Exchange rate gains from the International Bureau

Here’s a fun thing to notice.  These days the USPTO is picking up an extra $27 from the IB with each inbound Hague designation.

By way of background, when a design applicant files an international design application (a “Hague Agreement” application), the applicant always selects one or more “designated Offices”.  By this we mean that the applicant picks the places where the applicant hopes to protect the design (or designs) that are the subject of the application.  

When you file a Hague application, you pay fees as a function of your designations.  If you designate more Offices, you pay more fees up front.  Each designated Office gets to specify to the IB what fee it wishes to get paid.  Of course the Office will pick the amount of that fee based upon its own local currency, but the fee paid by a Hague applicant is in Swiss Francs.  Because currency exchange rates change from time to time, this means that any particular designated Office might wish to adjust the amount of its designation fee from time to time to respond to the changes in the exchange rates.

Which brings us to the present situation with US designations.  It will be recalled that the USPTO has allocated a series code of 35 to this kind of design patent application.  So what we are talking about is the fees that the USPTO receives from the IB in its 35-series cases.

For an ordinary domestic US design patent application, the cost to get an application filed is $1020 (for large entities, that is, with a filing fee of $220, a search fee of $160, and an exam fee of $640).  How much does the USPTO charge to handle an incoming Hague case? 

For the case quoted above, the applicant paid the US designation fee that was in effect on May 29, 2020 which was 908 Swiss Francs.  The IB charged that amount of money because at some earlier time, the USPTO had told the IB that 908 was the number of Swiss Francs that the USPTO wished to receive.  How did the USPTO arrive at that number?  You can tell from the above screen shot how the USPTO arrived at that number.  The USPTO decided that the number of US dollars that it needed to receive for each Hague case is 960.  Importantly, the USPTO gave a fee code of 1791 to this fee.  At some date prior to May 29, 2020, the USPTO looked up the exchange rate between CHF and USD and worked out that USD 960 was about CHF 908, and the USPTO sent a declaration to the IB specifying that number of CHF as the designation fee for the US.  So as I say, on May 29, 2020 the applicant in the case quoted above paid CHF 908 to the IB.

What happened next is that on August 7, 2020, the IB transmitted the case to the USPTO.  On or about August 7, 2020, the IB transmitted CHF 908 to the USPTO.  Apparently on the date of that transfer, this amounted to USD 987.  Which then put the USPTO in the position of having to figure out what to do with a number of dollars received that failed to match the number of dollars that is locked in for fee code 1791.  In this case the number of dollars received was “too high” by 27.  Something had to be done with that money!  There has to be a fee code in the amount of $27 to which that extra money can be allocated, or else all of USPTO’s fee accounting systems will explode or something.  So the USPTO set up fee code 9981 which is called “Exchange rate gains from International Bureau”.  

Of course exchange rates can go up or down.  It would not be at all surprising if sometimes the payment from the IB to the USPTO would amount to some number of US dollars that was less than 960 rather than more.  Our firm has handled quite a few US designations of Hague cases, and I looked through some of them for other instances where the amount of money received from the IB did not match.  I see for example a case that the IB transmitted to the USPTO on June 28, 2019 and the amount of money that actually arrived was only $923.  On December 31, 2019 the USPTO did an accounting entry writing off the shortfall of $36.  (No I cannot figure out why they did not write off $37.  They wrote off $36.  To this day, one dollar is missing for fee code 1791.  Eventually the system will explode because of this.) 

In 2019 when the discrepancy was in the direction of a shortage, the discrepancy simply got posted to the same fee code as the ordinary fee code, namely fee code 1791.  But in 2020 when the discrepancy was in the direction of an excess, the extra $27 got posted to a separate fee code 9981.   Go figure.

As I say, each designated Office can adjust the number of Swiss Francs for its designation fee from time to time.  You can see here that on August 17, 2020 the USPTO decided that instead of being paid 908 Swiss Francs, it wishes hencefoth to be paid 989 Swiss Francs.  The new number of Swiss Francs took effect for Hague applications filed on and after October 2, 2020.

And there you have it.