Micro Entity Status — Definitions

35 U.S.C. 123

Micro entity defined.

(a) IN GENERAL.—For purposes of this title, the

term "micro entity" means an applicant who makes a certification that the

applicant—

(1) qualifies as a small entity, as defined

in regulations issued by the Director;

(2) has not been named as an inventor on

more than 4 previously filed patent applications, other than applications

filed in another country, provisional applications under

section 111(b)

, or international applications

filed under the treaty defined in

section 351(a)

for

which the basic national fee under

section 41(a)

was not

paid;

(3) did not, in the calendar year preceding

the calendar year in which the applicable fee is being paid, have a gross

income, as defined in section 61(a) of the Internal Revenue Code of 1986,

exceeding 3 times the median household income for that preceding calendar

year, as most recently reported by the Bureau of the Census; and

(4) has not assigned, granted, or conveyed,

and is not under an obligation by contract or law to assign, grant, or

convey, a license or other ownership interest in the application

concerned to an entity that, in the calendar year preceding the calendar

year in which the applicable fee is being paid, had a gross income, as

defined in section 61(a) of the Internal Revenue Code of 1986, exceeding

3 times the median household income for that preceding calendar year, as

most recently reported by the Bureau of the Census.

(b) APPLICATIONS RESULTING FROM PRIOR

EMPLOYMENT.—An applicant is not considered to be named on a previously filed

application for purposes of subsection (a)(2) if the applicant has assigned, or

is under an obligation by contract or law to assign, all ownership rights in

the application as the result of the applicant’s previous employment.

ar, as

most recently reported by the Bureau of the Census.

(b) APPLICATIONS RESULTING FROM PRIOR

EMPLOYMENT.—An applicant is not considered to be named on a previously filed

application for purposes of subsection (a)(2) if the applicant has assigned, or

is under an obligation by contract or law to assign, all ownership rights in

the application as the result of the applicant’s previous employment.

(c) FOREIGN CURRENCY EXCHANGE RATE.—If an

applicant’s or entity’s gross income in the preceding calendar year is not in

United States dollars, the average currency exchange rate, as reported by the

Internal Revenue Service, during that calendar year shall be used to determine

whether the applicant’s or entity’s gross income exceeds the threshold

specified in paragraphs (3) or (4) of subsection (a).

(d) INSTITUTIONS OF HIGHER EDUCATION.—For

purposes of this section, a micro entity shall include an applicant who

certifies that—

(1) the applicant’s employer, from which

the applicant obtains the majority of the applicant’s income, is an

institution of higher education as defined in section 101(a) of the

Higher Education Act of 1965 (20 U.S.C. 1001(a)); or

(2) the applicant has assigned, granted,

conveyed, or is under an obligation by contract or law, to assign, grant,

or convey, a license or other ownership interest in the particular

applications to such an institution of higher education.

(e) DIRECTOR’S AUTHORITY.—In addition to the

limits imposed by this section, the Director may, in the Director’s discretion,

impose income limits, annual filing limits, or other limits on who may qualify

as a micro entity pursuant to this section if the Director determines that such

additional limits are reasonably necessary to avoid an undue impact on other

patent applicants or owners or are otherwise reasonably necessary and

appropriate

he

limits imposed by this section, the Director may, in the Director’s discretion,

impose income limits, annual filing limits, or other limits on who may qualify

as a micro entity pursuant to this section if the Director determines that such

additional limits are reasonably necessary to avoid an undue impact on other

patent applicants or owners or are otherwise reasonably necessary and

appropriate. At least 3 months before any limits proposed to be imposed

pursuant to this subsection take effect, the Director shall inform the

Committee on the Judiciary of the House of Representatives and the Committee on

the Judiciary of the Senate of any such proposed limits.

(f) PENALTY FOR FALSE CERTIFICATIONS.—In addition to

any other penalty available under law, an entity that is found to have falsely

made a certification under this section shall be subject to a fine, to be

determined by the Director, the amount of which shall be not less than 3 times

the amount that the entity failed to pay as a result of the false

certification, whether the Director discovers the false certification before or

after the date on which a patent has been issued.

The Leahy-Smith America Invents Act (AIA), Public Law

112-29, sec. 10(b), 125 Stat. 284 (September 16, 2011) added

35 U.S.C.

123

to define a “micro entity”, and established micro entity

discounts which became available on March 19, 2013. The Unleashing American Innovators

Act of 2022, Public Law 117-328, , division W, sec. 107, 136 Stat. 4459 (December 29,

2022) increased the micro entity discounts from 75 percent to 80 percent, with most

discounts becoming effective on December 29, 2022. The increase in the micro entity

discounts for the issue fee for international design applications under the Hague

Agreement applies to applications having a date of international registration on or

after May 1, 2023 (

37 CFR 1.18(b)(1)

)

6 Stat. 4459 (December 29,

2022) increased the micro entity discounts from 75 percent to 80 percent, with most

discounts becoming effective on December 29, 2022. The increase in the micro entity

discounts for the issue fee for international design applications under the Hague

Agreement applies to applications having a date of international registration on or

after May 1, 2023 (

37 CFR 1.18(b)(1)

). The increase in

the micro entity discounts for the search fee and the supplemental search fee for

international applications under the Patent Cooperation Treaty (PCT) applies to

applications having a receipt date on or after April 1, 2023 (

37 CFR 1.445(a)(2)

and

(a)(3)

). Also, the increase in the micro entity discounts for the

sequence listing late furnishing fee and the international preliminary examination and

processing fees for international applications under the PCT took effect on April 1,

2023 (

37

CFR 1.445(a)(5)

and

37 CFR 1.482

).

