IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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 DEPARTMENT  OF COMMERCE 
Patent  and Trademark  Office  
37 CFR Part 1 
[Docket No.: PTO –P–2011–0016] 
RIN 0651 –AC78  
Changes  To Implement  Micro  Entity  
Status  for Paying  Patent  Fees  
AGENCY : United  States  Patent  and 
Trademark  Office,  Commerce. 
ACTION : Final  rule.  
 
SUMMARY : The United  States  Patent  and 
Trademark  Office  (Office)  is revising  the 
rules  of practice  in patent  cases  to 
implement  the micro  entity  provision  of 
the Leahy -Smith  America  Invents  Act 
(AIA).  Certain  patent  fees set or adjusted 
under  the fee setting  authority  in the 
AIA will  be reduced  by seventy -five 
percent  for micro  entities.  The Office  is  IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
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revising  the rules  of practice  to set out 
the procedures  pertaining  to claiming 
micro  entity  status,  paying  patent  fees as 
a micro  entity,  notification  of loss of 
micro  entity  status,  and  correction  of 
payments  of patent  fees paid  
erroneously  in the micro  entity  amount. 
In a separate  rulemaking,  the Office  is 
in the process  of proposing  to set or 
adjust  patent  fees under  the Leahy - 
Smith  America  Invents  Act, including 
setting  fees for micro  entities  with  a 
seventy -five percent  reduction.  The 
Office  has sought  to address  the 
concerns  of its stakeholders  as 
expressed  in the public  comment,  and 
plans  to seek additional  public  
comment  on the micro  entity  provisions 
after the Office  and  the public  have 
gained  experience  with  the micro  entity 
procedures  in operation.  The Office  will 
pursue  further  improvements  to the 
micro  entity  procedures  in light  of the 
public  comment  and  its experience  with 
the micro  entity  procedures.  
DATES : Effective  March  19, 2013.  FOR  
FURTHER  INFORMATION  CONTACT : James  
Engel,  Senior  Legal  Advisor  ((571)  
272–7725),  Office  of Patent  Legal  
Administration,  Office  of the Deputy 
Commissioner  for Patent  Examination 
Policy.  
SUPPLEMENTARY  INFORMATION : 
Executive  Summary:  Purpose:  The 
AIA provides  that:  (1) The Office  may 
set or adjust  any patent  fee, provided 
that the aggregate  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);  and  (2) most  fees 
set or adjusted  under  this  authority  are 
reduced  by fifty percent  for small 
entities  and  by seventy -five percent  for 
micro  entities.  The AIA also adds  a new 
section  to Title  35 of the United  States 
Code  that  defines  a ‘‘micro  entity.’’  The 
rules  of practice  currently  have 
provisions  pertaining  to small  entity 
status,  as the patent  laws  provided  a 
small  entity  discount  prior to the Leahy - 
Smith  America  Invents  Act. This  final 
rule  revises  the rules  of practice  to 
implement  the ‘‘micro  entity’’  
provisions  added  by the Leahy -Smith  
America  Invents  Act.  
Summary  of Major  Provisions: The 
Office  is adding  a provision  to the rules 
of practice  pertaining  to micro  entity 
status.  The provision  sets out the 
requirements  to qualify  as a micro  entity 
tracking  the statutory  requirements  for a 
micro  entity  set forth  in section  10 of 
the Leahy -Smith  America  Invents  Act. 
The provision  also sets out procedures 
relating  to micro  entity  status  that 
largely  track  the regulatory  requirements  and  procedures  in 37 CFR  1.27 for small 
entity  status.  These  new  procedures 
pertain  to claiming  micro  entity  status, 
paying  patent  fees as a micro  entity, 
notifying  the Office  of loss of micro 
entity  status,  and  correcting  payments  of 
patent  fees paid erroneously  in the 
micro  entity  amount.  The procedures  for 
claiming  micro  entity  status  require  the 
filing  of a certification  of entitlement  to 
micro  entity  status.  The Office  is 
developing  forms  (paper  and  electronic) 
for use by members  of the public  to 
provide  a certification  of micro  entity 
status.  The procedures  for paying  fees as 
a micro  entity  provide  that  a micro  
entity  certification  need only  be filed 
once  in an application  or patent,  but 
that a fee may be paid  in the micro 
entity  amount  only  if the applicant  or 
patentee  is still  entitled  to micro  entity 
status  on the date  the fee is paid.  The 
procedures  pertaining  to notifying  the 
Office  of loss of micro  entity  status  and 
correcting  payments  of patent  fees paid 
erroneously  in the micro  entity  amount 
track  the corresponding  small  entity 
provisions  for notifying  the Office  of 
loss of small  entity  status  and  correcting 
payments  of patent  fees paid  
erroneously  in the small  entity  amount.  
Costs  and  Benefits:  This  rulemaking  is 
not economically  significant  as that 
term  is defined  in Executive  Order  
12866  (Sept.  30, 1993).  
Background:  The AIA was enacted  
into  law on September  16, 2011.  See 
Public  Law 112–29, 125 Stat.  283 
(2011).  Section  10(a)  of the AIA 
provides  that  the Office  may set or 
adjust  by rule  any patent  fee 
established,  authorized,  or charged 
under  title  35, United  States  Code, 
provided  that  aggregate  patent  fees 
recover  only  the aggregate estimated 
costs  to the Office  for processing,  
activities,  services,  and  materials 
relating  to patents  (including 
administrative  costs).  See 125 Stat.  at 
316. Section  10(b)  of the AIA provides 
that  ‘‘the  fees set or adjusted  under 
[section  10(a)]  for filing,  searching, 
examining,  issuing,  appealing,  and 
maintaining  patent  applications  and 
patents  shall  be reduced  by 50 percent 
with  respect  to the application  of such 
fees to any small  entity  that  qualifies  for 
reduced  fees under  [35 U.S.C.]  41(h)(1)  
*  *  *, and  shall  be reduced  by 75 
percent  with  respect  to the application 
of such  fees to any micro  entity  as 
defined  in [35 U.S.C.]  123.’’  See 125 
Stat.  at 316–17. The patent  laws 
provided  in 35 U.S.C.  41(h)  for small 
entities  prior  to the Leahy -Smith 
America  Invents  Act. Section  10(g)  of 
the AIA adds  a new  35 U.S.C.  123 to 
define  a ‘‘micro  entity.’’  See 125 Stat.  at 
318–19. 35 U.S.C.  123(a)  provides  one basis 
under which  an applicant  may establish 
micro  entity  status.  35 U.S.C.  123(d) 
provides  another  basis  under which  an 
applicant  may establish  micro  entity 
status.  Each  will  be discussed  in turn.  
35 U.S.C.  123(a)  provides  that  the 
term  ‘‘micro  entity’’  means  an applicant 
who  makes  a certification  that  the 
applicant:  (1) Qualifies  as a small  entity 
as defined  in 37 CFR  1.27;  (2) has not 
been  named  as an inventor  on more  
than  four previously  filed  patent 
applications,  other  than applications 
filed  in another  country,  provisional 
applications  under 35 U.S.C.  111(b),  or 
international  applications  for which  the 
basic  national  fee under  35 U.S.C.  41(a) 
was not paid;  (3) did  not,  in the 
calendar  year preceding  the calendar 
year in which  the applicable  fee is being 
paid,  have  a gross  income,  as defined  in 
section  61(a)  of the Internal  Revenue 
Code  of 1986  (26 U.S.C.  61(a)),  
exceeding  three  times  the median 
household  income  for that  preceding 
calendar  year,  as most  recently  reported 
by the Bureau  of the Census;  and  (4) has 
not assigned,  granted,  or conveyed,  and 
is not under  an obligation  by contract  or 
law to assign,  grant,  or convey,  a license 
or other  ownership  interest  in the 
application  concerned  to an entity  that, 
in the calendar  year preceding  the 
calendar  year in which  the applicable 
fee is being  paid,  had  a gross  income,  as 
defined  in section  61(a)  of the Internal 
Revenue  Code  of 1986,  exceeding  three 
times  the median  household  income  for 
that  preceding  calendar  year,  as most 
recently  reported  by the Bureau  of the 
Census.  See 125 Stat.  at 318. 35 U.S.C.  
123(a)  provides  one basis  under which 
an applicant  may establish  micro  entity 
status.  
The Office  will  indicate  the income  
level  that  is three  times  the median 
household  income  for the calendar  year 
most  recently  reported  by the Bureau  of 
the Census  (the income  threshold  set 
forth  in 35 U.S.C.  123(a)(3)  and  (a)(4)) 
on its Internet  Web  site,  with its 
Independent  Inventor  resource 
information,  and  on the Office’s  
certification  of micro  entity  status  (gross 
income  basis)  form  (Form  PTO/SB/15A). 
The Office  will  also make  available 
resources  to micro  entities  to help 
navigate  the new  micro  entity  
procedures.  
35 U.S.C.  123(b)  provides  that  an 
applicant  is not considered  to be named 
on a previously  filed  application  for 
purposes  of 35 U.S.C.  123(a)(2)  if the 
applicant  has assigned,  or is under an 
obligation  by contract  or law to assign, 
all ownership  rights  in the application 
as the result  of the applicant’s  previous 
employment.  See id.  IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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35 U.S.C.  123(c)  provides  that  if an 
applicant’s  or entity’s  gross  income  in 
the preceding  calendar  year is not in 
United  States  dollars,  the average 
currency  exchange  rate,  as reported  by 
the Internal  Revenue  Service,  during 
that  calendar  year shall  be used  to 
determine  whether  the applicant’s  or 
entity’s  gross  income  exceeds  the 
threshold  specified  in 35 U.S.C.  
123(a)(3)  or (4). See 125 Stat.  at 319.  
35 U.S.C.  123(d)  provides  that  a micro  
entity  shall  also include  an applicant 
who certifies  that:  (1) The applicant’s 
employer,  from  which  the applicant 
obtains  the majority  of the applicant’s 
income,  is an institution  of higher 
education  as defined  in section  101(a)  of 
the Higher  Education  Act of 1965  (20 
U.S.C.  1001(a));  or (2) the applicant  has 
assigned,  granted,  conveyed,  or is under 
an obligation  by contract  or law,  to 
assign,  grant,  or convey,  a license  or 
other  ownership  interest  in the 
particular  application  to such an 
institution  of higher  education.  See id. 
As explained  earlier,  35 U.S.C.  123(a) 
provides  one basis  under which  an 
applicant  may establish  micro  entity 
status,  and  35 U.S.C.  123(d)  provides 
another  basis  under which  an applicant 
may establish  micro  entity  status.  
35 U.S.C.  123(e)  provides  that  in 
addition  to the limits  imposed  by this 
section,  the Director  has the discretion 
to impose  income  limits,  annual  filing 
limits,  or other  limits  on who  may  
qualify  as a micro  entity  pursuant  to this 
section  if the Director  determines  that 
such additional  limits  are reasonably 
necessary  to avoid  an undue  impact  on 
other  patent  applicants  or owners  or are 
otherwise  reasonably  necessary  and 
appropriate.  35 U.S.C.  123(e)  also 
provides  that  at least  three  months  
before  any limits  proposed  to be 
implemented  pursuant  to 35 U.S.C.  
123(e)  take effect,  the Director  shall 
inform  the Committee  on the Judiciary 
of the House  of Representatives  and  the 
Committee  on the Judiciary  of the 
Senate  of any such  proposed  limits.  See 
id. 
The micro  entity  provisions  of 35 
U.S.C.  123 are currently  in effect. 
However,  no patent  fee is currently 
eligible  for the seventy -five percent 
micro  entity  reduction  as no patent  fee 
has yet been  set or adjusted  under 
section  10 of the Leahy -Smith  America  
Invents  Act. The Office  is in the process 
of proposing  to set or adjust  patent  fees 
under  section  10 of the AIA in a 
separate  rulemaking.  See Setting  and 
Adjusting  Patent  Fees,  77 FR 55028 
(Sept.  6, 2012).  The fees set or adjusted 
by the Office  under  section  10 of the 
AIA for filing,  searching,  examining, 
issuing,  appealing,  and  maintaining  a patent  application  and  patent  will  be 
reduced  by: (1) Fifty  percent  for an 
applicant  or patentee  who  establishes 
small  (but not micro)  entity  status  in the 
patent  application  or patent;  and  (2) 
seventy -five percent  for an applicant  or 
patentee  who  establishes  micro  entity 
status  in the patent  application  or 
patent.  
The Office  plans  to rely upon  the 
applicant’s  certification  of micro  entity 
status  (except  where  it conflicts  with  the 
information  contained  in the Office’s 
records,  such  as where  Office  records 
indicate  that  the applicant  is named  as 
an inventor  on more  than  four  
previously  filed  and  unassigned 
nonprovisional  patent  applications)  and 
will  not require  any additional 
documents  from  the applicant 
concerning  the applicant’s  entitlement  
to claim  micro  entity  status.  This 
practice  is similar  to small  entity 
practice  where  the Office  generally  does 
not question  a claim  of entitlement  to 
small  entity  status.  See 37 CFR  1.27(f); 
see also Manual  of Patent  Examining 
Procedure  § 509.03  (8th ed. 2001)  (Rev.  
9, Aug.  2012)  (MPEP).  
The Office  does  not plan  to provide  
advisory  opinions  on whether  a 
particular  entity  is entitled  to claim 
micro  entity  status.  See MPEP  § 509.03. 
The Office,  however,  is providing  the 
following  information  concerning 
procedures  for micro  entity  status  under  
35 U.S.C.  123:  
35 U.S.C.  123 uses  the term  
‘‘applicant’’ throughout,  which  was 
virtually  synonymous  with ‘‘inventor’’ 
on September  16, 2011  (the date  of 
enactment  of the AIA as well  as the 
effective  date  of 35 U.S.C.  123).  35 
U.S.C.  118, however,  as amended 
effective  on September  16, 2012,  by 
Section  4 of the AIA,  now  permits  an 
application  to be made  by a person  to 
whom  the inventor  has assigned  or is 
under  an obligation  to assign  the 
invention.  In addition,  a person  who 
otherwise  shows  sufficient  proprietary 
interest  in the matter  may make  an 
application  for patent  on behalf  of and 
as agent  for the inventor.  Thus,  35 
U.S.C.  118 now  allows  a person  other 
than  the inventor  to file an application 
as the applicant  if the inventor  has 
assigned  or is under  an obligation  to 
assign  the invention  to the person  or if 
the person  shows  sufficient  proprietary 
interest  in the matter.  Note  also that  as 
of March  16, 2013,  35 U.S.C.  100 will 
be amended  to provide  new  and  specific 
definitions  of the terms  ‘‘inventor,’’  
‘‘joint  inventor,’’  and  ‘‘coinventor.’’  
35 U.S.C.  123 does  not explicitly  
preclude  an assignee -applicant  under  35 
U.S.C.  118 from  claiming  micro  entity 
status  under  35 U.S.C.  123(a)  or (d), although  some  provisions  of 35 U.S.C.  
123(a)  and  (d) refer to an applicant  who 
is a natural  person  inventor  rather  than 
a juristic  entity.  See 35 U.S.C.  123(a)(2) 
(provides  that  a micro  entity  applicant 
under  35 U.S.C.  123(a)  must  not have  
‘‘been  named  as an inventor  on more 
than  4 previously  filed  patent 
applications’’)  and  123(d)(1) (provides 
that  the term  micro  entity  includes  an 
applicant  who  certifies  that  ‘‘the 
applicant’s  employer,  from  which  the 
applicant  obtains  the majority  of the 
applicant’s  income,  is an institution  of 
higher  education’’  as defined  by section  
101(a)  of the Higher  Education  Act of 
1965).  In addition,  35 U.S.C.  123(a),  (b) 
and  (d) specifically  refer  to a situation 
in which  the applicant  has assigned 
rights  in the invention  to an assignee. 
See 35 U.S.C.  123(a)(4)  (provides  that  a 
micro  entity  applicant  under  35 U.S.C.  
123(a)  must  not have  ‘‘assigned, granted, 
or conveyed,  and  is not under an 
obligation  by contract  or law to assign, 
grant,  or convey,  a license  or other 
ownership  interest  in the application 
concerned  to an entity’’  exceeding  a 
specified  gross  income);  35 U.S.C.  
