrastructure and updated assumptions about the resources 
necessary to meet production commitments in the Patent Pendency Model 
and PTAB models. The FY 2018 Budget is based on a framework of 
continuous and comprehensive budget reviews designed to ensure that all 
operational and administrative costs are reviewed and funds are 
reallocated when necessary to focus on high-priority and effective 
programs--primarily core mission activities--and mitigate risk by 
retaining minimum operating reserve balances. In addition, the USPTO 
operates similarly to a business in that the Office makes a determined 
effort to monitor and adjust spending in response to changes in 
workload, income, and operating reserve balances. These activities are 
carried out as regular parts of the budget execution and budget 
formulation processes.

[[Page 52785]]



                            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                   2,986           3,176           3,231           3,273           3,365
 Requirements...................
    Less: Planned Patent Fee               2,852           3,250           3,205           3,326           3,423
     Collections................
    Less: Other Income..........              24              24              24              24              24
To (-)/From (+) Operating                   -110              98              -2              77              82
 Reserve........................
EOY Operating Reserve Balance...             245             343             341             418             501
----------------------------------------------------------------------------------------------------------------

Step 2: Calculate Prospective Aggregate Revenue

    As described in ``Step 1,'' the USPTO's FY 2017 requirements in the 
FY 2018 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, 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 large enough 
decrease in patenting activities that overall revenues will decrease. 
When developing fee forecasts, the Office accounts for how applicant 
behavior will change at different fee amounts 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 how the Office calculates 
aggregate revenue is discussed in the document entitled, ``Setting and 
Adjusting Patent Fees during FY 2017--Aggregate Revenue Estimating 
Methodology.'' Details about projected workloads for each of the fee 
setting alternatives considered are available in the aggregate revenue 
tables for each alternative. All of these documents are 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 issue 
and 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

[[Page 52786]]

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 fee rates will become 
effective on September 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 cost 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 cost 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 
new patent fees will recover the prospective aggregate cost of its 
patent operations including contributions to the operating reserve per 
the strategic objective 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 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 fees are set at, above, and below their unit costs to 
balance the four key fee setting policy factors discussed in Part III.
    For some fees in this final rule, the USPTO does not 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 fee 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 final rule fees 
for large, small, and micro entities as well as unit costs for the last 
three fiscal years. Part VII. Discussion of Specific Rule contains a 
complete listing of fees that are set or adjusted in the final rule 
patent fee schedule.

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

    The Office is adjusting 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. 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 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 
fee adjustments in this category are listed in the Table of Patent 
Fees.

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

    For those fees changing 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. Note: Three fees in this section have fee 
changes less than 10 percent but are included here because they met 
this criteria in either the NPRM (i.e., Plant Issue and Inter Partes 
Review Post-Institution Fee--Up to 15 Claims) or preliminary proposed 
fees (i.e., Request for Continued Examination (RCE)--1st Request).
    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 rule.

[[Page 52787]]

    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 new 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              Final rule fees   Dollar change    Percent change
                                               -----------------------------------------------------------------------------------------   FY 2015 unit
                Fee description                                                        Large (Small)    Large (Small)    Large (Small)         cost
                                                    Large (Small) [Micro] Entity       [Micro] Entity   [Micro] Entity   [Micro] Entity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Submission of sequence listings of 300 MB to    new                                            $1,000          +$1,000              n/a              n/a
 800 MB.                                                                                       ($500)          (+$500)            (n/a)
                                                                                               [$250]          [+$250]            [n/a]
Submission of sequence listings of more than    new                                           $10,000         +$10,000              n/a              n/a
 800 MB.                                                                                     ($5,000)        (+$5,000)            (n/a)
                                                                                             [$2,500]        [+$2,500]            [n/a]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Office sets 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 300 MB to 800 MB and Tier 2 for file 
sizes greater than 800 MB.
    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 historical data, on 
average, less than 10 applications per year contained sequence listing 
files greater than 300 MB. 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 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. The fee would also apply to the submission of mega-
sequence listings received in national stage applications under 35 
U.S.C. 371, including mega-sequence listings received by the Office 
pursuant to PCT Article 20. 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 Search, Examination, and Issue and Plant Search and Issue Fees--Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
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             $700            +$140              +25              314
                                                                              ($280)           ($350)            (+$70            (+25)
                                                                              [$140]           [$175]           [+$35]            [+25]
Plant Issue Fee....................................................             $760             $800             +$40               +5              314
                                                                              ($380)           ($400)           (+$20)             (+5)
                                                                              [$190]           [$200]           [+$10]             [+5]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In the NPRM, the Office proposed a design issue fee of $800 and a 
plant issue fee of $1,000. In this final rule, after carefully 
considering comments from the PPAC and the public, the Office sets the 
design issue fee to $700 and the plant issue fee to $800, 13 percent 
and 20 percent less than the fees proposed in the NPRM respectively. 
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

[[Page 52788]]

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 revised fees better align the fees with 
costs by bringing both application types closer to aggregate cost 
recovery while maintaining some subsidization.
(c) Request for Continued Examination (RCE)--First and Second and 
Subsequent Request

                                              Table 6--Request for Continued Examination (RCE) Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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 Examination (RCE)--1st Request (see 37 CFR              $1,200           $1,300            +$100               +8           $2,187
 1.114)............................................................           ($600)           ($650)           (+$50)             (+8)
                                                                              [$300]           [$325]           [+$25]             [+8]
Request for Continued Examination (RCE)--2nd and Subsequent Request           $1,700           $1,900            +$200              +12            1,540
 (see 37 CFR 1.114)................................................           ($850)           ($950)          (+$100)            (+12)
                                                                              [$425]           [$475]           [+$50]            [+12]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The moderate increases to RCE fees support the fee setting policy 
factor to align fees with costs. The 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 
is increasing 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 with the increase in the first RCE fee rate 
significantly below FY 2015 unit cost, this service will continue to 
recover only a portion of the total cost in the future.
    The Office is increasing 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 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 sets the 
second and subsequent RCE fee rate with a slightly larger increase. 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 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 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) evaluates and strengthens work products, 
processes, and services at all stages of the patent process.
(d) Information Disclosure Statements (IDS)

                                                         Table 7--DS--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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 Disclosure Statement..................             $180             $240             +$60              +33              n/a
                                                                               ($90)           ($120)           (+$30)            (+33)
                                                                               [$45]            [$60]           [+$15]            [+33]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Office is increasing the submission fee for an Information 
Disclosure Statement (IDS) from $180 to $240. The adjustment is an 
effort to set the fee optimally to encourage early submission of an IDS 
when possible while keeping the fee 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

[[Page 52789]]



                                           Table 8--Certificate of Correction Fees--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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 is increasing the fee for a certificate of correction by 
$50 to $150. This adjustment will encourage applicants to submit 
accurate information initially, while at the same time not increasing 
the rate too much above unit cost recovery, which could 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

                                      Table 9--Request for Ex Parte Reexamination Fees--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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.   1.510(a)) Streamlined...............              new           $6,000          +$6,000              n/a              n/a
                                                                                             ($3,000)        (+$3,000)
                                                                                             [$1,500]        [+$1,500]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Office is establishing a new fee for smaller, streamlined 
reexamination filings. The streamlined filings will reduce the cost to 
the USPTO, allowing the Office to pass on the cost savings to 
applicants. This fee will 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   Final rule 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Forwarding an Appeal in an Application or Ex parte Reexamination              $2,000  $2,240 ($1,120)    +$240 (+$120)      +12% (+12%)           $4,815
 Proceeding to the Board.                                                    ($1000)           [$560]           [+$60]           [+12%]
                                                                              [$500]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Based on feedback on the NPRM, the Office has eliminated the 
proposed increase to the notice of appeal fee. The Notice of Appeal 
fees will remain at current rates (e.g., $800 for a large entity), and 
the Office has lowered the appeal forwarding fee from the proposed 
$2,500 (large entity) in the NPRM to $2,240 (large entity). At the 
current fee rate, the fees paid for an ex parte Notice of Appeal and 
Forwarding an Appeal only cover 58 percent of the

[[Page 52790]]

Office's cost for an appeal. The fee increase for Forwarding an Appeal 
will result in the combined ex parte appeal fees covering 63 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. 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 adjustment 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

                                                    Table 11--AIA Trials--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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--Up to 20 Claims.                             $9,000          $15,500          +$6,500             +72%          $22,165
Inter Partes Review Post-Institution Fee--Up to 15 Claims.                    14,000           15,000           +1,000              +7%           12,674
Inter Partes Review Request of Each Claim in Excess of 20.                       200              300             +100             +50%              n/a
Inter Partes Post-Institution Request of Each Claim in Excess of                 400              600             +200             +50%              n/a
 15.
Post-Grant or Covered Business Method Review Request Fee--Up to 20            12,000           16,000           +4,000             +33%           16,213
 Claims.
Post-Grant or Covered Business Method Review Post-Institution Fee--           18,000           22,000           +4,000             +22%           23,060
 Up to 15 Claims.
Post-Grant or Covered Business Method Review Request of Each Claim               250              375             +125             +50%              n/a
 in Excess of 20.
Post-Grant or Covered Business Method Review Post-Institution                    550              825             +275             +50%              n/a
 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 is adjusting 
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 inter partes review 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 2016, the PTAB received nearly 1,700 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. In this final rule, the 
Office is setting the Inter Partes Review Request Fee--Up to 20 Claims 
at $15,500 and the Inter Partes Review Post-Institution Fee--Up to 15 
Claims at $15,000. The total for the inter partes review (request and 
post-institution) fees is $30,500. These individual fee rates have 
changed from the rates proposed in the NPRM, although the total remains 
the same. The fee rates proposed in the NPRM were $14,000 for the Inter 
Partes Review Request Fee--Up to 20 Claims and $16,500 for the Inter 
Partes Review Post-Institution Fee--Up to 15 Claims. The Office is 
revising the fee levels to more closely align fees and costs to the 
Office for performing these services. Unit costs for inter partes 
review requests have consistently outpaced the unit costs for inter 
partes review post-institutions. See the Table of Patent Fees.
(i) Patent Cooperation Treaty (PCT)--International Stage

[[Page 52791]]



                               Table 12--Patent Cooperation Treaty (PCT)--International Stage--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Late Furnishing Fee for Providing a Sequence Listing in Response to              new             $300            +$300              n/a              n/a
 an Invitation Under PCT Rule 13ter................................                            ($150)          (+$150)
                                                                                                [$75]           [+$75]
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Office sets 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 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 Rule
    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 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 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 Practitioner 
Enrollment Fees
    The following fee adjustments are comprised of Office of Enrollment 
and Discipline (OED) fees and other patent practitioner enrollment 
fees. In addition to the fee rate changes, there are four new fees 
introduced 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 make these fee adjustments. No 
enrollment or disciplinary fees have been increased since 2008, and 
only two fees were adjusted that year. All other enrollment and 
discipline 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 Practitioner Enrollment--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Application Fee (Non-Refundable)...................................              $40             $100             +$60            +150%             $225
On Registration to Practice Under Sec.   11.6......................              100              200            +$100            +100%              493
Certificate of Good Standing as an Attorney or Agent, Standard.....               10               40             +$30            +300%               39
Certificate of Good Standing as an Attorney or Agent, Suitable for                20               50             +$30            +150%               49
 Framing...........................................................
Review of Decision by the Director of Enrollment and Discipline                  130              400            +$270            +208%            2,044
 Under Sec.   11.2(c)..............................................
Review of Decision of the Director of Enrollment and Discipline                  130              400            +$270            +208%            1,827
 Under Sec.   11.2(d)..............................................
Administrative Reinstatement Fee...................................              100              200            +$100            +100%              940

