Setting and Adjusting Patent Fees During Fiscal Year 2025, 91898-92011 [2024-26821]

Agencies

• DEPARTMENT OF COMMERCE
• Patent and Trademark Office

[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Rules and Regulations]
[Pages 91898-92011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26821]



[[Page 91897]]

Vol. 89

Wednesday,

No. 224

November 20, 2024

Part II





Department of Commerce





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Patent and Trademark Office





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37 CFR Parts 1, 41, and 42





Setting and Adjusting Patent Fees During Fiscal Year 2025; Final Rule

Federal Register / Vol. 89 , No. 224 / Wednesday, November 20, 2024 / 
Rules and Regulations

[[Page 91898]]


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DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 1, 41, and 42

[Docket No. PTO-P-2022-0033]
RIN 0651-AD64


Setting and Adjusting Patent Fees During Fiscal Year 2025

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

ACTION: Final rule.

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SUMMARY: The United States Patent and Trademark Office (USPTO) sets or 
adjusts patent fees as authorized by the Leahy-Smith America Invents 
Act (AIA), as amended by the Study of Underrepresented Classes Chasing 
Engineering and Science Success Act of 2018 (SUCCESS Act). The fee 
adjustments are needed to provide the USPTO with sufficient aggregate 
revenue to recover the aggregate estimated costs of patent operations 
in future years (based on assumptions and estimates found in the 
agency's Fiscal Year 2025 Congressional Justification (FY 2025 
Budget)), including implementing the USPTO 2022-2026 Strategic Plan 
(Strategic Plan).

DATES: This rule is effective on January 19, 2025. The amendments to 
Sec.  1.18(b)(1) shall apply to those international design applications 
under the Hague Agreement having a date of international registration 
on or after January 19, 2025.

FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director, Office of 
Planning and Budget, at 571-272-8966 or [email protected] or 
C. Brett Lockard, Director, Forecasting and Analysis Division, at 571-
272-0928 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Introduction

    The USPTO issues this final rule under section 10 of the AIA 
(section 10), Public Law 112-29, 125 Stat. 284, available at https://www.congress.gov/112/plaws/publ29/PLAW-112publ29.pdf, as amended by the 
SUCCESS Act, Public Law 115-273, 132 Stat. 4158, available at https://www.congress.gov/115/plaws/publ273/PLAW-115publ273.pdf, which 
authorizes the Under Secretary of Commerce for Intellectual Property 
and Director of the USPTO (Director) to set or adjust by rule any 
patent fee established, authorized, or charged under 35 U.S.C. for any 
services performed or materials furnished by the agency. Section 10 
prescribes that fees may be set or adjusted only to recover the 
aggregate estimated costs to the USPTO for processing, activities, 
services, and materials relating to patents, including administrative 
costs with respect to such patent fees. Section 10 authority includes 
flexibility to set individual fees in a way that furthers key policy 
factors while considering 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), a public comment period, and 
congressional oversight.

B. Purpose of This Action

    Based on a biennial review of fees, costs, and revenues that began 
in fiscal year (FY) 2021, the USPTO concluded that fee adjustments are 
necessary to provide the agency with sufficient financial resources to 
facilitate the effective administration of the U.S. patent system, 
including implementing the Strategic Plan, available on the agency 
website at https://www.uspto.gov/StrategicPlan. The USPTO reviewed and 
analyzed the overall balance between the agency's estimated revenue and 
costs over the next five years (based on current projections) under 
this rule. The fees established under this final rule will help 
stabilize the USPTO's finances by offsetting the forecasted increase in 
aggregate costs and maintaining the patent operating reserve in the 
desired range. The patent operating reserve mitigates financing risk 
and enables the agency to deliver reliable and predictable service 
levels, while positioning it to undertake initiatives that encourage 
participation in the innovation ecosystem.
    The individual fee adjustments align with the USPTO's strategic 
goals and its fee structure philosophy, including the agency's four key 
fee setting policy factors discussed in detail in Part IV: Rulemaking 
Goals and Strategies of this rule: (1) promote innovation strategies, 
(2) align fees with the full costs of products and services, (3) 
facilitate effective administration of the U.S. patent system, and (4) 
offer application processing options. The fee adjustments in this final 
rule will enable the USPTO to accomplish its mission to drive U.S. 
innovation, inclusive capitalism, and global competitiveness.

C. Summary of Provisions Impacted by This Action

    This final rule sets or adjusts 433 patent fees for undiscounted, 
small, and micro entities, including the introduction of 52 new fees. 
Any reference herein to ``undiscounted entity'' includes all entities 
other than those with established entitlement to either a small or 
micro entity fee discount, see Part II: Background of this rule for 
more information.
    Overall, discussed in detail below, the routine fees to obtain a 
patent (i.e., filing, search, examination, and issue fees) will 
increase under this final rule relative to the current fee schedule to 
ensure financial sustainability and accommodate increases needed to 
improve the predictability and reliability of patent intellectual 
property (IP) protection. Applicants who meet the eligibility criteria 
for small or micro entity discounts will continue to pay a reduced fee 
for the fees eligible for discount under AIA section 10(b). Additional 
information describing the fee adjustments established by this final 
rule is included in Part V: Individual Fee Rationale in this rulemaking 
and in the ``Table of Patent Fees--Current, Final Patent Fee Schedule, 
and Unit Cost'' (Table of Patent Fees) available on the fee setting 
section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.

D. Summary of Costs and Benefits of This Action

    This final rule is 3(f)(1) significant and requires a Regulatory 
Impact Analysis (RIA) under Executive Order (E.O.) 12866, Regulatory 
Planning and Review, (Sept. 30, 1993). The USPTO prepared an RIA to 
analyze the costs and benefits of the final rule over a five-year 
period, FY 2025-29. The RIA includes an analysis of how well the four 
alternatives align with the rulemaking strategies and goals, which are 
comprised of strategic priorities (goals, objectives, and key 
performance strategies) from the Strategic Plan and fee setting policy 
factors. From this conceptual framework, the USPTO assessed the 
absolute and relative qualitative costs and benefits of each 
alternative. Consistent with Office of Management and Budget (OMB) 
Circular A-4, ``Regulatory Analysis'' (see 88 FR 77615, Nov. 13, 2023), 
this final rule involves a transfer payment from one group to another. 
The USPTO recognizes that it is very difficult to precisely monetize 
and quantify social costs and benefits resulting from deadweight loss 
of a transfer rule such as this final rule. The costs and benefits

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identified and analyzed 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 USPTO did not identify any monetized costs and 
benefits of this final rule but found this final rule has significant 
qualitative benefits and only minimal costs.
    The RIA assesses the qualitative costs and benefits with respect to 
fee schedule design--how well the fee schedule aligns to the key fee 
setting policy factors--and securing aggregate revenue to recover 
aggregate cost--whether the alternative provides adequate revenue to 
support the core mission and strategic priorities described in the 
final rule, Strategic Plan, and FY 2025 Budget. Based on the costs and 
benefits identified and analyzed in the RIA, the fee schedule detailed 
in this final rule offers the highest net benefits. As described 
throughout this document, the final 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: Individual Fee Rationale of 
this rule, the fee changes are targeted in support of one or more fee 
setting policy factors. Lastly, this final rule secures the aggregate 
revenue needed to maintain patent operations and achieve the strategic 
priorities encompassed in the rulemaking goals and strategies (see Part 
IV: Rulemaking Goals and Strategies of this rule). The final fee 
schedule produces sufficient aggregate revenue to fund the strategic 
objectives to issue and maintain robust and reliable patents, improve 
patent application pendency, optimize the patent application process to 
enable efficiencies for applicants and other stakeholders, and enhance 
internal processes to prevent fraudulent and abusive behaviors that do 
not embody the USPTO's mission. Table 1 summarizes the RIA results. 
Additional details describing the costs and benefits can be found in 
the RIA, available on the fee setting section of the USPTO website at 
https://www.uspto.gov/FeeSettingAndAdjusting.
[GRAPHIC] [TIFF OMITTED] TR20NO24.000

II. Background

    Section 10(a) of the AIA authorizes the Director to set or adjust 
by rule any patent fee established, authorized, or charged under 35 
U.S.C. for any services performed or materials furnished by the agency. 
Fees under 35 U.S.C. may be set or adjusted only to recover the 
aggregate estimated costs to the USPTO for processing, activities, 
services, and materials related to patents, including administrative 
costs to the agency with respect to such patent operations. See 125 
Stat. at 316. Provided that 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) 
requires the Director to publish the final fee rule in the Federal 
Register and the USPTO's Official Gazette at least 45 days before the 
final fees become effective.
    Section 10 authorizes the USPTO to set or adjust patent fees within 
the regulatory process. The USPTO has used the AIA's fee setting 
authority to achieve its key fee setting policy factors and to generate 
the aggregate revenue needed to recover the aggregate estimated costs 
of operations and strategic patent priorities in final rules published 
in FY 2013 (``Setting and Adjusting Patent Fees,'' 78 FR 4212 (Jan. 18, 
2013)), FY 2018 (``Setting and Adjusting Patent Fees During Fiscal Year 
2017,'' 82 FR 52780 (Nov. 14, 2017)), and FY 2020 (``Setting and 
Adjusting Patent Fees During Fiscal Year 2020,'' 85 FR 46932 (Aug. 3, 
2020) (FY 2020 Final Rule)).
    Section 4 of the SUCCESS Act amended section 10(i)(2) to provide 
that the Director's authority to set or adjust any fee under section 10 
will end on September 16, 2026. While the fees established by this rule 
will remain in effect in perpetuity or until adjusted by a future 
rulemaking, the Director's authority to initiate new rulemakings to set 
or adjust fees will expire on that date.
    On December 29, 2022, the President signed into law the 
Consolidated Appropriations Act, 2023, which included the Unleashing 
American Innovators Act (UAIA). The UAIA, available at https://www.congress.gov/117/bills/hr2617/BILLS-117hr2617enr.pdf, increased fee 
discounts for small entities from 50% to 60% and fee discounts for 
micro entities from 75% to 80% for fees for filing, searching, 
examining, issuing, appealing, and maintaining patent applications and 
patents. The UAIA also increased fee discounts for small entities from 
75% to 80% for filing a basic, nonprovisional utility application 
electronically. See Consolidated Appropriations Act, 2023, Public Law 
117-328; ``Reducing Patent Fees for Small Entities and Micro Entities 
Under the Unleashing American Innovators Act of 2022,'' 88 FR 17147 
(Mar. 22, 2023).
    Section 10(b) of the AIA, as amended by the UAIA, requires the 
USPTO to reduce by 60% 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.

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    Section 10(g) of the AIA amended 35 U.S.C chapter 11 by adding 
section 123 concerning micro entities. The AIA, as amended by the UAIA, 
provides that the USPTO must reduce by 80% the fees for micro entities 
for filing, searching, examining, issuing, appealing, and maintaining 
patent applications and patents.
    When adopting fees under section 10, the Director must provide PPAC 
the proposed fees at least 45 days prior to publishing in the Federal 
Register. PPAC then has 30 days to deliberate, consider, and comment on 
the proposal, as well as hold public hearings on the proposed fees. 
Before the USPTO issues any final fees, PPAC must make a written report 
available to the public of the comments, advice, and recommendations of 
the committee regarding the proposed fees. The USPTO must consider and 
analyze any comments, advice, or recommendations received from PPAC 
before finally setting or adjusting fees.
    Consistent with this framework, on April 20, 2023, the Director 
notified PPAC of the USPTO's intent to set or adjust patent fees and 
submitted a preliminary patent fee proposal with supporting materials, 
which are available on the fee setting section of the USPTO website at 
https://www.uspto.gov/FeeSettingAndAdjusting. PPAC held a public 
hearing at the USPTO's headquarters in Alexandria, Virginia, on May 18, 
2023, where members of the public were given an opportunity to provide 
oral testimony. Transcripts of the hearing are available on the USPTO 
website at https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript-20230518.pdf. Members of the public were also 
given an opportunity to submit written comments for PPAC to consider, 
and these comments are available on Regulations.gov at https://www.regulations.gov/document/PTO-P-2023-0017-0001. On August 14, 2023, 
PPAC issued a written report setting forth in detail their comments, 
advice, and recommendations regarding the preliminary proposed fees. 
The report is available on the USPTO website at https://www.uspto.gov/sites/default/files/documents/PPAC-Report-on-2023-Fee-Proposal.docx.
    The USPTO considered and analyzed all comments, advice, and 
recommendations received from PPAC before publishing the notice of 
proposed rulemaking (NPRM), ``Setting and Adjusting Patent Fees during 
Fiscal Year 2025,'' in the Federal Register on April 3, 2024, at 89 FR 
23226. The NPRM and associated materials are available at https://www.uspto.gov/FeeSettingAndAdjusting. Likewise, before issuing this 
final rule, the agency considered and analyzed all comments, advice, 
and recommendations received from the public during the 60-day comment 
period on the NPRM that closed on June 3, 2024. The agency's response 
to comments received is available in Part VI: Discussion of Comments of 
this rule.

III. Estimating Aggregate Costs and Revenues

    Section 10 prescribes that patent fees may be set or adjusted only 
to recover the aggregate estimated costs to the USPTO for processing, 
activities, services, and materials relating to patents, including 
administrative costs with respect to such patent fees. The following is 
a description of how the USPTO calculates aggregate costs and revenue.

Step 1: Estimating Prospective Aggregate Costs

    Estimating prospective aggregate costs is accomplished primarily 
through the annual USPTO budget formulation process. The budget is a 
five-year plan for carrying out base programs and new initiatives to 
deliver on the USPTO's statutory mission and implement strategic goals 
and objectives.
    First, the USPTO projects 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 considers 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 costs, a primary production workload driver is 
the number of patent application filings (i.e., incoming work to the 
USPTO). The USPTO looks at indicators such as the expected growth in 
Real Gross Domestic Product (RGDP), a leading indicator of incoming 
patent applications, to estimate prospective workload. RGDP is reported 
by the Bureau of Economic Analysis and is forecasted each February by 
the OMB in the Economic and Budget Analyses section of the Analytical 
Perspectives and twice annually by the Congressional Budget Office 
(CBO) in the Budget and Economic Outlook.
    The expected workload must then be compared to the current 
examination capacity to determine any required staffing and operating 
cost (e.g., salaries, workload processing contracts, and publication) 
adjustments. The USPTO uses a patent pendency model to estimate 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/learning-and-resources/statistics/patent-pendency-model.
    Next, the USPTO calculates budgetary spending requirements based on 
the prospective aggregate costs of patent operations. First, the USPTO 
estimates the prospective costs of status quo operations (base 
requirements). Then, the base requirements are adjusted for anticipated 
pay increases and inflationary increases for the budget year and four 
outyears. The USPTO then estimates the prospective costs for expected 
changes in production workload and new initiatives over the same 
period. The USPTO reduces cost estimates for completed initiatives and 
known cost savings expected over the same five-year horizon. A detailed 
description of the budgetary requirements, aggregate costs, and related 
assumptions for the Patents program is available in the FY 2025 Budget.
    The USPTO estimates that the Patents program will cost $3.973 
billion in FY 2025, including $2.835 billion for patent examining; $90 
million for patent trial and appeals; $159 million for patent 
information resources; $24 million for activities related to IP 
protection, policy, and enforcement; and $866 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 agency-wide information technology (IT) 
infrastructure and IT support costs). See Appendix II of the FY 2025 
Budget. In addition, the USPTO will transfer $2 million to the 
Department of Commerce Inspector General for audit support.
    Table 2 below provides key underlying production workload 
projections and assumptions from the FY 2025 Budget used to calculate 
aggregate costs. Table 3 (see Step 2) presents the total budgetary 
requirements (prospective aggregate costs) for FY 2025 through FY 2029 
and the estimated collections and operating reserve balances that would 
result from the adjustments contained in this final rule. 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. There are risks that could materialize over the 
next several years (e.g., adjustments to

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examination capacity, higher contracting costs, changes in workload, 
and other inflationary increases, etc.) that could increase the USPTO's 
budgetary requirements. These estimates are refreshed annually in the 
production of the USPTO's budget.
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Step 2: Estimating Prospective Aggregate Revenue

    As described above in Step 1, the USPTO's prospective aggregate 
costs (as presented in the FY 2025 Budget) include budgetary 
requirements related to planned production, anticipated new 
initiatives, and a contribution to the patent operating reserve 
required for the USPTO to maintain patent operations and realize its 
strategic goals and objectives for the next five years. The prospective 
aggregate costs become the target aggregate revenue level that the new 
fee schedule must generate in a given year over the five-year planning 
horizon. To estimate aggregate revenue, the USPTO references the 
production models used to estimate aggregate costs and analyzes 
relevant factors and indicators to calculate or determine prospective 
fee workloads (e.g., number of applications and requests for services 
and products).
    Economic activity is an important consideration when developing 
workload and revenue forecasts for patent products and services because 
economic conditions affect patenting activity. 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. 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

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application processing requests and post-issuance decisions to maintain 
patent protection. When developing fee workload forecasts, the USPTO 
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 final rule 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., the elasticity 
measure is less than one in absolute value and demand is inelastic), 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., the elasticity measure is greater than 
one in absolute value and demand is elastic), a fee increase will lead 
to a relatively large decrease in patenting activities such that 
overall revenues will decrease. When developing fee forecasts, the 
USPTO accounts for how applicant behavior will change at different fee 
amounts projected for the various patent services. The USPTO previously 
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 information about how the USPTO estimates 
elasticity is provided in ``Setting and Adjusting Patent Fees during 
Fiscal Year 2020--Description of Elasticity Estimates,'' available on 
the USPTO website at https://www.uspto.gov/sites/default/files/documents/Elasticity_Appendix.docx.
    As required by law, the USPTO collects fees 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 to finance the associated work for 
providing those services. Maintenance fee payments account for about 
half of all patent fee collections and subsidize the cost of filing, 
search, and examination activities. Changes in application filing 
levels immediately impact current year fee collections. Fewer patent 
application filings mean the USPTO collects fewer fees to devote to 
production-related costs in the current pipeline. The production output 
in one- year impacts outyear revenue because less output in one year 
leads to fewer issue and maintenance fee payments in future years.
    The USPTO's five-year estimated aggregate patent fee revenue (see 
table 3) is based on the number of patent applications it expects to 
receive for a given fiscal year, work it expects to process in a given 
fiscal year (an indicator of patent issue fee workloads), 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 USPTO adjusts individual fee rates up or down 
based on cost and policy decisions, estimates the effective dates of 
new fee rates, and multiplies the resulting fee rates by workload 
volumes (including elasticity adjustments) to calculate a revenue 
estimate for each fee. For the aggregate revenue estimates shown below, 
the USPTO assumes that all final rule fee rates will become effective 
on January 18, 2025. 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 aggregate revenue estimate 
also includes collecting $50 million annually in other income 
associated with recoveries and reimbursable agreements (offsets to 
spending).
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IV. Rulemaking Goals and Strategies

A. Fee Setting Strategy

    The strategy of this final rule is to establish a fee schedule that 
generates sufficient multi-year revenue to recover the aggregate 
estimated costs of maintaining USPTO patent operations. The overriding 
principles behind this strategy are to operate within a sustainable 
funding model that supports the USPTO's strategic goals and objectives, 
such as optimizing patent application pendency through the promotion of 
efficient operations and filing behaviors, issuing robust and reliable 
patents, and encouraging access to the patent system for all 
stakeholders.
    The USPTO assessed this final rule for alignment with four key fee 
setting policy factors: (1) 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; (2) 
aligning fees with the full costs of products and services recognizes 
that some applicants may use particular services in a more costly 
manner than other applicants (e.g., patent applications cost more to 
process when more claims are filed); (3) facilitating the effective 
administration of the U.S. 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; and (4) offering application processing options, where 
feasible, in recognition that patent prosecution is not a one-size-
fits-all process. Part V: Individual Fee Rationale of this rule 
describes the reasoning for setting and adjusting individual fees, 
including the design benefits of the final fee schedule. The RIA, 
available on the fee setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, also discusses fee schedule 
design benefits.
    In the event any provision is invalidated or held to be 
impermissible as a result of a legal challenge, the ``remainder of the 
regulation could function sensibly without the stricken provision.'' 
Belmont Mun. Light Dep't v. FERC, 38 F.4th 173, 187 (D.C. Cir. 2022) 
(quoting MD/DC/DE Broad. Ass'n v. FCC, 236 F.3d 13, 22 (D.C. Cir. 
2001)). The USPTO views each fee in this final rule as able to stand on 
its own and to ``function sensibly'' without the others. This means 
that in the event that a reviewing court were to find that any one fee 
setting or fee adjustment was invalid, that finding would not affect 
the fees or adjustments enacted elsewhere in the rule. Therefore, in 
the event that any portion of this final rule is held to be invalid or 
impermissible, the USPTO intends that the remaining aspects of the 
regulatory provisions, and fees set and adjusted therein, remain valid.

B. Fee Setting Considerations

    The balance of this sub-section presents the specific fee setting 
considerations the USPTO reviewed in developing the final patent fee 
schedule: (1) historical cost of providing individual services, (2) the 
balance between projected costs and revenue to meet the USPTO's 
operational needs and strategic goals, (3) ensuring sustainable 
funding, and (4) PPAC's comments, advice, and recommendations on the 
USPTO's initial fee setting proposal and the public comments received 
in response to the April 2024 NPRM. Collectively, these considerations 
inform USPTO's chosen rulemaking strategy.
1. Historical Cost of Providing Individual Services
    The USPTO sets individual fee rates to further key policy 
considerations while considering the cost of a particular service. For 
instance, the USPTO has a longstanding practice of setting basic 
filing, search, and examination (``front-end'') fees below the actual 
cost of processing and examining applications to encourage innovators 
to take advantage of patent rights and protections; these costs are 
subsidized by aggregate patent revenues elsewhere.
    The USPTO considers unit cost accounting data provided by its 
Activity Based Information (ABI) program to evaluate the cost to 
provide specific services and then decide how to best align fees for 
particular services to recover the aggregate costs of all products and 
services. Using historical cost data and forecasted application 
demands, the USPTO can align fees to the costs of specific patent 
products and services. Additional information on the USPTO's costing 
methodology in addition to the last three years of historical cost data 
is provided in the document titled ``Setting and Adjusting Patent Fees 
during Fiscal Year 2025--Activity Based Information and Patent Fee Unit 
Expense Methodology,'' available on the fee setting section of the 
USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting. Part V: 
Individual Fee Rationale of this rule describes the reasoning and 
anticipated benefits for setting some individual fees at cost, below 
cost, or above cost such that the USPTO recovers the aggregate costs of 
providing services through aggregate fee collections.
2. Balancing Projected Costs and Revenue
    In developing this final patent fee schedule, the USPTO considered 
its current estimates of future year workload demands, fee collections, 
and costs to maintain core USPTO operations and meet its strategic 
goals as found in the FY 2025 Budget and the Strategic Plan. The 
USPTO's strategic goals include driving inclusive U.S. innovation and 
global competitiveness, promoting the efficient delivery of reliable IP 
rights, promoting the protection of IP against new and persistent 
threats, bringing innovation to impact, and generating impactful 
employee and customer experiences by maximizing agency operations. The 
following subsections provide details regarding updated revenue and 
cost estimates, cost-saving efforts taken by the USPTO, and planned 
strategic improvements.
a. Updated Revenue and Cost Estimates
    Projected revenue from the current fee schedule is insufficient to 
meet future budgetary requirements (costs) due largely to unforeseen 
economic and policy factors since the USPTO last exercised its 
rulemaking authority to set patent fees in the FY 2020 Final Rule. As 
further discussed below, increased fee discounts for small and micro 
entities under the UAIA have reduced revenue estimates. Higher-than-
expected inflation in the broader U.S. economy and government-wide pay 
raises have increased the USPTO's forecasted operating costs. Also, the 
USPTO has increased special pay rates and undertaken efforts to offer 
other incentives to recruit and retain examiners and other employees in 
patent specific job series in order to remain competitive in the job 
market for science, technology, engineering, and mathematics (STEM) 
workers. The USPTO is required by law to finance operations by 
recovering fees for the services offered by the agency. Not 
implementing the final rule would result in insufficient fee 
collections to process the anticipated work volumes, impacting 
stakeholders and failing to deliver on the USPTO mission.
    On December 29, 2022, the President signed into law the 
Consolidated Appropriations Act, 2023, which included the UAIA. The law 
reduced barriers to entry into the patent system by increasing small 
entity discounts from 50% to 60% and micro entity

[[Page 91904]]

discounts from 75% to 80%. The USPTO estimated as part of its Fiscal 
Year 2024 Congressional Justification (FY 2024 Budget) that these 
discounts would reduce projected fee collections by $74 million in FY 
2023 (partial year impact) and at least $100 million per year beginning 
in FY 2024 (full year impact). In addition to increased entity 
discounts, the UAIA increases costs through its provision that requires 
that the USPTO establish a new Southeast Regional Office and four new 
community outreach offices, including one in northern New England. The 
USPTO must also conduct a study to determine whether additional offices 
are required to achieve AIA mandates and to increase participation of 
underrepresented inventors in the patent system.
    Higher-than-expected inflation in the broader U.S. economy starting 
in 2021 increased the USPTO's operating costs above previous estimates 
for labor and nonlabor activities such as benefits, service contracts, 
and equipment. Salaries and benefits comprise 70% of all patent-related 
costs, and employee pay raises enacted across all U.S. government 
agencies--including the USPTO--in 2023 and 2024 were much larger than 
previously budgeted. Federal General Schedule (GS) pay was raised by 
4.6% in 2023 and 5.2% in 2024; before 2023 the last time GS pay was 
raised by at least 4.0% was in 2004. The FY 2025 Budget includes an 
estimated 2.0% civilian pay raise planned in calendar year (CY) 2025 
and assumed 3.0% civilian pay raises in CY 2026-29, as well as 
inflationary increases for other labor and nonlabor activities.
    Similarly, the USPTO adjusted the patent special rate table (pay) 
for the first time since 2007. In 2007 the special rate table was set 
11.4% to 31.4% above the GS pay table for the Washington, DC area 
because patent-related job fields require a highly educated and 
technical STEM workforce. This specialization has historically posed 
recruitment challenges for the agency, and the increased pay rates kept 
the USPTO competitive with private sector compensation opportunities. 
Prior to the adjustment, the differential above the GS pay table had 
diminished over the years, and by 2023 nearly half of the covered 
employees no longer received a specialized supplement above the GS 
counterparts--reducing the USPTO's competitive edge amongst both 
private and other Federal agencies. Following the change in 2024, the 
number of employees eligible for a specialized supplement increased, 
and the special rate table was set at 5.8% to 19.3% above the GS pay 
table for the Washington, DC area for most covered employees. The 
objective of the special rate table change is to provide competitive 
compensation to patent employees, thereby reducing attrition and 
enhancing recruitment of qualified talent.
b. Cost-Saving Measures
    The USPTO recognizes that fees cannot simply increase for every 
improvement deemed desirable. The agency has a responsibility to 
stakeholders to pursue strategic opportunities for improvement in an 
efficient, cost-conscious manner. Likewise, the USPTO recognizes its 
obligation to gain operational efficiency and reduce spending when 
appropriate. As noted in the FY 2023 Agency Financial Report (AFR), 
available on the agency website at https://www.uspto.gov/AnnualReport, 
total costs for the patent program increased 13.8% from FY 2019 to FY 
2023; the Consumer Price Index for All Urban Consumers (CPI-U) grew by 
19.9% over the same period. See CPI Inflation Calculator, U.S. Bureau 
of Labor Statistics, https://www.bls.gov/data/inflation_calculator.htm.
    The USPTO's FY 2025 Budget submission includes cost reducing 
measures such as giving up leased space in Northern Virginia and a 
moderate reduction in overall IT spending. In FY 2025, the USPTO 
estimates $4,569 million in total spending for patent and trademark 
operations. This is a $122 million net increase from the agency's FY 
2024 estimated spending level of $4,447 million. The net increase 
includes a $224 million upward adjustment for prescribed inflation and 
other adjustments and a $102 million downward adjustment in program 
spending and other realized efficiencies. This estimate builds on the 
$40 million in annual real estate savings assumed in the FY 2024 Budget 
submission to include additional annual cost savings of $12 million 
through releasing more leased space in Northern Virginia. The combined 
reduction in real estate space amounts to almost 1 million square feet 
and an estimated annual cost savings of approximately $52 million. 
Also, the USPTO is actively pursuing IT cost containment. The FY 2025 
budget includes a relatively flat IT spending profile despite upward 
pressure from inflation, supply chain disruptions, and government-wide 
pay raises; ongoing IT improvements that offer business value to fee-
paying customers; and data storage costs increasing proportionally with 
the forecasted growth in patent and trademark applications. The USPTO 
will achieve this cost containment goal via modern equipment in a new 
data center that will cost less to maintain and by retiring legacy IT 
systems. Both of these cost containment measures will further improve 
the USPTO's cybersecurity posture and increase system resiliency.
c. Efficient Delivery of Reliable IP Rights: Quality, Unexamined 
Inventory, and Pendency
    The USPTO continuously works to improve patent quality, 
particularly the predictability, reliability, and robustness of issued 
patents. See the patent quality section of the USPTO's website, https://www.uspto.gov/patents/quality-metrics, for more information including 
statutory compliance measures, process measures, and perception 
measures. The USPTO's strategic goal to ``promote the efficient 
delivery of reliable IP rights'' recognizes the importance of 
innovation as a foundation of American economic growth and global 
competitiveness as well as the role the USPTO plays in encouraging 
these principles. The USPTO is committed to improving pendency to 
deliver timely, efficient services that help innovators bring their 
ideas and products to impact more quickly and efficiently. The USPTO 
diligently works to balance timely examination with improvements in 
patent quality, particularly the robustness and reliability of issued 
patents, while remaining mindful that patent applications are becoming 
increasingly more complex and that technologies are converging. To 
address these challenges, the USPTO must continue to develop and equip 
examiners with additional guidance, training, tools, advanced 
technology, and procedural resources.
    The USPTO is pursuing initiatives to enhance patent quality and the 
clarity and completeness of the official record during prosecution of 
an application including encouraging applicants to begin filing patent 
applications in DOCX format, automating preexamination procedures, 
expanding examiner training, and working on additional guidance for 
examiners and the Patent Trial and Appeal Board (PTAB). Current 
guidance initiatives include refresher guidance on obviousness under 35 
U.S.C. 103 and enablement under 35 U.S.C. 112 and new guidance on how 
examiners should analyze inventorship issues for artificial 
intelligence (AI)-assisted inventions. See ``Updated Guidance for 
Making a Proper Determination of Obviousness,'' 89 FR 14449 (February 
27, 2024); ``Guidelines for Assessing Enablement in Utility 
Applications and Patents in

[[Page 91905]]

View of the Supreme Court Decision in Amgen Inc. et al. v. Sanofi et 
al.,'' 89 FR 1563 (December 21, 2023); ``Inventorship Guidance for AI-
Assisted Inventions,'' 89 FR 10043 (February 13, 2024). Also, the USPTO 
is increasing patent examination quality and efficiency via initiatives 
such as the Global Dossier Initiative (see https://www.uspto.gov/patents/basics/international-protection/global-dossier-initiative) and 
by providing examiners with advanced technologies and tools for 
identifying prior art, such as the AI-based ``More Like This'' and 
``Similarity Search'' features in the Patents End-to-End (PE2E) search 
suite (see 1494 Off. Gaz. Pat. Office 251 (January 11, 2022) and 1504 
Off. Gaz. Pat. Office 359 (November 15, 2022)). More information on the 
USPTO's AI initiatives, including the AI and Emerging Technologies 
Partnership, is available at https://www.uspto.gov/initiatives/artificial-intelligence.
    The USPTO recognizes that optimal pendency helps inventors and 
investors bring innovation to impact. The growing demand for patent 
services requires that the USPTO embrace new ways of delivering these 
critical IP services. Therefore, the USPTO is also working to identify 
policies, process changes, and technologies to improve patent pendency. 
Some of these efforts will focus on operational improvements to the 
patent examination process, including aligning the patent workforce 
with the incoming workload in the most efficient manner. Other efforts 
will target improvements to how applicants and other customers engage 
with the USPTO and navigate the prosecution process. For example, the 
USPTO has updated its website to improve access to resources and 
enhance customer service for inventors and practitioners, including 
modernizing and updating the Patent Basics and Patents Petitions pages, 
adding a Virtual Assistant on select pages, and providing an updated 
and modern general website search tool. The USPTO has also upgraded its 
computer systems, including transitioning in November 2023from legacy 
systems to Patent Center for the electronic filing and management of 
patent applications. Patent Center, a web-based platform that allows 
users to file and manage patent applications and requests, provides 
improved system performance and a more intuitive user interface for an 
enhanced user experience. The USPTO is committed to continuously 
improving the customer experience on its website to enhance and 
modernize accessibility, design, and overall satisfaction in our 
digital space. For information on additional enhancements to the 
agency's online services, visit the USPTO's web improvements page at 
https://www.uspto.gov/about-us/website-improvements. Effecting the 
changes in the examination process needed to ensure the issuance of 
reliable patents while also issuing those patents in a timely manner 
requires recognizing a potential increase in the core operating costs 
for future years.
    Another major component of the overall patent process that has seen 
an increase in operating costs is the work carried out by the PTAB and 
the Central Reexamination Unit (CRU). These units play a key role in 
providing an efficient system for amending or voiding any patent claims 
that overreach and stunt innovation, inclusive capitalism, and global 
competitiveness. To ensure that post-issuance challenges to patent 
rights through the PTAB and the CRU help protect innovation and 
investments to commercialize innovation, the USPTO will invest in new 
tools and resources that increase communication, knowledge sharing, and 
collective problem solving. These strategic investments will enable the 
USPTO to identify and continue to implement guidelines and best 
practices to serve the patent system.
3. Sustainable Funding
    All aspects of estimating the five-year forecast for aggregate 
cost, aggregate revenue, and the patent operating reserve are 
inherently uncertain because they are based on numerous, multifaceted 
planning assumptions predicated on external indicators of economic IP 
activity to forecast demand as well as internal workload drivers 
derived from production models. Maintaining a viable operating reserve 
is a key consideration as the USPTO sets patent fees. To mitigate the 
risk of uncertain demand, the USPTO maintains a patent operating 
reserve. The U.S. Government Accountability Office (GAO) considers 
operating reserves a best practice for user fee-funded government 
agencies like the USPTO. The patent operating reserve enables the USPTO 
to align fees and costs over a longer horizon and to improve its 
preparation for, and adjustment to, fluctuations in actual fee 
collections and spending.
    The USPTO manages 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 
intended to address immediate, unplanned changes in the economic or 
operating environments as the reserve builds to the optimal level. The 
minimum and optimal planning targets are reviewed every three years to 
ensure the reserve operating range (between minimum and optimal 
targets) mitigates the severity of an array of financial risks. Based 
on the current risk environment, including various risk factors such as 
economic and funding uncertainty and the high percentage of fixed costs 
in the Patents program, the USPTO established a minimum planning level 
of 8% of total spending--about one month's operating expenses 
(estimated between $318 million and $368 million from FY 2025-29)--and 
an optimal long-range target of 22% of total spending--about three 
months' operating expenses (estimated between $875 million and $1,012 
million from FY 2025-2029).
    Based on current cost and revenue assumptions in the FY 2025 
Budget, the USPTO forecasts that in FY 2024 aggregate estimated costs 
will exceed aggregate revenue and the operating reserve will be used to 
maintain operations. The fees contained in this final rule are 
projected to increase patent fee collections to the point that they 
exceed known spending requirements, and forecasted excess fee 
collections will replenish the patent operating reserve each year from 
FY 2025 through FY 2027. Based on this forecast, the USPTO will likely 
achieve its optimal level for the patent operating reserve in FY 2026. 
Based on spending requirements, the USPTO expects to rely on the patent 
operating reserve to fund a portion of operating expenses in FY 2028 
and FY 2029 as projected patent spending requirements will likely 
exceed projected fee collections.
    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 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 fee 
collections or spending requirements that affect the reserve balances. 
As seen in table 3, set forth in Part III: Estimating Aggregate Costs 
and Revenue of this rule, the operating reserve balance can change 
significantly over a five-year planning horizon, underscoring the value 
of the operating reserves as a risk mitigation tool for USPTO's 
financial vulnerability to varying risk factors and the importance of 
fee setting authority.
    The USPTO will continue to evaluate long-term planning assumptions 
to determine the appropriate course of

[[Page 91906]]

action beyond FY 2027 to appropriately adjust the Patents program for 
fluctuations in annual revenue resulting from changes in the economy, 
changes in spending requirements, and other financial risks. The USPTO 
will also continue to assess the patent operating reserve balance 
against its target balance annually, and at least every three years, 
the USPTO will evaluate whether the minimum and optimal target balance 
remain sufficient to provide the stable funding the USPTO needs. Per 
the USPTO's operating reserve policy, if the operating reserve balance 
is projected to exceed the optimal level by 10% for two consecutive 
years, the USPTO will consider fee reductions. The USPTO will continue 
to regularly review its operating budgets and long-range plans to 
ensure the prudent use of patent fees.
4. Comments, Advice, and Recommendations From PPAC and the Public
    As detailed in the NPRM and the report prepared in accordance with 
AIA fee setting authority, PPAC conveyed support for seeking adequate 
revenue to recover the costs for the USPTO to fulfill its role in 
supporting the country's innovation ecosystem, commenting that 
``[t]imely, high-quality search and examination require an 
appropriately compensated work force with adequate time to complete the 
same, supported by state of the art and reliable IT infrastructure.'' 
PPAC Report at 5-6.
    In addition, PPAC recognized that ``the USPTO is in the best 
position to assess its own needs and balance the tradeoffs in setting 
individual fees.'' PPAC Report at 6. The USPTO considered and analyzed 
the comments, advice, and recommendations received from PPAC before 
publishing this final rule.
    Likewise, the agency considered and analyzed the comments, advice, 
and recommendations received from the public during the 60-day comment 
period following publication of the NPRM before publishing this final 
rule. The agency's response to comments received is available in Part 
VI: Discussion of Comments of this rule.

C. Summary of Rationale and Purpose of the Proposed Rule

    The USPTO estimates that the proposed patent fee schedule will 
produce sufficient aggregate revenue to recover the aggregate estimated 
costs of patent operations and ensure financial sustainability for 
effective administration of the patent system. This proposed rule 
aligns with the USPTO's four key fee setting policy factors and 
supports the USPTO's mission-focused strategic goals.

V. Individual Fee Rationale

    The USPTO projects that aggregate revenue generated by the patent 
fees established in this final rule will recover the prospective 
aggregate estimated costs of patent operations as laid out in the FY 
2025 Budget.
    The USPTO did not set each individual fee necessarily equal to the 
estimated costs of performing activities related to the fee. Instead, 
as described in Part IV: Rulemaking Goals and Strategies of this rule, 
some fees are set at, above, or below their unit costs to balance four 
key fee setting policy factors: (1) promoting innovation strategies, 
(2) aligning fees with the full costs of products and services, (3) 
facilitating effective administration of the U.S. patent system, and 
(4) offering application processing options. For example, the agency 
sets many initial filing fees below unit cost to promote innovation 
strategies by removing barriers to entry to the patent system. To 
balance the aggregate revenue loss of fees set below cost, the USPTO 
must set other fees above cost in areas less likely to reduce 
inventorship (e.g., maintenance).
    For some fees established in this final rule, such as extension of 
time fees, the USPTO does not maintain individual historical cost data 
for services provided; instead, the agency considers the policy factors 
described in Part IV: Rulemaking Goals and Strategies of this rule to 
inform fee setting. For example, facilitating effective administration 
of the U.S. patent system enables the USPTO to foster an environment 
where USPTO personnel can provide and applicants can receive prompt, 
quality interim and final decisions; encourage the prompt conclusion of 
prosecuting an application, resulting in pendency reduction and faster 
dissemination of patented information; and help recover costs for 
activities that strain the patent system.
    The fee changes are grouped into three categories: (A) an across-
the-board adjustment to patent fees, (B) an adjustment to front-end 
fees, and (C) targeted fees. Part VII: Discussion of Specific Rules of 
this rule contains a complete listing of fees set or adjusted in the 
final patent fee schedule, including small and micro entity fees. This 
information is also listed in the Table of Patent Fees available on the 
fee setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.
    This final rule includes one procedural amendment (D) expanding the 
applicability of the rule allowing applicants to obtain a refund of 
search and excess claims fees paid in an application through express 
abandonment.