123(b)  (provides  that  an applicant  is not 
considered  to be named  on a previously 
filed  application  for purposes  of 35 
U.S.C.  123(a)(2)  if ‘‘the  applicant  has 
assigned,  or is under  an obligation  by 
contract  or law to assign,  all ownership 
rights  in the application  as the result  of 
the applicant’s  previous  employment’’); 
and  35 U.S.C.  123(d)(2)  (provides  that 
the term  micro  entity  includes  an 
‘‘applicant  [who]  has assigned,  granted, 
conveyed,  or is under  an obligation  by 
contract  or law,  to assign,  grant,  or 
convey,  a license  or other  ownership 
interest  in the particular  applications’’ 
to an institution  of higher  education  as 
defined  by section  101(a)  of the Higher 
Education  Act of 1965).  Finally,  the 
legislative  history  of 35 U.S.C.  123 
includes  a reference  to micro  entities  as 
inventors  and  not the assignees  of 
inventors.  See H.R.  Rep 112–98 at 50 
(2011)  (describing  micro  entities  as ‘‘a 
group  of inventors’’  and  ‘‘truly 
independent  inventors’’).  Nevertheless,  
35 U.S.C.  123 does  not explicitly 
preclude  an assignee -applicant  under  35 
U.S.C.  118 from  claiming  micro  entity 
status  for an application  under 35 U.S.C.  
123(a)  or 123(d),  provided  there  is 
compliance  with  the applicable  micro 
entity  criteria.  Each  applicant  must 
qualify  for micro  entity  status,  and  any 
other  party  holding  rights  in the 
application  must  qualify  for small  entity 
status.  See 37 CFR  1.29 (h). Note  that  a 
party  who  qualifies  for micro  entity 
status  necessarily  qualifies  for small 
entity  status,  as under  37 CFR  1.29 a  IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
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micro  entity  must first qualify  as a small 
entity  under 37 CFR  1.27.  
An ‘‘institution  of higher  education,’’  
as that  term  is used  in 35 U.S.C.  123(d), 
is defined  in the Higher  Education  Act 
of 1965  (20 U.S.C.  1001(a)).  Section  
101(a)  of the Higher  Education  Act of 
1965  (20 U.S.C.  1001)  provides  that:  
‘‘For  purposes  of this  chapter,  other  
than subchapter  IV, the term  ‘institution 
of higher  education’  means  an 
educational  institution  in any State 
that—(1) Admits  as regular  students  
only  persons  having  a certificate  of 
graduation  from  a school  providing 
secondary  education,  or the recognized 
equivalent  of such  a certificate,  or 
persons  who  meet  the requirements  of 
section  1091(d)(3)  of this  title;  (2) is 
legally  authorized  within  such  State  to 
provide  a program  of education  beyond 
secondary  education;  (3) provides  an 
educational  program  for which  the 
institution  awards  a bachelor’s  degree  or 
provides  not less than  a 2-year  program 
that  is acceptable  for full credit  toward 
such  a degree,  or awards  a degree  that 
is acceptable  for admission  to a graduate 
or professional  degree  program,  subject 
to review  and  approval  by the Secretary; 
(4) is a public  or other  nonprofit 
institution;  and  (5) is accredited  by a 
nationally  recognized  accrediting  
agency  or association,  or if not so 
accredited,  is an institution  that  has 
been  granted  pre-accreditation  status  by 
such  an agency  or association  that  has 
been  recognized  by the Secretary  for the 
granting  of pre-accreditation  status,  and 
the Secretary  has determined  that  there 
is satisfactory  assurance  that  the 
institution  will  meet  the accreditation 
standards  of such  an agency  or 
association  within  a reasonable  time.’’  
Section  103 of the Higher  Education  Act 
of 1965  (20 U.S.C.  1003)  provides  ‘‘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’’  and  that  the Freely 
Associated  States  means  the ‘‘Republic 
of the Marshall  Islands,  the Federated 
States  of Micronesia,  and  the Republic  
of Palau.’’  
The Office  is setting  out in the rules  
of practice  the requirements  for micro 
entity  status  and  procedures  for 
claiming  micro  entity  status,  paying 
patent  fees as a micro  entity,  notifying 
the Office  of loss of micro  entity  status, 
and  correcting  payments  of patent  fees 
paid erroneously  in the micro  entity 
amount.  The Office  is also developing  
forms  for use by members  of the public 
to provide  a certification  of micro  entity  status.  The procedures  track  the 
corresponding  provisions  in 37 CFR  
1.27 and  1.28 for small  entities,  except 
where  the small  entity  procedure  is not 
appropriate  for micro  entity  status 
under  the provisions  of 35 U.S.C.  123. 
For example,  35 U.S.C.  123 requires  a 
certification  as a condition  for an 
applicant  to be considered  a micro 
entity.  Thus,  the process  in 37 CFR  
1.27(c)(3)  for establishing  small  entity 
status  by payment  of certain  fees in the 
small  entity  amount  cannot  be made 
applicable  to establishing  micro  entity 
status,  and  the process  in 37 CFR  1.28(a) 
for a refund  based  upon  subsequent 
establishment  of small  entity  status  is 
not applicable  where  there  is 
subsequent  establishment  of micro 
entity  status.  In addition,  35 U.S.C.  
123(a)(3)  and  (a)(4)  require  that  the 
income  level  be met for the calendar 
year preceding  the calendar  year in 
which  the applicable  fee is paid. Thus, 
the provision  in 37 CFR  1.27(g)(1)  that 
the applicant  need  only  determine 
continued  eligibility  for small  entity 
status  for issue  and  maintenance  fee 
payments,  but can pay intervening  fees 
at small  entity  rate without  determining 
whether  still  entitled  to small  entity 
status,  cannot  be made  applicable  to 
payment  of patent  fees as a micro  entity.  
Discussion  of Specific  Rules  
The following  is a discussion  of the 
amendments  to Title  37 of the Code  of 
Federal  Regulations,  Part 1. 
Section  1.29:  Section  1.29 is added  to 
implement  procedures  for claiming 
micro  entity  status.  
Since  35 U.S.C.  123(a)  through  (d) 
specify  the requirements  to qualify  as a 
micro  entity,  the provisions  in §§ 1.29(a) 
through  (d) generally  track  the 
provisions  of 35 U.S.C.  123(a)  through  
(d). 
Section  1.29(a)  implements  the 
provisions  of 35 U.S.C.  123(a),  and 
includes  reference  to inventors  or joint 
inventors  where  appropriate.  Section  
1.29(a)  provides  that  an applicant 
claiming  micro  entity  status  under  35 
U.S.C.  123(a)  must  certify  that:  (1) The 
applicant  qualifies  as a small  entity  as 
defined  in § 1.27;  (2) neither  the 
applicant  nor the inventor  nor a joint 
inventor  has been  named  as the inventor 
or a joint  inventor  (see 35 U.S.C.  100)  
on more  than  four previously  filed 
patent  applications,  other  than 
applications  filed  in another  country, 
provisional  applications  under  35 
U.S.C.  111(b),  or international 
applications  for which  the basic 
national  fee under  35 U.S.C.  41(a)  was 
not paid;  (3) neither  the applicant  nor 
the inventor  nor a joint  inventor,  in the 
calendar  year preceding  the calendar  year in which  the applicable  fee is being 
paid,  had  a gross  income,  as defined  in 
section  61(a)  of the Internal  Revenue 
Code  of 1986  (26 U.S.C.  61(a)),  
exceeding  three  times  the median 
household  income  for that  preceding 
calendar  year,  as most  recently  reported 
by the Bureau  of the Census;  and  (4) 
neither  the applicant  nor the inventor 
nor a joint  inventor  has assigned, 
granted,  or conveyed,  nor is under an 
obligation  by contract  or law to assign, 
grant,  or convey,  a license  or other 
ownership  interest  in the application 
concerned  to an entity  that,  in the 
calendar  year preceding  the calendar 
year in which  the applicable  fee is being 
paid,  had  a gross  income,  as defined  in 
section  61(a)  of the Internal  Revenue 
Code  of 1986,  exceeding  three  times  the 
median  household  income  for that 
preceding  calendar  year,  as most 
recently  reported  by the Bureau  of the 
Census.  See also § 1.29(h)  (each 
applicant  must qualify  for micro  entity 
status,  and  each  other  party  holding 
rights  in the invention  must  qualify  for 
small  entity  status).  
Section  61(a)  of the Internal  Revenue  
Code  of 1986  (26 U.S.C.  61(a))  provides 
that:  ‘‘[e]xcept  as otherwise  provided  in 
this  subtitle,  gross  income  means  all 
income  from  whatever  source  derived, 
including  (but not limited  to) the 
following  items:  (1) Compensation  for 
services,  including  fees, commissions, 
fringe  benefits,  and  similar  items;  (2) 
Gross  income  derived  from  business;  (3) 
Gains  derived  from  dealings  in property; 
(4) Interest;  (5) Rents;  (6) Royalties;  (7) 
Dividends;  (8) Alimony  and  separate 
maintenance  payments;  (9) Annuities; 
(10) Income  from  life insurance  and 
endowment  contracts;  (11) Pensions;  
(12) Income  from  discharge  of 
indebtedness;  (13) Distributive  share  of 
partnership  gross  income;  (14) Income 
in respect  of a decedent;  and  (15) 
Income  from  an interest  in an estate  or 
trust.’’  The median  household  income 
for calendar  year 2011  (the year most 
recently  reported  by the Bureau  of the 
Census)  was $50,054.  See Income,  
Poverty,  and  Health  Insurance  Coverage 
in the United  States  in 2011  at pages  5 
and  31 (Table  A–1) (Sept.  2012).  Thus, 
the income  level  specified  in 
§§ 1.29(a)(3)  and  (a)(4)  (three  times  the 
median  household  income)  is $150,162 
for calendar  year 2011  (the year most 
recently  reported  by the Bureau  of the 
Census).  
If an application  names  more  than one 
applicant  or inventor,  each  applicant 
and  each  inventor  must meet  the 
requirements  of § 1.29(a)  for  the 
applicants  to file a micro  entity  
certification  under  § 1.29(a)  in  the 
application.  It would  not be appropriate   IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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to file a micro  entity  certification  under  
§ 1.29(a)  for  the application  if there  were 
more  than  one applicant  or inventor  and 
not all of the applicants  and  inventors 
qualified  as micro  entities  under  35 
U.S.C.  123(a):  e.g., (1) an applicant  or 
inventor  exceeded  the gross  income 
levels;  (2) an applicant  or inventor  had 
more  than  four other  nonprovisional 
applications;  or (3) an applicant  or 
inventor  had  assigned,  granted,  or 
conveyed  the application  or was under 
an obligation  to do so, to an entity  that 
exceeds  the gross  income  levels. 
Additionally,  the income  level 
requirement  in 35 U.S.C.  123(a)(3) 
applies  to each  applicant’s  and 
inventor’s  income  separately  (i.e., the 
combined  gross  income  of all of the 
applicants  and  inventors  need not be 
below  the income  level  in 35 U.S.C.  
123(a)(3)).  Further,  the assignment 
requirement  in § 1.29(a)(4)  applies  to 
each  applicant  and  inventor  (i.e., if an 
applicant  or inventor  assigns  or is 
obligated  to assign  the invention  to 
more  than  one assignee  (e.g., half 
interest  in the invention  to two 
assignees),  each  of the assignees  must 
meet  the income  limit  specified  in 
§ 1.29(a)(4)).  Note  also that  in this 
context  an inventor  ordinarily  should 
qualify  as a small  entity  under  
§§ 1.29(a)(1)  and  1.27(a)(1).  Under  
§ 1.27(a)(1),  an inventor  generally  is a 
small  entity  and  retains  such  status  even 
if the inventor  assigns  some  rights  to 
another  small  entity.  Similarly,  to obtain 
micro  entity  status,  § 1.29(h)  requires  
that  any non-applicant  assignee  be a 
small  entity.  
Section  1.29(b)  implements  the 
provisions  of 35 U.S.C.  123(b).  Section  
1.29(b)  provides  that  an applicant, 
inventor,  or joint  inventor  is not 
considered  to be named  on a previously 
filed  application  for purposes  of 
§ 1.29(a)(2)  if the applicant,  inventor,  or 
joint  inventor  has assigned,  or is under 
an obligation  by contract  or law to 
assign,  all ownership  rights  in the 
application  as the result  of the 
applicant’s,  inventor’s,  or joint 
inventors  previous  employment.  
Section  1.29(c)  implements  the 
provisions  of 35 U.S.C.  123(c).  Section  
1.29(c)  provides  that  if an applicant’s, 
inventor’s,  joint  inventor’s,  or entity’s 
gross  income  in the preceding  calendar 
year is not in United  States  dollars,  the 
average  currency  exchange  rate,  as 
reported  by the Internal  Revenue 
Service,  during  that  calendar  year shall 
be used  to determine  whether  the 
applicant’s,  inventor’s,  joint  inventor’s, 
or entity’s  gross  income  exceeds  the 
threshold  specified  in § 1.29(a)(3)  or 
(a)(4).  The Internal  Revenue  Service 
reports  the average  currency  exchange  rate (Yearly  Average  Currency  Exchange 
Rates)  on its Internet  Web  site (http:// 
www.irs.gov/busin esses/small/ 
international/article/  
0,,id=206089,00.html ). 
Section  1.29(d)  implements  the 
provisions  of 35 U.S.C.  123(d).  Section  
1.29(d)  provides  that  an applicant 
claiming  micro  entity  status  under  35 
U.S.C.  123(d)  must  certify  that:  (1) The 
applicant  qualifies  as a small  entity  as 
defined  in § 1.27;  and  (2)(i)  the 
applicant’s  employer,  from  which  the 
applicant  obtains  the majority  of the 
applicant’s  income,  is an institution  of 
higher  education  as defined  in section  
101(a)  of the Higher  Education  Act of 
1965  (20 U.S.C.  1001(a));  or (ii) the 
applicant  has assigned,  granted, 
conveyed,  or is under  an obligation  by 
contract  or law,  to assign,  grant,  or 
convey,  a license  or other  ownership 
interest  in the particular  application  to 
such  an institution  of higher  education. 
To the extent  that  35 U.S.C.  123(d) 
(unlike  35 U.S.C.  123(a))  does  not 
expressly  require  that  an applicant 
qualify  as a small  entity  under  § 1.27, 
the Office  is invoking  its authority 
under  35 U.S.C.  123(e)  to expressly 
require  that  a party  claiming  micro  
entity  status  via 35 U.S.C.  123(d)  qualify 
as a small  entity  under  § 1.27.  The 
legislative  history  of 35 U.S.C.  123 refers 
to micro  entities  as a subset  of small 
entities,  namely,  ‘‘truly  independent 
inventors.’’  See H.R.  Rep 112–98 at 50 
(‘‘[t]he  Committee  was made  aware, 
however,  that  there  is likely  a benefit  to 
describing —and then accommodating — 
a group  of inventors  who  are even 
smaller  [than  small  entities],  in order  to 
ensure  that  the USPTO  can tailor  its 
requirements,  and  its assistance,  to the 
people  with very little capital,  and  just 
a few inventions,  as they  are starting 
out. This  section  of the Act defines  this 
even  smaller  group —the micro -entity — 
that  includes  only  truly  independent 
inventors’’).  Thus,  permitting  an 
applicant  who  does  not qualify  as a 
small  entity  to take advantage  of the 
benefits  of micro  entity  status  via 35 
U.S.C.  123(d)  would  be inconsistent 
with  the purposes  of micro  entity 
provisions  of 35 U.S.C.  123. The statute 
and  its legislative  history  do not,  for 
example,  contemplate  a for-profit,  large 
entity  applicant  becoming  a ‘‘micro 
entity’’  (and  thus obtaining  a 75 percent 
discount)  merely  by licensing  or 
assigning  some  interest  (even  merely  a 
nominal  or miniscule  interest)  to an 
institution  of higher  education. 
Accordingly,  the Office  has determined 
that  requiring  all micro  entities  to 
qualify  as small  entities  is reasonably  
necessary  and  appropriate  to ensure  that applicants  who  do not qualify  as a small 
entity  do not inappropriately  attempt  to 
take advantage  of micro  entity  status.  
See also § 1.29(h)  (each  applicant  must 
qualify  for micro  entity  status,  and  each 
other  party  holding  rights  in the 
invention  must  qualify  for small  entity 
status).  
