Removing the Troll from the Thicket: The Case for Enhancing Patent Maintenance Fees in
Relation to the Size of a Patent Owner’s Non-Practiced Patent Portfolio
David S. Olson
Now that the PTO has the power to set fees, this Article proposes a further adjustment of
patent maintenance fees that will act to discourage excessively large patent portfolios without
significant harms to incentives to innovate and disseminate innovation. The reform proposed in
this Article helps alleviate problems in software and high technology patenting, without
significant negative effect in other industries, such as pharmaceuticals or biotechnology. It is
simple and can be simply adopted by the PTO, or through congressional enactment.
This Article proposes that maintenance fees be increased according to a sliding scale tied
to the number of non-practiced patents a patent owner has in its portfolio. Thus, as the size of a
firm’s patent portfolio increases, so to does the maintenance fee multiplier charged for all its
patents, beginning with the second maintenance fee due date. All patents with common
ownership interests would be aggregated in determining the fee enhancement. Because the
enhanced fees do not kick in until 7.5 years after issuance, incentives to invent and to
disseminate should not be significantly reduced. This proposal will encourage large patent
portfolio holders to pare down their holdings by determining which of their older patents are not
worth maintaining. This will benefit competitors and new inventors who are currently subject to
hold-up problems from large portfolios—many of which are particularly caused by old, lowvalue patents held en masse.
One benefit of this Article’s proposal is that non-practicing entities will generally be
charged higher maintenance fees than other firms that have the same number of patents but
commercialize many of them. By narrowly targeting portfolios held by non-practicing entities,
the costs to practicing entities are lower. On the other hand, as the Article discusses, there are
disadvantages to large patent portfolios, even when active participants in an industry hold them.
Accordingly, this Article’s proposal also discourages such firms from having large numbers of
non-practiced patents in their portfolios.
A separate, but equally important aspect of this Article’s proposal is that, in order to
determine whether maintenance fee enhancements are due, patent owners will be required to
disclose their practiced and non-practiced patents. This disclosure will be very advantageous to
the patent system, because there is currently a great deal of opacity and uncertainty as to two
important types of patent data: (1) who owns which patents, (2) whether particular patents are
being practiced, and by what products or processes. Because determining patent boundaries is
notoriously difficult in some instances, there may be difficulties in determining whether
particular patents are being practiced. Moreover, each firm will have an incentive to overstate the
number of practiced patents to receive a lower fee enhancement.