A. Across-the-Board Adjustment to Patent Fees

    The broader U.S. economy has experienced higher-than-expected 
inflation the last two years and, in turn, USPTO operating costs 
increased relative to baseline estimates for labor and nonlabor 
activities such as benefits, service contracts, and equipment. 
Additionally, the USPTO adjusted the patent special rate table (pay) 
for the first time since 2007 to provide competitive compensation to 
patent employees. The agency's estimates of future costs in the FY 2025 
Budget include a 2.0% civilian pay raise planned in CY 2025 and an 
assumption of 3.0% civilian pay raises in CY 2026-29, as well as 
inflationary increases for other labor and nonlabor activities.
    In the NPRM, the USPTO proposed raising fees not covered by the 
targeted adjustments discussed in part V(C) of this rule by 5%. 
However, this final rule alters that proposal. The agency stated in the 
NPRM that it may need to refine the size of the across-the-board-
adjustment either upward or downward such that fees are set at a level 
that secures aggregate cost recovery and maintains the operating 
reserves at acceptable levels. The USPTO has removed or adjusted 
several of the targeted proposals in the NPRM based on stakeholder 
feedback. To keep the USPTO on a stable financial track sufficient to 
recover the aggregate estimated costs of patent operations and to 
support the agency's strategic objectives, the agency is adjusting by 
approximately 7.5% all patent fees not covered by the targeted 
adjustments discussed in part V(C). This option results in an aggregate 
increase to projected patent fee collections that is about the same as 
the projected increase in the NPRM.
    The effective date of this final rule is more than four years after 
the agency's last fee adjustment in October 2020. A 7.5% across-the-
board increase in 2025 will be equivalent to a 1.7% annual increase, 
well below the prevailing inflation rate since October 2020. The agency 
is not proposing a larger increase in line with inflation because the 
across-the-board adjustment is intended to supplement the additional 
revenue collected from the targeted adjustments. Also, the USPTO will 
continue its ongoing efforts to improve operational efficiency and 
reduce spending when appropriate.

[[Page 91907]]

    The 7.5% across-the-board adjustment strikes an appropriate balance 
between projected aggregate revenue and aggregate costs based on the 
assumptions used to develop the point-in-time estimates that support 
this final rule. For patent fees with small and micro entity fee 
reductions, the undiscounted fee is rounded up or down to the nearest 
$5 by applying standard arithmetic rules. The resulting fee amounts are 
more convenient to patent users and permit the USPTO to set small and 
micro entity fees at whole dollar amounts when applying applicable fee 
reductions. Therefore, some smaller fees will not change since a 7.5% 
increase would round down to the current fee, while other fees will 
change by slightly more or less than 7.5%, depending on rounding. For 
patent fees that do not have small and micro entity fee reductions, the 
fees are rounded to the nearest dollar by applying standard arithmetic 
rules. The fee adjustments in this category are listed in the Table of 
Patent Fees available on the fee setting section of the USPTO website 
at https://www.uspto.gov/FeeSettingAndAdjusting.

B. Adjustment to Front-End Patent Fees

    The USPTO is adjusting all filing, search, and examination fees not 
covered by the targeted adjustments as discussed in part V(C) of this 
rule by an additional 2.5% on top of the 7.5% across-the-board 
adjustment, for a total front-end increase of 10%. This total is 
consistent with the fee increases proposed in the NPRM. The net 
increase over the across-the-board adjustment has been lowered from 5% 
to 2.5%, keeping the total increase for front-end patent fees at 10%. 
The current fee schedule sets filing, search, and examination fees 
below the costs of performing these services to achieve low barriers to 
entry into the innovation ecosystem. These front-end fees are 
subsidized by other fee collections, primarily maintenance fees. This 
adjustment will marginally recover some, but not all, additional 
filing, search, and examination costs earlier in the patent life cycle, 
thus mitigating the risk of potentially lower maintenance fee payments 
in the future while remaining consistent with a low barrier to entry 
policy.
    Similar to the across-the-board adjustment, for fees that have 
small and micro entity fee reductions, the undiscounted fee is rounded 
up or down to the nearest $5 by applying standard arithmetic rules. 
Therefore, the fee rates established in this final rule might not be 
precisely 10% higher than the current fee rates. The fee adjustments in 
this category are listed in the Table of Patent Fees available on the 
fee setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.

C. Targeted Adjustments to Patent Fees

    The USPTO sets or adjusts the following fees for the reasons stated 
below. Small and micro entity fees are set as 40% and 20%, 
respectively, of the undiscounted fees.
1. After Final Consideration Pilot Program 2.0
    The USPTO considered the public feedback on the After Final 
Consideration Pilot Program 2.0 (AFCP 2.0) and the proposed fee and 
decided not to renew the program. Consequently, a fee is not necessary. 
The program will expire on December 14, 2024.
2. Continuing Application Fees

[[Page 91908]]

[GRAPHIC] [TIFF OMITTED] TR20NO24.003

    The USPTO is instituting new fees for certain continuing 
applications to ensure a sustainable funding model into the future. The 
patent fee structure is designed to encourage innovation by maintaining 
low barriers to entry, which the agency accomplishes by keeping front-
end fees (filing, search, and examination fees) below the costs for the 
corresponding front-end services (preexamination, search, and 
examination), and by reducing most patent fees by 60% for small 
entities and by 80% for micro entities. For example, for a utility 
application, current front-end fees ($1,820 for undiscounted entities 
in FY 2023) are set far below the USPTO's average costs for filing, 
search, and examination activities ($6,165 in FY 2023). As of FY 2023, 
the subsidy (the difference between the USPTO's costs and what an 
applicant pays) for an average application was $4,345 for an 
undiscounted entity and even higher for those applicants paying 
discounted fee rates ($5,501 for a small entity filing electronically, 
and $5,801 for a micro entity).
    The USPTO recovers the shortfall (i.e., the costs associated with 
filing, search, and examination activities that are not recouped by 
their associated fees) from other fees, particularly issue fees and 
maintenance fee payments made after issuance of a utility patent. See 
e.g., FY 2023 AFR at 63-64, available on the USPTO website at https://www.uspto.gov/AnnualReport. Maintenance fees are due 3.5 years, 7.5 
years, and 11.5 years from the issue date of a utility patent. See 35 
U.S.C. 41(b)(1). During FY 2023, maintenance fees collected from 
utility patentees were 54.9% of the USPTO's patent revenue, about one-
third of which derived from payment of the 11.5-year fee. This revenue 
is vital to providing

[[Page 91909]]

the necessary aggregate financing to fund patent operations.
    Continuing applications, which include continuation, divisional, 
and continuation-in-part applications filed under the conditions 
specified in 35 U.S.C. 120, 121, 365(c), or 386(c) and Sec.  1.78, 
represent a large and increasing share of patent applications. From FY 
2010 to FY 2022, total serialized filings rose about 44%, including a 
moderate increase in noncontinuing applications (about 25%) and a large 
increase in continuing applications (about 100%), due almost entirely 
to increased continuation filings. Since FY 2010, divisional and 
continuation-in-part applications remained flat at annual levels of 
about 22,000 and 19,000, respectively. However, continuation 
applications have tripled, from about 40,000 in FY 2010 to about 
122,800 in FY 2022, representing about 34% of FY 2022 serialized 
filings.
    The volume and rapid increase of continuing applications negatively 
impacts the USPTO's workload and docketing practices. For example, it 
is difficult for the agency to balance patent resources between the 
examination of ``new'' (i.e., noncontinuing) applications disclosing 
new technologies and innovations and continuing applications that, in 
some cases, are a repetition of previously examined applications either 
issued as patents or that have become abandoned. See e.g., FY 2021 
pendency statistics review presented at the PPAC quarterly meeting on 
Nov. 18, 2021, available on the USPTO website at https://www.uspto.gov/sites/default/files/documents/20211115-PPAC-FY21-pendency-stats-review.pdf (note that about 80% of continuations have a patented 
parent). In addition, certain continuing applications, particularly 
divisional and continuation-in-part applications, might present 
different claimed inventions or more complex issues than a non-
continuing application. Examiners are provided the same amount of time 
to examine a continuing application as a non-continuing application; 
equal time equates to equal cost to the agency.
    Moreover, continuing applications filed long after their earliest 
benefit date (EBD) are less likely to have a patent term long enough 
for the USPTO to recover more of their costs from maintenance fees. The 
EBD is a term used in this rulemaking (the NPRM and this final rule) to 
refer to the earliest filing date for which benefit is claimed under 35 
U.S.C. 120, 121, 365(c), or 386(c) and Sec.  1.78(d). The EBD is 
determined on an application-by-application basis. The EBD cannot be 
the filing date of a foreign application or the filing date of a 
provisional application to which benefit is claimed under 35 U.S.C. 
119(e). When the later-filed application is a utility or plant patent 
application, the EBD is also the date from which the 20-year patent 
term is calculated under 35 U.S.C. 154(a)(2). The EBD is also known as 
the patent term filing date. For more information about benefit claims, 
see Manual of Patent Examining Procedure (MPEP) (9th ed., Rev. 01.2024, 
November 2024) 210 and 211 et seq.; for more information about the 
patent term filing date, see MPEP 804, subsection I.B.1(a); and for 
more information about patent term, see MPEP 2701. The MPEP may be 
viewed on or downloaded from the USPTO website at https://www.uspto.gov/MPEP or https://mpep.uspto.gov.
    Figure 1 depicts the estimated patent terms for a hypothetical 
patent family containing five applications that are filed at different 
times after their EBD: Parent A filed at 0 years, Child B filed at 2.5 
years after the EBD, Child C filed at 5 years after the EBD, Child D 
filed at 7.5 years after the EBD, and Child E filed at 10 years after 
the EBD. Each application claims the benefit of every prior-filed 
application in the family under 35 U.S.C. 120, e.g., Child C is a 
continuation of Child B, which is a continuation of Parent A. The 
pendency of each application is shown as a white bar with a dotted 
outline, and the term of each patent is shown as a shaded gray bar. For 
the sake of simplicity, the terms are estimated based on a 30-month 
pendency and assume that no patent term adjustments, patent term 
extensions, or terminal disclaimers apply. Key dates for each patent 
are indicated by labeled ovals (e.g., ``I'' for the issue date, and 
``M1,'' ``M2,'' or ``M3'' for the maintenance fee due dates, which for 
purposes of this illustration are shown as inclusive of the 35 U.S.C. 
41(b)(2) grace periods).
[GRAPHIC] [TIFF OMITTED] TR20NO24.004


[[Page 91910]]


    As shown in figure 1, Parent A is filed on the EBD, Child B is 
filed 2.5 years after the EBD, and Child C is filed 5 years after the 
EBD. All three of these applications will have a patent term long 
enough to require payment of all three maintenance fees to avoid 
expiration prior to the maximum statutory term. Child D and Child E, 
however, will not. Child D, filed 7.5 years after the EBD, will not 
have a term long enough to require payment of the third maintenance fee 
to avoid expiration prior to the maximum statutory term, and Child E, 
filed 10 years after the EBD, will not have a term long enough to 
require payment of the second or third maintenance fee to avoid 
expiration prior to the maximum statutory term.
    While not all patentees choose to maintain their patents for their 
full term, the USPTO's ability to subsidize front-end fees is dependent 
on a sufficient number of patentees paying maintenance fees so that the 
aggregate revenue generated by patent fees will cover the aggregate 
costs of patent operations. As the volume of applications with terms 
that are not long enough to require one or more maintenance fees 
increases, the risk that the agency will not generate sufficient 
aggregate revenue also increases. Instituting fees for certain 
continuing applications based on the EBD will make the USPTO's funding 
model more resilient to changes in filing behaviors that impact the 
average term of issued patents and the resulting impact on maintenance 
fee payments.
    In May 2023, the agency originally proposed that new fees would 
apply to nonprovisional applications that have an actual filing date 
more than three or more than seven years later than their EBD. In 
response to feedback from PPAC, the USPTO adjusted the thresholds in 
the NPRM and proposed that the new fees would apply to nonprovisional 
applications that have an actual filing date more than five or more 
than eight years later than their EBD. During the public comment period 
following the NPRM, the USPTO received a number of comments expressing 
concerns that the adjusted thresholds were still too early in time. 
After weighing the public feedback and considering the effects on the 
patent system as a whole, the USPTO has adjusted the timing thresholds 
for the continuing application fees as detailed below.
    As set forth in this final rule, the new fees in Sec.  1.17(w) 
apply to nonprovisional applications that have an actual filing date 
more than six years after their EBD. The Sec.  1.17(w)(1) fee applies 
when the later-filed application's EBD is more than six and no more 
than nine years earlier than its actual filing date and is $2,700 for 
undiscounted applications, $1,080 for applications receiving a small 
entity discount, and $540 for applications receiving a micro entity 
discount. For the hypothetical patent family shown in figure 1, Child D 
would incur the Sec.  1.17(w)(1) fee because it was filed 7.5 years 
after its EBD. The Sec.  1.17(w)(2) fee applies when the later-filed 
application's EBD is more than nine years earlier than its actual 
filing date and is $4,000 for undiscounted applications, $1,600 for 
applications receiving a small entity discount, and $800 for 
applications receiving a micro entity discount. For the hypothetical 
patent family shown in figure 1, Child E would incur the Sec.  
1.17(w)(2) fee because it was filed 10 years after its EBD.
    The new fees in Sec.  1.17(w) will partially offset foregone 
maintenance fee revenue resulting from later-filed continuing 
applications and, therefore, recover more costs related to continuing 
applications filed long after their EBD directly from filers of such 
applications. As noted previously, the Sec.  1.17(w) fees are designed 
so that continuing applications filed six or fewer years after their 
EBD will continue to receive a front-end fee subsidy that is equal to 
that received by non-continuing applications. Thus, low barriers to 
entry into the patent system are preserved for non-continuing 
applications and for approximately 80.3% of continuing applications. 
For those continuing applications filed more than six years after their 
EBD, the Sec.  1.17(w) fee will essentially reduce the amount of the 
front-end fee subsidy in recognition that such applications are less 
likely to have a patent term long enough for the USPTO to recover the 
costs of their search and examination from maintenance fees. The Sec.  
1.17(w) fees are set at a rate that is both less than the front-end fee 
subsidy and substantially less than the third maintenance fee amount.
    For example, for the hypothetical patent family shown in figure 1, 
under the undiscounted fee rates as adjusted by this final rule, Child 
D would pay the undiscounted Sec.  1.17(w)(1) fee of $2,700 and would 
not have a term long enough to require payment of the third maintenance 
fee ($8,280) to avoid expiration prior to the maximum statutory term. 
Child E would pay the undiscounted Sec.  1.17(w)(2) fee of $4,000 and 
would not have a term long enough to require payment of the second 
($4,040) or third ($8,280) maintenance fee to avoid expiration prior to 
the maximum statutory term. Therefore, the Sec.  1.17(w)(1) fees will 
help offset a front-end subsidy of approximately $4,165 (with front-end 
fees adjusted to a combined $2,000 in this final rule and combined FY 
2023 unit costs of $6,165 for filing, search, and examination 
activities). If these applications paid discounted fees, the difference 
would be even greater. For example, if Child D received small entity 
fee discounts, the Sec.  1.17(w)(1) fee would be $1,080, partially 
offsetting a front-end subsidy of approximately $5,435 and less than 
the third maintenance fee of $3,312.
    If future workloads for continuing applications were to remain 
consistent with FY 2022 data, about 80.3% of continuing applications 
would not incur the new fees because they are filed within six years of 
their EBD, while the remaining 19.7% of continuing applications (about 
6.5% of all applications) would incur a continuing application fee. In 
particular, as shown in table 5, about 11.4% of continuing applications 
are filed more than six but not more than nine years after their EBD 
and would incur the Sec.  1.17(w)(1) fee, and an additional 8.3% of 
continuing applications are filed more than nine years after their EBD 
and would incur the Sec.  1.17(w)(2) fee. The table includes columns 
for ranges of years from the EBD to the filing date, the share of 
continuing applications in each range, and the applicability of the 
Sec.  1.17(w) fees.

[[Page 91911]]

[GRAPHIC] [TIFF OMITTED] TR20NO24.005

    Figure 2 illustrates the same data, with the addition of noting 
when the Sec.  1.17(w) fees are incurred. The x-axis represents the 
years from the EBD to the filing date, and the y-axis shows the total 
share of continuing applications. Each vertical bar in figure 2 
corresponds to a row in table 5. The leftmost two vertical bars labeled 
``0 to 3'' and ``>3 to 6'' represent the approximate 80.3% share of 
continuing applications will not incur the new fees, the vertical bar 
labeled ``>6 to 9'' represents the 11.4% share of continuing 
applications that will incur the Sec.  1.17(w)(1) fee, and the 
rightmost three vertical bars inside the dashed box represent the 8.3% 
share of continuing applications that will incur the Sec.  1.17(w)(2) 
fee.
[GRAPHIC] [TIFF OMITTED] TR20NO24.006

    For an application filed on or after the effective date of this 
final rule, payment of the Sec.  1.17(w) fees is required at the time a 
prompting benefit claim (i.e., a benefit claim that causes the EBD of 
the later-filed application to be more than six or nine years earlier 
than its actual filing date) is presented in the later-filed 
application. If the prompting benefit claim is presented at the time of 
filing the later-filed application, the applicable Sec.  1.17(w) fee 
will be due at filing. If the prompting benefit claim is presented at a 
later time, the applicable Sec.  1.17(w) fee will be due concurrently 
with the presentation of the prompting benefit claim. If the later 
presentation of the prompting benefit claim is by way of a petition for 
acceptance of an unintentionally delayed benefit claim under Sec.  
1.78(e), the applicable Sec.  1.17(w) fee will be due in addition to 
the petition fee under Sec.  1.17(m).
    Because the fees in Sec.  1.17(w) are based on the application's 
EBD, presenting multiple benefit claims at the same time will not incur 
multiple fees. However, if benefit claims are presented at multiple 
times during an application's pendency, a second fee

[[Page 91912]]

may be due if the later-presented benefit claim changes the 
application's EBD to be more than nine years earlier than the actual 
filing date. In this situation, the amount due under Sec.  1.17(w)(2) 
for the later presentation will reflect any prior payment under Sec.  
1.17(w)(1) for the earlier presentation. For instance, if the fee under 
Sec.  1.17(w)(1) was paid at the time of filing and a prompting benefit 
claim requiring payment of the Sec.  1.17(w)(2) fee is presented at a 
later time, the additional amount owed is the difference between the 
current fee amount stated in Sec.  1.17(w)(2) and the amount of the 
previous payment under Sec.  1.17(w)(1).
    An application that is pending prior to the effective date of this 
final rule will not incur a fee under Sec.  1.17(w) based on any 
benefit claims that were properly presented prior to the effective 
date. If a benefit claim is presented in the application on or after 
the effective date of this final rule, however, the application will 
incur a fee under Sec.  1.17(w) if the actual filing date of the 
application is more than six or nine years later than its EBD.
    The following examples are not exhaustive but illustrate the most 
common situations anticipated to require payment of the new fees under 
Sec.  1.17(w). For purposes of these examples, the agency assumes that 
all requirements for claiming benefit under 35 U.S.C. 119, 120, 121, 
365(c), or 386(c) and Sec.  1.78 are satisfied, and that all fees are 
paid at the undiscounted rates.

    Example 1: Claiming benefit of a nonprovisional application 
under 35 U.S.C. 120. Application A is a nonprovisional application 
filed on July 1, 2026. The Application Data Sheet (ADS) present upon 
A's filing contains a benefit claim under 35 U.S.C. 120 to 
nonprovisional application N filed on March 2, 2020, which is the 
only benefit claim in the application. A's EBD is March 2, 2020, 
which is more than six but not more than nine years earlier than A's 
actual filing date of July 1, 2026. In this example, the Sec.  
1.17(w)(1) fee of $2,700 is due upon A's filing.
    Example 2: Claiming benefit of a provisional application under 
35 U.S.C. 119(e). Application B is a nonprovisional application 
filed on July 1, 2026. The ADS present upon B's filing contains a 
benefit claim under 35 U.S.C. 120 to nonprovisional application O 
filed on February 2, 2021, and a benefit claim under 35 U.S.C. 
119(e) to provisional application P filed on March 3, 2020. The 
USPTO's records indicate that O also contains a benefit claim under 
35 U.S.C. 119(e) to provisional application P. In this situation, 
P's filing date is not the EBD, because Sec.  1.17(w) does not 
encompass benefit claims under 35 U.S.C. 119(e). Instead, B's EBD is 
February 2, 2021, which is less than six years earlier than B's 
actual filing date of July 1, 2026. In this example, no fee would be 
due under Sec.  1.17(w).
    Example 3: Claiming benefit of a provisional application under 
35 U.S.C. 120. Application C is a nonprovisional application filed 
on July 1, 2026. The ADS present upon C's filing contains a benefit 
claim under 35 U.S.C. 120 to nonprovisional application O filed on 
February 2, 2021, and a benefit claim under 35 U.S.C. 120 to 
provisional application P filed on March 3, 2020. The USPTO's 
records indicate that O also contains a benefit claim under 35 
U.S.C. 120 to provisional application P. In this situation, P's 
filing date is the EBD, because Sec.  1.17(w) encompasses benefit 
claims under 35 U.S.C. 120. C's EBD is March 3, 2020, which is more 
than six but not more than nine years earlier than C's actual filing 
date of July 1, 2026. In this example, the Sec.  1.17(w)(1) fee of 
$2,700 is due upon C's filing. Note, it is not recommended that 
applicants claim the benefit to a provisional application under 35 
U.S.C. 120 since such a claim could have the effect of reducing the 
patent term. See MPEP 211.02, subsection III.
    Example 4: Claiming priority to a foreign application under 35 
U.S.C. 119(a). Application D is a nonprovisional application filed 
on July 1, 2026. The ADS present upon D's filing contains a benefit 
claim under 35 U.S.C. 120 to nonprovisional application O filed on 
February 2, 2021, and a priority claim under 35 U.S.C. 119(a) to 
foreign application Q filed on March 3, 2020. The USPTO's records 
indicate that O also contains a priority claim under 35 U.S.C. 
119(a) to foreign application Q. In this situation, Q's filing date 
is not the EBD, because Sec.  1.17(w) does not encompass priority 
claims to foreign applications under 35 U.S.C. 119. Instead, D's EBD 
is February 2, 2021, which is less than six years earlier than D's 
actual filing date of July 1, 2026. In this example, no fee would be 
due under Sec.  1.17(w).
    Example 5: National stage of an international application 
claiming priority to a foreign application under 35 U.S.C. 119(a) 
and 365(b). Application E is an international application filed 
under the Patent Cooperation Treaty (PCT) on July 1, 2026. The PCT 
Request form present upon E's filing contains a priority claim under 
35 U.S.C. 119(a) and 365(b) to foreign application R filed on July 
7, 2025. When the national stage of E is commenced in the United 
States under 35 U.S.C. 371, the USPTO will determine the EBD of the 
national stage application to evaluate whether any continuing 
application fees are due. In this situation, R's filing date is not 
the EBD, because Sec.  1.17(w) does not encompass priority claims to 
foreign applications. Instead, E's EBD is July 1, 2026, which is the 
same as its actual filing date. In this example, no fee would be due 
under Sec.  1.17(w).
    Example 6: National stage of an international application 
claiming benefit of a nonprovisional application under 35 U.S.C. 120 
and 365(c). Application F is an international application 
designating the United States that is filed under the PCT on July 1, 
2026. The PCT request form present upon F's filing contains a 
benefit claim under 35 U.S.C. 120 and 365(c) to nonprovisional 
application N filed on March 2, 2020. When the national stage of F 
is commenced in the United States under 35 U.S.C. 371, the USPTO 
will determine the EBD of the national stage application to evaluate 
whether any continuing application fees are due. In this situation, 
N's filing date of March 2, 2020, is the EBD, because Sec.  1.17(w) 
encompasses benefit claims under 35 U.S.C. 120 and 365(c). Thus, F's 
EBD is March 2, 2020, which is more than six years, and no more than 
nine years, earlier than F's actual filing date of July 1, 2026. In 
this example, the Sec.  1.17(w)(1) fee of $2,700 is due when F 
commences the U.S. national stage under 35 U.S.C. 371.
    Example 7: Bypass continuation of an international application 
claiming benefit of a nonprovisional application under 35 U.S.C. 120 
and 365(c). Application G is a nonprovisional application filed on 
December 28, 2028. The ADS present upon G's filing contains benefit 
claims under 35 U.S.C. 120 and 365(c) to international application F 
filed on July 1, 2026, and nonprovisional application N filed on 
March 2, 2020. As noted in Example 6, supra, F also contains a 
benefit claim under 35 U.S.C. 120 and 365(c) to N. In this 
situation, N's filing date of March 2, 2020, is the EBD because 
Sec.  1.17(w) encompasses benefit claims under 35 U.S.C. 120 and 
365(c). Thus, G's EBD is March 2, 2020, which is more than six but 
not more than nine years earlier than G's actual filing date of 
December 28, 2028. In this example, the Sec.  1.17(w)(1) fee of 
$2,700 is due upon G's filing.
    Example 8: International design application claiming benefit of 
a nonprovisional application under 35 U.S.C. 120. Application H is 
an international design application designating the United States 
that is filed under the Hague Agreement Concerning the International 
Registration of Industrial Designs, July 2, 1999 (``Hague 
Agreement''), on July 1, 2026. The DM/1 form titled ``Application 
for International Registration'' present upon H's filing does not 
contain any priority or benefit claims. Thus, at the time of H's 
filing, H's EBD is the same as its actual filing date, and no fee 
would be due under Sec.  1.17(w). Shortly after the international 
registration is published by the International Bureau and a U.S. 
application number (35/series) is established, the applicant files a 
corrected ADS containing a benefit claim under 35 U.S.C. 120 to 
nonprovisional application N filed on March 2, 2020. Because this 
newly added benefit claim causes H's EBD to become March 2, 2020, 
which is more than six but not more than nine years earlier than H's 
actual filing date of July 1, 2026, the Sec.  1.17(w)(1) fee of 
$2,700 is due upon filing of the corrected ADS.
    Example 9: Adding timely benefit claims under 35 U.S.C. 120 
after filing; single fee due. Application I is a nonprovisional 
application filed on July 3, 2028. The ADS present upon I's filing 
does not contain any benefit claims, and thus no fee would be due 
under Sec.  1.17(w) upon I's filing. Two months after I's filing, 
the applicant files a second ADS containing a benefit claim under 35 
U.S.C. 120 to nonprovisional application O filed on February 2, 
2021. Because this newly added benefit claim causes I's EBD to 
become February 2, 2021, which is more than six but

[[Page 91913]]

not more than nine years earlier than I's actual filing date of July 
3, 2028, the Sec.  1.17(w)(1) fee of $2,700 is due upon filing of 
the second ADS. The applicant pays the fee. One month later (three 
months after I's filing), the applicant files a third ADS containing 
the previously added benefit claim to O and a new benefit claim 
under 35 U.S.C. 120 to nonprovisional application N filed on March 
2, 2020. This newly added benefit claim causes I's EBD to become 
March 2, 2020, which is more than six but not more than nine years 
earlier than I's actual filing date of July 3, 2028. However, 
because the applicant already paid the Sec.  1.17(w)(1) fee, no 
additional fee is due upon filing of the third ADS.
    Example 10: Adding timely benefit claims under 35 U.S.C. 120 
after filing; multiple fees due. Application J is a nonprovisional 
application filed on July 5, 2029. The ADS present upon J's filing 
contains a benefit claim under 35 U.S.C. 120 to nonprovisional 
application O filed on February 2, 2021, which is the only benefit 
claim in the application. J's EBD is February 2, 2021, which is more 
than six but not more than nine years, earlier than J's actual 
filing date of July 5, 2029. In this example, the Sec.  1.17(w)(1) 
fee of $2,700 is due upon J's filing. The applicant pays the fee. 
Two months after I's filing, the applicant files a second ADS 
containing the previously added benefit claim to O and a new benefit 
claim under 35 U.S.C. 120 to nonprovisional application N filed on 
March 2, 2020. This newly added benefit claim causes J's EBD to 
become March 2, 2020, which is more than nine years earlier than I's 
actual filing date of July 5, 2029, and thus prompts the fee in 
Sec.  1.17(w)(2). Because the fee in Sec.  1.17(w)(1) was previously 
paid, the previous payment is subtracted from the amount now due 
under Sec.  1.17(w)(2). Accordingly, the amount due upon filing of 
the second ADS is $1,300 (the current fee amount of $4,000 set forth 
in Sec.  1.17(w)(2) less the $2,700 previously paid under Sec.  
1.17(w)(1)).
    Example 11: Adding delayed benefit claim under 35 U.S.C. 120. 
Application K is a nonprovisional application filed on July 5, 2029. 
The ADS present upon K's filing does not contain any benefit claims. 
Eighteen months after K's filing, the applicant files a second ADS 
containing a benefit claim under 35 U.S.C. 120 to nonprovisional 
application N filed on March 2, 2020. Because this newly added 
benefit claim causes K's EBD to become March 2, 2020, which is more 
than nine years earlier than K's actual filing date of July 5, 2029, 
the Sec.  1.17(w)(2) fee of $4,000 is due upon filing of the second 
ADS. In addition, because this benefit claim is delayed (not 
submitted within the required time period in Sec.  1.78(d)), a 
petition for acceptance of an unintentionally delayed benefit claim 
under Sec.  1.78(e) and the petition fee under Sec.  1.17(m) are 
also required.
    Example 12: Adding timely benefit claim under 35 U.S.C. 120 in 
an application that predates the effective date of the final rule; 
Sec.  1.17(w)(1) fee due. Application L is a nonprovisional 
application filed on January 2, 2025, which is prior to the 
effective date of this final rule. The ADS present upon L's filing 
contains a benefit claim under 35 U.S.C. 120 to nonprovisional 
application S filed on February 5, 2018, which is the only benefit 
claim in the application. L's EBD is February 5, 2018, which is more 
than six but not more than nine years earlier than L's actual filing 
date of January 2, 2025. Because L was filed prior to the effective 
date of this final rule, no fee under Sec.  1.17(w)(1) was due upon 
L's filing or upon the effective date of the final rule. Two months 
after L's filing and after the effective date of this final rule, 
the applicant files a second ADS containing a benefit claim under 35 
U.S.C. 120 to nonprovisional application O filed on February 2, 
2021. While the newly added benefit claim does not change L's EBD, 
its presentation in an application having an EBD more than six but 
not more than nine years earlier than its actual filing date prompts 
the fee in Sec.  1.17(w)(1). Accordingly, the Sec.  1.17(w)(1) fee 
of $2,700 is due upon filing of the second ADS.
    Example 13: Adding timely benefit claim under 35 U.S.C. 120 in 
an application that predates the effective date of the final rule; 
Sec.  1.17(w)(2) fee due. Application M is a nonprovisional 
application filed on January 2, 2025, which is prior to the 
effective date of this final rule. The ADS present upon M's filing 
contains a benefit claim under 35 U.S.C. 120 to nonprovisional 
application S filed on February 5, 2018, which is the only benefit 
claim in the application. M's EBD is February 5, 2018, which is more 
than six but not more than nine years earlier than M's actual filing 
date of January 2, 2025. Because M was filed prior to the effective 
date of this final rule, no fee under Sec.  1.17(w)(1) was due upon 
M's filing or upon the effective date of the final rule. Two months 
after M's filing and after the effective date of this final rule, 
the applicant files a second ADS containing a benefit claim under 35 
U.S.C. 120 to nonprovisional application T filed on March 6, 2015. 
This newly added benefit claim causes M's EBD to become March 6, 
2015, which is more than nine years earlier than M's actual filing 
date of January 2, 2025, and thus prompts the fee in Sec.  
1.17(w)(2). Accordingly, the Sec.  1.17(w)(2) fee of $4,000 is due 
upon filing of the second ADS.

    The USPTO does not believe these new fees will disproportionately 
impact small or micro entities. Based on FY 2022 data, of the 
applications that had an EDB more than six years before the actual 
filing date, about 70% were undiscounted, about 29% received a small 
entity discount, and about 1% received a micro entity discount. The 
USPTO also anticipates that these fees will be relatively technology 
neutral. Technology Center (TC) 3700 receives a much higher proportion 
of late-filed continuing applications than other areas, but this TC 
covers diverse subject matter and many technologies, including 
mechanical engineering, manufacturing, gaming, and medical devices and 
processes.
3. Design Application Fees
BILLING CODE 3510-16-P

[[Page 91914]]

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[[Page 91915]]


[GRAPHIC] [TIFF OMITTED] TR20NO24.008

BILLING CODE 3510-16-C
    The patent fee structure is designed to encourage innovation by 
maintaining low barriers to entry into the patent system. The USPTO 
accomplishes this goal by keeping initial filing fees for utility, 
plant, and design applications below the agency's costs for 
preexamination, search, and examination, and by reducing most patent 
fees by 60% for small entities and by 80% for micro entities. See Part 
II: Background, supra. The USPTO recovers the remaining costs of 
performing the work from other fees, particularly issue fees and 
maintenance fee payments made after issuance of a utility patent. See 
e.g., the FY 2023 Agency Financial Report at 63-64, available on the 
USPTO website at https://www.uspto.gov/AnnualReport. Although the USPTO 
is not permitted to establish maintenance fees for design or plant 
patents (see 35 U.S.C. 41(b)(3)), the maintenance fees it collects from 
utility patentees represented 54.9% of patent revenue in FY 2023. This 
revenue is vital to providing the necessary aggregate revenue to 
recover the aggregate costs of patent operations.
    Currently, the undiscounted design fees ($1,760 total for filing, 
search, examination, and issue fees) are set well below the cost of 
their associated services for both new design applications ($2,252 cost 
in FY 2023) and continued prosecution applications (CPAs) ($2,947 cost 
in FY 2023). The discounted design fees are significantly lower ($704 
total for a small entity, and $352 total for a micro entity), even 
though the costs are the same. More than half of design applicants pay 
discounted fees; for example, of the design applications filed in FY 
2023, 26% paid the micro entity fee amount, 37% paid the small entity 
fee amount, and only 37% paid the undiscounted fee amount.
    As a result of design fees being set below cost and the heavy use 
of entity fee discounts by design applicants, the USPTO's collections 
from design fees are significantly below design costs. In FY 2023, the 
USPTO's collections from design fees averaged only $1,013 per 
application. This resulted in a shortfall of $1,239 per design 
application, which represented 55% of the cost. In other words, design 
applicants, on an aggregate basis, paid for only 45% of design costs. 
Because USPTO operations are financed solely by user fees, the agency 
must make up the shortfall in the design area through fees set in other 
patent areas. While the USPTO has

[[Page 91916]]

raised design fees twice in the last 10 years, those increases were not 
large enough to eliminate the shortfall over the long term. Thus, 
design costs continue to be subsidized by other fees, primarily utility 
patent maintenance fees.
    This subsidy has grown in recent years, as shown in figure 3. The 
graph depicts average fee collections per design application (average 
collections) in dark gray, and the average shortfall or subsidy per 
design application (average subsidy) in light gray. The average subsidy 
per design application in FY 2022 was $1,108 and in FY 2023 was $1,239. 
Table 7 below figure 3 provides the actual dollar amounts for each data 
point (unit cost, average collections, and average subsidy) shown in 
figure 3 and also includes the subsidy as a percentage of unit cost for 
each fiscal year.
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[GRAPHIC] [TIFF OMITTED] TR20NO24.010


[[Page 91917]]


    Historically, this difference between design fees and design costs 
did not result in a significant subsidy because the annual volume of 
design applications was much lower than the annual volume of issued 
utility patents. Since 2014, however, the number of design applications 
has surged 50% (from 36,254 in FY 2014 to 53,665 in FY 2023), while the 
number of issued utility patents (and thus, the volume of potential 
future maintenance fees) has increased only 2% (from 303,930 in FY 2014 
to 310,245 in FY 2023). See e.g., FY 2023 Workload Table 1, available 
on the USPTO website at https://www.uspto.gov/AnnualReport. 
Furthermore, most of the growth in design application filings is 
attributable to applications in which discounted fees are paid. From FY 
2014 to FY 2023, the number of undiscounted design applications 
(including CPAs) filed increased 12%, but the number of small entity 
applications increased 31%, and the number of micro entity applications 
increased 306%. As a result, the entity spread for design applications 
changed dramatically. For example, in FY 2014, the entity spread for 
design applications was 50% undiscounted, 40% small entity, and 10% 
micro entity; during FY 2023, the entity spread for design applications 
was 37% undiscounted, 37% small entity, and 26% micro entity. In 
contrast, the entity spread in utility application filings has remained 
the same from FY 2014 to FY 2023, at about 72% undiscounted, 24% small 
entity, and 4% micro entity.
    Moreover, because design fee payors do not bear the full costs of 
design services, the current imbalance between fees and costs in the 
design patent area could lead to overuse of discounted services. See 
e.g., ``Federal User Fees: A Design Guide,'' Report No. GAO-08-386SP 
(May 2008), available at https://www.gao.gov/products/gao-08-386sp, and 
the ``Patent and Trademark Office: New User Fee Design Presents 
Opportunities to Build on Transparency and Communication Success,'' 
Report No. GAO-12-514R (April 2012), available at https://www.gao.gov/products/gao-12-514r.
    The USPTO is increasing the fees for design patent applications to 
account for inflationary cost increases and recover a larger portion of 
design costs from design applicants. The design fee increases will 
affect national design application filings including CPAs, and 
international design application filings that designate the United 
States under the Geneva Act of the Hague Agreement.
    As shown in the fee table above, the combined total of filing fees 
in Sec.  1.16(b), search fees in Sec.  1.16(l), examination fees in 
Sec.  1.16(p), and issue fees in Sec.  1.18(b)(1) for a design 
application or CPA that proceeds to issuance is increasing from $1,760 
to $2,600 for undiscounted applications, from $704 to $1,040 for 
applications receiving a small entity discount, and from $352 to $520 
for applications receiving a micro entity discount. The reissue fees 
under Sec.  1.16(e), 16(n), and 16(r) are part of the across-the-board 
adjustment and not included in this targeted adjustment.
    Note that under the Hague Agreement and its implementing 
regulations in the United States, including Sec.  1.1031, the required 
fees (known as designation fees) for international design application 
filings that designate the United States are set by reference to the 
national fees. Thus, the first part of the designation fee corresponds 
to the sum of the filing fee, search fee, and examination fee, and the 
second part of the designation fee corresponds to the issue fee. See 
MPEP 2910 for more information about international design application 
fees. The transmittal fee for international design applications filed 
in the USPTO as an office of indirect filing under Sec.  1.1031(a) is 
part of the across-the-board adjustment and not included in this 
targeted adjustment.
    The increased design fees for an undiscounted applicant ($2,600 in 
combined filing, search, examination, and issue fees) are now in 
between the cost of new design applications and CPA design 
applications, while the fees for discounted entities ($1,040 for a 
small entity and $520 for a micro entity) remain far below cost. 
Despite these increases, the adjusted fees will not achieve full 
recovery of design costs. On an individual basis, the adjusted fees, 
including the issue fee, will recover the cost of examining and issuing 
a design application if the applicant pays the undiscounted rate and 
does not file a CPA. Because most design applications qualify for 
discounted fees, design fee collections will not fully recover design 
costs on an aggregate basis. For example, if the application filing 
volume, entity spread, and cost remain the same as in FY 2023, the 
increased fees would result in design fee collections averaging $1,462 
per application, thus reducing the shortfall to about $790 per 
application, which is about 35% of the cost. The final rule thus 
improves cost recovery from design applicants, who will now on an 
aggregate basis pay for about 65% of design costs as compared to the 
45% they paid in FY 2023.
    These design fees maintain a low barrier to entry into the patent 
system while increasing revenue to recover more design costs from 
design applicants. The USPTO has accomplished these goals by balancing 
relatively low front-end fees against the higher design issue fee and 
the reduced, but still large, subsidy from utility maintenance fees. 
While front-end fees are set below cost for all entities, both the 
design issue fee and utility maintenance fees are set above their unit 
cost for undiscounted entities. For example, the design issue cost is 
$539, and the design issue fee is $1,300 for an undiscounted entity, 
$520 for a small entity, and $260 for a micro entity. As of June 2024, 
the undiscounted issue fee of $1,300 was 6% lower than the inflation-
adjusted 2013 issue fee would be. As a result of this balancing, the 
USPTO has managed to keep the front-end fees only $5 to $10 higher than 
they were set in 2020 for the majority of design applicants. When the 
issue fee is included, the total fees paid by discounted entities are 
still 13% less than inflation-adjusted 2013 fees would be. See CPI 
Inflation Calculator, U.S. Bureau of Labor Statistics, https://www.bls.gov/data/inflation_calculator.htm (comparing March 2013 to June 
2024 to calculate buying power).
    The USPTO believes these fee adjustments appropriately balance 
encouraging innovation and recovering costs. For example, based on the 
FY 2023 unit cost and assuming that filing volume and entity spread 
remain stable, recovering the full cost of design services from design 
applicants would require total fees of about $4,000 for undiscounted 
applications. Abruptly raising fees to these levels could discourage 
innovation, so the USPTO is implementing a more moderate increase to 
$2,600 for undiscounted applications. After considering all relevant 
factors, the agency believes the adjusted design fees strike a balance 
that encourages innovation while bringing in increased revenue to 
recover more design costs.
    The USPTO is conscious that fee increases affect resource-
constrained applicants. The agency will continue to offer the 60% 
discount for small entities and the 80% discount for micro entities, 
which reduces the impact of the fee increases on these entities. For 
example, when these discounts are taken into account, the total fees 
paid by discounted entities through issuance of a design application 
represent less than half of the USPTO's costs (small entities pay 46% 
of new design application costs and 35% of CPA costs, and micro 
entities pay 23% of new design application costs and 18% of CPA costs).
4. Excess Claims Fees
BILLING CODE 3510-16-P

