Pay the Right Price: USPTO Targets False Fee Status Claims

By Lauryn Bishoff

The United States Patent and Trademark Office (USPTO) is implementing penalties for entities that falsely claim micro entity status. [1] To provide background, an entity may qualify for micro entity status if they are a person, a small business concern (having less than 500 employees), or a nonprofit organization (including institutions of higher education). Additionally, to qualify for micro-entity status, an entity must have a gross income below $241,830 and must not be listed as an inventor on more than four previously filed patent applications. [2]

Entities that qualify are eligible for reduced fees when applying for a patent. Entities that claim reduced patent fees without meeting the required qualifications gain an unfair advantage over those who pay the full amount. Such actions deprive the USPTO, a fully fee-funded agency, of essential revenue and may lead to increased fees for all applicants to cover the resulting loss.

To address this issue, the USPTO is now imposing fines on entities that make false claims of small or micro entity status. The fine is at least three times the amount the entity should have paid. However, if the entity can demonstrate that the false claim was made in good faith, meaning they did not know their claim was false, the fine may be waived. In such cases, the entity is still required to pay the fee deficiency.

When the USPTO suspects a false claim, they will issue a combined notice and order, informing the entity of the payment deficiency and providing an opportunity to explain why a fine should not be imposed. When the USPTO issues a combined notice and order, the USPTO will remove the application from examination pending resolution of the preliminary determination that the application contains a false assertion. The USPTO will not return the application to examination until both the fee deficiency is paid and fine issue is resolved (either paid or withdrawn). After reviewing any response and the overall record, the USPTO will issue a final notice stating whether a fine will be issued and, if so, the amount

By enforcing these penalties, the USPTO aims to promote accurate status claims, protect its source of revenue, and discourage abuse of the reduced-fee system.

References

[1] https://www.uspto.gov/web/offices/com/sol/og/2025/week27/TOC.htm#ref10

[2] https://www.uspto.gov/patents/laws/micro-entity status#Maximum%20Qualifying%20Gross%20Income