Introduction of Micro Entity Status Qualifies You for a 75% Discount on Patents

The America Invents Act (AIA) has made filing a patent for many people much less expensive. Before the AIA went into effect on 16 September 2011, there were only two ways to file a patent: either as a normal entity or a small entity. In a nutshell, if you qualified for the small entity status the processing fees that you had to pay to the United States Patent and Trademark Office (USPTO) were substantially lower than those of a normal entity but still more costly than the average person would like to pay. Now, however, a newer and cheaper status, the micro entity, has been introduced that will provide future innovators with even lower fees. With the new micro entity status, these same processing fees are discounted by 75% of what a normal entity’s fees would cost. It kind of makes you want to put on your creative hat just so you can file a patent. But how exactly does 75% savings break down?

There are three processing fees associated with filing a patent that all entities are required to pay. These include the filing fee, the search fee, and the examination fee. For a normal entity these fees are respectively $280, $600, and $720 for a grand total of $1,600, just to submit your patent to the USPTO. For the new micro entity status, the fees are $70, $150, and $180 totaling a $400. Already each of these fees have been reduced down to a mind-boggling 25% of their original cost but the savings don’t end there. If you file electronically, the US Patent and Trademark Office will shave off another $70 making the total cost of filing the patent only $330. That is a $1,270 difference!

Moreover, the requirements for gaining micro entity status are fairly relaxed and easily attainable. In fact, most people in America will qualify for the micro entity status just because of how easy it is to meet the requirements. 35 U.S.C. § 123 basically defines a micro entity as a person who has filed fewer than five previous patent applications, and has a gross income of under $150,000. Apart from a few other minor details, this basic definition allows for the overwhelming majority of citizens to qualify for the substantially reduced processing fees. In theory, more than 90% of all potential applicants will qualify for this new status.

If you do not qualify as a micro entity, don’t fret because there is still another option available to you! You most likely qualify to file as a small entity, which makes you eligible for your processing fees to be reduced by 50%. 13 C.F.R. § 121.801 generally states that you qualify for small entity status if you employ fewer than 501 people. Virtually any small or family-owned business is eligible for small entity status under this requirement.

So do you have an idea that you think can become the next big thing? Save a little money and file your patent as a micro or small entity.

André J. Ausseresses
Law Clerk
JAFARI LAW GROUP®, INC.