Congress Quietly Reduces Small and Micro Entity USPTO Fees to Ring In the New Year

Intellectual Property

As part of the Consolidated Appropriations Act of 2023, Congress quietly enacted the Unleashing American Innovators Act of 2022. In addition to an effort to educate and connect more people with the USPTO through establishing an additional satellite office, establishing community outreach offices, and updating the USPTO’s pro bono program, this Act also reduces USPTO fees for small and micro entities, effective immediately. Previously, small entities were entitled to a discount of 50% and micro entities to 75% off the standard fees. Under the Unleashing American Innovators Act, small entities are now entitled to a 60% discount and micro entities to an 80% discount off the standard fees.   

For example, the 3.5-year maintenance fee for a U.S. utility patent is $2,000. Under the previous fee regime, the small entity maintenance fee would be $1,000, and the micro entity fee would be $500. Under the new fee regime, the same maintenance fee is $800 for a small entity and $400 for a micro entity. The complete USPTO fee schedule can be found on the USPTO’s official website.

As a practical matter, these new fees do not apply to outstanding issue fees for allowed patent applications in which the Notice of Allowance and Fees Due letter (form PTOL-85) was mailed before these fee changes went into effect on December 29, 2022. The issue fees due in those cases are the amounts listed in that letter. 

As the name of the Unleashing American Innovators Act implies, the clear goal behind the fee reduction is to provide more cost-effective access to the U.S. patent system with the hope of spurring innovation for solo inventors, small businesses, and colleges/universities (which are historically the typical small and micro entities). 

Possibly out of concern for entities improperly taking advantage of the reduced fees, Congress also included a new penalty for false assertions of small or micro entity status in this Act. Under the new law, "an entity that is found to have falsely asserted entitlement to a fee reduction under this section shall be subject to a fine, to be determined by the Director, the amount of which shall be not less than three times the amount that the entity failed to pay as a result of the false assertion, whether the Director discovers the false assertion before or after the date on which a patent has been issued." (Emphasis added.) It is not clear how this will square with current patent rules, in which "any attempt to fraudulently establish status as a small entity" is considered "as a fraud practiced or attempted on the Office," which may jeopardize enforceability of the patent (37 CFR 1.27(h)), but if "established in good faith" and caught later as an error can be excused via payment of the fee deficiency and correction of the entity status (37 C.F.R. 1.28(a)). (Emphasis added). We will have to wait to see if the USPTO promulgates proposed rulemaking as to how it will implement these new penalties into the current system.

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