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Federal Register / Vol. 77, No. 244 / Wednesday, December 19, 2012 / Rules and Regulations
minimize litigation, eliminate
ambiguity, and reduce burden.
10. Protection of Children
We have analyzed this rule under
Executive Order 13045, Protection of
Children from Environmental Health
Risks and Safety Risks. This rule is not
an economically significant rule and
does not create an environmental risk to
health or risk to safety that may
disproportionately affect children.
11. Indian Tribal Governments
This rule does not have tribal
implications under Executive Order
13175, Consultation and Coordination
with Indian Tribal Governments,
because it does not have a substantial
direct effect on one or more Indian
tribes, on the relationship between the
Federal Government and Indian tribes,
or on the distribution of power and
responsibilities between the Federal
Government and Indian tribes.
12. Energy Effects
We have analyzed this rule under
Executive Order 13211, Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use. We have
determined that it is not a ‘‘significant
energy action’’ under that order because
it is not a ‘‘significant regulatory action’’
under Executive Order 12866 and is not
likely to have a significant adverse effect
on the supply, distribution, or use of
energy. The Administrator of the Office
of Information and Regulatory Affairs
has not designated it as a significant
energy action. Therefore, it does not
require a Statement of Energy Effects
under Executive Order 13211.

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13. Technical Standards
This rule does not use technical
standards. Therefore, we did not
consider the use of voluntary consensus
standards.
14. Environment
We have analyzed this rule under
Department of Homeland Security
Management Directive 023–01 and
Commandant Instruction M16475.lD,
which guide the Coast Guard in
complying with the National
Environmental Policy Act of 1969
(NEPA) (42 U.S.C. 4321–4370f), and
have made a determination that this
action is one of a category of actions
which do not individually or
cumulatively have a significant effect on
the human environment. This rule is
categorically excluded, under figure 2–
1, paragraph (34)(g), of the Instruction.
This regulation establishes one security
zone. A final ‘‘Environmental Analysis

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Check List’’ and a final ‘‘Categorical
Exclusion Determination’’ are available
in the docket where indicated under
ADDRESSES.
List of Subjects in 33 CFR Part 165
Harbors, Marine security, Navigation
(water), Reporting and recordkeeping
requirements, Security measures, and
Waterways.
For the reasons discussed in the
preamble, the Coast Guard amends 33
CFR part 165 as follows:
PART 165—REGULATED NAVIGATION
AREAS AND LIMITED ACCESS AREAS
1. The authority citation for part 165
continues to read as follows:

■

Authority: 33 U.S.C. 1226, 1231; 46 U.S.C.
Chapter 701; 50 U.S.C. 191, 195; 33 CFR
1.05–1, 6.04–1, 6.04–6, and 160.5; Pub. L.
107–295, 116 Stat. 2064; Department of
Homeland Security Delegation No. 0170.1.

2. Add § 165.T14–215 to read as
follows:

■

§ 165.T14–215 Security Zone; On the
Waters in Kailua Bay, Oahu, HI.

(a) Location. The following area,
within the Honolulu Captain of the Port
Zone (See 33 CFR 3.70–10), from the
surface of the water to the ocean floor
is a temporary security zone: All waters
in Kailua Bay to the west of a line
beginning at Kapoho Point and thence
southwestward at a bearing of 240°
(true) to the shoreline at the
southeastern corner of Kailuana Loop;
as well as the nearby channel from its
entrance at Kapoho Point to a point 150yards to the southwest of the N. Kalaheo
Avenue Road Bridge. This zone extends
from the surface of the water to the
ocean floor. This zone will include the
navigable waters of the channel
beginning at point 21°24′56″ N,
157°44′58″ W, then extending to
21°25′26″ N, 157°44′21″ W (Kapoho
Point) including all the waters to the
west of a straight line to 21°25′11″ N,
157°43′34″ W (Kailuana Loop), and then
extending back to the original point
21°24′56″ N, 157°44′58″ W.
(b) Effective period. This section is
effective from 6 a.m. HST on December
17, 2012, through 10 p.m. HST on
January 6, 2013.
(c) Regulations. The general
regulations governing security zones
contained in 33 CFR 165.33, subpart D,
apply to the security zone created by
this temporary final rule.
(1) All persons are required to comply
with the general regulations governing
security zones found in 33 CFR part
165.
(2) Entry into or remaining in this
zone is prohibited unless authorized by

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the Coast Guard Captain of the Port
Honolulu.
(3) Persons desiring to transit the
security zones identified in paragraph
(a) of this section may contact the
Captain of the Port at Command Center
telephone number (808) 842–2600 and
(808) 842–2601, fax (808) 842–2624 or
on VHF channel 16 (156.8 Mhz) to seek
permission to transit the zones. If
permission is granted, all persons and
vessels must comply with the
instructions of the Captain of the Port
Honolulu or his designated
representative and proceed at the
minimum speed necessary to maintain a
safe course while within the zone.
(4) The U.S. Coast Guard may be
assisted in the patrol and enforcement
of the zones by Federal, State, and local
agencies.
(d) Notice of enforcement. The
Captain of the Port Honolulu will cause
notice of the enforcement of the security
zone described in this section to be
made by verbal broadcasts and written
notice to mariners and the general
public.
(e) Definitions. As used in this
section, designated representative
means any Coast Guard commissioned,
warrant, or petty officer who has been
authorized by the Captain of the Port
Honolulu to assist in enforcing the
security zones described in paragraph
(a) of this section.
Dated: November 29, 2012.
J.M. Nunan,
Captain, U.S. Coast Guard, Captain of the
Port, Honolulu.
[FR Doc. 2012–30628 Filed 12–18–12; 8:45 am]
BILLING CODE 9110–04–P

DEPARTMENT OF COMMERCE
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
United States Patent and
Trademark Office, Commerce.
ACTION: Final rule.
AGENCY:

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

SUMMARY:

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Federal Register / Vol. 77, No. 244 / Wednesday, December 19, 2012 / Rules and Regulations

revising 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 LeahySmith America Invents Act, including
setting fees for micro entities with a
seventy-five percent reduction. The
Office has sought to address the
concerns of its stakeholders as
expressed in the public comment, and
plans to seek additional public
comment on the micro entity provisions
after the Office and the public have
gained experience with the micro entity
procedures in operation. The Office will
pursue further improvements to the
micro entity procedures in light of the
public comment and its experience with
the micro entity procedures.
DATES: Effective March 19, 2013.
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
AIA provides that: (1) The Office may
set or adjust any patent fee, provided
that the aggregate 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 for small
entities and by seventy-five percent for
micro entities. The AIA 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 LeahySmith America Invents Act. This final
rule revises the rules of practice to
implement the ‘‘micro entity’’
provisions added by the Leahy-Smith
America Invents Act.
Summary of Major Provisions: The
Office is adding a provision to the rules
of practice pertaining to micro entity
status. The provision sets out the
requirements to qualify as a micro entity
tracking the statutory requirements for a
micro entity set forth in section 10 of
the Leahy-Smith America Invents Act.
The provision also sets out procedures
relating to micro entity status that
largely track the regulatory requirements

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and procedures 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 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 AIA was enacted
into law on September 16, 2011. See
Public Law 112–29, 125 Stat. 283
(2011). Section 10(a) of the AIA
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 aggregate patent fees
recover only 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 AIA 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 AIA adds a new 35 U.S.C. 123 to
define a ‘‘micro entity.’’ See 125 Stat. at
318–19.

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35 U.S.C. 123(a) provides one basis
under which an applicant may establish
micro entity status. 35 U.S.C. 123(d)
provides another basis under which an
applicant may establish micro entity
status. Each will be discussed in turn.
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.
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.

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Federal Register / Vol. 77, No. 244 / Wednesday, December 19, 2012 / Rules and Regulations
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 application 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 has the discretion
to 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 or adjust patent fees
under section 10 of the AIA in a
separate rulemaking. See Setting and
Adjusting Patent Fees, 77 FR 55028
(Sept. 6, 2012). The fees set or adjusted
by the Office under section 10 of the
AIA for filing, searching, examining,
issuing, appealing, and maintaining a

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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
small entity status. See 37 CFR 1.27(f);
see also Manual of Patent Examining
Procedure § 509.03 (8th ed. 2001) (Rev.
9, Aug. 2012) (MPEP).
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:
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 AIA as well as the
effective date of 35 U.S.C. 123). 35
U.S.C. 118, however, as amended
effective on September 16, 2012, by
Section 4 of the AIA, now 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, 35
U.S.C. 118 now allows 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 to the person or if
the person shows sufficient proprietary
interest in the matter. Note also that as
of March 16, 2013, 35 U.S.C. 100 will
be amended to provide new and specific
definitions of the terms ‘‘inventor,’’
‘‘joint inventor,’’ and ‘‘coinventor.’’
35 U.S.C. 123 does not explicitly
preclude an assignee-applicant under 35
U.S.C. 118 from claiming micro entity
status under 35 U.S.C. 123(a) or (d),

