Correctly Providing Entity Status Remains Critical – New Penalty

The USPTO will begin implementing statutory penalties for falsely made assertions or certifications of small and micro entity status. 

For patent cases in which an inappropriately discounted small or micro entity fee is paid on or after December 29, 2022, entities are subject to a penalty under 35 USC 41(j) and 123(f). This penalty applies to any patent case, regardless of its filing date, for which an inappropriately discounted small or micro entity fee is paid on or after December 29, 2022.  Unless the entity can show that the assertion or certification was made in good faith, a fine will be assessed of not less than three times the amount the entity failed to appropriately pay to the USPTO. 

When the USPTO makes a preliminary determination that an application or patent contains a false assertion or certification that resulted in the erroneous payment of at least one fee at a reduced amount, they will issue a Combined Notice of Payment Deficiency and Order to Show Cause. This Notice will invite the applicant or patentee to explain why a fine should not be assessed and set a two (2) month period for response. The USPTO will subsequently issue a final determination stating whether a fine is being assessed and the fine amount.

• Once a fine has been assessed, the fine is a debt owed to the United States government. 

• It is possible to file a request for further review after a fine has been imposed. 

• The fine must be paid even if the application is abandoned or if the patent has expired. 

• Failure to pay the fine by the deadline may result in sanctions under 37 CFR 11.18 for the entity’s conduct, including termination of the proceedings. Practitioners remain subject to the USPTO Rules of Professional Conduct and sanctions for violations thereof.

• Failure to pay both the fine and fee deficiency paid by the deadline will result in abandonment of the application.

• Payment of only the fee deficiency amount after the fine has been assessed does not obviate the fine owed to the United States Government, and a collection process will be initiated to collect the debt.