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Thursday Mar 08, 2012

Comparing USPTO's New Post-Grant Processes and Associated Costs to EPO's

Blog by Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos

This is the first in a series of blogs we'll use to explore aspects of USPTO's proposed rules implementing the America Invents Act (AIA). We'll focus on aspects of our proposed rules that have attracted questions during our recent roadshows and other outreach efforts.

This first installment will consider our new post-grant review system. Some practitioners have raised a legitimate question: Why will the new post-grant procedures mandated by the AIA cost parties more than European Patent Office (EPO) oppositions? While the new U.S. post-grant processes and the existing EPO opposition procedure (which has a first-stage in the Opposition Division and a second-stage before the Appeals Board) are each “post-grant processes,” there are a number of important, fundamental differences. And these differences, in turn, drive major differences in cost.

But before getting to comparisons/contrasts, it is important to note that this blog is not about declaring that the new U.S. system is either better or worse than European opposition practice. It is just different. And the EPO opposition system does an excellent job, well-suited to the policy objectives and practice environment in which it operates.

Generally, EPO opposition (both stages) is akin to a second, participatory, after-grant examination, whereas U.S. post-grant processes are more similar to litigation than examination. The fundamental differences, which arise from the presence of this litigation characteristic in AIA proceedings, include, for example, who it is that conducts the proceeding and the final effect of the decision.

Specifically, EPO oppositions are conducted by specially appointed examiners; do not allow for discovery; and no estoppel is imposed after an unsuccessful challenge. In contrast, U.S. AIA post-grant processes will be conducted by patent judges, who will officiate over processes with substantial discovery, with estoppels to be imposed upon final written decisions.
Moreover, EPO proceedings operate on a much different time scale than Congress has mandated for U.S. AIA post-grant proceedings. For example, it is our understanding that the first stage EPO proceedings typically take 18 months to three years for an orally-announced decision, after which parties can wait another six months for written decisions. An appeal within the EPO adds another two to three years to the overall pendency of a proceeding. In contrast, the AIA requires the USPTO to promulgate rules to ensure that U.S. post-grant processes are concluded within one year of institution, with up to six additional months for good cause. And we are trying hard to design our USPTO rules implementing AIA to ensure virtually all of our post-grant processes complete within that one year period.
Unsurprisingly, very different processes lead to very different cost structures. As to the fees charged to request a post-grant proceeding, the proposed fees for the U.S. post-grant proceedings are substantially higher than those charged for EPO oppositions. This in part reflects the very different nature of the processes -- it will cost more to run the process required by the AIA.

But it also reflects a policy preference. While EPO oppositions are subsidized, the proposed U.S. fees reflect a cost-recovery model charged directly to the requestor, without utilizing subsidies paid by patent applicants or other service requestors. This is no accident -- it is intended to implement the statutory language stating that post-grant process fees will be established with reference to the cost of conducting the processes. Congress chose to use this language uniquely for the post-grant provisions of AIA. While it does not on its face require us to charge at a strict cost-recovery level, clearly it was meant to guide USPTO in determining where to set our applicable fees.

So, the new U.S. post-grant procedures are quite different from Europe's opposition procedure; and our policy backdrop is different; so our fee proposals are different. But, as with all of our fee proposals, we are eager for input from our stakeholders, and take seriously the questions practitioners have raised regarding how we arrived at the cost recovery figures we have published. So keep the comments coming, and we will do our best to finally set fees as fairly as possible to all users of the U.S. patent system.


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