Everything You Need to Know About Patent Maintenance Fees

What are patent maintenance fees?

Patent maintenance fees are mandatory fees that must be paid to the United States Patent and Trademark Office ("USPTO") at certain time points after a patent issues in order to keep a utility patent in force. See 35 U.S.C. 41(b). Maintenance fees are not required for a design or plant patent. See id. Maintenance fees are not due during the process of obtaining a patent. Rather, they are triggered only after the patent issues.

When are patent maintenance fees due?

Under 35 U.S.C. 41(b), maintenance fees are due on issued utility patents at 3.5 years after grant, 7.5 years after grant, and 11.5 years after grant. Maintenance fees may be paid at most six months in advance of the due date. A patent owner who fails to pay by the deadline has a grace period of six months to pay thereafter. The patent shall expire at the end of the six-month grace period. The USPTO Director may require the payment of a surcharge as a condition of accepting within such six-month grace period the payment of an applicable maintenance fee.

What happens if I miss a maintenance fee due date?

Maintenance fees may be paid up to six months after their due date, with a surcharge for the late payment. See 37 C.F.R. 1.136(e). Failure to pay a maintenance fee within six months of one of the statutorily required timeframes results in the expiration of the patent.[1]

Reinstating a patent after failing to pay maintenance fees:

It is possible to revive a patent by payment of maintenance fees after the six-month grace period has expired if the delay is shown to have been unintentional. See 35 U.S.C. 41(c)(1). The patent owner must submit a statement establishing that the delay was "unintentional," and must include the maintenance fees owed as well as the fee for filing the petition. See 37 CFR 1.378; see also Network Signatures, Inc. v. State Farm Mut. Auto. Ins. Co., 731 F.3d 1239, 1243 (Fed. Cir. 2013). The standard for unintentional delay does not allow for revival where the delay was at any time intentional, i.e., the result of a deliberate course of action. For example, a patent owner who fails to pay maintenance fees because they believe that the invention has no commercial value cannot later change their mind and argue that their delay was unintentional. See, e.g., In re Rembrandt Techs. LP Patent Litig., 899 F.3d 1254, 1272-73 (Fed. Cir. 2018)(discussing the standard for unintentional delay).

Is it ever a good idea not to pay patent maintenance fees?

No, it is not a good idea to choose not to pay patent maintenance fees on time unless you have decided the cost of maintaining the patent justify losing the right to enforce the patent.

Small entity vs. large entity fees:

Concerns over the costs of patent-related fees being overly burdensome on individuals, small businesses, and nonprofits spurred Congress to enact a different fee schedule for small entities. See, e.g., Ulead Sys., Inc. v. Lex Comput. & Mgmt. Corp., 351 F.3d 1139, 1142 (Fed. Cir. 2003). The USPTO subsequently adopted rules governing claims to "small entity" status. Maintenance fees are reduced by 50 percent for a "small entity." The USPTO defines a "small entity" as a small business that satisfies certain requirements, an independent inventor, or a non-profit organization. See 37 C.F.R. 1.27. A small business qualifies as a small entity if it: 1) has no more than 500 employees; and 2) has not assigned, granted, conveyed, or licensed (or is not under an obligation to do so) any rights in the invention to any person who could not be classified as an independent inventor, or to any entity which would not qualify as a non-profit organization or a small business itself under 37 C.F.R. 121.802. See 13 C.F.R. 121.802.

It is important for patent owners to be mindful of the qualifications for claiming small entity status. Improperly paying small entity fees when a patent owner is, in fact, not a small entity may result in serious consequences. For example, paying maintenance fees as a "small entity" when an entity does not qualify for such status can potentially result in a finding of inequitable conduct should the patent ever be litigated. See, e.g., Ulead Sys., Inc. v. Lex Comput. & Mgmt. Corp., 351 F.3d 1139, 1146 (Fed. Cir. 2003) ("[O]ur traditional standard for inequitable conduct is applicable to USPTO proceedings involving the payment of maintenance fees as a small entity."). A finding of inequitable conduct makes the entire patent unenforceable against infringers. See, e.g., Regeneron Pharma., Inc. v. Merus N.V., 864 F.3d 1343, 1350 (Fed. Cir. 2017).

What is the patent maintenance fee schedule?

35 U.S.C. 41(f) allows the USPTO to adjust maintenance fees each year on October 1 to reflect fluctuations in the Consumer Price Index, but the USPTO will publish a notice adjusting patent related fees before they are actually adjusted. The table below reproduces the current (as of August 2020) USPTO fee schedule[2] for patent maintenance fees:

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[1] See, e.g., Ray v. Lehman, 55 F.3d 606, 608 (Fed. Cir. 1995)

[2] https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule#Patent%20Maintenance%20Fee (patent fees are subject to change)

Authors: Sean Daley, Lawrence Jarvis