The PTO Fee Proposal News & Comments Page

Originated and maintained (more or less) by Ed Suominen, a registered patent agent and independent inventor as an informal information resource for concerned patent professionals, inventors, and citizens who care about the future of the U.S. patent system should this proposal become law. Click here for more information about this page.

See NEWS Section below for latest updates

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Table of Contents

Introduction: What the Heck is Going On?

Basically, the fees for several key aspects of obtaining and maintaining a patent are going up substantially. I will quote SMALL ENTITY amounts. These include:

• Filing fees: Base fee for search and examination, up to 20 claims, up to 3 independent claims, is now $385. This will rise to $150 to file, and $1200 for examination. So, the base fee goes from $385 to $1350. Examination will be split from filing, for the first time in the US.

• Claims fees: Independent claims over 3 are now $41. This will go up to $80 for 4th claim, $160 for 5th claim, $320 for 6th claim, and a 125% marginal increase for each claim beyond that. Total claims over 20 are now $9 per claim. This will go up to $40 for claim 21-25, $80 for 26-30, $160 for 31-35, $320 for $36-40, and a 125% increase for each group of 5 thereafter.

• Issue Fees: Would go from $640 to $830.

• Extension fees: Presently $55 for the first month, would become $70, $260, and $600 for the first, second and third time this is done in an application. Not clear if this is the month-to-month progression that is now $55, $200, and $460.

• Maintenance fees: These are now $440, $1010, $1550 at 3.5, 7.5 and 11.5 years. These would become $450, $1500, $2500.

• Related Application Surcharges: Entirely new are fees for applications that cross-reference other applications. For 3, 4, 5, and 6 cross references, there are respectively imposed a $1000, $2000, $4000, and $8000 surcharge. For application that contain 1 or more claims not patentably distinct from 1 other patent or application, there is a $10,680 surcharge. (EAS: Yes, that's correct, ten thousand dollars !!) For 2 or 3 other patents, this becomes $13,350 and $16,690, with a 125% increase for each patent thereafter. This appears to, in essence, be a "double patenting" penalty; but its language is unclear and it could be interpreted even more detrimentally as a claim-rejection penalty. These are the "large entity" numbers; it is not fully clear to me if small entities would be hit by half of this. (EAS: I believe the present small-entity discounts will apply to all fees except the examination fee, and that fee will likely have a 75% "micro-entity" discount for individuals with taxable income less than $70,000 per year.)

So, what does this all mean?

First, setting aside patents that cross reference each other and inventors that may get into double patenting situations, the cost of filing and receiving examination for a base patent with 20 or less claims and 3 or less independent claims goes up from $385 to $1350, an increase of 350%. For someone who files, let's say, 40 claims including 4 independent claims, the cost goes from _$606* to _$4430*, an increase of 730%. The basic rule is that ALL inventors will pay at least three and a half times as much as they are paying now; if they want more claims, they may easily be hit by a seven-to-ten-fold increase, and even more if they have a truly large claim count. So, at all levels, access to the patent system is severely curtailed.

Second, inventors who hold more than one patent seem to be particularly targeted. Basically, nobody will ever take the risk of running into a double patenting situation, since the surcharge alone for most inventors will force abandonment of the application. And the fees for cross referencing will essentially make it prohibitively expensive for people to claim priority from their earlier applications. This will specifically hurt inventors who make improvements to their inventions and seek to protect their improvements, and it will force people to try to get everything in their first application since the cost (and double patenting risk) of simply filing a continuation and picking up matter that was unclaimed or disallowed in the first application will now be prohibitive. In this respect, the patent office is targeting its repeat-business customers for special surcharges and high risks -- something that anyone in business would recognize to be particularly inane. Appeals are more likely, as would be, for example, the filing of multiple Requests for Continued examination resulting in prosecutions that run over many years, which would not cease until everything is just right.

But, at bottom, what this really boils down to is that the patent office door is being slammed in the face of all but the very wealthiest companies and individuals; and even they will be forced to be much more careful with what they file and how they tie their applications together. There have certainly been complaints about the quality of patent examination, and there are those who have complained that too many "bad" patents are being allowed that should have been rejected. The proper solution to this is to increase the quality of examination. The solution that appears to have been chosen, however, is to simply make it too expensive to even apply for a patent in the first place.

The idea of splitting the filing from the request for examination is certainly acceptable; and would mirror the practice in many other countries. But the fees associated with such a revised approach should maintain some continuity in cost to those presently in place. They clearly do not. For ALL filers, a 350% increase is the bottom line. For sophisticated filers who seek more claims or to avail themselves of priority, 350% is only a starting point, and many will face overall fees that are ten or twenty times higher than what they confront at present, and even more in extreme cases.

This also will make it more likely that people will file at the outset through the PCT system, since that, at least for the moment, avoids these steep increases and the PCT treaty would likely constrain the extent to which these fee increases can show up in PCT filing and examination fees. Certainly, US fees at present are much lower than PCT filing fees, and many inventors choose to start in the US for that reason. With the new proposal, these fees will be comparable. All in all, the PTO has put together a pretty potent recipe to turn away its customers, and especially it BEST customers.