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although some provisions of 35 U.S.C.
123(a) and (d) refer to an applicant who
is a natural person inventor rather than
a juristic entity. See 35 U.S.C. 123(a)(2)
(provides that a micro entity applicant
under 35 U.S.C. 123(a) must not have
‘‘been named as an inventor on more
than 4 previously filed patent
applications’’) and 123(d)(1) (provides
that the term micro entity includes an
applicant who certifies that ‘‘the
applicant’s employer, from which the
applicant obtains the majority of the
applicant’s income, is an institution of
higher education’’ as defined by section
101(a) of the Higher Education Act of
1965). In addition, 35 U.S.C. 123(a), (b)
and (d) specifically refer to a situation
in which the applicant has assigned
rights in the invention to an assignee.
See 35 U.S.C. 123(a)(4) (provides that a
micro entity applicant under 35 U.S.C.
123(a) must not have ‘‘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’’ exceeding a
specified gross income); 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’’);
and 35 U.S.C. 123(d)(2) (provides that
the term micro entity includes an
‘‘applicant [who] 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 an institution of higher education as
defined by section 101(a) of the Higher
Education Act of 1965). Finally, the
legislative history of 35 U.S.C. 123
includes a reference to micro entities as
inventors and not the assignees of
inventors. See H.R. Rep 112–98 at 50
(2011) (describing micro entities as ‘‘a
group of inventors’’ and ‘‘truly
independent inventors’’). Nevertheless,
35 U.S.C. 123 does not explicitly
preclude an assignee-applicant under 35
U.S.C. 118 from claiming micro entity
status for an application under 35 U.S.C.
123(a) or 123(d), provided there is
compliance with the applicable micro
entity criteria. Each applicant must
qualify for micro entity status, and any
other party holding rights in the
application must qualify for small entity
status. See 37 CFR 1.29 (h). Note that a
party who qualifies for micro entity
status necessarily qualifies for small
entity status, as under 37 CFR 1.29 a

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micro entity must first qualify as a small
entity under 37 CFR 1.27.
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 is setting out 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

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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 for an
applicant to be 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 paid. Thus,
the provision in 37 CFR 1.27(g)(1) that
the applicant need only determine
continued eligibility for 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 the
amendments to Title 37 of the Code of
Federal Regulations, Part 1.
Section 1.29: Section 1.29 is 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 §§ 1.29(a)
through (d) generally track the
provisions of 35 U.S.C. 123(a) through
(d).
Section 1.29(a) implements the
provisions of 35 U.S.C. 123(a), and
includes reference to inventors or joint
inventors where appropriate. Section
1.29(a) provides that an applicant
claiming micro entity status under 35
U.S.C. 123(a) must certify that: (1) The
applicant qualifies as a small entity as
defined in § 1.27; (2) neither the
applicant nor the inventor nor a joint
inventor has been named as the inventor
or a joint inventor (see 35 U.S.C. 100)
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) neither the applicant nor
the inventor nor a joint inventor, in the
calendar year preceding the calendar

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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 (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)
neither the applicant nor the inventor
nor a joint inventor has assigned,
granted, or conveyed, nor is 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 also § 1.29(h) (each
applicant must qualify for micro entity
status, and each other party holding
rights in the invention must qualify for
small entity status).
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 2011 (the year most
recently reported by the Bureau of the
Census) was $50,054. See Income,
Poverty, and Health Insurance Coverage
in the United States in 2011 at pages 5
and 31 (Table A–1) (Sept. 2012). Thus,
the income level specified in
§§ 1.29(a)(3) and (a)(4) (three times the
median household income) is $150,162
for calendar year 2011 (the year most
recently reported by the Bureau of the
Census).
If an application names more than one
applicant or inventor, each applicant
and each inventor must meet the
requirements of § 1.29(a) for the
applicants to file a micro entity
certification under § 1.29(a) in the
application. It would not be appropriate

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to file a micro entity certification under
§ 1.29(a) for the application if there were
more than one applicant or inventor and
not all of the applicants and inventors
qualified as micro entities under 35
U.S.C. 123(a): e.g., (1) an applicant or
inventor exceeded the gross income
levels; (2) an applicant or inventor had
more than four other nonprovisional
applications; or (3) an applicant or
inventor had assigned, granted, or
conveyed the application or was under
an obligation to do so, to an entity that
exceeds the gross income levels.
Additionally, the income level
requirement in 35 U.S.C. 123(a)(3)
applies to each applicant’s and
inventor’s income separately (i.e., the
combined gross income of all of the
applicants and inventors need not be
below the income level in 35 U.S.C.
123(a)(3)). Further, the assignment
requirement in § 1.29(a)(4) applies to
each applicant and inventor (i.e., if an
applicant or inventor 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 income limit specified in
§ 1.29(a)(4)). Note also that in this
context an inventor ordinarily should
qualify as a small entity under
§§ 1.29(a)(1) and 1.27(a)(1). Under
§ 1.27(a)(1), an inventor generally is a
small entity and retains such status even
if the inventor assigns some rights to
another small entity. Similarly, to obtain
micro entity status, § 1.29(h) requires
that any non-applicant assignee be a
small entity.
Section 1.29(b) implements the
provisions of 35 U.S.C. 123(b). Section
1.29(b) provides that an applicant,
inventor, or joint inventor is not
considered to be named on a previously
filed application for purposes of
§ 1.29(a)(2) if the applicant, inventor, or
joint inventor 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, inventor’s, or joint
inventors 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,
inventor’s, joint inventor’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, inventor’s, joint inventor’s,
or entity’s gross income exceeds the
threshold specified in § 1.29(a)(3) or
(a)(4). The Internal Revenue Service
reports the average currency exchange

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rate (Yearly Average Currency Exchange
Rates) on its Internet Web site (http://
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 § 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 application 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 § 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 § 1.27. The
legislative history of 35 U.S.C. 123 refers
to micro entities as a subset of small
entities, namely, ‘‘truly independent
inventors.’’ See H.R. Rep 112–98 at 50
(‘‘[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

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applicants who do not qualify as a small
entity do not inappropriately attempt to
take advantage of micro entity status.
See also § 1.29(h) (each applicant must
qualify for micro entity status, and each
other party holding rights in the
invention must qualify for small entity
status).
Section 1.29(e) provides that micro
entity status must be established in an
application in by filing a certification in
writing that complies with either
§ 1.29(a) or § 1.29(d) and that is signed
in compliance with § 1.33(b). Section
1.29(e) also contains provisions for a
micro entity that correspond to the
provisions of § 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 § 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 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 § 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 § 1.27(e) for a small entity.
Section 1.29(g) provides that a
certification of entitlement to micro
entity status need only be filed once in
an application or patent, and that micro
entity status, once established, remains
in effect until changed pursuant to
§ 1.29(i). However, a fee may be paid in
the micro entity amount only if status as
a micro entity as defined in § 1.29(a) or
(d) is appropriate (which requires that
status as a small entity is also
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 once micro entity
status has been established in an
application, the applicant must still be
entitled to micro entity status to pay a
fee in the micro entity amount at the

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time of all payments of fees in the micro
entity amount.
For micro entity status under 35
U.S.C. 123(a), the applicant must
determine that the applicant and each
inventor or joint inventor still meet the
applicable conditions of 35 U.S.C.
123(a) and § 1.29(a) to claim micro
entity status. For example, the applicant
must determine that neither the
applicant nor inventor nor joint
inventor 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). In addition, the applicant must
determine that neither the applicant nor
inventor nor joint inventor 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), and
that no new inventor or joint inventor
has been named in the application who
does not meet the conditions specified
in 35 U.S.C. 123(a) and § 1.29(a)). For
micro entity status under 35 U.S.C.
123(d), the applicant must determine
that each applicant and inventor still
complies with 35 U.S.C. 123(d) and
§ 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 § 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 § 1.29(a)
or 1.29(d). Section 1.29(h) also indicates
that each applicant must qualify for
micro entity status under § 1.29(a) or
1.29(d), and that any other party holding
rights in the application must qualify for
small entity status under § 1.27. As
discussed previously, a party who
qualifies for micro entity status
necessarily qualifies for small entity
status, as under § 1.29(a)(1) and (d)(1) a
micro entity must first qualify as a small

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entity under § 1.27. 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
§ 1.29.
Section 1.29(i) contains provisions for
a micro entity that correspond to the
provisions of § 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 § 1.29(a) or 1.29(d) is no
longer appropriate. The notification that
micro entity status is no longer
appropriate must be signed by a party
identified in § 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.
Section 1.29(i) further provides that a
notification that micro entity status is
no longer appropriate will not be treated
as a notification that small entity status
is also no longer appropriate unless it
also contains a notification of loss of
entitlement to small entity status under
§ 1.27(f)(2). Thus, an applicant or
patentee who files a notification that
micro entity status is no longer
appropriate will be treated as a small
entity by default unless the notification
also contains a notification of loss of
entitlement to small entity status under
§ 1.27(f)(2).
Section 1.29 finally provides that
once a notification of a loss of
entitlement to micro entity status is
filed in the application or patent, 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 § 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 § 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).

