Comments on: USPTO Implements Micro-Entity Discount Effective March 2013

By: Mark Nowotarski

Mark Nowotarski — Thu, 09 May 2013 13:47:44 +0000

@ Mike,

Don’t forget the conversation you are going to have with the licensee, Mr. Edison. He can’t make more than $150k a year either. See 37 CFR 1.29(3)(b).

An think of the fun when Mr. Tesla calls asking why you have been paying small entity fees when you should have been paying micro entity fees.

By: Anon

Anon — Sat, 22 Dec 2012 16:45:43 +0000

This link explains a bit more about my comment at 14):

http://www.patentlyo.com/patent/2012/08/how-the-aia-violates-trips.html#comments

By: Anon

Anon — Fri, 21 Dec 2012 12:36:45 +0000

EG and PS DIP are correct – this is for the universities, and only nominally for the actual small inventors (you do not need both a monetary cap and a number of applications cap, and I can see NO reason for that number of applications cap – in fact, I think it goes against the very purpose of the patent office (promoting).

Along that same line of thought (focus on universities), does anyone know (or have a theory) why the technical corrections bill(s) have not attempted to correct the AIA flaw applying certain provisions (i.e. PUR exemption) only to US universities in apparent violation of signed international treaties?

By: PS DIP

PS DIP — Fri, 21 Dec 2012 11:40:16 +0000

If the median income is 50K and you have to be below three times that value, doesn’t this mean a substantial discount for 75-80% of the US population? Shouldn’t the question then be whether an inventor does not qualify for the discount? Folks are much happier to brag about their high income.

(Yes, I know a hard working first year associate often makes more than 150K in the crazy world we live in, but 150K is still a lot of money.)

EG is right that this was written for Universities anyway. Anybody else gaining a benefit is just gravy. How come the notes above about who qualifies do not include the University auto-qualifications?

By: Stan E. Delo

Stan E. Delo — Thu, 20 Dec 2012 23:47:10 +0000

Steve M-

I tend to agree about micro-status perhaps not being such a good idea or deal after all. Sounds pretty risky to me, for being able to save a few hundred dollars most times? I think patent applications filed prior to next March will not be a problem as regards micro status, and fortunately I got mine filed before the AIA was passed using a small entity status. As I seem to recall, there is no limit to applications for small entities, until they start to get really successful, when it won’t really matter anymore.

Stan~

By: Steve M

Steve M — Thu, 20 Dec 2012 20:53:41 +0000

. . . do abandoned applications count against the four allowed?

Do apps filed before passage of the AIA count against the four?

By: Steve M

Steve M — Thu, 20 Dec 2012 20:49:26 +0000

I can just see infringers asking courts for discovery to include micro-entity claimants’ income tax returns for IC challenges (and/or to demonstrate dishonesty to juries, etc) to the inventor(s) patent(s).

At least for independent inventors (as opposed to small companies, universities, non-profits, etc), the risk doesn’t seem worth the savings.

And do cons, cons-in-part, divisionals, reissueds, etc count against the allowed maximum of, “four previously filed patent applications?” Do reexams; perhaps where any claims have been amended, or new claims added?

By: Mike Zall

Mike Zall — Thu, 20 Dec 2012 20:33:02 +0000

Its not a question of honesty, its just that the culture we live in makes that a very sensitive subject. Try asking a deponent his income at a deposition. Three attorneys will jump down your throat.

By: EG

EG — Thu, 20 Dec 2012 20:32:11 +0000

To all:

The primary beneficiary of the micro entity discount are the universities (also very easy to establish who those are versus individuals): they can claim the benefit for all of their applications while the individual applicant can only do so for 5 max. So much for the few “bones thrown” by the AIA (Abominable Inane Act).

By: Stan E. Delo

Stan E. Delo — Thu, 20 Dec 2012 19:52:29 +0000

Mike Z-

Yes, that would be a touchy subject indeed. It would seem to me that if you just asked Mr. Einstein to tell you honestly what he believed his annual income was, that it would absolve you from any further responsibilities in the matter. Perhaps a written and signed statement by the inventor(s) of their annual income? I find it hard to believe that a patent attorney could be held culpable in any manner if their client happened to be telling them less than the whole truth. The document would never have to revealed, unless push came to shove some day. (Hopefully never)

The inventor(s) would then be in the hot seat, and not the practitioner, who has done nothing wrong at all. If you have a client who will lie to you, that is really their problem, and not yours. They are obviously unethical, and can be left to their own devices if you have some sort of document to prove what they told you, hopefully in good faith.

