The debate has begun among users of the U.S. patent office, large and small, to hammer out a fair and usable fee structure.
Last year’s America Invents Act made major changes to our patent system, largely designed to improve patent office operations, reduce the backlog of applications and improve the quality of patents. Last week, the U.S. Patent and Trademark Office set out a framework to help determine fees for using the services of the PTO going forward.
While there was disagreement by industry groups over various provisions of the patent reform legislation, most agreed on one thing: the fees paid by users of the PTO should cover the cost of the services provided by the PTO. Once paid, the fees should be available to the PTO to continue to provide those services and not be diverted to other purposes.
PTO’s proposal fulfills the goals of the America Invents Act. Most important, the proposal is neutral. It does not provide special advantages or impose unique burdens on large applicants like Cisco (we apply for more than 700 patents per year) or on smaller applicants who may have far fewer applications.
The first approach proposed by the PTO would have increased initial filing fees by 47 percent. However, this increase would be offset with a 53 percent reduction of issue and publication fees. This sensible shift would align fees with the cost of service. Much of the increased revenue would come from higher fees to keep patents in force, allowing patent owners to decide which patents are worth the additional expenditure – at a time when their value is more certain.
There are also fee increases for requesting continued examination of rejected patent applications, although this comes with an understanding by the PTO that procedures may need to change to reduce the need for such requests. All filers, including large and small companies, as well as individual inventors, will benefit from a 17 percent reduction in the fees for prioritized examination. PTO is also proposing increases in fees to review the validity of already issued patents.
There is a strong benefit to increasing the PTO’s available resources. The U.S. economy needs an efficient patent examination system that quickly grants patents on real inventions, and weeds out weak patents that harm legitimate innovators.
By hiring more examiners and modernizing its infrastructure, PTO will process more patent applications, more quickly reducing its backlog. More importantly, the PTO will improve the quality of the patents it approves. For companies like ours, the additional fees would be outweighed by the economic benefit of avoiding for litigation costs against accusations of infringement based on bad patents.
The PTO also lays out an alternative approach which leaves fees in place but does not provide the same improvements to backlog or quality. The presentation of alternative approaches should lead to a healthy discussion to help the PTO choose the best path forward.
The bottom line is that there is no free lunch and no free patent process. We hope users of the patent office, large and small, will work together to achieve a fair and usable solution that will generate the benefits the new law was designed to accomplish.--Mark Chandler is Cisco Systems' senior vice president, general counsel and secretary; Dan Lang, Cisco's vice president for intellectual property, contributed to this article