What Occurs When You Don't Pay a Patent Maintenance Fee?

Jan 20, 2020

Many people mistakenly believe that the receipt of a patent is the final step in the process of protecting their creation. It's not. The fact is that to maintain the patent, the United States Patent & Trademark Office (USPTO) requires patent holders to pay patent maintenance fees at intervals of 42, 90, and 138 months. Failure to pay these fees results in the expiration of the patent. It is a common mistake, and it can have devastating financial consequences for individuals and business entities.

Patent Maintenance Fees

Patent maintenance fees vary based on the renewal point and the size of the entity. At 3.5 years, the maintenance fee is $1,600 for a large entity, $800 for a small entity, and $400 for a micro-entity. 

The fee rises at 7.5 years to $3,600 for a large entity, $1,800 for a small entity, and $900 for a micro-entity.

At 11.5 years, the maintenance fee is $7,500 for a large entity, $3,700 for a large entity, and $1,850 for a micro-entity. You can see updated fees and information about how to pay on the USPTO's website

The Maintenance Fee Grace Period

The USPTO requires patent holders to pay maintenance fees at 3.5, 7.5, and 11.5 years following the date of application for the original patent. It is acceptable to pay these fees up to six months before the due date.

Once the due date passes, a six-month grace period begins. During this time, the patent holder can pay the fee in addition to a nominal late charge. The current late fee is $160 for a large entity, $80 for a small entity, and $40 for a micro-entity.

Failing to Pay the Maintenance Fees

If the patent holder fails to pay the maintenance fees by the end of the grace period, the patent will lapse, and the patent holder cannot enforce any rights on the patent. However, there are a few notable exceptions to this rule. The first exception is that design patents and plant patents do not require the payment of maintenance fees. Design patents are protected for 14 years, while plant patents are protected for 20 years from the date of application.

Another exception is unintentional delays in payment. This is a high bar to rise above. It requires demonstrating that the failure to pay the fee was the result of simple mistakes such as clerical errors and failing to record the correct deadline. However, a deliberate decision to allow the payment maintenance period to expire would not qualify. Patent holders can apply to reinstate their patent for up to two years following the expiration date.        

Understanding Intervening Rights

Failure to keep the patent active can allow third parties to obtain intervening rights. This allows the third party to use the patent without having to pay any royalties or damages to the original patent holder. If the patent holder pursues the third party for compensation, the courts can allow them to continue using the patent based on their determination of what is fair and equitable to both parties. The courts have broad discretion in this regard, and it can cost the original patent holder significant amounts of time and money.

What if the maintenance fees cost more than the patent itself is worth? Global Patent Solutions helps you evaluate your patents so that you can keep your IP portfolio streamlined and beneficial. If it's time to sell your patent, we can help with that too. Contact us to discuss the steps we take to guide businesses through patent maintenance and evaluation.  



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