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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 § 1.29(i) through error, the
error will be excused upon compliance
with the separate submission and
itemization requirements of § 1.29(k)(1)
and the deficiency payment requirement
of § 1.29(k)(2).
Section 1.29(k)(1) provides that any
paper submitted under § 1.29(k) must be
limited to the deficiency payment (all
fees paid in error) required for a single
application or patent. Section 1.29(k)(1)
provides 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 § 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 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. This corresponds
to the procedure for fee deficiency
payments based upon the previous
erroneous payment of patent fees in the
small entity amount. See § 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 non-small
entity) on the date the deficiency is paid

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in full and the amount of the previous
erroneous (small entity) fee payment’’).
Section 1.29(k)(3) provides that if the
requirements of §§ 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
§ 1.17(i), or result in a requirement for
compliance within a one-month nonextendable time period under § 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 § 1.29(k)
will be treated as a notification of a loss
of entitlement to micro entity status
under § 1.29(i).
Comments and Responses to
Comments: The Office published a
notice on May 30, 2012, proposing to
change the rules of practice to
implement the micro entity provisions
of the AIA. See Changes to Implement
Micro Entity Status for Paying Patent
Fees, 77 FR 31806 (May 30, 2012). The
Office received twenty-seven written
comments (from intellectual property
organizations, industry, law firms,
individual patent practitioners, and the
general public) in response to this
notice. There were some comments
received that related to practice before
the agency but not related to the
proposed changes to the rules of
practice to implement the micro entity
provisions of the AIA, and these
comments have been forwarded to the
Office of Innovation Development for
further consideration. The Office is
always interested to hear feedback from
the public concerning ways in which it
can assist small and independent
inventors. The comments germane to
the proposed changes to the rules of
practice to implement the micro entity
provisions of the AIA and the Office’s
responses to the comments follow:
Comment 1: One comment stated that
there are several instances in 35 U.S.C.
123 and proposed § 1.29 where the term
‘‘applicant’’ is inapplicable to an
organization and must really be
referring to the inventor(s) (e.g., a
certification that ‘‘applicant’’ has not
been named as an ‘‘inventor’’ in more
than four previously filed applications,
references to applicant’s previous
employment or employer). One
comment indicated that the term
‘‘applicant’’ should be used in an
interchangeable manner so as to mean
either the inventor(s) or a company to
which the patent application is assigned
(i.e., the rules should refer to ‘‘applicant
or inventor’’) in view of the AIA’s

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change to 35 U.S.C. 118. That comment
further indicated, however, that the
ability to vary from the statute ‘‘may be
limited.’’ One comment similarly
indicated that the final rules should
replace all instances of ‘‘applicant’’ and
‘‘applicant’s’’ with ‘‘inventor’’ and
‘‘inventor’s’’ in § 1.29(a) (second
instance), (b), (c), (d)(1), (d)(2)(i), and
(d)(2)(ii) in view of the AIA’s change to
35 U.S.C. 118. One comment stated that
in the case of university inventions, the
university typically is the applicant and
this creates anomalies in proposed
§ 1.29(d), since the institution
(university) logically cannot make the
certifications required under
§ 1.29(d)(2)(i) and (d)(2)(ii) (that the
employer from which the university
obtains the majority of its income is an
institution of higher education as
defined by section 101(a) of the Higher
Education Act of 1965, or that the
university itself 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 application).
Response: The Office specifically
invited public comment in the notice of
proposed rulemaking on the issue of
whether the term ‘‘inventor’’ should be
used in place of ‘‘applicant’’ at any
instance in the proposed micro entity
rules. See Changes to Implement Micro
Entity Status for Paying Patent Fees, 77
FR at 31808. The Office agrees that
some, though not all, provisions of 35
U.S.C. 123 refer to a situation where an
inventor is the applicant. The micro
entity provisions of 35 U.S.C. 123 were
enacted as part of the AIA, which also
revised the patent laws to provide a
specific definition of the term
‘‘inventor’’ and to change who may be
the applicant for a patent. See 125 Stat.
at 285 (defining ‘‘inventor’’) and 293–97
(changing the patent laws to distinguish
between who may apply for a patent as
the applicant and who must be named
as the inventor); see also 35 U.S.C. 100;
35 U.S.C. 118. The Office does not
consider it appropriate either to amend
the language of 35 U.S.C. 123 as
incorporated into the corresponding
provisions of § 1.29 or to somehow view
the terms ‘‘applicant’’ and ‘‘inventor’’ as
interchangeable in all instances under
35 U.S.C. 123. See Brown v. Gardner,
513 U.S. 115, 118 (1994) (presumption
that a given term is used to mean the
same thing throughout a statute). As
discussed previously, while some of the
provisions in 35 U.S.C. 123(a) and (d)
refer to an inventor-applicant, 35 U.S.C.
123 does not explicitly preclude an
assignee-applicant under 35 U.S.C. 118
from claiming micro entity status under

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35 U.S.C. 123(a) or (d), provided there
is compliance with the applicable micro
entity criteria by each applicant.
However, each applicant must qualify
for micro entity status, and any other
party holding rights in the application
must qualify for small entity status. See
37 CFR 1.29(h).
Comment 2: One comment stated that
it is possible that the legislative intent
of 35 U.S.C. 123(a)(2) was that an
applicant should satisfy this criterion so
long as the applicant has fewer than
four previously filed applications in
which micro entity fees were paid. One
comment stated that the four
application limit under 35 U.S.C.
123(a)(2) should apply only to
applications filed within the past
twenty years or so. One comment stated
that it would make sense for the term
‘‘inventor’’ in § 1.29(a)(2) to refer to an
applicant who has had the opportunity
to claim micro entity status in four
previously filed patent applications.
One comment indicated that § 1.29(a)(2)
should be amended to provide that if an
application is entitled to micro entity
status, then continuation and divisional
applications of that parent application
should normally be entitled to micro
entity status without counting the
parent application or any parallel filed
continuing or divisional patent
applications in the same patent family
toward the four application limit.
Response: Section 1.29(a)(2) tracks the
provisions of 35 U.S.C. 123(a)(2) with
the clarification to reference nonapplicant inventors and joint inventors.
35 U.S.C. 123(a)(2) provides a
certification that the applicant, inter
alia, ‘‘has not been named as an
inventor on more than 4 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.’’ This provision refers to when
an inventor-applicant has been named
as an inventor in a previous application,
including as one in a group of joint
inventors. See 35 U.S.C. 100. An
applicant that is not an inventor would
plainly not violate this criteria.
Moreover, this provision has been
clarified to refer to an inventor or joint
inventor who is not the applicant. 35
U.S.C. 123(a)(2) by its express terms
does not, however, provide for
exceptions to this four-application limit
suggested by the comments. In addition,
while 35 U.S.C. 123(e) authorizes the
Office to place additional limits on who
may qualify as a micro entity under 35
U.S.C. 123, it does not authorize the

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Office to remove limitations contained
in 35 U.S.C. 123.
Comment 3: One comment suggested
expanding the scope of the § 1.29(b)
exception to applications counted
toward the four application limit in
§ 1.29(a)(2) by including applications
assigned to the inventor’s current
employer when the invention is outside
the current employer’s scope of
employment with the inventor.
Response: Section 1.29(b) tracks the
provisions of 35 U.S.C. 123(b) with the
clarification to reference non-applicant
inventors and joint inventors. 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 applicant’s previous employment.’’
Thus, the exception in 35 U.S.C. 123(b)
by its express terms does not apply to
applications assigned to a current
employer. In addition, as discussed
previously, while 35 U.S.C. 123(e)
authorizes the Office to place additional
limits on who may qualify as a micro
entity under 35 U.S.C. 123, it does not
authorize the Office to remove
limitations contained in 35 U.S.C. 123.
Comment 4: One comment noted that
the Office has indicated that it will
publish the income level that is three
times the median household income for
the calendar year most recently reported
by the Bureau of the Census, but that 35
U.S.C. 123(a) (and § 1.29(a)) require that
applicants use the median household
income data for ‘‘the calendar year
preceding the calendar year in which
the applicable fee is being paid.’’ The
comment expressed concern that
median household income data for a
given year is not reported by the Bureau
of the Census until the succeeding year.
One comment suggested that § 1.29(a)(3)
be amended to provide that an applicant
may rely on his or her most recently
filed income tax return regardless of
whether the most recently filed tax
return accounted for the previous
calendar year’s gross income.
Response: Section 1.29(a)(3) tracks the
provisions of 35 U.S.C. 123(a)(3) with
the clarification to reference nonapplicant inventors and joint inventors.
35 U.S.C. 123(a)(3) provides that each
inventor’s gross income ‘‘in the calendar
year preceding the calendar year in
which the applicable fee is being paid’’
must not exceed ‘‘three times the
median household income for that
preceding calendar year as most
recently reported by the Bureau of the
Census.’’ 35 U.S.C. 123(a)(3) does not
provide for an applicant to simply rely

