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Patent maintenance fees, also called renewal fees, are required by the USPTO on utility patents over the course of a 20-year period at three separate intervals.7 min read
What Are Patent Maintenance Fees?
Patent maintenance fees, also sometimes called patent renewal fees, are fees paid to the USPTO (The United States Patent and Trademark Office) to keep up a granted patent, typically a utility patent, already in force. With certain types of foreign patents, patent maintenance fees are also required for pending patent applications.
Patent maintenance fees are not mandatory with every type of patent. Also, some patents have laws about the maintenance fees required and how often they should be paid.
Patent Maintenance Fees in the United States
In the United States, patent maintenance fees are required for utility patents over the course of a 20-year period at three separate intervals. Patent maintenance fees are not required for design patents. This 20-year period begins at the time of patent filing or the priority date. Maintenance fees are required at the fourth-, eighth- and 12th-year anniversary from the time the patent is granted. There is a "window period" in which the patent maintenance fees should be paid, which is a six-month period before the fee is actually due.
According to the USPTO renewal website, the fee schedule is as follows:
- 4+ years: $1,600 for large entity, $800/$400 for small/micro
- 8+ years: $3,600 for large entity, $1,800/$900 for small/micro
- 12+ years: $7,400 for large entity, $3,700/$1850
Additionally, the patent office charges penalty fees for late payments within six months of the due date, which is $160 for a large entity, $80 for a small entity, and $40 for a micro entity. If the payment is late due to unintentional circumstances beyond the patent's expiration date, there is a fee of $1,700 for a large entity, $850 for a small entity, and $850 for a micro entity.
(By definition: A small entity is an individual, a nonprofit organization, or a business that employs fewer than 500 people. To be classified as a micro entity, the applicant can't have an income of more than three times the previous year's median household income, approximately $50,000. The applicant also can't be named on more than four previous applications.)
Foreign Patent Maintenance Fees
Foreign patent maintenance fees are quite different from those in the U.S. and are dependent upon the country in which the patent is filed. Most foreign patents require annual maintenance fees, which are also sometimes called patent annuities. These patent annuity payments are also usually required after the first application process and not when the patent is actually approved. Furthermore, foreign patent annuities tend to grow larger with every passing year until the maximum maintenance fee is reached. Therefore, you may start out paying a small, conservative fee, but every year, the maintenance fees involved will grow higher until you reach say, for example, the tenth year. At which time the fee will stay the same amount for the life of the patent.
There are different types of patent maintenance fees with the foreign patent as well. These usually fall into three categories:
- the government fee
- the foreign associate fee
- the local agent professional fee
While some of these fees are rather small in some countries, each is an important part of maintenance fee upkeep, and if not paid, can put your patent in jeopardy. In some countries, if you miss the deadline for any reason, there's no way to reinstate the patent. Some of these fees offer opportunities for a patent holder to do a little research and pay a smaller fee. For example, some countries do offer smaller annuities for small entities. However, this information can be hard to find for certain and it is often hard to find the exact limits of what makes an entity a small one. If working with an annuity payment firm, it is best to garner a good understanding of the different fees involved in the overall patent maintenance fees you pay.
Why are Patent Maintenance Fees Important?
Maintenance fees on your patent are important for a few reasons. While many inventors see maintenance fees as only a way for the USPTO to profit, there are other reasons for these fees. About 50 percent of patents expire simply because their owners disregard maintenance fee payments. Therefore, the way is cleared for new patents for those with products or inventions which could not get a patent before.
If you do not pay your patent maintenance fees, your patent will expire and your invention will no longer be patented under the USPTO. It is proposed that the system is designed this way to continually allow the flow of new patents and weed out those patented inventions whose owners are no longer as focused on using their patent in product development.
Reasons to Consider Not Paying Patent Maintenance Fees
The business of filing for and obtaining a patent is costly. The estimated cost for a small business entity to file for a patent and maintain the patent with the associated fees for the long-term can range from $220,000 to $440,000. While some patents turn out to be well worth the investment, this may not always be the case. It is good to evaluate the patent and the associated fees at every renewal period to decide if continuing to hold the patent would be a good financial decision.
As an example, you invent a special automotive component this year and plan to use that patented utility to create a product, and fully believe this patent will garner you a healthy return on sales going forward. By the fourth year, the patent still proves to be valuable, so you pay the maintenance fees. However, by the eight-year point, when patent maintenance fees are once again due, a greater product development has emerged and the patent you now hold is no longer as valuable. This would be a good reason not to pay the maintenance fees and allow the patent to expire.