(EAS: This is a really interesting idea, and may be a partially effective response if this thing actually happens.)

Certainly, those of us in the patent bar have a direct interest, since anything that drives up the costs for our clients to such a high degree can only hurt our business.

But the real loser here will be the US economy. One can argue that the Patent system, rooted in our constitution, is the most important and successful piece of economic development legislation ever enacted. By giving inventors the exclusive rights to their discoveries for a limited period of time in exchange for the disclosure of these inventions to advance technology in the society at large, the patent system helped to fuel the industrial revolution of the 19th century, and the electronics, information, biological and chemical revolutions of the 20th century. Now, many less people will be disposed to dedicate their inventions to the public after a limited monopoly, because it will cost too much to do so. After establishing a model patent system that has been emulated worldwide, we are now killing the goose that lays our golden eggs.

Jay R. Yablon
Law Office of Jay R. Yablon
910 Northumberland Drive
Schenectady, New York 12309-2814
Phone / Fax: (518)377-6737
jyablon@nycapPLEASENOSPAM.rr.com

News

• The Patent Office Professionals Association issues devastating survey results from Examiner and condemns fee proposal: Click here.

• IPO cautions that reports of fee proposal's demise may be premature: Click here.

• Association of Patent Law Firms publishes strongly worded letter against fee proposal

Examiner's Union Condemns Fee Proposal

New: The Patent Office Professionals Association has sent the IP subcommittee of the House Judiciary committee a scathing condemnation of its top management's fee proposal. The following quote gives a sense of the document:

[T]he patent professionals of POPA believe that the very foundations
of the U.S. Patent System are in danger of being so substantially and
negatively altered by the USPTO 21 st Century Strategic Plan, that the
integrity of the patent system may be seriously and irreversibly damaged.

Caution from IPO

Copied from the IPO's Daily News page.

Fee Increase This Year Still Possible

Although the draft fee bill put forth by the Bush Administration has received little or no support from Congress or the private sector, reports of the death of the fee issue for this year are premature. A significant fee bill, even by October 1, the start of the government's new fiscal year, is still possible. IPO is following the issue closely.

Association of Patent Law Firms publishes an open letter opposing the legislation

An Open Letter to the U.S. Congress and the American People

We are the current and past Presidents of the Association of Patent Law Firms (APLF), and we write to you in those capacities to express our opposition to the U.S. Patent and Trademark Office Reauthorization Act of 2003. The APLF believes that this legislation, innocuously presented as a fee increase, amounts to a substantial revamping of the United States patent system. The APLF contends that it is improper to push through this significant overhaul of the patent system as a "mere" appropriations bill without study and public debate of its deleterious impact on the U.S. economy. Indeed, we fear that the matter is being handled in the current manner precisely to avoid public discourse and debate on the merits of this new system.

The USPTO's 21st Century Strategic Plan states that it is the result of thorough top to bottom review of the entire agency, and seeks to make the USPTO more market responsive. However, the plan notes that its implementation will require behavioral changes within the USPTO and among users of the patent system. In our view, some of these behavioral changes seem designed to reduce the number of patent applications to be filed and to narrow the scope of subject matter to be patented. The APLF believes that Congress should not mandate such drastic changes until all affected parties have had a chance to be heard. At a minimum, the USPTO should not pursue such changes outside the established format for regulatory changes after permitting public examination and comment. The U.S. companies and individual inventors who will be most impacted have not had a chance to openly present their opinion of this legislation. Until such time as this can happen, and all interested parties have shared their input, we ask that you reject any attempt to mandate "behavioral change" of patent applicants by the smokescreen of a mere appropriations request.

Even for ordinary patent applications, this legislation represents a startlingly huge increase in the fees for practices which are fully condoned by the laws governing U.S. patent practice. The APLF believes that the fee increases are being offered by the USPTO as a way to entice Congress into passing legislation, which would ostensibly provide additional funds for Congress. However, an inspection of the impact of such fees reveals that, far from increasing fees, the result may be to decrease the number of patent applications being filed and to increase the abandonment of pending applications. If so, the plan may have the effect of lowering PTO revenues below today's level. Although Congress may conclude that reducing the workload being asked of the USPTO is a good thing, such conclusion should not be reached lightly. We contend that the proponents of this legislation have not studied the economic impact of such a radical shift in protection of products and ideas.

Initially, the APLF objects to the amount of the new examination fee. Under the current system, the filing fee is $740 for large companies, and $370 for small companies and individual inventors. Under the newly proposed system, large companies would pay $1,550 in filing and examination fees and small companies would pay $1,400. This is a 100% increase for large companies and a 300% increase in filing fees for small businesses and independent inventors!!! The USPTO consistently runs in the black under the existing fee schedule. Thus, this increase is far out of line with what is fair, or what is needed to update and to continue to run the USPTO. No purpose is served by increasing the filing fees 100-300%. The overall increase in fees will likely be much greater once other charges are imposed during prosecution. This will almost certainly negatively impact the number of patent applications filed, which will lead to a decrease in fees collected by the USPTO, and less protection for the inventions of the American people.