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[[Page 91919]]


[GRAPHIC] [TIFF OMITTED] TR20NO24.012

BILLING CODE 3510-16-C
    The USPTO charges a fee for filing, or later presenting at any 
other time, each independent claim in excess of three (referred to as 
an excess independent claim), as well as each claim (whether dependent 
or independent) in excess of 20 (referred to as an excess total claim). 
These thresholds for excess independent claims and excess total claims 
(collectively, ``excess claims'') are set in 35 U.S.C. 41(a)(2).
    In this final rule, the USPTO is increasing the fee for each excess 
independent claim in an application (Sec.  1.16(h)), reissue 
application (Sec.  1.16(h)), reexamination proceeding (Sec.  
1.20(c)(3)), or national stage application (Sec.  1.492(d)) to $600 for 
undiscounted entities. The USPTO is also increasing the fee for each 
excess total claim in an application (Sec.  1.16(i)), a reissue 
application (Sec.  1.16(i)), reexamination proceeding (Sec.  
1.20(c)(4)), or national stage application (Sec.  1.492(e)) to $200 for 
undiscounted entities. The Sec.  1.16(j) and Sec.  1.492(f) multiple 
dependent claim fees are part of the across-the-board adjustment and 
not included in this targeted adjustment.
    These changes will provide the agency with more revenue to help 
recover the additional search and examination costs associated with 
excess claims, as well as prosecution costs not covered by front-end 
fees. The USPTO notes that excess claiming can be a significant burden 
to the patent system and the agency. The number of claims impacts the 
complexity of examination and increases the demands placed on the 
examiner. For example, if each independent claim in an application 
requires a completely separate prior art patentability determination 
and an application contains six independent claims, the examiner must 
conduct six completely separate prior art patentability

[[Page 91920]]

determinations. Excess dependent claims also represent additional work, 
because a dependent claim may be allowable over the prior art even if 
the claim from which it depends is not. Dependent claims also require 
separate patentability determinations for non-prior-art issues such as 
enablement, subject matter eligibility, utility, and written 
description. Thus, applicants who include excess claims are using the 
patent system more extensively than those who do not.
    Moreover, examination efficiency is promoted when there is a high 
frequency of applications with 20 claims or fewer. Thus, these fee 
changes will enhance prosecution, because the USPTO believes that 
applicants motivated by costs will be incentivized by the fee 
adjustments to not file excess claims. The agency has increased excess 
claims fees several times during the last 20 years, which has been very 
effective at reducing excess claims from their peak in the early 2000s. 
For instance, in FY 2023, 83% of applications did not contain any 
excess claims, and 17% contained excess total claims, excess 
independent claims, or both (10% contained excess total claims only, 
3.1% contained excess independent claims only, and 3.5% contained both 
excess total claims and excess independent claims). These percentages 
are in line with historic values over the last decade.
    The excess total claims fees are also designed to ensure that most 
applicants presenting excess claims will be able to do so for less than 
the cost of filing a second application. The front-end application fees 
(including the new continuing application fees discussed earlier) and 
excess claims fees are naturally linked and likely to have 
counterbalancing effects. For example, an increase in new or continuing 
applications could result from raising only excess claims fees, and an 
increase in excess claims could result from raising only the front-end 
application fees (even in specific, lesser-occurring situations). The 
increases in excess claims fees implemented in this final rule are 
intended to avert the latter scenario. Without these adjustments, the 
agency expects that excess claims numbers would increase in response to 
increased front-end fees, including the fees for certain continuing 
applications discussed previously.
    In FY 2023, 86% of applications contained no excess total claims 
and therefore will not be affected by this fee adjustment, 11% paid 
excess claims fees but contained 10 or fewer excess claims, and only 3% 
contained more than 10 excess claims. For the 11% of applications 
containing 10 or fewer excess claims, it would remain either the same 
cost or be less expensive to pay the excess total claims fees as 
opposed to filing a second application. As an example, for an 
undiscounted entity, 10 excess total claims at $200 each would equal 
$2,000 in excess total claims fees, which is the same as the combined 
filing, search and examination fees for filing an application as 
adjusted by this final rule. Moreover, for applications containing from 
one to 10 excess claims, the average number of excess claims was 5, so 
on average, paying excess total claims fees would be much less 
expensive than a second application. As an example, for an undiscounted 
entity, 5 excess total claims at $200 each would equal $1,000 in excess 
total claims fees.
    For the 3% of applications containing more than 10 excess total 
claims, the average was 34 excess claims. Thus, for this group of 
applications, it would be more expensive to pay the excess total claims 
fees as opposed to filing a second application, but this increased 
expense reflects that these applications are, on average, presenting 
more than the number of claims that would be covered by the fees for 
filing a second application. Notably, about one-third of these 
applications (10% of all applications containing excess total claims, 
or 1% of all applications) contained an average of 59 excess claims, 
which is more than would be covered by the fees for filing two 
additional applications.
5. Extension of Time for Provisional Application Fees

[[Page 91921]]

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[[Page 91922]]


[GRAPHIC] [TIFF OMITTED] TR20NO24.014

    The USPTO is implementing a standalone extension of time (EOT) fee 
structure for provisional applications in which fees will be decreased 
from current amounts by an average of 81%. Under EOT practice, if an 
applicant is

[[Page 91923]]

required to reply within a nonstatutory or shortened statutory time 
period, the applicant may normally petition to extend the time period 
for reply with the requisite fee. The time extension may be up to the 
earlier of the expiration of any maximum period set by statute or five 
months after the time period set for reply if a petition for an EOT 
under Sec.  1.136(a), including the EOT fee set in Sec.  1.17(a), is 
filed.
    Currently, the EOT fees specified in Sec.  1.17(a) apply equally to 
both provisional and nonprovisional applications. The USPTO is 
implementing an average 81% EOT fee decrease in provisional 
applications under a new paragraph (u) of Sec.  1.17 and is 
additionally amending Sec.  1.136(a) to refer to EOT fees under both 
Sec.  1.17(a) and new Sec.  1.17(u). For patent applications other than 
provisional applications, the EOT fees retained under Sec.  1.17(a) 
will be increased in accordance with the across-the-board proposal.
    With fees reduced by 81% on average, the separate EOT fee structure 
for provisional applications will benefit filers in all entity status 
categories. The agency envisions that micro entity provisional 
application filers will benefit most. As explained in the Director's 
April 20, 2023, letter to PPAC:

    The USPTO's fee review concluded that applicants who have 
certified micro entity status in provisional applications are more 
than twice as likely to request EOT as compared to other applicants. 
Thus, we are proposing reduced EOT fees for provisional applications 
by an average of 81% to reduce financial and entry barriers and 
further foster inclusive innovation.

    Some micro entity applicants need time extensions to accommodate 
attempts to meet additional formality requirements associated with 
establishing micro entity status. Another consideration favoring this 
change is that provisional applications are not examined; therefore, 
there is less urgency to expedite processing.
6. Information Disclosure Statement Size Fees
[GRAPHIC] [TIFF OMITTED] TR20NO24.015

    Sections 1.97 and 1.555 provide applicants and patent owners the 
opportunity to submit an information disclosure statement (IDS) 
containing items of information for consideration by the examiner. To 
be considered in a

[[Page 91924]]

patent application, the IDS must meet the timing requirements of Sec.  
1.97 and the content requirements of Sec.  1.98. In a reexamination 
proceeding, the IDS must meet the content requirements of Sec.  1.98. 
There are no specific regulatory limits to the number of items of 
information that may be included in an IDS. Most applications contain 
relatively few items of information provided by applicants for 
consideration. Approximately 87% of applications contain 50 or fewer 
applicant-provided items of information, and approximately 77% contain 
fewer than 25.
    The USPTO receives large IDS submissions that cause the cumulative 
number of applicant-provided items of information in an application to 
exceed 50 in a small percentage of applications. Based on the agency's 
most recent data, in approximately 13% of applications applicants 
provide over 50 total items of information. About 5% of applications 
contain 51 to 100 applicant-provided items of information, about 4% of 
applications contain 101 to 200 applicant-provided items of 
information, and only 4% of applications contain more than 200 
applicant-provided items of information. In an even smaller subset of 
applications, the number of applicant-provided items can be quite 
large, sometimes in the thousands or even tens of thousands.
    In many instances, these large IDS submissions contain clearly 
irrelevant, marginally relevant, or cumulative information. It is 
onerous for examiners and hinders the USPTO's statutory obligation to 
timely examine applications under 35 U.S.C. 154 to consider large 
numbers of clearly irrelevant, marginally relevant, or cumulative 
information. Additionally, large IDS submissions are costly for the 
agency to consider. Therefore, the USPTO suggests, as a best practice, 
that applicants and patent owners avoid filing large IDS submissions by 
eliminating clearly irrelevant, marginally relevant, or cumulative 
information. See MPEP 2004, item 13. If applicants or patent owners 
file a large IDS, the USPTO encourages them to ``highlight those 
documents which have been specifically brought to applicant's attention 
and/or are known to be of most significance.'' MPEP 2004, item 13.
    In 2006, the USPTO attempted to address large IDS submissions by 
proposing new requirements, including that IDSs with more than twenty 
citations be accompanied by an explanation of relevance. See ``Changes 
To Information Disclosure Statement Requirements and Other Related 
Matters,'' 71 FR 38808 (July 10, 2006). The proposal was not adopted; 
instead, to provide some relief for examiners burdened with large IDS 
submissions, the agency began providing examiners additional time to 
consider large IDS submissions in applications.
    On average, the USPTO provides examiners approximately 80,000 
additional hours each year to consider large IDS submissions in 
applications, costing the agency $10 million annually. As there is 
currently no fee for large IDS submissions, this cost is subsidized 
generally by patent fees, primarily maintenance fees collected for 
patents that resulted from applications that did not contain large IDS 
submissions.
    Accordingly, to have applicants and patent owners filing large IDS 
submissions cover more of their associated costs, the USPTO is amending 
Sec.  1.17 by adding new paragraph (v) to implement a new IDS size fee 
based on the cumulative number of items of information provided by an 
applicant or patent owner during the pendency of the application or 
reexamination proceeding. ``Provided'' in this context refers to items 
cited on an IDS under Sec.  1.98(a)(1) by an applicant or patent owner, 
whether or not an actual copy of the cited item is submitted by the 
applicant or patent owner to the agency.
    The IDS size fee sets forth: a first amount ($200) in Sec.  
1.17(v)(1) for a cumulative number of applicant-provided or patent 
owner-provided items of information in excess of 50; a second amount 
($500) in Sec.  1.17(v)(2) for a cumulative number of applicant-
provided or patent-owner-provided items of information in excess of 100 
but not exceeding 200, less any amount previously paid under Sec.  
1.17(v)(1); and a third amount ($800) in Sec.  1.17(v)(3) for a 
cumulative number of applicant-provided or patent owner-provided items 
of information in excess of 200, less any amounts previously paid under 
Sec.  1.17(v)(1) and/or (v)(2).
    Generally, each item provided (listed under Sec.  1.98(a)(1) on an 
IDS filed under Sec.  1.97) by an applicant or owner, including each 
instance of a particular item, will count toward the cumulative number 
of items of information. For example, if the applicant lists a 
particular item (e.g., a journal article authored by Marie Curie) twice 
on the same IDS, each listing will count. Similarly, if the applicant 
lists the same item in multiple IDSs in the same application, each of 
those listings will count. However, if a particular item provided by an 
applicant or patent owner on an IDS was not considered because the item 
was non-compliant and that particular item is provided on an IDS a 
second time in the same application or patent, it will not be counted 
again. Applicants are reminded that when a U.S. application is listed 
on an IDS, the examiner will only consider the specification (including 
the claims) and drawings of the application. If the applicant seeks 
consideration of documents in the prosecution history of the 
application such as particular Office actions, they must list such 
documents separately. See MPEP 609.04(a)(I).
    The cumulative count is determined for each application or patent 
separately. That is, the count from an application does not carry over 
to any continuing applications, CPAs, reissue applications, or any 
post-issuance proceedings such as supplemental examinations or 
reexamination proceedings. Instead, continuing, CPA, and reissue 
applications and post-issuance proceedings will start with a count of 
zero. Note, however, that a request for continued examination (RCE) is 
not the filing of a new application, and thus the count will not reset 
when an RCE is filed.
    Under current IDS practice, an examiner will consider items of 
information that were considered in a parent application when examining 
a child application (e.g., a continuation, continuation-in-part, or 
divisional application) without any action required on the applicant's 
part. See MPEP 609.02 for information about this practice. Examiners 
will continue to follow current IDS practice with respect to 
considering items of information that were cited in parent 
applications. To be clear, an item of information that an applicant 
cited in a parent application will not be counted in a child 
application for purpose of the IDS size fees unless it is resubmitted, 
i.e., provided by the applicant on an IDS in the child application. 
Thus, applicants who wish to avoid paying the IDS size fees in a child 
application for items of information considered in a parent application 
may do so by not resubmitting the items. An item of information must be 
resubmitted in the continuing application if the applicant desires the 
item of information to be printed on the patent. See MPEP 609.02, 
subsection II.A.2.
    Additionally, the USPTO is amending Sec.  1.98(a) to include a new 
content requirement for an IDS that will facilitate implementation of 
the IDS size fee. Specifically, the USPTO is requiring that an IDS 
contain a clear written assertion by the applicant and patent owner 
that the IDS is accompanied by the appropriate IDS size fee or that no 
IDS size fee is required. This assertion is necessary because it 
ensures the

[[Page 91925]]

record is clear as to which fee the applicant or patent owner believes 
may be due (or that no fee may be due) with the IDS so the examiner can 
promptly ascertain whether the IDS is compliant. There is no specific 
language required for the written assertion, but it should be readily 
identifiable on the IDS and clearly convey the applicable IDS size fee 
by specifying the particular paragraph in Sec.  1.17(v) that applies 
(e.g., ``the fee due under 1.17(v)(2)''), if any.
    The following examples illustrate some common situations 
anticipated to arise in connection with payment of the new fees under 
Sec.  1.17(v):

    Example 1: Single IDS submission with cumulative count less than 
fee threshold. If an applicant submits a single IDS during 
prosecution with 30 items of information, no IDS size fee would be 
due. At the time of submitting the IDS, the applicant certifies that 
no IDS size fee is required.
    Example 2: Single IDS submission with cumulative count exceeding 
fee threshold. If an applicant submits a single IDS during 
prosecution with 101 items of information, the $500 fee under Sec.  
1.17(v)(2) for exceeding 100 items of information, but not exceeding 
200, is due. At the time of submitting the IDS, the applicant must 
certify that the Sec.  1.17(v)(2) fee is due and pay the fee.
    Example 3: Re-submission of item previously refused 
consideration. If an applicant submits a first IDS with 49 items of 
information, no IDS size fee would be due. At the time of submitting 
the first IDS, the applicant certifies that no IDS size fee is 
required. When the examiner evaluates the first IDS, the examiner 
discovers that the copy of a particular item (a journal article 
authored by Marie Curie) provided by the applicant is blurry and 
illegible. Accordingly, the examiner does not consider the Curie 
article. Subsequently, in that same application, the applicant files 
a second IDS with two items of information, including the same Curie 
article previously listed and a newly cited item. Because the Curie 
article was previously before the examiner and refused consideration 
for being noncompliant, its resubmission in the second IDS is not 
counted again. Thus, the cumulative number of items of information 
in the application after submission of the second IDS is only 50 
(the total of the 49 items from the first IDS and the newly cited 
item from the second IDS), and no IDS size fee would be due. At the 
time of submitting the second IDS, the applicant certifies that no 
IDS size fee is required.
    Example 4: Multiple IDS submissions covered by the same fee. If 
an applicant files a first IDS with 61 items of information, the 
$200 fee under Sec.  1.17(v)(1) for exceeding 50 items of 
information, but not exceeding 100, is due. At the time of 
submitting the first IDS, the applicant certifies that the Sec.  
1.17(v)(1) fee is due and pays the fee. Subsequently, in that same 
application, if the applicant files a second IDS with 10 items of 
information, the cumulative number of items of information in the 
application would be 71. No additional fee would be due, because the 
cumulative number of items is still in the range covered by the 
Sec.  1.17(v)(1) fee that was previously paid. While the applicant 
must still include a certification with the second IDS, the 
applicant may certify that no IDS size fee is required with 
submission of the second IDS.
    Example 5: Multiple IDS submissions requiring additional fees. 
If an applicant files a first IDS with 51 items of information, they 
would certify that the Sec.  1.17(v)(1) fee for exceeding 50 items 
of information, but not exceeding 100, is due and pay the fee of 
$200. Subsequently, in that same application, if the applicant files 
a second IDS with 50 items of information, the cumulative number of 
items of information in the application would be 101. The applicant 
would then certify that the Sec.  1.17(v)(2) fee for exceeding 100 
items of information, but not exceeding 200, is due, and pay $300 
(the $500 fee under Sec.  1.17(v)(2) minus the $200 previously 
paid). Further, in that same application, if the applicant files a 
third IDS with 100 items of information, the cumulative number of 
items of information in the application would be 201. The applicant 
would then certify that the Sec.  1.17(v)(3) fee for exceeding 200 
items of information is due and pay $300 (the $800 fee under Sec.  
1.17(v)(3) minus the $500 previously paid). Thus, in this example, 
the applicant would pay a combined IDS size fee of $800 for the 
three IDSs filed during the pendency of the application.

    With respect to the new content requirement under Sec.  1.98(a), 
the agency envisions modifying USPTO Form PTO/SB/08 to include the 
requisite written assertion stylized as a set of check boxes 
corresponding to each IDS size fee, along with an additional box 
indicating that no IDS size fee is due. Since the form must be signed 
in accordance with Sec.  1.33(b), certifications under Sec. Sec.  1.4 
and 11.18 will apply. Applicants and patent owners are strongly advised 
to use the PTO/SB/08 form, but it will not be required. An 
authorization to charge fees to a deposit account is not a compliant 
written assertion under the new Sec.  1.98(a) requirement, unless the 
authorization clearly identifies the particular IDS size fee that 
should be charged for submission of a particular IDS. For example, 
language such as ``the Director is authorized to charge the Sec.  
1.17(v)(2) fee for the IDS submitted on July 1, 2026 to deposit account 
XX-XXXXX'' would be a compliant written assertion because reference to 
paragraph (v)(2) particularly identifies the IDS size fee due, but 
language such as ``the Director is authorized to charge any applicable 
IDS size fee to deposit account XX-XXXXX'' would not be a compliant 
written assertion because it fails to establish which IDS size fee is 
due. General authorizations to charge fees to a deposit account are not 
compliant written assertions under the new Sec.  1.98(a) requirement. 
See 37 CFR 1.25 and MPEP 509.01 for more information about deposit 
account authorization practice.
    It is the applicant's and patent owner's responsibility to track 
the cumulative number of items of information provided in the 
application and provide a written assertion of any applicable IDS size 
fee due. In accordance with Sec.  1.97(i), an IDS filed in an 
application without the written assertion or the necessary IDS size fee 
will be placed in the file but not considered. The applicant may then 
file a new IDS accompanied by the written assertion or necessary IDS 
size fee, but the date the new IDS is filed will be the date of the IDS 
for purposes of determining compliance with Sec.  1.97. See MPEP 
609.05(a). An IDS filed in a reexamination proceeding without the 
written assertion or the necessary IDS size fee will be placed in the 
file and will remain of record, but the IDS will not be considered.
    Applicants are reminded that the duty of disclosure under 
Sec. Sec.  1.56 and 1.555 only requires the submission of information 
material to patentability. Material information is described in 
Sec. Sec.  1.56(b) and 1.555(b) as information that is not cumulative 
to information already of record and (1) establishes, by itself or in 
combination with other information, a prima facie case of 
unpatentability of a claim; or (2) refutes or is inconsistent with a 
position the applicant takes in opposing an argument of unpatentability 
relied on by the USPTO or asserting an argument of patentability. The 
United States Court of Appeals for the Federal Circuit uses an even 
higher standard for materiality than the Sec. Sec.  1.56(b) and 
1.555(b) standards by requiring ``but-for'' materiality, such that the 
USPTO would not have allowed a claim had it been aware of the 
undisclosed information. Therasense, Inc. v. Becton, Dickinson & Co., 
649 F.3d 1276, 1288, 99 USPQ2d 1065, 1071 (Fed. Cir. 2011) (en banc). 
Neither the Sec. Sec.  1.56(b) and 1.555(b) standards nor the Federal 
Circuit's ``but-for'' standard require the submission of clearly 
irrelevant or marginally relevant information.
    By placing more of the cost for considering IDS submissions 
totaling over 50 items of information on the applicants who file such 
IDS submissions, less cost will be borne across the patent system. To 
the extent that the IDS size fees may encourage some applicants to 
filter out irrelevant or cumulative information prior to submission, 
the examiners of those applications will be able to focus on the more 
relevant information and perform a more efficient and effective

[[Page 91926]]

examination, thus benefiting the patent system as a whole.
    The USPTO does not believe the IDS size fee will have a large 
impact on patent applicants or owners. As stated previously, a majority 
of applicants do not provide large amounts of information for 
consideration. Based on current IDS filing volume, the vast majority 
(approximately 87%) of applications will not be affected by these fees 
because they contain 50 or fewer applicant-provided items of 
information. Only 13% of applications contain more than 50 applicant-
provided items of information. About 5% of applications contain 51 to 
100 applicant-provided items of information and would incur only the 
first fee in Sec.  1.17(v)(1), about 4% of applications contain 101 to 
200 applicant-provided items of information and would incur the first 
and second fees in Sec.  1.17(v)(1) and (v)(2), and only 4% of 
applications contain more than 200 applicant-provided items of 
information and would incur all three fees in Sec.  1.17(v)(1), (v)(2), 
and (v)(3). Additionally, the fee should not disproportionately impact 
small and micro entities. During FY 2022, small entities accounted for 
only 25% of applications that would incur a fee, while micro entities 
made up less than 1%. When compared to all utility application filings 
that same year, only 1 in 62 applications filed by micro entities and 1 
in 7.5 applications filed by small entities would incur an IDS size 
fee.
7. Patent Term Adjustment Fees
    The USPTO considered the public feedback on the proposed increase 
from $210 to $300 for filing an application for patent term adjustment 
under Sec.  1.705(b) and decided not to proceed with this proposal. 
Instead, the fee for this service will be increased in accordance with 
the across-the-board adjustment applied to most patent fees.
8. Patent Term Extension Fees
[GRAPHIC] [TIFF OMITTED] TR20NO24.016

    The USPTO is increasing the fees for filing applications for patent 
term extensions (PTE) and applications for interim extensions under 35 
U.S.C. 156 and implementing a new fee for requesting a supplemental 
redetermination of the PTE in a pending PTE application. These changes 
adjust the fee rates for inflation, reflect the full cost of these 
services, and support the agency's fee setting policy of aligning fees 
with the costs of providing the service. The fees for these services 
are set forth in Sec.  1.20(j).
    The PTE service and fee were introduced in October 1984 as part of 
initial operating guidelines established after enactment of the PTE 
provisions of 35 U.S.C. 156 in the Drug Price Competition and Patent 
Term Restoration Act of 1984 (Pub. L. 98-417, 98 Stat. 1585 (1984)) 
(Hatch-Waxman Act). See Guidelines for Extension of Patent Term under 
35 U.S.C. 156, 1047 Off. Gaz. Pat. Office 16 (Oct. 9, 1984). Patent 
term extensions under 35 U.S.C. 156 enable owners of patents claiming 
certain products subject to premarket regulatory review to restore to 
the terms of those patents some of the time lost while awaiting 
premarket approval for the products from a regulatory agency. The 
products eligible for PTE services under 35 U.S.C. 156 include human 
drug products, medical devices, animal drugs, and food or color 
additive products, all of which are regulated by the FDA, and 
veterinary biological products, which are regulated by the United 
States Department of Agriculture (USDA). See MPEP 2750 for more 
information regarding the legislative history and scope of the Hatch-
Waxman Act with respect to PTE.
    In accordance with this law and its implementing regulations, the 
patent owner must file an application for PTE with the USPTO within a 
short time after the product receives permission for commercial 
marketing or use from the applicable regulatory agency (i.e., the FDA 
or the USDA). See MPEP 2754 et seq. Upon receipt, the USPTO reviews the 
application, applicant, patent, and claimed product or process and then 
works with the applicable regulatory agency to evaluate compliance with 
the statutory requirements for PTE under 35 U.S.C. 156. While it is the 
USPTO's responsibility to decide whether an

[[Page 91927]]

applicant has satisfied statutory requirements and whether the patent 
qualifies for PTE, the applicable regulatory agency possesses expertise 
and records regarding some statutory requirements and has certain 
direct responsibilities under 35 U.S.C. 156 for determining length of 
the regulatory review period. See MPEP 2756 for a more detailed 
explanation of how the USPTO works with these regulatory agencies to 
determine a patent's eligibility for PTE under 35 U.S.C. 156. Once the 
USPTO has received the necessary information from the regulatory 
agency, it determines the applicable PTE (if any) and formulates a 
notice of final determination or determination of ineligibility, 
reviews any responses or reconsideration requests received from the 
patent owner, and prepares a final determination or certificate as 
appropriate. See MPEP 2755 through 2759 for an explanation of this 
process. Because of the coordination and communication required between 
the USPTO and the appropriate regulatory agency and the complexity of 
the legal determinations involved, it often takes two or more years to 
reach a final determination or determination of ineligibility. The time 
required varies greatly depending on the individual circumstances of 
each application.
    When introduced in 1984, the fee for this service was set at $750 
and has since increased to $1,180. See e.g., ``Guidelines for Extension 
of Patent Term Under 35 U.S.C. 156,'' 1047 OG 16 (Oct. 9, 1984), 
``Rules for Extension of Patent Term,'' 52 FR 9386 (Mar. 24, 1987), and 
FY 2020 Final Rule. If the original fee were adjusted for inflation as 
measured by the CPI, it would be $2,238 as of June 2024. Moreover, the 
complexity and cost of this service has increased over time due to the 
subject matter and legal expertise required to evaluate the statutory 
requirements. Thus, the USPTO proposed to raise the Sec.  1.20(j)(1) 
fee for this service from $1,180 to $6,700.
    While the proposed fee was greater than the reported unit cost in 
the NPRM ($2,581 for FY 2022), the USPTO did not begin formally 
tracking the unit cost of this specific service until midway through FY 
2021. Prior to FY 2018, the service volume was quite low at about 42 
applications each year. Since then, volume has averaged 100-plus 
applications each year. As previously noted, PTE services involve work 
that is performed over the course of multiple years, with individual 
applications varying widely in terms of their complexity and the length 
of time it requires to obtain the necessary information from the PTE 
applicant and the appropriate regulatory agency. The USPTO is exploring 
how it can improve its expense modeling for these services. For more 
information about how the USPTO determines fee unit expenses, see the 
document titled, ``USPTO Setting and Adjusting Patent Fees During 
Fiscal Year 2025--Activity Based Information and Patent Fee Unit 
Expense Methodology,'' available on the fee setting section of the 
USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.
    The USPTO is also implementing a new service fee in Sec.  
1.20(j)(4) that applies to the approximately one-third of applications 
for PTE in which the user files a response that includes a terminal 
disclaimer after receiving the notice of final determination. The 
submission of terminal disclaimers at this late stage in the review 
process affects the patent term, requiring the USPTO to engage in a 
substantial amount of rework to recalculate the applicable PTE and make 
a supplemental redetermination of the appropriate extension in view of 
the disclaimer. These submissions became more common after the Federal 
Circuit's decision in Gilead Sciences, Inc. v. Natco Pharma Ltd., 753 
F.3d 1208 (Fed. Cir. 2014), which made it clear that the extended term 
of a patent can be affected by a terminal disclaimer filed against a 
later-issued but earlier-expiring reference patent.
    These late-stage disclaimer submissions are expected to become more 
common in the future because of In re Cellect, 81 F.4th 1216 (Fed. Cir. 
2023), in which the Federal Circuit explained that patent term 
adjustment and PTE are treated differently with respect to nonstatutory 
double patenting and terminal disclaimers. Currently, beneficiaries of 
this rework receive this additional service for free because the cost 
is subsidized by other users (e.g., by unrelated fee collections from 
other patent applicants and owners). In accordance with user fee design 
principles, the USPTO is implementing a new fee of $1,440 to cover the 
costs of this service and to be paid by users who benefit from it. 
Because the notice of final determination is mailed at a late stage of 
the review process, most PTE service users will have a window of 
several years during the review process to submit terminal disclaimers 
without incurring this additional fee.
    The USPTO is also increasing the Sec.  1.20(j)(2) and (j)(3) fees 
for filing applications for interim PTE under Sec.  1.790. This service 
and fees were introduced in 1994 in response to an amendment of the 
Hatch-Waxman Act that added 35 U.S.C. 156(d)(5). See MPEP 2750 and 
Guidelines for Interim Extension Under 35 U.S.C. 156(d)(5) of a Patent 
Term Prior To Regulatory Approval of a Product for Commercial Marketing 
or Use--Public Law 103-179 (Dec. 3, 1993), 1159 Off. Gaz. Pat. 12 (Feb. 
1, 1994). Interim patent extension under 35 U.S.C. 156(d)(5) is 
available for a patent claiming a product that is undergoing the 
approval phase of regulatory review as defined in 35 U.S.C. 156(g) if 
the patent is expected to expire before approval is granted. The 
application of an interim patent extension is very similar to an 
application for PTE with a similar evaluation process, except the USPTO 
is not required to seek the advice of the regulatory agency. See MPEP 
2755.02 for more information regarding this service.
    The interim extension service has a very low volume of about 20 or 
fewer applications each year, but it is costly and requires special 
handling due to the subject matter and legal expertise required to 
evaluate the statutory requirements. The USPTO is raising the Sec.  
1.20(j)(2) fees from $440 to $1,320 for the initial (first) application 
for an interim extension of patent term and the Sec.  1.20(j)(3) fees 
from $230 to $680 for each subsequent application. This fee increase 
will help recover the agency's costs of performing this service. Upon 
its introduction in 1994, the fees for this service were set at $400 
for an initial application and $200 for subsequent applications, and 
they have increased by only $40 and $30, respectively, since. See FY 
2020 Final Rule.
    No PTE-related fees are eligible for entity discounts in this fee 
setting because section 10(b) of the AIA, as amended by the UAIA, only 
authorizes discounting six categories of fees (i.e., fees for filing, 
searching, examining, issuing, appealing, and maintaining patent 
applications and patents). PTE-related fees do not fall into any of the 
section 10 categories. Even without discounts, the USPTO expects that 
PTE service users will be financially able to pay for the PTE services 
they are requesting because the service is limited to certain patents 
on human drug products, medical devices, animal drugs, food or color 
additive products, and veterinary biological products.
    Over the last 40 years, 81% of PTE applications concerned human 
drug products, 15% concerned medical devices, 3% concerned animal 
drugs, and about 1% concerned food or color additive products or 
veterinary biological products. See, e.g., the USPTO website at https:/
/www.uspto.gov/patents/laws/patent-

[[Page 91928]]

term-extension/patent-terms-extended-under-35-usc-156, which provides a 
list of patents that have been extended via this service. It costs 
companies millions or billions of dollars to research, develop, test, 
and obtain regulatory approval for the products and medical devices 
that are the subjects of PTE applications. Thus, when compared to 
either FDA user fees or the research and development costs required to 
develop a new drug and obtain marketing approval, the fees to obtain a 
PTE for the patent covering such a new drug are quite small.\1\
9. Request for Continued Examination Fees
[GRAPHIC] [TIFF OMITTED] TR20NO24.017

    For utility and plant applications where prosecution is closed 
(e.g., a final rejection has been mailed), the applicant may file a 
request for continued examination (RCE) and pay a specified fee within 
the requisite time period. Applicants typically file an RCE when they 
choose to continue prosecution before an examiner rather than appeal a 
rejection or abandon the application. Prior to application abandonment, 
applicants may also file a continuing application to extend prosecution 
rather than file an RCE.

[[Page 91929]]

    Since FY 2013, the USPTO has split RCE fees into two parts: (1) a 
fee for a first RCE and (2) a second, higher fee for a second or 
subsequent RCE. ``See Setting and Adjusting Patent Fees,'' 78 FR 4212 
(Jan. 18, 2013). Higher fees for RCEs filed after the first RCE are 
intended to help promote more compact prosecutions by reducing RCE 
filings in favor of appeal or reaching agreement with an examiner. 
Higher fees for successively filed RCEs also address the inequities of 
providing further subsidies to those applicants who use more USPTO 
resources per application than others. As explained in the USPTO's FY 
2013 rulemaking, 78 FR at 4245, because the USPTO sets the fee for the 
first RCE below the costs to process it, the agency must recoup those 
costs elsewhere. Since most applicants resolve their issues with the 
first RCE, the agency determined that applicants who file more than one 
RCE are using the patent system more extensively than those who file 
zero or only one RCE. Therefore, the USPTO determined in the FY 2013 
rulemaking that the cost to review applications with multiple RCEs 
should not be subsidized with other back-end fees to the same extent as 
applications with a first RCE, newly filed applications, or other 
continuing applications. This splitting of the fees promotes compact 
prosecution and more appropriately distributes the benefit of the low 
barrier to entry feature of below cost front-end fees.
    The USPTO's FY 2017 fee setting rulemaking maintained the 
undiscounted fee for a first RCE well below cost but set the 
undiscounted fee for second and subsequent RCEs at 19% above cost. See 
``Setting and Adjusting Patent Fees During Fiscal Year 2017,'' 82 FR 
52780 (Nov. 14, 2017). The initial undiscounted RCE fee from FY 2017 
would have required an applicant to file four RCEs for the USPTO to 
mostly recover the costs for treating all of the applicant's RCE 
filings. These costs have increased annually since FY 2017. In fact, 
the current undiscounted fee for second and subsequent RCEs is set so 
far below cost that no amount of RCE filings would result in the agency 
recapturing the costs of providing the service.
    The bifurcated fee structure does not appear to have had much 
effect on RCE filing behavior. During FY 2011, when the agency's fee 
schedule set only one RCE fee, RCE filings comprised about 30% of all 
RCE and utility patent application filings collectively. In FY 2018, 
RCE filings comprised 29% of the total despite the bifurcated fee 
structure introduced in FY 2013. The RCE filing percentage declined to 
25% in FY 2021 and 23% in FY 2022. It is unlikely these recent 
decreases resulted from the bifurcated fee structure, as the RCE filing 
percentage was hardly affected in the years immediately following FY 
2013.
    The USPTO had proposed in the NPRM to trifurcate the RCE fee 
structure, i.e., to split the existing RCE fees into three parts--a fee 
for a first RCE, a higher fee for a second RCE, and a still higher fee 
for third and subsequent RCEs filed in a single patent application. 
Under the trifurcated structure, the undiscounted fee for a first RCE 
would have been more than 50% below cost, and the undiscounted fee for 
a second RCE would have been just above cost. As proposed, the 
undiscounted fee for third and subsequent RCEs would have been enough 
above current RCE costs that a third RCE from an applicant with no 
entity status discount, combined with the fees for filing the first two 
RCEs, would have covered agency costs for treating all three RCEs.
    During the public comment period on the NPRM, the USPTO received a 
number of comments expressing concerns over the proposal to trifurcate 
the RCE fees. Having further considered the public feedback on this 
proposal, the USPTO decided against proceeding with this proposal. 
Instead, the USPTO will retain the existing bifurcated RCE fee 
structure in which the first RCE is charged at a lower rate than the 
second and subsequent RCEs.
    In this final rule, the USPTO is increasing the Sec.  1.17(e)(1) 
fee for a first RCE ($1,500 for undiscounted entities) only 10%, 
similar to the across-the-board adjustment applied to most patent fees. 
The undiscounted fee for a first RCE will thus remain more than 50% 
below cost ($3,110 in FY 2023). In accordance with the existing 
rationale for the bifurcated fee structure described above in 
connection with the FY 2013 and FY 2017 fee settings, the USPTO is 
increasing the undiscounted Sec.  1.17(e)(2) fee for the second and 
subsequent RCEs to an amount ($2,860) that is above the agency's costs 
of processing those RCEs ($2,258 in FY 2023).
    Even at the undiscounted rate, the fee for second and subsequent 
RCEs does not fully recoup the costs associated with the first RCE, and 
the agency must recoup those costs elsewhere (e.g., for the second RCE, 
the USPTO has incurred $5,368 in RCE costs for the first and second 
RCEs, but has received only $4,360 in RCE fees from an undiscounted 
entity). It is not until the fourth and subsequent RCEs that the 
cumulative undiscounted RCE fees recover the cumulative RCE processing 
costs. Moreover, although RCEs in applications receiving entity 
discounts incur the same processing costs, the discounted fees are so 
far below cost that the agency would never recoup its costs regardless 
of the number of RCEs filed (e.g., for the second RCE, the USPTO has 
incurred $5,368 in RCE costs for the first and second RCEs, but has 
received only $1,744 in RCE fees from a small entity and $872 from a 
micro entity). The final rule thus leaves the agency in essentially the 
same position financially as it has been since FY 2017, in that it will 
not recover its RCE processing costs from an applicant paying 
undiscounted RCE fees until the fourth or subsequent RCE filing and 
never recover its costs from applicants paying discounted RCE fees. For 
all RCEs (first, second, and subsequent), about 76% are filed by 
undiscounted entities, 22% by small entities, and 2% by micro entities.
10. Suspension of Action Fees

[[Page 91930]]

[GRAPHIC] [TIFF OMITTED] TR20NO24.018

    Currently, Sec.  1.103(a) permits applicants to request a 
suspension of action for a period not exceeding six months for good and 
sufficient cause. The patent examiner typically decides the first 
request for suspension. Second and subsequent requests require 
Technology Center director approval. Due to the heightened approval 
level, these requests cost the USPTO more to process. Additionally, the 
pendency of an application increases as more requests for suspension 
are requested and granted.
    The USPTO is creating a new tiered fee structure for requests for 
suspension of action under Sec.  1.103(a). Specifically, the agency is 
increasing the undiscounted fee for a first suspension request to $300 
and establishing a new undiscounted fee of $450 for the second or 
subsequent requests in the same application. The fee increases strive 
to shift the costs of the service to those applicants who request 
suspensions, thereby reducing subsidization from other fees. This 
increase will not affect fees for suspensions of action requested at 
the time of filing a CPA under Sec.  1.103(b) or an RCE under Sec.  
1.103(c).
    To effect this change, the USPTO is amending Sec.  1.17(g) by 
splitting it into two paragraphs, (g)(1) and (g)(2). Paragraph (g)(1) 
covers all fees formerly encompassed by Sec.  1.17(g), other than those 
for suspension of action under Sec.  1.103(a). Paragraph (g)(2) covers 
fees for suspension of action under Sec.  1.103(a) and is bifurcated so 
that new paragraph (g)(2)(i) covers the fee for the first suspension 
request and new paragraph (g)(2)(ii) covers the fee for the second and 
subsequent requests. The Sec.  1.17 (g)(2) fees are the tiered 
suspension of action fees proposed in the NPRM and shown above in table 
13.
    The USPTO receives approximately 2,500 requests for suspension 
under Sec.  1.103(a) each year. Of those requests, 86% are filed by 
undiscounted entities, 12% by small entities, and 2% by micro entities. 
Given the availability of entity discounts, the USPTO believes this fee 
increase will generally have a negligible impact on small and micro 
entities.
11. Terminal Disclaimer Fees
    In the NPRM, the USPTO proposed creating a new tiered fee structure 
for terminal disclaimers. The proposed fees for filing such terminal 
disclaimers would have increased and would have varied depending on the 
stage of examination of the application in which the terminal 
disclaimer was filed. In particular, the proposal would have created 
five tiers of fees for filing terminal disclaimers, beginning at $200 
for the first tier and increasing by $300 for each subsequent tier. The 
proposed structure focused on encouraging applicants to promptly 
address double patenting issues that arise during prosecution.
    However, during the public comment period, the USPTO received a 
number of comments expressing concerns over the proposed structure, 
particularly whether applicants would be able to make informed 
decisions on whether to file a terminal disclaimer before the fees 
escalated. The USPTO considered the public feedback and decided not to 
proceed with this proposal. Instead, the fee for this service will be 
increased in accordance with the across-the-board adjustment applied to 
most patent fees.
12. Unintentional Delay Petition Fees
BILLING CODE 3510-16-P

