A guest post from Gary Speier, shareholder with Schwegman, Lundberg & Woessner.
Last week, the USPTO published a Federal Register notice proposing rules for implementing certain provisions of section 10 of the America Invents Act related to micro entities. (A copy of this notice is available here of at the end of this post.) The proposed rules set forth the requirements for qualifying as a micro entity and the procedures for claiming micro entity status, paying patent fees as a micro entity, notifying the USPTO of any status change, and correcting erroneous payments. In a separate rulemaking expected this summer, the USPTO will be proposing to set or adjust fees using its new fee-setting authority under AIA section 10. Micro entities will receive a seventy-five percent reduction in those fees related to filing, searching, examining, issuing, and appealing patent applications and maintaining patents. Comments on today’s notice, “Changes to Implement Micro Entity Status for Paying Patent Fees,” are due July 30.
Section 61 of the Internal Revenue Code (IRC 61, 26 U.S.C. § 61) defines “gross income,” which is the starting point for determining which items of income are taxable for federal income tax purposes in the United States. Section 61 states that “except as otherwise provided in this subtitle gross income means all income from whatever source derived”. The United States Supreme Court has interpreted this to mean that Congress intended to express its full power to tax incomes to the extent that such taxation is permitted under Article I, Section 8, Clause 1 (the Taxing and Spending Clause) of the Constitution of the United States and under the Constitution’s Sixteenth Amendment.
If median income information is not available for the prior year until the end of the following year, it could make it difficult to determine if a client qualifies for micro entity status. I personally propose that the PTO independently publish (or provide direct access to) the “amount.” If this cannot be done on Jan 2 for the preceding year, they should require that we should work off the data from two years prior. Of course, only folks in a window of gross income about $135-165 (3 x $45-55K) would reasonably have cause for concern. Note the YR 2010 median household income was $49,445. (See http://www.census.gov/hhes/www/income/data/index.html.)