Setting and Adjusting Patent Fees During Fiscal Year 2020, 37398-37440 [2019-15727]

Download as PDF 37398 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules DEPARTMENT OF COMMERCE Patent and Trademark Office 37 CFR Parts 1, 11, 41, and 42 [Docket No. PTO–P–2018–0031] RIN 0651–AD31 Setting and Adjusting Patent Fees During Fiscal Year 2020 United States Patent and Trademark Office, Department of Commerce. ACTION: Notice of proposed rulemaking. AGENCY: The United States Patent and Trademark Office (Office or USPTO) proposes to set or adjust patent fees as authorized by the Leahy-Smith America Invents Act (Act or AIA), as amended by the Study of Underrepresented Classes Chasing Engineering and Science Success Act of 2018 (SUCCESS Act). The USPTO is a business-like operation where the demand for patent products and services and the cost of our operations are affected by external factors, such as the economy, legislation, court decisions, and increases in the costs of supplies and contract services, as well as internal factors, such as changes in patent examination processes and procedures. The proposed fee adjustments are needed to provide the Office with a sufficient amount of aggregate revenue to recover the aggregate cost of patent operations in future years (based on current projections) and to allow the Office to continue progress towards achieving strategic goals. DATES: The Office solicits comments from the public on this proposed rule. Written comments must be received on or before September 30, 2019 to ensure consideration. ADDRESSES: Comments should be sent by electronic mail message over the internet addressed to: fee.setting@ uspto.gov. Comments may also be submitted by postal mail addressed to: Mail Stop—Office of the Chief Financial Officer, Director of the United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313–1450, marked to the attention of ‘‘Brendan Hourigan.’’ Comments may also be sent by electronic mail message over the internet via the Federal eRulemaking Portal at https://www.regulations.gov. See the Federal eRulemaking Portal website for additional instructions on providing comments via the Federal eRulemaking Portal. Although comments may be submitted by postal mail, the Office prefers to receive comments by jbell on DSK3GLQ082PROD with PROPOSALS2 SUMMARY: VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 electronic mail message over the internet, which allows the Office to more easily share comments with the public. Electronic comments are preferred to be submitted in plain text, but also may be submitted in portable document format (PDF) or a word processing format. Comments not submitted electronically should be submitted on paper in a format that facilitates convenient digital scanning into portable document format. The comments will be available for public inspection via the Office’s internet website (https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting) and at https://www.regulations.gov. Because comments will be made available for public inspection, information that the submitter does not desire to make public, such as an address or phone number, should not be included in the comments. FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director of the Office of Planning and Budget, by telephone at (571) 272–8966; or Dianne Buie, Office of Planning and Budget, by telephone at (571) 272–6301. SUPPLEMENTARY INFORMATION: I. Executive Summary A. Purpose of This Action The Office proposes this rule under section 10 of the AIA (Section 10). Public Law 112–29, 125 Stat. 284, as amended by the SUCCESS Act Public Law 115–273, 132 Stat. 4158, which authorizes the Director of the USPTO to set or adjust by rule any patent fee established, authorized, or charged under title 35 of the United States Code (U.S.C.) for any services performed, or materials furnished, by the Office. Section 10 prescribes that fees may be set or adjusted only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents, including administrative costs of the Office with respect to such patent fees. Section 10 authority includes flexibility to set individual fees in a way that furthers key policy factors, while taking into account the cost of the respective services. Section 10 also establishes certain procedural requirements for setting or adjusting fee regulations, such as public hearings and input from the Patent Public Advisory Committee (PPAC) and congressional oversight. B. Summary of Provisions Impacted by This Action Consistent with Federal fee setting standards, the Office conducted a biennial review of fees, costs, and PO 00000 Frm 00002 Fmt 4701 Sfmt 4702 revenues that began in 2017, and concluded that fee adjustments are necessary to provide the resources needed to improve patent operations, including implementing the USPTO 2018–2022 Strategic Plan (Strategic Plan). As a result, the 295 proposed fee adjustments outlined in this proposed rule align directly with the Office’s strategic goals and four key fee setting policy factors, discussed in detail in Part V. The fee schedule in this proposed rule will recover the aggregate estimated costs of patent operations, including achieving the Office’s strategic goals as detailed in the Strategic Plan, available at https://www.uspto.gov/sites/default/ files/documents/USPTO_2018-2022_ Strategic_Plan.pdf. The Strategic Plan defines the USPTO’s mission, vision, and long-term goals and presents the actions the Office will take to realize those goals. This proposed fee setting rule supports the patent-related strategic goal to optimize patent quality and timeliness, which includes optimizing patent application pendency and examination timeframes, issuing highly reliable patents, fostering innovation through business effectiveness, and enhancing the operations of the Patent Trial and Appeal Board (PTAB). To the extent that the aggregate revenue generated by this rule will be used to pay for all patent-related costs of the USPTO, this proposed rule also supports USPTO’s goal to provide domestic and global leadership to improve intellectual property (IP) policy protection and enforcement, as well as the mission support goal to deliver organizational excellence, which includes optimizing speed, quality, and cost-effectiveness of IT delivery to achieve business value and ensuring financial sustainability to facilitate effective USPTO operations. The Office intends to issue a final rule on fee changes in FY 2020 after receipt and analysis of public comments. During a formal process closely tied to the annual budget process, the USPTO reviewed and analyzed the overall balance between the Office’s estimated revenue and costs over the next five years (based on current projections), and also reviewed individual fee changes and new fee proposals to assess their alignment with the Office’s strategic goals and fee structure philosophy, both of which aim to provide sufficient financial resources to facilitate the effective administration of patent operations. Specifically, the Office assessed how well each proposal aligned with four key fee setting policy factors: Promote innovation strategies, align fees with the full cost of products E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules and services, set fees to facilitate the effective administration of the patent systems, and offer processing options for applicants. In this proposed rule, the Office proposes to set or adjust 295 patent fees for large, small and micro entities (any reference herein to ‘‘large entity’’ includes all entities other than those that have established entitlement to either a small or micro entity fee discount). The fees for small and micro entity rates are tiered with small entities at a 50 percent discount and micro entities at a 75 percent discount. Small entity fee eligibility is based on the size or certain non-profit status of the applicant’s business and that of any other party holding rights in the invention. Micro entity fee eligibility is described in Section 10(g) of the AIA. The Office also proposes introducing 11 new fees and discontinuing three fees. Overall, the routine fees to obtain a patent (i.e., filing, search, examination, and issue fees) will increase under this Notice of Proposed Rulemaking (NPRM) relative to the current fee schedule in order to ensure financial sustainability and accommodate increases needed to improve the predictability and reliability of patent IP protection (which are discussed in detail below). Applicants who meet the definition for small or micro entity discounts will continue to pay a reduced fee for the fees eligible for a discount under Section 10(b). Additional information describing the proposed fee adjustments is included in Part V: Individual Fee Rationale in this rulemaking and in the ‘‘Table of Patent Fees—Current, Proposed and Unit Cost’’ (hereinafter ‘‘Table of Patent Fees’’) available at https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. As background, Section 10 of the AIA changed the Office’s fee setting model and authorized the USPTO to set or adjust patent fees within the regulatory process. Section 10 better equips the Office to respond to changing circumstances. In FY 2013 and FY 2018, the USPTO used the AIA’s fee setting authority to achieve key fee setting policy factors—to promote innovation strategies, align fees with the full cost of products and services, set fees to facilitate the effective administration of the patent systems, and offer patent processing options for applicants—and to generate sufficient resources needed to meet the Office’s strategic patent priorities. With the additional fees collected as a result of the January 2013 Setting and Adjusting Patent Fees Final Rule (hereinafter ‘‘the January 2013 Final Rule’’) (78 FR 4212) and the VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 January 2018, Setting and Adjusting Patent Fees in Fiscal Year 2017 Final Rule (hereinafter ‘‘the January 2018 Final Rule’’) (82 FR 52780), the Office made considerable progress in reducing backlog and pendency. Since the development of the USPTO fee schedule currently in effect, a number of the assumptions on which the cost and revenue projections supporting that rulemaking have changed. Notably, since the January 2018 Final Rule was published, (a) USPTO’s projected patent examination costs have increased and (b) fee collections have been lower than anticipated due to lower than expected application filings, small declines in maintenance fee renewal rates, and a later than planned implementation of the January 2018 Final Rule. The higher fees proposed in this current rulemaking are needed as the Office continues its efforts towards accomplishing its mission and responding to the demands of both the domestic and international economies for robust and timely IP products and services. The proposed fee adjustments account for both the lower than anticipated revenue being generated under the existing fee schedule and also keeping pace with the rising costs of operations in the future, including growing the operating reserve. The Office continues its efforts towards accomplishing its mission and responding to the demands of both the domestic and international economies for robust and timely IP products and services. The USPTO must continually challenge itself to reinforce the predictability, reliability, and quality of those IP rights. The Office needs to foster the utmost confidence in the legal durability of its products in order to inspire greater innovation and further economic growth. The Office’s strategic goal to optimize patent quality and timeliness recognizes the importance of innovation as the foundation of American economic growth and national competitiveness. Through this goal, the Office diligently works to balance timely examination with improvements in patent quality; particularly, the reliability of issued patents. One of these improvements is a comprehensive analysis of examination time, known as the Examiner Time Analysis (ETA). The last comprehensive review of examination time was completed over 40 years ago. Since then, significant changes to the examination process have occurred, including the emergence of new, more complex technologies; a growth of available prior art that must be searched; impacts of new electronic tools on the examination process; the PO 00000 Frm 00003 Fmt 4701 Sfmt 4702 37399 challenges of transitioning to a new patent classification system; and changes in the legal landscape or examination practices. As the USPTO plans for the future, the Office considered how changes such as these impact the amount of time it takes to examine an application. The USPTO is also working towards improving patent quality by providing increased clarity on patentable subject matter eligibility under section 101 of title 35 U.S.C. The Office continues to strive to create consistency and increased clarity through this guidance. The Office is also focusing efforts on improving the initial search and availability of the best prior art to examiners. This aspect takes a variety of forms and the Office is working on many possible approaches. Overall, presenting more comprehensive search results to the examiners initially will lead to more efficient examination, a decrease in the information gap between the examination phase and the later challenge or litigation phases during the life of a patent, and increase the reliability of the patent grant overall. Effecting the changes in the examination process needed to ensure the issuance of reliable patents, while also issuing those patents in a timely manner, means recognizing a potential increase in the core operating costs for future years. Another major component of the overall patent process is the work carried out by the PTAB. On April 24, 2018, the U.S. Supreme Court issued its decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). Changes related to the SAS decision, along with other implementations, will increase the average cost to conduct each proceeding. These changes are discussed in detail in section V. Individual Fee Rationale. As a production-oriented entity, the USPTO relies upon IT as a missioncritical enabler for every aspect of its operation. The quality, efficiency, and productivity of patent operations correlate to the performance of IT systems. To accomplish its performance-based strategies, the USPTO continuously engages in multiyear efforts to upgrade its business systems and the IT infrastructure supporting those systems in order to keep pace with emerging business, legislative, and court needs and technology standards. Since the last patent fee setting effort, the USPTO has made significant progress on IT tools, including continued development and implementation of the Patent End-toEnd (PE2E) IT capability. For example, the Office continues to work on releasing systems such as Patent Center E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 37400 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules which will modernize the transaction systems by combining EFS Web and PAIR in a single interface. The Office has also made progress on the continued development and deployment of the PTAB-End-to-End (PTAB E2E) IT capabilities, which will expand the use of intelligent data to support appeal decisions and process inter partes review (IPR) proceedings, post-grant review (PGR) proceedings, covered business method review (CBM) proceedings, and derivation (DER) proceedings. Other IT efforts are underway to stabilize, modernize, or replace the USPTO’s legacy systems and aging infrastructure. To this end, the Office is conducting a wholesale review of all technology resources and is in the process of changing over the oldest infrastructure. Consequently, the Office is taking a fresh look at the IT systems from top to bottom. This provides USPTO with the opportunity to fundamentally transform the Office’s IT systems with state-of-the art technology. The Office invests a considerable amount of resources in IT modernization and stabilization each year, and the FY 2020 Budget does not anticipate that costs will increase beyond levels previously foreseen. However, given updated revenue and spending projections, this proposed fee increase is needed to support continuing IT investments at previously planned levels. Without an increase in USPTO’s aggregate revenue, resources available for IT investment will inevitably be curtailed. Lastly, the USPTO has taken steps to establish and maintain operating reserves to facilitate execution of multiyear plans. Using fee setting authority and other tools, the USPTO continuously refines its multi-year planning and budgeting. The fee setting authority prescribed in the AIA, as amended by the SUCCESS Act, allows the Office to effectively engage the stakeholder community on proposed fee adjustments; fully recover the aggregate costs of its planned operations, including the development and maintenance of sufficient operating reserves; invest in strategic agency initiatives; and respond to changing market needs and other external factors. Research has shown that large feefunded, business-like agencies without an operating reserve are at risk of cash flow stress. USPTO’s operating reserves enable the Office to mitigate this risk. For instance, earlier in FY 2019, certain federal government departments and agencies, including the Department of Commerce, shut down as a result of a lapse in appropriations. The USPTO received special consideration to remain VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 open using funds available from the operating reserves. This allowed the USPTO to continue operations, thus preventing a significant degradation in services levels, such as patent pendency timeframes. This example provides an ongoing compelling case for the operating reserves’ significant value. The USPTO assesses risk annually, and determines the minimum level of reserves necessary to shield core operations against known financial risks. Based on current cost and revenue assumptions, the FY 2020 Budget projects that the USPTO’s patent operating reserve will fall well below this minimum level in FY 2019 and FY 2020. Both external factors and internal decisions impacting the spending and revenue projections mentioned above have impacted the Office’s ability to grow the operating reserve to the levels anticipated in the January 2018 Final Rule. Absent the proposed fee increase, the USPTO’s patent operating reserve will be exhausted by FY 2024, which would leave the Office vulnerable to changes in the economy that reduce annual revenue, government wide fiscal events, unexpected cost increases, and a number of other financial risks. The USPTO also acutely recognizes that fees cannot simply increase for every improvement the Office deems desirable. The USPTO has a responsibility to stakeholders to pursue strategic opportunities for improvement in an efficient, cost-conscious manner. The Office’s Financial Advisory Board (FAB) focuses on financial risk management and determining what expenses are truly necessary. Each year the FAB reviews multiple scenarios to determine what level of fee collections are expected and what the hiring and spending levels should be in order to effectively carry out the Office’s mission. The FAB also regularly reviews USPTO activities to identify opportunities for cost savings and resources that can be redirected to higher priority efforts. As a result of the USPTO’s careful financial management and prudent use of fee setting authority, the Congress recognized the Office to be good stewards of fee setting authority and extended that authority through the SUCCESS Act. In order to continue building on the progress made over the past seven years, and consistent with the USPTO’s biennial fee review policy, the Office proposes the fee schedule detailed herein to continue to focus on the fundamental purpose of the USPTO, which is to foster innovation, competitiveness, and job growth by recognizing and securing IP rights, through the delivery of high quality and PO 00000 Frm 00004 Fmt 4701 Sfmt 4702 timely patent examination and review proceedings in order to produce reliable and predictable intellectual property rights. This proposed rule seeks to provide the USPTO sufficient financial resources to facilitate the effective administration of the U.S. IP system. The proposal includes targeted fee adjustments in addition to an approximately five percent across the board adjustment. This proposed rule is needed because actual fee collections have not materialized as expected in the January 2018 Final Rule, projected fee collections have been lowered as a result, and critical costs to the Office continue to increase. The proposed fees set forth in this proposed rule will help replenish and grow the patent operating reserve and stabilize USPTO’s finances, enabling the Office to deliver reliable and predictable service levels, even in times of financial fluctuations. A more robust patent operating reserve will also position the Office to identify and continue to undertake capital improvements, such as adapting to an ever-increasing technological future. The operating reserve will be managed carefully; if the projected operating reserve were to exceed the targeted optimal level by ten percent for two consecutive years, it is USPTO policy to examine the contributing factors and determine whether it would be advisable to lower fee rates. The fees proposed in this NPRM intend to position the Office well to deliver on known commitments and address unknown risks in the future. C. Summary of Costs and Benefits of This Action The proposed rule is economically significant and results in a need for a Regulatory Impact Analysis (RIA) under Executive Order 12866 Regulatory Planning and Review, (Sept. 30, 1993). The Office prepared a RIA to analyze the costs and benefits of the NPRM over a five-year period, FY 2020–FY 2024. The RIA includes an analysis of four alternatives for how well they aligned to the Office’s rulemaking strategies and goals, which include strategic priorities (goals, objectives, and initiatives) from the Strategic Plan and the Office’s fee setting policy factors. From this conceptual framework, the Office assessed the absolute and relative qualitative costs and benefits of each alternative. Consistent with OMB Circular A–4, ‘‘Regulatory Analysis,’’ the rule involves a transfer payment from one group to another. The Office recognizes that it is very difficult to precisely monetize and quantify social costs and benefits resulting from deadweight loss of a transfer rule such E:\FR\FM\31JYP2.SGM 31JYP2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules as the proposed rule. The costs and benefits that the Office identifies and analyzes in the RIA are strictly qualitative. Qualitative costs and benefits have effects that are difficult to express in either dollar or numerical values. Monetized costs and benefits, on the other hand, have effects that can be expressed in dollar values. The Office did not identify any monetized costs and benefits of the proposed rule, but found that the proposed rule has significant qualitative benefits with no identified costs. The qualitative costs and benefits that the RIA assesses are: (1) Fee schedule design—a measure of how well the fee schedule aligns to the key fee setting policy factors; and (2) securing aggregate revenue to recover aggregate cost—a measure of whether the alternative provides adequate revenue to support the core mission and strategic priorities described in the NPRM, Strategic Plan, and FY 2020 Budget. Based on the costs and benefits identified and analyzed in the RIA, the fee schedule proposed in this NPRM offers the highest net benefits. As described throughout this document, the proposed fee schedule maintains the existing balance of below cost entry fees (e.g., filing, search, and examination) and above cost maintenance fees as one approach to foster innovation. Further, as detailed in Part V, the proposed fee changes are targeted in support of one or more fee setting policy factors. Lastly, the proposed rule secures the aggregate revenue needed to achieve the strategic priorities encompassed in the rulemaking goals and strategies (see Part III). The proposed fee schedule allows for optimizing patent quality and timeliness. This significantly increases the value of patents by advancing commercialization of new technologies sooner and reduces uncertainty regarding the scope of patent rights, which fosters innovation and has a positive effect on economic growth. Table 1 summarizes the RIA results. TABLE 1—PROPOSED PATENT FEE SCHEDULE COSTS AND BENEFITS, CUMULATIVE FY 2020–FY 2024 jbell on DSK3GLQ082PROD with PROPOSALS2 Qualitative costs and benefits Costs: None Identified ...... Benefits: Secure Aggregate Revenue to Recover Aggregate Costs. Fee Schedule Design. VerDate Sep<11>2014 Neutral. Significant. Significant. 20:55 Jul 30, 2019 Jkt 247001 TABLE 1—PROPOSED PATENT FEE SCHEDULE COSTS AND BENEFITS, CUMULATIVE FY 2020–FY 2024— Continued Qualitative costs and benefits Net Benefit ................ Significant Benefit. Additional details describing the costs and benefits are available in the RIA at https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. II. Legal Framework A. Leahy-Smith America Invents Act— Section 10 The Leahy-Smith America Invents Act was enacted into law on September 16, 2011. See Public Law 112–29, 125 Stat. 284. Section 10(a) of the Act authorizes the Director of the Office to set or adjust by rule any patent fee established, authorized, or charged under title 35, U.S.C., for any services performed by, or materials furnished by, the Office. Fees under title 35 U.S.C. may be set or adjusted only to recover the aggregate estimated cost to the Office for processing, activities, services, and materials related to patents, including administrative costs to the Office with respect to such patent operations. See 125 Stat. at 316. Provided that the fees in the aggregate achieve overall aggregate cost recovery, the Director may set individual fees under Section 10 at, below, or above their respective cost. Section 10(e) of the Act requires the Director to publish the final fee rule in the Federal Register and the Official Gazette of the Patent and Trademark Office at least 45 days before the final fees become effective. Section 10(i) terminates the Director’s authority to set or adjust any fee under Section 10(a) upon the expiration of the seven-year period that began on September 16, 2011. B. The Study of Underrepresented Classes Chasing Engineering and Science Success Act of 2018 The Study of Underrepresented Classes Chasing Engineering and Science Success Act of 2018 (SUCCESS Act), was enacted into law on October 31, 2018. See Public Law 115–273, 132 Stat. 4158. Section 4 of the SUCCESS Act amended Section 10(i)(2) of the AIA by striking ‘‘7-year’’ and inserting ‘‘15year’’ in reference to the expiration of fee setting authority. Therefore, the updated Section 10(i) of the AIA terminates the Director’s authority to set or adjust any fee under Section 10(a) PO 00000 Frm 00005 Fmt 4701 Sfmt 4702 37401 upon the expiration of the 15-year period that began on September 16, 2011 and ends on September 16, 2026. C. Small Entity Fee Reduction Section 10(b) of the AIA requires the Office to reduce by 50 percent the fees for small entities that are set or adjusted under Section 10(a) for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents. D. Micro Entity Fee Reduction Section 10(g) of the AIA amended chapter 11 of title 35, U.S.C., by adding section 123 concerning micro entities. The Act provides that the Office must reduce by 75 percent the fees for micro entities for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents. Micro entity fees were implemented through the previous patent fee rule, and the Office will maintain this 75 percent micro entity discount for the appropriate fees and proposes to implement micro entity fees for additional services as appropriate. E. Patent Public Advisory Committee Role The Secretary of Commerce established the PPAC under the American Inventors Protection Act of 1999. 35 U.S.C. 5. The PPAC advises the Under Secretary of Commerce for Intellectual Property and Director of the USPTO on the management, policies, goals, performance, budget, and user fees of patent operations. When adopting fees under Section 10 of the Act, the Director must provide the PPAC with the proposed fees at least 45 days prior to publishing the proposed fees in the Federal Register. The PPAC then has at least 30 days within which to deliberate, consider, and comment on the proposal, as well as hold public hearing(s) on the proposed fees. The PPAC must make a written report available to the public of the comments, advice, and recommendations of the committee regarding the proposed fees before the Office issues any final fees. The Office will consider and analyze any comments, advice, or recommendations received from the PPAC before finally setting or adjusting fees. Consistent with this framework, on August 8, 2018, the Director notified the PPAC of the Office’s intent to set or adjust patent fees and submitted a preliminary patent fee proposal with supporting materials. The preliminary patent fee proposal and associated materials are available at https:// www.uspto.gov/about-us/performance- E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 37402 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules and-planning/fee-setting-and-adjusting. The PPAC held a public hearing in Alexandria, Virginia, on September 6, 2018. Transcripts of the hearing are available for review at https:// www.uspto.gov/sites/default/files/ documents/PPAC_Hearing_Transcript_ 20180906.pdf. Members of the public were invited to the hearing and given the opportunity to submit written and/ or oral testimony for the PPAC to consider. The PPAC considered such public comments from this hearing and made all comments available to the public via the Fee Setting website, https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. The PPAC also provided a written report setting forth in detail the comments, advice, and recommendations of the committee regarding the preliminary proposed fees. The report regarding the preliminary proposed fees was released on October 29, 2018, and can be found online at https://www.uspto.gov/sites/default/ files/documents/PPAC_Fee_Setting_ Report_Oct2018_1.pdf. The Office considered and analyzed all comments, advice, and recommendations received from the PPAC before publishing this NPRM. Before a final rule is issued, this proposed rule provides the public with a 60-day period during which to provide comments to be considered by the USPTO. innovation strategies, aligning fees with the full cost of products and services, facilitating the effective administration of the U.S. patent system, and offering patent processing options to applicants. Each factor promotes a particular aspect of the U.S. patent system. Promoting innovation strategies seeks to ensure barriers to entry into the U.S. patent system remain low, and innovation is incentivized by granting inventors certain short-term exclusive rights to stimulate additional inventive activity. Aligning fees with the full cost of products and services recognizes that as a fully fee-funded entity, the Office must account for all of its costs even as it elects to set certain fees below, at, or above cost. This factor also recognizes that some applicants may use particular services in a much more costly manner than other applicants (e.g., patent applications cost more to process when more claims are filed). Facilitating effective administration of the patent system seeks to encourage patent prosecution strategies that promote efficient patent prosecution, resulting in compact prosecution and reduction in the time it takes to obtain a patent. Finally, the Office recognizes that patent prosecution is not a one-size-fits-all process; therefore, where feasible, the Office endeavors to fulfill its fourth policy factor of offering patent processing options to applicants. III. Rulemaking Goals and Strategies B. Fee Setting Considerations The balance of this sub-section presents the specific fee setting considerations the Office reviewed in developing the proposed patent fee schedule. Specific considerations are: (1) Historical costs of patent operations and investments to date in meeting the Office’s strategic goals; (2) the balance between projected costs to meet the Office’s operational needs and strategic goals and the projected future year fee collections; (3) fee schedule design; (4) sustainable funding; and (5) the comments, advice, and recommendations offered by the PPAC on the Office’s initial fee setting proposal. Collectively, these considerations inform the Office’s chosen rulemaking strategy. (1) Historical Cost. To ascertain how to best align fees with the full cost of products and services, the Office considers unit cost data provided by the USPTO’s Activity Based Information (ABI) program. Using historical cost data and forecasted application demands, the Office can align fees to the costs of specific patent products and services. The document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—Activity A. Fee Setting Strategy The overall strategy of this proposed rule is to establish a fee schedule that generates sufficient multi-year revenue to recover the aggregate cost of maintaining USPTO operations and accomplishing the USPTO’s strategic goals in accordance with the authority granted to the USPTO by AIA Section 10, as amended by the SUCCESS Act. The overriding principles behind this strategy are to operate within a sustainable funding model to avoid disruptions caused by fluctuations in financial operations, and to enable the USPTO to continue strategic improvements, such as optimizing patent application pendency, issuing highly reliable patents, fostering innovation through business effectiveness, enhancing operations of the PTAB, and optimizing speed, quality, and cost effectiveness of information technology delivery to achieve business value. In addition to the overriding principles outlined above, as discussed earlier in this document, the Office also assesses alignment with the four key fee setting policy factors: Promoting VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 PO 00000 Frm 00006 Fmt 4701 Sfmt 4702 Based Information and Patent Fee Unit Expense Methodology,’’ available at https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting, provides detail on the Office’s costing methodology in addition to the last three years of historical cost data. Part IV of this proposed rule details the Office’s methodology for establishing fees. Additionally, Part V describes the reasoning for setting some fees at cost, below cost, or above cost such that the Office recovers the aggregate cost of providing services through fees. (2) Projected Costs and Revenue. In developing this NPRM, the USPTO considered its most current estimates of future year workload demands, fee collections, and costs to maintain core USPTO operations and meet the Office’s strategic goals, all of which can be found in the FY 2020 Budget. The FY 2020 Budget and the Strategic Plan highlight the priorities of: Optimizing patent application pendency, issuing highly reliable patents, fostering innovation through business effectiveness, enhancing operations of the PTAB, optimizing speed, quality, and cost effectiveness of IT delivery to achieve business value, and ensuring financial sustainability to facilitate effective USPTO operations. This also enables the USPTO to continue to leverage nationwide talent to build, retain and effectively manage the highly educated and talented workforce it needs to properly serve its stakeholder community and the country. (a) Updated Revenue Estimates. As is discussed in more detail in Part IV: Fee Setting Methodology, when setting fees at appropriate levels to recover aggregate costs, the USPTO must estimate future year demand for the USPTO’s products and services through a careful analysis of economic conditions, potential changes in the legal and policy environment, and operational efficiency and productivity. Many of these factors fall outside the USPTO’s control. Since the time that the USPTO published the January 2018 Final Rule, new information has become available that has resulted in adjustments to several of the assumptions underlying the Office’s revenue projections. The result of this change is a lowering of revenue expectations under the existing fee schedule. This reduction is due to a number of factors, most significant of which is a reduction in the estimates for application filings and maintenance fee collections. Actual Utility, Plant, and Reissue (UPR) application filings in FYs 2017 and 2018 were less robust than E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules expected. In the FY 2020 Budget, given the lower than expected previous year filings, and an analysis of domestic and global economic forecasts, the USPTO has lowered future year filing projections from what was expected when the January 2018 Final Rule was published. The lower level of filings also affects the multi-year workloads of the Office, and means that fixed costs, like those for IT development, get spread across a smaller pool of patent applications, which contributes to higher unit costs. Further, in the time since the January 2018 Final Rule was published, the USPTO has refined its methodology for projecting maintenance fees. In FYs 2017 and 2018 maintenance fee collections were lower than expected. Based on the refined methodology and recent trends, the refreshed forecast included in the FY 2020 Budget has been lowered. Much of this reduction is due to a very slight downward adjustment in expected third stage maintenance fee renewal rates. Absent the proposed increase in fees or an unsustainable reduction in operating costs, the USPTO would be forced to draw down its operating reserves and take on higher levels of financial risk. (b) Quality, Backlog, and Pendency. The strategic goal to ‘‘optimize patent quality and timeliness’’ recognizes the importance of innovation as the foundation of American economic growth and national competitiveness. Through this goal, the Office will continually improve patent quality, particularly the predictability and reliability of issued patents. The USPTO is also committed to improving pendency to better ensure the timely delivery of innovative goods and services to market and the related economic growth and creation of new or higher-paying jobs. The Office will continue to diligently make progress toward pendency targets and quality expectations to issue predictable and reliable patents, while also addressing the anticipated growth in application filings. The Office will work to optimize patent examination timeframes within the framework of Patent Term Adjustment (PTA) while continuing to monitor and report traditional pendency measures. This includes engaging customers to identify optimal pendency and examination timeframes, and making sure that the Office has the appropriate number of examiners to generate the level of production to meet those timeframes. This proposed rule will produce revenues adequate to continue the USPTO’s progress towards attaining its VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 strategic goal to optimize patent quality and timeliness. The Office recognizes the importance of issuing high quality patents that provide reliable and predictable intellectual property protection. If the USPTO is to achieve its strategic objective of issuing highly reliable patents, patent examiners must be afforded sufficient time to conduct a thorough and complete examination of each application. In the time since fees were last adjusted, the USPTO has completed a comprehensive analysis of examination time, known as ETA, the result of which determined a need for updates to the allotment of examination time. In the past, allotment of examination time for a particular application was determined by the most comprehensive claim, and could not account for multidisciplinary inventions. Sometimes, patent applications of similar technologies would receive disparate time for examination as a result. This, together with significant changes in patent prosecution that have occurred since examination time goals were established over 40 years ago—such as advancements in the technological complexities of applications, a growing volume of prior art, and a changing legal landscape—have brought about the need for updates to the allotment of examination time. The time examiners are given to examine applications is the critical link between pendency and quality. These updates reflect internal and external stakeholders’ priorities and experiences as it relates to examination time, quality, and application complexity, and also enable optimal pendency and quality levels. In addition to the changing legal landscape, increasing technical complexities of applications and the growing volume of prior art to be searched during examination, updates to examination time will also take into account the full scope of technology recited in an application as well as the particular attributes of the application, such as the number of claims, the size of the specification, and the number of references cited in any filed information disclosure statement. Based on technology examined, examiners that currently receive the lowest amount of time for examination will generally see the largest increases in examination time, and conversely, examiners that currently receive the highest amount of time may see little, if any, increase in examination time. Further, all examiners will be provided additional examination time based on the specific attributes of the application. Together, these changes improve the calibration of PO 00000 Frm 00007 Fmt 4701 Sfmt 4702 37403 the time needed to conduct a thorough examination, position the Office to better adjust time in the future as needed, and will stakeholders increased confidence in the certainty of any resultant patent rights. Separate from the ETA findings, analysis of the Patent staffing model indicates an incremental decrease in examiners’ average net output over time, resulting in higher core patent examination costs than in previous estimates. One possible explanation for this reduction in output may be that the percentage of examiners receiving production awards has dropped, and a larger number of examiners are forgoing promotions and staying at lower grades. Additionally, applicants’ increased use of programs like After Final Consideration Pilot (AFCP) and interviews, along with increased training needs due to changes in legal landscape and examination practices, has increased the amount of nonexamination time used by examiners, also leading to productivity losses. Another area where essential operating costs have increased is the PTAB. The PTAB, as it currently exists, was established by the AIA in September 2012. The PTAB manages pendency for three different activities: AIA trials which, by statute, must be adjudicated within one year of filing; reexamination petitions which, by statute, must be completed with ‘‘special dispatch’’; and ex parte appeals. The PTAB’s commitment is to timely resolve appeals and inter partes matters within statutory or USPTO timeframes, while streamlining processes and procedures throughout the PTAB. This entails retaining and leveraging nationwide talent. As the Office institutes operational changes at the PTAB to comply with the SAS decision and implement other improvements, as detailed in Part V, the average workload associated with each trial is increasing. (c) Business Effectiveness. Given the estimates of costs and revenue in the FY 2020 Budget, absent efforts to boost future revenue, funding for other USPTO and stakeholder priorities, like IT modernization and other business improvement initiatives, would need to be reduced to well below planned levels in the coming years. To this end, revenue generated from the proposed fee structure will enable the USPTO to focus on how the Patent organization operates to foster business effectiveness. In fulfilling this objective, the Office will listen to customers and employees and then take patent-specific actions that will position the Office to meet expectations. E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 37404 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules The USPTO will provide the cuttingedge tools that employees and customers need to efficiently and effectively accomplish their tasks, particularly through the continued implementation of Patents End-to-End. For example, this could entail the use of artificial intelligence or machinelearning efforts. Another key initiative that will enhance the work capabilities of both employees and customers is to improve searchable (text) access to domestic and international patent applications, including access to nonpatent literature and prior art, and office actions. (3) Fee Schedule Design. The proposed fee schedule was designed to set individual fees to further key policy considerations while taking into account the cost of the particular service. To encourage innovators to take advantage of patent protection, the Office continues its longstanding practice of setting basic ‘‘front-end’’ fees (e.g., filing, search, and examination) below the actual cost of carrying out these activities. Additionally, new fees are set, and existing fees are adjusted, in order to facilitate the effective administration of the patent system. Part IV of this proposed rule details the Office’s methodology for establishing fees, and Part V describes the reasoning for setting and adjusting individual fees, including fee schedule design benefits. The RIA, available at https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting, also discusses fee schedule design benefits. (4) Sustainable Funding. A major component of sustainable funding is the creation and maintenance of a viable patent operating reserve that allows for effective management of the U.S. patent system and responsiveness to changes in the economy, unanticipated production workload, and revenue changes. As a fee-funded agency, the USPTO uses its reserves to mitigate the variability in its spending and revenue streams that can create volatility in patent operations and threaten the Office’s ability to support mission operations. The USPTO aims to manage the operating reserve within a range of acceptable balances and assesses its options when projected balances fall either below or above that range. Minimum planning targets are assessed annually and are intended to address immediate unplanned changes in the economic or operating environments as the Office builds its reserve to the optimal level. The optimal reserve target, which is reviewed at least biennially, is established based on an VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 assessment of the likelihood and severity of an array of financial risks. A recent assessment of the Patent operating reserve relative to the current financial risk environment revalidated the optimal reserve level of three months’ operating expenses as the appropriate long-range target given various risk factors, such as the high percentage of fixed costs in the Patent business and recent and potential changes in the legal, judicial, and policy environments. For the Patent business line’s operating reserve, a minimum planning level of approximately $300 million—just over one month’s operating expenses—has been established. The USPTO’s annual budget delineates prospective spending levels (aggregate costs) to execute core mission activities and strategic initiatives. In the FY 2020 Budget, the USPTO estimated that its aggregate patent operating costs for FY 2020, including administrative costs, would be $3.2 billion and aggregate estimated patent fee collections and other income is $3.1 billion, with the operating reserve making up the difference. The health of the operating reserve, which is expected to be below the minimum target through FY 2021 as the USPTO continues investments in missioncritical areas, is a key consideration as the USPTO sets its fees. Aided by the increased fees proposed in the NPRM, future year projections are anticipated to build the Patent operating reserve to an optimal level of three months operating requirements. These projections are based on point-in-time estimates and assumptions that are subject to change. For instance, the Budget includes assumptions about filing levels, renewal rates, whether or not the President will authorize or Congress will mandate employee pay raises, the productivity of the workforce, and many other factors. A change in any of these factors could have a significant cumulative impact on reserve balances. The operating reserve estimates do not reflect the 2019 1.9 percent pay raise as authorized in the Consolidated Appropriation Act, 2019, Public Law 116–6, 133 Stat. 13, which was passed after the cost estimates for the FY 2020 Budget were finalized. This new requirement will increase the patent budgetary requirements by approximately $31–$44 million per year. This will result in a cumulative impact of $245 million over the budget horizon. As seen in Table 3, set forth in Part IV: Fee Setting Methodology, over a five-year planning horizon the operating reserve balance can change significantly; underscoring the Office’s financial vulnerability to varying risk PO 00000 Frm 00008 Fmt 4701 Sfmt 4702 factors and the importance of fee setting authority. The USPTO will continue to assess the patent operating reserve balance against its target balance annually, and at least every two years, the Office will evaluate whether the optimal target balance continues to be sufficient to provide the stable funding the Office needs. Per the Office’s operating reserve policy, if the operating reserve balance is projected to exceed the optimal level by ten percent for two consecutive years, the Office will consider fee reductions. Under the new fee structure, as in the past, the Office will continue to regularly review its operating budgets and long-range plans to ensure the USPTO uses patent fees prudently. (5) Comments, Advice, and Recommendations from the PPAC. In the report prepared in accordance with AIA fee setting authority, the PPAC conveyed support for the USPTO in seeking the revenues it needs to increase the reliability and certainty of patent rights, provide timely examination, improve and secure its IT infrastructure and adequately fund its operating reserve. Specifically, the report stated, ‘‘As a general matter, we believe that increased revenue for the USPTO will be important to fulfill its Strategic Plan and implement the recommendations of the PPAC.’’ Patent Pub. Advisory Comm., Fee Setting Report (2018). However, the PPAC expressed concerns over some of the individual fee adjustments and their potential impacts on patent applicants and holders. The USPTO has included additional information in this NPRM to further address some of the concerns of PPAC and the public. The PPAC expressed general support for the stated goals and an increase in patent fees. In general, the PPAC urged the Office to provide more detail and justification on how additional revenue will be used to enhance patent quality. The PPAC also suggested the USPTO should be clear as to how it will use revenues to modernize its IT infrastructure to increase stability and scalability, and to strengthen security, as well as to support more effective examination processes. Both the FY 2020 Budget and Part III: Rulemaking Goals and Strategies, and Part V: Individual Fee Rationale offer this additional information. Regarding the proposed changes to the issue and maintenance fees, the PPAC expressed support for the rationale for weighting the increases toward the issue fee and first stage maintenance fee. The PPAC also suggested that the USPTO carefully consider elasticity for first stage E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules maintenance fees and its potential impact on revenue. The Office’s elasticity study showed that first stage maintenance fees are among the least elastic patent-related fees. For more information see ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—Description of Elasticity Estimates,’’ available at https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. The PPAC supports the increases to the fees in post-grant proceedings (post grant review (PGR), inter partes review (IPR) and covered business methods (CBM) proceedings). The PPAC noted that they understand the impact of the SAS Institute v. Iancu 138 S. Ct. 1348 (2018) and Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) decisions have on PTAB’s workload and the additional resources needed to manage that increased workload. In the report, the PPAC suggested that the PTAB conduct data collection and analysis on the impact of these decisions on its processes so stakeholders can better appreciate the need for increased fees. The Office appreciates this suggestion and is currently collecting data on the impact of these decisions and will reevaluate the extent of the increase in costs once actual data become available. The PPAC also expressed support for the new fee for pro hac vice admissions noting, ‘‘It makes sense to recover the costs of processing these petitions from those in need of pro hac vice admission rather than from overall trial fees’’ PPAC, at 3. The PPAC supports the surcharge on non-DOCX filings. The report expressed that ‘‘the USPTO should have the flexibility to incentivize applicants to use filing formats that maximize efficiency for both the USPTO and its stakeholders’’ PPAC, at 3. The report noted opposition to the proposed increases for the Fee for Late Payment of a Maintenance Fee. The PPAC believes the magnitude of increase of the surcharge for late maintenance fee payments may be excessive. However, the PPAC agrees that it is desirable to have timely payment of maintenance fees to make clear to the public when patent rights will be extended and therefore agrees with a meaningful incentive to encourage timely payment. In response, the USPTO has reduced the proposed Maintenance Fee Surcharge from $1,000 to $500 for large entities. The PPAC suggested, ‘‘If the goal is to discourage late payments, then perhaps the USPTO should provide services to individuals and small businesses to make it simple to stay current on deadlines and pay in a timely fashion’’ PPAC, at 3. The VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 USPTO appreciates the PPAC’s suggestion. The USPTO provides tools to help patent owners monitor due dates, such as the Patent Maintenance Fees Storefront, https://fees.uspto.gov/ MaintenanceFees, with which anyone can see the payment windows for all patents. Additionally, customers with USPTO.gov accounts (i.e., MyUSPTO) can create a ‘‘patent docket’’ and add patent or application numbers in order to keep track of due dates. Also, the weekly Official Gazette notices list the range of patents for which maintenance fees are now payable. In addition, with the availability of free electronic calendar applications, individuals are able to easily set up reminders of when maintenance fee payments are eligible for renewal (3, 7, 11 years from issue) and when they are due (3.5, 7.5, 11.5 years from issue). The PPAC expressed a lack of support for the proposal to increase Request for Expedited Examination of a Design Application. The advisory body requested sufficient justification for such a large increase. In response to this concern, the USPTO has provided additional justification and data. Part V: Individual Fee Rationale offers this additional information. The PPAC supported the active patent practitioner fee to make certain that the roll of registered practitioners is up-todate and to defray the patent related costs of operating the Office of Enrollment and Discipline (OED). The PPAC noted that the proposed annual active practitioner fee attracted numerous comments. In the report, the PPAC requested further information from the USPTO about how the anticipated fee collections will offset the cost of operations of the OED and to what extent. The PPAC agreed that the annual active practitioner fee would better align the costs of OED services with those who receive the benefits. The PPAC believes that the OED fees would not create an unreasonable burden. In response to the report, the USPTO has made changes to the annual active practitioner fee. In particular, some of the comments received suggested that offering a paper option would make the structure of the fee overly complicated and administratively burdensome. In view of these comments, the paper filing option has been removed. Only electronic payments will be accepted. Additionally, several of the comments received in the course of the PPAC hearing suggested that requiring practitioners to either retake the registration examination or make a showing that they continue to possess the qualifications necessary to practice PO 00000 Frm 00009 Fmt 4701 Sfmt 4702 37405 before the Office after they had been voluntarily inactive for two years, and to retake the examination after they had been inactive for five years, would be overly burdensome. Accordingly, the proposal has been changed; practitioners who are endorsed on the roster as voluntarily inactive will be liable for a fee of $70 per year to cover OED’s administrative costs in maintaining the register and updating their information, but will neither be required to make a showing of their qualifications, nor be required to take the examination. Practitioners may apply to become active by paying the reinstatement fee and making their request to the OED Director. In regards to the Continuing Legal Education (CLE) discount, the PPAC supports the USPTO’s goal to improve the services provided by the patent bar to the public. The PPAC has requested more information supporting the effectiveness of such a CLE incentive. Part V: Individual Fee Rationale offers this additional justification for the CLE discount. In summary, the USPTO appreciates the overall support for an increase in patent fees to meet sufficient funding levels provided by the PPAC and its stakeholders. After careful consideration of the comments, concerns, and suggestions provided in the report, and keeping in mind the goals of this proposed rule, the USPTO elected to make changes to two of the fee proposals initially presented to the PPAC. The fee structure proposed herein will ultimately allow the USPTO to maintain patent operations and continue on its path towards achieving the goals and objectives laid out in the Strategic Plan. The Office looks forward to receiving additional comments on this revised proposal during the public comment period. C. Summary of Rationale and Purpose of the Proposed Rule The Office estimates that the proposed patent fee schedule will produce aggregate revenues to recover the aggregate costs of patent operations, including the implementation of its strategic and mission support goals, objectives, and initiatives in FY 2021 and beyond. Using the Strategic Plan as a foundation, the proposed rule will provide sufficient aggregate revenue to recover the aggregate cost of patent operations, including optimizing patent application pendency, issuing highly reliable patents, fostering innovation through business effectiveness, enhancing the operations of the PTAB, optimizing the speed, quality, and costeffectiveness of information technology E:\FR\FM\31JYP2.SGM 31JYP2 37406 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules delivery to achieve business value, and ensuring financial sustainability to facilitate effective operations. IV. Fee Setting Methodology The Office carried out three primary steps in developing the proposed fees: Step 1: Determine the prospective aggregate costs of patent operations over the five-year period, including the cost of implementing new initiatives to achieve strategic goals and objectives. Step 2: Calculate the prospective revenue streams derived from the individual fee amounts (from Step 3) that will collectively recover the prospective aggregate cost over the 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. jbell on DSK3GLQ082PROD with PROPOSALS2 Step 1: Determine Prospective Aggregate Costs Calculating prospective aggregate costs is accomplished primarily through the annual USPTO budget formulation process. The budget is a five-year plan (that the Office prepares annually) for carrying out base programs and new initiatives to implement the USPTO’s strategic goals and objectives. The first activity performed to determine prospective aggregate cost is to project the level of demand for patent products and services. Demand for products and services depends on many factors that are subject to change, including domestic and global economic activity. The USPTO also takes into account overseas patenting activities, policies and legislation, and known process efficiencies. Because filing, search, and examination costs are the largest share of the total patent operating cost, a primary production workload driver is the number of patent application filings (i.e., incoming work to the Office). The Office looks at indicators such as the expected growth in Real Gross Domestic Product (RGDP), the leading indicator of incoming patent applications, to estimate prospective workload. RGDP is reported by the Bureau of Economic Analysis (www.bea.gov) and is forecasted each February by the OMB (www.omb.gov) in the Economic and Budget Analyses section of the Analytical Perspectives and twice annually by the Congressional Budget Office (CBO) (www.cbo.gov) in the Budget and Economic Outlook. A description of the Office’s methodology for using RGDP can be found in Appendix I—Multi-year Planning by Business Line and Cost Containment of the FY 2020 Budget. The expected change in the required production workload must then be compared to the current examination production capacity to determine any required staffing and operating cost (e.g., salaries, workload processing contracts, and publication) adjustments. The Office uses a patent pendency model that estimates patent production output based on actual historical data and input assumptions, such as incoming patent applications and overtime hours. An overview of the model, including a description of inputs, outputs, key data relationships, and a simulation tool is available at https://www.uspto.gov/ patents/stats/patent_pend_model.jsp. The second activity is to calculate the aggregate costs to execute the requirements. In developing its budget, the Office first looks at the cost of status quo operations (the base requirements). The base requirements are adjusted for anticipated pay increases and inflationary increases for the budget year and four out years (detailed calculations and assumptions for this adjustment can be found in the FY 2020 Budget). The Office then estimates the prospective cost for expected changes in production workload and new initiatives over the same period of time (refer to ‘‘Program Changes by SubProgram’’ sections of the FY 2020 Budget). The Office reduces cost estimates for completed initiatives and known cost savings expected over the same five-year horizon. Finally, the Office estimates its three month target operating reserve level based on this aggregate cost calculation for the year to determine if operating reserve adjustments are necessary. The FY 2020 Budget identifies that, during FY 2020, patent operations will cost $3.170 billion (see Appendix II of the FY 2020 Budget), including $2.153 billion for patent examining; $93 million for patent trial and appeals; $161 million for patent information resources; $28 million for activities related to IP protection, policy, and enforcement; and $734 million for general support costs necessary for patent operations (e.g., the patent share of rent, utilities, legal, financial, human resources, other administrative services, and Office-wide IT infrastructure and IT support costs). In addition, the Office transfers $2 million to the DOC Inspector General for audit support. The Office also estimates collecting $37 million in other income associated with recoveries and reimbursable agreements (offsets to spending). A detailed description of the operating requirements and related aggregate cost is located in the FY 2020 Budget. Table 2 below provides key underlying production workload projections and assumptions from the FY 2020 Budget used to calculate aggregate cost. Table 3 (see Step 2) presents the total budgetary requirements (prospective aggregate cost) for FY 2020 through FY 2024 and the estimated collections and operating reserve balances that would result from the proposed adjustments contained in this NPRM. Table 3 does not reflect the 2019 1.9 percent pay raise as authorized in the Consolidated Appropriation Act, 2019, Public Law 116–6, 133 Stat. 13, which was passed after the cost estimates for the FY 2020 Budget were finalized. This new requirement will increase the patent budgetary requirements by approximately $31–$44 million per year. This will result in a cumulative impact of $245 million over the budget horizon. As the Budget notes, these projections are based on point-intime estimates and assumptions that are subject to change. There is considerable uncertainty in out-year budgetary requirements. A number of risks could materialize over the next several years (e.g., associated with recompetitions of major contracts, lease renewals, changing assumptions about Presidentially authorized or congressionally mandated employee pay raises, etc.) that could increase the USPTO’s budgetary requirements in the short- to medium-term. These estimates are refreshed annually in the production of the USPTO’s Budget. TABLE 2—PATENT PRODUCTION WORKLOAD PROJECTIONS [FY 2020–FY 2024] Utility, plant, and reissue (UPR) FY 2020 Applications * ........................................................................ Application Growth Rate ...................................................... VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 PO 00000 Frm 00010 FY 2021 611,158 0.2% Fmt 4701 Sfmt 4702 612,614 0.2% FY 2022 621,450 1.4% E:\FR\FM\31JYP2.SGM 31JYP2 FY 2023 629,204 1.2% FY 2024 636,625 1.2% Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules 37407 TABLE 2—PATENT PRODUCTION WORKLOAD PROJECTIONS—Continued [FY 2020–FY 2024] Utility, plant, and reissue (UPR) FY 2020 Production Units ................................................................... Unexamined Patent Application Backlog ............................. Examination Capacity ** ....................................................... Performance Measures (UPR): Avg. First Action Pendency (Months) ........................... Avg. Total Pendency (Months) ..................................... FY 2021 FY 2022 FY 2023 FY 2024 607,252 498,554 8,313 597,025 503,975 8,686 612,487 502,669 9,046 624,005 497,497 9,174 625,527 489,448 9,297 14.7 22.8 14.7 22.8 14.5 22.9 14.3 22.7 14.0 22.4 jbell on DSK3GLQ082PROD with PROPOSALS2 * In this table, the patent application filing data includes requests for continued examination (RCEs). ** In this table, Examination Capacity is the UPR Examiners On-Board at End-of-Year, as described in the FY 2020 Budget. Step 2: Calculate Prospective Aggregate Revenue As described above in Step 1, the USPTO’s FY 2020 requirements in the FY 2020 Budget include the aggregate prospective cost of planned production, anticipated new initiatives, and a contribution to the patent operating reserve required for the Office to maintain patent operations and realize its strategic goals and objectives for the next five years. The aggregate prospective cost becomes the target aggregate revenue level that the new fee schedule must generate in a given year and over the five-year planning horizon. To calculate the aggregate revenue estimates, the Office first analyzes relevant factors and indicators to calculate or determine prospective fee workloads (e.g., number of applications and requests for services and products), growth in those workloads, and resulting fee workload volumes (quantities) for the five-year planning horizon. Economic activity is an important consideration when developing workload and revenue forecasts for the USPTO’s products and services because economic conditions affect patenting activity. The Office considers economic activity when developing fee workloads and aggregate revenue forecasts for its products and services. Major economic indicators include the overall condition of the U.S. and global economies, spending on research and development activities, and investments that lead to the commercialization of new products and services. The most relevant economic indicator that the Office uses is the RGDP, which is the broadest measure of economic activity and is anticipated to grow approximately two percent for FY 2020 based on CBO estimates. These indicators correlate with patent application filings, which are a key driver of patent fees. Economic indicators also provide insight into market conditions and the management of IP portfolios, which influence application processing requests and VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 post-issuance decisions to maintain patent protection. When developing fee workload forecasts, the Office considers other influential factors including overseas activity, policies and legislation, court decisions, process efficiencies, and anticipated applicant behavior. Anticipated applicant behavior in response to fee changes is measured using an economic principle known as elasticity, which for the purpose of this proposal measures how sensitive applicants and patentees are to changes in fee amounts. The higher the elasticity measure (in absolute value), the greater the applicant response to the relevant fee change. If elasticity is low enough (i.e., demand is inelastic or the elasticity measure is less than one in absolute value), a fee increase will lead to only a relatively small decrease in patent activities, and overall revenues will still increase. Conversely, if elasticity is high enough (i.e., demand is elastic or the elasticity measure is greater than one in absolute value), a fee increase will lead to a relatively large decrease in patenting activities such that overall revenues will decrease. When developing fee forecasts, the Office accounts for how applicant behavior will change at different fee amounts projected for the various patent services. The Office analyzed elasticity for nine broad patent fee categories: Filing/ search/examination fees, excess independent claims fees, excess total claims fees, application size (excess page) fees, issue fees, request for continued examination (RCE) fees, appeal fees, AIA trial fees, and maintenance fees, including distinctions by entity size where applicable. Additional detail about the Office’s elasticity estimates is available in ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020— Description of Elasticity Estimates,’’ available at https://www.uspto.gov/ about-us/performance-and-planning/ fee-setting-and-adjusting. PO 00000 Frm 00011 Fmt 4701 Sfmt 4702 Aggregate Revenue Estimate Ranges When estimating aggregate revenue, the USPTO prepares a high and a low range of fee collection estimates. This range accounts for the inherent uncertainty, sensitivity, and volatility of predicting fluctuations in the economy and market environment; interpreting policy and process efficiencies; and developing fee workload and fee collection estimates from assumptions. The Office estimates a range for all its major workload categories including application filings, extensions of time, PTAB fees, maintenance fees, patent cooperation treaty (PCT) filings, and trademark filings. Additional detail about the Office’s aggregate revenue, including projected workloads by fee, is available in ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—Aggregate Revenue Estimates Alternative 1: Proposed Alternative’’ available at https:// www.uspto.gov/about-us/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 maintenance fees, which subsidize the cost of filing, search, and examination activities. Changes in application filing levels immediately impact current year fee collections, because fewer patent application filings means the Office collects fewer fees to devote to production-related costs. The resulting reduction in production activities also creates an out-year revenue impact because less production output in one year results in fewer issue and maintenance fee payments in future years. The USPTO’s five-year estimated aggregate patent fee revenue (see Table 3) is based on the number of patent applications it expects to receive for a E:\FR\FM\31JYP2.SGM 31JYP2 37408 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules given fiscal year, work it expects to process in a given fiscal year (an indicator of future patent issue fee workload), expected examination and process requests for the fiscal year, and the expected number of post-issuance decisions to maintain patent protection over that same fiscal year. Within the iterative process for estimating aggregate revenue, the Office adjusts individual fee rates up or down based on cost and policy decisions (see Step 3: Set Specific Fee Amounts), estimates the effective dates of new fee rates, and then multiplies the resulting fee rates by appropriate workload volumes to calculate a revenue estimate for each fee. To calculate the aggregate revenue, the Office assumes that all proposed fee rates will become effective on January 1, 2021 except for the new Annual Active Patent Practitioner Fees, which are assumed to become effective January 1, 2022. Using these figures, the USPTO sums the individual fee revenue estimates, and the result is a total aggregate revenue estimate for a given year (see Table 3). The financial outlook in Table 3 is different from the numbers contained in the FY 2020 Budget. At the time the FY 2020 Budget was prepared, the proposed fee adjustments were not finalized. Therefore, the revenue estimates in this NPRM and associated documents do not exactly match what was assumed in the FY 2020 Budget. Forecasted revenue for FY 2021 through FY 2024 is $2 million to $4 million lower per year, for a total impact of $12 million lower than the estimates reported in the FY 2020 Budget. TABLE 3—PATENT FINANCIAL OUTLOOK [FY 2020–FY 2024] Dollars in millions FY 2020 Projected Fee Collections .................................................... Other Income ....................................................................... Total Projected Fee Collections and Other Income ............ Budgetary Requirements ..................................................... Funding to (+) and from (¥) Operating Reserve ................ EOY Operating Reserve Balance ........................................ Over/(Under) $300M Minimum Level .................................. Over/(Under) Optimal Level ................................................. jbell on DSK3GLQ082PROD with PROPOSALS2 Step 3: Set Specific Fee Amounts Once the Office finalizes the annual requirements and aggregate prospective costs through the budget formulation process, the Office determines specific fee amounts that, together, will derive the aggregate revenue required to recover the estimated aggregate prospective costs during the five year budget horizon. Calculating individual fees is an iterative process that encompasses many variables and policy factors. These are discussed in greater detail in section V. Individual Fee Rationale. One of the variables the USPTO considers to inform fee setting is the historical cost estimates associated with individual fees. The Office’s ABI provides historical cost for an organization’s activities and outputs by individual fee using the activity-based costing (ABC) methodology. ABC is commonly used for fee setting throughout the Federal Government. Additional information about the methodology, including the cost components related to respective fees, is available in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—ActivityBased Information and Patent Fee Unit Expense Methodology’’ available at https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. The USPTO provides data for FY 2016–FY 2018 because the VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 FY 2021 3,095 37 3,132 3,172 (40) 203 (97) (589) 3,358 37 3,395 3,326 69 272 (28) (559) Office finds that reviewing the trend of ABI historical cost information is the most useful way to inform fee setting. The underlying ABI data are available for public inspection at the USPTO upon request. When the Office implements a new process or service, historical ABI data is typically not available. However, the Office will use the historical cost of a similar process or procedure as a starting point to estimate the full cost of a new activity or service. V. Individual Fee Rationale The Office projects that the aggregate revenue generated from the proposed patent fees will recover the prospective aggregate cost of its patent operations including contributions to the operating reserve per the strategic initiative to ensure financial sustainability to facilitate effective USPTO operations. As detailed previously, the PPAC supports this approach, stating that ‘‘The PPAC supports the USPTO in seeking the revenues it needs to increase the reliability and certainty of patent rights, provide timely examination, improve and secure its IT infrastructure and adequately fund its operating reserve’’ PPAC, at [2]. It is important to recognize that each individual proposed fee is not necessarily set equal to the estimated cost of performing the activities related to the fee. Instead, as described in Part III: Rulemaking Goals and Strategies, PO 00000 Frm 00012 Fmt 4701 Sfmt 4702 FY 2022 3,687 37 3,724 3,434 290 562 262 (296) FY 2023 3,690 37 3,727 3,524 203 765 465 (116) FY 2024 3,836 37 3,873 3,626 247 1,012 712 105 some of the proposed fees are set at, above, or below their unit costs to balance several key fee setting policy factors: Promoting innovation strategies, aligning fees with the full cost of products and services, facilitating effective administration of the patent system, and offering patent processing options to applicants. For example, many of the initial filing fees are intentionally set below unit cost in order to promote innovation strategies by removing barriers to entry for innovators. To balance the aggregate revenue loss of fees set below cost, other fees must be set above cost in areas where it is less likely to reduce inventorship (e.g., maintenance). For some fees proposed in this NPRM, such as excess claims fees, the USPTO does not typically maintain individual historical cost data for the service provided. Instead, the Office considers the policy factors described in Part III to inform fee setting. For example, by setting fees at particular levels using the facilitating effective administration of the patent system policy factor, the USPTO aims to: (1) Foster an environment where examiners can provide and applicants can receive prompt, quality interim and final decisions; (2) encourage the prompt conclusion of prosecuting an application, resulting in pendency reduction and the faster dissemination of patented information; and (3) help E:\FR\FM\31JYP2.SGM 31JYP2 37409 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules recover costs for activities that strain the patent system. The rationale for the proposed changes are grouped into three major categories, discussed below: (A) Across the board adjustment to patent fees; (B) targeted fees; and (C) discontinued fees. The purpose of the categorization is to identify large fee changes for the reader and provide an individual fee rationale for such changes. The categorization is based on changes in large entity fee amounts because percentage changes for small and micro entity fees that are in place today would be the same as the percentage change for the large entity, and the dollar change would be half or one quarter of the large entity change. The Table of Patent Fees includes the current and proposed fees for large, small, and micro entities as well as unit costs for the last three fiscal years. Part VI: Discussion of Specific Rules contains a complete listing of fees that are set or adjusted in the proposed patent fee schedule. A. Across the Board Adjustment to Patent Fees In order to both keep USPTO on a stable financial track and allow for the advancement of policies and practices that enhance the country’s innovation ecosystem, the Office proposes to adjust all patent fees not covered by the targeted adjustments as discussed in section B, or proposed to be discontinued as discussed in section C, by approximately five percent. Given that nearly three years will have passed between the implementation date of the last fee adjustments and when the proposed fees are expected to take effect, a five percent increase is similar to fees increasing by 1.6 percent annually to help USPTO keep up with inflationary cost increases. Proposed fees are rounded to the nearest five dollars by applying standard arithmetic rules. For fees that have small and micro entity fee reductions, the large entity fee is rounded up or down to the nearest 20 dollars by applying standard arithmetic rules. The resulting proposed fee amounts are more convenient to patent users and permit the Office to set small and micro entity fees at whole dollar amounts when applying the applicable fee reduction. Therefore, some smaller fees will not be changing, since a five percent increase would round down to the current fee, while other fees would change by slightly more or less than five percent, depending on rounding. The proposed fee adjustments in this category are listed in the Table of Patent Fees. The five percent across the board adjustment strikes an appropriate balance between projected aggregate revenue and aggregate cost based on the assumptions used to develop the pointin-time estimates that support this NPRM. As was discussed in Part IV: Fee Setting Methodology, these assumptions are likely to change as new information becomes available. Refreshed estimates for the FY 2021 Budget will be available to the public before publication of the final rule. If changes to the assumptions underlying the USPTO’s cost and revenue estimates result in significant changes in the FY 2021 Budget projections, the Office will refine the size of the across the board adjustment, either upward or downward, such that fees are set a level that secures aggregate cost recovery while ensuring a reasonable pace for operating reserve growth. B. Targeted Fees For those fees targeted in this proposal, the individual fee rationale discussion is divided into two categories: (1) Adjustments to existing fees; and (2) new fees. Adjustments to existing fees are further divided into subcategories according to the function of the fees, including: (a) Maintenance fee surcharge; (b) request for the expedited examination of a design application fee; (c) utility issue and maintenance fees; and (d) AIA trial fees. New fees are further divided into subcategories according to the function of the fees, including: (a) Non-DOCX filing surcharge fee; (b) Pro Hac Vice; and (c) Annual Active Patent Practitioner fees. As discussed above, for purposes of comparing amounts in the individual fee rationale discussion, the Office has included the current fees as the baseline to calculate the dollar change and percent change for proposed fees. (1) Adjustments to Existing Fees The following fees are proposed to be increased by an amount other than the five percent across the board increase proposed for most patent-related fees. These targeted adjustments are made for a variety of strategic reasons. A discussion of the rationale for each fee follows. (a) Maintenance Fee Surcharge TABLE 4—MAINTENANCE FEE SURCHARGE FEES—FEE CHANGES Current fees Large (small) [micro] entity Fee description Surcharge—3.5 year—Late payment within 6 months ....... Surcharge—7.5 year—Late payment within 6 months ....... jbell on DSK3GLQ082PROD with PROPOSALS2 Surcharge—11.5 year—Late payment within 6 months ..... The Office proposes to increase the surcharge for a late maintenance fee payment within six months following the due date. The proposed fee of $500 for large entities has been reduced from the $1,000 presented in the September VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees Large (small) [micro] entity Dollar change Large (small) [micro] entity $500 ($250) [$125] $500 ($250) [$125] $500 ($250) [$125] +$340 (+$170) [+$85] +$340 (+$170) [+$85] +$340 (+$170) [+$85] $160 ($80) [$40] $160 ($80) [$40] $160 ($80) [$40] 2018 PPAC hearing. It is the responsibility of the patentee to ensure maintenance fees are paid timely to prevent expiration of a patent. If a maintenance fee is not paid within the first six months in the year in which it PO 00000 Frm 00013 Fmt 4701 Sfmt 4702 Percent change Large (small) [micro] entity +213% (+213%) [+213%] +213% (+213%) [+213%] +213% (+213%) [+213%] FY 2018 unit cost N/A N/A N/A can be paid, a Maintenance Fee Reminder notice is sent to the fee address or correspondence address on record. Failure to receive the notice does not shift the burden of monitoring the time for paying a maintenance fee E:\FR\FM\31JYP2.SGM 31JYP2 37410 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules from the patentee to the USPTO. At this point, a surcharge is required in addition to the maintenance fee in order to maintain a patent. If the maintenance fee and any applicable surcharge are not paid by the end of the 4th, 8th, or 12th years after the date of issue, the patent rights lapse and a Notice of Patent Expiration is sent to the fee address or correspondence address on record. If a fee address has not been established, the notices are sent to the correspondence address. Over 95 percent of patent renewals are paid before the due date, but some patents are renewed during the six month period following the due date. While still below what other IP offices charge, increasing this surcharge brings the USPTO more in line with its global counterparts. The goal of increasing this surcharge is to encourage patent holders to renew prior to the due date. Encouraging on-time renewals will benefit the public by increasing the understanding of which patents remain in force and which patent rights have been allowed to lapse. The USPTO provides tools to help patent owners monitor due dates, such as the Patent Maintenance Fees Storefront, https://fees.uspto.gov/ MaintenanceFees, where anyone can see the payment windows for all patents. Additionally, customers with USPTO.gov accounts (i.e., MyUSPTO) can create a ‘‘patent docket’’ and add patent or application numbers in order to keep track of due dates. Also, the weekly Official Gazette notices list the range of patents for which maintenance fees are now payable. In addition, as previously discussed in section III, with the availability of free calendar apps, individuals can easily set up their own reminders of when maintenance fee payments are eligible for renewal (3, 7, 11 years from issue) and when they are due (3.5, 7.5, 11.5 years from issue). (b) Request for Expedited Examination of a Design Application Fee TABLE 5—REQUEST FOR EXPEDITED EXAMINATION OF A DESIGN APPLICATION FEE Current fees Large (small) [micro] entity Fee description Request for expedited examination of a design application The Office proposes to increase the fee to request expedited examination of a design application. This fee was introduced at a fee rate of $900 in November 2000. The Office is proposing to increase the fee for the first time since its inception, to a rate of $2,000. Expedited examination is available to all design applicants who first conduct a preliminary examination search and file a request for expedited treatment accompanied by a fee for the expedited treatment and handling (37 CFR 1.17(k)) in addition to the required filing, search, and examination fees. This cost-based expedited treatment fulfills a particular need by affording rapid design patent protection that may be especially important where marketplace conditions are such that new designs on articles are typically in vogue for limited periods of time. The applications are individually examined Proposed fees Large (small) [micro] entity Dollar change Large (small) [micro] entity $2,000 ($1,000) [$500] +$1,100 (+$550) [+$225] $900 ($450) [$225] with priority, and the clerical processing is conducted and/or monitored by specially designated personnel to achieve expeditious processing through initial application processing and the Design Examining Group. For a patentable design application, the expedited treatment is a streamlined filing-to-issuance procedure. This procedure further expedites design application processing by decreasing clerical processing time as well as the time spent routing the application between processing steps. Specially designated personnel are required to conduct and/or monitor the expedited clerical processing. Also, expedited design applications may be individually treated throughout the examination process where necessary for expedited treatment, whereas normally, the search phase of design Percent change Large (small) [micro] entity +122% (+122%) [+122%] FY 2018 unit cost $125 application examination is conducted in groups. For the first few years following the introduction of this program, requests for expedited examination of a design application were less than one percent of total design filings. In recent years, requests have increased to over two percent of total filings. This increase in demand for this service has forced the Office to choose to cap the program (i.e., impose limits on the number of expedited examinations it will undertake in a given fiscal year), end the program, or increase the fee. Increasing this optional fee will allow the USPTO to better manage staffing to match demand for this service, while still keeping the service available as an option for those who may benefit from this program. (c) Utility Patent Issue and Maintenance Fees TABLE 6—UTILITY PATENT ISSUE AND MAINTENANCE FEES Current fees Large (small) [micro] entity jbell on DSK3GLQ082PROD with PROPOSALS2 Fee description Utility Issue Fee ................................................................... Reissue Issue Fee ............................................................... VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 PO 00000 Frm 00014 Proposed fees Large (small) [micro] entity Dollar change Large (small) [micro] entity $1,200 ($600) [$300] $1,200 ($600) [$300] +$200 (+$100) [+$50] +$200 (+$100) [+$50] $1,000 ($500) [$250] $1,000 ($500) [$250] Fmt 4701 Sfmt 4702 E:\FR\FM\31JYP2.SGM 31JYP2 Percent change Large (small) [micro] entity +20% (+20%) [+20%] +20% (+20%) [+20%] FY 2018 unit cost $325 $325 37411 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 6—UTILITY PATENT ISSUE AND MAINTENANCE FEES—Continued Current fees Large (small) [micro] entity Fee description For Maintaining an Original or Any Reissue Patent, Due at 3.5 years. Dollar change Large (small) [micro] entity $2,000 ($1,000) [$500] $3,760 ($1,880) [$940] $7,700 ($3,850) [$1,925] +$400 ($800) [$400] +$160 ($80) [$40] +$300 ($150) [$75] $1,600 ($800) [$400] $3,600 ($1,800) [$900] $7,400 ($3,700) [$1,850 For Maintaining an Original or Any Reissue Patent, Due at 7.5 years. For Maintaining an Original or Any Reissue Patent, Due at 11.5 years. In the September 2018 PPAC public hearing, the Office proposed adjusting the issue fees by 20 percent and first stage maintenance fees by 25 percent. These adjustments will mark the first time maintenance fee rates have changed since 2013. Based on the support in the PPAC report, the Office determined to move forward with the proposal to increase the issue fee and maintenance fees as initially proposed. Proposed fees Large (small) [micro] entity The total package of fees proposed in this NPRM does not significantly impact the balance between front-end and backend fees. The USPTO continues to set front-end fees below the cost to the Office to provide those services, in order to encourage innovation. Under this proposal, front-end fees for a utility patent with one RCE and lifetime maintenance will continue to be about 18 percent of the total fees paid over the Percent change Large (small) [micro] entity FY 2018 unit cost +25% (+25%) [+25%] +4% (+4%) [+4%] +4% (+4%) [+4%] n/a n/a n/a life of a patent (see Table 7). However, as certain technology lifecycles grow shorter, it is important that the USPTO not rely too heavily on fees paid late in the life of a patent. Therefore, the Office proposes to slightly rebalance the backend fees to recover the initial search and examination costs earlier in the life of the patent. TABLE 7—FRONT-END AND BACK-END FEE BALANCE Current Proposed Fee group Detailed fee title Front End Fees .. Filing ............................................... Search ............................................. $760 ................................................ $1,300 ............................................. Issue ............................................... 1st Stage Maintenance ................... 2nd Stage Maintenance .................. 3rd Stage Maintenance .................. $300 $660 5 8 $1,000 $1,600 $3,600 $7,400 6 10 22 45 ......................................................... $16,620 100 Examination 1st RCE Back End Fees ... Total ............ The issue fee for utility and reissue patents is proposed to be increased from $1,000 to $1,200, and the first stage maintenance fee is proposed to be increased from $1,600 to $2,000. As a result, the combined fees paid for issue and first stage maintenance would increase from 16 percent to 18 percent of the total fees paid for a utility patent with one RCE and lifetime maintenance. However, second and third stage Large entity fee Percent of total (%) Group’s percent of total (%) 2 4 Large entity fee 18 $800 $1,360 16 .................... 66 maintenance fees would only increase by 4 percent—less than the across the board adjustment—with second stage increasing from $3,600 to $3,760 and third stage increasing from $7,400 to $7,700. The Office determined elasticity estimates for the three maintenance payments for both large and small entities. For all point estimates and confidence intervals, maintenance fees 100 Percent of total (%) $320 $700 4 8 $1,200 $2,000 $3,760 $7,700 2 4 .................... .................... 7 11 21 43 $17,840 100 Group’s percent of total (%) 18 18 64 100 were found to be inelastic, with the first stage being the least elastic of these fees. More detailed information on elasticity estimates can be found at https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—Description of Elasticity Estimates’’. (d) AIA Trial Fees jbell on DSK3GLQ082PROD with PROPOSALS2 TABLE 8—AIA TRIAL FEES—FEE CHANGES AND UNIT COSTS Current fees Large (small) [micro] entity Fee description Inter Partes Review Request Fee-Up to 20 Claims ............ VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 PO 00000 Frm 00015 Proposed fees Large (small) [micro] entity Dollar change Large (small) [micro] entity $19,500 +$4,000 $15,500 Fmt 4701 Sfmt 4702 E:\FR\FM\31JYP2.SGM 31JYP2 Percent change Large (small) [micro] entity +26% FY 2018 unit cost $15,016 37412 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 8—AIA TRIAL FEES—FEE CHANGES AND UNIT COSTS—Continued Current fees Large (small) [micro] entity Fee description Inter Partes Review Post-Institution Fee—Up to 15 Claims * ............................................................................. Inter Partes Review Post-Institution Fee—Up to 20 Claims * ............................................................................. Inter Partes Review Request of Each Claim in Excess of 20 ...................................................................................... Inter Partes Post-Institution Request of Each Claim in Excess of 15 * ....................................................................... Inter Partes Post-Institution Request of Each Claim in Excess of 20 * ....................................................................... 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 Post-Institution Fee—Up to 20 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 * .......... Post-Grant or Covered Business Method Review Post-Institution Request of Each Claim in Excess of 20 * .......... Percent change Large (small) [micro] entity Proposed fees Large (small) [micro] entity Dollar change Large (small) [micro] entity 15,000 n/a n/a n/a 24,490 n/a 18,750 n/a n/a n/a 300 375 +75 +25 n/a 600 n/a n/a n/a n/a n/a 750 n/a n/a n/a 16,000 20,000 +4,000 +25 21,465 22,000 n/a n/a n/a 29,842 n/a 27,500 n/a n/a n/a 375 475 +100 +27 n/a 825 n/a n/a n/a n/a n/a 1,050 n/a n/a n/a FY 2018 unit cost * The post-institutional threshold for paying claims fees will increase from 15 to 20. jbell on DSK3GLQ082PROD with PROPOSALS2 On April 24, 2018, the U.S. Supreme Court issued its decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). As required by the decision, the PTAB will institute a trial as to all claims or none. Previously, the PTAB has instituted a trial on just some claims. This has increased the amount of time spent per case post-institution. The Office has also modified its preinstitution practice to take into account the impacts of the SAS decision. For example, prior to SAS, the PTAB did not generally address all arguments at institution. Post SAS, for purposes of deciding whether to institute trial on a petition, the Office’s policy is to provide details to the parties to the extent practicable, including responding to arguments in a patent owner’s preliminary response that were not the basis for the decision whether or not to institute. This has increased the amount of time spent per case pre-institution. These changes related to the SAS decision will increase the average cost to conduct each proceeding. Other implementations, such as providing automatic sur-replies and pre- VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 hearing conferences, were made to help provide additional fairness and certainty to the parties and public while continuing the PTAB’s practice of rendering high quality decisions within the statutory time limits applicable to AIA trial proceedings; however, these changes, too, have increased the average cost of conducting each proceeding. The Office proposes that the postinstitutional threshold for paying excess claim fees will increase from 15 to 20 so as to match the PTAB’s request threshold, reflecting the fact that, following the Supreme Court decision in SAS, PTAB is required to institute all claims or none. The Office notes that the fee increases proposed in the NPRM are based on estimates. At this time, best estimates indicate that the average expense attributable to the institution stage of inter partes reviews has increased more than 20 percent between the second quarter of FY 2018 (before the SAS decision) and the fourth quarter of FY 2018 (following the SAS decision), and that the average expense attributable to the final decision stage of inter partes reviews has also increased PO 00000 Frm 00016 Fmt 4701 Sfmt 4702 more than 20 percent during the same period. Also, note that the FY 2018 unit costs shown in Table 8 are annual costs, and the PTAB was only operating under the SAS decision for part of the year. When the final rule is prepared, USPTO will have more data on how the SAS decision has impacted the costs of AIA trials, and the fee rates in the final rule may differ from what is proposed here, in response to the updated information. Additionally, the fee increases the Office is considering are not expected to be implemented until 2021, and the new fees are expected to be in place for several years beyond that; as such, increases of greater than 20 percent are necessary to account for cost increases already experienced as well as future inflationary cost growth. This proposed rulemaking will help the PTAB continue to maintain the appropriate level of judicial and administrative resources to continue to provide high quality and timely decisions for AIA trials. (2) New Fees (a) Non-DOCX Filing Surcharge Fee E:\FR\FM\31JYP2.SGM 31JYP2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules 37413 jbell on DSK3GLQ082PROD with PROPOSALS2 TABLE 9—NON-DOCX FILING SURCHARGE FEE—FEE CHANGES AND UNIT COST Fee description Current fees Large (small) [micro] entity Non-DOCX Filing Surcharge ............................................... New ................ The Office proposes a new fee to be charged for utility non-provisional applications filed under 35 U.S.C. 111 submitted in a format other than DOCX (structured text). This surcharge will apply to filings that are submitted in an electronic document, such as a PDF, that is not saved in the DOCX format. It will also apply to filings that are submitted non-electronically, in addition to the existing paper filing surcharge. The surcharge is proposed to be introduced for specifications, claims, and abstracts. The submission in DOCX format will facilitate improvements in the efficiency of patent operations. Using EFS-Web, anyone with a Webenabled computer can file patent applications and documents without downloading special software or changing document preparation tools and processes. Registering as an EFSWeb eFiler allows enhanced filing, follow-on processing, saved submissions, and more. EFS-Web registered eFilers have been able to file specification, abstract, and claims in DOCX for utility non-provisional filings since August 2017. Launched in 2015, the eCommerce Modernization (eMod) Project aims to improve the electronic application process for patent applicants by modernizing the USPTO’s filing and viewing systems. Recent improvements include implementing structured text functionalities. Structured text allows applicants to more easily submit their documents in text-based documents, rather than having to create PDF documents. This streamlines the application and publication processes for both the applicants and examiners. The Office tested the capabilities of structured text within EFS-Web and PAIR with the eMod Text Pilot Program, which ran from August 2016 until September 2017. The pilot was successful and many improvements were made based on feedback from applicants, which included independent inventors, law firms, and corporations. Structured text features are now available to all EFS-Web registered and Private PAIR users, and include the ability for applicants to file VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees Large (small) [micro] entity $400 (200) [100] structured text via EFS-Web, and access structured text submissions, structured text office actions, and XML downloads via Private PAIR. Additional information can be found in the associated Submit DOCX and Retrieve DOCX guides. For more information on filing in DOCX, please visit https:// www.uspto.gov/patent/docx. To encourage the filing of more applications in structured text, a required fee surcharge is proposed for applications that do not include DOCX format. This will accelerate the adoption of DOCX to realize a variety of benefits. Both the USPTO and applicants will see increased efficiencies from encouraging DOCX filings. Based on a USPTO survey, over 80 percent of applicants author their patent applications in DOCX in the normal course of business. Filing in structured text allows applicants to submit their specifications, claims, and abstracts in text-based format, and eliminates the need to convert structured text into a PDF for filing. Applicants can access examiner Office actions in text-based format which makes it easy to copy and paste when drafting responses. The availability of structured text also improves accessibility for sightimpaired customers, who use screen reading technology. DOCX filing provides opportunities to increase efficiency in the Office. It enables development of software to provide automated initial reviews of applicant submissions to help reduce effort required by the Office. The automated reviews can tell applicants up-front if potential problems exist and allow them to make changes prior to or at the time of submission. This also improves validation based on content, such as claims validation for missing claim numbering or abstract validation for word count and paragraph count. Increased DOCX filing will also lead to higher data quality, by reducing system conversion errors. It provides a flexible format with no template constraints. This also improves data quality by supporting original formats for chemical formulas, mathematical equations, and tables. DOCX filing also PO 00000 Frm 00017 Fmt 4701 Sfmt 4702 Dollar change Large (small) [micro] entity +$400 (+200) [+100] Percent change Large (small) [micro] entity n/a (n/a) [n/a] FY 2018 unit cost Large (small) [micro] entity n/a improves document identification by automatic detection, allows for greater reuse of content, and provides improved searching for patent applications and submissions. The originally submitted structured text document is available within Private PAIR, allowing easy retrieval of original DOCX files after transfer of cases between users. Structured text usage also helps streamline the application process and provides benefits for the USPTO. The Office converts image-based filings (e.g., PDF documents) into text-based format for internal processing. Text-based filings will allow the Office to skip this time-consuming and costly step. Optical character recognition of image-based filings costs the Office approximately $3.15 per new submission. Encouraging text-based filings has the potential to save the Office up to $1.6 million annually. If, in the future, the program were extended to additional application documents besides specifications, claims, and abstracts, the potential savings could reach as much as $9.0 million annually. Extensible Markup Language (XML) generated from DOCX files complies with the international World Intellectual Property Office (WIPO) Standard ST.96 from intake through display and use in examination tools. Receiving filings through structured text makes documents automatically available to examiners in almost realtime. DOCX filing also improves examination consistency by using automated tools to analyze text, increases the accuracy of examiner formalities reviews and tools (i.e. claims tree generators, document comparison), and improves results in automated presearch and future analytics (i.e., section 112(b) and (f) evaluations) by using text supplied by applicants. DOCX submission contributes to the USPTO’s plan to begin the automation of publication processes, which will lead to large cost reductions in production of patent artifacts (grants and pre grant publications), and contributes to the USPTO’s plan to begin the automation of processes to assist in formalities reviews, classification, and routing E:\FR\FM\31JYP2.SGM 31JYP2 37414 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules which leads to improved patent quality, reduced pendency and greater consistency. (b) Pro Hac Vice Fees TABLE 10—PRO HAC VICE—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Fee for non-registered practitioners to appear before the Patent Trial and Appeal Board. New ................ The Office proposes to charge a fee to appear pro hac vice in an AIA trial proceeding. The proposed nonregistered practitioner fee is for each proceeding that a non-registered practitioner requests admission to practice. If a non-registered practitioner requests admission to multiple AIA trial proceedings, multiple requests and fees $250 would be required, one for each proceeding. Once a request is granted, the counsel is admitted for the entire duration of a proceeding, which may extend for several years, (e.g., when an inter partes review proceeds to final written decision, and, after appeal to the Federal Circuit, is remanded back to PTAB for further proceedings). By +$250 FY 2018 unit cost n/a n/a instituting the pro hac vice fee, the Office will be able to shift the cost of this service of processing these requests from the overall AIA trial fees to the requesting, non-USPTO registered counsel. (c) Annual Active Patent Practitioner Fee jbell on DSK3GLQ082PROD with PROPOSALS2 TABLE 11—OED AND PATENT ENROLLMENT—FEE CHANGES AND UNIT COSTS Current fees Proposed fees Dollar change Percent change Fee description Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Large (small) [micro] entity Annual Active Patent Practitioner Fee without certifying continuing legal education (CLE) completion. Annual Active Patent Practitioner Fee with certifying continuing legal education (CLE) completion. Annual Voluntarily Inactive Fee ........................................... New ................ $340 +$340 n/a n/a New ................ $240 +$240 n/a n/a New ................ $70 +$70 n/a n/a The Office proposes to implement an annual active patent practitioner fee under 37 CFR 1.21 and 11.8. Currently, the costs of OED’s disciplinary and other functions are paid by patent applicants and owners. The Office proposes these fees so that practitioners, who directly benefit from registration, should bear the costs associated with maintaining the integrity of their profession, including the costs of OED’s register maintenance and disciplinary functions. This parallels the way many state bars operate where the services of maintaining the bar are often paid by the attorneys who are members of that bar. Accordingly, these fee collections are proposed to shift the costs of the services OED provides practitioners in administering the disciplinary system and register maintenance from patent applicants and owners to the practitioners. The intent of the proposed annual active patent practitioner fee is to offset the portion of costs of OED’s disciplinary and register maintenance VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 operations currently paid by patent applicants and owners. The fees would also serve to fund the Patent Pro Bono Program and the Law School Clinic Certification Program, which increase public access to competent legal representation in IP matters, help enhance the IP legal profession for its members, and serve to make the patent examination process more efficient by decreasing the number of pro se applicants. In addition, the fee would help to cover the costs of increased outreach efforts, including speaking engagements and providing additional training opportunities to help patent practitioners receive the CLE discount, as discussed below. The fee, as proposed, would not cover services provided to trademark practitioners and applicants, and therefore, the amount collected from patent practitioners would only be used to cover OED’s patent-related functions. To determine the appropriate annual fee rates, the USPTO engaged in an analysis of OED’s costs currently paid by patent applicants and owners, as well as the PO 00000 Frm 00018 Fmt 4701 Sfmt 4702 FY 2018 unit cost expected costs of implementing the annual fee. The calculation of the annual fee rates was based upon the annual OED budget after subtracting contributions from trademark operations and contributions from enrollment fee collections, and adding in the costs of implementing the fee and the costs of outreach programs. The calculation was also based on amortizing the IT costs of the implementation of the annual fee over the first three years the fee is collected. In determining the proper fee amount to offset these costs, OED estimated its annual fee collections based on the projected number of registered practitioners who will pay each fee (or be removed from the register) during the year the annual fee is first collected. The estimated collections are based on the current number of registered practitioners and an estimation of how many practitioners are expected to be added to the register between now and when the fee is implemented. Furthermore, increasing the predictability and reliability of patents E:\FR\FM\31JYP2.SGM 31JYP2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules jbell on DSK3GLQ082PROD with PROPOSALS2 is critical to incentivizing innovation. CLE serves to enhance practitioners’ legal skills. Ideally, when practitioners are well-trained and well-educated in patent law and practice, higher quality applications are filed, prosecution is more efficient, and patent grants become stronger, more reliable, and more predictable. It is also critical that patent examiners be able to maintain the pace of their examination process while ensuring that patent quality is preserved. Accordingly, through the encouragement of practitioner CLE by offering a $100 annual fee discount as well as recognition on OED’s public practitioner search page, the patent system should benefit greatly. The USPTO intends to coordinate the delivery of CLE programs, assess whether third party CLE programs are adequate, and make the completion of CLE—whether offered by the USPTO or third parties—as convenient as possible for practitioners to complete, while ensuring that practitioners receive the training necessary to stay up to date with current ethics and patent law and practice. Annual Active Patent Practitioner Fee Each year, registered practitioners, as well as individuals granted limited recognition under 37 CFR 11.9(b), will be, on or before a date to be set by the OED Director, required to pay to the OED Director an annual active patent practitioner fee. Adequate notice will be published and sent to practitioners in advance of the due date for payment of the fee. Payment will be for the calendar year in which the annual active patent practitioner fee is assessed. Practitioners will be required to pay the fee electronically through the USPTO’s online payment system. Persons newly registered or granted limited recognition will not be liable for the annual active practitioner fee during the calendar year in which they are first registered or granted limited recognition. Practitioners who are endorsed on the register as administratively inactive or in emeritus status will not be liable for the annual active practitioner fee. Law school students participating in the USPTO Law School Clinic Certification Program who are granted limited recognition to practice before the Office in patent matters pursuant to 37 CFR 11.16(d) will not be liable for the annual active practitioner fee. Practitioners who are endorsed on the register as voluntarily inactive will be liable for a fee of $70 per year to cover OED’s administrative costs in maintaining the register and updating their information. Practitioners may apply to become active by paying VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 the reinstatement fee and making their request to the OED Director, as set forth below. Emeritus Status The USPTO proposes to create a new emeritus status for practitioners. The new emeritus status would allow active patent practitioners who have been registered for ten or more years to elect emeritus status, provided they are not under investigation at the time they elect such a status. Emeritus practitioners may not practice in patent matters, with the exception of pro bono matters through the USPTO Patent Pro Bono Program in which they do not receive compensation. A practitioner in emeritus status will not be required to pay the annual fee, but will remain under the disciplinary jurisdiction of the OED Director. Continuing Legal Education (CLE) The USPTO proposes to provide a $100 discount for registered practitioners or persons granted limited recognition who certify completion of six hours of continuing legal education in the twenty four months preceding payment of the fee, including five hours of patent law and practice and one hour of ethics credit. Practitioners would be asked to certify whether or not they have completed the recommended number of CLE hours over the past twenty four months at the time they pay their annual active patent practitioner fee, as set forth below. The USPTO proposes that a registered practitioner or person granted limited recognition may earn up to two of the five hours of CLE in patent law and practice toward the CLE discount by participating in the USPTO Patent Pro Bono Program. For every three hours of pro bono service, a patent practitioner may earn one hour of CLE credit toward the annual active patent practitioner fee discount. Late Payment Failure to pay the annual fee by the due date may result in the practitioner being charged a delinquency fee and being subject to administrative suspension. Specifically, if a registered practitioner, or person granted limited recognition pursuant to 37 CFR 11.9(b), fails to pay the annual fee by the due date, the OED Director will publish and send a notice to the practitioner advising him or her of the nonpayment, the consequence of being administratively suspended, and the requirements for reinstatement. The notice will request payment of the annual fee and a $50 delinquency fee, as set forth in 37 CFR 1.21(a)(9)(i), PO 00000 Frm 00019 Fmt 4701 Sfmt 4702 37415 within 60 days after the date of such notice. If a practitioner fails to comply with the notice within the time allowed, the OED Director will then publish and send to the practitioner a Rule to Show Cause why his or her registration should not be administratively suspended. The OED Director shall file a copy of the Rule to Show Cause with the USPTO Director. The practitioner will be given 30 days from the date of the Rule to Show Cause to file a response with the USPTO Director. The response should address any factual and legal bases why the practitioner should not be administratively suspended. Within ten days of receiving a copy of the response, the OED Director may file a reply with the USPTO Director. The USPTO Director will enter an order either dismissing the Rule to Show Cause or administratively suspending the registered practitioner. Administratively suspended practitioners will continue to be assessed the annual active patent practitioner fee during the period of their suspension. Reinstatement The sections referring to reinstatement from administratively inactive status remain unchanged. The reinstatement sections relating to other statuses are set forth below. Administratively Suspended Pursuant to 37 CFR 11.11(f)(1), any registered practitioner, or person granted limited recognition, who has been administratively suspended for less than five years may be reinstated on the register provided the practitioner is not a party to a disciplinary proceeding. To apply for reinstatement, the practitioner will need to submit an application form supplied by the OED, demonstrate compliance with the provisions of § 11.7(a)(2)(i) and submit a declaration or affidavit attesting to the fact that the practitioner has read the most recent revisions of the patent laws and the rules of practice before the Office; and pay the fees set forth in § 1.21(a)(9)(ii), and all outstanding fees as set forth in § 1.21(a)(8), as well as any applicable delinquency fees as set forth in § 1.21(a)(9)(i), for each year the practitioner is administratively suspended. Any administratively suspended registered practitioner or person granted limited recognition who fails to make these complete payments within five years of the effective date of the suspension for nonpayment shall be required to file a petition to the OED Director requesting reinstatement and providing objective evidence that they E:\FR\FM\31JYP2.SGM 31JYP2 37416 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules continue to possess the necessary legal qualifications to render valuable service to patent applicants. Voluntary Inactive Any registered practitioner whose name has been endorsed as voluntarily inactive may be reinstated on the register provided the practitioner: (i) Is not a party to a disciplinary proceeding; (ii) has applied for reinstatement on an application form supplied by the OED Director; (iii) has demonstrated compliance with the provisions of § 11.7(a)(2)(i) and (iii); (iv) submits a declaration or affidavit attesting to the fact that the practitioner has read the most recent revisions of the patent laws and the rules of practice before the Office; (v) has paid the fees set forth in § 1.21(a)(9)(ii); (vi) is not currently administratively suspended; and (vii) has paid all outstanding fees as set forth in § 1.21(a)(7), as well as any applicable delinquency fees as set forth in 37 CFR 1.21(a)(9)(i), for each year the practitioner is voluntarily inactive. A practitioner will be subject to investigation and discipline for his or her conduct that occurred prior to, during, or after the period of his or her voluntary inactivation. Emeritus Practitioners who have elected emeritus status may be restored to active status by filing a request for reinstatement with the OED Director and paying the $210 reinstatement fee and the $70 inactive fee for each year they were in emeritus status. C. Discontinued Fees This section describes fees that are proposed to be discontinued. The purpose of this proposed action is to help streamline the patent fee schedule, while also focusing USPTO workforce efforts on producing products that benefit the general public, rather than producing outputs for individual customers. The Office does not capture historical cost information for these proposed discontinued fees. TABLE 12—DISCONTINUED FEES Fee description Copy of Patent Technology Monitoring Team (PTMT) patent bibliographic extract and other DVD (optical disc) (currently at § 1.19(j)). Copy of U.S. patent custom data extracts (currently at § 1.19(k)). Copy of selected technology reports, miscellaneous technology areas (currently at § 1.19(l)). In January 2018, to comply with Presidential Executive Order 13681, Improving the Security of Consumer Financial Transactions, select computer service fees were discontinued and the services made free. These proposed changes follow that trend. The above proposed service fees will be eliminated and the Office will instead provide these services, in a slightly modified form (i.e., electronic), for free. The first fee proposed for discontinuation is the current 37 CFR 1.19(j) fee for a copy of Patent Technology Monitoring Team, or PTMT, patent bibliographic extract and other DVDs. PTMT patent bibliographic data is currently available online for free, curtailing the need for USPTO to send out extracts on disc. The second fee proposed for discontinuation is the current 37 CFR Percent change Large (small) [micro entity Proposed fees Large (small) [micro] entity Dollar change Large (small) [micro] entity $50 Discontinue .... ¥$50 n/a .................. n/a $100 Discontinue .... ¥$100 n/a .................. n/a $30 Discontinue .... ¥$30 n/a .................. n/a Current fees Large (small) [micro] entity 1.19(k) fee for a copy of U.S. patent custom data extracts. With the elimination of this service fee, USPTO would create the common customizations and release them online, free to the public, at the same time the data is released. Further customizations would be discontinued. Additionally, PatentsView (http:// www.patentsview.org), while not an official USPTO data source, meets many of the needs for those requesting custom data extracts, at no charge to the consumer. The third fee proposed for discontinuation is the current 37 CFR 1.19(l) fee for a copy of selected technology reports in miscellaneous technology areas. Selected technology reports are currently available online for free, curtailing the need for USPTO to send out paper copies of the reports. FY 2018 unit cost VI. Discussion of Specific Rules The following section shows the Code of Federal Regulations (CFR) proposed fee amendments. The discussion below includes all proposed fee amendments, all proposed fee discontinuations, and all proposed changes to the CFR text. Title 37 of the CFR, parts 1, 11, 41, and 42, are proposed to be amended as follows: Section 1.16 is proposed to be amended by revising paragraphs (a) through (e), (h), (j), (k), and (m) through (s) and adding paragraph (u) to set forth the application filing, excess claims, search, and examination fees for patent applications filed as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.16 are shown in Table 13. TABLE 13—CFR SECTION 1.16 FEE CHANGES Current fees (dollars) jbell on DSK3GLQ082PROD with PROPOSALS2 CFR section Fee code Large 1.16(a) ....................... 1.16(a) ....................... 1011/2011/3011 ........ 4011 .......................... 1.16(b) ....................... 1.16(b) ....................... 1.16(c) ........................ 1012/2012/3012 ........ 1017/2017/3017 ........ 1013/2013/3013 ........ VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Basic Filing Fee—Utility ................... Basic Filing Fee—Utility (electronic filing for small entities). Basic Filing Fee—Design ................ Basic Filing Fee—Design (CPA) ..... Basic Filing Fee—Plant ................... PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 Small Micro Large Small Micro 300 n/a 150 75 75 n/a 320 n/a 160 80 80 n/a 200 200 200 100 100 100 50 50 50 220 220 220 110 110 110 55 55 55 E:\FR\FM\31JYP2.SGM 31JYP2 37417 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 13—CFR SECTION 1.16 FEE CHANGES—Continued Current fees (dollars) CFR section Fee code Proposed fees (dollars) Description Large 1.16(d) ....................... 1.16(e) ....................... 1.16(e) ....................... 1005/2005/3005 ........ 1014/2014/3014 ........ 1019/2019/3019 ........ 1.16(h) ....................... 1201/2201/3201 ........ 1.16(h) ....................... 1204/2204/3204 ........ 1.16(j) ......................... 1.16(k) ........................ 1.16(m) ...................... 1.16(n) ....................... 1.16(o) ....................... 1.16(p) ....................... 1.16(q) ....................... 1.16(r) ........................ 1.16(s) ........................ 1203/2203/3203 1111/2111/3111 1113/2113/3113 1114/2114/3114 1311/2311/3311 1312/2312/3312 1313/2313/3313 1314/2314/3314 1081/2081/3081 1.16(s) ........................ 1081/2081/3081 ........ 1.16(s) ........................ 1081/2081/3081 ........ 1.16(s) ........................ 1081/2081/3081 ........ 1.16(s) ........................ 1081/2081/3081 ........ 1.16(u) ....................... NEW .......................... ........ ........ ........ ........ ........ ........ ........ ........ ........ Section 1.17: Section 1.17 is proposed to be amended by revising paragraphs (a), (c) through (g), (i)(2), (k), (m), (p), (r), Provisional Application Filing Fee ... Basic Filing Fee—Reissue .............. Basic Filing Fee—Reissue (Design CPA). Independent Claims in Excess of Three. Reissue Independent Claims in Excess of Three. Multiple Dependent Claim ............... Utility Search Fee ............................ Plant Search Fee ............................. Reissue Search Fee ........................ Utility Examination Fee .................... Design Examination Fee ................. Plant Examination Fee .................... Reissue Examination Fee ................ Utility Application Size Fee—for Each Additional 50 Sheets That Exceeds 100 Sheets. Design Application Size Fee—for Each Additional 50 Sheets That Exceeds 100 Sheets. Plant Application Size Fee—for Each Additional 50 Sheets That Exceeds 100 Sheets. Reissue Application Size Fee—for Each Additional 50 Sheets That Exceeds 100 Sheets. Provisional Application Size Fee— for Each Additional 50 Sheets That Exceeds 100 Sheets. Non-DOCX Filing Surcharge Fee .... Small Micro Large Small Micro 280 300 300 140 150 150 70 75 75 300 320 320 150 160 160 75 80 80 460 230 115 480 240 120 460 230 115 480 240 120 820 660 420 660 760 600 620 2,200 400 410 330 210 330 380 300 310 1,100 200 205 165 105 165 190 150 155 550 100 860 700 440 700 800 640 660 2,320 420 430 350 220 350 400 320 330 1,160 210 215 175 110 175 200 160 165 580 105 400 200 100 420 210 105 400 200 100 420 210 105 400 200 100 420 210 105 400 200 100 420 210 105 n/a n/a n/a 400 200 100 and (s) to set forth the application processing fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.17 are shown in Table 14. TABLE 14—CFR SECTION 1.17 FEE CHANGES Current fees (dollars) CFR section Fee code jbell on DSK3GLQ082PROD with PROPOSALS2 Large 1.17(a)(1) ................... 1251/2251/3251 ........ 1.17(a)(2) ................... 1252/2252/3252 ........ 1.17(a)(3) ................... 1253/2253/3253 ........ 1.17(a)(4) ................... 1254/2254/3254 ........ 1.17(a)(5) ................... 1255/2255/3255 ........ 1.17(c) ........................ 1.17(d) ....................... 1817/2817/3817 ........ 1819/2819/3819 ........ 1.17(e)(1) ................... 1801/2801/3801 ........ 1.17(e)(2) ................... 1820/2820/3820 ........ 1.17(f) ........................ 1462/2462/3462 ........ 1.17(g) ....................... 1463/2463/3463 ........ VerDate Sep<11>2014 21:54 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Extension for Response Within First Month. Extension for Response Within Second Month. Extension for Response Within Third Month. Extension for Response Within Fourth Month. Extension for Response Within Fifth Month. Request for Prioritized Examination Correction of Inventorship After First Action on Merits. Request for Continued Examination (RCE) (1st request) (see 37 CFR 1.114). Request for Continued Examination (RCE) (2nd and subsequent request). Petitions Requiring the Petition Fee Set Forth in 37 CFR 1.17(f) (Group I). Petitions Requiring the Petition Fee Set Forth in 37 CFR 1.17(g) (Group II). PO 00000 Frm 00021 Fmt 4701 Sfmt 4702 Small Micro Large Small Micro 200 100 50 220 110 55 600 300 150 640 320 160 1,400 700 350 1,480 740 370 2,200 1,100 550 2,320 1,160 580 3,000 1,500 750 3,160 1,580 790 4,000 600 2,000 300 1,000 150 4,200 640 2,100 320 1,050 160 1,300 650 325 1,360 680 340 1,900 950 475 2,000 1,000 500 400 200 100 420 210 105 200 100 50 220 110 55 E:\FR\FM\31JYP2.SGM 31JYP2 37418 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 14—CFR SECTION 1.17 FEE CHANGES—Continued Current fees (dollars) CFR section Fee code Proposed fees (dollars) Description Large 1.17(i)(2) .................... 1803/2803/3803 ........ 1.17(i)(2) .................... 1.17(k) ........................ 1808/2808/3808 ........ 1802/2802/3802 ........ 1.17(m) ...................... 1453/2453/3453 ........ 1.17(m) ...................... 1454/2454/3454 ........ 1.17(m) ...................... 1784/2784/3784 ........ 1.17(m) ...................... 1558/2558/3558 ........ 1.17(p) ....................... 1806/2806/3806 ........ 1.17(r) ........................ 1809/2809/3809 ........ 1.17(s) ........................ 1810/2810/3810 ........ Section 1.18: Section 1.18 is proposed to be amended by revising paragraphs (a) through (f) to set forth the patent Request for voluntary publication or republication. Other Publication Processing Fee ... Request for Expedited Examination of a Design Application. Petition for revival of an abandoned application for a patent, for the delayed payment of the fee for issuing each patent, or for the delayed response by the patent owner in any reexamination proceeding. Petition for the Delayed Submission of a Priority or Benefit Claim. Petition to Excuse Applicant’s Failure to Act Within Prescribed Time Limits in an International Design Application. Petition for the Delayed Payment of the Fee for Maintaining a Patent in Force. Submission of an Information Disclosure Statement. Filing a Submission After Final Rejection (see 37 CFR 1.129(a)). For Each Additional Invention to be Examined (see 37 CFR 1.129(b)). Small Micro Large Small Micro 130 130 130 140 140 140 130 900 130 450 130 225 140 2,000 140 1,000 140 500 2,000 1,000 500 2,100 1,050 525 2,000 1,000 500 2,100 1,050 525 2,000 1,000 500 2,100 1,050 525 2,000 1,000 500 2,100 1,050 525 240 120 60 260 130 65 840 420 210 880 440 220 840 420 210 880 440 220 issue fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.18 are shown in Table 15. TABLE 15—CFR SECTION 1.18 FEE CHANGES Current fees (dollars) CFR section Fee code Proposed fees (dollars) Description Large 1.18(a)(1) ................... 1.18(a)(1) ................... 1.18(b)(1) ................... 1.18(c)(1) ................... 1.18(d)(3) ................... 1.18(e) ....................... 1501/2501/3501 1511/2511/3511 1502/2502/3502 1503/2503/3503 1505/2505/3505 1455/2455/3455 ........ ........ ........ ........ ........ ........ 1.18(f) ........................ 1456/2456/3456 ........ Section 1.19: Section 1.19 is proposed to be amended by revising paragraphs (b)(1)(i)(B) and (b)(1)(ii)(B), and by Utility Issue Fee ............................... Reissue Issue Fee ........................... Design Issue Fee ............................. Plant Issue Fee ................................ Publication Fee for Republication .... Filing an Application for Patent Term Adjustment. Request for Reinstatement of Term Reduced. Small Micro Large Small Micro 1,000 1,000 700 800 300 200 500 500 350 400 300 200 250 250 175 200 300 200 1,200 1,200 740 840 320 210 600 600 370 420 320 210 300 300 185 210 320 210 400 400 400 420 420 420 removing and reserving paragraphs (j) through (l) to set forth the patent document supply fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.19 are shown in Table 16. TABLE 16—CFR SECTION 1.19 FEE CHANGES Current fees (dollars) CFR section Fee code jbell on DSK3GLQ082PROD with PROPOSALS2 Large 1.19(b)(1)(i)(B) ........... VerDate Sep<11>2014 8051 .......................... 21:54 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Copy Patent File Wrapper, Paper Medium, Any Number of Sheets. PO 00000 Frm 00022 Fmt 4701 280 Sfmt 4702 Small 280 Micro Large 280 E:\FR\FM\31JYP2.SGM 290 31JYP2 Small 290 Micro 290 37419 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 16—CFR SECTION 1.19 FEE CHANGES—Continued Current fees (dollars) CFR section Fee code Proposed fees (dollars) Description Large 1.19(b)(1)(ii)(B) .......... 8052 .......................... 1.19(j) ........................ 8057 .......................... 1.19(k) ....................... 8058 .......................... 1.19(l) ........................ 8059 .......................... Copy Patent File Wrapper, Electronic Medium, Any Size or Provided Electronically. Copy of Patent Technology Monitoring Team (PTMT) patent bibliographic extract and other DVD (optical disc). Copy of U.S. patent custom data extracts. Copy of selected technology reports, miscellaneous technology areas. Small Micro Large Small Micro 55 55 55 60 60 60 50 50 50 ( 1) (1) (1) 100 100 100 ( 1) (1) (1) 30 30 30 ( 1) (1) (1) 1 discontinue. Section 1.20: Section 1.20 is proposed to be revised to set forth post issuance fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.20 are shown in Table 17. TABLE 17—CFR SECTION 1.20 FEE CHANGES Current fees (dollars) CFR section Fee code jbell on DSK3GLQ082PROD with PROPOSALS2 Large 1.20(a) ....................... 1.20(b) ....................... 1811/2811/3811 ........ 1816/2816/3816 ........ 1.20(c)(1) ................... 1831/2831/3831 ........ 1.20(c)(2) ................... 1812/2812/3812 ........ 1.20(c)(7) ................... 1812/2812/3812 ........ 1.20(c)(3) ................... 1821/2821/3821 ........ 1.20(c)(5) ................... 1824/2824/3824 ........ 1.20(d) ....................... 1814/2814/3814 ........ 1.20(e) ....................... 1551/2551/3551 ........ 1.20(f) ........................ 1552/2552/3552 ........ 1.20(g) ....................... 1553/2553/3553 ........ 1.20(h) ....................... 1554/2554/3554 ........ 1.20(h) ....................... 1555/2555/3555 ........ 1.20(h) ....................... 1556/2556/3556 ........ 1.20(j)(1) .................... 1.20(j)(2) .................... 1457/2457/3457 ........ 1458/2458/3458 ........ VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Certificate of Correction ................... Processing Fee for Correcting Inventorship in a Patent. Ex Parte Reexamination (§ 1.510(a)) in forty (40) or fewer pages. Ex Parte Reexamination (§ 1.510(a)) in forty-one (41) or more pages. Refused request for ex parte Reexamination. Reexamination Independent Claims in Excess of Three and also in Excess of the Number of Such Claims in the Patent Under Reexamination. Petitions in a Reexamination Proceeding, Except for those Specifically Enumerated in 37 CFR 1.550(i) and 1.937(d). Statutory Disclaimer, Including Terminal Disclaimer. For Maintaining an Original or Any Reissue Patent, Due at 3.5 years. For Maintaining an Original or Any Reissue Patent, Due at 7.5 years. For Maintaining an Original or Any Reissue Patent, Due at 11.5 years. Surcharge—3.5 year—Late Payment Within 6 Months. Surcharge—7.5 year—Late Payment Within 6 Months. Surcharge—11.5 year—Late Payment Within 6 Months. Extension of Term of Patent ............ Initial Application for Interim Extension (see 37 CFR 1.790). PO 00000 Frm 00023 Fmt 4701 Sfmt 4702 Small Micro Large Small Micro 150 150 150 150 150 150 160 160 160 160 160 160 6,000 3,000 1,500 6,300 3,150 1,575 12,000 6,000 3,000 12,600 6,300 3,150 3,600 1,800 900 3,780 1,890 945 460 230 115 480 240 120 1,940 970 485 2,040 1,020 510 160 160 160 170 170 170 1,600 800 400 2,000 1,000 500 3,600 1,800 900 3,760 1,880 940 7,400 3,700 1,850 7,700 3,850 1,925 160 80 40 500 250 125 160 80 40 500 250 125 160 80 40 500 250 125 1,120 420 1,120 420 1,120 420 1,180 440 1,180 440 1,180 440 E:\FR\FM\31JYP2.SGM 31JYP2 37420 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 17—CFR SECTION 1.20 FEE CHANGES—Continued Current fees (dollars) CFR section Fee code Proposed fees (dollars) Description Large 1.20(j)(3) .................... 1459/2459/3459 ........ 1.20(k)(1) ................... 1826/2826/3826 ........ 1.20(k)(2) ................... 1827/2827/3827 ........ 1.20(k)(3)(ii) ............... 1829/2829/3829 ........ Section 1.21: Section 1.21 is proposed to be amended by adding paragraphs (a)(7) and (8) and revising paragraphs (a)(1), (2), and (5), (a)(9)(ii), (a)(10), (k), (n), (o), and (q) to set forth miscellaneous fees and charges as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.21 are shown in Table 18. The USPTO proposes to add paragraph (a)(7) to § 1.21 to create a voluntary inactive fee of $70, to be paid by registered practitioners and persons granted limited recognition who are endorsed on the register as voluntarily inactive. The USPTO proposes to add paragraph (a)(8) to § 1.21 to create an annual active patent practitioner fee. Paragraph (a)(8)(i) of § 1.21 is proposed to set a discounted fee of $240 for registered practitioners and persons granted limited recognition under 37 CFR 11.9(b) who certify to the OED Director that they have completed six hours of continuing legal education Subsequent Application for Interim Extension (see 37 CFR 1.790). Request for Supplemental Examination. Reexamination Ordered as a Result of Supplemental Examination. Supplemental Examination Document Size Fee—for Each Additional 50 Sheets or a Fraction Thereof in a Nonpatent Document. Small Micro Large Small Micro 220 220 220 230 230 230 4,400 2,200 1,100 4,620 2,310 1,155 12,100 6,050 3,025 12,700 6,350 3,175 280 140 70 300 150 75 within the past 24 months. Paragraph (a)(8)(ii) of § 1.21 is proposed to set a fee of $340 for registered practitioners and persons granted limited recognition under 37 CFR 11.9(b) who do not certify to the OED Director that they have completed six hours of continuing legal education within the past 24 months. The USPTO proposes to amend paragraph (o) of § 1.21 to clarify the applicability of its provisions. The USPTO proposes to specify that the mega-sequence listing fee applies to applications filed under 35 U.S.C. 111 and 371 to clarify that the fee applies to provisional applications, nonprovisional applications, and national stage applications; the fee does not apply to international applications filed with the U.S. Receiving Office (RO/US). Furthermore, because a sequence listing in a national stage application may be received by the USPTO from the International Bureau in accordance with PCT Article 20, rather than directly submitted to the USPTO by the applicant, the USPTO proposes to specifically provide that the megasequence listing fee applies to such receipt. The USPTO further proposes to clarify that the fee applies to only the first submission or receipt of a sequence listing in electronic form having a size ranging from 300 MB to 800 MB and to the first submission or receipt of a sequence listing in electronic form having a size over 800 MB. Thus, an applicant will not be charged the megasequence listing fee for the submission of a substitute or replacement electronic form of the sequence listing (see 37 CFR 1.825) unless the size of the substitute or replacement electronic form sequence listing is subject to the provisions of a different paragraph of § 1.21(o) (e.g., the first sequence listing in an application is between 300 MB and 800 MB, and a replacement sequence listing is greater than 800 MB). Finally, the USPTO proposes to specify that for purposes of determining the fee required under § 1.21(o), the size of the electronic form of the sequence listing is measured without file compression. TABLE 18—CFR SECTION 1.21 FEE CHANGES Current fees (dollars) CFR section Fee code jbell on DSK3GLQ082PROD with PROPOSALS2 Large 1.21(a)(1)(i) ................ 1.21(a)(1)(ii)(A) .......... 9001 .......................... 9010 .......................... 1.21(a)(1)(ii)(B) .......... 9011 .......................... 1.21(a)(1)(iii) .............. 9029 .......................... 1.21(a)(2)(i) ................ 9003 .......................... 1.21(a)(2)(ii) ............... 9026 .......................... 1.21(a)(2)(iii) .............. 9025 .......................... 1.21(a)(5)(i) ................ 9012 .......................... 1.21(a)(5)(ii) ............... 9013 .......................... 1.21(a)(7) ................... NEW .......................... VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description 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. 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). Inactive Patent Practitioner Fee ...... PO 00000 Frm 00024 Fmt 4701 Sfmt 4702 Small Micro Large Small Micro 100 200 100 200 100 200 110 210 110 210 110 210 450 450 450 470 470 470 450 450 450 470 470 470 200 200 200 210 210 210 200 200 200 210 210 210 100 100 100 110 110 110 400 400 400 420 420 420 400 400 400 420 420 420 n/a n/a n/a 70 70 70 E:\FR\FM\31JYP2.SGM 31JYP2 37421 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 18—CFR SECTION 1.21 FEE CHANGES—Continued Current fees (dollars) CFR section Fee code Large 1.21(a)(8)(i) ................ NEW .......................... 1.21(a)(8)(ii) ............... NEW .......................... 1.21(a)(9)(ii) ............... 1.21(a)(10) ................. 9004 .......................... 9014 .......................... 1.21(k) ........................ 9024 .......................... 1.21(n) ....................... 8026 .......................... 1.21(o)(1) ................... 1091/2091/3091 ........ 1.21(o)(2) ................... 1092/2092/3092 ........ 1.21(q) ....................... 8054 .......................... 1 No Proposed fees (dollars) Description Annual Active Practitioner Fee with certifying continuing legal education completion. Annual Active Practitioner Fee without certifying continuing legal education completion. 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. Unspecified other services, excluding labor. Handling Fee for Incomplete or Improper Application. Submission of sequence listings ranging in size of 300 MB to 800 MB. Submission of sequence listings exceeding 800 MB. Additional Fee for Expedited Service. Small Micro Large Small Micro n/a n/a n/a 240 240 240 n/a n/a n/a 340 340 340 200 1,600 200 1,600 200 1,600 210 1,680 210 1,680 210 1,680 (1) (1 ) ( 1) ( 1) (1 ) (1 ) 130 130 130 140 140 140 1,000 500 250 1,060 530 265 10,000 5,000 2,500 10,500 5,250 2,625 160 160 160 170 170 170 Cost. Section 1.27: Section 1.27 is proposed to be amended by revising the introductory text of paragraph (a)(3) to provide that the payment, by any party, of the exact amount of the small entity transmittal fee set forth in § 1.1031(a) will be treated as a written assertion of entitlement to small entity status. The proposed change to § 1.27(a)(3) will make it easier for applicants filing an international design application through the USPTO as an office of indirect filing to establish small entity status. Section 1.431: Section 1.431 is proposed to be amended by revising paragraph (c) to remove reference to the late payment fee calculation under PCT Rule 16bis.2. The late payment fee pursuant to PCT Rule 16bis.2 is proposed to be added to § 1.445, as that provision concerns international application filing, processing and search fees. Section 1.445: Section 1.445 is proposed to be amended by revising paragraphs (a) to set forth international filing, processing, and search fees and charges as authorized under Section 10 of the Act. The changes to the fee amounts indicated in 37 CFR 1.445 are shown in Table 19. Section 1.445(a) is also proposed to be amended to include the late payment fee pursuant to PCT Rule 16bis.2. See discussion of § 1.431, supra. TABLE 19—CFR SECTION 1.445 FEE CHANGES Current fees (dollars) CFR section Fee code jbell on DSK3GLQ082PROD with PROPOSALS2 Large 1.445(a)(1)(i)(A) ......... 1.445(a)(2)(i) .............. 1601/2601/3601 ........ 1602/2602/3602 ........ 1.445(a)(3)(i) .............. 1604/2604/3604 ........ 1.445(a)(4)(i) .............. 1621/2621/3621 ........ 1.445(a)(5) ................. 1627/2627/3627 ........ Section 1.482: Section 1.482 is proposed to be amended by revising paragraphs (a) and (c) to read as set out VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Transmittal Fee ................................ Search Fee—Regardless of Whether There is a Corresponding Application (see 35 U.S.C. 361(d) and PCT Rule 16). Supplemental Search Fee When Required, per Additional Invention. Transmitting Application to Intl. Bureau to Act as Receiving Office. Late Furnishing Fee for Providing a Sequence Listing in Response to an Invitation Under PCT Rule 13ter. Frm 00025 Fmt 4701 Sfmt 4702 Micro Large Small Micro 240 2,080 120 1,040 60 520 260 2,180 130 1,090 65 545 2,080 1,040 520 2,180 1,090 545 240 120 60 260 130 65 300 150 75 320 160 80 in the regulatory text at the end of this document. The changes to the fee PO 00000 Small amounts indicated in § 1.482 are shown in Table 20. E:\FR\FM\31JYP2.SGM 31JYP2 37422 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 20—CFR SECTION 1.482 FEE CHANGES Current fees (dollars) CFR section Fee code Proposed fees (dollars) Description Large 1.482(a)(1)(i) .............. 1605/2605/3605 ........ 1.482(a)(1)(ii) ............. 1606/2606/3606 ........ 1.482(a)(2)(i) .............. 1607/2607/3607 ........ 1.482(c) ...................... 1627/2627/3627 ........ Section 1.492: Section 1.492 is proposed to be amended by revising paragraphs (a), (b)(3) and (4), (c)(2), (d), (f), (h), and (j) to set forth the Preliminary Examination Fee—U.S. Was the ISA. Preliminary Examination Fee—U.S. Was Not the ISA. Supplemental Examination Fee per Additional Invention. Late Furnishing Fee for Providing a Sequence Listing in Response to an Invitation Under PCT Rule 13ter. Small Micro Large Small Micro 600 300 150 640 320 160 760 380 190 800 400 200 600 300 150 640 320 160 300 150 75 320 160 80 application filing, excess claims, search, and examination fees for international patent applications entering the national stage as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 1.492 are shown in Table 21. TABLE 21—CFR SECTION 1.492 FEE CHANGES jbell on DSK3GLQ082PROD with PROPOSALS2 Current fees (dollars) Fee code Description 1.492(a) ..................... 1.492(b)(3) ................. 1631/2631/3631 ........ 1642/2642/3642 ........ 1.492(b)(4) ................. 1632/2632/3632 ........ 1.492(c)(2) ................. 1633/2633/3633 ........ 1.492(d) ..................... 1614/2614/3614 ........ 1.492(f) ...................... 1616/2616/3616 ........ 1.492(h) ..................... 1617/2617/3617 ........ 1.492(j) ....................... 1681/2681/3681 ........ Basic PCT National Stage Fee ....... 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—Multiple Dependent. Search fee, examination fee or oath or declaration after the date of commencement of the national stage. National Stage Application Size Fee—for Each Additional 50 Sheets That Exceeds 100 Sheets. CFR section Large Section 11.8: The USPTO proposes to add paragraph (d) to § 11.8 to establish a new fee to be paid annually by practitioners. Paragraph (d)(1) of § 11.8 is proposed to require registered practitioners and persons granted limited recognition under § 11.9(b) to pay the fee to the OED Director each year, beginning the year after they are registered or granted limited recognition. Paragraph (d)(2) of § 11.8 is proposed to explain that failure to comply with paragraph (d)(1) may result in being charged a delinquency fee, administrative suspension as set forth in § 11.11(b), or both. The USPTO proposes to add paragraph (d)(3)(i) to § 11.8 to provide for a discount for registered practitioners or persons granted limited recognition who certify completion of six hours of continuing legal education VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Frm 00026 Fmt 4701 Sfmt 4702 Micro Large Small Micro 300 520 150 260 75 130 320 540 160 270 80 135 660 330 165 700 350 175 760 380 190 800 400 200 460 230 115 480 240 120 820 410 205 860 430 215 140 70 35 160 80 40 400 200 100 420 210 105 credit in the preceding twenty-four months, including five hours of patent law and practice and one hour of ethics. To receive the discount, practitioners would be asked to certify that they completed the recommended number of CLE hours at the time they pay their annual active patent practitioner fee. Generally, the same types of courses and activities that qualify for CLE credit in another state will qualify for credit for purposes of the CLE certification discount, so long as it covers the appropriate topics. For patent law and practice, any course that covers any of the topics included in 37 CFR 11.5(b)(1) would be accepted. For ethics credit, any ethics course hosted by the USPTO, or any course accepted for ethics CLE credit in any U.S. state or territory would be accepted. The USPTO considered that CLE may not be equally PO 00000 Small Proposed fees (dollars) available to practitioners in all geographic areas, and therefore, has proposed that live or pre-recorded material would be accepted for purposes of obtaining the CLE discount. The USPTO is also seeking comments on whether the public would like the option to request that OED ‘‘pre-certify’’ courses for a fee if they comply with OED’s guidelines for accepted CLE courses. The USPTO considered requiring patent examiners to complete similar training, but is not proposing to do so at this time. Patent examiners are already required to complete rigorous training as part of their job duties. Further, patent practitioners are not, at this time, required to complete CLE, but the USPTO is proposing to merely offer a discount on the annual fee for doing so. Patent examiners would not be required to pay the annual active patent E:\FR\FM\31JYP2.SGM 31JYP2 37423 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules practitioner fee under this proposal, and therefore would not receive a discount to the fee. The USPTO also considered that patent agents and some patent attorneys are not currently subject to any CLE requirements, so requiring CLE to receive a discount may be viewed as more burdensome for these groups. However, all patent agents and attorneys are provided the same services in maintaining the integrity of their profession, and granted the same rights to practice before the USPTO, and therefore, the USPTO proposes charging the same fee for all patent practitioners. Again, the USPTO is not requiring any practitioner to complete CLE, but merely offering a discount for doing so. The USPTO proposes to add paragraph (d)(3)(ii) of § 11.8 to provide that a registered practitioner or person granted limited recognition may earn up to two of the five hours of CLE in patent law and practice by participating in the USPTO Patent Pro Bono Program. For every three hours of pro bono service, a patent practitioner may earn one hour of CLE credit toward the annual active patent practitioner fee discount. Section 11.11: The USPTO proposes to redesignate paragraph (a)(1) as paragraph (a), and to amend the paragraph to provide that the OED Director may publish a practitioner’s CLE certification status. The USPTO proposes to remove paragraph (a)(2) of § 11.11, as its provisions relate to the mandatory survey, which would no longer be conducted by the OED Director if the annual fee is implemented. The USPTO proposes to amend paragraph (b)(1) of § 11.11 to apply to those failing to comply with § 11.8(d)(1), which refers to the annual active patent practitioner fee, rather than § 11.11(a)(2), which refers to the mandatory survey. The USPTO proposes to add paragraph (b)(4) of § 11.11 to provide that the annual active patent practitioner fee will continue to be assessed for those practitioners who are administratively suspended during the period of administrative suspension. The USPTO proposes to amend paragraph (d)(1) of § 11.11 to remove the exception set forth in paragraph (d)(4), as there is currently no paragraph (d)(4). The addition of paragraph (d)(4) is being proposed in these Rules, but does not refer to an exception to (d)(1). The USPTO proposes to add paragraph (d)(4) of § 11.11 to require registered practitioners and persons granted limited recognition under § 11.9(b), who are endorsed on the register as voluntarily inactive to pay an annual voluntary inactive fee of $70 to the OED Director each year. The USPTO proposes to amend paragraph (d)(6) of § 11.11 to remove the current process for a practitioner in voluntary inactive status to request reinstatement, and instead, refer the practitioner to paragraph (f)(3), which contains a new proposed process for reinstatement of practitioners in voluntary inactive status. The USPTO proposes to redesignate paragraph (e) of § 11.11 as paragraph (e)(1) and add paragraph (e)(2) to create a new emeritus status for practitioners. The new emeritus status would allow active practitioners who have been registered for ten or more years to elect emeritus status, provided they are not under investigation at the time they elect such a status. Emeritus practitioners may not practice in patent matters, with the exception of pro bono matters through the USPTO Patent Pro Bono Program in which they do not receive compensation. A practitioner in emeritus status will not be required to pay the annual fee, but will remain under the disciplinary jurisdiction of the OED Director. The USPTO proposes to amend paragraph (f)(1) of § 11.11 to remove any references to resigned practitioners, remove the requirement that a practitioner who was administratively suspended for two or more years before the date the Office receives a completed application from the person must also pass the registration examination under § 11.7(b)(1)(ii), and add the requirement that any practitioner who remains administratively suspended for more than five years shall be required to file a petition to the OED Director requesting reinstatement and providing objective evidence that the practitioner continues to possess the necessary legal qualifications to render applicants valuable service to patent applicants. The USPTO proposes to add paragraph (f)(3) which would set forth the process by which voluntarily inactive practitioners may be reinstated on the register in active status. The USPTO proposes to add paragraph (f)(4) of § 11.11, which sets forth the process by which a practitioner who has resigned may apply to be reinstated to the register in active status. The USPTO proposes to add paragraph (f)(5) of § 11.11 which sets forth the process by which a practitioner who has elected emeritus status may apply to be reinstated to the register in active status. Section 41.20: Section 41.20 is proposed to be amended by revising paragraph (a), (b)(1), (b)(2)(ii), and (b)(3) and (4) to set forth the appeal fees as authorized under Section 10 of the Act. The changes to the fee amounts indicated in § 41.20 are shown in Table 22. TABLE 22—CFR SECTION 41.20 FEE CHANGES Current fees (dollars) CFR section Fee code jbell on DSK3GLQ082PROD with PROPOSALS2 Large 41.20(a) ..................... 1405/2405/3405 ........ 41.20(b)(1) ................. 41.20(b)(2)(ii) ............. 1401/2401/3401 ........ 1404/2404/3404 ........ 41.20(b)(3) ................. 41.20(b)(4) ................. 1403/2403/3403 ........ 1413/2413/3413 ........ Section 42.15: Section 42.15 is proposed to be amended by revising paragraphs (a) through (e) to set forth VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Petitions to the Chief Administrative Patent Judge Under 37 CFR 41.3. Notice of Appeal .............................. Filing a Brief in Support of an Appeal in an Inter Partes Reexamination Proceeding. Request for Oral Hearing ................ Forwarding an Appeal in an Application or Ex Parte Reexamination Proceeding to the Board. Frm 00027 Fmt 4701 Sfmt 4702 Micro Large Small Micro 400 400 400 420 420 420 800 2,000 400 1,000 200 500 840 2,100 420 1,050 210 525 1,300 2,240 650 1,120 325 560 1,360 2,360 680 1,180 340 590 the inter partes review and post-grant review or covered business method patent review of patent fees as PO 00000 Small authorized under Section 10 of the Act. The changes to the fee amounts E:\FR\FM\31JYP2.SGM 31JYP2 37424 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules indicated in § 42.15 are shown in Table 23. TABLE 23—CFR SECTION 42.15 FEE CHANGES Current fees (dollars) CFR section Fee code 42.15(a)(1) ................. 1406 .......................... 42.15(a)(2) ................. 1414 .......................... 42.15(a)(2) ................. 1414 .......................... 42.15(a)(3) ................. 1407 .......................... 42.15(a)(4) ................. 1415 .......................... 42.15(b)(1) ................. 1408 .......................... 42.15(b)(2) ................. 1416 .......................... 42.15(b)(2) ................. 1416 .......................... 42.15(b)(3) ................. 1409 .......................... 42.15(b)(4) ................. 1417 .......................... 42.15(c)(1) ................. 42.15(d) ..................... 1412 .......................... 1411 .......................... 42.15(e) ..................... NEW .......................... jbell on DSK3GLQ082PROD with PROPOSALS2 VII. Rulemaking Considerations A. AIA: America Invents Act This proposed rule seeks to set and adjust fees under Section 10(a) of the AIA as amended by the SUCCESS Act, Public Law 115–273, 132 Stat. 4158. Section 10(a) of the AIA authorizes the Director of the USPTO to set or adjust by rule any patent fee established, authorized, or charged under title 35 of the U.S.C. for any services performed, or materials furnished, by the Office. The SUCCESS Act extends the USPTO fee setting authority until September 2026. Section 10 prescribes that fees may be set or adjusted only to recover the aggregate estimated cost to the Office for processing, activities, services, and materials relating to patents, including administrative costs of the Office with respect to such patent fees. Section 10 authority includes flexibility to set VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 Proposed fees (dollars) Description Inter Partes Review Request Fee— Up to 20 Claims. Inter Partes Review Post-Institution Fee—Up to 15 Claims. Inter Partes Review Post-Institution Fee—Up to 20 Claims. 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 20. Post-Grant or Covered Business Method Patent Review Request Fee—Up to 20 Claims. Post-Grant or Covered Business Method Patent Review Post-Institution Fee—Up to 15 Claims. Post-Grant or Covered Business Method Patent Review Post-Institution Fee—Up to 20 Claims. 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 20. Petition for a Derivation Proceeding Request to Make a Settlement Agreement Available and Other Requests Filed in a Patent Trial Proceeding. Pro Hac Vice Admission Fee .......... Large Small Micro Large Small Micro 15,500 15,500 15,500 19,500 19,500 19,500 15,000 15,000 15,000 n/a n/a n/a n/a n/a n/a 18,750 18,750 18,750 300 300 300 375 375 375 600 600 600 750 750 750 16,000 16,000 16,000 20,000 20,000 20,000 22,000 22,000 22,000 n/a n/a n/a n/a n/a n/a 27,500 27,500 27,500 375 375 375 475 475 475 825 825 825 1,050 1,050 1,050 400 400 400 400 400 400 420 420 420 420 420 420 n/a n/a n/a 250 250 250 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 PO 00000 Frm 00028 Fmt 4701 Sfmt 4702 patent operations. When proposing fees under Section 10 of the Act, the Director must provide the PPAC with the proposed fees at least 45 days prior to publishing the proposed fees in the Federal Register. The PPAC then has at least 30 days within which to deliberate, consider, and comment on the proposal, as well as hold public hearing(s) on the proposed fees. The PPAC must make a written report available to the public of the comments, advice, and recommendations of the committee regarding the proposed fees before the Office issues any final fees. The Office considers and analyzes any comments, advice, or recommendations received from the PPAC before finally setting or adjusting fees. Consistent with this framework, on August 8, 2018, the Director notified the PPAC of the Office’s intent to set or E:\FR\FM\31JYP2.SGM 31JYP2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules jbell on DSK3GLQ082PROD with PROPOSALS2 adjust patent fees and submitted a preliminary patent fee proposal with supporting materials. The preliminary patent fee proposal and associated materials are available at https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting. The PPAC held a public hearing in Alexandria, Virginia, on September 6, 2018. Transcripts of the hearing are available for review at https:// www.uspto.gov/sites/default/files/ documents/PPAC_Hearing_Transcript_ 20180906.pdf. Members of the public were invited to the hearing and given the opportunity to submit written and/ or oral testimony for the PPAC to consider. The PPAC considered such public comments from this hearing and made all comments available to the public via the Fee Setting website, https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting. The PPAC also provided a written report setting forth in detail the comments, advice, and recommendations of the committee regarding the preliminary proposed fees. The report regarding the preliminary proposed fees was released on October 29, 2018, and can be found online at https://www.uspto.gov/sites/default/ files/documents/PPAC_Fee_Setting_ Report_Oct2018.pdf. The Office considered and analyzed all comments, advice, and recommendations received from the PPAC before publishing this NPRM. Further discussion of the PPAC report can be found in the section titled ‘‘Fee Setting Considerations.’’ Before the final rule is issued, this proposed rule provides the public with a 60-day period during which comments may be submitted for consideration by the USPTO. B. Regulatory Flexibility Act The USPTO publishes this Initial Regulatory Flexibility Analysis (IRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) to examine the impact on small entities of the Office’s proposed rule implementing changes to patent fees. Under the RFA, whenever an agency is required by 5 U.S.C. 553 (or any other law) to publish an NPRM, the Office must prepare and make available for public comment an IRFA, unless the Office certifies under 5 U.S.C. 605(b) that the proposed rule, if implemented, will not have a significant economic impact on a substantial number of small entities. Given that the proposed fee schedule is projected to result in $1,061.3 million in additional aggregate revenue over the current fee schedule (baseline) for the period including FY 2021 to FY 2024, the Office acknowledges that the fee VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 adjustments proposed will impact all entities seeking patent protection and could have a significant impact on small and micro entities. The $1,061.3 million in additional aggregate revenue results from an additional $167.0 million in FY 2021, $294.9 million in FY 2022, $294.6 million in FY 2023, and $304.9 million in FY 2024. While the Office welcomes all comments on this IRFA, it particularly seeks comments describing the type and extent of the impact of the proposed patent fees on commenters’ specific businesses. In describing the impact, the Office requests biographic detail about the impacted businesses or concerns, including the size, average annual revenue, past patent activity (e.g., applications submitted, contested cases pursued, maintenance fees paid, patents abandoned, etc.), and planned patent activity of the impacted business or concern, where feasible. The Office will use this information to further assess the impact of the proposed rule on small entities. Where possible, comments should also describe any recommended alternative methods of setting and adjusting patent fees that would further reduce the impact on small entities. Items 1–5 below discuss the five items specified in 5 U.S.C. 603(b)(1)–(5) to be addressed in an IRFA. Item 6 below discusses alternatives to this proposal that the Office considered. 1. A Description of the Reasons Why the Action by the Office Is Being Considered Section 10 of the AIA, as amended by SUCCESS Act, authorizes the Director of the USPTO to set or adjust by rule any patent fee established, authorized, or charged under title 35, U.S.C., for any services performed, or materials furnished, by the Office. Section 10 prescribes that patent fees may be set or adjusted only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents, including administrative costs to the Office with respect to such patent fees. The proposed fee schedule will recover the aggregate cost of patent operations while facilitating the effective administration of the U.S. patent system. The reasons why the rulemaking is being considered are further discussed in section 6.i below and elsewhere in this IRFA and the NPRM. 2. The Objectives of, and Legal Basis for, the Proposed Rule The objective of the proposed rule is to implement the fee setting provisions of Section 10 of the Act by setting or adjusting patent fees to recover the PO 00000 Frm 00029 Fmt 4701 Sfmt 4702 37425 aggregate cost of patent operations, including administrative costs, while facilitating the effective administration of the U.S. patent system. Since its inception, the Act strengthened the patent system by affording the USPTO the ‘‘resources it requires to clear the still sizeable backlog of patent applications and move forward to deliver to all American inventors the first rate service they deserve.’’ H.R. Rep. No. 112–98(I), at 163 (2011). In setting and adjusting fees under the Act, the Office seeks to secure a sufficient amount of aggregate revenue to recover the aggregate cost of patent operations, including revenue needed to achieve strategic and operational goals. Additional information on the Office’s strategic goals may be found in the Strategic Plan available at https:// www.uspto.gov/sites/default/files/ documents/USPTO_2018-2022_ Strategic_Plan.pdf. Additional information on the Office’s goals and operating requirements may be found in the ‘‘USPTO FY 2020 President’s Budget Request,’’ available at https:// www.uspto.gov/about-us/performanceand-planning/budget-and-financialinformation. The legal basis for the proposed rule is Section 10 of the Act. 3. A Description of and, Where Feasible, an Estimate of the Number of Small Entities to Which the Proposed Rule Will Apply SBA Size Standard The Small Business Act (SBA) size standards applicable to most analyses conducted to comply with the RFA are set forth in 13 CFR 121.201. These regulations generally define small businesses as those with less than a specified maximum number of employees or less than a specified level of annual receipts for the entity’s industrial sector or North American Industry Classification System (NAICS) code. As provided by the RFA, and after consulting with the Small Business Administration, the Office formally adopted an alternate size standard for the purpose of conducting an analysis or making a certification under the RFA for patent-related regulations. See Business Size Standard for Purposes of United States Patent and Trademark Office Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR 67109, 67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 37, 60 (Dec. 12, 2006). The Office’s alternate small business size standard consists of SBA’s previously established size standard for entities entitled to pay reduced patent fees. See 13 CFR 121.802. E:\FR\FM\31JYP2.SGM 31JYP2 37426 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules Unlike SBA’s generally applicable small business size standards, the size standard for the USPTO is not industryspecific. The Office’s definition of a small business concern for RFA purposes is a business or other concern that: (1) Meets the SBA’s definition of a ‘‘business concern or concern’’ set forth in 13 CFR 121.105 and (2) meets the size standards set forth in 13 CFR 121.802 for the purpose of paying reduced patent fees, namely, an entity: (a) Whose number of employees, including affiliates, does not exceed 500 persons and (b) which has not assigned, granted, conveyed, or licensed (and is under no obligation to do so) any rights in the invention to any person who made it and could not be classified as an independent inventor, or to any concern that would not qualify as a nonprofit organization or a small business concern under this definition. See Business Size Standard for Purposes of United States Patent and Trademark Office Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR 67109, 67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 37, 60 (Dec. 12, 2006). If a patent applicant self-identifies on a patent application as qualifying as a small entity, or provides certification of micro entity status for reduced patent fees under the Office’s alternative size standard, the Office captures this data in the Patent Application Location and Monitoring (PALM) database system, which tracks information on each patent application submitted to the Office. Small Entity Defined The Act provides that fees set or adjusted under Section 10(a) ‘‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 50 percent’’ with respect to the application of such fees to any ‘‘small entity’’ (as defined in 37 CFR 1.27) that qualifies for reduced fees under 35 U.S.C. 41(h)(1). In turn, 125 Stat. at 316–17. 35 U.S.C. 41(h)(1) provides that certain patent fees ‘‘shall be reduced by 50 percent’’ for a small business concern as defined by section 3 of the SBA, and to any independent inventor or nonprofit organization as defined in regulations described by the Director. Micro Entity Defined Section 10(g) of the Act created a new category of entity called a ‘‘micro entity.’’ 35 U.S.C. 123; see also 125 Stat. at 318–19. Section 10(b) of the Act provides that the fees set or adjusted under Section 10(a) ‘‘for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 75 percent with respect to the application of such fees to any micro entity as defined by 35 U.S. Code 123.’’ 125 Stat. at 315–17. 35 U.S.C. 123(a) defines a ‘‘micro entity’’ as an applicant who makes a certification that the applicant: (1) Qualifies as a small entity as defined in 37 CFR 1.27; (2) has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111(b), or Patent Cooperation Treaty (PCT) applications for which the basic national fee under 35 U.S.C. 41(a) was not paid; (3) did not, in the calendar year preceding the calendar year in which the applicable fee is being paid, have a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986 (26 U.S.C. 61(a)), exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; 1 and (4) has not assigned, granted, or conveyed, and is not under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity exceeding the income limit set forth in (3) above. See 125 Stat. at 318. 35 U.S.C. 123(d) also defines a ‘‘micro entity’’ as an applicant who certifies that: (1) The applicant’s employer, from which the applicant obtains the majority of the applicant’s income, is an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)); or (2) the applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular applications to such an institution of higher education. Estimate of Number of Small Entities Affected The changes in the proposed rule will apply to any entity, including small and micro entities, which pays any patent fee set forth in the NPRM. The reduced fee rates (50 percent for small entities and 75 percent for micro entities) will continue to apply to any small entity asserting small entity status and to any micro entity certifying micro entity status for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents. The Office reviews historical data to estimate the percentages of application filings asserting small entity status. Table 24 presents a summary of such small entity filings by type of application (utility, reissue, plant, design) over the last five years. TABLE 24—NUMBER OF PATENT APPLICATIONS FILED IN LAST FIVE YEARS * jbell on DSK3GLQ082PROD with PROPOSALS2 ** FY 2018 Utility: All ...................................................... Small ................................................. % Small ............................................. Micro ................................................. % Micro ............................................. Reissue: All ...................................................... Small ................................................. % Small ............................................. Micro ................................................. % Micro ............................................. Plant: All ...................................................... Small ................................................. FY 2017 FY 2016 FY 2015 20:55 Jul 30, 2019 Jkt 247001 Average 596,484 136,246 22.8 20,140 3.4 604,292 136,350 22.6 20,417 3.4 608,778 133,304 21.9 20,695 3.4 579,174 127,819 22.1 19,119 3.3 580,596 128,377 22.1 18,142 3.1 593,865 132,419 22.3 19,703 3.3 985 208 21.1 18 1.8 1,049 246 23.5 19 1.8 1,088 230 21.1 21 1.9 1,090 211 19.4 12 1.1 1,215 228 18.8 22 1.8 1,085 225 20.8 18 1.7 1,047 467 1,071 534 1,187 567 1,105 514 1,110 527 1,104 522 1 For more information, see https:// www.uspto.gov/patent/laws-and-regulations/microentity-status-gross-income-limit. VerDate Sep<11>2014 FY 2014 PO 00000 Frm 00030 Fmt 4701 Sfmt 4702 E:\FR\FM\31JYP2.SGM 31JYP2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules 37427 TABLE 24—NUMBER OF PATENT APPLICATIONS FILED IN LAST FIVE YEARS *—Continued ** FY 2018 % Small ............................................. Micro ................................................. % Micro ............................................. Design: All ...................................................... Small ................................................. % Small ............................................. Micro ................................................. % Micro ............................................. FY 2017 FY 2016 FY 2015 FY 2014 Average 44.6 9 0.9 49.9 17 1.6 47.8 11 0.9 46.5 8 0.7 47.5 17 1.5 47.3 12 1.1 46,010 18,945 41.2 5,448 11.8 44,072 18,126 41.1 5,006 11.4 42,324 16,791 39.7 4,289 10.1 38,225 14,783 38.7 24 0.1 36,220 14,354 39.6 n/a n/a 41,370 16,600 40.1 3,692 8.4 * The patent application filing data in this table includes RCEs. ** FY 2018 application filing data are preliminary and will be finalized in the FY 2019 Performance and Accountability Report (PAR). Because the percentage of small entity filings varies widely between application types, the Office has averaged the small entity filing rates over the past five years for those application types in order to estimate future filing rates by small and micro entities. Those average rates appear in the last column of Table 24. The Office estimates that small entity filing rates will continue for the next five years at these average historic rates. The Office forecasts the number of projected patent applications (i.e., workload) for the next five years using a combination of historical data, economic analysis, and subject matter expertise. The Office estimates that serialized UPR patent application filings will grow by 1.5 percent in FY 2019 and 1.0 percent in FYs 2020–2024. The Office forecasts design patent applications independently of UPR applications because they exhibit different behavior. Using the estimated filings for the next five years, and the average historic rates of small entity filings, Table 25 presents the Office’s estimates of the number of patent application filings by all applicants, including small and micro entities, over the next five fiscal years by application type. The Office has undertaken an elasticity analysis to examine if fee adjustments may impact small entities and, in particular, whether increases in fees would result in some such entities not submitting applications. Elasticity measures how sensitive demand for services by patent applicants and patentees is to fee changes. If elasticity is low enough (demand is inelastic), then fee increases will not reduce patenting activity enough to negatively impact overall revenues. If elasticity is high enough (demand is elastic), then increasing fees will decrease patenting activity enough to decrease revenue. The Office analyzed elasticity at the overall filing level across all patent applicants with regard to entity size and estimated the potential impact to patent application filings across entities. Additional information about elasticity estimates is available at https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—Description of Elasticity Estimates.’’ TABLE 25—ESTIMATED NUMBERS OF PATENT APPLICATIONS IN FY 2019–FY 2024 FY 2019 (current) Utility ..................... Reissue ................. Plant ...................... Design ................... Total ............... All All All All jbell on DSK3GLQ082PROD with PROPOSALS2 FY 2021 FY 2022 FY 2023 FY 2024 .......................... .......................... .......................... .......................... 609,639 750 1,050 49,118 611,158 750 1,050 52,283 612,614 750 1,050 55,649 621,450 750 1,050 59,262 629,204 750 1,050 63,156 636,625 750 1,050 67,255 All .......................... 660,557 665,241 670,063 682,512 694,160 705,680 4. A Description of the Projected Reporting, Recordkeeping, and Other Compliance Requirements of the Proposed Rule, Including an Estimate of the Classes of Small Entities Which Will Be Subject to the Requirement and Type of Professional Skills Necessary for Preparation of the Report or Record If implemented, the proposed rule will not change the burden of existing reporting and recordkeeping requirements for payment of fees. The current requirements for small and micro entities will continue to apply. Therefore, the professional skills necessary to file and prosecute an application through issue and maintenance remain unchanged under VerDate Sep<11>2014 FY 2020 20:55 Jul 30, 2019 Jkt 247001 this proposal. This action proposes only to adjust patent fees and not to set procedures for asserting small entity status or certifying micro entity status, as previously discussed. The full proposed fee schedule (see Part VI: Discussion of Specific Rules) is set forth in the NPRM. The proposed fee schedule sets or adjusts 295 patent fees in total. This includes three fees that will be discontinued and 11 new fees. 5. Identification, to the Extent Practicable, of All Relevant Federal Rules Which May Duplicate, Overlap, or Conflict With the Proposed Rules The USPTO is the sole agency of the U.S. Government responsible for administering the provisions of title 35, PO 00000 Frm 00031 Fmt 4701 Sfmt 4702 U.S.C., pertaining to examining and granting patents. It is solely responsible for issuing rules to comply with Section 10 of the AIA. No other Federal, state, or local entity has jurisdiction over the examination and granting of patents. Other countries, however, have their own patent laws, and an entity desiring a patent in a particular country must make an application for patent in that country, in accordance with the applicable law. Although the potential for overlap exists internationally, this cannot be avoided except by treaty (such as the Paris Convention for the Protection of Industrial Property, or the PCT). Nevertheless, the USPTO believes E:\FR\FM\31JYP2.SGM 31JYP2 37428 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules that there are no other duplicative or overlapping rules. jbell on DSK3GLQ082PROD with PROPOSALS2 6. Description of Any Significant Alternatives to the Proposed Rules Which Accomplish the Stated Objectives of Applicable Statutes and Which Minimize Any Significant Economic Impact of the Proposed Rules on Small Entities The USPTO considered several alternative approaches to this proposed rule, discussed below, including full cost recovery for individual services, an across the board adjustment to fees, and a baseline (current fee rates). The discussion here begins with a description of the fee schedule adopted for this proposed rule. i. Alternative 1: Proposed Alternative— Set and Adjust Patent Fees The alternative proposed herein secures the Office’s required revenue to recover its aggregate costs, while progressing towards high quality and timely patent examination and review proceedings in order to produce reliable and predictable IP rights. This will benefit all applicants, including small and micro entities, without undue burden to patent applicants and holders, barriers to entry, or reduced incentives to innovate. This alternative maintains small and micro entity discounts. Compared to the current fee schedule, there are no new small or micro entity fee codes being extended to existing large entity fee rates and none are being eliminated. All entities will benefit from the Office’s proposal to discontinue three fees related to goods and services found to be of limited value based on the ability to obtain these services at zero cost or more efficiently from nonOffice sources. The Office will instead provide these services, in a slightly modified form (i.e. electronic), for free. As discussed throughout this document, the fee changes proposed in this alternative are moderate compared to other alternatives. Given that the proposed fee schedule will result in increased aggregate revenue under this alternative, small and micro entities would pay some higher fees when compared to the current fee schedule (Alternative 4). In summary, the fees to obtain a patent will increase. All fees are subject to the 5.0 percent across the board increase. In addition to the across the board increase, some fees will be subject to a larger increase. For example, the issue fee and first stage maintenance fee rate will increase by 20.0 and 25.0 percent respectively. However, second and third stage maintenance fees will only increase by 4.0 percent, less than VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 the across the board increase. This alternative includes a new surcharge fee for applications not filed in DOCX format, which aims to improve the electronic application process for patent applicants by modernizing the USPTO’s filing and viewing systems. This streamlines application and publication processes, which benefits both the applicants and examiners. In an effort to enable PTAB to continue high quality, timely, and efficient proceedings with the expected increase in work following the Supreme Court decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018), AIA trial fees will increase 25.0 percent. Finally, in response to feedback from the PPAC and members of the public, the proposed fee increase for Maintenance Fee Surcharge—Late Payment within Six Months, has been changed to $500. Under the original proposal to the PPAC, the fee would have increased by $840 to $1,000. Adjusting the patent fee schedule as proposed in this NPRM allows the Office to implement the patent-related strategic goals and objectives documented in the Strategic Plan and to carry out requirements as described in the FY 2020 Budget. Specifically, this proposed fee setting rule is estimated to generate sufficient revenue to support increases in core examination costs that are necessary to implement strategic initiatives to issue highly reliable patents, such as increasing the time examiners are provided to work on each application. This proposed rule also supports the Strategic Plan’s mission support goal to deliver organizational excellence (which includes optimizing speed, quality, and cost-effectiveness of IT delivery to achieve business value and ensuring financial sustainability to facilitate effective USPTO operations) by allowing the Office to continue to make necessary business improvements. While all of the other alternatives discussed facilitate progress toward some of the Office’s goals, the proposed alternative is the only one that does so in a way that does not impose undue costs on patent applicants and holders. A comparison between the proposed fee schedule for this proposed rule, and existing fees (labeled Alternative 1— Proposed Fee Schedule—Setting and Adjusting Patent Fees during Fiscal Year 2020) is available at https:// www.uspto.gov/about-us/performanceand-planning/fee-setting-and-adjusting, in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—IRFA Tables.’’ Fee changes for small and micro entities are included in the tables. For the comparison between proposed fees and current fees, as noted above, the PO 00000 Frm 00032 Fmt 4701 Sfmt 4702 ‘‘current fees’’ column displays the fees that were in effect as of January 2018. ii. Other Alternatives Considered In addition to the proposed fee schedule set forth in Alternative 1, above, the Office considered several other alternative approaches. For each alternative considered, the Office calculated proposed fees and the resulting revenue derived by each alternative scenario. The proposed fees and their corresponding revenue tables are available at https://www.uspto.gov/ about-us/performance-and-planning/ fee-setting-and-adjusting. Please note, only the fees outlined in Alternative 1 are proposed in this NPRM; other scenarios are shown only to demonstrate the Office’s analysis of other options. a. Alternative 2: Unit Cost Recovery It is common practice in the Federal Government to set individual fees at a level sufficient to recover the cost of that single service. In fact, official guidance on user fees, as cited in OMB Circular A–25: User Charges, states that user charges (fees) should be sufficient to recover the full cost to the Federal Government of providing the particular service, resource, or good, when the government is acting in its capacity as sovereign. As such, the USPTO considered setting most individual large entity fees at the historical cost of performing the activities related to the particular service in FY 2018. There are several complexities in achieving individual fee unit cost recovery for the patent fee schedule. The most significant is the AIA requirement to provide a 50 percent discount on fees to small entities and a 75 percent discount on fees to micro entities. To account for this requirement, this alternative continues existing small and micro entity discounts where eligible under AIA authority. Thus, in order to continue the small and micro entity discounts and generate sufficient revenue to recover the Office’s anticipated budgetary requirements over the five-year period, for this alternative, maintenance fees must be set significantly above unit cost. With the exception of maintenance fees, fees for which there is no FY 2018 cost data would be set at current rates under this alternative. The Office no longer collects activity-based information for maintenance fees, and previous year unit costs were negligible. For the small number of services that have a variable fee, the aggregate revenue table does not list a fee. Instead, for those services with an estimated workload, the workload is listed in E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules dollars rather than units to develop revenue estimates. Fees without either a fixed fee rate or a workload estimate are assumed to provide zero revenue to the Office. Note, this alternative bases fee rates for FY 2020 through FY 2024 on FY 2018 historical costs. The Office recognizes that this approach does not account for inflationary factors that would likely increase costs and necessitate higher fees in the out-years. Alternative 2 does not align well with the strategic and policy goals of this proposed rule. Both the current and proposed fee schedules are structured to collect more fees further along in the process (i.e. issue fees and maintenance fees), where the patent owner has better information about a patent’s value, rather than up front (i.e., filing fees, search fees, and examination fees), when applicants are less certain about the value of their art, even though the front-end services are costlier to the Office. This alternative presents significant barriers to those seeking patent protection, because if the Office were to immediately shift from the current front-end/back-end balance to a unit cost recovery structure, front-end fees would increase significantly, nearly tripling in some cases (e.g., search fees). The Office has estimated the potential quantitative elasticity impacts for application filings (e.g., filing, search, and examination fees), maintenance renewals (all stages), and other major fee categories. Results of this analysis indicate that a high cost of entry into the patent system could lead to a significant decrease in the incentives to invest in innovative activities among all entities, especially for small and micro entities. Under the current fee schedule, maintenance fees subsidize all applications, including those applications for which no claims are allowed. By insisting on unit cost payment at each point in the application process, the Office is effectively charging high fees for every attempted patent, meaning those applicants who have less information about the patentability of their claims or the market value of their invention may be less likely to pursue initial prosecution (e.g., filing, search, and examination) or subsequent actions to continue prosecution (e.g., RCE). The ultimate effect of these changes in behavior is likely to stifle innovation. Similarly, the Office suspects that renewal rates could change as well, given fee reductions for maintenance fees at each of the three stages. While some innovators and firms may choose to file fewer applications given the higher front-end costs, others, whose claims are allowed or upheld, may seek VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 to fully maximize the benefits of obtaining a patent by keeping those patents in force for longer than they would have previously (i.e., under the baseline). In the aggregate, patents that are maintained beyond their useful life weaken the IP system by slowing the rate of public accessibility and followon inventions, which is contrary to the Office’s policy factor of promoting innovation strategies. In sum, this alternative is inadequate to accomplish the goals and strategies as stated in Part III of this proposed rule. The fee schedule for Alternative 2: Unit Cost Recovery is available at https://www.uspto.gov/about-us/ performance-and-planning/fee-settingand-adjusting, in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—IRFA Tables.’’ For the comparison between proposed (unit cost recovery) fees and current fees, the ‘‘current fees’’ column displays the fees that are in effect as of January 2018. This column is used to calculate dollar and percent fee change compared to proposed fees. b. Alternative 3: Across the Board Adjustment In years past, the USPTO used its authority to adjust statutory fees annually according to increases in the consumer price index (CPI), which is a commonly used measure of inflation. Building on this prior approach and incorporating the additional authority under the AIA to set small and micro entity fees, Alternative 3 would set fees by applying a one-time 10.0 percent, across the board inflationary increase to the baseline (current fees) beginning in FY 2021. Ten percent represents the change in revenue needed to achieve the aggregate revenue needed to cover future budgetary requirements. As estimated by the CBO, projected CPI rates by fiscal year are: 2.4 percent in FY 2020, 2.5 percent in FY 2021, 2.5 percent in FY 2022, and 2.4 percent in both FY 2023 and FY 2024. The Office elected not to apply the estimated cumulative inflationary adjustment (12.2 percent), from FY 2020 through FY 2024, because doing so would result in significantly more fee revenue than needed to meet the Office’s core mission and strategic priorities. Under this alternative, nearly every existing fee would be increased and no fees would be discontinued or reduced. Given that all entities (large, small, and micro) would pay 10 percent higher fees for every product and service, especially the fees due at the time of filing, this alternative does not adequately support the Office’s policy factor to promote innovation strategies. PO 00000 Frm 00033 Fmt 4701 Sfmt 4702 37429 The fee schedule for Alternative 3: Across the Board Adjustment is available at https://www.uspto.gov/ about-us/performance-and-planning/ fee-setting-and-adjusting, in the document entitled ‘‘USPTO Setting and Adjusting Patent Fees during Fiscal Year 2020—IRFA Tables.’’ For the comparison between proposed (across the board adjustment) fees and current fees, the ‘‘current fees’’ column displays the fees that are in effect as of July 2018. c. Alternative 4: Baseline (Current Fee Schedule) The Office considered a no-action alternative. This alternative would retain the status quo, meaning that the Office would continue the small and micro entity discounts that the Congress provided in Section 10 of the Act and maintain fees as of January 2018. This approach would not provide sufficient aggregate revenue to accomplish the Office’s rulemaking goals, as set forth in Part III of this NPRM or the Strategic Plan. IT improvement, progress on backlog and pendency, and other improvement activities would continue, but at a significantly slower rate as increases in core patent examination costs that are necessary to implement strategic initiative to issue highly reliable patents—such as increasing the time examiners are provided to work on each application—crowd out funding for other improvements. Likewise, without a fee increase, the USPTO would deplete its operating reserves, leaving the Office vulnerable to fiscal and economic events. This would expose core operations to unacceptable levels of financial risk and would position the Office to have to return to making inefficient, short-term funding decisions. iii. Alternatives Specified by the RFA The RFA provides that an agency also consider four specified ‘‘alternatives’’ or approaches, namely: (1) Establishing different compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarifying, consolidating, or simplifying compliance and reporting requirements under the rule for small entities; (3) using performance rather than design standards; and (4) exempting small entities from coverage of the rule, or any part thereof. 5 U.S.C. 604(c). The USPTO discusses each of these specified alternatives or approaches below and describes how this NPRM is adopting these approaches. E:\FR\FM\31JYP2.SGM 31JYP2 37430 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules Differing Requirements As discussed above, the changes proposed in this proposed rule would continue existing fee discounts for small and micro entities that take into account the reduced resources available to them as well as offer new discounts when applicable under AIA authority. Specifically, micro entities would continue to receive a 75 percent reduction in patent fees under this proposal and non-micro, small entities would continue to pay 50 percent of the fee. This proposed rule sets fee levels but does not set or alter procedural requirements for asserting small or micro entity status. To pay reduced patent fees, small entities must merely assert small entity status to pay reduced patent fees. The small entity may make this assertion by either checking a box on the transmittal form, ‘‘Applicant claims small entity status,’’ or by paying the basic filing or basic national small entity fee exactly. The process to claim micro entity status is similar in that eligible entities need only submit a written certification of their status prior to or at the time a reduced fee is paid. This proposed rule does not change any reporting requirements for any small or micro entity. For both small and micro entities, the burden to establish their status is nominal (making an assertion or submitting a certification) and the benefit of the fee reductions (50 percent for small entities and 75 percent for micro entities) is significant. This proposed rule makes the best use of differing requirements for small and micro entities. It also makes the best use of the redesigned fee structure, as discussed further below. jbell on DSK3GLQ082PROD with PROPOSALS2 Clarification, Consolidation, or Simplification of Requirements This proposed rule pertains to setting or adjusting patent fees. Any compliance or reporting requirements proposed in this rule are de minimis and necessary to implement lower proposed fees. Therefore, any clarifications, consolidations, or simplifications to compliance and reporting requirements for small entities are not applicable or would not achieve the objectives of this rulemaking. Performance Standards Performance standards do not apply to the current proposed rule. Exemption for Small and Micro Entities The proposed changes here maintain a 50 percent reduction in fees for small entities and a 75 percent reduction in fees for micro entities. The Office considered exempting small and micro VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 entities from paying increased patent fees, but determined that the USPTO would lack statutory authority for this approach. Section 10(b) of the Act provides that ‘‘fees set or adjusted under subsection (a) for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents shall be reduced by 50 percent [for small entities] and shall be reduced by 75 percent [for micro entities]’’ (emphasis added). Neither the AIA nor any other statute authorizes the USPTO simply to exempt small or micro entities, as a class of applicants, from paying increased patent fees. C. Executive Order 12866 (Regulatory Planning and Review): This proposed rule has been determined to be economically significant for purposes of Executive Order 12866 (Sept. 30, 1993). The Office has developed a RIA as required for rulemakings deemed to be economically significant. The complete RIA is available at https:// www.uspto.gov/about-us/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 proposed rule; (2) tailored the proposed rule to impose the least burden on society consistent with obtaining the regulatory objectives; (3) selected a regulatory approach that maximizes net benefits; (4) specified performance objectives; (5) identified and assessed available alternatives; (6) involved the public in an open exchange of information and perspectives among experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole, and provided on-line access to the rulemaking docket; (7) attempted to promote coordination, simplification, and harmonization across government agencies and identified goals designed to promote innovation; (8) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (9) ensured the objectivity of scientific and technological information and processes. E. Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs): This proposed rule is not expected to be subject to the requirements of Executive Order 13771 (Jan. 30, 2017) because this proposed rule is expected to involve a transfer payment. F. Executive Order 13132 (Federalism): This rulemaking does not PO 00000 Frm 00034 Fmt 4701 Sfmt 4702 contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999). G. Executive Order 13175 (Tribal Consultation): This rulemaking will not: (1) Have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000). H. Executive Order 13211 (Energy Effects): This rulemaking is not a significant energy action under Executive Order 13211 because this proposed rulemaking is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001). I. Executive Order 12988 (Civil Justice Reform): This rulemaking meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996). J. Executive Order 13045 (Protection of Children): This rulemaking does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997). K. Executive Order 12630 (Taking of Private Property): This rulemaking will not affect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988). L. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the United States Patent and Trademark Office will submit a report containing the rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the Government Accountability Office. The changes in this proposed rule are expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this proposed rule is a ‘‘major rule’’ as defined in 5 U.S.C. 804(2). E:\FR\FM\31JYP2.SGM 31JYP2 37431 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules jbell on DSK3GLQ082PROD with PROPOSALS2 M. Unfunded Mandates Reform Act of 1995: The proposed changes set forth in this rulemaking do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq. N. National Environmental Policy Act: This rulemaking will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq. O. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rulemaking does not contain provisions which involve the use of technical standards. P. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) requires that the Office consider the impact of paperwork and other information collection burdens imposed on the public. This proposed rule involves information collection requirements which are subject to review by the OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501–3549). The collection of information involved in this proposed rule has been reviewed and previously approved by OMB under control numbers 0651–0012, 0651–0016, 0651– 0020, 0651–0021, 0651–0031, 0651– 0032, 0651–0033, 0651–0059, 0651– 0063, 0651–0064, 0651–0069, and 0651– 0075. Notwithstanding any other provision of law, no person is required to respond to nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number. List of Subjects 37 CFR Part 1 Administrative practice and procedure, Biologics, Courts, Freedom of information, Inventions and patents, Reporting and recordkeeping requirements, Small businesses. VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 37 CFR Part 11 Administrative practice and procedure, Inventions and patents, Lawyers, Reporting and recordkeeping requirements. 37 CFR Part 41 Administrative practice and procedure, Inventions and patents, Lawyers, Reporting and recordkeeping requirements. 37 CFR Part 42 Administrative practice and procedure, Inventions and patents, Lawyers. For the reasons set forth in the preamble, 37 CFR parts 1, 11, 41, and 42 are proposed to be amended as follows: PART 1—RULES OF PRACTICE IN PATENT CASES 1. The authority citation for 37 CFR part 1 continues to read as follows: (c) Basic fee for filing each application for an original plant patent: TABLE 3 TO PARAGRAPH (c) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity $55.00 $110.00 $220.00 (d) Basic fee for filing each provisional application: TABLE 4 TO PARAGRAPH (d) 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 (e) Basic fee for filing each application for the reissue of a patent: TABLE 5 TO PARAGRAPH (e) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity $80.00 $160.00 $320.00 ■ (f) * * * Authority: 35 U.S.C. 2(b)(2), unless otherwise noted. TABLE 6 TO PARAGRAPH (f) 2. Section 1.16 is amended by: a. Revising paragraphs (a) through (e); b. Adding table headings in paragraphs (f) and (g); ■ c. Revising paragraph (h); ■ d. Adding a table heading in paragraph (i); ■ e. Revising paragraphs (j) and (k); ■ f. Adding a table heading in paragraph (l); ■ g. Revising paragraphs (m) through (s); ■ h. Adding a table heading in paragraph (t); and ■ i. Adding paragraph (u). The revisions and additions read as follows: ■ ■ ■ * TABLE 1 TO PARAGRAPH (a) 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 * PO 00000 Frm 00035 Fmt 4701 Sfmt 4702 $55.00 $110.00 $220.00 * * * * (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: TABLE 8 TO PARAGRAPH (h) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $120.00 $240.00 $480.00 (i) * * * TABLE 9 TO PARAGRAPH (i) * * * * (j) In addition to the basic filing fee in an application, other than a provisional application, that contains, or is amended to contain, a multiple dependent claim, per application: TABLE 2 TO PARAGRAPH (b) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity * * (b) Basic fee for filing each application under 35 U.S.C. 111 for an original design patent: * TABLE 7 TO PARAGRAPH (g) $80.00 $160.00 $80.00 $320.00 * (g) * * * § 1.16 National application filing, search, and examination fees. (a) Basic fee for filing each application under 35 U.S.C. 111 for an original patent, except design, plant, or provisional applications: * TABLE 10 TO PARAGRAPH (j) By a micro entity (§ 1.29) .................... E:\FR\FM\31JYP2.SGM 31JYP2 $215.00 37432 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 10 TO PARAGRAPH (j)— Continued By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. TABLE 17 TO PARAGRAPH (q)— Continued $430.00 $860.00 (k) Search fee for each application filed under 35 U.S.C. 111 for an original patent, except design, plant, or provisional applications: $175.00 $350.00 $700.00 (l) * * * TABLE 12 TO PARAGRAPH (l) * * * * (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 .. $110.00 $220.00 $440.00 TABLE 14 TO PARAGRAPH (n) $105.00 $210.00 $420.00 $175.00 $350.00 $700.00 (o) Examination fee for each application filed under 35 U.S.C. 111 for an original patent, except design, plant, or provisional applications: TABLE 15 TO PARAGRAPH (o) $200.00 $400.00 $800.00 (p) Examination fee for each application filed under 35 U.S.C. 111 for an original design patent: TABLE 16 TO PARAGRAPH (p) jbell on DSK3GLQ082PROD with PROPOSALS2 $160.00 $320.00 $640.00 (q) Examination fee for each application for an original plant patent: TABLE 17 TO PARAGRAPH (q) By a micro entity (§ 1.29) .................... VerDate Sep<11>2014 21:26 Jul 30, 2019 $165.00 Jkt 247001 By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * * * * * (u) Additional fee for any application filed under 35 U.S.C. 111 for an original patent, except design, plant, or provisional applications where the application is not submitted in DOCX format: 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 .. * $100.00 200.00 (3) For reply within third month: TABLE 3 TO PARAGRAPH (a)(3) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. Frm 00036 $370.00 740.00 1,480.00 (4) For reply within fourth month: Fmt 4701 Sfmt 4702 By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $580.00 1,160.00 2,320.00 (5) For reply within fifth month: TABLE 5 TO PARAGRAPH (a)(5) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $790.00 1,580.00 3,160.00 * * * * * (c) For filing a request for prioritized examination under § 1.102(e): TABLE 6 TO PARAGRAPH (c) 200.00 400.00 * * * * 3. Section 1.17 is amended by: ■ a. Revising paragraph (a); ■ b. Revising paragraphs (c) through (g); ■ c. Adding a table heading in paragraph (h); ■ d. Adding a table heading in paragraph (i)(1); ■ e. Revising paragraphs (i)(2) and (k); ■ f. Revising paragraph (m); ■ g. Adding a table heading in paragraph (o); ■ h. Revising paragraphs (p) through (s); and ■ i. Adding a table heading in paragraph (t). The revisions and additions read as follows: ■ PO 00000 $160.00 $320.00 $640.00 TABLE 4 TO PARAGRAPH (a)(4) TABLE 20 TO PARAGRAPH (t) TABLE 21 TO PARAGRAPH (u) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $55.00 110.00 220.00 TABLE 2 TO PARAGRAPH (a)(2) (t) * * * (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 .. By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $580.00 $1,160.00 $2,320.00 (s) Application size fee for any application filed under 35 U.S.C. 111 for the specification and drawings which exceed 100 sheets of paper, for each additional 50 sheets or fraction thereof: TABLE 13 TO PARAGRAPH (m) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. TABLE 1 TO PARAGRAPH (a)(1) TABLE 18 TO PARAGRAPH (r) TABLE 19 TO PARAGRAPH (s) (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 .. $330.00 $660.00 (a) Extension fees pursuant to § 1.136(a): (1) For reply within first month: (2) For reply within second month: TABLE 11 TO PARAGRAPH (k) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. § 1.17 Patent application and reexamination processing fees. By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $1,050.00 2,100.00 4,200.00 (d) For correction of inventorship in an application after the first action on the merits: TABLE 7 TO PARAGRAPH (d) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $160.00 $320.00 640.00 (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: TABLE 8 TO PARAGRAPH (e)(1) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ E:\FR\FM\31JYP2.SGM 31JYP2 $340.00 680.00 37433 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 8 TO PARAGRAPH (e)(1)— Continued By other than a small or micro entity .. 1,360.00 (2) For filing a second or subsequent request for continued examination pursuant to § 1.114 in an application: TABLE 9 TO PARAGRAPH (e)(2) 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 (f) For filing a petition under one of the sections in paragraphs (f)(1) through (6) of this section which refers to this paragraph (f): TABLE 10 TO PARAGRAPH (f) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $105.00 210.00 420.00 (1) Section 1.36(a)—for revocation of a power of attorney by fewer than all of the applicants. (2) Section 1.53(e)—to accord a filing date. (3) Section 1.182—for decision on a question not specifically provided for in an application for patent. (4) Section 1.183—to suspend the rules in an application for patent. (5) Section 1.741(b)—to accord a filing date to an application under § 1.740 for extension of a patent term. (6) Section 1.1023—to review the filing date of an international design application. (g) For filing a petition under one of the sections in paragraphs (g)(1) through (15) of this section which refers to this paragraph (g): jbell on DSK3GLQ082PROD with PROPOSALS2 $55.00 110.00 220.00 (1) Section 1.12—for access to an assignment record. (2) Section 1.14—for access to an application. (3) Section 1.46—for filing an application on behalf of an inventor by a person who otherwise shows sufficient proprietary interest in the matter. (4) Section 1.55(f)—for filing a belated certified copy of a foreign application. (5) Section 1.55(g)—for filing a belated certified copy of a foreign application. (6) Section 1.57(a)—for filing a belated certified copy of a foreign application. (7) Section 1.59—for expungement of information. VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 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): TABLE 16 TO PARAGRAPH (m) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * * * (o) * * * TABLE 12 TO PARAGRAPH (h) * * * * * $525.00 1,050.00 2,100.00 * TABLE 17 TO PARAGRAPH (o) * (i) * * * (1) * * * * * * * * (p) For an information disclosure statement under § 1.97(c) or (d): TABLE 13 TO PARAGRAPH (i)(1) TABLE 18 TO PARAGRAPH (p) * * * * * (2) For taking action under one of the sections in paragraphs (i)(2)(i) and (ii) of this section which refers to this paragraph (i)(2): TABLE 14 TO PARAGRAPH (i)(2) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. TABLE 11 TO PARAGRAPH (g) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. (8) Section 1.103(a)—to suspend action in an application. (9) Section 1.136(b)—for review of a request for extension of time when the provisions of § 1.136(a) are not available. (10) Section 1.377—for review of decision refusing to accept and record payment of a maintenance fee filed prior to expiration of a patent. (11) Section 1.550(c)—for patent owner requests for extension of time in ex parte reexamination proceedings. (12) Section 1.956—for patent owner requests for extension of time in inter partes reexamination proceedings. (13) Section 5.12 of this chapter—for expedited handling of a foreign filing license. (14) Section 5.15 of this chapter—for changing the scope of a license. (15) Section 5.25 of this chapter—for retroactive license. (h) * * * $140.00 140.00 140.00 (i) Section 1.217—for processing a redacted copy of a paper submitted in the file of an application in which a redacted copy was submitted for the patent application publication. (ii) Section 1.221—for requesting voluntary publication or republication of an application. * * * * * (k) For filing a request for expedited examination under § 1.155(a): By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. (q) Processing fee for taking action under one of the sections in paragraphs (q)(1) through (3) of this section which refers to this paragraph (q): $50.00. (1) Section 1.41—to supply the name or names of the inventor or inventors after the filing date without a cover sheet as prescribed by § 1.51(c)(1) in a provisional application. (2) Section 1.48—for correction of inventorship in a provisional application. (3) Section 1.53(c)(2)—to convert a nonprovisional application filed under § 1.53(b) to a provisional application under § 1.53(c). (r) For entry of a submission after final rejection under § 1.129(a): TABLE 15 TO PARAGRAPH (k) 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 * * * * (m) For filing a petition for the revival of an abandoned application for a patent, for the delayed payment of the $65.00 130.00 260.00 TABLE 19 TO PARAGRAPH (r) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $220.00 440.00 880.00 * PO 00000 Frm 00037 Fmt 4701 Sfmt 4702 (s) For each additional invention requested to be examined under § 1.129(b): E:\FR\FM\31JYP2.SGM 31JYP2 37434 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 20 TO PARAGRAPH (s) By a micro entity (§ 1.29 ..................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $220.00 440.00 880.00 (t) * * * TABLE 21 TO PARAGRAPH (t) * * * * * 4. Section 1.18 is amended by revising paragraphs (a), (b)(1), (c), (d)(3), (e) and (f) to read as follows: ■ § 1.18 Patent post allowance (including issue) fees. (a) Issue fee for issuing each original patent, except a design or plant patent, or for issuing each reissue patent: TABLE 1 TO PARAGRAPH (a) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $300.00 600.00 1,200.00 (b)(1) Issue fee for issuing an original design patent: TABLE 2 TO PARAGRAPH (b)(1) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. TABLE 3 TO PARAGRAPH (c) $210.00 420.00 840.00 320.00 210.00 420.00 5. Section 1.19 is amended by revising paragraphs (b)(1)(i)(B) and (b)(1)(ii)(B) and removing and reserving paragraphs (j) through (l) to read as follows: ■ Document supply fees. jbell on DSK3GLQ082PROD with PROPOSALS2 * * * * * (b) * * * (1) * * * (i) * * * (B) Copy Patent File Wrapper, Paper Medium, Any Number of Sheets: $290.00. * * * * * (ii) * * * VerDate Sep<11>2014 21:34 Jul 30, 2019 § 1.20 By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. Jkt 247001 Post issuance fees. (a) For providing a certificate of correction for applicant’s mistake (§ 1.323): $160.00. (b) Processing fee for correcting inventorship in a patent (§ 1.324): $160.00. (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. TABLE 1 TO PARAGRAPH (c)(1)(i) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * * * * (c) Issue fee for issuing an original plant patent: § 1.19 independent form in excess of three and also in excess of the number of claims in independent form in the patent under reexamination: $185.00 370.00 740.00 * By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. (d) * * * (3) Republication fee (§ 1.221(a)) ....... (e) For filing an application for patent term adjustment under § 1.705: ....... (f) For filing a request for reinstatement of all or part of the term reduced pursuant to § 1.704(b) in an application for patent term adjustment under § 1.705: ......................... (B) Copy Patent File Wrapper, Electronic, Any Medium, Any Size: $60.00. * * * * * ■ 6. Section 1.20 is revised to read as follows: $1,575.00 3,150.00 6,300.00 (ii) The following parts of an ex parte reexamination request are excluded from paragraphs (c)(1)(i)(A) through (F) of this section: (A) The copies of every patent or printed publication relied upon in the request pursuant to § 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: TABLE 2 TO PARAGRAPH (c)(2) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $3,150.00 6,300.00 12,600.00 (3) For filing with a request for reexamination or later presentation at any other time of each claim in PO 00000 Frm 00038 Fmt 4701 Sfmt 4702 TABLE 3 TO PARAGRAPH (c)(3) $120.00 240.00 480.00 (4) For filing with a request for reexamination or later presentation at any other time of each claim (whether dependent or independent) in excess of 20 and also in excess of the number of claims in the patent under reexamination (note that § 1.75(c) indicates how multiple dependent claims are considered for fee calculation purposes): TABLE 4 TO PARAGRAPH (c)(4) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or microentity ... $25.00 50.00 100.00 (5) If the excess claims fees required by paragraphs (c)(3) and (4) of this section are not paid with the request for reexamination or on later presentation of the claims for which the excess claims fees are due, the fees required by paragraphs (c)(3) and (4) must be paid or the claims canceled by amendment prior to the expiration of the time period set for reply by the Office in any notice of fee deficiency in order to avoid abandonment. (6) For filing a petition in a reexamination proceeding, except for those specifically enumerated in §§ 1.550(i) and 1.937(d): TABLE 5 TO PARAGRAPH (c)(6) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $510.00 1,020.00 2,040.00 (7) For a refused request for ex parte reexamination under § 1.510 (included in the request for ex parte reexamination fee at § 1.20(c)(1) or (2)): TABLE 6 TO PARAGRAPH (c)(7) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or microentity ... $945.00 1,890.00 3,780.00 (d) For filing each statutory disclaimer (§ 1.321): $170.00. (e) For maintaining an original or any reissue patent, except a design or plant patent, based on an application filed on or after December 12, 1980, in force beyond four years, the fee being due by three years and six months after the original grant: E:\FR\FM\31JYP2.SGM 31JYP2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules TABLE 7 TO PARAGRAPH (e) 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 (f) For maintaining an original or any reissue patent, except a design or plant patent, based on an application filed on or after December 12, 1980, in force beyond eight years, the fee being due by seven years and six months after the original grant: TABLE 8 TO PARAGRAPH (f) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $940.00 1,880.00 3,760.00 (g) For maintaining an original or any reissue patent, except a design or plant patent, based on an application filed on or after December 12, 1980, in force beyond twelve years, the fee being due by eleven years and six months after the original grant: TABLE 9 TO PARAGRAPH (g) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $1,925.00 3,850.00 7,700.00 (h) Surcharge for paying a maintenance fee during the six-month grace period following the expiration of three years and six months, seven years and six months, and eleven years and six months after the date of the original grant of a patent based on an application filed on or after December 12, 1980: TABLE 10 TO PARAGRAPH (h) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $125.00 250.00 500.00 (i) [Reserved] (j) For filing an application for extension of the term of a patent. TABLE 11 TO PARAGRAPH (j) jbell on DSK3GLQ082PROD with PROPOSALS2 (1) Application for extension under § 1.740 ............................................. (2) Initial application for interim extension under § 1.790 ........................... (3) Subsequent application for interim extension under § 1.790 .................. $1,180.00 440.00 230.00 (k) In supplemental examination proceedings: (1) For processing and treating a request for supplemental examination: TABLE 12 TO PARAGRAPH (k)(1) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. VerDate Sep<11>2014 20:55 Jul 30, 2019 $1,155.00 2,310.00 4,620.00 Jkt 247001 (2) For ex parte reexamination ordered as a result of a supplemental examination proceeding: TABLE 13 TO PARAGRAPH (k)(2) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $3,175.00 6,350.00 12,700.00 (3) For processing and treating, in a supplemental examination proceeding, a non-patent document over 20 sheets in length, per document: (i) Between 21 and 50 sheets: TABLE 14 TO PARAGRAPH (k)(3)(i) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or microentity ... $45.00 90.00 180.00 (ii) For each additional 50 sheets or a fraction thereof: TABLE 15 TO PARAGRAPH (k)(3)(ii) 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 7. Section 1.21 is amended by revising paragraphs (a)(1), (2), and (5), adding paragraphs (a)(7) and (8), revising paragraphs (a)(9)(ii) and (a)(10), adding paragraph (k), and revising paragraphs (n), (o), and (q) to read as follows: ■ § 1.21 Miscellaneous fees and charges. * * * * * (a) * * * (l) For admission to examination for registration to practice: (i) Application Fee (non-refundable): $110.00. (ii) Registration examination fee. (A) For test administration by commercial entity: $210.00. (B) For test administration by the USPTO: $470.00. (iii) For USPTO-administered review of registration examination: $470.00. (2) On registration to practice or grant of limited recognition: (i) On registration to practice under § 11.6 of this chapter: $210.00. (ii) On grant of limited recognition under § 11.9(b) of this chapter: $210.00. (iii) On change of registration from agent to attorney: $110.00. * * * * * (5) For review of decision: (i) By the Director of Enrollment and Discipline under § 11.2(c) of this chapter: $420.00. (ii) Of the Director of Enrollment and Discipline under § 11.2(d) of this chapter: $420.00. * * * * * (7) Annual Voluntary Inactive Fee: $70.00. PO 00000 Frm 00039 Fmt 4701 Sfmt 4702 37435 (8) For the Annual Active Practitioner Fee: (i) With certification of continuing legal education completion pursuant to § 11.8(d)(3) of this chapter: $240.00. (ii) Without certification of continuing legal education completion pursuant to § 11.8(d)(3) of this chapter: $340.00. (9) * * * (ii) Administrative reinstatement fee: $210.00. (10) On application by a person for recognition or registration after disbarment or suspension on ethical grounds, or resignation pending disciplinary proceedings in any other jurisdiction; on application by a person for recognition or registration who is asserting rehabilitation from prior conduct that resulted in an adverse decision in the Office regarding the person’s moral character; and on application by a person for recognition or registration after being convicted of a felony or crime involving moral turpitude or breach of fiduciary duty; on petition for reinstatement by a person excluded or suspended on ethical grounds, or excluded on consent from practice before the Office: $1,680.00. * * * * * (k) For items and services that the Director finds may be supplied, for which fees are not specified by statute or by this part, such charges as may be determined by the Director with respect to each such item or service: Actual cost. * * * * * (n) For handling an application in which proceedings are terminated pursuant to § 1.53(e): $140.00. (o) The receipt of a very lengthy sequence listing (mega-sequence listing) in an application under 35 U.S.C. 111 or 371 is subject to the following fee: (1) First receipt by the Office of a sequence listing in electronic form ranging in size from 300MB to 800MB (without file compression): TABLE 1 TO PARAGRAPH (o)(1) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $265.00 530.00 1,060.00 (2) First receipt by the Office of a sequence listing in electronic form exceeding 800MB in size (without file compression): TABLE 2 TO PARAGRAPH (o)(2) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * E:\FR\FM\31JYP2.SGM * 31JYP2 * * * $2,625.00 5,250.00 10,500.00 37436 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules (q) Additional Fee for Expedited Service: $170.00. ■ 8. Section 1.27 is amended by revising paragraph (c)(3) introductory text as follows: time limit within which to pay the deficient fees plus the late payment fee. * * * * * ■ 10. Section 1.445 is amended by revising paragraph (a) to read as follows: § 1.27 Definition of small entities and establishing status as a small entity to permit payment of small entity fees; when a determination of entitlement to small entity status and notification of loss of entitlement to small entity status are required; fraud on the Office. § 1.445 International application filing, processing and search fees. * * * * * (c) * * * (3) Assertion by payment of the small entity basic filing, basic transmittal, basic national fee, international search fee, or individual designation fee in an international design application. The payment, by any party, of the exact amount of one of the small entity basic filing fees set forth in § 1.16(a), (b), (c), (d), or (e), the small entity transmittal fee set forth in § 1.445(a)(1) or § 1.1031(a), the small entity international search fee set forth in § 1.445(a)(2) to a Receiving Office other than the United States Receiving Office in the exact amount established for that Receiving Office pursuant to PCT Rule 16, or the small entity basic national fee set forth in § 1.492(a), will be treated as a written assertion of entitlement to small entity status even if the type of basic filing, basic transmittal, or basic national fee is inadvertently selected in error. The payment, by any party, of the small entity first part of the individual designation fee for the United States to the International Bureau (§ 1.1031) will be treated as a written assertion of entitlement to small entity status. * * * * * ■ 9. Section 1.431 is amended by revising paragraph (c) to read as follows: jbell on DSK3GLQ082PROD with PROPOSALS2 * * * * (c) Payment of the international filing fee (PCT Rule 15.2) and the transmittal and search fees (§ 1.445) may be made in full at the time the international application papers required by paragraph (b) of this section are deposited or within one month thereafter. The international filing, transmittal, and search fee payable is the international filing, transmittal, and search fee in effect on the receipt date of the international application. If the international filing, transmittal and search fees are not paid within one month from the date of receipt of the international application and prior to the sending of a notice of deficiency which imposes a late payment fee (§ 1.445(a)(6)), applicant will be notified and given a one month non-extendable VerDate Sep<11>2014 21:49 Jul 30, 2019 Jkt 247001 TABLE 1 TO PARAGRAPH (a)(1)(i)(A) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $65.00 130.00 260.00 (B) For an international application having a receipt date that is on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]: TABLE 2 TO PARAGRAPH (a)(1)(i)(B) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $60.00 120.00 240.00 (C) For an international application having a receipt date that is before January 1, 2014: $240.00. (ii) A non-electronic filing fee portion for any international application designating the United States of America that is filed on or after November 15, 2011, other than by the Office electronic filing system, except for a plant application: By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. By a small entity (§ 1.27(a)) ................ By other than a small entity ................ $200.00 400.00 (2) A search fee (see 35 U.S.C. 361(d) and PCT Rule 16): (i) For an international application having a receipt date that is on or after [EFFECTIVE DATE OF FINAL RULE]: TABLE 4 TO PARAGRAPH (a)(2)(i) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $545.00 1,090.00 2,180.00 (ii) For an international application having a receipt date that is on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]: TABLE 5 TO PARAGRAPH (a)(2)(ii) By a micro entity (§ 1.29) .................... PO 00000 Frm 00040 Fmt 4701 Sfmt 4702 $520.00 1,040.00 $2,080.00 (iii) For an international application having a receipt date that is before January 1, 2014: $2,080.00. (3) A supplemental search fee when required, per additional invention: (i) For an international application having a receipt date that is on or after [EFFECTIVE DATE OF FINAL RULE]: TABLE 6 TO PARAGRAPH (a)(3)(i) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $545.00 1,090.00 2,180.00 (ii) For an international application having a receipt date that is on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]: TABLE 7 TO PARAGRAPH (a)(3)(ii) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $520.00 1,040.00 2,080.00 (iii) For an international application having a receipt date that is before January 1, 2014: $2,080.00. (4) A fee equivalent to the transmittal fee in paragraph (a)(1) of this section that would apply if the USPTO was the Receiving Office for transmittal of an international application to the International Bureau for processing in its capacity as a Receiving Office (PCT Rule 19.4). (5) Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter: TABLE 8 TO PARAGRAPH (a)(5) TABLE 3 TO PARAGRAPH (a)(1)(ii) § 1.431 International application requirements. * (a) The following fees and charges for international applications are established by law or by the Director under the authority of 35 U.S.C. 376: (1) A transmittal fee (see 35 U.S.C. 361(d) and PCT Rule 14) consisting of: (i) A basic portion: (A) For an international application having a receipt date that is on or after [EFFECTIVE DATE OF FINAL RULE]: TABLE 5 TO PARAGRAPH (a)(2)(ii)— Continued 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 (6) Late payment fee pursuant to PCT Rule 16bis.2 * * * * * ■ 11. Section 1.482 is revised to read as follows: § 1.482 International preliminary examination and processing fees. (a) The following fees and charges for international preliminary examination are established by the Director under the authority of 35 U.S.C. 376: (1) The following preliminary examination fee is due on filing the Demand: (i) If an international search fee as set forth in § 1.445(a)(2) has been paid on the international application to the United States Patent and Trademark E:\FR\FM\31JYP2.SGM 31JYP2 37437 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules Office as an International Searching Authority: (b) * * * (1) * * * $160.00 320.00 640.00 * 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) An additional preliminary examination fee when required, per additional invention: (b) The handling fee is due on filing the Demand and shall be as prescribed in PCT Rule 57. (c) Late furnishing fee for providing a sequence listing in response to an invitation under PCT Rule 13ter: TABLE 4 TO PARAGRAPH (c) * * * * By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * $135.00 270.00 540.00 $175.00 350.00 700.00 (c) * * * (1) * * * * * * * (2) In all situations not provided for in paragraph (c)(1) of this section: TABLE 7 TO PARAGRAPH (c)(2) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $200.00 400.00 800.00 (d) In addition to the basic national fee, for filing or on later presentation at any other time of each claim in independent form in excess of 3: * * * * (a) The basic national fee for an international application entering the national stage under 35 U.S.C. 371: TABLE 8 TO PARAGRAPH (d) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. TABLE 1 TO PARAGRAPH (a) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. VerDate Sep<11>2014 21:49 Jul 30, 2019 By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $120.00 240.00 480.00 (e) * * * $80.00 160.00 320.00 Jkt 247001 PO 00000 TABLE 9 TO PARAGRAPH (e) Frm 00041 * $215.00 430.00 860.00 * * * * * (h) Surcharge for filing any of the search fee, the examination fee, or the oath or declaration after the date of the commencement of the national stage (§ 1.491(a)) pursuant to § 1.495(c): TABLE 11 TO PARAGRAPH (h) 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 (i) * * * TABLE 12 TO PARAGRAPH (i) * * * * * (j) Application size fee for any international application, the specification and drawings of which exceed 100 sheets of paper, for each additional 50 sheets or fraction thereof: By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. Fmt 4701 Sfmt 4702 $105.00 210.00 420.00 PART 11—REPRESENTATION OF OTHERS BEFORE THE UNITED STATES PATENT AND TRADEMARK OFFICE 13. The authority citation for 37 CFR part 11 continues to read as follows: ■ Authority: 5 U.S.C. 500; 15 U.S.C. 1123; 35 U.S.C. 2(b)(2), 32, 41; sec. 1, Pub. L. 113–227, 128 Stat. 2114. 14. Section 11.8 is amended by adding paragraph (d) to read as follows: ■ § 11.8 2 National stage fees. * * TABLE 13 TO PARAGRAPH (j) TABLE 6 TO PARAGRAPH (c)(1) * * TABLE 10 TO PARAGRAPH (f) TABLE 5 TO PARAGRAPH (b)(4) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * (f) In addition to the basic national fee, if the application contains, or is amended to contain, a multiple dependent claim, per application: (4) In all situations not provided for in paragraph (b)(1), (2), or (3) of this section: $80.00 160.00 320.00 12. Section 1.492 is amended by: a. Revising paragraph (a); b. Adding table headings in paragraphs (b)(1) and (2); ■ c. Revising paragraphs (b)(3) and (4); ■ d. Adding a table heading in paragraph (c)(1); ■ e. Revising paragraphs (c)(2) and (d); ■ f. Adding a table heading in paragraph (e); ■ g. Revising paragraphs (f) and (h); ■ h. Adding a table heading in paragraph (i); and ■ i. Revising paragraph (j). The revisions and additions read as follows: jbell on DSK3GLQ082PROD with PROPOSALS2 * (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: ■ ■ ■ § 1.49 * TABLE 4 TO PARAGRAPH (b)(3) $160.00 320.00 640.00 By a micro entity (§ 1 .29) ................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * TABLE 3 TO PARAGRAPH (b)(2) TABLE 3 TO PARAGRAPH (a)(2) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. * (2) * * * (ii) If the International Searching Authority for the international application was an authority other than the United States Patent and Trademark Office: TABLE 2 TO PARAGRAPH (a)(1)(ii) * TABLE 2 TO PARAGRAPH (b)(1) TABLE 1 TO PARAGRAPH (a)(1)(i) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. TABLE 9 TO PARAGRAPH (e)— Continued Oath and registration fee. * * * * * (d)(1) Each registered practitioner, as well as individuals granted limited recognition under § 11.9(b), shall each year, on or before a date to be set by the OED Director, pay to the OED Director an annual active patent practitioner fee as set forth in § 1.21(a)(8) of this chapter. Adequate notice shall be published and sent to practitioners in E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 37438 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules advance of the due date for payment of the annual active patent practitioner fee. Payment shall be for the calendar year in which the annual active patent practitioner fee is assessed. Practitioners shall not be liable for the annual active practitioner fee during the calendar year in which they are first registered or granted limited recognition. Practitioners who are endorsed on the register as administratively inactive pursuant to § 11.11(c) or in emeritus status pursuant to § 11.11(e)(2) shall not be liable for the annual active patent practitioner fee. Practitioners who have been disciplinarily suspended, excluded, or who have resigned shall not be liable for the annual active patent practitioner fee during the time period in which they are suspended, excluded, or have resigned. (2) Failure to comply with the provisions of paragraph (d)(1) of this section may result in the registered practitioner, or individual granted limited recognition under § 11.9(b), being charged a delinquency fee as set forth in § 1.21(a)(9)(i) of this chapter and may subject a practitioner to administrative suspension as set forth in § 11.11(b). An administratively suspended registered practitioner, or person granted limited recognition, may be reinstated or reactivated on the register pursuant to § 11.11(f)(1). (3)(i) A registered practitioner, or person granted limited recognition under § 11.9(b), who certifies to the OED Director that the practitioner has completed, in the past 24 months, five hours of continuing legal education credits in patent law and practice and one hour of continuing legal education credit in ethics, shall pay an annual active patent practitioner fee in the amount set forth in § 1.21(a)(8)(i) of this chapter. All other registered practitioners, or persons granted limited recognition under § 11.9(b), shall pay an annual active patent practitioner fee in the amount set forth in § 1.21(a)(8)(ii) of this chapter. (ii) A registered practitioner, or person granted limited recognition under § 11.9(b), may earn up to two of the five hours of continuing legal education credit in patent law and practice as set forth in paragraph (a) of this section by providing patent pro bono legal services through the USPTO Patent Pro Bono Program. One hour of continuing legal education credit in patent law and practice may be earned for every three hours of patent pro bono legal service. ■ 15. Section 11.11 is amended by revising the section heading and paragraphs (a) and (b)(1), adding paragraph (b)(4), revising paragraph VerDate Sep<11>2014 20:55 Jul 30, 2019 Jkt 247001 (d)(1), adding paragraph (d)(4), revising paragraphs (d)(6), (e), and (f)(1), and adding paragraphs (f)(3) through (5) to read as follows: § 11.11 Administrative suspension, inactivation, resignation, reinstatement, and revocation. (a) Contact information. A registered practitioner must notify the OED Director of his or her postal address for his or her office, at least one and up to three email addresses where he or she receives email, and a business telephone number, as well as every change to any of said addresses or telephone number within thirty days of the date of the change. A registered practitioner shall, in addition to any notice of change of address and telephone number filed in individual patent applications, separately file written notice of the change of address or telephone number to the OED Director. A registered practitioner who is an attorney in good standing with the bar of the highest court of one or more States shall provide the OED Director with the State bar identification number associated with each membership. The OED Director shall publish from the register a list containing the name, postal business addresses, business telephone number, registration number, and registration status as an attorney or agent of each registered practitioner recognized to practice before the Office in patent matters. The OED Director may also publish from the register the continuing legal education certification status of each registered practitioner. (b) * * * (1) Whenever it appears that a registered practitioner, or person granted limited recognition under § 11.9(b) has failed to comply with § 11.8(d)(1), the OED Director shall publish and send a notice to the registered practitioner or person granted limited recognition advising of the noncompliance, the consequence of being administratively suspended set forth in paragraph (b)(6) of this section if noncompliance is not timely remedied, and the requirements for reinstatement under paragraph (f) of this section. The notice shall be published and sent to the registered practitioner or person granted limited recognition by mail to the last postal address furnished under paragraph (a) of this section or by email addressed to the last email addresses furnished under paragraph (a) of this section. The notice shall demand compliance and payment of a delinquency fee set forth in § 1.21(a)(9)(i) of this chapter within sixty days after the date of such notice. * * * * * PO 00000 Frm 00042 Fmt 4701 Sfmt 4702 (4) An administratively suspended registered practitioner or person granted limited recognition will continue to be assessed the annual active patent practitioner fee as set forth in § 11.8(d) during the period of administrative suspension. * * * * * (d) * * * (1) Any active registered practitioner may voluntarily enter inactive status by filing a request, in writing, that his or her name be endorsed on the register as voluntarily inactive. Upon acceptance of the request, the OED Director shall endorse the name as voluntarily inactive. * * * * * (4) Each registered practitioner, as well as individuals granted limited recognition under § 11.9(b), endorsed on the register as voluntarily inactive, shall each year, on or before a date to be set by the OED Director, pay to the OED Director an annual voluntary inactive fee as set forth in § 1.21(a)(7) of this chapter. Adequate notice shall be published and sent to practitioners in advance of the due date for payment of the annual voluntary inactive fee. Payment shall be for the calendar year in which the annual voluntary inactive fee is assessed. * * * * * (6) A voluntarily inactive practitioner may request reinstatement by complying with paragraph (f)(3) of this section. (e) Resignation and emeritus status. (1) A registered practitioner or a practitioner recognized under § 11.14(c), who is not under investigation under § 11.22 for a possible violation of the USPTO Rules of Professional Conduct, subject to discipline under § 11.24 or § 11.25, or a practitioner against whom probable cause has been found by a panel of the Committee on Discipline under § 11.23(b), may resign by notifying the OED Director in writing that he or she desires to resign. Upon acceptance in writing by the OED Director of such notice, that registered practitioner or practitioner under § 11.14 shall no longer be eligible to practice before the Office in patent matters but shall continue to file a change of address for five years thereafter in order that he or she may be located in the event information regarding the practitioner’s conduct comes to the attention of the OED Director or any grievance is made about his or her conduct while he or she engaged in practice before the Office. The name of any registered practitioner whose resignation is accepted shall be removed from the active register, endorsed as resigned, and notice thereof E:\FR\FM\31JYP2.SGM 31JYP2 jbell on DSK3GLQ082PROD with PROPOSALS2 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules published in the Official Gazette. Upon acceptance of the resignation by the OED Director, the registered practitioner must comply with the provisions of § 11.116. (2) A registered practitioner who has been registered for 10 or more years and who is currently in active status may request emeritus status in writing from the OED Director, unless such practitioner is under investigation under § 11.22 for a possible violation of the USPTO Rules of Professional Conduct, is a practitioner against whom probable cause has been found by a panel of the Committee on Discipline under § 11.23(b), or is a respondent in a pending proceeding instituted under § 11.24, § 11.25, or § 11.29. Upon acceptance in writing by the OED Director of such request, the practitioner shall no longer be eligible to practice before the Office in patent matters, except to provide patent pro bono legal services through the USPTO Patent Pro Bono Program. An emeritus practitioner performing pro bono legal services may neither ask for nor receive any compensation of any kind from the client, except for out-of-pocket expenses, for the patent legal services rendered by the emeritus practitioner. The name of any individual whose emeritus status is accepted shall be endorsed as emeritus. Upon acceptance of the emeritus status by the OED Director, the emeritus practitioner shall comply with the provisions of § 11.116 and shall continue to file a change of address for the period of their emeritus status. (f) * * * (1)(i) Any administratively suspended registered practitioner, or person granted limited recognition under § 11.9(b) may be reinstated on the register provided the practitioner: (A) Is not a party to a disciplinary proceeding; (B) Has applied for reinstatement on an application form supplied by the OED Director; (C) Has demonstrated compliance with the provisions of § 11.7(a)(2)(i) and (iii); (D) Has submitted a declaration or affidavit attesting to the fact that the practitioner has read the most recent revisions of the patent laws and the rules of practice before the Office; (E) Has paid the fees set forth in § 1.21(a)(9)(ii) of this chapter; and (F) Has paid all outstanding fees as set forth in § 1.21(a)(8) of this chapter, as well as any applicable delinquency fees as set forth in § 1.21(a)(9)(i) of this chapter, for each year the practitioner is administratively suspended. VerDate Sep<11>2014 21:49 Jul 30, 2019 Jkt 247001 (ii) Practitioners who certify to the OED Director that they have completed six hours of continuing legal education over the past twenty four months, comprising five hours in the area of patent law and one hour in ethics, may receive a $100 discount on the annual fee for each year in which they are administratively suspended. A practitioner will be subject to investigation and discipline for his or her conduct that occurs prior to, during, or after the period of his or her administrative suspension. Any administratively suspended registered practitioner or person granted limited recognition who fails to make these complete payments within five years of the effective date of the suspension for nonpayment shall be required to file a petition to the OED Director requesting reinstatement and providing objective evidence that they continue to possess the necessary legal qualifications to render applicants valuable service to patent applicants. * * * * * (3)(i) Any registered practitioner whose name has been endorsed as voluntarily inactive pursuant to paragraph (d)(1) of this section may be reinstated on the register provided the practitioner: (A) Is not a party to a disciplinary proceeding; (B) Has applied for reinstatement on an application form supplied by the OED Director; (C) Has demonstrated compliance with the provisions of § 11.7(a)(2)(i) and (iii); (D) Submits a declaration or affidavit attesting to the fact that the practitioner has read the most recent revisions of the patent laws and the rules of practice before the Office; (E) Paid the reinstatement fee set forth in § 1.21(a)(9)(ii) of this chapter; and (F) Paid the fee set forth in § 1.21(a)(7) of this chapter for each year the practitioner was voluntarily inactive. (ii) A practitioner is subject to investigation and discipline for his or her conduct that occurred prior to, during, or after the period of his or her voluntary inactivation. (4) Any registered practitioner who has been endorsed as resigned pursuant to paragraph (e) of this section may be reinstated on the register provided the practitioner has applied for reinstatement on an application form supplied by the OED Director, demonstrated compliance with the provisions of § 11.7(a)(2)(i) and (iii), paid the reinstatement fee set forth in § 1.21(a)(9)(ii) of this chapter, and paid the fees set forth in § 1.21(a)(7) of this PO 00000 Frm 00043 Fmt 4701 Sfmt 4702 37439 chapter for each year the practitioner was resigned. A practitioner who has resigned for two or more years before the date the Office receives a completed application from the person who resigned must also pass the registration examination under § 11.7(b)(1)(ii). Any reinstated practitioner is subject to investigation and discipline for his or her conduct that occurred prior to, during, or after the period of his or her resignation. (5) Any registered practitioner in emeritus status may be reinstated on the register provided the practitioner has applied for reinstatement on an application form supplied by the OED Director, paid the reinstatement fee set forth in § 1.21(a)(9)(ii) of this chapter, and paid the fee set forth in § 1.21(a)(7) of this chapter for each year the practitioner was in emeritus status. Any reinstated practitioner is subject to investigation and discipline for his or her conduct that occurred prior to, during, or after emeritus status being conferred. PART 41—PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD 16. The authority citation for 37 CFR part 41 continues to read as follows: ■ Authority: 35 U.S.C. 2(b)(2), 3(a)(2)(A), 21, 23, 32, 41, 134, 135, and Pub. L. 112–29. 17. Section 41.20 is amended by revising paragraphs (a), (b)(1), (b)(2)(ii), and (b)(3) and (4) to read as follows: ■ § 41.20 Fees. (a) Petition fee. The fee for filing a petition under this part is: $420.00. (b) * * * (1) For filing a notice of appeal from the examiner to the Patent Trial and Appeal Board: TABLE 1 TO PARAGRAPH (b)(1) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $210.00 420.00 840.00 (2) * * * (ii) In addition to the fee for filing a notice of appeal, for filing a brief in support of an appeal in an inter partes reexamination proceeding: TABLE 2 TO PARAGRAPH (b)(2)(II) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $525.00 1,050.00 2,100.00 (3) For filing a request for an oral hearing before the Board in an appeal under 35 U.S.C. 134: E:\FR\FM\31JYP2.SGM 31JYP2 37440 Federal Register / Vol. 84, No. 147 / Wednesday, July 31, 2019 / Proposed Rules § 42.15 TABLE 3 TO PARAGRAPH (b)(3) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $340.00 680.00 1,360.00 (4) In addition to the fee for filing a notice of appeal, for forwarding an appeal in an application or ex parte reexamination proceeding to the Board: TABLE 4 TO PARAGRAPH (b)(4) By a micro entity (§ 1.29) .................... By a small entity (§ 1.27(a)) ................ By other than a small or micro entity .. $590.00 1,180.00 2,360.00 PART 42—TRIAL PRACTICE BEFORE THE PATENT TRIAL AND APPEAL BOARD 18. The authority citation for 37 CFR part 42 continues to read as follows: ■ Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 316, 321–326; Pub. L. 112–29, 125 Stat. 284; and Pub. L. 112–274, 126 Stat. 2456. 19. Section 42.15 is revised to read as follows: jbell on DSK3GLQ082PROD with PROPOSALS2 ■ VerDate Sep<11>2014 21:49 Jul 30, 2019 Jkt 247001 Fees. (a) On filing a petition for inter partes review of a patent, payment of the following fees are due: (1) Inter Partes Review request fee: $19,500.00. (2) Inter Partes Review PostInstitution fee: $18,750.00. (3) In addition to the Inter Partes Review request fee, for requesting review of each claim in excess of 20: $375.00. (4) In addition to the Inter Partes PostInstitution request fee, for requesting review of each claim in excess of 20: $750.00. (b) On filing a petition for post-grant review or covered business method patent review of a patent, payment of the following fees are due: (1) Post-Grant or Covered Business Method Patent Review request fee: $20,000.00. (2) Post-Grant or Covered Business Method Patent Review Post-Institution fee: $27,500.00. (3) In addition to the Post-Grant or Covered Business Method Patent PO 00000 Frm 00044 Fmt 4701 Sfmt 9990 Review request fee, for requesting review of each claim in excess of 20: $475.00. (4) In addition to the Post-Grant or Covered Business Method Patent Review Post-Institution fee, for requesting review of each claim in excess of 20: $1,050.00. (c) On the filing of a petition for a derivation proceeding, payment of the following fees is due: (1) Derivation petition fee: $420.00. (2) [Reserved] (d) Any request requiring payment of a fee under this part, including a written request to make a settlement agreement available: $420.00. (e) Fee for non-registered practitioners to appear before the Patent Trial and Appeal Board: $250.00. Dated: July 18, 2019. Andrei Iancu, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. [FR Doc. 2019–15727 Filed 7–30–19; 8:45 am] BILLING CODE 3510–16–P E:\FR\FM\31JYP2.SGM 31JYP2

