USPTO Takes a Hint from European Practice in Addressing Late Continuation Concerns

As expected, the United States Patent and Trademark Office (USPTO) is raising its fees this year, effective January 19, 2025. However, the USPTO is doing something a little unusual this time—they’re raising the cost of filing continuations in older applications. Specifically, a late continuation application more than 6 years after the earliest benefit date (EBD) will cost an extra $2700, and after 9 years will cost an extra $4000. Note that these fees are reduced by 60% for small entities and even more for micro entities. This article provides practical continuation application filing tips in view of these changes, which we also explain more fully below.

The fee increase addresses practical and policy concerns about late continuation practice. The first, more practical concern, is that patents are only good for 20 years after the initial non-provisional application is filed, and if a continuation application is filed later in the 20 year span, the USPTO could not collect as many maintenance fees, which are due at 3.5 years (currently $2000 for large entities, $800 for small entities), 7.5 years ($3760 for large entities, $1504 for small entities), and 11.5 years ($7700 for large entities, $3080 for small entities) after issuance. For example, if a patent grants 15 years after the initial non-provisional filing, the patent would only have 5 years of term left and the USPTO would only get to collect a 3.5 year maintenance fee of $2000, so the USPTO would miss out on the $3760 and $7700 maintenance fees at 7.5 and 11.5 years after issuance. With the new policy, the USPTO can collect some of that missed revenue up front, which in the example would amount to $4000. 

A second concern is that of patent thicketing, which has been described negatively by others as the process of seeking large numbers of patents that cover a single product or different embodiments of a single product. There have been some complaints among Congress that continuation applications perpetuate patent thicketing. For example, in 2022, a number of senators wrote to the USPTO director calling for reforms in continuation practice. They wrote: 

The USPTO has fee-setting authority and has set fees for filing, search, and examination of applications below the actual costs of carrying out these activities, while maintenance fees for issued patents are above the actual cost. If the up-front fees reflected the actual cost of obtaining a patent, would this increase patent quality by discouraging filing of patents unlikely to succeed? Similarly, if fees for continuation applications were increased above the initial filing fees, would examination be more thorough and would applicants be less likely to use continuations to cover, for example, inventions that are obvious variations of each other?

It appears that the USPTO paid attention to this, and that by increasing fees, the USPTO can not only raise its revenue per patent application, but may incentivize a reduction in the number of continuations filed later over the course of the 20 year statutory patent term. 

Increasing filing costs for late continuations is not new, and the European Patent Office (EPO) has already been practicing this policy. In Europe, if you file a divisional application (the European equivalent to a continuation), you pay the prior annuity fees for the length of time the patent family has been pending. For example, if you file a divisional application from a European application that is 5 years old, 5 years of annuity fee payments will be due with the divisional filing. Similarly, a divisional of a 10-year-old application would require 10 years worth of annuity fees when filed. The EPO even has a further fee for divisional applications of second and later generations, which grows with each generation.

Practice Tips

With the new fee schedule, continuation applications filed on or after January 19, 2025 and having an EBD 6 or more years ago will incur the new continuation application fees. In view of this, one practice tip is to review older patent families to determine whether you can avoid the higher fees by filing a continuation application and paying the current, lower fees before January 19, 2025. 

Another consideration for patent practitioners involves the use of no-fee continuation application filings. This is a commonly used strategy where a continuation application is filed without initially paying filing fees and then upon receipt of a Notice to File Missing Parts (NTFMP) the fees are paid. This practice has the advantage of allowing the patent Applicant(s) to delay paying filing fees while having time to decide if they want to continue to pursue the continuation application. A no-fee continuation application that is filed before January 19, 2025 may end up being accorded the extra $2700 or $4000 fee unless care is taken to avoid it. Consider the following scenarios: 

1. No-fee continuation filed before January 19, 2025 Ü NTFMP issued before January 19, 2025 Ü practitioner responds and pays fees after January 19, 2025 Ünew fees are due
2. No-fee continuation filed before January 19, 2025 Ü NTFMP issued before January 19, 2025 Ü practitioner responds and pays fees before January 19, 2025 Üno extra new fees due
3. No-fee continuation filed before January 19, 2025 Ü NTFMP issued after January 19, 2025 Ü new fees are due
4. No-fee continuation filed before January 19, 2025 Ü filing fees paid before January 19, 2025 to avoid NFMP Ü no extra new fees due

The bottom line of these scenarios above is that if you have filed any no-fee continuations in cases with an EBD 6 or more years ago, you can avoid paying the extra fees if you proactively pay their filing fees before January 19, 2025, regardless of whether you have already received a NTFMP or not. 

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