Universities & Micro Entities to Receive 75% reduction in Patent Office Fees

One new provision in the new patent act that will be welcomed by a number of patent applicants is the new “micro entity” fee structure. “Small entities” already receive a 50% discount on most patent office fees. Those fees will be reduced by another 50% for qualifying micro entities — a total of 75% discount as compared with the large entity fee.

A new provision (35 U.S.C. 123) defines the term “micro entity” as the patent applicant (inventor):

  1. Qualifies as a small entity;
  2. Has not been named as an inventor on more than 4 previously filed US non-provisional patent applications (not including inventions assigned based upon prior employment);
  3. Does not have an income of more than 3x the median US household income ($50k for 2009); and
  4. Has not conveyed or contractually promised to convey rights or to an entity that has an income of more than 3x the median US household income.

In a major subsidy to universities, the House Bill (H.R. 1249) grants the 75% fee reduction to public and non-profit universities and other “institutes of higher education.”  The Senate Bill (S. 23) only grants the 75% reduction to State public institutions of higher education.  The parties will look to work out the details in conference. To become law, the identical bill must be passed in both houses.

The statute also provides that the USPTO Director can set additional limits to restrict the impact of the micro entity status. These may include, for instance, additional income and annual filing limits.

65 thoughts on “Universities & Micro Entities to Receive 75% reduction in Patent Office Fees

  1. 65

    I applaud the idea of giving big breaks to micro-entities and research institutions, but if the patent reform act passes without putting an end to fee diversion, will the USPTO really be able to afford to shell out such generous subsidies?

  2. 64

    ‘One new provision in the new patent act that will be welcomed by a number of patent applicants is the new “micro entity” fee structure’

    “Welcomed”?? Sure, like the plague.

    Read the fine print. By definition one cannot file more than 4 aplns. Geez, it takes more than that to survive the PTO’s knee jerk rejections on one invention.

    This bill is nothing less than another monumental federal giveaway for banks and huge multinationals and an off shoring job killing nightmare for America.

    Just because they call it “reform” doesn’t mean it is. Even the leading patent expert in China has stated the bill will help them steal our inventions. Who are the supporters of this bill working for??

    Patent reform is a fraud on America. This bill will not do what they claim it will. What it will do is help large multinational corporations maintain their monopolies by robbing and killing their small entity and startup competitors (so it will do exactly what the large multinationals paid for) and with them the jobs they would have created. Yet small entities create the lion’s share of new jobs. According to recent studies by the Kauffman Foundation and economists at the U.S. Census Bureau, “startups aren’t everything when it comes to job growth. They’re the only thing.” This bill is a wholesale slaughter of US jobs. Those wishing to help in the fight to defeat this bill should contact us as below.

    Small entities and inventors have been given far too little voice on this bill when one considers that they rely far more heavily on the patent system than do large firms who can control their markets by their size alone. The smaller the firm, the more they rely on patents -especially startups and individual inventors.

    Please see link to truereform.piausa.org for a different/opposing view on patent reform.
    link to docs.piausa.org

  3. 63

    Screaming Lord Sutch stole the name of his political party from a reference made on Monty Python’s Tiny Black Round Thing (a 45 rpm comedy record) which in turn probably came from an actual episode of Monty Python. Inbetween standing for parliament he had a day job as a minor rock star in which he use to open his act by appearing from a coffin, which I believe he plagiarised from an American rock’n’roller back in the ’50s. Sadly, Lord Sutch is no longer with us. He wasn’t really a lord either, but certainly deserved to have been elevated to the peerage.

  4. 62

    As a patent agent, I’d like to add that the predecessor of the AIPLA was an amicus curae supporting putting patent agents out of business in the Sperry case back in ’63, and although they started recruiting agents as members a few years back they still offer us no voting rights. So, no, the AIPLA most emphatically does not represent the IP bar in general. Whether it represents the views of it’s voting members is a separate question.

  5. 60

    I agree that if this is the case, it certainly is a trap for those least prepared to handle it.

  6. 59

    Yes, as I think about those who sacrificed thier lives, some of whom are out there in the audience today (and are sure to vote Demoncratic), during this Recovery Summer, which is recovering from the last Recovery Summer, at least that’s what my teleprompter said…

  7. 58

    If there are only roughly 13,000 University patents out of roughly 400,000 issued patents per year, that is only about 3.6%.

  8. 57

    This micro entity thing at 25% deals nothing with the larger issue of the new buerocracy created by adding 150 pages of no doubt inventor unfriendly text to complicate the system. The same lobying big business intrests need to pick up 75% or more of the new changes litigation expense increases and level the legal playing field and pay to fight the new methods of fraud and theft they have created.

