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Entity size matters

Until 2013, the U.S. Patent and Trademark Office defined two types of applicants: “large entity” and “small entity.” Those qualifying as “small entities” enjoyed a 50 percent discount on fees. A small entity can be an independent inventor, a small business with fewer than 500 employees, or a nonprofit organization such as a university.

Last year the office added a third status, “micro entity,” which entitles certain “small entities” to a 75 percent reduction in patent fees.

The savings can add up quickly for a university, which may have hundreds of employees inventing new products and technologies. The fees to apply for and maintain each patent currently can range up to $6,000 or more for a university.

When Congress passed the America Invents Act, its intent was to make it easier for universities to qualify for these lower fees. Unfortunately recent changes in Patent & Trademark Office rules regarding powers of attorney make it difficult for universities to take advantage of the discount pricing.

The America Invents Act allows an applicant to qualify for “micro entity” status when the applicant is associated with a qualified university in the United States. The rules state that to qualify for micro entity status, the application must not name the university that employs or licenses the technology from the inventor as an applicant.

But in an apparent contradiction, the only way the university can grant a power of attorney related to the patent application is if the application does name it as an applicant. The result: a university cannot grant power of attorney and qualify as a micro entity at the same time.

As universities wait for either Congress or the Patent & Trademark Office to come to the rescue, there are ways out of this conundrum, but each is complicated and can raise legal or ethical issues.

- Peter Borghetti, Meyer, Unkovic & Scott, pjb@muslaw.com

Business workshop is a weekly feature from local experts offering tidbits on matters affecting business. To contribute, contact Business Editor Brian Hyslop at bhyslop@post-gazette.com.


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