On December 8, 2010, the USPTO launched an Extended Missing Parts Pilot Program that will permit applicants to delay payment of search and examination fees (only) for up to 12 months for certain original U.S. non-provisional applications. Applicants who use this program will incur a $130 surcharge and, perhaps more importantly for applicants in pharmaceutical and biotechnology fields, will be charged with "applicant delay" under the Patent Term Adjustment rules.

The USPTO first proposed this program in April of 2010. The final proposal address some of my initial concerns, and clarifies specific details about how the program will operate.

Qualified Applications

The program is only open to original U.S. non-provisional applications that directly claim priority to a U.S. provisional application filed within the previous twelve months.

The Federal Register notice expressly states that PCT applications and U.S. national stage applications are not eligible for the program. Presumably, continuation and divisional applications also are not eligible, since they would not "directly" claim priority to a provisional application.

The application must be published in accordance with normal 18 month publication procedures, so no non-publication request can be filed.

Participating in the Program

To participate in the Extended Missing Parts Pilot Program, a "Certification and Request for Extended Missing Parts Pilot Program" must be filed at the same time as the application.

Operation of the Program

If a qualified application is filed with a Certification and Request, the USPTO will issue a Notice to File Missing Parts that sets a non-extendable 12 month deadline for paying the search fee, the examination fee, any excess claim fees, and the missing parts surcharge (currently $130).

Once those fees are paid, the application will be placed in the examination queue based on its actual filing date. Thus, participating in the program should not negatively impact examination (unless the application might have been taken up for examination within those first 12 months).

If those fees are not paid by the end of the 12 month period, the application will be abandoned.

As noted above, the application will be published in accordance with normal 18 month publication procedures.

Other "Missing Parts"

If a qualified application that was filed with a Certification and Request has other "missing parts," such as being filed without the basic filing fee and/or executed inventor’s declaration, the USPTO will issue a Notice to File Missing Parts that sets an extendable 2 month deadline (in accordance with current practice) for submitting these requirements and a concurrently running non-extendable 12 month deadline for submitting the search, examination, and excess claim fees.  The missing parts surcharge will be payable with the first set of submissions (e.g., the basic filing fee and/or inventor’s declaration), and will not be due again when the remaining fees are paid.

Un-Qualified Applications

If an un-qualified application is filed with a Certification and Request, the USPTO will issue a Notice to File Missing Parts that sets only the standard extendable 2 month deadline for satisfying all requirements.

Costs of the Program

In addition to the missing parts surcharge (currently $130), there are other costs to participating in this program:

  • Administrative costs of monitoring a new deadline 

    Applicants will have to set up their docketing systems to monitor and comply with this new deadline.  Additionally, an applicant could be faced with keeping track of two separate deadlines for completing filing formalities: one for the basic filing fee and executed inventors’ declaration and one for the search and examination fees. For applicants with a large number of application filings, this new administrative burden would not be trivial.

  • Risk that the extended fees will increase

    In accordance with standard USPTO practice, the fees will have to be paid at their current rate at the time of payment, rather than at the rate in effect at the time the Notice to File Missing Parts was issued. Thus, if the search and examination fees go up during the 12 month period, the higher fees will have to be paid. Again, for applicants with a large number of application filings, this difference could be significant.

  • Patent Term Adjustment consequences   

The Federal Register notice makes clear that applicants will be charged with “delay” under the Patent Term Adjustment (PTA) provisions, for paying the fees more than three months after a Notice to File Missing Parts is issued. For patents directed to pharmaceutical or biotechnology inventions (whose value often peaks at the end of the patent’s term) the costs of this potential loss of additional patent term could far out-weigh any benefits of the program.

Benefits of the Program

As envisaged by the USPTO, the program will offer applicants the benefit of being able to delay payment of the search and examination fees for up to 12 months, during which time they can "ascertain the value of their inventions" and "focus on commercialization efforts."

For applicants who file a large number of applications, the ability to obtain an additional year before spending $760/$380 in USPTO fees could help maximize patent budgets and direct investments into the most promising technologies. On the other hand, many pharmaceutical or biotechnology applications are filed so early in the development timeline that decisions still won’t be made with certainty within the extra year offered by this program. However, if PCT and/or foreign applications are filed in parallel, it is possible that search results will be available that could help guide the decision-making process.

The program also could help the USPTO reduce the backlog of unexamined applications if a significant number of applications enter the program and are abandoned at the end of the 12 month period. In the April 2010 Federal Register notice, the USPTO indicated that the program could put more technology in the public domain because the applications will be published even if they never are searched, examined and granted.

Confusion about the Program

The April 2010 Federal Register notice caused confusion with its reference to a "24-month provisional application." The December 8, 2010 Federal Register notice is very careful to explain and emphasize that the program does not change in any way the substantive filing requirements for a non-provisional application or the filing deadline for a "complete" non-provisional application (specification, claims, drawings, etc.) in order to retain the right to claim priority to the provisional application. 

On the other hand, the USPTO muddied the waters again with this tweet from its Twitter account (@uspto)

12/9/10 12:39 PM
Our new pilot program effectively allows a 12-month extension to provisional #patent application periods. http://ow.ly/3mDsz

Despite this characterization, it is important to understand and keep in mind that the ONLY items that can be extended under the program are the search fee, examination fee and excess claim fees. 

Assessing the Program

The effective date of the Pilot Program is December 8, 2010, and it is set to run for one year, until December 7, 2011. The USPTO will use this time period to assess the program and determine if it should be continued and/or modified.

Applicants who are interested in this program should consider whether its possible benefits outweigh its definite costs, and should consult with patent counsel on the full impact of a decision to participate in this program.