`[Federal Register Volume 89, Number 222 (Monday, November 18, 2024)]
[Rules and Regulations]
[Pages 91062-91091]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-26644]



[[Page 91061]]

Vol. 89

Monday,

No. 222

November 18, 2024

Part IV





 Department of Commerce





-----------------------------------------------------------------------





 Patent and Trademark Office





-----------------------------------------------------------------------





37 CFR Parts 2 and 7





Setting and Adjusting Trademark Fees During Fiscal Year 2025; Final 
Rule

  Federal Register / Vol. 89 , No. 222 / Monday, November 18, 2024 / 
Rules and Regulations  

[[Page 91062]]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

Patent and Trademark Office

37 CFR Parts 2 and 7

[Docket No. PTO-T-2022-0034]
RIN 0651-AD65


Setting and Adjusting Trademark Fees During Fiscal Year 2025

AGENCY: United States Patent and Trademark Office, Department of 
Commerce.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The United States Patent and Trademark Office (USPTO) sets or 
adjusts trademark fees, as authorized by the Leahy-Smith America 
Invents Act (AIA), as amended by the Study of Underrepresented Classes 
Chasing Engineering and Science Success Act of 2018 (SUCCESS Act). The 
fee adjustments will provide the USPTO sufficient aggregate revenue to 
recover the aggregate costs of trademark operations in future years 
(based on assumptions and estimates found in the agency's Fiscal Year 
2025 Congressional Justification (FY 2025 Budget)), including 
implementing the USPTO 2022-2026 Strategic Plan (Strategic Plan).

DATES: This rule is effective on January 18, 2025.

FOR FURTHER INFORMATION CONTACT: Brendan Hourigan, Director, Office of 
Planning and Budget, at 571-272-8966 or [email protected]; or 
C. Brett Lockard, Director, Forecasting and Analysis Division, at 571-
272-0928 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Executive Summary

A. Introduction

    The USPTO publishes this final rule under section 10 of the AIA 
(section 10), Public Law 112-29, 125 Stat. 284, available at https://www.congress.gov/112/plaws/publ29/PLAW-112publ29.pdf, as amended by the 
SUCCESS Act, Public Law 115-273, 132 Stat. 4158, available at https://www.congress.gov/115/plaws/publ273/PLAW-115publ273.pdf, which 
authorizes the Under Secretary of Commerce for Intellectual Property 
and Director of the USPTO (Director) to set or adjust by rule any 
trademark fee established, authorized, or charged under the Trademark 
Act of 1946 (the Trademark Act), 15 U.S.C. 1051 et seq., as amended, 
for any services performed or materials furnished by the agency. 35 
U.S.C. 41 note. Section 10 prescribes that trademark fees may be set or 
adjusted only to recover the aggregate estimated costs to the USPTO for 
processing, activities, services, and materials relating to trademarks, 
including administrative costs of the agency with respect to such 
trademark fees. Section 10 authority includes flexibility to set 
individual fees in a way that furthers key policy factors, while 
considering the cost of the respective services. Section 10 also 
establishes certain procedural requirements for setting or adjusting 
fee regulations, such as public hearings and input from the Trademark 
Public Advisory Committee (TPAC), a public comment period, and 
congressional oversight.

B. Purpose of This Action

    Based on a biennial review of fees, costs, and revenues that began 
in fiscal year (FY) 2021, the USPTO concluded that fee adjustments are 
necessary to provide the agency with sufficient financial resources to 
facilitate the effective administration of the U.S. trademark system, 
including implementing the Strategic Plan, available on the agency 
website at https://www.uspto.gov/StrategicPlan.
    The individual fees set or adjusted in this rule align with the 
USPTO's fee structure philosophy, including the agency's four key fee 
setting policy factors: (1) promote innovation strategies, (2) align 
fees with the full cost of trademark services, (3) set fees to 
facilitate the effective administration of the trademark system, and 
(4) offer application processing options. The fee adjustments will 
enable the USPTO to accomplish its mission to drive U.S. innovation, 
inclusive capitalism, and global competitiveness by delivering high-
quality and timely trademark examination and review proceedings that 
produce accurate and reliable trademark rights for domestic and 
international stakeholders.

C. Summary of Provisions Impacted by This Action

    The USPTO sets or adjusts 28 trademark fees, including the 
introduction of seven new fees in this rule. The agency is also 
discontinuing four fees.
    Under the fee schedule in this rule, the routine fees to obtain and 
maintain a trademark registration (e.g., application filings, intent-
to-use/use (ITU) filings, and post-registration maintenance fees) will 
increase relative to the current fee schedule, in order to ensure 
financial sustainability and provide for improvements needed relative 
to trademark filings and registration. Additional information 
describing the fee adjustments is included in Part V: Individual Fee 
Rationale in this rulemaking and in the ``Table of Trademark Fees: 
Current, Final Trademark Fee Schedule, and Unit Cost'' (Table of 
Trademark Fees), available on the fee setting section of the USPTO 
website at https://www.uspto.gov/FeeSettingAndAdjusting.

II. Background

    Section 10(a) of the AIA, available at https://www.congress.gov/112/plaws/publ29/PLAW-112publ29.pdf, authorizes the Director to set or 
adjust by rule any fee established, authorized, or charged under the 
Trademark Act for any services performed or materials furnished by the 
agency. Section 10 provides that trademark fees may be set or adjusted 
only to recover the aggregate estimated costs to the USPTO for 
processing, activities, services, and materials relating to trademarks, 
including administrative costs of the agency with respect to such 
trademark fees. Provided that the fees in the aggregate achieve overall 
aggregate cost recovery, the Director may set individual fees under 
section 10 at, below, or above their respective cost. Section 10(e) 
requires the Director to publish the final fee rule in the Federal 
Register and the USPTO's Official Gazette at least 45 days before the 
final fees become effective.
    Section 4 of the SUCCESS Act, available at https://www.congress.gov/115/plaws/publ273/PLAW-115publ273.pdf, amended section 
10(i)(2) to provide that the Director's authority to set or adjust any 
fee under section 10 will end on September 16, 2026. While the fees 
established by this rule will remain in effect in perpetuity or until 
adjusted by a future rulemaking, the Director's authority to initiate 
new rulemakings to set or adjust fees will expire on that date.
    When adopting fees under section 10 of the AIA, the Director must 
provide the proposed fees to TPAC, which advises the Director on the 
management, policies, goals, performance, budget, and user fees of 
trademark operations, at least 45 days prior to publishing the proposed 
fees in the Federal Register. TPAC then has 30 days within which to 
deliberate, consider, and comment on the proposal, as well as hold a 
public hearing on the proposed fees. Then, TPAC must publish a written 
report setting forth in detail the comments, advice, and 
recommendations of the committee regarding the proposed fees. The USPTO 
must consider and analyze any comments, advice, or

[[Page 91063]]

recommendations received from TPAC before setting or adjusting fees.
    Accordingly, on May 8, 2023, the Director notified TPAC of the 
USPTO's intent to set and adjust trademark fees and submitted a 
preliminary trademark fee proposal with supporting materials. The 
preliminary trademark fee proposal and associated materials are 
available on the fee setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting.
    TPAC held a public hearing at the USPTO's headquarters in 
Alexandria, Virginia, on June 5, 2023, and members of the public were 
given an opportunity to provide oral testimony. Transcripts of the 
hearing are available for review on the USPTO website at https://www.uspto.gov/sites/default/files/documents/TPAC-Fee-Setting-Hearing-Transcript-20230605.pdf. Members of the public were also given an 
opportunity to submit written comments for TPAC to consider, and these 
comments are available on Regulations.gov at https://www.regulations.gov/docket/PTO-T-2023-0016. On August 14, 2023, TPAC 
issued a written report setting forth their comments, advice, and 
recommendations regarding the preliminary proposed fees. The report is 
available on the USPTO website at https://www.uspto.gov/sites/default/files/documents/TPAC-Report-on-2023-Fee-Proposal.docx.
    The USPTO considered and analyzed all comments, advice, and 
recommendations received from the TPAC before publishing the notice of 
proposed rulemaking (NPRM), ``Setting and Adjusting Trademark Fees 
during Fiscal Year 2025,'' in the Federal Register on March 26, 2024, 
at 89 FR 20897. The NPRM and associated materials are available on the 
fee setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting. Likewise, before issuing this final rule, the 
agency considered and analyzed all comments, advice, and 
recommendations received from the public during the 60-day comment 
period on the NPRM that closed on May 28, 2024. The agency's response 
to comments received is available in Part VI: Discussion of Comments.

III. Estimating Aggregate Costs and Revenue

    Section 10 of the AIA provides that trademark fees may be set or 
adjusted only to recover the aggregate estimated costs to the USPTO for 
processing, activities, services, and materials relating to trademarks, 
including administrative costs with respect to such trademark fees. The 
following is a description of how the agency estimates aggregate costs 
and revenue.

Step 1: Estimating Aggregate Costs

    Estimating prospective aggregate costs is accomplished primarily 
through the annual budget formulation process. The annual budget is a 
five-year plan for carrying out base programs and new initiatives to 
deliver on the USPTO's statutory mission and implement the agency's 
strategic goals and objectives.
    First, the USPTO projects the level of demand for trademark 
services, which depends on many factors that are subject to change, 
including domestic and global economic activity. The agency also 
considers non-US trademark-related activities, policies, and 
legislation, and known process efficiencies. The number of trademark 
application filings (i.e., incoming work to the USPTO) drives 
examination costs, which make up the largest share of trademark 
operating costs. The USPTO looks at indicators including the expected 
growth in real gross domestic product (RGDP), a leading indicator of 
incoming trademark applications, to estimate prospective workloads. The 
RGDP is reported quarterly by the Bureau of Economic Analysis and 
forecasted each February by the Office of Management and Budget (OMB) 
in the Economic and Budget Analyses section of the Analytical 
Perspectives, and twice annually by the Congressional Budget Office in 
the Budget and Economic Outlook.
    The expected workload is then compared to the current examination 
capacity to determine any required staffing and operating costs (e.g., 
salaries, workload processing contracts, and publication) adjustments. 
The agency uses a trademark pendency model that estimates trademark 
production output based on actual historical data and input 
assumptions, such as incoming trademark applications, number of 
examining attorneys on board, and overtime hours. Key statistics 
regarding pendency, application filings, and current inventory used to 
inform the model can be viewed on the data visualization center section 
of the USPTO website at https://www.uspto.gov/dashboard/trademarks.
    Next, the USPTO calculates budgetary spending requirements based on 
the prospective aggregate costs of trademark operations. First, the 
agency estimates the costs of status quo operations (base 
requirements), then adjusts that figure for anticipated pay increases 
and inflationary increases for the budget year and four out years. The 
USPTO then estimates the prospective costs for expected changes in 
production workload and new initiatives over the same period. The 
agency then reduces cost estimates for completed initiatives and known 
cost savings expected over the same five-year horizon. A detailed 
description of budgetary requirements, aggregate costs, and related 
assumptions for the Trademarks program is available in the FY 2025 
Budget.
    The USPTO estimates that trademark operations will cost $594 
million in FY 2025, including $293 million for trademark examining; $24 
million for trademark trials and appeals; $50 million for trademark 
information resources; $22 million for activities related to 
intellectual property (IP) protection, policy, and enforcement; and 
$204 million for general support costs necessary for trademark 
operations (e.g., the trademark share of rent, utilities, legal, 
financial, human resources, other administrative services, and agency-
wide information technology (IT) infrastructure and support costs). See 
Appendix II of the FY 2025 Budget. In addition, the agency will 
transfer $280 thousand to the Department of Commerce, Inspector 
General, for audit support for the Trademarks program.
    Table 1 below provides key underlying production workload 
projections and assumptions from the FY 2025 Budget used to calculate 
aggregate costs. Table 2 (see Step 2) presents the total budgetary 
requirements (prospective aggregate costs) for FY 2025 through FY 2029 
and the estimated collections and operating reserve balances that would 
result from the adjustments contained in this final rule. These 
projections are based on point-in-time estimates and assumptions that 
are subject to change. There is considerable uncertainty in outyear 
budgetary requirements. There are risks that could materialize over the 
next several years (e.g., adjustments to examination capacity, time 
allotted to examining attorneys and other personnel to perform their 
work, higher contracting costs, changes in workload, and other 
inflationary increases, etc.) that could increase the USPTO's budgetary 
requirements. These estimates are refreshed annually during the 
formulation of USPTO's budget.

[[Page 91064]]



                        Table 1--Trademark Production Workload Projections, FY 2025-2029
----------------------------------------------------------------------------------------------------------------
       Production measures            FY 2025         FY 2026         FY 2027         FY 2028         FY 2029
----------------------------------------------------------------------------------------------------------------
Applications....................         774,000         817,000         863,000         912,000         964,000
Application growth rate.........            4.6%            5.5%            5.6%            5.7%            5.7%
Balanced disposals..............       1,552,600       1,680,000       1,740,000       1,850,000       1,930,000
Unexamined trademark application         463,756         442,627         418,438         402,622         401,645
 inventory......................
Examination capacity *..........             806             841             876             913             948
Performance measures:
    Avg. first action pendency               7.5             6.3             5.9             5.5             4.9
     (months)...................
    Avg. total pendency (months)            13.5            11.3            10.9             9.5             8.9
----------------------------------------------------------------------------------------------------------------
* In this table, examination capacity is the number of examining attorneys on board at end of year, as described
  in the FY 2025 Budget.

Step 2: Estimating Prospective Aggregate Revenue

    As described above in Step 1, the USPTO's prospective aggregate 
costs (as presented in the FY 2025 Budget) include budgetary 
requirements related to planned production, anticipated initiatives, 
and a contribution to the trademark operating reserve required for the 
agency to maintain trademark operations and realize its strategic goals 
and objectives for the next five years. Prospective aggregate costs 
become the target aggregate revenue level that the new fee schedule 
must generate in a given year and over the five-year planning horizon. 
To estimate aggregate revenue, the USPTO uses the same production 
models used to estimate aggregate costs and also analyzes relevant 
factors and indicators to calculate prospective fee workloads (i.e., 
number of times each fee for a service or product will be paid).
    The same economic indicators used to forecast incoming workloads 
also provide insight into market conditions and the management of IP 
portfolios, which influence application processing requests and post-
registration decisions to maintain trademark protection. When 
developing fee workload forecasts, the USPTO also considers other 
factors including fraud and scams impacting trademark filings, overseas 
activity, policies and legislation, court decisions, process 
efficiencies, and anticipated applicant behavior.
    As required by law, the USPTO collects fees for trademark-related 
services and products at different points in time within the 
application examination process and over the life of the pending 
trademark application and resulting registration to finance the 
associated work for providing those services. Trademark application 
filings are a key driver of trademark fee collections, as initial 
filing fees account for more than half of total trademark fee 
collections. Changes in application filing levels immediately impact 
current year fee collections. Fewer application filings mean the USPTO 
collects fewer fees to devote to production-related costs in the 
current pipeline. The resulting reductions also create an outyear 
revenue impact because less output in one year leads to fewer ITUs and 
maintenance fee payments in future years. Historically, fee collections 
from ITUs and maintenance fees account for about one third of total 
trademark fee collections, which the agency uses to subsidize costs for 
filing and examination activities not fully covered by initial filing 
fees.
    The USPTO's five-year estimated aggregate trademark fee revenue 
(see table 2) is based on, for each fiscal year, the number of 
trademark applications it expects to receive, work it expects to 
process (an indicator of the ITU fee workloads), expected examination 
and process requests, and the expected number of post-registration 
filings to maintain trademark registrations. The USPTO forecasts the 
same number of future year applications filed under the final fee 
schedule compared to the current fee schedule because outside research 
suggests that demand for trademark applications is inelastic. See 
Ga[eacute]tan De Rassenfosse, ``On the Price Elasticity of Demand for 
Trademarks,'' Social Science Research Network, Jan. 28, 2018, https://doi.org/10.2139/ssrn.2628646; Benedikt Herz and Malwina Mejer, ``On the 
Fee Elasticity of the Demand for Trademarks in Europe,'' Oxford 
Economic Papers, Jul. 3, 2016, https://doi.org/10.1093/oep/gpw035. The 
USPTO does anticipate a larger share of filers will take measures to 
avoid the surcharges compared to the share of filers that take 
advantage of the Trademark Electronic Application System (TEAS) Plus 
option under the current fee schedule. The USPTO's Office of the Chief 
Economist periodically conducts economic studies and may, in the 
future, develop trademark fee price elasticity estimates for use in 
rulemakings.
    Within the iterative process for estimating aggregate revenue, the 
USPTO adjusts individual fee rates up or down based on cost and policy 
decisions, estimates the effective dates of new fee rates, and then 
multiplies the resulting fee rates by appropriate workload volumes to 
calculate a revenue estimate for each fee. Using these figures, the 
USPTO sums the individual fee revenue estimates, and the result is a 
total aggregate revenue estimate for a given year (see table 2). The 
aggregate revenue estimate also includes collecting $10 million 
annually in other income associated with recoveries and reimbursements 
from other Federal agencies (offsets to spending). The aggregate 
revenue estimates presented below are based on assumptions and data 
found in the FY 2025 Budget including assuming that all final rule fee 
rates would take effect on November 15, 2024. The effective date of the 
final rule fee rates has since been changed from that original 
assumption to January 18, 2025, except the increased fee for Madrid 
applications will be owed on applications with a receipt date on or 
after February 18, 2025, and the increased fee for renewing an 
international registration at the World Intellectual Property 
Organization (WIPO) will be owed on requests made on or after February 
18, 2025, as well.

                               Table 2--Trademark Financial Outlook, FY 2025-2029
----------------------------------------------------------------------------------------------------------------
                                                                Dollars in millions
                                 -------------------------------------------------------------------------------
                                      FY 2025         FY 2026         FY 2027         FY 2028         FY 2029
----------------------------------------------------------------------------------------------------------------
Projected fee collections.......             583             642             668             697             725

[[Page 91065]]

 
Other income....................              10              10              10              10              10
Total projected fee collections              593             652             678             707             735
 and other income...............
Budgetary requirements..........             594             611             635             664             690
Funding to (+) and from (-)                  (1)              41              43              43              45
 operating reserve..............
End-of-year operating reserve                 85             126             169             213             258
 balance........................
Over/(under) minimum level......            (51)            (14)              23              60              99
Over/(under) optimal level......           (212)           (179)           (148)           (119)            (87)
----------------------------------------------------------------------------------------------------------------

IV. Rulemaking Goals and Strategies

A. Fee Setting Strategy

    The strategy of this final rule is to establish a fee schedule that 
generates sufficient multiyear revenue to recover the aggregate costs 
of maintaining USPTO trademark operations as required by law. The 
overriding principles behind this strategy are to operate within a 
sustainable funding model that supports the USPTO's strategic goals and 
objectives, such as optimizing trademark application pendency through 
the promotion of efficient operations and filing behaviors, issuing 
accurate and reliable trademark registrations, and encouraging access 
to the trademark system for all stakeholders.
    The USPTO assessed this final rule's alignment with four key fee 
setting policy factors that promote important aspects of the U.S. 
trademark system: (1) promoting innovation strategies seeks to ensure 
barriers to entry into the U.S. trademark system remain low, encourage 
high-growth and innovation-based entrepreneurship, and incentivize 
innovation and entrepreneurship by issuing registrations to stimulate 
additional entrepreneurial activity; (2) aligning fees with the full 
costs of products and services recognizes that some applicants may use 
particular services in a more costly manner than other applicants 
(e.g., trademark applications cost more and take longer to examine when 
identifications of goods and services include thousands of characters) 
and charges those applicants appropriately rather than sharing the 
costs among all applicants; (3) facilitating the effective 
administration of the trademark system seeks to encourage efficient 
prosecution of trademark applications, reducing the time it takes to 
obtain a registration; and (4) offering application processing options 
provides multiple paths, where feasible, in recognition that trademark 
applications and their prosecution are not a one-size-fits-all process. 
The reasoning for setting and adjusting individual fees is described in 
Part V: Individual Fee Rationale.
    In the event any provision is invalidated or held to be 
impermissible as a result of a legal challenge, the ``remainder of the 
regulation could function sensibly without the stricken provision.'' 
Belmont Mun. Light Dep't v. FERC, 38 F.4th 173, 187 (D.C. Cir. 2022) 
(quoting MD/DC/DE Broad. Ass'n v. FCC, 236 F.3d 13, 22 (D.C. Cir. 
2001)). The USPTO views each fee in this final rule as able to stand on 
its own and to ``function sensibly'' without the others. This means 
that in the event that a reviewing court were to find that any one fee 
setting or fee adjustment was invalid, that finding would not affect 
the fees or adjustments enacted elsewhere in the rule. Therefore, in 
the event that any portion of this final rule is held to be invalid or 
impermissible, the USPTO intends that the remaining aspects of the 
regulatory provisions, and fees set and adjusted therein, remain valid.

