Question 1
Who can claim small entity status? Questions dealing with small entity status can ask you to pick out an organization that can never have small entity status. An example would be: Which of the following can never be considered a small entity?
A. A University with 500 students that receives 37% of its funding from grants from large entity companies
B. A small business with net sales of $2 million/year
C. A small business with 200 employees and gross sales of $5.2 million/year
D. The US government
E. A taxi service that employs 520 people, and of those employees, 247 of them are independent contractors
Answer “E” – This is one of those types of questions that if you get tricked you will most likely waste heaps of time looking for obscure rules regarding independent contractors that simply don’t exist in the MPEP. Remember 1) independent inventor, 2) small businesses (< 500 employees), 3) nonprofit organizations, 4) the government, and 5) universities, which are all listed in the MPEP, qualify for small entity.
Question 2
Who can sign the assertion of small entity status?
509.03 Claiming Small Entity Status (2) Parties who can sign and file the written assertion. The written assertion can be signed by: (i) One of the parties identified in § 1.33(b) (e.g., an attorney or agent registered with the Office), § 3.73(b) of this chapter notwithstanding, who can also file the written assertion; (ii) At least one of the individuals identified as an inventor (even though a § 1.63 executed oath or declaration has not been submitted), notwithstanding § 1.33(b)(4), who can also file the written assertion pursuant to the exception under § 1.33(b) of this part; or (iii) An assignee of an undivided part interest, notwithstanding §§ 1.33(b)(3) and 3.73(b) of this chapter, but the partial assignee cannot file the assertion without resort to a party identified under § 1.33(b) of this part. […] (g)(1) New determination of entitlement to small entity status is needed when issue and maintenance fees are due. Once status as a small entity has been established in an application or patent, fees as a small entity may thereafter be paid in that application or patent without regard to a change in status until the issue fee is due or any maintenance fee is due.
Question 3
What happens when small entity status changes before issuance? In particular, one question asked about an inventor that filed as small entity then assigned the rights to a large entity company. The company paid the small entity issue fee although they knew they were supposed to pay a large entity fee. Then the assignee came to the agent for advice about repercussions. ANSWER?
Question 4
The applicant accidentally paid large entity filing fee even though entitled to small entity status. Can he get a refund and how long does he have to apply?
37 CFR 1.28(a). Refunds when small entity status is later established; how errors in small entity status are excused. (a) Refunds based on later establishment of small entity status. A refund pursuant to § 1.26, based on establishment of small entity status, of a portion of fees timely paid in full prior to establishing status as a small entity may only be obtained if an assertion under § 1.27(c) and a request for a refund of the excess amount are filed within three months of the date of the timely payment of the full fee. T he three-month time period is not extendable under § 1.136. Status as a small entity is waived for any fee by the failure to establish the status prior to paying, at the time of paying, or within three months of the date of payment of, the full fee.
Question 5
Must small entity status be reasserted in a continuing application? Yes – this is covered in Chapter 500. Scan the exploded headings and you will find “509.03 Claiming Small Entity Status.” Skim that section and you will find the rules under “Assertions required”.
{ 20 comments… read them below or add one }
Note: What can an assignee not of record sign? Small entity status, MPEP 324, 300-19
509.03 Assignee must have full rights (not partial or not of record) to sign an assertion of small entitiy status.
Don’t these two statements cancel each other out? A question in the database asks what an assignee not of record can sign, and I am pretty sure the answer is small entity status.
Question 5 – MPEP 509.03
(4)Assertion required in related, continuing, and reissue applications. Status as a small entity must be specifically established by an assertion in each related, continuing and reissue application in which status is appropriate and desired. Status as a small 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 § 1.53 as a continuation, divisional, or continuation-in-part application
(including a continued prosecution application under § 1.53(d)), or the filing of a reissue application, requires a new assertion as to continued entitlement to small entity status for the continuing or reissue application.(d)When small entity fees can be paid.
But why ‘E’ in Question 1? I am just beginning to study the MPEP. Thank you.
Q 1:
why is the government a small entity. I dont see it listed in MPEP. See MPEP 509.02
having a license with the goverment under some special order is not a bar against claiming small entity status.
35 USC 41 says “director may waive a govt entity from paying a fee” but does not say it is a small entity (from April 2002 AM Q13).
Who can sign the Assertion of small entity status?
509.03 Claiming Small Entity Status (2) Parties who can sign and file the written assertion. The written assertion can be signed by: (i) One of the parties identified in § 1.33(b) (e.g., an attorney or agent registered with the Office), § 3.73(b) of this chapter notwithstanding, who can also file the written assertion; (ii) At least one of the individuals identified as an inventor (even though a § 1.63 executed oath or declaration has not been submitted), notwithstanding § 1.33(b)(4), who can also file the written assertion pursuant to the exception under § 1.33(b) of this part; or (iii) An assignee of an undivided part interest, notwithstanding §§ 1.33(b)(3) and 3.73(b) of this chapter, but the partial assignee cannot file the assertion without resort to a party identified under § 1.33(b) of this part. […] (g)(1) New determination of entitlement to small entity status is needed when issue and maintenance fees are due. Once status as a small entity has been established in an application or patent, fees as a small entity may thereafter be paid in that application or patent without regard to a change in status until the issue fee is due or any maintenance fee is due.
