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title: "Congress Grills USPTO on AI and Fees: Key Takeaways for Software Founders"
description: Congress questioned the USPTO on automation and fees, impacting software founders. Key insights on trademark application strategies and Office Actions.
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 September 30, 2026

# Congress Grills USPTO on AI and Fees: Key Takeaways for Software Founders

![Picture of Pablo Segarra, Esq.](https://www.segarraip.com/hs-fs/hubfs/PabloWritingCover.png?width=50&name=PabloWritingCover.png) By  [Pablo Segarra, Esq.](https://www.segarraip.com/segarraip-blog/author/pablo-segarra-esq)  ·   5 minute read

Trademark Intelligence / USPTO / Pablo Segarra

On Tuesday, senators spent an afternoon questioning the head of the USPTO about fees, backlogs, and artificial intelligence. Trademarks barely came up. For a software founder waiting on an application, here is the takeaway: the Office is automating the paperwork. The refusals that cost founders months were never paperwork.

| Dec 12 When the USPTO's fee-setting authority expires unless Congress acts, per IPWatchdog's report on the Sept. 29, 2026 hearing. |
| --- |

On September 29, Director John Squires was the only witness at a [Senate Judiciary IP Subcommittee oversight hearing](https://www.judiciary.senate.gov/committee-activity/hearings/oversight-of-the-united-states-patent-and-trademark-office-09-29-2026). According to [IPWatchdog's report](https://ipwatchdog.com/2026/09/29/senate-ip-subcommittee-focuses-on-fee-setting-ptab-rule-in-uspto-oversight-hearing/), much of the hearing turned on the agency's fee-setting authority, which expires December 12. Squires also pointed to an AI search pilot and said the Office is exploring AI-driven "pre-application services" to flag unmet formalities before examination.

Those comments were made mostly in the context of patents. On the trademark side, the automation is already here. The USPTO says its Classification Agentic Codification Tool, called Class ACT, had [analyzed 250,000 trademark applications by July](https://www.uspto.gov/subscription-center/2026/head-class-trademarks-full-power-usptos-ai-tool), assigning classes and design codes and cutting that step's pendency from months to minutes.

That is real progress, and I'm glad to see it. But founders should be clear about what it fixes. Faster sorting doesn't change whether your name gets refused. And headlines about fee authority are not a reason to rush, or to wait. You file when your name is cleared and your launch is real.

| 250K Applications run through Class ACT, per USPTO (July) | July 1 AI tool opened to all trademark examiners | 3 mo To respond to an Office Action | $125 To buy 3 more months |
| --- | --- | --- | --- |

## What did the USPTO say about AI and applications?

| **At the hearing, the Director described an AI search pilot and possible AI checks that would flag missing formalities before examination, largely in the patent context.** No new trademark program was announced. Separately, the USPTO's trademark operation already uses AI to assign classes and design codes, suggest mark descriptions in Trademark Center, and search by image. These tools speed up intake. Examining attorneys still make the legal calls. |
| --- |

Follow the incentives. An agency under pressure over backlogs and budgets will automate what it can measure: intake, sorting, and formalities. Those gains show up in pendency charts and play well in oversight hearings. The judgment calls, whether a name is too descriptive or too close to someone else's, stay with human examiners because they are the part the law cares about most.

## Why do software trademark applications get Office Actions?

| **An Office Action is a letter from a USPTO examining attorney explaining why your application can't be approved yet.** For software and SaaS founders, four issues cause most of the trouble: vague descriptions of what the software does, specimens that don't show the name tied to the software, names that describe the product, and conflicts with an existing mark for related technology. |
| --- |

**Identification of goods and services.** "Software" alone is too broad. The Office wants to know what the software does and how customers get it, which usually means choosing between Class 9 for downloadable software and Class 42 for software provided online.

**Specimens.** A specimen is your proof that the name is actually in use. For software, a screenshot that shows the name without showing how to download or access the product is a common reason for refusal.

**Descriptiveness.** A name that simply describes what the software does gets refused under Section 2(e)(1) of the Lanham Act, or registered only with part of it disclaimed.

**Likelihood of confusion.** Tech is crowded. If an existing registration covers similar software under a similar name, the examiner will cite it, and no formality check will make that conflict go away.

The Office can automate the paperwork. It can't make the strategic calls that decide whether your name registers.