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on his or her most recently filed income
tax return if the most recently filed tax
return does not pertain to the calendar
year preceding the calendar year in
which the applicable fee is being paid.
The Office will post on its Internet Web
site the U.S. dollar amount that equals
three times the median household
income as most recently reported by the
Bureau of the Census. Thus, the Office’s
Internet Web site will contain the U.S.
dollar amount that equals three times
the median household income as most
recently reported by the Bureau of the
Census as provided for in § 1.29(a)(3)
and 35 U.S.C. 123(a)(3).
Comment 5: One comment requested
guidance as to what effect marital status
has on ‘‘gross income’’ in terms of
§ 1.29(a)(3), and whether the inventor’s
tax return is filed jointly or separately
changes the amount of ‘‘gross income’’
for purposes of meeting the requirement
of proposed § 1.29(a)(3). The comment
also indicated that in community
property states, the law may be
construed such that the inventor/
applicant has assigned his or her rights
in part to the spouse, as a matter of law.
Another comment stated that marital
status of an individual applicant may
have an impact on the assignment or
ownership rights in an invention and
the gross income of the applicant, and
that it may require an opinion from an
accountant or tax attorney with respect
to the applicant’s income.
Response: The Office reads the ‘‘gross
income’’ requirement contained in 35
U.S.C. 123(a)(3) and § 1.29(a)(3) with
respect to a married person as applying
to the amount of income the person
would have reported as gross income if
that person were filing a separate tax
return (which includes properly
accounting for that person’s portion of
interest, dividends, and capital gains
from joint bank or brokerage accounts),
regardless of whether the person
actually filed a joint return or a separate
return for the relevant calendar year.
Additionally, the Office does not
consider a spouse’s ownership interest
in a patent application or patent arising
by operation of residence in a
community property state as falling
within the ambit of 35 U.S.C. 123(a)(4)
and § 1.29(a)(4) because the spouse’s
ownership interest arises by operation
of state law, rather than an assignment,
grant, conveyance, or obligation to
assign, grant, or convey.
Comment 6: One comment questioned
the situation where the applicant’s
income is not in U.S. dollars and the
applicable currency exchange rate is
applied to determine the applicant’s
gross income in U.S. dollars in
accordance with § 1.29(c), whether the

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applicant’s gross income in terms of
U.S. dollars should be compared to
three times the median household
income for the preceding calendar year
in the United States, or should be
compared to the median household
income for the preceding calendar year
in the country in which the applicant
obtained income.
Response: In all cases, the inventor’s
gross income in the previous calendar
year must be compared to the U.S.
dollar amount equaling three times the
median household income as most
recently reported by the Bureau of the
Census (which will be posted on the
Office’s Internet Web site) at the time
the applicable fee is being paid in order
to meet the gross income requirement of
§ 1.29(a)(3).
Comment 7: One comment suggested
that the language ‘‘that calendar year’’ in
proposed § 1.29(c) should be changed to
‘‘the preceding calendar year’’ to clarify
that applicants whose income is not in
U.S. dollars must apply the currency
exchange rate from the preceding
calendar year when calculating income
in U.S. dollars in order to determine
whether the proposed § 1.29(a)(3) ‘‘gross
income’’ requirement is met.
Response: Section 1.29(c) tracks the
provisions of 35 U.S.C. 123(c) with the
clarification to reference non-applicant
inventors and joint inventors. The
phrase ‘‘that calendar year’’ in 35 U.S.C.
123(c) and § 1.29(c) means ‘‘the
preceding calendar year’’ as previously
recited in 35 U.S.C. 123(c) and § 1.29(c).
Comment 8: One comment indicated
that foreign applicants should be
directed to make a ‘‘good faith attempt’’
to estimate their gross income in terms
of U.S. tax law.
Response: 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). 35 U.S.C. 123
does not provide any alternative basis,
such as a good faith estimation as
suggested by the comment, for
determining whether an applicant or
entity meets the gross income
requirement of 35 U.S.C. 123(a)(3). For
an applicant or entity whose previous
calendar year’s gross income was
received partially in U.S. dollars and
partially in non-United States currency,
the gross income amount in non-United
States currency must be converted into
U.S. dollars in accordance with § 1.29(c)
and then added to the gross income

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amount in U.S. dollars to determine
whether the applicant or entity meets
the gross income requirement of
§ 1.29(a)(3).
Comment 9: One comment suggested
that the definition of micro entity status
should be broadened to benefit even
more small inventors than those who
meet the requirements of 35 U.S.C.
123(a).
Response: The legislative history
includes a statement that Congress
developed the micro entity provision to
benefit truly independent inventors,
people with very little capital and just
a few inventions, who are just starting
out. See H.R. Rep 112–98 at 50. Small
entity inventors who do not meet the
micro entity requirements of 35 U.S.C.
123 may still claim small entity status
and receive the fifty percent small entity
fee reduction. In any event, as discussed
previously, while 35 U.S.C. 123(e)
authorizes the Office to place additional
limits on who may qualify as a micro
entity under 35 U.S.C. 123, it does not
authorize the Office to remove
limitations contained in 35 U.S.C. 123
or expand the scope of 35 U.S.C. 123 to
include more small entities.
Comment 10: Several comments
objected to the requirement under
§ 1.29(d)(1) that in order to qualify for
micro entity status under § 1.29(d), the
applicant must qualify as a small entity
as defined in § 1.27 in addition to
meeting one of the requirements under
§ 1.29(d)(2)(i) or (d)(2)(ii).
Response: 35 U.S.C. 123(e) provides
that in addition to the limits imposed by
35 U.S.C. 123, 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.
The Office has determined that
requiring all micro entities to qualify as
small entities (§ 1.29(d)(1)) 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. As
discussed in the notice of proposed
rulemaking, the legislative history of 35
U.S.C. 123 includes a statement that
micro entity status is directed to a
subset of small entities, namely, ‘‘truly
independent inventors.’’ See H.R. Rep
112–98 at 50.
Comment 11: Several comments
indicated that § 1.29(d)(2)(ii) should
provide that the rights transferred or
owed to an institution of higher
education should be substantial. The

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comments indicated that institutions of
higher education are generally nonpracticing entities or that applicants
could engage in sham transfers of a de
minimus interest to an institution of
higher education, and suggested the
Office use its authority under 35 U.S.C.
123(e) to ensure the transfer of rights is
for a substantial purpose. One comment
indicated that micro entity status by a
grant of rights to an institution of higher
education under § 1.29(d)(2)(ii) should
not be available to an institution of
higher education and that without such
a limitation, institutions of higher
education could simply grant rights to
each other and thereby qualify their
patent for micro entity status.
Response: As discussed previously,
the Office is requiring that all micro
entities qualify as small entities
(§ 1.29(d)(1)) to ensure that applicants
who do not qualify as a small entity do
not inappropriately attempt to take
advantage of micro entity status. This
requires that any person or entity
claiming micro entity status not have
assigned, granted, conveyed, or
licensed, and be under no obligation
under contract or law to assign, grant,
convey, or license, any rights in the
invention to any person, concern, or
organization which would not qualify
for small entity status as a person, small
business concern, or nonprofit
organization. See § 1.27(a). The Office
plans to closely monitor the percentage
of applicants claiming small entity
status under 35 U.S.C. 123(d) and will
propose additional limits under the
authority provided in 35 U.S.C. 123(e) if
it appears that a substantial number of
applicants are engaging in sham
transactions with institutions of higher
education to obtain micro entity status.
Comment 12: One comment indicated
that 35 U.S.C. 123(d) is unclear as to
whether it was intended to cover a
separate non-profit corporation,
research foundation, or other institution
that is legally separate from an
institution of higher education but
whose stated mission is to represent that
institution of higher education, to act on
its behalf, and/or commercialize the
intellectual property of that institution
of higher education. The comment
suggested that a research foundation
should be treated as a qualifying
institution of higher education for
purposes of micro entity status if the
research foundation is acting on behalf
of a university which is an institution of
higher education as defined in section
101(a) of the Higher Education Act of
1965. Another comment suggested that
the Office consider expanding the scope
of § 1.29(d) to include technology
transfer organizations whose primary

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purpose is to facilitate the
commercialization of technologies
developed by one or more institutions of
higher education as defined by section
101(a) of the Higher Education Act of
1965. Another comment suggested that
micro entity status be made available to
applicants whose inventions are coowned with Federal Government
research laboratories and that patent
applications on inventions made solely
or jointly by Federal laboratory
personnel should be considered in the
same manner as applications made
solely by personnel at academic
research laboratories. Another comment
suggested amending § 1.29(d) to extend
the definition of ‘‘institution of higher
education’’ to include certain nonprofit
scientific or educational organizations
that are not institutions of higher
education ‘‘as defined in section 101(a)
of the Higher Education Act of 1965 (20
U.S.C. 1001(a))’’ as required by 35
U.S.C. 123(d). Another comment
suggested that the Office interpret
‘‘institution of higher education as
defined in section 101(a) of the Higher
Education Act of 1965 (20 U.S.C.
1001(a))’’ as it appears in 35 U.S.C.
123(d) to include institutions of higher
education set forth in subsection (b) of
20 U.S.C. 1001, thus making micro
entity status available to institutions
that grant only graduate degrees if they
otherwise qualify as institutions of
higher education under 20 U.S.C.
1001(a).
Response: 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.
Consistent with the discussion above
and in the notice of proposed
rulemaking about the statutory terms
‘‘applicant’’ and ‘‘inventor,’’ note that
the statutory criteria in 35 U.S.C. 123(d)
ordinarily would not be met by an
institution of higher education that is
itself an assignee-applicant. Also, while
35 U.S.C. 123(e) authorizes the Office to
place additional limits on who may
qualify as a micro entity under 35 U.S.C.
123, it does not authorize the Office to
remove limitations contained in 35
U.S.C. 123 such as to expand the scope
of 35 U.S.C. 123(d) to include a

