In an attempt to make the late submission of IDSes less costly, the Patent Office is instituting a pilot program to extend the ability to submit an Information Disclosure Statement under 37 C.F.R. 1.97(d) to after the payment of the issue fee.  The pilot program starts on Wednesday, March 16, 2012, and is slated to end September 30, 2012.  However, the process is somewhat complex, and unlikely to be much used.

The Patent Office issued a Press Release, and published the Federal Register Notice that includes all the rules.

Submission of such an IDS will require:

1.  New transmittal form PTO/SB/09 which will be made available as a PTO form. (currently not there, I will update the link when it is added)

2.  IDS including IDS submission fee ($180)

3.  Declaration under 1.97(e)(1) or (2) that:

• That each item of information contained in the information disclosure statement was first cited in any communication from a foreign patent office in a counterpart foreign application not more than three months prior to the filing of the information disclosure statement; or
• That no item of information contained in the information disclosure statement was cited in a communication from a foreign patent office in a counterpart foreign application, and, to the knowledge of the person signing the certification after making reasonable inquiry, no item of information contained in the information disclosure statement was known to any individual designated in § 1.56(c) more than three months prior to the filing of the information disclosure statement.

4.  A Petition to Withdraw from issue after payment of issue under 37 CFR 1.313(c)(2), including fee ($130)

5.  A Request for Continued Examination (RCE) form, including fee ($930/$465)

The Examiner will, upon review of the IDS, determine whether prosecution needs to be reopened.  If so, the RCE will be entered, and prosecution will be reopened.  However, the IDS fee will not be refunded.

If the Examiner determines that the IDS does not raise new issues, the Examiner will issue a Corrected Notice of Allowability, indicating that the IDS has been considered.  The RCE fee will be refunded.  There will be no need to respond to the corrected Notice of Allowability, the case will automatically progress to issue.

So the new policy effectively requires exactly the same process as you would use now, upon receiving a late reference, except that the Patent Office will treat the RCE request as conditional, and will refund the RCE fee if they determine that the references do not raise new issues.

As a general policy, we do not recommend the use of declarations under 1.97(e)(2) because it requires “reasonable inquiry” that no one associated with the case was aware of any of the references.  There is a real risk that someone, maybe an inventor who is no longer with the assignee, was aware of a reference.  However, a declaration under 1.97(e)(1) only requires is a reference from a foreign patent office in a computerpart foreign application.  Unfortunately, that does not include related patent applications, whether U.S. or foreign, only references from  foreign counterpart applications.

There are two potential advantages to this procedure.  First, there is the savings of the RCE fee, a savings of between $750 and $285, since the IDS fee is now required).  Second, any such submission will be placed on the examiner’s “expedited” stack. Currently the wait for RCE responses has been increasing drastically, due to the pressure on Examiners to reduce wait time for the first office action.  Thus, being on the expedited stack may be a significant time advantage.  Despite these advantages I don’t think this procedure will significantly change existing practice, or help with the excessive RCEs.

The USPTO’s published fee increase proposal is going to have an impact on every patent department in every company. You can find the Patent Office’s discussion and a PDF with the fee increases on the AIA microsite.  While some fees are untouched, and a few are even reduced, many fees are significantly increased.

Some of the major fee increases:

USPTO Patent Fee Change Table

Many fees are increased by a small amount, those are not listed in the above table.  The only noticeable fee reduction is for issue fees.  If an application is publishes, the issue fee will be reduced by 50% compared to an issue fee for a non-published application.  While publication will still cost $300, the savings of $1,080 on the issue fee is not insignificant.  However, this change is not scheduled to start until January 1, 2014, almost a full year after the new fee increases become effective.

The increases in the filing fees, RCEs, and maintenance fees are going to have a large impact on patent budgets.  If you budget for prosecution and maintenance fees separately, and I recommend you do, increase your estimates for both, starting in February of 2013.  Since many companies set their budgets annually, make sure your next budget cycle includes the likely increases in patent costs.

