IP Law Daily, PATENT NEWS: USPTO memo emphasizes penalties for falsely asserting small, micro entity status, (Jun 12, 2025)
A combined notice and order, followed by a subsequent notice with a final determination, will be issued.
The steps and process for implementing statutory penalties for false assertions or certifications of small and micro entity status, including notice provisions, are explained in a memo by the USPTO Acting Director Coke Morgan Stewart, the USPTO has announced. The USPTO is statutorily required under 35 U.S.C. §§ 41(j) and 123(f) to impose a minimum fine of three times the underpaid amount when an entity is found to have falsely asserted small or micro entity status. An exception is made if the entity can demonstrate that the misrepresentation was made in good faith. The memo, titled “Statutory Penalties for False Assertions or Certifications of Small and Micro Entity Status,” is available here.
An entity may qualify for small entity status if the entity is a person, a small business concern, or a nonprofit organization, including an institution of higher education. Some entities that qualify for small entity status may enjoy an additional reduction of most fees charged by the USPTO if they also qualify for micro entity status. The entity may be entitled to certify micro entity status under either a gross income basis or a United States institution of higher education basis.
Reviews. If a false claim is suspected, the USPTO will issue a combined notice and order. Once that is issued, the examination of the application is paused, and the entity has three response options:
Rebut the claim with evidence that the assertion or certification was not false.
Acknowledge the false claim but show good faith, pay the fee deficiency, and provide supporting evidence.
Admit the false claim without good faith, pay the deficiency, and prepare to pay the fine.
The USPTO will issue a subsequent notice with a final determination following the response. Any applicable fines will be included in the subsequent notice.
If the USPTO makes a final determination that the application contains a false assertion or certification that resulted in the payment of at least one fee in an unentitled reduced amount, there will be a patent term adjustment (PTA) impact for the application.
Other consequences. The USPTO may issue sanctions under 37 CFR 11.18(c) for an entity's conduct before the USPTO regarding a false assertion or certification. Practitioners remain subject to the USPTO Rules of Professional Conduct and sanctions stemming from those rules, too.
Date reminder. A reminder is included in the memo that an entity is subject to the penalty provisions of 35 U.S.C. 41(j) and 123(f) only when inappropriately discounted fees were paid on or after December 29, 2022. The filing date of the application is not relevant as to whether the fee payment may result in a penalty.
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