Tag: patent filing fees

Back in November, I posted about the new micro entity fees that will eventually be available to qualifying entities as part of the America Invents Act. In that post, I discussed how the micro entity fees will only go into effect after the USPTO has followed the fee-setting process. Here is a recap of the fee-setting process from that post:

• the USPTO director submits the proposed fee to the Patent Public Advisory Committee or the Trademark Public Advisory Committee
• the Committee holds a public hearing regarding the proposed fee during the thirty day period after submission from the USPTO director
• the USPTO director publishes a written report of the comments, advice, and recommendations of the committee
• the proposed fee changes are published in the Federal Register
• the public may submit comments for at least forty-five days after the proposed fee changes are published
• the final fee changes are published in the Federal Register
• at least forty-five days after publication of the final fee change, the changes may become effective

USPTO Fee Proposal

Last week, the USPTO director, David Kappos, submitted this letter to the Patent Public Advisory Committee with the USPTO’s fee proposal. The director’s letter detailed (among other things) why the USPTO needs to increase fees, one of the reasons being the need to have funding to reduce the large patent application backlog. The USPTO intends to increase fees collected by 10% (over current revenue) in 2013 and an additional 5% (over 2013 revenue) in 2014 in order to fund the process of eliminating this backlog. According to the director’s letter, the application backlog will be sufficiently reduced by 2015 so that filing fees can decrease in 2016.

The director’s letter also discusses how the USPTO will not make money from the front end of the patent application process (filing, search, and examination fees that are paid upon submission of the patent application), but will rather let filing fees be lower than “full-cost recovery.” The intention is to encourage a greater number of applications, and then make up this front-end subsidy by setting later fees, such as patent maintenance fees, above cost.

This plan will be implemented by decreasing the issue and publication fees. The figure shows how a patent applicant will pay slightly less over the course of the patent examination process (blue and red bars) under the USPTO-proposed fees, but then will have paid more by the time the second maintenance fee is paid (which occurs 7.5 years after the patent issues).

The table below summarizes the proposed maintenance fee increases.

Stage	When Due	Current Fee	Proposed Fee	Change
1	3.5 years after issue	$1,130	$1,600	+42%
2	7.5 years after issue	$2,850	$3,600	+26%
3	11.5 years after issue	$4,730	$7,600	+61%

Note: All fee amounts listed in the figure and table above are for large entity patent applicants.

Small and Micro Entity Fees

As I explained in my previous post about micro entity fees, a “small entity” is patent applicant that falls under one of the categories listed below and has not assigned or licensed any rights in the invention to any person, concern, or organization which would not qualify as a small entity.

• individuals;
• businesses that have less than 500 employees;
• charitable organizations; or
• universities or other other institutions of higher education.

A “micro entity” is a small entity that:

• qualifies as a small entity;
• has not been named as an inventor on more than four previously-filed patent applications;
• did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding three times the median household income (median household income in 2010 was about $50,000); and
• has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the patent application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income.

When the proposed fees go into effect, a small entity will receive a 50% discount off the fees listed above. A micro entity will pay only 25% of the fees listed above.

Looking Forward

The Patent Public Advisory Committee will hold two hearings on the proposed fee increases. One of them occurred today, February 15. The second hearing will be held Thursday, February 23 at the Sunnyvale Public Library in Sunnyvale, California. Following these hearings, the USPTO will continue to follow the fee-setting process laid out above. The USPTO hopes that its proposed fees will be effective sometime around February, 2013. I will publish updates as progress is made.

Links:

• USPTO Director’s Letter to the Patent Public Advisory Committee
• Executive Summary: Patent Fee Proposal
• Table of Patent Fee Changes

One of the changes brought about by the America Invents Act is a new status of patent applicant called the “micro entity.” The idea is similar to the current “small entity” status granted to certain applicants–but instead of reducing fees by 50% (as for small entity applicants), the Act reduces certain patent fees by 75% for those applicants that qualify. So, who can qualify as a micro entity, and when do the changes go into effect?

First, let us review the qualifications of a small entity. The following can qualify as a small entity:

• individuals;
• businesses that have less than 500 employees;
• charitable organizations; or
• universities or other other institutions of higher education.

A small entity is a patent applicant that falls under one of the above categories and has not assigned or licensed any rights in the invention to any person, concern, or organization which would not qualify for small entity status. As stated above, a small entity patent applicant is entited to a 50% reduction in certain patent filing fees.

The Act defines a micro entity as an applicant that meets the following criteria:

• qualifies as a small entity;
• has not been named as an inventor on more than four previously-filed patent applications*;
• did not, in the calendar year preceding the calendar year in which the applicable fee is paid, have a gross income exceeding three times the median household income (median household income in 2010 was about $50,000); and
• has not assigned, granted, or conveyed (and is not under obligation to do so) a license or other ownership interest in the patent application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is paid, had a gross income exceeding 3 times the median household income.

* any application in which an inventor was named, and which was assigned (or under obligation to assign) as a result of previous employment does not count toward that inventor’s four-application limit.

The micro entity status may only benefit the patent novices–once a person has more than four patent applications under his belt, he will not qualify. In comparison, the small entity status may be enjoyed by qualifying applicants without such limitation.

If you think that you or your organization may qualify for micro entity status, it could be worth looking into. However, even though the definition of a micro entity went into effect September 16, 2011 (the date the Act was enacted), as of the date of this blog entry, no one can benefit from the micro entity statuts–yet. Section 10 of the America Invents Act describes the USPTO’s fee-setting authority. Until the USPTO goes through the prescribed fee-setting procedure for micro entity fees, it cannot apply the discount. How long will that take? While it is difficult to predict exactly when the micro entity discount will be available, a review of the fee-setting procedure laid out by the Act can be instructive.

The fee-setting procedure conforms to the following timeline:

• the USPTO director submits the proposed fee to the Patent Public Advisory Committee or the Trademark Public Advisory Committee
• the Committee holds a public hearing regarding the proposed fee during the thirty day period after submission from the USPTO director
• the USPTO director publishes a written report of the comments, advice, and recommendations of the committee
• the proposed fee changes are published in the Federal Register
• the public may submit comments for at least forty-five days after the proposed fee changes are published
• the final fee changes are published in the Federal Register
• at least forty-five days after publication of the final fee change, the changes may become effective

According to the fee-setting procedure, the fastest that new fees (including micro entity fees) could become effective is 120 days after the process is started. In reality, my guess is that micro entity fees will not be available until around a year from now, but we won’t know for sure until it actually occurs.