As we are well aware, the patent examination process is complex. USPTO personnel, USPTO technology, inventors, and patent applicants can and do make mistakes. Regardless of how an error arises, there should be a workable, reliable, and consistent petition process to address and correct errors. When it comes to financial mistakes, 35 USC 42(d) authorizes. "The Director may refund any fee paid by mistake or any amount in excess of that required."

In Part I, we identified a sample of applications in which the USPTO extracted over $95,000 in excess filing fees.

In this article, we investigate how the USPTO handles requests and petitions for refunds. Table 1 summarizes Decisions A-U, which address requests and petitions for refund of excess fees imposed at the time of filing. Applications 1-VIII are the same sample analyzed in Part I. These decisions and related petitions were readily obtained from a search of Petition.ai, the most comprehensive searchable database of publicly available patent petition documents filed with the USPTO.

Deciding Office:

• Refund Office: Decisions B, C, D, E, I, J, P, Q, and U

• Office of Petitions: Decisions A, K, L, R, S, and T

• International Patent Legal Administration: Decisions F, G, H, M, N, and O

  The USPTO Refund Information webpage and MPEP 607.02 instructs applicants to use Form PTO-2326 to request refunds from the Receipts Division of the Office of Finance. This survey shows Form PTO-2326 was reviewed by paralegal specialists who relied, with little or no authorship, upon boilerplate form paragraphs that did not acknowledge or address applicant’s arguments. The requests were often dismissed (dismissed in Decisions B, C, E, I, J, P, Q, and U; granted in Decision D). Troublingly, Decisions B, C, E, L, and U were missing from the electronic files, and renewed petitions mentioned Refund Requests I, J, P, and Q, which were either not decided or not retained in the electronic files. We have previously reported missing petition decisions for the Climate Change Mitigation Pilot Program and for Retroactive Foreign Filing Licenses. These missing documents directly contradict the White House's memo calling for the retention of all federal records in electronic form and run counter to MPEP Section 719 which states the Image File Wrapper is the official file record of the application.

  According to MPEP 607.02(V), the only surefire way for applicants to receive a refund of the search fee or any excess claims fee is to file a petition under 37 CFR 1.138(d) to expressly abandon the application before examination. Yet, Applicants have another option. A refund can be requested in a petition under 37 CFR 1.181. These petitions are typically assigned to petition examiners in the Office of Petitions or, if the application is a PCT national stage filing, to legal advisors in the International Patent Legal Administration.

On the One Hand, the USPTO Broadly Interprets Specific Authorizations

As discussed in Part I, in theory, inventors have several options to avoid paying excess and multiple dependent claim fees. In practice, these protective measures did not stop USPTO overreach.

Checking PTO-1390 box (c)(ii) (Applications I, II, and III), checking PTO-1390 box (b) (Applications IV and V), or initially limiting fees paid via a credit card (Application VI) did not stop the USPTO from broadly misinterpreting (to put it nicely!) these limited authorizations to charge excess and/or multiple dependent claims.

After two refund requests in Application I were dismissed, applicant filed a petition for a refund of $15,880. With brazen gall, Decision B stated, "the lack of any authorization within the transmittal letter is not dispositive that applicant did not provide a general authorization.” Upon re-petition, Decision A took the position that "[n]o refund will be made for claims that have already been paid for. See MPEP § 607 III. Accordingly, the Preliminary Amendment [to the specification] cannot serve to avoid paying the required excess claim fees or provide a refund of claims that have already been paid for."

Decision H dismisses MPEP 509’s instructions while authorizing fee payment for a separate paper, not "this paper", as follows: "Many applications contain broad language authorizing any additional fees which might have been due to be charged to a deposit account. The USPTO will interpret such broad authorization to include authorization to charge deposit account fees set forth in 37 CFR 1.16 and 1.17…" As a result, Decisions G and H refused to refund $13,540 for excess claim and multiple dependent claim fees for Application IV.

Applicants can try to limit unwarranted takings by paying fees via a credit card, although this carries the risk of losing a filing date should there be insufficient fees. Application VI was filed using a combined approach of limited credit card payment coupled with authorization limits for the deposit account. Before a corrective preliminary amendment was filed, the USPTO extracted fees for the original claim set.

Upon petition, instead of following the very specific authorizations and correcting this error, the USPTO doubled-down on their overly broad interpretation and refused to refund the money. Decisions K and L

A Lucky Few Receive Refunds

Applications I, II, and III were filed with a check on PTO-1390 box (c)(ii), yet in each instance, the USPTO removed excess claim fees. In January 2024, Decision D granted the renewed petition to refund Application II's $1,600. The excerpt from Decision D, shown in Figure 1, appears equally applicable to Application I. Inexplicably, that same month, Decision A dismissed the renewed petition to refund Application I's $15,880.

Meanwhile, in March 2024, Decision F granted a Shenzhen-based applicant's petition on the first go-round and refunded $340 in excess claim fees for Application III.

Finders Keepers, Losers Weepers

Applicants should be aware the USPTO scours filing papers to identify tiny procedural errors in order to refuse their entry. The USPTO then leverages these so-called deficient preliminary amendments to charge excess fees or the original claim sets.