[[Page 52792]]

 
On Grant of Limited Recognition Under Sec.   11.9(b)...............              new             $200            +$200              n/a              n/a
For USPTO-Assisted Recovery of ID or Reset of Password for the                   new               70             +$70              n/a              n/a
 Office of Enrollment and Discipline Information System............
For USPTO-Assisted Change of Address Within the Office of                        new               70             +$70              n/a              n/a
 Enrollment and Discipline Information System......................
For USPTO-Administered Review of Registration Examination..........              new              450            +$450              n/a              515
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The Office increases 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. This rule creates a new fee 
code for On Grant of Limited Recognition, allowing for a separate 
accounting of registration to practice or for a grant of limited 
recognition. Both Registration to Practice and Grant of Limited 
Recognition are increasing to $200, which is still below the estimated 
cost of performing these services. The Office is 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 prosecute 
an international patent application in the manner described in Sec.  
11.9(c). The Office is using the existing fee code for Registration to 
Practice fees and creating a new fee code for Grant of Limited 
Registration.
    The Office is increasing 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 is increasing 
the fee for both of these services to cost recovery, $40 and $50, 
respectively.
    The Office is increasing the fees for petitions to the OED Director 
regarding enrollment or recognition. However, the new 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 $400 fee.
    The Office is adjusting the fees for a review of the 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 new $400 fee. This is an 
increase from the current fee but is still set significantly below cost 
recovery.
    The Office is setting 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, helps to close the gap between the fee and the cost for 
performing this service.
    The Office is creating a fee for USPTO-assisted reset of user IDs 
and passwords for an OED Information System--Customer Interface (OEDIS-
CI) account set 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. This fee 
would only be charged if it was requested that the USPTO perform this 
task instead of the self-service option.
    The Office is creating and setting 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. This fee would 
only be charged if it was requested that the USPTO perform this task 
instead of the self-service option.
    The Office is setting 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 is setting the fee for changing a practitioner's 
registration status from agent to attorney. The Office currently 
charges $100 for this service. 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 set, 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 entity fees are provided. Providing these fee reductions for 
small and micro entity innovators continues the Office's efforts to 
foster innovation across all patent system users.

[[Page 52793]]



                          Table 14--Amended Fees To Include Discounts for Small and Micro Entities--Fee Changes and Unit Costs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Current fees   Final rule 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
Petition for the Delayed Payment of the Fee for Maintaining a                 $1,700           $2,000            +$300              +18             $121
 Patent in Force...................................................           ($850)         ($1,000)          (+$150)            (+18)
                                                                              [$850]           [$500]          [-$350]            [-41]
Petition for Revival of an Abandoned Application for a Patent, for            $1,700           $2,000            +$300              +18              244
 the Delayed Payment of the Fee for Issuing Each Patent, or for the           ($850)         ($1,000)          (+$150)            (+18)
 Delayed Response by the Patent Owner in any Reexamination                    [$850]           [$500]          [-$350]            [-41]
 Proceeding........................................................
Petition for the Delayed Submission of a Priority or Benefit Claim.           $1,700           $2,000            +$300              +18              244
                                                                              ($850)         ($1,000)          (+$150)            (+18)
                                                                              [$850]           [$500]          [-$350]            [-41]
Petition to Excuse Applicant's Failure to Act Within Prescribed               $1,700           $2,000            +$300              +18              n/a
 Time Limits in an International Design Application................           ($850)         ($1,000)          (+$150)            (+18)
                                                                              [$850]           [$500]          [-$350]            [-41]
Petition to Convert an International Design Application to a Design             $180             $180               $0                0              n/a
 Application Under 35 U.S.C. Chapter 16............................           ($180)            ($90)           (-$90)            (-50)
                                                                              [$180]            [$45]          [-$135]            [-75]
Hague International Design Application Fees--Transmittal Fee.......             $120             $120               $0                0              n/a
                                                                              ($120)            ($60)           (-$60)              -50
                                                                              [$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 discontinued or new fees.
(a) Discontinued and Replaced

                                                  Table 15--Discontinued Fees With New Fee Replacements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Current fees                 Final rule fees          Dollar change    Percent change
                                        ------------------------------------------------------------------------------------------------  FY 2015  unit
            Fee description                                                                             Large (small)    Large (small)         cost
                                          Large (small) [micro] entity   Large (small) [micro] entity   [micro] entity   [micro] entity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copy of Patent-Related File Wrapper and  $200                           discontinue..................            -$200              n/a              n/a
 Contents of 400 or Fewer Pages, if
 Provided on Paper.
Additional Fee for Each Additional 100   $40                            discontinue..................             -$40              n/a              n/a
 Pages of Patent-Related File Wrapper
 and (Paper) Contents, or Portion
 Thereof.
Copy Patent File Wrapper, Paper Medium,  new                            $280.........................            +$280              n/a              n/a
 Any Number of Sheets.
Copy of Patent-Related File Wrapper and  $55                            discontinue..................             -$55              n/a              n/a
 Contents if Provided on a Physical
 Electronic Medium as Specified in Sec.
   1.19(b)(1)(ii).
Copy of Patent-Related File Wrapper and  $55                            discontinue..................             -$55              n/a              n/a
 Contents if Provided Electronically.
Additional Fee for Each Continuing       $15                            discontinue..................             -$15              n/a              n/a
 Physical Electronic Medium in Single
 Order of Sec.   1.19(b)(1)(ii)(B).
Copy Patent File Wrapper, Electronic     new                            $55..........................             +$55              n/a              n/a
 Medium, Any Size or Provided
 Electronically.
Computer Records.......................  at cost                        discontinue..................          at cost              n/a              n/a
Copy of Patent Grant Single-Page TIFF    new                            $10,400......................         +$10,400              n/a              n/a
 Images (52 week subscription).

[[Page 52794]]

 
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 Bibliographic        new                            $50..........................             +$50              n/a              n/a
 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 Reports,     new                            $30..........................             +$30              n/a              n/a
 Miscellaneous Technology Areas.
Labor Charges for Services, per Hour or  $40                            discontinue..................             -$40              n/a              n/a
 Fraction Thereof.
Additional Fee for Overnight Delivery..  new                            $40..........................             +$40              n/a              n/a
Additional Fee for Expedited Service...  new                            $160.........................            +$160              n/a              n/a
--------------------------------------------------------------------------------------------------------------------------------------------------------

    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 allows 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 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 provides 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 is now replaced with a set fee for ``Overnight Delivery.''
(b) Discontinued

                                                               Table 16--Discontinued Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                  Current fees                 Final rule fees          Dollar change    Percent change
                                        ------------------------------------------------------------------------------------------------   FY 2015 unit
            Fee description                                                                             Large (small)    Large (small)         cost
                                          Large (small) [micro] entity   Large (small) [micro] entity   [micro] entity   [micro] entity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Self-Service Copy Charge, per Page.....  $0.25........................  discontinue..................           -$0.25              n/a              n/a
Establish Deposit Account..............  $10..........................  discontinue..................             -$10              n/a              n/a
Uncertified Statement Re: Status of
 Maintenance Fee Payments.
$10....................................  discontinue..................  -$10.........................              n/a              n/a              $10
Petitions for documents in form other    at cost......................  discontinue..................          at cost              n/a              n/a
 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      $55..........................  discontinue..................             -$55              n/a              n/a
 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 Sec.   1.19(b)(1);
 First Physical Electronic Medium in a
 Single Order.
Additional Fee for Each Continuing Copy  $15..........................  discontinue..................             -$15              n/a              n/a
 of Patent-Related File Wrapper
 Contents as Specified in Sec.
 1.19(b)(2)(i)(A).

[[Page 52795]]

 
Copy of Patent-Related File Wrapper      $55..........................  discontinue..................             -$55              n/a              n/a
 Contents That Were Submitted and are
 Stored on Compact Disk, or Other
 Electronic Form, Other Than as
 Available in Sec.   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 is retiring 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 Comments

Comments and Responses

    The USPTO published a proposed rule on October 3, 2016 soliciting 
comments on the proposed fee schedule. In response, the USPTO received 
comments from five intellectual property organizations, one federal 
agency, and nineteen individual commenters representing law firms, 
corporations, or themselves. These comments are posted on the USPTO's 
Web site at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

General Fee Setting Approach

    Comment 1: Two commenters expressed general support for the 
increases, and another expressed understanding of the fee increases and 
asked how a change will affect his particular patenting situation.
    Response: The USPTO appreciates the endorsement from the 
commenters, and is committed to achieving the goals developed in 
consultation with the stakeholder community as set forth in the 
Strategic Plan.
    Comment 2: Three commenters objected to any increase in fees, as 
they believed such increases placed hardships on individual filers, 
small-business owners, and federal agencies or, due to the resulting 
growing operating reserve, makes the USPTO an easy target for fee 
diversion. A United States Federal agency objects to the proposed fee 
increases citing a direct and negative impact on its ability to apply 
for, obtain, and maintain patents on its inventions due to flat annual 
budgets. In the opinion of the Federal agency, the proposed fee 
increases will limit its patenting activity thus making it more 
difficult to attract commercial licensees.
    Response: The USPTO appreciates the concern about rising fees, but 
points out the necessity of adjusting fees to recover the aggregate 
estimated cost to the Office for processing, activities, services, and 
materials relating to patents, including administrative costs of the 
Office with respect to such patent fees. As noted in the NPRM, FY 2018 
President's Budget, and the FY 2016 Performance and Accountability 
Report (PAR) among other publications, 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. 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. For small 
businesses and individual filers, 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. This final rule applies small 
entity discounts to two additional fees and applies micro entity 
discounts to six additional fees.
    Comment 3: One commenter cites operating reserve level estimates 
from the FY 2017 President's Budget, as referred to in the NPRM, noting 
that the operating reserve level is estimated to exceed the optimal 
level in out years and that overfunding the operating reserve is unfair 
to applicants and could be a target for fee diversion.
    Response: In the intervening months since the FY 2017 President's 
Budget, the Office's budgetary requirements and fee collection 
estimates have evolved. The USPTO continuously updates both patent fee 
collections projections and workload projections based on the latest 
data. Since the NPRM publication in October 2016 there is a revised 
understanding of expected incoming fees and projected spending.
    Over the five year planning horizon budgetary requirements 
increased compared to the prior NPRM outlook projections. The primary 
drivers of the requirements variance are investments to modernize IT 
systems and infrastructure and updated assumptions about the resources 
necessary to meet production commitments in the Patent Pendency Model 
and PTAB model. In addition, UPR filings growth projections were 
revised downward during the FY 2018 budget formulation process due to 
revised RGDP estimates and more conservative estimates of out year 
growth. With the FY 2018 President's Budget, and under the fee rates 
included in this final rule, the operating reserve level estimates do 
not reach the optimal level of three months of expenses in the five 
year budget horizon.
    As described in Part III. B. of the final rule, which summarizes 
the USPTO's operating reserve policy, 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. A key assumption is that the 
USPTO will