1) the attorney/agent, 2) inventor or 3) assignee. Maybe I am just tired but the partial assignee is not making sense to me. Can someone clarify?
My understanding is that an assignee of an undivided part interest may sign but it must go through an attorney or agent of record.
Another person noted a question similar to #3 on their exam. “I think they had the small entity question where the small entity was claimed in error, a good faith mistake, and hence what should the applicant do?” What is the answer?
04.03.13p
13. Prior to filing a patent application for a client, a registered practitioner determined that the client was entitled to claim small entity status under 37 CFR 1.27. The practitioner filed a patent application for the client on November 1, 2002 together with a claim for small entity status under 37 CFR 1.27. On December 2, 2002, a Notice to File Missing Parts was mailed setting a two month period for reply and requiring the basic filing fee and the surcharge under 37 CFR 1.16(e). The practitioner timely submitted the small entity fees for the basic filing fee and the surcharge as required in the Notice. Shortly thereafter, the practitioner discovered that on October 31, 2002, the day before the application was filed, the client, without advising the practitioner, had assigned all rights in the invention that is the subject of the application to an entity that would not qualify for small entity status under 37 CFR 1.27. In accordance with the USPTO rules and the procedures set forth in the MPEP, which of the following actions would be the best action for the practitioner to take?
(A) File a continuing application under 37 CFR 1.53(b) with the large entity filing fee and then file a letter of express abandonment under 37 CFR 1.138 in the original application after the continuing application has been accorded a filing date.
(B) Promptly file a notification of loss of small entity status under 37 CFR 1.27(g) and, thereafter, pay large entity fees whenever any subsequent fees are required.
(C) Wait until a Notice of Allowance is received and then timely submit the large entity issue fee along with a notification of loss of small entity status under 37 CFR 1.27(g).
(D) File a paper under 37 CFR 1.28(c) requesting that the good faith error in claiming small entity status be excused and complying with the separate submission and itemization requirements of 37 CFR 1.28(c) and including payment of the deficiency owed.
(E) Pay the difference between the large entity filing fee and small entity filing fee and the difference between the large entity surcharge and small entity surcharge within two months from the mail date of the Notice to File Missing Parts.
ANSWER: (D) is the most correct answer. MPEP § 509.03, under the heading “Correcting Errors In Small Entity Status,” states “37 CFR 1.28(c) provides that if small entity status is established in good faith and the small entity fees are paid in good faith, and it is later discovered that such status as a small entity was established in error or through error the Office was not notified of a change of status, the error will be excused upon compliance with the separate submission and itemization requirements of 37 CFR 1.28(c)(1) and (c)(2), and the deficiency payment requirement of 37 CFR 1.28(c)(2).” (A), (B), (C), and (E) are not correct. Small entity status was not appropriate when the assertion of small entity status was filed with the application on November 1, 2002 and none of the actions recited in (A), (B), (C), and (E) would correct the error in claiming small entity status. The only mechanism for correcting a good faith error in claiming small entity status is by filing a request in compliance with 37 CFR § 1.28(c).
one of the old exams has a question about who does not qualify as a small entity.
The answer key says “government”.
Perhaps the question meant a company who has licensed to a federal agency? If so, then the company may be exempt. 37 CFR 1.27(a)(4); MPEP 509.02.
I believe question 3 is from an old exam. The answer can be found at 509.03.VII
509.03.VII – Once small entity status is established in an application or patent, fees as a small entity may thereafter be paid in that application or patent without regard to a change in status until the issue fee is due or any maintenance fee is due
If, as the question stated, SES is inappropriate but small entity fees are still paid, the answer is found in 509.03. This could mean they lose the ability to enforce their patent.
VIII. IMPROPERLY ESTABLISHING SMALL ENTITY STATUS
37 CFR 1.27(h) indicates that any attempt to fraudulently establish status as a small entity or pay fees as a small entity will be considered as a fraud practiced or attempted on the Office… In addition, improperly and with intent to deceive establishing status as a small entity or paying fees as a small entity will be considered as a fraud practiced or attempted on the Office.
MPEP 905.02.VI
VI. RIGHTS HELD BY GOVERNMENT ORGANIZATIONS
Also, although
the Federal government agencies do not qualify as nonprofit organizations for paying reduced fees under the rules,
a license to a Federal agency resulting from a funding agreement with the agency pursuant to 35 U.S.C. 202(c)(4) will not preclude
the proper claiming of small entity status. Furthermore,
a license to the Government resulting from a rights determination under Executive Order 10096 does not constitute a license so as to prohibit claiming small entity status by a person under 37 CFR 1.27(a)(1).
Q13 in the 2002 AM exam: which one does never qualify as small entity:
(A) A nonprofit organization.
