When the America Invents Act became law, it established a statutory penalty of $400 for the practitioner who failed to e-file a new patent application. ($200 for small entities.) This might best be understood as a Congressional mandate to the USPTO to do whatever was needed to ensure that a backup e-filing server would always be available even if the main e-filing server were to crash.
It will be recalled that there was a massive system outage at the USPTO starting on August 15, 2018. Despite numerous reminders in 2014, 2015, and 2016 to the USPTO to take steps to move the backup server physically away from the main server, USPTO failed to do so, and as a consequence the system outage took down the backup server as well as the main server. During the massive system outage, practitioners thus had no choice but to file their new patent applications on paper. These applications were filed by Priority Mail Express (Rule 10) or were hand-carried to the USPTO. Each such application thus incurred the $400 penalty.
Of course one wishes that USPTO would refund the penalty given that it was USPTO’s fault, not that of the practitioner, that the filer failed to e-file. But during the previous outages, the USPTO had taken the position that because the $400 was statutory, not rule-based, then its hands were tied and it was impossible to refund the $400. During the August 2018 outage, however, Director Iancu posted a message that the USPTO was working on a way to give back the $400. I wondered (blog article) how the USPTO would finesse this.
Now USPTO has posted a Federal Register notice that establishes a policy for getting the $400 back. This blog article discusses the notice and explains how to actually get the money back.
So here are the detailed steps to follow to get the $400 back.
- First, you have to make sure that the outage that forced you to pay the $400 was an outage for which the USPTO has posted a mea culpa on its web site. The August 2018 outage is such an outage. And, common sense tells you, you have to make sure your paper-filed case was filed during the specified mea culpa time period (here, August 15-23).
- Second, you have to wait until USPTO gets around to telling you the actual application number of your paper-filed patent application. In this webinar I describe how to find out your application number. Briefly, the options that might work include:
- looking in Financial Manager,
- looking at your credit card bill,
- looking at the back of your canceled check,
- waiting for the application to turn up in Private PAIR, and
- waiting for a physical Filing Receipt or Notice of Missing Parts to show up in the mail.
- Once you find out the application number, then you e-file the application all over again. You e-file it in EFS-Web (or, if the outage is a long time from now, in the successor system which is going to be called Patent Center). Importantly, you e-file it as a follow-on filing (in the same application number as your paper case), not as a new application. You also file a statement that the e-filed application is a true and correct copy of the paper-filed application.
- USPTO now has a form PTO/SB/448 for this purpose. The document description should be “Refund Request for Papers Filed During a Designated Outage”.
- At this point, you request a refund of the $400. Or if you have not yet paid the $400 but USPTO has mailed a Notice that you must pay it, you request that the Notice be canceled.
- You cannot wait forever to do this e-filing and this requesting. If the situation is that you already paid the $400, then you must do the e-filing and the requesting within one month of the mailing date of the Filing Receipt. If the situation is that you have not yet paid the $400, then you must do the e-filing and the requesting within the period for reply from the Notice asking for the $400.
- You will then need to docket to check for USPTO refunding the $400 or expressly withdrawing the Notice, following up with the USPTO as necessary.
Keep in mind that there are actually at least two possible fees for which this procedure might be helpful. One is the $400 penalty for failing to e-file. The other is the excess-pages fee where an e-filed page counts as ¾ of a paper-filed page.
What Director Iancu says is that USPTO will treat the paper-filed case as if it had been e-filed. The idea is that this hopefully finesses the Congressional mandate that the $400 penalty be paid for a paper-filed case.
I am torn between thinking that this finesse is too clever and will blow up TYFNIL, and thinking that maybe it is just barely clever enough and will not blow up TYFNIL. I must express grudging admiration that Director Iancu has at least tried to finesse this problem, a thing that had not been attempted at the USPTO with the previous outages. It would be fun to learn who exactly it was at the USPTO who thought of this finesse. I would like to shake his or her hand and give him or her a kudos in this blog, if I could. But I expect that nobody outside of the USPTO will ever get to learn who it was that thought of this.
It will be appreciated that the massive outage of August 2018 was not the first such massive outage. Previous crashes that knocked out both the main server and the backup server happened in November of 2016 and December of 2015 and May of 2014. Plenty of practitioners incurred $400 penalties during those crashes. In our office, for example, we incurred that $400 penalty during the May 2014 crash. Of course one wishes that today’s new policy would permit the practitioner to follow the same steps — e-file the patent application all over again in EFS-Web, and then ask for a refund of the $400. Unfortunately the way the policy is worded, it expressly disallows refunds for those past crashes. The policy says that the practitioner’s refund request must arrive at the USPTO within just a short time from when the USPTO imposed the penalty. So it is far too late for our firm to get back that $400 now which we incurred during the May 2014 crash.
While the policy fails to address previous crashes at the USPTO, what can be said is that the policy is forward-looking as to possible future crashes. It expressly contemplates that if there were a future crash, USPTO would post a mea culpa on the USPTO web site, and the practitioner who got dinged for the $400 penalty during that future crash could then obtain a refund (or avoid having to pay the penalty).
What one hopes, of course, is that USPTO will belatedly comply with the Congressional mandate of the AIA to make sure that a backup server is working even if the main server has crashed. If USPTO were to do so, then the happy result would be that today’s policy would not actually need to be called upon in the future. Everyone — the practitioners and the USPTO itself — would benefit greatly if USPTO were to do so.
With this in mind, let’s hope the USPTO moves the EFS-Web Contingency server away from Virginia (see blog article). Let’s hope the USPTO, in an open and candid process, explains to the customer community the steps that it will do to reduce SPFs (single points of failure). This would include, but not be limited to, connecting the backup server to the power grid in a different way, connecting it to the Internet in a different way, and eliminating internal data cross-feeds between the two servers that could lead to a single software mistake crashing both systems at the same time.