As discussed last week, the USPTO is proposing a significant increase to the fee for ex parte patent reexamination (EXP). Likewise, the new supplemental examination (SE) fee, should prosecution be required, is on the order of $21K. (supplemental examination fee, plus corresponding reexamination fee)

The rules package for Post Grant Review (PGR) and Inter Partes Review were expected last week (if not before). However, these packages were delayed by OMB, which has identified them as significant rule making. It is expected that the rules for PGR and IPR will publish this week. The fees for these new proceedings will be estimated based on the same analysis applied to EXP and SE and are expected to be in the $40-50k range.

For a step-by-step explanation of the USPTO’s fee calculation process, and perhaps a preview of PGR and IPR fee determinations click here.

USPTO Fee Structure to Discourage Conduct?

It is expected that the rules to implement post-grant review (PGR), inter partes review (IPR) and transitional business methods post-grant review (TBMP) proceedings will be printed in the Federal Register this coming Tuesday. Included in the new rules will be the filing fees associated with these new proceedings. By statute these filing fees must be set to recover the average actual costs to the USPTO to conduct these proceedings.

As demonstrated in last week’s rule package for supplemental examination, the average aggregate cost can be significantly higher than present fee levels. The proposed rules issued last week set a fee of $ 5,180 to request supplemental examination and another $16,000 for the resulting ex parte reexamination should the supplemental examination request raise a substantial new question of patentability (SNQ). It is expected that Tuesday’s rule package for PGR, IPR and TBMP will set fee levels in excess of $ 40,000. But, such fee levels may have an unfortunate chilling effect on those interested in using these new post grant patent proceedings.

Interestingly, in February 2012, the USPTO will be publishing proposed rules for adjusting all of its fees under its new fee setting authority set forth in the America Invents Act (AIA). The new USPTO fee setting authority will permit the USPTO to revise the fees set by Congress under 35 U.S.C. §§ 41 (a) and (b) based on the aggregate costs of funding the USPTO. This will permit the USPTO to incentivize and disencentivize applicant, patent owner and third party behavior by setting the fees at low or high levels to encourage certain activities while discouraging others. For example, filing, issue and first stage maintenance fees may be set low to encourage innovation while excess claim, extension of time, continuation application, and second stage and third stage maintenance fees may be set higher to subsidize the costs of patent examination. However, if the USPTO were to set at punitive rates fees for requests for continued examination (RCE) and appeals, this will be not received favorably by the patent user community. RCE and appeals are not activities that applicants relish. If these are necessary to pursue because of poor patent examination it would be unjust to force applicants to pay excessive fees to achieve justice when the patents should have been granted at an earlier stage of examination.

Correction of improvidently issued patents by post grant proceedings is in the public’s interest. Therefore, if the USPTO were to impose excessively high fees to request ex parte reexamination, IPR, PGR and TBMP, such will be inconsistent with sound public policy. Ideally, if these patents should have not have issued, then the maintenance fees paid by the patent owners who have benefited by obtaining defective patents should be used to subsidize the costs of the proceedings. It is especially unfair for third parties adversely affected by such patents to have to pay the full costs of their correction. It is hoped that when the USPTO does its fee redesign in February that they will correct the problem created by Congress by resetting these post-grant patent proceedings fees at lower rates to increase participation rates to desired levels.

Finally, the patent user community is concerned that the new proposed rules for adjusting fees will be boosted above the 15% surcharge rate effective in September 2011 to build a revolving reserve fund above the collections level needed to achieve Congressional budget levels assigned by Congress. If fees collected exceed appropriation levels then they become subject to fee diversion by Congress. Until the fee diversion problem is resolved the patent user community will remain skittish about the money infused into a revolving fund with a future hope, but no guarantee, that the USPTO will have full access to the fees.

Today, by Federal Register Notice (here), the USPTO has scheduled public hearings on fee setting with the Patent Public Advisory Committee (PPAC). Interested members of the public may present their views and comments by coordinating in advance with the Office.

As mentioned on Monday, the proposed rule package for supplemental examination is expected this week; in fact, it will publish tomorrow. In addition to the expected rule package on the new supplemental examination proceeding, the USPTO has included proposed revisions to existing patent reexamination fees.