Agencies

[Federal Register Volume 84, Number 147 (Wednesday, July 31, 2019)]
[Proposed Rules]
[Pages 37398-37440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15727]



[[Page 37397]]

Vol. 84

Wednesday,

No. 147

July 31, 2019

Part II





Department of Commerce





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Patent and Trademark Office





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37 CFR Parts 1, 11, 41, et al.





Setting and Adjusting Patent Fees During Fiscal Year 2020; Proposed 
Rule

Federal Register / Vol. 84 , No. 147 / Wednesday, July 31, 2019 / 
Proposed Rules

[[Page 37398]]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1, 11, 41, and 42

[Docket No. PTO-P-2018-0031]
RIN 0651-AD31


Setting and Adjusting Patent Fees During Fiscal Year 2020

AGENCY: United States Patent and Trademark Office, Department of 
Commerce.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (Office or 
USPTO) proposes to set or adjust patent fees as authorized by the 
Leahy-Smith America Invents Act (Act or AIA), as amended by the Study 
of Underrepresented Classes Chasing Engineering and Science Success Act 
of 2018 (SUCCESS Act). The USPTO is a business-like operation where the 
demand for patent products and services and the cost of our operations 
are affected by external factors, such as the economy, legislation, 
court decisions, and increases in the costs of supplies and contract 
services, as well as internal factors, such as changes in patent 
examination processes and procedures. The proposed fee adjustments are 
needed to provide the Office with a sufficient amount of aggregate 
revenue to recover the aggregate cost of patent operations in future 
years (based on current projections) and to allow the Office to 
continue progress towards achieving strategic goals.

DATES: The Office solicits comments from the public on this proposed 
rule. Written comments must be received on or before September 30, 2019 
to ensure consideration.

ADDRESSES: Comments should be sent by electronic mail message over the 
internet addressed to: [email protected]. Comments may also be 
submitted by postal mail addressed to: Mail Stop--Office of the Chief 
Financial Officer, Director of the United States Patent and Trademark 
Office, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the 
attention of ``Brendan Hourigan.'' Comments may also be sent by 
electronic mail message over the internet via the Federal eRulemaking 
Portal at https://www.regulations.gov. See the Federal eRulemaking 
Portal website for additional instructions on providing comments via 
the Federal eRulemaking Portal.
    Although comments may be submitted by postal mail, the Office 
prefers to receive comments by electronic mail message over the 
internet, which allows the Office to more easily share comments with 
the public. Electronic comments are preferred to be submitted in plain 
text, but also may be submitted in portable document format (PDF) or a 
word processing format. Comments not submitted electronically should be 
submitted on paper in a format that facilitates convenient digital 
scanning into portable document format.
    The comments will be available for public inspection via the 
Office's internet website (https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting) and at https://www.regulations.gov. Because comments will be made available for public 
inspection, information that the submitter does not desire to make 
public, such as an address or phone number, should not be included in 
the comments.

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

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

A. Purpose of This Action

    The Office proposes this rule under section 10 of the AIA (Section 
10). Public Law 112-29, 125 Stat. 284, as amended by the SUCCESS Act 
Public Law 115-273, 132 Stat. 4158, which authorizes the Director of 
the USPTO to set or adjust by rule any patent fee established, 
authorized, or charged under title 35 of the United States Code 
(U.S.C.) for any services performed, or materials furnished, by the 
Office. Section 10 prescribes that fees may be set or adjusted only to 
recover the aggregate estimated costs to the Office for processing, 
activities, services, and materials relating to patents, including 
administrative costs of the Office with respect to such patent fees. 
Section 10 authority includes flexibility to set individual fees in a 
way that furthers key policy factors, while taking into account the 
cost of the respective services. Section 10 also establishes certain 
procedural requirements for setting or adjusting fee regulations, such 
as public hearings and input from the Patent Public Advisory Committee 
(PPAC) and congressional oversight.