The fees which are reduced by 80 percent for micro

entities include filing fees (nonprovisional and provisional), search fees, examination

fees, issue fees, and appeal fees for utility, design, plant, and reissue patent

applications. Also included are patent maintenance fees including the maintenance fee

grace period surcharges as well as the surcharge for a petition to accept a delayed

maintenance fee payment in order to reinstate an expired patent. Included within the

ambit of filing fees subject to the micro entity discount are excess claims fees,

application size fees, non-DOCX filing surcharge required by

37 CFR

1.16(u)

, and the surcharge required by

37 CFR 1.16(f)

,

when applicable. Included within the ambit of examination fees subject to the micro

entity discount are the fees for requesting prioritized examination under

37 CFR

1.102(e)

,

ex parte

reexamination under

37 CFR

1.510

(only if the request is filed by the patent owner), and

supplemental examination under

37 CFR 1.601

harge required by

37 CFR

1.16(u)

, and the surcharge required by

37 CFR 1.16(f)

,

when applicable. Included within the ambit of examination fees subject to the micro

entity discount are the fees for requesting prioritized examination under

37 CFR

1.102(e)

,

ex parte

reexamination under

37 CFR

1.510

(only if the request is filed by the patent owner), and

supplemental examination under

37 CFR 1.601

. Included within the

ambit of appeal fees subject to the micro entity discount are the fees for filing notice

of appeal, forwarding an appeal to the PTAB, and requesting an oral hearing.

I.

REQUIREMENT FOR A CERTIFICATION

35 U.S.C.

123

requires a certification as a condition for an applicant to

be considered a micro entity. The certification must be in writing and must be filed

prior to or at the time a fee is first paid in the micro entity amount in an

application or patent. Status as a micro entity in one application or patent does not

affect the status of any other application or patent. The refiling of an application

under

37 CFR

1.53

as a continuation or divisional, or continuation-in-part

application (including a continued prosecution application under

37 CFR

1.53(d)

(design applications only)), or the filing of a reissue

application, requires a new certification of entitlement to micro entity status in

the continuing or reissue application. See

37 CFR

1.29(e)

. A fee may be paid in the micro entity amount only if

it is submitted with, or subsequent to, the submission of a certification of

entitlement to micro entity status. See

37 CFR 1.29(f)

. The micro entity

provisions of

37 CFR 1.29

apply to applications

filed before, on, and after March 19, 2013. A micro entity certification may be filed

in pending applications, reexamination proceedings (for patent owners only), and

supplemental examination proceedings at any time during prosecution and in patents

prior to or concurrent with a maintenance fee payment

ty status. See

37 CFR 1.29(f)

. The micro entity

provisions of

37 CFR 1.29

apply to applications

filed before, on, and after March 19, 2013. A micro entity certification may be filed

in pending applications, reexamination proceedings (for patent owners only), and

supplemental examination proceedings at any time during prosecution and in patents

prior to or concurrent with a maintenance fee payment.

Any attempt to fraudulently establish status or pay

fees as a micro entity shall be considered as a fraud practiced or attempted on the

Office. Improperly, and with intent to deceive, establishing status or paying fees as

a micro entity shall be considered as a fraud practiced or attempted on the Office.

See

37 CFR

1.29(j)

.

II.

BASES FOR ESTABLISHING MICRO ENTITY STATUS

There are two separate bases for establishing micro

entity status referred to as the “gross income basis” under

35 U.S.C.

123(a)

and the “institution of higher education basis” under

35

U.S.C. 123(d)

.

37 CFR 1.29(a)

implements the

gross income basis for establishing micro entity status, and

37 CFR

1.29(d)

implements the institution of higher education basis

for establishing micro entity status. The Office’s micro entity certification forms

are form PTO/SB/15A (gross income basis)(see

MPEP §

509.04(a)

) and form PTO/SB/15B (institution of higher

education basis)(see

MPEP § 509.04(b)

). No evidence such

as a copy of a tax return need accompany the certification form(s). In addition, the

certification form(s) need not be notarized. The certification form(s) must, however,

identify the application or patent to which it pertains and it must be signed by an

authorized party as set forth in

MPEP § 509.04(c)

. For new

application filings not previously assigned a patent application number, providing

the first named inventor and the title of the invention at the top of the

certification form(s) in the spaces provided will be sufficient to identify the

application

owever,

identify the application or patent to which it pertains and it must be signed by an

authorized party as set forth in

MPEP § 509.04(c)

. For new

application filings not previously assigned a patent application number, providing

the first named inventor and the title of the invention at the top of the

certification form(s) in the spaces provided will be sufficient to identify the

application. It is strongly recommended that the following document descriptions be

used as appropriate:

• Certification of Micro Entity (Gross Income

Basis)

• Certification of Micro Entity (Education

Basis)