Section  1.29(e)  provides  that  micro 
entity  status  must be established  in an 
application  in by filing  a certification  in 
writing  that  complies  with either  
§ 1.29(a)  or  § 1.29(d)  and  that  is signed 
in compliance  with  § 1.33(b).  Section  
1.29(e)  also  contains  provisions  for a 
micro  entity  that  correspond  to the 
provisions  of § 1.27(c)(4)  for a small 
entity.  Section  1.29(e)  provides  that:  (1) 
Status  as a micro  entity  must  be 
specifically  established  by an assertion 
in each  related,  continuing,  and  reissue 
application  in which  status  is 
appropriate  and  desired;  (2) status  as a 
small  or micro  entity  in one application 
or patent  does  not affect  the status  of 
any other  application  or patent, 
regardless  of the relationship  of the 
applications  or patents;  and  (3) the 
refiling  of an application  under § 1.53 as 
a continuation,  divisional,  or 
continuation -in-part application 
(including  a continued  prosecution 
application  under § 1.53(d)), or the 
filing  of a reissue  application,  requires  a 
new  certification  of entitlement  to micro  
entity  status  for the continuing  or 
reissue  application.  
Section  1.29(f)  contains  provisions  for 
a micro  entity  that  correspond  to the 
provisions  of § 1.27(d)  for a small  entity. 
Section  1.29(f)  provides  that  a fee may  
be paid  in the micro  entity  amount  only 
if it is submitted  with, or subsequent  to, 
the submission  of a certification  of 
entitlement  to micro  entity  status.  
Section  1.29(g)  contains  provisions  for 
a micro  entity  that  correspond  to the 
provisions  of § 1.27(e)  for  a small  entity. 
Section  1.29(g)  provides  that  a 
certification  of entitlement  to micro 
entity  status  need only  be filed  once  in 
an application  or patent,  and  that  micro 
entity  status,  once  established,  remains 
in effect  until  changed  pursuant  to 
§ 1.29(i).  However,  a fee may be paid  in 
the micro  entity  amount  only  if status  as 
a micro  entity  as defined  in § 1.29(a)  or 
(d) is appropriate  (which  requires  that 
status  as a small  entity  is also 
appropriate)  on the date  the fee is being 
paid. Thus,  while  an applicant  is not 
required  to provide  a certification  of 
entitlement  to micro  entity  status  with 
each  fee payment  once  micro  entity 
status  has been  established  in an 
application,  the applicant  must  still  be 
entitled  to micro  entity  status  to pay a 
fee in the micro  entity  amount  at the  IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
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time  of all payments  of fees in the micro 
entity  amount.  
For micro  entity  status  under  35 
U.S.C.  123(a),  the  applicant  must 
determine  that  the applicant  and  each 
inventor  or joint  inventor  still  meet  the 
applicable  conditions  of 35 U.S.C.  
123(a)  and  § 1.29(a)  to  claim  micro  
entity  status.  For example,  the applicant 
must determine  that  neither  the 
applicant  nor inventor  nor joint  
inventor  has had  a change  in gross 
income  that  exceeds  the gross  income 
threshold  in 35 U.S.C.  123(a)(3)  (a new 
determination  must be made  each  year 
because  gross  income  may change  from 
year to year,  and  micro  entity  status  is 
based  upon  gross  income  in the 
calendar  year preceding  the calendar  
year in which  the applicable  fee is being 
paid).  In addition,  the applicant  must 
determine  that  neither  the applicant  nor 
inventor  nor joint  inventor  has made,  or 
is obligated  by contract  or law to make, 
an assignment,  grant,  or conveyance  to 
an entity  not meeting  the gross  income 
threshold  in 35 U.S.C.  123(a)(4),  and 
that  no new  inventor  or joint  inventor 
has been  named  in the application  who 
does  not meet  the conditions  specified 
in 35 U.S.C.  123(a)  and  § 1.29(a)).  For 
micro  entity  status  under  35 U.S.C.  
123(d),  the applicant  must  determine 
that  each  applicant  and  inventor  still 
complies  with  35 U.S.C.  123(d)  and 
§ 1.29(d)  (e.g., still  obtains  the majority 
of his or her income  from  an institution 
of higher  education  as defined  in 
section  101(a)  of the Higher  Education 
Act of 1965  (20 U.S.C.  1001(a)).  Section  
1.29(g)  also provides  that  where  an 
assignment  of rights  or an obligation  to 
assign  rights  to other  parties  who  are 
micro  entities  occurs  subsequent  to the 
filing  of a certification  of entitlement  to 
micro  entity  status,  a second 
certification  of entitlement  to micro 
entity  status  is not required.  
Section  1.29(h)  contains  provisions  
for a micro  entity  that  correspond  to the 
provisions  of § 1.27(f)  for a small  entity. 
Section  1.29(h)  provides  that  prior  to 
submitting  a certification  of entitlement 
to micro  entity  status  in an application, 
including  a related,  continuing,  or 
reissue  application,  a determination  of 
such entitlement  should  be made 
pursuant  to the requirements  of § 1.29(a) 
or 1.29(d).  Section  1.29(h)  also indicates 
that  each  applicant  must  qualify  for 
micro  entity  status  under  § 1.29(a)  or 
1.29(d),  and  that  any other  party  holding 
rights  in the application  must  qualify  for 
small  entity  status  under  § 1.27.  As 
discussed  previously,  a party  who 
qualifies  for micro  entity  status 
necessarily  qualifies  for small  entity  
status,  as under  § 1.29(a)(1)  and  (d)(1)  a 
micro  entity  must first qualify  as a small  entity  under § 1.27.  Section  1.29(h)  also 
indicates  that  the Office  will  generally 
not question  certification  of entitlement 
to micro  entity  status  that  is made  in 
accordance  with  the requirements  of 
§ 1.29.  
Section  1.29(i)  contains  provisions  for 
a micro  entity  that  correspond  to the 
provisions  of § 1.27(g)(2)  for a small 
entity.  Section  1.29(i)  provides  that 
notification  of a loss of entitlement  to 
micro  entity  status  must be filed  in the 
application  or patent  prior  to paying,  or 
at the time  of paying,  any fee after the 
date  on which  status  as a micro  entity  
as defined  in § 1.29(a)  or  1.29(d)  is no 
longer  appropriate.  The notification  that 
micro  entity  status  is no longer 
appropriate  must  be signed  by a party 
identified  in § 1.33(b).  Payment  of a fee 
in other  than the micro  entity  amount  is 
not sufficient  notification  that  micro 
entity  status  is no longer  appropriate.  
Section  1.29(i)  further  provides  that  a 
notification  that  micro  entity  status  is 
no longer  appropriate  will  not be treated 
as a notification  that  small  entity  status 
is also no longer  appropriate  unless  it 
also contains  a notification  of loss of 
entitlement  to small  entity  status  under  
§ 1.27(f)(2).  Thus,  an applicant  or 
patentee  who  files a notification  that 
micro  entity  status  is no longer 
appropriate  will  be treated  as a small 
entity  by default  unless  the notification 
also contains  a notification  of loss of 
entitlement  to small  entity  status  under  
§ 1.27(f)(2).  
Section  1.29 finally  provides  that 
once  a notification  of a loss of 
entitlement  to micro  entity  status  is 
filed  in the application  or patent,  a new 
certification  of entitlement  to micro 
entity  status  is required  to again  obtain  
micro  entity  status.  
Section  1.29(j)  contains  provisions  for 
a micro  entity  that  correspond  to the 
provisions  of § 1.27(h)  for a small  entity. 
Section  1.29(j)  provides  that  any attempt 
to fraudulently  establish  status  as a 
micro  entity,  or pay fees as a micro 
entity,  shall be considered  as a fraud 
practiced  or attempted  on the Office, 
and that  establishing  status  as a micro 
entity,  or paying  fees as a micro  entity, 
improperly,  and  with  intent to deceive, 
shall  be considered  as a fraud  practiced 
or attempted  on the Office.  
Section  1.29(k)  contains  provisions  
for a micro  entity  that  correspond  to the 
provisions  of § 1.28(c)  for  a small  entity. 
Section  1.28(c)  permits  an applicant  or 
patentee  to correct  the erroneous 
payment  of a patent  fee in the small 
entity  amount  if status  as a small  entity 
was established  in good  faith,  and  fees 
as a small  entity  were  paid  in good  faith. 
See DH Tech.  Inc. v. Synergystex  Int’l 
Inc., 154 F.3d  1333  (Fed.  Cir. 1998).  Section  1.29(k)  provides  that  if: (i) An 
applicant  or patentee  establishes  micro 
entity  status  in an application  or patent 
in good  faith;  (ii) the applicant  or 
patentee  pays  fees as a micro  entity  in 
the application  or patent  in good  faith; 
and  (iii) applicant  or patentee  later 
discovers  that  such  micro  entity  status 
either  was established  in error,  or that 
the Office  was not notified  of a loss of 
entitlement  to micro  entity  status  as 
required  by § 1.29(i)  through  error,  the 
error  will  be excused  upon  compliance 
with  the separate  submission  and 
itemization  requirements  of § 1.29(k)(1) 
and  the deficiency  payment  requirement 
of § 1.29(k)(2).  
Section  1.29(k)(1)  provides  that  any 
paper  submitted  under  § 1.29(k)  must  be 
limited  to the deficiency  payment  (all 
fees paid  in error)  required  for a single 
application  or patent.  Section  1.29(k)(1) 
provides  that  where  more  than  one 
application  or patent  is involved, 
separate  submissions  of deficiency 
payments  (e.g., checks)  and  itemizations 
are required  for each  application  or 
patent.  Section  1.29(k)(1)  also provides 
that  the paper  must  contain  an 
itemization  of the total  deficiency 
payment  and  include  the following 
information:  (1) Each  particular  type  of 
fee that  was erroneously  paid  as a micro 
entity,  (e.g., basic  statutory  filing  fee, 
two-month  extension  of time  fee) along 
with  the current  fee amount  for a small 
or non-small  entity;  (2) the micro  entity 
fee actually  paid,  and  the date  on which 
it was paid;  (3) the deficiency  owed 
amount  (for each  fee erroneously  paid); 
and  (4) the total  deficiency  payment 
owed,  which  is the sum  or total  of the 
individual  deficiency  owed  amounts  as 
set forth  in § 1.29(k)(2).  
Section  1.29(k)(2)  provides  that  the 
deficiency  owed,  resulting  from  the 
previous  erroneous  payment  of micro 
entity  fees, must  be paid.  The deficiency 
owed  for each  previous  fee erroneously 
paid  as a micro  entity  is the difference 
between  the current  fee amount  for a 
small  entity  or non-small  entity,  as 
applicable,  on the date  the deficiency  is 
paid  in full and  the amount  of the 
previous  erroneous  micro  entity  fee 
payment.  The total  deficiency  payment 
owed  is the sum  of the individual 
deficiency  owed  amounts  for each  fee 
amount  previously  and  erroneously  
paid  as a micro  entity.  This  corresponds 
to the procedure  for fee deficiency 
payments  based  upon  the previous 
erroneous  payment  of patent  fees in the 
small  entity  amount.  See § 1.28(c)(2)(i) 
(‘‘[t]he  deficiency  owed  for each 
previous  fee erroneously  paid as a small 
entity  is the difference  between  the 
current  full fee amount  (for non-small 
entity)  on the date  the deficiency  is paid   IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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in full and  the amount  of the previous 
erroneous  (small  entity)  fee payment’’).  
Section  1.29(k)(3)  provides  that  if the 
requirements  of §§ 1.29(k)(1)  and  (k)(2) 
are not complied  with,  such failure  will 
either  be treated  at the option  of the 
Office  as an authorization  for the Office 
to process  the deficiency  payment  and 
charge  the processing  fee set forth  in 
§ 1.17(i),  or result  in a requirement  for 
compliance  within  a one-month  non- 
extendable  time  period  under § 1.136(a) 
to avoid  the return  of the fee deficiency 
payment.  
Section  1.29(k)(4)  provides  that  any 
deficiency  payment  (based  on a 
previous  erroneous  payment  of a micro 
entity  fee) submitted  under  § 1.29(k) 
will be treated  as a notification  of a loss 
of entitlement  to micro  entity  status 
under  § 1.29(i).  
Comments  and  Responses  to 
Comments:  The Office  published  a 
notice  on May 30, 2012,  proposing  to 
change  the rules  of practice  to 
implement  the micro  entity  provisions 
of the AIA.  See Changes  to Implement 
Micro  Entity  Status  for Paying  Patent 
Fees,  77 FR 31806  (May  30, 2012).  The 
Office  received  twenty -seven  written 
comments  (from  intellectual  property 
organizations,  industry,  law firms, 
individual  patent  practitioners,  and  the 
general  public)  in response  to this 
notice.  There  were  some  comments 
received  that  related  to practice  before 
the agency  but not related  to the 
proposed  changes  to the rules  of 
practice  to implement  the micro  entity 
provisions  of the AIA,  and  these 
comments  have  been  forwarded  to the 
Office  of Innovation  Development  for 
further  consideration.  The Office  is 
always  interested  to hear  feedback  from 
the public  concerning  ways  in which  it 
can assist  small  and  independent 
inventors.  The comments  germane  to 
the proposed  changes  to the rules  of 
practice  to implement  the micro  entity 
provisions  of the AIA and  the Office’s 
responses  to the comments  follow:  
Comment  1: One comment  stated  that 
there  are several  instances  in 35 U.S.C.  
123 and  proposed  § 1.29 where  the term  
‘‘applicant’’ is inapplicable  to an 
organization  and  must  really  be 
referring  to the inventor(s)  (e.g., a 
certification  that  ‘‘applicant’’ has not 
been  named  as an ‘‘inventor’’  in more 
than  four previously  filed  applications, 
references  to applicant’s  previous 
employment  or employer).  One 
comment  indicated  that  the term  
‘‘applicant’’  should  be used  in an 
interchangeable  manner  so as to mean 
either  the inventor(s)  or a company  to 
which  the patent  application  is assigned 
(i.e., the rules  should  refer  to ‘‘applicant 
or inventor’’)  in view  of the AIA’s  change  to 35 U.S.C.  118. That  comment 
further  indicated,  however,  that  the 
ability  to vary from  the statute  ‘‘may  be 
limited.’’  One comment  similarly 
indicated  that  the final  rules  should 
replace  all instances  of ‘‘applicant’’ and 
‘‘applicant’s’’  with ‘‘inventor’’  and 
‘‘inventor’s’’  in § 1.29(a)  (second 
instance),  (b), (c), (d)(1),  (d)(2)(i),  and 
(d)(2)(ii)  in view  of the AIA’s  change  to 
35 U.S.C.  118. One comment  stated  that 
in the case of university  inventions,  the 
university  typically  is the applicant  and 
this  creates  anomalies  in proposed  
§ 1.29(d),  since  the institution 
(university)  logically  cannot  make  the 
certifications  required  under  
§ 1.29(d)(2)(i) and  (d)(2)(ii)  (that  the 
employer  from  which  the university 
obtains  the majority  of its income  is an 
institution  of higher  education  as 
defined  by section  101(a)  of the Higher 
Education  Act of 1965,  or that  the 
university  itself  has assigned,  granted, 
conveyed,  or is under  an obligation  by 
contract  or law,  to assign,  grant,  or 
convey,  a license  or other  ownership 
interest  in the particular  application).  
Response:  The Office  specifically 
invited  public  comment  in the notice  of 
proposed  rulemaking  on the issue  of 
whether  the term  ‘‘inventor’’  should  be 
used  in place  of ‘‘applicant’’ at any 
instance  in the proposed  micro  entity 
rules.  See Changes  to Implement  Micro 
Entity  Status  for Paying  Patent  Fees,  77 
FR at 31808.  The Office  agrees  that 
some,  though  not all, provisions  of 35 
U.S.C.  123 refer to a situation  where  an 
inventor  is the applicant.  The micro 
entity  provisions  of 35 U.S.C.  123 were 
enacted  as part  of the AIA,  which  also 
revised  the patent  laws  to provide  a 
specific  definition  of the term  
‘‘inventor’’  and  to change  who  may be 
the applicant  for a patent.  See 125 Stat. 
at 285 (defining  ‘‘inventor’’)  and  293–97 
(changing  the patent  laws  to distinguish 
between  who  may apply  for a patent  as 
the applicant  and  who  must  be named  
as the inventor);  see also 35 U.S.C.  100;  
35 U.S.C.  118. The Office  does  not 
consider  it appropriate  either  to amend 
the language  of 35 U.S.C.  123 as 
incorporated  into  the corresponding 
provisions  of § 1.29 or to somehow  view 
the terms  ‘‘applicant’’  and  ‘‘inventor’’  as 
interchangeable  in all instances  under  
35 U.S.C.  123. See Brown  v. Gardner,  
513 U.S. 115, 118 (1994)  (presumption 
that  a given  term  is used  to mean  the 
same  thing  throughout  a statute).  As 
discussed  previously,  while  some  of the 
provisions  in 35 U.S.C.  123(a)  and  (d) 
refer  to an inventor -applicant,  35 U.S.C.  