[[Page 52796]]

retain fee setting authority to adjust fee rates in the future as 
assumptions about the out years might change. For example, if the 
operating reserve balance is projected to exceed the optimal level by 
10 percent for two consecutive years, the Office would consider using 
fee setting authority to reduce fees, per the operating reserve policy. 
Under the new fee structure, as in the past, the Office will remain a 
prudent steward of patent fees.
    The USPTO continues to communicate the importance of continued 
access to all fees collected as a critical component of sustainable 
funding strategy to the public, lawmakers, and the executive branch. 
While fee diversion remains a possibility without an explicit law 
eliminating the possibility, the Office will continue its educational 
efforts in this area.
    The financial outlook presented in this final rule reduces the 
trajectory of the estimated optimal operating reserve level because of 
changes in fees made in response to stakeholder feedback and in 
recognition of a changing outlook for Office operations and finances.
PTAB Fees
    The Office received five comments regarding the proposed increases 
in PTAB fees, including two comments about fees for AIA trial 
proceedings.
    Comment 4: One commenter noted that the work performed by the PTAB 
in AIA trial proceedings is time consuming, and the commenter supports 
the increase in fee rates in those proceedings to ensure high quality 
decisions continue.
    Response: The Office appreciates the commenter's general support 
for fee increases in AIA trial proceedings. The USPTO is committed to 
maintaining the PTAB's ability to provide timely and high quality 
decisions. The AIA significantly affected the operations of the PTAB by 
establishing new types of trial proceedings. The AIA trial proceedings 
in the PTAB have been immensely popular (over 5,500 AIA trial 
proceedings filed through FY 2016) because they provide a less 
expensive and faster alternative to district court litigation. As a 
result, the PTAB workload has increased significantly. To accommodate 
the sudden growth in workload, the PTAB expanded its workforce and has 
continued to enhance its resources to meet the 12-month statutory 
requirement for completing each AIA trial proceeding. The fee rates in 
this final rule are the result of considering and analyzing historical 
data on the aggregate cost for conducting AIA trial proceedings, now 
that the proceedings have been in place for three fiscal years. The 
increase in AIA trial proceeding fees will help the PTAB maintain the 
level of judicial, legal, and administrative staff necessary to sustain 
the quality and timeliness of PTAB decisions, and close the gap between 
the costs and the fees associated with AIA trial proceedings.
    Comment 5: One commenter sought small and micro entity discounts 
for AIA trial proceeding fees, and requested expansion of pro bono 
representation to small entities in AIA trial proceedings.
    Response: The authority to reduce fees or to charge additional fees 
for small and micro entities under the USPTO's rulemaking authority is 
limited by the AIA to providing discounts to the six categories under 
Section 10(b) of the Act. AIA trial proceeding fees are outside of the 
six categories; therefore, absent a change in statutory authority, 
those fees are not eligible for discounts. The Office further notes 
that, in many cases, AIA trial proceedings serve as an alternative to 
more expensive litigation in the district court.
    The patent pro bono programs are individually run as regional 
programs available to assist inventors and small businesses in their 
state or region. Each program sets the standards for participation, 
performs the intake function, screens potential clients, screens 
potential volunteer patent attorneys, and attempts to match the client 
with the volunteer attorney. These programs may be comprised of bar 
associations, non-profits, universities, or others. The USPTO, as a 
federal agency, does not direct the pro bono activities of these 
programs, but rather, provides resources and expertise to help 
establish and expand the reach of the programs.
    Comment 6: Three commenters opposed the increase to appeal fees. 
One commenter specifically expressed concern over passing a large 
portion of the appeal unit costs as increased fee rates borne by an 
appellant. Thus, the commenter suggested eliminating, or substantially 
reducing, the notice of appeal fee. Another commenter questioned 
whether increasing appeal fees would discourage meritorious appeals, 
noting that, the reversal rate by the PTAB indicates that a large 
number of appeals are pursued to correct invalid rejections.
    Response: The Office appreciates the commenters' concerns and, 
based on that feedback, has eliminated the proposed increase to the 
notice of appeal fee and reduced the proposed increase to the appeal 
forwarding fee. Thus, in this final rule, the Notice of Appeal fees 
will remain at current rates (e.g., $800 for a large entity), and the 
Office has lowered the appeal forwarding fee from the proposed $2,500 
(large entity) in the NPRM to $2,240 (large entity). The Office 
believes that those fees strike the appropriate balance between the 
expressed concerns and the Office's need to recover the costs for 
conducting an appeal. The Office notes that, even with the increase to 
the appeals forwarding fee, the true cost of an appeal is subsidized 
significantly. At the current rate, fees paid for an appeal cover 58 
percent of the Office's cost for conducting the appeal. The increase to 
the appeal forwarding fee, which occurs after an examiner's answer, 
will result in total appeal fees covering approximately 63 percent of 
the cost for an appeal. Given the high cost of the appeals process to 
the Office, the appeal forwarding fee adjustment is necessary to 
decrease the gap between the total fees charged and the total costs in 
the aggregate for the appeals process.
    The Office recognizes that applicants may in some cases need to 
appeal an examiner's decision. The appeal process, however, results in 
a high cost to the Office irrespective of whether the PTAB affirms or 
reverses the rejected claims on appeal because the PTAB must process, 
review, and decide the appeal on the merits. In addition, Office data 
show that more than 65 percent of the appeals decided on the merits by 
the PTAB result in an affirmance of at least some of the rejected 
claims (September 2016 Appeals and Interferences Statistics). The data 
demonstrate that the PTAB is affirming a larger percentage of rejected 
claims than it reverses.
    The fee increase also will allow the PTAB to continue to reduce the 
appeals inventory and improve pendency for appeals. Additionally, the 
Office notes that the notice of appeal fee provides an appellant two 
months to file a brief, and to have that brief reviewed by two 
examiners and a supervisor with a subsequent conference regarding the 
rejection, the brief, and whether the appellant will forward the case 
to the PTAB for consideration of the appeal on the merits. If the 
examiner decides to reopen the case or allow it, the cost to an 
appellant for filing the notice of appeal would be less than the 
appellant would incur in filing an RCE, which is the other option 
available when facing rejection. The Office considered the relationship 
between the options of an appeal, on the one hand, and requesting an 
RCE, on the other, when determining the appropriate fee rates in this 
rulemaking.

[[Page 52797]]

    Comment 7: A commenter suggested that the Office consider 
suspending the appeal forwarding fee until an application is taken up 
for review by PTAB, given the appeal backlog and the current state of 
flux of patent subject matter eligibility.
    Response: In the future, the USPTO may consider changes to the 
timing of appeal fee payments. However, the general rule is that fees 
payable to the USPTO are required to be paid in advance; that is, at 
the time of requesting any action by the Office (37 CFR 1.22).
    Comment 8: One commenter proposed a refund to an applicant for 
reversals by the PTAB.
    Response: At this time, the USPTO does not have the statutory 
authority to issue refunds on the basis of ex parte appeal outcome.
    Comment 9: One commenter expressed interest in seeing the increased 
fee data versus decrease in response time to determine if the fee 
increase resulted in increased productivity of the USPTO and PTAB.
    Response: The Office appreciates the suggestion to compare data 
regarding increases in fee versus decrease in response time. The Office 
will continue to explore whether and how such comparative data fit 
within the overall fee setting strategy of allowing the Office to 
recover the aggregate cost of patent operations, while implementing key 
strategic initiatives, including decreasing pendency. The Office notes 
that the PTAB has made significant strides in reducing the appeals 
inventory and pendency of appeals over the past several years. Appeal 
inventory reached over 27,000 in 2012 (prior to the last fee setting 
rule), and the PTAB reduced that inventory to about 17,000 by the end 
of FY 2016. Thus, the PTAB has maintained a high level of productivity 
despite an increase in workload. The additional fees set forth in this 
rule will provide funds necessary to allow the PTAB to continue to 
maintain the appropriate level of judicial and administrative resources 
needed to provide high quality and timely decisions for ex parte 
appeals.
    Between 2012 and 2016 the PTAB also received more than 5,500 
petitions for AIA trial proceedings, and met all statutory deadlines in 
those proceedings. Despite the high demand for these services, the PTAB 
has continued to meet all AIA statutory deadlines. By targeting a fee 
increase to the AIA trial fees, the Office is addressing the 
subsidization of these proceedings in order to allow the PTAB to 
continue to maintain the appropriate level of judicial and 
administrative resources to provide high quality and timely decisions 
for AIA trial proceedings.
Examination Fees
    Comment 10: A commenter questions the USPTO's statement that 
pendency has improved, noting that in the opinion of the commenter, at 
least a portion of the improvement is due to reduced quality. 
Specifically, the commenter questions whether examiners are properly 
incentivized to conduct adequate examinations; the comment describes 
several examples of rejections that allegedly illustrate poor quality 
examinations. The commenter closes by proposing that if the PTAB or the 
Court of Appeals reverses an examiner rejection, the fees paid or a 
multiple thereof would be refunded to the applicant and deducted from 
the bonus payments of the examiners who signed off on the rejection.
    Response: As part of its current strategic plan, the Office has a 
goal to optimize patent quality and timeliness. The aim of the Office's 
processes for examiner oversight, review, and rewards, including the 
bonus payment program, is to provide high quality and timely 
examination at a reasonable cost. The Office continually assesses its 
operational strategies with respect to these processes to take into 
account changing circumstances, and the Office's efforts to reduce 
pendency have resulted in first action and average total pendency 
dropping from a high of 21.9 months and 32.4 months, respectively, in 
FY 2012 to 16.2 months and 25.3 months today. As pendency continues to 
decline, the Office's ability to test programs that may further enhance 
quality grows stronger, as demonstrated by the establishment of the 
Enhanced Patent Quality Initiative (EPQI) (https://www.uspto.gov/patent/initiatives/enhanced-patent-quality-initiative-0) in FY 2015.
    As part of the EPQI, the USPTO solicited stakeholder feedback 
through various outreach efforts and used this feedback to develop and 
refine multiple programs to improve quality. One of these programs is 
the Increasing Clarity and Reasoning in Office Action program in which 
the Office included tips and techniques for drafting clear Office 
actions as part of examiner training. For example, as part of the 
Office's training on 35 U.S.C. 101, the USPTO not only taught the 
relevant changes in the law, but also included examples on how to write 
clear rejections as well as tips for responding to arguments. As a 
result of this training, there was a statistically significant 
improvement in the correctness and clarity of 35 U.S.C. 101 rejections. 
As part of the Quality Metrics program, the Office overhauled its 
quality metrics for work products and for examination processes. With 
respect to work products, the Office used data from the new Master 
Review Form to create clarity and correctness metrics on a per statute 
basis, which will allow the Office to better assess how to improve 
Office action quality. With respect to examination processes, the 
Office is evaluating certain types of transactions, such as rework and 
reopenings, to identify trends and examiner behaviors indicative of 
either best practices or potential quality concerns. Rather than 
setting targets for the particular transactions, the Office is 
conducting a root-cause analysis to allow for reopenings and rework 
where appropriate while providing training to ensure examiners have the 
necessary skills and resources to be as efficient as possible. These 
programs highlight only a couple of the programs that the Office is 
currently implementing to improve quality.
    While providing refunds or deducting base or bonus pay from 
examiners is beyond the scope of this rulemaking, the Office continues 
to review new and revised approaches to determine what approaches may 
better incentivize the patent workforce to achieve its strategic goals.
    Comment 11: One commenter expressed concerns regarding the proposed 
increased fee rates for excess claims in reexaminations.
    Response: The large entity fee for a reexamination with unlimited 
pages is set at $12,000. The unit cost for performing this service was 
$23,288 in FY 2015. When fewer claims are filed, the time required for 
the assigned reexamination specialist to review the request and examine 
the requested claims is reduced, which translates to a reduced overall 
cost of conducting the proceeding. The excess claims fees charges help 
to subsidize the overall cost for performing a reexamination.
    Comment 12: One commenter suggested that the Office should consider 
expanding the situations for which a portion of reexamination fees may 
be refunded. For example, a partial refund of the reexamination fees 
may be merited where a reexamination is ordered, but an examiner does 
not make any new art-based rejections.
    Response: The USPTO is required to go through the entire 
reexamination process and the costs are calculated on the time an 
examiner spends on the reexamination. Whether the examiner makes a new 
rejection or not does not factor into how the Office calculates the 
cost of a reexamination proceeding. The

