Patent Lapse

A patent lapse is the premature termination of a patent due to failure to pay required maintenance fees: US MAINTENANCE FEE SCHEDULE: utility patents (not design or plant patents) require three maintenance fee payments after grant; 3.5-YEAR MAINTENANCE FEE: due between 3 years and 3 years 6 months after grant; 7.5-YEAR MAINTENANCE FEE: due between 7 years and 7 years 6 months after grant; 11.5-YEAR MAINTENANCE FEE: due between 11 years and 11 years 6 months after grant; GRACE PERIOD: each maintenance fee has a 6-month grace period with surcharge; within grace period: patent remains in force; surcharge required at time of payment; LAPSE: if the maintenance fee plus any surcharge is not paid by the end of the grace period, the patent lapses; lapse = loss of all patent rights; the invention enters the public domain; any person may practice the invention without license; DESIGN AND PLANT PATENTS: design patents: no maintenance fees — they run for their full 15-year term (for patents granted after May 13, 2015; 14 years for earlier); plant patents: no maintenance fees; CURRENT FEE AMOUNTS (approximate, subject to change): 3.5-year fee: $2,000 (large entity); $800 (small entity); $400 (micro entity); 7.5-year fee: $3,760 (large entity); $1,504 (small entity); $752 (micro entity); 11.5-year fee: $7,700 (large entity); $3,080 (small entity); $1,540 (micro entity); surcharges add 50% to each base fee; DISTINGUISHED FROM ABANDONMENT: abandonment = deliberate decision to give up the patent; lapse = unintentional failure to pay on time; both result in loss of rights, but lapse may be revivable.

A lapsed patent may be revived if the delay in payment was unintentional: STATUTORY BASIS: 35 U.S.C. § 41(c)(1): USPTO shall accept a late maintenance fee if the delay was unintentional; REVIVAL PROCEDURE: file a petition to revive under 37 C.F.R. § 1.137(a); pay the overdue maintenance fee plus surcharge; pay the petition fee; include a statement that the entire delay was unintentional; TIME LIMIT FOR REVIVAL: within 2 years of the date the maintenance fee was due (i.e., during the extended 6-month grace period or within 2 years after); after 2 years from the due date: revival is not available; the patent remains lapsed permanently; UNINTENTIONAL STANDARD: the USPTO accepts a statement of unintentional delay at face value in most cases; no detailed explanation required for the first petition; fraudulent statement risks invalidity of the revived patent; INTENTIONAL LAPSE: if the owner deliberately chose not to pay (e.g., patent no longer commercially valuable), revival is not available; intentional abandonment ≠ unintentional delay; EFFECT OF REVIVAL: patent is restored to full force; all rights from grant date are restored; BUT: intervening rights may apply (see below); THIRD-PARTY NOTICE: the USPTO publishes a notice of revival; parties who began using the invention during the lapse period may have intervening rights; INTERVENING RIGHTS: 35 U.S.C. § 41(c)(2): a person who, in good faith, commenced making/using/selling during the lapse period has the right to continue those acts after revival; equitable intervening right: discretionary relief beyond the specific infringing articles; protects substantial preparation.

A lapsed patent places the claimed invention in the public domain with certain nuances: GENERAL RULE: when a patent lapses (or expires at end of its term), the claimed invention is freely available to all; any person may make, use, sell, import the claimed invention without license; the former patent holder cannot sue for infringement of the lapsed patent; WHAT ENTERS THE PUBLIC DOMAIN: the specific subject matter claimed in the lapsed patent; claims define the scope of protection — the public gets what the claims covered; unclaimed features were never protected and remain in the public domain regardless; CONTINUING PATENT FAMILY: if the patent owner has related patents (continuations, divisionals, continuations-in-part), those remain in force; the lapsed patent's claims may be duplicated in related patents if properly obtained before lapse; a lapsed patent on one claim does not affect sibling patents in the family; PROSECUTION HISTORY: the lapsed patent's prosecution history (office actions, amendments, arguments) remains relevant for interpreting related patents in the family; PUBLIC USE: competitors may begin using the lapsed invention immediately upon lapse; no waiting period; no compulsory license needed; NO UNFAIR COMPETITION: merely using a lapsed patent's technology does not constitute unfair competition; the patent owner cannot enforce the patent through other legal theories (trade secret, unfair competition) if the invention was disclosed in the patent; PATENT MARKING: if the owner marked products with the patent number after lapse, continued marking may violate 35 U.S.C. § 292 (false marking) — subject to suit for damages.