123 does  not explicitly  preclude  an 
assignee -applicant  under  35 U.S.C.  118 
from  claiming  micro  entity  status  under  35 U.S.C.  123(a)  or (d), provided  there  
is compliance  with  the applicable  micro 
entity  criteria  by each  applicant. 
However,  each  applicant  must qualify 
for micro  entity  status,  and  any other 
party  holding  rights  in the application 
must  qualify  for small  entity  status.  See 
37 CFR  1.29(h).  
Comment  2: One comment  stated  that 
it is possible  that  the legislative  intent  
of 35 U.S.C.  123(a)(2)  was that  an 
applicant  should  satisfy  this  criterion  so 
long as the applicant  has fewer  than  
four previously  filed  applications  in 
which  micro  entity  fees were  paid.  One 
comment  stated  that  the four 
application  limit  under  35 U.S.C.  
123(a)(2)  should  apply  only  to 
applications  filed  within  the past  
twenty  years  or so. One comment  stated 
that  it would  make  sense  for the term  
‘‘inventor’’  in § 1.29(a)(2)  to refer to an 
applicant  who  has had  the opportunity 
to claim  micro  entity  status  in four 
previously  filed  patent  applications.  
One comment  indicated  that  § 1.29(a)(2) 
should  be amended  to provide  that  if an 
application  is entitled  to micro  entity 
status,  then continuation  and  divisional 
applications  of that  parent  application 
should  normally  be entitled  to micro 
entity  status  without  counting  the 
parent  application  or any parallel  filed 
continuing  or divisional  patent 
applications  in the same  patent  family 
toward  the four application  limit.  
Response:  Section  1.29(a)(2)  tracks  the 
provisions  of 35 U.S.C.  123(a)(2)  with  
the clarification  to reference  non- 
applicant  inventors  and  joint  inventors.  
35 U.S.C.  123(a)(2)  provides  a 
certification  that  the applicant,  inter 
alia, ‘‘has  not been  named  as an 
inventor  on more  than  4 previously  filed 
patent  applications,  other  than 
applications  filed  in another  country, 
provisional  applications  under  35 
U.S.C.  111(b),  or international 
applications  *  *  * for which  the basic 
national  fee under  35 U.S.C.  41(a)  was 
not paid.’’  This  provision  refers  to when 
an inventor -applicant  has been  named  
as an inventor  in a previous  application, 
including  as one in a group  of joint 
inventors.  See 35 U.S.C.  100. An 
applicant  that  is not an inventor  would 
plainly  not violate  this  criteria. 
Moreover,  this  provision  has been 
clarified  to refer to an inventor  or joint 
inventor  who  is not the applicant.  35 
U.S.C.  123(a)(2)  by its express  terms 
does  not,  however,  provide  for 
exceptions  to this  four-application  limit 
suggested  by the comments.  In addition, 
while  35 U.S.C.  123(e)  authorizes  the 
Office  to place  additional  limits  on who 
may qualify  as a micro  entity  under  35 
U.S.C.  123, it does  not authorize  the  IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
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Office  to remove  limitations  contained 
in 35 U.S.C.  123.  
Comment  3: One comment  suggested  
expanding  the scope  of the § 1.29(b) 
exception  to applications  counted 
toward  the four application  limit  in 
§ 1.29(a)(2)  by including  applications 
assigned  to the inventor’s  current 
employer  when  the invention  is outside 
the current  employer’s  scope  of 
employment  with  the inventor.  
Response:  Section  1.29(b)  tracks  the 
provisions  of 35 U.S.C.  123(b)  with  the 
clarification  to reference  non-applicant 
inventors  and  joint  inventors.  35 U.S.C.  
123(b)  provides  that  an applicant  is not 
considered  to be named  on a previously 
filed  application  for purposes  of 35 
U.S.C.  123(a)(2)  if the applicant  has 
assigned,  or is under  an obligation  by 
contract  or law to assign,  all ownership 
rights  in the application  ‘‘as the result 
of applicant’s  previous  employment.’’ 
Thus,  the exception  in 35 U.S.C.  123(b) 
by its express  terms  does  not apply  to 
applications  assigned  to a current 
employer.  In addition,  as discussed 
previously,  while  35 U.S.C.  123(e)  
authorizes  the Office  to place  additional 
limits  on who  may qualify  as a micro 
entity  under 35 U.S.C.  123, it does  not 
authorize  the Office  to remove 
limitations  contained  in 35 U.S.C.  123.  
Comment  4: One comment  noted  that 
the Office  has indicated  that  it will 
publish  the income  level  that  is three 
times  the median  household  income  for 
the calendar  year most  recently  reported 
by the Bureau  of the Census,  but that  35 
U.S.C.  123(a)  (and  § 1.29(a))  require  that 
applicants  use the median  household 
income  data  for ‘‘the  calendar  year 
preceding  the calendar  year in which  
the applicable  fee is being  paid.’’  The 
comment  expressed  concern  that 
median  household  income  data  for a 
given  year is not reported  by the Bureau 
of the Census  until  the succeeding  year.  
One comment  suggested  that  § 1.29(a)(3) 
be amended  to provide  that  an applicant 
may rely on his or her most  recently  
filed  income  tax return  regardless  of 
whether  the most  recently  filed  tax 
return  accounted  for the previous 
calendar  year’s  gross  income.  
Response:  Section  1.29(a)(3)  tracks  the 
provisions  of 35 U.S.C.  123(a)(3)  with 
the clarification  to reference  non- 
applicant  inventors  and  joint  inventors.  
35 U.S.C.  123(a)(3)  provides  that  each 
inventor’s  gross  income  ‘‘in the calendar 
year preceding  the calendar  year in 
which  the applicable  fee is being  paid’’ 
must  not exceed  ‘‘three  times  the 
median  household  income  for that 
preceding  calendar  year as most 
recently  reported  by the Bureau  of the 
Census.’’ 35 U.S.C.  123(a)(3)  does  not 
provide  for an applicant  to simply  rely on his or her most  recently  filed  income 
tax return  if the most  recently  filed  tax 
return  does  not pertain  to the calendar 
year preceding  the calendar  year in 
which  the applicable  fee is being  paid. 
The Office  will  post  on its Internet  Web 
site the U.S. dollar  amount  that  equals 
three  times  the median  household 
income  as most  recently  reported  by the 
Bureau  of the Census.  Thus,  the Office’s 
Internet  Web  site will  contain  the U.S. 
dollar  amount  that  equals  three  times 
the median  household  income  as most 
recently  reported  by the Bureau  of the 
Census  as provided  for in § 1.29(a)(3) 
and 35 U.S.C.  123(a)(3).  
Comment  5: One comment  requested  
guidance  as to what  effect  marital  status 
has on ‘‘gross  income’’ in terms  of 
§ 1.29(a)(3),  and  whether  the inventor’s 
tax return  is filed  jointly  or separately 
changes  the amount  of ‘‘gross  income’’ 
for purposes  of meeting  the requirement 
of proposed  § 1.29(a)(3).  The comment 
also indicated  that  in community 
property  states,  the law may be 
construed  such that  the inventor/ 
applicant  has assigned  his or her rights 
in part  to the spouse,  as a matter  of law. 
Another  comment  stated  that  marital 
status  of an individual  applicant  may 
have  an impact  on the assignment  or 
ownership  rights  in an invention  and 
the gross  income  of the applicant,  and 
that  it may require  an opinion  from  an 
accountant  or tax attorney  with  respect 
to the applicant’s  income.  
Response:  The Office  reads  the ‘‘gross  
income’’  requirement  contained  in 35 
U.S.C.  123(a)(3)  and  § 1.29(a)(3)  with 
respect  to a married  person  as applying 
to the amount  of income  the person 
would  have  reported  as gross  income  if 
that  person  were  filing  a separate  tax 
return  (which  includes  properly 
accounting  for that  person’s  portion  of 
interest,  dividends,  and  capital  gains 
from  joint  bank  or brokerage  accounts), 
regardless  of whether  the person 
actually  filed  a joint  return  or a separate 
return  for the relevant  calendar  year. 
Additionally,  the Office  does  not 
consider  a spouse’s  ownership  interest 
in a patent  application  or patent  arising 
by operation  of residence  in a 
community  property  state  as falling 
within  the ambit  of 35 U.S.C.  123(a)(4) 
and  § 1.29(a)(4)  because  the spouse’s 
ownership  interest  arises  by operation  
of state  law,  rather  than an assignment, 
grant,  conveyance,  or obligation  to 
assign,  grant,  or convey.  
Comment  6: One comment  questioned  
the situation  where  the applicant’s 
income  is not in U.S. dollars  and  the 
applicable  currency  exchange  rate is 
applied  to determine  the applicant’s 
gross  income  in U.S. dollars  in 
accordance  with  § 1.29(c),  whether  the applicant’s  gross  income  in terms  of 
U.S. dollars  should  be compared  to 
three  times  the median  household 
income  for the preceding  calendar  year 
in the United  States,  or should  be 
compared  to the median  household 
income  for the preceding  calendar  year 
in the country  in which  the applicant 
obtained  income.  
Response:  In all cases,  the inventor’s  
gross  income  in the previous  calendar 
year must  be compared  to the U.S. 
dollar  amount  equaling  three  times  the 
median  household  income  as most 
recently  reported  by the Bureau  of the 
Census  (which  will  be posted  on the 
Office’s  Internet  Web  site) at the time 
the applicable  fee is being  paid  in order  
to meet  the gross  income  requirement  of 
§ 1.29(a)(3).  
Comment  7: One comment  suggested  
that  the language  ‘‘that  calendar  year’’  in 
proposed  § 1.29(c)  should  be changed  to 
‘‘the  preceding  calendar  year’’  to clarify 
that  applicants  whose  income  is not in 
U.S. dollars  must apply  the currency 
exchange  rate from  the preceding 
calendar  year when  calculating  income 
in U.S. dollars  in order  to determine 
whether  the proposed  § 1.29(a)(3)  ‘‘gross 
income’’  requirement  is met.  
Response:  Section  1.29(c)  tracks  the 
provisions  of 35 U.S.C.  123(c)  with  the 
clarification  to reference  non-applicant 
inventors  and  joint  inventors.  The 
phrase  ‘‘that  calendar  year’’  in 35 U.S.C.  
123(c)  and  § 1.29(c)  means  ‘‘the 
preceding  calendar  year’’  as previously 
recited  in 35 U.S.C.  123(c)  and  § 1.29(c).  
Comment  8: One comment  indicated  
that  foreign  applicants  should  be 
directed  to make  a ‘‘good  faith  attempt’’ 
to estimate  their  gross  income  in terms 
of U.S. tax law.  
Response:  35 U.S.C.  123(c)  provides  
that  if an applicant’s  or entity’s  gross  
income  in the preceding  calendar  year 
is not in United  States  dollars,  the 
average  currency  exchange  rate,  as 
reported  by the Internal  Revenue 
Service,  during  that  calendar  year shall 
be used  to determine  whether  the 
applicant’s  or entity’s  gross  income 
exceeds  the threshold  specified  in 35 
U.S.C.  123(a)(3)  or (4). 35 U.S.C.  123 
does  not provide  any alternative  basis, 
such  as a good  faith  estimation  as 
suggested  by the comment,  for 
determining  whether  an applicant  or 
entity  meets  the gross  income 
requirement  of 35 U.S.C.  123(a)(3).  For 
an applicant  or entity  whose  previous 
calendar  year’s  gross  income  was 
received  partially  in U.S. dollars  and 
partially  in non-United  States  currency, 
the gross  income  amount  in non-United 
States  currency  must  be converted  into 
U.S. dollars  in accordance  with  § 1.29(c) 
and  then added  to the gross  income   IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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amount  in U.S. dollars  to determine 
whether  the applicant  or entity  meets 
the gross  income  requirement  of 
§ 1.29(a)(3).  
Comment  9: One comment  suggested  
that  the definition  of micro  entity  status 
should  be broadened  to benefit  even 
more  small  inventors  than  those  who 
meet  the requirements  of 35 U.S.C.  
123(a).  
Response:  The legislative  history  
includes  a statement  that  Congress 
developed  the micro  entity  provision  to 
benefit  truly independent  inventors, 
people  with very little capital  and  just 
a few inventions,  who  are just starting 
out.  See H.R.  Rep 112–98 at 50. Small 
entity  inventors  who  do not meet  the 
micro  entity  requirements  of 35 U.S.C.  
123 may still  claim  small  entity  status 
and  receive  the fifty percent  small  entity 
fee reduction.  In any event,  as discussed 
previously,  while  35 U.S.C.  123(e) 
authorizes  the Office  to place  additional 
limits  on who  may qualify  as a micro 
entity  under 35 U.S.C.  123, it does  not 
authorize  the Office  to remove 
limitations  contained  in 35 U.S.C.  123 
or expand  the scope  of 35 U.S.C.  123 to 
include  more  small  entities.  
Comment  10: Several  comments  
objected  to the requirement  under  
§ 1.29(d)(1) that  in order  to qualify  for 
micro  entity  status  under  § 1.29(d),  the 
applicant  must qualify  as a small  entity 
as defined  in § 1.27 in addition  to 
meeting  one of the requirements  under  
§ 1.29(d)(2)(i) or (d)(2)(ii).  
Response:  35 U.S.C.  123(e)  provides  
that  in addition  to the limits  imposed  by 
35 U.S.C.  123, the Director  may,  in the 
Director’s discretion,  impose  income 
limits,  annual  filing  limits,  or other 
limits  on who  may qualify  as a micro 
entity  pursuant  to this  section  if the 
Director  determines  that  such  additional 
limits  are reasonably  necessary  to avoid 
an undue  impact  on other  patent 
applicants  or owners  or are otherwise 
reasonably  necessary  and  appropriate. 
The Office  has determined  that 
requiring  all micro  entities  to qualify  as 
small  entities  (§ 1.29(d)(1)) is reasonably 
necessary  and  appropriate  to ensure  that 
applicants  who  do not qualify  as a small 
entity  do not inappropriately  attempt  to 
take advantage  of micro  entity  status.  As 
discussed  in the notice  of proposed 
rulemaking,  the legislative  history  of 35 
U.S.C.  123 includes  a statement  that 
micro  entity  status  is directed  to a 
subset  of small  entities,  namely,  ‘‘truly 
independent  inventors.’’  See H.R.  Rep 
112–98 at 50. 
Comment  11: Several  comments  
indicated  that  § 1.29(d)(2)(ii) should 
provide  that  the rights  transferred  or 
owed  to an institution  of higher 
education  should  be substantial.  The comments  indicated  that  institutions  of 
higher  education  are generally  non- 
practicing  entities  or that  applicants 
could  engage  in sham  transfers  of a de 
minimus  interest  to an institution  of 
higher  education,  and  suggested  the 
Office  use its authority  under  35 U.S.C.  
123(e)  to ensure  the transfer  of rights  is 
for a substantial  purpose.  One comment 
indicated  that  micro  entity  status  by a 
grant  of rights  to an institution  of higher 
education  under § 1.29(d)(2)(ii) should 
not be available  to an institution  of 
higher  education  and  that  without  such 
a limitation,  institutions  of higher 
education  could  simply  grant  rights  to 
each  other  and  thereby  qualify  their 
patent  for micro  entity  status.  
