PTO Proposes Changes to Implement Micro Entity Patent Fees

By Gene Quinn
May 30, 2012

The U.S. Commerce Department’s United States Patent and Trademark Office (USPTO) today announced a proposed rule change with the publication of a Federal Register titled Changes to Implement Micro Entity Status for Paying Patent Fees.  The Office seeks written comments no later than July 30, 2012.

The amend to the rules of practice in patent cases is for the purpose of implementing the micro entity provision of the Leahy-Smith America Invents Act (AIA).  If an applicant qualifies as a micro entity, then the applicant is eligible to pay reduced patent fees once the USPTO exercises its fee setting authority under the AIA.  The fee setting provision in the AIA sets the micro entity discount at 75% of the fees set or adjusted for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.
“The new micro entity provision in the America Invents Acts makes our patent system more accessible for smaller innovators by entitling them to a 75% discount on patent fees,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos.  “By paying discounted patent fees as micro entities, smaller innovators can access the patent system to move their ideas into the marketplace and accelerate U.S. economic growth.”

The America Invents Act

The AIA, which was enacted on September 16, 2011, presents a major revision to the patent system.  The most sweeping change — moving from a first to invent system to a first to file system — will not be accomplished until March 16, 2013.  In the meantime, various provisions have already become effective, with the next set of provisions due to become effective on September 16, 2012.  The USPTO is expected to release final rules relative to these September 2012 changes to the law sometime during the month of July 2012.  This change to the fee structure to include a micro-entity for purpose of reduced fee payment is envisioned by the AIA and will become effective at some point during the first quarter of 2013.


The terms of the Leahy-Smith America Invents Act provided that the Patent Office has the authority to set or adjust any patent fee, provided that the revenue generated by patent fees recovers only the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (including administrative costs).  The AIA also continued to allow most fees set or adjusted by the USPTO to be reduced by 50%with respect to small entities and by seventy-five percent with respect to micro entities. The Leahy-Smith America Invents Act also added a new section the patent laws that defines a “micro entity.”

Generally speaking, a “micro entity” refers to an applicant that makes a certification that the application: (1) qualifies as a small entity; (2) has not been named an inventor on more than 4 previously filed non-provisional patent applications in the United States; (3) did not have a gross income that exceeds 3 times the median household income for that preceding calendar year; and (4) has not assigned, granted, or conveyed a license or other ownership interest in the application concerned to an entity that had gross income exceeding 3 times the median household income for the preceding calendar year.

Small Entity Status

The rules of practice currently have provisions pertaining to small entity status.  A small entity can be any party, whether person, small business or non-profit organization.  Individuals are considered small entities if they have not assigned, granted, or conveyed, or licensed any rights in the invention.  A small business is considered a small entity if they have not assigned, granted, or conveyed, or licensed any rights in the invention and the business does not employ more than 500 persons.  A non-profit organization qualifies as a small entity if they have not assigned, granted, conveyed, or licensed any rights in the invention and is either: (1) a university or other institution of higher education located in any country; (2) an organization of the type described in 501(c)(3) of the Tax Code and exempt from taxation under 501(a) of the Tax Code; (3) a nonprofit scientific or education organization qualified under a nonprofit organization statute of any state in the United States; or (4) a nonprofit organization located in a foreign country which would qualify as a nonprofit organization under (2) or (3).  See 37 CFR 1.27.

The Proposed Rule Change

In order to effectuate the requirement of the AIA, the Patent Office is proposing changes to the rules of practice to set out the procedures for an applicant to claim micro entity status and to pay patents fees as a micro entity.  The USPTO likewise is proposing changes to the rules of practice to set procedures for an applicant to notify the Office of the loss of micro entity status and to correct payments of patent fees erroneously paid in the micro entity amount.

The USPTO proposes to add a provision to the rules of practice pertaining to micro entity status. The provision will set out the requirements to qualify as a micro entity tracking the micro entity provision of Section 10 of the Leahy-Smith America Invents Act. The provision will also set out procedures relating to micro entity status that largely track the provisions in 37 CFR 1.27 for small entity status. These new procedures pertain to claiming micro entity status, paying patent fees as a micro entity, notifying the Office of loss of micro entity status, and correcting payments of patent fees paid erroneously in the micro entity amount.

The Specific Details 

First, the Office does not plan to provide advisory opinions on whether a particular entity is entitled to claim micro entity status.

If an application names more than one applicant, each applicant must meet the requirements for the applicants to file a micro entity certification in the application.

The Office is developing both paper and electronic forms for use by members of the public to provide a certification of micro entity status.

The procedures for claiming micro entity status require the filing of a certification of entitlement to micro entity status.  The Office does plans to rely upon the applicant’s certification of micro entity status (except where it conflicts with the information contained in the Office’s records, such as where Office records indicate that the applicant is named as an inventor on more than four previously filed and unassigned nonprovisional patent applications) and will not require any additional documents from the applicant concerning the applicant’s entitlement to claim micro entity status.

The procedures for paying fees as a micro entity provide that a micro entity certification need only be filed once in an application or patent, but that a fee may be paid in the micro entity amount only if the applicant or patentee is still entitled to micro entity status on the date the fee is paid. The procedures pertaining to notifying the Office of loss of micro entity status and correctingpayments of patent fees paid erroneously in the micro entity amount track the corresponding small entity provisions for notifying the Office of loss of small entity status and correcting payments of patent fees paid erroneously in the small entity amount.

