Prosecuting and maintaining a patent can get expensive on government fees alone. Luckily, some applicants can qualify for discounts on patent prosecution expenses. Prior to the America Invents Act (AIA), the largest reduction of fees an applicant can have is 50%, and this only happens if the applicant qualifies as a “small entity” as defined in 37 C.F.R. § 1.27. On March 19, 2013, the AIA introduced the category of “micro entity” for applicants (37 C.F.R. § 1.29), and these applicants receive typically a 75% reduction of fees. Small entity and micro entity applicants receive discounts for most patent-related fees, though some of the exceptions are the processing fee for provisional applications and fees for statutory disclaimer (including terminal disclaimer).
The four requirements for micro entity status relate to the individuals of interest for the application, namely, the inventors, joint inventors, and the legal representative of an insane or legally incapacitated inventor (“Individuals of Interest”).
- The first requirement for determining micro entity status is that the Individuals of Interest must each qualify as a small entity.
- The second requirement is that the Individuals of Interest, taken separately, cannot have been named as the inventor or a joint inventor on more than four previously filed U.S. patent applications. Not included in this application count are provisional patent applications and any patent applications where the Individuals of Interest are obligated to assign to someone else due to an employment contract.
- The third and fourth requirements make clear that the Individuals of interest cannot have a gross income exceeding three times the median household income for the calendar year preceding the calendar year in which the applicable fee is being paid. The Bureau of the Census reported the medium household income for 2015 was $56,516. So, to qualify for micro entity status, the gross income of each of the inventors, the representative of an insane or legally incapacitated inventor, the individual assignee, or individual obligated assignee cannot not be more than $169,548. This amount can change each year, so it is a good idea to check for an updated amount before you pay your fee.
- The fourth requirement is that the Individuals of Interest cannot be under an obligation to assign, grant, or convey a license or other ownership to another entity that does not meet the same income requirements as the Individuals of Interest.
If you believe you are a micro entity or have questions about what entity status you would be qualified for in paying your patent fees, please contact us and let us help you make sure you pay the right fees. Payment of the wrong fees can result in expiration or invalidation of your patent rights.