Preventing accidental lapse requires proactive docketing and fee management: DOCKETING SYSTEMS: patent management software (Anaqua, CPA Global, Dennemeyer, Questel, CPi) tracks maintenance fee deadlines automatically; critical for portfolios with many patents; features: automatic reminders; deadline calendars; fee amount tracking by entity size; ENTITY STATUS MANAGEMENT: correct entity status (large/small/micro) reduces fees significantly; small entity: qualifies if inventor is individual, or company with <500 employees, or nonprofit; micro entity: inventor meeting income limits or majority of prior patents assigned to specific institutions; INCORRECT ENTITY OVERPAYMENT: if you paid large entity fees but qualify as small entity, refund of the excess is NOT available — but correction ensures future fees are at correct rate; INCORRECT SMALL ENTITY CLAIMING: if you claim small entity but your company has >500 employees or was acquired by a large entity, the patent can be challenged for underpayment; TRANSFER OF OWNERSHIP: when a patent is assigned, the new owner must update entity status and assume docketing responsibility; failure to communicate after assignment is a common cause of accidental lapse; PORTFOLIO REVIEWS: quarterly review of all pending maintenance fee deadlines; prioritize based on commercial value — pay for commercially valuable patents; let less valuable ones lapse intentionally; REMINDER SERVICES: USPTO sends paper reminder notices to the correspondence address on file; these are courtesy notices only — failure to receive does not excuse late payment; USPTO also offers an Electronic Patent Acknowledgement (EPA) reminder service; OUTSIDE COUNSEL COORDINATION: if multiple law firms handle different patents, a central tracking system prevents gaps.

Patent owners sometimes choose to let patents lapse or abandon them to reduce portfolio costs: INTENTIONAL LAPSE BY NON-PAYMENT: simply not paying the maintenance fee; patent lapses at end of the grace period; no formal filing required; patent enters public domain; cannot be revived (intentional abandonment cannot use § 41(c) revival); FORMAL ABANDONMENT: under 37 C.F.R. § 1.138: the patent owner (or attorney) submits a written statement of express abandonment; effective immediately upon acceptance; can be filed at any time; useful when the owner wants to end the patent before a maintenance fee deadline; STRATEGIC REASONS FOR LAPSE/ABANDONMENT: cost savings (especially for large portfolios with marginal patents); regulatory: pharmaceutical company may abandon a patent to facilitate generic entry and avoid public relations damage; licensing: some licensors agree to abandon patents as part of settlements; STATUTORY DISCLAIMER: 35 U.S.C. § 253: the patent owner may file a disclaimer of any complete claim in a patent; the remaining claims survive; disclaimers are used to narrow scope to avoid invalidity challenges; disclaimed claims cannot be revived; TERMINAL DISCLAIMER: a specific type of disclaimer that limits the remaining patent term to expire with another related patent (used to overcome obviousness-type double patenting rejections); DIFFERENCE FROM LAPSE: formal abandonment is deliberate and recorded; lapse by non-payment is passive; both result in loss of rights; only lapse may be revived (if unintentional); abandoned patents cannot be revived; PROSECUTION-STAGE ABANDONMENT: if a patent application is abandoned (not an issued patent), the applicant may revive with petition, statement of unintentional abandonment, and fee — separate from maintenance fee revival.