## Which problems can AI catch, and which can't it?

| A checker can flag | A strategy has to solve |
| --- | --- |
| Missing applicant details or signatures | Whether your name is too close to a registered one |
| The wrong class for a listed item | Whether to amend, argue, or narrow your description |
| A mark description that doesn't match the drawing | Whether your name is legally descriptive |
| A blank or malformed field | Whether to keep the name at all |

## Should you file now because of the fee deadline?

| **Not because of the deadline alone.** The expiration of fee-setting authority does not by itself change any fee. It limits how the USPTO can adjust fees going forward until Congress acts. The fees in the current schedule are what you pay today. File when your name is cleared and committed, and check the official schedule the day you file. |
| --- |

What does move your cost is how you file. The [current USPTO fee schedule](https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule) charges a $350 base fee per class, then adds surcharges when the application is incomplete or when you write your own description instead of using the Office's ID Manual. For software, where founders love to describe their product in their own words, those surcharges add up fast.

| How USPTO fees can stack, per class (USD) $350 · Base application, ID Manual description   $550 · Plus free-form description (+$200)   $650 · Plus insufficient information (+$100)   $850 · Plus each extra 1,000 characters (+$200)   Source: USPTO fee schedule, electronically filed trademark application fees (last revised Aug. 14, 2026). Illustrative; which surcharges apply depends on the application. |
| --- |

## What to do if you already have an Office Action

| 1 | Calendar the deadline today. You generally have three months to respond, with one three-month extension available for $125. Miss it and the application is abandoned. |
| --- | --- |
| 2 | Sort the requirements from the refusals. A requirement asks you to fix something, like a description. A refusal says the name can't register as filed. They need very different responses. |
| 3 | Don't argue the easy ones. Accept reasonable description changes and fix specimens quickly, so the examiner's attention stays on the issue that actually matters. |
| 4 | Get help before the deadline, not after. A confusion or descriptiveness refusal is a legal argument with evidence. It is far easier to build with time than to rescue in the last week. |

## The honest complication

Not every Office Action needs a lawyer. A request to clarify your description, correct an address, or pick a class from the ID Manual is often something a careful founder can handle. The USPTO's own tools are making those fixes easier, and that is a genuine win for small companies.

The line is the word "refusal." When the examiner says your name is descriptive or confusingly similar to someone else's, you are no longer filling out a form. You are making an argument that decides whether you own your name. That is also exactly the part no software on either side of the process is going to make for you.

| The Office is working on speed. Your job is an application worth being fast about. |
| --- |

## What another founder should notice

Go back to the hearing room. Hours of testimony about fees, backlogs, and AI, and the thing that decides whether a software founder owns their name barely came up. That isn't a scandal. It's a reminder of whose job it is.

The USPTO will keep getting faster at sorting applications. Your job is to make sure that when yours reaches a human examiner, the name is cleared, the description is precise, and the specimen shows real use. If you've already got an Office Action, our breakdown of [what trademark attorneys do for USPTO Office Actions](https://www.segarraip.com/segarraip-blog/what-trademark-attorneys-do-for-uspto-office-actions) walks through the response process.

## Frequently Asked Questions

### How long do I have to respond to a trademark Office Action?

Generally three months from the issue date, and you can request one three-month extension for a $125 fee. If you don't respond in time, the application is abandoned, though revival may be possible in limited circumstances.

### What is a specimen refusal for software?

It means the proof of use you submitted doesn't show the name functioning as a trademark for the software. Common fixes include a screenshot showing the name alongside a way to download, access, or buy the product.

### Class 9 or Class 42 for SaaS?

Software used online without downloading generally falls in Class 42. Downloadable software falls in Class 9. Many products offer both and should cover both classes.

### Will USPTO trademark fees change after December?

Nobody can say yet. Expiring fee-setting authority limits future adjustments until Congress acts; it doesn't change today's fees on its own. Check the official fee schedule when you file.

| Segarra IP PLLC · Software trademark filings File it right the first time. [Read the trademark registration guide](https://www.segarraip.com/trademark-registration-guide) |
| --- |

## Sources

| [IPWatchdog, "Senate IP Subcommittee Focuses on Fee-Setting, PTAB Rule in USPTO Oversight Hearing" (Sept. 29, 2026)](https://ipwatchdog.com/2026/09/29/senate-ip-subcommittee-focuses-on-fee-setting-ptab-rule-in-uspto-oversight-hearing/) |
| --- |
| [Senate Judiciary Committee, Oversight of the USPTO hearing page (Sept. 29, 2026)](https://www.judiciary.senate.gov/committee-activity/hearings/oversight-of-the-united-states-patent-and-trademark-office-09-29-2026) |
| [USPTO, "Head of the class: Trademarks at full power with USPTO's AI tool" (July 13, 2026)](https://www.uspto.gov/subscription-center/2026/head-class-trademarks-full-power-usptos-ai-tool) |
| [USPTO fee schedule (last revised Aug. 14, 2026)](https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule) |

Pablo Segarra, Esq. is a federal trademark attorney and founder of Segarra IP PLLC. He handles trademark filings and Office Action responses for software and SaaS companies.

General information, not legal advice.

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