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[GRAPHIC] [TIFF OMITTED] TR20NO24.023

BILLING CODE 3510-16-P
    During FY 2020, the USPTO issued a notice to clarify when 
additional information is required to support a petition for 
unintentional delay. See ``Clarification of the Practice for Requiring 
Additional Information in Petitions Filed in Patent Applications and 
Patents Based on Unintentional Delay,'' 85 FR 12222 (March 2, 2020) 
(2020 Notice). Petitions based on unintentional delay include petitions 
seeking revival of an abandoned application, acceptance of a delayed 
maintenance fee payment, and acceptance of a delayed priority or 
benefit claim. The 2020 Notice clarified that ``any applicant filing a 
petition to revive an abandoned application under Sec.  1.137 more than 
two years after the date of abandonment, any patentee filing a petition 
to accept a delayed maintenance fee under Sec.  1.378 more than two 
years after the date of expiration for nonpayment of a maintenance fee, 
and any applicant or patent owner filing a petition to accept a delayed 
priority or benefit claim under Sec.  1.55(e) or Sec.  1.78(c) and (e) 
more than two years after the due date of the priority or benefit claim 
should expect to be required to provide an additional explanation of 
the circumstances surrounding the delay that establishes that the 
entire delay was unintentional.'' Id. at 12223.
    As the evidentiary requirements for these petitions have increased, 
the costs to review and treat these petitions have also increased due 
to the higher level of review needed to consider the additional 
explanation. Accordingly, the USPTO is setting a new, higher fee for 
petitions based on unintentional delay over two years to recover their 
additional associated costs. The higher fee should encourage timely 
petition filings and avoid delays in the examination process. Timely 
filing of petitions based on unintentional delay benefits applicants 
because it avoids delays in the examination process, and it also 
benefits the patent system as a whole by reducing uncertainty and 
unpredictability relating to patent rights, inasmuch as the abandoned 
status of an application, the expired status of a patent, or an absence 
of the priority or benefit claim could be relied upon by other parties.
    To effect this change, the USPTO is amending Sec.  1.17(m) by 
splitting it into three paragraphs, (m)(1) through (m)(3). Paragraph 
(m)(1) implements the new higher fee ($3,000 for undiscounted entities) 
for petitions based on unintentional delay over two years. This higher 
fee will apply to petitions under Sec.  1.78(c) and (e) to accept a 
delayed benefit claim submitted more than two years after the date the 
benefit claim was due, under Sec.  1.55(e) to accept a delayed priority 
claim more than two years after the date the foreign priority claim was 
due, under Sec.  1.137 to revive an abandoned application or 
reexamination proceeding more than two years after the date of 
abandonment, under Sec.  1.378 to seek reinstatement of an expired 
patent more than two years after the date of expiration for nonpayment 
of a maintenance fee, and under Sec.  1.1051 to excuse an applicant's 
failure to act within prescribed time limits in an international design 
application.
    Paragraph (m)(2) implements the fee for petitions based on 
unintentional delay that is less than or equal to two years, and 
paragraph (m)(3) implements the fee for petitions requesting 
restoration of the right of priority, i.e., petitions under Sec.  
1.55(c), Sec.  1.78(b), or Sec.  1.452 for the extension of the 12-
month (6-month for designs) period for filing a subsequent application. 
These

[[Page 91936]]

fees are also increasing as compared to the current Sec.  1.17(m) fee 
(from $2,100 to $2,260 for undiscounted entities) in accordance with 
the across-the-board adjustment applied to most patent fees.
    The USPTO receives approximately 12,000 petitions each year based 
upon the unintentional standard (FY 2021, 12,752 petitions; FY 2022, 
11,755 petitions; FY 2023, 11,304 petitions). About 10% of these 
petitions (1,200) have a delay of more than two years. Therefore, the 
higher cost for petitions having a delay of greater than two years 
should not have a significant impact on patent applicants overall. The 
increased fee will help ensure those applicants requesting the service 
pay its costs, thereby reducing subsidization from other patent 
applicants.
13. America Invents Act Trial Fees
[GRAPHIC] [TIFF OMITTED] TR20NO24.024

    As proposed, the USPTO is increasing existing fees for AIA trial 
proceedings by 25%. Under 35 U.S.C. 311(a) and 321(a), the USPTO 
Director must establish reasonable fees for inter partes review and 
post-grant review in relation to their aggregate costs. The fee 
increases will better align the fee rates charged to petitioners with 
the actual costs borne by the USPTO in providing these proceedings. 
This change will help the PTAB maintain the appropriate level of 
judicial and administrative resources to continue providing high-
quality and timely decisions for AIA trials.
14. Request for Review of a PTAB Decision by the Director Fee

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[GRAPHIC] [TIFF OMITTED] TR20NO24.025

    The USPTO is setting a new fee for parties requesting Director 
Review in AIA trial proceedings under part 42. The fee is set at the 
same rate as a petition to the Chief Judge in ex parte appeals (see 37 
CFR 42.20(a)) and is designed to partially recover the USPTO's costs 
for conducting Director Reviews. The new fee is part of the agency's 
ongoing efforts to formalize the Director Review process developed in 
response to the Supreme Court's decision in United States v. Arthrex, 
Inc. and furthers the USPTO's goals of promoting innovation through 
consistent, transparent decision-making and the issuance and 
maintenance of reliable patents.
    More specifically, Arthrex explained that ``constitutional 
principles chart a clear course: Decisions by [administrative patent 
judges (APJs)] must be subject to review by the Director.'' See 141 S. 
Ct. 1970, 1986 (2021). Following the statutory authority provided to 
the Director by Congress and the constitutional principles explained by 
the Supreme Court, the USPTO set forth an interim process for Director 
Review, which has been updated periodically. The agency sought public 
feedback on the interim process and is using feedback to promulgate 
rules. See ``Rules Governing Director Review of Patent Trial and Appeal 
Board Decisions,'' 89 FR 26807 (April 16, 2024); ``Request for Comments 
on Director Review, Precedential Opinion Panel Review, and Internal 
Circulation and Review of Patent Trial and Appeal Board Decisions,'' 87 
FR 43249 (July 20, 2022).
    As a part of the interim process, when the USPTO receives a 
Director Review request from a party to an AIA proceeding, the request 
is processed and routed to an advisory committee that assists with 
Director Review. The committee includes at least 11 representatives 
from various USPTO business units who serve at the Director's 
discretion. Members independently review each request and associated 
case materials, and the committee meets regularly to recommend which 
requests for review should be granted. The Director considers each 
request, its case materials, and the committee's recommendation in 
determining whether to grant or deny review. When the Director 
determines to grant review, personnel from various USPTO business units 
assist in case processing and in issuing and publicizing the Director 
Review decision.
    Given the number of agency personnel involved in Director Review, 
the USPTO expects the new fee will be relatively small compared to the 
overall costs. The agency plans to formally capture and evaluate these 
costs after the fee takes effect.

D. Amendment to Obtaining a Refund Through Express Abandonment

    The USPTO is amending paragraph (d) of Sec.  1.138, which permits 
an applicant to obtain a refund of the search and excess claims fees 
that were paid in an application by submitting a petition and 
declaration of express abandonment before an examination has been made 
of the application. The current rule permits such refunds only in 
nonprovisional applications filed under 35 U.S.C. 111(a) and Sec.  
1.53(b). The amendment expands the applicability of the rule to permit 
such refunds in national stage applications filed under 35 U.S.C. 371.
    The amendment also clarifies that refunds of search and excess 
claims fee payments under these provisions are limited to the search 
and excess claims fees set forth in Sec.  1.16 (which apply to 
applications filed under 35 U.S.C. 111(a) and Sec.  1.53(b)) and Sec.  
1.492 (which apply to national stage applications filed under 35 U.S.C. 
371). No refunds will be permitted of any search fees paid under Sec.  
1.445 during the international stage of an application filed under the 
PCT, even if such an application later enters the national stage under 
35 U.S.C. 371.
    The petition process and the conditions under which a refund will 
be granted will not otherwise change. See MPEP 711.01, subsection III 
for more information. The amendment puts national stage applications on 
the same footing as applications filed under 35 U.S.C. 111(a) when an 
application is expressly abandoned prior to examination.

VI. Discussion of Comments

Comments and Responses

    The USPTO published a proposed rule on April 3, 2024, soliciting 
comments on the proposed fee schedule. In response, the USPTO received 
comments from 28 associations and individuals including intellectual 
property organizations, law firms, corporations, attorneys, and others. 
These comments are available on Regulations.gov at https://www.regulations.gov/docket/PTO-P-2022-0033.
    Summaries of comments and the agency's responses follow.

General Fee Setting Approach

    Comment 1: One commenter stated that most of the fee proposals are 
necessary and appropriate. The commenter also urged Congress to 
appropriate previously diverted funds from the USPTO budget back to the 
agency to improve the patent examination process.
    Response: The USPTO appreciates the feedback from the commenter and 
is committed to achieving the goals developed in consultation with the 
stakeholder community as set forth in the Strategic Plan. Comments 
directed to Congress are outside the scope of this rulemaking.
    Comment 2: One commenter expressed their support of the proposals 
set forth in the NPRM in their entirety.
    Response: The USPTO appreciates the commenter's support for the 
proposed fees. The fees in the final rule will give the agency 
sufficient financial resources to facilitate the effective 
administration of the U.S. patent system and implement the goals 
outlined in the Strategic Plan.
    Comment 3: One commenter expressed their support of the

[[Page 91938]]

proposals, noting that the adjustments will allow the USPTO to come 
closer to recovering its aggregate costs for patent examination 
activities by better aligning fees with the costs of products and 
services, while also promoting more efficient patent prosecution.
    Response: The USPTO appreciates the commenter's feedback. The 
agency carefully considered all comments it received about the 
proposals outlined in the NPRM and believes the fees in the final rule 
strike a balance between addressing commenter concerns and providing 
sufficient financial resources to recover the aggregate estimated costs 
of patent operations and support the goals described in the Strategic 
Plan.
    Comment 4: Commenters stated that the proposed fee increases are 
severe and appear to represent a departure from the USPTO's historic 
practice of adjusting fees incrementally to reflect anticipated cost 
increases and agency priorities.
    Response: The USPTO recognizes that higher fees will affect 
entities interacting with the agency. The USPTO is experiencing an 
increase in aggregate costs, and fee increases are necessary to 
maintain operations and deliver the priorities listed in the Strategic 
Plan. Most fees fall into the across-the-board and front-end 
adjustments and will increase around 7.5% or 10% respectively. It has 
been more than four years since the agency's last fee adjustment in 
October 2020 and these increases are well below the prevailing 
inflation rate since then. While some fees are increasing by larger 
percentages and new fees are being introduced, the rationales for these 
increases are explained in Part V(c): Targeted Adjustments to Patent 
Fees. Moreover, the time frame associated with the fee setting process 
inherently provides for the phasing in of fee changes. For example, 
this fee setting process began with a proposal presented to PPAC in 
April 2023, and the public has had two opportunities to review and 
comment on the fee proposals as part of the process since then. The 
USPTO refined the fee proposal in both the NPRM and this final rule 
based on feedback from the public and PPAC.
    Comment 5: One commenter stated that the proposals run counter to 
the USPTO's stated goals and mission and could drive smaller companies 
and start-ups out of the U.S. patent process.
    Response: Helping small businesses and independent inventors with 
limited resources is important to the USPTO. The agency provides 
several free or reduced-fee programs to assist independent inventors 
and small businesses in securing patent protection for their 
inventions, including the Patent Pro Bono Program, Pro Se Assistance 
Program, and Law School Clinic Certification Program, as well as tips 
to avoid scams. More information on these programs can be found on the 
USPTO website: https://www.uspto.gov/ProBonoPatents, https://www.uspto.gov/ProSePatents, and https://www.uspto.gov/LawSchoolClinic.
    The USPTO also offers reduced fees for small and micro entities. 
Applicants qualifying as a micro entity under section 11(g) of the AIA 
are eligible for an 80% reduction on most fees, and applicants 
qualifying as a small entity under 35 U.S.C. 41(h)(1) are eligible for 
a 60% fee reduction. Many of the small and micro entity fees adjusted 
in this rule will continue to be lower than the fee rates that were in 
place prior to passage of the UAIA, which increased the percentages of 
these discounts.
    Comment 6: One commenter suggested that several of the proposed fee 
adjustments are punitive charges.
    Response: The USPTO has increased fees via this final rule because 
it is required by law to recover its aggregate estimated costs for 
processing, activities, services, and materials relating to the patent 
system, including administrative costs with respect to such patent 
fees. The agency set many of the targeted fee adjustments in this final 
rule to recover more costs directly from the users of services that 
increase the agency's costs of processing and examination. Setting fees 
lower than prescribed in the final rule would necessitate an offset by 
raising other fees, reducing spending on core mission and strategic 
priorities, or depleting the operating reserves, thereby significantly 
increasing agency financial risk. More information on why the USPTO is 
setting individual fees at the specified rates can be found in Part V: 
Individual Fee Rationale of this rule.
    Comment 7: One commenter stated that an increase in the price of 
obtaining a patent can be expected to decrease patents and innovation. 
The commenter believed increasing fees to cover the agency's costs 
could lead to excessive spending and suggested reducing costs rather 
than increasing fees and potentially disincentivizing innovation.
    Response: The USPTO recognizes its duty to stakeholders to be good 
stewards of the patent system and continues to pursue efforts to 
increase efficiency and control costs.
    Additionally, the agency conducted an elasticity analysis (i.e., an 
assessment of the degree to which changes in fee rates affect demand 
for services) as part of a prior rulemaking and found that patent fees 
are relatively inelastic. As such, increases of the nature contained in 
this rule would not be expected to significantly deter innovation. A 
description of elasticity estimates can be found on the fee setting and 
adjusting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.
    The USPTO recognizes that fees cannot simply increase for every 
improvement it deems desirable. The USPTO's financial advisory board 
evaluates financial risk and determines which expenses are truly 
necessary to achieve performance outcomes and service level commitments 
to stakeholders. As noted in the FY 2023 AFR, available on the agency 
website at https://www.uspto.gov/AnnualReport, total costs for the 
patent program increased 13.8% from FY 2019 to FY 2023, well below the 
CPI-U, which grew by 19.9% over the same period.
    Comment 8: One commenter stated that the patent system is not well 
suited to sudden changes and requested that the USPTO consider a more 
moderate, incremental approach to raising fees and adding new ones.
    Response: The time frame associated with the fee setting process 
inherently provides for the phasing in of fee changes and intentionally 
incorporates multiple opportunities for public feedback. As part of the 
fee setting process, the public has had two opportunities to review and 
comment on the fee proposals. The agency refined the fee proposals in 
both the NPRM and this final rule based on feedback from the public and 
PPAC, including reducing some proposed fee increases.
    Comment 9: Commenters stated that dramatic, controversial fee 
increases run the risk of the USPTO losing its fee setting authority or 
having it renewed only for another relatively short period of time. 
Commenters cautioned the USPTO against reopening the door to 
congressional interest in USPTO user fees and potential fee diversions 
from collecting excessive funds.
    Response: The agency recognizes its responsibility to be a good 
steward of the fee setting authority granted by Congress, as well as 
its duty to its stakeholders. After considering the many public 
comments, the agency has removed or adjusted several fees proposed in 
the NPRM. These changes include removal of the AFCP 2.0, terminal 
disclaimer, patent term adjustment, and third and subsequent RCE 
proposals and the adjustment of the patent term extension and 
continuing applications proposals. The USPTO is committed to improving 
the fee schedule design to generate sufficient financial resources for 
effective

[[Page 91939]]

administration of the U.S. IP system while also remaining responsive to 
stakeholder feedback. The agency takes its responsibility to 
stakeholders seriously and appreciates the rigorous and open review 
process involved in adjusting fee rates.
    Comment 10: One commenter stated that fees need to be set in such a 
way that patent applicants and holders do not overpay or underpay.
    Response: With the exception of small and micro entity discounts, 
the agency is legally obligated to charge the same fees for applicants. 
As explained in this final rule, the revised fees strike the right 
balance between maintaining low barriers to entry to the patent system 
and providing sufficient financial resources to recover the aggregate 
costs of patent operations and support the goals described in the 
Strategic Plan.
    Comment 11: One commenter stated the USPTO was effectively 
proposing a one-size-fits-all fee structure in the NPRM. The commenter 
believed the proposed fee structure would deny options to applicants by 
imposing cost-prohibitive fees.
    Response: The USPTO is not adopting a one-size-fits-all fee 
structure. The fees in this final rule are intended to encourage 
efficient operations and filing options, but they do not eliminate 
other prosecution pathways. The USPTO agrees with the commenter that 
applicants may have diverse patenting needs and strategies. However, 
the current fee structure includes fees for many less-widely used 
services below unit cost, meaning their costs are subsidized by 
applicants who do not take advantage of the service. The fee structure 
in this final rule will help redistribute some of those costs to 
applicants who are directly requesting these services.
    The agency realizes that fee increases will affect applicants. At 
the same time, the USPTO's costs for processing, activities, services, 
and materials relating to patents, including administrative costs with 
respect to such patent fees, have increased. The agency set many of the 
targeted fee adjustments in this final rule to recover more costs 
directly from the users of services that increase the agency's costs of 
processing and examination. Setting fees lower than prescribed in this 
final rule would require that the USPTO offset shortfalls by raising 
other fees, reducing spending on core mission and strategic priorities, 
and/or depleting the operating reserves, thereby significantly 
increasing agency financial risk. Additionally, the USPTO has continued 
its longstanding policy of charging patent applicants and holders lower 
filing, search, and examination (front-end) fees and higher issue and 
maintenance (back-end) fees, when an invention's relative value is 
better known.
    In addition, the USPTO provides several programs to support 
independent inventors and small businesses. See the response to comment 
5 for resources regarding free or reduced fee programs to assist these 
entities in securing patent protection for their inventions. The USPTO 
also offers reduced fee rates for many fees to small and micro 
entities. An applicant who meets micro entity requirements is eligible 
for an 80% reduction in most fees, and small entity status offers a 60% 
fee reduction. Many of the small and micro entity fees adjusted in this 
final rule will continue to be lower than the fee rates that were in 
place prior to passage of the UAIA, which increased the percentages of 
these discounts.
    Comment 12: Commenters stated the proposal escalates fees at 
critical aspects of the patent process and for actions that many patent 
owners take to clarify rights or simplify litigation. The commenters 
cautioned against raising fees for common actions for valuable patents, 
which might disproportionately impact the most innovative companies, 
small businesses, and independent inventors who rely on patent 
protection in response to theft by efficient infringers.
    Response: As a fee-funded agency, the law requires the USPTO to 
recover its aggregate costs for the services it provides. The agency 
set many of the targeted fee adjustments in this final rule to recover 
more costs directly from the users of services that increase the costs 
of processing and examination. Setting fees lower than prescribed in 
this final rule would require that the USPTO offset shortfalls by 
raising other fees, reducing spending on core mission and strategic 
priorities, and/or depleting the operating reserves, thereby 
significantly increasing agency financial risk. Also, the USPTO has 
continued its longstanding policy of charging patent applicants and 
holders lower filing, search, and examination (front-end) fees and 
higher issue and maintenance (back-end) fees when an invention's 
relative value is better known. For small businesses and independent 
inventors, applicants who meet the micro entity requirements are 
eligible for an 80% reduction on most fees, and applicants with small 
entity status receive a 60% fee reduction. The USPTO notes that many of 
the small and micro entity fees adjusted in this final rule will 
continue to be lower than the fee rates that were in place prior to 
passage of the UAIA, which increased the size of these discounts.
    Comment 13: One commenter stated that patent fees should reflect 
the actual costs incurred by the USPTO rather than be used as a tool to 
incentivize specific behaviors. The commenter stated that this strategy 
could result in unintended consequences.
    Response: Section 10(a) of the AIA grants the USPTO broad authority 
to set or adjust patent fees to generate the aggregate revenue required 
to recover the aggregate estimated costs of operations. As part of the 
Final Regulatory Flexibility Analysis (FRFA), the agency considered a 
unit cost recovery alternative that set most individual undiscounted 
fees at the historical cost of performing the activities related to 
that particular service in FY 2022. The USPTO ultimately opted against 
this alternative because it would reverse the agency's longstanding 
policy of setting front-end fees below cost and charging higher back-
end fees when a patent holder has more information about a patent's 
value. The results of the FRFA are discussed further in Part VIII(b): 
Regulatory Flexibility Act of this final rule.
    Comment 14: One commenter stated that the proposed fee rule does 
not appear to project that increased fees will result in any 
performance improvements. The commenter requests that the USPTO share 
information on how it will use the increased fees to address unexamined 
inventory and pendency rates.
    Response: The fees included in this final rule will provide the 
agency with sufficient financial resources to facilitate the effective 
administration of the U.S. patent system, including implementing the 
Strategic Plan. The RIA associated with this rule uses the same 
production models for all alternatives simply for comparison. Aggregate 
revenue resulting from the current fee schedule, in absence of 
implementation of this rule, would require the USPTO to reduce planned 
spending, which would impede the agency's ability to achieve these 
performance levels (i.e., pendency could increase) and other strategic 
priorities. The Strategic Plan, available on the agency website at 
https://www.uspto.gov/StrategicPlan, includes a description of several 
initiatives that will address quality, unexamined inventory, and 
pendency. Additionally, Part IV(C): Efficient Delivery of Reliable IP 
Rights: Quality, Unexamined Inventory, and Pendency of this rule 
includes discussion of some of these initiatives. To effect necessary 
changes in the examination process and ensure

[[Page 91940]]

the timely issuance of reliable patents, the USPTO must plan for 
potential increases in core operating costs for future years. The USPTO 
lays out spending plans in each year's congressional budget 
justification, available at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information. These strategic 
investments will enable the USPTO to identify and continue implementing 
improvements, guidelines, and best practices to serve the patent 
system, including reducing pendency in the future.
    Comment 15: One commenter stated the proposed fee structure could 
result in decreased revenue. The commenter requested that the USPTO 
share any financial impact analysis of the proposed fee structure's net 
expected effect.
    Response: The USPTO carefully considered the fee schedule in this 
final rule. As part of the fee setting process, the agency conducted 
both a regulatory flexibility analysis (IRFA for the NPRM and FRFA for 
this final rule) and RIA. These analyses relied in part on the results 
of an existing elasticity analysis (i.e., an assessment of the degree 
to which changes in fee rates may affect demand for services), which 
found that patent fees are relatively inelastic and, therefore, fee 
increases will not reduce patenting activity enough to negatively 
impact overall revenue. The results of the FRFA are discussed in Part 
VIII(B): Regulatory Flexibility Act of this rule. The RIA and 
Description of Elasticity Estimates can be found at https://www.uspto.gov/FeeSettingAndAdjusting.
    Comment 16: One commenter stated that the proposed fee structure is 
inconsistent with the goals and traditions of the U.S. patent system, 
as the fees will increase the financial hurdle to gain entry into the 
patent system.
    Response: As discussed in Part I: Executive Summary of this final 
rule, the individual fee adjustments included in this final rule align 
with the USPTO's strategic goals and its fee structure philosophy, 
including the agency's four key fee setting policy factors: (1) promote 
innovation strategies, (2) align fees with the full costs of products 
and services, (3) facilitate effective administration of the U.S. 
patent system, and (4) offer application processing options. The fee 
adjustments will enable the USPTO to accomplish its mission of driving 
U.S. innovation, inclusive capitalism, and global competitiveness. 
While many fees will increase, the USPTO has long promoted a fee 
structure that fosters innovation by reducing barriers to entry into 
the patent system through lower front-end fees (set below cost) and 
higher back-end fees. Under the fee structure in the final rule, front-
end fees will remain below cost to continue facilitating entry into the 
patent system and, in so doing, encourage the disclosure of information 
on new inventions and ideas to the public. For small businesses and 
independent inventors, applicants who meet the micro entity 
requirements are eligible for an 80% reduction on most fees, and 
applicants with small entity status receive a 60% fee reduction. The 
USPTO notes that many of the small and micro entity fees adjusted in 
this final rule will continue to be lower than the fee rates that were 
in place prior to passage of the UAIA, which increased the size of 
these discounts. The agency carefully considered many factors discussed 
in this final rule and determined that the fee increases are adequate 
to generate the aggregate revenue required to recover examination costs 
while continuing to foster innovation.
    Comment 17: One commenter expressed their support of the USPTO's 
use of cost-cutting measures to limit the need for increasing or 
creating new fees but expressed concern regarding the flatlining of IT 
budgets, which they stated might be short-sighted.
    Response: As outlined in the FY 2025 Budget, the agency will 
achieve this cost containment goal via modern equipment in a new data 
center that will cost less to maintain. In addition, by retiring legacy 
systems, the agency will reduce the required number of maintenance 
teams, reduce hardware and software costs, reduce storage and licensing 
costs, improve technical debt and patching efficiency, and improve 
cybersecurity. With respect to the impact these cost-cutting measures 
will have on operations, the USPTO remains committed to sustaining its 
planned levels of functionality and performance, and compliance with 
Federal laws, regulations, and directives. The agency's FY 2025 Budget 
is available on the USPTO website at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information.
    Comment 18: One commenter stated that patent quality is a matter 
for the courts and issues could be resolved by awarding legal costs to 
prevailing parties in all but exceptional cases.
    Response: Providing high-quality, efficient examination of patent 
applications is paramount to the USPTO's mission. With respect to 
shifting cost burdens in legal proceedings, such changes are beyond the 
scope of this rulemaking.

Across-the-Board Adjustment to Patent Fees

    Comment 19: One commenter recognized the need for the USPTO to 
increase some patent fees and stated the across-the-board adjustment is 
reasonable.
    Response: The USPTO appreciates the commenter's feedback. The 
across-the-board adjustment outlined in this final rule will help keep 
the UPSTO on a stable financial track sufficient to recover the 
aggregate costs of patent operations and support the agency's strategic 
objectives.
    Comment 20: One commenter expressed disagreement with including the 
DOCX surcharge in the across-the-board adjustment since the agency 
implemented the fee less than a year ago.
    Response: The USPTO is adjusting the DOCX surcharge as part of the 
across-the-board adjustment to help keep pace with inflationary cost 
increases. Although the DOCX surcharge was instituted recently, the 
agency is required by law to finance operations in the aggregate by 
recovering fees for its services. Setting fees lower than prescribed in 
this final rule would require that the USPTO offset shortfalls by 
raising other fees, reducing spending on core mission and strategic 
priorities, and/or depleting the operating reserves, thereby 
significantly increasing agency financial risk.

Front-End Adjustment to Patent Fees

    Comment 21: One commenter stated that the current relationship 
between front-end and back-end fees should be maintained and noted that 
PPAC objected to adding or increasing up-front processing fees.
    Response: To encourage innovation, the USPTO will continue to set 
front-end fees below its costs of providing these services. Further, 
while the USPTO increased the across-the-board adjustment in this final 
rule to ensure aggregate cost recovery in light of reductions to other 
proposals, it lowered the front-end increase relative to the across-
the-board adjustment from 5% to 2.5%, keeping the total front-end 
increase at 10%. Therefore, the fees set in this final rule will have a 
smaller impact on the balance between front-end and back-end fees 
compared to the NPRM proposal while still allowing the USPTO to 
marginally recover some costs earlier in the patent life cycle.
    Comment 22: One commenter expressed support for the USPTO 
recovering more of its costs through

[[Page 91941]]

front-end fees and encouraged the USPTO to consider an even larger 
shift towards cost recovery on the front-end.
    Response: The USPTO appreciates the commenter's support. While this 
final rule slightly increases filing, search, and examination fees, the 
agency remains committed to promoting a fee structure that fosters 
innovation by maintaining low barriers to entry into the patent system. 
Lower front-end fees facilitate entry into the patent system and, in so 
doing, encourage the disclosure of information on new inventions and 
ideas to the public. Higher back-end fees not only help the agency 
recoup costs incurred at the front end of the process but also foster 
innovation by encouraging patent holders to assess the costs and 
benefits of maintaining their patent at various points over its 20-year 
term (i.e., 3.5 years, 7.5 years, and 11.5 years) when maintenance fees 
are due. This strategy helps ensure that low-value patents are released 
back into the public domain for subsequent commercialization. The USPTO 
carefully considered many factors discussed in this final rule in 
determining that the increases to filing, search, and examination fees 
are adequate to generate the aggregate revenue needed to recover 
examination costs and continue fostering innovation.
    Comment 23: One commenter suggested that undiscounted fees be 
decoupled from fees for small and micro entities to allow for further 
fee increases for large users.
    Response: The agency does not have the legal authority to set fees 
for small and micro entities separately from undiscounted fees. The 
authority to reduce fees for small and micro entities under the USPTO's 
rulemaking authority is limited by the AIA as amended by the UAIA. 
These statutes prescribe that the USPTO must provide small and micro 
entity discounts based on a set percentage of the undiscounted fee 
rate. Further, these discounts apply to only the six fee categories 
under section 10(b) of the AIA. Helping small businesses and 
independent inventors is an important part of the USPTO's mission of 
driving U.S. innovation, inclusive capitalism, and global 
competitiveness. See the response to comment 5 for resources regarding 
free or reduced fee programs that assist these entities in securing 
patent protection for their inventions.

Targeted Fee Adjustments

After Final Consideration Pilot Program 2.0 Fee

    Comment 24: Commenters expressed concerns about the AFCP 2.0 pilot 
program and the proposed participation fee. Commenters stated that the 
program's primary benefit is the opportunity to hold an interview with 
the examiner after the close of prosecution.
    Response: The agency considered public feedback on AFCP 2.0 and the 
proposed fee and opted to allow the program to expire on December 14, 
2024. As a reminder, under customary examination practice, after the 
close of prosecution, amendments that will place the application either 
in condition for allowance or in better form for appeal may be entered, 
and the applicant may also hold an interview with the examiner. See 
Sec.  1.116(b) and section 714.12 of Manual of Patent Examining 
Procedure (MPEP) (9th ed., Rev. 01.2024, November 2024), which may be 
viewed on or downloaded from the USPTO website at https://www.uspto.gov/MPEP or https://mpep.uspto.gov. Thus, even without the 
program, applicants still have the opportunity to hold interviews with 
examiners after the close of prosecution.

Continuing Application Fees

    Comment 25: One commenter stated that the meaning of the term 
``earliest benefit date'' or ``EBD'' as used in the NPRM was not clear, 
particularly with regard to whether or how it differs from the 
``effective filing date'' language in 35 U.S.C. 102. The commenter 
suggested that established statutory language be used instead of the 
``earliest benefit date'' or ``EBD.''
    Response: EBD is not a synonym for ``effective filing date.'' The 
USPTO has added additional examples and explanations in this final rule 
to further clarify the meaning of EBD.
    ``Effective filing date'' is a term defined in the statute and can 
refer to a priority date or a benefit date. The USPTO determines the 
effective filing date on a claim-by-claim basis. As set forth in 35 
U.S.C. 100(i)(1), for a patent application, the effective filing date 
for a claimed invention is either (A) the actual filing date of the 
application containing a claim to the invention or (B) the filing date 
of the earliest application for which the application is ``entitled, as 
to such invention, to a right of priority under [35 U.S.C.] section 
119, 365(a), 365(b), 386(a), or 386(b) or to the benefit of an earlier 
filing date under section 120, 121, 365(c), or 386(c).'' See MPEP 
2152.01 for more information about the effective filing date.
    The EBD is a term used in this rulemaking (the NPRM and this final 
rule) to refer to the earliest filing date for which benefit is claimed 
under 35 U.S.C. 120, 121, 365(c), or 386(c), and Sec.  1.78(d). The EBD 
is determined on an application-by-application basis. The EBD cannot be 
the filing date of a foreign application or the filing date of a 
provisional application to which benefit is claimed under 35 U.S.C. 
119(e).
    In short, the effective filing date can be a priority date or a 
benefit date, and different claims in the same application can have 
different effective filing dates. The EBD, however, can only be a 
benefit date, and there is only one EBD per application. The difference 
is explained further in table 17.

[[Page 91942]]

[GRAPHIC] [TIFF OMITTED] TR20NO24.026

    With respect to using statutory language, when the later-filed 
application is a utility or plant patent application, the EBD is also 
the date from which the 20-year patent term is calculated under 35 
U.S.C. 154(a)(2), and thus for a utility or plant application the EBD 
is synonymous with the ``patent term filing date.'' See MPEP 804, 
subsection I.B.1(a) for more information about the patent term filing 
date. There is no preexisting statutory language to use for design 
applications, as the term of design patents is calculated differently 
than for utility and plant patents. See MPEP 2701 for more information 
about patent term.
    Comment 26: One commenter questioned whether continuing application 
fees would actually be technology neutral since the USPTO stated in the 
NPRM that TC 3700 ``receives a much higher proportion of late-filed 
continuing application than other areas.''
    Response: The fee will be assessed for all continuing applications 
in all technologies. Although TC 3700 has a higher proportion of 
continuing applications that would be subject to the new fee(s) as 
compared to other TCs, there is diverse subject matter examined within 
this TC, encompassing many technologies. For example, TC 3700 examines 
applications directed to mechanical engineering, machine and hand 
tools, manufacturing (all disciplines), gaming, amusement and 
educational devices (electrical and mechanical), combustion technology, 
fluid handling, refrigeration, medical and surgical instruments and 
processes, diagnostic equipment, and medical treatment devices. 
Therefore, its relative excess of late-filed continuations does not 
cause a significant difference when combined with data from the entire 
corps, and technology sectors are considered as a whole.
    Comment 27: Commenters expressed concern about perceived unfairness 
of the continuing application fees for those applications that claim 
priority to foreign applications.
    Response: As noted above in the response to comment 25, foreign 
priority dates are not included in the determination of an EBD. The EBD 
is limited to the earliest filing date for which benefit is claimed 
under 35 U.S.C. 120, 121, 365(c), or 386(c), and Sec.  1.78(d). Thus, 
an application that claims a right of priority to a foreign application 
will not incur any fees set forth in Sec.  1.17(w) based on that 
priority claim.
    Comment 28: Commenters suggested that the continuing application 
fees will disproportionately affect national stage applications, 
discourage use of the Patent Cooperation Treaty (PCT) system, or 
prevent applicants from considering the merits of a bypass continuation 
application claiming benefit of a PCT application until after the 
applicable timing thresholds for the fees have passed.
    Response: Applicants are free to choose whatever route they believe 
is more advantageous for obtaining patent protection in the United 
States, whether through the PCT or through a direct national filing 
under 35 U.S.C. 111(a). National stage applications filed under 35 
U.S.C. 371 are unlikely to be affected by the continuing application 
fees because PCT time limits are much shorter than the timing 
thresholds that prompt the continuing application fees, and very few 
national stage applications contain benefit claims that could prompt 
the fees.
    Consider the following illustrative example. An international 
application designating the U.S. is filed under the PCT on May 5, 2026. 
The international application claims priority to a single foreign 
patent application that was filed in the Canadian Intellectual Property

[[Page 91943]]

Office on June 6, 2025. This international application has an 
international filing date of May 5, 2026, and a priority date of June 
6, 2025 (the ``priority date'' for an international application is 
defined in PCT Article 2(xi)).
    The PCT time limit to commence the U.S. national stage is 30 months 
(2.5 years) from the priority date. Assume the exemplary application 
commences the U.S. national stage on the last possible day, which is 
December 6, 2027 (the day that is 30 months from the June 6, 2025, 
priority date). See MPEP 1893.01 for more information about national 
stage commencement time limits. When the U.S. national stage is 
commenced, the USPTO will determine the EBD of the national stage 
application to evaluate whether any continuing application fees are 
due. As explained in the response to comment 25, foreign priority dates 
are not included in the determination of an EBD, and thus the filing 
date of the Canadian patent application is not the EBD. Instead, the 
exemplary national stage application would have an EBD that is the same 
as its international filing date, i.e., May 5, 2026. Because the EBD is 
the same as the actual filing date (the international filing date), no 
continuing application fees would be due upon national stage 
commencement of this application.
    Even if the international application had also included a benefit 
claim to an earlier-filed U.S. application, it is very unlikely that 
the national stage application would be affected by the continuing 
application fees. USPTO data from FY 2020 through FY 2023 indicates 
that very few (less than 1%) U.S. national stage applications include a 
benefit claim to an earlier-filed application such that their EBD would 
be earlier than the international filing date, let alone an EBD that is 
more than six years prior to the international filing date as would be 
required to incur the continuing application fee. Given that the 
primary purpose of filing an international application is usually to 
pursue international patent protection, this data is not surprising.
    Similarly, a so-called bypass continuing application of an 
international application is unlikely to be affected by the continuing 
application fees for any benefit claim to the international application 
or any benefit or priority claim made through the PCT system (e.g., 
where the international application serves as an intermediate 
application to establish copendency between the bypass application and 
an earlier-filed application). See MPEP 1895 et seq. for more 
information about bypass applications. Even if such an application were 
affected, the effects would be similar to those for an application 
where the benefit ``chain'' did not include an international 
application.
    Consider another illustrative example. On January 8, 2032, an 
applicant files two applications: an international application 
designating the U.S.; and application D, which is a U.S. nonprovisional 
application. Both applications claim priority to a single foreign 
patent application that was filed in the Instituto Mexicano de la 
Propiedad Industrial (IMPI) on January 10, 2031, and also claim benefit 
as a continuation of U.S. nonprovisional applications A, B, and C under 
35 U.S.C. 120, with the earliest-filed application being A, which was 
filed on July 11, 2025. The international application would not incur 
any fees under Sec.  1.17(w) unless and until it commences the U.S. 
national stage. Application D will incur the Sec.  1.17(w)(1) fee 
because its actual filing date (January 8, 2032) is more than six years 
after its EBD (A's filing date of July 11, 2025).
    On July 7, 2033, 30 months after the priority date (the filing date 
of the Mexican patent application), the applicant commences the U.S. 
national stage of the international application. At this time, the 
USPTO will determine the EBD of the national stage application to 
evaluate whether any continuing application fees are due. As previously 
noted, the foreign priority date is not included, but benefit claims 
under 35 U.S.C. 120 are included. The earliest benefit date to which 
the national stage application claims benefit is A's filing date, and 
thus the national stage application has an EBD of July 11, 2025. 
Because the actual filing date of the national stage application (the 
international filing date of January 8, 2032) is more than six years 
after its EBD (A's filing date of July 11, 2025), the Sec.  1.17(w)(1) 
fee will be due upon national stage commencement of this application.
    The applicant files two additional applications on July 7, 2033. 
The first is a bypass application that claims benefit of the 
international application and the earlier-filed applications A, B, C, 
and D. The second is a nonprovisional application E that claims benefit 
to A, B, C, and D. Both the bypass application and E will incur the 
Sec.  1.17(w)(1) fee, because their actual filing date (July 7, 2033) 
is more than six years after their EBD (A's filing date of July 11, 
2025).
    In this example, all three of these latter applications (the 
national stage application, the bypass application, and E) are in 
essentially the same position with respect to being able to evaluate 
their merits based on the history of the prior applications. Over the 
last few years, the USPTO's Traditional Total Pendency (which the USPTO 
defines as the average number of months from the patent application 
filing date to the date the application has reached final disposition 
(e.g., issued as a patent or abandoned)) has ranged between 24 and 26 
months. More data on Traditional Total Pendency is available on the 
USPTO's Patents pendency data web page at https://www.uspto.gov/dashboard/patents/pendency.html.
    Thus, assuming a Traditional Total Pendency of 26 months, in this 
example the applicant easily could have completed the prosecution of 
their earlier-filed applications A, B, and C by July 2033 and would 
also have progressed with the prosecution of application D. The 
applicant would thus have the benefit of reviewing the patentability 
issues that arose during prosecution of A, B, C, and D before filing 
the applications in July 2033 that would incur the continuing 
application fees.
    In addition, applicants using the PCT system can consider the 
international search report (ISR) and the optional international 
preliminary examination report (IPER) during the international stage 
before filing either a national stage or a bypass application.
    While there may be outlier situations, this discussion illustrates 
that the commenters' concerns about disproportionate effects on 
national stage applications and being unable to consider the merits of 
a bypass application until after the due date for the continuing 
application fees are largely unfounded.
    Comment 29: One commenter stated that the continuing application 
fees limit applicants' rights to file continuing applications under 35 
U.S.C. 120 and thus are punitive in nature.
    Response: The continuing application fees do not prevent applicants 
from filing as many continuing applications as they want at any time 
during the pendency of the parent application, nor are they punitive in 
nature. Instead, they are designed to recover more of the costs of 
examining continuing applications where maintenance fees on the issued 
patent are unlikely to be paid as a result of insufficient term.
    This final rule does not impose a fee under Sec.  1.17(w) for 
continuing applications filed within six years of their EBD. About 
80.3% of continuing applications are filed within six years of their 
EBD and thus will not incur the