Tiny informalities resulted in significant unwarranted fee payments for Application VI. Decision M dismissed Application VI's request for a refund as follows: "[t]hus, it is clear that the Office will refund an applicant if the applicant mistakenly pays a fee that wasn't due but will not refund fees where an applicant took an action by mistake or made an error which resulted in a required fee payment. The present situation does not constitute a mistake which necessitates the refunding of the charged fees." Thus, a single incorrect claim status identifier in a preliminary amendment was used by the USPTO to capture $13,900 in excess fees from a US non-profit dedicated to the advancement of military medicine.

Zeroing in on an obvious typographical error in a preliminary amendment remarks section, the USPTO refused to enter Application VII's preliminary amendment. The agency then pocketed $6,390 for the now-cancelled original claims and rationalized not refunding the fees as follows: "[a] subsequently filed preliminary amendment canceling claims and/or eliminating multiple dependent claims will not entitle applicants to a refund of fees previously paid.”

Apparently, no mechanism exists to correct applicants’ obvious, minor typographic errors in their preliminary amendments - an omission that rewarded the USPTO with a collective windfall of $20,290 from our small sample size.

Fees Taken to Cover DOCX-Associated Errors

Part I exposed the USPTO charging inventors fees to correct USPTO-generated errors made during the DOCX submission process. The Office recently acknowledged confusion exists over whether the DOCX surcharge would be incurred for filing a same-day preliminary amendment using the legacy PDF format in a DOCX-submitted application. To avoid the non-DOCX surcharge, the Office clarified the accompanying preliminary amendment must also be submitted in DOCX format. Applicants who relied upon the prior guidance were nonsensically invited to file a petition under 37 CFR 1.183 to request a refund if the surcharge has not been paid. The Office provides no remedy for the majority of filers whose fees would have already been taken from a deposit account. Reading between the lines, the announcement supports our findings that once money is removed from a deposit account, it is rarely returned.

On the Other Hand, the USPTO Construes "Mistake” Narrowly

As authorizations are interpreted broadly, seasoned practitioners may not be surprised to find that, on the other hand, the USPTO construes the term "mistake" narrowly, rarely attributing any error to itself. For example, fees taken for errors created by the USPTO’s DOCX conversion process in Applications VIII and IX were denied refunds because the Office reasoned the applicant's payment of the fees were deemed not a mistake and fees already paid cannot be refunded. Decisions S, T, and U. Not to put too fine a point on it, Applicant didn't pay the fee by mistake, rather, the USPTO took the fee on purpose. Even though the USPTO fails to acknowledge their error in taking the money, the fees were "in excess of that required" since applicant should not have been charged anything at all to fix USPTO errors.

Following a 232-day delay, Decision S dismissed Application VIII’s petition because "[t]he Office cannot refund excess claim fees that were properly paid merely because applicant cancels the excess claims prior to first office action....no refund will be made for claims being canceled that have already been paid for, citing MPEP 607.02." This reasoning conflicts with 35 USC 42 (a)(2)(C) which allows the director to provide a refund "before an examination on the merits".

Decision T refused to refund Application IX's request for the page fees charged for Auxiliary PDF in DOCX submission because they "were not 'paid by mistake.' Applicant submitted 50 pages in excess of 100 at the time of filing."

It seems arbitrary and capricious for the agency to refund fees in some cases but not in others with similar fact patterns. Even when a petition is granted, the refunded fees do not compensate the patent practitioner for the time it took to prepare and file these repeated requests and petitions. While Decision R eventually provided a refund of $8,300, this "win" did not cover the time and effort applicant spent to draft and file those petitions or the $550 interest that would have accrued over the 590 days that the USPTO held the money.

How Can This Mess Be Fixed?

The USPTO justifies proposed fee increases to better align fees with the costs of services provided. As Professor Saurabh Vishnubhakat notes, "[i]t is longstanding USPTO practice to set filing, search, and examination fees well below the marginal cost of those activities specifically to encourage entry into the Patent Office.” To be clear, the USPTO did not examine any excess or multiple dependent claims in Applications I-VIII. In each instance, the claim set was pared down to 20 total and 3 independent claims before examination, which are permitted without incurring excess fees. The fees were taken by the USPTO in error and in excess of what was required. Because these fees were not used to compensate the patent examiners for time or resources that may have spent examining excess claims, Director Kathi Vidal has the authority to refund these fees, according to 35 USC 42 (a)(2)(C).

This would not be the first time America's Innovation Agency has been caught with their hand in the cookie jar. A USPTO financial analyst in charge of customer deposit accounts fraudulently removed nearly $500,000 from dormant deposit accounts from 1998-2005.

We believe these taken fees are only the frosting on the cupcake. In fact, following the publication of Part I, IP practitioners reached out to us with similar tales of woe involving large amounts of money. The many missing refund request decisions are not available for public scrutiny. Given these dismal petition results, it’s understandable if applicants conserve resources and choose not to devote time and effort to chase sunk costs. Any general reluctance on the IP community's part to challenge USPTO's financial malfeasance will likely embolden the agency to continue amassing their ill-gotten gains. While this level of highway robbery most impacts the underrepresented and under-resourced inventors, these egregious takings and refund practices shred the goodwill the USPTO has with its external stakeholders. These losses and accompanying procedural irregularities should capture the attention of the Department of Commerce Office of Inspector General, whose mission is to detect and deter waste, fraud, and abuse.