For prosecution costs, if you work with an outside firm most of the cost is attorney fees.  I would estimate that this fee increase will lead to an increase of overall costs by approximately 15% across the board.  Of course, if you are handling prosecution in-house, you should be increasing your budget for PTO fees by at least 60%, given the inflation of filing, RCE, and appeals fees.

More significantly, you will need to increase your budget for maintenance fees.  If your portfolio is evenly distributed in terms of status, then you should increase your overall maintenance fee  budget by ~50%.  If your portfolio is younger, with most of your issued patents at the first or second maintenance fee stage, increase your maintenance fee budget by ~35%.  If your portfolio is older, more heavily weighted toward patents in their final maintenance fee stage, you will need to increase your budget by 60%.  For an evenly distributed portfolio of 100 issued patents, the additional cost would be ~$45,500, raising the annual maintenance fee budget from ~$96,700 to ~$142,200.

While the Patent Office has not finalized these fees, I attended the public hearing and there appeared to be little interest in discussing changing these fees, or acknowledging their likely impact on innovation.

The America Invents Act is going to be changing many aspects of patent prosecution and litigation.  I have divided it into four segments, patent strategy, patent prosecution, post-issue owner’s rights, and post-issue third party rights.  Each change to the patent law will impact one or more areas.

These changes have been partially implemented, in September of last year.  Another large group of changes will be coming in September of this year.  The fee changes proposed by the Patent Office, which appear to be non-negotiable despite the many hearings held, are going to be implemented in February of next year.  I will make a longer post about the fee changes, and their impact later.  And finally, in March of 2013, the First to File or Disclose rules, and the associated other rules, will be coming into play.  As you can see, the September 2012 changes will mostly impact third parties, starting the post-grant opposition, and other changes.

This graph is a summary of the changes, their timing and the segments which they primarily impact.

The Patent Office has published the new rules for instituting a claim of derivation.  Derivation proceedings were part of the shift to First to File, which allows someone who can prove that the first filer stole their idea to obtain the patent, even though they were not first to file.  It effectively replaces interferences, but requires not just first invention, but actual demonstration of theft.

The basics are that the petition must state with peculiarity the basis for the charge of derivation, must be filed under oath, and must be supported by substantial evidence.  However, the new rules appear to have a built-in Catch-22 with respect to publication.

The petition must be “filed within one year of the first publication by the earlier applicant of a claim to the same or substantially the same invention.” However, “derivation is unlikely to be declared even where the Director thinks the standard for instituting a derivation proceeding is met if the petitioner’s claim is not otherwise in condition for allowance.”

The requirement that inventors monitor the Patent Office publications closely is difficult, especially when the published claims may not reflect the (derived) later claims.  But more importantly, the timing can be impossible.

The senior applicant (e.g. the one accused of derivation) may request an early publication.  Currently accelerated publication ensures that a patent application is published as early as possible, and generally 14 weeks after receipt of the request.

This could mean that a junior applicant’s case may not even be filed, much less examined, even under the 18 month first action standard, before the petition to initiate the derivation proceeding has its deadline.  Even if the junior applicant files shortly after the senior applicant, with accelerated publication it’s unlikely that the junior applicant’s case would be in condition for allowance by the time the one year deadline rolls around.

Am I missing something?

I will update this post after the hearing, or potentially during the hearing if network is accessible. I expect that my opinions will not get much traction, since the Patent Office isn’t a big fan of small inventors, but I do intend to express my dislike of the huge increases in RCE fees & Appeal fees.

I would much rather have the fees shifted to either larger patents (e.g. patent size fees increased by a lot more) or shifted to maintenance fees. If you have opinions about the fees, and want to have input, attend a hearing, or write to the Patent Office. Let your voice be heard.

David Kappos, Director of the USPTO recently participated in an hour and a half of Q&A with Eileen McDermott of Managing IP (webcast available here) , discussing how implementing the new patent rules will change Patent Office practice.

He was overall quite positive about the changes.  Below I summarize some the aspects of his comments that I thought were particularly relevant.  My comments are in italics.

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