Response:  As discussed  previously,  
the Office  is requiring  that  all micro 
entities  qualify  as small  entities  
(§ 1.29(d)(1)) to ensure  that  applicants 
who  do not qualify  as a small  entity  do 
not inappropriately  attempt  to take 
advantage  of micro  entity  status.  This 
requires  that  any person  or entity 
claiming  micro  entity  status  not have 
assigned,  granted,  conveyed,  or 
licensed,  and  be under  no obligation 
under  contract  or law to assign,  grant, 
convey,  or license,  any rights  in the 
invention  to any person,  concern,  or 
organization  which  would  not qualify  
for small  entity  status  as a person,  small 
business  concern,  or nonprofit 
organization.  See § 1.27(a).  The Office 
plans  to closely  monitor  the percentage 
of applicants  claiming  small  entity 
status  under  35 U.S.C.  123(d)  and  will 
propose  additional  limits  under the  
authority  provided  in 35 U.S.C.  123(e)  if 
it appears  that  a substantial  number  of 
applicants  are engaging  in sham 
transactions  with institutions  of higher 
education  to obtain  micro  entity  status.  
Comment  12: One comment  indicated  
that  35 U.S.C.  123(d)  is unclear  as to 
whether  it was intended  to cover  a 
separate  non-profit  corporation,  
research  foundation,  or other  institution 
that  is legally  separate  from  an 
institution  of higher  education  but 
whose  stated  mission  is to represent  that 
institution  of higher  education,  to act on 
its behalf,  and/or  commercialize  the 
intellectual  property  of that  institution  
of higher  education.  The comment 
suggested  that  a research  foundation 
should  be treated  as a qualifying 
institution  of higher  education  for 
purposes  of micro  entity  status  if the 
research  foundation  is acting  on behalf 
of a university  which  is an institution  of 
higher  education  as defined  in section  
101(a)  of the Higher  Education  Act of 
1965.  Another  comment  suggested  that 
the Office  consider  expanding  the scope  
of § 1.29(d)  to include  technology 
transfer  organizations  whose  primary  purpose  is to facilitate  the 
commercialization  of technologies 
developed  by one or more  institutions  of 
higher  education  as defined  by section  
101(a)  of the Higher  Education  Act of 
1965.  Another  comment  suggested  that 
micro  entity  status  be made  available  to 
applicants  whose  inventions  are co- 
owned  with  Federal  Government 
research  laboratories  and  that  patent 
applications  on inventions  made  solely 
or jointly  by Federal  laboratory 
personnel  should  be considered  in the 
same  manner  as applications  made 
solely  by personnel  at academic  
research  laboratories.  Another  comment 
suggested  amending  § 1.29(d)  to extend 
the definition  of ‘‘institution  of higher 
education’’  to include  certain  nonprofit 
scientific  or educational  organizations 
that  are not institutions  of higher 
education  ‘‘as defined  in section  101(a) 
of the Higher  Education  Act of 1965  (20 
U.S.C.  1001(a))’’  as required  by 35 
U.S.C.  123(d).  Another  comment 
suggested  that  the Office  interpret  
‘‘institution  of higher  education  as 
defined  in section  101(a)  of the Higher 
Education  Act of 1965  (20 U.S.C.  
1001(a))’’  as it appears  in 35 U.S.C.  
123(d)  to include  institutions  of higher 
education  set forth  in subsection  (b) of 
20 U.S.C.  1001,  thus making  micro 
entity  status  available  to institutions 
that  grant  only  graduate  degrees  if they 
otherwise  qualify  as institutions  of 
higher  education  under  20 U.S.C.  
1001(a).  
Response:  35 U.S.C.  123(d)  provides 
that  a micro  entity  shall also include  an 
applicant  who  certifies  that:  (1) The 
applicant’s  employer,  from  which  the 
applicant  obtains  the majority  of the 
applicant’s  income,  is an institution  of 
higher  education  as defined  in section  
101(a)  of the Higher  Education  Act of 
1965  (20 U.S.C.  1001(a));  or (2) the 
applicant  has assigned,  granted, 
conveyed,  or is under  an obligation  by 
contract  or law,  to assign,  grant,  or 
convey,  a license  or other  ownership 
interest  in the particular  applications  to 
such  an institution  of higher  education. 
Consistent  with  the discussion  above 
and  in the notice  of proposed 
rulemaking  about  the statutory  terms  
‘‘applicant’’ and  ‘‘inventor,’’  note  that 
the statutory  criteria  in 35 U.S.C.  123(d) 
ordinarily  would  not be met by an 
institution  of higher  education  that  is 
itself  an assignee -applicant.  Also,  while  
35 U.S.C.  123(e)  authorizes  the Office  to 
place  additional  limits  on who  may 
qualify  as a micro  entity  under  35 U.S.C.  
123, it does  not authorize  the Office  to 
remove  limitations  contained  in 35 
U.S.C.  123 such  as to expand  the scope 
of 35 U.S.C.  123(d)  to include  a  IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
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separate,  non-profit  corporation,  
research  foundation,  technology  transfer 
organization,  Federal  Government 
research  laboratory,  other  non-profit 
scientific  or educational  organization, 
institution  of higher  education  as 
defined  in section  101(b)  of the Higher 
Education  Act of 1965,  or other 
institution  that  is legally  separate  from 
an institution  of higher  education  as 
defined  in section  101(a)  of the Higher 
Education  Act of 1965  as suggested  by 
the comments.  An entity  or institution 
must  meet  the definition  of an 
institution  of higher  education  as 
defined  in section  101(a)  of the Higher 
Education  Act of 1965  for an applicant 
employed  by, or who  has assigned  or is 
under  an obligation  to assignee  to, the 
entity  or institution,  to be eligible  for 
micro  entity  status  under  35 U.S.C.  
123(d).  
Comment  13: Several  comments  
indicated  that  the proposed  rules show 
a bias in favor  of institutions  of higher 
education  and  against  independent 
inventors  because  an independent 
inventor  has to meet  certain  criteria  to 
be entitled  to micro  entity  status.  
Response:  Both  independent  
inventors  under  35 U.S.C.  123(a)  and 
those  employed  by or under  a legal  or 
contractual  obligation  to assign,  grant, 
or convey  an interest  in an application 
to an institution  of higher  education  as 
defined  in section  101(a)  of the Higher 
Education  Act of 1965  under  35 U.S.C.  
123(d),  must  meet  certain  criteria  to be 
eligible  for micro  entity  status. 
Specifically,  the applicant  must qualify 
as a small  entity  as defined  in § 1.27.  In 
addition,  as to 35 U.S.C.  123(d)  either 
the applicant’s  employer,  from  which 
the applicant  obtains  the majority  of the 
applicant’s  income,  must  be an 
institution  of higher  education  as 
defined  in section  101(a)  of the Higher 
Education  Act of 1965  (20 U.S.C.  
1001(a)),  or the applicant  must have 
assigned,  granted,  conveyed,  or be 
under  an obligation  by contract  or law,  
to assign,  grant,  or convey,  a license  or 
other  ownership  interest  in the 
particular  application  to such an 
institution  of higher  education.  The 
income  and  application  filing  criteria 
specified  in § 1.29(a)  tracks  the criteria 
in 35 U.S.C.  123(a).  
Comment  14: One comment  
questioned  whether  micro  entity  status 
will  be available  to foreign  applicants.  
Response:  Micro  entity  status  is 
available  to any applicant  (foreign  or 
domestic  alike)  who  meets  the 
requirements  of 35 U.S.C.  123 and 
§ 1.29.  Notably,  35 U.S.C.  123(d) 
provides  that  an institution  must meet 
the definition  of an institution  of higher 
education  as defined  in section  101(a)  of the Higher  Education  Act of 1965  for 
micro  entity  status  to be obtained  based 
upon  the applicant’s  employment  at or 
the applicant’s  assignment  or obligation 
to the institution.  One criteria  of the 
definition  of ‘‘institution  of higher 
education’’  set forth  in section  101(a)  of 
the Higher  Education  Act of 1965  is that 
the institution  must  be located  in a 
‘‘State.’’  Section  103 of the Higher 
Education  Act of 1965  provides  that  the 
term  ‘‘State’’  as used  in section  101(a)  
‘‘includes  the several  States  of the 
United  States,  the Commonwealth  of 
Puerto  Rico,  the District  of Columbia, 
Guam,  American  Samoa,  the United 
States  Virgin  Islands,  and  the Freely 
Associated  States’’  and  that  the Freely 
Associated  States  means  the ‘‘Republic 
of the Marshall  Islands,  the Federated 
States  of Micronesia,  and  the Republic 
of Palau.’’  
Comment  15: Several  comments  urged  
deletion  of the requirement  in § 1.29(e) 
that  micro  entity  status  be specifically 
established  by a new  certification  in 
each  related  continuing  and  reissue 
application.  One comment  indicated 
that  unless  the Office  removes  the 
provision  in proposed  § 1.29(g)  that  a 
fee may be paid  in the micro  entity 
amount  only  if status  as a micro  entity 
is appropriate  on the date  the fee is 
paid,  the Office  should  remove  the 
requirement  in proposed  § 1.29(e)  that 
status  as a micro  entity  must  be 
specifically  established  in each  related, 
continuing  and  reissue  application  in 
which  status  is appropriate  and  desired. 
One comment  stated  that  § 1.29(e) 
contains  an error  in that  contrary  to its 
language,  status  as a micro  entity  in one 
application  does  affect  the status  of 
other  applications.  The commenter, 
however,  suggests  retaining  language  in 
§ 1.29(e)  stating  that  micro  entity  status 
must  be specifically  established  in each 
continuing  and  divisional  application  in 
which  status  is appropriate  and  desired.  
Response:  The Office  shares  the 
concerns  of the comments  that  the small 
entity  and  micro  entity  regulations  and 
procedures  be as simple  as possible.  For 
this  reason,  the Office  is making  the 
micro  entity  provisions  as consistent 
with  the small  entity  provisions  as 
possible,  including  the provisions 
pertaining  to claiming  small  entity  
status  in related  continuing  and  reissue 
applications.  See § 1.27(c)(4).  In 
addition,  35 U.S.C.  123 requires  that  the 
applicant  make  a certification  under  35 
U.S.C.  123(a)  or (d) to qualify  for micro 
entity  status.  An applicant’s  ability  to 
meet  the requirements  in 35 U.S.C.  
123(a)  or (d) may change  over time.  For 
example,  from  a first application  to a 
related  continuing  or reissue  
application,  an applicant’s  gross  income  (35 U.S.C.  123(a)(3))  and  employment 
(35 U.S.C.  123(d)(1)) may change,  and 
the number  of applications  naming  the 
applicant  as an inventor  (35 U.S.C.  
123(a)(2))  will  change  with  the filing  of a 
related  continuing  or reissue application.  
Therefore,  the Office  is concerned  about  
permitting  micro  entity status  to 
automatically  carry  over into  a related  
continuing  or reissue  application 
without  the certification  required  by 35 
U.S.C.  123(a)  or (d). Finally,  while  being 
named  as an inventor  in other 
applications  may affect  an applicant’s 
ability  to claim  micro  entity  status  in an 
application,  status  as a micro  entity  in 
one application  does  not affect  the 
status  of other  applications.  Finally,  as 
discussed  previously,  the Office  plans  to 
seek additional  public  comment  on the 
micro  entity  provisions  after the Office 
and  the public  have  gained  experience 
with  the micro  entity  procedures  in 
operation,  and  will  pursue  further 
improvements  to the micro  entity 
procedures  in light  of the public 
comment  and  its experience  with  the 
micro  entity  procedures.  
Comment  16: One comment  stated  
that  § 1.29 is unclear  as to who  must 
sign the micro  entity  certification  in 
applications  with more  than one 
applicant.  The comment  suggested  that 
§ 1.29 be amended  to make  clear  that 
each  applicant  must meet  the 
requirements  of 35 U.S.C.  123(a)  or (d) 
for the applicants  to file a micro  entity 
certification  in the application.  Further, 
the comment  suggested  that  §§ 1.29(a) 
and (d) be revised  to state  that  ‘‘each 
applicant  so establishing  such  status 
must  certify  that  that  applicant’’  meets 
all the requirements  in order  to establish 
micro  entity  status.  One basis  given  for 
this  suggestion  is that  joint  applicants 
will  generally  not be privy  to each  
other’s  private  financial  information, 
and  should  not be required  to submit  a 
certification  as to the qualification  of 
their  joint  applicants.  
Response:  Section  1.29(e)  provides  
that  a micro  entity  status  certification 
must  be signed  in compliance  with  
§ 1.33(b).  Section  1.33(b)  requires  that 
amendments  and  other  papers  filed  in 
the application  be signed  by: (1) A 
patent  practitioner  of record;  (2) a patent 
practitioner  not of record  who  acts in a 
representative  capacity  under the 
provisions  of § 1.34;  or (3) the applicant 
(§ 1.42).  Section  1.33(b)  further  provides 
that  all papers  submitted  on behalf  of a 
juristic  entity  must be signed  by a patent 
practitioner  unless  otherwise  specified.  
If the application  names  more  than one 
inventor  and  the joint  inventors  are the 
applicant  under § 1.42(a),  a micro  entity  
status  certification  must  be signed  by: 
(1) A patent  practitioner  of record;  (2) a  IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
- 13 -   
 
patent  practitioner  not of record  who 
acts in a representative  capacity  under 
the provisions  of § 1.34;  or (3) all of the 
inventors.  
Comment  17: One comment  suggested  
amending  § 1.29(f)  to include  language 
permitting  the micro  entity  certification 
to be filed  in response  to a notice  of fee 
deficiency  mailed  by the Office.  
Response:  Certification  of micro  entity  
status  can be made  at any stage  of 
prosecution,  or at any time  before  or 
with  payment  of a maintenance  fee after 
the patent  issues.  However,  a fee may be 
paid  in the micro  entity  amount  only  if 
it is submitted  with, or subsequent  to, 
the submission  of a certification  of 
entitlement  to micro  entity  status.  
Comment  18: Several  comments  
argued  that  there  should  be no need  to 
recertify  small  entity  status  if micro 
entity  status  is lost,  because  the 
applicant  had  to certify  small  entity 
status  to qualify  as a micro  entity  and 
the applicant  should  continue  to qualify 
for small  entity  status  after losing  micro 
entity  status.  
Response:  Section  1.29(i)  as adopted  
in this  final  rule  provides  that  a 
notification  that  micro  entity  status  is 
no longer  appropriate  will  not be treated 
as a notification  that  small  entity  status 
is also no longer  appropriate  unless  it 
also contains  a notification  of loss of 
entitlement  to small  entity  status  under  
§ 1.27(f)(2).  An applicant  or patentee 
who files a notification  that  micro  entity 
status  is no longer  appropriate  will  be 
treated  as a small  entity  by default  
unless  the notification  also contains  a 
notification  of loss of entitlement  to 
small  entity  status  under  § 1.27(f)(2), 
thus minimizing  burdens  on small 
entity  applicants  and  patentees.  An 
applicant  or patentee  who  is no longer  
a micro  entity  or a small  entity  must 
provide  both  a notification  under  
§ 1.29(i)  of loss of entitlement  to micro 
entity  status  and  a notification  under  of 
§ 1.27(f)(2)  of loss of entitlement  to 
small  entity  status.  
Comment  19: A number  of comments  
indicated  that  the proposed  requirement 
in § 1.29(g)  to determine  continued 
qualification  for micro  entity  status  each 
time  a fee is paid  was overly 
burdensome.  One comment  indicated 
that this  proposed  requirement  would 
inevitably  lead  to additional  cost to 
applicants  in prosecuting  applications 
before  the Office.  Several  comments 
suggested  that  § 1.29(g)  be revised  to be 
similar  to small  entity  practice  such  that 
once  micro  entity  status  is acquired,  fees 
can continue  to be paid in the micro 
entity  amount  until  the issue  fee or any 
maintenance  fee is due, or that  micro 
entity  status  be permitted  to be 
maintained  throughout  the calendar  year in which  micro  entity  status  was 
established  without  regard  to continued 
qualification.  The comments  indicated 
that  an entity  that  licenses  multiple 
patent  applications  will  need  to confirm 
that  each  licensee  does  not have  a gross 
income  that  exceeds  three  times  the 
median  household  income  for the 
preceding  calendar  year,  and  that  an 
entity  with a patent  application  naming 
multiple  inventors  will  need  to confirm 
that  each  inventor  for each  application 
does  not have  a gross  income  that 
exceeds  three  times  the median 
household  income  for the preceding 
calendar  year.  One comment 
alternatively  suggested  that  micro  entity 
status  be maintained  by applicants 
through  the end  of a calendar  year,  even 
if there  has been  a change  in income 
status  during  the calendar  year that 
disqualifies  the applicant  from  a 
continued  claim  to micro  entity  status.  