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separate, non-profit corporation,
research foundation, technology transfer
organization, Federal Government
research laboratory, other non-profit
scientific or educational organization,
institution of higher education as
defined in section 101(b) of the Higher
Education Act of 1965, or other
institution that is legally separate from
an institution of higher education as
defined in section 101(a) of the Higher
Education Act of 1965 as suggested by
the comments. An entity or institution
must meet the definition of an
institution of higher education as
defined in section 101(a) of the Higher
Education Act of 1965 for an applicant
employed by, or who has assigned or is
under an obligation to assignee to, the
entity or institution, to be eligible for
micro entity status under 35 U.S.C.
123(d).
Comment 13: Several comments
indicated that the proposed rules show
a bias in favor of institutions of higher
education and against independent
inventors because an independent
inventor has to meet certain criteria to
be entitled to micro entity status.
Response: Both independent
inventors under 35 U.S.C. 123(a) and
those employed by or under a legal or
contractual obligation to assign, grant,
or convey an interest in an application
to an institution of higher education as
defined in section 101(a) of the Higher
Education Act of 1965 under 35 U.S.C.
123(d), must meet certain criteria to be
eligible for micro entity status.
Specifically, the applicant must qualify
as a small entity as defined in § 1.27. In
addition, as to 35 U.S.C. 123(d) either
the applicant’s employer, from which
the applicant obtains the majority of the
applicant’s income, must be 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 the applicant must have
assigned, granted, conveyed, or be
under an obligation by contract or law,
to assign, grant, or convey, a license or
other ownership interest in the
particular application to such an
institution of higher education. The
income and application filing criteria
specified in § 1.29(a) tracks the criteria
in 35 U.S.C. 123(a).
Comment 14: One comment
questioned whether micro entity status
will be available to foreign applicants.
Response: Micro entity status is
available to any applicant (foreign or
domestic alike) who meets the
requirements of 35 U.S.C. 123 and
§ 1.29. Notably, 35 U.S.C. 123(d)
provides that an institution must meet
the definition of an institution of higher
education as defined in section 101(a) of

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the Higher Education Act of 1965 for
micro entity status to be obtained based
upon the applicant’s employment at or
the applicant’s assignment or obligation
to the institution. One criteria of the
definition of ‘‘institution of higher
education’’ set forth in section 101(a) of
the Higher Education Act of 1965 is that
the institution must be located in a
‘‘State.’’ Section 103 of the Higher
Education Act of 1965 provides that the
term ‘‘State’’ as used in section 101(a)
‘‘includes the several States of the
United States, the Commonwealth of
Puerto Rico, the District of Columbia,
Guam, American Samoa, the United
States Virgin 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.’’
Comment 15: Several comments urged
deletion of the requirement in § 1.29(e)
that micro entity status be specifically
established by a new certification in
each related continuing and reissue
application. One comment indicated
that unless the Office removes the
provision in proposed § 1.29(g) that a
fee may be paid in the micro entity
amount only if status as a micro entity
is appropriate on the date the fee is
paid, the Office should remove the
requirement in proposed § 1.29(e) that
status as a micro entity must be
specifically established in each related,
continuing and reissue application in
which status is appropriate and desired.
One comment stated that § 1.29(e)
contains an error in that contrary to its
language, status as a micro entity in one
application does affect the status of
other applications. The commenter,
however, suggests retaining language in
§ 1.29(e) stating that micro entity status
must be specifically established in each
continuing and divisional application in
which status is appropriate and desired.
Response: The Office shares the
concerns of the comments that the small
entity and micro entity regulations and
procedures be as simple as possible. For
this reason, the Office is making the
micro entity provisions as consistent
with the small entity provisions as
possible, including the provisions
pertaining to claiming small entity
status in related continuing and reissue
applications. See § 1.27(c)(4). In
addition, 35 U.S.C. 123 requires that the
applicant make a certification under 35
U.S.C. 123(a) or (d) to qualify for micro
entity status. An applicant’s ability to
meet the requirements in 35 U.S.C.
123(a) or (d) may change over time. For
example, from a first application to a
related continuing or reissue
application, an applicant’s gross income

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(35 U.S.C. 123(a)(3)) and employment
(35 U.S.C. 123(d)(1)) may change, and
the number of applications naming the
applicant as an inventor (35 U.S.C.
123(a)(2)) will change with the filing of
a related continuing or reissue
application. Therefore, the Office is
concerned about permitting micro entity
status to automatically carry over into a
related continuing or reissue application
without the certification required by 35
U.S.C. 123(a) or (d). Finally, while being
named as an inventor in other
applications may affect an applicant’s
ability to claim micro entity status in an
application, status as a micro entity in
one application does not affect the
status of other applications. Finally, as
discussed previously, the Office plans to
seek additional public comment on the
micro entity provisions after the Office
and the public have gained experience
with the micro entity procedures in
operation, and will pursue further
improvements to the micro entity
procedures in light of the public
comment and its experience with the
micro entity procedures.
Comment 16: One comment stated
that § 1.29 is unclear as to who must
sign the micro entity certification in
applications with more than one
applicant. The comment suggested that
§ 1.29 be amended to make clear that
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. Further,
the comment suggested that §§ 1.29(a)
and (d) be revised to state that ‘‘each
applicant so establishing such status
must certify that that applicant’’ meets
all the requirements in order to establish
micro entity status. One basis given for
this suggestion is that joint applicants
will generally not be privy to each
other’s private financial information,
and should not be required to submit a
certification as to the qualification of
their joint applicants.
Response: Section 1.29(e) provides
that a micro entity status certification
must be signed in compliance with
§ 1.33(b). Section 1.33(b) requires that
amendments and other papers filed in
the application be signed by: (1) A
patent practitioner of record; (2) a patent
practitioner not of record who acts in a
representative capacity under the
provisions of § 1.34; or (3) the applicant
(§ 1.42). Section 1.33(b) further provides
that all papers submitted on behalf of a
juristic entity must be signed by a patent
practitioner unless otherwise specified.
If the application names more than one
inventor and the joint inventors are the
applicant under § 1.42(a), a micro entity
status certification must be signed by:
(1) A patent practitioner of record; (2) a

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patent practitioner not of record who
acts in a representative capacity under
the provisions of § 1.34; or (3) all of the
inventors.
Comment 17: One comment suggested
amending § 1.29(f) to include language
permitting the micro entity certification
to be filed in response to a notice of fee
deficiency mailed by the Office.
Response: Certification of micro entity
status can be made at any stage of
prosecution, or at any time before or
with payment of a maintenance fee after
the patent issues. However, 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.
Comment 18: Several comments
argued that there should be no need to
recertify small entity status if micro
entity status is lost, because the
applicant had to certify small entity
status to qualify as a micro entity and
the applicant should continue to qualify
for small entity status after losing micro
entity status.
Response: Section 1.29(i) as adopted
in this final rule provides that a
notification that micro entity status is
no longer appropriate will not be treated
as a notification that small entity status
is also no longer appropriate unless it
also contains a notification of loss of
entitlement to small entity status under
§ 1.27(f)(2). An applicant or patentee
who files a notification that micro entity
status is no longer appropriate will be
treated as a small entity by default
unless the notification also contains a
notification of loss of entitlement to
small entity status under § 1.27(f)(2),
thus minimizing burdens on small
entity applicants and patentees. An
applicant or patentee who is no longer
a micro entity or a small entity must
provide both a notification under
§ 1.29(i) of loss of entitlement to micro
entity status and a notification under of
§ 1.27(f)(2) of loss of entitlement to
small entity status.
Comment 19: A number of comments
indicated that the proposed requirement
in § 1.29(g) to determine continued
qualification for micro entity status each
time a fee is paid was overly
burdensome. One comment indicated
that this proposed requirement would
inevitably lead to additional cost to
applicants in prosecuting applications
before the Office. Several comments
suggested that § 1.29(g) be revised to be
similar to small entity practice such that
once micro entity status is acquired, fees
can continue to be paid in the micro
entity amount until the issue fee or any
maintenance fee is due, or that micro
entity status be permitted to be
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year in which micro entity status was
established without regard to continued
qualification. The comments indicated
that an entity that licenses multiple
patent applications will need to confirm
that each licensee does not have a gross
income that exceeds three times the
median household income for the
preceding calendar year, and that an
entity with a patent application naming
multiple inventors will need to confirm
that each inventor for each application
does not have a gross income that
exceeds three times the median
household income for the preceding
calendar year. One comment
alternatively suggested that micro entity
status be maintained by applicants
through the end of a calendar year, even
if there has been a change in income
status during the calendar year that
disqualifies the applicant from a
continued claim to micro entity status.
Response: 35 U.S.C. 123(a) does not
allow for a provision similar to small
entity practice under which once micro
entity status is acquired, fees can
continue to be paid in the micro entity
amount until the issue fee or any
maintenance fee is due or that micro
entity status be maintained throughout
the calendar year in which micro entity
status was established without regard to
continued qualification. 35 U.S.C.
123(a) requires that a micro entity ‘‘not
[have] been named as an inventor on
more than 4 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’’ and ‘‘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.’’ 35 U.S.C. 123(a)(2) and
(a)(3). Finally, while applicants with
complex licensing arrangements may
consider confirming the status of each
licensee challenging, this is more a
function of the complexity of the
licensing arrangement than any
complexity in the requirement that a fee
may be paid in the micro entity amount
only if status as a micro entity as
defined in § 1.29(a) or § 1.29(d) is
appropriate on the date the fee is being
paid.
Comment 20: Several comments
objected to the statement in proposed
§ 1.29(h) that ‘‘[i]t should be determined
that all parties holding rights in the
invention qualify for micro entity
status.’’ One comment stated that