B. Summary of Provisions Impacted by This Action

    Consistent with Federal fee setting standards, the Office conducted 
a biennial review of fees, costs, and revenues that began in 2017, and 
concluded that fee adjustments are necessary to provide the resources 
needed to improve patent operations, including implementing the USPTO 
2018-2022 Strategic Plan (Strategic Plan). As a result, the 295 
proposed fee adjustments outlined in this proposed rule align directly 
with the Office's strategic goals and four key fee setting policy 
factors, discussed in detail in Part V.
    The fee schedule in this proposed rule will recover the aggregate 
estimated costs of patent operations, including achieving the Office's 
strategic goals as detailed in the Strategic Plan, available at https://www.uspto.gov/sites/default/files/documents/USPTO_2018-2022_Strategic_Plan.pdf. The Strategic Plan defines the USPTO's 
mission, vision, and long-term goals and presents the actions the 
Office will take to realize those goals. This proposed fee setting rule 
supports the patent-related strategic goal to optimize patent quality 
and timeliness, which includes optimizing patent application pendency 
and examination timeframes, issuing highly reliable patents, fostering 
innovation through business effectiveness, and enhancing the operations 
of the Patent Trial and Appeal Board (PTAB). To the extent that the 
aggregate revenue generated by this rule will be used to pay for all 
patent-related costs of the USPTO, this proposed rule also supports 
USPTO's goal to provide domestic and global leadership to improve 
intellectual property (IP) policy protection and enforcement, as well 
as the mission support goal to deliver organizational excellence, which 
includes optimizing speed, quality, and cost-effectiveness of IT 
delivery to achieve business value and ensuring financial 
sustainability to facilitate effective USPTO operations. The Office 
intends to issue a final rule on fee changes in FY 2020 after receipt 
and analysis of public comments.
    During a formal process closely tied to the annual budget process, 
the USPTO reviewed and analyzed the overall balance between the 
Office's estimated revenue and costs over the next five years (based on 
current projections), and also reviewed individual fee changes and new 
fee proposals to assess their alignment with the Office's strategic 
goals and fee structure philosophy, both of which aim to provide 
sufficient financial resources to facilitate the effective 
administration of patent operations. Specifically, the Office assessed 
how well each proposal aligned with four key fee setting policy 
factors: Promote innovation strategies, align fees with the full cost 
of products

[[Page 37399]]

and services, set fees to facilitate the effective administration of 
the patent systems, and offer processing options for applicants.
    In this proposed rule, the Office proposes to set or adjust 295 
patent fees for large, small and micro entities (any reference herein 
to ``large entity'' includes all entities other than those that have 
established entitlement to either a small or micro entity fee 
discount). The fees for small and micro entity rates are tiered with 
small entities at a 50 percent discount and micro entities at a 75 
percent discount. Small entity fee eligibility is based on the size or 
certain non-profit status of the applicant's business and that of any 
other party holding rights in the invention. Micro entity fee 
eligibility is described in Section 10(g) of the AIA. The Office also 
proposes introducing 11 new fees and discontinuing three fees.
    Overall, the routine fees to obtain a patent (i.e., filing, search, 
examination, and issue fees) will increase under this Notice of 
Proposed Rulemaking (NPRM) relative to the current fee schedule in 
order to ensure financial sustainability and accommodate increases 
needed to improve the predictability and reliability of patent IP 
protection (which are discussed in detail below). Applicants who meet 
the definition for small or micro entity discounts will continue to pay 
a reduced fee for the fees eligible for a discount under Section 10(b). 
Additional information describing the proposed fee adjustments is 
included in Part V: Individual Fee Rationale in this rulemaking and in 
the ``Table of Patent Fees--Current, Proposed and Unit Cost'' 
(hereinafter ``Table of Patent Fees'') available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    As background, Section 10 of the AIA changed the Office's fee 
setting model and authorized the USPTO to set or adjust patent fees 
within the regulatory process. Section 10 better equips the Office to 
respond to changing circumstances. In FY 2013 and FY 2018, the USPTO 
used the AIA's fee setting authority to achieve key fee setting policy 
factors--to promote innovation strategies, align fees with the full 
cost of products and services, set fees to facilitate the effective 
administration of the patent systems, and offer patent processing 
options for applicants--and to generate sufficient resources needed to 
meet the Office's strategic patent priorities. With the additional fees 
collected as a result of the January 2013 Setting and Adjusting Patent 
Fees Final Rule (hereinafter ``the January 2013 Final Rule'') (78 FR 
4212) and the January 2018, Setting and Adjusting Patent Fees in Fiscal 
Year 2017 Final Rule (hereinafter ``the January 2018 Final Rule'') (82 
FR 52780), the Office made considerable progress in reducing backlog 
and pendency.
    Since the development of the USPTO fee schedule currently in 
effect, a number of the assumptions on which the cost and revenue 
projections supporting that rulemaking have changed. Notably, since the 
January 2018 Final Rule was published, (a) USPTO's projected patent 
examination costs have increased and (b) fee collections have been 
lower than anticipated due to lower than expected application filings, 
small declines in maintenance fee renewal rates, and a later than 
planned implementation of the January 2018 Final Rule. The higher fees 
proposed in this current rulemaking are needed as the Office continues 
its efforts towards accomplishing its mission and responding to the 
demands of both the domestic and international economies for robust and 
timely IP products and services. The proposed fee adjustments account 
for both the lower than anticipated revenue being generated under the 
existing fee schedule and also keeping pace with the rising costs of 
operations in the future, including growing the operating reserve.
    The Office continues its efforts towards accomplishing its mission 
and responding to the demands of both the domestic and international 
economies for robust and timely IP products and services. The USPTO 
must continually challenge itself to reinforce the predictability, 
reliability, and quality of those IP rights. The Office needs to foster 
the utmost confidence in the legal durability of its products in order 
to inspire greater innovation and further economic growth.
    The Office's strategic goal to optimize patent quality and 
timeliness recognizes the importance of innovation as the foundation of 
American economic growth and national competitiveness. Through this 
goal, the Office diligently works to balance timely examination with 
improvements in patent quality; particularly, the reliability of issued 
patents. One of these improvements is a comprehensive analysis of 
examination time, known as the Examiner Time Analysis (ETA). The last 
comprehensive review of examination time was completed over 40 years 
ago. Since then, significant changes to the examination process have 
occurred, including the emergence of new, more complex technologies; a 
growth of available prior art that must be searched; impacts of new 
electronic tools on the examination process; the challenges of 
transitioning to a new patent classification system; and changes in the 
legal landscape or examination practices. As the USPTO plans for the 
future, the Office considered how changes such as these impact the 
amount of time it takes to examine an application.
    The USPTO is also working towards improving patent quality by 
providing increased clarity on patentable subject matter eligibility 
under section 101 of title 35 U.S.C. The Office continues to strive to 
create consistency and increased clarity through this guidance. The 
Office is also focusing efforts on improving the initial search and 
availability of the best prior art to examiners. This aspect takes a 
variety of forms and the Office is working on many possible approaches. 
Overall, presenting more comprehensive search results to the examiners 
initially will lead to more efficient examination, a decrease in the 
information gap between the examination phase and the later challenge 
or litigation phases during the life of a patent, and increase the 
reliability of the patent grant overall. Effecting the changes in the 
examination process needed to ensure the issuance of reliable patents, 
while also issuing those patents in a timely manner, means recognizing 
a potential increase in the core operating costs for future years.
    Another major component of the overall patent process is the work 
carried out by the PTAB. On April 24, 2018, the U.S. Supreme Court 
issued its decision in SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 
(2018). Changes related to the SAS decision, along with other 
implementations, will increase the average cost to conduct each 
proceeding. These changes are discussed in detail in section V. 
Individual Fee Rationale.
    As a production-oriented entity, the USPTO relies upon IT as a 
mission-critical enabler for every aspect of its operation. The 
quality, efficiency, and productivity of patent operations correlate to 
the performance of IT systems. To accomplish its performance-based 
strategies, the USPTO continuously engages in multi-year efforts to 
upgrade its business systems and the IT infrastructure supporting those 
systems in order to keep pace with emerging business, legislative, and 
court needs and technology standards. Since the last patent fee setting 
effort, the USPTO has made significant progress on IT tools, including 
continued development and implementation of the Patent End-to-End 
(PE2E) IT capability. For example, the Office continues to work on 
releasing systems such as Patent Center

[[Page 37400]]

which will modernize the transaction systems by combining EFS Web and 
PAIR in a single interface. The Office has also made progress on the 
continued development and deployment of the PTAB-End-to-End (PTAB E2E) 
IT capabilities, which will expand the use of intelligent data to 
support appeal decisions and process inter partes review (IPR) 
proceedings, post-grant review (PGR) proceedings, covered business 
method review (CBM) proceedings, and derivation (DER) proceedings. 
Other IT efforts are underway to stabilize, modernize, or replace the 
USPTO's legacy systems and aging infrastructure. To this end, the 
Office is conducting a wholesale review of all technology resources and 
is in the process of changing over the oldest infrastructure. 
Consequently, the Office is taking a fresh look at the IT systems from 
top to bottom. This provides USPTO with the opportunity to 
fundamentally transform the Office's IT systems with state-of-the art 
technology.
    The Office invests a considerable amount of resources in IT 
modernization and stabilization each year, and the FY 2020 Budget does 
not anticipate that costs will increase beyond levels previously 
foreseen. However, given updated revenue and spending projections, this 
proposed fee increase is needed to support continuing IT investments at 
previously planned levels. Without an increase in USPTO's aggregate 
revenue, resources available for IT investment will inevitably be 
curtailed.
    Lastly, the USPTO has taken steps to establish and maintain 
operating reserves to facilitate execution of multi-year plans. Using 
fee setting authority and other tools, the USPTO continuously refines 
its multi-year planning and budgeting. The fee setting authority 
prescribed in the AIA, as amended by the SUCCESS Act, allows the Office 
to effectively engage the stakeholder community on proposed fee 
adjustments; fully recover the aggregate costs of its planned 
operations, including the development and maintenance of sufficient 
operating reserves; invest in strategic agency initiatives; and respond 
to changing market needs and other external factors.
    Research has shown that large fee-funded, business-like agencies 
without an operating reserve are at risk of cash flow stress. USPTO's 
operating reserves enable the Office to mitigate this risk. For 
instance, earlier in FY 2019, certain federal government departments 
and agencies, including the Department of Commerce, shut down as a 
result of a lapse in appropriations. The USPTO received special 
consideration to remain open using funds available from the operating 
reserves. This allowed the USPTO to continue operations, thus 
preventing a significant degradation in services levels, such as patent 
pendency timeframes. This example provides an ongoing compelling case 
for the operating reserves' significant value. The USPTO assesses risk 
annually, and determines the minimum level of reserves necessary to 
shield core operations against known financial risks. Based on current 
cost and revenue assumptions, the FY 2020 Budget projects that the 
USPTO's patent operating reserve will fall well below this minimum 
level in FY 2019 and FY 2020. Both external factors and internal 
decisions impacting the spending and revenue projections mentioned 
above have impacted the Office's ability to grow the operating reserve 
to the levels anticipated in the January 2018 Final Rule. Absent the 
proposed fee increase, the USPTO's patent operating reserve will be 
exhausted by FY 2024, which would leave the Office vulnerable to 
changes in the economy that reduce annual revenue, government wide 
fiscal events, unexpected cost increases, and a number of other 
financial risks.
    The USPTO also acutely recognizes that fees cannot simply increase 
for every improvement the Office deems desirable. The USPTO has a 
responsibility to stakeholders to pursue strategic opportunities for 
improvement in an efficient, cost-conscious manner. The Office's 
Financial Advisory Board (FAB) focuses on financial risk management and 
determining what expenses are truly necessary. Each year the FAB 
reviews multiple scenarios to determine what level of fee collections 
are expected and what the hiring and spending levels should be in order 
to effectively carry out the Office's mission. The FAB also regularly 
reviews USPTO activities to identify opportunities for cost savings and 
resources that can be redirected to higher priority efforts. As a 
result of the USPTO's careful financial management and prudent use of 
fee setting authority, the Congress recognized the Office to be good 
stewards of fee setting authority and extended that authority through 
the SUCCESS Act.
    In order to continue building on the progress made over the past 
seven years, and consistent with the USPTO's biennial fee review 
policy, the Office proposes the fee schedule detailed herein to 
continue to focus on the fundamental purpose of the USPTO, which is to 
foster innovation, competitiveness, and job growth by recognizing and 
securing IP rights, through the delivery of high quality and timely 
patent examination and review proceedings in order to produce reliable 
and predictable intellectual property rights. This proposed rule seeks 
to provide the USPTO sufficient financial resources to facilitate the 
effective administration of the U.S. IP system. The proposal includes 
targeted fee adjustments in addition to an approximately five percent 
across the board adjustment. This proposed rule is needed because 
actual fee collections have not materialized as expected in the January 
2018 Final Rule, projected fee collections have been lowered as a 
result, and critical costs to the Office continue to increase. The 
proposed fees set forth in this proposed rule will help replenish and 
grow the patent operating reserve and stabilize USPTO's finances, 
enabling the Office to deliver reliable and predictable service levels, 
even in times of financial fluctuations. A more robust patent operating 
reserve will also position the Office to identify and continue to 
undertake capital improvements, such as adapting to an ever-increasing 
technological future. The operating reserve will be managed carefully; 
if the projected operating reserve were to exceed the targeted optimal 
level by ten percent for two consecutive years, it is USPTO policy to 
examine the contributing factors and determine whether it would be 
advisable to lower fee rates. The fees proposed in this NPRM intend to 
position the Office well to deliver on known commitments and address 
unknown risks in the future.

C. Summary of Costs and Benefits of This Action

    The proposed rule is economically significant and results in a need 
for a Regulatory Impact Analysis (RIA) under Executive Order 12866 
Regulatory Planning and Review, (Sept. 30, 1993). The Office prepared a 
RIA to analyze the costs and benefits of the NPRM over a five-year 
period, FY 2020-FY 2024. The RIA includes an analysis of four 
alternatives for how well they aligned to the Office's rulemaking 
strategies and goals, which include strategic priorities (goals, 
objectives, and initiatives) from the Strategic Plan and the Office's 
fee setting policy factors. From this conceptual framework, the Office 
assessed the absolute and relative qualitative costs and benefits of 
each alternative. Consistent with OMB Circular A-4, ``Regulatory 
Analysis,'' the rule involves a transfer payment from one group to 
another. The Office recognizes that it is very difficult to precisely 
monetize and quantify social costs and benefits resulting from 
deadweight loss of a transfer rule such

[[Page 37401]]

as the proposed rule. The costs and benefits that the Office identifies 
and analyzes in the RIA are strictly qualitative. Qualitative costs and 
benefits have effects that are difficult to express in either dollar or 
numerical values. Monetized costs and benefits, on the other hand, have 
effects that can be expressed in dollar values. The Office did not 
identify any monetized costs and benefits of the proposed rule, but 
found that the proposed rule has significant qualitative benefits with 
no identified costs.
    The qualitative costs and benefits that the RIA assesses are: (1) 
Fee schedule design--a measure of how well the fee schedule aligns to 
the key fee setting policy factors; and (2) securing aggregate revenue 
to recover aggregate cost--a measure of whether the alternative 
provides adequate revenue to support the core mission and strategic 
priorities described in the NPRM, Strategic Plan, and FY 2020 Budget. 
Based on the costs and benefits identified and analyzed in the RIA, the 
fee schedule proposed in this NPRM offers the highest net benefits. As 
described throughout this document, the proposed fee schedule maintains 
the existing balance of below cost entry fees (e.g., filing, search, 
and examination) and above cost maintenance fees as one approach to 
foster innovation. Further, as detailed in Part V, the proposed fee 
changes are targeted in support of one or more fee setting policy 
factors. Lastly, the proposed rule secures the aggregate revenue needed 
to achieve the strategic priorities encompassed in the rulemaking goals 
and strategies (see Part III). The proposed fee schedule allows for 
optimizing patent quality and timeliness. This significantly increases 
the value of patents by advancing commercialization of new technologies 
sooner and reduces uncertainty regarding the scope of patent rights, 
which fosters innovation and has a positive effect on economic growth. 
Table 1 summarizes the RIA results.

 Table 1--Proposed Patent Fee Schedule Costs and Benefits, Cumulative FY
                              2020-FY 2024
------------------------------------------------------------------------
      Qualitative costs and benefits
------------------------------------------------------------------------
Costs:
  None Identified.........................  Neutral.
Benefits:
  Secure Aggregate Revenue to Recover       Significant.
   Aggregate Costs.
  Fee Schedule Design.....................  Significant.
Net Benefit...............................  Significant Benefit.
------------------------------------------------------------------------

    Additional details describing the costs and benefits are available 
in the RIA at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.

II. Legal Framework

A. Leahy-Smith America Invents Act--Section 10

    The Leahy-Smith America Invents Act was enacted into law on 
September 16, 2011. See Public Law 112-29, 125 Stat. 284. Section 10(a) 
of the Act authorizes the Director of the Office to set or adjust by 
rule any patent fee established, authorized, or charged under title 35, 
U.S.C., for any services performed by, or materials furnished by, the 
Office. Fees under title 35 U.S.C. may be set or adjusted only to 
recover the aggregate estimated cost to the Office for processing, 
activities, services, and materials related to patents, including 
administrative costs to the Office with respect to such patent 
operations. See 125 Stat. at 316. Provided that the fees in the 
aggregate achieve overall aggregate cost recovery, the Director may set 
individual fees under Section 10 at, below, or above their respective 
cost. Section 10(e) of the Act requires the Director to publish the 
final fee rule in the Federal Register and the Official Gazette of the 
Patent and Trademark Office at least 45 days before the final fees 
become effective. Section 10(i) terminates the Director's authority to 
set or adjust any fee under Section 10(a) upon the expiration of the 
seven-year period that began on September 16, 2011.

B. The Study of Underrepresented Classes Chasing Engineering and 
Science Success Act of 2018

    The Study of Underrepresented Classes Chasing Engineering and 
Science Success Act of 2018 (SUCCESS Act), was enacted into law on 
October 31, 2018. See Public Law 115-273, 132 Stat. 4158. Section 4 of 
the SUCCESS Act amended Section 10(i)(2) of the AIA by striking ``7-
year'' and inserting ``15-year'' in reference to the expiration of fee 
setting authority. Therefore, the updated Section 10(i) of the AIA 
terminates the Director's authority to set or adjust any fee under 
Section 10(a) upon the expiration of the 15-year period that began on 
September 16, 2011 and ends on September 16, 2026.

C. Small Entity Fee Reduction

    Section 10(b) of the AIA requires the Office to reduce by 50 
percent the fees for small entities that are set or adjusted under 
Section 10(a) for filing, searching, examining, issuing, appealing, and 
maintaining patent applications and patents.

D. Micro Entity Fee Reduction

    Section 10(g) of the AIA amended chapter 11 of title 35, U.S.C., by 
adding section 123 concerning micro entities. The Act provides that the 
Office must reduce by 75 percent the fees for micro entities for 
filing, searching, examining, issuing, appealing, and maintaining 
patent applications and patents. Micro entity fees were implemented 
through the previous patent fee rule, and the Office will maintain this 
75 percent micro entity discount for the appropriate fees and proposes 
to implement micro entity fees for additional services as appropriate.

E. Patent Public Advisory Committee Role

    The Secretary of Commerce established the PPAC under the American 
Inventors Protection Act of 1999. 35 U.S.C. 5. The PPAC advises the 
Under Secretary of Commerce for Intellectual Property and Director of 
the USPTO on the management, policies, goals, performance, budget, and 
user fees of patent operations.
    When adopting fees under Section 10 of the Act, the Director must 
provide the PPAC with the proposed fees at least 45 days prior to 
publishing the proposed fees in the Federal Register. The PPAC then has 
at least 30 days within which to deliberate, consider, and comment on 
the proposal, as well as hold public hearing(s) on the proposed fees. 
The PPAC must make a written report available to the public of the 
comments, advice, and recommendations of the committee regarding the 
proposed fees before the Office issues any final fees. The Office will 
consider and analyze any comments, advice, or recommendations received 
from the PPAC before finally setting or adjusting fees.
    Consistent with this framework, on August 8, 2018, the Director 
notified the PPAC of the Office's intent to set or adjust patent fees 
and submitted a preliminary patent fee proposal with supporting 
materials. The preliminary patent fee proposal and associated materials 
are available at https://www.uspto.gov/about-us/performance-

[[Page 37402]]

and-planning/fee-setting-and-adjusting. The PPAC held a public hearing 
in Alexandria, Virginia, on September 6, 2018. Transcripts of the 
hearing are available for review at https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript_20180906.pdf. Members 
of the public were invited to the hearing and given the opportunity to 
submit written and/or oral testimony for the PPAC to consider. The PPAC 
considered such public comments from this hearing and made all comments 
available to the public via the Fee Setting website, https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC also provided a written report setting forth in 
detail the comments, advice, and recommendations of the committee 
regarding the preliminary proposed fees. The report regarding the 
preliminary proposed fees was released on October 29, 2018, and can be 
found online at https://www.uspto.gov/sites/default/files/documents/PPAC_Fee_Setting_Report_Oct2018_1.pdf. The Office considered and 
analyzed all comments, advice, and recommendations received from the 
PPAC before publishing this NPRM. Before a final rule is issued, this 
proposed rule provides the public with a 60-day period during which to 
provide comments to be considered by the USPTO.

III. Rulemaking Goals and Strategies

A. Fee Setting Strategy

    The overall strategy of this proposed rule is to establish a fee 
schedule that generates sufficient multi-year revenue to recover the 
aggregate cost of maintaining USPTO operations and accomplishing the 
USPTO's strategic goals in accordance with the authority granted to the 
USPTO by AIA Section 10, as amended by the SUCCESS Act. The overriding 
principles behind this strategy are to operate within a sustainable 
funding model to avoid disruptions caused by fluctuations in financial 
operations, and to enable the USPTO to continue strategic improvements, 
such as optimizing patent application pendency, issuing highly reliable 
patents, fostering innovation through business effectiveness, enhancing 
operations of the PTAB, and optimizing speed, quality, and cost 
effectiveness of information technology delivery to achieve business 
value.
    In addition to the overriding principles outlined above, as 
discussed earlier in this document, the Office also assesses alignment 
with the four key fee setting policy factors: Promoting innovation 
strategies, aligning fees with the full cost of products and services, 
facilitating the effective administration of the U.S. patent system, 
and offering patent processing options to applicants. Each factor 
promotes a particular aspect of the U.S. patent system. Promoting 
innovation strategies seeks to ensure barriers to entry into the U.S. 
patent system remain low, and innovation is incentivized by granting 
inventors certain short-term exclusive rights to stimulate additional 
inventive activity. Aligning fees with the full cost of products and 
services recognizes that as a fully fee-funded entity, the Office must 
account for all of its costs even as it elects to set certain fees 
below, at, or above cost. This factor also recognizes that some 
applicants may use particular services in a much more costly manner 
than other applicants (e.g., patent applications cost more to process 
when more claims are filed). Facilitating effective administration of 
the patent system seeks to encourage patent prosecution strategies that 
promote efficient patent prosecution, resulting in compact prosecution 
and reduction in the time it takes to obtain a patent. Finally, the 
Office recognizes that patent prosecution is not a one-size-fits-all 
process; therefore, where feasible, the Office endeavors to fulfill its 
fourth policy factor of offering patent processing options to 
applicants.

B. Fee Setting Considerations

    The balance of this sub-section presents the specific fee setting 
considerations the Office reviewed in developing the proposed patent 
fee schedule. Specific considerations are: (1) Historical costs of 
patent operations and investments to date in meeting the Office's 
strategic goals; (2) the balance between projected costs to meet the 
Office's operational needs and strategic goals and the projected future 
year fee collections; (3) fee schedule design; (4) sustainable funding; 
and (5) the comments, advice, and recommendations offered by the PPAC 
on the Office's initial fee setting proposal. Collectively, these 
considerations inform the Office's chosen rulemaking strategy.
    (1) Historical Cost. To ascertain how to best align fees with the 
full cost of products and services, the Office considers unit cost data 
provided by the USPTO's Activity Based Information (ABI) program. Using 
historical cost data and forecasted application demands, the Office can 
align fees to the costs of specific patent products and services. The 
document entitled ``USPTO Setting and Adjusting Patent Fees during 
Fiscal Year 2020--Activity Based Information and Patent Fee Unit 
Expense Methodology,'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, provides detail on 
the Office's costing methodology in addition to the last three years of 
historical cost data. Part IV of this proposed rule details the 
Office's methodology for establishing fees. Additionally, Part V 
describes the reasoning for setting some fees at cost, below cost, or 
above cost such that the Office recovers the aggregate cost of 
providing services through fees.
    (2) Projected Costs and Revenue. In developing this NPRM, the USPTO 
considered its most current estimates of future year workload demands, 
fee collections, and costs to maintain core USPTO operations and meet 
the Office's strategic goals, all of which can be found in the FY 2020 
Budget. The FY 2020 Budget and the Strategic Plan highlight the 
priorities of: Optimizing patent application pendency, issuing highly 
reliable patents, fostering innovation through business effectiveness, 
enhancing operations of the PTAB, optimizing speed, quality, and cost 
effectiveness of IT delivery to achieve business value, and ensuring 
financial sustainability to facilitate effective USPTO operations. This 
also enables the USPTO to continue to leverage nationwide talent to 
build, retain and effectively manage the highly educated and talented 
workforce it needs to properly serve its stakeholder community and the 
country.
    (a) Updated Revenue Estimates. As is discussed in more detail in 
Part IV: Fee Setting Methodology, when setting fees at appropriate 
levels to recover aggregate costs, the USPTO must estimate future year 
demand for the USPTO's products and services through a careful analysis 
of economic conditions, potential changes in the legal and policy 
environment, and operational efficiency and productivity. Many of these 
factors fall outside the USPTO's control. Since the time that the USPTO 
published the January 2018 Final Rule, new information has become 
available that has resulted in adjustments to several of the 
assumptions underlying the Office's revenue projections. The result of 
this change is a lowering of revenue expectations under the existing 
fee schedule. This reduction is due to a number of factors, most 
significant of which is a reduction in the estimates for application 
filings and maintenance fee collections.
    Actual Utility, Plant, and Reissue (UPR) application filings in FYs 
2017 and 2018 were less robust than

[[Page 37403]]

expected. In the FY 2020 Budget, given the lower than expected previous 
year filings, and an analysis of domestic and global economic 
forecasts, the USPTO has lowered future year filing projections from 
what was expected when the January 2018 Final Rule was published. The 
lower level of filings also affects the multi-year workloads of the 
Office, and means that fixed costs, like those for IT development, get 
spread across a smaller pool of patent applications, which contributes 
to higher unit costs.
    Further, in the time since the January 2018 Final Rule was 
published, the USPTO has refined its methodology for projecting 
maintenance fees. In FYs 2017 and 2018 maintenance fee collections were 
lower than expected. Based on the refined methodology and recent 
trends, the refreshed forecast included in the FY 2020 Budget has been 
lowered. Much of this reduction is due to a very slight downward 
adjustment in expected third stage maintenance fee renewal rates.
    Absent the proposed increase in fees or an unsustainable reduction 
in operating costs, the USPTO would be forced to draw down its 
operating reserves and take on higher levels of financial risk.
    (b) Quality, Backlog, and Pendency. The strategic goal to 
``optimize patent quality and timeliness'' recognizes the importance of 
innovation as the foundation of American economic growth and national 
competitiveness. Through this goal, the Office will continually improve 
patent quality, particularly the predictability and reliability of 
issued patents. The USPTO is also committed to improving pendency to 
better ensure the timely delivery of innovative goods and services to 
market and the related economic growth and creation of new or higher-
paying jobs.
    The Office will continue to diligently make progress toward 
pendency targets and quality expectations to issue predictable and 
reliable patents, while also addressing the anticipated growth in 
application filings. The Office will work to optimize patent 
examination timeframes within the framework of Patent Term Adjustment 
(PTA) while continuing to monitor and report traditional pendency 
measures. This includes engaging customers to identify optimal pendency 
and examination timeframes, and making sure that the Office has the 
appropriate number of examiners to generate the level of production to 
meet those timeframes. This proposed rule will produce revenues 
adequate to continue the USPTO's progress towards attaining its 
strategic goal to optimize patent quality and timeliness.
    The Office recognizes the importance of issuing high quality 
patents that provide reliable and predictable intellectual property 
protection. If the USPTO is to achieve its strategic objective of 
issuing highly reliable patents, patent examiners must be afforded 
sufficient time to conduct a thorough and complete examination of each 
application. In the time since fees were last adjusted, the USPTO has 
completed a comprehensive analysis of examination time, known as ETA, 
the result of which determined a need for updates to the allotment of 
examination time.
    In the past, allotment of examination time for a particular 
application was determined by the most comprehensive claim, and could 
not account for multi-disciplinary inventions. Sometimes, patent 
applications of similar technologies would receive disparate time for 
examination as a result. This, together with significant changes in 
patent prosecution that have occurred since examination time goals were 
established over 40 years ago--such as advancements in the 
technological complexities of applications, a growing volume of prior 
art, and a changing legal landscape--have brought about the need for 
updates to the allotment of examination time. The time examiners are 
given to examine applications is the critical link between pendency and 
quality. These updates reflect internal and external stakeholders' 
priorities and experiences as it relates to examination time, quality, 
and application complexity, and also enable optimal pendency and 
quality levels.
    In addition to the changing legal landscape, increasing technical 
complexities of applications and the growing volume of prior art to be 
searched during examination, updates to examination time will also take 
into account the full scope of technology recited in an application as 
well as the particular attributes of the application, such as the 
number of claims, the size of the specification, and the number of 
references cited in any filed information disclosure statement. Based 
on technology examined, examiners that currently receive the lowest 
amount of time for examination will generally see the largest increases 
in examination time, and conversely, examiners that currently receive 
the highest amount of time may see little, if any, increase in 
examination time. Further, all examiners will be provided additional 
examination time based on the specific attributes of the application. 
Together, these changes improve the calibration of the time needed to 
conduct a thorough examination, position the Office to better adjust 
time in the future as needed, and will stakeholders increased 
confidence in the certainty of any resultant patent rights.
    Separate from the ETA findings, analysis of the Patent staffing 
model indicates an incremental decrease in examiners' average net 
output over time, resulting in higher core patent examination costs 
than in previous estimates. One possible explanation for this reduction 
in output may be that the percentage of examiners receiving production 
awards has dropped, and a larger number of examiners are forgoing 
promotions and staying at lower grades. Additionally, applicants' 
increased use of programs like After Final Consideration Pilot (AFCP) 
and interviews, along with increased training needs due to changes in 
legal landscape and examination practices, has increased the amount of 
non-examination time used by examiners, also leading to productivity 
losses.
    Another area where essential operating costs have increased is the 
PTAB. The PTAB, as it currently exists, was established by the AIA in 
September 2012. The PTAB manages pendency for three different 
activities: AIA trials which, by statute, must be adjudicated within 
one year of filing; re-examination petitions which, by statute, must be 
completed with ``special dispatch''; and ex parte appeals. The PTAB's 
commitment is to timely resolve appeals and inter partes matters within 
statutory or USPTO timeframes, while streamlining processes and 
procedures throughout the PTAB. This entails retaining and leveraging 
nationwide talent. As the Office institutes operational changes at the 
PTAB to comply with the SAS decision and implement other improvements, 
as detailed in Part V, the average workload associated with each trial 
is increasing.
    (c) Business Effectiveness. Given the estimates of costs and 
revenue in the FY 2020 Budget, absent efforts to boost future revenue, 
funding for other USPTO and stakeholder priorities, like IT 
modernization and other business improvement initiatives, would need to 
be reduced to well below planned levels in the coming years. To this 
end, revenue generated from the proposed fee structure will enable the 
USPTO to focus on how the Patent organization operates to foster 
business effectiveness. In fulfilling this objective, the Office will 
listen to customers and employees and then take patent-specific actions 
that will position the Office to meet expectations.

[[Page 37404]]

    The USPTO will provide the cutting-edge tools that employees and 
customers need to efficiently and effectively accomplish their tasks, 
particularly through the continued implementation of Patents End-to-
End. For example, this could entail the use of artificial intelligence 
or machine-learning efforts. Another key initiative that will enhance 
the work capabilities of both employees and customers is to improve 
searchable (text) access to domestic and international patent 
applications, including access to non-patent literature and prior art, 
and office actions.
    (3) Fee Schedule Design. The proposed fee schedule was designed to 
set individual fees to further key policy considerations while taking 
into account the cost of the particular service. To encourage 
innovators to take advantage of patent protection, the Office continues 
its longstanding practice of setting basic ``front-end'' fees (e.g., 
filing, search, and examination) below the actual cost of carrying out 
these activities. Additionally, new fees are set, and existing fees are 
adjusted, in order to facilitate the effective administration of the 
patent system. Part IV of this proposed rule details the Office's 
methodology for establishing fees, and Part V describes the reasoning 
for setting and adjusting individual fees, including fee schedule 
design benefits. The RIA, available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, also discusses fee 
schedule design benefits.
    (4) Sustainable Funding. A major component of sustainable funding 
is the creation and maintenance of a viable patent operating reserve 
that allows for effective management of the U.S. patent system and 
responsiveness to changes in the economy, unanticipated production 
workload, and revenue changes. As a fee-funded agency, the USPTO uses 
its reserves to mitigate the variability in its spending and revenue 
streams that can create volatility in patent operations and threaten 
the Office's ability to support mission operations.
    The USPTO aims to manage the operating reserve within a range of 
acceptable balances and assesses its options when projected balances 
fall either below or above that range. Minimum planning targets are 
assessed annually and are intended to address immediate unplanned 
changes in the economic or operating environments as the Office builds 
its reserve to the optimal level. The optimal reserve target, which is 
reviewed at least biennially, is established based on an assessment of 
the likelihood and severity of an array of financial risks. A recent 
assessment of the Patent operating reserve relative to the current 
financial risk environment revalidated the optimal reserve level of 
three months' operating expenses as the appropriate long-range target 
given various risk factors, such as the high percentage of fixed costs 
in the Patent business and recent and potential changes in the legal, 
judicial, and policy environments. For the Patent business line's 
operating reserve, a minimum planning level of approximately $300 
million--just over one month's operating expenses--has been 
established. The USPTO's annual budget delineates prospective spending 
levels (aggregate costs) to execute core mission activities and 
strategic initiatives. In the FY 2020 Budget, the USPTO estimated that 
its aggregate patent operating costs for FY 2020, including 
administrative costs, would be $3.2 billion and aggregate estimated 
patent fee collections and other income is $3.1 billion, with the 
operating reserve making up the difference. The health of the operating 
reserve, which is expected to be below the minimum target through FY 
2021 as the USPTO continues investments in mission-critical areas, is a 
key consideration as the USPTO sets its fees. Aided by the increased 
fees proposed in the NPRM, future year projections are anticipated to 
build the Patent operating reserve to an optimal level of three months 
operating requirements. These projections are based on point-in-time 
estimates and assumptions that are subject to change. For instance, the 
Budget includes assumptions about filing levels, renewal rates, whether 
or not the President will authorize or Congress will mandate employee 
pay raises, the productivity of the workforce, and many other factors. 
A change in any of these factors could have a significant cumulative 
impact on reserve balances. The operating reserve estimates do not 
reflect the 2019 1.9 percent pay raise as authorized in the 
Consolidated Appropriation Act, 2019, Public Law 116-6, 133 Stat. 13, 
which was passed after the cost estimates for the FY 2020 Budget were 
finalized. This new requirement will increase the patent budgetary 
requirements by approximately $31-$44 million per year. This will 
result in a cumulative impact of $245 million over the budget horizon. 
As seen in Table 3, set forth in Part IV: Fee Setting Methodology, over 
a five-year planning horizon the operating reserve balance can change 
significantly; underscoring the Office's financial vulnerability to 
varying risk factors and the importance of fee setting authority.
    The USPTO will continue to assess the patent operating reserve 
balance against its target balance annually, and at least every two 
years, the Office will evaluate whether the optimal target balance 
continues to be sufficient to provide the stable funding the Office 
needs. Per the Office's operating reserve policy, if the operating 
reserve balance is projected to exceed the optimal level by ten percent 
for two consecutive years, the Office will consider fee reductions. 
Under the new fee structure, as in the past, the Office will continue 
to regularly review its operating budgets and long-range plans to 
ensure the USPTO uses patent fees prudently.
    (5) Comments, Advice, and Recommendations from the PPAC. In the 
report prepared in accordance with AIA fee setting authority, the PPAC 
conveyed support for the USPTO in seeking the revenues it needs to 
increase the reliability and certainty of patent rights, provide timely 
examination, improve and secure its IT infrastructure and adequately 
fund its operating reserve. Specifically, the report stated, ``As a 
general matter, we believe that increased revenue for the USPTO will be 
important to fulfill its Strategic Plan and implement the 
recommendations of the PPAC.'' Patent Pub. Advisory Comm., Fee Setting 
Report (2018). However, the PPAC expressed concerns over some of the 
individual fee adjustments and their potential impacts on patent 
applicants and holders. The USPTO has included additional information 
in this NPRM to further address some of the concerns of PPAC and the 
public.
    The PPAC expressed general support for the stated goals and an 
increase in patent fees. In general, the PPAC urged the Office to 
provide more detail and justification on how additional revenue will be 
used to enhance patent quality. The PPAC also suggested the USPTO 
should be clear as to how it will use revenues to modernize its IT 
infrastructure to increase stability and scalability, and to strengthen 
security, as well as to support more effective examination processes. 
Both the FY 2020 Budget and Part III: Rulemaking Goals and Strategies, 
and Part V: Individual Fee Rationale offer this additional information.
    Regarding the proposed changes to the issue and maintenance fees, 
the PPAC expressed support for the rationale for weighting the 
increases toward the issue fee and first stage maintenance fee. The 
PPAC also suggested that the USPTO carefully consider elasticity for 
first stage

[[Page 37405]]

maintenance fees and its potential impact on revenue. The Office's 
elasticity study showed that first stage maintenance fees are among the 
least elastic patent-related fees. For more information see ``USPTO 
Setting and Adjusting Patent Fees during Fiscal Year 2020--Description 
of Elasticity Estimates,'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    The PPAC supports the increases to the fees in post-grant 
proceedings (post grant review (PGR), inter partes review (IPR) and 
covered business methods (CBM) proceedings). The PPAC noted that they 
understand the impact of the SAS Institute v. Iancu 138 S. Ct. 1348 
(2018) and Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) 
decisions have on PTAB's workload and the additional resources needed 
to manage that increased workload. In the report, the PPAC suggested 
that the PTAB conduct data collection and analysis on the impact of 
these decisions on its processes so stakeholders can better appreciate 
the need for increased fees. The Office appreciates this suggestion and 
is currently collecting data on the impact of these decisions and will 
reevaluate the extent of the increase in costs once actual data become 
available. The PPAC also expressed support for the new fee for pro hac 
vice admissions noting, ``It makes sense to recover the costs of 
processing these petitions from those in need of pro hac vice admission 
rather than from overall trial fees'' PPAC, at 3.
    The PPAC supports the surcharge on non-DOCX filings. The report 
expressed that ``the USPTO should have the flexibility to incentivize 
applicants to use filing formats that maximize efficiency for both the 
USPTO and its stakeholders'' PPAC, at 3.
    The report noted opposition to the proposed increases for the Fee 
for Late Payment of a Maintenance Fee. The PPAC believes the magnitude 
of increase of the surcharge for late maintenance fee payments may be 
excessive. However, the PPAC agrees that it is desirable to have timely 
payment of maintenance fees to make clear to the public when patent 
rights will be extended and therefore agrees with a meaningful 
incentive to encourage timely payment. In response, the USPTO has 
reduced the proposed Maintenance Fee Surcharge from $1,000 to $500 for 
large entities. The PPAC suggested, ``If the goal is to discourage late 
payments, then perhaps the USPTO should provide services to individuals 
and small businesses to make it simple to stay current on deadlines and 
pay in a timely fashion'' PPAC, at 3. The USPTO appreciates the PPAC's 
suggestion. The USPTO provides tools to help patent owners monitor due 
dates, such as the Patent Maintenance Fees Storefront, https://fees.uspto.gov/MaintenanceFees, with which anyone can see the payment 
windows for all patents. Additionally, customers with USPTO.gov 
accounts (i.e., MyUSPTO) can create a ``patent docket'' and add patent 
or application numbers in order to keep track of due dates. Also, the 
weekly Official Gazette notices list the range of patents for which 
maintenance fees are now payable. In addition, with the availability of 
free electronic calendar applications, individuals are able to easily 
set up reminders of when maintenance fee payments are eligible for 
renewal (3, 7, 11 years from issue) and when they are due (3.5, 7.5, 
11.5 years from issue).
    The PPAC expressed a lack of support for the proposal to increase 
Request for Expedited Examination of a Design Application. The advisory 
body requested sufficient justification for such a large increase. In 
response to this concern, the USPTO has provided additional 
justification and data. Part V: Individual Fee Rationale offers this 
additional information.
    The PPAC supported the active patent practitioner fee to make 
certain that the roll of registered practitioners is up-to-date and to 
defray the patent related costs of operating the Office of Enrollment 
and Discipline (OED). The PPAC noted that the proposed annual active 
practitioner fee attracted numerous comments. In the report, the PPAC 
requested further information from the USPTO about how the anticipated 
fee collections will offset the cost of operations of the OED and to 
what extent. The PPAC agreed that the annual active practitioner fee 
would better align the costs of OED services with those who receive the 
benefits. The PPAC believes that the OED fees would not create an 
unreasonable burden. In response to the report, the USPTO has made 
changes to the annual active practitioner fee.
    In particular, some of the comments received suggested that 
offering a paper option would make the structure of the fee overly 
complicated and administratively burdensome. In view of these comments, 
the paper filing option has been removed. Only electronic payments will 
be accepted. Additionally, several of the comments received in the 
course of the PPAC hearing suggested that requiring practitioners to 
either retake the registration examination or make a showing that they 
continue to possess the qualifications necessary to practice before the 
Office after they had been voluntarily inactive for two years, and to 
retake the examination after they had been inactive for five years, 
would be overly burdensome. Accordingly, the proposal has been changed; 
practitioners who are endorsed on the roster as voluntarily inactive 
will be liable for a fee of $70 per year to cover OED's administrative 
costs in maintaining the register and updating their information, but 
will neither be required to make a showing of their qualifications, nor 
be required to take the examination. Practitioners may apply to become 
active by paying the reinstatement fee and making their request to the 
OED Director. In regards to the Continuing Legal Education (CLE) 
discount, the PPAC supports the USPTO's goal to improve the services 
provided by the patent bar to the public. The PPAC has requested more 
information supporting the effectiveness of such a CLE incentive. Part 
V: Individual Fee Rationale offers this additional justification for 
the CLE discount.
    In summary, the USPTO appreciates the overall support for an 
increase in patent fees to meet sufficient funding levels provided by 
the PPAC and its stakeholders. After careful consideration of the 
comments, concerns, and suggestions provided in the report, and keeping 
in mind the goals of this proposed rule, the USPTO elected to make 
changes to two of the fee proposals initially presented to the PPAC. 
The fee structure proposed herein will ultimately allow the USPTO to 
maintain patent operations and continue on its path towards achieving 
the goals and objectives laid out in the Strategic Plan. The Office 
looks forward to receiving additional comments on this revised proposal 
during the public comment period.

C. Summary of Rationale and Purpose of the Proposed Rule

    The Office estimates that the proposed patent fee schedule will 
produce aggregate revenues to recover the aggregate costs of patent 
operations, including the implementation of its strategic and mission 
support goals, objectives, and initiatives in FY 2021 and beyond. Using 
the Strategic Plan as a foundation, the proposed rule will provide 
sufficient aggregate revenue to recover the aggregate cost of patent 
operations, including optimizing patent application pendency, issuing 
highly reliable patents, fostering innovation through business 
effectiveness, enhancing the operations of the PTAB, optimizing the 
speed, quality, and cost-effectiveness of information technology

[[Page 37406]]

delivery to achieve business value, and ensuring financial 
sustainability to facilitate effective operations.

IV. Fee Setting Methodology

    The Office carried out three primary steps in developing the 
proposed fees:
    Step 1: Determine the prospective aggregate costs of patent 
operations over the five-year period, including the cost of 
implementing new initiatives to achieve strategic goals and objectives.
    Step 2: Calculate the prospective revenue streams derived from the 
individual fee amounts (from Step 3) that will collectively recover the 
prospective aggregate cost over the five-year period.
    Step 3: Set or adjust individual fee amounts to collectively 
(through executing Step 2) recover projected aggregate cost over the 
five-year period, while furthering key policy factors.
    These three steps are iterative and interrelated. The following is 
a description of how the USPTO carries out these three steps.

Step 1: Determine Prospective Aggregate Costs

    Calculating prospective aggregate costs is accomplished primarily 
through the annual USPTO budget formulation process. The budget is a 
five-year plan (that the Office prepares annually) for carrying out 
base programs and new initiatives to implement the USPTO's strategic 
goals and objectives.
    The first activity performed to determine prospective aggregate 
cost is to project the level of demand for patent products and 
services. Demand for products and services depends on many factors that 
are subject to change, including domestic and global economic activity. 
The USPTO also takes into account overseas patenting activities, 
policies and legislation, and known process efficiencies. Because 
filing, search, and examination costs are the largest share of the 
total patent operating cost, a primary production workload driver is 
the number of patent application filings (i.e., incoming work to the 
Office). The Office looks at indicators such as the expected growth in 
Real Gross Domestic Product (RGDP), the leading indicator of incoming 
patent applications, to estimate prospective workload. RGDP is reported 
by the Bureau of Economic Analysis (www.bea.gov) and is forecasted each 
February by the OMB (www.omb.gov) in the Economic and Budget Analyses 
section of the Analytical Perspectives and twice annually by the 
Congressional Budget Office (CBO) (www.cbo.gov) in the Budget and 
Economic Outlook. A description of the Office's methodology for using 
RGDP can be found in Appendix I--Multi-year Planning by Business Line 
and Cost Containment of the FY 2020 Budget. The expected change in the 
required production workload must then be compared to the current 
examination production capacity to determine any required staffing and 
operating cost (e.g., salaries, workload processing contracts, and 
publication) adjustments. The Office uses a patent pendency model that 
estimates patent production output based on actual historical data and 
input assumptions, such as incoming patent applications and overtime 
hours. An overview of the model, including a description of inputs, 
outputs, key data relationships, and a simulation tool is available at 
https://www.uspto.gov/patents/stats/patent_pend_model.jsp.
    The second activity is to calculate the aggregate costs to execute 
the requirements. In developing its budget, the Office first looks at 
the cost of status quo operations (the base requirements). The base 
requirements are adjusted for anticipated pay increases and 
inflationary increases for the budget year and four out years (detailed 
calculations and assumptions for this adjustment can be found in the FY 
2020 Budget). The Office then estimates the prospective cost for 
expected changes in production workload and new initiatives over the 
same period of time (refer to ``Program Changes by Sub-Program'' 
sections of the FY 2020 Budget). The Office reduces cost estimates for 
completed initiatives and known cost savings expected over the same 
five-year horizon. Finally, the Office estimates its three month target 
operating reserve level based on this aggregate cost calculation for 
the year to determine if operating reserve adjustments are necessary.
    The FY 2020 Budget identifies that, during FY 2020, patent 
operations will cost $3.170 billion (see Appendix II of the FY 2020 
Budget), including $2.153 billion for patent examining; $93 million for 
patent trial and appeals; $161 million for patent information 
resources; $28 million for activities related to IP protection, policy, 
and enforcement; and $734 million for general support costs necessary 
for patent operations (e.g., the patent share of rent, utilities, 
legal, financial, human resources, other administrative services, and 
Office-wide IT infrastructure and IT support costs). In addition, the 
Office transfers $2 million to the DOC Inspector General for audit 
support. The Office also estimates collecting $37 million in other 
income associated with recoveries and reimbursable agreements (offsets 
to spending).
    A detailed description of the operating requirements and related 
aggregate cost is located in the FY 2020 Budget. Table 2 below provides 
key underlying production workload projections and assumptions from the 
FY 2020 Budget used to calculate aggregate cost. Table 3 (see Step 2) 
presents the total budgetary requirements (prospective aggregate cost) 
for FY 2020 through FY 2024 and the estimated collections and operating 
reserve balances that would result from the proposed adjustments 
contained in this NPRM. Table 3 does not reflect the 2019 1.9 percent 
pay raise as authorized in the Consolidated Appropriation Act, 2019, 
Public Law 116-6, 133 Stat. 13, which was passed after the cost 
estimates for the FY 2020 Budget were finalized. This new requirement 
will increase the patent budgetary requirements by approximately $31-
$44 million per year. This will result in a cumulative impact of $245 
million over the budget horizon. As the Budget notes, these projections 
are based on point-in-time estimates and assumptions that are subject 
to change. There is considerable uncertainty in out-year budgetary 
requirements. A number of risks could materialize over the next several 
years (e.g., associated with recompetitions of major contracts, lease 
renewals, changing assumptions about Presidentially authorized or 
congressionally mandated employee pay raises, etc.) that could increase 
the USPTO's budgetary requirements in the short- to medium-term. These 
estimates are refreshed annually in the production of the USPTO's 
Budget.

                                 Table 2--Patent Production Workload Projections
                                                [FY 2020-FY 2024]
----------------------------------------------------------------------------------------------------------------
   Utility, plant, and reissue
              (UPR)                   FY 2020         FY 2021         FY 2022         FY 2023         FY 2024
----------------------------------------------------------------------------------------------------------------
Applications *..................         611,158         612,614         621,450         629,204         636,625
Application Growth Rate.........            0.2%            0.2%            1.4%            1.2%            1.2%

[[Page 37407]]

 
Production Units................         607,252         597,025         612,487         624,005         625,527
Unexamined Patent Application            498,554         503,975         502,669         497,497         489,448
 Backlog........................
Examination Capacity **.........           8,313           8,686           9,046           9,174           9,297
Performance Measures (UPR):
    Avg. First Action Pendency              14.7            14.7            14.5            14.3            14.0
     (Months)...................
    Avg. Total Pendency (Months)            22.8            22.8            22.9            22.7            22.4
----------------------------------------------------------------------------------------------------------------
* In this table, the patent application filing data includes requests for continued examination (RCEs).
** In this table, Examination Capacity is the UPR Examiners On-Board at End-of-Year, as described in the FY 2020
  Budget.

Step 2: Calculate Prospective Aggregate Revenue

    As described above in Step 1, the USPTO's FY 2020 requirements in 
the FY 2020 Budget include the aggregate prospective cost of planned 
production, anticipated new initiatives, and a contribution to the 
patent operating reserve required for the Office to maintain patent 
operations and realize its strategic goals and objectives for the next 
five years. The aggregate prospective cost becomes the target aggregate 
revenue level that the new fee schedule must generate in a given year 
and over the five-year planning horizon. To calculate the aggregate 
revenue estimates, the Office first analyzes relevant factors and 
indicators to calculate or determine prospective fee workloads (e.g., 
number of applications and requests for services and products), growth 
in those workloads, and resulting fee workload volumes (quantities) for 
the five-year planning horizon. Economic activity is an important 
consideration when developing workload and revenue forecasts for the 
USPTO's products and services because economic conditions affect 
patenting activity.
    The Office considers economic activity when developing fee 
workloads and aggregate revenue forecasts for its products and 
services. Major economic indicators include the overall condition of 
the U.S. and global economies, spending on research and development 
activities, and investments that lead to the commercialization of new 
products and services. The most relevant economic indicator that the 
Office uses is the RGDP, which is the broadest measure of economic 
activity and is anticipated to grow approximately two percent for FY 
2020 based on CBO estimates.
    These indicators correlate with patent application filings, which 
are a key driver of patent fees. Economic indicators also provide 
insight into market conditions and the management of IP portfolios, 
which influence application processing requests and post-issuance 
decisions to maintain patent protection. When developing fee workload 
forecasts, the Office considers other influential factors including 
overseas activity, policies and legislation, court decisions, process 
efficiencies, and anticipated applicant behavior.
    Anticipated applicant behavior in response to fee changes is 
measured using an economic principle known as elasticity, which for the 
purpose of this proposal measures how sensitive applicants and 
patentees are to changes in fee amounts. The higher the elasticity 
measure (in absolute value), the greater the applicant response to the 
relevant fee change. If elasticity is low enough (i.e., demand is 
inelastic or the elasticity measure is less than one in absolute 
value), a fee increase will lead to only a relatively small decrease in 
patent activities, and overall revenues will still increase. 
Conversely, if elasticity is high enough (i.e., demand is elastic or 
the elasticity measure is greater than one in absolute value), a fee 
increase will lead to a relatively large decrease in patenting 
activities such that overall revenues will decrease. When developing 
fee forecasts, the Office accounts for how applicant behavior will 
change at different fee amounts projected for the various patent 
services. The Office analyzed elasticity for nine broad patent fee 
categories: Filing/search/examination fees, excess independent claims 
fees, excess total claims fees, application size (excess page) fees, 
issue fees, request for continued examination (RCE) fees, appeal fees, 
AIA trial fees, and maintenance fees, including distinctions by entity 
size where applicable. Additional detail about the Office's elasticity 
estimates is available in ``USPTO Setting and Adjusting Patent Fees 
during Fiscal Year 2020--Description of Elasticity Estimates,'' 
available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Aggregate Revenue Estimate Ranges
    When estimating aggregate revenue, the USPTO prepares a high and a 
low range of fee collection estimates. This range accounts for the 
inherent uncertainty, sensitivity, and volatility of predicting 
fluctuations in the economy and market environment; interpreting policy 
and process efficiencies; and developing fee workload and fee 
collection estimates from assumptions. The Office estimates a range for 
all its major workload categories including application filings, 
extensions of time, PTAB fees, maintenance fees, patent cooperation 
treaty (PCT) filings, and trademark filings. Additional detail about 
the Office's aggregate revenue, including projected workloads by fee, 
is available in ``USPTO Setting and Adjusting Patent Fees during Fiscal 
Year 2020--Aggregate Revenue Estimates Alternative 1: Proposed 
Alternative'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Summary
    Patent fees are collected for patent-related services and products 
at different points in time within the patent application examination 
process and over the life of the pending patent application and granted 
patent. Approximately half of all patent fee collections are from 
maintenance fees, which subsidize the cost of filing, search, and 
examination activities. Changes in application filing levels 
immediately impact current year fee collections, because fewer patent 
application filings means the Office collects fewer fees to devote to 
production-related costs. The resulting reduction in production 
activities also creates an out-year revenue impact because less 
production output in one year results in fewer issue and maintenance 
fee payments in future years.
    The USPTO's five-year estimated aggregate patent fee revenue (see 
Table 3) is based on the number of patent applications it expects to 
receive for a

[[Page 37408]]

given fiscal year, work it expects to process in a given fiscal year 
(an indicator of future patent issue fee workload), expected 
examination and process requests for the fiscal year, and the expected 
number of post-issuance decisions to maintain patent protection over 
that same fiscal year. Within the iterative process for estimating 
aggregate revenue, the Office adjusts individual fee rates up or down 
based on cost and policy decisions (see Step 3: Set Specific Fee 
Amounts), estimates the effective dates of new fee rates, and then 
multiplies the resulting fee rates by appropriate workload volumes to 
calculate a revenue estimate for each fee. To calculate the aggregate 
revenue, the Office assumes that all proposed fee rates will become 
effective on January 1, 2021 except for the new Annual Active Patent 
Practitioner Fees, which are assumed to become effective January 1, 
2022. Using these figures, the USPTO sums the individual fee revenue 
estimates, and the result is a total aggregate revenue estimate for a 
given year (see Table 3). The financial outlook in Table 3 is different 
from the numbers contained in the FY 2020 Budget. At the time the FY 
2020 Budget was prepared, the proposed fee adjustments were not 
finalized. Therefore, the revenue estimates in this NPRM and associated 
documents do not exactly match what was assumed in the FY 2020 Budget. 
Forecasted revenue for FY 2021 through FY 2024 is $2 million to $4 
million lower per year, for a total impact of $12 million lower than 
the estimates reported in the FY 2020 Budget.

                                        Table 3--Patent Financial Outlook
                                                [FY 2020-FY 2024]
----------------------------------------------------------------------------------------------------------------
                                                                Dollars in millions
                                 -------------------------------------------------------------------------------
                                      FY 2020         FY 2021         FY 2022         FY 2023         FY 2024
----------------------------------------------------------------------------------------------------------------
Projected Fee Collections.......           3,095           3,358           3,687           3,690           3,836
Other Income....................              37              37              37              37              37
Total Projected Fee Collections            3,132           3,395           3,724           3,727           3,873
 and Other Income...............
Budgetary Requirements..........           3,172           3,326           3,434           3,524           3,626
Funding to (+) and from (-)                 (40)              69             290             203             247
 Operating Reserve..............
EOY Operating Reserve Balance...             203             272             562             765           1,012
Over/(Under) $300M Minimum Level            (97)            (28)             262             465             712
Over/(Under) Optimal Level......           (589)           (559)           (296)           (116)             105
----------------------------------------------------------------------------------------------------------------

Step 3: Set Specific Fee Amounts

    Once the Office finalizes the annual requirements and aggregate 
prospective costs through the budget formulation process, the Office 
determines specific fee amounts that, together, will derive the 
aggregate revenue required to recover the estimated aggregate 
prospective costs during the five year budget horizon. Calculating 
individual fees is an iterative process that encompasses many variables 
and policy factors. These are discussed in greater detail in section V. 
Individual Fee Rationale.
    One of the variables the USPTO considers to inform fee setting is 
the historical cost estimates associated with individual fees. The 
Office's ABI provides historical cost for an organization's activities 
and outputs by individual fee using the activity-based costing (ABC) 
methodology. ABC is commonly used for fee setting throughout the 
Federal Government. Additional information about the methodology, 
including the cost components related to respective fees, is available 
in the document entitled ``USPTO Setting and Adjusting Patent Fees 
during Fiscal Year 2020--Activity-Based Information and Patent Fee Unit 
Expense Methodology'' available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The USPTO provides 
data for FY 2016-FY 2018 because the Office finds that reviewing the 
trend of ABI historical cost information is the most useful way to 
inform fee setting. The underlying ABI data are available for public 
inspection at the USPTO upon request.
    When the Office implements a new process or service, historical ABI 
data is typically not available. However, the Office will use the 
historical cost of a similar process or procedure as a starting point 
to estimate the full cost of a new activity or service.

