"The micro-entity discount created by Congress in the Leahy-Smith America Invents Act represents one of patent law's more generous gestures toward independent inventors. Under 35 U.S.C. § 123, applicants who qualify pay only 20% of the standard USPTO filing fees. But the statute comes with a precise set of eligibility requirements, and inventors who miscalculate their status face stiff consequences."
"An administrative trap involves a misapplication of the § 123(b) prior-employment exception to the application-filing limit. A litigation trap involves what happened when the inventors tried to challenge that denial in court and discovered that the representations they made to the USPTO in support of micro-entity status had stripped them of Article III standing to sue."
"All three inventors certified micro-entity status for the '288 application and paid the corresponding discounted fees. In April 2024, the USPTO sent a notice of payment deficiency, informing the Nesarikars that their micro-entity certification appeared to be in error, with each of the three being named on 10+ prior patent applications. The inventors responded by invoking the § 123(b) prior-employment exception, asserting that they were obligated to assign their prior applications - and the '288 application itself - to former employers."
Micro-entity status under 35 U.S.C. § 123 allows applicants to pay only 20% of standard USPTO filing fees, but eligibility depends on meeting specific statutory requirements. A Federal Circuit decision, Nesarikar v. USPTO, illustrates consequences from misapplying the § 123(b) prior-employment exception. The inventors filed an AI autonomous-vehicle application and certified micro-entity status, paying discounted fees. After the USPTO issued a notice of payment deficiency, the inventors asserted that prior applications and the new application were obligated to be assigned to former employers. The USPTO rejected the representations, and when the inventors sought judicial review, the representations made to support micro-entity status were treated as stripping Article III standing.
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