Response:  35 U.S.C.  123(a)  does  not 
allow  for a provision  similar  to small 
entity  practice  under  which  once  micro 
entity  status  is acquired,  fees can 
continue  to be paid  in the micro  entity 
amount  until  the issue  fee or any 
maintenance  fee is due  or that  micro 
entity  status  be maintained  throughout 
the calendar  year in which  micro  entity 
status  was established  without  regard  to 
continued  qualification.  35 U.S.C.  
123(a)  requires  that  a micro  entity  ‘‘not 
[have]  been  named  as an inventor  on 
more  than  4 previously  filed  patent 
applications,  other  than applications 
filed  in another  country,  provisional 
applications  under 35 U.S.C.  111(b),  or 
international  applications  for which  the 
basic  national  fee under  35 U.S.C.  41(a) 
was not paid’’  and  ‘‘not,  in the calendar 
year preceding  the calendar  year in 
which  the applicable  fee is being  paid, 
have  a gross  income,  as defined  in 
section  61(a)  of the Internal  Revenue 
Code  of 1986  (26 U.S.C.  61(a)), 
exceeding  three  times  the median 
household  income  for that  preceding 
calendar  year.’’  35 U.S.C.  123(a)(2)  and 
(a)(3).  Finally,  while  applicants  with 
complex  licensing  arrangements  may 
consider  confirming  the status  of each 
licensee  challenging,  this  is more  a 
function  of the complexity  of the 
licensing  arrangement  than any 
complexity  in the requirement  that  a fee 
may be paid  in the micro  entity  amount 
only  if status  as a micro  entity  as 
defined  in § 1.29(a)  or  § 1.29(d)  is 
appropriate  on the date  the fee is being 
paid.  
Comment  20: Several  comments  
objected  to the statement  in proposed  
§ 1.29(h)  that  ‘‘[i]t  should  be determined 
that  all parties  holding  rights  in the 
invention  qualify  for micro  entity 
status.’’  One comment  stated  that proposed  § 1.29(h)  appears  to require  an 
opinion  that  all parties  holding  rights  in 
the invention  qualify  for micro  entity 
status.  One comment  indicated  that 
because  ‘‘parties’’  could  include  an 
applicant  under 35 U.S.C.  118 not 
qualifying  as a micro  entity  but filing  an 
application  on behalf  of an inventor 
qualifying  as a micro  entity,  the 
statement  should  be deleted.  Another 
comment  indicated  that  the sentence 
cited  from  § 1.29(h)  is redundant  and/or 
inconsistent  with the statute  as 35 
U.S.C.  123(a)(4)  expressly  includes  such 
a limitation  whereas  35 U.S.C.  123(d) 
does  not.  The comment  also indicated 
that  the sentence  cited from  § 1.29(h)  is 
inconsistent  with § 1.29(d)  which  would 
otherwise  allow  any entity  that  qualifies 
for small  entity  status  to obtain  the 
benefits  of micro  entity  status  by 
assigning,  granting,  or conveying,  a 
license  or other  ownership  interest  to a 
qualified  institution  of higher  
education.  The comment  suggested 
amending  the sentence  cited  from  
§ 1.29(h)  by replacing  ‘‘qualify  for micro 
entity  status’’  with  ‘‘qualify  for small 
entity  status,’’  or alternatively,  replacing 
the phrase  ‘‘all parties  holding  rights  to 
the invention’’  with  ‘‘all applicants.’’ 
One comment  indicated  that 
‘‘invention’’ is not the equivalent  of 
‘‘application,’’ and  thus the word  
‘‘invention’’ in the phrase  ‘‘all parties 
holding  rights  to the invention’’  should 
be changed  to ‘‘application,’’ or the 
Office  should  provide  guidance  on the 
meaning  of the expression  ‘‘rights  in the 
invention.’’  
Response:  The Office  is revising  this 
provision  to indicate  that  each  applicant 
must  qualify  for micro  entity  status 
under  § 1.29(a)  or  § 1.29(d),  and  that 
each  other  party  holding  rights  in the 
application  must  qualify  for small  entity 
status  under  § 1.27.  Note  that 
§ 1.27(a)(3)  provides  for small  entity 
status  with  respect  to nonprofit 
organizations  and  is applicable  to 
universities  or other  institutions  of 
higher  education.  See § 1.27(a)(3)(ii)(A).  
35 U.S.C.  123(e)  provides  that  in 
addition  to the limits  imposed  by 35 
U.S.C.  123, the Director  may,  in the 
Director’s discretion,  impose  income 
limits,  annual  filing  limits,  or other 
limits  on who  may qualify  as a micro 
entity  pursuant  to this  section  if the 
Director  determines  that  such  additional 
limits  are reasonably  necessary  to avoid 
an undue  impact  on other  patent 
applicants  or owners  or are otherwise 
reasonably  necessary  and  appropriate. 
As discussed  previously,  the Office  has 
determined  that  requiring  all micro 
entities  to qualify  as small  entities  and 
that  all other  parties  holding  rights  in  IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
- 14 - 
 
the invention  qualify  for small  entity 
status  is reasonably  necessary  and 
appropriate  to ensure  that  applicants 
who  do not qualify  as a small  entity  do 
not inappropriately  attempt  to take 
advantage  of micro  entity  status.  
Comment  21: One comment  indicated  
that  § 1.29(h)  is an advisory  opinion, 
and not a statement  of any requirement, 
and  thus should  be deleted.  
Response:  Section  1.29(h)  requires  
that  each  applicant  qualify  for micro 
entity  status  under  § 1.29(a)  or  § 1.29(d), 
and  that  each  other  party  holding  rights 
in the application  qualify  for small 
entity  status  under  § 1.27,  in order  for 
the applicant  to make  a certification  of 
entitlement  to micro  entity  status.  With 
respect  to the small  entity  status 
requirement,  § 1.27(a)  requires  that  any 
person  or entity  claiming  small  entity 
status  not have  assigned,  granted, 
conveyed,  or licensed,  and  is under  no 
obligation  under  contract  or law to 
assign,  grant,  convey,  or license,  any 
rights  in the invention  to any person, 
concern,  or organization  which  would 
not qualify  for small  entity  status  as a 
person,  small  business  concern,  or 
nonprofit  organization.  
Comment  22: Several  comments  
indicated  that  proposed  § 1.29(i)  is 
overly  burdensome.  One comment 
indicated  that  proposed  § 1.29(i)  would 
require  that  possible  loss of entitlement 
to micro  entity  status  be evaluated  each  
time  a fee is to be paid.  One comment 
stated  that  the cost of compliance 
defeats  the Congressional  purpose  of 
providing  for micro  entity  status  and 
thus proposed  § 1.29(i)  should  be 
stricken.  
Response:  Section  1.29(i)  requires  
only  that  a notification  of a loss of 
entitlement  to micro  entity  status  must 
be filed  in the application  or patent 
prior  to paying,  or at the time  of paying, 
any fee after the date  on which  status  as 
a micro  entity  as defined  in § 1.29(a)  or 
§ 1.29(d)  is no longer  appropriate.  As 
discussed  previously,  § 1.29(g)  provides 
that  a fee may be paid  in the micro 
entity  amount  only  if status  as a micro  
entity  as defined  in § 1.29(a)  or  § 1.29(d) 
is appropriate  on the date  the fee is 
being  paid.  Section  1.29(i)  provides  a 
necessary  step  for documentation  of the 
cessation  of micro  entity  status.  
Comment  23: One comment  suggested  
that  § 1.29(i)  be amended  to permit 
payments  for entity  status  other  than 
micro  entity  as sufficient  notification  of 
loss of entitlement  to micro  entity 
status,  without  additional 
correspondence  to the Office.  
Response:  Office  experience  with  
small  entity  payments  is that  some 
small  entities  will  occasionally  pay 
patent  fees in the full (non -small  entity)  amounts  inadvertently.  If mere  payment 
of fees in the full or small  entity  amount 
is treated  as a notification  of loss of 
entitlement  to micro  entity  status,  a 
micro  entity  who  inadvertently  paid a 
patent  fee in the full or small  entity 
amount  will  thereafter  no longer  be 
treated  as a micro  entity.  This  could 
result  in increased  costs  for entities  that 
are entitled  to claim  micro  entity  status, 
and  there  would  be a lack of clear 
documentation  on whether  micro  entity 
status  has ceased.  
Comment  24: Several  comments  
indicated  that  proposed  § 1.29(j)  is 
vague  because  the proposed  rule  does 
not define  what  constitutes  fraud.  The 
comments  indicated  that  the Office 
should  amend  the rule  to make  clear 
what  would  constitute  fraud.  One 
comment  stated  that  fraud  is a legal 
conclusion  including  proof  of mental 
state.  One comment  stated  that  some 
small  entities  not qualifying  for micro 
entity  status  under  § 1.29(a)  may  be 
tempted  to marginally  align  with  a 
university  in order  to take benefit  under  
§ 1.29(d),  and  requested  that  the Office 
clarify  whether  such  a strategy  would  be 
considered  a fraud,  even  if the letter  of 
the rules  is met.  One comment  
requested  guidance  on what  penalties 
the Office  anticipates  enforcing  in the 
event  that  a fraudulent  certification  is 
made.  
Response:  Section  1.29(j)  provides  
that  ‘‘[a]ny  attempt  to fraudulently 
establish  status  as a micro  entity,  or pay 
fees as a micro  entity,  shall  be 
considered  as a fraud  practiced  or 
attempted  on the Office,’’  and  that 
‘‘[i]mproperly,  and  with intent  to 
deceive,  establishing  status  as a micro 
entity,  or paying  fees as a micro  entity, 
shall  be considered  as a fraud  practiced 
or attempted  on the Office.’’  The 
language  in § 1.29(j)  parallels  the 
corresponding  small  entity  provision  in 
§ 1.27(h),  and  thus terms  ‘‘fraudulently’’ 
and  ‘‘fraud’’  in § 1.29(j)  have  the same 
meaning  as the terms  ‘‘fraudulently’’  
and  ‘‘fraud’’  in § 1.27(h).  The definition 
of common  law fraud  is based  on the 
definition  discussed  by the U.S. Court  of 
Appeals  for the Federal  Circuit  (Federal 
Circuit).  See Unitherm  Food  Systems, 
Inc. v. Swift -Ekrich,  Inc., 375 F.3d  1341,  
1358  (Fed.  Cir. 2004);  In re Spalding  
Sports  Worldwide,  Inc., 203 F.3d  800,  
807 (Fed.  Cir. 2000).  Applicants 
questioning  how  to resolve  close 
situations  or what  penalties  may result 
from  a fraudulent  certification  should 
consider  that:  (1) The Federal  Circuit 
has noted  that  an applicant  would  be 
‘‘foolish’’  to claim  small  entity  status  if 
there  is the slightest  doubt  about  an 
applicant ’s entitlement  to claim  small 
entity  (DH Tech.,  154 F.3d  at 1343);  (2) depending  on future  developments  in 
the case law,  it is possible  that  a patent 
could  be held unenforceable  as a 
consequence  of a fraud  or inequitable 
conduct  relating  to a micro  entity  or 
small  entity  certification  (this  was 
clearly  possible  for small  entity 
certifications  prior  to the Federal 
Circuit’s  decision  in Therasense,  Inc. v. 
Becton,  Dickinson  and  Co., 649 F.3d  
1276  (Fed.  Cir. 2011)  (see, e.g., Nilssen 
v. Osram  Sylvania,  Inc., 504 F.3d  1223 
(2007),  and  Ulead  Systems,  Inc. v. Lex 
Computer  Management  Corp.,  351 F.3d  
1120  (Fed.  Cir. 2003)),  but the Federal 
Circuit  has not yet decided  the question 
of whether  a false  declaration  of small 
entity  status  could  constitute 
inequitable  conduct  under the 
Therasense  standard  (see Outside  the 
Box Innovations,  LLC v. Travel  Caddy, 
Inc., 695 F.3d  1285,  1294  (Fed.  Cir. 
2012);  see also Therasense,  649 F.3d  at 
1299,  n.6 (O’Malley, J., concurring  in 
part and  dissenting  in part));  and  (3) 
there  can be further  significant  penalties 
for fraud  (e.g., 35 U.S.C.  257(e)  
(provides  that  the matter  shall  be 
referred  to the Attorney  General  if the 
Director  becomes  aware  that  a material 
fraud  on the Office  may have  been 
committed  in connection  with a patent 
that  is the subject  of a supplemental 
examination).  
Comment  25: One comment  stated  
that  with  respect  to the provisions 
relating  to fraudulent  certification 
(§§ 1.29(g)  through  (k)), it would  be 
beneficial  to clarify  the depth  of inquiry 
which  is considered  acceptable  (e.g., 
good  faith  attempt)  for a representative 
of an applicant  to obtain  in order  to sign 
a certification.  The comment  indicated 
that  it would  be too burdensome  on a 
practitioner  to expect  more  than 
obtaining  verbal  affirmation  from  an 
applicant  that  the applicant  meets  the 
guidelines  for obtaining  micro  entity 
status.  
Response:  The depth  of inquiry  
required  for any paper  presented  to the 
Office,  including  a micro  entity  status 
certification,  is specified  in § 11.18. 
Specifically,  § 11.18(b)  provides  that  by 
presenting  to the Office  or hearing 
officer  in a disciplinary  proceeding 
(whether  by signing,  filing,  submitting, 
or later  advocating)  any paper,  the party 
presenting  such  paper,  whether  a 
practitioner  or non-practitioner,  is 
making  two certifications.  The first 
certification  is that  all statements  made 
therein  of the party’s  own  knowledge  
are true,  all statements  made  therein  on 
information  and  belief  are believed  to be 
true,  and  all statements  made  therein  
are made  with  the knowledge  that 
whoever,  in any matter  within the 
jurisdiction  of the Office,  knowingly   IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
- 15 -   
 
and  willfully  falsifies,  conceals,  or 
covers  up by any trick,  scheme,  or 
device  a material  fact, or knowingly  and 
willfully  makes  any false,  fictitious,  or 
fraudulent  statements  or 
representations,  or knowingly  and 
willfully  makes  or uses  any false  writing 
or document  knowing  the same  to 
contain  any false,  fictitious,  or 
fraudulent  statement  or entry,  shall  be 
subject  to the penalties  set forth  under  
18 U.S.C.  1001  and  any other  applicable 
criminal  statute,  and  further  that 
violations  of the provisions  of this 
section  may jeopardize  the probative 
value  of the paper.  See § 11.18(b)(1).  
The second  certification  is that  to the 
best of the party’s  knowledge, 
information  and  belief,  formed  after an 
inquiry  reasonable  under the 
circumstances:  (1) The paper  is not 
being  presented  for any improper 
purpose,  such as to harass  someone  or 
to cause  unnecessary  delay  or needless 
increase  in the cost of any proceeding 
before  the Office;  (2) the other  legal 
contentions  therein  are warranted  by 
existing  law or by a nonfrivolous 
argument  for the extension,  
modification,  or reversal  of existing  law 
or the establishment  of new  law; (3) the 
allegations  and  other  factual  contentions 
have  evidentiary  support  or, if 
specifically  so identified,  are likely  to 
have  evidentiary  support  after a 
reasonable  opportunity  for further 
investigation  or discovery;  and  (4) the 
denials  of factual  contentions  are 
warranted  on the evidence,  or if 
specifically  so identified,  are reasonably 
based  on a lack of information  or belief. 
See § 11.18(b)(2).  
Comment  26: Several  comments  
suggested  eliminating  the requirement 
under  proposed  § 1.29(k)  that  any 
deficiency  payment  include  an 
itemization  and  an accounting  of the 
total  deficiency  payment.  One comment 
indicated  that  proposed  § 1.29(k)  should 
be revised  to parallel  the rule  that 
applies  to an error  in paying  a small 
entity  fee when  the large  entity  fee 
should  have  been  paid.  The comment 
alternatively  proposed  that  the rules 
could  be amended  to require:  (1) One 
base fee for rectifying  the failure  to 
correct  micro  entity  status,  and  (2) an 
accounting  of when  the change  of status 
occurred.  
