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What the America Invents Act means for the small inventor

By Jeffrey Shieh, senior patent attorney, Inovia, special to Network World
October 05, 2011 02:48 PM ET

Network World - On Sept. 16 President Obama signed the Leahy-Smith America Invents Act (the "America Invents Act") into law, ushering in the most significant changes to the U.S. patent system in decades.

There are numerous resources that provide summaries of the act's provisions. However, I would like to focus on how the America Invents Act may impact -- both positively and negatively -- small businesses and sole inventors, and offer tips for them to maximize their patent protection.

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The most relevant and beneficial change to the solo inventor/small company is the creation of a new class of inventors: the "micro entity." Previously, a 50% reduction for certain fees was available for applicants qualifying for small entity status. Under the America Invents Act, micro entities would be eligible for a 75% reduction in fees.

The Leahy-Smith America Invents Act, Section 123, defines a micro entity as an applicant who:

1) Qualifies as a small entity, as defined in regulations issued by the Director.

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 section 111(b), or international applications filed under the treaty defined in section 351(a) for which the basic national fee under section 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, exceeding 3 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 3 times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census (Act).

Additionally, a micro entity shall 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.

The smallest filers will certainly embrace this new micro entity class and its 75% reduction in patent fees. It is interesting, however, that universities, often with extensive intellectual property budgets and hundreds of applications, also fall under this category of patent filers.

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