Patent filing fee reduction strategies – micro entity status

Earlier this year, the United States Patent Office (USPTO) implemented a “Micro Entity” applicant status pursuant to the 2011 America Invents Act (AIA).  This rule allows qualifying applicants to receive a 75% fee reduction of certain fees—including fees for filing, searching, examining, issuing, appealing, and maintaining patent applications and issued patents. See the USPTO Fee Schedule for a complete listing of fees.

An applicant may qualify for “Micro Entity Status” based on:  (1) experience and gross income; or (2) status as an Institution of Higher Education.

(1) Micro Entity Qualification Based on Experience and Gross Income:

An applicant must certify to the following four criteria:

  • Small Entity Status: The applicant qualifies as a small entity under 37 C.F.R 1.27 (generally, an entity that has less than 500 employees, see 13 CFR 121.802); and
  • No More than Four Previous Applications: The applicant or any joint inventor has not filed more than four previously filed US non-provisional patent applications (exceptions: applications filed in another country; international applications for which the National Stage fee 35 U.S.C. 41(a) was not paid – PCT applications which did not go past the International Stage; applications from a prior employment or assigned to the prior employer); and
  • Gross Income Limitation: The applicant or any listed inventor did not have a gross income for the previous year that was greater than $184,116.  The “Maximum Qualifying Gross Income” will change annually based upon median US household income.  Check the current USPTO Qualifying Gross Income eligibility fee; and
  • Grant of Rights (if any) must be to another Micro Entity: The applicant or any listed inventor has not promised, assigned, granted, or conveyed a license or other ownership interest (and is not obligated to do so) to a non-micro entity.

(2) Micro Entity Qualification for Institution of Higher Education Status:

An applicant must certify to one of the following criteria:

  • Employee of Institution: The applicant is an employee of an Institution of Higher Education from which the applicant obtains the majority of the applicant’s income(Institution of Higher Education as defined in Section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) (not the same as a “not for profit” or school); or
  • Grant of Rights to Institution: The applicant has assigned, granted, or conveyed a license or other ownership interest (or is obligated to do so) directly to the Institution of Higher Education itself (not a research institute, foundation or technology transfer office). ** Under the current USPTO rules, an assignee can be listed as the named application, however, in order to qualify for reduced micro entity fees, an Institution of Higher Education (with current or promised ownership interest) should list the inventors as the named as applicants until discrepancies in the law are resolved.

Moving forward, applicants can secure (or lose) reduced fees at anytime throughout the life of a filed application or issued patent.  Keep in mind that each time fees are paid the applicant must certify that it has “Micro Entity” status.  Therefore, it’s best to conduct to review of these requirements prior to each fee filing.

For more information on this topic, please contact Pamela K. Riewerts, Esq. (U.S. Registered Patent Attorney) at

Beware of the inducement bogeyman

In AKAMAI TECHNOLOGIES, INC. v. LIMELIGHT NETWORKS, INC. (Fed Cir. August 31, 2012) the en banc court held that a person can be liable for inducement to infringe even if the direct infringement is only found by combining the acts of more than one other person. You can read all 103 pages of the case here: Akamai v Limelight

What? In English: If you are aware of a patent (inducement requires specific intent to induce, so it requires knowledge of the patent) and you either perform one step in the method and induce one or more other persons to perform the remaining steps, or if you induce two or more other persons to engage in steps that together infringe, you are liable for inducement to infringe.

This is a major change in the law. This case overruled a recent prior case that had held that inducement requires inducing a single other party to engage in the acts that constitute direct infringement.

What does this mean? It means that if you are a business that say, provides a load balanced server farm for your clients, and you make that server farm available to your clients, who use it to manage their web content, and Akamai informs you of their patent that covers this technology, you will be liable for inducement to infringe even though the mere operation of a server farm does not practice every element in the claims of the patent. It means that businesses that are made aware of patents will have to consider every conceivable set of steps, whether done by their clients or others (inducement does not require any agency between the inducer and the person engaging in direct infringement) because the patent holder can “aggregate” all of the users it needs to meet the requirement of showing infringement.

There were numerous dissenting opinions, and it is somewhat probable that the Supreme Court will take this case.

For more information, contact Mike Oliver.

Verizon subscribers safe after patent close call, will cost them in the long run

In ACTIVEVIDEO NETWORKS, INC. v. VERIZON COMMUNICATIONS, INC., case available here Verizon mostly lost its appeal after a jury awarded the plaintiff substantial damages related to infringement of patents plaintiff held on video on demand services. The trial court also had awarded a permanent injunction against Verizon, which had it been upheld, Verizon would have had to remove VOD services for its subscribers. However, the appeal court held that a permanent injunction was not justified, primarily because money damages would be sufficient (the plaintiff had previously negotiated with another provider and licensed its patents).

Even though the injunction was overturned, Verizon will end up paying a significant per subscriber amount for the license, on the order of 20 times the royalty rate negotiated with a prior licensee.

This case contains a very good analysis of many issues that are presented in patent trials ( which themselves are rare) including marking, hypothetical negotiation, and the requirements of expert testimony. Indeed, Verizon lost much of the case because most of its expert testimony was excluded because it was conclusory.

For more information, contact Mike Oliver.