Getting A Refund From The Patent Office If You Are Now A Small Entity

By: Mark R. Malek

This concludes the series of articles that I have been writing on entity status in the United States Patent Office.  The first article introduced the new micro-entity status.  The next article gave some background information on what would happen if you claimed the wrong entity status before the USPTO, and the latest article set forth the obligations on an inventor to continuously monitor their small entity status.

This article comes from two separate experiences that I have recently had where my clients had been paying large entity fees for quite some time, but were, in all actuality, small entities.  As indicated in the first of the series of articles, the small entity fees at the patent office (for the most part) are 50% those of large entities.  If an inventor were to file a typical patent application and perhaps have some extra claims therein, this number could add up to be something significant. 

When we became aware that our client was actually a small entity, of course, we made an immediate change to their status on all future filings.  I was curious, however, as to whether or not we could recover any of the fees that my clients had inadvertently paid.  I was hoping that I could recover the fees going back to when my clients had actually become small entities.  Well – you won’t believe it, but here is such a mechanism in the patent office.

I was somewhat skeptical that we would be able to recover any funds.  After all, the USPTO is an agency that pays for itself…and then some.  We (patent attorneys) were very excited to hear that the USPTO might be able to keep all the fees that it actually generates, but then Washington got in the way of itself (insert sequester jokes here).  Keeping all the fees that it generates would have meant improvements in the patent examination process.  The point is that the USPTO is not some government agency that lives off the taxpayers.  Instead, it is an agency that is self sufficient and, as is many times the case, the ever so fiscally irresponsible folks in Washington skim off the top of the earnings of the USPTO to pay for its exorbitant overhead.  I’m not hear to get started on our elected monarchy, but I’m just stating the facts here.

Anyway, the reason why the USPTO is a self sufficient organization is that in the patent prosecution process, there is a fee for just about everything.  There is a filing fee, an examination fee, a publication fee, an issue fee, maintenance fees, etc.   We have a little joke that there is a fee for paying a fee fee.  As you could imagine, with so many fees swirling around in the USPTO, I did not think I was ever going to be able to recover money for my clients back from the agency.  Boy was I wrong.

37 C.F.R. 1.28 outlines the process for obtaining a refund when small entity status is later established.  This is also outlined in the Manual of Patent Examining Procedures (MPEP) Section 509.03.  The grace period is a short one – three months.  Therefore, get working on requesting the refunds as soon as possible.  If representing an institutional client, such as a company with several patent applications on file, it is important to know that a separate filing is required for each application.  Unfortunately, you cannot file one document that indicates that company XYZ is now a small entity, and that you would like a refund of large entity fees that it paid ever since becoming a small entity.  It has to be done for each application individually.

The easy way around this is to continuously monitor your entity status (as is required in the case of small entities).   As soon as you realize that your entity status has changed, then make sure to immediately start working on those requests for refunds in order to be sure that you do note exceed the grace period.  If you need some assistance in figuring out the process for requesting a refund from the USPTO, feel free contact me. You can also follow me on Twitter, LinkedIn and Facebook for even more information.