Response:  The fee deficiency  payment  
provisions  of § 1.29(k)  track  the small 
entity  fee deficiency  payment  
provisions  of § 1.28(c).  The Office  needs 
the itemization  to properly  apply  the fee 
deficiency  payment  so that  the Office’s 
records  for the application  or patent  will 
properly  show  which  fees have  been  
paid  for the application  or patent  and  in 
what amount.  Comment  27: One comment  suggested 
the Office  establish  a database  of the 
various  certification  types  and  permit 
annual  updating  of applicant  status, 
rather  than individual  application  
status.  Another  comment  suggested  that 
§ 1.29 be amended  to provide  for micro 
entity  status  certifications  contained  in 
patent  application  assignments  recorded 
under  part  3 of 37 CFR.  
Response:  The suggestions  are not 
currently  feasible  as inventor  or 
assignee  names  are not always  stated 
consistently  from  application  to 
application  (either  in application  papers 
or in assignment  cover  sheets).  The 
suggestions  will  be considered  if the 
Office  moves  to adopt  a system  under 
which  there  are unique  inventor  and 
applicant -assignee  designations.  
Comment  28: One comment  indicated 
that  many  practitioners  who  have 
participated  in the LegalCORPS  
Inventor  Assistance  Program  (a pilot 
patent  law pro bono  program  developed 
with  the support  of the Office)  have  
seen  first-hand  that  many  inventors 
qualifying  for free legal  assistance 
through  the program  will  not be able to 
file applications  electronically,  due  in 
part  to being  unable  to make  electronic 
payments  via deposit  account  or credit 
card.  The comment  suggested  that  the 
final  rule  could  address  this  issue  by 
providing  for electronic  filing  of 
documents  along  with  a written 
certification  by the applicant  that  any 
fees associated  with  that  filing  are being 
submitted  by check  deposited  in the 
U.S.  mail  on the date  of application 
filing.  
Response:  Electronic  filing  remains  a 
viable  filing  option  for micro  entities, 
even  if the applicant  does  not have  a 
deposit  account  at the Office  and  even  
if the applicant  does  not have  sufficient 
access  to credit  to enable  payment  by 
credit  card.  Fees may be paid by 
electronic  funds  transfer  (EFT),  which 
requires  nothing  more  than  a checking 
account.  However,  before  making  any 
payments  by EFT,  an EFT profile  must 
be created  at the Office  ‘‘Office  of 
Finance  On-Line  Shopping  Page’’  at 
https://ramps.uspto.gov/eram/.  To 
begin,  click  the link  titled  ‘‘Create  or 
Modify  an EFT Profile’’  on the ‘‘Office 
of Finance  On-Line  Shopping  Page.’’  It 
is important  that  micro  entities  and 
other  applicants  file their applications 
electronically  via EFS-Web  in order  to 
avoid  the non-electronic  filing  fee under  
§ 1.10,  which  is $400  (and  $200  for 
small  and  micro  entities).  Additionally, 
a small  or micro  entity  that  files an 
application  in paper  (versus 
electronically  via EFS-Web)  will  not 
receive  the discount  (currently  $97.00)  available  only  to small  entities  that  file 
a patent  application  electronically.  
Rulemaking Considerations  
A. Regulatory  Flexibility  Act: For the 
reasons  set forth  herein,  the Deputy 
General  Counsel  for General  Law of the 
United  States  Patent  and  Trademark 
Office  has certified  to the Chief  Counsel 
for Advocacy  of the Small  Business 
Administration  that  changes  in this  final 
rule  will  not have  a significant  
economic  impact  on a substantial 
number  of small  entities.  See 5 U.S.C.  
605(b).  The Office  did  not receive  public 
comments  on this  certification.  
This  final  rule  revises  the rules  of 
practice  to allow  a subset  of small 
entities —i.e., micro  entities —to pay 
further  reduced  fees, namely,  a seventy - 
five percent  discount.  This  final  rule 
sets out procedures  pertaining  to 
claiming  micro  entity  status,  paying 
patent  fees as a micro  entity,  
notification  of loss of micro  entity 
status,  and  correction  of payments  of 
patent  fees paid erroneously  in the 
micro  entity  amount.  This  final  rule 
maintains  the criteria  in 35 U.S.C.  
123(a)  and  (d) for entitlement  to file a 
certification  of micro  entity  status  (note 
also the requirement  in 37 CFR  
1.29(d)(1) that  an applicant  claim  small 
entity  status  in compliance  with  37 CFR  
1.27 in order  to claim  micro  entity 
status;  see also 37 CFR  1.29(h),  35 
U.S.C.  123(e)).  This  rule  also includes 
clarifications  under  37 CFR  1.29(a)  to 
refer  to non-applicant  inventors  and 
joint  inventors.  The micro  entity 
procedures  in this  final  rule  track  to the 
extent  feasible  the corresponding  small 
entity  procedures  under  37 CFR  1.27. 
Thus,  the burden  to all entities, 
including  small  entities,  imposed  by 
this final  rule  is no greater  than those 
imposed  by the pre-existing  regulations 
pertaining  to claiming  small  entity 
status:  paying  patent  fees as a small  
entity,  notification  of loss of small  entity 
status,  and  correction  of payments  of 
patent  fees paid erroneously  in the 
small  entity  amount.  
Requiring  that  an applicant  claim  
small  entity  status  in compliance  with  
37 CFR  1.27 in order  to claim  micro 
entity  status  under  37 CFR  1.29(d)(1) 
will not have  a significant  economic 
impact  on a substantial  number  of small 
entities.  The Office  uses  the Small 
Business  Administration  business  size 
standard  for the purpose  of paying 
reduced  patent  fees in 13 CFR  121.802  
as the size standard  when  conducting  an 
analysis  or making  a certification  under 
the Regulatory  Flexibility  Act for patent - 
related  regulations.  See Business  Size 
Standard  for Purposes  of United  States 
Patent  and  Trademark  Office  Regulatory   IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
- 16 - 
 
Flexibility  Analysis  for Patent -Related  
Regulations,  71 FR 67109,  67109  (Nov.  
20, 2006).  A small  entity  for purposes  of 
the Regulatory  Flexibility  Act analysis  is 
a small  entity  for purposes  of paying 
reduced  patent  fees. Therefore,  
requiring  in 37 CFR  1.29(d)(1) that  an 
entity  claim  small  entity  status  in 
compliance  with  37 CFR  1.27 in order 
to claim  micro  entity  status  will 
preclude  only  an applicant  or patentee 
who  is a large  entity  (i.e., not a small 
entity)  from  claiming  micro  entity 
status.  
The Office  estimates  that  a minority  
percentage  of small  entity  applications 
will  be filed  by paying  micro  entity  fees 
under  this  final  rule.  Based  upon  the 
data  in the Office’s  Patent  Application 
Locating  and  Monitoring  (PALM) 
system,  of the approximately  2,498,000 
nonprovisional  patent  applications 
(utility,  plant,  design,  and  reissue)  and 
requests  for continued  examination  filed 
in total  over the last five fiscal  years, 
small  entity  fees were  paid  in 
approximately  669,000  (26.8  percent). 
Thus,  an average  of approximately  
500,000  nonprovisional  patent 
applications  and  requests  for continued 
examination  have  been  filed  each  year 
for the last five fiscal  years,  with  small 
entity  fees being  paid  in approximately  
134,000  of the nonprovisional  patent 
applications  and  requests  for continued 
examination  filed  each  year.  
As indicated  above,  this  rule  provides  
a procedure  for small  entities  to attain  
a 75 percent  reduction  in fees as a micro 
entity,  as provided  by statute.  The 
procedures  for micro  entity  status  track 
the existing  procedures  for small  entity 
status.  While  the rule  impacts  the entire 
universe  of small  entity  applications  
and  patents,  the rule  is necessary  for 
implementing  a further  reduction  in 
fees, which  is entirely  beneficial,  and  no 
other  provision  has an economic  impact 
on the affected  small  entities.  
B. Executive  Order  12866  (Regulatory  
Planning  and  Review):  This  rulemaking 
has been  determined  to be not 
significant  for purposes  of Executive  
Order  12866  (Sept.  30, 1993).  
C. Executive  Order  13563  (Improving  
Regulation  and  Regulatory  Review):  The 
Office  has complied  with  Executive 
Order  13563.  Specifically,  the Office  
has,  to the extent  feasible  and 
applicable:  (1) Made  a reasoned 
determination  that  the benefits  justify 
the costs  of the rule;  (2) tailored  the rule 
to impose  the least  burden  on society 
consistent  with  obtaining  the regulatory 
objectives;  (3) selected  a regulatory 
approach  that  maximizes  net benefits; 
(4) specified  performance  objectives;  (5) 
identified  and  assessed  available 
alternatives;  (6) involved  the public  in an open  exchange  of information  and 
perspectives  among  experts  in relevant 
disciplines,  affected  stakeholders  in the 
private  sector,  and  the public  as a 
whole,  and  provided  on-line access  to 
the rulemaking  docket;  (7) attempted  to 
promote  coordination,  simplification, 
and  harmonization  across  government 
agencies  and  identified  goals  designed 
to promote  innovation;  (8) considered 
approaches  that  reduce  burdens  and 
maintain  flexibility  and  freedom  of 
choice  for the public;  and  (9) ensured 
the objectivity  of scientific  and 
technological  information  and 
processes.  
One comment  argued  that  the 
rulemaking  fails to comply  with 
Executive  Order  13563  on the grounds 
that:  (1) The Office  did  not conduct  a 
burden/benefit  analysis  which  includes 
realistic  professional  services  fees for 
patent  practitioners,  the time  involved 
in understanding  and  complying  with 
the rule,  and  the sanctions  imposed  by 
rule;  (2) proposed  37 CFR  1.29 fails to 
consider  the value  to society  of 
university  inventions,  for which  35 
U.S.C.  123(d)  seeks  to provide  specific 
benefits,  and  which  imposes  no limits 
on how  a university  might  seek to 
exploit  its rights;  and  (3) proposed  37 
CFR  1.29 imposes  significant  burdens 
for the affected  applicants,  and  is thus 
not tailored  to impose  the least  burden 
on society  consistent  with  obtaining  the 
regulatory  objectives.  
The Office  considered  costs  and 
benefits  to applicants  claiming  micro 
entity  status  (including  universities),  as 
well  as to all other  applicants  and  the 
Office  in this  rulemaking.  Executive 
Order  13563  reaffirms  Executive  Order  
12866.  This  rulemaking  was deemed  by 
OMB  as not economically  significant  as 
that  term  is defined  in Executive  Order  
12866  (Sept.  30, 1993).  Therefore,  the 
regulatory  analysis  provided  in section  
6(a)(3)(C)  of Executive  Order  12866  and 
OMB  Circular  A–4 is inapplicable  to 
this rulemaking.  The Office,  however, 
did  conduct  the regulatory  analysis 
provided  in section  6(a)(3)(C)  and  OMB 
Circular  A–4 for the related  rulemaking 
to set and  adjust  patent  fees under 
section  10 of the Leahy -Smith  America 
Invents  Act. 37 CFR  1.29 does  impose 
the least  burden  on society  consistent 
with  obtaining  the regulatory  objectives  
by permitting  an applicant  to self-certify 
entitlement  to micro  entity  status,  and 
does  not require  any further  information 
or certification  from  the applicant 
provided  that  the applicant  remains 
entitled  to micro  entity  status.  In 
addition,  having  micro  entity  
procedures  which  track  the pre-existing  
small  entity  procedures  to the extent 
practicable  is less burdensome  than  fashioning  new  micro  entity  procedures. 
Finally,  while  having  no requirements 
would  arguably  impose  the least  burden 
on an entity  seeking  the benefit  of micro 
(or small)  entity  status,  it would  not 
impose  the least  burden  on society 
overall  and  would  not obtain  the 
regulatory  objectives  of creating  the 
beneficial  option  of micro  entity  status 
with  a seventy -five percent  fee 
reduction  as provided  by statute. 
Revising  the regulations  as suggested  
by the comment  would  expand  the 
scope  of micro  entity  status  beyond 
what  the statute  allows.  It also would 
not meet  the regulatory  objectives  of 
ensuring  that  a for-profit,  large  entity 
applicant  not become  a ‘‘micro  entity’’ 
(and  thus obtaining  a seventy -five 
percent  discount)  merely  by licensing  or 
assigning  some  interest  (nominal  or 
otherwise)  to an institution  of higher 
education.  The Office  received 
comments  (including  in response  to the 
section  10 rulemaking)  in support  of the 
Office  imposing  additional  requirements 
under  35 U.S.C.  123(e)  to avoid  sham 
licensing  agreements  for the purpose  of 
improperly  claiming  micro  entity  status 
(as improper  micro  entity  claims  would 
result  in higher  fees for other  
applicants).  Thus,  the narrow 
requirements  imposed  by the Office 
under  35 U.S.C.  123(e)  are necessary  to 
avoid  abuses  of micro  entity  status,  and 
simply  eliminating  them  in the name  of 
reducing  burden  would  not impose  the 
least  burden  on society  overall  and 
would  not obtain  the regulatory 
objectives.  
D. Executive  Order  13132  
(Federalism): This  rulemaking  does  not 
contain  policies  with  federalism  
implications  sufficient  to warrant 
preparation  of a Federalism  Assessment 
under  Executive  Order  13132  (Aug.  4, 
1999).  
E. Executive  Order  13175  (Tribal  
Consultation):  This  rulemaking  will  not: 
(1) Have  substantial  direct  effects  on one 
or more  Indian  tribes;  (2) impose 
substantial  direct  compliance  costs  on 
Indian  tribal  governments;  or (3) 
preempt  tribal  law.  Therefore,  a tribal 
summary  impact  statement  is not 
required  under  Executive  Order  13175 
(Nov.  6, 2000).  
F. Executive  Order  13211  (Energy  
Effects):  This  rulemaking  is not a 
significant  energy  action  under 
Executive  Order  13211  because  this 
rulemaking  is not likely  to have  a 
significant  adverse  effect  on the supply, 
distribution,  or use of energy.  Therefore, 
a Statement  of Energy  Effects  is not 
required  under  Executive  Order  13211 
(May  18, 2001).  
G. Executive  Order  12988  (Civil  
Justice  Reform): This  rulemaking  meets   IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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applicable  standards  to minimize 
litigation,  eliminate  ambiguity,  and 
reduce  burden  as set forth  in sections  
3(a) and  3(b)(2)  of Executive  Order  
12988  (Feb.  5, 1996).  
H. Executive  Order  13045  (Protection  
of Children): This  rulemaking  does  not 
concern  an environmental  risk to health 
or safety  that  may disproportionately 
affect  children  under  Executive  Order  
13045  (Apr.  21, 1997).  
I. Executive  Order  12630  (Taking  of 
Private  Property):  This  rulemaking  will 
not effect  a taking  of private  property  or 
otherwise  have  taking  implications 
under  Executive  Order  12630  (Mar.  15, 
1988).  
J. Congressional  Review  Act: Under  
the Congressional  Review  Act 
provisions  of the Small  Business 
Regulatory  Enforcement  Fairness  Act of 
1996  (5 U.S.C.  801 et seq.), the United 
States  Patent  and  Trademark  Office  will 
submit  a report  containing  this  final  rule 
and  other  required  information  to the 
United  States  Senate,  the United  States 
House  of Representatives,  and  the 
Comptroller  General  of the Government 
Accountability  Office.  In addition,  the 
United  States  Patent  and  Trademark 
Office  will  inform  the Committee  on the 
Judiciary  of the House  of 
Representatives  and  the Committee  on 
the Judiciary  of the Senate  of any 
proposed  limits  under  35 U.S.C.  123(e) 
at least  three  months  before  any limits  
proposed  to be implemented  pursuant 
to 35 U.S.C.  123(e)  take effect.  
The changes  in this  final  rule  are not 
expected  to result  in an annual  effect  on 
the economy  of 100 million  dollars  or 
more,  a major  increase  in costs  or prices, 
or significant  adverse  effects  on 
competition,  employment,  investment, 
productivity,  innovation,  or the ability  
of United  States -based  enterprises  to 
compete  with  foreign -based  enterprises 
in domestic  and  export  markets. 
Therefore,  this  final  rule  is not a ‘‘major 
rule’’  as defined  in 5 U.S.C.  804(2).  