[[Page 52798]]

addition of claims by patent owner during an ex parte reexamination 
ordered pursuant to 35 U.S.C. 303 require the examiner to examine those 
claims during the proceeding, which includes making decisions which may 
be either adverse or favorable to patentability. Thus, even when the 
examiner does not make new art based rejections to new claims (e.g. 
makes a decision favorable to patentability with respect to the new 
claims to newly added claims), the addition of new claims by patent 
owner during the proceeding necessarily requires additional time by the 
examiner to fully search and examine those new claims. Further, even 
when the art cited by requester under 35 U.S.C. 301 is applicable to 
the newly added claims presented by the patent owner during the 
proceeding, the examiner will still need to search and examine the new 
claims to ensure the best art is presented with respect to those new 
claims. Thus, the time and cost of completing a reexamination 
proceeding is not necessarily predicated on whether or not new art 
based rejections are made by the examiner during the proceeding, but 
rather the amount of time needed to make decisions as to patentability. 
Accordingly, relating a fee refund to whether additional art rejections 
are made during the proceeding is not necessarily merited.
Design Fees
    Comment 13: The Office received three comments concerning the 
increase in design patent issue fee rates. Commenters noted that design 
patent issue fees were being increased by a large percentage and 
significantly more than utility patent issue fees were being increased.
    Response: As discussed in Part V. B., the increase to the design 
patent issue fee has been lowered twice from the initial proposal made 
in October 2015 based on stakeholder feedback. The final design patent 
issue fee is $700, an increase of $140 (25 percent) for large entities. 
The minimum required fees to obtain a design patent (filing, search, 
examination and issue) are set to increase slightly beyond cost 
recovery for large entities ($1,660 versus $1,596 in FY 2015) to 
subsidize the substantial number (almost half in FY 2015) of small and 
micro entity applicants who pay lower fee rates despite similar costs 
to the Office.
    Further, given the lack of maintenance fees to subsidize front-end 
costs for design patents, the new fee rates aim to more closely align 
design-related fees with their costs. Even with the increased fee 
rates, design application processing costs will continue to be 
subsidized by non-design specific fee revenues. Still, the Office 
believes the moderate fee rate increases in filing, search, 
examination, and issue are more appropriately aligned to costs and 
support the policy factor to foster innovation.
    Comment 14: Two commenters suggest that the increase of design 
patent fee rates are comparatively greater than similar fees charged by 
other national/regional IP offices.
    Response: Substantive examination of design patent applications are 
conducted at the USPTO whereas most other national/regional IP offices 
do not conduct substantive examination of design patent applications. 
Substantive examination of design patent applications requires 
significant time from a highly trained patent examiner. Additionally, 
most other national/regional IP offices require design patent holders 
to pay renewal fees to maintain their property rights. As previously 
noted, in the United States, design patents are not subject to renewal 
fees.
    Comment 15: Two commenters suggested allowing applicants to submit 
design patent applications with multiple designs per application 
instead of a single design per application, as required under current 
practice.
    Response: Changes to design application practice are beyond the 
scope of the Office's fee setting authority. Currently, more than one 
embodiment of a design may be claimed so long as such embodiments 
involve a single inventive concept according to the obviousness-type 
double patenting practice for designs.
    Comment 16: Three commenters questioned the calculation of the 
costs of filing, search, examination, and issuance of design patents.
    Response: For detailed information about how the Office calculates 
these costs please see the appendix entitled ``Activity Based 
Information and Patent Fee Unit Expense Methodology,'' available at 
https://www.uspto.gov/sites/default/files/documents/ABI%20Cost%20Supplement.docx.
    Comment 17: Three commenters pointed out that the costs of filing 
and issuance are the same for design patent applications as they are 
for utility, plant, and reissue patent applications.
    Response: The pre-examination and issuance processing for all of 
these patent application types are similar, and vary little between 
types. Therefore, the costs for these services are the same among the 
different patent types.
    Comment 18: Two commenters noted that the cost of search and 
examination of design patent applications is relatively high compared 
to other national/regional IP offices.
    Response: As mentioned previously, this is because a substantive 
examination is required under U.S. statute, which is a costly process. 
Substantive examination of design patents is not common in other 
national/regional IP offices.
Plant Fees
    Comment 19: The Office received ten comments from persons concerned 
with the increase in plant patent issue fee rates. These comments 
generally touched on the many years of development that go into new 
plant varieties, and noted that the resulting products are not sold in 
high volumes nor at high costs per unit, and therefore it can be 
difficult to recuperate costs.
    Response: As first discussed in Part V. B., the increase to the 
plant patent issue fee has been lowered from the rate proposed in the 
NPRM based on stakeholder feedback. The final plant patent issue fee is 
$800, an increase of $40 (5 percent) for large entities. In both the 
current and final rule fee structure, front-end fees are set below the 
Office's costs to foster innovation, per the fee setting policy factor. 
In the case of utility patents, the Office recovers these costs at the 
end of the process through maintenance fees. Similar to design patents 
(discussed earlier), plant patent holders are not required to pay 
maintenance fees. Additionally, similar to design patents, a 
significant proportion of applicants are provided small or micro entity 
discounts. While the fee rates in this rule will allow plant patent 
fees to recover a greater share of plant patent related costs, the 
balance will continue to be subsidized by other types of patent fees. 
However, in response to stakeholder concerns, specifically those 
regarding the potential impacts on small entities and individual 
inventors, the Office determined that a smaller fee rate increase was 
acceptable. For more information on costs please see the Regulatory 
Impact Analysis, Table of Patent Fees, and Activity Based Information 
and Patent Fee Unit Expense Methodology, all available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Request for Continued Examination (RCE) Fees
    Comment 20: Four commenters had concerns about the proposed 
increased fees for RCEs, though two of these commenters did express 
appreciation that the proposed rates were lower than the original 
October 2015 proposal. One

[[Page 52799]]

commenter believed that an examiner should be familiar with the 
application, prior art, and issues when handling an RCE, and 
interpreted the increase of RCE fee rates as an attempt to dissuade 
applicants from filing RCEs, rather than a means to recoup costs.
    Response: The Office appreciates the comments related to RCE costs. 
In setting the fee rates, the Office's goal is not to dissuade RCE 
filings, but to more closely align the fee rates with the cost of 
processing RCEs, as calculated using the most recently available cost 
data (FY 2015). The first RCE fee ($1,300 for large entities) has been 
set at a rate lower than both the cost of performing the services 
associated with an RCE ($2,187) and the fees for filing a continuing 
application ($1,720 for large entities), as well as much lower than the 
average historic cost of services associated with examining a new 
patent application ($4,255). Because the Office set the fee for the 
first RCE below the cost to process, the Office must recoup the costs 
elsewhere. Since most applicants that file one or more RCE resolve all 
remaining issues with a first RCE, the Office determined that 
applicants that file more than one RCE are using the patent system more 
extensively than those who file none or only one RCE. The fee set for 
the second and subsequent RCE ($1,900 for large entities) is above the 
cost of the Office processing those RCEs ($1,540). However, this does 
not fully recoup the costs associated with the first RCE, and the 
Office still must recoup the costs elsewhere for large entity 
applicants filing more than one RCE ($3,200 in RCE fees, $3,727 in 
costs).
    Comment 21: Another commenter believed the process used to arrive 
at the unit cost estimates for RCE processing is opaque and unreliable, 
citing inconsistencies in reported data. This commenter also questioned 
the use of a survey to allocate expenses. The commenter believed that a 
more focused look at the unit cost estimates is necessary before 
increasing fee rates.
    Response: The differences in the reported RCE costs from the 
initial proposal to PPAC and the NPRM are due to an improvement in the 
costing methodology. The approach was updated in FY 2015, and the data 
in more recent documents reflect the improved methodology, including 
updated historical data. Previously, the RCE cost was determined using 
the Total Activity Unit Expense Adjusted for Frequency of Occurrence 
approach, which based the cost of the RCE on activities performed only 
during the RCE process and summed the unit costs to obtain a final unit 
cost of an RCE. The updated methodology, the Incremental Expense 
approach, improves upon this by also capturing the increased cost of 
search and exam activities that occur prior to RCE filings. For those 
applications that reach an RCE, the initial cost of getting to that 
stage is greater than for an application that does not reach an RCE. 
When calculating the historical cost of standard search and examination 
fees, the Office uses the cost of only applications that do not undergo 
an RCE. By using the incremental costing approach, the increased 
initial cost for applications that reach an RCE is captured within the 
RCE fee expense number. The patent examiner survey captures an average 
level of effort for the various examination activities. However, the 
survey does not isolate RCEs and therefore does not capture the level 
of effort specific to an RCE. Year-to-year variations in results have 
been small, but because survey data is applied to approximately $2 
billion worth of expense, very small changes in the survey responses 
could result in large dollar changes to various activity costs. The 
survey instrument and the associated burdening and factoring of 
workloads is the Office's best estimate for costs given available 
information.
    The $411 increase in the RCE expense shown from FY 2014 to FY 2015 
comes from an increase in cost for RCE specific work. Total Adjusted 
Activity expense for the activities `Prepare All Subsequent Actions' 
and `Perform Subsequent Search' increased the most for applications 
with RCE activities both before and during the RCE itself. No material 
changes were made in overhead allocations; however, overhead costs 
increased, specifically related to investment in Information Technology 
associated with the Patent End to End System.
    Comment 22: A commenter expressed appreciation for the Office's 
efforts to reduce the need for RCEs, but noted that many RCE filings 
are due to the current final rejection and after final practices, and 
urged the Office to eliminate these policies. The commenter argued that 
allowing every response to be entered will improve quality and lower 
pendency. The commenter believes that, before increasing RCE fee rates, 
the Office should determine the cost of after final responses and 
advisory actions.
    Response: The Office appreciates the comments on the various 
efforts to reduce the need for RCEs. These comments are outside the 
scope of this rulemaking, however, the Office looks forward to working 
with stakeholders as it continues efforts related to the Enhanced 
Patent Quality Initiative and any potential revisions to final 
rejection and after final policies. The AFCP 2.0--extended through 
September 30, 2017--is part of the USPTO's on-going efforts towards 
compact prosecution and increased collaboration between examiners and 
stakeholders. Regarding the cost of after final responses and advisory 
actions, the estimated the cost of these activities are calculated and 
included in the unit cost of other associated activities provided by 
the Office. For detailed information about how the Office calculates 
these costs please see the appendix entitled ``Activity Based 
Information and Patent Fee Unit Expense Methodology'' available at 
https://www.uspto.gov/sites/default/files/documents/ABI%20Cost%20Supplement.docx.
    Comment 23: Another commenter also interpreted the fee rate 
increase as a way to discourage RCEs, but stated that the applicant 
community views RCEs as a necessity due to inefficiencies in the 
examination process. This commenter cited the Alice Corp. v. CLS Bank 
International and the Mayo Collaborative Services v. Prometheus 
Laboratories, Inc. decisions, and argued that RCEs allow applicants 
more time to await court decisions that may assist the applicant's 
case. Therefore the commenter believes RCEs should be encouraged, not 
discouraged. The commenter worries that small businesses and 
independent inventors would be unable or unwilling to pay increased RCE 
fees, and instead would abandon their patent applications.
    Response: While the Office recognizes that recent court decisions 
have impacted patent-eligibility requirements, it disagrees with the 
commenter that the Office should incentivize RCE filings through lower 
fee rates. This would be in direct conflict with the current compact 
prosecution goals and would in effect increase the RCE subsidy. The 
Office would almost certainly need to charge higher issue and/or 
maintenance fees to offset the cost of processing increased RCEs at 
lower fee rates. Increasing the issue and/or maintenance fees to offset 
decreased cost recovery of RCEs would also cause filers who do not seek 
RCEs to more heavily subsidize services provided to the filers who seek 
RCEs. The Office does not believe such subsidization would be an 
optimal result. The Office also notes that small and micro entity fee 
discounts are available for RCEs.
Application Filing Fees
    Comment 24: A commenter suggested that the Office consider specific 
increases only for continuation

