Changes to Implement Micro Entity Status for Paying Patent Fees, 31806-31814 [2012-12971]

Agencies

• DEPARTMENT OF COMMERCE
• United States Patent and Trademark Office

[Federal Register Volume 77, Number 104 (Wednesday, May 30, 2012)]
[Proposed Rules]
[Pages 31806-31814]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12971]


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DEPARTMENT OF COMMERCE

United States 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: Notice of proposed rulemaking.

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SUMMARY: The United States Patent and Trademark Office (Office) is 
proposing to amend the rules of practice in patent cases to implement 
the micro entity provision of the Leahy-Smith America Invents Act. 
Certain patent fees set or adjusted under the fee setting authority in 
the Leahy-Smith America Invents Act will be reduced by seventy-five 
percent for micro entities. The Office is proposing changes to 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.

DATES: Comment Deadline Date: Written comments must be received on or 
before July 30, 2012.

ADDRESSES: Comments should be sent by electronic mail message over the 
Internet addressed to: micro_entity@uspto.gov. Comments may also be 
submitted by postal mail addressed to: Mail Stop Comments--Patents, 
Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-1450, 
marked to the attention of James Engel, Senior Legal Advisor, Office of 
Patent Legal Administration, Office of the Deputy Commissioner for 
Patent Examination Policy.
    Comments may also be sent by electronic mail message over the 
Internet via the Federal eRulemaking Portal. See the Federal 
eRulemaking Portal Web site (https://www.regulations.gov) for additional 
instructions on providing comments via the Federal eRulemaking Portal.
    Although comments may be submitted by postal mail, the Office 
prefers to receive comments by electronic mail message over the 
Internet because sharing comments with the public is more easily 
accomplished. Electronic comments are preferred to be submitted in 
plain text, but also may be submitted in ADOBE[supreg] portable 
document format or MICROSOFT WORD[supreg] format. Comments not 
submitted electronically should be submitted on paper in a format that 
facilitates convenient digital scanning into ADOBE[supreg] portable 
document format.
    The comments will be available for public inspection at the Office 
of the Commissioner for Patents, currently located in Madison East, 
Tenth Floor, 600 Dulany Street, Alexandria, Virginia. Comments also 
will be available for viewing via the Office's Internet Web site 
(https://www.uspto.gov). Because comments will be made available for 
public inspection, information that the submitter does not desire to 
make public, such as an address or phone number, should not be included 
in the comments.

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 Leahy-Smith America Invents Act 
provides that: (1) The Office may set or adjust any patent fee, 
provided that the 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 with respect to small entities and by seventy-
five percent with respect to micro entities. The Leahy-Smith America 
Invents Act 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 notice proposes changes to the rules of practice to 
implement the ``micro entity'' provisions added by the Leahy-Smith 
America Invents Act.
    Summary of Major Provisions: The Office proposes to add a provision 
to the rules of practice pertaining to micro entity status. The 
provision will set out the requirements to qualify as a micro entity 
tracking the micro entity provision of Section 10 of the Leahy-Smith 
America Invents Act. The provision will also set out procedures 
relating to micro entity status that largely track the provisions 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

[[Page 31807]]

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 Leahy-Smith America Invents Act was enacted into 
law on September 16, 2011. See Public Law 112-29, 125 Stat. 283 (2011). 
Section 10(a) of the Leahy-Smith America Invents Act 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 fees only recover 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 Leahy-Smith America Invents Act 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 Leahy-Smith America Invents Act 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 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. 35 U.S.C. 123(d) (discussed subsequently) provides 
another 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.
    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 applications 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 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. 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 and adjust patent fees 
under section 10 of the Leahy-Smith America Invents Act in a separate 
rulemaking. The fees set or adjusted by the Office under section 10 of 
the Leahy-Smith America Invents Act 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