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proposed § 1.29(h) appears to require an
opinion that all parties holding rights in
the invention qualify for micro entity
status. One comment indicated that
because ‘‘parties’’ could include an
applicant under 35 U.S.C. 118 not
qualifying as a micro entity but filing an
application on behalf of an inventor
qualifying as a micro entity, the
statement should be deleted. Another
comment indicated that the sentence
cited from § 1.29(h) is redundant and/or
inconsistent with the statute as 35
U.S.C. 123(a)(4) expressly includes such
a limitation whereas 35 U.S.C. 123(d)
does not. The comment also indicated
that the sentence cited from § 1.29(h) is
inconsistent with § 1.29(d) which would
otherwise allow any entity that qualifies
for small entity status to obtain the
benefits of micro entity status by
assigning, granting, or conveying, a
license or other ownership interest to a
qualified institution of higher
education. The comment suggested
amending the sentence cited from
§ 1.29(h) by replacing ‘‘qualify for micro
entity status’’ with ‘‘qualify for small
entity status,’’ or alternatively, replacing
the phrase ‘‘all parties holding rights to
the invention’’ with ‘‘all applicants.’’
One comment indicated that
‘‘invention’’ is not the equivalent of
‘‘application,’’ and thus the word
‘‘invention’’ in the phrase ‘‘all parties
holding rights to the invention’’ should
be changed to ‘‘application,’’ or the
Office should provide guidance on the
meaning of the expression ‘‘rights in the
invention.’’
Response: The Office is revising this
provision to indicate that each applicant
must qualify for micro entity status
under § 1.29(a) or § 1.29(d), and that
each other party holding rights in the
application must qualify for small entity
status under § 1.27. Note that
§ 1.27(a)(3) provides for small entity
status with respect to nonprofit
organizations and is applicable to
universities or other institutions of
higher education. See § 1.27(a)(3)(ii)(A).
35 U.S.C. 123(e) provides that in
addition to the limits imposed by 35
U.S.C. 123, 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.
As discussed previously, the Office has
determined that requiring all micro
entities to qualify as small entities and
that all other parties holding rights in

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the invention qualify for small entity
status 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.
Comment 21: One comment indicated
that § 1.29(h) is an advisory opinion,
and not a statement of any requirement,
and thus should be deleted.
Response: Section 1.29(h) requires
that each applicant qualify for micro
entity status under § 1.29(a) or § 1.29(d),
and that each other party holding rights
in the application qualify for small
entity status under § 1.27, in order for
the applicant to make a certification of
entitlement to micro entity status. With
respect to the small entity status
requirement, § 1.27(a) requires that any
person or entity claiming small entity
status not have assigned, granted,
conveyed, or licensed, and is under no
obligation under contract or law to
assign, grant, convey, or license, any
rights in the invention to any person,
concern, or organization which would
not qualify for small entity status as a
person, small business concern, or
nonprofit organization.
Comment 22: Several comments
indicated that proposed § 1.29(i) is
overly burdensome. One comment
indicated that proposed § 1.29(i) would
require that possible loss of entitlement
to micro entity status be evaluated each
time a fee is to be paid. One comment
stated that the cost of compliance
defeats the Congressional purpose of
providing for micro entity status and
thus proposed § 1.29(i) should be
stricken.
Response: Section 1.29(i) requires
only that a 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 § 1.29(a) or
§ 1.29(d) is no longer appropriate. As
discussed previously, § 1.29(g) provides
that a fee may be paid in the micro
entity amount only if status as a micro
entity as defined in § 1.29(a) or § 1.29(d)
is appropriate on the date the fee is
being paid. Section 1.29(i) provides a
necessary step for documentation of the
cessation of micro entity status.
Comment 23: One comment suggested
that § 1.29(i) be amended to permit
payments for entity status other than
micro entity as sufficient notification of
loss of entitlement to micro entity
status, without additional
correspondence to the Office.
Response: Office experience with
small entity payments is that some
small entities will occasionally pay
patent fees in the full (non-small entity)

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amounts inadvertently. If mere payment
of fees in the full or small entity amount
is treated as a notification of loss of
entitlement to micro entity status, a
micro entity who inadvertently paid a
patent fee in the full or small entity
amount will thereafter no longer be
treated as a micro entity. This could
result in increased costs for entities that
are entitled to claim micro entity status,
and there would be a lack of clear
documentation on whether micro entity
status has ceased.
Comment 24: Several comments
indicated that proposed § 1.29(j) is
vague because the proposed rule does
not define what constitutes fraud. The
comments indicated that the Office
should amend the rule to make clear
what would constitute fraud. One
comment stated that fraud is a legal
conclusion including proof of mental
state. One comment stated that some
small entities not qualifying for micro
entity status under § 1.29(a) may be
tempted to marginally align with a
university in order to take benefit under
§ 1.29(d), and requested that the Office
clarify whether such a strategy would be
considered a fraud, even if the letter of
the rules is met. One comment
requested guidance on what penalties
the Office anticipates enforcing in the
event that a fraudulent certification is
made.
Response: Section 1.29(j) provides
that ‘‘[a]ny 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
‘‘[i]mproperly, 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.’’ The
language in § 1.29(j) parallels the
corresponding small entity provision in
§ 1.27(h), and thus terms ‘‘fraudulently’’
and ‘‘fraud’’ in § 1.29(j) have the same
meaning as the terms ‘‘fraudulently’’
and ‘‘fraud’’ in § 1.27(h). The definition
of common law fraud is based on the
definition discussed by the U.S. Court of
Appeals for the Federal Circuit (Federal
Circuit). See Unitherm Food Systems,
Inc. v. Swift-Ekrich, Inc., 375 F.3d 1341,
1358 (Fed. Cir. 2004); In re Spalding
Sports Worldwide, Inc., 203 F.3d 800,
807 (Fed. Cir. 2000). Applicants
questioning how to resolve close
situations or what penalties may result
from a fraudulent certification should
consider that: (1) The Federal Circuit
has noted that an applicant would be
‘‘foolish’’ to claim small entity status if
there is the slightest doubt about an
applicant’s entitlement to claim small
entity (DH Tech., 154 F.3d at 1343); (2)

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depending on future developments in
the case law, it is possible that a patent
could be held unenforceable as a
consequence of a fraud or inequitable
conduct relating to a micro entity or
small entity certification (this was
clearly possible for small entity
certifications prior to the Federal
Circuit’s decision in Therasense, Inc. v.
Becton, Dickinson and Co., 649 F.3d
1276 (Fed. Cir. 2011) (see, e.g., Nilssen
v. Osram Sylvania, Inc., 504 F.3d 1223
(2007), and Ulead Systems, Inc. v. Lex
Computer Management Corp., 351 F.3d
1120 (Fed. Cir. 2003)), but the Federal
Circuit has not yet decided the question
of whether a false declaration of small
entity status could constitute
inequitable conduct under the
Therasense standard (see Outside the
Box Innovations, LLC v. Travel Caddy,
Inc., 695 F.3d 1285, 1294 (Fed. Cir.
2012); see also Therasense, 649 F.3d at
1299, n.6 (O’Malley, J., concurring in
part and dissenting in part)); and (3)
there can be further significant penalties
for fraud (e.g., 35 U.S.C. 257(e)
(provides that the matter shall be
referred to the Attorney General if the
Director becomes aware that a material
fraud on the Office may have been
committed in connection with a patent
that is the subject of a supplemental
examination).
Comment 25: One comment stated
that with respect to the provisions
relating to fraudulent certification
(§§ 1.29(g) through (k)), it would be
beneficial to clarify the depth of inquiry
which is considered acceptable (e.g.,
good faith attempt) for a representative
of an applicant to obtain in order to sign
a certification. The comment indicated
that it would be too burdensome on a
practitioner to expect more than
obtaining verbal affirmation from an
applicant that the applicant meets the
guidelines for obtaining micro entity
status.
Response: The depth of inquiry
required for any paper presented to the
Office, including a micro entity status
certification, is specified in § 11.18.
Specifically, § 11.18(b) provides that by
presenting to the Office or hearing
officer in a disciplinary proceeding
(whether by signing, filing, submitting,
or later advocating) any paper, the party
presenting such paper, whether a
practitioner or non-practitioner, is
making two certifications. The first
certification is that all statements made
therein of the party’s own knowledge
are true, all statements made therein on
information and belief are believed to be
true, and all statements made therein
are made with the knowledge that
whoever, in any matter within the
jurisdiction of the Office, knowingly

