One of the changes brought about by the America Invents Act is a new status of patent applicant called the “micro entity.” The idea is similar to the current “small entity” status granted to certain applicants–but instead of reducing fees by 50% (as for small entity applicants), the Act reduces certain patent fees by 75% for those applicants that qualify. So, who can qualify as a micro entity, and when do the changes go into effect?
First, let us review the qualifications of a small entity. The following can qualify as a small entity:
- businesses that have less than 500 employees;
- charitable organizations; or
- universities or other other institutions of higher education.
A small entity is a patent applicant that falls under one of the above categories and has not assigned or licensed any rights in the invention to any person, concern, or organization which would not qualify for small entity status. As stated above, a small entity patent applicant is entited to a 50% reduction in certain patent filing fees.
The Act defines a micro entity as an applicant that meets the following criteria:
- qualifies as a small entity;
- has not been named as an inventor on more than four previously-filed patent applications*;
- 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 (median household income in 2010 was about $50,000); and
- has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the patent application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income.
* any application in which an inventor was named, and which was assigned (or under obligation to assign) as a result of previous employment does not count toward that inventor’s four-application limit.
The micro entity status may only benefit the patent novices–once a person has more than four patent applications under his belt, he will not qualify. In comparison, the small entity status may be enjoyed by qualifying applicants without such limitation.
If you think that you or your organization may qualify for micro entity status, it could be worth looking into. However, even though the definition of a micro entity went into effect September 16, 2011 (the date the Act was enacted), as of the date of this blog entry, no one can benefit from the micro entity statuts–yet. Section 10 of the America Invents Act describes the USPTO’s fee-setting authority. Until the USPTO goes through the prescribed fee-setting procedure for micro entity fees, it cannot apply the discount. How long will that take? While it is difficult to predict exactly when the micro entity discount will be available, a review of the fee-setting procedure laid out by the Act can be instructive.
The fee-setting procedure conforms to the following timeline:
- the USPTO director submits the proposed fee to the Patent Public Advisory Committee or the Trademark Public Advisory Committee
- the Committee holds a public hearing regarding the proposed fee during the thirty day period after submission from the USPTO director
- the USPTO director publishes a written report of the comments, advice, and recommendations of the committee
- the proposed fee changes are published in the Federal Register
- the public may submit comments for at least forty-five days after the proposed fee changes are published
- the final fee changes are published in the Federal Register
- at least forty-five days after publication of the final fee change, the changes may become effective
According to the fee-setting procedure, the fastest that new fees (including micro entity fees) could become effective is 120 days after the process is started. In reality, my guess is that micro entity fees will not be available until around a year from now, but we won’t know for sure until it actually occurs.