The New Fast Track for Patent Applications Comes at a Price

Monday, April 25th, 2011

The U.S. Patent and Trademark Office (“USPTO”) just launched a program under which you can have your patent application expedited by paying a $4000 surcharge.

Using the program could reduce application processing time to a year, which would shave nearly two years off of average application-processing time. But, unless and until the law changes, this program will cause regular patent applications to go slower than they otherwise would.

Presently it takes a long time to get a U.S. patent. The average time from application filing to final disposition is 33.9 months. That’s too long, and the USPTO is fighting to reduce that time to 20 months by 2015. That’s a daunting target. The USPTO will need help from Congress to get there (more on that below)

Last summer, the USPTO proposed to separate patent applications into three tracks – fast, regular and slow. This new program is the fast track.

The regular track is the way patents presently move through the USPTO – the track the USPTO wants to speed up to 20-month processing.

The slow track would charge lower fees for delayed processing of the application. The USPTO has not yet launched the slow track.

The $4000 fast-track fee is on top of the other filing and processing fees the USPTO charges. When you include those other fees, a corporate applicant would pay $5,520 in total processing fees while a small-entity applicant would pay $4,892.

The USPTO promises fast-track applications will reach final disposition in an average of 12 months, but it does not promise that any individual application will be processed that fast. Also, final disposition could be a result other issuance of a patent issuance, such as final rejection of the application.

The USPTO will begin accepting fast-track applications on May 4. It will accept only 10,000 fast-track applications for the rest of the current federal fiscal year, which runs through September 2011. It then will evaluate whether to accept a higher volume in the future.

Here’s the rub for regular patent applicants: Fast-track applications will go to the front of the line, so they will make regular patent applications go slower unless and until Congress changes how the USPTO is funded.

The USPTO is entirely funded by fees paid by patent and trademark applicants and owners. It receives no money from tax payments.

In fact, in the past the government has siphoned money from the USPTO to use in the general treasury. This is one reason why the patent-application processing time presently is unacceptably slow – because Congress has diverted money paid to the USPTO to do things.

In the budget deal for federal fiscal year 2011 that was just enacted, USPTO funds almost certainly will be diverted again. If the USPTO’s fee-receipt projections hold, it will lose to the Treasury approximately $110 million of its expected receipts of $2.2 billion.

Under fast-track, the USPTO planned to hire extra patent attorneys to process those applications so regular applications would not be slowed. I don’t see how such supplemental hiring will be possible given the diversion of USPTO fees. The USPTO admitted in its publication of the fast-track rules that this program could slow down regular applications for the rest of fiscal year 2011.

The solution is in Congress’s hands. Patent reform bills are pending that would let the USPTO keep all of its fee revenue. Passage would enable the USPTO to use the $4000 expedited-processing fees to hire the extra patent examiners needed to staff the fast track.

Patent reform is close to passing. The Senate has passed a bill and the House just reported a similar bill out of committee. Yet, reform could get shelved over a sticking point, or because of more important or sexier issues.

Patenting fast-track is a potentially attractive value proposition. But the regular patent system needs to go much faster too, and it shouldn’t be slowed by fast-track, so let’s hope patent reform passes soon.

By John B. Farmer
Published in the Richmond Times-Dispatch
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