Further, the plan proposed charges for additional claims (i.e., claims beyond an arbitrarily defined standard number of claims) are excessive and in some cases ludicrous. For example, U.S. Patent No. 6,400,595, recently issued to Micron Technologies on June 6, 2002, covers computer memory, contains 374 claims, and cost approximately $8,000 in additional PTO surcharge fees under the current rules. Under the newly proposed fee legislation, this fee would jump to OVER $47 BILLION. We recognize that 374 is a large number of claims, and the USPTO has an understandable desire to lower the number of patents with large numbers of claims. But the proposed legislation goes too far. Even had this patent only had 200 claims, the additional fees would have totaled over $20 million. The APLF opposes these fees as unreasonable, unfair, and ill advised. Ironically, these fees proposed by the plan represent an approach that is directly contrary to the "market" based approach that the plan purports to adopt.

The proposed fee legislation will also add new penalties for filing a patent application that is related to earlier patents or applications. Such penalty will be either in the form of fees for multiple continuation/divisional applications, or in the form of a fine for pursuing "patentably indistinct" claims. The fine (i.e., starting at $10,680 and rising rapidly thereafter) would be levied if an examiner determines that an application claim is patentably indistinct from a pending application of an issued patent. As written, the patentably indistinct standard is not defined, and the fine may well apply to rejections for a wide variety of reasons. It should be noted that a patentably indistinct claim does not mean that the claim covers the same invention as the other claim; but rather, that the two claims appear similar in scope. At a minimum, such fines will result in a great increase in the number of appeals by applicants who contest the fine, and there is no suggestion that this aspect of the plan has been carefully considered. The APLF believes that Congress should not allow the USPTO to prevent inventors from obtaining the full scope of patent protection afforded them by Congress through the use of prohibitive fee legislation.

Moreover, this fee proposal is retroactive, thereby applying to all applications pending as of October 1, 2002. These applications were filed under the current practice, which permits such close claim language, and Congress has set up a process to handle the patentably indistinct claim (the terminal disclaimer).

It is also the position of the APLF that this legislation may well have a chilling effect on the overall U.S. economy. We contend that a healthy patent system has been an important factor in the economic engine that has brought jobs and prosperity to the United States. If the cost of obtaining patents is increased overnight by 100-300% or more, businesses will be forced to seek and obtain fewer patents, thereby opening themselves up to unscrupulous competitors. The APLF feels strongly that the proposed fee legislation will undermine America's competitive advantages, at a time when we can least afford it.

Finally, the APLF notes that a USPTO fee increase has already been proposed and was published in the Federal Register Vol. 67, No. 88, pp. 30634-30637 on May 7, 2002. The APLF believes that this legislation is eminently more appropriate for an appropriations bill and is more han fair.

The APLF believes that Congress should research the DRAMATIC impact this proposal will have on U.S. companies and on the U.S. economy before DECIDING WHETHER TO ENACT such a radical overhaul of the patent system. We therefore ask you to please join us in opposing the U.S. Patent and Trademark Office Reauthorization Act of 2003, as currently proposed.

Thank you for your time and consideration.

Dan Boehnen Current President, Association of Patent Law Firms

Bruce H. Bernstein Past President, Association of Patent Law Firms

Congressman who is also an inventor may be helpful

The patent community could have a good supporter in Congress. At least one of the Congressman (from California), Darrell Issa, is a patent holder himself with a list of over 35 utility and design patents in which he is a named inventor.

Source: PATNEWS, Greg Aharonian. Edited by *SW*

EAS: Click here for Congressman Issa's contact info.

House Judiciary Committee Hearings

Here is a transcript of the hearings that took place Thursday, July 18. There are some great quotes in there -- could someone put some excerpts here? -Ed

Association of University Technology Managers Concerns

Patent Fee Increase Proposal Threatens University Technology Transfer

The U.S. House of Representatives, Committee on the Judiciary, Subcommittee on Courts, the Internet, and Intellectual Property is presently reviewing a measure titled, "Strategic Plan and Fee Legislation for the USPTO." If enacted, the legislation would significantly increase the cost of patent prosecution of PTO fees in the United States.

The dramatic increase in patent prosecution/filing may adversely affect AUTM members. The AUTM Board suggests that you bring this matter to the attention of your institution's federal relations office. Furthermore, your institution may desire to communicate with your U.S. congressional representative to explain the potentially harmful impact the measure would have on academic technology transfer, which has been a source of significant growth for the U.S. economy. For contact information and to determine if your congressional representative is on the Judiciary Subcommittee scheduled to address this matter, visit http://clerk.house.gov/committee/index.php?subcomcode=HJU03.