K. Unfunded  Mandates  Reform  Act  of 
1995:  The changes  set forth  in this 
rulemaking  do not involve  a Federal 
intergovernmental  mandate  that  will 
result  in the expenditure  by State,  local, 
and  tribal  governments,  in the aggregate, 
of 100 million  dollars  (as adjusted)  or 
more  in any one year,  or a Federal 
private  sector  mandate  that  will  result  
in the expenditure  by the private  sector 
of 100 million  dollars  (as adjusted)  or 
more  in any one year,  and  will  not 
significantly  or uniquely  affect  small 
governments.  Therefore,  no actions  are 
necessary  under  the provisions  of the 
Unfunded  Mandates  Reform  Act of 
1995.  See 2 U.S.C.  1501  et seq. 
L. National  Environmental  Policy  Act: 
This  rulemaking  will  not have  any effect  on the quality  of the environment  and 
is thus categorically  excluded  from 
review  under  the National 
Environmental  Policy  Act of 1969.  See 
42 U.S.C.  4321  et seq. 
M. National  Technology  Transfer  and 
Advancement  Act: The requirements  of 
section  12(d)  of the National 
Technology  Transfer  and  Advancement 
Act of 1995  (15 U.S.C.  272 note)  are not 
applicable  because  this  rulemaking  does 
not contain  provisions  which  involve  
the use of technical  standards.  
N. Paperwork  Reduction  Act: The 
Paperwork  Reduction  Act of 1995  (44 
U.S.C.  3501  et seq.)  requires  that  the 
USPTO  consider  the impact  of 
paperwork  and  other  information 
collection  burdens  imposed  on the 
public.  This  final  rule  makes  changes  to 
the rules  of practice  that  would  impose 
new  information  collection 
requirements  involving  fee deficiency 
statements  which  are subject  to review 
by the Office  of Management  and 
Budget  (OMB)  under  the Paperwork  
Reduction  Act of 1995  (44 U.S.C.  3501 – 
3549).  Accordingly,  the Office  submitted  
a proposed  information collection  to 
OMB  for its review  and  approval  when  
the notice  of proposed  rulemaking  was 
published.  The Office  also published  the 
title,  description,  and  respondent  
description  of the  information  
collection,  with  an estimate of the 
annual  reporting  burdens,  in the  notice  
of proposed  rulemaking  (See  Changes  to 
Implement  Micro  Entity  Status  for 
Paying  Patent  Fees,  77 FR 
31812 –13). 
The Office  received  one comment  on 
the proposed  information  collection 
indicating  that  the estimate  of 3,000 
respondents  per year was a significant 
underestimate  as every  inventor 
employed  outside  of large  entities  will 
likely  be confronted  with  the various 
certifications,  and  that  there  may be tens 
of thousands  of university  professors  or 
university  students  on work -study  who 
qualify  under  35 U.S.C.  123(d).  
The information  collection  
requirements  discussed  in the notice  of 
proposed  rulemaking,  however, 
narrowly  pertain  to the information 
required  for fee deficiency  payments 
based  upon  the previous  erroneous 
payment  of patent  fees in the micro 
entity  amount  (See Changes  to 
Implement  Micro  Entity  Status  for 
Paying  Patent  Fees,  77 FR 31812).  Based 
upon  the number  of applicants  and 
patentees  who  make  fee deficiency 
payments  under  existing  37 CFR  1.28(c) 
(about  2,250  per year),  the  Office 
believes  that  3,000  respondents  per year 
is a reasonable  and  conservative  
estimate  of the number  of applicants 
and patentees  who  make  fee deficiency  payments  under  37 CFR  1.28(c)  or 
1.29(k).  
As discussed  in the notice  of 
proposed  rulemaking,  OMB  has 
determined  under 5 CFR  1320.3(h)  that 
the certification  of micro  entity  status 
(e.g., Form  PTO/SB/15A  (gross  income 
basis)  or Form  PTO/SB/15B  (institution 
of higher  education  basis)  does  not 
collect  ‘‘information’’  within the 
meaning  of the Paperwork  Reduction 
Act of 1995  (See Changes  to Implement 
Micro  Entity  Status  for Paying  Patent 
Fees,  77 FR 31812).  The changes 
adopted  in this  final  rule  do not require 
any further  change  to the proposed 
information  collection.  
Accordingly,  the Office  has 
resubmitted  the proposed  information 
collection  to OMB.  The proposed 
information  collection  is available  at the 
OMB’s  Information  Collection  Review 
Web  site (www.reginfo.gov/public/do/ 
PRAMain ). 
Notwithstanding  any other  provision  
of law,  no person  is required  to respond 
to, nor shall  a person  be subject  to a 
penalty  for failure  to comply  with,  a 
collection  of information  subject  to the 
requirements  of the Paperwork 
Reduction  Act, unless  that  collection  of 
information  displays  a currently  valid 
OMB  control  number.  
List of Subjects  in 37 CFR  Part 1 
Administrative  practice  and 
procedure,  Courts,  Freedom  of 
information,  Inventions  and  patents, 
Reporting  and  recordkeeping 
requirements,  Small  businesses.  
For the reasons  set forth  in the 
preamble,  37 CFR  part  1 is amended  as 
follows:  
 
PART  1—RULES  OF PRACTICE  IN 
PATENT  CASES  
 
■ 1. The authority  citation  for 37 CFR  
part  1 continues  to read  as follows:  
Authority:  35 U.S.C.  2(b)(2).  
 
■ 2. Section  1.29 is added  to read as 
follows:  
 
§ 1.29   Micro entity status.  
(a) To establish  micro  entity  status 
under  this  paragraph,  the applicant 
must  certify  that:  
(1) The applicant  qualifies  as a small  
entity  as defined  in § 1.27;  
(2) Neither  the applicant  nor the 
inventor  nor a joint  inventor  has been 
named  as the inventor  or a joint 
inventor  on more  than  four previously 
filed  patent  applications,  other  than 
applications  filed  in another  country, 
provisional  applications  under  35 
U.S.C.  111(b),  or international 
applications  for which  the basic   IP/N/1/USA/D/9 • IP/N/1/USA/P/14  
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national  fee under  35 U.S.C.  41(a)  was 
not paid;  
(3) Neither  the applicant  nor the 
inventor  nor a joint  inventor,  in the 
calendar  year preceding  the calendar 
year in which  the applicable  fee is being 
paid,  had  a gross  income,  as defined  in 
section  61(a)  of the Internal  Revenue 
Code  of 1986  (26 U.S.C.  61(a)),  
exceeding  three  times  the median 
household  income  for that  preceding 
calendar  year,  as most  recently  reported 
by the Bureau  of the Census;  and 
(4) Neither  the applicant  nor the 
inventor  nor a joint  inventor  has 
assigned,  granted,  or conveyed,  nor is 
under  an obligation  by contract  or law 
to assign,  grant,  or convey,  a license  or 
other  ownership  interest  in the 
application  concerned  to an entity  that, 
in the calendar  year preceding  the 
calendar  year in which  the applicable 
fee is being  paid,  had  a gross  income,  as 
defined  in section  61(a)  of the Internal 
Revenue  Code  of 1986,  exceeding  three 
times  the median  household  income  for 
that  preceding  calendar  year,  as most 
recently  reported  by the Bureau  of the 
Census.  
(b) An applicant,  inventor,  or joint  
inventor  is not considered  to be named 
on a previously  filed  application  for 
purposes  of paragraph  (a)(2)  of this 
section  if the applicant,  inventor,  or 
joint  inventor  has assigned,  or is under 
an obligation  by contract  or law to 
assign,  all ownership  rights  in the 
application  as the result  of the 
applicant’s,  inventor’s,  or joint  
inventor’s  previous  employment.  
(c) If an applicant’s,  inventor’s,  joint  
inventor’s,  or entity’s  gross  income  in 
the preceding  calendar  year is not in 
United  States  dollars,  the average 
currency  exchange  rate,  as reported  by 
the Internal  Revenue  Service,  during 
that  calendar  year shall  be used  to 
determine  whether  the applicant’s, 
inventor’s,  joint  inventor’s,  or entity’s 
gross  income  exceeds  the threshold 
specified  in paragraph  (a)(3)  or (4) of 
this  section.  
(d) To establish  micro  entity  status  
under  this  paragraph,  the applicant 
must  certify  that:  
(1) The applicant  qualifies  as a small  
entity  as defined  in § 1.27;  and 
(2)(i)  The applicant’s  employer,  from  
which  the applicant  obtains  the majority 
of the applicant’s  income,  is an 
institution  of higher  education  as 
defined  in section  101(a)  of the Higher  
Education  Act of 1965  (20 U.S.C.  
1001(a));  or 
(ii) The applicant  has assigned,  
granted,  conveyed,  or is under an 
obligation  by contract  or law,  to assign, 
grant,  or convey,  a license  or other 
ownership  interest  in the particular  application  to such  an institution  of 
higher  education.  
(e) Micro  entity  status  is established  
in an application  by filing  a micro  entity 
certification  in writing  complying  with 
the requirements  of either  paragraph  (a) 
or paragraph  (d) of this  section  and 
signed  in compliance  with  § 1.33(b). 
Status  as a micro  entity  must  be 
specifically  established  in each  related, 
continuing  and  reissue  application  in 
which  status  is appropriate  and  desired. 
Status  as a micro  entity  in one 
application  or patent  does  not affect  the 
status  of any other  application  or patent, 
regardless  of the relationship  of the 
applications  or patents.  The refiling  of 
an application  under § 1.53 as a 
continuation,  divisional,  or 
continuation -in-part application 
(including  a continued  prosecution 
application  under § 1.53(d)), or the 
filing  of a reissue  application,  requires 
a new  certification  of entitlement  to 
micro  entity  status  for the continuing  or 
reissue  application.  
(f) A fee may be paid  in the micro  
entity  amount  only  if it is submitted 
with,  or subsequent  to, the submission 
of a certification  of entitlement  to micro 
entity  status.  
(g) A certification  of entitlement  to 
micro  entity  status  need only  be filed 
once  in an application  or patent.  Micro 
entity  status,  once  established,  remains 
in effect  until  changed  pursuant  to 
paragraph  (i) of this  section.  However,  a 
fee may be paid  in the micro  entity 
amount  only  if status  as a micro  entity 
as defined  in paragraph  (a) or (d) of this 
section  is appropriate  on the date  the fee 
is being  paid.  Where  an assignment  of 
rights  or an obligation  to assign  rights  to 
other  parties  who  are micro  entities  
occurs  subsequent  to the filing  of a 
certification  of entitlement  to micro 
entity  status,  a second  certification  of 
entitlement  to micro  entity  status  is not 
required.  
(h) Prior  to submitting  a certification  
of entitlement  to micro  entity  status  in 
an application,  including  a related, 
continuing,  or reissue  application,  a 
determination  of such entitlement 
should  be made  pursuant  to the 
requirements  of this  section.  It should 
be determined  that  each  applicant 
qualifies  for micro  entity  status  under 
paragraph  (a) or (d) of this  section,  and 
that  any other  party  holding  rights  in 
the invention  qualifies  for small  entity 
status  under  § 1.27.  The Office  will 
generally  not question  certification  of 
entitlement  to micro  entity  status  that  is 
made  in accordance  with  the 
requirements  of this  section.  
(i) Notification  of a loss of entitlement  
to micro  entity  status  must be filed  in 
the application  or patent  prior to  paying,  or at the time  of paying,  any fee 
after the date  on which  status  as a micro 
entity  as defined  in paragraph  (a) or (d) 
of this  section  is no longer  appropriate. 
The notification  that  micro  entity  status 
is no longer  appropriate  must  be signed 
by a party  identified  in § 1.33(b). 
Payment  of a fee in other  than the micro 
entity  amount  is not sufficient 
notification  that  micro  entity  status  is 
no longer  appropriate.  A notification 
that micro  entity  status  is no longer 
appropriate  will  not be treated  as a 
notification  that  small  entity  status  is 
also no longer  appropriate  unless  it also 
contains  a notification  of loss of 
entitlement  to small  entity  status  under  
§ 1.27(f)(2).  Once  a notification  of a loss 
of entitlement  to micro  entity  status  is 
filed  in the application  or patent,  a new 
certification  of entitlement  to micro 
entity  status  is required  to again  obtain 
micro  entity  status.  
(j) Any attempt  to fraudulently  
establish  status  as a micro  entity,  or pay 
fees as a micro  entity,  shall  be 
considered  as a fraud  practiced  or 
attempted  on the Office.  Improperly, 
and with  intent to deceive,  establishing 
status  as a micro  entity,  or paying  fees 
as a micro  entity,  shall  be considered  as 
a fraud  practiced  or attempted  on the 
Office.  
(k) If status  as a micro  entity  is 
established  in good  faith  in an 
application  or patent,  and  fees as a 
micro  entity  are paid  in good  faith  in the 
application  or patent,  and  it is later 
discovered  that  such  micro  entity  status 
either  was established  in error,  or that 
the Office  was not notified  of a loss of 
entitlement  to micro  entity  status  as 
required  by paragraph  (i) of this  section 
through  error,  the error  will  be excused 
upon  compliance  with the separate 
submission  and  itemization  
requirements  of paragraph  (k)(1)  of this 
section  and  the deficiency  payment 
requirement  of paragraph  (k)(2)  of this 
section.  
(1) Any paper  submitted  under  this 
paragraph  must be limited  to the 
deficiency  payment  (all fees paid  in 
error)  required  for a single  application 
or patent.  Where  more  than one 
application  or patent  is involved, 
separate  submissions  of deficiency 
payments  are required  for each 
application  or patent  (see § 1.4(b)).  The 
paper  must contain  an itemization  of the 
total  deficiency  payment  for the single 
application  or patent  and  include  the 
following  information:  
(i) Each  particular  type  of fee that  was 
erroneously  paid as a micro  entity,  (e.g., 
basic  statutory  filing  fee, two-month 
extension  of time  fee) along  with  the 
current  fee amount  for a small  or non- 
small  entity,  as applicable;   IP/N/1/USA /D/9 • IP/N/1/USA/P/14  
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(ii) The micro  entity  fee actually  paid, 
and  the date  on which  it was paid;  
(iii) The deficiency  owed  amount  (for 
each  fee erroneously  paid);  and 
(iv) The total  deficiency  payment 
owed,  which  is the sum  or total  of the 
individual  deficiency  owed  amounts  as 
set forth  in paragraph  (k)(2)  of this 
section.  
(2) The deficiency  owed,  resulting 
from  the previous  erroneous  payment  of 
micro  entity  fees, must  be paid.  The 
deficiency  owed  for each  previous  fee 
erroneously  paid as a micro  entity  is the 
difference  between  the current  fee 
amount  for a small  entity  or non-small 
entity,  as applicable,  on the date  the 
deficiency  is paid  in full and  the 
amount  of the previous  erroneous  micro 
entity  fee payment.  The total  deficiency 
payment  owed  is the sum  of the individual  deficiency  owed  amounts  
for each  fee amount  previously  and 
erroneously  paid as a micro  entity.  
(3) If the requirements  of 
paragraphs (k)(1)  and  (2) of this  
section  are not complied  with, such  
failure  will  either be treated  at the 
option  of the Office  as an 
authorization  for the Office  to process  
the deficiency  payment  and charge  
the processing  fee set forth  in 
§ 1.17(i),  or result  in a requirement  
for compliance  within  a one-month  
time period  that  is not extendable  
under  
§ 1.136(a) to avoid  the return  of the 
fee deficiency  payment.  
(4) Any deficiency  payment  (based  
on a previous  erroneous  payment  of a 
micro  entity  fee) submitted  under  this 
paragraph  will  be treated  as a notification  of a loss of entitlement  to 
micro  entity  status  under  paragraph  (i) 
of this  section,  but payment  of a 
deficiency  based  upon  the difference 
between  the current  fee amount  for a 
small  entity  and  the amount  of the 
previous  erroneous  micro  entity  fee 
payment  will  not be treated  as an 
assertion  of small  entity  status  under  
§ 1.27(c).  Once  a deficiency  payment  is 
submitted  under  this  paragraph,  a 
written  assertion  of small  entity  status 
under  § 1.27(c)(1)  is required  to obtain 
small  entity  status.  
Dated:  December 14, 2012.  
David  J. Kappos,  
Under  Secretary  of Commerce  for Intellectual 
Property  and Director  of the United  States 
Patent  and Trademark  Office.  
[FR Doc.  2012 –30674  Filed  12–18–12; 8:45 am] 
BILLING  CODE  3510–16–P
 
 
 
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