B. Fee Setting Considerations

    The balance of this subsection presents the specific fee setting 
considerations the USPTO reviewed in developing the final trademark fee 
schedule: (1) historical cost of providing individual services; (2) the 
balance between projected costs and revenue to meet the USPTO's 
operational needs and strategic goals; (3) ensuring sustainable 
funding; and (4) the comments, advice, and recommendations offered by 
TPAC on the agency's initial fee setting proposal and the public 
comments received in response to the March 2024 NPRM. The USPTO 
carefully considered the comments, advice, and recommendations offered 
by TPAC and the public. Collectively, these considerations informed the 
agency's chosen rulemaking strategy.
1. Historical Cost of Providing Individual Services
    The USPTO sets individual fee rates to ensure recovery of aggregate 
costs and to further key policy considerations while considering the 
cost of a particular service. For instance, the USPTO has a 
longstanding practice of setting application filing fees below the 
actual cost of processing and examining applications to encourage brand 
owners to take advantage of the protections and rights offered by 
trademark registration; these costs are subsidized by aggregate 
trademark revenues elsewhere.
    The USPTO considers unit cost accounting data provided by its 
Activity Based Information (ABI) program to evaluate the cost to 
provide specific services and then decide how to best align fees for 
particular services to recover the aggregate costs of all products and 
services. Using historical cost data, the USPTO can align fees to the 
costs of specific trademark products and services. When the USPTO 
implements a new process or service, historical activity-based 
information data is typically not available. However, the USPTO will 
use the historical cost of a similar process or procedure as a starting 
point to estimate the full cost of a new activity or service.
    The document titled ``Setting and Adjusting Trademark Fees During 
Fiscal Year 2025: Activity Based Information and Trademark Fee Unit 
Expense Methodology,'' available on the fee setting section of the 
USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, provides 
additional information on the agency's costing methodology in addition 
to the last three years of historical cost data. Part V: Individual Fee 
Rationale of this final rule describes the reasoning and anticipated 
benefits for setting some individual fees at cost, below cost, or above 
cost such that the USPTO recovers the aggregate cost of providing 
services through fees.
2. Balancing Projected Costs and Revenue
    In developing the final trademark fee schedule, the USPTO 
considered its current estimates of future year workload demands, fee 
collections, and costs to maintain core USPTO operations and meet its 
strategic goals,

[[Page 91066]]

as found in the FY 2025 Budget and the Strategic Plan. The USPTO's 
strategic goals include driving inclusive U.S. innovation and global 
competitiveness, promoting the efficient delivery of reliable IP 
rights, promoting the protection of IP against new and persistent 
threats, bringing innovation to impact, and generating impactful 
employee and customer experiences by maximizing agency operations. The 
following subsections provide details regarding updated revenue and 
cost estimates, cost saving efforts taken by the USPTO, and planned 
strategic improvements.
a. Updated Revenue and Cost Estimates
    Projected revenue from the current fee schedule is expected to fall 
below future budgetary requirements (costs) due largely to lower-than-
expected demand for trademark services compared to prior forecasts and 
higher-than-expected inflation in the broader U.S. economy in recent 
years that has increased the USPTO's operating costs. Consequently, 
aggregate operating costs will exceed aggregate revenue for the 
Trademarks program under the current fee schedule. The USPTO is 
required by law to finance operations by recovering fees for the 
services offered by the agency. Not implementing the final rule would 
result in insufficient fee collections to process the anticipated work 
volumes, impacting stakeholders and failing to deliver on the USPTO 
mission.
    Forecasts for aggregate revenue using current demand estimates are 
lower than prior forecasts. This lower-than-expected demand has 
coincided with changes to trademark owners' filing and renewal 
patterns, resulting in imbalances in the overall fee structure. The 
USPTO sets application filing fees below its examination costs to 
maintain a low barrier to entry into the trademark registration system 
and relies on fees collected for post-registration maintenance and ITU 
extensions to subsidize the agency's losses on each application 
examined. However, changes in the mix of filers and their preferences 
have upset the traditional balance of the trademark fee structure. The 
share of applicants filing ITU applications is declining. Also, the 
percentage of registrants that choose to maintain their trademark 
registration is declining as a larger share of filers are groups that 
are historically less likely to renew their registrations at a rate 
that would be sufficient to recover examination costs. The USPTO 
believes these changes in the mix of filers are systemic and will 
continue.
    Following an unprecedented application surge in FY 2021, trademark 
application filings declined and began returning to historic filing 
levels in FY 2022, in line with the USPTO's expectations. Application 
filings were largely unchanged in FY 2023. Given the current economic 
outlook for the broader economy and filing activity over the past two 
years, the USPTO projects trademark application filings to decline 
slightly in FY 2024 and increase in line with historic growth rates in 
FY 2025.
    Higher-than-expected inflation in the broader U.S. economy starting 
in 2021 increased the USPTO's operating costs above previous estimates 
for labor and nonlabor activities such as benefits, service contracts, 
and equipment. Salaries and benefits comprise about two-thirds of all 
trademark-related costs, and employee pay raises enacted across all 
U.S. government agencies in FY 2023-24--including the USPTO--were much 
larger than previously budgeted. Federal General Schedule (GS) pay was 
raised by 4.6% in 2023 and 5.2% in 2024; before 2023 the last time GS 
pay was raised by at least 4.0% was in 2004. The FY 2025 Budget 
includes an estimated 2.0% civilian pay raise planned in calendar year 
(CY) 2025 and assumed 3.0% civilian pay raises in CY 2026-29, as well 
as inflationary increases for other labor and nonlabor activities.
b. Cost-Saving Measures
    The USPTO recognizes that fees cannot simply increase for every 
improvement deemed desirable. The agency has a responsibility to 
stakeholders to pursue strategic opportunities for improvement in an 
efficient, cost-conscious manner. Likewise, the USPTO recognizes its 
obligation to reduce spending when appropriate.
    The USPTO's FY 2025 Budget submission includes cost reducing 
measures such as giving up leased space in Northern Virginia. In FY 
2025, the USPTO estimates $4,569 million in total spending for patent 
and trademark operations. This is a $122 million net increase from the 
agency's FY 2024 estimated spending level of $4,447 million. The net 
increase includes a $224 million upward adjustment for prescribed 
inflation and other adjustments and a $102 million downward adjustment 
in program spending and other realized efficiencies. This estimate 
builds on the $40 million in annual real estate savings assumed in the 
FY 2024 Budget submission to include additional annual cost savings of 
$12 million through releasing more leased space in Northern Virginia. 
The combined reduction in real estate space amounts to almost 1 million 
square feet and an estimated annual cost savings of approximately $52 
million. Also, the USPTO is actively pursuing IT cost containment. The 
FY 2025 budget includes a relatively flat IT spending profile despite 
upward pressure from inflation, supply chain disruptions, and 
government-wide pay raises; ongoing IT improvements that offer business 
value to fee-paying customers; and data storage costs increasing 
proportionally with the USPTO's forecasted growth in patent and 
trademark applications.
c. Efficient Delivery of Reliable IP Rights: Quality, Unexamined 
Inventory, and Pendency
    The USPTO's strategic goal to ``promote the efficient delivery of 
reliable IP rights'' recognizes the importance of innovation as the 
foundation of American economic growth and global competitiveness. 
Toward this end, the USPTO is committed to continuously improving 
trademark quality, as well as the accuracy and reliability of the 
trademark register. The agency will continue equipping trademark 
examining attorneys with updated tools, procedures, and clarifying 
guidance to effectively examine all applications. The USPTO will also 
retire legacy systems and integrate the use of emerging technologies to 
streamline work processes for greater efficiencies, adjust staffing 
levels, and refine core duties to ensure its ability to meet 
significant changes in filing volumes and a variety of improper filing 
behaviors.
    Also, the USPTO is committed to improving trademark application 
pendency. The agency recognizes that applying for trademark 
registration is a key step for creators, entrepreneurs, and established 
brand owners as they move from generating ideas for new products and 
services to commercializing the resulting innovations in the 
marketplace. The USPTO is focused on incentivizing creativity and 
product innovation by removing unnecessary impediments or delays in 
securing IP rights, thereby bringing goods and services to impact for 
the public good more quickly.
    The agency's recent trademark pendency challenge is the result of 
several years of sustained increases in trademark application filings 
punctuated by an unprecedented, year-long influx during FY 2021 that 
created a significant increase in unexamined inventory. In addressing 
these challenges, the USPTO will continue to reevaluate its operating 
posture to maximize efficiency, set data-driven pendency goals, realign 
the trademark workforce to maintain stability during

[[Page 91067]]

workload fluctuations and optimize pendency goals, and use available 
technology solutions to streamline and automate trademark work 
processes.
    The agency is working diligently to balance timely examination with 
trademark quality. Improvements include the deployment of a new 
browser-based, end-to-end examination system (TM Exam) designed to 
improve examination quality and efficiency and establishment of a 
dedicated Trademark Academy to improve the training experience for new 
examiners.
    Also, the USPTO is developing and implementing several strategies 
to combat trademark scams, address fraudulent filings, and protect the 
trademark register. For example, the agency is implementing robotic 
process automation to validate trademark application addresses against 
the U.S. Postal Service's database, mitigating a key fraud risk. In 
addition, the USPTO recently formed the Register Protection Office 
(RPO), a new organization within the Office of the Deputy Commissioner 
for Trademark Examination Policy dedicated to register protection and 
fraud risk management through efforts like scam education and 
prevention.
    The USPTO is also leveraging the Trademark Modernization Act (TMA) 
cancellation provisions to help clear the trademark register of 
registrations not in use. See Public Law 116-260, available at https://www.congress.gov/116/plaws/publ260/PLAW-116publ260.pdf. The agency 
implemented the TMA nonuse cancellation provisions in December 2021 and 
in December 2022 implemented additional provisions that shortened the 
applicant response period for Office actions from six to three months. 
See ``Changes To Implement Provisions of the Trademark Modernization 
Act of 2020,'' 86 FR 64300 (Nov. 17, 2021).
3. Sustainable Funding
    The USPTO's five-year forecasts of aggregate trademark costs, 
aggregate trademark revenue, and the trademark operating reserve are 
inherently uncertain. The Government Accountability Office (GAO) 
recommends operating reserves as a best practice for fee-funded 
agencies like the USPTO, and the trademark operating reserve allows the 
agency to align long-term fees and costs and manage fluctuations in 
actual fee collections and spending.
    The USPTO manages the trademark operating reserve within a range of 
acceptable balances and assesses options when projected balances fall 
either below or above the range. The agency develops minimum planning 
targets to address immediate, unplanned changes in the economic or 
operating environment as the reserve builds toward the optimal level. 
The USPTO reviews both its minimum and optimal planning targets every 
three years to ensure the reserve's operating range mitigates an array 
of financial risks. Based on the current risk environment, including 
various factors such as economic and funding uncertainty and the 
Trademarks program's high percentage of fixed costs, the agency 
recently established a minimum operating reserve planning level at 23% 
of total spending--about three months' operating expenses (estimated at 
$137 million and $159 million from FY 2025 through FY 2029)--and an 
optimal long-range target of 50% of total spending--about six months' 
operating expenses (estimated at $297 million and $345 million from FY 
2025 through FY 2029).
    Based on cost and revenue assumptions in the FY 2025 Budget, the 
USPTO forecasts that aggregate trademark costs will exceed aggregate 
trademark revenue during FY 2024. The agency will finance the shortfall 
in trademark operations via the trademark operating reserve. The USPTO 
projects that the fee adjustments contained in this final rule will 
increase trademark fee collections to sufficiently recover budgeted 
spending requirements; modest fee collections above budgeted spending 
requirements will replenish and grow the operating reserve each year 
from FY 2025 to FY 2029.
    These projections are point-in-time estimates and subject to 
change. For example, the FY 2025 Budget includes assumptions regarding 
filing levels, renewal rates, federally mandated employee pay raises, 
workforce productivity, and many other factors. A change in any one of 
these variables could have a significant cumulative impact on the 
trademark operating reserve balance. As shown in table 2, presented in 
Part III: Estimating Aggregate Costs and Revenue, the operating reserve 
balance can change significantly over a five-year planning horizon. 
This variation highlights the agency's financial vulnerability to 
various risk factors and the importance of its fee setting authority.
    The USPTO will continue assessing the trademark operating reserve 
balance against its target balance annually, and at least every three 
years, the agency will evaluate whether the minimum and optimal target 
balances remain sufficient to provide stable funding. Per USPTO policy, 
the agency will consider fee reductions if projections show the 
operating reserve balance will exceed its optimal level by 25% for two 
consecutive years. In addition, the USPTO will continue to regularly 
review its operating budgets and long-range plans to ensure the prudent 
use of trademark fees.
4. Comments, Advice, and Recommendations From TPAC and the Public
    As detailed in the NPRM, in the report prepared in accordance with 
AIA fee setting authority, TPAC conveyed overall support for the 
USPTO's efforts to secure adequate revenue to recover the aggregate 
estimated costs of trademark operations, stating ``[w]e have no doubt 
that overall increases are needed to ensure that the USPTO complies 
with its statutory mandate to set fees at a level commensurate with 
anticipated aggregate costs.'' TPAC Report at 3. The agency considered 
and analyzed the comments, advice, and recommendations received from 
TPAC before publishing this final rule.
    Likewise, the USPTO considered and analyzed the comments, advice, 
and recommendations received from the public during the 60-day comment 
period before publishing this final rule. The agency's response to 
comments received is available in Part VI: Discussion of Comments.

C. Summary of Rulemaking Goals and Strategies

    The USPTO estimates that the final trademark fee schedule will 
produce sufficient aggregate revenue to recover the aggregate costs of 
trademark operations and ensure financial sustainability for effective 
administration of the trademark system. This final rule aligns with the 
USPTO's four key fee setting policy factors and supports the agency's 
mission-focused strategic goals.

V. Individual Fee Rationale

    Where data is available, the USPTO sets some fees at, above, or 
below unit cost to balance the agency's four key fee setting policy 
factors as described in Part IV: Rulemaking Goals and Strategies. The 
USPTO does not maintain individual historical cost data for all fees; 
therefore, it sets some fees based solely on policy factors. For 
example, the USPTO sets initial filing fees below unit cost to promote 
innovation strategies by reducing barriers to entry for applicants. To 
balance the aggregate revenue loss of fees set below cost, the USPTO 
must set other fees above unit cost in areas less likely to impact 
entrepreneurship (e.g., renewal fees). By setting fees at particular 
levels to facilitate effective administration of the trademark system,

[[Page 91068]]

the USPTO aims to foster an environment where examining attorneys can 
provide, and applicants can receive, prompt, high-quality examination 
decisions while the agency recovers costs for workload-intensive 
activities.
    This final rule maintains existing cost differentials for all paper 
filings; their processing is generally more costly than electronic 
submissions, and current fees do not recover these costs.

1. Trademark Application Filing Fees

                                   Table 3--Trademark Application Filing Fees
----------------------------------------------------------------------------------------------------------------
                                                               Final rule     Dollar      Percent      FY 2023
                  Description                    Current fee      fee         change       change     unit cost
----------------------------------------------------------------------------------------------------------------
Application (paper), per class.................         $750         $850         $100           13       $1,457
Base application (electronic), per class.......          n/a          350          n/a          n/a          n/a
Application (TEAS Plus), per class.............          250  Discontinue          n/a          n/a          402
Application (TEAS Standard), per class.........          350  Discontinue          n/a          n/a          532
Fee for failing to meet TEAS Plus requirements,          100  Discontinue          n/a          n/a            4
 per class.....................................
Application fee filed with WIPO (section                 500          600          100           20          890
 66(a)), per class.............................
Subsequent designation fee filed with WIPO               500          600          100           20          863
 (section 66(a)), per class....................
----------------------------------------------------------------------------------------------------------------

    The USPTO is changing application filing fees to incentivize more 
complete and timely filings and improve prosecution. Trademark 
applicants currently have two filing options via the Trademark 
Electronic Application System (TEAS): TEAS Plus and TEAS Standard. TEAS 
Plus is the lowest-cost filing option currently provided by the USPTO 
but comes with more stringent initial filing requirements. These 
applications reduce manual processing and potential for data entry 
errors, making them more efficient and complete for both the filer and 
the agency. The USPTO incurs fewer costs and impediments during their 
examination, thereby expediting processing and reducing pendency. About 
half of all trademark applications are filed using TEAS Plus. Fees for 
TEAS Standard are higher than those for TEAS Plus and offer applicants 
more options during filing; the higher fees relate to the USPTO's 
higher processing and examination costs.
    The USPTO is implementing a single electronic application filing 
option that will discontinue both TEAS Plus and TEAS Standard filing 
options, as well as the processing fee for failing to meet the 
requirements of a TEAS Plus application. This final rule will replace 
TEAS Plus and TEAS Standard fees with a single electronic filing option 
and corresponding base application fee plus new surcharges based on 
application attributes. Similar to TEAS, applicants choosing to comply 
with the requirements detailed in this final rule in their initial 
filing (comparable to TEAS Plus) will pay the lowest fees under the 
final fee schedule, compared to applicants who choose not to comply 
with all requirements (comparable to TEAS Standard). The USPTO does not 
anticipate the total number of applications filed each year to change 
under the final schedule compared to the current schedule. The agency 
does anticipate that a larger share of applicants will take measures to 
avoid the surcharges in this rule as compared to the share of 
applicants who use the TEAS Plus option under the current fee schedule. 
Applications that do not meet all requirements for the lowest cost 
electronic filing option are discussed below.
    The final fee schedule sets the fee for a base application filed 
electronically at $350, $100 more than a TEAS Plus application, to help 
the agency recover its costs. The USPTO anticipates a base application 
will have a unit cost similar to a TEAS Plus application for the 
agency. The USPTO is increasing the paper application fee by $100 to 
maintain the existing cost differential between a paper filing and the 
lowest cost electronic application.
    As part of the final fee schedule, the USPTO is discontinuing the 
processing fee for failing to meet the requirements of a TEAS Plus 
application on the effective date of the final rule. Therefore, on or 
after that date, any pending TEAS Plus applications that would have 
been subject to the TEAS Plus processing fee will be subject to the 
insufficient information surcharge fee if the application fails to 
satisfy any of the requirements for a base application in paragraphs 
(a)(1) through (19) of Sec.  2.22. These requirements are the same as 
the requirements for a valid TEAS Plus application under the current 
TEAS system, and the fee rate for the insufficient information 
surcharge is identical to the processing fee for failing to meet the 
requirements of a TEAS Plus application, i.e., $100 per class.
    The USPTO is making revisions to the regulatory text in 37 CFR to 
incorporate the base application fee and discontinuation of TEAS 
application fees. These revisions include replacing references to 
``TEAS'' and ``ESTTA'' with ``electronically'' in sections 2.6 and 7.6 
to reflect the discontinuation of TEAS fees under this final rule. 
These generalized references for electronic filings are more dynamic 
and will more easily accommodate any future changes to the USPTO's 
electronic filing system.
    In the NPRM, the USPTO also proposed using this system for filing 
an application under section 66(a) (Madrid Protocol) of the Trademark 
Act. However, this final rule alters that proposal. Article 8(2) of the 
Madrid Protocol and rule 10 of the Madrid regulations require the 
payment of all application fees before the International Bureau may 
record an international registration or subsequent designation. Due to 
technological and administrative limitations, WIPO is currently unable 
to collect surcharges prior to recordation and has requested delayed 
implementation of any surcharges for Madrid filers.
    In this final rule, the USPTO is dropping the proposed structure 
for 66(a) filings and instead adjusting the existing flat application 
fee for Madrid applications to $600 per class, as paid in Swiss francs 
to WIPO. Article 8(7) of the Madrid Protocol permits individual 
countries to establish their own fee for Madrid applications, subject 
to the Protocol's requirement that the fee for Madrid filers does not 
exceed that for domestic filers. The $600 fee is commensurate with what 
Madrid applicants would expect to pay, on average, if filing directly 
under the base application and surcharge system.
    The approach enacted in this final rule conforms with feedback 
received from WIPO and other commenters. The USPTO will reconsider a 
base filing and surcharge system for Madrid applications in the future 
after WIPO develops the capacity to implement surcharges.
    The increased fee will be owed on Madrid applications with a 
receipt date on or after February 18, 2025, because the Madrid 
Agreement Concerning the

[[Page 91069]]

International Registration of Marks requires three months' advance 
notice to WIPO before an increase in the amount of the international 
application or subsequent designation fee may enter into force.