(B) A two-person business concern with a $4,000,000 income.
(C) A federal government agency.
(D) A university in Canada.
(E) A person.
Answer key says C) A federal government agency. Explains that although under sec 41(e) Director may waive fees under certain circumstances for federal agency, this does not make a federal agency a small entity under CFR 1.27.
Probably, the conditions given in choice E) of the question quoted in the very beginning, would create a situation where the taxi business would qualify as small entity.
Derrick, you essentially raised an interesting question about whether or not contractors count toward the small entity 500 number. Though the 500 employee number is not actually located in the MPEP directly (not that I can find) and really shouldn’t be tested on. The answer appears to be yes they do count toward the 500 numbers. Here’s the reasoning:
§ 1.27 Definition of small entities…
(a) Definition of small entities…
(2)Small business concern.
(ii) Meets the size standards set forth in 13 CFR 121.801 through 121.805 to be eligible for reduced patent fees.
And from 13 CFR 121.802 (around the time period of E8r4):
[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR121.802]
[Page 330]
TITLE 13–BUSINESS CREDIT AND ASSISTANCE
CHAPTER I–SMALL BUSINESS ADMINISTRATION
PART 121_SMALL BUSINESS SIZE REGULATIONS–Table of Contents
Subpart A_Size Eligibility Provisions and Standards
Sec. 121.802 What size standards are applicable to reduced patent
fees programs?
A concern eligible for reduced patent fees is one:
(a) Whose number of employees, including affiliates, does not exceed 500 persons; and
(b) Which has not assigned, granted, conveyed, or licensed (and is
under no obligation to do so) any rights in the invention to any person
who made it and could not be classified as an independent inventor, or to any concern which would not qualify as a non-profit organization or a small business concern under this section.
- The “including affiliates” here seems to me to suggest that contractors would be included.
It appears that the government (or federal agency) can never qualify as a small entity because they are explicitly excluded from being in the “nonprofit” category (MPEP 509.02, part VI which states “Also, although the Federal government agencies do not qualify as nonprofit organizations for paying reduced fees under the rules…” Since they don’t qualify as a person, and I really don’t think they would ever consider themselves a “small business”, that means that they would not be a small entity for reduced fee purposes.
Regarding response #7: I believe the answer can be found in MPEP 509.03 and 37 CFR 1.28(c).
(c) How errors in small entity status are excused. If status as a small entity is established in good faith, and fees as a small entity are paid in good faith, in any application or patent, and it is later discovered that such status as a small entity was established in error, or that through error the Office was not notified of a loss of entitlement to small entity status as required by § 1.27(g)(2), the error will be excused upon: compliance with the separate submission and itemization requirements of paragraphs (c)(1) and (c)(2) of this section, and the deficiency payment requirement of paragraph (c)(2) of this section:
(1) Separate submission required for each application or patent. Any paper submitted under this paragraph must be limited to the deficiency payment (all fees paid in error), required by paragraph (c)(2) of this section, for one application or one patent. 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. See § 1.4(b).
(2) Payment of deficiency owed. The deficiency owed, resulting from the previous erroneous payment of small entity fees, must be paid.
Regarding whether assignee not of record can sign:
VII. WHEN OWNERSHIP NEED NOT BE ESTABLISHED
Examples of situations where ownership need not be established under 37 CFR 3.73(b) are when the assignee: signs a request for a continued prosecution application under 37 CFR 1.53(d), where papers establishing ownership under 37 CFR 3.73(b) were filed in the prior application and ownership has not changed ( MPEP § 201.06(d)); signs a small entity statement ( MPEP § 509.03); signs a statement of common ownership of two inventions ( MPEP § 706.02(l)(2)); signs a NASA or DOE property rights statement ( MPEP § 151); signs an affidavit under 37 CFR 1.131 where the inventor is unavailable ( MPEP § 715.04); signs a certificate under 37 CFR 1.8 ( MPEP § 512); or files a request for reexamination of a patent under 37 CFR 1.510 ( MPEP § 2210).
Got this today. Easy once I had seen this post!
“Notwithstanding” means “Despite” (I had to look it up to be sure).
(2) Parties who can sign and file the written assertion. The written assertion can be signed by:
(i) One of the parties identified in § 1.33(b) (e.g., an attorney or agent registered with the Office), § 3.73(b) of this chapter notwithstanding, who can also file the written assertion;
(ii) At least one of the individuals identified as an inventor (even though a § 1.63 executed oath or declaration has not been submitted), notwithstanding § 1.33(b)(4), who can also file the written assertion pursuant to the exception under § 1.33(b) of this part; or
(iii) An assignee of an undivided part interest, notwithstanding §§ 1.33(b)(3) and 3.73(b) of this chapter, but the partial assignee cannot file the assertion without resort to a party identified under § 1.33(b) of this part.
I found this website created by intellectual property attorneys, Brown & Michael and it discusses whether or not their clients are entitled to the small entity fee status. Check it out… http://www.bpmlegal.com/howsmall.html
I found it pretty informative!