IPO Announces Opposition to PTO Fee Proposal

See the IPO's statement

The IPO (Intellectual Property Owners association) is an organization largely comprising sizeable corporations and their counsel. At least in my observation, IPO's positions are not often in agreement with those of the individual and small-business inventors that NAPP's members tend to represent. So I was especially pleased to note the following on IPO's "Daily News" site:

   MONDAY, JULY 15, 2002, 10:30 a.m.

   IPO WILL OPPOSE ADMINISTRATION'S PATENT FEE BILL -- IPO will oppose the
   Administration's patent and trademark fee   bill, which would increase
   patent fees by more than 50 percent effective Oct. 1. An IPO statement
   detailing the reasons for opposition will be released by mid-week.

AIPLA Opposes Fee Proposal

IMPORTANT NOTICE

To AIPLA Members:

Subject: PTO Strategic Plan and Fee Legislation

On July 5, the PTO posted its Strategic Plan and Fee Legislation on its website: http://www.uspto.gov/web/offices/com/strat2001/index.htm The Fee Legislation would adjust the statutory patent fees and authorize the PTO to raise trademark fees in FY 2003 without regard to the Consumer Price Index. The House Judiciary Subcommittee on Courts, the Internet, and Intellectual Property will conduct a hearing on "The U.S. Patent and Trademark Office: Fee Schedule Adjustment and Agency Reform" on July 18.

AIPLA will express strong opposition to the proposed fee bill and urge the Subcommittee to reject it. Among the reasons -

• The fees are set to recover the arbitrary amount of revenue targeted in the President's Budget, $1.527 billion, so that $162 million can be diverted to non-PTO programs;

• The PTO is maintaining its recovery level at $1.527 billion even though it expects to receive 24% fewer patent and trademark applications than were expected when the initial recovery level was set;

• Due to the extra fee revenue to be collected for diversion, the combined filing, search, examination, and issue fees will be twice the fees required today through issue, and this does not take into account sharply increasing fees for excess claims and 48% greater maintenance fees; and

• It is likely that the PTO has underestimated the actual fee revenue that will be collected.

The statement I will give is posted on the AIPLA website: http://www.aipla.org

I will report to the membership following the hearing and outline the status and appropriate next steps.

Mike Kirk Executive Director

Some Comments from Patent Practitioners

Dr. Robert Hunter, Patent Agent

The fee increase is expected to significantly reduce patenting activity by small entities (independent inventors, small businesses and universities) because they will no longer be able to afford to use the system. This change and others will allow the USPTO to hire 2,500 fewer new Examiners (Federal employees who examine patent applications and decide patentability) over the next five years.

The proposal calls for more than tripling the fees charged to small entities for basic patent applications. Currently, small entities pay the USPTO $370 to file a non-provisional utility patent application, and that includes the cost of examining the application. Under the new fee schedule, a small entity would pay a $150 filing fee and a $1,250 examination fee - a $970 jump over the current filing and examination cost for a basic patent application. In addition to the basic fees, the USPTO is proposing to establish a schedule of rapidly escalating fees for including additional claims in an application (either when it is filed or later) and to levy significantly increased patent maintenance fees.

Research has shown that the number of independent claims in an issued patent is strongly predictive of the value of the patent. It is not unusual for the total number of claims needed to adequately protect a complex and potentially valuable invention (e.g., a chemical, biotechnology or software invention) to reach or exceed 50 and for the number of independent claims to reach or exceed 20. Currently, 30 additional total claims and 17 total independent claims would add $884 to the filing fee for a small entity. Under the Bush Administration proposal, this number of additional claims would increase the filing fee by an incredible $85,680. Huge fees will be imposed on inventors who attempt to "game the system" by filing continuing applications that claim the same invention in a different way than it was claimed in an earlier-filed application. The cost to a small entity for maintaining a patent over its 20-year term would increase from $3,000 to $4,450. It is clear that adoption of the Bush proposal will essentially deny access to the U.S. patent system by small entities with potentially valuable inventions and destroy the small businesses of the practitioners who serve them (like me).

The proposed fee increase, which is scheduled to become effective on October 1, 2002 (just two months from now), must be approved by Congress. If you do not believe that the U.S. patent system should be available only to wealthy individuals and large corporations, I urge you to express your opinion to your Senators and Congressman. You can obtain their e-mail addresses at: http://www.senate.gov/contacting/index.cfm and http://www.house.gov/writerep/.

Carl Oppedahl, Patent Attorney

The new head of the Patent Office has proposed new fees to go into effect this October. Among the proposals is that independent claims in excess of three would cost increasingly high surcharges. A sixth independent claim would cost $640, for example.

The base filing fee would no longer include having the application examined. Instead, the applicant would be required to pay a $1250 fee to get the application examined. If the examination fee were not paid, the application would go abandoned.

