I 111th CONGRESS 2d Session H. R. 5322 IN THE HOUSE OF REPRESENTATIVES May 18, 2010 Mr. Conyers (for himself and Mr. Smith of Texas) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To provide authority to the Director of the United States Patent and Trademark Office to set or adjust patent and trademark fees, and for other purposes.

1.

Short title

This Act may be cited as the Patent and Trademark Office Funding Stabilization Act of 2010.

2.

Definitions

In this Act: (1)

Director

The term Director means the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. (2)

Fund

The term Fund means the United States Patent and Trademark Office Public Enterprise Fund established under section 4(b). (3)

Office

The term Office means the United States Patent and Trademark Office. (4)

Patent public advisory committee

The term Patent Public Advisory Committee means the Patent Public Advisory Committee established under section 5(a)(1) of title 35, United States Code. (5)

Trademark Act of 1946

The term Trademark Act of 1946 means the Act entitled Act to provide for the registration and protection of trademarks used in commerce, to carry out the provisions of certain international conventions, and for other purposes, approved July 5, 1946 (15 U.S.C. 1051 et seq.) (commonly referred to as the Trademark Act of 1946 or the Lanham Act). (6)

Trademark public advisory committee

The term Trademark Public Advisory Committee means the Trademark Public Advisory Committee established under section 5(a)(1) of title 35, United States Code.

3.

Fee setting authority

(a)

In general

(1)

Authority

The Director may set or adjust by rule any fee established or charged by the Office under section 41 or 376 of title 35, United States Code, or under section 31 of the Trademark Act of 1946 (15 U.S.C. 1113), or any other fee established or charged by the Office under any other provision of law, for the filing or processing of any submission to the Office, or for any other service performed by or materials furnished by the Office, subject to paragraph (2). (2)

Fees to recover costs

Fees may be set or adjusted under paragraph (1) only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (in the case of patent fees) and trademarks (in the case of trademark fees), including administrative costs of the Office with respect to such patent or trademark fees (as the case may be). (b)

Small and micro entities

The fees set or adjusted under subsection (a) for filing, processing, issuing, and maintaining patent applications and patents shall be reduced by 50 percent with respect to the application of such fees to any small entity that qualifies for reduced fees under section 41(h)(1) of title 35, United States Code, and shall be reduced by 75 percent with respect to the application of such fees to any micro entity as defined in section 123 of that title (as added by subsection (f) of this section). (c)

Reduction of fees in certain fiscal years

In each fiscal year, the Director— (1)shall consult with the Patent Public Advisory Committee and the Trademark Public Advisory Committee on the advisability of reducing any fees described in subsection (a); and (2)after the consultation required under paragraph (1), may reduce such fees. (d)

Role of the public advisory committee

The Director shall— (1)not less than 45 days before publishing any proposed fee under subsection (a) in the Federal Register, submit the proposed fee to the Patent Public Advisory Committee or the Trademark Public Advisory Committee, or both, as appropriate; (2)(A)provide the relevant advisory committee described in paragraph (1) a 30-day period following the submission of any proposed fee, on which to deliberate, consider, and comment on such proposal; (B)require that, during such 30-day period, the relevant advisory committee hold a public hearing relating to such proposal; and (C)assist the relevant advisory committee in carrying out such public hearing, including by offering the use of the resources of the Office to notify and promote the hearing to the public and interested stakeholders; (3)require the relevant advisory committee to make available to the public a written report setting forth in detail the comments, advice, and recommendations of the committee regarding the proposed fee; and (4)consider and analyze any comments, advice, or recommendations received from the relevant advisory committee before setting or adjusting (as the case may be) the fee. (e)

Publication in the Federal register

(1)

Publication and rationale

The Director shall— (A)publish any proposed fee change under this section in the Federal Register; (B)include, in such publication, the specific rationale and purpose for the proposal, including the possible expectations or benefits resulting from the proposed change; and (C)notify, through the Chair and Ranking Member of the Committees on the Judiciary of the Senate and the House of Representatives, the Congress of the proposed change not later than the date on which the proposed change is published under subparagraph (A). (2)

Public comment period

The Director shall, in the publication under paragraph (1), provide the public a period of not less than 45 days in which to submit comments on the proposed change in fees. (3)

Publication of final rule

The final rule setting or adjusting a fee under this section shall be published in the Federal Register and in the Official Gazette of the Patent and Trademark Office. (4)

Congressional comment period

A fee set or adjusted under subsection (a) may not become effective before the end of the 45-day period beginning on the day after the date on which the Director publishes the final rule adjusting or setting the fee under paragraph (3). (5)

Rule of construction

Rules prescribed under this section shall not diminish— (A)the rights of an applicant for a patent under title 35, United States Code, or for a trademark under the Trademark Act of 1946; or (B)any rights under a ratified treaty. (f)

Micro entity defined

(1)

In general

Chapter 11 of title 35, United States Code, is amended by adding at the end the following new section:

123.