2. Trademark Application Filing Surcharge Fees

                              Table 4--Trademark Application Filing Surcharge Fees
----------------------------------------------------------------------------------------------------------------
                                                               Final rule     Dollar      Percent      FY 2023
                  Description                    Current fee      fee         change       change     unit cost
----------------------------------------------------------------------------------------------------------------
Fee for insufficient information (sections 1             n/a         $100          n/a          n/a          n/a
 and 44), per class............................
Fee for using the free-form text box to enter            n/a          200          n/a          n/a          n/a
 the identification of goods/services (sections
 1 and 44), per class..........................
For each additional group of 1,000 characters            n/a          200          n/a          n/a          n/a
 beyond the first 1,000 (sections 1 and 44),
 per class.....................................
----------------------------------------------------------------------------------------------------------------

    The USPTO is implementing surcharges to the base application filing 
fee in this final rule to enhance the quality of incoming applications, 
encourage efficient application processing, ensure additional 
examination costs are paid by those submitting more time-consuming 
applications, and reduce pendency. Only those applicants submitting 
applications that do not comply with the base filing requirements would 
pay the surcharges. The system set by this final rule would impose 
individual surcharges for unmet application requirements, as compared 
to the current TEAS Standard fee and TEAS Plus processing fee for 
applications with one or more unmet TEAS Plus requirements. As 
discussed above, applications filed under section 66(a) (Madrid 
Protocol) will not be subject to these surcharges and will instead be 
assessed a higher flat fee commensurate with what Madrid applicants 
would expect to pay, on average, if filing directly under the base 
application and surcharge system.
(i) Insufficient Information Fee
    Trademark applications that include the information listed below 
allow for more efficient prosecution. Accordingly, applicants who 
submit more complete applications benefit from the final fee schedule 
by avoiding this surcharge, as the USPTO and its stakeholders benefit 
from efficient delivery of reliable IP rights. This final rule sets a 
$100 fee per class, in addition to the base fee, on applications under 
sections 1 and 44 that do not include required information at the time 
of filing. As discussed above, applications filed under section 66(a) 
(Madrid Protocol) will not be subjected to this surcharge.
    The information required for a base application is the same as 
current TEAS Plus requirements; therefore, applicants are not expected 
to expend more than a de minimis amount of additional resources 
compared to the current system. The USPTO is reordering and retitling 
these requirements as ``Requirements for a base application,'' as 
provided in Sec.  2.22(1) through (20):
     The applicant's name and domicile address;
     The applicant's legal entity;
     The citizenship of each individual applicant, or the state 
or country of incorporation or organization of each juristic applicant;
     If the applicant is a domestic partnership, the names and 
citizenship of the general partners, or if the applicant is a domestic 
joint venture, the names and citizenship of the active members of the 
joint venture;
     If the applicant is a sole proprietorship, the state of 
organization of the sole proprietorship and the name and citizenship of 
the sole proprietor;
     One or more bases for filing that satisfy all the 
requirements of Sec.  2.34. If more than one basis is set forth, the 
applicant must comply with the requirements of Sec.  2.34 for each 
asserted basis;
     If the application contains goods and/or services in more 
than one class, compliance with Sec.  2.86;
     A filing fee for each class of goods and/or services, as 
required by Sec.  2.6(a)(1)(ii) or (iii);
     A verified statement that meets the requirements of Sec.  
2.33, dated and signed by a person properly authorized to sign on 
behalf of the owner pursuant to Sec.  2.193(e)(1);
     If the applicant does not claim standard characters, the 
applicant must attach a digitized image of the mark. If the mark 
includes color, the drawing must show the mark in color;
     If the mark is in standard characters, a mark comprised 
only of characters in the Office's standard character set, typed in the 
appropriate field of the application;
     If the mark includes color, a statement naming the 
color(s) and describing where the color(s) appears on the mark, and a 
claim that the color(s) is a feature of the mark;
     If the mark is not in standard characters, a description 
of the mark;
     If the mark includes non-English wording, an English 
translation of that wording;
     If the mark includes non-Latin characters, a 
transliteration of those characters;
     If the mark includes an individual's name or likeness, 
either (1) a statement that identifies the living individual whose name 
or likeness the mark comprises and written consent of the individual, 
or (2) a statement that the name or likeness does not identify a living 
individual (see section 2(c) of the Act);
     If the applicant owns one or more registrations for the 
same mark, and the owner(s) last listed in Office records of the prior 
registration(s) for the same mark differs from the owner(s) listed in 
the application, a claim of ownership of the registration(s) identified 
by the registration number(s), pursuant to Sec.  2.36;
     If the application is a concurrent use application, 
compliance with Sec.  2.42;
     An applicant whose domicile is not located within the 
United States or its territories must designate an attorney as the 
applicant's representative, pursuant to Sec.  2.11(a), and include the 
attorney's name, postal address, email address, and bar information; 
and
     Correctly classified goods and/or services, with an 
identification of goods and/or services from the Office's Acceptable 
Identification of Goods and Services Manual within the electronic form.
    The insufficient information surcharge will apply if an application 
fails to satisfy any of the first 19 requirements in this list. See 
Part VII: Discussion of Specific Rules for more information.
    The agency will not impose this fee on applications denied a filing 
date for failure to satisfy the requirements under Sec.  2.21.
    As discussed above, any previously filed TEAS Plus applications 
that remain pending on or after the effective date of this final rule 
will be subject to the insufficient information surcharge

[[Page 91070]]

fee if the application fails to satisfy any of the above requirements 
because the requirements for a base application under the final rule 
are the same as the requirements for a TEAS Plus application. Under 
either system, TEAS or base plus surcharges, affected applications 
would be subject to a fee of $100 per class for failing to meet the 
requirements.
(ii) Entering Identifications of Goods and/or Services in the Free-Form 
Text Box Fee
    Section 2.22(a)(20) requires applicants to identify goods and/or 
services using identifications from the agency's Acceptable 
Identification of Goods and Services Manual (ID Manual) within the 
electronic form. Applicants may choose goods and/or services 
identifications by selecting directly from the ID Manual in the 
electronic application or entering manually in a free-form text box. 
The USPTO is setting a new $200 fee per class for applicants who choose 
to enter descriptions of goods and services in the free-form text box. 
To avoid the surcharge, applicants may use the ID Manual within the 
electronic application, which includes thousands of identifications. As 
discussed above, applications filed under section 66(a) (Madrid 
Protocol) will not be subject to this surcharge.
    Generally, examining attorneys do not need to review 
identifications of goods and/or services selected directly from the ID 
Manual within the electronic application form. Conversely, examining 
attorneys must carefully consider identifications entered in a free-
form text box to determine whether the descriptions are acceptable as 
written or require amendment to sufficiently specify the nature of the 
goods and/or services. Examining attorneys must review each entry to 
determine its acceptability, even in situations where an applicant 
types or pastes the ID Manual identification, because they do not know 
if wording in the free-form text box came from the ID Manual.
    Identifying an applicant's goods and/or services with sufficient 
specificity is necessary to provide adequate notice to third parties 
regarding the goods and/or services in connection with which the 
applicant intends to use, or is using, the mark. It also ensures the 
applicant pays the corresponding fee for each class of goods and/or 
services. Examining attorneys often spend substantial time reviewing 
identifications provided in the free-form text box and may initiate 
multiple communications with the applicant before determining an 
acceptable identification and collecting appropriate fees. This 
surcharge will help recover the additional costs associated with these 
more extensive reviews.
(iii) Each Additional 1,000 Characters Beyond the First 1,000 Fee
    When entering identifications in the free-form text box, some 
applicants submit extensive lists of goods and/or services. In more 
egregious cases, a list may comprise multiple pages and include goods 
and/or services in multiple classes. To ensure that applicants who 
submit lengthy identifications pay the costs of their review, the USPTO 
is setting a new fee of $200 for each additional group of 1,000 
characters beyond the first 1,000 characters in the free-form text box, 
including punctuation and spaces. Currently, less than 5% of directly 
filed applications contain custom identifications of goods and/or 
services that exceed 1,000 characters per class. Applicants who enter 
identifications directly from the ID Manual within the electronic 
application will not incur this fee, even if the identification exceeds 
1,000 characters. As discussed above, applications filed under section 
66(a) (Madrid Protocol) will not be subject to this surcharge for now.
    The USPTO selected a character-based limit for operational 
efficiency, as the electronic application system can perform character 
counts in real time and alert the applicant when they exceed the limit. 
A limit based on other criteria, such as a count of separate goods and/
or services, would require examiner review, as automating such counts 
is not technologically feasible. Such reviews by an examining attorney 
would increase the cost of examination and counteract the purpose of 
the fee, which is to ensure that applicants who submit lengthy 
identifications pay the costs of reviewing them.
    After review and consideration of the comments, the USPTO will not 
apply this fee to amended identifications that exceed the character 
limit in a response to an Office action.

3. Amendment to Allege Use (AAU) and Statement of Use (SOU) Fees

                                            Table 5--AAU and SOU Fees
----------------------------------------------------------------------------------------------------------------
                                                               Final rule     Dollar      Percent      FY 2023
                  Description                    Current fee      fee         change       change     unit cost
----------------------------------------------------------------------------------------------------------------
Amendment to allege use (AAU), per class                $200         $250          $50           25          n/a
 (paper).......................................
Statement of use (SOU), per class (paper)......          200          250           50           25          n/a
Amendment to allege use (AAU), per class                 100          150           50           50         $152
 (electronic)..................................
Statement of use (SOU), per class (electronic).          100          150           50           50          129
----------------------------------------------------------------------------------------------------------------

    The USPTO is increasing fees for the AAUs and SOUs to $150 per 
class for electronic filings and $250 per class for paper filings. The 
agency has not adjusted the AAU and SOU fees since 2002, even as 
processing costs increased during the subsequent two decades. The 
examination time for the AAUs and SOUs has grown due to the increased 
submission of questionable specimens, resulting in the issuance of more 
Office actions. These final fees will improve cost recovery and help 
rebalance the fee structure.
    4. Post-Registration Maintenance Fees

                                   Table 6--Post-Registration Maintenance Fees
----------------------------------------------------------------------------------------------------------------
                                                               Final rule     Dollar      Percent      FY 2023
                  Description                    Current fee      fee         change       change     unit cost
----------------------------------------------------------------------------------------------------------------
Section 9 registration renewal application, per         $500         $525          $25            5          n/a
 class (paper).................................
Section 8 declaration, per class (paper).......          325          425          100           31          $95
Section 15 declaration, per class (paper)......          300          350           50           17          n/a
Section 71 declaration, per class (paper)......          325          425          100           31          n/a
Section 9 registration renewal application, per          300          325           25            8          $24
 class (electronic)............................

[[Page 91071]]

 
Section 8 declaration, per class (electronic)..          225          325          100           44           48
Section 15 declaration, per class (electronic).          200          250           50           25           11
Section 71 declaration, per class (electronic).          225          325          100           44           48
Renewal fee filed at WIPO......................          300          325           25            8          n/a
----------------------------------------------------------------------------------------------------------------

    In the NPRM, the USPTO proposed increasing the section 9 
registration renewal fee to $350 per class and the section 8 and 71 
declaration fees to $300 per class. After further consideration in 
light of public comments and the USPTO's financial outlook, the agency 
is reallocating some of the section 9 renewal fee increase to section 8 
and 71 declaration fees. This final rule aligns these fees at $325 per 
class for electronic filings.
    The percentage of trademark registrants choosing to maintain their 
registrations has declined, as the share of applications from groups 
that have been historically less likely to maintain their registrations 
has increased. The USPTO expects these trends to continue. 
Additionally, costs to process maintenance filings have increased due 
to higher inflationary costs, post-registration audits, and elevated 
legal review to address potential fraud or improper filing behaviors.
    The USPTO has an obligation to recover the aggregate costs of 
trademark operations through user fees. The above-cost post-
registration maintenance fees recover costs incurred by the USPTO 
during examination. Given changes in demand and filing behaviors, the 
agency is rebalancing aggregate revenue derived from renewals and post-
registration maintenance fees to keep barriers to entry low for new 
applicants.
    The increased fee for renewing an international registration at 
WIPO will be owed on requests made on or after February 18, 2025, 
because the Madrid Agreement Concerning the International Registration 
of Marks requires three months' advance notice to WIPO before an 
increase in the amount of the international renewal fee may enter into 
force.

5. Letter of Protest Fee

                                         Table 7--Letter of Protest Fee
----------------------------------------------------------------------------------------------------------------
                                                           Final rule      Dollar        Percent    FY 2023 unit
                Description                  Current fee       fee         change        change         cost
----------------------------------------------------------------------------------------------------------------
Letter of protest.........................          $50          $150          $100           200          $893
----------------------------------------------------------------------------------------------------------------

    The USPTO is increasing the fee for filing a letter of protest from 
$50 to $150. The cost to process a letter of protest exceeds the 
adjusted fee, and the agency will continue subsidizing this service 
from aggregate trademark fee collections, setting the fee rate to 
encourage the filing of relevant, well-supported letters of protest and 
discourage frivolous filings. Letters of protest allow a third party to 
bring evidence to the USPTO on the registrability of a mark in a 
pending application without filing an opposition with the Trademark 
Trial and Appeal Board (TTAB). The letter of protest procedure is not a 
substitute for the statutory opposition and cancellation procedures 
available to third parties who believe they would be damaged by 
registration of the involved mark. Instead, it is intended to assist 
examination without causing undue delay or compromising the integrity 
and objectivity of the ex parte examination process, which involves 
only the applicant and the USPTO.
    The USPTO's estimated FY 2023 costs for reviewing and processing 
each letter of protest were $893, $843 more than the current $50 fee. 
The agency's costs are high because of the specialized staff who review 
letters of protest and the time required to determine whether: (1) the 
letters comply with submission requirements and (2) should be forwarded 
to an examining attorney. In addition, under the TMA, the USPTO is 
required to review and act on letters of protest within 60 days of 
receipt. The total subsidy for performing this service has grown due to 
a substantial increase in letters of protest forwarded to the USPTO 
each year. Letters of protest have risen from about 2,300 in FY 2016 to 
nearly 4,000 in FY 2023. The agency estimates this volume will grow to 
more than 5,000 letters annually by FY 2029, resulting in more cost to 
the USPTO.
    When viewed in the context of USPTO actions due to letters of 
protest, the agency's costs are considerable, while the letters have a 
minor impact on examination outcomes. During FY 2022, the USPTO decided 
4,557 letters of protest, of which 1,433 (31%) were not in compliance 
with Sec.  2.149 and therefore not included in the record of 
examination. Of the letters entered into the record, examining 
attorneys issued a refusal based on the asserted ground(s) in 1,213 
cases (27% of letters decided). Examining attorneys likely would have 
issued a refusal in these cases even without a letter of protest. The 
USPTO identified only 27 (0.59%) letters in FY 2022 that corresponded 
to an error in publishing a mark for opposition, similar to historical 
shares of letters decided each year.

 Table 8--Letters of Protest Filed and Letters Corresponding to Situations Where the USPTO Published a Mark for
                                       Opposition in Error, by Fiscal Year
----------------------------------------------------------------------------------------------------------------
                                                                             Letters
                                                 Letters of protest    corresponding to a      Share of total
                  Fiscal year                          decided          mark published in    letters decided (%)
                                                                              error
----------------------------------------------------------------------------------------------------------------
2016..........................................                 2,258                    17                  0.75
2017..........................................                 2,726                    13                  0.48

[[Page 91072]]

 
2018..........................................                 3,386                    28                  0.83
2019..........................................                 4,106                    43                  1.05
2020..........................................                 3,534                    22                  0.62
2021..........................................                 3,756                    39                  1.04
2022..........................................                 4,557                    27                  0.59
----------------------------------------------------------------------------------------------------------------

    In accordance with the USPTO's fee setting policy factors, this 
adjustment recovers more of the costs associated with letters of 
protest, although the agency's full costs for this service will 
continue to be subsidized by aggregate trademark revenues.

6. Other Petition Fees

                                          Table 9--Other Petition Fees
----------------------------------------------------------------------------------------------------------------
                                                               Final rule     Dollar      Percent      FY 2023
                  Description                    Current fee      fee         change       change     unit cost
----------------------------------------------------------------------------------------------------------------
Petition to the Director (paper)...............         $350         $500         $150           43          n/a
Petition to revive an application (paper)......          250          350          100           40          n/a
Petition to the Director (electronic)..........          250          400          150           60       $3,300
Petition to revive an application (electronic).          150          250          100           67           61
----------------------------------------------------------------------------------------------------------------

    Optional petitions are a valuable, though costly, part of the 
trademark registration process, and other trademark fees subsidize the 
optional petition processing costs. The new fee amounts would recover 
more costs associated with the extensive and lengthy review these 
services require.

VI. Discussion of Comments

    In response to the March 26, 2024, NPRM, the USPTO received 
comments from 27 associations and individuals including intellectual 
property organizations, law firms, attorneys, and others. These 
comments are available on Regulations.gov at https://www.regulations.gov/docket/PTO-T-2022-0034.
    The summaries of comments and the agency's responses to the written 
comments follow.

General Fee Setting Approach

    Comment 1: Commenters recognized the need for the USPTO to set fees 
at a level necessary to recover aggregate costs and ensure financial 
sustainability.
    Response: The USPTO appreciates the commenters' feedback.
    Comment 2: In principle, commenters supported fee increases needed 
to maintain effective and efficient operations, including efforts to 
lower pendency, combat fraud, and ensure the accuracy and reliability 
of the trademark register.
    Response: The USPTO appreciates the commenters' feedback and is 
committed to pursuing the goals and objectives in the Strategic Plan in 
a fiscally responsible manner.
    Comment 3: Commenters expressed appreciation for the USPTO's 
receptivity to feedback given during the public hearing and making 
adjustments to the fee proposals in response to that feedback.
    Response: The USPTO appreciates the commenters' feedback and 
remains committed to analyzing, considering, and incorporating feedback 
from our stakeholder community.
    Comment 4: One commenter noted that it was important for the USPTO 
to strike a balance between financial sustainability and accessibility 
to the trademark system in setting fees.
    Response: The USPTO agrees that financial sustainability and 
stakeholder accessibility are crucial fee setting considerations. The 
overriding principle behind this rulemaking is to provide the agency 
with a sustainable funding model that supports the USPTO's strategic 
goals and objectives, including providing affordable access to the 
trademark system for all stakeholders.
    Comment 5: Commenters emphasized that the fee schedule should be 
clear and transparent.
    Response: The USPTO strives to ensure that the costs associated 
with obtaining a federal trademark registration are clear and that 
examination is consistent for all applicants. Similar to a TEAS Plus 
application, the base application established by this final rule will 
indicate what information is required for a complete application, as 
well as the addition of indicators meant to alert applicants of 
additional surcharges based on information provided on the application 
at the time of filing. The USPTO expects that, in most cases, any 
incurred surcharges will be assessed and known to the applicant upon 
submission of the initial application.
    Comment 6: Commenters noted there should be greater agency 
transparency surrounding the budget, particularly around increased IT 
costs. Commenters asserted that the public is entitled to know more 
details about scheduled and upcoming IT improvements and why costs and 
delays have escalated over previous projections.
    Response: The USPTO is committed to providing stakeholders with 
financial and performance data that are complete, reliable, accurate, 
and consistent. The USPTO posts congressional budget justifications, 
agency financial reports, and annual performance plan and annual 
performance reports on the financial and performance section of the 
USTPO website at https://www.uspto.gov/about-us/financial-and-performance. Also, the General Services Administration's 
ITDashboard.gov enables stakeholders to understand the health of IT 
investments, the impact of IT portfolios, and other key IT indicators. 
Finally, the TPAC holds quarterly public meetings to review USPTO 
policies, goals, performance, budget, and user fees. During these 
meetings the USPTO presents the latest plans and updates regarding IT