If you file an application which, in the view of the Patent Office, contains or is amended to contain at least one claim which (in the view of the Patent Office) is not patentably distinct from one or more claims in four other patents or patent applications, a surcharge of $20,860 would be imposed.

When I first read this, I checked to see if the date was April 1. It's not. This seems to be a real document on the web site of the US Patent Office.

Jay R. Yablon, Patent Attorney

For any application that has one or more claims "not patentably distinct" from one or more claims in one other patent or application, they hit you with a $10,680 penalty! It appears from the comments published in support of this proposal that this is intended to apply to prior patents or applications by the same inventor or assignee or inventive entity, etc., but nowhere does the language make this clear. Right now it can be interpreted to apply to any and all patents or patent application including those -- to borrow a well-worn phrase -- "by another."

The amount of this penalty is staggering, but think about the nightmare of implementing this even if the fee were reasonable (like $1). What definition is used for patentably distinct? Normally, it is defined with reference to what is disclosed, including the claims. Is this a double-patenting type standard, i.e., if the claims in the other patent(s) would be doubly patented if they were your claims, then you get hit with the surcharge? I assume that a 103 rejection would not count here, because then the patentably-indistinctness would not be claimed in any one patent -- if it were, then this would be a 102 rejection. Is there an appeal from this, since the fee is based on a substantive patentablity finding? Are examiners going to game the system and give ridiculous rejections to get quota points for fees? What about a claims with 112 problems which cause an examiner to read a claim on an existing patent, even though it is clear that the inventor has no intention of claiming what is in that patent.

The pro-se inventors are dead meat under this proposal. But, even to discuss this in a rational way is sick. It is the most outrageous thing I have seen in a long time.

Ed Suominen, Patent Agent

There is no small-entity discount for the $1250 examination fee. So small business, institutional, or individual inventor clients pay more than double the $1,000 or so that they are paying now, and far more if they have divisionals, lots of claims, etc. etc.

The PTO is trying to justify the fee increases because it cites a shortfall in the number of patent applications. So in response to the inability of many inventors and their organizations to file as many patent applications in this economy as they had in happier times, the PTO now proposes to make filing patent applications significantly more expensive.

To be frank, this is not just unbelievable. It is an inexcusably stupid and ignorant proposal that needs to be thrust immediately into the spotlight of congressional scrutiny where (hopefully) wiser minds will prevail.

Call to Action

Some thoughts from Shalom Wertsebegr

To all those who care about the latest PTO proposal:

OK folks, we have heard lots of righteous indignation about it. There have been some great comments. But for the most part we are preaching to ourselves. We have seen a little activity on this web site, but it will take a lot more focused effort to defeat this.

We believe that the proposal put out by the USPTO is an outrageous attempt to make the PTO an exclusive club only for the very wealthy. We also believe it will have a devastating effect on our practices, our clients, and the US economy. If you feel the same, if you hope someone will do something about it, it is time for YOU to get involved.

If you don't care enough to get actively involved, that is your choice. But please don't complain any more about the proposal, now or after it becomes law.

Here are some things people can do:

• Establish a relationship with the appropriate staffer for your representative and senators. Tell your story. Follow up with a letter, and follow that up with a phone call inviting further discussion. Explain in clear English what this proposal will do to the economy of your state, to your clients, to your practice. You'd be surprised how much impact a well-placed staffer can have. These people are paid to find out what their bosses' constituents are thinking, and IP is one of those issues that don't swamp staffers with calls and letters.

• Write letters to your state congressional delegation, governors, and state representatives. They have connections to congress, too.

• Go and meet with a local inventor’s club, if you are aware of one in your area.

Sincerely,

Shalom Wertsberger
Registered Patent Agent
Shalom@Saltamar.com
Saltamar Innovations
www.Saltamar.com

More thoughts from Ed Suominen

This proposal is currently just a harebrained scheme advanced by a branch of the Department of Commerce. It will only have to its devastating effect if majorities of both houses of the U.S. Congress vote to make it law. That's where We the People come in.

Probably the most effective way to get the attention of a member of Congress on this issue is for an articulate constituent to spend some time on the phone with one of the member's staffers who is familiar with intellectual property matters. The next most effective way (and an effective follow-up to such a discussion) is with a letter mailed to the member of congress. If you can also fax the letter to the staffer and then follow up with a request for his or her feedback (or least a confirmation that it was received and read), so much the better.

JRY: I also suggest that we all make sure that our key clients become aware of this proposal in short order, so that they can begin to help us organize the inventor community. This proposal will especially damage small and large business clients who file continuation applications to keep an active deterrent alive in the patent office and who are constantly improving their products and who approach their patent portfolios more seriously and systematically.

