In most jurisdictions, utility-type Patents require that periodic patent maintenance fees or annual annuities be paid to maintain the Patent. These payments are usually made to the appropriate governmental body. Most jurisdictions, other than the United States, also require the payment of annual annuities.
United States Patent Maintenance Fees
Title 15 of the United States Code requires the owner of a utility US Patent to pay maintenance fees at three and one-half, seven and one-half and eleven and one-half years subsequent to the issue date of the US Patent.
What Happens if the US Patent’s Maintenance Fee Is Not Paid?
The Patent will expire if the fee is not paid prior to the expiration of the fourth, eighth or twelfth year subsequent to the issue date of the Patent.
An Example Case: Unpaid Patent Maintenance Fees
Due to a Programmer’s Error, Company A did not Generate the Payment for the Seven and One-Half Year Maintenance Fee for Company A’s US Patent for “Gizmo.”
At this point, Company B approaches Company A regarding a license of the “Gizmo” Patent. Is it possible for Company A to enter into a Valid License Agreement with Company B?
Scenario 1
Seven years and nine months subsequent to the issue date of the Gizmo Patent, Company A discovers the maintenance fee was not paid:
- Pursuant to 37 CFR 1.362(e), by paying the maintenance fee and the surcharge during the “grace period,” Company A and Company B can enter into a license for the Gizmo.
Scenario 2
Nine years subsequent to the issue date of the Gizmo Patent, Company A discovers the maintenance fee was not paid:
- Pursuant to 37 CFR 1.378, by filing a petition with the Director of Patents stating that the failure to pay the maintenance fee was unintentional, paying the USPTO fee for the petition and the required maintenance fee, the Director may reinstate the expired Gizmo Patent. As a general rule, the Director usually reinstates an expired Patent as long as these above mentioned conditions are met before two years subsequent to the expiration of the Patent. Subject to any intervening rights, Company A and Company B can enter into a license for the Gizmo.
Scenario 3
Ten and one-half years subsequent to the issue date of the Gizmo Patent, Company A discovers the maintenance fee was not paid:
- Pursuant to 37 CFR 1.378, by filing a petition with the Director of Patents stating that the failure to pay the maintenance fee was unintentional, paying the USPTO fee for the petition and the required maintenance fee, the Director may reinstate the expired Gizmo Patent. As a general rule, after two years subsequent the expiration of a Patent, the Director exercises more discretion in reinstating any expired Patent. Subject to favorable decision by the Director to reinstate the Patent and any intervening rights, Company A and Company B can enter into a license for the Gizmo.
If you have questions about your company’s Patent maintenance fees or annuities, please contact Business Patent Law, PLLC and we will discuss possibilities for your business and intellectual properties.
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