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September 20, 2011



One thing (amongst others) I find puzzling is, with regard to both the small entity and microentity discount, how does the 15% fee surcharge work: (1) is this surcharge based on the reduced fee, i.e., after taking the small entity/microentity discount?; or (2) is this surcharge based on the unreduced fee, i.e., before taking the small entity/microentity discount? My reading of Section 11(i)(1)(A) is that it is the latter, before the base fee is reduced by the small entity/microentity discount (but the wording of the AIA isn't exactly clear on this point). Does anyone else have a differing view, and if so, why?


Another "fly in the ointment" that is deceptive in the AIA, namely what is the "true" effective date of the microentity discount. The microentity discount won’t actually take effect until Kappos exercises his fee setting authority pursuant to Section 10 of the AIA. See below (from USPTO FAQ on the AIA):

Question FEE4: If I meet the micro entity of the AIA, will I be able to pay a micro entity fee beginning on the date of enactment – September 16, 2011?

No. The AIA does not permit the USPTO to apply the 75% micro entity fee discount until the micro entity fee for a specific item is set or adjusted using the fee setting authority provided in section 10 of the Act.

So while the microentity provision effective date is September 16, 2011, the fee reduction benefit of being a microentity won’t happen until Kappos exercises his fee setting authority under Section 10. Wonderful (and if you detect sarcasm, you’re correct).

Well, this makes things interesting. I have a microentity client with an upcoming national stage filing deadline, and we're in the position of beating the Sept. 26 fee increase, or waiting in the hope that the microentity discounts will kick in prior to the deadline (in December).

I'm guessing Kappos will take his sweet time about doing anything that cuts PTO revenue. If anyone thinks they know different, I'd like to hear it.

There seem to be some practical reasons why the USPTO needs to go through the rule-making process before implementing the fee reduction for micro entities, which is not going to be as simple as a 15% fee increase.

The definition of micro entity in section 123(a) of the AIA refers initially to 'applicant', but then in its subsections it becomes a bit unclear whether 'applicant' always means inventor(s) (as in 123(a)(2)), or could mean a small business or other organization (as in the reference to 'small entity' in 123(a)(1)). So whose income is being referred to in 123(a)(3) - the inventor(s)'? Or does the income of each of the 'small entity' parties involved have to meet the criterion of 123(a)(3)? What about when the inventor is deceased or otherwise unavailable and a representative of the inventor is the 'applicant'?

These could be some reasons for a delay in the implementation of micro entity status unrelated to the USPTO's great need for increased fee revenue.

Obama said it will "help American entrepreneurs and businesses bring their inventions to market sooner, creating new businesses and new jobs."

Earth to Obama, Earth to Obama, come in Obama...

New tasks forced upon the PTO, coupled with the soon-to-be across-the-board budget cuts, means less money for examination and BPAI. Sounds like increased backlog to me.

President Obama certainly made a difference in the passage of this bill, in the process also significantly raising the profile of the patent world and its issues. It's too bad that Congress didn't do its part by enacting the bill that almost everyone else wanted -- one that would have ended the diversion of USPTO fees to the legislature. But then, I guess that's what happens when you let foxes guard the henhouse.

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