Guidlines for Contacting your Representatives

Suggested Letter Outline & Planning

• Quickly, what is the issue in a sentence or two?
• Why should the congressman/staffer/bigwig care about this?
  • "Killing the goose that laid the golden egg"
• OK, we've got his/her attention, now what's really going on?
  • One paragraph of frightening examples and protests
  • Another paragraph of more frightening examples and protests
  • Maybe a third paragraph of still more frightening examples and protests
• Call to action, a single powerful paragraph with some of the following elements:
  • As a Courageous, Principled Leader, you've got to act
  • Your constituents will be grateful if you do act, and pissed if you don't
  • Your district may suffer etc. etc. if you don't
• Lots of signatures with registration numbers, patent numbers, company names, and any

other impressive indicia for the staffer to glance at

Random Concepts

• Someone mentioned that the significantly higher maintenance fees would effectively be a "taking" of his issued patents. Valid point?

SMS: Check out http://www.hhoglund.com/fees.htm on this issue

• The $$$ figures are absurd. Let's repeat them in all their absurdity wherever possible.

GHM: I believe the proposed fee schedule incorporates changes in the application process that are ill advised and poorly thought out. It does not reflect well on Bush's appointee.

GTP: Given that PTO fees are being diverted for the general use of the U.S. government, one aspect of the proposed fee hikes may be that the PTO is being increasingly viewed as an alternative to taxation as a source of funds. Besides the issue of whether singling out patent applicants as targets of such an indiscriminately large “tax” burden is fair or constitutional, our experience with “real” taxation (i.e., taxation that is called “taxation” rather than being disguised as “administrative agency fees”) teaches us that tax hikes often results in less tax revenue as it forces people into lower brackets (or in the present case, forces them to drop out of the patent system). If the goal is increased revenue for the U.S. government, there is therefore a serious practical question as to whether the proposed fee hikes would achieve that goal or would instead simply price the U.S. patent system out of reach of its user base. As the U.S. Supreme Court chastised the CAFC in Festo for failing to exercise caution when dealing with the delicate economics of innovation, especially without adequate economic studies, should not an administrative agency be just as cautious (P.S. Oops, since the USSC said in W-J and Festo that any change to that delicate balance should be made by Congress, I guess we'd be out of luck if Congress passes the bill. ---GTP)? (Further questions: Is there anything in the Administrative Procedures Act or other legislation affecting acts of administrative agencies that might help us out? ... The PTO is supposed to allow for public comment during rulemaking: are they taking public comment or are they saying, as they sometimes do, that this isn't the type of rulemaking that requires public comment?)

Suggested Recipients for Your Letters

• Your representative & senators
• The (ahem) Director
• The press
• Bigwigs at interest groups
• All clients and potential U.S. patent applicants you know

Inna Landsman: Contact information for congressmen is available at http://www.house.gov/writerep, and for senators at http://www.senate.gov/contacting/index.cfm

GTP: My intention is to write something up in Japanese as soon as the dust has cleared a bit and we have a better idea of what we're up against; e.g., how the math of the proposal should actually be understood. Together with a Japanese version of the worst bits of the proposal, I also intend to draft a sample letter in English which Japanese applicants can send to the PTO, AIPLA, and/or some other body that will care about their input (given that Japanese applicants do not in general have the right to vote in the U.S. but do represent a substantial fraction of filing and other fees to the PTO and legal fees to U.S. law firms which handle their applications -- any ideas for possible addressees?).

GTP: I have attached two more files (see bottom of page) to assist you in your snail mail, fax, and email letterwriting campaign. One file (FY 2003 Reauth data.txt) contains contact info (snail mail, fax, telephone, and email where available) for all members of the Subcommittee on Courts, the Internet, and Intellectual Property, which is the Subcommittee under the Committee on the Judiciary of the U.S. House of Representatives which is now reviewing the FY 2003 PTO Reauthorization Act. The other file (FY 2003 Reauth merge form.doc) is a Microsoft Word document which you can use as a merge form for convenience in generating letters to members of the Subcommittee -- please search on "###" for locations that should be personalized before merging). Please write quickly, since this bill appears to be moving through Congress very quickly (probably part of the PTO strategy). Snail mail to Congress may still be delayed, so fax and/or email is probably best.

Material you Can Use in Your Letter

JRY: Just when you thought it was safe to go back in the water (because the Supreme Court has overturned the absolute bar of Festo), the new Director of the Patent Office has offered a fee structure proposal that again threatens to undermine the system of patent protections that our founding fathers began back in 1790 to promote the useful art and sciences. This time, the threat is from a proposed fee structure that slams the Patent Office door in the face of small business and individual inventors by making it impossible to pursue patent protection without substantial sums of capital well beyond the already high cost of obtaining and maintaining a patent. The serious threat that this proposal poses to the fundamental underpinnings of American innovation cannot be overstated. We implore all members of the U.S. House and Senate to stop this proposal dead in its tracks. For example: {cite examples of current fees for filing typical applications versus with proposed fees, cite other outrageous fee examples, taking of patents by new maintenance fees, this crazy $10,000+ fee if you are not patentably distinct, etc.} {This is a running draft . . . please feel free to augment and edit. The first sentence about Festo may not be of interest to Congress, but I wanted to put it here, because both Festo (before the Supreme Court fixed it) and this new fee proposal will skew the way we practice in a way that is detrimental to our clients, and I'd like to bring that out.}

Sample Letter: Shalom Wertsberegr (independent patent agent)

I enclosed a copy of a letter I sent to a senior staffer in the my state (Maine) attempting to get a meeting. Change the details as you see fit.