[[Page 91073]]

improvements and other administrative matters.
    Although the USPTO strives to provide the most accurate cost and 
revenue estimates in the five-year forecast summary of each 
congressional budget submission, these forecasts reflect point-in-time 
planning assumptions and budget priorities. The agency routinely 
updates forecasts, tracks operational and financial performance, and 
monitors changes in the economy to mitigate uncertainty. The USPTO has 
earned 31 consecutive years of unmodified (clean) audit opinions on its 
annual financial statements.
    Comment 7: Commenters asserted that it was too soon to raise 
trademark fees because fees were raised in 2021, and new fees were also 
introduced as part of the Trademark Modernization Act. One commenter 
suggested these actions raise concerns about the ability of the USPTO 
to establish effective budgetary frameworks, project future operational 
outcomes, and maintain efficient operations.
    Response: The USPTO decided to adjust trademark fees at this time 
after conducting a deliberate and thorough review of fees, costs, and 
revenues. Based on this review, the agency concluded that fee 
adjustments are necessary to generate sufficient financial resources to 
facilitate the effective administration of the U.S. trademark system.
    The USPTO's budget projections reflect point-in-time estimates and 
assumptions that are subject to change, with considerable uncertainty 
in outyear forecasts and risks that could materialize. Fee collections 
and operational costs are affected by internal factors, including 
changes in examination processes and procedures, and also by external 
factors outside the USPTO's control, such as legislation, court 
decisions, and changes to the broader economy. As detailed in the 
Updated Revenue and Cost Estimates section of this rule, the USPTO has 
experienced a number of unanticipated circumstances since the current 
fee schedule took effect in January 2021. These factors include higher-
than-expected inflation in the broader U.S. economy leading to higher 
costs for supplies and contract services and employee pay raises 
enacted across all U.S. government agencies in FY 2023-24--including 
the USPTO--that were larger than previously planned for during the 
January 2021 fee change.
    Comment 8: One commenter asserted that previous fee increases have 
not improved operations, as processing times for applications have 
risen sharply since the last time fees were increased in 2021; 
therefore, the USPTO should not increase fees, as a fee increase is 
unlikely to improve agency efficiency.
    Response: The USPTO acknowledges that processing times and pendency 
have increased for trademark applications. These delays are the result 
of several years of sustained increases in trademark application 
filings, punctuated by an unprecedented year-long influx during FY 2021 
that created a significant unexamined application inventory. The cost 
of processing and examining applications is subsidized by other fees, 
so this surge has further stressed the USPTO's finances. Addressing 
this unexamined inventory has required and will continue to require 
significant investments in time and agency resources, making fee 
increases necessary to effectively administer the trademark system.
    Comment 9: One commenter stated that trademark registration costs 
have historically disproportionately affected minority-owned small 
businesses and the proposed increases will make matters worse. The 
commenter urged the USPTO to petition Congress to appropriate taxpayer 
funding rather than raising fees paid by small businesses and 
innovators.
    Response: The USPTO acknowledges that a growing body of research 
has revealed unequal innovation participation rates for women, people 
of color, veterans, and other underserved individuals. Working to 
address these concerns, the agency is developing its own equity 
initiatives and programs and is also partnering with organizations in 
both the public and private sectors to collectively advance inclusion 
in innovation. For more information on the USPTO's inclusive innovation 
initiatives, visit https://www.uspto.gov/Equity.
    Comment 10: One commenter asserted that the Initial Regulatory 
Flexibility Act (IRFA) analysis did not sufficiently describe or 
estimate the number of small entities the rule would affect and every 
small business in the United States is impacted by the proposed fee 
changes.
    Response: The USPTO disagrees that this rulemaking would impact 
every small business in the United States. Many small businesses do not 
hold any trademarks or may choose not to register their trademarks with 
the USPTO for reasons unrelated to the agency's fees.
    The USPTO does not collect or maintain statistics in trademark 
cases on small- versus large-entity applicants, and this information 
would be required to determine the number of small entities affected by 
this rule. However, the agency does not anticipate that the final rule 
will have a disproportionate impact on any particular class of small or 
large entities. The USPTO chose the fee schedule in the final rule 
because it will enable the agency to achieve its goals effectively and 
efficiently without unduly burdening small entities, erecting barriers 
to entry, or stifling incentives to innovate.
    Comment 11: Commenters recommended that the USPTO include an 
exception or reduce fees for small and micro businesses, similar to the 
small and micro entity discounts offered for patent applicants and 
holders.
    Response: Section 10(a) of the AIA authorizes the Director to set 
or adjust any fee established, authorized, or charged under the 
Trademark Act, but it does not include the authority to provide entity 
discounts for trademark fees.
    Comment 12: The Office of Advocacy for the Small Business 
Administration (SBA) recommended that the USPTO create more clear and 
accessible guidance for small businesses seeking to apply for or renew 
a trademark.
    Response: The USPTO is committed to improving the resources offered 
to small businesses and entrepreneurs, including expanding our partner 
pro bono services and IP law school clinic programs. Resources for 
inventors and entrepreneurs are available on the USPTO website at 
https://www.uspto.gov/Inventors. The USPTO's Trademark Assistance 
Center (TAC), https://www.uspto.gov/TrademarkAssistance can answer 
questions on a variety of trademark topics for first-time filers.
    Comment 13: The SBA commented that the unit cost recovery or 
across-the-board adjustment alternatives analyzed in the IRFA were 
better options than the proposed fee structure.
    Response: The USPTO is adopting the fee schedule detailed in this 
rulemaking because it will enable the agency to achieve its goals 
effectively and efficiently without unduly burdening small entities, 
erecting barriers to entry, or stifling incentives to innovate.
    The unit cost recovery alternative would produce a structure in 
which application and processing fees would increase significantly for 
all applicants, and post-registration maintenance filing fees would 
decrease dramatically when compared with current fees. The USPTO 
rejected this alternative because it does not reflect improvements in 
fee design to accomplish the agency's stated objectives of encouraging 
broader use of IP rights-protection mechanisms and participation by 
more trademark

[[Page 91074]]

owners, as well as practices that improve process efficiency. In 
contrast, the fee schedule in the final rule sets application filing 
fees below the unit cost of those services to encourage broader use of 
IP rights-protection mechanisms and participation by more trademark 
owners, including small businesses and individual filers.
    The USPTO also considered a 27% across-the-board increase for all 
fees. This fee schedule would have continued to promote innovation 
strategies and allow applicants to gain access to the trademark system 
through fees set below cost, while registrants pay maintenance fees 
above cost to subsidize the below-cost front-end fees. However, the 
agency ultimately rejected this proposal because, unlike the fee 
schedule outlined in the final rule, it would not enhance the 
efficiency of trademark processing and offers no new incentives for 
users to file more efficient and complete applications.
    Comment 14: One commenter suggested that before raising fees, the 
USPTO should assess the impact of recent agency measures like the U.S. 
counsel rule, the requirement for filers to log in with myUSPTO.gov, 
the TTAB's expedited cancellation program, the Trademark Modernization 
Act, and the three-month response deadline for Office actions.
    Response: The agency implemented the measures identified in the 
comment to improve the quality of both trademark applications and the 
trademark register and to reduce trademark pendency. In developing the 
most judicious fee adjustments possible, the USPTO followed its fee 
setting process that includes a comprehensive review that identifies, 
assesses, and integrates fraud risk controls, recent initiatives and 
measures (including those identified in the comment), and trends. Thus, 
the USPTO incorporated the impact of these initiatives into the new fee 
structure by considering filing patterns, capacity, and financial 
implications.
    Comment 15: Commenters expressed opposition to the fee proposals 
and claimed any problems the USPTO faces are the result of ``bad 
trademark applications being filed by the incompetent automated 
trademark service `mills' and the unethical trademark attorneys.'' In 
lieu of the proposed fee changes, commenters stated the USPTO should 
require comprehensive legal research before filing.
    Response: The USPTO enforces compliance with the Trademark Act's 
requirements for applications through a number of methods. Both the 
Trademark Act and the rules of practice require a verified statement 
alleging that ``to the best of the signatory's knowledge and belief, 
the facts recited in the application are accurate.'' 15 U.S.C. 
1051(a)(3), (b)(3), and 1126; 37 CFR 2.33 and 2.34. If the filing basis 
is section 1(b), section 44(d), or section 44(e), the statement must 
also assert that the verifier believes the applicant is entitled to, 
and has a bona fide intent to, use the mark in commerce on or in 
connection with the goods or services specified in the application, and 
that to the best of the signatory's knowledge and belief, no other 
person has the right to use the mark in commerce, either in the 
identical form or in such near resemblance as to be likely, used on or 
in connection with the goods or services of such other person, to cause 
confusion or mistake, or to deceive. If the filing basis is section 
1(a), the verification must also state that the applicant believes it 
is the owner of the mark and that it is in use in commerce.
    In addition, the USPTO is currently working to combat fraudulent 
applications through the recently created Register Protection Office 
(RPO). For example, in FY 2024, the RPO increased its capacity and 
improved its workflow to monitor and shutter USPTO.gov accounts for 
user agreement violations.
    Comment 16: One commenter stated the best course of action the 
USPTO can take to promote efficiency and reduce pendency is to better 
train examining attorneys. The commenter suggested that the USPTO 
instruct their examining attorneys that the ID Manual is not binding, 
and there is no need for conformity if an identification is acceptable 
as written. The commenter also stated that the USPTO should teach its 
examining attorneys not to issue unnecessary refusals.
    Response: The USPTO agrees that custom identifications may be 
acceptable as written, and that the agency should not issue unnecessary 
refusals. The new surcharge for entering identifications manually in a 
free-form text box is not an indication that custom identifications are 
unacceptable but reflects the extra work required by examining 
attorneys (and costs to the USPTO) to review each entry to determine 
its acceptability.
    As part of objective 2.2 in the 2022-2026 Strategic Plan, issuing 
and maintaining accurate and reliable trademark registrations, the 
agency is continuously enhancing training programs to keep pace with 
changing filing demands and with emerging issues and challenges.
    Comment 17: Commenters requested clarification on whether the 
proposed application and filing surcharge fees would apply to existing 
applications or only to applications filed after the effective date of 
the final rule.
    Response: In general, the proposed fees would apply only to 
applications filed after the effective date of the final rule. However, 
as discussed in Part IV: Individual Fee Rationale of this rule, any 
previously filed TEAS Plus applications that remain pending on or after 
the effective date of this final rule will be subject to the 
insufficient information surcharge fee if the application fails to 
satisfy any of the above requirements because the requirements for a 
base application are the same as the requirements for a TEAS Plus 
application. Under either system (TEAS or base plus surcharges), 
affected applications would be subject to a fee of $100 per class for 
failing to meet the requirements.
    Comment 18: One commenter noted the fee proposal would require a 
significant learning curve for legal and non-legal parties involved in 
the trademark registration process and will likely lead to more 
applicants seeking out legal assistance at law clinics. The commenter 
suggested that the USPTO establish clinical relationships with more 
Historically Black Colleges and Universities (HBCUs).
    Response: As part of objective 1.2 in the 2022-2026 Strategic Plan, 
the agency is continuing to expand its partner pro bono services and IP 
law school clinic programs to ensure greater access to counsel and to 
assist in procuring IP protection. Currently, about one third of law 
schools accredited by the American Bar Association (ABA), including 
three of six of HBCU law schools, participate in the USPTO's Law School 
Clinic Certification Program. All three HBCU law schools participating 
have both patent and trademark clinics. Participating clinics provide 
legal services pro bono to the public, including to inventors, 
entrepreneurs, and small businesses. More information on the program is 
available on the USPTO's website at https://www.uspto.gov/LawSchoolClinic.
    Regarding the learning curve, the required information for a base 
application is the same as required for TEAS Plus applications. The new 
base filing plus surcharge filing solution will flag all information 
required for filing, much like the TEAS Plus application today.
    Comment 19: Commenters expressed concern that the fee increases 
will disproportionately affect lower-income filers such as small 
businesses, startups, and pro se filers, many of whom may be

[[Page 91075]]

sensitive to cost changes and lack the means to secure legal counsel. 
One commenter suggested that the proposed free-form text box surcharge, 
in particular, will negatively impact small businesses.
    Response: The agency strives to keep front-end initial filing fees 
below cost to encourage broader participation and open access to the 
trademark system. The new fees reflect higher inflationary costs but 
will remain below the net cost of examination and further minimize 
undue burdens by shifting higher fee requirements to applicants who 
trigger higher examination costs due to lengthy or less clear 
identifications of goods and services or missing information. The USPTO 
expects that a majority of filers will avoid the surcharges and pay 
only the base application fee because they will provide all required 
information, select their identifications from the ID Manual, and not 
exceed the 1,000-character limit for each class.
    Comment 20: One commenter expressed concern that higher fees may 
push more applicants to file pro se and cause applicants to unknowingly 
give up their rights or to file in a manner that does not reflect their 
actual use, thereby damaging the accuracy of the trademark register.
    Response: As noted in response to comment 12, the USPTO provides 
resources for applicants and registrants that explain trademark rights 
on the agency's website at https://www.uspto.gov/Inventors. Applicants 
and registrants may find these resources helpful in understanding their 
rights and how to file in a manner that best reflects their actual use. 
In addition, although the USPTO cannot provide legal advice, the TAC, 
https://www.uspto.gov/TrademarkAssistance, can answer questions on a 
variety of trademark topics.
    The USPTO's Law School Clinic Certification Program, https://www.uspto.gov/LawSchoolClinic, includes over 60 participating law 
school clinics that provide patent or trademark legal services pro bono 
to qualified members of the public who are accepted as a client of a 
clinic. Each participating law school has requirements for accepting 
new clients and accepts new clients at their discretion. The agency is 
continuing to expand its partner pro bono services and IP law school 
clinic programs to ensure greater access to counsel and to assist in 
procuring IP protection.
    Comment 21: The SBA suggested that the introduction of surcharges 
will make it harder for applicants and legal counsel to accurately 
predict the overall cost associated with trademark applications. The 
SBA asserted that surcharges will negatively impact small businesses, 
which may lack resources for legal counsel or the ability to absorb 
unexpected costs.
    Response: The agency expects that the majority of filers will avoid 
surcharges and pay only the base application fee because they will 
provide all required information, select their identifications from the 
ID Manual, and not exceed the 1,000-character limit for each class. The 
USPTO further believes that applicants and legal counsel should be able 
to anticipate which applications will require custom identifications or 
excess characters based on their knowledge of the complexity of the 
application and the covered classes. Prior to submitting their 
application, applicants will be presented with the entire application 
cost--including surcharges--and have the opportunity to provide 
complete information and identifications from the ID manual or custom 
identifications that are 1,000 characters or fewer in length, thus 
avoiding the surcharges.
    As discussed above, the USPTO endeavors to keep front-end initial 
filing fees below cost to encourage broader participation and open 
access to the trademark system. The new fees reflect higher costs but 
will remain below the net cost of examination and further minimize 
undue burdens by shifting higher fee requirements to applicants who 
trigger higher examination costs due to lengthy or less clear 
identifications of goods and services or missing information.
    The USPTO's Law School Clinic Certification Program, https://www.uspto.gov/LawSchoolClinic, includes over 60 participating law 
school clinics that provide patent or trademark legal services pro bono 
to qualified members of the public who are accepted as a client of a 
clinic. Each participating law school has requirements for accepting 
new clients and accepts new clients at their discretion. The agency is 
continuing to expand its partner pro bono services and IP law school 
clinic programs to ensure greater access to counsel and to assist in 
procuring IP protection.

Targeted Fee Adjustments

Trademark Application Filing Fees
    Comment 22: One commenter suggested that any increase to basic 
filing fees should be limited to budgetary changes for inflation and 
cost of living.
    Response: Projected revenue from the current fee schedule is 
insufficient to meet future budgetary requirements (costs), due largely 
to higher-than-expected inflation in the broader U.S. economy that has 
increased the agency operating costs. Consequently, the USPTO's 
aggregate operating costs will exceed aggregate revenue for the 
Trademarks program under the current schedule.
    The USPTO chose the adjustments established in this final rule, 
including application filing fees, because they will enable the agency 
to achieve its goals effectively and efficiently without unduly 
burdening small entities, erecting barriers to entry, or stifling 
incentives to innovate. If the USPTO were to set the fee rate for a 
base application lower than prescribed in the final rule, the lower 
application filing fee would need to be offset by raising other fees, 
reducing spending on core mission and strategic priorities, or 
depleting the operating reserves, thereby significantly increasing 
agency financial risk.
    Comment 23: Commenters expressed concern that higher application 
fees may deter many potential applicants from filing for trademarks, 
reducing the overall number of applications and registrations.
    Response: The USPTO raised trademark fees in 2017 and 2021, with 
effective dates of January 14, 2017, and January 2, 2021, respectively. 
From FY 2016 to FY 2017, filings increased by about 60,000. During the 
fourth quarter of FY 2020 and the first quarter of FY 2021, the agency 
experienced a surge in filings in advance of the fee increase. Outside 
of that surge, the USPTO notes that filings in each of the last three 
quarters of FY 2021 (after the new fees took effect) were higher than 
filings in the third quarter of FY 2020 or any prior quarter. 
Therefore, the data indicate that fee increases have not impacted the 
long-term trend of growth in trademark filings.
    As noted in the NPRM, outside research also suggests that demand 
for trademark applications is inelastic. See Ga[eacute]tan De 
Rassenfosse, ``On the Price Elasticity of Demand for Trademarks,'' 
Social Science Research Network, Jan. 28, 2018, https://doi.org/10.2139/ssrn.2628646; Benedikt Herz and Malwina Mejer, ``On the Fee 
Elasticity of the Demand for Trademarks in Europe,'' Oxford Economic 
Papers, Jul. 3, 2016, https://doi.org/10.1093/oep/gpw035.
    Comment 24: One commenter expressed concern that increases to the 
base application fee, as compared to TEAS Plus and TEAS Standard fees, 
were too high and would be a significant burden for stakeholders, 
especially small businesses. The commenter noted that the effective fee

[[Page 91076]]

increases range from 40% (base application fee compared to TEAS Plus 
application fee) to 114% (base application fee plus all three surcharge 
fees compared to TEAS Standard application fee), depending on whether 
the applicant incurs any additional surcharges.
    Response: The new fees reflect higher costs that have accumulated 
over the years and will remain below the net cost of examination, 
further minimizing undue burdens by shifting higher fee requirements to 
applicants who trigger higher examination costs.
    Individuals and small businesses comprise the majority of trademark 
filers, and many are one-time filers. The USPTO expects that the 
majority of these filers will avoid the surcharges and pay only the 
base application fee because they will provide all required 
information, select their identifications from the ID Manual, and not 
exceed the 1,000-character limit for each class.
    Comment 25: Commenters disagreed with the USPTO's decision to move 
away from the two-tiered TEAS system. These commenters suggested that 
the TEAS system allows customers to explore various options with 
different prices based on their needs and financial capacity. In 
contrast, commenters suggested that the proposed fees act as a barrier 
to entry by increasing application costs, removing other cost options 
from the process, and losing the advantage of an earlier filing date 
strategy because of the time required to comply.
    Response: The new system will allow customers to explore various 
options with different prices based on their needs and financial 
capacity. In addition, it is designed to make application fees more 
equitable by aligning filing costs with the work required for 
examination. It is similar to the existing system in that applicants 
who comply with the base requirements in their initial filing 
(comparable to TEAS Plus) will pay the lowest fees, as compared to 
applicants who fail to meet all requirements (comparable to TEAS 
Standard). The USPTO does not anticipate the total number of 
applications filed each year will change under the schedule enacted 
herein. The agency does anticipate that a larger share of applicants 
will seek to avoid the proposed surcharges, as compared to the share of 
applicants who used the TEAS Plus option under the existing fee 
schedule.
    Comment 26: Commenters expressed concern about the potential 
complexity and unpredictability of the new system, as it appears to 
create new procedures and requirements to apply for and obtain 
registration.
    Response: Although the new system introduces changes, as noted 
above it is similar to the prior system in that applicants complying 
with the base requirements in their initial filing (comparable to TEAS 
Plus) will pay the lowest fees under the new fee schedule, as compared 
to applicants who fail to meet all requirements (comparable to TEAS 
Standard). Prior to submitting their application, applicants will be 
presented with the entire cost, including surcharges. Applicants can 
avoid some or all of these surcharges by providing complete information 
and identifications from the ID Manual or custom identifications of 
1,000 characters or less per class. The information required to avoid 
the insufficient information surcharge fee is the same as that required 
for the TEAS Plus application.
    Comment 27: One commenter believed the fee for a base application 
is too high and should be set at the current rate for a TEAS Plus 
application ($250) because it has essentially the same requirements.
    Response: Maintaining the initial filing fee at $250 would not 
accommodate cost increases and would likely undermine the timeliness 
and the quality of the examination and registration processes. When the 
agency introduced the TEAS Plus option in 2005, the fee was $275, and 
that costs for examination have risen significantly since that time.
    In addition, the USPTO is setting the fee for the base application 
at a rate greater than the current TEAS Plus fee to recover some 
additional examination costs earlier in the trademark life cycle. The 
new base application fee remains below the net cost of examination, and 
the new surcharges will further minimize undue burdens by shifting 
higher fee requirements to applicants who trigger higher examination 
costs.
    Comment 28: Commenters questioned why the USPTO did not include a 
greater increase to fees for paper applications, given the larger costs 
associated with these types of filings.
    Response: Under Sec.  2.23, the USPTO requires electronic filing of 
all trademark correspondence, including applications. Filers may 
petition for special circumstances, but paper applications make up 
fewer than 1% of current filings. In addition to a higher filing fee, 
paper filers also incur an additional petition fee for requesting 
acceptance of a paper submission. Because the vast majority of filings 
are electronic, the higher cost of processing paper applications has 
little marginal impact on the USPTO's overall costs.
    Comment 29: One commenter suggested that if the USPTO's intent is 
to generate publication-ready applications to improve pendency, it 
should evaluate why pendency has increased rather than raise fees.
    Response: The USPTO is working diligently to balance timely 
examination with trademark quality.
    As discussed in the NPRM and in Part IV: Rulemaking Goals and 
Strategies of this rule, the agency's recent trademark pendency 
challenge is the result of several years of sustained increases in 
trademark application filings punctuated by an unprecedented, year-long 
influx during FY 2021 that created a significant unexamined application 
inventory. In addressing these challenges, the USPTO will continue to 
reevaluate its operating posture to maximize efficiency, set data-
driven pendency goals, realign the trademark workforce to maintain 
stability during workload fluctuations and optimize pendency goals, and 
use available technology solutions to streamline and automate trademark 
work processes. Although new trademark application filings have since 
softened and inventory is stabilizing, unexamined inventory remains 
high and will take several years to address.
    Promoting efficient delivery of reliable IP rights is just one of 
the USPTO's goals; another is to recover the aggregate costs of 
trademark operations through user fees. Without raising fees, the 
agency projects that the trademark operating reserve will fall below 
minimum levels in the next few years with a consequent impact on 
timeliness, application quality, and the integrity of the trademark 
register. The USPTO designed the new fee structure to enhance 
application quality and streamline the examination process, resulting 
in lower pendency and greater cost recovery.
Trademark Application Filing Surcharge Fees
    Comment 30: Commenters expressed concern that the new surcharges 
could make it difficult for attorneys to provide clients with an 
accurate estimate of costs.
    Response: The USPTO expects that the majority of filers will avoid 
surcharges and pay only the base application fee because they will 
provide all required information, select their identifications from the 
ID Manual, and not exceed the 1,000-character limit per class. The 
USPTO further believes that applicants and legal counsel should be able 
to anticipate which applications

