The Essential Guide to Patent Maintenance Fees.

This article looks at patent maintenance fees. They might not be thrilling, but if you own a patent, understanding them is absolutely essential.

What Are Patent Maintenance Fees?

Patent maintenance fees are payments required to keep a granted patent in force (because you don’t want to be the person who screwed up a multi-billion dollar patent). These fees are intended to incentivize companies to abandon patents so that only patents with ongoing value remain enforceable. If you don’t pay the fees on time, your patent will expire, allowing anyone to use the invention without needing your permission. Note that patent offices outside of the United States often require payments of fees similar to maintenance fees prior to patent issuance.

When Are Maintenance Fees Due?

In the United States, patent maintenance fees are due at three intervals during the 20-year life of the patent:

3.5 years after the patent is issued.
7.5 years after issuance.
11.5 years after issuance.

These are the first, second, and third maintenance fees, respectively. Each fee increases in cost as the patent matures. While there is a 50% discount for smaller companies and for individuals, these are a rounding error in the balance sheets of big tech companies, but can be a cash flow disaster for startups.

Why Are Maintenance Fees Necessary?

The theory behind maintenance fees is simple:

Encourage innovation: If a patent owner isn’t actively using their invention, letting the patent lapse lets others build upon the idea without rewarding the original inventor. However, the crushing impact of IPRs and efficient infringement can now mean that monetizing a patent that is actively infringed may be beyond the financial reach of the patentee. This failure to monetize valid, infringed patents due to bad behavior by big technology companies often leaves inventors without the resources to pay the fees.
Reduce clutter in the patent system: By eliminating dormant patents, the system stays more relevant and efficient. But … consider that there are millions of patents in force at any given time. Now imagine that you want to know if you can sell something without infringing a patent. You likely need to use automated means to search for possible infringement problems, and those means can scale easily to handle double the number of patents in force.

Helpful Advice for Managing Maintenance Fees

Set Reminders
- Missing a maintenance fee deadline can result in the expiration of your patent. Use calendar alerts or software tools to stay on top of due dates. Seriously. This is a very big deal.
Understand the Value of Your Patent, and Don’t Assume the Value Won’t Change
- Evaluate whether the patent still has value before paying fees, especially the later ones, which can be expensive.
Consider Small Entity Discounts
- If you qualify as a small entity or micro entity, you may be eligible for significantly reduced fees.
- And as a bonus for Universities, they get to pay the micro-entity fee—usually 25% of the full fee.
Use the Grace Period if You Miss the Deadline
- If you miss a deadline, there’s typically a six-month grace period during which you can pay the fee with a late surcharge.
Delegate Responsibility
- There are professional services and law firms that will monitor and pay maintenance fees.

Closing Thoughts

Patent maintenance fees are a key part of owning a patent. They are a true cash flow impediment to start-ups and independent inventors, but they ensure your intellectual property remains protected.