After a patent application passes examination at the United States Patent and Trademark Office (USPTO), its issue fee paid, and the patent issued, one may be forgiven to think that the fees paid to the USPTO end there. However, the USPTO requires payment of maintenance fees for utility patents at specific times according to their respective issue dates to maintain the patents in force. See 35 U.S.C. § 41(b)(1). Design and plant patents are the exceptions. See 35 U.S.C. § 41(b)(3). Failure to pay maintenance fees on-time, or during a grace period, will lead to the expiration of the utility patent. This expiration can lead to other issues. First, an expired patent is unenforceable, so the patent owner cannot enforce an expired patent against infringers. Second, failure to pay the required maintenance fee may give rise to intervening rights for others to make or use the patented invention even after a patent has been reinstated following its expiration for non-payment. See 35 U.S.C. § 41(c)(2). Needless to say, it imperative that the owner of the patent is aware of any impending due dates for these fees and to pay them promptly when they are due.
Due dates for maintenance fees occur at the following times after the patent’s issuance date: 3.5 years, 7.5 years, and 11.5 years. Maintenance fees increase with each successive period and vary depending on the size of a company. For example, at the 3.5 year mark, small entities (companies having 500 employees or less) currently pay $1,000 and larger entities (classified as undiscounted) pay $2,000. These fees do change with time, so it important to check the current USPTO fee schedule to ensure that the proper fee amount is paid. If the maintenance fee is not paid by its due date, then there is a grace period of six months following the due date to pay the fee. If the maintenance fee is paid during this grace period, then this payment must be accompanied by a late payment surcharge. See 37 C.F.R. § 1.20(h).
Failure to pay the maintenance fee when it is due, and within the six month grace period, will result in the patent expiring. An expired patent is unenforceable. To reinstate an expired patent, a petition to the Director of the USPTO must be filed with the required maintenance fee, a petition fee, and a statement that the delayed payment of the maintenance fee was unintentional. See 37 C.F.R. §§ 1.378(b)(1)-(b)(3). If the Director accepts the payment of the maintenance fee upon petition, then the patent is considered as not having expired. However, the reinstated patent may be subject to intervening rights.
Intervening rights in reinstated patents is an affirmative defense based in equity that involves the activities of others when the patent was expired. Specifically, when a patent is expired, individuals may rely on the assumption that the patent is no longer enforceable, and thus, make or sell the invention that is covered by the expired patent’s claims. Furthermore, if individuals rely on the patent’s expired status and make substantial preparations to use it, a court may permit the individuals to continue to make or sell the invention to recoup their initial investment made while the patent was expired. In other words, allowing a patent to expire (even unintentionally) can lead to serious negative results. That is why it is important to keep track of the maintenance fee due dates to avoid such a scenario. As they say, “An ounce of prevention is worth a pound of cure.”
Disclaimer: This post is for general information only, and thus does not serve or represent any legal advice. No attorney-client relationship is formed.