Key Changes and Strategic Considerations for Applicants

On November 20, 2024, the U.S. Patent and Trademark Office (USPTO) published a final rule introducing a significant new fee structure for continuing patent applications. This rule, set to take effect on January 19, 2025, establishes additional fees for any continuing application filed at least six years after its earliest benefit date (EBD). The final rule identifies EBD as the earliest filing date for which benefit is claimed under 35 U.S.C. §§ 120, 121, 365(c), or 386(c) and §?1.78(d) and, therefore, cannot be the filing date of a foreign application or the filing date of a provisional application to which benefit is claimed under 35 U.S.C. § 119(e).

Patent owners and practitioners should consider the new rule and the published examples and discuss how to adjust their filing strategies to avoid unnecessary costs.

Overview of the New Fee Structure

The final rule introduces two levels of additional fees for continuing applications filed six or more years after their EBDs. These fees are in addition to the regular filing and examination fees, which—unsurprisingly—are also increased under the new rules. For undiscounted entities, the following changes will apply:

1. $2,700 Fee: Continuing applications filed six or more years after their EBDs but less than nine years after will incur a one-time fee of $2,700 ($1,080 for small entities).
2. $4,000 Fee: Continuing applications filed nine or more years after their EBDs will incur a higher, one-time fee of $4,000 ($1,600 for small entities).

Impact of the Rule on Continuing Applications

Continuing applications, which include continuation, divisional, and continuation-in-part applications filed under the conditions specified in 35 U.S.C. §§ 120, 121, 365(c), or 386(c) and §?1.78, represent a large and increasing share of patent applications.

These fees represent a response by the USPTO to address the growing prevalence of continuing applications and an accompanying issue related to their maintenance fees. The USPTO has pointed out that continuing applications, particularly those that quickly expire after issuance, yield fewer maintenance fees compared to other applications. By implementing these additional fees, the USPTO aims to offset the lost revenue and encourage applicants to expedite their filings.

Exemplary Scenarios Under the New Rule

To help illustrate how the rule applies in practice, the USPTO provided several examples in the final published rule. Here are a few key examples that highlight how the new fees will be assessed based on different filing scenarios:

Example 1: Filing After the Six-Year Mark

• Application A is filed on July 1, 2026, with a benefit claim to a nonprovisional application (Application A) under 35 U.S.C. § 120, filed on March 2, 2020. Since the benefit claim establishes the earliest benefit date (EBD) as March 2, 2020, which is more than six years, but not more than nine years, before Application A’s filing date, a $2,700 fee would be due upon filing.

This example emphasizes the importance of filing before reaching the six-year mark to avoid the additional fee.

Examples 2 through 8: Benefit Claims to Provisional and International Applications

• Example 2 clarifies that claims under 35 U.S.C. § 119(e) to provisional applications do not affect the EBD for calculating fees.
• Example 3 discusses the implications of claiming benefit under 35 U.S.C. § 120 to a provisional application, which may trigger the additional fee if the EBD is more than six years prior to the filing date.
• Examples 4 through 8 extend these principles to priority claims to foreign applications, national stage entries, and international design applications, explaining how EBDs are determined in each case and when the extra fees apply, typically when the EBD exceeds six years but not more than nine years before the application’s actual filing date.
• For U.S. national stage applications, if the underlying international application only claims priority to one or more foreign or U.S. provisional applications, then the international filing date is the EBD. However, if the underlying international application claims benefit of a U.S. nonprovisional application (Application N), then Application N’s filing date is the EBD.

These examples highlight the complexities of benefit claims and emphasize the need to carefully evaluate filing timelines for provisional and international applications to avoid unexpected fees.

Example 9: Adding Benefit Claims After Filing

• Application I is filed on July 3, 2028, without any benefit claims. After two months, the applicant files a second ADS in Application I, which adds a benefit claim to a nonprovisional application filed on February 2, 2021. The EBD is now February 2, 2021, and since this date is more than six years but not more than nine years earlier than the filing date, a $2,700 fee would be due at the time the benefit claim is added.
• In Application I, a third ADS is filed one month later, adding another benefit claim, which changes the EBD to March 2, 2020, which is also more than six years but not more than nine years earlier than the filing date. However, because the applicant already paid the $2,700 fee, no additional fee would be required.

This example shows that once the additional fee is paid for the first benefit claim, no further fees are due as long as the application’s EBD remains within the same timeframe.

Example 10: Multiple Fees Due for Adding Multiple Benefit Claims

• Application J is filed on July 5, 2029, with a benefit claim to a nonprovisional application filed on February 2, 2021. The filing would incur the $2,700 fee, as the EBD is between six and nine years earlier. Later, the applicant adds a second benefit claim to another nonprovisional application filed on March 2, 2020. This change pushes the EBD to March 2, 2020, which is more than nine years earlier than the filing date, which would have triggered the $4,000 additional fee.