Micro entity defined.

(a)

In general

For purposes of this title, the term micro entity means an applicant who makes a certification that the applicant— (1)qualifies as a small entity, as defined in regulations issued by the Director; (2)has not been named as an inventor on more than 4 previously filed patent applications, other than applications filed in another country, provisional applications under section 111(b), or international applications filed under the treaty defined in section 351(a) for which the basic national fee under section 41(a) was not paid; (3)did not, in the calendar year preceding the calendar year in which the examination fee for the application is being paid, have a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as reported by the Bureau of the Census; and (4)has not assigned, granted, or conveyed, and is not under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the examination fee for the application is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding 3 times the median household income for that preceding calendar year, as reported by the Bureau of the Census. (b)

Applications resulting from prior employment

An applicant is not considered to be named on a previously filed application for purposes of subsection (a)(2) if the applicant has assigned, or is under an obligation by contract or law to assign, all ownership rights in the application as the result of the applicant’s previous employment. (c)

Foreign currency exchange rate

If the gross income of an applicant or entity for a calendar year, for purposes of paragraph (3) or (4) of subsection (a), is reported in a currency other than United States dollars, the average exchange rate for that currency, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the gross income exceeds the threshold specified in paragraph (3) or (4) of subsection (a).

. (2)

Conforming amendment

Chapter 11 of title 35, United States Code, is amended by adding at the end the following new item: 123. Micro entity defined. . (g)

Effective date; sunset

(1)

Effective date

This section and the amendments made by this section shall take effect on the date of the enactment of this Act. (2)

Sunset

(A)

In general

The authority to establish and adjust fees under subsection (a) shall terminate upon the expiration of the 10-year period beginning on the date of the enactment of this Act. (B)

Clarification

The termination of authority under subparagraph (A) does not apply to the requirement and authority under subsection (c).

4.

Patent and Trademark Office funding

(a)

Funding

(1)

In general

Section 42 of title 35, United States Code, is amended— (A)in subsection (b), by striking Patent and Trademark Office Appropriation Account and inserting United States Patent and Trademark Office Public Enterprise Fund; and (B)in subsection (c), in the first sentence— (i)by striking To the extent and all that follows through fees and inserting Fees; and (ii)by striking shall be collected by and shall be available to the Director and inserting shall be collected by the Director and shall be available until expended. (2)

Effective date

(A)

In general

The amendments made by paragraph (1) shall take effect on October 1, 2011. (B)

Termination of appropriation

The provisions of any appropriation Act that— (i)are enacted before the effective date set forth in subparagraph (A), (ii)make amounts available pursuant to section 42(c) of title 35, United States Code, and (iii)are in effect on the effective date set forth in subparagraph (A), shall cease to be effective on that effective date, and any unexpended amounts made available pursuant to such section shall be transferred in accordance with subsection (b)(5).(b)

USPTO revolving fund

(1)

Establishment

There is established in the Treasury of the United States a revolving fund to be known as the United States Patent and Trademark Office Public Enterprise Fund. Any amounts in the Fund shall be available for use by the Director without fiscal year limitation. (2)

Derivation of resources

There shall be deposited into the Fund the following: (A)Any fees collected under sections 41, 42, and 376 of title 35, United States Code. If such fees are collected by, and payable to, the Director, the Director shall transfer such amounts to the Fund. (B)Any fees collected under section 31 of the Trademark Act of 1946 (15 U.S.C. 1113). (3)

Expenses

Amounts deposited into the Fund under paragraph (2) shall be available, without fiscal year limitation, to cover— (A)all expenses, to the extent consistent with the limitation on the use of fees set forth in section 42(c) of title 35, United States Code (including all administrative and operating expenses), that are determined in the discretion of the Director to be ordinary and reasonable and are incurred by the Director for the continued operation of all services, programs, activities, and duties of the Office, as such services, programs, activities, and duties are described under— (i)title 35, United States Code; and (ii)the Trademark Act of 1946; and (B)all expenses incurred pursuant to any obligation, representation, or other commitment of the Office. (4)