[[Page 91077]]

will require custom identifications or excess characters based on their 
knowledge of the complexity of the application and the covered classes. 
Prior to submitting their application, applicants will be presented 
with the entire cost, including surcharges, and have the opportunity to 
update before filing to potentially avoid the surcharges. The 
electronic application system will clearly indicate the fields required 
to avoid the incomplete information surcharge, and there will be no 
surcharge for IDs selected from the ID Manual within the application. 
Attorneys should be aware that IDs entered within the free-form text 
box will generate a surcharge, as will those that exceed the 1,000-
character limit if entered in that box, and advise their clients 
accordingly.
    Comment 31: Commenters sought clarification on whether use of the 
free-form text box will subject applicants to both the insufficient 
information surcharge and the free-form text surcharge.
    Response: Use of the free-form text box will not trigger the 
insufficient information surcharge. As detailed in Part VII: Discussion 
of Specific Rules, the insufficient information surcharge will apply if 
an application fails to satisfy any of the requirements in paragraphs 
(a)(1) through (19) in the list of requirements for a base application 
under Sec.  2.22. Applicants will incur the free-form text surcharge 
when they enter identifications of goods and/or services in the free-
form text box (paragraph (a)(20) under Sec.  2.22), and there will be 
no surcharge for IDs selected from the ID Manual within the 
application.
    Comment 32: Commenters sought clarification on when the 
insufficient information surcharge would be assessed: at filing, when 
applications are acted upon by the USPTO, or when amended.
    Response: The USPTO expects that if the insufficient information 
surcharge is assessed, the vast majority of applicants will be assessed 
the surcharge at filing, and the electronic filing system will display 
total filing cost prior to submission. Some filers could be assessed 
the surcharge after filing if the examining attorney determines that 
required information was missing on the original application.
    Comment 33: One commenter requested clarification on whether the 
insufficient information surcharge will be assessed per class or on 
each piece of missing information per class.
    Response: The insufficient information surcharge is a per-class fee 
that applies to applications that do not include required information 
at the time of filing. The surcharge is not per requirement; it is $100 
per class, regardless of the number of requirements an applicant fails 
to satisfy.
    Comment 34: One commenter requested clarification regarding whether 
an applicant who uses the ID Manual that requires a fill-in (e.g., 
software) will be charged the insufficient information fee if the 
examining attorney does not approve the language used to describe the 
nature and function of the goods and/or services.
    Response: As with TEAS Plus, the agency will not require an 
additional fee if the identification of goods or services has a fill-
in-the-blank element and the applicant inserts information that 
reasonably attempts to satisfy requirements in accordance with the 
instructions but requires amendment because the inserted information: 
(1) sets forth goods and/or services in another class (e.g., headwear, 
namely, football helmets); (2) is indefinite (e.g., maternity clothing, 
namely, sportswear); (3) includes indefinite wording from the 
parenthetical guidance provided for instructional purposes (e.g., 
``specify,'' ``indicate,'' ``etc.''); or (4) is inaccurate.
    Applicants will incur the free-form text surcharge if they leave 
the fill-in-the-blank element empty, insert information that is clearly 
inappropriate for the selected identification, or insert additional 
goods and/or services unrelated to the selected identification. For 
example, applicants also will incur the additional fee if they identify 
the goods and/or services in the original application as ``processed 
meat, namely, laptop computers''; ``bicycle parts, namely, bicycle 
parts''; or ``sound recordings featuring music, and sunglasses.'' In 
these situations, the applicant has, in effect, failed to submit an 
identification from the ID Manual, and the additional fee will apply 
even if the applicant deletes the unacceptable terminology.
    Comment 35: One commenter requested clarification regarding whether 
applicants will be assessed the insufficient information surcharge for 
not satisfying ``all of the requirements of Sec.  2.34'' in an 
application filing basis if the specimen of use is deemed unacceptable 
in a use-based application.
    Response: Similar to the guidance for TEAS Plus applications, as 
long as the specimen depicts the mark, the applicant will not incur an 
additional fee for registrations refused because the specimen is 
unacceptable. The insufficient information surcharge will apply if the 
mark on the specimen is materially different from the mark on the 
drawing. If the mark on the specimen and the drawing are materially 
different, the applicant has, in effect, failed to submit a specimen 
showing use of the mark sought to be registered. The surcharge will not 
apply if the difference between the mark on the specimen and the mark 
on the drawing is not material.
    Comment 36: Commenters, including the SBA, expressed concern 
regarding the difficulty of anticipating whether the insufficient 
information fee will apply for an applicant, given that many of the 
requirements are subjective to the examining attorney's opinions and 
discretion, rather than objective factual standards. Commenters 
included color claim, description of a mark, identification of form of 
applicant, and translation of a mark as examples of subjective 
determinations where a fee could be imposed later in examination. 
Commenters suggested these questions will lead to accounting disputes, 
thus inhibiting the quality and timeliness of prosecution progress.
    Response: The USPTO acknowledges the commenters' concerns and 
offers assurance that the agency strives to ensure consistent 
examination. An applicant may request that the USPTO review situations 
where, in their opinion, the agency has acted inconsistently in its 
treatment of their pending application(s) or recent registration(s). 
Applicants also may submit a request for review when a substantive or 
procedural issue has been addressed in a significantly different manner 
in different cases, subject to requirements on the Consistency 
Initiative page on the USPTO website at https://www.uspto.gov/trademarks/trademark-updates-and-announcements/consistency-initiative. 
If the applicant believes that the agency incorrectly imposed an 
insufficient information fee and has discussed the issue with the 
examining attorney, they may also contact the managing or senior 
attorney in the examining attorney's law office.
    Comment 37: One commenter expressed concern that the list of 
criteria that would impose an insufficient information surcharge fee is 
not in line with the Trademark Manual of Examining Procedure.
    Response: The current Trademark Manual of Examining Procedure (May 
2024) provides guidance regarding TEAS Plus and TEAS Standard 
applications, including guidance regarding the processing fee for 
applications that do not meet the requirements for a TEAS Plus 
application under Sec.  2.22(a). The information required to avoid the

[[Page 91078]]

insufficient information surcharge fee is the same as that required for 
the TEAS Plus application. After implementation of this final rule, the 
agency will update the manual in accordance with the requirements 
enacted herein.
    Comment 38: Commenters questioned why the insufficient information 
fee will be imposed on a per class basis when most basic information 
requirements are not class-based.
    Response: The USPTO has a longstanding practice of charging 
trademark fees on a per-class basis. The insufficient information 
surcharge mirrors the per-class processing fee for TEAS Plus 
applications that do not meet filing requirements. Any unmet 
requirements in a submitted application complicate the examination of 
every class claimed in the application.
    Comment 39: One commenter expressed concern regarding the 
insufficient information surcharge, given what they assert are the 
current application system's limitations.
    Response: The new TM Center electronic filing system is capable of 
meeting the demands of the new fee structure and will clearly indicate 
the fields required to avoid the incomplete information surcharge. The 
agency also notes that prior to submitting their application, 
applicants will be presented with the entire cost, including 
surcharges, and have the opportunity to update their application before 
filing to potentially avoid the surcharges.
    Comment 40: One commenter suggested that the USPTO consider whether 
the insufficient information fee is appropriate in instances where an 
applicant makes a good-faith effort to supply required information, 
such as when they have no knowledge of a term's non-English meaning.
    Response: Requiring the fee is appropriate in the situation 
described in the comment because Sec.  2.32(a)(9) requires an applicant 
to research a mark that is comprised of or includes non-English wording 
to determine whether there is a transliteration or translation of the 
wording. If there is, and the applicant omits the translation or 
transliteration, the examining attorney will issue an Office action 
requiring the insufficient information surcharge and submission of the 
translation and/or transliteration, as appropriate. If the initial 
application includes a translation or transliteration, the surcharge 
will not apply for later amendment of the translation or 
transliteration. The surcharge will apply if the translation or 
transliteration comprises or contains inappropriate material.
    Comment 41: Commenters noted that it is often in an applicant's 
best interests to submit an application without signing the supporting 
verified statements or providing every piece of information in order to 
get the earliest possible filing date. They suggested that if the 
information is provided after filing but before examination, there has 
been no inconvenience to the USPTO, and therefore the insufficient 
information fee will be strategically restrictive and needlessly 
burdensome to applicants.
    Response: To qualify for the reduced base application fee, 
applicants must include all required information at filing, as with 
TEAS Plus and TEAS Standard. Applicants also must individually assess 
when to file their applications and what information they wish to 
provide at filing beyond the requirements for receipt of a filing date 
in Sec.  2.21.
    Comment 42: One commenter expressed concern that there is no avenue 
to appeal or refund the insufficient information surcharge fee in cases 
where an applicant could prove their provided information was, in fact, 
sufficient.
    Response: If an examining attorney issues an Office action 
requiring payment of the surcharge for insufficient information, the 
applicant may respond with arguments and proof that the information was 
sufficient or that no information was required in that particular 
field. In such cases, the agency would not have collected the surcharge 
at filing. Therefore, no refund would be necessary for applicants who 
successfully overcome the surcharge requirement.
    Comment 43: Commenters requested clarification regarding when 
applicants will be assessed the free-form text surcharge: at filing, 
when the USPTO acts upon an application, or when amended.
    Response: The agency will assess the free-form text surcharge at 
any of the following points: at filing, when the application is amended 
to add a class(es) that was included in the free-from text box and not 
paid for, or when it is determined upon examination that the applicant 
has, in effect, failed to submit an identification from the ID Manual. 
See the response to comment 34 and Part V: Individual Fee Rationale for 
more information.
    Comment 44: One commenter requested clarification regarding how the 
USPTO will address amendments to descriptions selected from the ID 
Manual that are later modified to incorporate exclusionary language to 
differentiate from the goods or services of third parties, including 
prior registrants, whether in the context of agency refusals for an 
alleged likelihood of confusion under section 2(d), or opposition, 
cancellation, litigation, or other inter partes proceedings.
    Response: If the applicant originally selected the identification 
from the ID Manual within the electronic application, the addition of 
exclusionary language will not trigger the insufficient information or 
character count surcharges.
    Comment 45: One commenter requested clarification on whether use of 
the ID Manual drop-downs will result in the character limit surcharge.
    Response: Items selected from the ID Manual will not be subject to 
the character limit surcharge.
    Comment 46: One commenter requested clarification on the difference 
in substance between the agency's Acceptable Identification of Goods 
and Services Manual and the Trademark Next Generation ID Manual.
    Response: There is no difference in substance between the two 
versions of the ID Manual.
    Comment 47: One commenter acknowledged that additional work is 
involved in examining free-form text identifications but questioned 
whether the fee is proportionate to the work performed by the USPTO.
    Response: The USPTO appreciates the commenter's acknowledgement 
that examining free-form text identifications requires additional work. 
Examining attorneys often spend substantial time reviewing 
identifications provided in the free-form text box and may initiate 
multiple communications with the applicant before determining an 
acceptable identification. The USPTO believes this surcharge is 
proportionate to the additional costs associated with these more 
extensive reviews.
    Comment 48: Commenters, including the SBA, expressed concern that 
the free-form text surcharge may result in lower quality applications, 
as the ID Manual options for many industries are insufficient or too 
inaccurate to define their goods or services. Commenters asserted that 
this issue may cause some applicants to mistakenly narrow their goods 
and/or services identifications, choose the wrong goods and/or services 
identifications, or abandon their applications and rely on common law 
protections. They suggest that a review and cleanup of the ID Manual 
would make it more useful.
    Response: The USPTO currently has no plans for a comprehensive 
review of the ID Manual, but if it does not contain options relevant to 
applicants, they may submit new entries as described on the USPTO 
website at https://www.uspto.gov/trademarks/guides-and-manuals/
trademark-identification-

[[Page 91079]]

goods-and-services-manual-suggestions. As noted on the website, after 
the agency receives a proposed identification or recitation, it is 
reviewed by the Administrator for Trademark Classification Policy and 
Practice. The Administrator will determine whether to include the 
proposed identification or recitation, or a modified version, in the ID 
Manual. In addition, the Administrator will inform the submitting party 
whether the suggestion is accepted, rejected, or accepted in a modified 
form, typically within one to two business days. If accepted, the ID 
generally will appear in the next available weekly update.
    Comment 49: Commenters expressed concern regarding the process for 
updating the ID Manual. Specifically, they note that the free-form text 
box surcharge will likely cause an influx of requests and expressed 
concern that the USPTO may not have the capacity to address the 
requests in a timely manner. Additionally, these commenters believed 
the process to update the ID manual is slow and lacks transparency. The 
commenters expressed concern that the surcharge will negatively impact 
innovation and originality, while imposing a burden on applicants whose 
goods and services cannot accurately be described through standardized 
descriptions.
    Response: The USPTO is committed to timely and transparent updates 
to the ID manual. The Administrator for Trademark Classification Policy 
and Practice will, typically within one to two business days, inform 
the submitting party whether the suggestion is accepted, rejected, or 
accepted in a modified form. If accepted, the ID generally will appear 
in the next available weekly update. Should an influx of requests 
occur, the USPTO will monitor the requests to ensure that responses 
remain timely.
    Comment 50: One commenter suggested that it is more efficient for 
an applicant to copy and paste an ID Manual entry into the free-form 
text box than to individually search each entry from the drop-down 
menu. The commenter believed the surcharge will increase the time and 
legal costs charged to clients.
    Response: As discussed in the NPRM and in Part V: Individual Fee 
Rationale of this rule, examining attorneys generally do not need to 
review identifications of goods and/or services selected directly from 
the ID Manual within the electronic application form. Conversely, 
examining attorneys must carefully consider identifications entered in 
the free-form text box to determine whether the descriptions are 
acceptable as written or require amendment to sufficiently specify the 
nature of the goods and/or services. Applicants will still have the 
option to copy and paste into the free-form text box rather than select 
from the ID Manual, but those who do so will pay the surcharge to help 
offset the increased costs of examination, similar to applicants who 
chose not to file via TEAS Plus in the legacy system. Applicants may 
conduct an advanced search of the ID Manual to narrow results by 
following instructions provided on the USPTO website at https://www.uspto.gov/trademarks/guides-and-manuals/searching-trademark-id-manual.
    Comment 51: One commenter questioned the rationale for the free-
form text box surcharge since examining attorneys use a feature that 
color codes free-text identifications that are identical to the ID 
Manual.
    Response: As discussed in the NPRM and in Part V: Individual Fee 
Rationale of this rule, examining attorneys must carefully consider 
identifications entered in the free-form text box to determine whether 
the descriptions are acceptable as written or require amendment to 
sufficiently specify the nature of the goods and/or services. This 
applies even in situations where an applicant types or pastes the ID 
Manual identification. The USPTO believes this surcharge is 
proportionate to the additional costs associated with these more 
extensive reviews.
    Comment 52: One commenter disagreed with the free-form text box 
surcharge on the basis that applicants have historically had the 
ability to identify goods and/or services in the TEAS Standard 
application.
    Response: The USPTO acknowledges that applicants may identify goods 
and services in the TEAS Standard application. In order to do so, these 
applicants have paid a higher filing fee than for a TEAS Plus 
application, in which the goods and/or services must be chosen from the 
ID Manual within the form. Therefore, the additional surcharge for 
listing goods and/or services in the free-form text box of the base 
application versus selecting from the ID Manual is consistent with the 
higher TEAS Standard filing fee.
    Comment 53: Commenters requested clarification regarding when the 
character count surcharge will apply: at filing, when applications are 
acted upon by the agency, or when amended. Other commenters asked 
specifically about a USPTO-imposed requirement to further specify goods 
and/or services and the addition of exclusionary language to 
differentiate from the goods and/or services of third parties whose 
registrations or applications are cited during examination or asserted 
in an inter partes proceeding.
    Response: As discussed in Part V: Individual Fee Rationale of this 
rule, the character count surcharge will apply only at filing. A 
requirement to amend the identification to ensure it is sufficiently 
specific to provide adequate notice to third parties regarding the 
goods and/or services in connection with which the applicant intends to 
use or is using the mark will not trigger the surcharge, even if the 
amended identification exceeds 1,000 characters. The amendment of an 
identification to add exclusionary language also will not trigger the 
character count surcharge.
    Comment 54: Commenters requested clarification whether the 
character count surcharge will apply only to free-form descriptions or 
also to pre-approved descriptions from the ID Manual.
    Response: The character count surcharge will apply to free-form 
descriptions only. It will not apply to items selected from the ID 
Manual within the electronic application, including fill-ins.
    Comment 55: One commenter suggested that the surcharge for 
exceeding the 1,000-character limit, per class, would shift the burden 
of application examination from the examining attorney to the applicant 
at the preliminary filing stage.
    Response: As discussed in the NPRM, some identifications comprise 
many pages and include goods and/or services in multiple classes. In 
some cases, the applicant has paid the fee for only one class, although 
the listed goods and/or services are classified in multiple classes. 
Even when the goods and/or services are separated into classes, the 
examining attorney must carefully review the entire identification to 
ensure each item is sufficiently definite and properly classified. The 
surcharge does not shift any burden of proper examination from the 
examining attorney; rather, it ensures that applicants who submit 
lengthy identifications pay the costs of their review.
    Comment 56: Commenters, including the SBA, expressed concern that 
the character count surcharge may create inequities between applicants 
in different industries, with certain industries having easy-to-
describe goods or services that will not trigger the character count 
surcharge, while applicants in newer, more innovative industries may 
claim only two to three goods or services before incurring the 
surcharge.

[[Page 91080]]

    Response: As discussed above, applications with descriptions of 
goods and/or services comprising thousands of characters generate 
additional work for examining attorneys to determine whether the 
descriptions are acceptable as written or require amendment for 
sufficient specification. The increased costs of this additional work 
have historically been borne by all trademark owners, and the tiered 
system is designed to make application fees more equitable by aligning 
them with the required work.
    To avoid incurring the character count surcharge, applicants may 
submit new entries for inclusion in the ID Manual as described on the 
USPTO website at https://www.uspto.gov/trademarks/guides-and-manuals/trademark-identification-goods-and-services-manual-suggestions. As 
noted in responses to comments 48 and 49, the Administrator for 
Trademark Classification Policy and Practice will, typically within one 
to two business days, inform the submitting party whether the 
suggestion is accepted, rejected, or accepted in a modified form. If 
accepted, the ID generally will appear in the next available weekly 
update. If the entry is included in the ID Manual, the applicant may 
then choose it directly without incurring the character count 
surcharge, even it if exceeds 1,000 characters.
    Comment 57: The SBA noted that since goods and/or services cannot 
be added after submission of an application, it is common practice to 
file with a broader list and then refine it later. Therefore, the 
character count surcharge could be strategically restrictive to 
applicants.
    Response: Under this final rule, applicants may still submit broad 
lists by selecting items from the ID Manual. Identifications chosen 
from the ID Manual within the electronic application are not subject to 
the character count surcharge even if they exceed 1,000 characters. 
Applicants may also submit broad lists in the free-form text box but 
must pay the associated surcharge plus the character count surcharge 
for lists exceeding 1,000 characters to compensate for the additional 
time spent on those applications. To avoid these surcharges, applicants 
should make every effort to use the ID Manual within the electronic 
application, which includes thousands of identifications, or submit 
their custom identification for inclusion in the manual.
    Comment 58: One commenter suggested that the character limit 
surcharge may lead to more applications with less thorough 
descriptions, which could then result in more challenges related to the 
searching and clearing of marks.
    Response: The USPTO agrees that submitting indefinite or broad 
identifications could result in more Office actions that require 
sufficiently definite identifications and, in some cases, more 
likelihood-of-confusion refusals. Therefore, the agency encourages 
applicants to use identifications in clear, concise terms that the 
general public will easily understand and that accurately and 
completely describe the goods or services. Further, the USPTO notes 
that applicants may use the ID Manual within the electronic 
application, which includes thousands of identifications, to avoid the 
surcharge or submit their custom identification for inclusion in the 
manual.
    Comment 59: Commenters offered several alternatives for the USPTO 
to consider in place of the 1,000-character limit. The alternatives 
offered include a 2,000-character limit, a 3,000-character limit, and a 
limit on the number of goods and/or services separated by semicolons.
    Response: Based on an internal analysis, the USPTO determined that 
the 1,000-character limit strikes the balance of assessing a surcharge 
on applications that require more resources to examine without 
impacting a majority of applicants. As noted in Part V: Individual Fee 
Rationale, less than 5% of trademark applications contain custom 
identifications of goods and/or services that exceed 1,000 characters 
per class.
    Comment 60: One commenter suggested that if the USPTO institutes 
the free-form text box surcharge, then the character count surcharge is 
unnecessary.
    Response: Each surcharge serves a different purpose. As discussed 
in the NPRM and Part V: Individual Fee Rationale of this rule, 
examining attorneys generally do not need to review identifications of 
goods and/or services selected directly from the ID Manual within the 
electronic application. Conversely, examining attorneys must carefully 
consider identifications entered in the free-form text box to determine 
whether the descriptions are acceptable as written or require amendment 
to sufficiently specify the nature of the goods and/or services. In 
several cases, the identification comprised multiple pages and included 
goods and/or services in multiple classes. The character count 
surcharge ensures that applicants who submit lengthy identifications 
pay the costs of their review.
    Comment 61: One commenter expressed concern with spacing and 
punctuation being included in the character limit, suggesting that a 
word count would be a more equitable metric.
    Response: The USPTO considered both options and found that 
character counts are straightforward and predictable, and clearly 
reflect the customer's actions. Word counts are more complex and 
variable.
Madrid Application Filing Fees
    Comment 62: One commenter argued that it is not possible to 
implement the necessary operational, financial, and IT changes in a 
timely manner that would allow WIPO to determine if an international 
applicant should be charged the custom ID/free-form text surcharge.
    Response: Of the comments on various aspects of the Madrid 
Application Filing Fee system proposed in the NPRM, perhaps the most 
notable was regarding the inability of WIPO to institute a system to 
collect surcharges prior to recordation of the international 
registration or subsequent designation in the proposed timeframe. As a 
result, as discussed in Part V: Individual Fee Rationale, the USPTO 
will continue charging a flat application fee for Madrid applications. 
To align Madrid fees with domestic fees, per treaty obligations, the 
USPTO is adjusting the flat application fee to $600, which is 
commensurate with what applicants would expect to pay, on average, if 
filing directly under the base application and surcharge system. The 
USPTO will reconsider a base filing and surcharge system for Madrid 
applications when WIPO develops the capacity to implement surcharges.
    Comment 63: One commenter suggested an alternative way to implement 
the proposed application fee structure for Madrid applications, with 
applicants charged a flat application filing fee (that does not exceed 
the amount applicants would have paid to the USPTO) until WIPO is able 
to implement the necessary operational, financial, and IT changes 
required for the proposed fee structure. At that time, Madrid 
applicants would be charged a base application fee and the relevant 
surcharges, but the commenter suggested that the insufficient 
information surcharge is incompatible with the Madrid Protocol, and 
therefore applicants would not be charged this fee at any point.
    Response: The USPTO is implementing these suggestions in this final 
rule as discussed in the response to comment 62 and in Part V: 
Individual Fee Rationale. The USPTO will