---

Thank you for your interest you expressed in the issue we briefly discussed this morning, and for your willingness to meet with me.

At issue is a proposal published yesterday by the United States Patent and Trademark Office, that effectively multiply patenting costs to small investors by a minimum of 3.5 times, on the average by 30 times, and in some cases by several hundred times. I strongly believe that if this proposal was in place several years ago, than biotech firms like (any big one in your state), software companies like (ditto), or environmental innovation like those in (ditto), as well as many others, would not be in existence today. Just by way of example, according to the new price scheme, a basic biotech patent application fees would rise to roughly $290,000, from today’s (already high) $2800. If they pursued more than one patent, filing fees and penalties may run in the multi million dollars.

Additionally the proposal imposes stiff fines for not bending over to whatever is the will of the patent office by making appeals and other procedures to oppose the excessive power of the office, or its abuse, prohibitively expensive.

This is a clear case of a government agency attempting to change the law for its own convinience, with no benefit whatsever to the public, except perhapes to the extremely wealthy. The proposal is clearly designed to keep the independent inventors and small businesses (as a matter of fact even mid-size businesses) away from their constitutional rights to patent protection, by pricing them out of the system. I believe the damage caused to the US patent system, and to US economy in general will be devastating.

This attempt flies directly in the face of legislation like 35 USC, the American Inventor Protection Act 1999 (AIPA 99), and indeed I believe in the face of the constitution.

I am trying to raise awareness to this looming disaster, and would like to present the facts as well as my viewpoint to Senator Snowe, so she can take a lead position on this issue. The issue is extremely complex, and this is why I believe that a meeting, and close cooperation is called for. In such a meeting I could provide an explanation of how things occur in practice, and of the devastating effects of the different aspects of the proposal.

It would not be fair not to disclose that I do have a very significant personal stake in the issue. I am a US patent agent, registered to practice patent law in the US patent office. If this legislation will pass, all but one of my clients would be unable to continue prosecution, and I will lose my business shortly after it had finally began to show profits. However, if this proposal should pass, the US and (your state) economy will be denied the far greater benefits of their invention, in fields such as medicine, software, safety equipment, hygiene, sport equipment, communications, and others.

I would appreciate it if you could call me at your earliest convenience at (your phone number). If allowed to continue, this proposal carries a potentially devastating results to American Innovation and the American economy, and should be handled with the utmost important.

I thank you for your prompt attention.

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Sample Letter: Gerald T. Peters, U.S. Patent Agent

This is a generic version of letters I sent to my representatives in Congress via email. Please feel free to use it for your own purposes after modifying it as appropriate to suit your own situation. With respect to the attachments mentioned in the email post, the text of the FY 2003 PTO Reauthorization Act can be downloaded from http://www.uspto.gov/web/offices/com/strat2001/USPTO_Fee_Leg_and_Sect_Analysis.pdf and is also attached at the bottom of this web page, and the spreadsheet I prepared for comparing the current vs. the proposed fee schedules (Fee calculation GTP.xls) is attached to the bottom of this web page, or if you have trouble downloading it I will be happy to provide it to anyone upon request to me at gerrypeters@compuservePLEASENOSPAM.com (NB: You will need to delete the text "STOPSPAM" from my email address). Please feel free to use, post, or otherwise distribute the spreadsheet at no charge.

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• Date:
  • ENTER DATE
• To:
  • VIA EMAIL TO ENTER EMAIL ADDRESS
  • Honorable Senator or Representative LASTNAME
  • U.S. Senate or House of Representatives
  • Congress of the United States
  • Washington DC 20510 if to a Senator or 20515 if to a Representative USA
• From:
  • Your name and title
  • Your firm’s name
  • Your street address establishing you as a constituent of the addressee
• In re:
  • Please save American industry and vote down the FY 2003 PTO Reauthorization Act

Honorable Senator or Representative LASTNAME

Introductory paragraph establishing fact that you are constituent of addressee and providing any business or personal background you think may be relevant.

I am writing to you today to express my opinion with respect to a bill before Congress which if passed would, I believe, (1) have an effect opposite the intended effect of the bill which is to increase revenue for the United States Patent and Trademark Office and by extension the rest of the U.S. government, and (2) devastate future prospects for innovation in the U.S. and seriously impair the future economic outlook in the U.S. .

The bill I am talking about is the FY 2003 PTO Reauthorization Act, which I believe is now before the U.S. Congress. This bill contains some drastic increases in fees and changes in the way fees are assessed.

