Concern over US plan to push up patent fees

A push for higher fees by the US Patent and Trademark Office (PTO) could spell trouble for small Australian biotechs and technology transfer companies.

Fee hikes proposed for October 1 by the PTO are being labelled "outrageous" by patent specialists in the US and Australia.

One critic, US patent agent Shalom Wertsberger, claims the new price schedule has the potential to push application fees for a basic biotech patent to $US290,000 - more than 10 times current levels.

The new structure will "slam the Patent Office door in the face of small business and individual inventors" who don't have substantial capital backing to pursue patent protection, Wertsberger claims in a protest letter posted on the Internet.

The PTO's proposals will need to be endorsed by US legislators before they can be put into effect.

Should that happen, the impact on the industry will be "tremendous", says Matt Lohmeyer, general manager (biotechnology and medicine) of Unisearch, the commercialisation company of the University of NSW.

It will add to the already expensive cost of pursuing intellectual property protection in the US, he says. It may well lead Australian companies to deal more directly with US patent agents on the assumption they will be better able to steer clients around "some of the more gratuitous fees".

"I suspect that many Australian firms will need to either ensure they work with an Australian attorney firm which has close links to the US or bypass the Australian patent system altogether and file first in the USA, relying on US patent attorneys to ensure they are not caught out (by the new fees)."

One of the proposed changes slaps a $US10,680 surcharge on applications which in the Patent Office's view contain at least one claim which is not "patentably distinct" from claims in another pending applications or patents.

That surcharge will jump to more than $US20,000 if the new claim clashes with four other pending or granted patents.

Other proposed changes will lift application examination fees by $1020 for a small entity and the cost of filing an appeal by $825, says Mallesons Stephen Jaques partner John Swinson, a specialist in intellectual property.

Without counting heavy surcharge on applications which fail the "patentably distinct" test, the new fees will "raise everything else by what appears to be 25 per cent," Swinson says.

He estimates the new fees would more than double patent costs for a small business client who application includes 10 additional dependent claims.

Dr Peter Devine, business development vice-president with drug discovery company Progen Industries, sees danger ahead for start-ups and smaller biotechs if the US trend flows through to other jurisdictions.

He estimates the current average cost of obtaining a provisional patent valid in a single country at $5,000 to $10,000.

Thanks to the Patent Cooperation Treaty, such a provisional patent is held to be valid in all signatory countries.

Subsequently, patent protection must be pursued on a country-by-country basis which can saddle biotechs with a total patent bill of $100,000.

While large, it will escalate significantly in size if other patent offices decide to follow the US Patent Office initiative, Devine says.