[[Page 52800]]

applications filed late enough that third stage maintenance fees would 
not be applicable, due to the end of the patent term.
    Response: In the future, the Office will evaluate the feasibility 
and potential impacts of implementing a change to continuation fees 
based on associated patent terms.
Information Disclosure Statement Fees
    Comment 25: A commenter believes the Office should not increase the 
Information Disclosure Statement (IDS) submission fee rate until the 
issues raised in 81 FR 59197 (Aug. 29, 2016) ``Request for Comments and 
Notice of Roundtable Event on Leveraging Electronic Resources To 
Retrieve Information From Applicant's Other Applications and Streamline 
Patent Issuance'' have been considered and implemented. The commenter 
further suggested that the Office consider lengthening the time period 
set in 37 CFR 1.97(e)(1) for communications received from a foreign 
patent office in a counterpart application from three months to five 
months.
    Response: In the future, the Office will continue to pursue efforts 
to improve IDS practice including the leverage of electronic resources 
to both increase Office efficiency and to provide additional services 
to applicants. Changes to 37 CFR 1.97(e)(1) are outside the scope of 
this rulemaking.
Excess Claims Fees
    Comment 26: A commenter expressed concern with the increases for 
excess claim fee rates and questioned the fee set for excess claims. 
Additionally, this commenter recommended a refund system in which 
excess claim fees are returned when claims are canceled in response to 
a restriction requirement or when claims are canceled by an applicant 
before examination.
    Response: There is excess burden associated with examining excess 
claims. The number of claims impact the complexity of the request and 
increases the demands placed on the examiner. The excess claims fee 
rates are aimed to permit applicants to include excess claims when 
necessary to obtain an appropriate scope of coverage for an invention, 
while deterring applicants from routinely presenting a copious number 
of claims for merely tactical reasons. Filing applications with the 
most prudent number of unambiguous claims will enable prompt conclusion 
of application processing, because more succinct applications 
facilitate faster examination with an expectation of fewer errors. 
Therefore, the Office is increasing excess claim fee rates to 
facilitate an efficient and compact application examination process, 
which benefits the applicant and the USPTO through more effective 
administration of patent prosecution. In addition to helping the Office 
meet its policy goals of reducing application processing time, 
application pendency, and examination burden, the increase in excess 
claims fee rates is also justified because fees paid by applicants 
filing a large number of claims will help establish the EPQI based on 
stakeholder feedback to provide better services and products as well as 
enhance customer service, and continue to provide patent examiners 
detailed training in efficient interview techniques and in compact 
prosecution. The revenue from excess claim fees also supports the 
front-end subsidies built into the fee rates for filing, search, and 
examination. The Office already has a practice to refund excess claim 
fees when the application is abandoned prior to examination. See 37 CFR 
1.138(d) and MPEP 607.02, Subsection V & 711.01, Subsection III. 
However, as noted in the NPRM, the Office is committed to undertaking a 
study to determine the feasibility of a refund program in which excess 
claim fees are returned when claims are cancelled in response to a 
restriction requirement. However, cancelling claims on restriction 
impacts applicants rights to rejoinder. In addition, letting applicants 
obtain a refund if they cancel claims after rejoinder is considered 
requires the Office to consider rejoinder as to the withdrawn claims 
which can be costly.
Mega-Sequence Listings Fees
    Comment 27: One commenter expressed concern with the proposed mega-
sequence fees without historical cost information and suggests non-fee 
alternatives.
    Response: The proposed fee for mega-sequence listings is based on 
data available at this time. The Office will collect activity based 
cost information if needed and will share this information with the 
public when available. The final rule fee is structured to fulfill the 
AIA authority to set fees so that aggregate revenue from patent fees 
recovers the aggregate estimated cost of patent operations.
Streamlined ex parte Reexamination Fees
    Comment 28: One commenter favors the reduced fee for streamlined 
reexamination proceedings but questions the forty page limit.
    Response: The streamlined ex parte reexamination option has been 
created to promote efficiency and cost reduction, while making it 
financially less burdensome for requesters with limited resources and 
encouraging focused submissions from all petitioners. As part of the 
Office's FY 2015 fee review process, the length of ex parte 
reexamination requests were studied. It was determined that, in many 
cases, clear, concise and focused requests can be written in fewer than 
forty pages (including claim charts). Further, the study demonstrated 
that when requests were less than forty pages, on average, the time 
required for the assigned Reexamination Specialist to review the 
request and examine the requested claims was reduced, which translates 
to a reduced overall cost of conducting the proceeding.
Disciplinary Proceeding Fees
    Comment 29: One commenter applauds the USPTO for dropping the 
previously proposed new fee code for imposing costs of disciplinary 
proceedings on practitioners. Additionally this commenter states that 
disciplinary fees should not be imposed on practitioners when OED 
determines that no disciplinary action is warranted. If the USPTO were 
to attempt to assess a disciplinary fee again in the future, the 
commenter suggests that that fee should be outcome-dependent.
    Response: 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 Sec.  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.
Broader Comments
    Comment 30: One commenter notes that the FederalRegister.gov search 
query did not categorize the rule as significant, and therefore it may 
have been overlooked.
    Response: OMB is responsible for making significance determinations 
for rulemakings pursuant to Executive Order 12866. OMB determined this 
rule to be ``Economically Significant,'' a subset of ``Significant,'' 
pursuant to the EO, and this designation was reflected in the preamble 
to the proposed rule. While the Office of the Federal Register provides 
a convenient source for the

[[Page 52801]]

public to search and identify pending rules that have been deemed 
Significant under EO 12866, the primary Web site designated by OMB for 
identifying such rulemakings is at Reginfo.gov, which is jointly 
maintained by OMB/U.S. General Services Administration (GSA). An entry 
for the proposed rule was posted on that Web site (https://www.reginfo.gov/public/do/eoDetails?rrid=126564), as well as published 
in the United Agenda of Regulatory and Deregulatory Actions properly 
designated as an ``Economically Significant'' rule (https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201610&RIN=0651-AD02).
    Comment 31: Two commenters sought more elasticity information. One 
commenter suggested that the assumption that demand for patent services 
is inelastic may be less true for design patents and another commenter 
noted that the elasticity supplement does not address elasticity 
separately for large, small, and micro entities.
    Response: In this rule, the Office assumes that the fee rate 
adjustments are not substantial enough to create a significant and 
measurable change in demand for existing products and services 
regardless of entity size. For more information please refer to the 
Elasticity Supplement, available at https://www.uspto.gov/sites/default/files/documents/Elasticity%20Supplement.pdf.
    Comment 32: One commenter notes that the Regulatory Impact Analysis 
(RIA) should have included more costs to the American economy. 
Specifically, the commenter suggested that patent applications, patent 
issues, and maintenance fees would decrease, all of which would lead to 
lost jobs, lost wages, and an increased trade deficit.
    Response: The Office appreciates the attention paid to the costs 
and benefits detailed in the RIA. The OMB Office of Information and 
Regulatory Affairs has indicated that it considers the final rule to be 
a transfer rule, concerning payments from one group to another that 
does not affect the total resources available to society. The Office 
recognizes that innovation has become a principal driver of the modern 
economy by stimulating economic growth and creating high-paying jobs. 
However, monetizing and quantifying certain impacts of patent fees on 
the economy and the rate of innovation are inherently difficult due to 
the number of variables involved, the difficulty in predicting economic 
activity, and the availability of data, especially data on private 
sector behavior. The Office does provide some quantitative and 
qualitative data in the RIA to assist the reader in measuring the cost 
and benefits of the rulemaking. The Office follows the guidance set 
forth in Circular A-4 in determining which data to provide in this 
final rule.
    Comment 33: One commenter suggested that the rule should be 
resubmitted under the current presidential administration.
    Response: The USPTO recognizes the timing of the rule and confirms 
that the final rule has undergone review, discussion, and feedback from 
the current presidential administration via the Office of Management 
and Budget. This final rule has the approval of the current 
administration.
    Comment 34: One commenter recommended that the USPTO increase fees 
from foreign firms that file in the United States.
    Response: Charging higher fees to foreign applicants would likely 
be contrary to the USPTO's treaty obligations including those under 
Article 3 of the Agreement on Trade-Related Aspects of Intellectual 
Property Rights (TRIPS) and Article 2 of the Paris Convention. The 
USPTO has a strong commitment to the global IP community. The USPTO 
engages in international patent cooperation through various treaties, 
agreements, and programs to increase the certainty of IP rights while 
reducing stakeholder costs and moving towards a harmonized global 
patent system. By providing discounted fees for small businesses and 
independent inventors regardless of national origin, the USPTO takes an 
impartial fee setting approach that supports innovation by even the 
smallest economic interests. This promotes strong global IP rights 
which, in turn, helps American businesses.
    Comment 35: One commenter sought more information about support for 
independent inventors.
    Response: To support small and medium sized enterprises (SMEs), the 
USPTO has offered discounts for many patent fees since 1982. Initially, 
the discount was fifty percent of eligible patent fees. The AIA 
expanded the number of fees eligible for small entity discounts and 
created a sub-class of small entities, ``micro entities'', that are 
eligible for even greater discounts--seventy five percent. Fees set or 
adjusted for filing, searching, examining, issuing, appealing, and 
maintaining patent applications and patents are subject to this 
discounting. The fee adjustments in this final rule include the 
expansion of the micro entity discount to greater numbers of fees. 
Additionally, the USPTO offers other assistance to SMEs, such as: The 
patent Pro Bono program, the patent Pro Se Assistance program, various 
outreach programs, the Inventors Assistance Center, the Patent and 
Trademark Resource Centers, and partnerships with law firms. More 
information about these programs are available at https://www.uspto.gov/learning-and-resources/inventors-entrepreneurs-resources.