[[Page 91944]]

fees. Only continuing applications filed more than six years after 
their EBD (about 19.7% of continuing applications or about 6.5% of all 
applications) will incur a continuing application fee based on today's 
filing patterns.
    As explained in the response to comment 33, the continuing 
application fees reduce, but do not eliminate, the existing subsidy of 
front-end fees (i.e., filing, search, and examination fees) that patent 
applicants are currently receiving. As explained in Part V. Individual 
Fee Rationale of this rule, the agency maintains a low barrier to entry 
into the patent system by setting front-end fees below the unit cost of 
the corresponding front-end services (i.e., preexamination, search, and 
examination). The difference between front-end fees and front-end unit 
costs are subsidized by other fees (e.g., maintenance fees) that are 
set above their unit cost.
    As of FY 2023, this front-end subsidy amounted to $4,345 for an 
undiscounted entity. The subsidy was substantially higher for 
applicants paying discounted fee rates because their front-end fees are 
discounted 60% or more as compared to undiscounted rates while the unit 
costs of the corresponding services remain the same. For undiscounted 
entities, based on FY 2023 unit costs, the final rule's increase of the 
front-end fee rates will reduce the subsidy to $4,165 for applications 
that are not subject to continuing application fees, $1,465 for 
continuing applications subject to the $2,700 fee under Sec.  
1.17(w)(1), and $165 for continuing applications subject to the $4,000 
fee under Sec.  1.17(w)(2) fee. Thus, applications subject to 
continuing application fees will still receive a subsidy on their 
front-end fees, albeit lower than that given to non-continuing 
applications and continuing applications filed six or fewer years after 
their EBD. In addition to this subsidy of front-end fees, those 
applicants who are resource-constrained likely will also qualify for 
entity discounts, which afford a 60% (for small entity status) or 80% 
(for micro entity status) discount on most patent fees, further 
reducing the financial burden on such applicants.
    Comment 30: Commenters expressed their support for the proposed 
fees for continuing applications. One commenter noted that 
continuations are more likely to be litigated, and the fees will allow 
for comprehensive review of these applications. Other commenters stated 
that the continuing application fees were inappropriate, asserting that 
the USPTO's costs of examining continuing applications are lower than 
the cost of examining non-continuing applications.
    Response: The agency's costs for examining continuing applications 
are not necessarily lower than the costs of examining non-continuing 
applications. Examiners are provided the same amount of time to examine 
a continuing application as a non-continuing application; equal time 
equates to equal cost to the agency. Certain continuing applications, 
particularly divisional and continuation-in-part applications, may 
present different claimed inventions or more complex issues than a non-
continuing application. For example, as an applicant grows their 
application family by filing additional continuing applications over 
time, the determinations of which claims in the child application are 
supported under 35 U.S.C. 112(a) by which parent applications may be 
more complex, and double patenting concerns may be more frequent and 
time-consuming to analyze. Moreover, as explained in the response to 
comment 29, even those applicants paying the continuing application 
fees are the beneficiaries of subsidized front-end fees that are set 
below front-end costs.
    Comment 31: Commenters expressed concerns about the timing 
thresholds for the continuing application fees, asserting there are 
substantial delays at the USPTO preventing applicants from being able 
to determine the scope of their first application's claims before 
filing a continuing application subject to the fees. Thus, the 
commenters stated they would be unable to file a continuing application 
without having to pay the continuing application fees. The commenters 
pointed to the USPTO's Patents Dashboard for patent pendency data in 
support of their comments. One commenter asserted that average pendency 
was about 2.5 years for non-continuing applications and five to six 
years for continuation and divisional applications.
    Response: The continuing application fees do not prevent applicants 
from filing as many continuing applications as they want at any time 
during the pendency of the parent application. See MPEP 211.01(b), 
which explains the copendency requirement for claiming the benefit of a 
nonprovisional application under 35 U.S.C. 120, 121, 365(c) or 386(c). 
Applicants are not required to wait until their first application has 
been examined or allowed before filing a continuing application. Many 
applicants choose not to wait, as evidenced by the fact that about 38% 
of continuing applications are filed within two years of their EBD.
    Regarding concerns about timeliness of application examination, the 
commenter setting forth the 2.5 and 5-6 year time periods appears to 
have misunderstood the data provided on the Patents Dashboard, 
available on the USPTO website at https://www.uspto.gov/dashboard/patents/. The dashboard reports data on Patents operations on an 
ongoing basis. Several different pendency metrics are reported and 
defined on the USPTO's Patents pendency data web page, https://www.uspto.gov/dashboard/patents/pendency.html, including a metric 
called ``Traditional Total Pendency'' and two other metrics called 
``Pendency for Continuation Applications'' and ``Pendency for 
Divisional Applications.''
    As noted in response to comment 28, Traditional Total Pendency is 
defined as the average number of months from the patent application 
filing date to the date the application has reached final disposition 
(e.g., issued as a patent or abandoned) and is inclusive of both 
continuing and non-continuing applications. As reported on the Patents 
Dashboard, over the two-year period ending in June 2024, Traditional 
Total Pendency fluctuated between 24 and 26 months and as of June 2024 
was 25.9 months. In other words, the USPTO is reporting an average 
pendency from actual filing date to final disposition for both 
continuing and non-continuing applications of 25.9 months. The reported 
pendency of 25.9 months is several months shorter than the 30 months 
suggested by the commenter.
    In contrast to Traditional Total Pendency, the Pendency for 
Continuation Applications and Pendency for Divisional Applications 
metrics reflect the total elapsed time from the filing of the first 
parent application through any intermediate parent applications to the 
final disposition of the continuation or divisional application. In 
other words, these latter two metrics are measuring the elapsed time 
from the EBD of a continuing application to the final disposition of 
the continuing application. It is expected that these latter two 
metrics would have higher results than Traditional Total Pendency 
because they reflect the pendency of an entire chain of continuing 
applications, not a single application.
    Thus, for an exemplary application Z, which is a continuation of Y, 
which is a continuation of X, the Traditional Total Pendency would be 
the time from Z's filing to Z's final disposition, but the Pendency for 
Continuation Applications would be the time from X's filing to the 
final disposition of Z. The USPTO stopped reporting the Pendency for

[[Page 91945]]

Continuation Applications and Pendency for Divisional Applications 
metrics on its Patents Dashboard in April 2023. The last reported 
numbers for these metrics were 61.7 months for continuations and 69.1 
months for divisionals, which reflect the elapsed time from the EBDs of 
the continuations or divisionals until their final dispositions.
    Based on the currently reported Traditional Total Pendency of 
approximately 26 months (as of June 2024, the USPTO's average 
Traditional Total Pendency was 25.9 months), even if there were delays 
on either or both the agency's or the applicant's side, applicants 
typically would still have several years to file continuing 
applications before the continuing application fees would apply, even 
if they delay filing of a continuing application until just before the 
final disposition of its parent. See the discussion of example 
applications A through F in the response to comment 32.
    Comment 32: Commenters expressed concerns about the timing 
thresholds for the continuing application fees, particularly the 
threshold of five years after the EBD. Commenters stated that five 
years was insufficient time to benefit from the examination of a parent 
application, and thus the continuing application fees would negatively 
impact industries such as medical devices or biotechnology by 
encouraging applicants to file applications too early in the innovation 
process. Some commenters also expressed concern that the continuing 
application fees would stifle innovation by independent inventors, 
small businesses, or resource-constrained applicants.
    Response: The USPTO decided to modify the timing thresholds for the 
continuing application fees so they now apply only to those continuing 
applications having an actual filing date more than six or nine years 
after their EBD. These revised thresholds will afford applicants more 
time to benefit from examination of the parent applications and to file 
continuing applications without incurring the Sec.  1.17(w) fees before 
being faced with the decision of whether to file a continuing 
application that would incur the fees.
    This final rule does not impose a fee under Sec.  1.17(w) for 
continuing applications filed within six years of their EBD. As about 
80% of continuing applications are filed within six years of their EBD, 
the majority of continuing applications will not incur the fees. 
Moreover, applicants will now have six full years to consider the 
examination of the original non-continuing application and any 
intermediate applications before deciding whether to file a continuing 
application that would incur the fees.
    The USPTO is not aware of data that supports the commenters' 
concerns about not having sufficient time to benefit from the 
examination of a parent application before incurring the fees or that 
certain industries or applicants will be negatively impacted because 
the fees will encourage them to file continuing applications too early 
or not at all. As previously noted, about 80% of continuing 
applications are filed within six years of their EBD, over half of 
which are filed within three years of their EBD. Thus, the majority of 
continuing applications, including those filed by independent 
inventors, small businesses, or resource-constrained applicants, will 
be unaffected by this rulemaking.
    For the approximately 19.7% of continuing applications filed more 
than six years after their EBD, this final rule is not expected to 
change applicant behavior to any significant degree. Some applicants 
may be encouraged to file and prosecute their portfolios more 
efficiently, perhaps by shifting a continuing application filing a few 
months earlier to avoid the fees or to reduce the fee amount. Other 
applicants may choose to present additional claims in earlier 
applications instead of filing additional continuing applications. As 
explained in the NPRM, the USPTO is not seeking to change applicant 
behavior with these fees but instead is motivated by the need to 
generate sufficient aggregate revenue to cover the aggregate cost of 
patent operations. The continuing application fees are thus designed to 
recover more costs related to continuing applications filed long after 
their EBD from the filers of such applications.
    Given that Traditional Total Pendency has ranged between 24 and 26 
months over the last few years, typically an applicant can be at the 
point of filing their third or subsequent continuing application by the 
time the fees under Sec.  1.17(w) would apply. Consider the following 
examples, which show how a typical applicant can file and prosecute 
multiple applications (applications A, B, and C) before being faced 
with the decision of whether the filing of application D more than six 
years after its EBD is worth the additional cost of the Sec.  
1.17(w)(1) fee. For simplicity's sake, the examples assume a 
Traditional Total Pendency of 26 months that remains the same 
throughout the examples and also assumes that all applications are 
utility applications.

    Example 1: Applications A, B, and C: Applicant files non-
continuing application A on July 11, 2025. Application A issues 26 
months later in September 2027. On September 10, 2027, just prior to 
A's issuance, applicant files continuing application B, which claims 
the benefit of A's filing date under 35 U.S.C. 120. B issues 26 
months later in November 2029. On November 9, 2029, just prior to 
B's issuance, applicant files continuing application C, which claims 
the benefit of A and B's filing dates under 35 U.S.C. 120. C issues 
26 months later in January 2032. None of applications A, B, or C 
will owe a continuing application fee. A is not a continuing 
application, and B and C have actual filing dates that are less than 
six years after their EBD of July 11, 2025 (the filing date of A, 
which is the EBD to which B and C claim benefit under 35 U.S.C. 
120).
    Example 2: Applications D and E: On January 8, 2032, just prior 
to C's issuance, applicant files continuing application D, which 
claims the benefit of A, B, and C's filing dates under 35 U.S.C. 
120. D issues 26 months later in March 2034. On March 7, 2034, just 
prior to D's issuance, applicant files continuing application E, 
which claims the benefit of A, B, C, and D's filing dates under 35 
U.S.C. 120. E issues 26 months later in May 2036. Applications D and 
E will owe the Sec.  1.17(w)(1) fee, because their actual filing 
dates in January 2032 and May 2034 are more than six years after 
their EBD of July 11, 2025 (the filing date of A, which is the EBD 
to which D and E claim benefit under 35 U.S.C. 120).
    Example 3: Application F: On May 6, 2036, just prior to E's 
issuance, applicant files continuing application F, which claims the 
benefit of A, B, C, D, and E's filing dates under 35 U.S.C. 120. F 
issues 26 months later in July 2038. Application F will owe the 
Sec.  1.17(w)(2) fee because its actual filing date in May 2036 is 
more than nine years after its EBD of July 11, 2025 (the filing date 
of A, which is the earliest benefit date to which F claims benefit 
under 35 U.S.C. 120).

    As these examples illustrate, a typical applicant can file at least 
two continuations in series without paying the continuing application 
fees, even if they wait until the last possible moment (e.g., issuance 
of the parent) before filing each continuing application. In reality, 
applicants need not wait until the last possible moment and may file 
multiple continuing applications at any point in time during the 
pendency of the immediate parent application. Further, when an 
applicant considers their innovation economically valuable enough to 
file multiple continuing applications over the course of many years, it 
is unlikely that they would consider the Sec.  1.17(w) fees as an 
obstacle to filing the additional applications they consider necessary.
    Comment 33: Commenters suggested that the timing thresholds for the

[[Page 91946]]

continuing application fees were arbitrary or unfair or that the USPTO 
should exempt certain types of applications (e.g., divisional, 
continuation-in-part, or design applications) from the continuing 
application fees.
    Response: As explained in the NPRM, the continuing application fees 
will apply to all utility, plant, and design continuing applications, 
i.e., continuation, divisional, and continuation-in-part applications, 
which have an actual filing date that is more than a set number of 
years after their EBD. The continuing application fees are motivated by 
the need to generate sufficient aggregate revenue to cover the 
aggregate cost of patent operations and are designed to recover more 
costs related to continuing applications filed long after their EBD 
from the filers of such applications.
    The patent fee structure is designed to encourage innovation by 
maintaining low barriers to entry, which the agency accomplishes by 
keeping the front-end fees (filing, search, and examination fees) below 
the costs for the corresponding front-end services (preexamination, 
search, and examination). For example, for a utility application, 
current front-end fees ($1,820 for undiscounted entities in FY 2023) 
are set far below the USPTO's average costs for filing, search, and 
examination activities ($6,165 in FY 2023), and the difference is 
subsidized by other fee collections, primarily issue fees and 
maintenance fees. As of FY 2023, for the average application, this 
subsidy (the difference between the USPTO's costs and what an applicant 
pays) was $4,345 for an undiscounted entity, and even higher for those 
applicants paying discounted fee rates ($5,501 for a small entity 
filing electronically, and $5,801 for a micro entity).
    After weighing public feedback and considering the effects on the 
patent system as a whole, the USPTO has decided to retain this existing 
subsidy amount and the resultant low barrier to entry for most 
continuing applications. The USPTO has adjusted the timing thresholds 
for the continuing application fees, which will now be prompted when 
the actual filing date of an application is more than six or nine years 
after its EBD.
    The USPTO notes that continuing applications filed long after their 
EBD have a direct impact on the agency's ability to generate sufficient 
aggregate revenue. As explained in the NPRM, such applications are less 
likely to have a patent term long enough for the USPTO to recover the 
costs of their search and examination from maintenance fees. While not 
all patentees choose to maintain their patents for their full term, the 
USPTO's ability to subsidize front-end fees is dependent on a 
sufficient number of patentees paying all three maintenance fees so 
that the aggregate revenue generated by patent fees will cover the 
aggregate costs of patent operations.
    As an example of how continuing applications filed long after their 
EBD are less likely to have a patent term long enough for the USPTO to 
recover the costs of their search and examination from maintenance 
fees, table 18 below shows the patent terms for each member of the 
exemplary patent family discussed in the response to comment 32. As 
explained in the prior response, all of these patents have an EBD of 
July 11, 2025, and a patent term that will expire in July 2045 (20 
years after the EBD) assuming no patent term adjustments, patent term 
extensions, or terminal disclaimers apply. Due dates are expressed in 
months and years only and reflect the statutory due dates set forth in 
35 U.S.C. 41(b). See MPEP 2506 for more information about maintenance 
fee due dates. As shown in table 18 below, applications D and E (which 
will incur the Sec.  1.17(w)(1) fee for the reasons explained in the 
prior response) will not have a term long enough to require payment of 
the third maintenance fee to avoid expiration prior to the maximum 
statutory term, and application F (which will incur the Sec.  
1.17(w)(2) fee for the reasons explained in the prior response) will 
not have a term long enough to require payment of the second or third 
maintenance fee to avoid expiration prior to the maximum statutory 
term.
[GRAPHIC] [TIFF OMITTED] TR20NO24.027


[[Page 91947]]


    As noted previously, the Sec.  1.17(w) fees are designed so that 
continuing applications filed six or fewer years after their EBD will 
continue to receive a front-end fee subsidy that is equal to that 
received by non-continuing applications. Thus, low barriers to entry 
into the patent system are preserved for non-continuing applications 
and for approximately 80% of continuing applications. For those 
continuing applications filed more than six years after their EBD, the 
Sec.  1.17(w) fee will essentially reduce the amount of the front-end 
fee subsidy, in recognition that such applications are less likely to 
have a patent term long enough for the USPTO to recover the costs of 
their search and examination from maintenance fees. The Sec.  1.17(w) 
fees are set at a rate that is both less than the front-end fee subsidy 
and substantially less than the third maintenance fee amount. For 
example, under the undiscounted fee rates as adjusted by this final 
rule, exemplary application D would pay the undiscounted Sec.  
1.17(w)(1) fee of $2,700, and application F would pay the undiscounted 
Sec.  1.17(w)(2) fee of $4,000, as compared to a front-end subsidy of 
approximately $4,165 (with front-end fees of $2,000 and combined FY 
2023 unit costs of $6,165 for filing, search, and examination 
activities) and an undiscounted third maintenance fee of $8,280. If 
these applications paid discounted fees, the difference would be even 
greater, e.g., if application D paid small entity fees, the Sec.  
1.17(w)(1) fee would be $1,080, as compared to a front-end subsidy of 
approximately $5,435 and a third maintenance fee of $3,312.
    Comment 34: Commenters expressed concern that the continuing 
application fees, particularly the higher fee proposed for applications 
filed more than eight years after the EBD, may encourage applicants to 
shift from filing continuing applications to filing appeals. They 
asserted that this shift could potentially overwhelm the appeal system 
or incur significant delays.
    Response: The USPTO modified the timing thresholds for the 
continuing application fees so they now will apply only to those 
continuing applications having an actual filing date more than six or 
nine years after their EBD. These revised thresholds will afford 
applicants more time to benefit from the examination of the parent 
applications and file continuing applications without incurring the 
Sec.  1.17(w) fees before being faced with the decision of whether to 
file a continuing application that would incur the fees.
    The USPTO disagrees that the continuing application fees will 
result in the appeal system being overwhelmed or significantly delayed. 
If an applicant feels that an examiner has unjustly rejected their 
claim(s) and the differences in opinion can be justly resolved only 
upon appeal, then appealing may be the better choice for applicant and 
the overall patent system as compared to refiling the rejected claims 
in a continuing application. See MPEP 1201 et seq. for a discussion of 
appeal practice. As noted in the NPRM, continuations make up the 
majority of continuing applications, and about 80% of continuations 
have a patented parent, which is indicative that applicants are both 
obtaining allowable subject matter in a parent application and also 
filing continuing applications.
    Comment 35: Commenters asserted that the USPTO did not consider 
increases to the maintenance fees instead of introducing the continuing 
application fees.
    Response: As explained in the NPRM, the agency considered such an 
option. See, e.g., fee alternative 3 discussed in the NPRM at Part 
VII(B): Regulatory Flexibility Act. The USPTO decided not to pursue 
that alternative, choosing instead to increase maintenance fees in 
addition to introducing the continuing application fees. In particular, 
each maintenance fee amount is being increased about 7% to 8%; for 
instance, the undiscounted third maintenance fee is increasing from 
$7,700 to $8,280. The combined effect of the increased maintenance fees 
and the continuing application fees will help provide sufficient 
aggregate revenue to cover the aggregate costs of patent operations, 
while also enabling the agency to keep front-end fees below unit cost 
for all applications. If the USPTO did not charge the continuing 
application fees, it would need to raise other fees (particularly the 
issue and maintenance fees) even higher to offset costs and to generate 
sufficient aggregate revenue to cover the aggregate costs of patent 
operations, which would burden all applicants, not just those filing 
continuing applications long after their EBD.

Design Application Fees

    Comment 36: Commenters expressed concern about the increased fees 
for design applications and questioned the cost rationale for the 
increases. Several commenters asserted that the fee increases will 
discourage applicants (particularly independent inventors, small 
businesses, or resource-constrained applicants) from filing design 
applications. One commenter stated that the fee increases are punitive 
because design examination is less complicated than utility 
examination, and one commenter stated that the fees should not be 
increased until design pendency is lowered.
    Response: In setting the fee rates, the USPTO's goal is not to 
dissuade design applications but to more closely align the fee rates 
with the costs of examining and issuing these applications and to 
support the hiring of additional design examiners to meet the agency's 
pendency goals.
    While examination of design applications is less costly than 
examination of utility applications, the agency still incurs 
significant costs to provide design services. In FY 2023, the cost for 
preexamination, search, examination, and issuance activities, was 
$2,252 per design application, not including continued prosecution 
applications (CPAs), which have a higher cost of $2,947. The FY 2023 
fees for an undiscounted applicant ($1,760 in combined filing, search, 
examination, and issue fees) were far below these costs. Further, 
because the majority of design applications qualify for discounted fees 
(in FY 2023, 26% of applicants paid the micro entity fee amount, 37% 
paid the small entity fee amount, and only 37% paid the undiscounted 
fee amount), the design fee collections in the same year averaged only 
$1,013 per application. This imbalance resulted in a shortfall of 
$1,239 per application, representing 55% of the cost, and design 
examination was subsidized by other fee collections, primarily utility 
maintenance fees.
    Historically, this difference between design fees and design costs 
did not result in a significant subsidy because the design fees were 
much higher relative to their costs, the annual volume of design 
applications was much lower than the annual volume of issued utility 
patents, and a greater proportion of design applicants were paying 
undiscounted fees. For example, in FY 2013, the subsidy was only 14%, 
because design costs were $1,446, the undiscounted design fees were 
$1,780, and about half of design applications were filed by 
undiscounted entities, resulting in an average shortfall/subsidy of 
about $200. Since that time, design costs have increased significantly, 
and design fees decreased sharply in 2014 and have only recently come 
back to 2013 levels (undiscounted design fees were only $1,320 in FY 
2014, $1,660 in FY 2018, and $1,760 in FY 2023). Meanwhile, the number 
of design applications has surged 50%, virtually all from discounted 
entities. Notably, the total undiscounted design fees in FY

[[Page 91948]]

2023 were $20 less than in 2013 before adjusting for inflation and 27% 
less when adjusted for inflation as of June 2024. See CPI Inflation 
Calculator, U.S. Bureau of Labor Statistics, https://www.bls.gov/data/inflation_calculator.htm (comparing March 2013 to June 2024 to 
calculate buying power).
    With the fee increases, design fees for an undiscounted applicant 
($2,600 in combined filing, search, examination, and issue fees) are 
now in between the cost of new design applications and CPA design 
applications, while the fees for discounted entities ($1,040 for a 
small entity, and $520 for a micro entity) remain far below cost. The 
increased fees should reduce the subsidy amount by about a third if all 
other variables remain the same. For example, if the application filing 
volume, entity spread, and cost remain the same as in FY 2023, the 
increased fees would result in design fee collections averaging $1,462 
per application, thus reducing the shortfall to about $790 per 
application, which is about 35% of the cost. This expected decrease in 
the shortfall amount will reduce the subsidy from $1,239 to $790, which 
is a 36% decrease.
    The USPTO is conscious that fee increases affect resource-
constrained applicants, and the agency will continue to offer the 60% 
discount for small entities and the 80% discount for micro entities, 
which reduces the impact of the fee increases on these entities. When 
these discounts are taken into account, the total fees paid by 
discounted entities through issuance of a design application under this 
final rule represent less than half of the USPTO's FY 2023 cost per 
design application, including preexamination, search, examination, and 
issuance activities (small entities pay 46% of new design application 
costs and 35% of CPA costs, and micro entities pay 23% of new design 
application costs and 18% of CPA costs).
    The design fees maintain a low barrier to entry into the patent 
system while bringing in increased revenue to recover more design costs 
from design applicants. The USPTO has accomplished these goals by 
balancing relatively low front-end fees against the higher design issue 
fee and the reduced, but still large, subsidy from utility maintenance 
fees. While the front-end fees are set below cost, both the design 
issue fee and the utility maintenance fees are set above their unit 
cost. As a result of this balancing, the USPTO has managed to keep the 
front-end fees only $5 to $10 higher than they were set in 2020 for 
design applicants qualifying for small or micro entity discounts. When 
the issue fee is included, the total fees paid by discounted entities 
are 13% more than inflation-adjusted 2013 fees would be. See CPI 
Inflation Calculator, U.S. Bureau of Labor Statistics, https://www.bls.gov/data/inflation_calculator.htm (comparing March 2013 to June 
2024 to calculate buying power).
    Comment 37: Commenters questioned why the design issue fee increase 
was greater than for other design fees, particularly in view of the 
switch to electronic patent issuance.
    Response: In FY 2023, the front-end costs (i.e., costs for the 
preexamination, search, and examination) of a design application were 
$1,713 for a new design application and $2,408 for a CPA, but the 
front-end fees were only $1,300 for an undiscounted entity, $520 for a 
small entity, and $260 for a micro entity. In order to recover these 
costs plus the additional cost of issuance while also recovering a 
greater percentage of design costs from design applicants, the issue 
fee is set above its cost for undiscounted entities. Thus, while the 
design issue cost is $539, the design issue fees are $1,300 for an 
undiscounted entity, $520 for a small entity, and $260 for a micro 
entity. As of June 2024, the undiscounted issue fee of $1,300 is 6% 
lower than the inflation-adjusted 2013 issue fee would be. See CPI 
Inflation Calculator, U.S. Bureau of Labor Statistics, https://www.bls.gov/data/inflation_calculator.htm (comparing March 2013 to June 
2024, to calculate buying power). As explained in other responses, 
these fees maintain a lower barrier to entry into the patent system 
while also increasing design fee collections and reducing the subsidy 
required for the average design application. Moreover, despite the 
switch to electronic patent issuance in April 2023 the unit cost for 
issuing a patent decreased only slightly from $574 in FY 2022 to $539 
in FY 2023.
    Comment 38: Commenters suggested that the USPTO should increase 
utility maintenance fees to pay for design costs or should seek 
legislative solutions such as maintenance fees for design patents 
instead of increasing design patent fees.
    Response: The agency already relies on utility maintenance fees, 
which are increased in this final rule, to subsidize a significant 
portion of design costs. As explained in other responses, assuming that 
the application filing volume, entity spread, and cost remain the same 
as in FY 2023, the average subsidy for design applications will be 
about $790 per application, which is about 35% of the cost. The subsidy 
amount is even higher for discounted entities, e.g., about $1,212 or 
54% of the cost for small entities, and $1,732 or 77% of the cost for 
micro entities. As explained in the NPRM and this final rule, the 
design fee increases will more closely align the fee rates with the 
agency's costs, which should reduce the current imbalance between fees 
and costs. The design fees will also support the hiring of additional 
design examiners to meet the agency's pendency goals. With respect to 
legislative solutions such as maintenance fees for design patents, such 
changes are beyond the scope of this rulemaking.
    Comment 39: One commenter suggested that the USPTO could reduce 
costs instead of raising fees by allowing applicants to submit design 
patent applications with multiple designs per application instead of a 
single design per application, as required under current practice.
    Response: Changes to design application practice are beyond the 
scope of this rulemaking. Currently, more than one embodiment of a 
design may be claimed so long as such embodiments involve a single 
inventive concept according to the obviousness-type double patenting 
practice for designs.
    Comment 40: One commenter stated that USPTO design fees are much 
higher than those in other jurisdictions such as the European Union.
    Response: The agency conducts substantive examination of design 
applications, whereas most other national or regional IP offices do 
not. Substantive examination requires significant time from a highly 
trained patent examiner. Additionally, most other national or regional 
IP offices require design patent holders to pay annuity or renewal fees 
to maintain their property rights, which drives up the cost of 
obtaining and maintaining a design patent. When these annuity or 
renewal fees are taken into account, USPTO fees for undiscounted 
entities are comparable to, or less expensive than, the fees charged by 
other large patent offices and, for discounted entities, the USPTO fees 
are much lower.
    Comment 41: Commenters suggested that the USPTO could reduce costs 
instead of raising fees by addressing improper micro entity assertions.
    Response: The agency has robust diligence procedures in place to 
identify anomalies in patent filings and in the last several years has 
identified questionable or apparently erroneous certifications of 
eligibility for micro entity status in applications, particularly in 
the design area. See, e.g., the USPTO Director's blog entry from 
September 2021, titled ``Ensuring the validity of micro entity 
certifications--

[[Page 91949]]

which provide reduced fees to eligible inventors and small 
businesses,'' available on the USPTO website at https://www.uspto.gov/blog/ensuring-the-validity-of-micro. As explained in that blog entry, 
when the agency becomes aware of such questionable certifications, it 
takes remedial actions including mailing Notices of Additional Fees Due 
in the applications. However, because applications with questionable 
certifications remain a small fraction of incoming filings, addressing 
these issues does not negate the need for additional fee revenue that 
will be provided by this final rule.

Excess Claims Fees

    Comment 42: One commenter expressed support for the increased fees 
for excess claims, noting that as larger numbers of claims are filed in 
a single application, examiners need to spend additional time reviewing 
the claims, conducting prior art searches, and assessing patentability. 
Other commenters expressed concern about the increased fees for excess 
claims and asserted that the USPTO did not provide a sufficient cost-
based rationale for the increases.
    Response: The agency incurs additional costs associated with 
examining excess claims. The USPTO has determined the resources 
necessary to carry out search and examination of applications based on 
the statutory thresholds for excess claims (no more than 20 total 
claims, of which no more than three are independent) and on applicant 
claiming trends, which indicate that the majority of applications do 
not contain excess claims. In FY 2023, 83% of applications did not 
contain any excess claims and 17% contained excess total claims, excess 
independent claims, or both (10% contained excess total claims only, 
3.1% contained excess independent claims only, and 3.5% contained both 
excess total claims and excess independent claims). These percentages 
are in line with historical values over the last decade.
    The USPTO notes that excess claiming can be a significant burden to 
the patent system and the agency. The number of claims impacts the 
complexity of examination and increases the demands placed on the 
examiner. For example, if each independent claim in an application 
requires a completely separate prior art patentability determination 
and if an application contains six independent claims, the examiner 
must conduct six completely separate prior art patentability 
determinations. Excess dependent claims also represent additional work, 
as a dependent claim may be allowable over the prior art even if the 
claim from which it depends is not, and dependent claims also require 
separate patentability determinations for non-prior art based issues 
such as enablement, subject matter eligibility, utility, and written 
description. Thus, applicants who include excess claims are using the 
patent system more extensively than those who do not.
    The USPTO accordingly determined that the cost to review 
applications containing excess claims should not be subsidized with 
other back-end fees to the same extent as applications that do not 
contain excess claims. While the subsidization of front-end fees is 
important for promoting innovation, it is also important to align fees 
with the full costs of products and services, because some applicants 
(here, applicants presenting excess claims) are using particular 
services in a more costly manner than other applicants. As explained in 
the NPRM, current front-end fees ($1,820 for undiscounted entities in 
FY 2023) are set far below the USPTO's average costs for filing, 
search, and examination activities ($6,165 in FY 2023), and the 
difference is subsidized by other fee collections, primarily issue fees 
and maintenance fees. As of FY 2023, for an average application that 
does not contain excess claims, this subsidy (the difference between 
the agency's costs and what an individual applicant pays) is $4,345 for 
an undiscounted entity and even higher for applicants paying discounted 
fee rates ($5,501 for a small entity filing electronically, and $5,801 
for a micro entity). Applications containing excess claims have higher 
costs, and if those costs are not recouped by excess claims fees paid 
by the applicants presenting the excess claims, they will be subsidized 
by other applicants who must, in turn, pay higher fees for other 
services, thus driving the subsidy for applications containing excess 
claims higher than the current $4,345-$5,801 amounts. The excess claims 
fees account for the increased subsidy.
    The excess claims fees are also designed to ensure that most 
applicants presenting excess claims will be able to do so for less than 
the cost of filing a second application. In FY 2023, 86% of 
applications contained no excess total claims, 11% contained 10 or 
fewer excess claims, and only 3% contained more than 10 excess claims.
    For the 11% of applications containing 10 or fewer excess claims, 
the average was five excess claims. In these applications, it would 
remain either the same cost or be less expensive to pay the excess 
total claims fees as opposed to filing a second application. For 
example, for an undiscounted entity, 10 excess total claims at $200 
each would be $2,000 in excess total claims fees, which will be the 
same as the combined filing, search, and examination fees for filing an 
application as adjusted by this final rule. The average number of 
excess claims for these applications was only five, so paying the 
excess total claim fees would be much less expensive than a second 
application. As an example, for an undiscounted entity, five excess 
total claims at $200 each would be $1,000 in excess total claims fees.
    For the 3% of applications containing more than 10 excess total 
claims, the average was 34 excess claims. Thus, for this group of 
applications, it would be more expensive to pay the excess total claims 
fees as opposed to filing a second application. This increased expense 
reflects that these applications are, on average, presenting more than 
the number of claims that would be covered by the fees for filing a 
second application. Notably, about one-third of these applications (10% 
of all applications containing excess total claims, or 1% of all 
applications) contained an average of 59 excess claims, which is more 
than would be covered by the fees for filing two additional 
applications.
    The USPTO's goal is to more closely align the fee rates with the 
cost of examining excess claims. Higher fees for excess claims will 
provide more revenue to help recover the additional search and 
examination costs associated with excess claims as well as prosecution 
costs not covered by front-end fees. These fees will also promote 
compact prosecution and address the inequities of providing further 
subsidies to those who make greater use of the patent system. If the 
USPTO does not increase the excess claims fees, it would, in effect, 
increase the subsidization of excess claims by other fees, requiring 
increases in other fees (particularly issue and maintenance fees) to 
offset the costs associated with excess claims at lower fee rates and 
to generate sufficient aggregate revenue to recover the aggregate costs 
of patent operations.
    Comment 43: Commenters stated that the increased fees for excess 
claims will discourage applicants from filing applications, 
particularly continuations or applications with broad disclosures, 
thereby weakening patent rights and limiting applicants' freedom to 
pursue additional patent claims.
    Response: The agency is not limiting the number of claims that 
applicants may file in their applications. The

[[Page 91950]]

USPTO notes that excess claiming can be a significant burden to the 
patent system and the agency. As discussed in other responses, the 
number of claims impacts the complexity of examination and increases 
the demands placed on the examiner. Applicants continue to have the 
opportunity to include excess claims when they consider it necessary to 
obtain an appropriate scope of coverage for an invention. The increased 
fees ensure that applicants who make greater use of the patent system 
bear more of the cost of the additional burden they are placing on the 
USPTO.
    The vast majority of applications contain either no excess total 
claims (86% of applications), or up to 10 excess claims (11% of 
applications, which on average contain five excess claims), and thus 
the increased fees for excess claims are unlikely to negatively impact 
the patent system as a whole. As explained in other responses, there is 
additional burden on the USPTO associated with examining excess claims; 
thus, the excess claims fee revenue will at least, in part, recover 
costs for this additional burden. Filing applications with the most 
prudent number of unambiguous claims enables prompt conclusion of 
application processing because more succinct applications facilitate 
faster examination. Therefore, the USPTO is increasing excess claims 
fee rates to facilitate an efficient and compact application 
examination process, which benefits the applicant and the USPTO through 
more effective administration of patent prosecution.
    Comment 44: Commenters stated that the increased fees for excess 
claims did not reflect the realities of prosecution practices. For 
example, some applicants may choose to recite different species in 
separate claims rather than as alternatives in a single claim, or some 
applicants may choose to present multiple inventions in the same 
application. One commenter also suggested a refund system in which 
excess claims fees are returned when claims are canceled in response to 
a restriction requirement or when claims are canceled by an applicant.
    Response: As set forth in MPEP 804, claims that are unrelated 
(e.g., unconnected in design, operation, and effect) are generally 
subject to restriction. Because independent claims in most applications 
are at least related, restriction requirements are usually based on a 
determination by the examiner that the claims are distinct. Therefore, 
the commenter's observation offers little relief from the burden 
imposed by excess claims, particularly excess independent claims. With 
regard to refunds, the USPTO already refunds excess claims fees when 
the application is abandoned prior to examination. See Sec.  1.138(d) 
and MPEP 607.02, subsection V & 711.01, subsection III. Canceling 
claims after restriction impacts an applicant's rights to rejoinder, 
and it is common for applicants who receive a restriction requirement 
to leave non-elected claims pending. In addition, allowing applicants 
to obtain a refund if they cancel claims after rejoinder is considered 
requires examiners to consider rejoinder as to the withdrawn claims, 
which can be costly.
    Comment 45: Commenters expressed concern about which USPTO 
activities would be funded by the excess claims fees and asserted that 
these fees should be used to fund the examination process only and not 
for any other activities.
    Response: As explained in the NPRM in parts IV(B): Fee Setting 
Considerations and V: Individual Fee Rationale, the USPTO sets or 
adjusts patent fees to recover the aggregate estimated costs for 
processing, activities, services, and materials relating to patents, 
including administrative costs with respect to such patent fees. The 
patent fees will recover the aggregate estimated costs of patent 
operations while enabling the USPTO to predictably finance the agency's 
daily operations and mitigate financial risks. As explained in the 
NPRM, some proposed fees are set at, above, or below their unit costs 
to balance four key fee setting policy factors: (1) promoting 
innovation strategies, (2) aligning fees with the full costs of 
products and services, (3) facilitating effective administration of the 
U.S. patent system, and (4) offering application processing options. 
For example, the agency sets many initial filing fees below unit cost 
to promote innovation strategies by removing barriers to entry to the 
patent system. To balance the aggregate revenue loss of fees set below 
cost, the USPTO must set other fees above cost in areas less likely to 
reduce inventorship (e.g., maintenance).
    For some fees proposed in the NPRM and set in this final rule, such 
as excess claims fees, the USPTO does not maintain individual 
historical cost data for services provided; instead, the agency 
considers the policy factors described in Part IV: Rulemaking Goals and 
Strategies of this rule to inform fee setting. For example, 
facilitating effective administration of the U.S. patent system enables 
the USPTO to foster an environment where USPTO personnel can provide 
and applicants can receive prompt, quality interim and final decisions; 
encourage the prompt conclusion of prosecuting an application, 
resulting in pendency reduction and faster dissemination of patented 
information; and help recover costs for activities that strain the 
patent system. As explained in other responses, there is additional 
burden on the USPTO associated with examining excess claims; thus, the 
excess claims fee revenue will at least, in part, recover costs for 
this additional burden. To the extent that the excess claims fee 
revenue might exceed the direct cost of examining excess claims, such 
revenue will be used to recover the aggregate estimated costs of other 
processing, activities, services, and materials relating to patents.
    Comment 46: One commenter suggested that the USPTO implement a 
tiered approach to excess claims fees instead of the current approach 
under which each excess claim incurs the same fee.
    Response: This rulemaking does not modify the statutory thresholds 
for excess claims, which are set in 35 U.S.C. 41(a)(2). The rulemaking 
simply adjusts the fee for submitting claims in excess of those 
thresholds (more than 20 claims total or more than three independent 
claims).