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and willfully falsifies, conceals, or
covers up by any trick, scheme, or
device a material fact, or knowingly and
willfully makes any false, fictitious, or
fraudulent statements or
representations, or knowingly and
willfully makes or uses any false writing
or document knowing the same to
contain any false, fictitious, or
fraudulent statement or entry, shall be
subject to the penalties set forth under
18 U.S.C. 1001 and any other applicable
criminal statute, and further that
violations of the provisions of this
section may jeopardize the probative
value of the paper. See § 11.18(b)(1).
The second certification is that to the
best of the party’s knowledge,
information and belief, formed after an
inquiry reasonable under the
circumstances: (1) The paper is not
being presented for any improper
purpose, such as to harass someone or
to cause unnecessary delay or needless
increase in the cost of any proceeding
before the Office; (2) the other legal
contentions therein are warranted by
existing law or by a nonfrivolous
argument for the extension,
modification, or reversal of existing law
or the establishment of new law; (3) the
allegations and other factual contentions
have evidentiary support or, if
specifically so identified, are likely to
have evidentiary support after a
reasonable opportunity for further
investigation or discovery; and (4) the
denials of factual contentions are
warranted on the evidence, or if
specifically so identified, are reasonably
based on a lack of information or belief.
See § 11.18(b)(2).
Comment 26: Several comments
suggested eliminating the requirement
under proposed § 1.29(k) that any
deficiency payment include an
itemization and an accounting of the
total deficiency payment. One comment
indicated that proposed § 1.29(k) should
be revised to parallel the rule that
applies to an error in paying a small
entity fee when the large entity fee
should have been paid. The comment
alternatively proposed that the rules
could be amended to require: (1) One
base fee for rectifying the failure to
correct micro entity status, and (2) an
accounting of when the change of status
occurred.
Response: The fee deficiency payment
provisions of § 1.29(k) track the small
entity fee deficiency payment
provisions of § 1.28(c). The Office needs
the itemization to properly apply the fee
deficiency payment so that the Office’s
records for the application or patent will
properly show which fees have been
paid for the application or patent and in
what amount.

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Comment 27: One comment suggested
the Office establish a database of the
various certification types and permit
annual updating of applicant status,
rather than individual application
status. Another comment suggested that
§ 1.29 be amended to provide for micro
entity status certifications contained in
patent application assignments recorded
under part 3 of 37 CFR.
Response: The suggestions are not
currently feasible as inventor or
assignee names are not always stated
consistently from application to
application (either in application papers
or in assignment cover sheets). The
suggestions will be considered if the
Office moves to adopt a system under
which there are unique inventor and
applicant-assignee designations.
Comment 28: One comment indicated
that many practitioners who have
participated in the LegalCORPS
Inventor Assistance Program (a pilot
patent law pro bono program developed
with the support of the Office) have
seen first-hand that many inventors
qualifying for free legal assistance
through the program will not be able to
file applications electronically, due in
part to being unable to make electronic
payments via deposit account or credit
card. The comment suggested that the
final rule could address this issue by
providing for electronic filing of
documents along with a written
certification by the applicant that any
fees associated with that filing are being
submitted by check deposited in the
U.S. mail on the date of application
filing.
Response: Electronic filing remains a
viable filing option for micro entities,
even if the applicant does not have a
deposit account at the Office and even
if the applicant does not have sufficient
access to credit to enable payment by
credit card. Fees may be paid by
electronic funds transfer (EFT), which
requires nothing more than a checking
account. However, before making any
payments by EFT, an EFT profile must
be created at the Office ‘‘Office of
Finance On-Line Shopping Page’’ at
https://ramps.uspto.gov/eram/. To
begin, click the link titled ‘‘Create or
Modify an EFT Profile’’ on the ‘‘Office
of Finance On-Line Shopping Page.’’ It
is important that micro entities and
other applicants file their applications
electronically via EFS-Web in order to
avoid the non-electronic filing fee under
§ 1.10, which is $400 (and $200 for
small and micro entities). Additionally,
a small or micro entity that files an
application in paper (versus
electronically via EFS-Web) will not
receive the discount (currently $97.00)

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available only to small entities that file
a patent application electronically.
Rulemaking Considerations
A. 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 in this final
rule will not have a significant
economic impact on a substantial
number of small entities. See 5 U.S.C.
605(b). The Office did not receive public
comments on this certification.
This final rule revises the rules of
practice to allow a subset of small
entities—i.e., micro entities—to pay
further reduced fees, namely, a seventyfive percent discount. This final rule
sets out 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 final rule
maintains the criteria in 35 U.S.C.
123(a) and (d) for entitlement to file a
certification of micro entity status (note
also the requirement 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 also 37 CFR 1.29(h), 35
U.S.C. 123(e)). This rule also includes
clarifications under 37 CFR 1.29(a) to
refer to non-applicant inventors and
joint inventors. The micro entity
procedures in this final rule 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
this final rule is no greater than those
imposed by the pre-existing 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 patentrelated regulations. See Business Size
Standard for Purposes of United States
Patent and Trademark Office Regulatory

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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 this final rule. 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 for
implementing a further reduction in
fees, which is entirely beneficial, and no
other provision has an economic impact
on the affected small entities.
B. 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).
C. 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

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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.
One comment argued that the
rulemaking fails to comply with
Executive Order 13563 on the grounds
that: (1) The Office did not conduct a
burden/benefit analysis which includes
realistic professional services fees for
patent practitioners, the time involved
in understanding and complying with
the rule, and the sanctions imposed by
rule; (2) proposed 37 CFR 1.29 fails to
consider the value to society of
university inventions, for which 35
U.S.C. 123(d) seeks to provide specific
benefits, and which imposes no limits
on how a university might seek to
exploit its rights; and (3) proposed 37
CFR 1.29 imposes significant burdens
for the affected applicants, and is thus
not tailored to impose the least burden
on society consistent with obtaining the
regulatory objectives.
The Office considered costs and
benefits to applicants claiming micro
entity status (including universities), as
well as to all other applicants and the
Office in this rulemaking. Executive
Order 13563 reaffirms Executive Order
12866. This rulemaking was deemed by
OMB as not economically significant as
that term is defined in Executive Order
12866 (Sept. 30, 1993). Therefore, the
regulatory analysis provided in section
6(a)(3)(C) of Executive Order 12866 and
OMB Circular A–4 is inapplicable to
this rulemaking. The Office, however,
did conduct the regulatory analysis
provided in section 6(a)(3)(C) and OMB
Circular A–4 for the related rulemaking
to set and adjust patent fees under
section 10 of the Leahy-Smith America
Invents Act. 37 CFR 1.29 does impose
the least burden on society consistent
with obtaining the regulatory objectives
by permitting an applicant to self-certify
entitlement to micro entity status, and
does not require any further information
or certification from the applicant
provided that the applicant remains
entitled to micro entity status. In
addition, having micro entity
procedures which track the pre-existing
small entity procedures to the extent
practicable is less burdensome than

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fashioning new micro entity procedures.
Finally, while having no requirements
would arguably impose the least burden
on an entity seeking the benefit of micro
(or small) entity status, it would not
impose the least burden on society
overall and would not obtain the
regulatory objectives of creating the
beneficial option of micro entity status
with a seventy-five percent fee
reduction as provided by statute.
Revising the regulations as suggested
by the comment would expand the
scope of micro entity status beyond
what the statute allows. It also would
not meet the regulatory objectives of
ensuring that a for-profit, large entity
applicant not become a ‘‘micro entity’’
(and thus obtaining a seventy-five
percent discount) merely by licensing or
assigning some interest (nominal or
otherwise) to an institution of higher
education. The Office received
comments (including in response to the
section 10 rulemaking) in support of the
Office imposing additional requirements
under 35 U.S.C. 123(e) to avoid sham
licensing agreements for the purpose of
improperly claiming micro entity status
(as improper micro entity claims would
result in higher fees for other
applicants). Thus, the narrow
requirements imposed by the Office
under 35 U.S.C. 123(e) are necessary to
avoid abuses of micro entity status, and
simply eliminating them in the name of
reducing burden would not impose the
least burden on society overall and
would not obtain the regulatory
objectives.
D. 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).
E. 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).
F. 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).
G. Executive Order 12988 (Civil
Justice Reform): This rulemaking meets

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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).
H. 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).
I. 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).
J. 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.), the United
States Patent and Trademark Office will
submit a report containing this 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 final rule 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 final rule is not a ‘‘major
rule’’ as defined in 5 U.S.C. 804(2).
K. Unfunded Mandates Reform Act of
1995: The changes set forth in this
rulemaking 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.
L. National Environmental Policy Act:
This rulemaking will not have any effect