The existing fee for requesting ex parte patent reexamination is $2520. The Notice proposes to raise this fee, to account for actual agency costs for conducting the proceeding, to a whopping $17,750. The notice also raises the fees for filing a petition (using the same justification) in either ex parte or inter partes patent reexamination to $1932. This new fee will apply to any petition filed under Rules 181,182, or 183. (The petition fee increase excludes extensions of time and some other minor petitions). Current fees are on the order of $200-$400. It may be that the increase in petition fees will help reign in the abusive practices currently plaguing the Office.

Certainly the Office should raise reexamination fees as they are presently quite low, but the jump to the proposed levels, especially as it relates to the hefty request fees, is unlikely to be received very favorably by the public.

The fee for filing a request for supplemental examination, and the corresponding reexamination that follows will cost filers. $21,296 ($5,180 for the request and $16,116 for the reexamination, if instituted). The Office is also charging extra for the review of documents that exceed 20 and 50 pages; an extra $166 for the former and $282 for the latter.

As I mentioned months back, the rumored cost of Inter Partes Review and Post Grant Review is upward of $48K per filing. Looking at these revisions to patent reexamination filing fees, one can expect higher fees for these more labor intensive office proceedings.

Tomorrow’s Federal Register will detail these fee changes and the rules for supplemental examination. Attached is a copy of the rules that will publish tomorrow (here)…more thoughts tomorrow.

]]> http://www.patentspostgrant.com/lang/en/2012/01/uspto-proposes-400-600-increase-in-patent-reexamination-fees/feed 0 http://www.patentspostgrant.com/lang/en/2012/01/7842 http://www.patentspostgrant.com/lang/en/2012/01/7842#comments Thu, 12 Jan 2012 09:10:23 +0000 Scott A. McKeown http://www.patentspostgrant.com/?p=7842

Post Grant Practice CLE

Today the AIPLA continues their multi-part web series on the America Invents Act (AIA). In the latest installment, the new post grant mechanisms of the AIA will be explored. The program is entitled Post-Issuance Activities and Enforcement Activities Under the America Invents Act.

Registration info is found (here)

For additional CLE credit in 2012, consider the following programs:

Post Grant Proceedings 2012 — The New Patent Litigation Practicing Law Institute, February 3, 2012 (NYC & Webinar)

Salvaging Patents with New Supplemental Examination Strafford Legal February 14th (Webinar)

USPTO Procedures Under the America Invents Act American Conference Institute March 26-27th (NYC & Webinar)

For those seeking a quick briefing on the new Rules of Practice Before the Board of Patent Appeals & Interferences in Ex Parte Appeals. The Practicing Law Institute (PLI) will be offering a one hour webinar next Monday, January 9, 2012.

Topics to be covered include:

• New petition practice to toll Reply Briefing deadlines
• Simplification of brief formatting and required appendices
• New default practices and assumptions
• Guidelines for identifying “new rejections”
• New jurisdictional timing
• Elimination of examiner responsibilities

I will be presenting along with my colleague (former Administrative Patent Judge and USPTO solicitor) Lee Barrett.

Registration details are found (here)

2011 was perhaps the most significant year to date in terms of post grant patent practice. The perennial legislative effort generally known as “patent reform” finally bore fruit as the Leahy-Smith America Invents Act (AIA); patent reexamination filings in 2011 reached an all time high; patent reissue practice was explored and clarified by the CAFC; and patent litigation parallel with patent reexamination continues to expand as a well established strategic practice.

As to the America Invents Act, several entirely new post grant patent proceedings have now been enacted into law (effective September 16, 2012).  A summary of these proceedings, and discussions of their expected impact are linked below (and throughout the blog).

Post Grant Review

Inter Partes Review

Supplemental Examination

Derivation

Transitional Business Method Patent Challenge

The USPTO is scheduled to issue a notice of proposed rule making on these proposed proceedings within the next 2-3 weeks. 2012 will bring much more detail to the broad legislative concepts found in the AIA.

As to patent reissue, the CAFC has clarified the scope of error necessary for patent reissue (Ex Parte Tanaka) and has addressed the complexities of the recapture doctrine (Ex Parte Mostafazadeh). The CAFC is expected to issue their decision in Ex Parte Staats, another important patent reissue case, in the coming weeks.

