Micro Entity Status at USPTO

The American Invents Act (AIA) authorized a new fee category, micro entity, directed to reduce fees for individual inventors and small companies. Previously, there were only two fee categories: Large entities that pay full fees, and small entities that usually pay half the fees of the large entity. Micro entities are provided a 75 percent reduction from the large entity fee rate.

To qualify as a micro entity, the applicant must meet all the items under one of the two sets rules.

Rule Set 1 (Income Limit):

  1. Each applicant qualifies as a USPTO-defined small entity under 37 C.F.R. 1.27.
  1. Each applicant is not named on more than four previously filed applications. However, the following application do not count: (a) applications that the applicant has assigned, or is obligated to assign, ownership rights as a result of previous employment (not current employment), and (b) the application was filed in another country, was a provisional application, or was an international application for which the basic national fee was not paid.
  1. Each applicant and joint inventor does not have a gross income more than three times the median household income in the previous year from when the fee(s) is paid. The limit as of August 2013 is $150,162, but this will change each year based upon United States household income. According to the USPTO FAQ page, if there are multiple inventors, the inventors income is not added together, but instead each inventor/applicant must not exceed the income limit.
  1. Each applicant has not (a) assigned, granted, or conveyed a license or other ownership to another entity that is not a micro entity, and is not (b) under an obligation to assign, grant, or convey a license or other ownership to another entity that is not a micro entity.

Rule Set 2 (Higher Ed.):

  1. Each applicant qualifies as a USPTO-defined small entity under 37 C.F.R. 1.27.
  1. 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 application to an institution of higher education as defined in 20 U.S.C. 1001(a).

Under rule set 1 many will not qualify because of the income limits and rights transfer limitations. Rule set 2 applies to universities and their employees.

Under the current fee schedule, it will cost a small entity $730 (Basic fee $70 + utility search fee $300 + utility examination fee $360) to file a utility patent application without excess claims. In contrast, it will cost a micro entity $400 (basic fee $70 + utility search fee $150 + utility examination fee $150). A large entity will pay $1600 ($280 + $600 + $720) for the same filing.

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