Custodians of money

Notwithstanding section 3302 of title 31, United States Code, any funds received by the Director and transferred to Fund, or any amounts directly deposited into the Fund, may be used— (A)to cover the expenses described in paragraph (3); and (B)to purchase obligations of the United States, or any obligations guaranteed by the United States. (5)

Unexpended balances

Any unexpended balances in any accounts held on behalf of the Director, or the Office, including in the Patent and Trademark Office Appropriation Account in the Treasury of the United States, shall be transferred to the Fund and shall remain available until expended. (c)

Annual report

Not later than 60 days after the end of each fiscal year, the Director shall submit a report to Congress that— (1)summarizes the operations of the Office for the preceding fiscal year, including financial details and staff levels broken down by each major activity of the Office; (2)details the operating plan of the Office, including specific expense and staff needs for the upcoming fiscal year; (3)describes the long-term modernization plans of the Office; (4)sets forth details of any progress towards such modernization plans made in the previous fiscal year; and (5)includes the results of the most recent audit carried out under subsection (e). (d)

Annual spending plan

(1)

In general

Not later than 30 days after the beginning of each fiscal year, the Director shall notify the Committees on Appropriations of both Houses of Congress of the plan for the obligation and expenditure of the total amount of the funds for that fiscal year in a manner consistent with section 605 of the Science, State, Justice, Commerce, and Related Agencies Appropriations Act, 2006 (Public Law 109–108; 119 Stat. 2334). (2)

Contents

Each plan under paragraph (1) shall— (A)summarize the operations of the Office for the current fiscal year, including financial details and staff levels with respect to major activities; and (B)detail the operating plan of the Office, including specific expense and staff needs, for the current fiscal year. (e)

Audit

The Director shall, on an annual basis, provide for an independent audit of the financial statements of the Office. Such audit shall be conducted in accordance with generally acceptable accounting procedures. (f)

Budget

In accordance with section 9301 of title 31, United States Code, the Fund shall prepare and submit each year to the President a business-type budget in such manner, and before such date, as the President prescribes by regulation for the budget program. (g)

Effective date

Subsections (b) through (f) and this subsection shall take effect on October 1, 2011.

5.

Fees for patent services

(a)

General patent services

Subsections (a) and (b) of section 41 of title 35, United States Code, is amended to read as follows: (a)

General fees

The Director shall charge the following fees: (1)

Filing and basic national fees

(A)On filing each application for an original patent, except for design, plant, or provisional applications, $330. (B)On filing each application for an original design patent, $220. (C)On filing each application for an original plant patent, $220. (D)On filing each provisional application for an original patent, $220. (E)On filing each application for the reissue of a patent, $330. (F)The basic national fee for each international application filed under the treaty defined in section 351(a) entering the national stage under section 371, $330. (G)In addition, excluding any sequence listing or computer program listing filed in an electronic medium as prescribed by the Director, for any application the specification and drawings of which exceed 100 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium), $270 for each additional 50 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium) or fraction thereof. (2)

Excess claims fees

(A)

In general

In addition to the fee specified in paragraph (1)— (i)on filing or on presentation at any other time, $220 for each claim in independent form in excess of 3; (ii)on filing or on presentation at any other time, $52 for each claim (whether dependent or independent) in excess of 20; and (iii)for each application containing a multiple dependent claim, $390. (B)

Multiple dependent claims

For the purpose of computing fees under subparagraph (A), a multiple dependent claim referred to in section 112 or any claim depending therefrom shall be considered as separate dependent claims in accordance with the number of claims to which reference is made. (C)

Refunds; errors in payment

The Director may by regulation provide for a refund of any part of the fee specified in subparagraph (A) for any claim that is canceled before an examination on the merits, as prescribed by the Director, has been made of the application under section 131. Errors in payment of the additional fees under this paragraph may be rectified in accordance with regulations prescribed by the Director. (3)

Examination fees

(A)

In general

(i)For examination of each application for an original patent, except for design, plant, provisional, or international applications, $220. (ii)For examination of each application for an original design patent, $140. (iii)For examination of each application for an original plant patent, $170. (iv)For examination of the national stage of each international application, $220. (v)For examination of each application for the reissue of a patent, $650. (B)