Patent reexamination has been impacted by the passage of the AIA in that the SNQ standard is now available only for ex parte patent examination. Likewise, the USPTO has proposed their own changes to patent reexamination practice to decrease pendency. With the passage of the AIA, it is unclear where this earlier proposal now stands.

2012 is expected to bring even further attention to post grant patent practice as it expands and matures under the new legislation. Stay tuned.

The seemingly never ending saga of the NTP patent reexaminations took yet another interesting turn yesterday. The BPAI issued revised decisions on remand that reversed the earlier rejections of some of the NTP claims. As a reminder, the reexamination of the NTP patents began during the litigation between NTP v. RIM.  The reexaminations continued at the USPTO in parallel with the then ongoing, and now infamous, litigation.  However, the co-pending litigation continued on to the settlement, narrowly avoiding a disruption of RIM’s business in the U.S via court imposed injunction.

Now, some 6+ years later, the reexaminations may be close to a conclusion (absent further appeal by NTP).

The revised decisions stem from the CAFC remand on claim construction issues relating to the definitions of “electronic mail” or “electronic mail message.” As a result of the revised construction, NTP has manged to claw back some of their previously rejected claims.The chart below shows the current status of the NTP portfolio as of yesterday, the decisions are linked here: 5,436,960; 5,438,611; 5,479,472; 5,625,670; 5,631,946; 5,819,172; 6,067,451; and 6,317,592 (not yet issued)

LEGEND:

-Green claims were newly confirmed/allowed as a result of yesterday’s decisions

-Black claims have been confirmed/allowed since the first decision of the BPAI

-Underlined claims are confirmed/allowed, but were added as new claims during the reexamination.

(CLICK TO ENLARGE)

NTP entered the patent reexamination process with over 2200 claims. The underlined claims were added in patent reexamination, which means they do not exist until printed at the conclusion of the reexamination. For many, if not all of these newly added claims, it is simply too late. This is because some of the underlying patents expired in May of 2011. Once a patent expires, new claims cannot be added….however existing claims can be enforced by proving that the claims were infringed prior to expiration. So, at the end of the day, assuming the surviving, original claims are infringed, NTP may be able to restart their stalled infringement campaign, against Apple, Yahoo, Sprint and others. (Virginia District Court stayed case pending USPTO reexamination)

While further appeals are also possible from the latest decision of the BPAI, it seems that NTP may have reached the point of diminishing returns and will instead allow the patent reexamination proceedings to finally end after 6+ years.

As injunctions in patent disputes have become more difficult to obtain since the earlier dispute with RIM, and the portfolio is expired/expiring, the previous leverage of NTP is significantly diminished.

Going forward, new NTP targets may find relief from a new provision of the America Invents Act (a.k.a recently enacted patent reform legislation, effective next September 16th) that will permit an inter partes style challenge (in this case Inter Partes Review) of these patents for the first time….the saga continues.

While not a typical post grant topic, prioritized examination (PE) is another feature of the recent America Invents Act that may be of interest to those with high value applications stalled at the USPTO.

As a reminder, PE under the AIA is essentially a codification of the USPTO’s track 1, Enhanced Examination Timing Control Procedures Initiative. Until passage of the AIA, and the increased funding that came along with the 15% surcharge, the Track 1 program was suspended. Thereafter, the Office began accepting requests for PE.

PE allows, as the name implies, examining certain applications out of turn based on a priority status and be disposed of within 12 months. That is to say, upon payment of a fee of $4800 for large entities, $2400 for qualifying micro entities, “priority” can be purchased. There is a cap of 10,000 such requests for any one fiscal year. Judging by initial filing rates (300 per month) that number is not likely to be exceeded.

Previously, applications undergoing prosecution, such as those at the RCE stage could not participate in this program….which makes sense in that there is no value in jumping to the head of line if already there. Why anyone would feel the need to pay such a hefty fee for a case already being examined is beyond me, yet the USPTO has provided for that eventuality in yesterday’s final rule publication in the Federal Register .

Of course, once an RCE is filed, the application no longer appears on the examiners special docket, and the application can slow as compared to past Office practices. Still, it is not clear to me if such a delay is worth the cost of PE. Nevertheless, the PTO is now expanding Track 1 to include RCE’s.