  9. 56


    13,000 US patents issued last year with the word University (no country limitations) in the Assignee field. At a made up number of say $1,500 in reduced fees during the course of prosecution, that is $20 million not collected.

    But does it matter? The PTO already collects more than it is allowed to spend. Any reduction in collections less than $200 million is just money being taken away from Congress, not money being taken away from the USPTO.

    If they lower maintenance fees too, then we may start talking real money though… Especially if some Wall Street types apply their talents to patent assigning in a creative manner. (Imagine if a few huge Assignees assigned all their patents and applications to a made-to-order University in a PTO fee reducing plan. Sorry, the cynic in me is creeping out.)

  10. 55

    This is actually another increased-tax-by-an-obfuscated-name on mid-size or larger entities application fees and maintenance fees. [In addition to the similarly obfuscated fee-diversion tax on all innovation.] It is a reflection of the disproportionate media, and thus political, attention that “small inventor” organizations and universities have always gotten. This is far greater than their filing rates, much less their allowance rates. In part that is due to the great American story that every important invention was invented by a lone individual in an attic, garage or basement [no matter how complex and expensive the technology has now become].
    So it would be helpful for someone to actually calculate just how much of a tax burden this really adds?
    [But keep in mind that nearly half of U.S. application filings these days are by FOREIGN large entities, which the U.S. Congress would undoubted love to find a way to tax even more if it would not be illegally discriminatory under existing treaties.]

  11. 54

    I have a perfectly good Idea! Lets have a class in School that is mandatory. It will encompass not just Business, but will also teach us how to write Patents and prosecute them. That will take care of many problems. Especially to stop those that only want to take what is not Theirs!
    David Pressman Books and the like. Better get going on writing them for all the Schools. And then in Literature class a mandatory read, On Sea’s Voyage.

  12. 53

    Asked and answered – if a claim has utility, it has utility – it need not have the full utility as alleged in the specification.

  13. 52

    Actually I would get a co-inventor so I could say “6 et al. disclose claim. All your claim are belong to us”.

  14. 51

    nah – that would be idle speculation as the rules for small entities already cover such shenanigans by way of including size of those that are licensed to use from the small entity.

  15. 50

    Pete I think I agree with you, however the factual situation is a bit different. In this case it is the art that indicates that some embodiments would have a utility. However, all embodiments explicitly mentioned in the spec have no utility that I can think of.

    Still, I think you’re right, and that was my position prior to posting the question, I’ve just never had to deal with such a close call like this.

  16. 49

    Well anon2, thanks for at least trying to be helpful, anon above you seems to have been making a joke that went over your head. But it wasn’t that good of a joke, so don’t worry about it.

    In any case, I actually do know that “claims do not have to “fulfil” all the “stated” benefits to have sub utility”. However, there is no “stated” utility in the application other than some lolable “functions” that are not substantial utilities. However, the art reveals that some embodiments that would be included in the scope of the claim would have a utility. Other embodiments however, i.e. all the ones explicitly mentioned in the spec, do not have a sub utility so far as I can see.

    So, what do you think?

  17. 48

    “Does not have an income of more than 3x the median US household income ”

    Under current law, an applicant who files as a small entity has an obligation to reassess whether their status has changed upon paying issue fees and maintenance fees. It lays a bit of a trap for small entities who prove successful in obtaining licensees.

    Will micro entities face the same obligation? Here, if the median income drops, and/or if the applicant’s income level rises, that could prove to be a significant trap for pro se applicants. I mean, we’re talking about people who make less than $150,000 per annum needing legal advice to avoid this trip stone. Pro se applicants who obtain licensees can presumably afford such advice, or turn over the prosecution and maintenance of the patent to the licensee. But pro se applicants who do not obtain licensees will surely run afoul of this provision in droves if a similar obligation applies.

  18. 47

    Fees in China are higher for applicants from the U.S. than the rest of the world? (I’m not a prosecutor, obviously.)

    I guess that doesn’t surprise me. Visas are also more expensive for U.S. citizens (I believe in retaliation of our high visa fees).

  19. 46

    I checked. Both my senators and my congressman both voted against the bill. Bravo for them. They have my votes from now until they retire and they are all in the party I generally oppose.

    This is not about politics generally. This is about massive corruption. I have never seen the like. It is amazing to behold.

    I am most disappointed by the AIPLA who should not represent big corporate America, but the IP bar generally. The corruption of this once proud organization is disturbing. We need to do something about it.