Information Disclosure Statement Size Fees

    Comment 47: One commenter expressed support for the IDS size fees 
as necessary to support the additional examination resources needed to 
review large numbers of references submitted by applicants. The 
commenter also stated that the IDS size fees will incentivize 
applicants to be more selective in submitting references, which will 
benefit clarity of the record. Other commenters also stated the fees 
may encourage applicants to submit fewer references but asserted that 
this result will be detrimental to patent quality and will potentially 
disparately affect small and micro entities, applicants who file 
families of applications, or applicants who file applications in 
certain technology areas.
    Response: Reviewing large numbers of references imposes an 
additional burden on the agency. As noted in the NPRM, the vast 
majority (approximately 87%) of applications will not be affected by 
these fees because they contain 50 or fewer applicant-provided items of 
information. Based on FY 2021 data, only 13% of applications contained 
more than 50 applicant-provided items of information: about 5% of 
applications contained 51 to 100 applicant-provided items of 
information, about 4% of applications contained 101 to 200 applicant-
provided items of information, and only 4% of

[[Page 91951]]

applications contained more than 200 applicant-provided items of 
information.
    As noted in the NPRM, small and micro entities should not be 
disproportionately impacted by these fees, as small entities accounted 
for only 25% of applications that would incur a fee in FY 2022, while 
micro entities made up less than 1%. One commenter apparently 
misunderstood this statement as implying that 1 in 4 small and micro 
entities would be affected by the new fee. The NPRM was referring to 
the entity spread, i.e., what proportion of applications that would 
incur an IDS size fee were filed by undiscounted entities (about 74%), 
small entities (about 25%), or micro entities (less than 1%). When 
compared to all utility application filings in FY 2022, only 1 in 62 
applications filed by micro entities and 1 in 7.5 applications filed by 
small entities would incur an IDS size fee.
    With respect to families of applications, under current IDS 
practice an examiner will consider items of information that were 
considered in a parent application when examining a child application 
(e.g., a continuation, continuation-in-part, or divisional application) 
without any action required on applicant's part. See MPEP 609.02 for 
information about this practice. Thus, for an application family that 
comprises a parent application and a child application, an item of 
information that the applicant cited in the parent application will not 
be counted in the child application for purpose of the IDS size fees 
unless it is resubmitted by the applicant on an IDS in the child 
application.
    Additionally, for both large families of applications and for those 
in certain technologies where applicants tend to cite more references 
than others, the USPTO notes that although Sec.  1.56 clearly imposes a 
duty to disclose material information, that rule neither authorizes nor 
requires filing unreviewed or irrelevant documents with the USPTO. Such 
documents add little to the effectiveness of the examination process 
and could negatively impact the quality of the resulting examination. 
The USPTO encourages applicants to avoid submitting long lists of 
documents if possible, such as by eliminating clearly irrelevant and 
marginally pertinent cumulative information. MPEP 2004, item 13. If the 
applicant or patent owner does submit a long list of references, the 
USPTO encourages them to ``highlight those documents which have been 
specifically brought to applicant's attention and/or are known to be of 
most significance.'' MPEP 2004, item 13. To the extent that the IDS 
size fees may encourage some applicants to filter out irrelevant or 
cumulative information prior to submission, the examiners of those 
applications will be able to focus on the more relevant information and 
perform a more efficient and effective examination, thus benefiting the 
patent system as a whole.
    Large IDS submissions are a significant burden to the patent system 
and the agency. The number of items of information submitted impacts 
the complexity of examination and increases the demands placed on the 
examiner. It costs the agency millions of dollars each year to provide 
examiners the additional time necessary to review large IDS 
submissions. Thus, applicants who submit large IDS submissions are 
using more USPTO resources than those who do not. The IDS size fees 
will provide more revenue to help recover the additional costs 
associated with large IDS submissions and address the inequities of 
providing subsidies to those who use more resources. If the USPTO did 
not charge these IDS size fees, it would in effect be increasing the 
subsidization of large IDS submissions by other fees and be required to 
raise other fees (particularly issue and maintenance fees) to offset 
the costs and generate sufficient aggregate revenue to cover the 
aggregate estimated costs of patent operations.
    Comment 48: Commenters suggested that legislative solutions such as 
inequitable conduct reform would be preferable to IDS size fees when 
addressing the issue of applicants who submit more than 50 cumulative 
items of information in an application.
    Response: The suggestion of legislative solutions is beyond the 
scope of this rulemaking.
    Comment 49: Commenters suggested that it is not or should not be 
burdensome for the USPTO to review large numbers of references because 
the agency could use search and analysis tools to determine which 
references are most relevant.
    Response: The agency is actively pursuing a number of initiatives 
involving advanced technologies and tools for increasing patent 
examination quality and efficiency such as the AI-based ``More Like 
This'' and ``Similarity Search'' features in the PE2E search suite, 
available on the USPTO website at https://www.uspto.gov/web/offices/com/sol/og/2022/week02/TOC.htm#ref10 and https://www.uspto.gov/sites/default/files/documents/ai-sim-search.pdf. The development and 
refinement of these technologies and tools require substantial 
investment by the agency and even when completed will not eliminate the 
need for an examiner to consider an applicant's cited references.
    Comment 50: One commenter objected to the new content requirement 
in Sec.  1.98(a) that an IDS contain a clear written assertion that the 
IDS is either accompanied by the appropriate IDS size fee or that no 
IDS size fee is required, stating that this requirement places a high 
burden on applicants.
    Response: As noted in the NPRM, this assertion is necessary to 
implement the IDS size fee because it ensures the record is clear as to 
which fee the applicant or patent owner believes may be due (or that no 
fee may be due), allowing the examiner to promptly ascertain whether 
the IDS is compliant. Including this assertion will greatly reduce the 
need for the USPTO to spend additional funds developing tools 
specifically to detect whether an IDS size fee is due in a particular 
application. The vast majority of applications (approximately 87%) 
contain fewer than 50 applicant-cited items of information, and 77% 
contain fewer than 25. Thus, it should not be burdensome for most 
applicants to check the appropriate box on the PTO form or to include a 
short statement saying that no IDS size fee is due. For those 
applications containing more than 50 applicant-cited items of 
information, it should not be unduly burdensome for an applicant to 
keep track of how many items of information they have submitted in a 
particular application and to make the appropriate assertion when 
submitting an IDS.
    Comment 51: One commenter suggested that the USPTO should eliminate 
the requirement for applicants to provide copies of the items of 
information cited in an IDS.
    Response: Changes to IDS practice are beyond the scope of this 
rulemaking. Currently, applicants are not required to submit copies of 
U.S. patent application publications or U.S. patents because these 
documents are already available to the USPTO. See Sec.  1.98 and MPEP 
609 for more information about the required contents of an IDS.
    Comment 52: One commenter suggested that the IDS size fees will 
undermine clarity of the record unless the USPTO exempts items of 
information that were cited in parent applications and that are 
resubmitted by applicants in the child application from being counted 
in the cumulative number of applicant-provided items of information.
    Response: Changes to IDS practice are beyond the scope of this 
rulemaking. Under current IDS practice, an examiner will consider items 
of information that

[[Page 91952]]

were considered in a parent application when examining a child 
application (e.g., a continuation, continuation-in-part, or divisional 
application) without any action required from the applicant. See MPEP 
609.02 for information about this practice. The IDS size fees will not 
undermine the clarity of the record because examiners will continue to 
follow current IDS practice with respect to considering items of 
information that were cited in parent applications. An item of 
information that an applicant cited in a parent application will not 
count towards the number of information items in a child application 
for purposes of the IDS size fees unless it is resubmitted by the 
applicant on an IDS in the child application. Thus, applicants who wish 
to avoid paying the IDS size fees in a child application for items of 
information considered in a parent application may do so by not 
resubmitting the items.

Patent Term Adjustment Fees

    Comment 53: Commenters stated the proposed targeted increase from 
$210 to $300 for filing an application for patent term adjustment (PTA) 
under Sec.  1.705(b) was too large.
    Response: The agency considered public feedback on the proposed 
targeted increase and opted not to proceed with this proposal. Instead, 
the PTA fee is increasing from $210 to $226 in this final rule in 
accordance with the across-the-board adjustment applied to most patent 
fees.

Patent Term Extension Fees

    Comment 54: Commenters requested that the USPTO offer entity 
discounts for patent term extension (PTE) fees because the proposed fee 
increases were substantial.
    Response: While the USPTO is committed to helping small and micro 
entity filers, the agency's authority to reduce fees for small and 
micro entities is limited to the six categories specified in section 
10(b) of the AIA (i.e., filing, searching, examining, issuing, 
appealing, and maintaining patent applications and patents). Since PTE 
services are outside of the six categories, those fees are not eligible 
for discounts absent a change in statutory authority.
    Comment 55: Commenters stated that the USPTO should not propose 
such a large increase to PTE fees without the supporting cost data to 
justify the proposal. One commenter suggested that the USPTO wait to 
propose an increase to PTE fees until there is data to back up the 
expectation that the unit cost determined by the ABI program will more 
closely align with the actual cost.
    Response: After considering the comments, the agency has chosen not 
to implement the proposed fee of $6,700 for filing a PTE application. 
Instead, the fee for an application for extension will be set at 
$2,500. This amount is between the FY 2022 unit cost and FY 2023 unit 
cost for the service. All other PTE fees will be adjusted in accordance 
with the levels outlined in the NPRM.
    Comment 56: Commenters expressed concerns about the increased fee 
for filing a PTE application.
    Response: The agency considered the public feedback on the proposed 
increase of the fee for filing a PTE application as set forth in Sec.  
1.20(j)(1) and determined that the fee for this service should be 
increased to cover the costs of providing this service. The USPTO 
carefully considered all of the comments and, in response, opted not to 
implement the proposed fee of $6,700, instead setting the fee at 
$2,500. This new amount is in line with the reported unit costs for 
this service, which were $2,581 in FY 2022 and $2,078 in FY 2023. This 
new fee will improve the agency's cost recovery for this service and 
reduce the current subsidization of this service by other patent fees.
    Comment 57: One commenter stated that the fee for supplemental 
redetermination after a notice of final determination should be 
refunded if the USPTO's initial determination was deemed to be 
incorrect.
    Response: The comment indicates a misunderstanding of the nature of 
this service. The new fee for supplemental redetermination after a 
notice of final determination is not related to correcting errors. 
Instead, the fee will recover the additional costs the USPTO incurs 
when a PTE applicant chooses to wait to file a response that includes a 
terminal disclaimer until after the agency has issued its notice of 
final determination. The submission of terminal disclaimers affects the 
patent term, and submission at this late stage in the PTE process 
requires the USPTO to engage in a substantial amount of rework to 
recalculate the applicable PTE and make a supplemental redetermination 
of the appropriate extension in view of the disclaimer. If a PTE 
applicant wishes to avoid this fee, they are encouraged to submit 
terminal disclaimers earlier in the PTE process.
    Comment 58: Commenters objected to increases to PTE fees, asserting 
the proposal would disproportionately impact the life sciences 
industry.
    Response: By statute, the products eligible for PTE services under 
35 U.S.C. 156 are limited to human drug products, medical devices, 
animal drugs, and food or color additive products, all of which are 
regulated by the FDA, and veterinary biological products, which are 
regulated by the USDA. While PTE fees are only relevant for certain 
products, the costs of providing PTE services are currently subsidized 
by other patent fees paid by non-PTE service users. These increases 
will improve the agency's cost recovery and recover PTE costs directly 
from PTE service users, thus reducing the burden of these fees on other 
entities. Further, the costs for regulatory approval of these products 
are extremely high. When compared to either FDA user fees or the 
research and development costs required to develop a new drug and 
obtain marketing approval, the proposed fees to obtain a patent term 
extension for the patent covering such a new drug are quite small, and 
therefore higher PTE fees should not impact the level of innovation in 
this industry.\2\

Request for Continued Examination Fees

    Comment 59: Commenters expressed concerns about the increased fees 
for RCEs, particularly the proposal to trifurcate the RCE fees, and 
disagreed with the USPTO's cost rationale. One commenter stated that 
all prosecution costs after the initial final rejection are relatively 
low, and one commenter asserted that examination costs decrease with 
subsequent RCEs. Another commenter stated that the USPTO does not incur 
any additional costs for subsequent RCEs, and several commenters 
asserted that the increased fees were an attempt to dissuade applicants 
from filing RCEs, rather than a means to recoup costs.
    Response: The agency considered the public feedback on the proposed 
trifurcation of the RCE fees and decided not to proceed with this 
proposal. Instead, the USPTO will retain the existing bifurcated RCE 
fee structure, in which the first RCE is charged at a lower rate than 
the second and subsequent RCEs. For more information on the adjusted 
fee rates for the first RCE and second and subsequent RCEs, see Part V: 
Individual Fee Rationale of this rule.
    Comment 60: One commenter expressed support for the increased RCE 
fees, stating that the increases will incentivize applicants to seek an 
earlier close to patent prosecution, including through appeals. Other 
commenters also stated the fees might encourage applicants to shift 
from filing RCEs to filing appeals. They stated that this shift could 
overwhelm the appeal system or cause significant delays. Another 
commenter stated that the fees might encourage applicants to file more 
continuation applications instead of RCEs.

[[Page 91953]]

    Response: The agency agrees with the commenters that increased fees 
for second and subsequent RCEs might encourage some applicants to shift 
from filing successive RCEs in favor of appeal or reaching agreement 
with an examiner. However, the USPTO disagrees that the increased fees 
will result in the appeal system being overwhelmed or significantly 
delayed.
    The appeal process at the USPTO begins with an applicant's filing 
of a notice of appeal and payment of an appeal fee. Currently, an 
applicant may request a pre-appeal brief conference review and, if so, 
may include a short paper presenting arguments on the appealable issues 
with their request. The pre-appeal brief conference program provides a 
relatively prompt review of the appealable issues in the application by 
a panel of examiners at no additional cost to the applicant (other than 
the notice of appeal fee that is required for all appeals). If 
prosecution of the application is reopened after the conference, the 
applicant will have a further opportunity to prosecute in front of the 
examiner and would not need to file an appeal brief. If the application 
remains under appeal, the applicant would then file an appeal brief if 
they wish to continue with the appeal. Upon receipt of an appeal brief, 
USPTO personnel conduct an internal appeal conference to determine 
whether to proceed with an examiner's answer, allow the application, or 
reopen prosecution. Based on historical data from FY 2010 to 2020, only 
43% of applications in which a notice of appeal is filed result in an 
examiner's answer. After the examiner's answer, the applicant has the 
opportunity to file a reply brief, and upon payment of the appeal 
forwarding fee, the application is forwarded to the Board for decision 
on the appeal. The applicant may also exit the appeal process by 
withdrawing the appeal, filing an RCE, or abandoning the application.
    Currently, the pendency of an appeal is relatively short, and the 
inventory of pending appeals is at historically low levels. As of the 
second quarter of FY 2024, pendency of a decided appeal--the period 
between the assignment of an appeal number and the mailing date of the 
decision--was 11.9 months. In addition, since the USPTO first 
bifurcated RCE fees in FY 2013, the PTAB has reduced the inventory of 
pending appeals from 25,437 to 4,231 at the close of FY 2023. If each 
of the 9,863 third and subsequent RCEs expected to be filed in FY 2025 
(as estimated in the aggregate revenue tables prepared for the NPRM) 
were instead a notice of appeal, this would result in approximately 
4,241 additional examiner's answers being mailed (based on the 
historical 43% rate) and a somewhat lower number of applications 
eventually forwarded to the Board. While this scenario would noticeably 
increase the PTAB's workload, the resultant number of appeals would 
still be far below historical levels even if every applicant who would 
otherwise have filed a third or subsequent RCE chooses to enter the 
appeal process instead of paying an increased RCE fee.
    It is unlikely that an applicant motivated primarily by costs would 
necessarily file an appeal instead of paying the RCE fees. The 
undiscounted fee for a second and subsequent RCE is $2,860, and an 
applicant's non-USPTO costs for the RCE may be very low, as many RCEs 
are filed with only an IDS or a request to reconsider a previously 
submitted response. In contrast, the undiscounted appeal fees are 
$3,440, including the notice of appeal and appeal forwarding fee; in 
addition, the applicant's non-USPTO costs for an appeal are likely 
significantly higher than for an RCE. For example, the 2023 Report of 
the Economic Survey, published by the Committee on Economics of Legal 
Practice of the American Intellectual Property Law Association (AIPLA) 
and available at https://www.aipla.org/home/news-publications/economic-survey, indicates that the mean cost (exclusive of USPTO fees) for an 
appeal without oral argument is $5,269, while fees for an amendment 
and/or argument responding to an Office action range from $2,364 to 
$3,972 (depending on the technology and complexity of the invention), 
and the fee for an IDS with less than 50 references is $473. When these 
non-USPTO costs are taken into consideration, a subsequent RCE might be 
significantly less expensive than an appeal. Compare, for example, the 
total of $8,709 for an appeal without an oral argument ($3,440 in USPTO 
fees plus $5,269 in other costs) with the total of $3,333 for a second 
RCE with an IDS ($2,860 in USPTO fees plus $473 in other costs), or 
even $5,224 to $6,832 for a second RCE with a new amendment and/
argument ($2,860 in USPTO fees plus $2,364 to $3,972 in other costs).
    Moreover, some applicants might see value in filing successive RCEs 
as opposed to appealing or reaching agreement with an examiner. As 
noted in the NPRM, the scope of an issued patent is fixed, and 
competitors may accordingly assess how to avoid infringement. The scope 
of a patent that results in the future from a pending application is 
harder to assess. These applicants may be less cost-sensitive than 
other applicants, given the value to them in prolonging prosecution. 
Other applicants may be more willing to consider appeals despite their 
higher cost because if the applicant still disagrees with the 
examiner's rejections after filing two RCEs, it may be more effective 
to appeal than to file a continuing application or another RCE because 
the appeal process ends with a resolution of the disputed rejections.
    The USPTO does not see continuing applications as completely 
interchangeable with an RCE. While there is an $860 fee differential 
between the fees to file a continuing application ($2,000 combined 
filing, search, and examination fees for an undiscounted application) 
and subsequent RCEs ($2,860 for an undiscounted application), the 
agency believes the different characteristics of these filings would be 
the overriding factor in an applicant's choice. Additionally, RCEs are 
not subject to excess claim or excess page fees and thus might cost 
less than continuing applications in many instances.
    In setting these fee rates, the USPTO's goal is not to steer 
applicants away from RCEs but to more closely align the fee rates with 
the costs of processing RCEs, as discussed in other responses. Higher 
fees for successively filed RCEs also address the inequities of 
providing further subsidies to those applicants who make greater use of 
the patent system. If the USPTO does not increase RCE fees, it would in 
effect be increasing the subsidization of RCEs by other fees, which 
would then require increases in other fees (particularly issue and 
maintenance fees) to offset the cost of processing RCEs at lower fee 
rates.
    Comment 61: Commenters asserted that the proposed fee increases 
were based on assumptions that multiple RCEs filed in the same 
application reflect dilatory or otherwise undesirable applicant 
behavior. Commenters described other prosecution scenarios as a reason 
why applicants file multiple RCEs, including filing an IDS after the 
close of prosecution when an applicant is unable to make the required 
certification under Sec.  1.97(e) and responding to new rejections in 
final Office actions.
    Response: The agency's goal is not to dissuade RCE filings but to 
more closely align the fee rates with the cost of processing RCEs, as 
discussed in other responses. The USPTO understands that applicants may 
file multiple RCEs for a variety of valid reasons and has determined 
that the cost to review applications with multiple RCEs should

[[Page 91954]]

not be subsidized with other back-end fees to the same extent as 
applications with a first RCE, newly filed applications, or continuing 
applications. Higher fees for successively filed RCEs also address the 
inequities of providing further subsidies to those applicants who make 
greater use of the patent system.
    With respect to filing an IDS after the close of prosecution when 
an applicant is unable to make the required certification under Sec.  
1.97(e), the USPTO notes that the requirement for a certification may 
be avoided by filing the IDS earlier, e.g., prior to the close of 
prosecution (in which case the applicant has the option to pay a small 
fee instead of making the certification) or within three months of the 
item(s) of information being cited in a communication from a foreign 
office in a counterpart foreign application or otherwise becoming known 
to individuals designated in Sec.  1.56(c). More information about 
certifications under Sec.  1.97(e) is provided in section 609.04(b) of 
the MPEP. Thus, applicants who wish to avoid paying the increased fees 
for second and subsequent RCEs have other options available to submit 
an IDS in an application.
    With respect to an applicant's need to respond to new rejections in 
final Office actions, the USPTO notes that second Office actions are 
not automatically made final and that new rejections in final Office 
actions are ordinarily necessitated by the applicant's amendment of the 
claims or based on information submitted by the applicant in an IDS 
filed during the period set forth in Sec.  1.97(c) with the fee set 
forth in Sec.  1.17(p). See MPEP 706.07(a) for more information about 
when final rejections are proper. Furthermore, after the close of 
prosecution, amendments that will place the application either in 
condition for allowance or in better form for appeal may be entered, 
and the applicant may also hold an interview with the examiner. See 
Sec.  1.116(b) and MPEP 714.12. Thus, applicants who wish to avoid 
paying the increased fees for second and subsequent RCEs have other 
options available to respond to rejections in an application.

Terminal Disclaimer Fees

    Comment 62: One commenter expressed support and several commenters 
objected to the proposed tiered fee structure for terminal disclaimers.
    Response: The agency considered this feedback on the proposed 
tiered fee structure for terminal disclaimers and decided not to 
proceed with this proposal. Instead, the fee for this service is 
increasing from $170 to $183 in accordance with the across-the-board 
adjustment applied to most patent fees.
    Comment 63: One commenter requested data on the costs of processing 
terminal disclaimers.
    Response: The agency's ABI program cannot calculate a specific unit 
expense for statutory disclaimers, including terminal disclaimers, 
because the service does not lend itself to unit costing as related 
costs are not easily severable from larger activity costs.

Unintentional Delay Petition Fees

    Comment 64: One commenter expressed concern with charging a higher 
fee for petitions based on unintentional delays of more than two years 
and asserted that the higher fee has an implicit purpose of 
discouraging the submission of such petitions.
    Response: The purpose of the higher fee for petitions based on 
unintentional delays of more than two years is to recover their 
additional associated costs. As noted in the NPRM, the USPTO requires 
additional information regarding the facts and circumstances 
surrounding such extended delays to ensure that the USPTO can support a 
conclusion that the entire delay was unintentional. As the evidentiary 
requirements for these petitions have increased, the costs to review 
and decide these petitions have also increased due to the higher level 
of review needed to consider the additional explanation. While the 
agency's primary goal in setting this fee rate is to recover the 
additional costs of these petitions, the higher fee also should 
encourage timely petition filings. Timely filing of petitions based on 
unintentional delay benefits applicants because it avoids delays in the 
examination process and also benefits the patent system as a whole by 
reducing uncertainty and unpredictability relating to patent rights. 
For example, the abandoned status of an application, the expired status 
of a patent, or an absence of the priority or benefit claim may be 
relied upon by other parties.

America Invents Act Trial Fees

    Comment 65: Commenters requested more information on historical 
costs associated with trial proceedings to better understand the cost 
data and support the claim that AIA trial costs have continued to 
increase.
    Response: The Table of Patent Fees, available on the fee setting 
section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, provides three years of historical cost data 
for most current fees, including AIA trial proceedings. In addition to 
the Table of Patent Fees, the fee setting section of the agency's 
website also includes a document titled ``Setting and Adjusting Patent 
Fees during Fiscal Year 2025--Activity Based Information and Patent Fee 
Unit Expense Methodology,'' which provides additional details on the 
cost methodologies used to derive the historical fee unit expenses 
outlined in the Table of Patent Fees. In response to this comment, the 
agency has provided additional details on PTAB activity costs in the 
methodology compared to the version published as part of the NPRM.
    Comment 66: One commenter stated that word counts are an 
ineffective strategy to address problems associated with AIA trial 
petitions. The commenter stated regular petition fees already 
disincentivize filing a parallel petition.
    Response: The agency elected not to move forward with setting fees 
based on word counts after considering the PPAC report and public 
comments received following the public hearing in May 2023, and the 
proposal was not included in the NPRM.
    Comment 67: One commenter requested reassurances that AIA trial 
fees would not be discounted for small and micro entities in the 
future.
    Response: Currently, AIA trial fees are not subject to small or 
micro entity discounts under section 10(b) of the AIA. Any expansion of 
small or micro entity discounts under section 10 would require 
statutory changes.
    Comment 68: One commenter stated that raising fees for AIA trials 
runs counter to congressional intent to make them cost-efficient.
    Response: The agency is committed to maintaining the PTAB's ability 
to provide fair, timely, and high-quality decisions. Under 35 U.S.C. 
311(a) and 321(a), the USPTO Director must establish reasonable fees 
for inter partes review and post-grant review in consideration of their 
total costs. The fee increases better align the fee rates charged to 
petitioners with the actual costs borne by the USPTO in providing these 
proceedings.
    Comment 69: One commenter stated that administrative post-grant 
proceedings have become a permanent part of the patent system and that 
the administrative costs of the USPTO for these services should not be 
subsidized by all patent applicants.
    Response: The increase in existing fees for AIA trial proceedings 
will better align the fee rates charged to petitioners with the actual 
costs borne by the USPTO in providing these proceedings.

[[Page 91955]]

Request for Review of a PTAB Decision by the Director Fee

    Comment 70: One commenter requested more information on historical 
costs associated with Director Review.
    Response: Unfortunately, the USPTO cannot calculate a specific unit 
expense for Director Review because it is a new fee code with no 
historical cost data. As noted in Part V: Individual Fee Rationale of 
this rule, many staff assist the Director in reviewing requests and 
associated case materials, as well as publicizing decisions. The agency 
plans to formally capture and evaluate the costs associated with 
Director Review after the fee takes effect.
    Comment 71: One commenter suggested that the Director Review 
process is a tool for ensuring consistency across cases and for the 
Director to set policy. The commenter objected to the proposed fee 
asserting private parties should not be required to pay for consistency 
across cases or for the Director to set policy.
    Response: The new fee is expected to be nominal compared to the 
overall cost of Director Review and is merely designed to recover some 
of the processing costs.
    Comment 72: One commenter stated that Director Review should be 
free because it is an alternative to seeking rehearing, and the cost of 
requesting rehearing is $0.
    Response: The fee for AIA proceedings already accounts for the 
agency's costs of handling panel rehearing requests; it does not 
account for the additional costs of Director Review.
    Comment 73: One commenter suggested that the USPTO should refund 
the proposed fee if the Director grants a review.
    Response: The agency's refund authority is limited to refunds of 
fees ``paid by mistake or in excess of that required'' under Sec.  
1.26(a). Because the fee provides partial recovery of costs that are 
incurred regardless of whether the Director Review request is granted, 
no refund is legally authorized.

Legal Considerations

    Comment 74: Commenters stated the proposed fee schedule violated 
the U.S. Constitution because setting fees to encourage or discourage 
behavior falls under the definition of a tax set forth by the U.S 
Constitution and the Supreme Court, and the USPTO does not have taxing 
authority.
    Response: Patent fees are paid for receiving and maintaining a 
patent grant. Such fees are payments for a service and not a tax.
    Comment 75: One commenter stated that the USPTO does not have the 
statutory authority to set fees that fall under 35 U.S.C. 41(d)(2) at 
more than their estimated unit cost.
    Response: Under section 10 of the AIA, the USPTO has specific 
authority to ``set or adjust by rule any fee established, authorized, 
or charged under title 35, United States Code, or the Trademark Act of 
1946 (15 U.S.C. 1051 et seq.), for any services performed by or 
materials furnished by, the Office'' so long as the aggregate revenues 
for all patent fees recover the aggregate estimated costs of the patent 
operation. The comment would interpret the AIA to include limitations 
that do not exist in the AIA.
    Comment 76: One commenter stated that the text of the Patent Act 
makes it clear that the USPTO cannot use fee setting to implement 
policy. The commenter asserted that the USPTO can advise others and can 
set policy for the agency but has no general authority to set or 
exercise policy.
    Response: The Patent Act, 35 U.S.C. 41(d), limits the USPTO to 
setting fees only to levels necessary to recover the estimated average 
cost of the service, prohibiting any other policy consideration from 
factoring into the calculation of fee levels. However, in 2011, 
Congress provided the USPTO with additional and broader fee setting 
authority under section 10 of the AIA, which co-exists with those 
authorities provided under the Patent Act. Section 10 of the AIA, 
provides the USPTO specific authority to ``set or adjust by rule any 
fee established, authorized, or charged under title 35, United States 
Code, or the Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for any 
services performed by or materials furnished by, the Office'' so long 
as the aggregate revenues for all patent fees recover the aggregate 
estimated costs of the patent operation. When it enacted this language, 
Congress was aware that USPTO's existing fee setting authority under 
the Patent Act allowed only for fee setting based on cost recovery. But 
the language Congress enacted in section 10 imposes no limitations on 
how the Office can set any individual fee, so long as in the aggregate 
patent revenues are balanced against patent costs. The USPTO has 
interpreted this authority to allow it to set individual fees at, 
below, or above their respective cost, so long as the USPTO recovers 
the aggregate costs of providing services through aggregate fee 
collections as provided by the statutory language. In the 13 years 
since its enactment, the USPTO has exercised its section 10 fee setting 
authority multiple times (final rules published in 2013, 2015, 2016, 
2017, and 2020). Congress demonstrated support of the USPTO's 
interpretation, and USPTO's repeated implementation of section 10 
authority in fee rulemaking in part to make policy changes, when 
Congress reauthorized the authority, with no change to its terms, in 
2018 under the Study of Underrepresented Classes Chasing Engineering 
and Science Success (SUCCESS) Act of 2018 (Pub. L. 115-273). Thus, the 
commenter's assertions regarding the USPTO's fee setting authority 
would interpret the AIA to include limitations that do not exist in the 
AIA.
    Comment 77: One commenter asserted that Congress explicitly 
specified where the USPTO has fee setting discretion, and the USPTO 
does not have broad authority outside of what was specified.
    Response: The AIA expressly provides the agency with broad fee 
setting authority. Specifically, section 10(a)(1) provides that, 
``[t]he Director may set or adjust by rule any fee established, 
authorized, or charged under title 35, United States Code, or the 
Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for any services 
performed by or materials furnished by, the Office.'' The fees set and 
adjusted in this rule fall within the subject matter identified by the 
AIA. See also discussion on fee setting authority in response to 
Comment 76.
    Comment 78: Commenters stated the consideration of policy factors 
and objectives beyond ``aggregate estimated costs to the Office'' is a 
violation of the USPTO's section 10 fee setting authority.
    Response: The AIA permits individual patent fees to be set or 
adjusted above, below, or equal to the cost of particular services, so 
long as the aggregate revenues for all patent fees recover the 
aggregate estimated costs of the patent operation. The comment would 
interpret the AIA to include limitations that do not exist in the AIA. 
See also discussion on fee setting authority in response to Comment 76.
    Comment 79: Commenters objected to the USPTO's statement in the 
NPRM that ``[s]ection 10 authority includes flexibility to set 
individual fees in a way that furthers key policy factors, while 
considering the cost of the respective services,'' stating language on 
flexibility is absent from the statute.
    Response: The AIA permits individual patent fees to be set or 
adjusted above, below, or equal to the cost of particular services, so 
long as the aggregate revenues for all patent fees recover the 
aggregate estimated costs of the patent operation. The comment

[[Page 91956]]

would interpret the AIA to include limitations that do not exist in the 
AIA. See also discussion on fee setting authority in response to 
Comment 76.
    Comment 80: Commenters stated that the USPTO does not have the 
authority to engage in substantive rulemaking. They asserted that 
proposals for new fees for continuing applications and terminal 
disclaimers and substantial increases to patent term extension fees 
were impermissible because the purpose of those proposals was to change 
applicant behavior and set policy.
    Response: The agency is undertaking this rulemaking action 
consistent with the requirements and authority under section 10 of the 
AIA. The AIA permits individual patent fees to be set or adjusted 
above, below, or equal to the cost of particular services, so long as 
the aggregate revenues for all patent fees recover the aggregate 
estimated costs of the patent operation. The comment would interpret 
the AIA to include limitations that do not exist in the AIA. See also 
discussion on fee setting authority in response to Comment 76.
    Comment 81: Commenters stated that in the absence of cost data, 
i.e., where a unit cost is not available (e.g., excess claims fees), 
the USPTO has no authority to impose any fee other than those provided 
in 35 U.S.C. 41. Commenters also stated any proposed adjustments must 
be in proportion to the original fees set by Congress in 2011 when the 
AIA was enacted, with any changes limited to the amount of inflation 
since then.
    Response: Section 10 of the AIA gives the agency authority to ``set 
or adjust by rule any fee established, authorized, or charged under 
title 35, United States Code, or the Trademark Act of 1946 (15 U.S.C. 
1051 et seq.), for any services performed by or materials furnished by, 
the Office'' so long as the aggregate revenues for all patent fees 
recover the aggregate estimated costs of the patent operation. The 
comment would interpret the AIA to include limitations that do not 
exist in the AIA.
    Comment 82: One commenter stated that the revenue split between 
front-end fees (filing, search, and examination) and back-end fees 
(maintenance and issue) must remain roughly 50/50 based on the 
historical proportions at the time Congress first enacted maintenance 
fees in 1980-82.
    Response: Under section 10 of the AIA, the agency has specific 
authority to ``set or adjust by rule any fee established, authorized, 
or charged under title 35, United States Code, or the Trademark Act of 
1946 (15 U.S.C. 1051 et seq.), for any services performed by or 
materials furnished by, the Office,'' so long as the aggregate revenues 
for all patent fees recover the aggregate estimated costs of the patent 
operation. The comment would interpret the AIA to include limitations 
that do not exist and are inconsistent with the AIA. The USPTO also 
notes that the fee schedule set forth in this rule continues the 
longstanding practice of setting basic filing, search, and examination 
(``front-end'') fees below the actual costs of processing and examining 
applications, and subsidizing these services by setting undiscounted 
issue and maintenance (``back-end'') fees above unit cost.
    Comment 83: One commenter asserted that setting AIA trial fees 
below cost was unlawful because the AIA requires the USPTO to set inter 
partes review and post-grant review fees ``to be reasonable, 
considering the aggregate cost of the review.'' This commenter also 
stated that claiming the increase supported ``aggregate cost recovery'' 
was purposefully misleading and less than candid.
    Response: The comment would interpret the AIA to include 
limitations that do not exist in the AIA. Under section 10 of the AIA, 
the USPTO has specific authority to ``set or adjust by rule any fee 
established, authorized, or charged under title 35, United States Code, 
or the Trademark Act of 1946 (15 U.S.C. 1051 et seq.), for any services 
performed by or materials furnished by, the Office,'' so long as the 
aggregate revenues for all patent fees recover the aggregate estimated 
costs of the patent operation. The USPTO is increasing the fee rate for 
this service as part of the overall package that balances aggregate 
costs of the Patents business line with aggregate revenues. Moreover, 
the USPTO has determined that the inter partes review and post-grant 
review fees are reasonable.
    Comment 84: Commenters asserted that the legislative history of the 
AIA makes it clear that the USPTO cannot use fee setting to implement 
policy.
    Response: The AIA permits individual patent fees to be set or 
adjusted above, below, or equal to the cost of particular services, so 
long as the aggregate revenues for all patent fees recover the 
aggregate estimated costs of the patent operation. The comment would 
interpret the AIA to include limitations that do not exist in the AIA.
    Comment 85: One commenter stated the USPTO violated the 
Administrative Procedure Act (APA) by proposing fee adjustments in 
instances where no individual cost data was available.
    Response: The USPTO disagrees with the assertion that it violated 
the APA in proposing its fee adjustments. The preamble and regulatory 
text clearly set forth the new costs and explain the rationale for each 
change in compliance with the requirements of the APA.
    Comment 86: One commenter asserted that the USPTO's RCE proposal 
impairs incentives for innovation and therefore an explanation of the 
regulation is required under E.O. 12866.
    Response: The preamble and regulatory text in the proposed rule and 
this final rule, as well as the accompanying RIA, clearly set forth the 
new costs and explain the rationale for the change in fees for RCEs in 
compliance with the requirements of the APA and E.O. 12866. Based on 
further consideration of the merits of the proposed rule in light of 
feedback from the public, the USPTO has decided not to move forward 
with creating a new tier for third and subsequent RCEs; instead, this 
final rule adjusts the existing RCE fees as discussed in Part V: 
Individual Fee Rationale of this rule.
    Comment 87: One commenter questioned why the last document 
published in the Federal Register as part of the FY 2020 patent final 
rule was not classified as economically significant and accused the 
USPTO of attempting to evade cost-benefit review under E.O. 12866 and 
the ``two for one'' provision of E.O. 13771 (in effect at the time).
    Response: The document referenced by the commenter, which published 
on September 18, 2020 (85 FR 58282), was a correction rule issued to 
fix typographical errors and makes other nonsubstantive changes. OMB 
determined that action was not significant pursuant to E.O. 12866 and 
thus did not require an RIA, nor was it subject to E.O. 13771. The 
final rule being corrected was published on August 3, 2020 (85 FR 
46932). That rule was determined to be economically significant and was 
accompanied by a Regulatory Impact Analysis that satisfied the 
requirements of E.O. 12866. The final rule was not subject to the 
requirements of E.O. 13771 because it involved a transfer payment, as 
detailed in part VIII(E) of that rule.
    Comment 88: Commenters stated the USPTO violated the Independent 
Offices Appropriations Act (IOAA), asserting the AIA must be construed 
in pari materia (a Latin phrase meaning ``on the same subject or 
matter'') with the IOAA, and a commentator objected to previous 
responses the USPTO gave in fee setting rulemakings regarding the IOAA.
    Response: The IOAA provides Federal agencies the authority to 
charge user fees where the agencies do not have their own specific 
statutory authority to

[[Page 91957]]

charge fees. Fees collected under the IOAA are deposited in the general 
fund of the U.S. Treasury and not available to the charging agency for 
its use. OMB Circular A-25, ``User Charges,'' provides guidance on IOAA 
authority. The IOAA has no relevance to the fee setting undertaken by 
the USPTO, as the agency has specific statutory authority to charge 
fees under 35 U.S.C. and the Trademark Act of 1946. The USPTO further 
has specific authority to set and adjust those fees as in the current 
rulemaking under section 10 of the AIA. Fees collected by the USPTO are 
made available to the agency through annual appropriations and are 
available to use for the activities that generated the fee (patent and 
trademark examination and proportionate administrative expenses). Thus, 
the general authority described in the IOAA and OMB Circular A-25 is 
not relevant to the USPTO's fee setting.
    Comment 89: One commenter stated the USPTO violated the Information 
Quality Act by proposing fee adjustments in instances where no 
individual cost data is available.
    Response: The USPTO disagrees with the assertion that it has 
violated the IQA in its fee proposals. The USPTO's information quality 
guidelines are intended to improve the quality of the information 
disseminated by the agency to the public by formalizing the existing 
pre-dissemination review processes and establishing mechanisms 
``allowing affected persons to seek and obtain correction of 
information maintained and disseminated by the agency.'' The USPTO's 
IQA Guidelines may be found at: https://www.uspto.gov/learning-and-resources/information-quality-guidelines. The USPTO does not calculate 
a specific unit expense for some fee codes since they may be: (1) a new 
fee code with no historical cost data, (2) a fee code with zero or very 
low workload or usage, and/or (3) a fee code which does not lend itself 
to unit costing as related costs are not easily severable from larger 
activity costs. Where the USPTO has historical data, it provides that 
data to the public for comment during the rulemaking. The IQA does not 
require the creation of new data for every action undertaken in this 
rulemaking.
    Comment 90: Commenters asserted that several of the USPTO's 
proposals violated the Paperwork Reduction Act (PRA). According to the 
commenters, the proposed fees, including those for continuing 
applications, terminal disclaimers, and IDSs, create an additional 
burden for applicants and that the collection of information for these 
fees is new and has not been previously reviewed or approved by the OMB 
as required.
    Response: The USPTO has complied with the PRA in considering the 
paperwork burdens associated with this final rule. The USPTO has 
previously received OMB approval for associated burdens and submitted 
additional statements to address revisions made by this final rule. 
Some of the proposals cited by the commenter have been adjusted since 
the NPRM after careful consideration of stakeholder feedback.
    Comment 91: One commenter stated the USPTO is violating the PRA by 
proposing fee adjustments in instances where no individual cost data is 
available.
    Response: The USPTO has complied with the PRA in considering the 
paperwork burdens associated with this final rule. The USPTO has 
submitted additional statements to the OMB to address revisions made by 
this final rule.
    Comment 92: One commenter stated a USPTO rulemaking cannot override 
or rewrite existing laws and asserted that the proposed fee increases 
undermine enacted laws to the extent that they will strongly discourage 
applicants from taking advantage of patent prosecution options created 
by Congress.
    Response: The USPTO disagrees with the assertion that it is 
overriding or undermining any existing laws in this fee setting. The 
preceding discussion of each fee contains extensive explanation for why 
fees have been established or adjusted, the potential impacts on filers 
and other stakeholders, and the consistency of the final rule with 
applicable law.
    Comment 93: One commenter stated terminal disclaimer fees should be 
eligible for a discount under 35 U.S.C. 41(h)(1) because they are 
included under 35 U.S.C. 41(a).
    Response: The fees in this final rule are set or adjusted under 
section 10 of the AIA. As previously discussed in ``Setting and 
Adjusting Patent Fees,'' 78 FR 4212, 4223 (Jan. 18, 2013), prior to the 
enactment of discounted fees under section 10 of the AIA, the small 
entity discount was available only for statutory fees provided under 35 
U.S.C. 41(a), (b), and (d)(1), which included terminal disclaimers. 
Section 10(a) of the AIA provides the agency authority to adjust all 
fees charged under 35 U.S.C., but section 10(b) provides that fees 
adjusted using section 10(a) authority only receive small entity (as 
defined by 35 U.S.C. 41(h)) and micro entity (as defined by section 
10(g) of the AIA) discounts if they are fees for ``filing, searching, 
examining, issuing, appealing, and maintaining patent applications and 
patents.'' As noted in ``Setting and Adjusting Patent Fees,'' 78 FR 
4212, 4223, the disclaimer fee does not fall under one of the six 
categories of discount-eligible patent fees set forth in section 10(b).
    Comment 94: One commenter stated the term ``original patent'' is a 
single term used in 35 U.S.C. 41(a)(1)(A), 41(a)(3)(A), and 41(a)(4)(A) 
to describe a group inclusive of both initial applications and any 
continuing applications, and the USPTO does not have the authority to 
further subdivide fees for specific subgroups (e.g., continuing 
applications) falling within the original patent.
    Response: The comment suggests the commenter understood the 
proposed rule to be subdividing certain statutory fees: the filing fees 
in 35 U.S.C. 41(a)(1)(A), the examination fees in 35 U.S.C. 
41(a)(3)(A), and the issue fees in 35 U.S.C. 41(a)(4)(A). The USPTO is 
not subdividing these fees. The filing, examination, and issue fees 
continue to be due in original applications, and while the rates for 
these fees are increased in this final rule, the rates remain the same 
for continuing and non-continuing applications. The rules implementing 
the adjustments to these fees are Sec. Sec.  1.16(a)-(e) and 1.492(a) 
for filing fees, Sec. Sec.  1.16(o)-(r) and 1.492(c) for examination 
fees, and Sec. Sec.  1.18(a)-(c) for issue fees. The commenter's 
reference to continuing applications relates to a different fee under 
Sec.  1.16(w), which is a new fee for presenting certain benefit claims 
in continuing applications. This new fee under Sec.  1.16(w) is a 
distinct fee, and, when due, it is due in addition to the filing, 
examination, and issue fees. Filing and examination fees are always due 
upon filing of the application, and issue fees are always due after 
allowance of an application. The new fee under Sec.  1.16(w) is due 
when certain benefit claims are made, which can occur upon filing, at 
any time during pendency, or even after a patent is granted.
    Comment 95: One commenter stated the USPTO does not have the 
authority to set fees for continuing applications at levels contained 
in the proposed rule because doing so would be cost prohibitive and 
effectively take away applicants' statutory rights to file continuing 
applications.
    Response: The AIA permits individual patent fees to be set or 
adjusted above, below, or equal to the cost of particular services, so 
long as the aggregate revenues for all patent fees recover the 
aggregate estimated costs of the patent operation. The comment would 
interpret the AIA to include limitations that do not exist in the AIA.