[[Page 31808]]

small entity status. See 37 CFR 1.27(f) and MPEP 509.03.
    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:
    If an application names more than one applicant, 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. For 
example, it would not be appropriate to file a micro entity 
certification for the application in the following situations in which 
there is more than one applicant: (1) some but not all of the 
applicants qualify as micro entities under 35 U.S.C. 123(a) (e.g., some 
applicants exceed the gross income levels; some applicants have more 
than four other nonprovisional applications; or some applicants have 
assigned, granted, or conveyed the application or are under an 
obligation to do so, to an entity that exceeds the gross income levels) 
and the institution of higher education provisions of 35 U.S.C. 123(d) 
are not applicable to the non-qualifying applicants; or (2) some but 
not all of the applicants meet the higher education provisions of 35 
U.S.C. 123(d) and the micro entity provisions of 35 U.S.C. 123(a) are 
not applicable to the remaining applicants. Additionally, where there 
is more than one applicant, the income level requirement in 35 U.S.C. 
123(a)(3) applies to each applicant's income separately (i.e., the 
combined gross income of all of the applicants need not be below the 
income level in 35 U.S.C. 123(a)(3)). Further, if an applicant 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 requirements in the micro entity standard 
(either by meeting the income limit specified in 35 U.S.C. 123(a)(4), 
or by being an institution of higher education under 35 U.S.C. 123(d)) 
for the applicant to claim micro entity status under 35 U.S.C. 123.
    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 proposes to include 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 of an applicant 
being 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 being paid. Thus, the provision in 37 CFR 1.27(g)(1) 
that the applicant need only determine continued eligibility to 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 proposed amendments to Title 37 of 
the Code of Federal Regulations, Part 1.
    Section 1.29: Section 1.29 is proposed to be 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 Sec. Sec.  1.29(a) through 
(d) will track the provisions of 35 U.S.C. 123(a) through (d). 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 Leahy-Smith America Invents Act as well as the 
effective date of 35 U.S.C. 123). 35 U.S.C. 118, effective on September 
16, 2012 (one year after the effective date of 35 U.S.C. 123), however, 
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, on and after September 16, 2012, 35 
U.S.C. 118 will allow 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, or if the person shows 
sufficient proprietary interest in the matter. As the terms 
``applicant'' and ``inventor'' will no longer be virtually synonymous 
on and after September 16, 2012, the Office invites public comment on 
the issue of whether the term ``inventor'' should be used in place of 
``applicant'' at any instance in the proposed Sec.  1.29.
    Section 1.29(a) implements the provisions of 35 U.S.C. 123(a). 
Section 1.29(a) provides that an applicant claiming micro entity status 
under 35

[[Page 31809]]

U.S.C. 123(a) must certify that the applicant: (1) Qualifies as a small 
entity as defined in Sec.  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.
    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 2010 (the year 
most recently reported by the Bureau of the Census) was $49,445. See 
Income, Poverty, and Health Insurance Coverage in the United States: 
2010 at pages 5 and 33 (Table A-1) (Sept. 2011). Thus, the income level 
specified in Sec. Sec.  1.29(a)(3) and (a)(4) (three times the median 
household income) is $148,335 for calendar year 2010.
    Section 1.29(b) implements the provisions of 35 U.S.C. 123(b). 
Section 1.29(b) provides that an applicant is not considered to be 
named on a previously filed application for purposes of Sec.  
1.29(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.
    Section 1.29(c) implements the provisions of 35 U.S.C. 123(c). 
Section 1.29(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 Sec.  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 (https://www.irs.gov/businesses/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 Sec.  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 applications 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 Sec.  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 Sec.  1.27. The legislative history of 35 U.S.C. 123 is 
clear that it is directed to a subset of small entities, namely, 
``truly independent inventors.'' See H.R. Rep 112-98 at 50 (2011) 
(``[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.
    Section 1.29(e) provides that small entity status must be asserted 
in compliance with Sec.  1.27 in an application for micro entity status 
to be established in such application. Section 1.29(e) further provides 
that micro entity status must be established in an application in which 
small entity status is or has previously been asserted in compliance 
with Sec.  1.27 by filing a certification in writing that complies with 
either Sec.  1.29(a) or Sec.  1.29(d) and that is signed in compliance 
with Sec.  1.33(b). Section 1.29(e) also contains provisions for a 
micro entity that correspond to the provisions of Sec.  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 
Sec.  1.53 as a continuation, divisional, or continuation-in-part 
application (including a continued prosecution application under Sec.  
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 Sec.  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 Sec.  1.27(e) for a small entity.

