PPAC Report on PTO Fee Proposal

The Patent Public Advisory Committee (PPAC) has issued its report on the PTO’s fee proposal published earlier this month.

PPAC praises the PTO for seeking to reduce RCE filings by expanding after final practice and permitting consideration of prior art after payment of the issue fee.  PPAC is also positive about the proposed fee reduction for Track I accelerated examination and elimination of the large fee for late filing of a declaration.  Finally, PPAC approves of shifting the appeal fee from the time of filing the appeal brief to the time that the appeal actually moves to the Patent Trial and Appeal Board (PTAB).  This will eliminate the need to pay the fee if prosecution is reopened by the examiner after the brief is filed, which often happens.

PPAC is critical of the PTO’s other initiative to reduce RCE filings by significantly raising the fee for doing so, especially for second and following RCEs.  These fees are higher than fees for filing a continuation and will not reduce re-filings when they are needed.  PPAC also criticizes the extremely high fees for extra claims; there does not seem to be a need for such high fees as the extra work is not commensurate with the fee levels.

PPAC believes that the rules for contested applications, such as post-grant review, are too complicated and should provide a structured or automatic discovery mechanism.  The fees for supplemental examination and the limitations on the number of references that may be considered are too high for this procedure to be adequately utilized.  Similarly, PPAC argues that the fees for ex parte reexamination are way too high and not commensurate in scope with the work required by the PTO.

In general, PPAC believes that the fees proposed are too high.  Perhaps the PTO is trying to meet its 10 month first office action goal too quickly and should slow the process down to keep from having to increase fees so much at the outset.

Controlling Applicant Behavior

Many of the proposed fees seem to be the PTO using its authority to encourage or discourage certain applicant behavior.  PPAC believes this may be inappropriate because the PTO does not take all motivating factors for such behaviors into account.  For example, applicants may take certain actions in response to a court decision.  PPAC suggests that the PTO should also realize that fee levels will influence office personnel and examiner behavior as well.

The PTO needs to take price elasticity into account when setting fees.  Many or most entities that use PTO services have set budgets for doing so.  As the price increases, these entities will have to reduce their requests for such services.  For example, if the price is too high, the number of applications filed will decrease.

An example of this is that less than half of the PTO’s set ceiling of 10,000 Track I accelerated applications were filed during FY2011.  PPAC believes this is because the PTO set the price for this track too high.

PPAC believes that the significant initial application filing fee, and other fees such as maintenance fees, are being raised so high so quickly as to shock the patent system.  This may result in significant reduction in PTO revenue due to reduced usage by applicants.

In its report, PPAC also recognizes another problem with the AIA.  The PTO’s stated goal is to reduce first action pendency to 10 months and total pendency to 20 months by 2015-16.  Patent applications are only published, however, 18 months from their earliest filing date.  Thus, at a first office action after 10 months, there may be a great deal of prior art that is not yet known to the applicant or the PTO.  Perhaps the PTO will allow claims that it later must unallow due to later publication of invalidating prior art.  This will create additional inefficiencies for the PTO and applicants.


Specifically, PPAC argues that the RCEs are a source of frustration to by the PTO and patent applicants.  The PTO seems to place the blame for the increase in RCE filings solely on patent applicants, while PPAC rightfully notes that examiners bear a great deal of the blame. 

The PTO generally measures patent pendency by considering RCE filings as abandonments and new application filings.  Thus, if an RCE is filed, the PTO total pendency numbers go down.  A few years ago, the PTO changed RCE procedures to delay the time for their consideration.  The huge proposed increase in fees significantly aggravates applicants by increasing costs for reduction on service.

PPAC also notes that the recent PTO reduction in unexamined application backlog is nearly commensurate with the RCE backlog plus the appeal backlog.

PPAC is highly critical of the proposed RCE fee increases calling them punitive.

PPAC believes that applicants’ options after a final office action are limited to RCE or appeal.  Both of these fees are too high, especially given that applicants are not allowed to participate in pre-appeal brief conferences.  PPAC supports such participation because without it, these conferences are of little use and the proposed fees are simply too high for RCE or appeals.

Contested Cases

PPAC argues that the fees for contested cases–Inter partes review, post grant review, etc.–are way too high.  PPAC estimates that the costs for these cases, including attorneys’ fees, discovery, etc. will be $250,000 to $500,000.  The proposed fees seem to be much higher than the associated PTO costs.


PPAC’s conclusion is that the PTO did take some public comments into account between its February proposed fees and its September notice and made some reductions to those proposed.  Too many of the fees, however, appear to be attempts to regulate applicant behavior instead of simply to recover the PTO’s associated costs.  PPAC advises the PTO to reconsider some of these proposed fees.

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One Response to “PPAC Report on PTO Fee Proposal”

  1. silver price Says:

    The PTO has now published its proposed fee schedule . Not surprisingly, the fees are going up. The PTO seeks to increase its funding to deal with backlog issues in applications and appeals. But, as noted by Patently-O , the PTO is clearly also attempting to influence applicant behavior through its proposed fees.

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