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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.
M. 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.
N. Paperwork Reduction Act: The
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.) requires that the
USPTO consider the impact of
paperwork and other information
collection burdens imposed on the
public. This final rule makes changes to
the rules of practice that would impose
new information collection
requirements involving fee deficiency
statements 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). Accordingly, the Office
submitted a proposed information
collection to OMB for its review and
approval when the notice of proposed
rulemaking was published. The Office
also published the title, description, and
respondent description of the
information collection, with an estimate
of the annual reporting burdens, in the
notice of proposed rulemaking (See
Changes to Implement Micro Entity
Status for Paying Patent Fees, 77 FR
31812–13).
The Office received one comment on
the proposed information collection
indicating that the estimate of 3,000
respondents per year was a significant
underestimate as every inventor
employed outside of large entities will
likely be confronted with the various
certifications, and that there may be tens
of thousands of university professors or
university students on work-study who
qualify under 35 U.S.C. 123(d).
The information collection
requirements discussed in the notice of
proposed rulemaking, however,
narrowly pertain to the information
required for fee deficiency payments
based upon the previous erroneous
payment of patent fees in the micro
entity amount (See Changes to
Implement Micro Entity Status for
Paying Patent Fees, 77 FR 31812). Based
upon the number of applicants and
patentees who make fee deficiency
payments under existing 37 CFR 1.28(c)
(about 2,250 per year), the Office
believes that 3,000 respondents per year
is a reasonable and conservative
estimate of the number of applicants
and patentees who make fee deficiency

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payments under 37 CFR 1.28(c) or
1.29(k).
As discussed in the notice of
proposed rulemaking, OMB has
determined under 5 CFR 1320.3(h) that
the certification of micro entity status
(e.g., Form PTO/SB/15A (gross income
basis) or Form PTO/SB/15B (institution
of higher education basis) does not
collect ‘‘information’’ within the
meaning of the Paperwork Reduction
Act of 1995 (See Changes to Implement
Micro Entity Status for Paying Patent
Fees, 77 FR 31812). The changes
adopted in this final rule do not require
any further change to the proposed
information collection.
Accordingly, the Office has
resubmitted the proposed information
collection to OMB. The proposed
information collection is available at the
OMB’s Information Collection Review
Web site (www.reginfo.gov/public/do/
PRAMain).
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 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:

■

§ 1.29

Micro entity status.

(a) To establish micro entity status
under this paragraph, the applicant
must certify that:
(1) The applicant qualifies as a small
entity as defined in § 1.27;
(2) Neither the applicant nor the
inventor nor a joint inventor has been
named as the inventor or a joint
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

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Federal Register / Vol. 77, No. 244 / Wednesday, December 19, 2012 / Rules and Regulations

national fee under 35 U.S.C. 41(a) was
not paid;
(3) Neither the applicant nor the
inventor nor a joint inventor, 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 (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) Neither the applicant nor the
inventor nor a joint inventor has
assigned, granted, or conveyed, nor is
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, inventor, or joint
inventor is not considered to be named
on a previously filed application for
purposes of paragraph (a)(2) of this
section if the applicant, inventor, or
joint inventor 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, inventor’s, or joint
inventor’s previous employment.
(c) If an applicant’s, inventor’s, joint
inventor’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,
inventor’s, joint inventor’s, or entity’s
gross income exceeds the threshold
specified in paragraph (a)(3) or (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 § 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

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application to such an institution of
higher education.
(e) Micro entity status is established
in an application by filing a micro entity
certification in writing complying with
the requirements of either paragraph (a)
or paragraph (d) of this section and
signed in compliance with § 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 § 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 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. However, 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
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 this section. It should
be determined that each applicant
qualifies for micro entity status under
paragraph (a) or (d) of this section, and
that any other party holding rights in
the invention qualifies for small entity
status under § 1.27. 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

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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 § 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. A notification
that micro entity status is no longer
appropriate will not be treated as a
notification that small entity status is
also no longer appropriate unless it also
contains a notification of loss of
entitlement to small entity status under
§ 1.27(f)(2). Once a notification of a loss
of entitlement to micro entity status is
filed in the application or patent, 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 § 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 nonsmall entity, as applicable;

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(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 (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
§ 1.17(i), or result in a requirement for
compliance within a one-month time
period that is not extendable under
§ 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
§ 1.27(c). Once a deficiency payment is
submitted under this paragraph, a
written assertion of small entity status
under § 1.27(c)(1) is required to obtain
small entity status.
Dated: December 14, 2012.
David J. Kappos,
Under Secretary of Commerce for Intellectual
Property and Director of the United States
Patent and Trademark Office.
[FR Doc. 2012–30674 Filed 12–18–12; 8:45 am]
BILLING CODE 3510–16–P

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ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 52
[EPA–R04–OAR–2012–0238; FRL–9762–6]

Approval and Promulgation of
Implementation Plans; South Carolina
110(a)(1) and (2) Infrastructure
Requirements for the 1997 and 2006
Fine Particulate Matter National
Ambient Air Quality Standards;
Correction
Environmental Protection
Agency (EPA).
ACTION: Final rule, correction.
AGENCY:

EPA published in the Federal
Register of August 1, 2012, a final rule
approving the State Implementation
Plan (SIP) submissions submitted by the
State of South Carolina, through the
South Carolina Department of Health
and Environmental Control (SC DHEC),
as demonstrating that the South
Carolina SIP met certain requirements of
the Clean Air Act (CAA or the Act) for
the 1997 annual and 2006 24-hour fine
particulate matter (PM2.5) national
ambient air quality standards (NAAQS).
This rulemaking corrects several errors
identified in the August 1, 2012, final
rule.
DATES: Effective on December 19, 2012.
FOR FURTHER INFORMATION CONTACT:
Sean Lakeman, Regulatory Development
Section, Air Planning Branch, Air,
Pesticides and Toxics Management
Division, U.S. Environmental Protection
Agency, Region 4, 61 Forsyth Street
SW., Atlanta, Georgia 30303–8960. The
telephone number is (404) 562–9043.
Mr. Lakeman can be reached via
electronic mail at
lakeman.sean@epa.gov.
SUPPLEMENTARY INFORMATION: This
action corrects inadvertent omissions in
the August 1, 2012, final rulemaking
and its associated regulatory text
section. Specifically, EPA is correcting
the final rule to expressly indicate that
the South Carolina Code Annotated
Sections described in the June 6, 2012,
proposed rule are being incorporated
into the South Carolina SIP.1 See 77 FR
33386. The August 1, 2012, final rule
also failed to list these code sections in
the regulatory text. Accordingly, this
SUMMARY:

1 The sections adopted into the SIP are S.C. Code
Ann. Sections 8–13–100(31); 8–13–700(A) and (B);
and 8–13–730. These sections were adopted into
the SIP to satisfy CAA section 128 state board
requirements made applicable to South Carolina’s
infrastructure SIP by section 110(a)(2)(E)(ii) of the
CAA. See EPA’s June 6, 2012, proposed rulemaking
for more information as to how these statutes meet
the applicable CAA section 128 requirements. 77
FR 33380, 33386.

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rulemaking corrects that inadvertent
omission by adding S.C. Code Ann.
Sections 8–13–100(31), 8–13–700(A)
and (B), and 8–13–730 to the regulatory
text of the August 1, 2012, final rule.
In addition, EPA is correcting the
footnote on page 45492 of the final rule
which inadvertently listed ‘‘April 13,
2012,’’ as the date of South Carolina’s
SIP revision. The correct date for South
Carolina’s SIP revision is April 3, 2012.
Through today’s notice, EPA is hereby
correcting the footnote on page 45492 of
the August 1, 2012, final rule to reflect
the correct date.
Finally, EPA is correcting the
statement on page 45493 of the August
1, 2012, final rule that stated ‘‘[t]oday’s
action is not approving any specific
rule, but rather making a determination
that South Carolina’s already approved
SIP meets certain CAA requirements.’’
Today’s rule removes this sentence from
the August 1, 2012, final rule and
replaces it with a sentence that reads:
‘‘EPA is making a determination that
South Carolina’s SIP meets certain CAA
requirements.’’ See 77 FR 45492.
EPA has determined that today’s
action falls under the ‘‘good cause’’
exemption in section 553(b)(3)(B) of the
Administrative Procedure Act (APA)
which, upon finding ‘‘good cause,’’
authorizes agencies to dispense with
public participation where public notice
and comment procedures are
impracticable, unnecessary, or contrary
to the public interest. Public notice and
comment for this action is unnecessary
because today’s action to correct an
inadvertent regulatory text omission
included with EPA’s August 1, 2012,
final rule is consistent with the
substantive revisions to the South
Carolina SIP described in the proposal
to approve certain state statues into the
South Carolina SIP as addressing the
section 110(a)(2)(E)(ii) state board
requirements for the 1997 annual and
2006 24-hour PM2.5 NAAQS. In
addition, EPA can identify no particular
reason why the public would be
interested in being notified of the
correction, or in having the opportunity
to comment on the correction prior to
this action being finalized, since this
correction action does not change the
meaning of EPA’s analysis or action to
approve certain state statues as
addressing the state board requirements
for the 1997 annual and 2006 24-hour
PM2.5 NAAQS into the South Carolina
SIP. EPA also finds that there is good
cause under APA section 553(d)(3) for
this correction to become effective on
the date of publication of this action.
Section 553(d)(3) of the APA allows an
effective date less than 30 days after
publication ‘‘as otherwise provided by

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