Filing Fees to Increase Substantially

From start to finish, the cost of an inter partes patent reexamination (IPX) proceeding is estimated to be $278K by the 2011 AIPLA Economic Survey. This figure includes all expenses from the time of filing the request to a decision of the Board of Patent Appeals & Interferences (BPAI). The government filing fee for requesting inter partes patent reexamination is $8800.

The America Invents Act (AIA) introduces several new inter partes proceedings for the purposes of challenging the validity of a U.S. Patent. The first, Inter Partes Review (IPR), will be available on September 16, 2012 and will replace IPX. The second, Post Grant Review (PGR) will also be available on September 16, 2012 to challenge certain business method patents. Thereafter, PGR may be used to challenge (within a 9 month window after issuance) a patent filed on or after March 16, 2013.

As discussed yesterday, IPR will provide a significant improvement over IPX with respect to overall pendency delays. PGR will follow the same general timeline. In addition to the improvement in pendency, both IPR and PGR will provide for limited discovery, protective orders, oral hearings, settlement, and the management of the proceedings by a three person Administrative Patent Judge (APJ) panel of the new Patent Trial & Appeal Board (PTAB). But, what is all of this going to cost filers?

If initial rumors out of the USPTO are correct, the filing fee for IPR and PGR will be on the order of $48,000. This is a significant increase over the current fee for IPX ($8800) and is intended to cover the increased effort of the agency to conclude these proceedings within 12-18 months. Likewise, as the Office will be assigning three APJs to every filing, and will be managing discovery, oral proceedings and a trial, there will be additional burdens on resources.

As to attorney fees, using the $278K average of IPX as a baseline, one can expect the cost of the new proceedings to at least double due to the increased time pressures, additional discovery and quasi-litigation features.

While half a million dollars may seem quite pricey, contrast this expense with the average cost of a patent litigation to the CAFC, estimated by the AIPLA to be $ 3 million for a low stakes case (i.e., less than $25 million at stake) and $6 million for a higher stakes case.