VII. Discussion of Specific Rule

    In this section the Office provides tables of all fees set or 
adjusted in the final rule.
    Section 1.16: The changes to the fee amounts indicated in Sec.  
1.16 are shown in Table 17.

                                                         Table 17--CFR Section 1.16 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Current fees  (dollars)         Final rule fees  (dollars)
         CFR section                     Fee code                   Description        -----------------------------------------------------------------
                                                                                          Large      Small      Micro      Large      Small      Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.16(a)......................  1011/2011/3011..............  Basic Filing Fee--Utility        280        140         70        300        150         75
                                                              (paper filing also
                                                              requires non-electronic
                                                              filing fee under
                                                              1.16(t)).
1.16(a)......................  4011........................  Basic Filing Fee--Utility        n/a         70        n/a        n/a         75        n/a
                                                              (electronic filing for
                                                              small entities).
1.16(b)......................  1012/2012/3012..............  Basic Filing Fee--Design.        180         90         45        200        100         50
1.16(b)......................  1017/2017/3017..............  Basic Filing Fee--Design         180         90         45        200        100         50
                                                              (CPA).
1.16(c)......................  1013/2013/3013..............  Basic Filing Fee--Plant..        180         90         45        200        100         50

[[Page 52802]]

 
1.16(d)......................  1005/2005/3005..............  Provisional Application          260        130         65        280        140         70
                                                              Filing Fee.
1.16(e)......................  1014/2014/3014..............  Basic Filing Fee--Reissue        280        140         70        300        150         75
1.16(e)......................  1019/2019/3019..............  Basic Filing Fee--Reissue        280        140         70        300        150         75
                                                              (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 Excess          80         40         20        100         50         25
                                                              of 20.
1.16(j)......................  1203/2203/3203..............  Multiple Dependent Claim.        780        390        195        820        410        205
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 Fee..        720        360        180        760        380        190
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 Fee..      2,160      1,080        540      2,200      1,100        550
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.17: 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)         Final rule 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 of        1,700        850        850      2,000      1,000        500
                                                              an abandoned application
                                                              for a patent, for the
                                                              delayed payment of the
                                                              fee for issuing each
                                                              patent, or for the
                                                              delayed response by the
                                                              patent owner in any
                                                              reexamination proceeding.
1.17(m)......................  1454/2454/3454..............  Petition for the Delayed       1,700        850        850      2,000      1,000        500
                                                              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.

[[Page 52803]]

 
1.17(m)......................  1558/2558/3558..............  Petition for the Delayed       1,700        850        850      2,000      1,000        500
                                                              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: The changes to the fee amounts indicated in Sec.  
1.18 are shown in Table 19.
    Section 1.18(b)(3) is being 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 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)         Final rule 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        700        350        175
1.18(c)(1)...................  1503/2503/3503..............  Plant Issue Fee..........        760        380        190        800        400        200
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.19: 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)         Final rule 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 Wrapper,        n/a        n/a        n/a         55         55         55
                                                              Electronic Medium, Any
                                                              Size or Provided
                                                              Electronically.
1.19(b)(4)...................  8014........................  For Assignment Records,           25         25         25         35         35         35
                                                              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 Full-       n/a        n/a        n/a      5,200      5,200      5,200
                                                              Text W/Embedded Images,
                                                              Patent Application
                                                              Publication Single-Page
                                                              TIFF Images, or Patent
                                                              Application Publication
                                                              Full-Text W/Embedded
                                                              Images (52 week
                                                              subscription).

[[Page 52804]]

 
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: 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)         Final rule fees  (dollars)
         CFR section                     Fee code                   Description        -----------------------------------------------------------------
                                                                                          Large      Small      Micro      Large      Small      Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.20(a)......................  1811........................  Certificate of Correction        100        100        100        150        150        150
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.
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 Independent        420        210        105        460        230        115
                                                              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 in           80         40         20        100         50         25
                                                              Excess of 20 and Also in
                                                              Excess of the Number of
                                                              Claims in the Patent
                                                              Under Reexamination.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.21: 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)         Final rule 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 Administration          200        200        200        200        200        200
                                                              by Commercial Entity.
1.21(a)(1)(ii)(B)............  9011........................  For Test Administration          450        450        450        450        450        450
                                                              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              100        100        100        200        200        200
                                                              Recognition under Sec.
                                                              11.9(b).
1.21(a)(2)(iii)..............  9025........................  On change of registration        100        100        100        100        100        100
                                                              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.

[[Page 52805]]

 
1.21(a)(5)(i)................  9012........................  Review of Decision by the        130        130        130        400        400        400
                                                              Director of Enrollment
                                                              and Discipline under
                                                              Sec.   11.2(c).
1.21(a)(5)(ii)...............  9013........................  Review of Decision of the        130        130        130        400        400        400
                                                              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 Change        n/a        n/a        n/a         70         70         70
                                                              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 300 MB to 800 MB.
1.21(o)(2)...................  ............................  Submission of sequence           n/a        n/a        n/a     10,000     10,000     10,000
                                                              listings exceeding 800
                                                              MB.
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.
--------------------------------------------------------------------------------------------------------------------------------------------------------

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

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


[[Page 52806]]

    Section 1.492: 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)         Final rule fees  (dollars)
         CFR section                     Fee code                   Description        -----------------------------------------------------------------
                                                                                          Large      Small      Micro      Large      Small      Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.492(a).....................  1631/2631/3631..............  Basic PCT National Stage         280        140         70        300        150         75
                                                              Fee.
1.492(b)(2)..................  1641/2641/3641..............  PCT National Stage Search        120         60         30        140         70         35
                                                              Fee--U.S. was the ISA.
1.492(b)(3)..................  1642/2642/3642..............  PCT National Stage Search        480        240        120        520        260        130
                                                              Fee--Search Report
                                                              Prepared and Provided to
                                                              USPTO.
1.492(b)(4)..................  1632/2632/3632..............  PCT National Stage Search        600        300        150        660        330        165
                                                              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: The changes to the fee amounts indicated in Sec.  
1.031 are shown in Table 26.
    Section 1.1031 is being 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 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).

                                                       Table 26--CFR Section 1.1031(a) Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Current fees  (dollars)         Final rule 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: 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)         Final rule fees  (dollars)
         CFR section                     Fee code                   Description        -----------------------------------------------------------------
                                                                                          Large      Small      Micro      Large      Small      Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
41.20(b)(4)..................  1413/2413/3413..............  Forwarding an Appeal in        2,000      1,000        500      2,240      1,120        560
                                                              an Application or Ex
                                                              Parte Reexamination
                                                              Proceeding to the Board.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 42.15: The changes to the fee amounts indicated in Sec.  
42.15 are shown in Table 28.

[[Page 52807]]



                                                         Table 28--CFR Section 42.15 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Current fees  (dollars)         Final rule 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     15,500     15,500     15,500
                                                              Request Fee.
42.15(a)(2)..................  1414........................  Inter Partes Review Post-     14,000     14,000     14,000     15,000     15,000     15,000
                                                              Institution Fee.
42.15(a)(3)..................  1407........................  In Addition to the Inter         200        200        200        300        300        300
                                                              Partes Review Request
                                                              Fee, for Requesting
                                                              Review of Each Claim in
                                                              Excess of 20.
42.15(a)(4)..................  1415........................  In addition to the Inter         400        400        400        600        600        600
                                                              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 Post-         250        250        250        375        375        375
                                                              Grant or Covered
                                                              Business Method Patent
                                                              Review Request Fee, for
                                                              Requesting Review of
                                                              Each Claim in Excess of
                                                              20.
42.15(b)(4)..................  1417........................  In Addition to the Post-         550        550        550        825        825        825
                                                              Grant or Covered
                                                              Business Method Patent
                                                              Review Post-Institution
                                                              Fee, for Requesting
                                                              Review of Each Claim in
                                                              Excess of 15.
--------------------------------------------------------------------------------------------------------------------------------------------------------

VIII. Rulemaking Considerations

A. America Invents Act

    This final rule sets and adjusts 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 cost to the Office for processing, activities, 
services, and materials relating to patents, including administrative 
costs of the Office with respect to such patent fees. Section 10 
authority includes flexibility to set individual fees in a way that 
furthers key policy factors, while taking into account the cost of the 
respective services. Section 10(e) of the AIA sets forth the general 
requirements for rulemakings that set or adjust fees under this 
authority. In particular, Section 10(e)(1) requires the Director to 
publish in the Federal Register any proposed fee change under Section 
10, and include in such publication the specific rationale and purpose 
for the proposal, including the possible expectations or benefits 
resulting from the proposed change. For such rulemakings, the AIA 
requires that the Office provide a public comment period of not less 
than 45 days.
    The PPAC advises the Under Secretary of Commerce for Intellectual 
Property and Director of the USPTO on the management, policies, goals, 
performance, budget, and user fees of patent operations. When proposing 
fees under Section 10 of the Act, the Director must provide the PPAC 
with the proposed fees at least 45 days prior to publishing the 
proposed fees in the Federal Register. The PPAC then has at least 30 
days within which to deliberate, consider, and comment on the proposal, 
as well as hold public hearing(s) on the proposed fees. The PPAC must 
make a written report available to the public of the comments, advice, 
and recommendations of the committee regarding the proposed fees before 
the Office issues any final fees. The Office considers and analyzes any 
comments, advice, or recommendations received from the PPAC before 
finally setting or adjusting fees.
    Consistent with this framework, on 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 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, available at 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 is 
available 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 the NPRM on October 3, 2016 
(81 FR 68150). The public was then provided a 60-day period during 
which to provide comments to be considered by the USPTO. The NPRM 
comment period

[[Page 52808]]

closed on December 2, 2016. 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. Pursuant to this requirement, 
this rule is effective on January 16, 2018.

