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New Micro Entity Patent Applicants will Benefit from a Seventy-Five Percent Discount on Fees

March 13, 2013

Hamilton Brook Smith Reynolds Alert

The Leahy-Smith America Invents Act (AIA) grants fee-setting authority to the United States Patent and Trademark Office (USPTO) and effective March 19, 2013, the USPTO will adjust certain patent fees.  In addition to increasing many patent filing and examination fees, the AIA has established a new "micro entity" status, which reduces certain USPTO fees.  Patent applicants who qualify for micro entity status will benefit from a 75% discount on most U.S. filing, searching, examination, issue and maintenance fees, as well as a reduction in certain PCT filing fees.

Two Paths to Establishing Micro Entity Status

An applicant can request certification as a micro entity if the applicant: 

  1. qualifies as a small entity;
  2. has not been named as an inventor on more than four previously filed patent applications;
  3. did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding three times the median household income (most recently reported by the federal government as $50,054); and
  4. has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the application concerned to a party that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding three times the median household income.

If an application names more than one applicant or inventor, each applicant and each inventor must meet the requirements of a micro entity and any other party holding rights in the invention must qualify as small entity.

The income level applies separately to the income of each applicant and inventor (not the combined gross income of all applicants and inventors).

Micro entity status shall also apply to an applicant (e.g., inventor) who qualifies as a small entity and certifies that:

  1. The applicant's employer, from which the applicant obtains the majority of the applicant's income, is an institution of higher education as defined in the Higher Education Act of 1965; or
  2. The applicant has assigned, granted, conveyed, or is under an obligation by contract or law, to assign, grant, or convey, a license or other ownership interest in the particular application to such an institution of higher education.

While most research institutions and hospitals will not qualify as institutions of higher education under the statute, these institutions, in particular cases, may still qualify as small entities.

A large entity applicant cannot become a micro entity merely by licensing or assigning some interest to an institution of higher education.

A few additional considerations to note when determining whether an applicant qualifies for micro entity status:

  • Micro entity status is established by filing a certification with the USPTO.
  • Once certified as a micro entity, the status will remain in effect until the applicant notifies the USPTO of loss of micro entity status.
  • Micro entity status must be deemed appropriate on the date any micro entity fee is filed.
  • Micro entity status does not carry over to related, continuing and reissue applications and the applicants must be re-certified anew for each new filing.

New USPTO Fee Schedule

The AIA also mandates that the USPTO generate sufficient revenue from its patent fees to recover the cost of its patent operations.  The USPTO estimated that in FY 2013, patent office costs would be about $2.5 billion.  To cover operating expenses and new programs initiated by the USPTO, most fees will increase effective March 19, 2013, although each individual fee increased does not necessarily reflect a cost equal to the performance of the covered activity. 
For example, a provisional application filing fee will increase from $250/$125 to $260/$130/$65 for large/small/micro entities.  Extensions of time fees will also increase, now ranging from $200 for a one-month extension to $3,000 for a five-month extension for large entities; small and micro entity discounts will apply.  Some fees will increase significantly, such as a request for ex parte reexamination, which increases from $2,520 to $12,000, although small entity ($6,000) and micro entity ($3,000) fees will now apply.  Filing fees and maintenance fees will increase; appeals will become more expensive; fees for filing Requests for Continued Examination (RCEs) will increase; and filing a Post Grant Review Request will increase to between $12,000 and $18,000. 
Some fees, such as certain fees related to international filings for small and micro entities, remain to be established and will not go into effect until January 1, 2014.  For additional information regarding the new fee schedule, please visit the USPTO Fee Schedule website