When the dust settled on the AIA legislation, research universities believed they had scored a victory by qualifying for so called “micro entity” fee status….payment of only 25% of the patent fees compared to large companies. However, when micro entity fees become effective Tuesday, March 19, 2013 some technology transfer offices may wonder what they really got from the AIA.
Universities as Applicants
Prior to October 2012, the university hired patent counsel, provided filing instructions and paid the bills…but the faculty researchers were the “patent applicants.” The inventors signed the power of attorney which led to confusion as to who the client really was.
That changed for the better when universities (and companies) could be the patent applicant and enjoyed new provisions to step in and file even when an inventor could not be located or refused to cooperate. Furthermore, the inventor oath and declaration was combinable with an assignment to the university so a technology transfer office only had to engage the inventor once in the initial patent filing process.
However, to obtain micro entity status as an Institution of Higher Education under the AIA and implemented rules, the patent applicant had to be (once again) the individual inventors….not the institution itself. Therefore, the gains made in administration, simplicity and efficiency are wiped out by shoddy legislation. Universities seeking micro entity status for reduced fees cannot be the patent applicant…the individual inventor(s) must be the applicant(s).
In its final rule making published December 19, 2012, the U.S. Patent & Trademark Office (USPTO) directly took up the question about whether a university research foundation was eligible for micro entity status. The answer was unambiguously “no.” The USPTO noted:
35 U.S.C. 123(d) provides that a micro entity shall also include an applicant who certifies that…applicant's employer….is an institution of higher education …or …has assigned…to such an institution ….35 U.S.C. 123(e) …does not authorize the Office …to include a separate, non-profit corporation, research foundation, technology transfer organization, Federal Government research laboratory, other non-profit scientific or educational organization, institution of higher education as defined in section 101(b) of the Higher Education Act of 1965, or other institution that is legally separate from an institution of higher education as defined in section 101(a) of the Higher Education Act of 1965 as suggested by the comments. (emphasis added and portions redacted for readability)
Thus, if your institution imposes an obligation on its faculty to assign, convey, license, etc… to a legally separate research foundation then no micro entity status is available. Research foundations are better configured to manage licensing and patent prosecution but to avoid receiving actual patent rights if micro entity status is desired.