[[Page 91958]]

    Comment 96: One commenter asserted that the continuing applications 
proposal was designed solely to suppress continuing application filings 
and that such a purpose is not within the USPTO's authority under 
section 10.
    Response: The continuing application fees do not prevent applicants 
from filing as many continuing applications as they want at any time 
during the pendency of the parent application. Instead, they are 
designed to recover more of the costs of examining continuing 
applications where maintenance fees on the issued patent are unlikely 
to be paid as a result of insufficient term. Further, the AIA permits 
individual patent fees to be set or adjusted above, below, or equal to 
the cost of particular services, so long as the aggregate revenues for 
all patent fees recover the aggregate estimated costs of the patent 
operation. The comment would interpret the AIA to include limitations 
that do not exist in the AIA.

VII. Discussion of Specific Rules

    The discussion below includes all fee amendments and all changes to 
the Code of Federal Regulations (CFR) text.
    Title 37 of the CFR, parts 1, 41, and 42, are proposed to be 
amended as follows:

Section 1.16

    Section 1.16 is amended by revising paragraphs (a) through (s) and 
(u) to set forth national application filing, search, examination, and 
related fees as authorized under section 10 of the AIA. The changes to 
the fee amounts in Sec.  1.16 are shown in table 19.
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Section 1.17

    Section 1.17 is amended by revising paragraphs (a), (c) through 
(i), (k), (m), and (o) through (t) and adding paragraphs (u), (v), and 
(w) to set forth application processing fees as authorized under 
section 10 of the AIA. The changes to the fee amounts in Sec.  1.17 are 
shown in table 20.
    The USPTO revises the introductory text of paragraph (a) to exclude

[[Page 91964]]

provisional applications filed under 1.53(c).
    The USPTO revises paragraph (g) by splitting it into two paragraphs 
(g)(1) and (2). Paragraph (g)(1) is the same as existing paragraph (g) 
except for the removal of Sec.  1.103(a) from its coverage. New 
paragraphs (g)(2)(i) and (ii) specify the fees for filing a first 
request pursuant to Sec.  1.103(a) respectively. The USPTO adds 
paragraphs (m)(1) through (3) to create tiered fees for unintentionally 
delayed petitions based on the length of the delay.
    The USPTO adds paragraphs (u) through (w). Paragraph (u) creates a 
lower fee for extension fees pursuant to Sec.  1.136(a) in provisional 
applications filed under Sec.  1.53(c). Paragraph (v) creates fees for 
information disclosure statements filed under Sec.  1.97. Paragraph (w) 
creates fees for presenting a benefit claim in a nonprovisional 
application under 35 U.S.C. 120, 121, 365(c), or 386(c) and Sec.  
1.78(d).
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Section 1.18

    Section 1.18 is amended by revising paragraphs (a) through (f) to 
set forth patent issue fees as authorized under section 10 of the AIA. 
The changes to the fee amounts in Sec.  1.18 are shown in table 21.

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Section 1.19

    Section 1.19 is amended by revising paragraphs (a), (b), and (f) to 
set forth document supply fees as authorized under section 10 of the 
AIA. The changes to the fee amounts in Sec.  1.19 are shown in table 
22.
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Section 1.20

    Section 1.20 is amended by revising paragraphs (a) through (h), 
(j), and (k) to set forth post issuance fees as authorized under 
section 10 of the AIA. The changes to the fee amounts in Sec.  1.20 are 
shown in table 23.
    The USPTO adds paragraph (j)(4) to create a fee for requesting 
supplemental redetermination after Notice of Final Determination.

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Section 1.21

    Section 1.21 is amended by revising paragraphs (a), (e), (h), (i), 
and (n) through (q) to set forth miscellaneous fees and charges as 
authorized under section 10 of the AIA. The changes to the fee amounts 
in Sec.  1.21 are shown in table 24.

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Section 1.78

    Section 1.78 is amended by revising paragraph (d)(3)(i) to include 
the fee cited in Sec.  1.17(w) as one of the requirements that must be 
submitted during the pendency of the later-filed application.
    The USPTO revises paragraph (e)(2) to add the applicable fee in 
Sec.  1.17(w) to the list of required items that must accompany a 
petition to accept an unintentionally delayed claim under 35

[[Page 91987]]

U.S.C. 120, 121, 365(c), or 386(c) for the benefit of a prior-filed 
application.

Section 1.97

    Section 1.97 is amended by revising paragraph (a) to require the 
information disclosure statement size fee under Sec.  1.17(v) for an 
information disclosure statement in compliance with Sec.  1.98 to be 
considered by the USPTO during the pendency of the application.

Section 1.98

    Section 1.98 is amended by revising the introductory text in 
paragraph (a) to include paragraph (a)(4) in the items that shall be 
included with any information disclosure statement.
    The USPTO adds paragraph (a)(4), which will require a clear written 
assertion that the information disclosure statement is accompanied by 
the applicable information disclosure statement size fee under Sec.  
1.17(v) or a clear written assertion that no information disclosure 
statement size fee under Sec.  1.17(v) is required.

Section 1.136

    Section 1.136 is amended by revising paragraph (a)(1) to include 
the addition of the fee set in Sec.  1.17(u) in extensions of time.

Section 1.138

    Section 1.138 is amended by revising paragraph (d) to expand the 
applicability of the express abandonment rule to permit such refunds in 
national stage applications filed under 35 U.S.C. 371. The current rule 
permits such refunds only in nonprovisional applications filed under 35 
U.S.C. 111(a) and Sec.  1.53(b). Paragraph (d) is also amended to 
clarify that refunds of search and excess claims fee payments under 
these provisions are limited to the search and excess claims fees set 
forth in Sec.  1.16 (which apply to applications filed under 35 U.S.C. 
111(a) and Sec.  1.53(b)) and search and excess claims fees set forth 
in Sec.  1.492 (which apply to national stage applications filed under 
35 U.S.C. 371). Paragraph (d) is also amended to clarify that refunds 
of search and excess claims fee payments under these provisions are 
limited to the search and excess claims fees set forth in Sec.  1.16 
(which apply to applications filed under 35 U.S.C. 111(a) and Sec.  
1.53(b)) and search and excess claims fees set forth in Sec.  1.492 
(which apply to national stage applications filed under 35 U.S.C. 371).

Section 1.445

    Section 1.445 is amended by revising and republishing paragraph (a) 
to set forth international filing, processing, and search fees as 
authorized under section 10 of the AIA. The changes to the fee amounts 
in Sec.  1.445 are shown in table 25. The fees are for or an 
international application having a receipt date that is on or after the 
effective date of the final rule. Fees previously provided for in 
paragraphs (a)(1)(i)(A), (a)(2)(i), and (a)(3)(i) for international 
applications having a receipt date that is on or after December 29, 
2023, will be redesignated as (a)(1)(i)(B), (a)(2)(ii), and (a)(3)(ii) 
and will apply to international applications having a receipt date that 
is on or after December 29, 2022, and before the effective date of the 
final rule. Other paragraphs under paragraphs (a)(1) through (3) are to 
be redesignated to accommodate these proposed changes.
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Section 1.482

    Section 1.482 is amended by revising paragraphs (a) and (c) to set 
forth international preliminary examination and processing fees for 
international patent applications entering the international stage as 
authorized under section 10 of the AIA. The changes to the fee amounts 
in Sec.  1.482 are shown in table 26.

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Section 1.492

    Section 1.492 is amended by revising paragraphs (a) through (f) and 
(h) through (j) to set forth national stage fees for international 
patent applications as authorized under section 10 of the AIA. The 
changes to the fee amounts in Sec.  1.492 are shown in table 27.

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Section 1.555

    Section 1.555 is amended by revising paragraph (a) to require the 
information disclosure statement size fee under Sec.  1.17(v) for an 
information disclosure statement in compliance with Sec.  1.98 to be 
considered by the USPTO during the pendency of the reexamination 
proceeding.

Section 1.1031

    Section 1.1031 is amended by revising paragraph (a) to set forth 
international design application fees as authorized under section 10 of 
the AIA. The

[[Page 91993]]

changes to the fee amounts in Sec.  1.1031 are shown in table 28.
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Section 41.20

    Section 41.20 is amended by revising paragraphs (a) and (b) to set 
forth petition and appeal fees as authorized under section 10 of the 
AIA. The changes to the fee amounts in Sec.  41.20 are shown in table 
29.

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Section 42.15

    Section 42.15 is amended by revising paragraphs (a) through (e) and 
adding paragraph (f) to set forth inter partes review and post-grant 
review or covered business method patent review of a patent fees as 
authorized under section 10 of the AIA. The changes to the fee amounts 
in Sec.  42.15 are shown in table 30.

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VIII. Rulemaking Considerations

A. America Invents Act

    This rule sets or adjust fees under section 10(a) of the AIA as 
amended by the SUCCESS Act, Pub. L. 115-273, 132 Stat. 4158. Section 
10(a) of the AIA authorizes the Director to set or adjust by rule any 
patent fee established, authorized, or charged under 35 U.S.C. for any 
services performed or materials furnished by the USPTO. 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 USPTO for processing, activities, 
services, and materials relating to patents, including administrative 
costs of the agency 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 USPTO provide a public comment period of not less 
than 45 days.
    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 AIA, the Director must provide PPAC with 
the proposed fees at least 45 days prior to publishing the proposed 
fees in the Federal Register. PPAC then has at least 30 days within 
which to deliberate, consider, and comment on the proposal, as well as 
hold public hearings on the proposed fees. PPAC must provide a written 
report to the public detailing the committee's comments, advice, and 
recommendations regarding the proposed fees before the USPTO issues a 
final rule. The USPTO must consider and analyze any comments, advice, 
or recommendations received from PPAC before setting or adjusting fees.
    Consistent with this framework, on April 20, 2023, the Director 
notified PPAC of the USPTO'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 on the fee setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting. PPAC held a public hearing at the 
USPTO's headquarters in Alexandria, Virginia, on May 18, 2023, where 
members of the public were given the opportunity to provide oral 
testimony. Transcripts of the hearing are available for review on the 
USPTO website at https://www.uspto.gov/sites/default/files/documents/PPAC_Hearing_Transcript-20230518.pdf. Members of the public were also 
given the opportunity to submit written comments for PPAC to consider, 
and these comments are available on Regulations.gov at https://www.regulations.gov/document/PTO-P-2023-0017-0001. On August 14, 2023, 
PPAC released a written report setting forth in detail their comments, 
advice, and recommendations regarding the preliminary proposed fees. 
The PPAC Report is available on the USPTO website at https://www.uspto.gov/sites/default/files/documents/PPAC-Report-on-2023-Fee-Proposal.docx. The USPTO considered and analyzed all comments, advice, 
and recommendations received from PPAC before publishing the NPRM on 
April 3, 2024 (89 FR 23226). The NPRM comment period closed on June 3, 
2024. Section 10(e) of the AIA requires the director to publish the 
final fee rule in the Federal Register and the Official Gazette of the 
USPTO at least 45 days before the final fees become effective. Pursuant 
to this requirement, this rule is effective on January 19, 2025.

B. Regulatory Flexibility Act (RFA)

    The USPTO publishes this Final Regulatory Flexibility Analysis 
(FRFA) as required by the RFA (5 U.S.C. 601 et seq.) to examine the 
impact of this final rule on small entities. Under the RFA, whenever an 
agency is required by 5 U.S.C. 553 (or any other law) to publish an 
NPRM, the agency must prepare and make available for public comment an 
Initial Regulatory Flexibility Analysis (IRFA), unless the agency 
certifies under 5 U.S.C. 605(b) that the proposed rule, if implemented, 
will not have a significant economic impact on a substantial number of 
small entities. The USPTO published an IRFA, along with the NPRM, on 
April 3, 2024 (89 FR 23226). Given that the final patent fee schedule, 
based on the assumptions found in the FY 2025 Budget, is projected to 
result in $2,053 million in additional aggregate revenue over the 
current fee schedule (baseline) for the period including FY 2025 to FY 
2029, the USPTO acknowledges that the fee adjustments will impact all 
entities seeking patent protection and could have a significant impact 
on small and micro entities. The $2,053 million in additional aggregate 
revenue results from an additional $292 million in FY 2025, $435 
million in FY 2026, $442 million in FY 2027, $441 million in FY 2028, 
and $444 million in FY 2029. This implies annualized effects of $406.3 
million using a 3% discount rate and $408.5 million using a 7% discount 
rate.
    Items 1-6 below discuss the six items specified in 5 U.S.C. 
604(a)(1)-(6) to be addressed in an FRFA. Item 6 below discusses the 
alternatives to this final rule that were considered.
    1. A statement of the need for, and objectives of, the rule.
    Section 10 of the AIA authorizes the Director to set or adjust by 
rule any patent fee established, authorized, or charged under 35 U.S.C. 
for any services performed or materials furnished by the USPTO. The 
objective of this final patent fee schedule is for patent fees to 
recover the aggregate cost of patent operations, including 
administrative costs, while facilitating effective administration of 
the U.S. patent system. Since its inception, the AIA strengthened the 
patent system by affording the USPTO the ``resources it requires to 
clear the still sizeable unexamined inventory 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 AIA, the agency will 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 USPTO's strategic 
goals may be found in the Strategic Plan, available at www.uspto.gov/StrategicPlan. Additional information on the agency's operating 
requirements to achieve the strategic goals may be found in the ``USPTO 
FY 2025 President's Budget Request,'' available at https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information.
    2. A statement of the significant issues raised by the public 
comments in response to the Initial Regulatory Flexibility Analysis, a 
statement of the assessment of the agency of such issues, and a 
statement of any changes made in the final rule as a result of such 
comments.
    The USPTO did not receive any public comments in response to the 
IRFA. However, the agency received comments about fees in general, as 
well as particular fees, and their impact on

[[Page 91997]]

small entities, which are discussed above in Part VI. Discussion of 
Comments.
    3. The response of the agency to any comments filed by the chief 
counsel for advocacy of the Small Business Administration in response 
to the proposed rule, and a detailed statement of any change made to 
the proposed rule in the final rule as a result of the comments.
    The USPTO did not receive any comments filed by the Chief Counsel 
for Advocacy of the Small Business Administration (SBA) in response to 
the NPRM.
    4. A description of and, where feasible, an estimate of the number 
of small entities to which the rule will apply or an explanation of why 
no such estimate is available.
a. SBA Size Standard
    The SBA size standards applicable to most analyses conducted to 
comply with the RFA are set forth in 13 CFR 121.201. These regulations 
generally define small businesses as those with less than a specified 
maximum number of employees or less than a specified level of annual 
receipts for the entity's industrial sector or North American Industry 
Classification System (NAICS) code. As provided by the RFA, and after 
consulting with the SBA, the USPTO 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 USPTO's alternate small business 
size standard consists of the SBA's previously established size 
standard for entities entitled to pay reduced patent fees. See 13 CFR 
121.802.
    Unlike the SBA's generally applicable small business size 
standards, the size standard for the USPTO is not industry-specific. 
The USPTO's definition of a small business concern for RFA purposes is 
a business or other concern that meets the SBA's definition of a 
``business concern or concern'' set forth in Sec.  121.105 and meets 
the size standards set forth in Sec.  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) that 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 71 FR at 67109, 1313 Off. Gaz. Pat. 
Office 60.
    A patent applicant can self-identify on a patent application as 
qualifying as a small entity or may provide certification of micro 
entity status for reduced patent fees under the USPTO's alternative 
size standard. The data is captured and tracked for each patent 
application submitted.
b. Small Entity Defined
    The AIA, as amended by the UAIA, 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 60 percent'' with respect to the application of such fees to 
any ``small entity'' (as defined in Sec.  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 
60 percent'' for a small business concern as defined by section 3 of 
the Small Business Act and for any independent inventor or nonprofit 
organization as defined in regulations described by the Director.
c. Micro Entity Defined
    Section 10(g) of the AIA 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 AIA, as amended by the UAIA, 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 80 percent with respect to the application of such 
fees to any micro entity as defined by 35 U.S.C. 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 Sec.  1.27; (2) has not been named as an inventor 
on more than four previously filed patent applications, other than 
applications filed in another country, provisional applications under 
35 U.S.C. 111(b), 35 U.S.C. 111(b), or Patent Cooperation Treaty (PCT) 
applications for which the basic national fee under 35 U.S.C. 41(a) was 
not paid; (3) did not, in the calendar year preceding the calendar year 
in which the applicable fee is being paid, have a gross income, as 
defined in section 61(a) of the Internal Revenue Code of 1986 (26 
U.S.C. 61(a)), exceeding three times the median household income for 
that preceding calendar year, as most recently reported by the Bureau 
of the Census; and (4) has not assigned, granted, 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; see also https://www.uspto.gov/PatentMicroEntity. 35 U.S.C. 123(d) also defines a ``micro'' as an 
applicant who certifies that 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 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.
d. Estimate of Number of Small Entities Affected
    The changes in this final rule will apply to any entity, including 
small and micro entities, that pays any patent fee set forth in the 
final rule. The reduced fee rates (60% for small entities and 80% 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 USPTO reviews historical data to estimate the percentages of 
application filings asserting small entity status. Table 31 presents a 
summary of such small entity filings by type of application (utility, 
reissue, plant, design) over the last five years.
BILLING CODE 3510-16-P

[[Page 91998]]

[GRAPHIC] [TIFF OMITTED] TR20NO24.064

BILLING CODE 3510-16-C
    Because the percentage of small entity filings varies widely 
between application types, the USPTO has averaged the small entity 
filing rates

[[Page 91999]]

over the past five years for those application types to estimate future 
filing rates by small and micro entities. Those average rates appear in 
the last column of table 31. The USPTO estimates that small entity 
filing rates will continue for the next five years at these average 
historic rates.
    The USPTO 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 
USPTO estimates that utility, plant, and reissue (UPR) patent 
application filings will grow by 0.4% in FY 2024 and about 1.5% per 
year on average from FY 2025 to FY 2029. Design patent applications are 
forecast independently of UPR applications because they exhibit 
different filing behaviors.
    Using the estimated filings for the next five years, and the 
average historic rates of small entity filings, table 32 presents the 
USPTO'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 USPTO has previously undertaken an elasticity analysis to 
examine if fee adjustments may impact small entities and 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 USPTO 
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 how the USPTO estimates elasticity is provided in 
``Setting and Adjusting Patent Fees during Fiscal Year 2020--
Description of Elasticity Estimates,'' available on the USPTO website 
at https://www.uspto.gov/sites/default/files/documents/Elasticity_Appendix.docx.
[GRAPHIC] [TIFF OMITTED] TR20NO24.065

    5. 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.
    When implemented, this rule will not change the burden of existing 
reporting and recordkeeping requirements for payment of fees. The 
current requirements for small and micro entities will continue to 
apply. Therefore, the professional skills necessary to file and 
prosecute an application through issue and maintenance remain unchanged 
under this rule. This action only adjusts patent fees and does not set 
procedures for asserting small entity status or certifying micro entity 
status, as previously discussed. There are no new compliance 
requirements in this rule.
    The full fee schedule (see Part VII: Discussion of Specific Rules) 
is set forth in this final rule. The fee schedule sets or adjusts 433 
patent fees in total, including 52 new fees.
    6. A description of the steps the agency has taken to minimize the 
significant economic impact on small entities consistent with the 
stated objectives of applicable statutes, including a statement of the 
factual, policy, and legal reasons for selecting the alternative 
adopted in the final rule and why each one of the other significant 
alternatives to the rule considered by the agency which affect the 
impact on small entities was rejected.
    The USPTO considered several alternative approaches to this final 
rule, discussed below, including full cost recovery for individual 
services, an across-the-board adjustment to fees, and a baseline 
(current fee rates). The discussion here begins with a description of 
the fee schedule adopted for this final rule. A full discussion of the 
costs and benefits of all four alternatives and the methodology used 
for that analysis is contained in the RIA, available at https://www.uspto.gov/FeeSettingAndAdjusting.
a. Alternative 1: Final Patent Fee Schedule--Setting and Adjusting 
Patent Fees During Fiscal Year 2025
    The final patent fee schedule secures the USPTO's required revenue 
to facilitate the effective administration of the U.S. patent system, 
including implementing the Strategic Plan. The revenue will allow the 
USPTO to continue to balance timely examination--to help innovators 
bring their ideas and products to impact more quickly and efficiently--
with improvements in patent quality--particularly, the robustness and 
reliability of issued patents--and ensure the USPTO can resource 
mission

[[Page 92000]]

success. Adequate resources will benefit all applicants, including 
small and micro entities, without undue burden or barriers to entry to 
patent applicants and holders 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 undiscounted fee rates and none are being 
eliminated.
    As discussed throughout this document, the fee changes in this 
alternative are moderate compared to other alternatives. Given that the 
final patent fee schedule will result in increased aggregate revenue, 
small and micro entities will pay 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 7.5% across-the-board adjustment. In addition to the 
across-the-board adjustment, some fees will be subject to a larger 
increase. For example, the fee rate for a first RCE will increase by 
10%, and second and subsequent RCEs will increase by 43%, respectively. 
Also, AIA trial fees will increase 25% to better align the fee rates 
charged with the actual costs borne by the USPTO to provide these 
proceedings and so PTAB can continue to maintain the appropriate level 
of judicial and administrative resources to continue to provide high-
quality and timely decisions for AIA trials.
    Adjusting the patent fee schedule as prescribed in this alternative 
allows the USPTO to implement the patent-related strategic goals and 
objectives documented in the Strategic Plan and to carry out 
requirements as described in the FY 2025 Budget. Specifically, the 
revenue from this final patent fee schedule is sufficient to recover 
the aggregate estimated costs of patent operations and to support the 
strategic objectives to issue and maintain robust and reliable patents, 
improve patent application pendency, optimize the patent application 
process to enable efficiencies for applicants and other stakeholders, 
and enhance internal processes to prevent fraudulent and abusive 
behaviors that do not embody the USPTO's mission. The final patent fee 
schedule focuses on building resiliency against financial shocks by 
maintaining the minimum operating reserve balance (approximately one 
month of operating expenses) while building the operating reserve 
balance to the optimal reserve target (approximately three months of 
operating expenses). While the other alternatives discussed facilitate 
progress toward some of the USPTO's goals, the final patent fee 
schedule is the only one that does so in a way that does not impose 
undue costs on patent applicants and holders.
    The fee schedule under this final rule is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Patent Fees During Fiscal Year 2025-FRFA Tables.''
b. Other Alternatives Considered
    In addition to the final fee schedule set forth in Alternative 1, 
the USPTO considered three other alternative approaches. The agency 
calculated proposed fees and the resulting revenue derived from each 
alternative scenario. The proposed fees and their corresponding revenue 
tables are available on the fee setting section of the USPTO website at 
https://www.uspto.gov/FeeSettingAndAdjusting. Only the fees outlined in 
Alternative 1 are set or adjusted in this final rule; other alternative 
scenarios are shown only to demonstrate the analysis of other options.
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 undiscounted 
fees at the historical cost of performing the activities related to the 
particular service in FY 2022. While more recent FY 2023 cost data is 
now available, for consistency with information presented in the NPRM, 
the agency continues to base the fee rates displayed under Alternative 
2 in the FRFA and the RIA on FY 2022 unit cost data. The USPTO 
recognizes that using FY 2022 costs to set fee rates beginning in FY 
2025 does not account for inflationary factors that would likely 
increase costs and necessitate higher fees in the out-years. However, 
the USPTO contends that the FY 2022 data is the best unit cost data 
available to inform this analysis.
    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 60% discount on fees to small entities and 
an 80% discount on fees to micro entities. To account for this 
requirement, this alternative retains existing small and micro entity 
discounts where eligible under AIA authority. To provide these 
discounts and still generate sufficient revenue to recover the 
anticipated budgetary requirements over the five-year period, 
maintenance fees must be set significantly above unit cost under this 
alternative. Note that the USPTO no longer collects activity-based 
information for maintenance fees, and previous year unit costs were 
negligible.
    Except for maintenance fees, this alternative sets fees for which 
there is no FY 2022 cost data at current rates. For the small number of 
services that have a variable fee, the aggregate revenue table does not 
list a fee. Instead, for those services with an estimated workload, the 
workload is listed in dollars rather than units to develop revenue 
estimates. Fees without either a fixed fee rate or a workload estimate 
are assumed to provide zero revenue.
    Alternative 2 does not align well with the agency's strategic and 
policy goals. Front-end services (i.e., filing, search, and 
examination) are costlier for the USPTO to perform than back-end 
services (i.e., issuance and maintenance), but both the current (the 
Baseline) and final patent fee schedule (Alternative 1) are structured 
to collect fees at filing below the cost and more fees further along in 
the process, when the patent owner has better information about a 
patent's value, rather than at the time of filing, when applicants are 
less certain about the value of their invention. Setting fees at the 
cost of the service under Alternative 2 would reverse the long-
established policy to set front-end fees below cost to foster 
innovation and would create a barrier for entry into the patent system.
    The USPTO has estimated the potential quantitative elasticity 
impacts for application filings (e.g., filing, search, and examination 
fees), maintenance renewals (all three 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. By setting fees 
to recover the cost of each service at each point in the application 
process, the USPTO would effectively charge high fees for every patent 
application, meaning those applicants who have less information about 
the patentability of

[[Page 92001]]

their claims or the market value of their invention may be less likely 
to pursue patent prosecution. The ultimate effect of these changes in 
behavior is likely to stifle innovation. While the loss of the front-
end subsidy designed to promote innovation strategies is the most 
obvious cost of this alternative, the impacts of much costlier patent 
processing options (e.g., RCEs and appeals) are also noticeable.
    Similarly, the USPTO suspects that patent 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 USPTO's policy factor of promoting 
innovation strategies. In sum, this alternative is inadequate to 
accomplish the goals as stated in Part IV: Rulemaking Goals and 
Strategies of this rule.
    The fee schedule for this alternative is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Patent Fees During Fiscal Year 2025--FRFA Tables.''
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 12.5%, across-the-board increase to the baseline 
(current fees) beginning in FY 2025. A 12.5% increase represents the 
change in revenue needed to achieve the aggregate revenue necessary to 
recover the aggregate estimated costs laid out in the FY 2025 Budget.
    Under this alternative, nearly every existing fee would be 
increased, no new fees would be introduced, and no fees would be 
discontinued or reduced. This alternative maintains the status quo 
ratio of front-end and back-end fees, given that all fees would be 
adjusted by the same escalation factor, thereby promoting innovation 
strategies and allowing applicants to gain access to the patent system 
through fees set below cost while patent holders pay issue and 
maintenance fees above cost to subsidize the below-cost front-end fees. 
Alternative 3 nevertheless fails to implement policy factors and 
deliver benefits beyond what exists in the Baseline fee schedule (e.g., 
no fee adjustments to offer new patent prosecution options or 
facilitate more effective administration of the patent system).
    The fee schedule for this alternative is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Patent Fees During Fiscal Year 2025--FRFA Tables.''
Alternative 4: Baseline (Current Fee Schedule)
    The USPTO considered a no-action alternative. This alternative 
would retain the status quo, meaning that the USPTO would continue the 
small and micro entity discounts that the Congress provided in section 
10 of the AIA, as amended by the UAIA, and maintain the fees that 
became effective on December 29, 2022.
    Alternative 4 would not secure aggregate revenue to recover the 
aggregate estimated costs laid out in the FY 2025 Budget. Under this 
alternative, the USPTO would only expect to collect sufficient revenue 
to continue executing some, not all, of the patent priorities. For 
example, the USPTO plans to hire approximately 800 to 850 patent 
examiners in FY 2024 through FY 2025, and between 700 and 900 patent 
examiners in FY 2026 through FY 2029 (averaging 350 over estimated 
attrition levels) during the five-year planning horizon. This 
additional examination capacity will allow the agency to improve patent 
reliability and maintain patent term adjustment (PTA) compliance rates. 
Alternative 4 provides neither sufficient resources to hire the same 
number of examiners nor sufficient resources to continue building the 
patent operating reserve to its optimal level in the five-year planning 
horizon. In fact, current estimates project that under the Baseline fee 
schedule, the USPTO would withdraw funds from the patent operating 
reserve in every year until the reserve is exhausted during FY 2027. 
This approach would not provide sufficient aggregate revenue to 
accomplish the USPTO's rulemaking goals as stated in Part IV: 
Rulemaking Goals and Strategies of this rule. IT improvements, progress 
on timely processing and quality, and other improvement activities 
would continue, but at a significantly slower rate as increases in core 
patent examination costs crowd out funding for other improvements. 
Likewise, without a fee increase, the USPTO would deplete its operating 
reserves, leaving the USPTO vulnerable to fiscal and economic events. 
This approach would expose core operations to unacceptable levels of 
financial risk and would position the USPTO to have to return to making 
inefficient, short-term funding decisions.
    The fee schedule for this alternative is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Patent Fees During Fiscal Year 2025--FRFA Tables.''
Alternatives Specified by the RFA
    The RFA provides that an agency also consider four specified 
``alternatives'' or approaches, namely: (i) establishing different 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (ii) clarifying, 
consolidating, or simplifying compliance and reporting requirements 
under the rule for small entities; (iii) using performance rather than 
design standards; and (iv) 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 final rule is adopting these approaches.
i. Differing Requirements
    As discussed above, the changes in this final 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 an 80% reduction in most patent fees 
under this final rule, and small entities that do not qualify as micro 
entities would continue to receive a 60% reduction in most patent fees.
    This final rule sets fee levels but does not set or alter 
procedural requirements for asserting small or micro entity status. 
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

[[Page 92002]]

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 final 
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 (60% for small 
entities and 80% for micro entities) is significant.
    This final 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.
ii. Clarification, Consolidation, or Simplification of Requirements
    This final rule pertains to setting or adjusting patent fees. Any 
compliance or reporting requirements in this rule are de minimis and 
necessary to implement lower 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.
iii. Performance Standards
    Performance standards do not apply to this final rule.
iv. Exemption for Small and Micro Entities
    This final rule maintains a 60% reduction in fees for small 
entities and an 80% reduction in fees for micro entities. The USPTO 
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 AIA, as amended by 
the UAIA, 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 60 percent [for 
small entities] and shall be reduced by 80 percent [for micro 
entities]'' (emphasis added). Neither the AIA, UAIA, nor any other 
statute authorizes the USPTO 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 final rule has been determined to be 3(f)(1) significant for 
purposes of Executive Order (E.O.) 12866 (Sept. 30, 1993), as amended 
by E.O. 14094 (April 6, 2023), Modernizing Regulatory Review. The USPTO 
has developed an RIA as required for rulemakings deemed to be 3(f)(1) 
significant. The complete RIA is available on the fee setting section 
of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.

D. Executive Order 13563 (Improving Regulation and Regulatory Review)

    The USPTO has complied with E.O. 13563 (Jan. 18, 2011). 
Specifically, the USPTO has, to the extent feasible and applicable: (1) 
made a reasoned determination that the benefits justify the costs of 
the final rule; (2) tailored the final rule to impose the least burden 
on society consistent with obtaining the regulatory objectives; (3) 
selected a regulatory approach that maximizes net benefits; (4) 
specified performance objectives; (5) identified and assessed available 
alternatives; (6) involved the public in an open exchange of 
information and perspectives among experts in relevant disciplines, 
affected stakeholders in the private sector, and the public as a whole, 
and provided online access to the rulemaking docket; (7) attempted to 
promote coordination, simplification, and harmonization across 
government agencies and identified goals designed to promote 
innovation; (8) considered approaches that reduce burdens and maintain 
flexibility and freedom of choice for the public; and (9) ensured the 
objectivity of scientific and technological information and processes.

E. Executive Order 13132 (Federalism)

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

F. 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 E.O. 
13175 (Nov. 6, 2000).

G. Executive Order 13211 (Energy Effects)

    This rulemaking is not a significant energy action under E.O. 13211 
because this 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 E.O. 13211 (May 18, 
2001).

H. 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 E.O. 12988 (Feb. 5, 1996).

I. Executive Order 13045 (Protection of Children)

    This rulemaking does not concern an environmental risk to health or 
safety that may disproportionately affect children under E.O. 13045 
(Apr. 21, 1997).

J. Executive Order 12630 (Taking of Private Property)

    This rulemaking will not affect a taking of private property or 
otherwise have taking implications under E.O. 12630 (Mar. 15, 1988).

K. 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.), the 
USPTO 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 final rule are expected to 
result in an annual effect on the economy of $100 million or more, a 
major increase in costs or prices, or significant adverse effects on 
competition, employment, investment, productivity, innovation, or the 
ability of United States-based enterprises to compete with foreign-
based enterprises in domestic and export markets. Therefore, this final 
rule meets the criteria in 5 U.S.C. 804(2).

L. Unfunded Mandates Reform Act of 1995

    The 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 (as 
adjusted) or more in any one year, or a Federal private sector mandate 
that will result in the expenditure by the private sector of $100 
million (as adjusted) or more in any one year, and will not 
significantly or uniquely affect small governments. Therefore, no 
actions are necessary under the provisions of the Unfunded Mandates 
Reform Act of 1995. See 2 U.S.C. 1501 et seq.

M. National Environmental Policy Act

    This rulemaking will not have any effect on the quality of the 
environment and is thus categorically excluded from

[[Page 92003]]

review under the National Environmental Policy Act of 1969. See 42 
U.S.C. 4321 et seq.

N. 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.

O. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
requires that the USPTO consider the impact of paperwork and other 
information collection burdens imposed on the public. The collection of 
information involved in this final rule has been reviewed and 
previously approved by OMB under control numbers 0651-0012, 0651-0016, 
0651-0017, 0651-0020, 0651-0021, 0651-0024, 0651-0027, 0651-0031, 0651-
0032, 0651-0033, 0651-0034, 0651-0035, 0651-0059, 0651-0062, 0651-0063, 
0651-0064, 0651-0069, 0651-0075 and 0651-0089. In addition, updates to 
the aforementioned information collections as a result of this final 
rule will be submitted to the OMB as non-substantive change requests.
    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.

P. E-Government Act Compliance

    The USPTO is committed to compliance with the E-Government Act to 
promote the use of the internet and other information technologies, to 
provide increased opportunities for citizen access to government 
information and services, and for other purposes.

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 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, 41, and 
42 are amended as follows:

PART 1--RULES OF PRACTICE IN PATENT CASES

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

    Authority: 35 U.S.C. 2(b)(2), unless otherwise noted.


