Why does micro entity status matter?

USPTO patent fees are generally proportionate to the size of the applicant. A large entity with over 500 employees must pay the full rate. A small entity pays 50% of the full rate. A micro entity pays only 25% of the full rate (i.e., a 75% discount off the full rate, and half the rate paid by a small entity).

What is a micro entity?

A micro entity must meet certain criteria, which includes specific income requirements.

Are you still a micro entity?

Even if an applicant is sure that they qualify as a micro entity upon the initial filing, circumstances can easily shift a micro entity up to a small entity. Since incomes fluctuate from year to year, particularly for entrepreneurs working in a startup, certain vigilance is required to ensure that an applicant remains a micro entity in the years following the initial filing of a US patent application.

What are the risks of incorrectly paying micro entity USPTO fees?

If an applicant has paid micro entity USPTO fees when in fact the applicant does not qualify for micro entity status, the consequences of such wrong payments will depend upon the good faith of the applicant at the time of the payment(s). If made with an intent to deceive, then such micro entity payments may be considered as a fraud practiced or attempted on the USPTO. [see 37 CFR 1.29(j)].

If prior micro entity payments were paid in error but in good faith, then the applicant must promptly file a notification of loss of micro entity status along with itemized requirements of 37 CFR 1.29(k)(1).

Why our firm does not pay micro entity fees?

Our firm feels that the risk of an unenforceable or invalid patent due to wrong micro entity payments outweighs the savings of USPTO fees. To ensure that a micro entity remains in the same status during follow-on years requires annual checkups, a service for which our attorney’s fees would outweigh the potential savings.

Moreover, our patent team adheres to flat-fee billing for patent prosecution matters as much as reasonably possible. Fixed rates for patent prosecution and other IP matters are made possible by efficient processes that avoid the churning of unnecessary back-and-forth communications with clients (e.g., “Is your income still less than X?”; “Have you filed fewer than Y patent applications?” etc.).

The following two tabs change content below.
Vic Lin

Vic Lin

Startup Patent Attorney | IP Chair at Innovation Capital Law Group
We love working with startups and small businesses. I help entrepreneurs protect their intellectual property so they can reach their business goals.