[[Page 31810]]

Section 1.29(g) provides that a certification of entitlement to micro 
entity status need only be filed once in an application or patent, that 
micro entity status, once established, remains in effect until changed 
pursuant to Sec.  1.29(i), but a fee may be paid in the micro entity 
amount only if status as a micro entity as defined in Sec.  1.29(a) or 
(d) is 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, the applicant must still be 
entitled to micro entity status to pay a fee in the micro entity 
amount. For micro entity status under 35 U.S.C. 123(a), the applicant 
must determine that each applicant still meets the conditions of 35 
U.S.C. 123(a) and Sec.  1.29(a) to claim micro entity status (e.g., 
that no applicant 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), 
that no applicant 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), that no new applicant has been 
named in the application who does not meet the conditions specified in 
35 U.S.C. 123(a) and Sec.  1.29(a)). For micro entity status under 35 
U.S.C. 123(d), the applicant must determine that each applicant still 
complies with 35 U.S.C. 123(d) and Sec.  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 Sec.  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 Sec.  
1.29(a) or 1.29(d). Section 1.29(h) indicates that it should be 
determined that all parties holding rights in the invention qualify for 
micro entity status. 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 Sec.  
1.29.
    Section 1.29(i) contains provisions for a micro entity that 
correspond to the provisions of Sec.  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 Sec.  1.29(a) or 1.29(d) is no 
longer appropriate. Section 1.29(k) provides for how to make such 
notification of loss of micro entity status. Also, the notification 
that micro entity status is no longer appropriate must be signed by a 
party identified in Sec.  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. Once a notification of a loss of 
entitlement to micro entity status is filed in the application or 
patent, a written assertion of small entity status under Sec.  
1.27(c)(1) is required to obtain small entity status. Applicants will 
be expected to pay fees in the full (other than small entity) amount if 
a written assertion of small entity status is not submitted with the 
notification of loss of entitlement to micro entity status. The written 
assertion of small entity status under Sec.  1.27(c)(1) may be 
submitted together with the notification of a loss of entitlement to 
micro entity status. In addition, 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 Sec.  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 Sec.  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 
Sec.  1.29(i) through error, the error will be excused upon compliance 
with the separate submission and itemization requirements of Sec.  
1.29(k)(1) and the deficiency payment requirement of Sec.  1.29(k)(2).
    Section 1.29(k)(1) provides that any paper submitted under Sec.  
1.29(k) must be limited to the deficiency payment (all fees paid in 
error) required for a single application or patent, and 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 Sec.  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 other than a 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 Sec.  
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 other than a small entity) on the date the

[[Page 31811]]

deficiency is paid in full and the amount of the previous erroneous 
(small entity) fee payment'').
    Section 1.29(k)(3) provides that if the requirements of Sec. Sec.  
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 Sec.  1.17(i), or result in a requirement for compliance 
within a one-month non-extendable time period under Sec.  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 Sec.  
1.29(k) will be treated as a notification of a loss of entitlement to 
micro entity status under Sec.  1.29(i).

