At the end of May 2012, the United States Patent and Trademark Office (USPTO) announced a proposed rule change with the publication of a Federal Register notice titled Changes to Implement Micro Entity Status for Paying Patent Fees. The Office seeks written comments no later than July 30, 2012. On September 6, 2012, the USPTO published proposed patent fees in the Federal Register, seeking to set fees for the first time under the authority derived from the America Invents Act.
These fees include micro-entity fees that are steeply discounted over the full fee. Indeed, the proposed patent fees made public for comment on September 6, 2012, significantly raise virtually all fees on small entities and large entities. Only micro-entities see a discount compared to the patent fees charged today. Because all fees across the board have gone up the micro-entity discount, while certainly significant, will not be quite what some were hoping for when dreaming of $.25-on-the-dollar fees based on what the fees are presently.
Extension of time fees will increase between 7% to 33%. Application size fees go up 29%. Excess claim fees increase between 33% to 73%. The first RCE fee goes up 29% and subsequent RCE fees go up 83%. The total fees due at filing go up 28%. Ex parte reexamination fees go up between 300% and 600%. Of course, in each situation, the fees drop for micro-entities and the increases will be paid by small entities and large entities.
Is this the right course for the Patent Office to take given the state of our economy? Will this become an issue in the Presidential Election? Few care about patents, but innovation, technology and small business are issues that surely will come up. In a world where everything is looked at under the microscope of the 24/7 media, could this be used to show that the Obama Administration is proposing additional fees on innovators? The timing of these proposed fees could thrust them, and the patent system, into the spotlight.
The Genesis and Definition of Micro Entity
The America Invents Act, which was enacted on September 16, 2011, presents a major revision to the patent system. The most sweeping change — moving from a ‘first to invent’ system to a ‘first to file’ system — will not be accomplished until March 16, 2013. The terms of the Leahy-Smith America Invents Act, however, presently gives the Patent Office the authority to set or adjust any patent fee, provided that the revenue generated by patent fees recovers only the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (including administrative costs). The AIA also allows most fees set or adjusted by the USPTO to be reduced by 50% with respect to small entities and by 75% with respect to micro entities. The Leahy-Smith America Invents Act also added a new section the patent laws that defines a “micro entity.”
Generally speaking, a “micro entity” refers to an applicant that makes a certification that the application: (1) qualifies as a small entity; (2) has not been named an inventor on more than 4 previously filed non-provisional patent applications in the United States; (3) did not have a gross income that exceeds 3 times the median household income for that preceding calendar year; and (4) has not assigned, granted, or conveyed a license or other ownership interest in the application concerned to an entity that had gross income exceeding 3 times the median household income for the preceding calendar year.
Impact of Raised Fees
What this means, however, is that not even all independent inventors will qualify for characterization as a micro entity, and small businesses will not be micro entities either. Thus, fees on many (if not most) independent inventors and entrepreneurs will significantly rise. Fees on small businesses and large businesses alike will also significantly rise and present an impediment to using the patent system. In fact, in the proposed fees publication in the Federal Register, the USPTO recognizes that these increased fees will have a detrimental impact on filing, suggesting that the number of applications filed over the next 30 months will likely drop.
While decreased fees for inventors who are relatively new to the patent system and who have lower incomes is certainly a positive development, the increase in fees on small businesses and entrepreneurs could have a detrimental effect on the economy and on job creation. A patent is a business asset that makes obtaining investment possible. It is also an asset that can be licensed. Making it more expensive and more difficult to obtain patent protection will be a burden on those in the economy who are celebrated most for being the engine of job growth.
Those wishing to comment on these new fees must do so on or before November 5, 2012. Comments should be sent by electronic mail message over the Internet addressed to: email@example.com. Further, these proposed fees will be fair game for discussion at the AIA Roadshows scheduled throughout the United States during the month of September.
Written by Gene Quinn of IPWatchdog.com