  20. 44

    You’re looking at this all wrong; like it’s supposed to make sense. It’s a kickback to universities for supporting bigger govn’t which gives the politicians the ability to claim to have done more. Good campaign bites and all. If you look at it that way, it makes perfect sense.

  21. 43

    Good point the IANAE — about agent fees. If we really want to do it right, we need the “inventor door,” where micro entitites may come and get practical advice on drafting patent applications and responding to office actions from experienced examiners. As we all know, private practice agents are in for the money and will not represent the micro entities, or will not represent them with any care and attention, their not being paid and such.

    So, we have a problem, and we need a solution.

  22. 42

    1. Clearly it does.

    2. Yes.

    3. Yes.

    4. Vote out all progressives and those labeled “moderate” republicans. Shrink the size and scope of the federal govn’t back to what it was originally intended to be.

  23. 41

    I’m speculating here, but probably to prevent a large entity from creating a micro entity it controls entirely, where the micro entity files all patents for the large entity.

  24. 40

    In 20 years of practice, I do not ever recall a situation where a further 25% reduction in filing fees would have made any difference whatsover to an inventor’s ability to afford a patent application. Granted, that’s because the attorney fees for preparing and prosecuting an application always exceed filing expenses. But that just means this new provision will only have a measurable impact on pro se applicants. I just don’t see how this new fee provision is giong to foster more innovation.

  25. 38

    I’m obliged. Thank you Tony.

    Thinking thin ends of wedges, and slippery slopes away from level playing fields, how long will it take before China uses this provision as a pretext for a revised Scales of Decreed Fees that are applicable specifically to all Applicants from the USA (except those who certify that their income is not more than, say, 3x that of an ordinary worker in China).

  26. 37

    Don’t you just love when a smart-@$$ (nice posting name) decides to weigh in on a question, and gets the question wrong?

    Ur Mom needs reading lessons. 6’s post clearly indicates a singular claim that has utility (but also lacks utility in some of the described embodiments of the specification). Since the claim has some admitted utility, the answer to 6’s question is clearly NO, a rejection for lack of utility would not be proper.

  27. 36


    Title 20 U.S.C. 1003 defines “State.” So there is no ambiguity.

    The term “State” includes, in addition to the several States of the United States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the Freely Associated States.

    The term “Freely Associated States” means the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau.

  28. 35

    Nonesense… The reduction in filing fees from 500 to 250 in the fact of $10,000 in attorney fees isn’t going to help any micro-entity…If ya really wanna help micro-entities, subsidize the patent professional fees…

  29. 34

    Congress, what have you jokers been smoking?
    The bill has 140 pages and not a one of them contains anything that is good.

    Ftf= bad
    fee diversion =bad
    adding more tasks to the already overburdened PTO = bad

  30. 33

    Applicants that are not microentities will have to pay extra to subsidize the microentity discount.

    No, they won’t. Other applicants aren’t even capable of subsidizing small and micro entities, because the PTO can’t keep all the money it collects as it is. If the PTO charges some people more, guess where the extra money goes. More to the point, guess where it doesn’t go.

    Anyway, it’s perfectly sound public policy for large entities to subsidize small entities, as long as small entities are people who generally have a harder time paying for their patents. Which is more or less the case if you don’t count universities.

    You know, as long as we ignore the fact that your patent agent’s fees will likely dwarf even large entity PTO fees.

  31. 32

    To whom or to what does the income rule apply? Only inventor(s), I presume from the summary given. So, if the “inventive entity” is 5 guys each with an annual income of $30,001, they can’t be granted micro-entity status?

  32. 31

    Applicants that are not microentities will have to pay extra to subsidize the microentity discount. There is no place else the money can come from. This is not a big enough deal to be a reason for opposing the bill, in my opinion, but it is terrible public policy.

  33. 27

    Can someone explain how the inventiveness of an individual has anything to do with a entity-size definition?

    There seems to be a fundamental problem with a government agency limiting and thus constraining promotion of the useful arts in such an arbitrary manner.

    As far as I know, such arbitrary rules are prime meat to be challenged in court and ruled as illegal.

  34. 26

    Reading only… and based on your commenting history,

    Um, no.

    Multple comments here:

    Do not read partials. ever. Too much of that type of “dissection” going around.

    Do not supply answers based on anyone’s commenting history. Especially 6’s. Answers should be based on objective truth (or at least on subjective and supported belief).


    What exactly is the “art of utility rejections”? What is the USPTO classification for this art field?

    It is established law that claims do not have to fulfill all the stated benefits to have substantial utility (enough utility to meet the legal requirement for patentability). The only riddle is why do you not know this.