V. Individual Fee Rationale

    The Office projects that the aggregate revenue generated from the 
proposed patent fees will recover the prospective aggregate cost of its 
patent operations including contributions to the operating reserve per 
the strategic initiative to ensure financial sustainability to 
facilitate effective USPTO operations. As detailed previously, the PPAC 
supports this approach, stating that ``The PPAC supports the USPTO in 
seeking the revenues it needs to increase the reliability and certainty 
of patent rights, provide timely examination, improve and secure its IT 
infrastructure and adequately fund its operating reserve'' PPAC, at 
[2].
    It is important to recognize that each individual proposed fee is 
not necessarily set equal to the estimated cost of performing the 
activities related to the fee. Instead, as described in Part III: 
Rulemaking Goals and Strategies, some of the proposed fees are set at, 
above, or below their unit costs to balance several key fee setting 
policy factors: Promoting innovation strategies, aligning fees with the 
full cost of products and services, facilitating effective 
administration of the patent system, and offering patent processing 
options to applicants. For example, many of the initial filing fees are 
intentionally set below unit cost in order to promote innovation 
strategies by removing barriers to entry for innovators. To balance the 
aggregate revenue loss of fees set below cost, other fees must be set 
above cost in areas where it is less likely to reduce inventorship 
(e.g., maintenance).
    For some fees proposed in this NPRM, such as excess claims fees, 
the USPTO does not typically maintain individual historical cost data 
for the service provided. Instead, the Office considers the policy 
factors described in Part III to inform fee setting. For example, by 
setting fees at particular levels using the facilitating effective 
administration of the patent system policy factor, the USPTO aims to: 
(1) Foster an environment where examiners can provide and applicants 
can receive prompt, quality interim and final decisions; (2) encourage 
the prompt conclusion of prosecuting an application, resulting in 
pendency reduction and the faster dissemination of patented 
information; and (3) help

[[Page 37409]]

recover costs for activities that strain the patent system.
    The rationale for the proposed changes are grouped into three major 
categories, discussed below: (A) Across the board adjustment to patent 
fees; (B) targeted fees; and (C) discontinued fees. The purpose of the 
categorization is to identify large fee changes for the reader and 
provide an individual fee rationale for such changes. The 
categorization is based on changes in large entity fee amounts because 
percentage changes for small and micro entity fees that are in place 
today would be the same as the percentage change for the large entity, 
and the dollar change would be half or one quarter of the large entity 
change.
    The Table of Patent Fees includes the current and proposed fees for 
large, small, and micro entities as well as unit costs for the last 
three fiscal years. Part VI: Discussion of Specific Rules contains a 
complete listing of fees that are set or adjusted in the proposed 
patent fee schedule.

A. Across the Board Adjustment to Patent Fees

    In order to both keep USPTO on a stable financial track and allow 
for the advancement of policies and practices that enhance the 
country's innovation ecosystem, the Office proposes to adjust all 
patent fees not covered by the targeted adjustments as discussed in 
section B, or proposed to be discontinued as discussed in section C, by 
approximately five percent. Given that nearly three years will have 
passed between the implementation date of the last fee adjustments and 
when the proposed fees are expected to take effect, a five percent 
increase is similar to fees increasing by 1.6 percent annually to help 
USPTO keep up with inflationary cost increases. Proposed fees are 
rounded to the nearest five dollars by applying standard arithmetic 
rules. For fees that have small and micro entity fee reductions, the 
large entity fee is rounded up or down to the nearest 20 dollars by 
applying standard arithmetic rules. The resulting proposed fee amounts 
are more convenient to patent users and permit the Office to set small 
and micro entity fees at whole dollar amounts when applying the 
applicable fee reduction. Therefore, some smaller fees will not be 
changing, since a five percent increase would round down to the current 
fee, while other fees would change by slightly more or less than five 
percent, depending on rounding. The proposed fee adjustments in this 
category are listed in the Table of Patent Fees.
    The five percent across the board adjustment strikes an appropriate 
balance between projected aggregate revenue and aggregate cost based on 
the assumptions used to develop the point-in-time estimates that 
support this NPRM. As was discussed in Part IV: Fee Setting 
Methodology, these assumptions are likely to change as new information 
becomes available. Refreshed estimates for the FY 2021 Budget will be 
available to the public before publication of the final rule. If 
changes to the assumptions underlying the USPTO's cost and revenue 
estimates result in significant changes in the FY 2021 Budget 
projections, the Office will refine the size of the across the board 
adjustment, either upward or downward, such that fees are set a level 
that secures aggregate cost recovery while ensuring a reasonable pace 
for operating reserve growth.

B. Targeted Fees

    For those fees targeted in this proposal, the individual fee 
rationale discussion is divided into two categories: (1) Adjustments to 
existing fees; and (2) new fees.
    Adjustments to existing fees are further divided into subcategories 
according to the function of the fees, including: (a) Maintenance fee 
surcharge; (b) request for the expedited examination of a design 
application fee; (c) utility issue and maintenance fees; and (d) AIA 
trial fees. New fees are further divided into subcategories according 
to the function of the fees, including: (a) Non-DOCX filing surcharge 
fee; (b) Pro Hac Vice; and (c) Annual Active Patent Practitioner fees.
    As discussed above, for purposes of comparing amounts in the 
individual fee rationale discussion, the Office has included the 
current fees as the baseline to calculate the dollar change and percent 
change for proposed fees.
(1) Adjustments to Existing Fees
    The following fees are proposed to be increased by an amount other 
than the five percent across the board increase proposed for most 
patent-related fees. These targeted adjustments are made for a variety 
of strategic reasons. A discussion of the rationale for each fee 
follows.
(a) Maintenance Fee Surcharge

                              Table 4--Maintenance Fee Surcharge Fees--Fee Changes
----------------------------------------------------------------------------------------------------------------
                               Current fees    Proposed fees   Dollar change  Percent change
       Fee description         Large (small)   Large (small)   Large (small)   Large (small)   FY 2018 unit cost
                              [micro] entity  [micro] entity  [micro] entity  [micro] entity
----------------------------------------------------------------------------------------------------------------
Surcharge--3.5 year--Late               $160            $500           +$340           +213%  N/A
 payment within 6 months.              ($80)          ($250)         (+$170)         (+213%)
                                       [$40]          [$125]          [+$85]         [+213%]
Surcharge--7.5 year--Late               $160            $500           +$340           +213%  N/A
 payment within 6 months.              ($80)          ($250)         (+$170)         (+213%)
                                       [$40]          [$125]          [+$85]         [+213%]
Surcharge--11.5 year--Late              $160            $500           +$340           +213%  N/A
 payment within 6 months.              ($80)          ($250)         (+$170)         (+213%)
                                       [$40]          [$125]          [+$85]         [+213%]
----------------------------------------------------------------------------------------------------------------

    The Office proposes to increase the surcharge for a late 
maintenance fee payment within six months following the due date. The 
proposed fee of $500 for large entities has been reduced from the 
$1,000 presented in the September 2018 PPAC hearing. It is the 
responsibility of the patentee to ensure maintenance fees are paid 
timely to prevent expiration of a patent. If a maintenance fee is not 
paid within the first six months in the year in which it can be paid, a 
Maintenance Fee Reminder notice is sent to the fee address or 
correspondence address on record. Failure to receive the notice does 
not shift the burden of monitoring the time for paying a maintenance 
fee

[[Page 37410]]

from the patentee to the USPTO. At this point, a surcharge is required 
in addition to the maintenance fee in order to maintain a patent. If 
the maintenance fee and any applicable surcharge are not paid by the 
end of the 4th, 8th, or 12th years after the date of issue, the patent 
rights lapse and a Notice of Patent Expiration is sent to the fee 
address or correspondence address on record. If a fee address has not 
been established, the notices are sent to the correspondence address. 
Over 95 percent of patent renewals are paid before the due date, but 
some patents are renewed during the six month period following the due 
date.
    While still below what other IP offices charge, increasing this 
surcharge brings the USPTO more in line with its global counterparts. 
The goal of increasing this surcharge is to encourage patent holders to 
renew prior to the due date. Encouraging on-time renewals will benefit 
the public by increasing the understanding of which patents remain in 
force and which patent rights have been allowed to lapse.
    The USPTO provides tools to help patent owners monitor due dates, 
such as the Patent Maintenance Fees Storefront, https://fees.uspto.gov/MaintenanceFees, where anyone can see the payment windows for all 
patents. Additionally, customers with USPTO.gov accounts (i.e., 
MyUSPTO) can create a ``patent docket'' and add patent or application 
numbers in order to keep track of due dates. Also, the weekly Official 
Gazette notices list the range of patents for which maintenance fees 
are now payable. In addition, as previously discussed in section III, 
with the availability of free calendar apps, individuals can easily set 
up their own reminders of when maintenance fee payments are eligible 
for renewal (3, 7, 11 years from issue) and when they are due (3.5, 
7.5, 11.5 years from issue).
(b) Request for Expedited Examination of a Design Application Fee

                     Table 5--Request for Expedited Examination of a Design Application Fee
----------------------------------------------------------------------------------------------------------------
                               Current fees    Proposed fees   Dollar change  Percent change
                              Large  (small)  Large  (small)  Large  (small)       Large
       Fee description            [micro]         [micro]         [micro]         (small)      FY 2018 unit cost
                                  entity          entity          entity      [micro] entity
----------------------------------------------------------------------------------------------------------------
Request for expedited                   $900          $2,000         +$1,100           +122%  $125
 examination of a design              ($450)        ($1,000)         (+$550)         (+122%)
 application.                         [$225]          [$500]         [+$225]         [+122%]
----------------------------------------------------------------------------------------------------------------

    The Office proposes to increase the fee to request expedited 
examination of a design application. This fee was introduced at a fee 
rate of $900 in November 2000. The Office is proposing to increase the 
fee for the first time since its inception, to a rate of $2,000.
    Expedited examination is available to all design applicants who 
first conduct a preliminary examination search and file a request for 
expedited treatment accompanied by a fee for the expedited treatment 
and handling (37 CFR 1.17(k)) in addition to the required filing, 
search, and examination fees. This cost-based expedited treatment 
fulfills a particular need by affording rapid design patent protection 
that may be especially important where marketplace conditions are such 
that new designs on articles are typically in vogue for limited periods 
of time. The applications are individually examined with priority, and 
the clerical processing is conducted and/or monitored by specially 
designated personnel to achieve expeditious processing through initial 
application processing and the Design Examining Group. For a patentable 
design application, the expedited treatment is a streamlined filing-to-
issuance procedure. This procedure further expedites design application 
processing by decreasing clerical processing time as well as the time 
spent routing the application between processing steps. Specially 
designated personnel are required to conduct and/or monitor the 
expedited clerical processing. Also, expedited design applications may 
be individually treated throughout the examination process where 
necessary for expedited treatment, whereas normally, the search phase 
of design application examination is conducted in groups.
    For the first few years following the introduction of this program, 
requests for expedited examination of a design application were less 
than one percent of total design filings. In recent years, requests 
have increased to over two percent of total filings. This increase in 
demand for this service has forced the Office to choose to cap the 
program (i.e., impose limits on the number of expedited examinations it 
will undertake in a given fiscal year), end the program, or increase 
the fee. Increasing this optional fee will allow the USPTO to better 
manage staffing to match demand for this service, while still keeping 
the service available as an option for those who may benefit from this 
program.
(c) Utility Patent Issue and Maintenance Fees

                               Table 6--Utility Patent Issue and Maintenance Fees
----------------------------------------------------------------------------------------------------------------
                               Current fees    Proposed fees   Dollar change  Percent change
                              Large  (small)  Large  (small)  Large  (small)       Large
       Fee description            [micro]         [micro]         [micro]         (small)      FY 2018 unit cost
                                  entity          entity          entity      [micro] entity
----------------------------------------------------------------------------------------------------------------
Utility Issue Fee...........          $1,000          $1,200           +$200            +20%  $325
                                      ($500)          ($600)         (+$100)          (+20%)
                                      [$250]          [$300]          [+$50]          [+20%]
Reissue Issue Fee...........          $1,000          $1,200           +$200            +20%  $325
                                      ($500)          ($600)         (+$100)          (+20%)
                                      [$250]          [$300]          [+$50]          [+20%]

[[Page 37411]]

 
For Maintaining an Original           $1,600          $2,000           +$400            +25%  n/a
 or Any Reissue Patent, Due           ($800)        ($1,000)          ($800)          (+25%)
 at 3.5 years.                        [$400]          [$500]          [$400]          [+25%]
For Maintaining an Original           $3,600          $3,760           +$160             +4%  n/a
 or Any Reissue Patent, Due         ($1,800)        ($1,880)           ($80)           (+4%)
 at 7.5 years.                        [$900]          [$940]           [$40]           [+4%]
For Maintaining an Original           $7,400          $7,700           +$300             +4%  n/a
 or Any Reissue Patent, Due         ($3,700)        ($3,850)          ($150)           (+4%)
 at 11.5 years.                      [$1,850        [$1,925]           [$75]           [+4%]
----------------------------------------------------------------------------------------------------------------

    In the September 2018 PPAC public hearing, the Office proposed 
adjusting the issue fees by 20 percent and first stage maintenance fees 
by 25 percent. These adjustments will mark the first time maintenance 
fee rates have changed since 2013. Based on the support in the PPAC 
report, the Office determined to move forward with the proposal to 
increase the issue fee and maintenance fees as initially proposed. The 
total package of fees proposed in this NPRM does not significantly 
impact the balance between front-end and back-end fees. The USPTO 
continues to set front-end fees below the cost to the Office to provide 
those services, in order to encourage innovation. Under this proposal, 
front-end fees for a utility patent with one RCE and lifetime 
maintenance will continue to be about 18 percent of the total fees paid 
over the life of a patent (see Table 7). However, as certain technology 
lifecycles grow shorter, it is important that the USPTO not rely too 
heavily on fees paid late in the life of a patent. Therefore, the 
Office proposes to slightly rebalance the back-end fees to recover the 
initial search and examination costs earlier in the life of the patent.

                                                       Table 7--Front-End and Back-End Fee Balance
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Current                                Proposed
                                                                           -----------------------------------------------------------------------------
                 Fee group                         Detailed fee title                                   Group's                                Group's
                                                                               Large      Percent of   percent of     Large      Percent of   percent of
                                                                             entity fee   total  (%)   total (%)    entity fee   total  (%)   total (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Front End Fees.............................  Filing.......................         $300            2           18         $320            2           18
                                             Search.......................         $660            4                      $700            4
 Examination                                 $760.........................            5                      $800            4  ...........
 1st RCE                                     $1,300.......................            8                    $1,360            8  ...........
Back End Fees..............................  Issue........................       $1,000            6           16       $1,200            7           18
                                             1st Stage Maintenance........       $1,600           10  ...........       $2,000           11
                                             2nd Stage Maintenance........       $3,600           22           66       $3,760           21           64
                                             3rd Stage Maintenance........       $7,400           45                    $7,700           43
                                                                           -----------------------------------------------------------------------------
    Total..................................  .............................      $16,620          100          100      $17,840          100          100
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The issue fee for utility and reissue patents is proposed to be 
increased from $1,000 to $1,200, and the first stage maintenance fee is 
proposed to be increased from $1,600 to $2,000. As a result, the 
combined fees paid for issue and first stage maintenance would increase 
from 16 percent to 18 percent of the total fees paid for a utility 
patent with one RCE and lifetime maintenance. However, second and third 
stage maintenance fees would only increase by 4 percent--less than the 
across the board adjustment--with second stage increasing from $3,600 
to $3,760 and third stage increasing from $7,400 to $7,700.
    The Office determined elasticity estimates for the three 
maintenance payments for both large and small entities. For all point 
estimates and confidence intervals, maintenance fees were found to be 
inelastic, with the first stage being the least elastic of these fees. 
More detailed information on elasticity estimates can be found at 
https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting in the document entitled ``USPTO Setting and Adjusting 
Patent Fees during Fiscal Year 2020--Description of Elasticity 
Estimates''.
(d) AIA Trial Fees

                               Table 8--AIA Trial Fees--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent change
                                   Current fees    Proposed fees   Dollar change       Large
         Fee description          Large  (small)  Large  (small)  Large  (small)      (small)      FY 2018 unit
                                      [micro]         [micro]         [micro]         [micro]          cost
                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Inter Partes Review Request Fee-         $15,500         $19,500         +$4,000            +26%         $15,016
 Up to 20 Claims................

[[Page 37412]]

 
Inter Partes Review Post-                 15,000             n/a             n/a             n/a          24,490
 Institution Fee--Up to 15
 Claims *.......................
Inter Partes Review Post-                    n/a          18,750             n/a             n/a             n/a
 Institution Fee--Up to 20
 Claims *.......................
Inter Partes Review Request of               300             375             +75             +25             n/a
 Each Claim in Excess of 20.....
Inter Partes Post-Institution                600             n/a             n/a             n/a             n/a
 Request of Each Claim in Excess
 of 15 *........................
Inter Partes Post-Institution                n/a             750             n/a             n/a             n/a
 Request of Each Claim in Excess
 of 20 *........................
Post-Grant or Covered Business            16,000          20,000          +4,000             +25          21,465
 Method Review Request Fee--Up
 to 20 Claims...................
Post-Grant or Covered Business            22,000             n/a             n/a             n/a          29,842
 Method Review Post-Institution
 Fee--Up to 15 Claims *.........
Post-Grant or Covered Business               n/a          27,500             n/a             n/a             n/a
 Method Review Post-Institution
 Fee--Up to 20 Claims *.........
Post-Grant or Covered Business               375             475            +100             +27             n/a
 Method Review Request of Each
 Claim in Excess of 20..........
Post-Grant or Covered Business               825             n/a             n/a             n/a             n/a
 Method Review Post-Institution
 Request of Each Claim in Excess
 of 15 *........................
Post-Grant or Covered Business               n/a           1,050             n/a             n/a             n/a
 Method Review Post-Institution
 Request of Each Claim in Excess
 of 20 *........................
----------------------------------------------------------------------------------------------------------------
* The post-institutional threshold for paying claims fees will increase from 15 to 20.

    On April 24, 2018, the U.S. Supreme Court issued its decision in 
SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). As required by the 
decision, the PTAB will institute a trial as to all claims or none. 
Previously, the PTAB has instituted a trial on just some claims. This 
has increased the amount of time spent per case post-institution. The 
Office has also modified its pre-institution practice to take into 
account the impacts of the SAS decision. For example, prior to SAS, the 
PTAB did not generally address all arguments at institution. Post SAS, 
for purposes of deciding whether to institute trial on a petition, the 
Office's policy is to provide details to the parties to the extent 
practicable, including responding to arguments in a patent owner's 
preliminary response that were not the basis for the decision whether 
or not to institute. This has increased the amount of time spent per 
case pre-institution. These changes related to the SAS decision will 
increase the average cost to conduct each proceeding.
    Other implementations, such as providing automatic sur-replies and 
pre-hearing conferences, were made to help provide additional fairness 
and certainty to the parties and public while continuing the PTAB's 
practice of rendering high quality decisions within the statutory time 
limits applicable to AIA trial proceedings; however, these changes, 
too, have increased the average cost of conducting each proceeding.
    The Office proposes that the post-institutional threshold for 
paying excess claim fees will increase from 15 to 20 so as to match the 
PTAB's request threshold, reflecting the fact that, following the 
Supreme Court decision in SAS, PTAB is required to institute all claims 
or none. The Office notes that the fee increases proposed in the NPRM 
are based on estimates. At this time, best estimates indicate that the 
average expense attributable to the institution stage of inter partes 
reviews has increased more than 20 percent between the second quarter 
of FY 2018 (before the SAS decision) and the fourth quarter of FY 2018 
(following the SAS decision), and that the average expense attributable 
to the final decision stage of inter partes reviews has also increased 
more than 20 percent during the same period. Also, note that the FY 
2018 unit costs shown in Table 8 are annual costs, and the PTAB was 
only operating under the SAS decision for part of the year. When the 
final rule is prepared, USPTO will have more data on how the SAS 
decision has impacted the costs of AIA trials, and the fee rates in the 
final rule may differ from what is proposed here, in response to the 
updated information. Additionally, the fee increases the Office is 
considering are not expected to be implemented until 2021, and the new 
fees are expected to be in place for several years beyond that; as 
such, increases of greater than 20 percent are necessary to account for 
cost increases already experienced as well as future inflationary cost 
growth. This proposed rulemaking will help the PTAB continue to 
maintain the appropriate level of judicial and administrative resources 
to continue to provide high quality and timely decisions for AIA 
trials.
(2) New Fees
(a) Non-DOCX Filing Surcharge Fee

[[Page 37413]]



                        Table 9--Non-DOCX Filing Surcharge Fee--Fee Changes and Unit Cost
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent change   FY 2018  unit
                                 Current fees      Proposed fees   Dollar change       Large        cost  Large
       Fee description          Large  (small)    Large  (small)  Large  (small)      (small)         (small)
                                [micro]  entity       [micro]         [micro]         [micro]         [micro]
                                                      entity          entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Non-DOCX Filing Surcharge...  New...............            $400           +$400             n/a             n/a
                                                           (200)          (+200)           (n/a)
                                                           [100]          [+100]           [n/a]
----------------------------------------------------------------------------------------------------------------

    The Office proposes a new fee to be charged for utility non-
provisional applications filed under 35 U.S.C. 111 submitted in a 
format other than DOCX (structured text). This surcharge will apply to 
filings that are submitted in an electronic document, such as a PDF, 
that is not saved in the DOCX format. It will also apply to filings 
that are submitted non-electronically, in addition to the existing 
paper filing surcharge. The surcharge is proposed to be introduced for 
specifications, claims, and abstracts. The submission in DOCX format 
will facilitate improvements in the efficiency of patent operations.
    Using EFS-Web, anyone with a Web-enabled computer can file patent 
applications and documents without downloading special software or 
changing document preparation tools and processes. Registering as an 
EFS-Web eFiler allows enhanced filing, follow-on processing, saved 
submissions, and more. EFS-Web registered eFilers have been able to 
file specification, abstract, and claims in DOCX for utility non-
provisional filings since August 2017.
    Launched in 2015, the eCommerce Modernization (eMod) Project aims 
to improve the electronic application process for patent applicants by 
modernizing the USPTO's filing and viewing systems. Recent improvements 
include implementing structured text functionalities. Structured text 
allows applicants to more easily submit their documents in text-based 
documents, rather than having to create PDF documents. This streamlines 
the application and publication processes for both the applicants and 
examiners. The Office tested the capabilities of structured text within 
EFS-Web and PAIR with the eMod Text Pilot Program, which ran from 
August 2016 until September 2017. The pilot was successful and many 
improvements were made based on feedback from applicants, which 
included independent inventors, law firms, and corporations. Structured 
text features are now available to all EFS-Web registered and Private 
PAIR users, and include the ability for applicants to file structured 
text via EFS-Web, and access structured text submissions, structured 
text office actions, and XML downloads via Private PAIR. Additional 
information can be found in the associated Submit DOCX and Retrieve 
DOCX guides. For more information on filing in DOCX, please visit 
https://www.uspto.gov/patent/docx.
    To encourage the filing of more applications in structured text, a 
required fee surcharge is proposed for applications that do not include 
DOCX format. This will accelerate the adoption of DOCX to realize a 
variety of benefits. Both the USPTO and applicants will see increased 
efficiencies from encouraging DOCX filings. Based on a USPTO survey, 
over 80 percent of applicants author their patent applications in DOCX 
in the normal course of business. Filing in structured text allows 
applicants to submit their specifications, claims, and abstracts in 
text-based format, and eliminates the need to convert structured text 
into a PDF for filing. Applicants can access examiner Office actions in 
text-based format which makes it easy to copy and paste when drafting 
responses. The availability of structured text also improves 
accessibility for sight-impaired customers, who use screen reading 
technology.
    DOCX filing provides opportunities to increase efficiency in the 
Office. It enables development of software to provide automated initial 
reviews of applicant submissions to help reduce effort required by the 
Office. The automated reviews can tell applicants up-front if potential 
problems exist and allow them to make changes prior to or at the time 
of submission. This also improves validation based on content, such as 
claims validation for missing claim numbering or abstract validation 
for word count and paragraph count.
    Increased DOCX filing will also lead to higher data quality, by 
reducing system conversion errors. It provides a flexible format with 
no template constraints. This also improves data quality by supporting 
original formats for chemical formulas, mathematical equations, and 
tables. DOCX filing also improves document identification by automatic 
detection, allows for greater reuse of content, and provides improved 
searching for patent applications and submissions. The originally 
submitted structured text document is available within Private PAIR, 
allowing easy retrieval of original DOCX files after transfer of cases 
between users.
    Structured text usage also helps streamline the application process 
and provides benefits for the USPTO. The Office converts image-based 
filings (e.g., PDF documents) into text-based format for internal 
processing. Text-based filings will allow the Office to skip this time-
consuming and costly step. Optical character recognition of image-based 
filings costs the Office approximately $3.15 per new submission. 
Encouraging text-based filings has the potential to save the Office up 
to $1.6 million annually. If, in the future, the program were extended 
to additional application documents besides specifications, claims, and 
abstracts, the potential savings could reach as much as $9.0 million 
annually.
    Extensible Markup Language (XML) generated from DOCX files complies 
with the international World Intellectual Property Office (WIPO) 
Standard ST.96 from intake through display and use in examination 
tools. Receiving filings through structured text makes documents 
automatically available to examiners in almost real-time. DOCX filing 
also improves examination consistency by using automated tools to 
analyze text, increases the accuracy of examiner formalities reviews 
and tools (i.e. claims tree generators, document comparison), and 
improves results in automated pre-search and future analytics (i.e., 
section 112(b) and (f) evaluations) by using text supplied by 
applicants. DOCX submission contributes to the USPTO's plan to begin 
the automation of publication processes, which will lead to large cost 
reductions in production of patent artifacts (grants and pre grant 
publications), and contributes to the USPTO's plan to begin the 
automation of processes to assist in formalities reviews, 
classification, and routing

[[Page 37414]]

which leads to improved patent quality, reduced pendency and greater 
consistency.
(b) Pro Hac Vice Fees

                               Table 10--Pro Hac Vice--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                 Current fees      Proposed fees   Dollar change  Percent change
                             --------------------------------------------------------------------
       Fee description                            Large  (small)  Large  (small)  Large  (small)   FY 2018  unit
                                Large  (small)        [micro]         [micro]         [micro]          cost
                                [micro]  entity       entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Fee for non-registered        New...............            $250           +$250             n/a             n/a
 practitioners to appear
 before the Patent Trial and
 Appeal Board.
----------------------------------------------------------------------------------------------------------------

    The Office proposes to charge a fee to appear pro hac vice in an 
AIA trial proceeding. The proposed non-registered practitioner fee is 
for each proceeding that a non-registered practitioner requests 
admission to practice. If a non-registered practitioner requests 
admission to multiple AIA trial proceedings, multiple requests and fees 
would be required, one for each proceeding. Once a request is granted, 
the counsel is admitted for the entire duration of a proceeding, which 
may extend for several years, (e.g., when an inter partes review 
proceeds to final written decision, and, after appeal to the Federal 
Circuit, is remanded back to PTAB for further proceedings). By 
instituting the pro hac vice fee, the Office will be able to shift the 
cost of this service of processing these requests from the overall AIA 
trial fees to the requesting, non-USPTO registered counsel.
(c) Annual Active Patent Practitioner Fee

                         Table 11--OED and Patent Enrollment--Fee Changes and Unit Costs
----------------------------------------------------------------------------------------------------------------
                                 Current fees      Proposed fees   Dollar change  Percent change
                             --------------------------------------------------------------------
       Fee description                            Large  (small)  Large  (small)  Large  (small)   FY 2018  unit
                                Large  (small)        [micro]         [micro]         [micro]          cost
                                [micro]  entity       entity          entity          entity
----------------------------------------------------------------------------------------------------------------
Annual Active Patent          New...............            $340           +$340             n/a             n/a
 Practitioner Fee without
 certifying continuing legal
 education (CLE) completion.
Annual Active Patent          New...............            $240           +$240             n/a             n/a
 Practitioner Fee with
 certifying continuing legal
 education (CLE) completion.
Annual Voluntarily Inactive   New...............             $70            +$70             n/a             n/a
 Fee.
----------------------------------------------------------------------------------------------------------------

    The Office proposes to implement an annual active patent 
practitioner fee under 37 CFR 1.21 and 11.8.
    Currently, the costs of OED's disciplinary and other functions are 
paid by patent applicants and owners. The Office proposes these fees so 
that practitioners, who directly benefit from registration, should bear 
the costs associated with maintaining the integrity of their 
profession, including the costs of OED's register maintenance and 
disciplinary functions. This parallels the way many state bars operate 
where the services of maintaining the bar are often paid by the 
attorneys who are members of that bar. Accordingly, these fee 
collections are proposed to shift the costs of the services OED 
provides practitioners in administering the disciplinary system and 
register maintenance from patent applicants and owners to the 
practitioners.
    The intent of the proposed annual active patent practitioner fee is 
to offset the portion of costs of OED's disciplinary and register 
maintenance operations currently paid by patent applicants and owners. 
The fees would also serve to fund the Patent Pro Bono Program and the 
Law School Clinic Certification Program, which increase public access 
to competent legal representation in IP matters, help enhance the IP 
legal profession for its members, and serve to make the patent 
examination process more efficient by decreasing the number of pro se 
applicants. In addition, the fee would help to cover the costs of 
increased outreach efforts, including speaking engagements and 
providing additional training opportunities to help patent 
practitioners receive the CLE discount, as discussed below.
    The fee, as proposed, would not cover services provided to 
trademark practitioners and applicants, and therefore, the amount 
collected from patent practitioners would only be used to cover OED's 
patent-related functions. To determine the appropriate annual fee 
rates, the USPTO engaged in an analysis of OED's costs currently paid 
by patent applicants and owners, as well as the expected costs of 
implementing the annual fee. The calculation of the annual fee rates 
was based upon the annual OED budget after subtracting contributions 
from trademark operations and contributions from enrollment fee 
collections, and adding in the costs of implementing the fee and the 
costs of outreach programs. The calculation was also based on 
amortizing the IT costs of the implementation of the annual fee over 
the first three years the fee is collected. In determining the proper 
fee amount to offset these costs, OED estimated its annual fee 
collections based on the projected number of registered practitioners 
who will pay each fee (or be removed from the register) during the year 
the annual fee is first collected. The estimated collections are based 
on the current number of registered practitioners and an estimation of 
how many practitioners are expected to be added to the register between 
now and when the fee is implemented.
    Furthermore, increasing the predictability and reliability of 
patents

[[Page 37415]]

is critical to incentivizing innovation. CLE serves to enhance 
practitioners' legal skills. Ideally, when practitioners are well-
trained and well-educated in patent law and practice, higher quality 
applications are filed, prosecution is more efficient, and patent 
grants become stronger, more reliable, and more predictable. It is also 
critical that patent examiners be able to maintain the pace of their 
examination process while ensuring that patent quality is preserved. 
Accordingly, through the encouragement of practitioner CLE by offering 
a $100 annual fee discount as well as recognition on OED's public 
practitioner search page, the patent system should benefit greatly.
    The USPTO intends to coordinate the delivery of CLE programs, 
assess whether third party CLE programs are adequate, and make the 
completion of CLE--whether offered by the USPTO or third parties--as 
convenient as possible for practitioners to complete, while ensuring 
that practitioners receive the training necessary to stay up to date 
with current ethics and patent law and practice.
Annual Active Patent Practitioner Fee
    Each year, registered practitioners, as well as individuals granted 
limited recognition under 37 CFR 11.9(b), will be, on or before a date 
to be set by the OED Director, required to pay to the OED Director an 
annual active patent practitioner fee. Adequate notice will be 
published and sent to practitioners in advance of the due date for 
payment of the fee. Payment will be for the calendar year in which the 
annual active patent practitioner fee is assessed. Practitioners will 
be required to pay the fee electronically through the USPTO's online 
payment system.
    Persons newly registered or granted limited recognition will not be 
liable for the annual active practitioner fee during the calendar year 
in which they are first registered or granted limited recognition. 
Practitioners who are endorsed on the register as administratively 
inactive or in emeritus status will not be liable for the annual active 
practitioner fee. Law school students participating in the USPTO Law 
School Clinic Certification Program who are granted limited recognition 
to practice before the Office in patent matters pursuant to 37 CFR 
11.16(d) will not be liable for the annual active practitioner fee. 
Practitioners who are endorsed on the register as voluntarily inactive 
will be liable for a fee of $70 per year to cover OED's administrative 
costs in maintaining the register and updating their information. 
Practitioners may apply to become active by paying the reinstatement 
fee and making their request to the OED Director, as set forth below.
Emeritus Status
    The USPTO proposes to create a new emeritus status for 
practitioners. The new emeritus status would allow active patent 
practitioners who have been registered for ten or more years to elect 
emeritus status, provided they are not under investigation at the time 
they elect such a status. Emeritus practitioners may not practice in 
patent matters, with the exception of pro bono matters through the 
USPTO Patent Pro Bono Program in which they do not receive 
compensation. A practitioner in emeritus status will not be required to 
pay the annual fee, but will remain under the disciplinary jurisdiction 
of the OED Director.
Continuing Legal Education (CLE)
    The USPTO proposes to provide a $100 discount for registered 
practitioners or persons granted limited recognition who certify 
completion of six hours of continuing legal education in the twenty 
four months preceding payment of the fee, including five hours of 
patent law and practice and one hour of ethics credit. Practitioners 
would be asked to certify whether or not they have completed the 
recommended number of CLE hours over the past twenty four months at the 
time they pay their annual active patent practitioner fee, as set forth 
below.
    The USPTO proposes that a registered practitioner or person granted 
limited recognition may earn up to two of the five hours of CLE in 
patent law and practice toward the CLE discount by participating in the 
USPTO Patent Pro Bono Program. For every three hours of pro bono 
service, a patent practitioner may earn one hour of CLE credit toward 
the annual active patent practitioner fee discount.
Late Payment
    Failure to pay the annual fee by the due date may result in the 
practitioner being charged a delinquency fee and being subject to 
administrative suspension. Specifically, if a registered practitioner, 
or person granted limited recognition pursuant to 37 CFR 11.9(b), fails 
to pay the annual fee by the due date, the OED Director will publish 
and send a notice to the practitioner advising him or her of the 
nonpayment, the consequence of being administratively suspended, and 
the requirements for reinstatement. The notice will request payment of 
the annual fee and a $50 delinquency fee, as set forth in 37 CFR 
1.21(a)(9)(i), within 60 days after the date of such notice.
    If a practitioner fails to comply with the notice within the time 
allowed, the OED Director will then publish and send to the 
practitioner a Rule to Show Cause why his or her registration should 
not be administratively suspended. The OED Director shall file a copy 
of the Rule to Show Cause with the USPTO Director. The practitioner 
will be given 30 days from the date of the Rule to Show Cause to file a 
response with the USPTO Director. The response should address any 
factual and legal bases why the practitioner should not be 
administratively suspended. Within ten days of receiving a copy of the 
response, the OED Director may file a reply with the USPTO Director. 
The USPTO Director will enter an order either dismissing the Rule to 
Show Cause or administratively suspending the registered practitioner. 
Administratively suspended practitioners will continue to be assessed 
the annual active patent practitioner fee during the period of their 
suspension.
Reinstatement
    The sections referring to reinstatement from administratively 
inactive status remain unchanged. The reinstatement sections relating 
to other statuses are set forth below.
Administratively Suspended
    Pursuant to 37 CFR 11.11(f)(1), any registered practitioner, or 
person granted limited recognition, who has been administratively 
suspended for less than five years may be reinstated on the register 
provided the practitioner is not a party to a disciplinary proceeding. 
To apply for reinstatement, the practitioner will need to submit an 
application form supplied by the OED, demonstrate compliance with the 
provisions of Sec.  11.7(a)(2)(i) and submit a declaration or affidavit 
attesting to the fact that the practitioner has read the most recent 
revisions of the patent laws and the rules of practice before the 
Office; and pay the fees set forth in Sec.  1.21(a)(9)(ii), and all 
outstanding fees as set forth in Sec.  1.21(a)(8), as well as any 
applicable delinquency fees as set forth in Sec.  1.21(a)(9)(i), for 
each year the practitioner is administratively suspended.
    Any administratively suspended registered practitioner or person 
granted limited recognition who fails to make these complete payments 
within five years of the effective date of the suspension for 
nonpayment shall be required to file a petition to the OED Director 
requesting reinstatement and providing objective evidence that they

[[Page 37416]]

continue to possess the necessary legal qualifications to render 
valuable service to patent applicants.
Voluntary Inactive
    Any registered practitioner whose name has been endorsed as 
voluntarily inactive may be reinstated on the register provided the 
practitioner: (i) Is not a party to a disciplinary proceeding; (ii) has 
applied for reinstatement on an application form supplied by the OED 
Director; (iii) has demonstrated compliance with the provisions of 
Sec.  11.7(a)(2)(i) and (iii); (iv) submits a declaration or affidavit 
attesting to the fact that the practitioner has read the most recent 
revisions of the patent laws and the rules of practice before the 
Office; (v) has paid the fees set forth in Sec.  1.21(a)(9)(ii); (vi) 
is not currently administratively suspended; and (vii) has paid all 
outstanding fees as set forth in Sec.  1.21(a)(7), as well as any 
applicable delinquency fees as set forth in 37 CFR 1.21(a)(9)(i), for 
each year the practitioner is voluntarily inactive. A practitioner will 
be subject to investigation and discipline for his or her conduct that 
occurred prior to, during, or after the period of his or her voluntary 
inactivation.
Emeritus
    Practitioners who have elected emeritus status may be restored to 
active status by filing a request for reinstatement with the OED 
Director and paying the $210 reinstatement fee and the $70 inactive fee 
for each year they were in emeritus status.

C. Discontinued Fees

    This section describes fees that are proposed to be discontinued. 
The purpose of this proposed action is to help streamline the patent 
fee schedule, while also focusing USPTO workforce efforts on producing 
products that benefit the general public, rather than producing outputs 
for individual customers. The Office does not capture historical cost 
information for these proposed discontinued fees.

                                                               Table 12--Discontinued Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Current fees                                 Dollar change
           Fee description              Large (small)  Proposed fees Large (small)   Large (small)     Percent change Large         FY 2018 unit cost
                                       [micro] entity         [micro] entity        [micro] entity     (small) [micro entity
--------------------------------------------------------------------------------------------------------------------------------------------------------
Copy of Patent Technology Monitoring              $50  Discontinue................            -$50  n/a.......................  n/a
 Team (PTMT) patent bibliographic
 extract and other DVD (optical disc)
 (currently at Sec.   1.19(j)).
Copy of U.S. patent custom data                  $100  Discontinue................           -$100  n/a.......................  n/a
 extracts (currently at Sec.
 1.19(k)).
Copy of selected technology reports,              $30  Discontinue................            -$30  n/a.......................  n/a
 miscellaneous technology areas
 (currently at Sec.   1.19(l)).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    In January 2018, to comply with Presidential Executive Order 13681, 
Improving the Security of Consumer Financial Transactions, select 
computer service fees were discontinued and the services made free. 
These proposed changes follow that trend. The above proposed service 
fees will be eliminated and the Office will instead provide these 
services, in a slightly modified form (i.e., electronic), for free.
    The first fee proposed for discontinuation is the current 37 CFR 
1.19(j) fee for a copy of Patent Technology Monitoring Team, or PTMT, 
patent bibliographic extract and other DVDs. PTMT patent bibliographic 
data is currently available online for free, curtailing the need for 
USPTO to send out extracts on disc.
    The second fee proposed for discontinuation is the current 37 CFR 
1.19(k) fee for a copy of U.S. patent custom data extracts. With the 
elimination of this service fee, USPTO would create the common 
customizations and release them online, free to the public, at the same 
time the data is released. Further customizations would be 
discontinued. Additionally, PatentsView (http://www.patentsview.org), 
while not an official USPTO data source, meets many of the needs for 
those requesting custom data extracts, at no charge to the consumer.
    The third fee proposed for discontinuation is the current 37 CFR 
1.19(l) fee for a copy of selected technology reports in miscellaneous 
technology areas. Selected technology reports are currently available 
online for free, curtailing the need for USPTO to send out paper copies 
of the reports.

VI. Discussion of Specific Rules

    The following section shows the Code of Federal Regulations (CFR) 
proposed fee amendments. The discussion below includes all proposed fee 
amendments, all proposed fee discontinuations, and all proposed changes 
to the CFR text.
    Title 37 of the CFR, parts 1, 11, 41, and 42, are proposed to be 
amended as follows:
    Section 1.16 is proposed to be amended by revising paragraphs (a) 
through (e), (h), (j), (k), and (m) through (s) and adding paragraph 
(u) to set forth the application filing, excess claims, search, and 
examination fees for patent applications filed as authorized under 
Section 10 of the Act. The changes to the fee amounts indicated in 
Sec.  1.16 are shown in Table 13.

                                                         Table 13--CFR Section 1.16 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.16(a)............................  1011/2011/3011.....................  Basic Filing Fee--            300      150       75      320      160       80
                                                                           Utility.
1.16(a)............................  4011...............................  Basic Filing Fee--            n/a       75      n/a      n/a       80      n/a
                                                                           Utility (electronic
                                                                           filing for small
                                                                           entities).
1.16(b)............................  1012/2012/3012.....................  Basic Filing Fee--Design      200      100       50      220      110       55
1.16(b)............................  1017/2017/3017.....................  Basic Filing Fee--Design      200      100       50      220      110       55
                                                                           (CPA).
1.16(c)............................  1013/2013/3013.....................  Basic Filing Fee--Plant.      200      100       50      220      110       55

[[Page 37417]]

 
1.16(d)............................  1005/2005/3005.....................  Provisional Application       280      140       70      300      150       75
                                                                           Filing Fee.
1.16(e)............................  1014/2014/3014.....................  Basic Filing Fee--            300      150       75      320      160       80
                                                                           Reissue.
1.16(e)............................  1019/2019/3019.....................  Basic Filing Fee--            300      150       75      320      160       80
                                                                           Reissue (Design CPA).
1.16(h)............................  1201/2201/3201.....................  Independent Claims in         460      230      115      480      240      120
                                                                           Excess of Three.
1.16(h)............................  1204/2204/3204.....................  Reissue Independent           460      230      115      480      240      120
                                                                           Claims in Excess of
                                                                           Three.
1.16(j)............................  1203/2203/3203.....................  Multiple Dependent Claim      820      410      205      860      430      215
1.16(k)............................  1111/2111/3111.....................  Utility Search Fee......      660      330      165      700      350      175
1.16(m)............................  1113/2113/3113.....................  Plant Search Fee........      420      210      105      440      220      110
1.16(n)............................  1114/2114/3114.....................  Reissue Search Fee......      660      330      165      700      350      175
1.16(o)............................  1311/2311/3311.....................  Utility Examination Fee.      760      380      190      800      400      200
1.16(p)............................  1312/2312/3312.....................  Design Examination Fee..      600      300      150      640      320      160
1.16(q)............................  1313/2313/3313.....................  Plant Examination Fee...      620      310      155      660      330      165
1.16(r)............................  1314/2314/3314.....................  Reissue Examination Fee.    2,200    1,100      550    2,320    1,160      580
1.16(s)............................  1081/2081/3081.....................  Utility Application Size      400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Design Application Size       400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Plant Application Size        400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Reissue Application Size      400      200      100      420      210      105
                                                                           Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(s)............................  1081/2081/3081.....................  Provisional Application       400      200      100      420      210      105
                                                                           Size Fee--for Each
                                                                           Additional 50 Sheets
                                                                           That Exceeds 100 Sheets.
1.16(u)............................  NEW................................  Non-DOCX Filing               n/a      n/a      n/a      400      200      100
                                                                           Surcharge Fee.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.17: Section 1.17 is proposed to be amended by revising 
paragraphs (a), (c) through (g), (i)(2), (k), (m), (p), (r), and (s) to 
set forth the application processing fees as authorized under Section 
10 of the Act. The changes to the fee amounts indicated in Sec.  1.17 
are shown in Table 14.

                                                         Table 14--CFR Section 1.17 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.17(a)(1).........................  1251/2251/3251.....................  Extension for Response        200      100       50      220      110       55
                                                                           Within First Month.
1.17(a)(2).........................  1252/2252/3252.....................  Extension for Response        600      300      150      640      320      160
                                                                           Within Second Month.
1.17(a)(3).........................  1253/2253/3253.....................  Extension for Response      1,400      700      350    1,480      740      370
                                                                           Within Third Month.
1.17(a)(4).........................  1254/2254/3254.....................  Extension for Response      2,200    1,100      550    2,320    1,160      580
                                                                           Within Fourth Month.
1.17(a)(5).........................  1255/2255/3255.....................  Extension for Response      3,000    1,500      750    3,160    1,580      790
                                                                           Within Fifth Month.
1.17(c)............................  1817/2817/3817.....................  Request for Prioritized     4,000    2,000    1,000    4,200    2,100    1,050
                                                                           Examination.
1.17(d)............................  1819/2819/3819.....................  Correction of                 600      300      150      640      320      160
                                                                           Inventorship After
                                                                           First Action on Merits.
1.17(e)(1).........................  1801/2801/3801.....................  Request for Continued       1,300      650      325    1,360      680      340
                                                                           Examination (RCE) (1st
                                                                           request) (see 37 CFR
                                                                           1.114).
1.17(e)(2).........................  1820/2820/3820.....................  Request for Continued       1,900      950      475    2,000    1,000      500
                                                                           Examination (RCE) (2nd
                                                                           and subsequent request).
1.17(f)............................  1462/2462/3462.....................  Petitions Requiring the       400      200      100      420      210      105
                                                                           Petition Fee Set Forth
                                                                           in 37 CFR 1.17(f)
                                                                           (Group I).
1.17(g)............................  1463/2463/3463.....................  Petitions Requiring the       200      100       50      220      110       55
                                                                           Petition Fee Set Forth
                                                                           in 37 CFR 1.17(g)
                                                                           (Group II).

[[Page 37418]]

 
1.17(i)(2).........................  1803/2803/3803.....................  Request for voluntary         130      130      130      140      140      140
                                                                           publication or
                                                                           republication.
1.17(i)(2).........................  1808/2808/3808.....................  Other Publication             130      130      130      140      140      140
                                                                           Processing Fee.
1.17(k)............................  1802/2802/3802.....................  Request for Expedited         900      450      225    2,000    1,000      500
                                                                           Examination of a Design
                                                                           Application.
1.17(m)............................  1453/2453/3453.....................  Petition for revival of     2,000    1,000      500    2,100    1,050      525
                                                                           an abandoned
                                                                           application for a
                                                                           patent, for the delayed
                                                                           payment of the fee for
                                                                           issuing each patent, or
                                                                           for the delayed
                                                                           response by the patent
                                                                           owner in any
                                                                           reexamination
                                                                           proceeding.
1.17(m)............................  1454/2454/3454.....................  Petition for the Delayed    2,000    1,000      500    2,100    1,050      525
                                                                           Submission of a
                                                                           Priority or Benefit
                                                                           Claim.
1.17(m)............................  1784/2784/3784.....................  Petition to Excuse          2,000    1,000      500    2,100    1,050      525
                                                                           Applicant's Failure to
                                                                           Act Within Prescribed
                                                                           Time Limits in an
                                                                           International Design
                                                                           Application.
1.17(m)............................  1558/2558/3558.....................  Petition for the Delayed    2,000    1,000      500    2,100    1,050      525
                                                                           Payment of the Fee for
                                                                           Maintaining a Patent in
                                                                           Force.
1.17(p)............................  1806/2806/3806.....................  Submission of an              240      120       60      260      130       65
                                                                           Information Disclosure
                                                                           Statement.
1.17(r)............................  1809/2809/3809.....................  Filing a Submission           840      420      210      880      440      220
                                                                           After Final Rejection
                                                                           (see 37 CFR 1.129(a)).
1.17(s)............................  1810/2810/3810.....................  For Each Additional           840      420      210      880      440      220
                                                                           Invention to be
                                                                           Examined (see 37 CFR
                                                                           1.129(b)).
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.18: Section 1.18 is proposed to be amended by revising 
paragraphs (a) through (f) to set forth the patent issue fees as 
authorized under Section 10 of the Act. The changes to the fee amounts 
indicated in Sec.  1.18 are shown in Table 15.

                                                         Table 15--CFR Section 1.18 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.18(a)(1).........................  1501/2501/3501.....................  Utility Issue Fee.......    1,000      500      250    1,200      600      300
1.18(a)(1).........................  1511/2511/3511.....................  Reissue Issue Fee.......    1,000      500      250    1,200      600      300
1.18(b)(1).........................  1502/2502/3502.....................  Design Issue Fee........      700      350      175      740      370      185
1.18(c)(1).........................  1503/2503/3503.....................  Plant Issue Fee.........      800      400      200      840      420      210
1.18(d)(3).........................  1505/2505/3505.....................  Publication Fee for           300      300      300      320      320      320
                                                                           Republication.
1.18(e)............................  1455/2455/3455.....................  Filing an Application         200      200      200      210      210      210
                                                                           for Patent Term
                                                                           Adjustment.
1.18(f)............................  1456/2456/3456.....................  Request for                   400      400      400      420      420      420
                                                                           Reinstatement of Term
                                                                           Reduced.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.19: Section 1.19 is proposed to be amended by revising 
paragraphs (b)(1)(i)(B) and (b)(1)(ii)(B), and by removing and 
reserving paragraphs (j) through (l) to set forth the patent document 
supply fees as authorized under Section 10 of the Act. The changes to 
the fee amounts indicated in Sec.  1.19 are shown in Table 16.

                                                         Table 16--CFR Section 1.19 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Current fees (dollars)          Proposed fees (dollars)
          CFR section                        Fee code                  Description     -----------------------------------------------------------------
                                                                                         Large    Small    Micro      Large        Small        Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.19(b)(1)(i)(B)...............  8051...........................  Copy Patent File          280      280      280          290          290          290
                                                                   Wrapper, Paper
                                                                   Medium, Any Number
                                                                   of Sheets.

[[Page 37419]]

 
1.19(b)(1)(ii)(B)..............  8052...........................  Copy Patent File           55       55       55           60           60           60
                                                                   Wrapper, Electronic
                                                                   Medium, Any Size or
                                                                   Provided
                                                                   Electronically.
1.19(j)........................  8057...........................  Copy of Patent             50       50       50          (1)          (1)          (1)
                                                                   Technology
                                                                   Monitoring Team
                                                                   (PTMT) patent
                                                                   bibliographic
                                                                   extract and other
                                                                   DVD (optical disc).
1.19(k)........................  8058...........................  Copy of U.S. patent       100      100      100          (1)          (1)          (1)
                                                                   custom data
                                                                   extracts.
1.19(l)........................  8059...........................  Copy of selected           30       30       30          (1)          (1)          (1)
                                                                   technology reports,
                                                                   miscellaneous
                                                                   technology areas.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 discontinue.

    Section 1.20: Section 1.20 is proposed to be revised to set forth 
post issuance fees as authorized under Section 10 of the Act. The 
changes to the fee amounts indicated in Sec.  1.20 are shown in Table 
17.

                                                         Table 17--CFR Section 1.20 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.20(a)............................  1811/2811/3811.....................  Certificate of                150      150      150      160      160      160
                                                                           Correction.
1.20(b)............................  1816/2816/3816.....................  Processing Fee for            150      150      150      160      160      160
                                                                           Correcting Inventorship
                                                                           in a Patent.
1.20(c)(1).........................  1831/2831/3831.....................  Ex Parte Reexamination      6,000    3,000    1,500    6,300    3,150    1,575
                                                                           (Sec.   1.510(a)) in
                                                                           forty (40) or fewer
                                                                           pages.
1.20(c)(2).........................  1812/2812/3812.....................  Ex Parte Reexamination     12,000    6,000    3,000   12,600    6,300    3,150
                                                                           (Sec.   1.510(a)) in
                                                                           forty-one (41) or more
                                                                           pages.
1.20(c)(7).........................  1812/2812/3812.....................  Refused request for ex      3,600    1,800      900    3,780    1,890      945
                                                                           parte Reexamination.
1.20(c)(3).........................  1821/2821/3821.....................  Reexamination                 460      230      115      480      240      120
                                                                           Independent Claims in
                                                                           Excess of Three and
                                                                           also in Excess of the
                                                                           Number of Such Claims
                                                                           in the Patent Under
                                                                           Reexamination.
1.20(c)(5).........................  1824/2824/3824.....................  Petitions in a              1,940      970      485    2,040    1,020      510
                                                                           Reexamination
                                                                           Proceeding, Except for
                                                                           those Specifically
                                                                           Enumerated in 37 CFR
                                                                           1.550(i) and 1.937(d).
1.20(d)............................  1814/2814/3814.....................  Statutory Disclaimer,         160      160      160      170      170      170
                                                                           Including Terminal
                                                                           Disclaimer.
1.20(e)............................  1551/2551/3551.....................  For Maintaining an          1,600      800      400    2,000    1,000      500
                                                                           Original or Any Reissue
                                                                           Patent, Due at 3.5
                                                                           years.
1.20(f)............................  1552/2552/3552.....................  For Maintaining an          3,600    1,800      900    3,760    1,880      940
                                                                           Original or Any Reissue
                                                                           Patent, Due at 7.5
                                                                           years.
1.20(g)............................  1553/2553/3553.....................  For Maintaining an          7,400    3,700    1,850    7,700    3,850    1,925
                                                                           Original or Any Reissue
                                                                           Patent, Due at 11.5
                                                                           years.
1.20(h)............................  1554/2554/3554.....................  Surcharge--3.5 year--         160       80       40      500      250      125
                                                                           Late Payment Within 6
                                                                           Months.
1.20(h)............................  1555/2555/3555.....................  Surcharge--7.5 year--         160       80       40      500      250      125
                                                                           Late Payment Within 6
                                                                           Months.
1.20(h)............................  1556/2556/3556.....................  Surcharge--11.5 year--        160       80       40      500      250      125
                                                                           Late Payment Within 6
                                                                           Months.
1.20(j)(1).........................  1457/2457/3457.....................  Extension of Term of        1,120    1,120    1,120    1,180    1,180    1,180
                                                                           Patent.
1.20(j)(2).........................  1458/2458/3458.....................  Initial Application for       420      420      420      440      440      440
                                                                           Interim Extension (see
                                                                           37 CFR 1.790).

