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Wednesday Sep 08, 2021

Ensuring the validity of micro entity certifications – which provide reduced fees to eligible inventors and small businesses

Guest blog by Andrew Faile, Acting Commissioner for Patents

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A core focus of our work at the USPTO is to foster innovation, competition, and economic growth, by providing opportunities for all current and aspiring inventors and entrepreneurs to participate in the intellectual property (IP) system. The cost of filing an application for a patent or trademark should not hinder individual inventors and small businesses from obtaining these key IP protections. That is why we offer a 50% and 75% reduction on most patent application fees to independent inventors and small businesses that qualify as small and micro entities.

A small entity is generally defined as a business which, including affiliates, has fewer than 500 employees, a qualifying nonprofit organization, or an individual who has not assigned, licensed or otherwise conveyed or promised to convey an interest in the invention to a non-small entity. To be a small entity applicant, it is required that all parties holding rights in the invention qualify for small entity status.

A micro entity must meet the criteria of a small entity, but also qualify for micro entity status, either on a gross income basis or on a basis of higher education, where the applicant must be obtaining the majority of their income from a United States institution of higher education. An additional requirement when filing for micro entity status based on gross income is that neither the applicant nor the inventor has been named as an inventor on more than four previously filed applications.

In recent years, we have seen a significant increase in applications by inventors claiming micro entity status, especially in the field of design patents. For example, from fiscal year 2019 to fiscal year 2020, applications for design patents filed with micro entity certifications increased by 44%, and that percentage continues to rise. In addition, requests to expedite the examination of a design application (referred to as “rocket docket” filings) with micro entity certifications increased by almost 400% during that same one-year period.

We love to see inventors utilize the micro entity discount to protect and grow their businesses – that’s why it exists. However, this uptick in micro entity filings has been accompanied by a significant increase in the number of erroneous micro entity certifications filed by inventors who do not qualify as micro entities. Many of the erroneous micro entity certifications we have seen are from applicants that are disqualified from claiming micro entity status because they have already been named on more than four previously filed applications and/or patents. The problem is particularly acute among rocket docket applications, and we are looking into whether similar issues exist in utility applications. These erroneous micro entity certifications, and the heavy use of the rocket docket by these applicants, unfortunately mean longer wait times for all applicants seeking design patents, including legitimate micro entity applicants.

We are proactively taking steps to address the issue of erroneous filings. We recently sent notices to applicants with questionable micro entity certifications requiring additional information to support their micro entity claim (if you received a notice and have questions, please call the Patents Ombudsman at 571-272-5555). Applicants who mistakenly claimed micro entity status will be able to make a fee deficiency payment and proceed through the application process in a non-micro entity status. Those who cannot provide information to support their micro entity status, and who do not make a fee deficiency payment, run the risk of their application being abandoned. We will continue to communicate with our customers and the public to ensure the requirements on how to file a patent application as a small and micro entity are clear.

We are always grateful for the opportunity to serve our dynamic innovation community. By taking these important steps to reduce current wait times and flush out erroneous certifications, we aim to protect all patent applicants, including legitimate micro entity applicants and small businesses, and prevent abuse of our world-class patent system.

For more information and assistance with filing an application, please visit the newly revamped inventor and entrepreneur resources page of the USPTO website.


One area of confusion is the "no more than four previously-filed applications." This is literally true when the fifth application is filed, so it follows that micro entity certification is appropriate at filing. But then for any subsequent fees in the fifth application (excess claims fees or extension of time fees during prosecution or issue fees) would then have to be paid at the small entity rate as of course would be in the sixth or later application naming the same inventor.

Posted by Jeromye Sartain on September 08, 2021 at 03:38 PM EDT #

There are a couple of rough spots in the Micro Entity process. (1) Some inventors are understandably unwilling to discuss gross income, even tho I (patent attorney) make it clear I just want a "yes" or "no" answer to the questions. Then, even tho I am confident they are entitled to Micro Entity, I feel I must kick them up to Small Entity. (2) "Gross Income" is not an entry on IRS1040. It leaves the inventor to grope with accounting issues, where they may be awash. Even CPAs ask what I want. It practically forces me to become the accountant and reviewer of tax returns. This is not good. (3) You would do well to state clear, hard and fast rules, such as how much evidence must the patent attorney review? At least for the senior status program you require that I keep proof of age in my file. What is the safe harbor for Micro Entity? When do I know I have done right by my client and not let him slip through, since you are now examining these issues? Thanks for considering these points.

Posted by Kyle W. Rost on September 08, 2021 at 03:52 PM EDT #

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