Rulemaking Considerations

A. Administrative Procedure Act

    This notice proposes to amend the rules of practice in patent cases 
to implement the micro entity provisions of the Leahy-Smith America 
Invents Act. The changes being proposed in this notice do not change 
the substantive criteria for entitlement to micro entity status (except 
possibly for requiring 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 35 U.S.C. 123(e)), but simply specify 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. Therefore, these proposed changes (except as discussed 
previously) involve rules of agency practice and procedure and/or 
interpretive rules. See Bachow Commc'ns Inc. v. FCC, 237 F.3d 683, 690 
(DC Cir. 2001) (rules governing an application process are procedural 
under the Administrative Procedure Act); Inova Alexandria Hosp. v. 
Shalala, 244 F.3d 242, 350 (4th Cir. 2001) (rules for handling appeals 
were procedural where they did not change the substantive standard for 
reviewing claims); Nat'l Org. of Veterans' Advocates v. Sec'y of 
Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001) (rule that 
clarifies interpretation of a statute is interpretive).
    Accordingly, prior notice and opportunity for public comment are 
not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law), and 
thirty-day advance publication is not required pursuant to 5 U.S.C. 
553(d) (or any other law), except possibly for the proposal to require 
in Sec.  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 
35 U.S.C. 123(e); Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37 
(Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 
2(b)(2)(B), does not require notice and comment rulemaking for 
``interpretative rules, general statements of policy, or rules of 
agency organization, procedure, or practice'') (quoting 5 U.S.C. 
553(b)(A)). The Office, however, is publishing this proposal for 
comment as it seeks the benefit of the public's views on the Office's 
proposed implementation of the micro entity provisions of the Leahy-
Smith America Invents Act.

B. 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 proposed in this notice will not have a 
significant economic impact on a substantial number of small entities. 
See 5 U.S.C. 605(b).
    This notice proposes changes to 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. The notice proposes 
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 notice does not propose to change the criteria in 
35 U.S.C. 123(a) or (d) for entitlement to file a certification of 
micro entity status (except possibly for requiring 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 35 U.S.C. 123(e)). The 
micro entity procedures proposed in this notice 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 
these rules is no greater than those imposed by the current 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 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 these 
proposed rules. 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 to implementing a reduction in fees, which is entirely 
beneficial, and no other provision has an economic impact on the 
affected small entities.

C. 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).

[[Page 31812]]

D. 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.

E. 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).

F. 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).

G. 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).

H. Executive Order 12988 (Civil Justice Reform)

    This rulemaking meets 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).

I. 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).

J. 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).

K. 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.), 
prior to issuing any final rule, the United States Patent and Trademark 
Office will submit a report containing the 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 notice 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 notice is 
not expected to result in a ``major rule'' as defined in 5 U.S.C. 
804(2).

L. Unfunded Mandates Reform Act of 1995

    The changes set forth in this notice 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.

M. 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.

N. 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.

O. Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) 
requires that the Office consider the impact of paperwork and other 
information collection burdens imposed on the public. An applicant who 
wishes to claim micro entity status must submit a certification of 
micro entity status, preferably by using Form PTO/SB/15A (gross income 
basis) or Form PTO/SB/15B (institution of higher education basis). The 
Office of Management and Budget (OMB) has determined that, under 5 CFR 
1320.3(h), Forms PTO/SB/15A and B do not collect ``information'' within 
the meaning of the Paperwork Reduction Act of 1995.
    This proposed rulemaking, however, does involve information 
collection requirements (for fee deficiency payment based upon the 
previous erroneous payment of patent fees in the micro entity amount) 
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). 
The collection of information involved in this notice has been 
submitted to OMB under OMB control number 0651-00xx. The proposed 
collection will be available at OMB's Information Collection Review Web 
site (www.reginfo.gov/public/do/PRAMain).
    Title of Collection: Fee Deficiency Payments.
    OMB Control Number: 0651-00xx.
    Needs and Uses: This information collection is necessary so that 
patent applicants and patentees may pay the balance of fees due (i.e., 
fee deficiency payment) when a fee was previously paid in error in a 
micro or small entity amount. The Office needs the information to be 
able to process and properly record a fee deficiency payment to avoid 
questions arising later either for the Office or for the applicant or 
patentees as to whether the proper fees have been paid in the 
application or patent.