  35. 25

    Reading only the last sentence of your comment and based on your commenting history, the answer is yes.

  36. 23

    If inventors walk taller they will see further.

    Even Newton accomplished what he did because he stood on the shoulders of giants.

    So I urge that stilts would be an aid to scientific creativity in both of our countries. If not, then at least the thought may lighten our cares a little.

  37. 22

    How can another Country
    get the jump on you.
    If it wasn’t for the friendliness,
    have I got a deal for you.

    Now the question that I ponder,
    If the US is so great,
    then why do you take what we have made
    and then you denegate?

    Why does some of Congress have the mindset that we’ll fix what we THINK needs fixing now? We have more important things to do. And what are those things that are more important in the US than the Economy, the Freedoms, the People? Because without out all of these we will cease as a Nation.

  38. 21

    By way of contribution to the debate on this serious subject, some years ago in the UK the Monster Raving Loonie Party (a real UK political organization which has been established for many years but disappoiningly has never had a member elected to Parliament) announced its policy for small businessmen …. stilts!

    Uplifted by these ideas, it is therefore proposed that the USPTO should provide a pair of stilts free of charge to the first named inventor of each small entity making a new US patent application. Special consideration may be needed for inventors in micro-entities who might need enhanced or powered stilts. Software and business method inventors might be supplied with software stilts for enhancement of their characters in in virtual worlds. It is to be hoped that Mr Kappos will receive these ideas in the spirit in which they are intended.

  39. 20

    So, can it be that a “small entity” can be of any nationality but a micro entity must be American? When I want to refer to a nation state I call it a “State”. Can anybody state with certainty that, here, “State” means “State of the Union” and not “nation State”?

    I’m curious: has there not always been in the USA this ambiguity as to the meaning of the word “State”. I suppose that, normally, the surrounding context removes the ambiguity. But here?

  40. 19

    I come bearing gifts from the interwebs:

    link to youtube.com

    In return I would appreciate if one of skill in the art of utility rejections could answer me a riddle.

    I’m a claim, some of the embodiments I cover would have substantial utility, other embodiments (the ones which appear to be of interest to the applicant) appear to not have substantial utility and those embodiments would be for decoration only. Am I properly rejected for lack of utility?

  41. 15

    I can see the Office Actions already … “Final Action. Yours truly is inventor and sole owner of pat. no. xxxxxx. All you claims are anticipated. This Action is final.”

  42. 13

    Wow. Big time payoff by the powers to their friends who supported the Patent Reform Bill. Who says that crony capitalism does not have its perks?

    If this doesn’t make one sick to one’s stomach with the outrageousness of it all, I have to wonder just what would make one appalled.

    Is this a new low for America? Is this what our government has become: a shill for the highest bidder?

    How can we put a stop to this c r a p?

  43. 12

    Like IBP, I’m relieved that universities will qualify for micro-entity status. Surely we were all concerned about the serious financial jeopardy facing universities today, given the record high tuitions and neverending flow of government contract money.

    What I can’t figure out though is how a dynamic dabbler / spammer duo isn’t jumping all over this limitation of four prior applications, like what happened with the claims / continuations rules. Someone think of the children.

  44. 11

    ya fish or 12 if your bright and starting out 4 can put your lights out before you can sell the first one then stop you up for years with the backlog.also just because you agree to convey to an entity with more than 3 times the average income doesent mean youve seen a nickle of money yet.Clearly indegency discrimination again uspto is good at it.

  45. 9

    “2.Has not been named as an inventor on more than 4 previously filed US non-provisional patent applications”

    Four is too few — should be ten

  46. 8

    Boy, talk about feeding the hand that bites you…

  47. 7

    No, the portion of HR 1249 Dennis refers to relies on 20 USC 1001 to define an educational entity, which the educational entity be in a State and be accredited by a nationally recognized accrediting agency.

  48. 5

    If they really wanted to see an explosion in innovation they should simply repeal the prohibition on examiners filing.

  49. 4

    Save it for Democratic Underground; this will make you look cool there. Here it just makes you a putz.

  50. 3

    The only reason public universities are broke is because they don’t charge students enough! Plus they let foreign people and illegal people attend. Those people ruin everything because they think America is about getting a free ride when in reality America is about winners, not losers. The spirit of America is about winners. It wasn’t a foreigner who made the first trans-atlantic solo flight, it was a great American named Charles Manson. That’s the kind of spirit I’m talking about.

  51. 2

    Are foreign universities included? If so, expect a flood of low quality apps from Taiwan.

  52. 1

    Because “universities” need all the help they can get, those poor, underprivileged institutions.

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