Applicability of other fee provisions

The provisions of paragraphs (3) and (4) of section 111(a) relating to the payment of the fee for filing the application shall apply to the payment of the fee specified in subparagraph (A) with respect to an application filed under section 111(a). The provisions of section 371(d) relating to the payment of the national fee shall apply to the payment of the fee specified in subparagraph (A) with respect to an international application. (4)

Issue fees

(A)For issuing each original patent, except for design or plant patents, $1,510. (B)For issuing each original design patent, $860. (C)For issuing each original plant patent, $1,190. (D)For issuing each reissue patent, $1,510. (5)

Disclaimer fee

On filing each disclaimer, $140. (6)

Appeal fees

(A)On filing an appeal from the examiner to the Board of Patent Appeals and Interferences, $540. (B)In addition, on filing a brief in support of the appeal, $540, and on requesting an oral hearing in the appeal before the Board of Patent Appeals and Interferences, $1,080. (7)

Revival fees

On filing each petition for the revival of an unintentionally abandoned application for a patent, for the unintentionally delayed payment of the fee for issuing each patent, or for an unintentionally delayed response by the patent owner in any reexamination proceeding, $1,620, unless the petition is filed under section 133 or 151, in which case the fee shall be $540. (8)

Extension fees

For petitions for 1-month extensions of time to take actions required by the Director in an application— (A)on filing a first petition, $130; (B)on filing a second petition, $360; and (C)on filing a third or subsequent petition, $620. (b)

Maintenance fees

(1)

In general

The Director shall charge the following fees for maintaining in force all patents based on applications filed on or after December 12, 1980: (A)3 years and 6 months after grant, $980. (B)7 years and 6 months after grant, $2,480. (C)11 years and 6 months after grant, $4,110. (2)

Grace period; surcharge

Unless payment of the applicable maintenance fee under paragraph (1) is received in the Office on or before the date the fee is due or within a grace period of 6 months thereafter, the patent shall expire as of the end of such grace period. The Director may require the payment of a surcharge as a condition of accepting within such 6-month grace period the payment of an applicable maintenance fee. (3)

No maintenance fee for design or plant patent

No fee may be established for maintaining a design or plant patent in force. . (b)

Delays in payment

Subsection (c) of section 41 of title 35, United States Code, is amended— (1)by striking (c)(1) The Director and inserting: (c)

Delays in payment of maintenance fees

(1)

Acceptance

The Director . (2)by striking (2) A patent and inserting (2) Effect on rights of others.—A patent; and (3)by moving the remaining text of paragraphs (1) and (2) 2 ems to the right. (c)

Patent search fees

Subsection (d) of section 41 of title 35, United States Code, is amended to read as follows: (d)

Patent Search and Other Fees

(1)

Patent search fees

(A)

In general

The Director shall charge a fee for the search of each application for a patent, except for provisional applications. The Director shall establish the fees charged under this paragraph to recover an amount not to exceed the estimated average cost to the Office of searching applications for patent either by acquiring a search report from a qualified search authority, or by causing a search by Office personnel to be made, of each application for patent. (B)

Specific fees

For purposes of determining the fees to be established under this paragraph, the cost to the Office of causing a search of an application to be made by Office personnel shall be deemed to be— (i)$540 for each application for an original patent, except for design, plant, provisional, or international applications; (ii)$100 for each application for an original design patent; (iii)$330 for each application for an original plant patent; (iv)$540 for the national stage of each international application; and (v)$540 for each application for the reissue of a patent. (C)

Applicability of other provisions

The provisions of paragraphs (3) and (4) of section 111(a) relating to the payment of the fee for filing the application shall apply to the payment of the fee specified in this paragraph with respect to an application filed under section 111(a). The provisions of section 371(d) relating to the payment of the national fee shall apply to the payment of the fee specified in this paragraph with respect to an international application. (D)

Refunds

The Director may by regulation provide for a refund of any part of the fee specified in this paragraph for any applicant who files a written declaration of express abandonment as prescribed by the Director before an examination has been made of the application under section 131, and for any applicant who provides a search report that meets the conditions prescribed by the Director. (E)