B. Regulatory Flexibility Act

    The USPTO publishes this Final Regulatory Flexibility Analysis 
(FRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601, et seq.) to examine the impact of the Office's rule to implement 
the fee setting provisions of the Leahy-Smith America Invents Act (Pub. 
L. 112-29, 125 Stat. 284) (the Act) on small entities. 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 Initial Regulatory Flexibility Analysis (IRFA), unless the 
agency certifies under 5 U.S.C. 605(b) that the rule, if implemented, 
will not have a significant impact on a substantial number of small 
entities. 5 U.S.C. 603, 605. The Office published an IRFA, along with 
the NPRM, on October 3, 2016 (81 FR 68150). The Office received no 
comments from the public directly applicable to the IRFA.
1. A Statement of the Need for, and Objectives of, the Rule
    The objective of the 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 effective administration of 
the U.S. patent system. In setting fees under the Act, the Office seeks 
to secure a sufficient amount of aggregate revenue to recover the 
aggregate cost of patent operations, including for achieving strategic 
and operational goals, such as enhancing patent quality, optimizing the 
timeliness of patent processing (through reducing patent backlog and 
pendency), delivering high quality and timely PTAB decisions, invest in 
modernizing the Patent business IT systems and infrastructure, and 
implementing a sustainable funding model. Additional information on the 
Office's strategic goals may be found in the Strategic Plan, available 
at https://www.uspto.gov/about-us/performance-and-planning/strategy-and-reporting. Additional information on the Office's goals and 
operating requirements may be found in the annual budgets, available at 
https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information.
2. A Statement of the Significant Issues Raised by the Public Comments 
in Response to the Initial Regulatory Flexibility Analysis, a Statement 
of the Assessment of the Agency of Such Issues, and a Statement of Any 
Changes Made in the Final Rule as a Result of Such Comments
    The Office did not receive any public comments in response to the 
IRFA. The Office received comments about fees in general as well as 
particular fees. Details of those comments are discussed and analyzed 
above in Part VI. Discussion of Comments.
3. The Response of the Agency to Any Comments Filed by the Chief 
Counsel for Advocacy of the Small Business Administration in Response 
to the Proposed Rule, and a Detailed Statement of Any Change Made to 
the Proposed Rule in the Final Rule as a Result of the Comments
    The Office did not receive any comments filed by the Chief Counsel 
for Advocacy of the Small Business Administration in response to the 
proposed rule.
4. A Description of and an Estimate of the Number of Small Entities To 
Which the Rule Will Apply or an Explanation of Why No Such Estimate Is 
Available
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 SBA, 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 (Nov. 20, 2006), 
1313 Off. Gaz. Pat. Office 60 (Dec. 12, 2006). The Office's alternate 
small business size standard consists of the SBA's previously 
established size standard for entities entitled to pay reduced patent 
fees. See 13 CFR 121.802. Unlike the 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 (Nov. 20, 2006), 1313 Off. Gaz. Pat. 
Office at 63 (Dec. 12, 2006). If a patent applicant self-identifies on 
a patent application as qualifying as a small entity for reduced patent 
fees under the Office's alternative size standard, the Office captures 
this data in the Patent Application Location and Monitoring (PALM) 
database system, which tracks information on each patent application 
submitted to the Office.
Small Entities Affected by This Rule
Small Entity Defined
    The Act provides that fees set or adjusted under Section 10(a) 
``for filing, searching, examining, issuing, appealing, and maintaining 
patent applications and patents shall be reduced by 50 percent'' with 
respect to the application of such fees to any ``small entity'' (as 
defined in 37 CFR 1.27) that qualifies for reduced fees under 35 U.S.C. 
41(h)(1). 125 Stat. at 316-17. 35 U.S.C. 41(h)(1), in turn, provides 
that certain patent fees ``shall be reduced by 50 percent'' for a small 
business concern as defined by Section 3 of the SBA, and to any 
independent inventor or nonprofit organization as defined in 
regulations described by the Director.
Micro Entity Defined
    Section 10(g) of the Act creates a new category of entity called a 
``micro entity.'' 35 U.S.C. 123; see also 125 Stat. at 318-19. Section 
10(b) of the Act provides that the fees set or adjusted under Section 
10(a) ``for filing, searching, examining, issuing, appealing, and 
maintaining patent applications and patents shall be reduced by 75 
percent with respect to

[[Page 52809]]

the application of such fees to any micro entity as defined by 35 U.S. 
Code Sec.  123.'' 125 Stat. at 315-17. 35 U.S.C. 123(a) defines a 
``micro entity'' as an applicant who certifies that the applicant: (1) 
Qualifies as a small entity as defined in 37 CFR 1.27; (2) has not been 
named as an inventor on more than four previously filed patent 
applications, other than applications filed in another country, 
provisional applications under 35 U.S.C. 111(b), or Patent Cooperation 
Treaty (PCT) applications for which the basic national fee under 35 
U.S.C. 41(a) was not paid; (3) did not, in the calendar year preceding 
the calendar year in which the applicable fee is being paid, have a 
gross income, as defined in Section 61(a) of the Internal Revenue Code 
of 1986 (26 U.S.C. 61(a)), exceeding three times the median household 
income for that preceding calendar year, as most recently reported by 
the Bureau of the Census; and (4) has not assigned, granted, conveyed, 
and is not under an obligation by contract or law, to assign, grant, or 
convey, a license or other ownership interest in the application 
concerned to an entity exceeding the income limit set forth in (3) 
above. See 125 Stat. at 318. 35 U.S.C. 123(d) also defines a ``micro 
entity'' as an applicant who certifies that: (1) The applicant's 
employer, from which the applicant obtains the majority of the 
applicant's income, is an institution of higher education as defined in 
Section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); 
or (2) the applicant has assigned, granted, conveyed, or is under an 
obligation by contract or law, to assign, grant, or convey, a license 
or other ownership interest in the particular applications to such an 
institution of higher education.
Estimate of Number of Small Entities Affected
    The changes in the rule apply to any entity, including a small or 
micro entity that pays any patent fee set forth in the final rule. The 
reduced fee rates (50 percent for small entities and 75 percent for 
micro entities) 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 and micro 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 2016 **    FY 2015      FY 2014      FY 2013      FY 2012    Average ***
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility....................................  All..........................      607,753      578,121      579,873      564,007      530,915      572,134
                                             Small........................      147,076      142,796      133,930      136,490      132,198      138,498
                                             % Small......................         24.2         24.7         23.1         24.2         24.9         24.2
                                             Micro........................       30,995       28,906       18,553        7,896          N/A       21,588
                                             % Micro......................          5.1          5.0          3.2          1.4          N/A          3.7
Reissue....................................  All..........................        1,072        1,087        1,207        1,074        1,212        1,130
                                             Small........................          258          246          280          229          278          258
                                             % Small......................         24.1         22.6         23.2         21.3         22.9         22.8
                                             Micro........................           19           12           24            9          N/A           16
                                             % Micro......................          1.8          1.1          2.0          0.8          N/A          1.4
Plant......................................  All..........................        1,180        1,119        1,123        1,318        1,181        1,184
                                             Small........................          589          673          581          655          576          615
                                             % Small......................         49.9         60.1         51.7         49.7         48.8         52.0
                                             Micro........................            9            4           22            3          N/A           10
                                             % Micro......................          0.8          0.4          2.0          0.2          N/A          0.9
Design.....................................  All..........................       40,406       37,735       36,254       35,065       32,258       36,344
                                             Small........................       16,890       14,981       14,740       15,814       15,806       15,646
                                             % Small......................         41.8         39.7         40.7         45.1         49.0         43.3
                                             Micro........................        4,364        4,000        3,622        1,683          N/A        3,417
                                             % Micro......................         10.8         10.6         10.0          4.8          N/A          9.1
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The patent application filing data in this table includes RCEs.
** FY 2016 application filing data are preliminary and will be finalized in the FY 2017 Performance and Accountability Report (PAR).
*** The micro entity average is from FY 2013 to FY 2016. 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 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 0.7 percent in FY 2017, 2.1 percent in 
FY 2018, 1.2 percent in FY 2019, 0.8 percent in FY 2020, and decline by 
0.5 percent in 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

[[Page 52810]]

regardless of entity size and determined that, as none of the 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.............      612,255      625,296      632,975      637,937      634,657
Reissue......................  All.............          818          823          829          834          840
Plant........................  All.............        1,180        1,155        1,130        1,107        1,083
Design.......................  All.............       41,218       43,548       46,013       48,620       51,379
                                                ----------------------------------------------------------------
    Total....................  All.............      655,471      670,822      680,947      688,498      687,959
----------------------------------------------------------------------------------------------------------------

    The USPTO continuously updates both patent fee collections 
projections and workload projections based on the latest data. The 
estimated number of patent applications have been updated since the 
NPRM was published in October 2016. UPR filings growth projections were 
revised downward during the FY 2018 budget formulation process due to 
revised RGDP estimates and more conservative estimates of out year 
growth. The most recent projections are shown in Table 30.
5. A Description of the Projected Reporting, Recordkeeping and Other 
Compliance Requirements of the 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
    When 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. This action is 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 fee schedule (see Part VII. Discussion of Specific Rule) 
is set forth in the final rule. The fee schedule sets or adjusts 202 
patent fees in total. This includes 14 fees that are discontinued and 
42 new fees, including small entity discounts to two additional fees 
and micro entity discounts to six additional fees.
6. A Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of Applicable Statutes, Including a Statement of the 
Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and why Each one of the Other Significant 
Alternatives to the Rule Considered by the Agency Which Affect the 
Impact on Small Entities Was Rejected
    The USPTO considered several alternative approaches to this rule, 
discussed below, including full cost recovery for individual services, 
an across the board adjustment to fees, and a baseline (current fee 
rates). The discussion here begins with a description of the fee 
schedule adopted for this final rule.
i. Alternative 1: Final Rule Fee Schedule--Setting and Adjusting Patent 
Fees During Fiscal Year 2017
    The USPTO chose the patent fee schedule in this final rule because 
it will enable the Office to achieve its goals effectively and 
efficiently without unduly burdening small entities, erecting barriers 
to entry, or stifling incentives to innovate. The alternative selected 
here achieves the aggregate revenue needed for the Office to offset 
aggregate cost, and is therefore beneficial to all entities that seek 
patent protection. Also, the alternative selected here benefits from 
improvements in the design of the fee schedule.
    This alternative offers small entities a 50 percent fee reduction 
and micro entities a 75 percent fee reduction. Under this selected 
alternative, small and micro entities will pay some higher fees than 
under some of the other alternatives considered. However, the fees are 
not as high as those initially proposed to PPAC or in the NPRM.
    In summary, the fees to obtain a patent will increase slightly. For 
example, fees for both tiers of RCEs will increase slightly. 
Maintenance fee rates remain unchanged at all three stages; however, 
all reissue patents are now 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 forwarding an 
appeal, but not as high as proposed in the NPRM. The fee increase 
proposed in the NPRM for notice of appeal has been removed. Two of the 
fees for inter partes reviews have changed from the NPRM. The Inter 
Partes Review Request Fee--Up to 20 Claims Final Rule rate is $15,500; 
the NRPM rate was $14,000. The Inter Partes Review Post-Institution 
Fee--Up to 15 Claims Final Rule rate is $15,000; the NPRM rate was 
$16,500. These adjustments are made to better align AIA trial fee rates 
and costs. ABI costing data since the inception of AIA trial fees shows 
that the unit costs to the Office for Inter Partes Review requests have 
consistently outpaced unit costs for Inter Partes Review post-
institutions. Fee increases for both post-grant reviews and covered-
business-method reviews are based on FY 2015 cost data and resources 
needed to sustain compliance with AIA deadlines. Finally, in response 
to feedback from members of the public, the design and plant issue fees 
are increasing by less than proposed in the NPRM. Design issues will 
increase to $700 instead of $800 and plant issues will increase to $800 
instead of $1,000.
    The final fee schedule for this rule, as compared to existing fees 
(labeled Alternative 1--Final Rule Fee Schedule--Setting and Adjusting 
Patent Fees during Fiscal Year 2017) is available at http://
www.uspto.gov/about-us/performance-and-planning/