[[Page 91081]]

reconsider a base filing and surcharge system for Madrid applications 
in the future when WIPO develops the capacity to implement surcharges. 
If so, the agency will ensure it complies with all treaty obligations 
when developing such a system.
    Comment 64: Commenters disagreed with charging Madrid applicants 
the insufficient information surcharge, claiming there is no legal 
basis for demanding any information beyond what is foreseen under 
Article 2 of the Madrid Protocol or for requiring additional payments 
for missing information.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the agency is maintaining a flat application 
fee for Madrid applications at this time. The USPTO may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges. If so, the USPTO 
will ensure it complies with all treaty obligations when developing 
such a system.
    Comment 65: Commenters disagreed with the surcharge system on the 
basis that there are no provisions in the Madrid System legal framework 
that would allow either WIPO or the USPTO to require additional fees 
after the international registration or subsequent designation has been 
recorded.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the agency is maintaining a flat application 
fee for Madrid applications at this time. The USPTO may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges. If so, the USPTO 
will ensure it complies with all treaty obligations when developing 
such a system.
    Comment 66: Commenters expressed concern about the burden 
application surcharges will place on foreign filers, asserting that the 
proposal could lead to unexpected charges for Madrid applicants who are 
unaware of USPTO guidelines. Commenters also suggested the surcharges 
could lead to unreasonable delays due to Office actions required to 
collect surcharge fees.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the agency is maintaining a flat application 
fee for Madrid applications at this time. Thus, there will be no delay 
in prosecuting Madrid applications because an Office action will not be 
needed to collect any surcharges after application submission. The 
USPTO may reconsider a base filing and surcharge system for Madrid 
applications in the future if WIPO develops the capacity to implement 
surcharges.
    Comment 67: One commenter asserted that the character count 
surcharge is prejudiced against foreign applicants and will price them 
out of registering marks in the United States.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the agency is maintaining a flat application 
fee for Madrid applications at this time. The USPTO may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges. Further, for 
applicants who file directly with the agency rather than using the 
Madrid Protocol, the character count surcharge will be applied to both 
foreign and domestic applicants.
    Comment 68: One commenter suggested that Madrid applicants should 
be given a clear and satisfactory method to satisfy the requirements of 
the proposed application system to avoid incurring any surcharges.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the USPTO is maintaining a flat application 
fee for Madrid applications at this time. The USPTO may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges.
    Comment 69: Some commenters expressed concern that Madrid filers 
may be given an advantage over domestic filers with the proposed 
application system because it is unclear how and when the proposed fees 
will be collected from Madrid applicants.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the agency is maintaining a flat application 
fee for Madrid applications at this time. In accordance with the Madrid 
Protocol's requirement that the fee for Madrid filers does not exceed 
that for domestic filers, the USPTO set this flat application fee 
commensurate with what applicants would expect to pay, on average, if 
filing directly with the USPTO under the base application and surcharge 
system. The agency may reconsider a base filing and surcharge system 
for Madrid applications in the future if WIPO develops the capacity to 
implement surcharges.
    Comment 70: Commenters expressed support for higher fees for Madrid 
applications. One commenter suggested that a flat fee priced at or 
above the estimated unit cost is the best option in the interests of 
American innovators and that strong arguments exist for pricing fees 
higher across the board for foreign filers, regardless of filing basis. 
Another commenter based their support on their belief that Madrid 
applications are more complex and have historically had higher 
processing costs than domestic applications.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the USPTO is maintaining a flat application 
fee for Madrid applications at this time. The agency may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges.
    The agency notes that the Agreement on Trade-Related Aspects of 
Intellectual Property Rights (TRIPS) requires that, with very limited 
exceptions, World Trade Organization (WTO) members provide national and 
most-favored-nation treatment to the nationals of other WTO members 
with regard to the protection and enforcement of IP rights. Higher fees 
for international filers from WTO member countries may conflict with 
this obligation.
    Finally, while the adjusted fee for Madrid applications remains 
below the estimated unit cost, the USPTO believes the new fees will be 
a step toward addressing the higher costs for such applications. The 
agency expects that ongoing collaboration with WIPO and other 
stakeholders will help harmonize applications and better align fees 
with costs.
    Comment 71: One commenter offered suggestions to improve 
implementation of the proposed application fee structure, assuming the 
proposed fees are in compliance with the Madrid Protocol. They 
suggested amending the WIPO designation forms to include explicit 
notices that failure to provide the required information will incur 
additional fees. They also suggested allowing Madrid applicants an 
additional three months from time of filing to find and appoint a U.S. 
attorney to amend, supplement, or otherwise provide any additional 
information to avoid incurring the surcharges.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the USPTO is maintaining a flat application 
fee for Madrid applications at this time. The agency may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges. The USPTO cannot 
make changes to forms submitted to WIPO but looks forward to ongoing 
collaboration

[[Page 91082]]

with WIPO and other stakeholders to help harmonize applications.
    Comment 72: One commenter argued that, regarding the free-form text 
and character count surcharges, brand owners who hold marks in multiple 
countries should continue to have freedom to choose how to draft a 
description of goods and services, including the degree of 
comprehensiveness.
    Response: As discussed in response to comment 62 and in Part V: 
Individual Fee Rationale, the agency is maintaining a flat application 
fee for Madrid applications at this time. The USPTO may reconsider a 
base filing and surcharge system for Madrid applications in the future 
if WIPO develops the capacity to implement surcharges.
    Applicants filing directly with the USPTO will continue to have 
freedom to choose how to draft a description of goods and/or services, 
but the free-form text box and character count surcharges will help 
recover the additional costs associated with more extensive reviews.
    Comment 73: One commenter noted that the ID Manual is not 
integrated with either the Madrid Goods and Services Database (MGS) 
administered by WIPO or the Harmonized Database available via the 
European Union Intellectual Property Office's (EUIPO) TMClass tool. The 
commenter asserted that it would be beneficial if these issues were 
addressed in the framework of global collaborative initiatives on 
classification.
    Response: This suggestion is outside the scope of this rulemaking.
Amendment To Allege Use and Statement of Use Fees
    Comment 74: Commenters supported charging identical fees for filing 
an amendment to allege use (AAU) or a statement of use (SOU).
    Response: The USPTO appreciates the commenters' support for this 
change.
    Comment 75: One commenter disagreed with the USPTO's decision to 
charge identical fee rates for filing an AAU or SOU, arguing that these 
fees should be set closer to their individual processing costs. The 
commenter also asserted that the agency should charge less for an AAU 
to incentivize applicants, because the AAUs create a stronger 
application since they are filed before initial examination.
    Response: Fees for the AAUs and SOUs remain aligned under this 
rulemaking to continue longstanding practice and because the ABI data 
suggest the agency's costs of examining the AAUs and SOUs are similar. 
The agency disagrees with the commenter's statement that the AAUs 
create a stronger application prior to examination. Although, in some 
cases, an AAU may be filed prior to initial examination, it is 
generally filed during the examination process or in response to an 
Office action. An SOU is filed during a defined statutory period after 
publication. Further, it is not clear that a lower fee for the AAUs 
will incentivize their filing versus the SOUs. In many cases, 
applicants are not prepared to show use of their mark in commerce prior 
to publication and will not benefit from lower fees for filing an 
allegation of use during that time.
    Comment 76: Commenters supported the USPTO's decision to not move 
forward with a proposal to increase the fees for a fourth or fifth 
request for an extension of time to file an SOU.
    Response: The USPTO appreciates the commenters' support for this 
decision.
    Comment 77: Commenters asserted that the increase to fees for 
filing an AAU or SOU are too high, with one commenter suggesting any 
increases should be limited to an inflationary adjustment because the 
work involved in processing them has not changed.
    Response: The USPTO appreciates the commenters' feedback. 
Examination time for the AAUs and SOUs has grown due to the increased 
submission of questionable specimens, resulting in the issuance of more 
Office actions. Further, the USPTO has not adjusted the AAU and SOU 
fees since 2002, and unit costs for these items continue to increase; 
the unit costs for FY 2023 are already close to or exceeding the 
adjusted rates.
    Comment 78: One commenter expressed concern that increasing the AAU 
and SOU fees may cause applicants to prematurely abandon their 
applications prior to registration, which would further decrease 
maintenance filings in the future.
    Response: The $50 increase in AAU and SOU fees is relatively small 
compared to both the overall costs of pursing trademark registration 
and the value of a registered trademark. Therefore, this fee increase 
should have little impact on the number of applicants who abandon their 
applications prior to registration.
    Comment 79: One commenter stated that fee increases for 
applications filed under section 1(b) of the Trademark Act were 
inappropriate and asserted that such applications save time during the 
initial examination compared to applications filed under section 1(a).
    Response: Applications filed under section 1(b) do not save time 
during the initial examination, as an AAU filed during the prosecution 
of a section 1(b) application (i.e., prior to publication) requires the 
examining attorney to, in essence, perform a second initial examination 
to ensure that the specimen of use submitted with the AAU shows use in 
commerce for the mark and goods and/or services identified in the 
application and that the dates of use and other required elements are 
acceptable. Similarly, an SOU filed after an issued notice of allowance 
requires the examining attorney to perform a similar review for 
acceptability.
Post-Registration Maintenance Fees
    Comment 80: Commenters stated that the increases to maintenance 
fees are too high, and any increases should be more aligned with the 
cost of providing these services.
    Response: The agency has an obligation to recover the aggregate 
costs of trademark operations through user fees, and above-cost post-
registration maintenance fees recover costs incurred by the USPTO 
during examination. If the agency were to set fee rates for maintenance 
fees lower than prescribed in this final rule, the change would need to 
be offset by raising other fees such as base application fees, reducing 
spending on core mission and strategic priorities, or depleting the 
operating reserves, significantly increasing financial risk to the 
agency.
    The share of applications from groups that have been historically 
less likely to maintain their registrations has increased. This shift 
in registration patterns generates less revenue. Therefore, the USPTO 
must adjust the balance between aggregate revenue derived from 
application fees and post-registration maintenance fees to sustain low 
barriers to filing new applications. Also, costs to process maintenance 
filings have increased due to higher inflationary costs, post-
registration audits, and elevated legal review to address potential 
fraud or improper filing behaviors.
    Comment 81: Commenters suggested that the increases to application 
fees, including the new surcharges, should be sufficient to address the 
higher costs of processing applications without increasing maintenance 
fees.
    Response: The USPTO has purposefully maintained initial fees below 
cost to reduce barriers to entry, resulting in a shortfall. Fees for 
post-registration activities help recover that shortfall. The agency 
reviews fees on a biennial basis, allowing the agency to balance costs 
associated with the services it provides stakeholders.
    The USPTO is increasing the fees for section 8 and section 71 
declarations of use because of the elevated level of effort and 
expertise involved in their

[[Page 91083]]

examination, which includes determining acceptability of their proof of 
use and whether the registration should be subject to audit. However, 
in light of comments raised by the public, the agency has reallocated 
some of the proposed fee increase from section 9 renewal applications 
to section 8 and section 71 declarations by lowering the proposed 
section 9 renewal fee and aligning it with section 8 and section 71 
declarations, setting all of these fees at $325 per class when filed 
electronically.
    Comment 82: One commenter suggested that lowering maintenance fees 
could increase the number of maintained registrations, potentially 
lowering the number of incoming applications and reducing overall costs 
to the USPTO.
    Response: While the agency has not conducted a full elasticity 
study, experience indicates that long-term maintenance trends are not 
due to fee rate changes. Maintenance trends vary from year to year, but 
when the USPTO lowered section 9 renewal fees in FY 2015, renewal rates 
decreased rather than increased. When the agency increased section 8 
declaration of use fees in FY 2017 and FY 2021, there was not a 
noticeable impact on maintenance rates.
    Comment 83: Commenters expressed concern that increases to 
maintenance fees will result in fewer trademark owners maintaining 
their registrations, making the register less reliable and leading to 
more owners relying on their common law rights, which could be 
problematic.
    Response: As noted in response to comment 82, registration renewal 
rates did not appreciably change in response to previous changes to 
post-registration maintenance fees.
    Comment 84: One commenter suggested that the increases to section 8 
and section 9 fees could lead to registrants filing new applications, 
rather than maintaining their existing registrations.
    Response: Although this result could happen, the registrant would 
bear the risks of losing their registration and the legal presumptions 
that accompany registration. Further, as noted in response to comment 
82, registration renewal rates did not appreciably change in response 
to the agency's previous changes to post-registration maintenance fees.
    Comment 85: One commenter asserted that the USPTO provided no data 
in the NPRM to support the assertion that setting renewal fees above 
unit cost is ``less likely to impact entrepreneurship.''
    Response: As noted in response to comment 82, registration renewal 
rates did not appreciably change in response to previous changes to 
post-registration maintenance fees. These fees are due at a time when 
the registrant has experienced several years of the benefits of 
registration. Further, fee collections from post-registration 
maintenance fees help the USPTO set initial filing fees below cost to 
encourage broader participation and open access to the trademark 
system. If the agency were to set fee rates for maintenance fees lower 
than prescribed in this final rule, the change would need to be offset 
by raising other fees such as base application fees, reducing spending 
on core mission and strategic priorities, or depleting the operating 
reserves, significantly increasing financial risk to the agency. The 
USPTO expects no negative impact on entrepreneurship from this rule.
Letter of Protest Fee
    Comment 86: One commenter expressed support for the $150 fee for 
letters of protest proposed in the NPRM, and the USPTO's responsiveness 
to the feedback from the public hearing after initially submitting to 
TPAC a fee of $250. The commenter suggested that the proposed smaller 
fee increase reflects the USPTO welcoming the public's support of and 
enthusiasm for the agency and its work.
    Response: The USPTO appreciates the commenter's support of its 
adjustment to the proposed fee.
    Comment 87: One commenter supported the proposed fee increase for 
letters of protest because they rarely alter an application's outcome.
    Response: The USPTO appreciates the commenter's support for the 
increased fee for letters of protest.
    Comment 88: Commenters suggested that the letters of protest fee 
should be either partially or fully refunded if the USPTO forwards the 
letter to an examining attorney.
    Response: The fee structure is designed to encourage the filing of 
relevant, well-supported letters of protest instead of frivolous 
filings. A relevant, well-supported letter of protest provides 
objective evidence bearing on the registrability of a mark. The unit 
costs for letters of protest are high because they are reviewed by 
specialized staff who must determine whether they comply with the 
requirements for submission and should be forwarded to the examining 
attorney. In addition, under the TMA, the USPTO must review and act on 
letters of protest within 60 days of receipt. The agency bears the 
costs of processing these letters regardless of whether they are 
forwarded to an examining attorney. In addition, the USPTO's refund 
authority is generally limited to fees paid by mistake or in excess of 
requirements.
    Comment 89: Commenters, including the SBA, asserted that the 
proposed increase to the letter of protest fee is too high and will 
discourage valuable submissions. They noted that letters of protest are 
valuable for filers and the USPTO because they provide industry 
expertise to examining attorneys and preserve the integrity of the 
trademark register. Some commenters suggested that well-founded letters 
of protest are a useful tool to avoid additional costs to the USPTO and 
can result in fewer challenges to registrability decisions.
    Response: As noted in the response to comment 88, the fee increase 
reflects the resources required to consider letters of protest. 
Specialized staff must determine if a letter of protest complies with 
submission requirements and whether to forward the letter to an 
examining attorney. In addition, under the TMA, the agency must review 
and act on letters of protest within 60 days of receipt.
    On the other hand, the commenters' statements regarding the value 
of letters of protest are not easily quantified. Many issues identified 
in letters of protest such as likelihood of confusion, descriptiveness, 
and non-use may have been identified independently without submission 
of the letter. Moreover, although examining attorneys may take into 
account evidence submitted in a letter of protest, they must still 
perform a complete examination of the relevant application. Finally, 
although the USPTO has not performed an elasticity analysis related to 
letters of protest, it notes that the number of letters decided has 
increased since it first introduced a letter of protest fee in 2021.
    Comment 90: One commenter stated the USPTO should create more 
detail positions for current USPTO employees to assist with the review 
of letters of protest and further automate the procedure for acceptance 
of these letters. The commenter asserted that this approach would 
reduce the overall processing costs for letters of protest.
    Response: Specialized staff must review and determine whether a 
letter of protest complies with submission requirements and whether to 
forward the letter of protest to the examining attorney, limiting 
opportunities for details or automation.
Other Petition Fees
    Comment 91: One commenter expressed concern that the increase to 
the fee for petitions to the Director is

[[Page 91084]]

unduly burdensome, because some petitions may be unavoidable due to 
actions outside of an applicant's control or needed to correct an error 
made by the USPTO. The commenter noted that some filers use petitions 
to protect themselves from scams, such as keeping a home address off 
the public record or requesting the withdrawal of an unauthorized 
filing. The commenter suggested that the USPTO provide separate forms 
at no or reduced cost for correcting errors made by third parties that 
are outside of the applicant's control.
    Response: If the need to file a petition is caused by the actions 
of a third party, such as a petition to withdraw an unauthorized 
filing, the agency does not require a petition fee, as long as the 
petitioner selects the appropriate option on the electronic form. If 
the petitioner pays the fee up front by mistake, the agency will refund 
it when the petition is granted.
    The fee is required for petitions to waive the domicile address 
requirement based on an extraordinary situation. However, if entered in 
the proper field, the domicile address is not part of the public 
record, and no petition would be required. Applicants and registrants 
may then designate a separate correspondence email address to receive 
information from the USPTO relating to their trademark. Applicants and 
registrants must always be cautious of communications regarding their 
application or registration. Scammers and private companies often use 
publicly viewable trademark information to call, mail, or email 
applicants and registrants with solicitations and scams, including 
posing as the USPTO.
    Comment 92: One commenter stated the increase to the fee for 
petitions to revive is too high because it is not proportional to the 
work being done, asserting that these petitions are automatically 
processed (i.e. processed without review) by the USPTO. The commenter 
further suggested that the USPTO should provide a refund in situations 
where the petition was required to correct an error made by the USPTO.
    Response: Only some petitions to revive an abandoned application 
under Sec.  2.66 are automatically processed. Also, in the case of 
agency error resulting in an abandoned application or a canceled or 
expired registration, the applicant or registrant may file a request to 
reinstate the application or registration under Sec.  2.64. There is no 
fee for a request for reinstatement. In addition, the USPTO's refund 
authority is generally limited to fees paid by mistake or in excess of 
what is required.

VII. Discussion of Specific Rules

    The following section describes the changes to the CFR for all fees 
set or adjusted in this final rule, including all fee amendments, fee 
discontinuations, and changes to the regulatory text.

Section 2.6

    Section 2.6 is amended by revising paragraph (a) to set forth 
trademark process fees as authorized under section 10 of the AIA. The 
changes to the fee amounts indicated in Sec.  2.6 are shown in table 
10.
    To clarify fees paid for filling applications under section 66(a) 
(Madrid Protocol) and renewing international registrations at WIPO, the 
USPTO adds paragraphs (a)(1)(ii)(A) and (B) and (a)(5)(iii).
    The USPTO amends paragraph (a)(1)(iii) to provide for filing ``an 
application electronically'' rather than filing ``a TEAS Standard 
application.''
    The USPTO amends paragraph (a)(1)(iv) to add the surcharge for 
insufficient information.
    The USPTO amends paragraph (a)(1)(v) to add the surcharge for 
adding goods and/or services in the free-form text box.
    The USPTO adds paragraph (a)(1)(vi) to add the surcharge for each 
additional 1,000 characters.
    The USPTO amends paragraphs (a)(2)(ii), (a)(3)(ii), (a)(4)(ii), 
(a)(5)(ii), (a)(6)(ii), (a)(7)(ii), (a)(8)(ii), (a)(9)(ii), 
(a)(10)(ii), (a)(11)(ii), (a)(12)(ii) and (iv), (a)(13)(ii), 
(a)(14)(ii), (a)(15)(ii) and (iv), (a)(16)(ii), (a)(17)(ii), 
(a)(18)(ii), (v), and (vii), (a)(19)(ii), (a)(20)(ii), (a)(21)(ii), 
(a)(22)(ii), (a)(23)(ii), (a)(27), and (a)(28)(ii) by replacing 
references to ``TEAS'' or ``ESTTA'' with ``electronically.''
    To clarify fees paid for services provided by the TTAB, the USPTO 
amends paragraphs (a)(18)(i) and (ii) by removing references to the 
TTAB and adding references to the TTAB to paragraphs (a)(16) through 
(18).