[[Page 37420]]

 
1.20(j)(3).........................  1459/2459/3459.....................  Subsequent Application        220      220      220      230      230      230
                                                                           for Interim Extension
                                                                           (see 37 CFR 1.790).
1.20(k)(1).........................  1826/2826/3826.....................  Request for Supplemental    4,400    2,200    1,100    4,620    2,310    1,155
                                                                           Examination.
1.20(k)(2).........................  1827/2827/3827.....................  Reexamination Ordered as   12,100    6,050    3,025   12,700    6,350    3,175
                                                                           a Result of
                                                                           Supplemental
                                                                           Examination.
1.20(k)(3)(ii).....................  1829/2829/3829.....................  Supplemental Examination      280      140       70      300      150       75
                                                                           Document Size Fee--for
                                                                           Each Additional 50
                                                                           Sheets or a Fraction
                                                                           Thereof in a Nonpatent
                                                                           Document.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.21: Section 1.21 is proposed to be amended by adding 
paragraphs (a)(7) and (8) and revising paragraphs (a)(1), (2), and (5), 
(a)(9)(ii), (a)(10), (k), (n), (o), and (q) to set forth miscellaneous 
fees and charges as authorized under Section 10 of the Act. The changes 
to the fee amounts indicated in Sec.  1.21 are shown in Table 18.
    The USPTO proposes to add paragraph (a)(7) to Sec.  1.21 to create 
a voluntary inactive fee of $70, to be paid by registered practitioners 
and persons granted limited recognition who are endorsed on the 
register as voluntarily inactive.
    The USPTO proposes to add paragraph (a)(8) to Sec.  1.21 to create 
an annual active patent practitioner fee. Paragraph (a)(8)(i) of Sec.  
1.21 is proposed to set a discounted fee of $240 for registered 
practitioners and persons granted limited recognition under 37 CFR 
11.9(b) who certify to the OED Director that they have completed six 
hours of continuing legal education within the past 24 months. 
Paragraph (a)(8)(ii) of Sec.  1.21 is proposed to set a fee of $340 for 
registered practitioners and persons granted limited recognition under 
37 CFR 11.9(b) who do not certify to the OED Director that they have 
completed six hours of continuing legal education within the past 24 
months.
    The USPTO proposes to amend paragraph (o) of Sec.  1.21 to clarify 
the applicability of its provisions. The USPTO proposes to specify that 
the mega-sequence listing fee applies to applications filed under 35 
U.S.C. 111 and 371 to clarify that the fee applies to provisional 
applications, nonprovisional applications, and national stage 
applications; the fee does not apply to international applications 
filed with the U.S. Receiving Office (RO/US). Furthermore, because a 
sequence listing in a national stage application may be received by the 
USPTO from the International Bureau in accordance with PCT Article 20, 
rather than directly submitted to the USPTO by the applicant, the USPTO 
proposes to specifically provide that the mega-sequence listing fee 
applies to such receipt. The USPTO further proposes to clarify that the 
fee applies to only the first submission or receipt of a sequence 
listing in electronic form having a size ranging from 300 MB to 800 MB 
and to the first submission or receipt of a sequence listing in 
electronic form having a size over 800 MB. Thus, an applicant will not 
be charged the mega-sequence listing fee for the submission of a 
substitute or replacement electronic form of the sequence listing (see 
37 CFR 1.825) unless the size of the substitute or replacement 
electronic form sequence listing is subject to the provisions of a 
different paragraph of Sec.  1.21(o) (e.g., the first sequence listing 
in an application is between 300 MB and 800 MB, and a replacement 
sequence listing is greater than 800 MB). Finally, the USPTO proposes 
to specify that for purposes of determining the fee required under 
Sec.  1.21(o), the size of the electronic form of the sequence listing 
is measured without file compression.

                                                         Table 18--CFR Section 1.21 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.21(a)(1)(i)......................  9001...............................  Application Fee (non-         100      100      100      110      110      110
                                                                           refundable).
1.21(a)(1)(ii)(A)..................  9010...............................  For Test Administration       200      200      200      210      210      210
                                                                           by Commercial Entity.
1.21(a)(1)(ii)(B)..................  9011...............................  For Test Administration       450      450      450      470      470      470
                                                                           by the USPTO.
1.21(a)(1)(iii)....................  9029...............................  For USPTO-Administered        450      450      450      470      470      470
                                                                           Review of Registration
                                                                           Examination.
1.21(a)(2)(i)......................  9003...............................  On Registration to            200      200      200      210      210      210
                                                                           Practice Under Sec.
                                                                           11.6.
1.21(a)(2)(ii).....................  9026...............................  On Grant of Limited           200      200      200      210      210      210
                                                                           Recognition under Sec.
                                                                            11.9(b).
1.21(a)(2)(iii)....................  9025...............................  On change of                  100      100      100      110      110      110
                                                                           registration from agent
                                                                           to attorney.
1.21(a)(5)(i)......................  9012...............................  Review of Decision by         400      400      400      420      420      420
                                                                           the Director of
                                                                           Enrollment and
                                                                           Discipline under Sec.
                                                                           11.2(c).
1.21(a)(5)(ii).....................  9013...............................  Review of Decision of         400      400      400      420      420      420
                                                                           the Director of
                                                                           Enrollment and
                                                                           Discipline under Sec.
                                                                           11.2(d).
1.21(a)(7).........................  NEW................................  Inactive Patent               n/a      n/a      n/a       70       70       70
                                                                           Practitioner Fee.

[[Page 37421]]

 
1.21(a)(8)(i)......................  NEW................................  Annual Active                 n/a      n/a      n/a      240      240      240
                                                                           Practitioner Fee with
                                                                           certifying continuing
                                                                           legal education
                                                                           completion.
1.21(a)(8)(ii).....................  NEW................................  Annual Active                 n/a      n/a      n/a      340      340      340
                                                                           Practitioner Fee
                                                                           without certifying
                                                                           continuing legal
                                                                           education completion.
1.21(a)(9)(ii).....................  9004...............................  Administrative                200      200      200      210      210      210
                                                                           Reinstatement Fee.
1.21(a)(10)........................  9014...............................  On petition for             1,600    1,600    1,600    1,680    1,680    1,680
                                                                           reinstatement by a
                                                                           person excluded or
                                                                           suspended on ethical
                                                                           grounds, or excluded on
                                                                           consent from practice
                                                                           before the Office.
1.21(k)............................  9024...............................  Unspecified other           (\1\)    (\1\)    (\1\)    (\1\)    (\1\)    (\1\)
                                                                           services, excluding
                                                                           labor.
1.21(n)............................  8026...............................  Handling Fee for              130      130      130      140      140      140
                                                                           Incomplete or Improper
                                                                           Application.
1.21(o)(1).........................  1091/2091/3091.....................  Submission of sequence      1,000      500      250    1,060      530      265
                                                                           listings ranging in
                                                                           size of 300 MB to 800
                                                                           MB.
1.21(o)(2).........................  1092/2092/3092.....................  Submission of sequence     10,000    5,000    2,500   10,500    5,250    2,625
                                                                           listings exceeding 800
                                                                           MB.
1.21(q)............................  8054...............................  Additional Fee for            160      160      160      170      170      170
                                                                           Expedited Service.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ No Cost.

    Section 1.27: Section 1.27 is proposed to be amended by revising 
the introductory text of paragraph (a)(3) to provide that the payment, 
by any party, of the exact amount of the small entity transmittal fee 
set forth in Sec.  1.1031(a) will be treated as a written assertion of 
entitlement to small entity status. The proposed change to Sec.  
1.27(a)(3) will make it easier for applicants filing an international 
design application through the USPTO as an office of indirect filing to 
establish small entity status.
    Section 1.431: Section 1.431 is proposed to be amended by revising 
paragraph (c) to remove reference to the late payment fee calculation 
under PCT Rule 16bis.2. The late payment fee pursuant to PCT Rule 
16bis.2 is proposed to be added to Sec.  1.445, as that provision 
concerns international application filing, processing and search fees.
    Section 1.445: Section 1.445 is proposed to be amended by revising 
paragraphs (a) to set forth international filing, processing, and 
search fees and charges as authorized under Section 10 of the Act. The 
changes to the fee amounts indicated in 37 CFR 1.445 are shown in Table 
19. Section 1.445(a) is also proposed to be amended to include the late 
payment fee pursuant to PCT Rule 16bis.2. See discussion of Sec.  
1.431, supra.

                                                         Table 19--CFR Section 1.445 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.445(a)(1)(i)(A)..................  1601/2601/3601.....................  Transmittal Fee.........      240      120       60      260      130       65
1.445(a)(2)(i).....................  1602/2602/3602.....................  Search Fee--Regardless      2,080    1,040      520    2,180    1,090      545
                                                                           of Whether There is a
                                                                           Corresponding
                                                                           Application (see 35
                                                                           U.S.C. 361(d) and PCT
                                                                           Rule 16).
1.445(a)(3)(i).....................  1604/2604/3604.....................  Supplemental Search Fee     2,080    1,040      520    2,180    1,090      545
                                                                           When Required, per
                                                                           Additional Invention.
1.445(a)(4)(i).....................  1621/2621/3621.....................  Transmitting Application      240      120       60      260      130       65
                                                                           to Intl. Bureau to Act
                                                                           as Receiving Office.
1.445(a)(5)........................  1627/2627/3627.....................  Late Furnishing Fee for       300      150       75      320      160       80
                                                                           Providing a Sequence
                                                                           Listing in Response to
                                                                           an Invitation Under PCT
                                                                           Rule 13ter.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.482: Section 1.482 is proposed to be amended by revising 
paragraphs (a) and (c) to read as set out in the regulatory text at the 
end of this document. The changes to the fee amounts indicated in Sec.  
1.482 are shown in Table 20.

[[Page 37422]]



                                                         Table 20--CFR Section 1.482 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.482(a)(1)(i).....................  1605/2605/3605.....................  Preliminary Examination       600      300      150      640      320      160
                                                                           Fee--U.S. Was the ISA.
1.482(a)(1)(ii)....................  1606/2606/3606.....................  Preliminary Examination       760      380      190      800      400      200
                                                                           Fee--U.S. Was Not the
                                                                           ISA.
1.482(a)(2)(i).....................  1607/2607/3607.....................  Supplemental Examination      600      300      150      640      320      160
                                                                           Fee per Additional
                                                                           Invention.
1.482(c)...........................  1627/2627/3627.....................  Late Furnishing Fee for       300      150       75      320      160       80
                                                                           Providing a Sequence
                                                                           Listing in Response to
                                                                           an Invitation Under PCT
                                                                           Rule 13ter.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 1.492: Section 1.492 is proposed to be amended by revising 
paragraphs (a), (b)(3) and (4), (c)(2), (d), (f), (h), and (j) to set 
forth the application filing, excess claims, search, and examination 
fees for international patent applications entering the national stage 
as authorized under Section 10 of the Act. The changes to the fee 
amounts indicated in Sec.  1.492 are shown in Table 21.

                                                         Table 21--CFR Section 1.492 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                           Fee  code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
1.492(a)...........................  1631/2631/3631.....................  Basic PCT National Stage      300      150       75      320      160       80
                                                                           Fee.
1.492(b)(3)........................  1642/2642/3642.....................  PCT National Stage            520      260      130      540      270      135
                                                                           Search Fee--Search
                                                                           Report Prepared and
                                                                           Provided to USPTO.
1.492(b)(4)........................  1632/2632/3632.....................  PCT National Stage            660      330      165      700      350      175
                                                                           Search Fee--All Other
                                                                           Situations.
1.492(c)(2)........................  1633/2633/3633.....................  National Stage                760      380      190      800      400      200
                                                                           Examination Fee--All
                                                                           Other Situations.
1.492(d)...........................  1614/2614/3614.....................  PCT National Stage            460      230      115      480      240      120
                                                                           Claims--Extra
                                                                           Independent (over
                                                                           three).
1.492(f)...........................  1616/2616/3616.....................  PCT National Stage            820      410      205      860      430      215
                                                                           Claims--Multiple
                                                                           Dependent.
1.492(h)...........................  1617/2617/3617.....................  Search fee, examination       140       70       35      160       80       40
                                                                           fee or oath or
                                                                           declaration after the
                                                                           date of commencement of
                                                                           the national stage.
1.492(j)...........................  1681/2681/3681.....................  National Stage                400      200      100      420      210      105
                                                                           Application Size Fee--
                                                                           for Each Additional 50
                                                                           Sheets That Exceeds 100
                                                                           Sheets.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 11.8: The USPTO proposes to add paragraph (d) to Sec.  11.8 
to establish a new fee to be paid annually by practitioners. Paragraph 
(d)(1) of Sec.  11.8 is proposed to require registered practitioners 
and persons granted limited recognition under Sec.  11.9(b) to pay the 
fee to the OED Director each year, beginning the year after they are 
registered or granted limited recognition. Paragraph (d)(2) of Sec.  
11.8 is proposed to explain that failure to comply with paragraph 
(d)(1) may result in being charged a delinquency fee, administrative 
suspension as set forth in Sec.  11.11(b), or both.
    The USPTO proposes to add paragraph (d)(3)(i) to Sec.  11.8 to 
provide for a discount for registered practitioners or persons granted 
limited recognition who certify completion of six hours of continuing 
legal education credit in the preceding twenty-four months, including 
five hours of patent law and practice and one hour of ethics. To 
receive the discount, practitioners would be asked to certify that they 
completed the recommended number of CLE hours at the time they pay 
their annual active patent practitioner fee. Generally, the same types 
of courses and activities that qualify for CLE credit in another state 
will qualify for credit for purposes of the CLE certification discount, 
so long as it covers the appropriate topics. For patent law and 
practice, any course that covers any of the topics included in 37 CFR 
11.5(b)(1) would be accepted. For ethics credit, any ethics course 
hosted by the USPTO, or any course accepted for ethics CLE credit in 
any U.S. state or territory would be accepted. The USPTO considered 
that CLE may not be equally available to practitioners in all 
geographic areas, and therefore, has proposed that live or pre-recorded 
material would be accepted for purposes of obtaining the CLE discount. 
The USPTO is also seeking comments on whether the public would like the 
option to request that OED ``pre-certify'' courses for a fee if they 
comply with OED's guidelines for accepted CLE courses. The USPTO 
considered requiring patent examiners to complete similar training, but 
is not proposing to do so at this time. Patent examiners are already 
required to complete rigorous training as part of their job duties. 
Further, patent practitioners are not, at this time, required to 
complete CLE, but the USPTO is proposing to merely offer a discount on 
the annual fee for doing so. Patent examiners would not be required to 
pay the annual active patent

[[Page 37423]]

practitioner fee under this proposal, and therefore would not receive a 
discount to the fee.
    The USPTO also considered that patent agents and some patent 
attorneys are not currently subject to any CLE requirements, so 
requiring CLE to receive a discount may be viewed as more burdensome 
for these groups. However, all patent agents and attorneys are provided 
the same services in maintaining the integrity of their profession, and 
granted the same rights to practice before the USPTO, and therefore, 
the USPTO proposes charging the same fee for all patent practitioners. 
Again, the USPTO is not requiring any practitioner to complete CLE, but 
merely offering a discount for doing so.
    The USPTO proposes to add paragraph (d)(3)(ii) of Sec.  11.8 to 
provide that a registered practitioner or person granted limited 
recognition may earn up to two of the five hours of CLE in patent law 
and practice by participating in the USPTO Patent Pro Bono Program. For 
every three hours of pro bono service, a patent practitioner may earn 
one hour of CLE credit toward the annual active patent practitioner fee 
discount.
    Section 11.11: The USPTO proposes to redesignate paragraph (a)(1) 
as paragraph (a), and to amend the paragraph to provide that the OED 
Director may publish a practitioner's CLE certification status.
    The USPTO proposes to remove paragraph (a)(2) of Sec.  11.11, as 
its provisions relate to the mandatory survey, which would no longer be 
conducted by the OED Director if the annual fee is implemented.
    The USPTO proposes to amend paragraph (b)(1) of Sec.  11.11 to 
apply to those failing to comply with Sec.  11.8(d)(1), which refers to 
the annual active patent practitioner fee, rather than Sec.  
11.11(a)(2), which refers to the mandatory survey.
    The USPTO proposes to add paragraph (b)(4) of Sec.  11.11 to 
provide that the annual active patent practitioner fee will continue to 
be assessed for those practitioners who are administratively suspended 
during the period of administrative suspension.
    The USPTO proposes to amend paragraph (d)(1) of Sec.  11.11 to 
remove the exception set forth in paragraph (d)(4), as there is 
currently no paragraph (d)(4). The addition of paragraph (d)(4) is 
being proposed in these Rules, but does not refer to an exception to 
(d)(1).
    The USPTO proposes to add paragraph (d)(4) of Sec.  11.11 to 
require registered practitioners and persons granted limited 
recognition under Sec.  11.9(b), who are endorsed on the register as 
voluntarily inactive to pay an annual voluntary inactive fee of $70 to 
the OED Director each year.
    The USPTO proposes to amend paragraph (d)(6) of Sec.  11.11 to 
remove the current process for a practitioner in voluntary inactive 
status to request reinstatement, and instead, refer the practitioner to 
paragraph (f)(3), which contains a new proposed process for 
reinstatement of practitioners in voluntary inactive status.
    The USPTO proposes to redesignate paragraph (e) of Sec.  11.11 as 
paragraph (e)(1) and add paragraph (e)(2) to create a new emeritus 
status for practitioners. The new emeritus status would allow active 
practitioners who have been registered for ten or more years to elect 
emeritus status, provided they are not under investigation at the time 
they elect such a status. Emeritus practitioners may not practice in 
patent matters, with the exception of pro bono matters through the 
USPTO Patent Pro Bono Program in which they do not receive 
compensation. A practitioner in emeritus status will not be required to 
pay the annual fee, but will remain under the disciplinary jurisdiction 
of the OED Director.
    The USPTO proposes to amend paragraph (f)(1) of Sec.  11.11 to 
remove any references to resigned practitioners, remove the requirement 
that a practitioner who was administratively suspended for two or more 
years before the date the Office receives a completed application from 
the person must also pass the registration examination under Sec.  
11.7(b)(1)(ii), and add the requirement that any practitioner who 
remains administratively suspended for more than five years shall be 
required to file a petition to the OED Director requesting 
reinstatement and providing objective evidence that the practitioner 
continues to possess the necessary legal qualifications to render 
applicants valuable service to patent applicants.
    The USPTO proposes to add paragraph (f)(3) which would set forth 
the process by which voluntarily inactive practitioners may be 
reinstated on the register in active status.
    The USPTO proposes to add paragraph (f)(4) of Sec.  11.11, which 
sets forth the process by which a practitioner who has resigned may 
apply to be reinstated to the register in active status.
    The USPTO proposes to add paragraph (f)(5) of Sec.  11.11 which 
sets forth the process by which a practitioner who has elected emeritus 
status may apply to be reinstated to the register in active status.
    Section 41.20: Section 41.20 is proposed to be amended by revising 
paragraph (a), (b)(1), (b)(2)(ii), and (b)(3) and (4) to set forth the 
appeal fees as authorized under Section 10 of the Act. The changes to 
the fee amounts indicated in Sec.  41.20 are shown in Table 22.

                                                         Table 22--CFR Section 41.20 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
41.20(a)...........................  1405/2405/3405.....................  Petitions to the Chief        400      400      400      420      420      420
                                                                           Administrative Patent
                                                                           Judge Under 37 CFR 41.3.
41.20(b)(1)........................  1401/2401/3401.....................  Notice of Appeal........      800      400      200      840      420      210
41.20(b)(2)(ii)....................  1404/2404/3404.....................  Filing a Brief in           2,000    1,000      500    2,100    1,050      525
                                                                           Support of an Appeal in
                                                                           an Inter Partes
                                                                           Reexamination
                                                                           Proceeding.
41.20(b)(3)........................  1403/2403/3403.....................  Request for Oral Hearing    1,300      650      325    1,360      680      340
41.20(b)(4)........................  1413/2413/3413.....................  Forwarding an Appeal in     2,240    1,120      560    2,360    1,180      590
                                                                           an Application or Ex
                                                                           Parte Reexamination
                                                                           Proceeding to the Board.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Section 42.15: Section 42.15 is proposed to be amended by revising 
paragraphs (a) through (e) to set forth the inter partes review and 
post-grant review or covered business method patent review of patent 
fees as authorized under Section 10 of the Act. The changes to the fee 
amounts

[[Page 37424]]

indicated in Sec.  42.15 are shown in Table 23.

                                                         Table 23--CFR Section 42.15 Fee Changes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Current fees (dollars)    Proposed fees (dollars)
            CFR section                            Fee code                      Description       -----------------------------------------------------
                                                                                                     Large    Small    Micro    Large    Small    Micro
--------------------------------------------------------------------------------------------------------------------------------------------------------
42.15(a)(1)........................  1406...............................  Inter Partes Review        15,500   15,500   15,500   19,500   19,500   19,500
                                                                           Request Fee--Up to 20
                                                                           Claims.
42.15(a)(2)........................  1414...............................  Inter Partes Review Post-  15,000   15,000   15,000      n/a      n/a      n/a
                                                                           Institution Fee--Up to
                                                                           15 Claims.
42.15(a)(2)........................  1414...............................  Inter Partes Review Post-     n/a      n/a      n/a   18,750   18,750   18,750
                                                                           Institution Fee--Up to
                                                                           20 Claims.
42.15(a)(3)........................  1407...............................  In Addition to the Inter      300      300      300      375      375      375
                                                                           Partes Review Request
                                                                           Fee, for Requesting
                                                                           Review of Each Claim in
                                                                           Excess of 20.
42.15(a)(4)........................  1415...............................  In addition to the Inter      600      600      600      750      750      750
                                                                           Partes Post-Institution
                                                                           Fee, for Requesting
                                                                           Review of Each Claim in
                                                                           Excess of 20.
42.15(b)(1)........................  1408...............................  Post-Grant or Covered      16,000   16,000   16,000   20,000   20,000   20,000
                                                                           Business Method Patent
                                                                           Review Request Fee--Up
                                                                           to 20 Claims.
42.15(b)(2)........................  1416...............................  Post-Grant or Covered      22,000   22,000   22,000      n/a      n/a      n/a
                                                                           Business Method Patent
                                                                           Review Post-Institution
                                                                           Fee--Up to 15 Claims.
42.15(b)(2)........................  1416...............................  Post-Grant or Covered         n/a      n/a      n/a   27,500   27,500   27,500
                                                                           Business Method Patent
                                                                           Review Post-Institution
                                                                           Fee--Up to 20 Claims.
42.15(b)(3)........................  1409...............................  In Addition to the Post-      375      375      375      475      475      475
                                                                           Grant or Covered
                                                                           Business Method Patent
                                                                           Review Request Fee, for
                                                                           Requesting Review of
                                                                           Each Claim in Excess of
                                                                           20.
42.15(b)(4)........................  1417...............................  In Addition to the Post-      825      825      825    1,050    1,050    1,050
                                                                           Grant or Covered
                                                                           Business Method Patent
                                                                           Review Post-Institution
                                                                           Fee, for Requesting
                                                                           Review of Each Claim in
                                                                           Excess of 20.
42.15(c)(1)........................  1412...............................  Petition for a                400      400      400      420      420      420
                                                                           Derivation Proceeding.
42.15(d)...........................  1411...............................  Request to Make a             400      400      400      420      420      420
                                                                           Settlement Agreement
                                                                           Available and Other
                                                                           Requests Filed in a
                                                                           Patent Trial Proceeding.
42.15(e)...........................  NEW................................  Pro Hac Vice Admission        n/a      n/a      n/a      250      250      250
                                                                           Fee.
--------------------------------------------------------------------------------------------------------------------------------------------------------

VII. Rulemaking Considerations

A. AIA: America Invents Act

    This proposed rule seeks to set and adjust fees under Section 10(a) 
of the AIA as amended by the SUCCESS Act, Public Law 115-273, 132 Stat. 
4158. Section 10(a) of the AIA authorizes the Director of the USPTO to 
set or adjust by rule any patent fee established, authorized, or 
charged under title 35 of the U.S.C. for any services performed, or 
materials furnished, by the Office. The SUCCESS Act extends the USPTO 
fee setting authority until September 2026. Section 10 prescribes that 
fees may be set or adjusted only to recover the aggregate estimated 
cost to the Office for processing, activities, services, and materials 
relating to patents, including administrative costs of the Office with 
respect to such patent fees. Section 10 authority includes flexibility 
to set individual fees in a way that furthers key policy factors, while 
taking into account the cost of the respective services. Section 10(e) 
of the AIA sets forth the general requirements for rulemakings that set 
or adjust fees under this authority. In particular, Section 10(e)(1) 
requires the Director to publish in the Federal Register any proposed 
fee change under Section 10, and include in such publication the 
specific rationale and purpose for the proposal, including the possible 
expectations or benefits resulting from the proposed change. For such 
rulemakings, the AIA requires that the Office provide a public comment 
period of not less than 45 days.
    The PPAC advises the Under Secretary of Commerce for Intellectual 
Property and Director of the USPTO on the management, policies, goals, 
performance, budget, and user fees of patent operations. When proposing 
fees under Section 10 of the Act, the Director must provide the PPAC 
with the proposed fees at least 45 days prior to publishing the 
proposed fees in the Federal Register. The PPAC then has at least 30 
days within which to deliberate, consider, and comment on the proposal, 
as well as hold public hearing(s) on the proposed fees. The PPAC must 
make a written report available to the public of the comments, advice, 
and recommendations of the committee regarding the proposed fees before 
the Office issues any final fees. The Office considers and analyzes any 
comments, advice, or recommendations received from the PPAC before 
finally setting or adjusting fees.
    Consistent with this framework, on August 8, 2018, the Director 
notified the PPAC of the Office's intent to set or

[[Page 37425]]

adjust patent fees and submitted a preliminary patent fee proposal with 
supporting materials. The preliminary patent fee proposal and 
associated materials are available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC held a 
public hearing in Alexandria, Virginia, on September 6, 2018. 
Transcripts of the hearing are available for review at https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript_20180906.pdf. Members of the public were 
invited to the hearing and given the opportunity to submit written and/
or oral testimony for the PPAC to consider. The PPAC considered such 
public comments from this hearing and made all comments available to 
the public via the Fee Setting website, https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. The PPAC also 
provided a written report setting forth in detail the comments, advice, 
and recommendations of the committee regarding the preliminary proposed 
fees. The report regarding the preliminary proposed fees was released 
on October 29, 2018, and can be found online at https://www.uspto.gov/sites/default/files/documents/PPAC_Fee_Setting_Report_Oct2018.pdf. The 
Office considered and analyzed all comments, advice, and 
recommendations received from the PPAC before publishing this NPRM. 
Further discussion of the PPAC report can be found in the section 
titled ``Fee Setting Considerations.'' Before the final rule is issued, 
this proposed rule provides the public with a 60-day period during 
which comments may be submitted for consideration by the USPTO.

B. Regulatory Flexibility Act

    The USPTO publishes this Initial Regulatory Flexibility Analysis 
(IRFA) as required by the Regulatory Flexibility Act (RFA) (5 U.S.C. 
601 et seq.) to examine the impact on small entities of the Office's 
proposed rule implementing changes to patent fees. Under the RFA, 
whenever an agency is required by 5 U.S.C. 553 (or any other law) to 
publish an NPRM, the Office must prepare and make available for public 
comment an IRFA, unless the Office certifies under 5 U.S.C. 605(b) that 
the proposed rule, if implemented, will not have a significant economic 
impact on a substantial number of small entities. Given that the 
proposed fee schedule is projected to result in $1,061.3 million in 
additional aggregate revenue over the current fee schedule (baseline) 
for the period including FY 2021 to FY 2024, the Office acknowledges 
that the fee adjustments proposed will impact all entities seeking 
patent protection and could have a significant impact on small and 
micro entities. The $1,061.3 million in additional aggregate revenue 
results from an additional $167.0 million in FY 2021, $294.9 million in 
FY 2022, $294.6 million in FY 2023, and $304.9 million in FY 2024.
    While the Office welcomes all comments on this IRFA, it 
particularly seeks comments describing the type and extent of the 
impact of the proposed patent fees on commenters' specific businesses. 
In describing the impact, the Office requests biographic detail about 
the impacted businesses or concerns, including the size, average annual 
revenue, past patent activity (e.g., applications submitted, contested 
cases pursued, maintenance fees paid, patents abandoned, etc.), and 
planned patent activity of the impacted business or concern, where 
feasible. The Office will use this information to further assess the 
impact of the proposed rule on small entities. Where possible, comments 
should also describe any recommended alternative methods of setting and 
adjusting patent fees that would further reduce the impact on small 
entities.
    Items 1-5 below discuss the five items specified in 5 U.S.C. 
603(b)(1)-(5) to be addressed in an IRFA. Item 6 below discusses 
alternatives to this proposal that the Office considered.
1. A Description of the Reasons Why the Action by the Office Is Being 
Considered
    Section 10 of the AIA, as amended by SUCCESS Act, authorizes the 
Director of the USPTO to set or adjust by rule any patent fee 
established, authorized, or charged under title 35, U.S.C., for any 
services performed, or materials furnished, by the Office. Section 10 
prescribes that patent fees may be set or adjusted only to recover the 
aggregate estimated costs to the Office for processing, activities, 
services, and materials relating to patents, including administrative 
costs to the Office with respect to such patent fees. The proposed fee 
schedule will recover the aggregate cost of patent operations while 
facilitating the effective administration of the U.S. patent system. 
The reasons why the rulemaking is being considered are further 
discussed in section 6.i below and elsewhere in this IRFA and the NPRM.
2. The Objectives of, and Legal Basis for, the Proposed Rule
    The objective of the proposed rule is to implement the fee setting 
provisions of Section 10 of the Act by setting or adjusting patent fees 
to recover the aggregate cost of patent operations, including 
administrative costs, while facilitating the effective administration 
of the U.S. patent system. Since its inception, the Act strengthened 
the patent system by affording the USPTO the ``resources it requires to 
clear the still sizeable backlog of patent applications and move 
forward to deliver to all American inventors the first rate service 
they deserve.'' H.R. Rep. No. 112-98(I), at 163 (2011). In setting and 
adjusting fees under the Act, the Office seeks to secure a sufficient 
amount of aggregate revenue to recover the aggregate cost of patent 
operations, including revenue needed to achieve strategic and 
operational goals. Additional information on the Office's strategic 
goals may be found in the Strategic Plan available at https://www.uspto.gov/sites/default/files/documents/USPTO_2018-2022_Strategic_Plan.pdf. Additional information on the Office's goals 
and operating requirements may be found in the ``USPTO FY 2020 
President's Budget Request,'' available at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information. The legal 
basis for the proposed rule is Section 10 of the Act.
3. A Description of and, Where Feasible, an Estimate of the Number of 
Small Entities to Which the Proposed Rule Will Apply
SBA Size Standard
    The Small Business Act (SBA) size standards applicable to most 
analyses conducted to comply with the RFA are set forth in 13 CFR 
121.201. These regulations generally define small businesses as those 
with less than a specified maximum number of employees or less than a 
specified level of annual receipts for the entity's industrial sector 
or North American Industry Classification System (NAICS) code. As 
provided by the RFA, and after consulting with the Small Business 
Administration, the Office formally adopted an alternate size standard 
for the purpose of conducting an analysis or making a certification 
under the RFA for patent-related regulations. See Business Size 
Standard for Purposes of United States Patent and Trademark Office 
Regulatory Flexibility Analysis for Patent-Related Regulations, 71 FR 
67109, 67109 (Nov. 20, 2006), 1313 Off. Gaz. Pat. Office 37, 60 (Dec. 
12, 2006). The Office's alternate small business size standard consists 
of SBA's previously established size standard for entities entitled to 
pay reduced patent fees. See 13 CFR 121.802.

[[Page 37426]]

    Unlike SBA's generally applicable small business size standards, 
the size standard for the USPTO is not industry-specific. The Office's 
definition of a small business concern for RFA purposes is a business 
or other concern that: (1) Meets the SBA's definition of a ``business 
concern or concern'' set forth in 13 CFR 121.105 and (2) meets the size 
standards set forth in 13 CFR 121.802 for the purpose of paying reduced 
patent fees, namely, an entity: (a) Whose number of employees, 
including affiliates, does not exceed 500 persons and (b) which has not 
assigned, granted, conveyed, or licensed (and is under no obligation to 
do so) any rights in the invention to any person who made it and could 
not be classified as an independent inventor, or to any concern that 
would not qualify as a nonprofit organization or a small business 
concern under this definition. See Business Size Standard for Purposes 
of United States Patent and Trademark Office Regulatory Flexibility 
Analysis for Patent-Related Regulations, 71 FR 67109, 67109 (Nov. 20, 
2006), 1313 Off. Gaz. Pat. Office 37, 60 (Dec. 12, 2006).
    If a patent applicant self-identifies on a patent application as 
qualifying as a small entity, or provides certification of micro entity 
status for reduced patent fees under the Office's alternative size 
standard, the Office captures this data in the Patent Application 
Location and Monitoring (PALM) database system, which tracks 
information on each patent application submitted to the Office.
Small Entity Defined
    The Act provides that fees set or adjusted under Section 10(a) 
``for filing, searching, examining, issuing, appealing, and maintaining 
patent applications and patents shall be reduced by 50 percent'' with 
respect to the application of such fees to any ``small entity'' (as 
defined in 37 CFR 1.27) that qualifies for reduced fees under 35 U.S.C. 
41(h)(1). In turn, 125 Stat. at 316-17. 35 U.S.C. 41(h)(1) provides 
that certain patent fees ``shall be reduced by 50 percent'' for a small 
business concern as defined by section 3 of the SBA, and to any 
independent inventor or nonprofit organization as defined in 
regulations described by the Director.
Micro Entity Defined
    Section 10(g) of the Act created a new category of entity called a 
``micro entity.'' 35 U.S.C. 123; see also 125 Stat. at 318-19. Section 
10(b) of the Act provides that the fees set or adjusted under Section 
10(a) ``for filing, searching, examining, issuing, appealing, and 
maintaining patent applications and patents shall be reduced by 75 
percent with respect to the application of such fees to any micro 
entity as defined by 35 U.S. Code 123.'' 125 Stat. at 315-17. 35 U.S.C. 
123(a) defines a ``micro entity'' as an applicant who makes a 
certification that the applicant: (1) Qualifies as a small entity as 
defined in 37 CFR 1.27; (2) has not been named as an inventor on more 
than 4 previously filed patent applications, other than applications 
filed in another country, provisional applications under 35 U.S.C. 
111(b), or Patent Cooperation Treaty (PCT) applications for which the 
basic national fee under 35 U.S.C. 41(a) was not paid; (3) did not, in 
the calendar year preceding the calendar year in which the applicable 
fee is being paid, have a gross income, as defined in section 61(a) of 
the Internal Revenue Code of 1986 (26 U.S.C. 61(a)), exceeding three 
times the median household income for that preceding calendar year, as 
most recently reported by the Bureau of the Census; \1\ and (4) has not 
assigned, granted, or conveyed, and is not under an obligation by 
contract or law, to assign, grant, or convey, a license or other 
ownership interest in the application concerned to an entity exceeding 
the income limit set forth in (3) above. See 125 Stat. at 318. 35 
U.S.C. 123(d) also defines a ``micro entity'' as an applicant who 
certifies that: (1) The applicant's employer, from which the applicant 
obtains the majority of the applicant's income, is an institution of 
higher education as defined in section 101(a) of the Higher Education 
Act of 1965 (20 U.S.C. 1001(a)); or (2) the applicant has assigned, 
granted, conveyed, or is under an obligation by contract or law, to 
assign, grant, or convey, a license or other ownership interest in the 
particular applications to such an institution of higher education.
---------------------------------------------------------------------------

    \1\ For more information, see https://www.uspto.gov/patent/laws-and-regulations/micro-entity-status-gross-income-limit.
---------------------------------------------------------------------------

Estimate of Number of Small Entities Affected
    The changes in the proposed rule will apply to any entity, 
including small and micro entities, which pays any patent fee set forth 
in the NPRM. The reduced fee rates (50 percent for small entities and 
75 percent for micro entities) will continue to apply to any small 
entity asserting small entity status and to any micro entity certifying 
micro entity status for filing, searching, examining, issuing, 
appealing, and maintaining patent applications and patents.
    The Office reviews historical data to estimate the percentages of 
application filings asserting small entity status. Table 24 presents a 
summary of such small entity filings by type of application (utility, 
reissue, plant, design) over the last five years.

                                           Table 24--Number of Patent Applications Filed in Last Five Years *
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                            ** FY 2018        FY 2017         FY 2016         FY 2015         FY 2014         Average
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility:
    All.................................................         596,484         604,292         608,778         579,174         580,596         593,865
    Small...............................................         136,246         136,350         133,304         127,819         128,377         132,419
    % Small.............................................            22.8            22.6            21.9            22.1            22.1            22.3
    Micro...............................................          20,140          20,417          20,695          19,119          18,142          19,703
    % Micro.............................................             3.4             3.4             3.4             3.3             3.1             3.3
Reissue:
    All.................................................             985           1,049           1,088           1,090           1,215           1,085
    Small...............................................             208             246             230             211             228             225
    % Small.............................................            21.1            23.5            21.1            19.4            18.8            20.8
    Micro...............................................              18              19              21              12              22              18
    % Micro.............................................             1.8             1.8             1.9             1.1             1.8             1.7
Plant:
    All.................................................           1,047           1,071           1,187           1,105           1,110           1,104
    Small...............................................             467             534             567             514             527             522

[[Page 37427]]

 
    % Small.............................................            44.6            49.9            47.8            46.5            47.5            47.3
    Micro...............................................               9              17              11               8              17              12
    % Micro.............................................             0.9             1.6             0.9             0.7             1.5             1.1
Design:
    All.................................................          46,010          44,072          42,324          38,225          36,220          41,370
    Small...............................................          18,945          18,126          16,791          14,783          14,354          16,600
    % Small.............................................            41.2            41.1            39.7            38.7            39.6            40.1
    Micro...............................................           5,448           5,006           4,289              24             n/a           3,692
    % Micro.............................................            11.8            11.4            10.1             0.1             n/a             8.4
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The patent application filing data in this table includes RCEs.
** FY 2018 application filing data are preliminary and will be finalized in the FY 2019 Performance and Accountability Report (PAR).

    Because the percentage of small entity filings varies widely 
between application types, the Office has averaged the small entity 
filing rates over the past five years for those application types in 
order to estimate future filing rates by small and micro entities. 
Those average rates appear in the last column of Table 24. The Office 
estimates that small entity filing rates will continue for the next 
five years at these average historic rates.
    The Office forecasts the number of projected patent applications 
(i.e., workload) for the next five years using a combination of 
historical data, economic analysis, and subject matter expertise. The 
Office estimates that serialized UPR patent application filings will 
grow by 1.5 percent in FY 2019 and 1.0 percent in FYs 2020-2024. The 
Office forecasts design patent applications independently of UPR 
applications because they exhibit different behavior.
    Using the estimated filings for the next five years, and the 
average historic rates of small entity filings, Table 25 presents the 
Office's estimates of the number of patent application filings by all 
applicants, including small and micro entities, over the next five 
fiscal years by application type.
    The Office has undertaken an elasticity analysis to examine if fee 
adjustments may impact small entities and, in particular, whether 
increases in fees would result in some such entities not submitting 
applications. Elasticity measures how sensitive demand for services by 
patent applicants and patentees is to fee changes. If elasticity is low 
enough (demand is inelastic), then fee increases will not reduce 
patenting activity enough to negatively impact overall revenues. If 
elasticity is high enough (demand is elastic), then increasing fees 
will decrease patenting activity enough to decrease revenue. The Office 
analyzed elasticity at the overall filing level across all patent 
applicants with regard to entity size and estimated the potential 
impact to patent application filings across entities. Additional 
information about elasticity estimates is available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting in the document entitled ``USPTO Setting and Adjusting Patent 
Fees during Fiscal Year 2020--Description of Elasticity Estimates.''

                                          Table 25--Estimated Numbers of Patent Applications in FY 2019-FY 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              FY 2019
                                                             (current)        FY 2020         FY 2021         FY 2022         FY 2023         FY 2024
--------------------------------------------------------------------------------------------------------------------------------------------------------
Utility...........................  All.................         609,639         611,158         612,614         621,450         629,204         636,625
Reissue...........................  All.................             750             750             750             750             750             750
Plant.............................  All.................           1,050           1,050           1,050           1,050           1,050           1,050
Design............................  All.................          49,118          52,283          55,649          59,262          63,156          67,255
                                   ---------------------------------------------------------------------------------------------------------------------
    Total.........................  All.................         660,557         665,241         670,063         682,512         694,160         705,680
--------------------------------------------------------------------------------------------------------------------------------------------------------

4. A Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Proposed Rule, Including an Estimate of 
the Classes of Small Entities Which Will Be Subject to the Requirement 
and Type of Professional Skills Necessary for Preparation of the Report 
or Record
    If implemented, the proposed rule will not change the burden of 
existing reporting and recordkeeping requirements for payment of fees. 
The current requirements for small and micro entities will continue to 
apply. Therefore, the professional skills necessary to file and 
prosecute an application through issue and maintenance remain unchanged 
under this proposal. This action proposes only to adjust patent fees 
and not to set procedures for asserting small entity status or 
certifying micro entity status, as previously discussed.
    The full proposed fee schedule (see Part VI: Discussion of Specific 
Rules) is set forth in the NPRM. The proposed fee schedule sets or 
adjusts 295 patent fees in total. This includes three fees that will be 
discontinued and 11 new fees.
    5. Identification, to the Extent Practicable, of All Relevant 
Federal Rules Which May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    The USPTO is the sole agency of the U.S. Government responsible for 
administering the provisions of title 35, U.S.C., pertaining to 
examining and granting patents. It is solely responsible for issuing 
rules to comply with Section 10 of the AIA. No other Federal, state, or 
local entity has jurisdiction over the examination and granting of 
patents.
    Other countries, however, have their own patent laws, and an entity 
desiring a patent in a particular country must make an application for 
patent in that country, in accordance with the applicable law. Although 
the potential for overlap exists internationally, this cannot be 
avoided except by treaty (such as the Paris Convention for the 
Protection of Industrial Property, or the PCT). Nevertheless, the USPTO 
believes

[[Page 37428]]

that there are no other duplicative or overlapping rules.
6. Description of Any Significant Alternatives to the Proposed Rules 
Which Accomplish the Stated Objectives of Applicable Statutes and Which 
Minimize Any Significant Economic Impact of the Proposed Rules on Small 
Entities
    The USPTO considered several alternative approaches to this 
proposed rule, discussed below, including full cost recovery for 
individual services, an across the board adjustment to fees, and a 
baseline (current fee rates). The discussion here begins with a 
description of the fee schedule adopted for this proposed rule.
i. Alternative 1: Proposed Alternative--Set and Adjust Patent Fees
    The alternative proposed herein secures the Office's required 
revenue to recover its aggregate costs, while progressing towards high 
quality and timely patent examination and review proceedings in order 
to produce reliable and predictable IP rights. This will benefit all 
applicants, including small and micro entities, without undue burden to 
patent applicants and holders, barriers to entry, or reduced incentives 
to innovate. This alternative maintains small and micro entity 
discounts. Compared to the current fee schedule, there are no new small 
or micro entity fee codes being extended to existing large entity fee 
rates and none are being eliminated. All entities will benefit from the 
Office's proposal to discontinue three fees related to goods and 
services found to be of limited value based on the ability to obtain 
these services at zero cost or more efficiently from non-Office 
sources. The Office will instead provide these services, in a slightly 
modified form (i.e. electronic), for free.
    As discussed throughout this document, the fee changes proposed in 
this alternative are moderate compared to other alternatives. Given 
that the proposed fee schedule will result in increased aggregate 
revenue under this alternative, small and micro entities would pay some 
higher fees when compared to the current fee schedule (Alternative 4).
    In summary, the fees to obtain a patent will increase. All fees are 
subject to the 5.0 percent across the board increase. In addition to 
the across the board increase, some fees will be subject to a larger 
increase. For example, the issue fee and first stage maintenance fee 
rate will increase by 20.0 and 25.0 percent respectively. However, 
second and third stage maintenance fees will only increase by 4.0 
percent, less than the across the board increase. This alternative 
includes a new surcharge fee for applications not filed in DOCX format, 
which aims to improve the electronic application process for patent 
applicants by modernizing the USPTO's filing and viewing systems. This 
streamlines application and publication processes, which benefits both 
the applicants and examiners. In an effort to enable PTAB to continue 
high quality, timely, and efficient proceedings with the expected 
increase in work following the Supreme Court decision in SAS Institute 
Inc. v. Iancu, 138 S. Ct. 1348 (2018), AIA trial fees will increase 
25.0 percent. Finally, in response to feedback from the PPAC and 
members of the public, the proposed fee increase for Maintenance Fee 
Surcharge--Late Payment within Six Months, has been changed to $500. 
Under the original proposal to the PPAC, the fee would have increased 
by $840 to $1,000.
    Adjusting the patent fee schedule as proposed in this NPRM allows 
the Office to implement the patent-related strategic goals and 
objectives documented in the Strategic Plan and to carry out 
requirements as described in the FY 2020 Budget. Specifically, this 
proposed fee setting rule is estimated to generate sufficient revenue 
to support increases in core examination costs that are necessary to 
implement strategic initiatives to issue highly reliable patents, such 
as increasing the time examiners are provided to work on each 
application. This proposed rule also supports the Strategic Plan's 
mission support goal to deliver organizational excellence (which 
includes optimizing speed, quality, and cost-effectiveness of IT 
delivery to achieve business value and ensuring financial 
sustainability to facilitate effective USPTO operations) by allowing 
the Office to continue to make necessary business improvements. While 
all of the other alternatives discussed facilitate progress toward some 
of the Office's goals, the proposed alternative is the only one that 
does so in a way that does not impose undue costs on patent applicants 
and holders.
    A comparison between the proposed fee schedule for this proposed 
rule, and existing fees (labeled Alternative 1--Proposed Fee Schedule--
Setting and Adjusting Patent Fees during Fiscal Year 2020) is available 
at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, in the document entitled ``USPTO Setting and Adjusting 
Patent Fees during Fiscal Year 2020--IRFA Tables.'' Fee changes for 
small and micro entities are included in the tables. For the comparison 
between proposed fees and current fees, as noted above, the ``current 
fees'' column displays the fees that were in effect as of January 2018.
ii. Other Alternatives Considered
    In addition to the proposed fee schedule set forth in Alternative 
1, above, the Office considered several other alternative approaches. 
For each alternative considered, the Office calculated proposed fees 
and the resulting revenue derived by each alternative scenario. The 
proposed fees and their corresponding revenue tables are available at 
https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting. Please note, only the fees outlined in Alternative 1 are 
proposed in this NPRM; other scenarios are shown only to demonstrate 
the Office's analysis of other options.
a. Alternative 2: Unit Cost Recovery
    It is common practice in the Federal Government to set individual 
fees at a level sufficient to recover the cost of that single service. 
In fact, official guidance on user fees, as cited in OMB Circular A-25: 
User Charges, states that user charges (fees) should be sufficient to 
recover the full cost to the Federal Government of providing the 
particular service, resource, or good, when the government is acting in 
its capacity as sovereign.
    As such, the USPTO considered setting most individual large entity 
fees at the historical cost of performing the activities related to the 
particular service in FY 2018. There are several complexities in 
achieving individual fee unit cost recovery for the patent fee 
schedule. The most significant is the AIA requirement to provide a 50 
percent discount on fees to small entities and a 75 percent discount on 
fees to micro entities. To account for this requirement, this 
alternative continues existing small and micro entity discounts where 
eligible under AIA authority. Thus, in order to continue the small and 
micro entity discounts and generate sufficient revenue to recover the 
Office's anticipated budgetary requirements over the five-year period, 
for this alternative, maintenance fees must be set significantly above 
unit cost.
    With the exception of maintenance fees, fees for which there is no 
FY 2018 cost data would be set at current rates under this alternative. 
The Office no longer collects activity-based information for 
maintenance fees, and previous year unit costs were negligible. For the 
small number of services that have a variable fee, the aggregate 
revenue table does not list a fee. Instead, for those services with an 
estimated workload, the workload is listed in

[[Page 37429]]

dollars rather than units to develop revenue estimates. Fees without 
either a fixed fee rate or a workload estimate are assumed to provide 
zero revenue to the Office. Note, this alternative bases fee rates for 
FY 2020 through FY 2024 on FY 2018 historical costs. The Office 
recognizes that this approach does not account for inflationary factors 
that would likely increase costs and necessitate higher fees in the 
out-years.
    Alternative 2 does not align well with the strategic and policy 
goals of this proposed rule. Both the current and proposed fee 
schedules are structured to collect more fees further along in the 
process (i.e. issue fees and maintenance fees), where the patent owner 
has better information about a patent's value, rather than up front 
(i.e., filing fees, search fees, and examination fees), when applicants 
are less certain about the value of their art, even though the front-
end services are costlier to the Office. This alternative presents 
significant barriers to those seeking patent protection, because if the 
Office were to immediately shift from the current front-end/back-end 
balance to a unit cost recovery structure, front-end fees would 
increase significantly, nearly tripling in some cases (e.g., search 
fees).
    The Office has estimated the potential quantitative elasticity 
impacts for application filings (e.g., filing, search, and examination 
fees), maintenance renewals (all stages), and other major fee 
categories. Results of this analysis indicate that a high cost of entry 
into the patent system could lead to a significant decrease in the 
incentives to invest in innovative activities among all entities, 
especially for small and micro entities. Under the current fee 
schedule, maintenance fees subsidize all applications, including those 
applications for which no claims are allowed. By insisting on unit cost 
payment at each point in the application process, the Office is 
effectively charging high fees for every attempted patent, meaning 
those applicants who have less information about the patentability of 
their claims or the market value of their invention may be less likely 
to pursue initial prosecution (e.g., filing, search, and examination) 
or subsequent actions to continue prosecution (e.g., RCE). The ultimate 
effect of these changes in behavior is likely to stifle innovation.
    Similarly, the Office suspects that renewal rates could change as 
well, given fee reductions for maintenance fees at each of the three 
stages. While some innovators and firms may choose to file fewer 
applications given the higher front-end costs, others, whose claims are 
allowed or upheld, may seek to fully maximize the benefits of obtaining 
a patent by keeping those patents in force for longer than they would 
have previously (i.e., under the baseline). In the aggregate, patents 
that are maintained beyond their useful life weaken the IP system by 
slowing the rate of public accessibility and follow-on inventions, 
which is contrary to the Office's policy factor of promoting innovation 
strategies. In sum, this alternative is inadequate to accomplish the 
goals and strategies as stated in Part III of this proposed rule.
    The fee schedule for Alternative 2: Unit Cost Recovery is available 
at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, in the document entitled ``USPTO Setting and Adjusting 
Patent Fees during Fiscal Year 2020--IRFA Tables.'' For the comparison 
between proposed (unit cost recovery) fees and current fees, the 
``current fees'' column displays the fees that are in effect as of 
January 2018. This column is used to calculate dollar and percent fee 
change compared to proposed fees.
b. Alternative 3: Across the Board Adjustment
    In years past, the USPTO used its authority to adjust statutory 
fees annually according to increases in the consumer price index (CPI), 
which is a commonly used measure of inflation. Building on this prior 
approach and incorporating the additional authority under the AIA to 
set small and micro entity fees, Alternative 3 would set fees by 
applying a one-time 10.0 percent, across the board inflationary 
increase to the baseline (current fees) beginning in FY 2021. Ten 
percent represents the change in revenue needed to achieve the 
aggregate revenue needed to cover future budgetary requirements.
    As estimated by the CBO, projected CPI rates by fiscal year are: 
2.4 percent in FY 2020, 2.5 percent in FY 2021, 2.5 percent in FY 2022, 
and 2.4 percent in both FY 2023 and FY 2024. The Office elected not to 
apply the estimated cumulative inflationary adjustment (12.2 percent), 
from FY 2020 through FY 2024, because doing so would result in 
significantly more fee revenue than needed to meet the Office's core 
mission and strategic priorities. Under this alternative, nearly every 
existing fee would be increased and no fees would be discontinued or 
reduced. Given that all entities (large, small, and micro) would pay 10 
percent higher fees for every product and service, especially the fees 
due at the time of filing, this alternative does not adequately support 
the Office's policy factor to promote innovation strategies.
    The fee schedule for Alternative 3: Across the Board Adjustment is 
available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting, in the document entitled ``USPTO Setting and 
Adjusting Patent Fees during Fiscal Year 2020--IRFA Tables.'' For the 
comparison between proposed (across the board adjustment) fees and 
current fees, the ``current fees'' column displays the fees that are in 
effect as of July 2018.
c. Alternative 4: Baseline (Current Fee Schedule)
    The Office considered a no-action alternative. This alternative 
would retain the status quo, meaning that the Office would continue the 
small and micro entity discounts that the Congress provided in Section 
10 of the Act and maintain fees as of January 2018.
    This approach would not provide sufficient aggregate revenue to 
accomplish the Office's rulemaking goals, as set forth in Part III of 
this NPRM or the Strategic Plan. IT improvement, progress on backlog 
and pendency, and other improvement activities would continue, but at a 
significantly slower rate as increases in core patent examination costs 
that are necessary to implement strategic initiative to issue highly 
reliable patents--such as increasing the time examiners are provided to 
work on each application--crowd out funding for other improvements. 
Likewise, without a fee increase, the USPTO would deplete its operating 
reserves, leaving the Office vulnerable to fiscal and economic events. 
This would expose core operations to unacceptable levels of financial 
risk and would position the Office to have to return to making 
inefficient, short-term funding decisions.
iii. Alternatives Specified by the RFA
    The RFA provides that an agency also consider four specified 
``alternatives'' or approaches, namely: (1) Establishing different 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) clarifying, 
consolidating, or simplifying compliance and reporting requirements 
under the rule for small entities; (3) using performance rather than 
design standards; and (4) exempting small entities from coverage of the 
rule, or any part thereof. 5 U.S.C. 604(c). The USPTO discusses each of 
these specified alternatives or approaches below and describes how this 
NPRM is adopting these approaches.

