Micro Entity Provisional Patent Fee Discount
If you’re an individual or small entity, micro entity status may be available to you. This can save money on filing and prosecuting patent applications.
However, there can be drawbacks to having micro entity status. One such issue is its difficulty in obtaining. Therefore, it’s essential to determine if you qualify before filing your patent application.
What is a micro entity?
Micro entities are defined as small business concerns, institutions of higher education, or individuals whose gross income does not exceed three times the median household income for the preceding year. To become a micro entity, you must meet certain requirements and pay an associated fee.
With each application, whether it be a divisional, continuing, continuation-in-part or reissue application, you must submit a certification of your eligibility for micro entity status. Furthermore, when refiling an existing patent under SS 1.53 as either a continuation, divisional, continuation-in-part application or reissue application, a new certification of your eligibility for micro entity status must be submitted.
To qualify for micro entity status, you must be named on no more than four utility patents and your gross income does not exceed three times the median household income for the preceding year. If your income falls below this amount, then you may qualify for a reduced USPTO filing fee.
If your income exceeds the minimum threshold, then you must pay a standard filing fee to file your patent application. Alternatively, you may apply for a provisional patent as well.
USPTO fees often increase, so be aware of the current rate before submitting your application. It is wise to consult a patent attorney if you are uncertain of your eligibility or would like help preparing and filing your application.
Though you can apply for micro entity status on your own, the process can be lengthy and complex. For this reason, it’s wise to hire a lawyer experienced in micro entity law to guide you through the procedure.
Micro entities can be an attractive option for certain businesses, but there are some drawbacks. One major disadvantage is the cost of obtaining micro entity status – especially if you do not possess much expertise in this area.
Another disadvantage is the complexity of following all regulations and requirements. You must ensure you qualify as a micro entity and pay all applicable fees to the USPTO each time.
How do I qualify for micro entity status?
Micro entity status is a way for small entities and inventors to save 50% on the provisional patent fee. This can reduce the cost of filing a patent by an incredible 75% – providing significant cost-savings!
To be classified as a micro entity, you must meet two requirements. Your gross income cannot exceed three times the median household income in your country and you must also be named on no more than five other patents that you have filed.
Second, you must be employed by an institution of higher education and assign or be required to assign your rights to that institution. This requirement prevents large entities from claiming micro entity status – for instance, some universities once had offices that only filed patent applications on employees’ behalf, disqualifying them from applying for micro entity recognition.
The fourth requirement is that your gross income in the year prior to paying fees cannot exceed three times median household income. This test can be challenging to pass, so it is wise to consult a USPTO attorney before claiming micro entity status.
It’s essential to remember that falsely claiming micro entity status can invalidate your patent. Furthermore, applying for micro entity status requires too much effort and requires reassessment every time a fee is paid.
This means you may have to pay more fees over time, potentially increasing the cost of your patent application. This is one of the primary reasons applicants hesitate to apply for micro entity status.
Fortunately, there are other ways to qualify as a micro entity. You can either meet the institution of higher education qualification by including form SB/15B with your patent application; alternatively, you may also meet this status on a gross income basis by certifying that your gross income prior to paying fees was less than three times the median household income in your jurisdiction.
What are the disadvantages of micro entity status?
Micro entity status can be an attractive option for small companies, but it comes with its own challenges. Notably, qualifying can be quite difficult and requires a great deal of work on your part; additionally, this status often becomes an ongoing expense.
Micro entity status can be earned in several ways. An applicant must be employed by an institution of higher education, have a gross income that is less than three times the median U.S. income, and be named on no more than four patents.
The USPTO’s micro entity provisional patent fee offers an impressive discount, saving applicants money – especially if they’re startups or have less than JPY 300m in capital.
However, if your business is larger or you need investment or funding to expand, micro entity status may not be the best option for you. Not only is it difficult to acquire, but having less information about your finances available to potential creditors or investors may make it less attractive.
Micro entities may only have minimal disclosure requirements when preparing their statutory accounts, which could put you at a competitive disadvantage as competitors may gain access to your financial details.
Furthermore, as a micro entity you must ensure your accounts are compliant with FRS 105 – the accounting standard for micro entities. This can be an intricate task so it’s best to hire an accountant who can guide you through the process.
Finally, the decision to file for a micro entity should be based on the advantages it provides. However, this can be challenging to assess as there are various factors that could influence whether or not this option is right for you.
If you’re uncertain, speaking to an attorney is recommended. Doing so will help avoid making a mistake that invalidates your application and help determine whether or not obtaining micro entity status is worth the extra effort and expense.
How do I know I?m qualified for micro entity status?
Micro entity status is an advantage that small companies can leverage to make filing patent applications much simpler. Not only will you save money on filing fees, but having this status means more funds in your pocket to invest in growing your business.
However, there are some drawbacks to claiming micro entity status. It can be a time-consuming process and it’s recommended that you consult an attorney before pursuing this status. They will help maximize your benefits and guarantee that you meet the criteria for micro entity recognition.
In order to qualify as a small entity, you must meet certain income and filing limits. For instance, your gross income must not exceed three times the median household income in the year before paying your application fee, and you cannot be named an inventor on more than four other US patents.
Those eligible to become a small entity must file their applications using either form SB/15A or SB/15B, and include a declaration with their submission that demonstrates they meet the criteria for micro entity status.
Additionally, they should check the box titled “Applicant claims small entity status” on the transmittal form. Otherwise, their application will be considered a large entity and they will have to pay full fee rate.
Are you curious to find out more about applying for micro entity status? Connect with an experienced attorney at UpCounsel for guidance. These attorneys specialize in patent law and can determine if micro entity status is right for your business.
Another thing to keep in mind is that you can only claim micro entity status once per application or patent. If you refile as a continuation, divisional, or continuation-in-part application or reissue your patent, then you must recertify your micro entity status once more.
In addition to cutting patent fees, micro entity status can be beneficial when filing R&D tax credits. These credits could significantly boost profits. Furthermore, you may be able to secure new shareholder buy-in or funding that allows your company to expand.