Working with a patent review committee helps inventors decide whether a patent is worth keeping. There are several levels used in an evaluation process by these professionals to determine the logicality of paying the maintenance fees, including:
- Whether the patent is still aligned with planned products and services;
- Whether holding the patent is important to protect ongoing product development;
- Whether the patent is particularly important to ward off outside patent development which could infringe on current business plans.
Reasons to Consider Paying Patent Maintenance Fees
Even though maintenance fees make holding the rights to a patent more costly, it is well worth the ongoing investment for most patent holders. Continuing the maintenance fees means no one can legally infringe on your rights as the patent holder. There are situations when it is questionable whether it is worth the continued fees, but with advice from a patent attorney and/or a patent review committee, many inventors find paying the fees are a logical solution.
Keep in mind that there are ways that you may be able to reduce the costs of patent fees, even though the ways to do so are few. One way to cut the cost of patent maintenance fees in some countries involves having the patent endorsed with a License of Right or LOR. The LOR endorsement shows others that you are willing to grant a license to the patent to any interested party. By having your patent endorsed with an LOR, you can see your maintenance fees drop by 50 percent.
What Happens When You Pay Patent Maintenance Fees vs. When You Do Not
It is highly important to keep tabs on maintenance fees once you are granted a patent. While the majority of maintenance fee payments are missed intentionally by inventors and business entities, there are some who either neglect the fee schedule or have misunderstandings about when fees should be paid. When the fee is paid, you continue to hold the right to your patent. If the fee goes unpaid beyond the six-month grace period after the due date, the rights to that patent are forfeited and others can step in and apply for a patent for the same item.
Common Mistakes with Patent Maintenance Fees
There are mistakes that you must avoid with patent maintenance fees. No entity, whether large or small, is not at risk for mistakes, miscommunications, or misunderstandings where patent maintenance fees are concerned. A few of the most common mistakes include:
- Not keeping record of when patent maintenance fees are due;
- Allowing simple clerical errors to get in the way of paying maintenance fees in a timely fashion;
- Not taking into consideration the differences between foreign patent maintenance fees and processes for paying those fees;
- Waiting too long to reach out to the USPTO with questions regarding patent fees;
- Assuming the size of your entity for payment purposes without knowing for certain what amount you should pay.
Because there are so many ways you could make a mistake with maintaining the fees associated with holding a patent for the long term, many inventors and businesses rely on a patent attorney or outside firm to handle the payments. This is especially true for those who hold multiple patents or patents in more than one country. Not every patent attorney firm will take on this responsibility, but many will. This gives you the peace of mind of knowing the ongoing maintenance is handled and documented accordingly.
Frequently Asked Questions
- Can you pay for multiple patent maintenance fees at once?
You can pay for multiple patent fees at once through the USPTO website. The site allows you to pay for as many as maintenance fees on separate patents at one time.
- Once the fees are paid, how long does it take for the payment to register with the USPTO?
In most cases, the payment will be updated in your account within an hour. However, the length of time it takes for the USPTO to update your account can differ depending on how many patent fees you pay at one time. Further, it is always a good idea to pay the maintenance fees well in advance of the final cut-off date at the end of the six-month grace period if something goes wrong.
- If you do not pay the maintenance fees on a patent, how long is it until the patent expires?
This can depend on several outlying factors. If you have missed a patent maintenance fee payment and are beyond your six-month grace period, it is best to look up the status of your patent using the USPTO website. If the patent is still listed as active, reach out to the patent office or your patent attorney for advice immediately. In most cases, the patent will quickly become public domain and your ownership will be revoked soon after a payment is missed. Patent owners do get one break: In 2013, the unavoidable delay standard was removed for owners who wished to reinstate patents that had been expired for more than two years because they hadn't paid maintenance fees.
If you need help with your patent maintenance fees, feel free to post your questions or concerns on UpCounsel's marketplace. UpCounsel accepts only the top five percent of lawyers to its site. The attorneys on UpCounsel come from upstanding backgrounds and educational institutions, such as Harvard Law and Yale Law. Many hold an average of 14 years of legal experience, including work on behalf of companies like Twilio, Google, and Stripe.