Question: Does the Owner of a Patent or Patent Application qualify for USPTO Micro Entity Status?


Answer: Typically, No, because of the following FOUR requirements.


1. The Owner is a Small Entity.


Owner is a Small Entity if Owner is a:
(i) a "person" (i.e. individual or individuals) who has not 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;
(ii) a "small business concern", meaning a business whose number of employees, including affiliates, does not exceed 500 persons that has not assigned, granted, conveyed, or licensed and is under no obligation to do so any rights in the invention to any person that would not qualify as a non-profit organization or a small business concern under this section; or
(iii) a nonprofit organization that has not 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 as a person, small business concern, or a nonprofit organization and meets other requirements.

2. The Owner Has Filed No More Than 4 Previous Patent Applications.


Neither the applicant nor the inventor nor any joint inventor has been named as the inventor on more than four previously filed patent applications where the following applications do not count toward the four application limit: provisional applications, foreign applications, PCT applications which did not go past the International Stage, and applications resulting from prior employment, 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 but this does not apply to the applicant's current employment.

3. Individual Income Not More Than $150,162 for Owner and All Inventors


Neither the applicant nor the inventor nor any joint inventor had, in the calendar year preceding the calendar year in which the applicable fee is being paid, a gross income (as defined by the IRS) exceeding three times the median household income for that preceding calendar year (as most recently reported by the Bureau of the Census). The income level which will entitle an applicant to "Micro Entity" status is initially set to $150,162, based on the 2011 figures (the latest year available when the regulations were issued in December 2012). It is only the inventor's own income which is used in this comparison, not the total income of the household regardless whether an applicant, inventor, or joint inventor filed a joint tax return rather than a separate tax return in the preceding calendar year, the “gross income” limit applies to the amount of income the person would have reported as gross income if that person filed a separate tax return, which includes, for example, properly accounting for that person’s portion of interest, dividends, and capital gains from joint bank or brokerage accounts.

and

4. No Assignment to Non-Micro Entity


The Owner 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 would not meet the above three criteria, and does not indeed to do so.

In other words...if the Owner intends to operate with greater income than the statutory amount and/or intends to license or assign the invention for greater income than the statutory amount, then the Owner is not a Micro Entity.


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