[[Page 31813]]

    Method of Collection: By mail, facsimile, hand delivery, or 
electronically to the Office.
    Affected Public: Individuals or households; businesses or other 
for-profits; and not-for-profit institutions.
    Estimated Number of Respondents: 3,000 responses per year. The 
basis is that the Office receives approximately 2,250 fee deficiency 
payments annually arising out of small entity filings. For purposes of 
this calculation, it was estimated that up to 750 fee deficiency 
payments could be made annually arising out of micro entity filings.
    Estimated Time per Response: The Office estimates that the 
responses in this collection will take the public 2 hours.
    Estimated Total Annual Respondent Burden Hours: 6,000 hours per 
year.
    Estimated Total Annual Respondent Cost Burden: $2,040,000 per year.
    The Office is soliciting comments to: (1) Evaluate whether the 
proposed information requirement is necessary for the proper 
performance of the functions of the Office, including whether the 
information will have practical utility; (2) evaluate the accuracy of 
the Office's estimate of the burden; (3) enhance the quality, utility, 
and clarity of the information to be collected; and (4) minimize the 
burden of collecting the information on those who are to respond, 
including by using appropriate automated, electronic, mechanical, or 
other technological collection techniques or other forms of information 
technology.
    Please send comments on or before July 30, 2012 to Mail Stop 
Comments--Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, 
VA, 22313-1450, marked to the attention of Raul Tamayo, Legal Advisor, 
Office of Patent Legal Administration, Office of the Deputy 
Commissioner for Patent Examination Policy. Comments should also be 
submitted to the Office of Information and Regulatory Affairs, Office 
of Management and Budget, New Executive Office Building, Room 10202, 
725 17th Street NW., Washington, DC 20503, Attention: Desk Officer for 
the Patent and Trademark Office.
    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 
proposed to be 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:


Sec.  1.29  Micro entity status.

    (a) To establish micro entity status under this paragraph, the 
applicant must certify that the applicant:
    (1) Qualifies as a small entity as defined in Sec.  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.
    (b) An applicant is not considered to be named on a previously 
filed application for purposes of paragraph (a)(2) of this section 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.
    (c) 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 paragraph 
(a)(3) or (a)(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 Sec.  
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 applications to such an 
institution of higher education.
    (e) Small entity status must be asserted in compliance with Sec.  
1.27 in an application for micro entity status to be established in 
such application. Micro entity status is established in an application 
in which small entity status is asserted in compliance with Sec.  1.27 
by filing a micro entity certification in writing of compliance with 
the requirements of either paragraph (a) or paragraph (d) of this 
section and is signed in compliance with Sec.  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 Sec.  1.53 as a continuation, divisional, or 
continuation-in-part application (including a continued prosecution 
application under Sec.  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, but 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

[[Page 31814]]

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 paragraph (a) or (d) of this section. 
It should be determined that all parties holding rights in the 
invention qualify for micro entity status. 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 Sec.  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. Once a notification of a loss of entitlement to micro 
entity status is filed in the application or patent, a written 
assertion of small entity status under Sec.  1.27(c)(1) is required to 
obtain small entity status, and 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 Sec.  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;
    (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 (k)(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 Sec.  
1.17(i), or result in a requirement for compliance within a one-month 
time period that is not extendable under Sec.  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 Sec.  1.27(c). 
Once a deficiency payment is submitted under this paragraph, a written 
assertion of small entity status under Sec.  1.27(c)(1) is required to 
obtain small entity status.

    Dated: May 23, 2012.
David J. Kappos,
Under Secretary of Commerce for Intellectual Property and Director of 
the United States Patent and Trademark Office.
[FR Doc. 2012-12971 Filed 5-29-12; 8:45 am]
BILLING CODE 3510-16-P