Stan~

By: Mike Zall

Mike Zall — Thu, 20 Dec 2012 19:15:27 +0000

Not only do you have to determine an inventors gross income, the coinventors also needs to be qualified. I could just see the conversation:
Attorney: Mr. Einstein, I want to see if you qualify for a micro-entity. Did you make less than $150,000 last year.
Mr. Einstein: Gee, I would rather not discuss that in the presence of Mr. Newton.
Attorney: Let’s go into the adjoining room and discuss this.
Mr. Einstein: You have to agree not to tell Mr. Newton. He tends to get jealous and envious.
Attorney: You are partners, aren’t you?
Mr. Einstein: No..just coinventors. I have a lot of other “balls in the air” that I do not want Mr. Newton to know about. Last year I had a big gambling win…very unusual…and I own an apple farm. Is my disclosure to you attorney client privileged? I do not want Mr. Newton to know my income or the IRS. Should I wait several weeks to file because my 2012 income is minimal?
Attorney: Let me speak to Mr. Newton, maybe he does not qualify and we will not have to discuss all these issues.
Mr. Einstein: He’s as poor as a church-mouse…does not spend a dime.
Attorney: Well, I still need to speak to Mr. Newton, perhaps he is a saver.
Mr. Einstein: He told me he had no income or savings, that is why I am putting up all the money on this project.
Attorney: Well…doing my due diligence, I still need to talk to him about his income.
Mr. Einstein: Well if he earned more than $150,000 last year I want him to kick in more money to this partnership. That SOB…he’s holding out…

….Don’t put me in the middle of that conversation. …
Mike

By: Mike Zall

Mike Zall — Thu, 20 Dec 2012 18:55:40 +0000

Additional comment:

By: Stan E. Delo

Stan E. Delo — Thu, 20 Dec 2012 18:21:11 +0000

I tend to think that the gross income requirement has to do with the national average, as opposed to the specific income for any particular individual or entity. The Bureau of the Census would most likely not be inclined to try to figure out what any individual average income might happen to be. Perhaps I am wrong, but that is how I read it. With perhaps 50,000 applications per year to consider, it would seem to be beyond their purview to be able to review individual incomes.

Stan~

” 3. Neither the applicant nor the inventor nor a joint inventor, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; and”

By: Noah H.

Noah H. — Thu, 20 Dec 2012 14:09:23 +0000

Maybe I’m missing something, but isn’t there an issue with the new (AIA) distinction between “applicant’ and “inventor” here, such as with respect to the 2nd requirement for establishing micro-entity status (that “Neither the applicant nor the inventor nor a joint inventor has been named as the inventor or a joint inventor on more than four previously filed patent applications…”)?

Specifically, isn’t it possible that an applicant (not an inventor – say an assignee, for example) could have many more than four previous applications but still meet this requirement as long as the “applicant:” 1) was not named as an “inventor” on any of the applications (which would probably be the case anyway for an assignee-applicant); and 2) none of the inventors (not the applicant) had more than four?

I understand that the other 3 requirements would still need to be met, including that the “applicant,” even if a juristic entity (say a non-profit), could not have a “gross income” exceeding three times the median “household income,” which itself seems at best oddly-worded to me…

Any thoughts/clarifications from those more insightful or knowledgeable than I would be appreciated!

By: Mike Zall

Mike Zall — Thu, 20 Dec 2012 12:52:46 +0000

I see a tremendous problem with the “gross income” issue. Clients are very reluctant to give their income, attorneys are very reluctant to ask for income. Often there is a reluctance to discuss the inventors age to Make Special, but I do it. That can be embarrassing if the inventor is ten years younger than 65. Multiply that by 100 when it comes to gross income. What happens when the client says that he does not know what his/her gross income is or whether child support or alimony or social security or disability benefits are gross income? Do we need to look at their income tax returns? Quite frankly, I probably will not even raise the issue and just claim a Small Entity. It’s a benefit that will rarely be used by attorneys, and only used, if at all, by pro se applicants to file patent applications that will never issue.
We need to get rid of the gross income requirement.