Patent Law Changes May Reduce Your Patent Costs – the “Micro – Entity”

On September 16, 2011, President Obama signed the America Invents Act.  This Act will cause drastic and complex changes to U.S. Patent Law.  The impact of many of these changes will only become apparent as the Act is implemented.  I will address some of these changes from time to time in my blog.

Let’s start with something all patent applicants, especially small companies and solo inventors, care about:  What’s this going to cost me?

For now, it appears that it is going to cost all patent applicants, small or large, more money.  As of September 26, 2011, many, if not most, patent fees will increase by about 15%.

Wait a minute (you may say), I thought this article was about how patent law changes would reduce my costs.  How does this 15% increase reduce my patent costs?  The answer is it doesn’t.

However, the America Invents Act also creates a new category of patent applicant called a “Micro – Entity”.  If you are familiar with a “Large Entity” and a “Small Entity” under current United States Patent Law, you know that a “Small Entity” gets a 50% reduction in various patent fees, as compared to a “Large Entity”.   Somewhat similarly, the America Invents Act will likely provide a 75% reduction in various patent fees for a “Micro – Entity” versus a “Large Entity”.

“Will likely provide?” that sounds like something a lawyer would say.  If I am a “Micro – Entity”, do I get 75% off or not?  The answer as of September 21, 2011, is hopefully, but not yet.  The United States Patent Office, in a press release dated September 21, 2011,   states that:

“Micro Entities

At this time the USPTO may not offer the micro entity discount (75%) on any fees. As provided for in the Leahy-Smith America Invents Act (Public Law 112-29) these fees will be adjusted under the fee setting authority provided for in Section 10 of the AIA.  The AIA continues to provide a small entity discount (50%) under 35 U.S. C. § 41(h)(1).

Once the USPTO sets these new fees, it is anticipated that the new fees will include a 50% reduction for small entities and a 75% reduction for micro entities for ‘filing, searching, examining, issuing, appealing, and maintaining patent applications and patents.’ Applicants qualifying for a small entity discount (50%) will be those who meet the current definition in 35 U.S. C. 41(h)(1) while applicants qualifying for a micro entity discount (75%) will be those who meet the definition outlined in AIA Section 11(g).”

OK, so the “Micro Entity” discount may not be in effect for a while; when, and if, it does go into effect, how do I know if I am a “Micro Entity”?

Well, it would be nice if we could just simply say that a “Micro Entity” is smaller than a “Small Entity” and  a “Small Entity” is smaller than a “Large Entity”.  However, since this involves the law and lawyers, not to mention the United States Congress, the answer is not that simple.  Suffice it to say that when you file for a U.S. patent application, you should ask your patent attorney whether you qualify for a “Micro Entity” discount or a “Small Entity” Discount.

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