[[Page 37430]]

Differing Requirements
    As discussed above, the changes proposed in this proposed rule 
would continue existing fee discounts for small and micro entities that 
take into account the reduced resources available to them as well as 
offer new discounts when applicable under AIA authority. Specifically, 
micro entities would continue to receive a 75 percent reduction in 
patent fees under this proposal and non-micro, small entities would 
continue to pay 50 percent of the fee.
    This proposed rule sets fee levels but does not set or alter 
procedural requirements for asserting small or micro entity status. To 
pay reduced patent fees, small entities must merely assert small entity 
status to pay reduced patent fees. The small entity may make this 
assertion by either checking a box on the transmittal form, ``Applicant 
claims small entity status,'' or by paying the basic filing or basic 
national small entity fee exactly. The process to claim micro entity 
status is similar in that eligible entities need only submit a written 
certification of their status prior to or at the time a reduced fee is 
paid. This proposed rule does not change any reporting requirements for 
any small or micro entity. For both small and micro entities, the 
burden to establish their status is nominal (making an assertion or 
submitting a certification) and the benefit of the fee reductions (50 
percent for small entities and 75 percent for micro entities) is 
significant.
    This proposed rule makes the best use of differing requirements for 
small and micro entities. It also makes the best use of the redesigned 
fee structure, as discussed further below.
Clarification, Consolidation, or Simplification of Requirements
    This proposed rule pertains to setting or adjusting patent fees. 
Any compliance or reporting requirements proposed in this rule are de 
minimis and necessary to implement lower proposed fees. Therefore, any 
clarifications, consolidations, or simplifications to compliance and 
reporting requirements for small entities are not applicable or would 
not achieve the objectives of this rulemaking.
Performance Standards
    Performance standards do not apply to the current proposed rule.
Exemption for Small and Micro Entities
    The proposed changes here maintain a 50 percent reduction in fees 
for small entities and a 75 percent reduction in fees for micro 
entities. The Office considered exempting small and micro entities from 
paying increased patent fees, but determined that the USPTO would lack 
statutory authority for this approach. Section 10(b) of the Act 
provides that ``fees set or adjusted under subsection (a) for filing, 
searching, examining, issuing, appealing, and maintaining patent 
applications and patents shall be reduced by 50 percent [for small 
entities] and shall be reduced by 75 percent [for micro entities]'' 
(emphasis added). Neither the AIA nor any other statute authorizes the 
USPTO simply to exempt small or micro entities, as a class of 
applicants, from paying increased patent fees.
    C. Executive Order 12866 (Regulatory Planning and Review): This 
proposed rule has been determined to be economically significant for 
purposes of Executive Order 12866 (Sept. 30, 1993). The Office has 
developed a RIA as required for rulemakings deemed to be economically 
significant. The complete RIA is available at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
    D. Executive Order 13563 (Improving Regulation and Regulatory 
Review): The Office has complied with Executive Order 13563 (Jan. 18, 
2011). Specifically, the Office has, to the extent feasible and 
applicable: (1) Made a reasoned determination that the benefits justify 
the costs of the proposed rule; (2) tailored the proposed rule to 
impose the least burden on society consistent with obtaining the 
regulatory objectives; (3) selected a regulatory approach that 
maximizes net benefits; (4) specified performance objectives; (5) 
identified and assessed available alternatives; (6) involved the public 
in an open exchange of information and perspectives among experts in 
relevant disciplines, affected stakeholders in the private sector, and 
the public as a whole, and provided on-line access to the rulemaking 
docket; (7) attempted to promote coordination, simplification, and 
harmonization across government agencies and identified goals designed 
to promote innovation; (8) considered approaches that reduce burdens 
and maintain flexibility and freedom of choice for the public; and (9) 
ensured the objectivity of scientific and technological information and 
processes.
    E. Executive Order 13771 (Reducing Regulation and Controlling 
Regulatory Costs): This proposed rule is not expected to be subject to 
the requirements of Executive Order 13771 (Jan. 30, 2017) because this 
proposed rule is expected to involve a transfer payment.
    F. Executive Order 13132 (Federalism): This rulemaking does not 
contain policies with federalism implications sufficient to warrant 
preparation of a Federalism Assessment under Executive Order 13132 
(Aug. 4, 1999).
    G. Executive Order 13175 (Tribal Consultation): This rulemaking 
will not: (1) Have substantial direct effects on one or more Indian 
tribes; (2) impose substantial direct compliance costs on Indian tribal 
governments; or (3) preempt tribal law. Therefore, a tribal summary 
impact statement is not required under Executive Order 13175 (Nov. 6, 
2000).
    H. Executive Order 13211 (Energy Effects): This rulemaking is not a 
significant energy action under Executive Order 13211 because this 
proposed rulemaking is not likely to have a significant adverse effect 
on the supply, distribution, or use of energy. Therefore, a Statement 
of Energy Effects is not required under Executive Order 13211 (May 18, 
2001).
    I. Executive Order 12988 (Civil Justice Reform): This rulemaking 
meets applicable standards to minimize litigation, eliminate ambiguity, 
and reduce burden as set forth in sections 3(a) and 3(b)(2) of 
Executive Order 12988 (Feb. 5, 1996).
    J. Executive Order 13045 (Protection of Children): This rulemaking 
does not concern an environmental risk to health or safety that may 
disproportionately affect children under Executive Order 13045 (Apr. 
21, 1997).
    K. Executive Order 12630 (Taking of Private Property): This 
rulemaking will not affect a taking of private property or otherwise 
have taking implications under Executive Order 12630 (Mar. 15, 1988).
    L. Congressional Review Act: Under the Congressional Review Act 
provisions of the Small Business Regulatory Enforcement Fairness Act of 
1996 (5 U.S.C. 801 et seq.), prior to issuing any final rule, the 
United States Patent and Trademark Office will submit a report 
containing the rule and other required information to the United States 
Senate, the United States House of Representatives, and the Comptroller 
General of the Government Accountability Office. The changes in this 
proposed rule are expected to result in an annual effect on the economy 
of 100 million dollars or more, a major increase in costs or prices, or 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets. Therefore, this proposed rule is a ``major rule'' as 
defined in 5 U.S.C. 804(2).

[[Page 37431]]

    M. Unfunded Mandates Reform Act of 1995: The proposed changes set 
forth in this rulemaking do not involve a Federal intergovernmental 
mandate that will result in the expenditure by State, local, and tribal 
governments, in the aggregate, of 100 million dollars (as adjusted) or 
more in any one year, or a Federal private sector mandate that will 
result in the expenditure by the private sector of 100 million dollars 
(as adjusted) or more in any one year, and will not significantly or 
uniquely affect small governments. Therefore, no actions are necessary 
under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 
U.S.C. 1501 et seq.
    N. National Environmental Policy Act: This rulemaking will not have 
any effect on the quality of the environment and is thus categorically 
excluded from review under the National Environmental Policy Act of 
1969. See 42 U.S.C. 4321 et seq.
    O. National Technology Transfer and Advancement Act: The 
requirements of section 12(d) of the National Technology Transfer and 
Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because 
this rulemaking does not contain provisions which involve the use of 
technical standards.
    P. Paperwork Reduction Act: The Paperwork Reduction Act of 1995 (44 
U.S.C. 3501 et seq.) requires that the Office consider the impact of 
paperwork and other information collection burdens imposed on the 
public. This proposed rule involves information collection requirements 
which are subject to review by the OMB under the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3501-3549). The collection of information 
involved in this proposed rule has been reviewed and previously 
approved by OMB under control numbers 0651-0012, 0651-0016, 0651-0020, 
0651-0021, 0651-0031, 0651-0032, 0651-0033, 0651-0059, 0651-0063, 0651-
0064, 0651-0069, and 0651-0075.
    Notwithstanding any other provision of law, no person is required 
to respond to nor shall any person be subject to a penalty for failure 
to comply with a collection of information subject to the requirements 
of the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB control number.

List of Subjects

37 CFR Part 1

    Administrative practice and procedure, Biologics, Courts, Freedom 
of information, Inventions and patents, Reporting and recordkeeping 
requirements, Small businesses.

37 CFR Part 11

    Administrative practice and procedure, Inventions and patents, 
Lawyers, Reporting and recordkeeping requirements.

37 CFR Part 41

    Administrative practice and procedure, Inventions and patents, 
Lawyers, Reporting and recordkeeping requirements.

37 CFR Part 42

    Administrative practice and procedure, Inventions and patents, 
Lawyers.
    For the reasons set forth in the preamble, 37 CFR parts 1, 11, 41, 
and 42 are proposed to be amended as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

0
1. The authority citation for 37 CFR part 1 continues to read as 
follows:

    Authority:  35 U.S.C. 2(b)(2), unless otherwise noted.
0
2. Section 1.16 is amended by:
0
a. Revising paragraphs (a) through (e);
0
b. Adding table headings in paragraphs (f) and (g);
0
c. Revising paragraph (h);
0
d. Adding a table heading in paragraph (i);
0
e. Revising paragraphs (j) and (k);
0
f. Adding a table heading in paragraph (l);
0
g. Revising paragraphs (m) through (s);
0
h. Adding a table heading in paragraph (t); and
0
i. Adding paragraph (u).
    The revisions and additions read as follows:


Sec.  1.16  National application filing, search, and examination fees.

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

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $80.00
By a small entity (Sec.   1.27(a)).........................      $160.00
By a small entity (Sec.   1.27(a)) if the application is          $80.00
 submitted in compliance with the Office electronic filing
 system (Sec.   1.27(b)(2))................................
By other than a small or micro entity......................      $320.00
------------------------------------------------------------------------

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

                        Table 2 to Paragraph (b)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................      $110.00
By other than a small or micro entity......................      $220.00
------------------------------------------------------------------------

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

                        Table 3 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................      $110.00
By other than a small or micro entity......................      $220.00
------------------------------------------------------------------------

    (d) Basic fee for filing each provisional application:

                        Table 4 to Paragraph (d)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $75.00
By a small entity (Sec.   1.27(a)).........................      $150.00
By other than a small or micro entity......................      $300.00
------------------------------------------------------------------------

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

                        Table 5 to Paragraph (e)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $80.00
By a small entity (Sec.   1.27(a)).........................      $160.00
By other than a small or micro entity......................      $320.00
------------------------------------------------------------------------

    (f) * * *

                        Table 6 to Paragraph (f)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

    (g) * * *

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

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

                        Table 8 to Paragraph (h)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $120.00
By a small entity (Sec.   1.27(a)).........................      $240.00
By other than a small or micro entity......................      $480.00
------------------------------------------------------------------------

    (i) * * *

                        Table 9 to Paragraph (i)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                        Table 10 to Paragraph (j)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $215.00

[[Page 37432]]

 
By a small entity (Sec.   1.27(a)).........................      $430.00
By other than a small or micro entity......................      $860.00
------------------------------------------------------------------------

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

                        Table 11 to Paragraph (k)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $175.00
By a small entity (Sec.   1.27(a)).........................      $350.00
By other than a small or micro entity......................      $700.00
------------------------------------------------------------------------

    (l) * * *

                        Table 12 to Paragraph (l)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                        Table 13 to Paragraph (m)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $110.00
By a small entity (Sec.   1.27(a)).........................      $220.00
By other than a small or micro entity......................      $440.00
------------------------------------------------------------------------

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

                        Table 14 to Paragraph (n)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $175.00
By a small entity (Sec.   1.27(a)).........................      $350.00
By other than a small or micro entity......................      $700.00
------------------------------------------------------------------------

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

                        Table 15 to Paragraph (o)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $200.00
By a small entity (Sec.   1.27(a)).........................      $400.00
By other than a small or micro entity......................      $800.00
------------------------------------------------------------------------

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

                        Table 16 to Paragraph (p)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................      $320.00
By other than a small or micro entity......................      $640.00
------------------------------------------------------------------------

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

                        Table 17 to Paragraph (q)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $165.00
By a small entity (Sec.   1.27(a)).........................      $330.00
By other than a small or micro entity......................      $660.00
------------------------------------------------------------------------

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

                        Table 18 to Paragraph (r)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $580.00
By a small entity (Sec.   1.27(a)).........................    $1,160.00
By other than a small or micro entity......................    $2,320.00
------------------------------------------------------------------------

    (s) Application size fee for any application filed under 35 U.S.C. 
111 for the specification and drawings which exceed 100 sheets of 
paper, for each additional 50 sheets or fraction thereof:

                        Table 19 to Paragraph (s)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $105.00
By a small entity (Sec.   1.27(a)).........................      $210.00
By other than a small or micro entity......................      $420.00
------------------------------------------------------------------------

    (t) * * *

                        Table 20 to Paragraph (t)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                        Table 21 to Paragraph (u)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $100.00
By a small entity (Sec.   1.27(a)).........................       200.00
By a small entity (Sec.   1.27(a)) if the application is          200.00
 submitted in compliance with the Office electronic filing
 system (Sec.   1.27(b)(2))................................
By other than a small or micro entity......................       400.00
------------------------------------------------------------------------

* * * * *
0
3. Section 1.17 is amended by:
0
a. Revising paragraph (a);
0
b. Revising paragraphs (c) through (g);
0
c. Adding a table heading in paragraph (h);
0
d. Adding a table heading in paragraph (i)(1);
0
e. Revising paragraphs (i)(2) and (k);
0
f. Revising paragraph (m);
0
g. Adding a table heading in paragraph (o);
0
h. Revising paragraphs (p) through (s); and
0
i. Adding a table heading in paragraph (t).
    The revisions and additions read as follows:


Sec.  1.17   Patent application and reexamination processing fees.

    (a) Extension fees pursuant to Sec.  1.136(a):
    (1) For reply within first month:

                       Table 1 to Paragraph (a)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................       110.00
By other than a small or micro entity......................       220.00
------------------------------------------------------------------------

    (2) For reply within second month:

                       Table 2 to Paragraph (a)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................      $320.00
By other than a small or micro entity......................      $640.00
------------------------------------------------------------------------

    (3) For reply within third month:

                       Table 3 to Paragraph (a)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $370.00
By a small entity (Sec.   1.27(a)).........................       740.00
By other than a small or micro entity......................     1,480.00
------------------------------------------------------------------------

    (4) For reply within fourth month:

                       Table 4 to Paragraph (a)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $580.00
By a small entity (Sec.   1.27(a)).........................     1,160.00
By other than a small or micro entity......................     2,320.00
------------------------------------------------------------------------

    (5) For reply within fifth month:

                       Table 5 to Paragraph (a)(5)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $790.00
By a small entity (Sec.   1.27(a)).........................     1,580.00
By other than a small or micro entity......................     3,160.00
------------------------------------------------------------------------

* * * * *
    (c) For filing a request for prioritized examination under Sec.  
1.102(e):

                        Table 6 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,050.00
By a small entity (Sec.   1.27(a)).........................     2,100.00
By other than a small or micro entity......................     4,200.00
------------------------------------------------------------------------

    (d) For correction of inventorship in an application after the 
first action on the merits:

                        Table 7 to Paragraph (d)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................      $320.00
By other than a small or micro entity......................       640.00
------------------------------------------------------------------------

    (e) To request continued examination pursuant to Sec.  1.114:
    (1) For filing a first request for continued examination pursuant 
to Sec.  1.114 in an application:

                       Table 8 to Paragraph (e)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $340.00
By a small entity (Sec.   1.27(a)).........................       680.00

[[Page 37433]]

 
By other than a small or micro entity......................     1,360.00
------------------------------------------------------------------------

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

                       Table 9 to Paragraph (e)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $500.00
By a small entity (Sec.   1.27(a)).........................     1,000.00
By other than a small or micro entity......................     2,000.00
------------------------------------------------------------------------

    (f) For filing a petition under one of the sections in paragraphs 
(f)(1) through (6) of this section which refers to this paragraph (f):

                        Table 10 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $105.00
By a small entity (Sec.   1.27(a)).........................       210.00
By other than a small or micro entity......................       420.00
------------------------------------------------------------------------

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

                        Table 11 to Paragraph (g)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $55.00
By a small entity (Sec.   1.27(a)).........................       110.00
By other than a small or micro entity......................       220.00
------------------------------------------------------------------------

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

                        Table 12 to Paragraph (h)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

    (i) * * *
    (1) * * *

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

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

                      Table 14 to Paragraph (i)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $140.00
By a small entity (Sec.   1.27(a)).........................       140.00
By other than a small or micro entity......................       140.00
------------------------------------------------------------------------

    (i) Section 1.217--for processing a redacted copy of a paper 
submitted in the file of an application in which a redacted copy was 
submitted for the patent application publication.
    (ii) Section 1.221--for requesting voluntary publication or 
republication of an application.
* * * * *
    (k) For filing a request for expedited examination under Sec.  
1.155(a):

                        Table 15 to Paragraph (k)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $500.00
By a small entity (Sec.   1.27(a)).........................     1,000.00
By other than a small or micro entity......................     2,000.00
------------------------------------------------------------------------

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

                        Table 16 to Paragraph (m)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $525.00
By a small entity (Sec.   1.27(a)).........................     1,050.00
By other than a small or micro entity......................     2,100.00
------------------------------------------------------------------------

* * * * *
    (o) * * *

                        Table 17 to Paragraph (o)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                        Table 18 to Paragraph (p)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $65.00
By a small entity (Sec.   1.27(a)).........................       130.00
By other than a small or micro entity......................       260.00
------------------------------------------------------------------------

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

                        Table 19 to Paragraph (r)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $220.00
By a small entity (Sec.   1.27(a)).........................       440.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------

    (s) For each additional invention requested to be examined under 
Sec.  1.129(b):

[[Page 37434]]



                        Table 20 to Paragraph (s)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29.............................      $220.00
By a small entity (Sec.   1.27(a)).........................       440.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------

    (t) * * *

                        Table 21 to Paragraph (t)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

0
4. Section 1.18 is amended by revising paragraphs (a), (b)(1), (c), 
(d)(3), (e) and (f) to read as follows:


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

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

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $300.00
By a small entity (Sec.   1.27(a)).........................       600.00
By other than a small or micro entity......................     1,200.00
------------------------------------------------------------------------

    (b)(1) Issue fee for issuing an original design patent:

                       Table 2 to Paragraph (b)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $185.00
By a small entity (Sec.   1.27(a)).........................       370.00
By other than a small or micro entity......................       740.00
------------------------------------------------------------------------

* * * * *
    (c) Issue fee for issuing an original plant patent:

                        Table 3 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $210.00
By a small entity (Sec.   1.27(a)).........................       420.00
By other than a small or micro entity......................       840.00
(d) * * *
(3) Republication fee (Sec.   1.221(a))....................       320.00
(e) For filing an application for patent term adjustment          210.00
 under Sec.   1.705:.......................................
(f) For filing a request for reinstatement of all or part         420.00
 of the term reduced pursuant to Sec.   1.704(b) in an
 application for patent term adjustment under Sec.   1.705:
------------------------------------------------------------------------

0
5. Section 1.19 is amended by revising paragraphs (b)(1)(i)(B) and 
(b)(1)(ii)(B) and removing and reserving paragraphs (j) through (l) to 
read as follows:


Sec.  1.19   Document supply fees.

* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (B) Copy Patent File Wrapper, Paper Medium, Any Number of Sheets: 
$290.00.
* * * * *
    (ii) * * *
    (B) Copy Patent File Wrapper, Electronic, Any Medium, Any Size: 
$60.00.
* * * * *
0
6. Section 1.20 is revised to read as follows:


Sec.  1.20   Post issuance fees.

    (a) For providing a certificate of correction for applicant's 
mistake (Sec.  1.323): $160.00.
    (b) Processing fee for correcting inventorship in a patent (Sec.  
1.324): $160.00.
    (c) In reexamination proceedings:
    (1)(i) For filing a request for ex parte reexamination (Sec.  
1.510(a)) having:
    (A) Forty (40) or fewer pages;
    (B) Lines that are double-spaced or one-and-a-half spaced;
    (C) Text written in a non-script type font such as Arial, Times New 
Roman, or Courier;
    (D) A font size no smaller than 12 point;
    (E) Margins which conform to the requirements of Sec.  
1.52(a)(1)(ii); and
    (F) Sufficient clarity and contrast to permit direct reproduction 
and electronic capture by use of digital imaging and optical character 
recognition.

                     Table 1 to Paragraph (c)(1)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,575.00
By a small entity (Sec.   1.27(a)).........................     3,150.00
By other than a small or micro entity......................     6,300.00
------------------------------------------------------------------------

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

                       Table 2 to Paragraph (c)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $3,150.00
By a small entity (Sec.   1.27(a)).........................     6,300.00
By other than a small or micro entity......................    12,600.00
------------------------------------------------------------------------

    (3) For filing with a request for reexamination or later 
presentation at any other time of each claim in independent form in 
excess of three and also in excess of the number of claims in 
independent form in the patent under reexamination:

                       Table 3 to Paragraph (c)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $120.00
By a small entity (Sec.   1.27(a)).........................       240.00
By other than a small or micro entity......................       480.00
------------------------------------------------------------------------

    (4) For filing with a request for reexamination or later 
presentation at any other time of each claim (whether dependent or 
independent) in excess of 20 and also in excess of the number of claims 
in the patent under reexamination (note that Sec.  1.75(c) indicates 
how multiple dependent claims are considered for fee calculation 
purposes):

                       Table 4 to Paragraph (c)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $25.00
By a small entity (Sec.   1.27(a)).........................        50.00
By other than a small or microentity.......................       100.00
------------------------------------------------------------------------

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

                       Table 5 to Paragraph (c)(6)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $510.00
By a small entity (Sec.   1.27(a)).........................     1,020.00
By other than a small or micro entity......................     2,040.00
------------------------------------------------------------------------

    (7) For a refused request for ex parte reexamination under Sec.  
1.510 (included in the request for ex parte reexamination fee at Sec.  
1.20(c)(1) or (2)):

                       Table 6 to Paragraph (c)(7)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $945.00
By a small entity (Sec.   1.27(a)).........................     1,890.00
By other than a small or microentity.......................     3,780.00
------------------------------------------------------------------------

    (d) For filing each statutory disclaimer (Sec.  1.321): $170.00.
    (e) For maintaining an original or any reissue patent, except a 
design or plant patent, based on an application filed on or after 
December 12, 1980, in force beyond four years, the fee being due by 
three years and six months after the original grant:

[[Page 37435]]



                        Table 7 to Paragraph (e)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $500.00
By a small entity (Sec.   1.27(a)).........................     1,000.00
By other than a small or micro entity......................     2,000.00
------------------------------------------------------------------------

    (f) For maintaining an original or any reissue patent, except a 
design or plant patent, based on an application filed on or after 
December 12, 1980, in force beyond eight years, the fee being due by 
seven years and six months after the original grant:

                        Table 8 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $940.00
By a small entity (Sec.   1.27(a)).........................     1,880.00
By other than a small or micro entity......................     3,760.00
------------------------------------------------------------------------

    (g) For maintaining an original or any reissue patent, except a 
design or plant patent, based on an application filed on or after 
December 12, 1980, in force beyond twelve years, the fee being due by 
eleven years and six months after the original grant:

                        Table 9 to Paragraph (g)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,925.00
By a small entity (Sec.   1.27(a)).........................     3,850.00
By other than a small or micro entity......................     7,700.00
------------------------------------------------------------------------

    (h) Surcharge for paying a maintenance fee during the six-month 
grace period following the expiration of three years and six months, 
seven years and six months, and eleven years and six months after the 
date of the original grant of a patent based on an application filed on 
or after December 12, 1980:

                        Table 10 to Paragraph (h)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $125.00
By a small entity (Sec.   1.27(a)).........................       250.00
By other than a small or micro entity......................       500.00
------------------------------------------------------------------------

    (i) [Reserved]
    (j) For filing an application for extension of the term of a 
patent.

                        Table 11 to Paragraph (j)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Application for extension under Sec.   1.740...........    $1,180.00
(2) Initial application for interim extension under Sec.          440.00
 1.790.....................................................
(3) Subsequent application for interim extension under Sec.       230.00
   1.790...................................................
------------------------------------------------------------------------

    (k) In supplemental examination proceedings:
    (1) For processing and treating a request for supplemental 
examination:

                      Table 12 to Paragraph (k)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,155.00
By a small entity (Sec.   1.27(a)).........................     2,310.00
By other than a small or micro entity......................     4,620.00
------------------------------------------------------------------------

    (2) For ex parte reexamination ordered as a result of a 
supplemental examination proceeding:

                      Table 13 to Paragraph (k)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $3,175.00
By a small entity (Sec.   1.27(a)).........................     6,350.00
By other than a small or micro entity......................    12,700.00
------------------------------------------------------------------------

    (3) For processing and treating, in a supplemental examination 
proceeding, a non-patent document over 20 sheets in length, per 
document:
    (i) Between 21 and 50 sheets:

                     Table 14 to Paragraph (k)(3)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $45.00
By a small entity (Sec.   1.27(a)).........................        90.00
By other than a small or microentity.......................       180.00
------------------------------------------------------------------------

    (ii) For each additional 50 sheets or a fraction thereof:

                    Table 15 to Paragraph (k)(3)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $75.00
By a small entity (Sec.   1.27(a)).........................       150.00
By other than a small or micro entity......................       300.00
------------------------------------------------------------------------

0
7. Section 1.21 is amended by revising paragraphs (a)(1), (2), and (5), 
adding paragraphs (a)(7) and (8), revising paragraphs (a)(9)(ii) and 
(a)(10), adding paragraph (k), and revising paragraphs (n), (o), and 
(q) to read as follows:


Sec.  1.21   Miscellaneous fees and charges.

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

                       Table 1 to Paragraph (o)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $265.00
By a small entity (Sec.   1.27(a)).........................       530.00
By other than a small or micro entity......................     1,060.00
------------------------------------------------------------------------

    (2) First receipt by the Office of a sequence listing in electronic 
form exceeding 800MB in size (without file compression):

                       Table 2 to Paragraph (o)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $2,625.00
By a small entity (Sec.   1.27(a)).........................     5,250.00
By other than a small or micro entity......................    10,500.00
------------------------------------------------------------------------

* * * * *

[[Page 37436]]

    (q) Additional Fee for Expedited Service: $170.00.
0
8. Section 1.27 is amended by revising paragraph (c)(3) introductory 
text as follows:


Sec.  1.27  Definition of small entities and establishing status as a 
small entity to permit payment of small entity fees; when a 
determination of entitlement to small entity status and notification of 
loss of entitlement to small entity status are required; fraud on the 
Office.

* * * * *
    (c) * * *
    (3) Assertion by payment of the small entity basic filing, basic 
transmittal, basic national fee, international search fee, or 
individual designation fee in an international design application. The 
payment, by any party, of the exact amount of one of the small entity 
basic filing fees set forth in Sec.  1.16(a), (b), (c), (d), or (e), 
the small entity transmittal fee set forth in Sec.  1.445(a)(1) or 
Sec.  1.1031(a), the small entity international search fee set forth in 
Sec.  1.445(a)(2) to a Receiving Office other than the United States 
Receiving Office in the exact amount established for that Receiving 
Office pursuant to PCT Rule 16, or the small entity basic national fee 
set forth in Sec.  1.492(a), will be treated as a written assertion of 
entitlement to small entity status even if the type of basic filing, 
basic transmittal, or basic national fee is inadvertently selected in 
error. The payment, by any party, of the small entity first part of the 
individual designation fee for the United States to the International 
Bureau (Sec.  1.1031) will be treated as a written assertion of 
entitlement to small entity status.
* * * * *
0
9. Section 1.431 is amended by revising paragraph (c) to read as 
follows:


Sec.  1.431  International application requirements.

* * * * *
    (c) Payment of the international filing fee (PCT Rule 15.2) and the 
transmittal and search fees (Sec.  1.445) may be made in full at the 
time the international application papers required by paragraph (b) of 
this section are deposited or within one month thereafter. The 
international filing, transmittal, and search fee payable is the 
international filing, transmittal, and search fee in effect on the 
receipt date of the international application. If the international 
filing, transmittal and search fees are not paid within one month from 
the date of receipt of the international application and prior to the 
sending of a notice of deficiency which imposes a late payment fee 
(Sec.  1.445(a)(6)), applicant will be notified and given a one month 
non-extendable time limit within which to pay the deficient fees plus 
the late payment fee.
* * * * *
0
10. Section 1.445 is amended by revising paragraph (a) to read as 
follows:


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

    (a) The following fees and charges for international applications 
are established by law or by the Director under the authority of 35 
U.S.C. 376:
    (1) A transmittal fee (see 35 U.S.C. 361(d) and PCT Rule 14) 
consisting of:
    (i) A basic portion:
    (A) For an international application having a receipt date that is 
on or after [EFFECTIVE DATE OF FINAL RULE]:

                    Table 1 to Paragraph (a)(1)(i)(A)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $65.00
By a small entity (Sec.   1.27(a)).........................       130.00
By other than a small or micro entity......................       260.00
------------------------------------------------------------------------

    (B) For an international application having a receipt date that is 
on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]:

                    Table 2 to Paragraph (a)(1)(i)(B)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $60.00
By a small entity (Sec.   1.27(a)).........................       120.00
By other than a small or micro entity......................       240.00
------------------------------------------------------------------------

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

                     Table 3 to Paragraph (a)(1)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a small entity (Sec.   1.27(a)).........................      $200.00
By other than a small entity...............................       400.00
------------------------------------------------------------------------

    (2) A search fee (see 35 U.S.C. 361(d) and PCT Rule 16):
    (i) For an international application having a receipt date that is 
on or after [EFFECTIVE DATE OF FINAL RULE]:

                     Table 4 to Paragraph (a)(2)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $545.00
By a small entity (Sec.   1.27(a)).........................     1,090.00
By other than a small or micro entity......................     2,180.00
------------------------------------------------------------------------

    (ii) For an international application having a receipt date that is 
on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]:

                     Table 5 to Paragraph (a)(2)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $520.00
By a small entity (Sec.   1.27(a)).........................     1,040.00
By other than a small or micro entity......................    $2,080.00
------------------------------------------------------------------------

    (iii) For an international application having a receipt date that 
is before January 1, 2014: $2,080.00.
    (3) A supplemental search fee when required, per additional 
invention:
    (i) For an international application having a receipt date that is 
on or after [EFFECTIVE DATE OF FINAL RULE]:

                     Table 6 to Paragraph (a)(3)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $545.00
By a small entity (Sec.   1.27(a)).........................     1,090.00
By other than a small or micro entity......................     2,180.00
------------------------------------------------------------------------

    (ii) For an international application having a receipt date that is 
on or after January 1, 2014 and before [EFFECTIVE DATE OF FINAL RULE]:

                     Table 7 to Paragraph (a)(3)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $520.00
By a small entity (Sec.   1.27(a)).........................     1,040.00
By other than a small or micro entity......................     2,080.00
------------------------------------------------------------------------

    (iii) For an international application having a receipt date that 
is before January 1, 2014: $2,080.00.
    (4) A fee equivalent to the transmittal fee in paragraph (a)(1) of 
this section that would apply if the USPTO was the Receiving Office for 
transmittal of an international application to the International Bureau 
for processing in its capacity as a Receiving Office (PCT Rule 19.4).
    (5) Late furnishing fee for providing a sequence listing in 
response to an invitation under PCT Rule 13ter:

                       Table 8 to Paragraph (a)(5)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $75.00
By a small entity (Sec.   1.27(a)).........................       150.00
By other than a small or micro entity......................       300.00
------------------------------------------------------------------------

    (6) Late payment fee pursuant to PCT Rule 16bis.2
* * * * *
0
11. Section 1.482 is revised to read as follows:


Sec.  1.482  International preliminary examination and processing fees.

    (a) The following fees and charges for international preliminary 
examination are established by the Director under the authority of 35 
U.S.C. 376:
    (1) The following preliminary examination fee is due on filing the 
Demand:
    (i) If an international search fee as set forth in Sec.  
1.445(a)(2) has been paid on the international application to the 
United States Patent and Trademark

[[Page 37437]]

Office as an International Searching Authority:

                     Table 1 to Paragraph (a)(1)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................       320.00
By other than a small or micro entity......................       640.00
------------------------------------------------------------------------

    (ii) If the International Searching Authority for the international 
application was an authority other than the United States Patent and 
Trademark Office:

                     Table 2 to Paragraph (a)(1)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $200.00
By a small entity (Sec.   1.27(a)).........................       400.00
By other than a small or micro entity......................       800.00
------------------------------------------------------------------------

    (2) An additional preliminary examination fee when required, per 
additional invention:

                       Table 3 to Paragraph (a)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $160.00
By a small entity (Sec.   1.27(a)).........................       320.00
By other than a small or micro entity......................       640.00
------------------------------------------------------------------------

    (b) The handling fee is due on filing the Demand and shall be as 
prescribed in PCT Rule 57.
    (c) Late furnishing fee for providing a sequence listing in 
response to an invitation under PCT Rule 13ter:

                        Table 4 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1 .29)...........................       $80.00
By a small entity (Sec.   1.27(a)).........................       160.00
By other than a small or micro entity......................       320.00
------------------------------------------------------------------------

0
12. Section 1.492 is amended by:
0
a. Revising paragraph (a);
0
b. Adding table headings in paragraphs (b)(1) and (2);
0
c. Revising paragraphs (b)(3) and (4);
0
d. Adding a table heading in paragraph (c)(1);
0
e. Revising paragraphs (c)(2) and (d);
0
f. Adding a table heading in paragraph (e);
0
g. Revising paragraphs (f) and (h);
0
h. Adding a table heading in paragraph (i); and
0
i. Revising paragraph (j).
    The revisions and additions read as follows:


Sec.  1.49  2 National stage fees.

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

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

    (b) * * *
    (1) * * *

                       Table 2 to Paragraph (b)(1)
------------------------------------------------------------------------
 
---------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

    (2) * * *

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

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

                       Table 4 to Paragraph (b)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $135.00
By a small entity (Sec.   1.27(a)).........................       270.00
By other than a small or micro entity......................       540.00
------------------------------------------------------------------------

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

                       Table 5 to Paragraph (b)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $175.00
By a small entity (Sec.   1.27(a)).........................       350.00
By other than a small or micro entity......................       700.00
------------------------------------------------------------------------

    (c) * * *
    (1) * * *

                       Table 6 to Paragraph (c)(1)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                       Table 7 to Paragraph (c)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $200.00
By a small entity (Sec.   1.27(a)).........................       400.00
By other than a small or micro entity......................       800.00
------------------------------------------------------------------------

    (d) In addition to the basic national fee, for filing or on later 
presentation at any other time of each claim in independent form in 
excess of 3:

                        Table 8 to Paragraph (d)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $120.00
By a small entity (Sec.   1.27(a)).........................       240.00
By other than a small or micro entity......................       480.00
------------------------------------------------------------------------

    (e) * * *

                        Table 9 to Paragraph (e)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                        Table 10 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $215.00
By a small entity (Sec.   1.27(a)).........................       430.00
By other than a small or micro entity......................       860.00
------------------------------------------------------------------------

* * * * *
    (h) Surcharge for filing any of the search fee, the examination 
fee, or the oath or declaration after the date of the commencement of 
the national stage (Sec.  1.491(a)) pursuant to Sec.  1.495(c):

                        Table 11 to Paragraph (h)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $40.00
By a small entity (Sec.   1.27(a)).........................        80.00
By other than a small or micro entity......................       160.00
------------------------------------------------------------------------

    (i) * * *

                        Table 12 to Paragraph (i)
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
 
                                * * * * *
------------------------------------------------------------------------

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

                        Table 13 to Paragraph (j)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $105.00
By a small entity (Sec.   1.27(a)).........................       210.00
By other than a small or micro entity......................       420.00
------------------------------------------------------------------------

PART 11--REPRESENTATION OF OTHERS BEFORE THE UNITED STATES PATENT 
AND TRADEMARK OFFICE

0
13. The authority citation for 37 CFR part 11 continues to read as 
follows:

    Authority: 5 U.S.C. 500; 15 U.S.C. 1123; 35 U.S.C. 2(b)(2), 32, 
41; sec. 1, Pub. L. 113-227, 128 Stat. 2114.
0
14. Section 11.8 is amended by adding paragraph (d) to read as follows:


Sec.  11.8   Oath and registration fee.

* * * * *
    (d)(1) Each registered practitioner, as well as individuals granted 
limited recognition under Sec.  11.9(b), shall each year, on or before 
a date to be set by the OED Director, pay to the OED Director an annual 
active patent practitioner fee as set forth in Sec.  1.21(a)(8) of this 
chapter. Adequate notice shall be published and sent to practitioners 
in

[[Page 37438]]

advance of the due date for payment of the annual active patent 
practitioner fee. Payment shall be for the calendar year in which the 
annual active patent practitioner fee is assessed. Practitioners shall 
not be liable for the annual active practitioner fee during the 
calendar year in which they are first registered or granted limited 
recognition. Practitioners who are endorsed on the register as 
administratively inactive pursuant to Sec.  11.11(c) or in emeritus 
status pursuant to Sec.  11.11(e)(2) shall not be liable for the annual 
active patent practitioner fee. Practitioners who have been 
disciplinarily suspended, excluded, or who have resigned shall not be 
liable for the annual active patent practitioner fee during the time 
period in which they are suspended, excluded, or have resigned.
    (2) Failure to comply with the provisions of paragraph (d)(1) of 
this section may result in the registered practitioner, or individual 
granted limited recognition under Sec.  11.9(b), being charged a 
delinquency fee as set forth in Sec.  1.21(a)(9)(i) of this chapter and 
may subject a practitioner to administrative suspension as set forth in 
Sec.  11.11(b). An administratively suspended registered practitioner, 
or person granted limited recognition, may be reinstated or reactivated 
on the register pursuant to Sec.  11.11(f)(1).
    (3)(i) A registered practitioner, or person granted limited 
recognition under Sec.  11.9(b), who certifies to the OED Director that 
the practitioner has completed, in the past 24 months, five hours of 
continuing legal education credits in patent law and practice and one 
hour of continuing legal education credit in ethics, shall pay an 
annual active patent practitioner fee in the amount set forth in Sec.  
1.21(a)(8)(i) of this chapter. All other registered practitioners, or 
persons granted limited recognition under Sec.  11.9(b), shall pay an 
annual active patent practitioner fee in the amount set forth in Sec.  
1.21(a)(8)(ii) of this chapter.
    (ii) A registered practitioner, or person granted limited 
recognition under Sec.  11.9(b), may earn up to two of the five hours 
of continuing legal education credit in patent law and practice as set 
forth in paragraph (a) of this section by providing patent pro bono 
legal services through the USPTO Patent Pro Bono Program. One hour of 
continuing legal education credit in patent law and practice may be 
earned for every three hours of patent pro bono legal service.
0
15. Section 11.11 is amended by revising the section heading and 
paragraphs (a) and (b)(1), adding paragraph (b)(4), revising paragraph 
(d)(1), adding paragraph (d)(4), revising paragraphs (d)(6), (e), and 
(f)(1), and adding paragraphs (f)(3) through (5) to read as follows:


Sec.  11.11  Administrative suspension, inactivation, resignation, 
reinstatement, and revocation.

    (a) Contact information. A registered practitioner must notify the 
OED Director of his or her postal address for his or her office, at 
least one and up to three email addresses where he or she receives 
email, and a business telephone number, as well as every change to any 
of said addresses or telephone number within thirty days of the date of 
the change. A registered practitioner shall, in addition to any notice 
of change of address and telephone number filed in individual patent 
applications, separately file written notice of the change of address 
or telephone number to the OED Director. A registered practitioner who 
is an attorney in good standing with the bar of the highest court of 
one or more States shall provide the OED Director with the State bar 
identification number associated with each membership. The OED Director 
shall publish from the register a list containing the name, postal 
business addresses, business telephone number, registration number, and 
registration status as an attorney or agent of each registered 
practitioner recognized to practice before the Office in patent 
matters. The OED Director may also publish from the register the 
continuing legal education certification status of each registered 
practitioner.
    (b) * * *
    (1) Whenever it appears that a registered practitioner, or person 
granted limited recognition under Sec.  11.9(b) has failed to comply 
with Sec.  11.8(d)(1), the OED Director shall publish and send a notice 
to the registered practitioner or person granted limited recognition 
advising of the noncompliance, the consequence of being 
administratively suspended set forth in paragraph (b)(6) of this 
section if noncompliance is not timely remedied, and the requirements 
for reinstatement under paragraph (f) of this section. The notice shall 
be published and sent to the registered practitioner or person granted 
limited recognition by mail to the last postal address furnished under 
paragraph (a) of this section or by email addressed to the last email 
addresses furnished under paragraph (a) of this section. The notice 
shall demand compliance and payment of a delinquency fee set forth in 
Sec.  1.21(a)(9)(i) of this chapter within sixty days after the date of 
such notice.
* * * * *
    (4) An administratively suspended registered practitioner or person 
granted limited recognition will continue to be assessed the annual 
active patent practitioner fee as set forth in Sec.  11.8(d) during the 
period of administrative suspension.
* * * * *
    (d) * * *
    (1) Any active registered practitioner may voluntarily enter 
inactive status by filing a request, in writing, that his or her name 
be endorsed on the register as voluntarily inactive. Upon acceptance of 
the request, the OED Director shall endorse the name as voluntarily 
inactive.
* * * * *
    (4) Each registered practitioner, as well as individuals granted 
limited recognition under Sec.  11.9(b), endorsed on the register as 
voluntarily inactive, shall each year, on or before a date to be set by 
the OED Director, pay to the OED Director an annual voluntary inactive 
fee as set forth in Sec.  1.21(a)(7) of this chapter. Adequate notice 
shall be published and sent to practitioners in advance of the due date 
for payment of the annual voluntary inactive fee. Payment shall be for 
the calendar year in which the annual voluntary inactive fee is 
assessed.
* * * * *
    (6) A voluntarily inactive practitioner may request reinstatement 
by complying with paragraph (f)(3) of this section.
    (e) Resignation and emeritus status. (1) A registered practitioner 
or a practitioner recognized under Sec.  11.14(c), who is not under 
investigation under Sec.  11.22 for a possible violation of the USPTO 
Rules of Professional Conduct, subject to discipline under Sec.  11.24 
or Sec.  11.25, or a practitioner against whom probable cause has been 
found by a panel of the Committee on Discipline under Sec.  11.23(b), 
may resign by notifying the OED Director in writing that he or she 
desires to resign. Upon acceptance in writing by the OED Director of 
such notice, that registered practitioner or practitioner under Sec.  
11.14 shall no longer be eligible to practice before the Office in 
patent matters but shall continue to file a change of address for five 
years thereafter in order that he or she may be located in the event 
information regarding the practitioner's conduct comes to the attention 
of the OED Director or any grievance is made about his or her conduct 
while he or she engaged in practice before the Office. The name of any 
registered practitioner whose resignation is accepted shall be removed 
from the active register, endorsed as resigned, and notice thereof

[[Page 37439]]

published in the Official Gazette. Upon acceptance of the resignation 
by the OED Director, the registered practitioner must comply with the 
provisions of Sec.  11.116.
    (2) A registered practitioner who has been registered for 10 or 
more years and who is currently in active status may request emeritus 
status in writing from the OED Director, unless such practitioner is 
under investigation under Sec.  11.22 for a possible violation of the 
USPTO Rules of Professional Conduct, is a practitioner against whom 
probable cause has been found by a panel of the Committee on Discipline 
under Sec.  11.23(b), or is a respondent in a pending proceeding 
instituted under Sec.  11.24, Sec.  11.25, or Sec.  11.29. Upon 
acceptance in writing by the OED Director of such request, the 
practitioner shall no longer be eligible to practice before the Office 
in patent matters, except to provide patent pro bono legal services 
through the USPTO Patent Pro Bono Program. An emeritus practitioner 
performing pro bono legal services may neither ask for nor receive any 
compensation of any kind from the client, except for out-of-pocket 
expenses, for the patent legal services rendered by the emeritus 
practitioner. The name of any individual whose emeritus status is 
accepted shall be endorsed as emeritus. Upon acceptance of the emeritus 
status by the OED Director, the emeritus practitioner shall comply with 
the provisions of Sec.  11.116 and shall continue to file a change of 
address for the period of their emeritus status.
    (f) * * *
    (1)(i) Any administratively suspended registered practitioner, or 
person granted limited recognition under Sec.  11.9(b) may be 
reinstated on the register provided the practitioner:
    (A) Is not a party to a disciplinary proceeding;
    (B) Has applied for reinstatement on an application form supplied 
by the OED Director;
    (C) Has demonstrated compliance with the provisions of Sec.  
11.7(a)(2)(i) and (iii);
    (D) Has submitted a declaration or affidavit attesting to the fact 
that the practitioner has read the most recent revisions of the patent 
laws and the rules of practice before the Office;
    (E) Has paid the fees set forth in Sec.  1.21(a)(9)(ii) of this 
chapter; and
    (F) Has paid all outstanding fees as set forth in Sec.  1.21(a)(8) 
of this chapter, as well as any applicable delinquency fees as set 
forth in Sec.  1.21(a)(9)(i) of this chapter, for each year the 
practitioner is administratively suspended.
    (ii) Practitioners who certify to the OED Director that they have 
completed six hours of continuing legal education over the past twenty 
four months, comprising five hours in the area of patent law and one 
hour in ethics, may receive a $100 discount on the annual fee for each 
year in which they are administratively suspended. A practitioner will 
be subject to investigation and discipline for his or her conduct that 
occurs prior to, during, or after the period of his or her 
administrative suspension. Any administratively suspended registered 
practitioner or person granted limited recognition who fails to make 
these complete payments within five years of the effective date of the 
suspension for nonpayment shall be required to file a petition to the 
OED Director requesting reinstatement and providing objective evidence 
that they continue to possess the necessary legal qualifications to 
render applicants valuable service to patent applicants.
* * * * *
    (3)(i) Any registered practitioner whose name has been endorsed as 
voluntarily inactive pursuant to paragraph (d)(1) of this section may 
be reinstated on the register provided the practitioner:
    (A) Is not a party to a disciplinary proceeding;
    (B) Has applied for reinstatement on an application form supplied 
by the OED Director;
    (C) Has demonstrated compliance with the provisions of Sec.  
11.7(a)(2)(i) and (iii);
    (D) Submits a declaration or affidavit attesting to the fact that 
the practitioner has read the most recent revisions of the patent laws 
and the rules of practice before the Office;
    (E) Paid the reinstatement fee set forth in Sec.  1.21(a)(9)(ii) of 
this chapter; and
    (F) Paid the fee set forth in Sec.  1.21(a)(7) of this chapter for 
each year the practitioner was voluntarily inactive.
    (ii) A practitioner is subject to investigation and discipline for 
his or her conduct that occurred prior to, during, or after the period 
of his or her voluntary inactivation.
    (4) Any registered practitioner who has been endorsed as resigned 
pursuant to paragraph (e) of this section may be reinstated on the 
register provided the practitioner has applied for reinstatement on an 
application form supplied by the OED Director, demonstrated compliance 
with the provisions of Sec.  11.7(a)(2)(i) and (iii), paid the 
reinstatement fee set forth in Sec.  1.21(a)(9)(ii) of this chapter, 
and paid the fees set forth in Sec.  1.21(a)(7) of this chapter for 
each year the practitioner was resigned. A practitioner who has 
resigned for two or more years before the date the Office receives a 
completed application from the person who resigned must also pass the 
registration examination under Sec.  11.7(b)(1)(ii). Any reinstated 
practitioner is subject to investigation and discipline for his or her 
conduct that occurred prior to, during, or after the period of his or 
her resignation.
    (5) Any registered practitioner in emeritus status may be 
reinstated on the register provided the practitioner has applied for 
reinstatement on an application form supplied by the OED Director, paid 
the reinstatement fee set forth in Sec.  1.21(a)(9)(ii) of this 
chapter, and paid the fee set forth in Sec.  1.21(a)(7) of this chapter 
for each year the practitioner was in emeritus status. Any reinstated 
practitioner is subject to investigation and discipline for his or her 
conduct that occurred prior to, during, or after emeritus status being 
conferred.

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

0
16. The authority citation for 37 CFR part 41 continues to read as 
follows:

    Authority: 35 U.S.C. 2(b)(2), 3(a)(2)(A), 21, 23, 32, 41, 134, 
135, and Pub. L. 112-29.

0
17. Section 41.20 is amended by revising paragraphs (a), (b)(1), 
(b)(2)(ii), and (b)(3) and (4) to read as follows:


Sec.  41.20  Fees.

    (a) Petition fee. The fee for filing a petition under this part is: 
$420.00.
    (b) * * *
    (1) For filing a notice of appeal from the examiner to the Patent 
Trial and Appeal Board:

                       Table 1 to Paragraph (b)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $210.00
By a small entity (Sec.   1.27(a)).........................       420.00
By other than a small or micro entity......................       840.00
------------------------------------------------------------------------

    (2) * * *
    (ii) In addition to the fee for filing a notice of appeal, for 
filing a brief in support of an appeal in an inter partes reexamination 
proceeding:

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

    (3) For filing a request for an oral hearing before the Board in an 
appeal under 35 U.S.C. 134:

[[Page 37440]]



                       Table 3 to Paragraph (b)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $340.00
By a small entity (Sec.   1.27(a)).........................       680.00
By other than a small or micro entity......................     1,360.00
------------------------------------------------------------------------

    (4) In addition to the fee for filing a notice of appeal, for 
forwarding an appeal in an application or ex parte reexamination 
proceeding to the Board:

                       Table 4 to Paragraph (b)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $590.00
By a small entity (Sec.   1.27(a)).........................     1,180.00
By other than a small or micro entity......................     2,360.00
------------------------------------------------------------------------

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

0
18. The authority citation for 37 CFR part 42 continues to read as 
follows:

    Authority: 35 U.S.C. 2(b)(2), 6, 21, 23, 41, 135, 311, 312, 316, 
321-326; Pub. L. 112-29, 125 Stat. 284; and Pub. L. 112-274, 126 
Stat. 2456.

0
19. Section 42.15 is revised to read as follows:


Sec.  42.15  Fees.

    (a) On filing a petition for inter partes review of a patent, 
payment of the following fees are due:
    (1) Inter Partes Review request fee: $19,500.00.
    (2) Inter Partes Review Post-Institution fee: $18,750.00.
    (3) In addition to the Inter Partes Review request fee, for 
requesting review of each claim in excess of 20: $375.00.
    (4) In addition to the Inter Partes Post-Institution request fee, 
for requesting review of each claim in excess of 20: $750.00.
    (b) On filing a petition for post-grant review or covered business 
method patent review of a patent, payment of the following fees are 
due:
    (1) Post-Grant or Covered Business Method Patent Review request 
fee: $20,000.00.
    (2) Post-Grant or Covered Business Method Patent Review Post-
Institution fee: $27,500.00.
    (3) In addition to the Post-Grant or Covered Business Method Patent 
Review request fee, for requesting review of each claim in excess of 
20: $475.00.
    (4) In addition to the Post-Grant or Covered Business Method Patent 
Review Post-Institution fee, for requesting review of each claim in 
excess of 20: $1,050.00.
    (c) On the filing of a petition for a derivation proceeding, 
payment of the following fees is due:
    (1) Derivation petition fee: $420.00.
    (2) [Reserved]
    (d) Any request requiring payment of a fee under this part, 
including a written request to make a settlement agreement available: 
$420.00.
    (e) Fee for non-registered practitioners to appear before the 
Patent Trial and Appeal Board: $250.00.

    Dated: July 18, 2019.
Andrei Iancu,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2019-15727 Filed 7-30-19; 8:45 am]
BILLING CODE 3510-16-P