USPTO makes mistake with Deposit Account authorizations

Hello readers.  If you paid a government fee to the USPTO during any of the times listed below, and if you tried to protect yourself by authorizing any later fees due to be drawn from your USPTO Deposit Account, apparently your effort to protect yourself has failed. 

It seems the chief operating principle for the USPTO’s software developers is “move fast and break things”.   This used to be the corporate motto of Facebook, until Facebook got a clue and changed its motto to “move fast with stability”.   Industry observers have written:

Take heart from the idea of moving fast, yes. But the advice from within the industry is to swap out “and break things” with something like “and test often.”

Here you can see a Notice that the USPTO inserted today into the IFW of some tens of thousands of patent files.  This notice, 394 words in length, uses standard bureaucratese, but may be translated into plain language:

Thank you very much for paying money, maybe lots of money, to the USPTO using Patent Center during a nine-day period running from October 9 through October 18, 2024.

When you paid this money to the USPTO during these days in October of 2024 using Patent Center, you might or might not have checked a box pre-authorizing the use of your USPTO Deposit Account to cover any fee deficiency.   Guess what?  No matter whether you checked this box or not, we have decided to presume that you did not check this box.  Or saying it more simply, if you checked that box, we have now ex post facto unchecked that box for you.

What corrective action would then need to be taken, and who bears the burden of carrying out the corrective action?

The Notice cheerfully explains that the entirety of this burden is shifted to the USPTO customer.  It is up to the USPTO customer to research the application file and to work out whether or not the USPTO was wrong to uncheck that box ex post facto.   If it turns out that the USPTO was wrong to uncheck that box ex post facto, then the USPTO customer is invited to craft and e-file a Miscellaneous Incoming Letter that tries to restore the pre-authorization.

Not only that — if the USPTO wrongly charged somebody’s Deposit Account when the filer did not actually authorize it, then what would need to happen is the USPTO giving the money back.  The Notice says:

If fees were charged against your deposit account based on an erroneous pre-authorization displayed on an Electronic Payment Receipt issued during the affected time periods, you may submit a request for refund (e.g., PTO-2326) indicating that a pre-authorization to charge fees to a deposit account was not made in this application.

Yes, apparently it is up to the filer who was wrongly charged due to this USPTO mistake to pursue a refund.   Maybe the filer will get a refund, or maybe not, who can say?  It’s anybody’s guess!

Let’s suppose, as cannot be ruled out, that some number of US patent applications will wrongly be deemed to have gone abandoned due to this Patent Center mistake.  And let’s suppose, as cannot be ruled out, that some number of grated US patents will wrongly be deemed to have been canceled due to a purported failure to pay a maintenance fee due to this Patent Center mistake.  It seems to me the correct behavior by the USPTO would have been to include in today’s Notice a few simple words:

If it turns out that your patent application was wrongly deemed abandoned due to our mistake, we promise in advance to waive any petition fee for revival.  And if it turns out that your patent was wrongly deemed canceled due to our mistake, we promise in advance to waive any petition fee for restoration, and we hereby undertake to indemnify you and hold you harmless for any loss of damages for intervening rights that would otherwise be lost to you due to our mistake.

 Such simple words are conspicuously absent from this Notice.

One of the predictable consequences flowing from the Notice as worded is that each of the tens of thousands of USPTO customers receiving this USPTO mistake will now be forced to receive this Notice, docket it, escalate it to an attorney for detailed review, and (in probably 90% of cases) conclude after detailed review that the mistake was a sort of “no harm, no foul” event.  Yes, the USPTO customer incurred a substantial internal cost to receive and docket and study the Notice (likely at least $200 of internal cost), but no, the USPTO mistake did not actually lead to a wrongful abandonment or cancellation, and did not lead to a wrongful charge to the Deposit Account involved.

In the USPTO Notice, the USPTO did not provide the number of USPTO customers who were forced to carry out this review.  I conservatively estimate it at ten thousand.  We received two such notices today.  Our internal cost was, conservatively measured, in excess of $400 (at least $200 per file).  My estimate is that the harm to the USPTO customer community due to this USPTO mistake was well more than two million dollars.

Any normal service provider would have tried to address this burden of well over two million dollars with some customer-facing response.  “As a token of our apology we are crediting your account with a courtesy credit of $200, which you may apply toward future purchases.”  Nope.