0
2. Section 1.16 is amended by revising the tables 1 through 19 in 
paragraphs (a) through (s) and table 21 in paragraph (u) to read as 
follows:


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

    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $70.00
By a small entity (Sec.   1.27(a)).........................       140.00
By a small entity (Sec.   1.27(a)) if the application is           70.00
 submitted in compliance with the USPTO electronic filing
 system (Sec.   1.27(b)(2))................................
By other than a small or micro entity......................       350.00
------------------------------------------------------------------------

    (b) * * *

                        Table 2 to Paragraph (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......................       300.00
------------------------------------------------------------------------

    (c) * * *

                        Table 3 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $48.00
By a small entity (Sec.   1.27(a)).........................        96.00
By other than a small or micro entity......................       240.00
------------------------------------------------------------------------

    (d) * * *

                        Table 4 to Paragraph (d)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       325.00
------------------------------------------------------------------------

    (e) * * *

                        Table 5 to Paragraph (e)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $70.00
By a small entity (Sec.   1.27(a)).........................       140.00
By other than a small or micro entity......................       350.00
------------------------------------------------------------------------

    (f) * * *

                        Table 6 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $34.00
By a small entity (Sec.   1.27(a)).........................        68.00
By other than a small or micro entity......................       170.00
------------------------------------------------------------------------

    (g) * * *

                        Table 7 to Paragraph (g)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $13.00
By a small entity (Sec.   1.27(a)).........................        26.00
By other than a small or micro entity......................        65.00
------------------------------------------------------------------------

    (h) * * *

                        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......................       600.00
------------------------------------------------------------------------

    (i) * * *

                        Table 9 to Paragraph (i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       200.00
------------------------------------------------------------------------

    (j) * * *

                        Table 10 to Paragraph (j)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       925.00
------------------------------------------------------------------------

    (k) * * *

                        Table 11 to Paragraph (k)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $154.00
By a small entity (Sec.   1.27(a)).........................       308.00
By other than a small or micro entity......................       770.00
------------------------------------------------------------------------

    (l) * * *

                        Table 12 to Paragraph (l)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       300.00
------------------------------------------------------------------------

    (m) * * *

[[Page 92004]]



                        Table 13 to Paragraph (m)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $97.00
By a small entity (Sec.   1.27(a)).........................       194.00
By other than a small or micro entity......................       485.00
------------------------------------------------------------------------

    (n) * * *

                        Table 14 to Paragraph (n)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $154.00
By a small entity (Sec.   1.27(a)).........................       308.00
By other than a small or micro entity......................       770.00
------------------------------------------------------------------------

    (o) * * *

                        Table 15 to Paragraph (o)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $176.00
By a small entity (Sec.   1.27(a)).........................       352.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------

    (p) * * *

                        Table 16 to Paragraph (p)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $140.00
By a small entity (Sec.   1.27(a)).........................       280.00
By other than a small or micro entity......................       700.00
------------------------------------------------------------------------

    (q) * * *

                        Table 17 to Paragraph (q)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $145.00
By a small entity (Sec.   1.27(a)).........................       290.00
By other than a small or micro entity......................       725.00
------------------------------------------------------------------------

    (r) * * *

                        Table 18 to Paragraph (r)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................     2,550.00
------------------------------------------------------------------------

    (s) * * *

                        Table 19 to Paragraph (s)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $90.00
By a small entity (Sec.   1.27(a)).........................       180.00
By other than a small or micro entity......................       450.00
------------------------------------------------------------------------

* * * * *
    (u) * * *

                        Table 21 to Paragraph (u)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $86.00
By a small entity (Sec.   1.27(a)).........................       172.00
By other than a small or micro entity......................       430.00
------------------------------------------------------------------------


0
3. Section 1.17 is amended by:
0
a. Revising paragraph (a) introductory text;
0
b. Revising tables 1 through 10 in paragraphs (a)(1) through (5), (c), 
(d), (e)(1) and (2), and (f);
0
c. Revising paragraph (g);
0
d. Redesignating tables 12 through 15 in paragraphs (h), (i)(1) and 
(2), and (k) as tables 14 through 17 to paragraphs (h), (i)(1) and (2), 
and (k) and revising them;
0
e. Revising paragraph (m);
0
f. Redesignating tables 17 and 18 in paragraphs (o) and (p) as table 21 
and 22 to paragraphs (o) and (p) and revising them;
0
g. Revising paragraph (q);
0
h. Redesigning tables 19 through 21 in paragraphs (r) through (t) as 
tables 23 through 25 to paragraphs (r) through (t) and revising them; 
and
0
i. Adding paragraphs (u) through (w).
    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), except in 
provisional applications filed under Sec.  1.53(c):
    (1) * * *

                       Table 1 to Paragraph (a)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $47.00
By a small entity (Sec.   1.27(a)).........................        94.00
By other than a small or micro entity......................       235.00
------------------------------------------------------------------------

    (2) * * *

                       Table 2 to Paragraph (a)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $138.00
By a small entity (Sec.   1.27(a)).........................       276.00
By other than a small or micro entity......................       690.00
------------------------------------------------------------------------

    (3) * * *

                       Table 3 to Paragraph (a)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $318.00
By a small entity (Sec.   1.27(a)).........................       636.00
By other than a small or micro entity......................     1,590.00
------------------------------------------------------------------------

    (4) * * *

                       Table 4 to Paragraph (a)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $499.00
By a small entity (Sec.   1.27(a)).........................       998.00
By other than a small or micro entity......................     2,495.00
------------------------------------------------------------------------

    (5) * * *

                       Table 5 to Paragraph (a)(5)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $679.00
By a small entity (Sec.   1.27(a)).........................     1,358.00
By other than a small or micro entity......................     3,395.00
------------------------------------------------------------------------

* * * * *
    (c) * * *

                        Table 6 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $903.00
By a small entity (Sec.   1.27(a)).........................     1,806.00
By other than a small or micro entity......................     4,515.00
------------------------------------------------------------------------

    (d) * * *

                        Table 7 to Paragraph (d)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $138.00
By a small entity (Sec.   1.27(a)).........................       276.00
By other than a small or micro entity......................       690.00
------------------------------------------------------------------------

    (e) * * *
    (1) * * *

                       Table 8 to Paragraph (e)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................     1,500.00
------------------------------------------------------------------------

    (2) * * *

                       Table 9 to Paragraph (e)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $572.00
By a small entity (Sec.   1.27(a)).........................     1,144.00
By other than a small or micro entity......................     2,860.00
------------------------------------------------------------------------

    (f) * * *

                        Table 10 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $90.00
By a small entity (Sec.   1.27(a)).........................       180.00
By other than a small or micro entity......................       450.00
------------------------------------------------------------------------
Note 1 to table 10 to paragraph (f):
1.36(a)--for revocation of a power of attorney by fewer than all of the
  applicants.
Sec.   1.53(e)--to accord a filing date.
Sec.   1.182--for decision on a question not specifically provided for
  in an application for patent.
Sec.   1.183--to suspend the rules in an application for patent.
Sec.   1.741(b)--to accord a filing date to an application under Sec.
  1.740 for extension of a patent term.
Sec.   1.1023--to review the filing date of an international design
  application.


[[Page 92005]]

    (g)(1) For filing a petition under one of the following sections 
which refers to this paragraph (g):

                      Table 11 to Paragraph (g)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $47.00
By a small entity (Sec.   1.27(a)).........................        94.00
By other than a small or micro entity......................       235.00
------------------------------------------------------------------------
Note 2 to table 11 to paragraph (g)(1):
Sec.   1.12--for access to an assignment record.
Sec.   1.14--for access to an application.
Sec.   1.46--for filing an application on behalf of an inventor by a
  person who otherwise shows sufficient proprietary interest in the
  matter.
Sec.   1.55(f)--for filing a belated certified copy of a foreign
  application.
Sec.   1.55(g)--for filing a belated certified copy of a foreign
  application.
Sec.   1.57(a)--for filing a belated certified copy of a foreign
  application.
Sec.   1.59--for expungement of information.
Sec.   1.136(b)--for review of a request for extension of time when the
  provisions of Sec.   1.136(a) are not available.
Sec.   1.377--for review of decision refusing to accept and record
  payment of a maintenance fee filed prior to expiration of a patent.
Sec.   1.550(c)--for patent owner requests for extension of time in ex
  parte reexamination proceedings.
Sec.   1.956--for patent owner requests for extension of time in inter
  partes reexamination proceedings.
Sec.   5.12 of this chapter--for expedited handling of a foreign filing
  license.
Sec.   5.15 of this chapter--for changing the scope of a license.
Sec.   5.25 of this chapter--for retroactive license.

    (2) For filing a petition to suspend action in an application under 
Sec.  1.103(a):
    (i) For filing a first request for suspension pursuant to Sec.  
1.103(a) in an application:

                     Table 12 to Paragraph (g)(2)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       300.00
------------------------------------------------------------------------

    (ii) For filing a second or subsequent request for suspension 
pursuant to Sec.  1.103(a) in an application:

                    Table 13 to Paragraph (g)(2)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $90.00
By a small entity (Sec.   1.27(a)).........................       180.00
By other than a small or micro entity......................       450.00
------------------------------------------------------------------------

    (h) * * *

                        Table 14 to Paragraph (h)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $30.00
By a small entity (Sec.   1.27(a)).........................        60.00
By other than a small or micro entity......................       150.00
------------------------------------------------------------------------
Note 3 to table 14 to paragraph (h):
1.84--for accepting color drawings or photographs.
Sec.   1.91--for entry of a model or exhibit.
Sec.   1.102(d)--to make an application special.
Sec.   1.138(c)--to expressly abandon an application to avoid
  publication.
Sec.   1.313--to withdraw an application from issue.
Sec.   1.314--to defer issuance of a patent.

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

                      Table 15 to Paragraph (i)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $30.00
By a small entity (Sec.   1.27(a)).........................        60.00
By other than a small or micro entity......................       150.00
------------------------------------------------------------------------
Note 4 to table 15 to paragraph (i)(1):
Sec.   1.28(c)(3)--for processing a non-itemized fee deficiency based on
  an error in small entity status.
Sec.   1.29(k)(3)--for processing a non-itemized fee deficiency based on
  an error in micro entity status.
Sec.   1.41(b)--for supplying the name or names of the inventor or joint
  inventors in an application without either an application data sheet
  or the inventor's oath or declaration, except in provisional
  applications.
Sec.   1.48--for correcting inventorship, except in provisional
  applications.
Sec.   1.52(d)--for processing a nonprovisional application filed with a
  specification in a language other than English.
Sec.   1.53(c)(3)--to convert a provisional application filed under Sec.
    1.53(c) into a nonprovisional application under Sec.   1.53(b).
Sec.   1.71(g)(2)--for processing a belated amendment under Sec.
  1.71(g).
Sec.   1.102(e)--for requesting prioritized examination of an
  application.
Sec.   1.103(b)--for requesting limited suspension of action, continued
  prosecution application for a design patent (Sec.   1.53(d)).
Sec.   1.103(c)--for requesting limited suspension of action, request
  for continued examination (Sec.   1.114).
Sec.   1.103(d)--for requesting deferred examination of an application.
Sec.   1.291(c)(5)--for processing a second or subsequent protest by the
  same real party in interest.
Sec.   3.81 of this chapter--for a patent to issue to assignee,
  assignment submitted after payment of the issue fee.

    (2) * * *

                      Table 16 to Paragraph (i)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $151.00
By a small entity (Sec.   1.27(a)).........................       151.00
By other than a small or micro entity......................       151.00
------------------------------------------------------------------------
Note 5 to table 16 to paragraph (i)(2):
Sec.   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.
Sec.   1.221--for requesting voluntary publication or republication of
  an application.

* * * * *
    (k) * * *

                        Table 17 to Paragraph (k)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $344.00
By a small entity (Sec.   1.27(a)).........................       688.00
By other than a small or micro entity......................     1,720.00
------------------------------------------------------------------------

* * * * *
    (m)(1) For filing a petition under one of the following sections 
which refers to this paragraph (m), when the petition is filed more 
than two years after the date when the required action was due:

                      Table 18 to Paragraph (m)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $600.00
By a small entity (Sec.   1.27(a)).........................     1,200.00
By other than a small or micro entity......................     3,000.00
------------------------------------------------------------------------
Note 6 to table 18 to paragraph (m)(1):
Sec.   1.55(e)--for the delayed submission of a priority claim, when the
  petition is filed more than two years after the date when the priority
  claim was due.
Sec.   1.78(c) or (e)--for the delayed submission of a benefit claim,
  when the petition is filed more than two years after the date when the
  benefit claim was due.
Sec.   1.137--for filing a petition for the revival of an abandoned
  application for a patent, or for the delayed payment of the fee for
  issuing each patent, when the petition is filed more than two years
  after the abandonment of the application.
Sec.   1.137--for filing a petition for the revival of a reexamination
  proceeding that was terminated or limited due to a delayed response by
  the patent owner, when the petition is filed more than two years after
  the termination or limitation of the reexamination proceeding.
Sec.   1.378--for filing a petition to accept a delayed payment of the
  fee for maintaining a patent in force, when the petition is filed more
  than two years after the patent expiration date.
Sec.   1.1051--for filing a petition to excuse an applicant's failure to
  act within prescribed time limits in an international design
  application, when the petition is filed more than two years after the
  abandonment of the application.

    (2) For filing a petition under Sec.  1.55(e), Sec.  1.78(c), Sec.  
1.78(e), Sec.  1.137, Sec.  1.1051, or Sec.  1.378, when the petition 
is filed before the time period specified in paragraph (m)(1) of this 
section:

                      Table 19 to Paragraph (m)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $452.00
By a small entity (Sec.   1.27(a)).........................       904.00
By other than a small or micro entity......................     2,260.00
------------------------------------------------------------------------

    (3) For filing a petition under Sec.  1.55(c), Sec.  1.78(b), or 
Sec.  1.452 for the extension of the 12-month (six-month for designs) 
period for filing a subsequent application:

                      Table 20 to Paragraph (m)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $452.00
By a small entity (Sec.   1.27(a)).........................       904.00
By other than a small or micro entity......................     2,260.00
------------------------------------------------------------------------


[[Page 92006]]

* * * * *
    (o) * * *

                        Table 21 to Paragraph (o)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a small entity (Sec.   1.27(a)) or micro entity (Sec.          $78.00
 1.29).....................................................
By other than a small or micro entity......................       195.00
------------------------------------------------------------------------

    (p) * * *

                        Table 22 to Paragraph (p)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $56.00
By a small entity (Sec.   1.27(a)).........................       112.00
By other than a small or micro entity......................       280.00
------------------------------------------------------------------------

    (q) Processing fee for taking action under one of the following 
sections which refers to this paragraph (q): $54.00.
    (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) * * *

                        Table 23 to Paragraph (r)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $189.00
By a small entity (Sec.   1.27(a)).........................       378.00
By other than a small or micro entity......................       945.00
------------------------------------------------------------------------

    (s) * * *

                        Table 24 to Paragraph (s)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $189.00
By a small entity (Sec.   1.27(a)).........................       378.00
By other than a small or micro entity......................       945.00
------------------------------------------------------------------------

    (t) * * *

                        Table 25 to Paragraph (t)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $39.00
By a small entity (Sec.   1.27(a)).........................        78.00
By other than a small or micro entity......................       195.00
------------------------------------------------------------------------

    (u) Extension fees pursuant to Sec.  1.136(a) in provisional 
applications filed under Sec.  1.53(c):
    (1) For reply within first month:

                      Table 26 to Paragraph (u)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $10.00
By a small entity (Sec.   1.27(a)).........................        20.00
By other than a small or micro entity......................        50.00
------------------------------------------------------------------------

    (2) For reply within second month:

                      Table 27 to Paragraph (u)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $20.00
By a small entity (Sec.   1.27(a)).........................        40.00
By other than a small or micro entity......................       100.00
------------------------------------------------------------------------

    (3) For reply within third month:

                      Table 28 to Paragraph (u)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       200.00
------------------------------------------------------------------------

    (4) For reply within fourth month:

                      Table 29 to Paragraph (u)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       400.00
------------------------------------------------------------------------

    (5) For reply within fifth month:

                      Table 30 to Paragraph (u)(5)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       800.00
------------------------------------------------------------------------

    (v) Information disclosure statement size fee for an information 
disclosure statement filed under Sec.  1.97 that, inclusive of the 
number of applicant-provided or patent owner-provided items of 
information listed under Sec.  1.98(a)(1) on the information disclosure 
statement, causes the cumulative number of applicant-provided or patent 
owner-provided items of information under Sec.  1.98(a)(1) during the 
pendency of the application or reexamination proceeding to:
    (1) Exceed 50 but not exceed 100. . . . . .$200;
    (2) Exceed 100 but not exceed 200. . . . . .$500, less any amount 
previously paid under paragraph (v)(1) of this section; and
    (3) Exceed 200. . . . . .$800, less any amounts previously paid 
under paragraphs (v)(1) and/or (2) of this section.
    (w) Additional fee for presenting a benefit claim in a 
nonprovisional application under 35 U.S.C. 120, 121, 365(c), or 386(c) 
and Sec.  1.78(d):
    (1) When the actual filing date of the nonprovisional application 
in which the benefit claim is presented is more than six years and no 
more than nine years from the earliest filing date for which benefit is 
claimed under 35 U.S.C. 120, 121, 365(c), or 386(c) and Sec.  1.78(d):

                      Table 31 to Paragraph (w)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $540.00
By a small entity (Sec.   1.27(a)).........................     1,080.00
By other than a small or micro entity......................     2,700.00
------------------------------------------------------------------------

    (2) When the actual filing date of the nonprovisional application 
in which the benefit claim is presented is more than nine years from 
the earliest filing date for which benefit is claimed under 35 U.S.C. 
120, 121, 365(c), or 386(c) and Sec.  1.78(d), the amount shown in this 
paragraph is due, less any amount previously paid under paragraph 
(w)(1) of this section:

                      Table 32 to Paragraph (w)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $800.00
By a small entity (Sec.   1.27(a)).........................     1,600.00
By other than a small or micro entity......................     4,000.00
------------------------------------------------------------------------


0
4. Section 1.18 is amended by:
0
a. Revising tables 1 through 3 in paragraphs (a), (b)(1), and (c); and
0
b. Revising paragraphs (d)(2) and (3), (e), and (f).
    The revisions read as follows:


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

    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $258.00
By a small entity (Sec.   1.27(a)).........................       516.00
By other than a small or micro entity......................     1,290.00
------------------------------------------------------------------------

    (b)(1) * * *

                       Table 2 to Paragraph (b)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $260.00
By a small entity (Sec.   1.27(a)).........................       520.00
By other than a small or micro entity......................     1,300.00
------------------------------------------------------------------------

* * * * *
    (c) * * *

                        Table 3 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $181.00
By a small entity (Sec.   1.27(a)).........................       362.00
By other than a small or micro entity......................       905.00
------------------------------------------------------------------------

    (d) * * *
    (2) Publication fee before January 1, 2014: $320.00.

[[Page 92007]]

    (3) Republication fee (Sec.  1.221(a)): $344.00.
    (e) For filing an application for patent term adjustment under 
Sec.  1.705: $226.00
    (f) For filing a request for reinstatement of all or part of the 
term reduced pursuant to Sec.  1.704(b) in an application for patent 
term adjustment under Sec.  1.705: $452.00.

0
5. Section 1.19 is amended by revising paragraphs (a)(2), (b)(1)(i)(A), 
(B), and (D), (b)(1)(ii)(A) and (B), (b)(3) and (4), and (f) to read as 
follows:


Sec.  1.19  Document supply fees.

* * * * *
    (a) * * *
    (2) Printed copy of a plant patent in color: $16.00.
* * * * *
    (b) * * *
    (1) * * *
    (i) * * *
    (A) Application as filed: $38.00.
    (B) Copy Patent File Wrapper, Paper Medium, Any Number of Sheets: 
$312.00.
* * * * *
    (D) Individual application documents, other than application as 
filed, per document: $27.00.
    (ii) * * *
    (A) Application as filed: $38.00.
    (B) Copy Patent File Wrapper, Electronic, Any Medium, Any Size: 
$65.00.
* * * * *
    (3) Copy of Office records, except copies available under paragraph 
(b)(1) or (2) of this section: $27.00.
    (4) For assignment records, abstract of title and certification, 
per patent: $38.00.
* * * * *
    (f) Uncertified copy of a non-United States patent document, per 
document: $27.00.
* * * * *

0
6. Section 1.20 is amended by:
0
a. Revising paragraphs (a) and (b);
0
b. Revising tables 1 through 5 in paragraphs (c)(1)(i) through (c)(4) 
and (c)(6);
0
c. Revising paragraph (d);
0
d. Revising tables 7 through 10 in paragraphs (e) through (h);
0
e. Revising paragraph (j); and
0
f. Redesignating tables 12 through 15 in paragraphs (k)(1) and (2) and 
(k)(3)(i) and (ii) as tables 11 through 14 in paragraphs (k)(1) and (2) 
and (k)(3)(i) and (ii) and revising them.
    The revisions read as follows:


Sec.  1.20  Post-issuance fees.

    (a) For providing a certificate of correction for an applicant's 
mistake (Sec.  1.323): $172.00.
    (b) Processing fee for correcting inventorship in a patent (Sec.  
1.324): $172.00.
    (c) * * *
    (1)(i) * * * * *

                     Table 1 to Paragraph (c)(1)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,355.00
By a small entity (Sec.   1.27(a)).........................     2,710.00
By other than a small or micro entity......................     6,775.00
------------------------------------------------------------------------

* * * * *
    (2) * * *

                       Table 2 to Paragraph (c)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $2,709.00
By a small entity (Sec.   1.27(a)).........................     5,418.00
By other than a small or micro entity......................    13,545.00
------------------------------------------------------------------------

    (3) * * *

                       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......................       600.00
------------------------------------------------------------------------

    (4) * * *

                       Table 4 to Paragraph (c)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       200.00
------------------------------------------------------------------------

* * * * *
    (6) * * *

                       Table 5 to Paragraph (c)(6)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $439.00
By a small entity (Sec.   1.27(a)).........................       878.00
By other than a small or micro entity......................     2,195.00
------------------------------------------------------------------------

* * * * *
    (d) For filing each statutory disclaimer (Sec.  1.321): $183.00.
    (e) * * *

                        Table 7 to Paragraph (e)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $430.00
By a small entity (Sec.   1.27(a)).........................       860.00
By other than a small or micro entity......................     2,150.00
------------------------------------------------------------------------

    (f) * * *

                        Table 8 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $808.00
By a small entity (Sec.   1.27(a)).........................     1,616.00
By other than a small or micro entity......................     4,040.00
------------------------------------------------------------------------

    (g) * * *

                        Table 9 to Paragraph (g)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $1,656.00
By a small entity (Sec.   1.27(a)).........................     3,312.00
By other than a small or micro entity......................     8,280.00
------------------------------------------------------------------------

    (h) * * *

                        Table 10 to Paragraph (h)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $108.00
By a small entity (Sec.   1.27(a)).........................       216.00
By other than a small or micro entity......................       540.00
------------------------------------------------------------------------

* * * * *
    (j) For filing an application for extension of the term of a 
patent:
    (1) Application for extension under Sec.  1.740: $2,500.00.
    (2) Initial application for interim extension under Sec.  1.790: 
$1,320.00.
    (3) Subsequent application for interim extension under Sec.  1.790: 
$680.00.
    (4) Requesting supplemental redetermination after notice of final 
determination: $1,440.00.
    (k) * * *
    (1) * * *

                      Table 11 to Paragraph (k)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $993.00
By a small entity (Sec.   1.27(a)).........................     1,986.00
By other than a small or micro entity......................     4,965.00
------------------------------------------------------------------------

    (2) * * *

                      Table 12 to Paragraph (k)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $2,731.00
By a small entity (Sec.   1.27(a)).........................     5,462.00
By other than a small or micro entity......................    13,655.00
------------------------------------------------------------------------

    (3) * * *
    (i) * * *

                     Table 13 to Paragraph (k)(3)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $39.00
By a small entity (Sec.   1.27(a)).........................        78.00
By other than a small or microentity.......................       195.00
------------------------------------------------------------------------

    (ii) * * *

                    Table 14 to Paragraph (k)(3)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       325.00
------------------------------------------------------------------------


0
7. Section 1.21 is amended by:
0
a. Revising paragraphs (a)(1)(i), (a)(1)(ii)(A), (a)(1)(iii) and (iv), 
(a)(2)(i)

[[Page 92008]]

and (ii), (a)(4)(i) and (ii), (a)(5)(i) and (ii), (a)(6)(ii), (a)(9)(i) 
and (ii), (a)(10), (e), (h)(2), (i), and (n);
0
b. Revising tables 1 and 2 in paragraphs (o)(1) and (2); and
0
c. Revising paragraphs (p) and (q).
    The revisions read as follows:


Sec.  1.21  Miscellaneous fees and charges.

* * * * *
    (a) * * *
    (l) * * *
    (i) Application Fee (non-refundable): $118.00.
    (ii) * * *
    (A) For test administration by commercial entity: $226.00.
* * * * *
    (iii) For USPTO-administered review of registration examination: 
$505.00.
    (iv) Request for extension of time in which to schedule examination 
for registration to practice (non-refundable): $124.00.
    (2) * * *
    (i) On registration to practice under Sec.  11.6 of this chapter: 
$226.00.
    (ii) On grant of limited recognition under Sec.  11.9(b) of this 
chapter: $226.00.
* * * * *
    (4) * * *
    (i) Standard: $43.00.
    (ii) Suitable for framing: $54.00.
    (5) * * *
    (i) By the Director of Enrollment and Discipline under Sec.  
11.2(c) of this chapter: $452.00.
    (ii) Of the Director of Enrollment and Discipline under Sec.  
11.2(d) of this chapter: $452.00.
    (6) * * *
    (ii) For USPTO-assisted change of address: $75.00.
* * * * *
    (9) * * *
    (i) Delinquency fee: $54.00.
    (ii) Administrative reinstatement fee: $226.00.
    (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; 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; and on petition for reinstatement by a person excluded 
or suspended on ethical grounds, or excluded on consent from practice 
before the Office: $1,806.00.
* * * * *
    (e) International type search reports: For preparing an 
international type search report of an international type search made 
at the time of the first action on the merits in a national patent 
application: $43.00
* * * * *
    (h) * * *
    (2) If not submitted electronically: $54.00
    (i) Publication in Official Gazette: For publication in the 
Official Gazette of a notice of the availability of an application or a 
patent for licensing or sale: Each application or patent: $27.00.
* * * * *
    (n) For handling an application in which proceedings are terminated 
pursuant to Sec.  1.53(e): $151.00.
    (o) * * *
    (1) * * *

                       Table 1 to Paragraph (o)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $228.00
By a small entity (Sec.   1.27(a)).........................       456.00
By other than a small or micro entity......................     1,140.00
------------------------------------------------------------------------

    (2) * * *

                       Table 2 to Paragraph (o)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................    $2,258.00
By a small entity (Sec.   1.27(a)).........................     4,516.00
By other than a small or micro entity......................    11,290.00
------------------------------------------------------------------------

    (p) Additional Fee for Overnight Delivery: $43.00.
    (q) Additional fee for expedited service: $183.00.

0
8. Section 1.78 is amended by revising paragraphs (d)(3)(i) and (e)(2) 
to read as follows:


Sec.  1.78  Claiming benefit of earlier filing date and cross-
references to other applications.

* * * * *
    (d) * * *
    (3)(i) The reference required by 35 U.S.C. 120 and paragraph (d)(2) 
of this section, and the applicable fee set forth in Sec.  1.17(w), 
must be submitted during the pendency of the later-filed application.
* * * * *
    (e) * * *
    (2) The petition fee as set forth in Sec.  1.17(m), and the 
applicable fee set forth in Sec.  1.17(w); and
* * * * *

0
9. Section 1.97 is amended by revising paragraph (a) to read as 
follows:


Sec.  1.97  Filing of information disclosure statement.

    (a) In order for an applicant for a patent or for a reissue of a 
patent to have an information disclosure statement in compliance with 
Sec.  1.98 considered by the Office during the pendency of the 
application, the information disclosure statement must satisfy one of 
paragraph (b), (c), or (d) of this section and be accompanied by any 
applicable information disclosure statement size fee under Sec.  
1.17(v).
* * * * *

0
10. Section 1.98 is amended by revising paragraph (a) introductory text 
and adding paragraph (a)(4) to read as follows:


Sec.  1.98  Content of information disclosure statement.

    (a) Any information disclosure statement filed under Sec.  1.97 
shall include the items listed in paragraphs (a)(1) through (4) of this 
section.
* * * * *
    (4) A clear written assertion that the information disclosure 
statement is accompanied by the applicable information disclosure 
statement size fee under Sec.  1.17(v) or a clear written assertion 
that no information disclosure statement size fee under Sec.  1.17(v) 
is required.
* * * * *

0
11. Section 1.136 is amended by revising paragraph (a)(1) introductory 
text to read as follows:


Sec.  1.136  Extensions of time.

    (a)(1) If an applicant is required to reply within a nonstatutory 
or shortened statutory time period, applicant may extend the time 
period for reply up to the earlier of the expiration of any maximum 
period set by statute or five months after the time period set for 
reply, if a petition for an extension of time and the fee set in Sec.  
1.17(a) or (u) are filed, unless:
* * * * *

0
12. Section 1.138 is amended by revising paragraph (d) to read as 
follows:


Sec.  1.138  Express abandonment.

* * * * *
    (d) An applicant seeking to abandon an application filed under 35 
U.S.C. 111(a) and Sec.  1.53(b) on or after December 8, 2004, or a 
national stage application under 35 U.S.C. 371 in which the basic 
national fee was paid on or after December 8, 2004 to obtain a refund 
of the search fee and excess claims fee paid in the application, must 
submit a declaration of express abandonment by way of a petition under 
this paragraph before an examination has been made of the application. 
The date indicated on any certificate of mailing or transmission under 
Sec.  1.8 will

[[Page 92009]]

not be taken into account in determining whether a petition under this 
paragraph (d) was filed before an examination has been made of the 
application. Refunds under this paragraph are limited to the search 
fees and excess claims fees set forth in Sec. Sec.  1.16 and 1.492. If 
a request for refund of the search fee and excess claims fee paid in 
the application is not filed with the declaration of express 
abandonment under this paragraph or within two months from the date on 
which the declaration of express abandonment under this paragraph was 
filed, the Office may retain the entire search fee and excess claims 
fee paid in the application. This two-month period is not extendable. 
If a petition and declaration of express abandonment under this 
paragraph are not filed before an examination has been made of the 
application, the Office will not refund any part of the search fee and 
excess claims fee paid in the application except as provided in Sec.  
1.26.

0
13. Section 1.445 is amended by revising and republishing 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 January 19, 2025:

                    Table 1 to Paragraph (a)(1)(i)(A)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $57.00
By a small entity (Sec.   1.27(a)).........................       114.00
By other than a small or micro entity......................       285.00
------------------------------------------------------------------------

    (B) For an international application having a receipt date that is 
on or after December 29, 2022, and before January 19, 2025:

                    Table 2 to Paragraph (a)(1)(i)(B)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $52.00
By a small entity (Sec.   1.27(a)).........................       104.00
By other than a small or micro entity......................       260.00
------------------------------------------------------------------------

    (C) For an international application having a receipt date that is 
on or after October 2, 2020, and before December 29, 2022:

                    Table 3 to Paragraph (a)(1)(i)(C)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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
------------------------------------------------------------------------

    (D) For an international application having a receipt date that is 
on or after January 1, 2014, and before October 2, 2020:

                    Table 4 to Paragraph (a)(1)(i)(D)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $60.00
By a small entity (Sec.   1.27(a)).........................       120.00
By other than a small or micro entity......................       240.00
------------------------------------------------------------------------

    (E) 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 USPTO patent electronic 
filing system, except for a plant application:

                     Table 5 to Paragraph (a)(1)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a small entity (Sec.   1.27(a)).........................         $200
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 January 19, 2025:

                     Table 6 to Paragraph (a)(2)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $480.00
By a small entity (Sec.   1.27(a)).........................       960.00
By other than a small or micro entity......................     2,400.00
------------------------------------------------------------------------

    (ii) For an international application having a receipt date that is 
on or after April 1, 2023, and before January 19, 2025:

                     Table 7 to Paragraph (a)(2)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $436.00
By a small entity (Sec.   1.27(a)).........................       872.00
By other than a small or micro entity......................     2,180.00
------------------------------------------------------------------------

    (iii) For an international application having a receipt date that 
is on or after October 2, 2020, and before April 1, 2023:

                    Table 8 to Paragraph (a)(2)(iii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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
------------------------------------------------------------------------

    (iv) For an international application having a receipt date that is 
on or after January 1, 2014, and before October 2, 2020:

                     Table 9 to Paragraph (a)(2)(iv)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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.
------------------------------------------------------------------------

    (v) 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 January 19, 2025:

                     Table 10 to Paragraph (a)(3)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $480.00
By a small entity (Sec.   1.27(a)).........................       960.00
By other than a small or micro entity......................     2,400.00
------------------------------------------------------------------------

    (ii) For an international application having a receipt date that is 
on or after April 1, 2023, and before January 19, 2025:

                    Table 11 to Paragraph (a)(3)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $436.00
By a small entity (Sec.   1.27(a)).........................       872.00
By other than a small or micro entity......................     2,180.00
------------------------------------------------------------------------

    (iii) For an international application having a receipt date that 
is on or after October 2, 2020, and before April 1, 2023:

                    Table 12 to Paragraph (a)(3)(iii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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
------------------------------------------------------------------------

    (iv) For an international application having a receipt date that is 
on or after January 1, 2014, and before October 2, 2020:

                    Table 13 to Paragraph (a)(3)(iv)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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
------------------------------------------------------------------------


[[Page 92010]]

    (v) 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 14 to Paragraph (a)(5)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $69.00
By a small entity (Sec.   1.27(a)).........................       138.00
By other than a small or micro entity......................       345.00
------------------------------------------------------------------------

    (6) Late payment fee pursuant to PCT Rule 16bis.2.
* * * * *

0
14. Section 1.482 is amended by revising tables 1 through 4 in 
paragraphs (a)(1)(i) and (ii), (a)(2), and (c) to read as follows:


Sec.  1.482  International preliminary examination and processing fees.

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

                     Table 1 to Paragraph (a)(1)(i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $141.00
By a small entity (Sec.   1.27(a)).........................       282.00
By other than a small or micro entity......................       705.00
------------------------------------------------------------------------

    (ii) * * *

                     Table 2 to Paragraph (a)(1)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $176.00
By a small entity (Sec.   1.27(a)).........................       352.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------

    (2) * * *

                       Table 3 to Paragraph (a)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $141.00
By a small entity (Sec.   1.27(a)).........................       282.00
By other than a small or micro entity......................       705.00
------------------------------------------------------------------------

* * * * *
    (c) * * *

                        Table 4 to Paragraph (c)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $69.00
By a small entity (Sec.   1.27(a)).........................       138.00
By other than a small or micro entity......................       345.00
------------------------------------------------------------------------


0
15. Section 1.492 is amended by revising table 1 in paragraph (a), 
tables 2 through 5 in paragraphs (b)(2) through (4), tables 7 through 
10 in paragraphs (c)(2) and (d) through (f), and tables 11 through 13 
in paragraphs (h) through (j) to read as follows.


Sec.  1.492  National stage fees.

* * * * *
    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $70.00
By a small entity (Sec.   1.27(a)).........................       140.00
By other than a small or micro entity......................       350.00
------------------------------------------------------------------------

    (b) * * *
    (2) * * *()

                       Table 3 to Paragraph (b)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $30.00
By a small entity (Sec.   1.27(a)).........................        60.00
By other than a small or micro entity......................       150.00
------------------------------------------------------------------------

    (3) * * *

                       Table 4 to Paragraph (b)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $116.00
By a small entity (Sec.   1.27(a)).........................       232.00
By other than a small or micro entity......................       580.00
------------------------------------------------------------------------

    (4) * * *

                       Table 5 to Paragraph (b)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $154.00
By a small entity (Sec.   1.27(a)).........................       308.00
By other than a small or micro entity......................       770.00
------------------------------------------------------------------------

    (c) * * *
    (2) * * *

                       Table 7 to Paragraph (c)(2)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $176.00
By a small entity (Sec.   1.27(a)).........................       352.00
By other than a small or micro entity......................       880.00
------------------------------------------------------------------------

    (d) * * *

                        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......................       600.00
------------------------------------------------------------------------

    (e) * * *

                        Table 9 to Paragraph (e)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       200.00
------------------------------------------------------------------------

    (f) * * *

                        Table 10 to Paragraph (f)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
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......................       925.00
------------------------------------------------------------------------

* * * * *
    (h) * * *

                        Table 11 to Paragraph (h)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $34.00
By a small entity (Sec.   1.27(a)).........................        68.00
By other than a small or micro entity......................       170.00
------------------------------------------------------------------------

    (i) * * *

                        Table 12 to Paragraph (i)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $30.00
By a small entity (Sec.   1.27(a)).........................        60.00
By other than a small or micro entity......................       150.00
------------------------------------------------------------------------

    (j) * * *

                        Table 13 to Paragraph (j)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $90.00
By a small entity (Sec.   1.27(a)).........................       180.00
By other than a small or micro entity......................       450.00
------------------------------------------------------------------------


0
16. Section 1.555 is amended by revising paragraph (a) to read as 
follows:


Sec.  1.555  Information material to patentability in ex parte 
reexamination and inter partes reexamination proceedings.

    (a) A patent by its very nature is affected with a public interest. 
The public interest is best served, and the most effective 
reexamination occurs when, at the time a reexamination proceeding is 
being conducted, the Office is aware of and evaluates the teachings of 
all information material to patentability in a reexamination 
proceeding. Each individual associated with the patent owner in a 
reexamination proceeding has a duty of candor and good faith in dealing 
with the Office, which includes a duty to disclose to the Office all 
information known to that individual to be material to patentability in 
a reexamination proceeding. The individuals who have a duty to disclose 
to the Office all information known to them to be material to 
patentability in a

[[Page 92011]]

reexamination proceeding are the patent owner, each attorney or agent 
who represents the patent owner, and every other individual who is 
substantively involved on behalf of the patent owner in a reexamination 
proceeding. The duty to disclose the information exists with respect to 
each claim pending in the reexamination proceeding until the claim is 
cancelled. Information material to the patentability of a cancelled 
claim need not be submitted if the information is not material to 
patentability of any claim remaining under consideration in the 
reexamination proceeding. The duty to disclose all information known to 
be material to patentability in a reexamination proceeding is deemed to 
be satisfied if all information known to be material to patentability 
of any claim in the patent after issuance of the reexamination 
certificate was cited by the Office or submitted to the Office in an 
information disclosure statement. However, the duties of candor, good 
faith, and disclosure have not been complied with if any fraud on the 
Office was practiced or attempted or the duty of disclosure was 
violated through bad faith or intentional misconduct by, or on behalf 
of, the patent owner in the reexamination proceeding. Any information 
disclosure statement must be filed with the items listed in Sec.  
1.98(a) as applied to individuals associated with the patent owner in a 
reexamination proceeding, should be filed within two months of the date 
of the order for reexamination, or as soon thereafter as possible, and 
be accompanied by any applicable information disclosure statement size 
fee under Sec.  1.17(v).
* * * * *

0
16. Section 1.1031 is amended by revising the table 1 to paragraph (a) 
to read as follows:


Sec.  1.1031  International design application fees.

    (a) * * *

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................       $26.00
By a small entity (Sec.   1.27(a)).........................        52.00
By other than a small or micro entity......................       130.00
------------------------------------------------------------------------

* * * * *

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

0
17. The authority citation for part 41 continues to read as follows:

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


0
18. Section 41.20 is amended by revising paragraph (a) and tables 1 
through 4 in paragraphs (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 petitions to the Chief 
Administrative Patent Judge under Sec.  41.3 is: $452.00.
    (b) * * *
    (1) * * *

                       Table 1 to Paragraph (b)(1)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $181.00
By a small entity (Sec.   1.27(a)).........................       362.00
By other than a small or micro entity......................       905.00
------------------------------------------------------------------------

    (2) * * *
    (ii) * * *

                     Table 2 to Paragraph (b)(2)(ii)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $452.00
By a small entity (Sec.   1.27(a)).........................       904.00
By other than a small or micro entity......................     2,260.00
------------------------------------------------------------------------

    (3) * * *

                       Table 3 to Paragraph (b)(3)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $292.00
By a small entity (Sec.   1.27(a)).........................       584.00
By other than a small or micro entity......................     1,460.00
------------------------------------------------------------------------

    (4) * * *

                       Table 4 to Paragraph (b)(4)
------------------------------------------------------------------------
 
------------------------------------------------------------------------
By a micro entity (Sec.   1.29)............................      $507.00
By a small entity (Sec.   1.27(a)).........................     1,014.00
By other than a small or micro entity......................     2,535.00
------------------------------------------------------------------------

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

0
19. The authority citation for part 42 continues to read as follows:

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


0
20. Section 42.15 is amended by revising paragraphs (a)(1) through (4), 
(b)(1) through (4), (c)(1), (d), and (e) and adding paragraph (f) to 
read as follows:


Sec.  42.15  Fees.

    (a) * * *
    (1) Inter Partes Review request fee--up to 20 claims: $23,750.00.
    (2) Inter Partes Review Post-Institution fee--up to 20 claims: 
$28,125.00.
    (3) In addition to the Inter Partes Review request fee, for 
requesting a review of each claim in excess of 20: $470.00.
    (4) In addition to the Inter Partes Post-Institution request fee, 
for requesting a review of each claim in excess of 20: $940.00.
    (b) * * *
    (1) Post-Grant or Covered Business Method Patent Review request 
fee--up to 20 claims: $25,000.00.
    (2) Post-Grant or Covered Business Method Patent Review Post-
Institution fee--up to 20 claims: $34,375.00.
    (3) In addition to the Post-Grant or Covered Business Method Patent 
Review request fee, for requesting a review of each claim in excess of 
20: $595.00.
    (4) In addition to the Post-Grant or Covered Business Method Patent 
Review Post-Institution fee, for requesting a review of each claim in 
excess of 20: $1,315.00.
    (c) * * *
    (1) Derivation petition fee: $452.00.
* * * * *
    (d) Any request requiring payment of a fee under this part, 
including a written request to make a settlement agreement available: 
$452.00.
    (e) Fee for non-registered practitioners to appear pro hac vice 
before the Patent Trial and Appeal Board: $269.00.
    (f) Fee for requesting a review of a Patent Trial and Appeal Board 
decision by the Director: $452.

Endnotes

    \1\ As reported by the CBO, three recent studies estimated the 
average research and development costs per new drug to range from $0.8 
billion to $2.3 billion. See ``Research and Development in the 
Pharmaceutical Industry,'' Report No. 57126 pp. 15 and 16 (April 2021), 
available at https://www.cbo.gov/publication/57126. FDA user fees 
applicable to prescription drugs are currently between $2.16 million 
and $4.31 million as a one-time sum, with an additional annual program 
fee of $403,889. See e.g., the FDA's user fee page for prescription 
drugs at https://www.fda.gov/industry/fda-user-fee-programs/prescription-drug-user-fee-amendments.
    \2\ See note 1, supra.

Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2024-26821 Filed 11-19-24; 8:45 am]
BILLING CODE 3510-16-P