Intellectual Property

Patent fees--like trademark and copyright fees--are set primarily by statute. Overall, patent fees recover the costs of the patent process within the Patent and Trademark Office (PTO) and can be adjusted annually for inflation. Despite this self-sufficiency, fees for individual services do not necessarily cover the costs of those services because (1) the largest fees are paid at the back end of the patent process, while PTO incurs most of its costs at the front end, and (2) different categories of applicants pay different fees for the same service. Trademark fees also recover the overall costs of the trademark process. However, trademark fees are smaller and fewer in number than patent fees. Moreover, fees and costs tend to be more closely aligned in the trademark process because income is received before the application is examined. There are no differences in trademark fees based on the size of the entity applying, no major differences in the costs for different types of trademark applicants, and fewer costs and delays caused by inaccurate and incomplete applications. Copyright fees are the smallest and simplest of all the federal intellectual property fees. Most applicants pay only an up-front, one-time registration fee of $20. However, copyright fees, which have not increased since fiscal year 1991, do not recover all costs. The Copyright Office supports legislation that would give it the authority to raise fees to recover the costs of copyright registration and services.

GAO noted that: (1) patent fees, like trademark and copyright fees, are set primarily by statute; (2) overall, patent fees recover the costs of the patent process within PTO and, by law, can be adjusted annually for inflation; (3) despite this self-sufficiency overall, fees for individual services are not necessarily commensurate with the costs of those services because the largest fees are paid at the back end of the patent process, while PTO incurs most of its costs at the front end, and different categories of applicants pay different fees for the same service; (4) generally, successful applicants and large entities tend to pay more than unsuccessful applicants and small entities for the same services; (5) because fees do not differ on the basis of the complexity of the invention and because fees do little to discourage the submission of inaccurate and incomplete applications, applicants with complicated inventions and applicants who create delays in the process may not pay fees sufficient to recover the additional costs they create; (6) trademark fees also recover the overall costs of the trademark process and can be adjusted annually for inflation; (7) trademark fees are smaller and fewer in number than patent fees; (8) fees and costs tend to be more closely aligned in the trademark process because most income is received prior to the examination of the application; (9) there are no differences in trademark fees based on the size of the entity applying, no significant differences in the costs for different types of trademark applications, and fewer costs and delays caused by inaccurate and incomplete applications; (10) copyright fees are the smallest and simplest of all the federal intellectual property fees; (11) most applicants pay only an up-front, one-time registration fee, with no differences based on entity size, the accuracy or completeness of the application, or the type of copyright being registered; (12) copyright fees do not recover costs and, as a result, the Copyright Office receives about $10 million a year in appropriations; (13) copyright fees have not been increased since fiscal year (FY) 1991 because the Copyright Office chose not to raise fees to adjust for inflation in FY 1995; (14) the Copyright Office has supported fee increases in the past and supports legislative proposals that would give the Register of Copyrights the authority to raise fees to recover costs; and (15) Copyright Office officials do not believe that the Copyright Office should be fully self-sustaining through fees because it performs other functions that the officials believe are more appropriately funded through appropriations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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