[[Page 52811]]

fee-setting-and-adjusting, in the document entitled ``USPTO Setting and 
Adjusting Patent Fees during Fiscal Year 2017--FRFA Tables.'' Fee 
changes for small and micro entities are included in the tables. For 
the comparison between final fees and current fees, as noted above, the 
``current fees'' column displays the fees that were in effect as of 
January 14, 2017.
ii. Other Alternatives Considered
    In addition to the fee schedule set forth in Alternative 1, above, 
the Office considered several other alternative approaches.
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. This 
alternative sets maintenance fees at approximately half of the amount 
of current maintenance fee rates. 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.
    Alternative 2 would not generate enough aggregate revenue to 
sufficiently cover the aggregate cost of patent operations and support 
the Office's strategic priorities to optimize the quality and 
timeliness of patent processing, deliver high quality and timely PTAB 
decisions, continue investing in modernizing the USPTO IT systems and 
infrastructure, or implement a sustainable funding model for operations 
(this alternative produces enough revenue to meet the minimum patent 
operating reserve level by the end of FY 2019, but does not keep 
building towards the optimal patent operating reserve level). It is 
important for the Office to balance accomplishing the priorities 
together so that it has sufficient resources to maintain them.
    Both the current and final 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 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 current fee schedule). 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--FRFA Tables.'' For the comparison 
between unit cost recovery fees and current fees, the ``current fees'' 
column displays the fees that are in effect as of January 14, 2017.
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 (current fees) beginning in FY 2017. Five percent 
represents the change in 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,

[[Page 52812]]

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--FRFA Tables.'' For the 
comparison between across the board fees and current fees, the 
``current fees'' column displays the fees that are in effect as of 
January 14, 2017.
c. Alternative 4: Baseline (Current Fee Schedule)
    The Office considered a no-action alternative. This alternative 
would retain the current fee schedule, 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 January 14, 2017.
    This approach would not provide sufficient aggregate revenue to 
accomplish the Office's rulemaking goals, as set forth in the FY 2018 
President's Budget or the Strategic Plan. Optimizing patent quality and 
timeliness, delivering high quality and timely PTAB decisions and 
investing in modernizing the USPTO IT systems and infrastructure would 
continue, but at a slower rate due to funding limitations. Sustainable 
funding would not be achieved. Without a fee increase, the USPTO would 
draw the operating reserve down to nothing by FY 2020, and have to cut 
expenditures.
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 
rule is adopting these approaches.
Differing Requirements
    As discussed above, the changes in this rule would continue 
existing fee discounts for small and micro entities that take into 
account the reduced resources available to them as well as offer new 
discounts when applicable under AIA authority. Specifically, micro 
entities would continue to pay a 75 percent reduction in patent fees 
and non-micro, small entities would continue to pay 50 percent of the 
fee.
    This rule sets fee levels but does not set or alter procedural 
requirements for asserting small or micro entity status. To pay reduced 
patent fees, small entities must merely assert small entity status to 
pay reduced patent fees. The small entity may make this assertion by 
either checking a box on the transmittal form, ``Applicant claims small 
entity status,'' or by paying the 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 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 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 rule 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 rule.
Exemption for Small and Micro Entities
    This rule maintains 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.
7. Identification, to the Extent Practicable, of All Relevant Federal 
Rules Which May Duplicate, Overlap, or Conflict With the Rule
    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.

C. Executive Order 12866 (Regulatory Planning and Review)

    This rule 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 (Jan. 18, 2011). 
Specifically, the Office has, to the extent feasible and applicable: 
(1) Made a reasoned determination that the benefits justify the costs 
of the 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

[[Page 52813]]

identified goals designed to promote innovation; (8) considered 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public; and (9) ensured the objectivity of scientific 
and technological information and processes.

E. Executive Order 13771 (Reducing Regulation and Controlling 
Regulatory Costs)

    This final rule is not subject to the requirements of Executive 
Order 13771 (82 FR 9339, February 3, 2017) because this rule involves a 
transfer payment.

F. Executive Order 13132 (Federalism)

    This rule does not contain policies with federalism implications 
sufficient to warrant preparation of a Federalism Assessment under 
Executive Order 13132 (Aug. 4, 1999).

G. 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 final 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 final rule is expected to result in a ``major rule'' as 
defined in 5 U.S.C. 804(2).

H. Unfunded Mandates Reform Act of 1995

    The changes in this rule 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.

I. Paperwork Reduction Act

    This 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.
    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 Parts 41 and 42

    Administrative practice and procedure, Inventions and patents, 
Lawyers.

    For the reasons set forth in the preamble, 37 CFR parts 1, 41, and 
42 are 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)............................       $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:

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

[[Page 52814]]

patent, except design, plant, or provisional applications:

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

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

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

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

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

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

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

    (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)............................      $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)............................      $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)............................      $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)............................      $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), (h), (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 (Sec.   1.29)............................      $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 (Sec.   1.29)............................      $475.00
By a small entity (Sec.   1.27(a)).........................       950.00
By other than a small or micro entity......................     1,900.00
 

* * * * *
    (h) For filing a petition under one of the following sections which 
refers to this paragraph (h):

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

    Sec.  1.84--for accepting color drawings or photographs.
    Sec.  1.91--for entry of a model or exhibit.
    Sec.  1.102(d)--to make an application special.
    Sec.  1.138(c)--to expressly abandon an application to avoid 
publication.
    Sec.  1.313--to withdraw an application from issue.
    Sec.  1.314--to defer issuance of a patent.
* * * * *
    (m) For filing a petition for the revival of an abandoned 
application for a patent, for the delayed payment of the fee for 
issuing each patent, for the delayed response by the patent owner in 
any reexamination proceeding, for the delayed payment of the fee for 
maintaining a patent in force, for the delayed submission of a priority 
or benefit claim, for the extension of the twelve-month (six-month for 
designs) period for filing a subsequent application (Sec. Sec.  1.55(c) 
and (e), 1.78(b), (c), and (e), 1.137, 1.378, and 1.452), or for filing 
a petition to excuse applicant's failure to act within prescribed time 
limits in an international design application (Sec.  1.1051):

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

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

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

* * * * *
    (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)............................       $45.00
By a small entity (Sec.   1.27(a)).........................        90.00
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)............................      $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)............................      $175.00
By a small entity (Sec.   1.27(a)).........................       350.00
By other than a small or micro entity......................       700.00
 

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

    (2) [Reserved]
* * * * *

0
5. Section 1.19 is amended by revising paragraphs (b) introductory text 
and (b)(1), removing and reserving paragraph (b)(2), revising 
paragraphs (b)(4) and (c), removing and reserving paragraphs (d) and 
(e), revising paragraph (f), removing and reserving paragraph (g), and 
adding paragraphs (h) through (l) to read as follows:


Sec.  1.19   Document supply fees.

* * * * *
    (b) Copies of Office documents to be provided in paper, or in 
electronic form, as determined by the Director (for other patent-
related materials see Sec.  1.21(k)):
    (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.

[[Page 52815]]

    (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.
* * * * *
    (4) For assignment records, abstract of title and certification, 
per patent: $35.00.
    (c) Library service (35 U.S.C. 13): For providing to libraries 
copies of all patents issued annually, per annum: $50.00.
* * * * *
    (f) Uncertified copy of a non-United States patent document, per 
document: $25.00.
* * * * *
    (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 patent        150.00
 (Sec.   1.324)............................................
 

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

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

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

 
 
 
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)............................      $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)............................       $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)............................      $400.00
By a small entity (Sec.   1.27(a)).........................       800.00
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)............................      $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)............................    $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. Section 1.21 is revised to read as follows:


Sec.  1.21   Miscellaneous fees and charges.

    The Patent and Trademark Office has established the following fees 
for the services indicated:
    (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) [Reserved]
    (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

[[Page 52816]]

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.
    (b) Deposit accounts:
    (1) [Reserved]
    (2) Service charge for each month when the balance at the end of 
the month is below $1,000: $25.00.
    (3) Service charge for each month when the balance at the end of 
the month is below $300 for restricted subscription deposit accounts 
used exclusively for subscription order of patent copies as issued: 
$25.00.
    (c) [Reserved]
    (d) [Reserved]
    (e) International type search reports: For preparing an 
international type search report of an international type search made 
at the time of the first action on the merits in a national patent 
application: $40.00.
    (f) [Reserved]
    (g) [Reserved]
    (h) For recording each assignment, agreement, or other paper 
relating to the property in a patent or application, per property:
    (1) If submitted electronically, on or after January 1, 2014: 
$0.00.
    (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.
    (j) [Reserved]
    (k) [Reserved]
    (l) [Reserved]
    (m) For processing each payment refused (including a check returned 
``unpaid'') or charged back by a financial institution: $50.00.
    (n) For handling an application in which proceedings are terminated 
pursuant to Sec.  1.53(e): $130.00.
    (o) The submission of very lengthy sequence listings (mega-sequence 
listings) are subject to the following fees:
    (1) Submission of sequence listings in electronic form ranging in 
size from 300 MB to 800 MB:

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

    (2) Submission of sequence listings in electronic form exceeding 
800 MB in size:

 
 
 
By a micro entity (Sec.   1.29)............................    $2,500.00
By a small entity (Sec.   1.27(a)).........................     5,000.00
By other than a small or micro entity......................    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)............................       $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)............................       $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) introductory text, (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)............................       $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)............................       $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)............................      $130.00
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)............................      $165.00
By a small entity (Sec.   1.27(a)).........................       330.00
By other than a small or micro entity......................       660.00
 

    (c) The examination fee for an international application entering 
the national stage under 35 U.S.C. 371:
* * * * *
    (2) In all situations not provided for in paragraph (c)(1) of this 
section:

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

[[Page 52817]]



 
 
 
By a micro entity (Sec.   1.29)............................       $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 paragraph (b)(4) to read as 
follows:


Sec.  41.20   Fees.

* * * * *
    (b) * * *
    (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 of this chapter)............      $560.00
By a small entity (Sec.   1.27(a)) of this chapter)........     1,120.00
By other than a small or micro entity......................     2,240.00
 

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: $15,500.00.
    (2) Inter Partes Review Post-Institution fee: $15,000.00.
    (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.
* * * * *

Joseph Matal,
Associate Solicitor, performing the functions and duties of the Under 
Secretary of Commerce for Intellectual Property and Director of the 
United States Patent and Trademark Office.
[FR Doc. 2017-24390 Filed 11-13-17; 8:45 am]
 BILLING CODE 3510-16-P