USPTO Proposes New Rules for Micro Entity Status
By Jeffery Habenicht – Edited by Dorothy Du
Changes to Implement Micro Entity Status for Paying Patent Fees, 77 Fed. Reg. 31,806 (proposed May 30, 2012) (to be codified at 37 C.F.R. pt. 1).
Federal Register
On May 30, 2012, the PTO published a notice of proposed rulemaking in the Federal Register entitled Changes to Implement Micro Entity Status for Paying Patent Fees. The new rules, to be codified as 37 C.F.R. §1.29, set out the proposed requirements for attaining micro entity status. Although narrow in scope, micro entity status provides a significant reduction in patent fees for those who qualify.
The Leahy-Smith America Invents Act (“AIA”), enacted on September 16, 2011, created the micro entity status. America Invents Act, Pub. L. No. 112-29, §10 (2011) (codified at 35 U.S.C. § 123). Applicants qualifying as a micro entity would be entitled to a 75-percent reduction in fees. Id. §10(b). Although the AIA set forth a definition of what constituted a micro entity, id. §10(g), it left the specifics of implementation to the PTO. Accordingly, the PTO’s proposed rules attempt to clarify who qualifies as a micro entity and establish the procedures for claiming micro entity status, notifying the PTO of a loss of status, and correcting erroneous payments of fees.
On the whole, commentators have generally welcomed the PTO’s proposed rules. PatentDocs provides an overview and analysis of the changes. PharmaPatents explains that that proposed rules help clarify the AIA’s definition of micro entity status but raise questions about potential abuse of the higher education prong. Patently-O also mentions the clarifications provided by the proposed rules and notes that the PTO is seeking comments on whether “applicant” should be changed to “inventor” anywhere in the rules.
The proposed rules set forth two independently sufficient means of establishing micro entity status. Under the first approach, an applicant can attain micro entity status if it (1) qualifies as a small entity, (2) is not a named inventor on more than four previous U.S. patent applications, (3) does not have a gross income greater than three times the median household income of the year preceding the year in which the fee is being paid, and (4) has not assigned and has no obligation to assign any patent rights to an entity that does have a gross income greater than three times the previous year’s median household income. Under the second approach, an applicant can attain micro entity status if it (1) qualifies as a small entity, and (2) the majority of its income comes from an institution of higher education or the applicant has assigned, or is obligated to assign, a license or other ownership interest to an institution of higher education. If a patent has multiple inventors, the fee reduction will only apply if each and every inventor satisfies the micro entity requirements.
Although the micro entity rules largely track the rules for small entity status in 37 C.F.R. §1.27 and §1.28, one major way in which the rules differ is that an applicant must submit a “certification in writing” that it qualifies under one of the two sets of requirements for establishing micro entity status, rather than simply pay certain fees in the small entity amount. The certification must be submitted prior to paying any fee or the fee reduction will not apply.
One interesting development highlighted by the PTO in the Federal Register Notice arises from the use of the word “applicant” in the AIA’s definition of micro entity. Prior to the AIA, the term “applicant” and “inventor” were synonymous because only inventors could apply. However, as of September 16, 2012 (one year after the effective date of the AIA) non-inventors can file an application for a patent if the inventor has assigned or is obliged to assign the patent to the applicant. Because of this change in terminology, the PTO expressly invites public comment on whether “inventor” should be substituted for “applicant” at any instance in the proposed micro entity rules.
Tags: Patent, Proposed Rules, Micro Entity, Patent Fees