Requirements for searches

The Director shall require that any search by a qualified search authority that is a commercial entity is conducted in the United States by persons that— (i)if individuals are United States citizens; and (ii)if business concerns, are organized under the laws of the United States or any State and employ United States citizens to perform the searches. (F)

Applications subject to secrecy order

A search of an application that is the subject of a secrecy order under section 181 or otherwise involves classified information may only be conducted by Office personnel. (G)

Conflicts of interest

A qualified search authority that is a commercial entity may not conduct a search of a patent application if the entity has any direct or indirect financial interest in any patent or in any pending or imminent application for patent filed or to be filed in the Office. (2)

Other fees

(A)

In general

The Director shall establish fees for all other processing, services, or materials relating to patents not specified in this section to recover the estimated average cost to the Office of such processing, services, or materials, except that the Director shall charge the following fees for the following services: (i)For recording a document affecting title, $40 per property. (ii)For each photocopy, $.25 per page. (iii)For each black and white copy of a patent, $3. (B)

Copies for libraries

The yearly fee for providing a library specified in section 12 with uncertified printed copies of the specifications and drawings for all patents in that year shall be $50. . (d)

Fees for small entities

Subsection (h) of section 41 of title 35, United States Code, is amended to read as follows: (h)

Fees for small entities

(1)

Reductions in fees

Subject to paragraph (3), fees charged under subsections (a), (b), and (d)(1) shall be reduced by 50 percent with respect to their application to any small business concern as defined under section 3 of the Small Business Act, and to any independent inventor or nonprofit organization as defined in regulations issued by the Director. (2)

Surcharges and other fees

With respect to its application to any entity described in paragraph (1), any surcharge or fee charged under subsection (c) or (d) shall not be higher than the surcharge or fee required of any other entity under the same or substantially similar circumstances. (3)

Reduction for electronic filing

The fee charged under subsection (a)(1)(A) shall be reduced by 75 percent with respect to its application to any entity to which paragraph (1) applies, if the application is filed by electronic means as prescribed by the Director. . (e)

Technical amendments

Section 41 of title 35, United States Code, is amended— (1)in subsection (e), in the first sentence, by striking The Director and inserting Waiver of fees; copies regarding notice.—The Director; (2)in subsection (f), by striking The fees and inserting Adjustment of fees.—The fees; (3)by repealing subsection (g); and (4)in subsection (i)— (A)by striking (i)(1) The Director and inserting the following: (i)

Electronic patent and trademark data

(1)

Maintenance of collections

The Director ; (B)by striking (2) The Director and inserting the following: (2)

Availability of automated search systems

The Director ; (C)by striking (3) The Director and inserting the following: (3)

Access fees

The Director ; and (D)by striking (4) The Director and inserting the following: (4)

Annual report to congress

The Director . (f)

Adjustment of trademark fees

Section 802(a) of division B of the Consolidated Appropriations Act, 2005 (Public Law 108–447)) is amended— (1)in the first sentence, by striking During fiscal years 2005, 2006 and 2007, and inserting Until such time as the Director sets or adjusts the fees otherwise,; and (2)in the second sentence, by striking During fiscal years 2005, 2006, and 2007, the and inserting The. (g)

Effective date

The amendments made by this section shall take effect on the date of the enactment of this Act.

6.

Temporary surcharge

(a)

Surcharge

There shall be a surcharge of 15 percent, rounded by standard arithmetic rules, on fees charged or authorized by sections 41(a), (b), (d)(1), and 132(b) of title 35, United States Code, subject to the following: (1)The surcharge shall be separate from, and in addition to, any other surcharge that may be required pursuant to any provision of title 35, United States Code, or other provision of law. (2)The surcharge under this subsection shall take effect on the 10th day after the date of the enactment of this Act, and shall remain in effect through September 30, 2011. (3)The receipts collected as a result of the surcharge under this subsection shall be available to the Office without fiscal year limitation, for all authorized activities and operations of the Office. (b)

Electronic filing incentive

(1)

In general

Notwithstanding any other provision of this section, the fee charged for each application for an original patent, except for a design, plant, or provisional application, shall be increased by $400 for an application that is not filed by electronic means as prescribed by the Director. The fee established by this subsection shall be reduced 50 percent for small entities that quality for reduced fees under section 41(h)(1) of title 35, United States Code. (2)

Effective date

This subsection shall take effect upon the expiration of the 60-day period beginning on the date of the enactment of this Act.