In this scenario, because the applicant had already paid the $2,700 fee, the amount due for the second fee is reduced by the prior payment and would, therefore, require payment of the $1,300 difference.

Example 11: Delayed Benefit Claim Leading to Higher Fee

• Application K is filed on July 5, 2029, without any benefit claims. Eighteen months later, a benefit claim is added, which changes the EBD to March 2, 2020. Since this EBD is more than nine years prior to the filing date, a $4,000 fee would be due. Moreover, the applicant must also file a petition for the acceptance of an unintentionally delayed benefit claim, along with the relevant petition fee.

This scenario highlights the additional complexities and costs that arise when benefit claims are delayed beyond the required time period.

Examples 12 and 13: Pre-Rule Filings with New Benefit Claims

• Application L is filed before the effective date of the new rule, on January 2, 2025. The benefit claim, which does not change the EBD, would not incur any fee at the time of filing. However, if a second ADS is filed two months later, the newly added benefit claim causes the application’s EBD to fall between six and nine years earlier than the filing date. As a result, a $2,700 fee would be due.
• Application M is similarly filed before the rule’s effective date. However, when a new benefit claim is added after the rule’s implementation, the EBD becomes more than nine years earlier, which would trigger the $4,000 fee.

These examples clarify that it is the date on which the benefit claim is made, not the filing date, that determines whether the new fees would be due.

Takeaways: What Applicants Should Consider Now

Unfortunately, the additional fees may induce a chilling effect on filing continuing applications. Certain valuable technology may not mature for at least a decade. Additionally, the USPTO may issue Restriction Requirements identifying several different patentably distinct inventions, each of which would need to be pursued in a separate divisional application. Decisions to file continuation and/or divisional applications may be thrust upon an applicant ahead of the sixth anniversary of the application, perhaps before a first allowance in the patent family.

There might be challenges to these sharp fee increases, but presuming the USPTO’s new rule withstands any litigation, here are some key takeaways for patent practitioners and applicants to consider now:

• File Ahead of the Six-Year or Nine-Year Mark: Of course, applicants who anticipate needing a continuation, divisional, or CIP application should file before the six-year mark to avoid the additional $2,700 fee or before the nine-year mark to avoid the $4,000 fee. In many patent families approaching six years from the EBD, filing a continuation application earlier could prove to be more cost-effective than waiting for a notice of allowance in a parent application. Calendaring time to review each pending and/or allowed patent application well before the six-year or nine-year date may be prudent. Filing claims covering different embodiments in parallel may also be more efficient and could be assigned to multiple examiners or art units.
• The Rule’s Effective Date Approaches: The rule’s January 19, 2025 effective date presents a big deadline for applicants. Filing before this date may help avoid the new fees, especially if the application’s EBD will trigger fees under the new rule. Fees could be reduced by reviewing open patent families claiming benefit to assets filed five or more years ago and filing a continuation or divisional application ahead of schedule.
• Always Check the Priority Benefit Claim: Based on the examples, correcting the benefit claim may be the easiest way to trigger unexpected continuing application fees.
• Add Claims Instead of Filing a Continuation: Consider adding claims to pending applications to potentially avoid the six- or nine-year continuation fees. While new claims may trigger restriction requirements (e.g., divisional applications) and/or slow down prosecution (and add RCE fees), the cost savings, even with higher excess claims fees ($600 per extra independent claim beyond three, $200 per extra total claim in excess of 20), could make adding claims a bargain over continuation filings.
• Potential Shift in Filing Practices: The additional costs may discourage applicants from filing continuation-in-part applications, e.g., after six years from the EBD. Unless there is a specific need to file a CIP, many applicants may choose to file new nonprovisional applications instead of continuation-in-part applications to minimize these additional fees.
• Make Careful Decisions: Closing a family at a six-year date or nine-year date to save budget should not be an automatic decision. Teams should examine each patent family individually for strategies and valuable unclaimed subject matter before deciding against filing additional continuation applications. Filing a broadening reissue application (within two years after a grant) to clean up a claim or add an embodiment brings a whole host of new costs and hurdles. Pursuing valuable claims and efficient prosecution will always be fundamental for maximizing IP budgets.

The introduction of these new fees may cause significant changes in patent application strategy. Be sure to read the rules, examples, and discussion thoroughly and discuss with your patent team. By understanding the new fee structure and adjusting their filing practices accordingly, applicants can better manage costs and avoid unexpected fees in the future.

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