As a few examples of the profound changes in store for U.S. patent applicants if the proposed fee schedule becomes law, (1) claims fees for an application having 25 independent claims and 65 claims total will go from $2,658 to $258,793 under the proposal, (2) an application containing claim(s) patentably indistinct from claim(s) of 5 other pending application(s) or granted patent(s) will be hit with a surcharge of $26,074 under the proposal, and (3) an application containing 5 cross-references for claiming domestic priority under 35 USC 120, 121, or 365(c) will be hit with a surcharge of $4,000 under the proposal.

Attached to this email post for your convenience is a spreadsheet (Fee calculation GTP.xls) for comparing fees under the present schedule vs. under the proposed schedule. Please feel free to post this spreadsheet to any website you like or to otherwise make it available to anyone at no charge.

A little playing with the spreadsheet should be sufficient to convince anyone at all familiar with the U.S. patent system just how seriously this will affect U.S. patent applicants. Especially striking is the fact that the behaviors subject to punitory-level fees under the proposal are the very behaviors that the case law from the CAFC and PTO policies for career advancement of examiners encourage in U.S. patent applicants.

For your convenience, I am also attaching the text of the FY 2003 PTO Reauthorization Act itself (USPTO_Fee_Leg_and_Sect_Analysis.pdf). This document can also be downloaded from the following URL:

http://www.uspto.gov/web/offices/com/strat2001/USPTO_Fee_Leg_and_Sect_Analysis.pdf

If you are interested in one small indication of the stir that the FY 2003 PTO Reauthorization Act is already causing among U.S. patent practitioners -- i.e., the people who represent inventors and innovators who produce the technology that fuels U.S. industry -- kindly have a look at the following website...

http://twiki.org/cgi-bin/view/Main/EdSuominen

...And as the details of the FY 2003 PTO Reauthorization Act become known to U.S. industry and others with an interest in obtaining patent protection in the U.S., and to the law offices and organizations which represent the interests of such parties, I am quite sure there will be first amazement and then outrage at the sheer folly and -- there is no other word -- stupidity of this proposal.

Given the anticipated increase in fees and the diminished ability to enforce patents in the U.S. courts, I feel ethically obligated to advise my clients to reevaluate the economics of obtaining patents vs. profiting from the inventiveness of others.

I think there are many situations even now, and certainly if the proposed fee increases become law, where a manufacturer or service provider would do better to forego patent protection altogether and instead benefit from those who are paying astronomical fees into the patent system for the dubious pleasure of disclosing their technology to the competition with little hope of enforcing patent rights before U.S. courts which have grown increasingly patentee-hostile over the last 5 or so years.

Respecfully yours,

• Your name

==================================================================
Your email signature, including name, title, firm name, street address establishing you as constituent of addressee, telephone and fax numbers, and email address
==================================================================

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Random Stuff

Please spread the word!

This site's URL is http://twiki.org/cgi-bin/view/Main/EdSuominen

Click here for statistics on this and other Twiki collaborative sites:

Files for Download

• USPTO_Fee_Leg_and_Sect_Analysis.pdf:

• FeecalculationsGTPrev2.xls:

GTP: I have attached two more files (see below) to assist you in your snail mail, fax, and email letterwriting campaign. One file (FY 2003 Reauth data.txt) contains contact info (snail mail, fax, telephone, and email where available) for all members of the Subcommittee on Courts, the Internet, and Intellectual Property, which is the Subcommittee under the Committee on the Judiciary of the U.S. House of Representatives which is now reviewing the FY 2003 PTO Reauthorization Act. The other file (FY 2003 Reauth merge form.doc) is a Microsoft Word document which you can use as a merge form for your convenience in generating letters to members of the Subcommittee -- please search on "###" for locations that should be personalized before merging). Please write quickly, since this bill appears to be moving through Congress very quickly (probably part of the PTO strategy). Snail mail to Congress may still be delayed, so fax and/or email is probably best.

• FY2003Reauthdata.txt:

• FY2003Reauthmergeform.doc:

About this Page

I originally started this collaborative web page in hopes that it would become the center of a collaborate work effort by patent practitioners, inventors, and others who are deeply concerned about the Patent Office's draconian fee proposal to defeat it. It has now evolved into what is probably its most useful and realistic purpose; an information resource to alert others to the potentially devastating effect on the U.S. patent system should this proposal become law. I hope this page remains a useful resource, but I do not plan to play a very active role in maintaining it and I cannot in any way be responsible for the edits and contributions of others.

You can add your comments to this page by clicking here. You will be prompted for a login and password. You can register so your name is attached to your edits, or you can edit anonymously with the login TWikiGuest and the password guest. If you get a warning about someone else editing, go ahead and proceed but save the text of your contribution just in case. (There probably won't be any problems.)

You can add to someone else's comments or add your own under a separate heading, which you create on a line starting with ---++

If you'd like me to add your comments (which I will probably agree to do), send me an email. (You'll need to remove "STOPSPAM" from the email address.)

Ed Suominen
Registered Patent Agent
Independent Inventor of EE Technology
4 U.S. Patents, additional patents pending
www.eepatents.com