The Final Rule was published yesterday, in the Federal Register. (PE FAQ here)

An RCE application may be granted prioritized examination status if the following conditions are met:

1.  RCE filed in an original (non-reissue) utility or plant application filed under 25 USC 111(a) or entered into the national stage under 35 USC 371.

2.  The Request for Prioritized Examination is filed via EFS-Web (except in a plant application) before a post-RCE Office Action is issued.  The Request for Prioritized Examination may be filed concurrently with or subsequently to the filing of the RCE.

3.  Application must contain or be amended to contain no more than 4 independent claims and 30 total claims at the time the Request for Prioritized Examination is filed, and may not contain any multiple dependent claims.

4.  Request for Prioritized Examination must be accompanied by the Prioritized Examination fee ($4800/$2400), the processing fee ($130) and the publication fee ($300 – if not already paid).

5.  Only one Request for Prioritized Examination of an RCE can be filed in any given application.

Note:  RCE in a U.S. national stage application is eligible for this program, while such applications are not eligible for basic Track 1 Prioritized Examination, and Request for Prioritized Examination can be filed after an RCE has been filed (so long as no Office Action has issued since the RCE filing).

On Tuesday the CAFC heard arguments in the case of Pregis Corporation v. Kappos and Free Flow Packaging Intl. At issue in this case was a cross appeal of under the Administrative Procedure Act (APA) alleging that the USPTO had issued U.S. Patent 7,361,397 in an arbitrary and capricious manner. The ‘397 Patent is directed to plastic film used in machines that manufacture the now ubiquitous air pillows found in shipping containers.

Yet, rather than going through the time and effort to necessary to sue a government agency on a seemingly novel cause of action, why didn’t appellant Pregis simply seek reexamination of the ‘397 Patent?

At the time Pregis was approached to take a license, the ‘397 Patent had not yet issued from the USPTO. Pregis was approached to take a license to the Free Flow portfolio. (a notice of allowance had issued for the application underlying the ‘397 Patent). Thus, there was no ‘397 Patent to reexamine at the outset of the dispute between the parties.

Being outside the protest window for the maturing application (rarely used anyway), and believing there to be clear mistakes/capricious action made in the allowance of the case, Pregis filed suit against the USPTO under the APA in the Federal District Court of Virginia (Alexandria).

The initial complaint (here) may have been primarily intended as a “back door” protest to encourage the Office to revisit the allowance. Nevertheless, the patent issued in due course and the APA action continued through the Virginia Court. The dispute made its way to the CAFC on Tuesday. Interestingly, the USPTO was represented by an attorney from the Dept. of Justice on appeal.

At mins 23-45 of the CAFC argument, the APA issues were explored, with significant attention applied to public policy concerns. (recording here).

It would seem unlikely that the Court will endorse the practice, nevertheless the debate is quite interesting in view of recent APA issues explored by the CAFC. (In re Jung, Hyatt v. Kappos)

In fiscal year 2011 the USPTO initiated a total of 1133 patent reexamination proceedings (both ex parte and inter partes). The 2011 tally represents an overall increase in filings of about 7% relative to 2010 numbers.

Interestingly, while ex parte filings receded slightly, inter partes filings surged by 33% relative to 2010. In FY 2011 374 requests for inter partes patent reexamination were filed.

USPTO statistics for 2011 are found (here)

Ex parte patent reexamination proceedings are typically disfavored over inter partes reexamination proceedings as being too one-sided, and historically biased in favor of patent holders. Likewise, as patent reexamination is increasingly employed as a litigation tool, it is not surprising that the more robust proceeding is now surpassing ex parte filings (especially now that most issued patents qualify by virtue of being filed as applications on or after 11/29/1999)

On the one year enactment anniversary of the America Invents Act (AIA), inter partes patent reexamination (IPX) will be replaced by Inter Partes Review (IPR). The USPTO will gradually implement Inter Partes Review over the first four years by limiting the proceeding to the first 281 filers. This limit was established by the AIA as a control to keep the Office from being overwhelmed in the early implementation stages of this new AIA proceeding.

The 281 filing cap is based upon the total inter partes patent reexamination filings for 2010. (fiscal year concluding before passage of the AIA)

Based upon the current market demand for IPX filings, the USPTO may find themselves up against the 2010 limit very quickly.