                                        Table 10--Sec.   2.6 Fee Changes
----------------------------------------------------------------------------------------------------------------
                                                                                                      Final rule
         CFR section              Fee code        Description     Paper or electronic   Current fee      fee
----------------------------------------------------------------------------------------------------------------
2.6(a)(1)(i).................  6001..........  Application       Paper................         $750         $850
                                                (paper), per
                                                class.
2.6(a)(1)(ii)(A).............  7931..........  Application fee   Electronic...........          500          600
                                                filed with WIPO
                                                (section
                                                66(a)), per
                                                class.
2.6(a)(1)(ii)(A).............  7933..........  Subsequent        Electronic...........          500          600
                                                designation fee
                                                filed with WIPO
                                                (section
                                                66(a)), per
                                                class.
2.6(a)(1)(iii)...............  7009..........  Application       Electronic...........          350  Discontinue
                                                (TEAS
                                                Standard), per
                                                class.
2.6(a)(1)(iii)...............  New...........  Base              Electronic...........          n/a          350
                                                application,
                                                per class.
2.6(a)(1)(iv)................  7007..........  Application       Electronic...........          250  Discontinue
                                                (TEAS Plus),
                                                per class.
2.6(a)(1)(iv)................  New...........  Fee for           Paper................          n/a          100
                                                insufficient
                                                information
                                                (sections 1 and
                                                44), per class.
2.6(a)(1)(iv)................  New...........  Fee for           Electronic...........          n/a          100
                                                insufficient
                                                information
                                                (sections 1 and
                                                44), per class.
2.6(a)(1)(v).................  6008..........  Fee for failing   Paper................          100  Discontinue
                                                to meet TEAS
                                                Plus
                                                requirements,
                                                per class.
2.6(a)(1)(v).................  7008..........  Fee for failing   Electronic...........          100  Discontinue
                                                to meet TEAS
                                                Plus
                                                requirements,
                                                per class.
2.6(a)(1)(v).................  New...........  Fee for using     Paper................          n/a          200
                                                the free-form
                                                text box to
                                                enter the
                                                identification
                                                of goods/
                                                services
                                                (sections 1 and
                                                44), per class.
2.6(a)(1)(v).................  New...........  Fee for using     Electronic...........          n/a          200
                                                the free-form
                                                text box to
                                                enter the
                                                identification
                                                of goods/
                                                services
                                                (sections 1 and
                                                44), per class.

[[Page 91085]]

 
2.6(a)(1)(vi)................  New...........  For each          Paper................          n/a          200
                                                additional
                                                group of 1,000
                                                characters
                                                beyond the
                                                first 1,000
                                                (sections 1 and
                                                44), per class
                                                (paper).
2.6(a)(1)(vi)................  New...........  For each          Electronic...........          n/a          200
                                                additional
                                                group of 1,000
                                                characters
                                                beyond the
                                                first 1,000
                                                (sections 1 and
                                                44), per class.
2.6(a)(2)(i).................  6002..........  Amendment to      Paper................          200          250
                                                allege use
                                                (AAU), per
                                                class.
2.6(a)(2)(ii)................  7002..........  Amendment to      Electronic...........          100          150
                                                allege use
                                                (AAU), per
                                                class.
2.6(a)(3)(i).................  6003..........  Statement of use  Paper................          200          250
                                                (SOU), per
                                                class.
2.6(a)(3)(ii)................  7003..........  Statement of use  Electronic...........          100          150
                                                (SOU), per
                                                class.
2.6(a)(5)(i).................  6201..........  Section 9         Paper................          500          525
                                                registration
                                                renewal
                                                application,
                                                per class.
2.6(a)(5)(ii)................  7201..........  Section 9         Electronic...........          300          325
                                                registration
                                                renewal
                                                application,
                                                per class.
2.6(a)(5)(iii)(A)............  7932..........  Renewal fee       Electronic...........          300          325
                                                filed at WIPO.
2.6(a)(12)(i)................  6205..........  Section 8         Paper................          325          425
                                                declaration,
                                                per class.
2.6(a)(12)(ii)...............  7205..........  Section 8         Electronic...........          225          325
                                                declaration,
                                                per class.
2.6(a)(13)(i)................  6208..........  Section 15        Paper................          300          350
                                                declaration,
                                                per class.
2.6(a)(13)(ii)...............  7208..........  Section 15        Electronic...........          200          250
                                                declaration,
                                                per class.
2.6(a)(15)(i)................  6005..........  Petition to the   Paper................          350          500
                                                Director.
2.6(a)(15)(ii)...............  7005..........  Petition to the   Electronic...........          250          400
                                                Director.
2.6(a)(15)(iii)..............  6010..........  Petition to       Paper................          250          350
                                                revive an
                                                application.
2.6(a)(15)(iv)...............  7010..........  Petition to       Electronic...........          150          250
                                                revive an
                                                application.
2.6(a)(25)...................  7011..........  Letter of         Electronic...........           50          150
                                                protest.
----------------------------------------------------------------------------------------------------------------

Section 2.22

    Section 2.22 is amended by revising the section heading and 
paragraph (a) to set forth the requirements for a base application fee.
    The USPTO is amending the section heading to read ``Requirements 
for a base application.''
    The USPTO is amending the introductory text to paragraph (a) to 
reflect the requirements for an application for registration under 
section 1 or section 44 of the Act that meet the requirements for a 
filing date under Sec.  2.21 to pay the base application fee.
    The USPTO removes paragraph (a)(7) and redesignates paragraphs 
(a)(8) through (20) as paragraphs (a)(7) through (19).
    The USPTO amends redesignated paragraph (a)(11) by replacing the 
reference to ``TEAS Plus form'' with ``application.''
    The USPTO amends paragraph (a)(17) by replacing references to 
``portrait'' with ``likeness'' to maintain consistency within the 
paragraph.
    The USPTO adds paragraph (a)(20) which establishes the requirement 
of using correctly classified goods and/or services from the ID Manual.
    The USPTO amends paragraph (b) to provide that an applicant must 
pay the fee for insufficient information, per class, if the application 
fails to satisfy any of the requirements in paragraphs (a)(1) through 
(19).
    The USPTO amends paragraph (c) to provide that an applicant must 
pay the fee for using the free-form text box to enter the 
identification of goods/services, per class, if the application fails 
to satisfy the requirements of paragraph (a)(20).
    The USPTO amends paragraph (d) to provide that an applicant must 
pay the fee for each additional group of 1,000 characters beyond the 
first 1,000, per class, if the application fails to satisfy the 
requirements of paragraph (a)(20) and the identification of goods and/
or services in any class exceeds 1,000 characters.

Section 7.6

    Section 7.6 is amended by revising paragraph (a) to set forth the 
schedule of U.S. process fees as authorized under section 10 of the 
AIA. The changes to the fee amounts in Sec.  7.6 are shown in table 11.
    The USPTO amends paragraph (a)(1)(ii), (a)(2)(ii), (a)(3)(ii), 
(a)(4)(ii), (a)(5)(ii), and (a)(6)(ii) and (iv) by replacing references 
to ``TEAS'' or ``ESTTA'' with ``electronically.''

                                        Table 11--Sec.   7.6 Fee Changes
----------------------------------------------------------------------------------------------------------------
                                                                                                      Final rule
         CFR section              Fee code        Description     Paper or electronic   Current fee      fee
----------------------------------------------------------------------------------------------------------------
7.6(a)(6)(i).................  6905..........  Section 71        Paper................         $325         $425
                                                declaration,
                                                per class.
7.6(a)(6)(ii)................  7905..........  Section 71        Electronic...........          225          325
                                                declaration,
                                                per class.
----------------------------------------------------------------------------------------------------------------

VIII. Rulemaking Considerations

A. America Invents Act

    This final rule seeks to set and adjust fees under section 10(a) of 
the AIA as amended by the SUCCESS Act. Section 10(a) authorizes the 
Director to set or adjust by rule any trademark fee established, 
authorized, or charged under the Trademark Act for any services 
performed by, or materials furnished by, the USPTO (see section 10 of 
the AIA, Pub. L. 112-29, 125 Stat. 284, 316-17, as amended by Pub. L. 
115-273, 132 Stat. 4158). Section 10 authority includes flexibility to 
set

[[Page 91086]]

individual fees in a way that furthers key policy factors, while taking 
into account the cost of the respective services.
    Section 10(e) sets forth the general requirements for rulemakings 
that set or adjust fees under this authority. In particular, section 
10(e)(1) requires the Director to publish in the Federal Register any 
proposed fee change under section 10 and include in such publication 
the specific rationale and purpose for the proposal, including the 
possible expectations or benefits resulting from the proposed change. 
For such rulemakings, the AIA requires that the USPTO provide a public 
comment period of not less than 45 days.
    TPAC advises the Under Secretary of Commerce for Intellectual 
Property and Director of the USPTO on the management, policies, goals, 
performance, budget, and user fees of trademark operations. When 
adopting fees under section 10, the AIA requires the Director to 
provide TPAC with the proposed fees at least 45 days prior to 
publishing them in the Federal Register. TPAC then has at least 30 days 
within which to deliberate, consider, and comment on the proposal, as 
well as hold a public hearing(s) on the proposed fees. TPAC must make a 
written report available to the public of the comments, advice, and 
recommendations of the committee regarding the proposed fees before the 
USPTO issues any final fees. The USPTO is required to consider and 
analyze any comments, advice, or recommendations received from TPAC 
before finally setting or adjusting fees.
    Consistent with this framework, on May 8, 2023, the Director 
notified TPAC of the USPTO's intent to set and adjust trademark fees 
and submitted a preliminary trademark fee proposal with supporting 
materials. The preliminary trademark fee proposal and associated 
materials are available on the fee setting section of the USPTO website 
at https://www.uspto.gov/FeeSettingAndAdjusting. TPAC held a public 
hearing at the USPTO's headquarters in Alexandria, Virginia, on June 5, 
2023, and members of the public were given the opportunity to provide 
oral testimony. A transcript of the hearing is available on the USPTO 
website at https://www.uspto.gov/sites/default/files/documents/TPAC-Fee-Setting-Hearing-Transcript-20230605.pdf. Members of the public were 
also given the opportunity to submit written comments for TPAC to 
consider, and these comments are available on Regulations.gov at 
https://www.regulations.gov/docket/PTO-T-2023-0016. On August 14, 2023, 
TPAC issued a written report setting forth in detail its comments, 
advice, and recommendations regarding the preliminary proposed fees. 
The TPAC Report is available on the USPTO website at https://www.uspto.gov/sites/default/files/documents/TPAC-Report-on-2023-Fee-Proposal.docx. The USPTO considered and analyzed all comments, advice, 
and recommendations received from TPAC before publishing the NPRM on 
March 26, 2024 (89 FR 20897). The NPRM comment period closed on May 28, 
2024. Section 10(e) of the Act requires the Director to publish the 
final fee rule in the Federal Register and the Official Gazette of the 
USPTO at least 45 days before the final fees become effective. Pursuant 
to this requirement, this rule is effective on January 18, 2025.

B. Regulatory Flexibility Act (RFA)

    The USPTO publishes this Final Regulatory Flexibility Analysis 
(FRFA) as required by the RFA (5 U.S.C. 601 et seq.) to examine the 
impact of the USPTO's changes to trademark fees on small entities. 
Under the RFA, whenever an agency is required by 5 U.S.C. 553 (or any 
other law) to publish an NPRM, the agency must prepare and make 
available for public comment an initial regulatory flexibility analysis 
(IRFA), unless the agency certifies under 5 U.S.C. 605(b) that the 
proposed rule, if implemented, will not have a significant economic 
impact on a substantial number of small entities (see 5 U.S.C. 603, 
605).
    The agency published an IRFA, along with the NPRM, on March 26, 
2024 (89 FR 20897). Given that the final trademark fee schedule, based 
on the assumptions found in the FY 2025 Budget, is projected to result 
in $696.8 million in additional aggregate revenue over the current fee 
schedule (baseline) for the period including FY 2025 to FY 2029, the 
USPTO acknowledges that the fee adjustments will impact all entities 
seeking or maintaining a trademark registration. The $696.8 million in 
additional aggregate revenue results from an additional $102.5 million 
in FY 2025, $146.0 million in FY 2026, $143.2 million in FY 2027, 
$149.5 million in FY 2028, and $155.7 million in FY 2029. This implies 
annualized effects of $138.9 million using a 3% discount rate and 
$138.0 million using a 7% discount rate.
    Items 1-6 below discuss the six items specified in 5 U.S.C. 
604(a)(1)-(6) to be addressed in an FRFA. Item 6 below discusses 
alternatives to this final rule that the agency considered.
1. A Statement of the Need for, and Objectives of, the Rule
    Section 10 of the AIA authorizes the Director of the USPTO to set 
or adjust by rule any trademark fee established, authorized, or charged 
under title 35 U.S.C., for any services performed, or materials 
furnished, by the USPTO. Section 10 prescribes that trademark fees may 
be set or adjusted only to recover the aggregate estimated costs for 
processing, activities, services, and materials relating to trademarks, 
including USPTO administrative costs with respect to such trademark 
fees. The final rule will recover the aggregate costs of trademark 
operations while enabling the USPTO to predictably finance the agency's 
daily operations and mitigate financial risks.
2. A Statement of the Significant Issues Raised by the Public Comments 
in Response to the Initial Regulatory Flexibility Analysis, a Statement 
of the Assessment of the Agency of Such Issues, and a Statement of Any 
Changes Made in the Final Rule as a Result of Such Comments
    The USPTO received two public comments in response to the IRFA. 
Details of those comments and the USPTO's responses are discussed and 
analyzed above in Part VI: Discussion of Comments, specifically 
comments 10 and 13. No changes were made in the final rule as a result 
of these comments.
3. The Response of the Agency to Any Comments Filed by the Chief 
Counsel for Advocacy of the Small Business Administration in Response 
to the Proposed Rule, and a Detailed Statement of Any Change Made to 
the Proposed Rule in the Final Rule as a Result of the Comments
    The Office of Advocacy for the Small Business Administration 
submitted a comment on the proposed rule on May 28, 2024, and it is 
available on Regulations.gov at https://www.regulations.gov/comment/PTO-T-2022-0034-0025. Summaries of the SBA's comments and the USPTO's 
responses are detailed above in Part VI: Discussion of Comments, 
specifically comments 12, 13, 21, 36, 48, 56, 57, and 89. No changes 
were made in the final rule as a result of these comments.
4. A Description of and, Where Feasible, an Estimate of the Number of 
Small Entities to Which the Rule Will Apply or an Explanation of Why No 
Such Estimate Is Available
    The USPTO does not collect or maintain statistics in trademark 
cases on small- versus large-entity applicants, and this information 
would be required

[[Page 91087]]

to determine the number of small entities affected by this final rule.
    This final rule applies to any entity filing trademark documents 
with the USPTO. The USPTO estimates, based on the assumptions in the FY 
2025 Budget, that during the first full fiscal year under the fees as 
proposed (FY 2026), the USPTO would collect approximately $146 million 
more in trademark processing and TTAB fees compared to projected fee 
collections under the current fee schedule. The USPTO would receive an 
additional $100 million in application filing fees, including 
applications filed through the Madrid Protocol and application 
surcharges; $4 million more from petitions, letters of protest, and 
requests for reconsideration; $7 million more from SOU and AAU fees; 
and $35 million more for post-registration maintenance fees, including 
sections 9 and 66 renewals and sections 8, 71, and 15 declarations.
    The USPTO collects fees for trademark-related services at different 
points in the trademark application examination process and over the 
registration life cycle. In FY 2023, application filing fees made up 
about 54% of all trademark fee collections. Fees for proceedings and 
appeals before the TTAB comprised 3% of revenues. Fees from other 
trademark activities, petitions, assignments and certifications, and 
Madrid processing totaled approximately 5% of revenues. Fees for post-
registration and intent-to-use filings, which subsidize the costs of 
filing, search, examination, and the TTAB, comprised 38%.
    The USPTO bases its five-year estimated aggregate trademark fee 
revenue on the number of trademark applications and other fee-related 
filings it expects for a given fiscal year, work it expects to process 
in a given fiscal year (an indicator of fees paid after the agency 
performs work, such as SOU fees), expected examination and process 
requests in a given fiscal year, and the expected number of post-grant 
decisions to maintain trademark protection in a given fiscal year. 
Within its iterative process for estimating aggregate revenue, the 
USPTO adjusts individual fee rates up or down based on policy and cost 
considerations and then multiplies the resulting fee rates by 
appropriate workload volumes to calculate a revenue estimate for each 
fee, which is then used to calculate aggregate revenue. Additional 
details about the USPTO's aggregate revenue, including projected 
workloads by fee, are available on the fee setting section of the USPTO 
website at https://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
5. A Description of the Projected Reporting, Recordkeeping, and Other 
Compliance Requirements of the Rule, Including an Estimate of the 
Classes of Small Entities Which Will Be Subject to the Requirement and 
the Type of Professional Skills Necessary for Preparation of the Report 
or Record
    This final rule imposes no new reporting or recordkeeping 
requirements. The main purpose of this final rule is to set and adjust 
trademark fees.
    6. A Description of the Steps the Agency Has Taken To Minimize the 
Significant Economic Impact on Small Entities Consistent With the 
Stated Objectives of Applicable Statutes, Including a Statement of the 
Factual, Policy, and Legal Reasons for Selecting the Alternative 
Adopted in the Final Rule and Why Each One of the Other Significant 
Alternatives to the Rule Considered by the Agency Which Affect the 
Impact on Small Entities Was Rejected
    The USPTO considered several alternative approaches to this final 
rule based on the assumptions found in the FY 2025 Budget. These 
alternatives are: (1) a description of the fee schedule adopted in this 
final rule; (2) fees set at the unit cost of providing individual 
services based on FY 2022 costs; (3) an across-the-board fee adjustment 
of 27%; and (4) no change to the baseline of current fees. The four 
alternatives are explained here with additional information regarding 
the development of each proposal and aggregate revenue estimate. A 
description of the Aggregate Revenue Estimating Methodology is 
available on the fee setting section of the USPTO website at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
a. Alternative 1: Final Trademark Fee Schedule--Setting and Adjusting 
Trademark Fees During Fiscal Year 2025
    The USPTO is setting or adjusting trademark fees codified in 37 CFR 
parts 2 and 7. Fees are adjusted for all application filing types 
(i.e., paper applications, electronic applications, and requests for 
extension of protection under section 66(a) of the Trademark Act (15 
U.S.C. 1141f)), including new surcharge fees. The USPTO also is 
increasing other trademark fees to promote effective administration of 
the trademark system, including fees for post-registration maintenance 
under sections 8, 9, and 71, certain petitions to the Director, and 
filing a letter of protest.
    The USPTO chose the adjustments established in this final rule 
because they will enable the agency to achieve its goals effectively 
and efficiently without unduly burdening small entities, erecting 
barriers to entry, or stifling incentives to innovate. The alternative 
established here finances the USPTO's objectives for meeting its goals 
outlined in the Strategic Plan. These goals include optimizing 
trademark application pendency through the promotion of efficient 
operations and filing behaviors, issuing accurate and reliable 
trademark registrations, and encouraging access to the trademark system 
for all stakeholders. All applicants and registrants will benefit under 
this final rule because it will allow the agency to grant registrations 
sooner and more efficiently. All trademark applicants should benefit 
from the efficiencies realized under the final rule.
    The USPTO anticipates that the impact of an increased fee on letter 
of protest filers would be small. The fee of $150 is set at a level low 
enough to enable the filing of relevant, well-supported letters, but 
high enough to recover some additional processing costs. The USPTO 
enacted the current fee for letters of protest on November 17, 2020, 
(85 FR 73197) and implemented it on January 2, 2021. Despite this fee, 
the USPTO received almost 4,000 letters in each of the last two fiscal 
years and expects the volume will grow to more than 5,000 letters per 
year by FY 2029.
    The fee schedule under this final rule is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Trademark Fees During Fiscal Year 2025: Final Regulatory Flexibility 
Act Tables.''
b. Other Alternatives Considered
    In addition to the final fee schedule set forth in Alternative 1, 
the USPTO considered three other alternative approaches. The agency 
calculated proposed fees and the resulting revenue derived from each 
alternative scenario. The proposed fees and their corresponding revenue 
tables are available on the fee setting section of the USPTO website at 
https://www.uspto.gov/FeeSettingAndAdjusting. Please note, only the 
fees outlined in Alternative 1 are set or adjusted in this final rule; 
other alternative scenarios are shown only to demonstrate the analysis 
of other options.