Any attempt to fraudulently or improperly (i.e., with deceptive intent) establish status as a micro entity, or pay fees as a micro entity, shall be considered as a fraud practiced or attempted on the Office.

If status as a micro entity is established in good faith in an application or patent, and fees as a micro entity are paid in good faith in the application or patent, and it is later discovered that such micro entity status either was established in error, or that the Office was not notified of a loss of entitlement to micro entity status as required by paragraph (i) of this section through error, the error will be excused upon compliance with the separate submission and itemization requirements and the payment of the deficiency owed.

Comment Details

The comment deadline is July 30, 2012.

Comments should be sent by electronic mail message over the Internet addressed to: Comments may also be submitted by postal mail addressed to: Mail Stop Comments—Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the attention of James Engel, Senior Legal Advisor, Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy.

For further information contact James Engel, Senior Legal Advisor (571-272-7725), Office of Patent Legal Administration, Office of the Deputy Commissioner for Patent Examination Policy.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of Read more.

Discuss this

There are currently 10 Comments comments.

  1. EG May 31, 2012 8:15 am


    It should also be noted that “institutions of higher learning” (i.e., universities) will also get the micro entity discount for ALL patent applications (not just the first 5) where the invention is assigned or under an obligationn of assignment to those institutions.

  2. Anon May 31, 2012 9:52 am


    Combine that (I think) with the Prior User Right exception exception, and I think the biggest winner from the AIA is the univeristy system.

  3. EG May 31, 2012 10:28 am


    The universities certainly had more “pull” with Congress in carving out exceptions to the AIA than did the rest of the Davids. But there are a number of university-based groups (WARF being one of those) that aren’t happy about the rest of the AIA (still the Abominable Inane Act to me).

  4. MaxDrei May 31, 2012 11:35 am

    The hardest-hitting criticism of ROW-FtF is that it hurts hard-working, creative and ambitious academics, who have to publish first (or be d~~ned).

    So, the AIA puts into effect a new patent system, that is “First to Publish” rather than “First to File”.

    And they get fee rebates too.

    Mission accomplished, no? The USA is now set fair to dominate scientific advance for the next century.

  5. Anon May 31, 2012 12:33 pm

    There are clear advantages to be explored by being a small spin-off (with close ties) to a university.

    In a certain way, the silver lining to the raincloud that is the AIA is that universities may have substantially greater power in the patent game.

    For too long, the power has been in large, multi-national corporations who got too much of a say as to which areas of fundamental research were (funded and thus) undertaken. It is my sincerest hope that pure, general research can return to prominence, funded in part by innovation owned and controlled by the universities themselves.

  6. Stan E. Delo May 31, 2012 3:07 pm

    EG and Anon-

    I used to attend the Tech Transfer forum for a few years, run by the Association of University Technology Managers (AUTM), and when the AIA was going down, I tried to warn them about what it might mean for them. They mostly seemed very ho-hum about it, even before the University carve-outs were introduced.

    Even with the PUR’s and the micro status carve-outs though, their practice of publish or perish puts them at risk, because the one year grace period is essentially gone in my humble opinion. And then there is always the third new way to challenge their patents using Post Grant Review.

    Since Federally funded R&D has been significantly reduced over the last decade or so, and corporations are not usually inclined to spend a lot there, the Universities represent a major portion of new technologies being developed. For one instance, what about two radically different new battery technologies being developed at Universities?

    One of them shows promise to produce batteries that have 4 times the energy density of Lithium Ion batteries, and a battery pack for a car can be recharged in about 20 minutes, and give them a range of about 400 miles. Nano technology producing tremendous amounts of surface area, and there is no liquid or gel electrolyte to spill in the event of a bad collision.


  7. Stan E. Delo May 31, 2012 3:43 pm

    Does anyone happen to know if I can apply for micro entity status after I have already filed as a small entity? The application fee I don’t mind, but if I have to boot-strap the production myself, getting a break on the maintenance and issue fees might be helpful. I filed at the end of last July, and I don’t expect to see a granted patent until some time in 2014. Near as I can tell, the micro entity option will be enabled in March of 2013, when the new fee schedule is ostensibly to take effect.


  8. patent litigation June 8, 2012 2:31 am

    Thank goodness for the AIA’s micro entity provisions. Without them, the so-called “patent reform” legislation might amount to little more than a giveaway to large corporations and other moneyed IP owners.

  9. Small Inventors Organization June 20, 2012 1:44 pm

    This question came up in our local inventors group.

    We came up with another “interpretation” of the law; that seems fairer and allows more small inventors to qualify as a micro-entity.

    Can the law be “interpreted” with the bracketed word “micro-entity” as added as below ?:

    “has not been named as an inventor on more than four previously filed [micro-entity] patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111.”

    This interpretation (which is different from the current USPTO interpretation) would allow inventors (under the income limit of ~3 x median income) to designate up to 4 micro-entity applications.

    [e.g., the limit of 4 is interpreted as being for micro-entity applications, and excludes non-micro applications].

    A possible rationale for our proposed interpretation:
    a) Basic fairness: Micro based on limited income. Inventors should not be penalized for their previous unsuccessful attempts.
    b) Micro-entity was sold in Congress as helping the small inventor.
    c) More innovation occurs when inventors with limited incomes can become successful inventors.

    Perhaps you could comment or write a blog-article on this. Thanks.