Q) Small Entity Status (4.03.13p)

by admin on April 8, 2010 · 11 comments

in Uncategorized

Recent test takers report question #13 from the October 2003 (pm) exam is in the Patent Bar database of tested questions.


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).

{ 11 comments… read them below or add one }

1 BananaNo Gravatar April 14, 2010 at 5:09 pm

Tricky question in my opinion but I learned the nuance from my wrong answer. I think I chose B but that speaks to losing small entity status, and you can’t lose something you didn’t have. The reassignment occurred before filing, so the small entity status was filed in error, therefore it was not a “loss of small entity status,” it was filed under the wrong entity, the right one not being “small.”

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2 jkpatentlawNo Gravatar June 16, 2012 at 6:14 pm

I just want to know how you changed your icon.

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3 lanceNo Gravatar August 12, 2010 at 8:27 pm

I agree with Banana, and I made the same mistake…eventually I’ll get the concept that one must chose the answer that is MOST correct…

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4 StephenNo Gravatar August 12, 2010 at 9:03 pm

Watch out on the exam, there are other questions dealing with small entity status where the answer would be C. If you rightfully claim small entity status and subsequently fall out of small entity status because you licensed ect….you are only required to pay the large entity status fees whenever your issue fees or maintenance fees come up. Basically, you get to keep the small entity status until the issue/maintenance fees are due. I believe this to be the case under the scenario.

This question is tricky because it asks you what happens if you claim small entity status when you weren’t entitled to it.

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5 ELSNo Gravatar March 1, 2011 at 4:03 pm

Agreeing with Stephen. Specifically, in 509.03 under the heading VII. REMOVAL OF STATUS:

“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.”

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6 SolNo Gravatar April 1, 2012 at 7:57 pm

As a reminder, don’t forget a required notice in addtion to the fee

(2)Notification of loss of entitlement to small entity status is required when issue and maintenance fees are due.

7 SusanNo Gravatar August 13, 2010 at 12:45 am

I agree with Stephen. USPTO gives the benefit of the doubt to the filers that SE status was properly claimed. This question is for the situation where the status was mistakenly claimed.

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8 BigbadvoododaddyNo Gravatar July 11, 2011 at 1:06 pm

Here is a PLI question by J. White which caused some grief.
You decide:

Q: You have been asked to take over the prosecution docket of another attorney who has left your firm.
In reviewing one file you note that the issue fee was paid as a small entity. You know that the
application had in fact been assigned to IBM as part of a merger one month before the fee was paid,
although the formal assignment was not filed in the Office for recording until just after the fee was paid.
The previous attorney assures you by phone that she had no knowledge that the application was being
assigned at that time and that your call is the first time she heard of that assignment. You are now
required by PTO rules and practice to:
A. Do nothing since you did not make the mistake.
B. Cause payment to be made to the Office in the amount of the difference between what was paid
and what should have been paid.
C. File a statement in the PTO establishing that the fee was paid erroneously but in good faith, and
including payment in the amount of the deficiency.
D. File a Petition to the Commissioner together with an affidavit establishing that the fee was paid
incorrectly without deceptive intent.
E. Abandon the application.

ANSWER: (B) is the correct answer. See MPEP 509.03. The applicant should reimburse the PTO the
difference between the small entity amount and the large entity amount. No explanation of the mistake
is necessary.

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9 jkpatentlawNo Gravatar June 16, 2012 at 6:17 pm

What.
I mean I see the difference here. What I can say is this:
After having worked for attorneys, many times what manuals “say” you are “supposed to do” is different from what they “really do” in practice. It could just be that in practice, sending the deficiency is equivalent to a statement of the mistake “not being deceptive intent and initially made in good faith, etc…”
I don’t k now.

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10 passedatlastNo Gravatar June 19, 2012 at 5:57 pm

6/19/12: Got this today, got it wrong.

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11 addzNo Gravatar January 1, 2014 at 9:31 pm

What happens when it is not an error but you just want to change it. Ie I filed small entity and and I want to change it to large entity just in case the entity status changes at a later date.

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