If you get to page 1060 of the Consolidated Appropriations Act of 2023, you will see the Unleashing American Innovators Act of 2022, which was enacted on December 29, 2022. Part of that law changed the formula for calculating small and micro entity USPTO fee discounts. Effective immediately, small entities are entitled to a 60% discount (up from a 50% discount) and micro entities are entitled to an 80% discount (up from a 75% discount). The new fee schedule can be found here.

New Penalty For False Assertions of Small Entity Status

Perhaps concerned about the temptation to falsely assert small or micro entity status in order to enjoy these further reduced fees, the Unleashing American Innovators Act also includes a new penalty for false assertions.

Under current rules, “any attempt to fraudulently establish status as a small entity” is considered “as a fraud practiced or attempted on the Office,” which would jeopardize enforceability of the patent. However, if small (or micro) entity was “established in good faith” but later discovered to be “in error,” the error will be “excused” upon submission of a correction of entity status and payment of a fee deficiency for each fee paid at the erroneously claimed discounted rate.

Under the new law, “ an entity that is found to have falsely asserted entitlement to a fee reduction under this section shall be subject to a fine, to be determined by the Director, the amount of which shall be not less than 3 times the amount that the entity failed to pay as a result of the false assertion, whether the Director discovers the false assertion before or after the date on which a patent has been issued.” In view of the discretion delegated to the Director, I expect the USPTO to issue a proposed rule-making for implementation of this new penalty.

The MPEP reminds that there is a duty to investigate entitlement to claim small entity status, which must be verified before small entity status is first claimed (e.g., when paying discounted filing fees), again when the issue fee payment is made, and again when each maintenance fee payment is made.

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