Purpose of Fee Study

The Patent and Trademark Office established a fee study project to assess the current PTO fee structure and ensure it is meeting two goals: (1) Continuing to promote access to intellectual property systems and (2) Enabling the PTO to operate in a business-like manner. The research on fee issues is seeking external as well as internal input on the PTO's fee structure. The PTO believes that it is important to obtain and incorporate customer input into PTO's analysis, and improve the information available to PTO management for decision making regarding the fee structure. An underlying assumption of the fee study project was that it would be revenue neutral; i.e. any resulting proposals to the fee structure would be revenue neutral in the aggregate. The Fee Study Team is comprised of employees from the Office of Planning and Evaluation, the Office of Budget, the Office of the Comptroller, and the Patent Organization.

Purpose of The Sessions

The PTO Fee Study Customer Input Sessions were held for two main purposes. The first was to inform customers of factors that may impact on fees. Many of these factors also contributed to the formation of the PTO's fee study effort.

• GAO report on intellectual property fees. This report, which was issued in May 1997, was requested by Senator Orrin Hatch, who is chairman of the Senate Judiciary Committee.

• Cost accounting effort that the PTO is conducting. The primary purpose of the cost accounting effort is to provide PTO management with better cost data with which to make decisions, and provide more accurate reports.

• Pending government legislation. The legislation pending in the Senate (S.507) would give PTO the flexibility to adjust fees. H.R. 400, on the other hand, retains with the Congress the authority to set most patent fees. While the prospects for enactment of either of these bills in their current form are uncertain at this time, it is something that PTO customers should be aware of, and that the PTO needs to be ready to address if legislation is enacted.

• Business process reengineering. A business process reengineering review effort took place in both Patents and Trademarks. For Patents, this resulted in a goal to "assess fees commensurate with resource utilization and customer efficiency".

  The second purpose of the sessions was to seek customer input and suggestions on the fee structure and factors that may impact fees. The PTO is committed to seeking customer input, and taking it into consideration for decision making purposes.
The issues raised by the GAO for which feedback was sought, were:

• Dichotomy of costs and revenues - As the GAO report noted, "…while most of the costs of the patent process are incurred during the PTO's examination of the application, most of the fees are paid after the examination has been completed." [These are primarily in the form of issue and maintenance fees.]

• Successful applicants pay a larger share - Patent applicants who are successful subsidize those applicants whose applications are not successful. This subsidization is a result of the back-end fee recovery aspect of the patent fee structure.

• Fees by invention type - The GAO also noted that "…any particular patent fee may not recover costs because fees generally do not vary by invention type, even though the time and complexity involved in examining applications for different types of inventions can vary significantly." Fees charged are the same regardless of the invention type or complexity.

• Inaccurate or incomplete applications - The GAO's final observation was that "…patent fees may not recover costs because they generally are not designed to discourage an applicant's delays in the examination process."

In addition to the issues raised by the GAO, three additional topics were discussed at all sessions. These topics were:

• Current fee structure, ease of use - Whether or not the current patent fee structure was easy for customers to use.

• Electronic filing - Suggestions for incentives that the PTO could offer that would encourage applicants to file electronically.

• New products or services - Suggestions for new products or services that customers would like to see offered.

Other miscellaneous topics were discussed at sessions when they arose. A complete listing of these topics and their responses will be made available through documentation being published on the Internet.

How Customers Were Selected to Attend The Sessions

With the exception of the four inventor sessions held during the Independent Inventors Conference (IIC) in Chicago, customers were selected at random to attend each of the sessions. Approximately 12 customers were confirmed to attend each of the remaining sessions, although actual attendance at most sessions was smaller. Customer listings were obtained from the PTO's Patent Application Location Monitoring System and the listing of registered patent agents, and used to randomly select customers. Presidents of Inventor Groups were also contacted to obtain inventor names and phone numbers.

Once the random selections were made, each customer was contacted by telephone and informed about the session to be held in their geographical location. Customers choosing to attend the session were sent a letter of confirmation and a copy of the GAO findings regarding patent fees.

How The Sessions Were Conducted

All sessions, excluding the four inventor sessions held at the IIC in Chicago, were conducted roundtable style. Employees from the PTO's Fee Team attended each session to take meeting notes, and facilitate and moderate the session. Most sessions were attended by an employee from the Deputy Assistant Commissioner for Patent Policy and Projects area to answer technical questions regarding patents, and an employee from the Center for Quality Services to facilitate the sessions.

Session participants provided feedback, discussion and suggestions regarding each of the issues raised by the GAO. Responses from the participants were captured in detail (with no attribution) by the session note taker, and summarized on a flip chart during the session. Discussions were encouraged, but participants were informed during the introduction that consensus was not a goal of discussions and suggestions.

Next Steps

All comments were compiled by session, and copies were sent to participants. Comments from the sessions conducted were then summarized, grouped, and posted on the PTO's website. Several issues raised at the sessions have been assigned for further research within the PTO.

If a decision is made to pursue a change to the current fee structure, the PTO may develop and publish one or more alternative proposals for public comment in the Federal Register (i.e., an Advance Notice of Rulemaking) and on the PTO's website. Based on responses to these alternatives, the PTO may seek a formal change. If a decision is made to pursue a formal change to the fee structure, the PTO may propose legislation or publish a Notice of Proposed Rulemaking.

Schedule of Sessions Held With Patent Fee Customers

October 8, 1997 - November 5, 1997

Chicago, Illinois

• 2 Attorney Sessions - October 8, 1997
• 4 Inventor Sessions - October 9-10, 1997 (Independent Inventors Conference, 200 Inventors total at this conference)

Minneapolis, Minnesota

• 2 Attorney Sessions - October 15, 1997

Boston, Massachusetts

• 1 Large Entity Session - October 20, 1997
• 1 Independent Inventor and Small Entity Session - October 20, 1997
• 1 Attorney Session - October 21, 1997

New York City, New York

• 1 Independent Inventor and Small Entity Session - October 23, 1997
• 1 High Technology Customer Session - October 24, 1997
• 1 Attorney Session - October 24, 1997

Los Angeles, California

• 1 Large Entity Session - October 27, 1997
• 1 Independent Inventor and Small Entity Session - October 27, 1997
• 1 High Technology Customer Session - October 28, 1997
• 1 Attorney Session - October 28, 1997

Sunnyvale, California

• 1 Large Entity Session - October 30, 1997
• 1 Independent Inventor and Small Entity Session - October 30, 1997
• 1 High Technology Customer Session - October 31, 1997
• 1 Attorney Session - October 31, 1997

Seattle, Washington

• 1 Large and Small Entity Combined Session - November 4, 1997
• 1 High Technology Customer Session - November 5, 1997
• 1 Attorney Session - November 5, 1997