Unintended Consequences of the New USPTO Micro Entity Fees
|Written by: Raymond Millien
Senior IP Counsel, GE Healtcare
Posted: June 17, 2013 @ 2:15 pm
Maybe it’s just me? In my 15 years of practicing patent law, I have never felt uncomfortable interviewing potential clients in order to obtain the essential information needed to file a patent application on their behalf. This was the case until now! Ever since March 19, 2013, I have been feeling slightly uncomfortable asking one question to some of my new clients. What is that question you ask? It is: “What was your household income in the preceding calendar year?” So, why am I asking a question that makes this Registered Patent Attorney sound more like a Certified Public Accountant? Answer: The AIA.
The Leahy-Smith America Invents Act (“AIA”), was signed by President Obama on September 16, 2011, after receiving overwhelming bi-partisan support by passing the House 304-117, and the Senate 89-9. The AIA has been recognized as the first major overhaul to the patent system in almost 60 years! Under the AIA, the USPTO now offers a three-tier pricing structure for a majority of its patent-related fees.
Prior to the AIA, the USPTO offered a 50% reduction on most fees (e.g., filing, searching, examining, issuing, appealing, and maintenance fees) to every “small entity” – individuals or corporate entities with less than 500 employees (including affiliates) – as defined by the Small Business Administration. Now, under the AIA, the USPTO offers each “micro entity” a 75% reduction on such fees. A “micro entity,” as defined in 35 U.S.C. § 123, is a patent applicant who meets the definition of a “small entity” in addition to: (1) not being named on more than four previously-filed, U.S. non-provisional applications; and (2) not having gross income exceeding three times the median U.S. household income for the preceding calendar year in which the applicable fee is being paid. Obviously, a patent applicant that does not meet the “micro entity” nor the “small entity” definitions will be considered a “large entity” and must pay the standard (i.e., 100%) fee.
Paying micro entity fees can produce significant savings. For example, the basic non-provisional patent application filing, search and examination fees for a large entity, as of March 19, 2013, is $1600. The same fees for a small entity is $800 (or $730 if filed electronically). For a micro entity, however, the same fees would amount to just $400!
So, the next question becomes: “How do we calculate ‘three times the median U.S. household income’”? In 2011, the median U.S. household income, as reported by the Census Bureau on September 12, 2012, was $50,054. Thus, the cut-off for micro entity status would be three times that, or $150,162. (The USPTO makes the latest figure easy to find here.) The income of an inventor’s spouse does not figure into the calculation, but where there are joint inventors, each must meet (and certify that they meet) the “micro entity” status requirements.
So, what have I done to help cure my uneasiness? Two things. One, I’ve started to implement my personal “terminal disclaimer rule” when it comes to the Certification of Micro Entity Status form (PTO/SB/15A). That rules states: “When a document can get you in trouble, even if it has a ‘Registration No.’ field on it, have the client sign it! Second, I’ve inserted the following four questions into my firm’s standard Invention Disclosure Form in hopes of avoiding the “How much do you make?” conversation:
Invariably, however, a potential new client will still call me in order to discuss the reason for these questions or to clarify how to answer them. Thus, the uneasiness cannot always be avoided! But, then again, maybe it’s just me!
About the Author
Raymond Millien, a member of the IAM Strategy 300, is Senior IP Counsel at GE Healthcare where he leads global IP strategy for its $6.1B software, consulting and services businesses. Mr. Millien received a B.S. from Columbia University, and a J.D. from The George Washington University Law School. Mr. Millien may be reached by at email@example.com.
PLEASE NOTE: This article reflects Mr. Millien's personal views as of the date the article was published and should not be necessarily attributed to his former, current or future employers, or their clients.