On May 16, 2023, the United States Patent & Trademark Office alerted practitioners of proposed changes to trademark fees and invited stakeholders to comment on the proposal. The fee changes are expected to take effect November of 2024.

How Does the USPTO Determine Fees?

The USPTO operates under the Commerce Department with the stated purpose of “[promoting] the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” (Article I, Section 8, Clause 8, US Constitution) To fulfill that mandate, the USPTO collects fees from patent and trademark application, registration, and maintenance activity to fund day-to-day operations, increase awareness and support for innovation across the country, and provide protection and enforcement of intellectual property rights in the U.S. and abroad.

Under section 10 of the America Invents Act, the USPTO has authority to set or adjust fees, but may only make these adjustments to recover aggregate estimated costs for processing applications and administrative costs related thereto. Proposed fee adjustments must be published by the relevant advisory committee, a public hearing must be held, and the advisory committee must prepare a written report for submission to Congress’s consideration. (See the Supplementary Information section at https://www.federalregister.gov/d/2023-08906)

What Changes Are Proposed?

The USPTO recently released tables comparing current trademark fees to those proposed. Overall, Trademark fees (for electronic filings) will increase by an average of 17% for filing, allegation of use, and renewal activities. A few particularly notable trademark fee changes include:

• An increase in basic trademark application filings, and the creation of “premium” fees for customized identification of goods and services
• An increase in fees for allegations of use on intent-to-use applications
• An increase in fees for Fourth and Fifth Requests for Extension of Time to file Statements of Use

What Does This Mean for Applicants?

In 2021, the USPTO adopted a tiered filing system known as TEAS Plus and TEAS Standard. The intention of this change was to encourage trademark owners to use the USPTO’s pre-populated identification descriptors for goods and services, which makes the examination process more efficient. However, the naming of the tiers was confusing, and many trademark owners continued to file the more complex TEAS Standard applications, incurring unnecessary fees for themselves, and creating inefficiencies for examiners. The USPTO noticed that more than 50% of applications continued to be filed as TEAS Standard, despite the $100 savings per class offered by using TEAS Plus.

Under the proposed changes, all electronically filed trademark applications will be filed as “Basic Applications” with a filing fee of $350 per class. This fee is equivalent to the current fee associated with TEAS Standard applications and represents an increase of $100 from the current per class TEAS Plus fee. But Basic Applications will enjoy the same search and examination process as TEAS Plus applications currently do, with the requirement that applicants use the USPTO’s pre-populated descriptors for goods and services.

For applicants who want to customize the descriptions of their goods and services, rather than use the pre-populated descriptors, payment of “premium” fees will be required under the proposed changes. The proposed premiums fees include a $200 per class fee for the first 1,000 characters of any custom description, an additional $200 per class fee for any custom description of more than 1,000 characters, and the possibility of incurring a $100 per class fee for “insufficient information” if the trademark examiner takes issue with the custom description presented in the application.

All told, custom descriptions can increase the cost of an application from $350 to up to $850 per class under the proposed changes. For an application covering three classes, the premium fees for a new trademark application with custom descriptions could reach as high as $2,550, as opposed to $1,050 for a Basic Application. Clearly, the USPTO prefers that applicants use its pre-populated descriptors, and the proposed fee changes create a strong incentive to do just that.

Meanwhile, owners of intent-to-use trademark applications will also be facing some substantial fee increases, in addition to the basic filing fee increases. Intent-to-use trademark applications are an effective way to lay claim to a trademark before making public, commercial use thereof.

Under the current system, intent-to-use applicants have six months from receipt of a Notice of Allowance to submit evidence of commercial use to the trademark office. This initial six-month deadline can be extended up to five times, each extension providing an additional six months within which to submit evidence of use. Each extension requires payment of associated fees, in addition to the fees associated with submitting a Statement of Use. So, an applicant requesting all five available extensions could expect to pay $625 in USPTO fees per class under the current fee structure.

The proposed changes will increase the costs of the fourth and fifth extensions from $125 per class to $250 per class, meaning an applicant requesting all five available extensions will now need to pay $875 per class. Through these extension fee increases and a $50-$100 increase in Statement of Use fees, depending on when it is submitted, the USPTO is encouraging trademark applicants to begin commercial use of their trademarks sooner rather than later.

How can Small Businesses Respond?

The USPTO encourages stakeholder comments on the proposed changes. If you would like to submit written comments on the trademark fee changes, you can do so by following the instructions provided in the Written Comments section at https://www.federalregister.gov/documents/2023/ 04/27/2023-08906/trademark-public-advisory-committee-public-hearing-on-the-proposed-trademark-fee-schedule. The Gravis Law IP Team is also available to prepare and submit written comments on your behalf. The deadline for written comments is upcoming on June 12, 2023. Assuming the proposed changes do go into effect in November 2024, below are our recommendations for minimizing additional costs for applicants.

Takeaway #1: Focus on efficiency to reduce fees at filing.

The Basic Trademark Application fee remains accessible at a more reasonable $350 per class. To take advantage, applicants will be required to forego custom descriptions and utilize the USPTO’s pre-populated identification descriptors. Most applicants will not struggle to find categories that adequately describe the goods and services their trademarks are used on, and we can certainly assist in identifying the correct categories to include in your Basic Application.

Applicants that feel strongly that custom descriptors are necessary for their trademark applications would be wise to submit applications ahead of the November 2024 effective date of the fee changes, particularly given the uncertainty associated with the $100 per class “insufficient information” fee.

Takeaway #2: Submit specimens of use early.

The fees associated with Extensions of Time for filing Statements of Use can pile up even under the current fee schedule. With increases to the fees associated with submitting a Statement of Use itself and those associated with fourth and fifth extensions, intent-to-use applications will be getting significantly more expensive.

If you have been thinking about an intent-to-use trademark application but haven’t filed yet, it would be wise to do so before the new fee schedule goes into effect in November 2024. Thereafter, planning to have evidence of use ready within six months of a Notice of Allowance will allow you to avoid paying any extension fees, and having evidence of use ready at least within two years of the Notice of Allowance will at least avoid the more punishing fees associated with fourth and fifth extension requests.