[[Page 91088]]

Alternative 2: Unit Cost Recovery
    The USPTO considered an alternative that would set all trademark 
fees to recover 100% of unit costs associated with each service, based 
on historical unit costs. The USPTO uses the ABI to determine the unit 
costs of activities that contribute to the services and processes 
associated with individual fees. It is common practice in the Federal 
Government to set a particular fee at a level that recovers the cost of 
a given good or service. OMB Circular A-25, User Charges, states that 
user charges (fees) should be sufficient to recover the full cost to 
the Federal Government of providing the particular service, resource, 
or good when the Government is acting in its capacity as sovereign. 
Under the USPTO's unit cost recovery alternative, fees are generally 
set in line with the FY 2022 costs of providing the service. The agency 
recognizes that this approach does not account for changes in the fee 
structure or inflationary factors that could likely increase the costs 
of certain trademark services and necessitate higher fees in the 
outyears. However, the USPTO contends that FY 2022 data is the best 
available to inform this analysis.
    This alternative does not align well with the strategic and policy 
goals of this final rule. It would produce a structure in which 
application and processing fees would increase significantly for all 
applicants, and post-registration maintenance filing fees would 
decrease dramatically when compared with current fees. The USPTO 
rejected this alternative because it does not address improvements in 
fee design to accomplish the agency's stated objectives of encouraging 
broader usage of IP rights-protection mechanisms and participation by 
more trademark owners, as well as practices that improve process 
efficiency.
    The fee schedule for this alternative is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Trademark Fees During Fiscal Year 2025: Final Regulatory Flexibility 
Act Tables.''
Alternative 3: Across-the-Board Adjustment
    The USPTO considered a 27% across-the-board increase for all fees. 
This alternative would maintain the status quo structure of cost 
recovery, where processing and examination costs are subsidized by fees 
for ITU extensions and post-registration maintenance filings (which 
exceed the cost of performing these services), given that all fees 
would be adjusted by the same escalation factor. This fee schedule 
would continue to promote innovation strategies and allow applicants to 
gain access to the trademark system through fees set below cost, while 
registrants pay maintenance fees above cost to subsidize the below-cost 
front-end fees. This alternative would also generate sufficient 
aggregate revenue to recover aggregate operating costs.
    The USPTO ultimately rejected this proposal. Unlike the final fee 
schedule, it would not enhance the efficiency of trademark processing 
and offer no new incentives for users to file more efficient and 
complete applications.
    The proposed fee schedule for this alternative is available in the 
document titled ``Setting and Adjusting Trademark Fees During Fiscal 
Year 2025: Final Regulatory Flexibility Act Tables'' at http://www.uspto.gov/about-us/performance-and-planning/fee-setting-and-adjusting.
Alternative 4: Baseline (Current Fee Schedule)
    The final alternative the USPTO considered would leave all 
trademark fees as currently set. The USPTO rejected this alternative 
because, due to changes in demand for certain services and rising 
costs, a fee increase is necessary to meet future budgetary 
requirements as described in the FY 2025 Budget. Under this 
alternative, the USPTO would expect to collect sufficient revenue to 
continue executing only some, but not all, trademark priorities. This 
approach would not provide sufficient aggregate revenue to accomplish 
the USPTO's rulemaking goals as stated in Part IV: Rulemaking Goals and 
Strategies. Improvement activities, including better protecting the 
trademark register, enhanced IT, and tactical management programs would 
continue, but at a significantly slower rate as increases in core 
trademark examination costs crowd out funding for other improvements. 
Likewise, without a fee increase, the USPTO would deplete its trademark 
operating reserve, leaving the agency vulnerable to fiscal and economic 
events. This alternative would expose core operations to unacceptable 
levels of financial risk and position the USPTO to return to making 
inefficient, short-term funding decisions.
    The fee schedule for this alternative is available on the fee 
setting section of the USPTO website at https://www.uspto.gov/FeeSettingAndAdjusting, in the document titled ``Setting and Adjusting 
Trademark Fees During Fiscal Year 2025: Final Regulatory Flexibility 
Act Tables.''

C. Executive Order 12866 (Regulatory Planning and Review)

    This rulemaking has been determined to be significant for purposes 
of Executive Order (E.O.) 12866 (Sept. 30, 1993), as amended by E.O. 
14094 (April 6, 2023), Modernizing Regulatory Review.

D. Executive Order 13563 (Improving Regulation and Regulatory Review)

    The USPTO has complied with E.O. 13563 (Jan. 18, 2011). 
Specifically, the USPTO has, to the extent feasible and applicable: (1) 
made a reasoned determination that the benefits justify the costs of 
this final rule; (2) tailored this final rule to impose the least 
burden on society consistent with obtaining the regulatory objectives; 
(3) selected a regulatory approach that maximizes net benefits; (4) 
specified performance objectives; (5) identified and assessed available 
alternatives; (6) involved the public in an open exchange of 
information and perspectives among experts in relevant disciplines, 
affected stakeholders in the private sector, and the public as a whole, 
and provided online access to the rulemaking docket; (7) attempted to 
promote coordination, simplification, and harmonization across 
government agencies and identified goals designed to promote 
innovation; (8) considered approaches that reduce burdens and maintain 
flexibility and freedom of choice for the public; and (9) ensured the 
objectivity of scientific and technological information and processes.

E. Executive Order 13132 (Federalism)

    This rulemaking does not contain policies with federalism 
implications sufficient to warrant preparation of a Federalism 
Assessment under E.O. 13132 (Aug. 4, 1999).

F. Executive Order 13175 (Tribal Consultation)

    This rulemaking will not: (1) have substantial direct effects on 
one or more Indian Tribes; (2) impose substantial direct compliance 
costs on Indian Tribal governments; or (3) preempt Tribal law. 
Therefore, a Tribal summary impact statement is not required under E.O. 
13175 (Nov. 6, 2000).

G. Executive Order 13211 (Energy Effects)

    This rulemaking is not a significant energy action under E.O. 13211 
because this final rulemaking is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy.

[[Page 91089]]

Therefore, a Statement of Energy Effects is not required under E.O. 
13211 (May 18, 2001).

H. Executive Order 12988 (Civil Justice Reform)

    This rulemaking meets applicable standards to minimize litigation, 
eliminate ambiguity, and reduce burden as set forth in sections 3(a) 
and 3(b)(2) of E.O. 12988 (Feb. 5, 1996).

I. Executive Order 13045 (Protection of Children)

    This rulemaking does not concern an environmental risk to health or 
safety that may disproportionately affect children under E.O. 13045 
(Apr. 21, 1997).

J. Executive Order 12630 (Taking of Private Property)

    This rulemaking will not affect a taking of private property or 
otherwise have taking implications under E.O. 12630 (Mar. 15, 1988).

K. Congressional Review Act

    Under the Congressional Review Act provisions of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq.), the 
USPTO will submit a report containing the rule and other required 
information to the United States Senate, the United States House of 
Representatives, and the Comptroller General of the GAO. The changes in 
this final rule are expected to result in an annual effect on the 
economy of $100 million or more, a major increase in costs or prices, 
or significant adverse effects on competition, employment, investment, 
productivity, innovation, or the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets. Therefore, this final rule meets the criteria in 5 
U.S.C. 804(2).

L. Unfunded Mandates Reform Act of 1995

    The changes set forth in this rulemaking do not involve a Federal 
intergovernmental mandate that will result in the expenditure by State, 
local, and Tribal governments, in the aggregate, of $100 million (as 
adjusted) or more in any one year, or a Federal private sector mandate 
that will result in the expenditure by the private sector of $100 
million (as adjusted) or more in any one year and will not 
significantly or uniquely affect small governments. Therefore, no 
actions are necessary under the provisions of the Unfunded Mandates 
Reform Act of 1995. See 2 U.S.C. 1501 et seq.

M. National Environmental Policy Act

    This rulemaking will not have any effect on the quality of the 
environment and is thus categorically excluded from review under the 
National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

N. National Technology Transfer and Advancement Act

    The requirements of section 12(d) of the National Technology 
Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not 
applicable because this rulemaking does not contain provisions that 
involve the use of technical standards.

O. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
requires that the USPTO consider the impact of paperwork and other 
information collection burdens imposed on the public. The collection of 
information involved in this final rule has been reviewed and 
previously approved by OMB under control numbers 0651-0009, 0651-0050, 
0651-0051, 0651-0054, 0651-0055, and 0651-0061. In addition, updates to 
the aforementioned information collections as a result of this final 
rule will be submitted to the OMB as non-substantive change requests.
    Notwithstanding any other provision of law, no person is required 
to respond to nor shall any person be subject to a penalty for failure 
to comply with a collection of information subject to the requirements 
of the Paperwork Reduction Act unless that collection of information 
displays a currently valid OMB control number.

P. E-Government Act Compliance

    The USPTO is committed to compliance with the E-Government Act to 
promote the use of the internet and other information technologies, to 
provide increased opportunities for citizen access to government 
information and services, and for other purposes.

List of Subjects

37 CFR Part 2

    Administrative practice and procedure, Courts, Lawyers, Trademarks.

37 CFR Part 7

    Administrative practice and procedure, Trademarks.

    For the reasons set forth in the preamble, and under the authority 
contained in section 10(a) of the AIA, 15 U.S.C. 1113, 1123, and 35 
U.S.C. 2, as amended, 37 CFR parts 2 and 7 are amended as follows:

PART 2--RULES OF PRACTICE IN TRADEMARK CASES

0
1. The authority citation for part 2 continues to read as follows:

    Authority: 15 U.S.C. 1113, 1123; 35 U.S.C. 2; sec. 10, Pub. L. 
112-29, 125 Stat. 284; Pub. L. 116-260, 134 Stat. 1182, unless 
otherwise noted. Sec. 2.99 also issued under secs. 16, 17, 60 Stat. 
434; 15 U.S.C. 1066, 1067.


0
2. Section 2.6 is amended by revising paragraphs (a)(1), (2), and (3), 
(a)(4)(ii), (a)(5), (a)(6)(ii), (a)(7)(ii), (a)(8)(ii), (a)(9)(ii), 
(a)(10)(ii), (a)(11)(ii), (a)(12)(i), (ii), and (iv), (a)(13), 
(a)(14)(ii), (a)(15), (a)(16) heading, (a)(16)(ii), (a)(17) heading, 
(a)(17)(ii), (a)(18) heading, (a)(18)(i), (ii), (v), and (vii), 
(a)(19)(ii), (a)(20)(ii), (a)(21)(ii), (a)(22)(ii), (a)(23)(ii), 
(a)(25) and (27), and (a)(28)(ii) to read as follows:


Sec.  2.6  Trademark fees.

    (a) * * *
    (1) Application filing fees. (i) For filing an application on 
paper, per class--$850.00
    (ii) For filing an application under section 66(a) of the Act, per 
class:
    (A) For an international application having a receipt date that is 
on or after February 18, 2025--$600
    (B) For an international application having a receipt date that is 
before February 18, 2025--$500.00
    (iii) For filing an application electronically, per class--$350.00
    (iv) Additional fee under Sec.  2.22(b), per class--$100.00
    (v) Additional fee under Sec.  2.22(c), per class--$200.00
    (vi) Additional fee under Sec.  2.22(d) for each additional 1,000 
characters in identifications of goods/services beyond the first 1,000 
characters, per class--$200.00
    (2) Amendment to allege use. (i) For filing an amendment to allege 
use under section 1(c) of the Act on paper, per class--$250.00
    (ii) For filing an amendment to allege use under section 1(c) of 
the Act electronically, per class--$150.00
    (3) Statement of use. (i) For filing a statement of use under 
section 1(d)(1) of the Act on paper, per class--$250.00
    (ii) For filing a statement of use under section 1(d)(1) of the Act 
electronically, per class--$150.00
    (4) * * *
    (ii) For filing a request under section 1(d)(2) of the Act for a 
six-month extension of time for filing a statement of use under section 
1(d)(1) of the Act electronically, per class--$125.00
    (5) Application for renewal of a registration fees. (i) For filing 
an

[[Page 91090]]

application for renewal of a registration on paper, per class--$525.00
    (ii) For filing an application for renewal of a registration 
electronically, per class--$325.00
    (iii) For filing an application for renewal of a registration 
electronically, pursuant to Sec.  7.41 of this chapter:
    (A) On or after February 18, 2025, per class--$325.00
    (B) Before February 18, 2025, per class--$300.00
    (6) * * *
    (ii) Additional fee for filing a renewal application during the 
grace period electronically, per class--$100.00
    (7) * * *
    (ii) For filing to publish a mark under section 12(c), per class 
electronically--$100.00
    (8) * * *
    (ii) For issuing a new certificate of registration upon request of 
registrant, request filed electronically--$100.00
    (9) * * *
    (ii) For a certificate of correction of registrant's error, request 
filed electronically--$100.00
    (10) * * *
    (ii) For filing a disclaimer to a registration electronically--
$100.00
    (11) * * *
    (ii) For filing an amendment to a registration electronically--
$100.00
* * * * *
    (12) * * *
    (i) For filing an affidavit under section 8 of the Act on paper, 
per class--$425.00
    (ii) For filing an affidavit under section 8 of the Act 
electronically, per class--$325.00
* * * * *
    (iv) For deleting goods, services, and/or classes after submission 
and prior to acceptance of an affidavit under section 8 of the Act 
electronically, per class--$250.00
    (13) Affidavit under section 15. (i) For filing an affidavit under 
section 15 of the Act on paper, per class--$350.00
    (ii) For filing an affidavit under section 15 of the Act 
electronically, per class--$250.00
    (14) * * *
    (ii) Additional fee for filing a section 8 affidavit during the 
grace period electronically, per class--$100.00
    (15) Petitions to the Director. (i) For filing a petition under 
Sec.  2.146 or Sec.  2.147 on paper--$500.00
    (ii) For filing a petition under Sec.  2.146 or Sec.  2.147 
electronically--$400.00
    (iii) For filing a petition under Sec.  2.66 on paper--$350.00
    (iv) For filing a petition under Sec.  2.66 electronically--$250.00
    (16) Petition to cancel to the Trademark Trial and Appeal Board. * 
* *
    (ii) For filing a petition to cancel electronically, per class--
$600.00
    (17) Notice of opposition to the Trademark Trial and Appeal Board. 
* * *
    (ii) For filing a notice of opposition electronically, per class--
$600.00
    (18) Ex parte appeal to the Trademark Trial and Appeal Board. (i) 
For filing an ex parte appeal on paper, per class--$325.00
    (ii) For filing an ex parte appeal electronically, per class--
$225.00
* * * * *
    (v) For filing a second or subsequent request for an extension of 
time to file an appeal brief electronically, per application--$100.00
* * * * *
    (vii) For filing an appeal brief electronically, per class--$200.00
    (19) * * *
    (ii) Request to divide an application filed electronically, per new 
application created--$100.00
    (20) * * *
    (ii) For correcting a deficiency in a section 8 affidavit via 
electronic filing--$100.00
    (21) * * *
    (ii) For correcting a deficiency in a renewal application via 
electronic filing--$100.00
    (22) * * *
    (ii) For filing a request for an extension of time to file a notice 
of opposition under Sec.  2.102(c)(1)(ii) or (c)(2) electronically--
$200.00
    (23) * * *
    (ii) For filing a request for an extension of time to file a notice 
of opposition under Sec.  2.102(c)(3) electronically--$400.00
* * * * *
    (25) Letter of protest. For filing a letter of protest, per subject 
application--$150.00
* * * * *
    (27) Extension of time for filing a response to a non-final Office 
action under Sec.  2.93(b)(1). For filing a request for extension of 
time for filing a response to a non-final Office action under Sec.  
2.93(b)(1) electronically--$125.00
    (28) * * *
    (ii) For filing a request for an extension of time for filing a 
response to an Office action under Sec.  2.62(a)(2) electronically--
$125.00
* * * * *

0
3. Section 2.22 is revised and republished to read as follows:


Sec.  2.22   Requirements for a base application.

    (a) An application for registration under section 1 and/or section 
44 of the Act that meets the requirements for a filing date under Sec.  
2.21 will be subject only to the filing fee under Sec.  2.6(a)(1)(iii) 
if it includes:
    (1) The applicant's name and domicile address;
    (2) The applicant's legal entity;
    (3) The citizenship of each individual applicant, or the state or 
country of incorporation or organization of each juristic applicant;
    (4) If the applicant is a domestic partnership, the names and 
citizenship of the general partners, or if the applicant is a domestic 
joint venture, the names and citizenship of the active members of the 
joint venture;
    (5) If the applicant is a sole proprietorship, the state of 
organization of the sole proprietorship and the name and citizenship of 
the sole proprietor;
    (6) One or more bases for filing that satisfy all the requirements 
of Sec.  2.34. If more than one basis is set forth, the applicant must 
comply with the requirements of Sec.  2.34 for each asserted basis;
    (7) If the application contains goods and/or services in more than 
one class, compliance with Sec.  2.86;
    (8) A filing fee for each class of goods and/or services, as 
required by Sec.  2.6(a)(1)(ii) or (iii);
    (9) A verified statement that meets the requirements of Sec.  2.33, 
dated and signed by a person properly authorized to sign on behalf of 
the owner pursuant to Sec.  2.193(e)(1);
    (10) If the applicant does not claim standard characters, the 
applicant must attach a digitized image of the mark. If the mark 
includes color, the drawing must show the mark in color;
    (11) If the mark is in standard characters, a mark comprised only 
of characters in the Office's standard character set, typed in the 
appropriate field of the application;
    (12) If the mark includes color, a statement naming the color(s) 
and describing where the color(s) appears on the mark, and a claim that 
the color(s) is a feature of the mark;
    (13) If the mark is not in standard characters, a description of 
the mark;
    (14) If the mark includes non-English wording, an English 
translation of that wording;
    (15) If the mark includes non-Latin characters, a transliteration 
of those characters;
    (16) If the mark includes an individual's name or likeness, either:
    (i) A statement that identifies the living individual whose name or 
likeness the mark comprises and written consent of the individual; or
    (ii) A statement that the name or likeness does not identify a 
living individual (see section 2(c) of the Act);

[[Page 91091]]

    (17) If the applicant owns one or more registrations for the same 
mark, and the owner(s) last listed in Office records of the prior 
registration(s) for the same mark differs from the owner(s) listed in 
the application, a claim of ownership of the registration(s) identified 
by the registration number(s), pursuant to Sec.  2.36;
    (18) If the application is a concurrent use application, compliance 
with Sec.  2.42;
    (19) An applicant whose domicile is not located within the United 
States or its territories must designate an attorney as the applicant's 
representative, pursuant to Sec.  2.11(a), and include the attorney's 
name, postal address, email address, and bar information; and
    (20) Correctly classified goods and/or services, with an 
identification of goods and/or services from the Office's Acceptable 
Identification of Goods and Services Manual within the electronic form.
    (b) If an application fails to satisfy any of the requirements of 
paragraphs (a)(1) through (19) of this section, the applicant must pay 
the fee required by Sec.  2.6(a)(1)(iv).
    (c) If an application fails to satisfy the requirements of 
paragraph (a)(20) of this section, the applicant must pay the fee 
required by Sec.  2.6(a)(1)(v).
    (d) If an application fails to satisfy the requirements of 
paragraph (a)(20) of this section, and the identification of goods and/
or services in any class exceeds 1,000 characters, the applicant must 
pay the fee required by Sec.  2.6(a)(1)(vi) for each affected class.

PART 7--RULES OF PRACTICE IN FILINGS PURSUANT TO THE PROTOCOL 
RELATING TO THE MADRID AGREEMENT CONCERNING THE INTERNATIONAL 
REGISTRATION OF MARKS

0
4. The authority citation for part 7 continues to read as follows:

    Authority:  15 U.S.C. 1123, 35 U.S.C. 2, Pub. L. 116-260, 134 
Stat. 1182, unless otherwise noted.


0
5. Section 7.6 is amended by revising paragraphs (a)(1)(ii), 
(a)(2)(ii), (a)(3)(ii), (a)(4)(ii), (a)(5)(ii), (a)(6)(i), (ii), and 
(iv), (a)(7)(ii), and (a)(8)(ii) to read as follows:


Sec.  7.6  Schedule of U.S. process fees.

    (a) * * *
    (1) * * *
    (ii) For certifying an international application based on a single 
basic application or registration filed electronically, per class--
$100.00
    (2) * * *
    (ii) For certifying an international application based on more than 
one basic application or registration filed electronically, per class--
$150.00
    (3) * * *
    (ii) For transmitting a subsequent designation under Sec.  7.21, 
filed electronically--$100.00
    (4) * * *
    (ii) For transmitting a request to record an assignment or 
restriction, or release of a restriction, under Sec.  7.23 or Sec.  
7.24 filed electronically--$100.00
    (5) * * *
    (ii) For filing a notice of replacement under Sec.  7.28 
electronically, per class--$100.00
    (6) * * *
    (i) For filing an affidavit under section 71 of the Act on paper, 
per class--$425.00
    (ii) For filing an affidavit under section 71 of the Act 
electronically, per class--$325.00
* * * * *
    (iv) For deleting goods, services, and/or classes after submission 
and prior to acceptance of an affidavit under section 71 of the Act 
electronically, per class--$250.00
    (7) * * *
    (ii) Surcharge for filing an affidavit under section 71 of the Act 
during the grace period electronically, per class--$100.00
    (8) * * *
    (ii) For correcting a deficiency in a section 71 affidavit filed 
electronically--$100.00
* * * * *

Katherine K. Vidal,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2024-26644 Filed 11-15-24; 8:45 am]
BILLING CODE 3510-16-P`