Small Entity Government Use License Exception: Amendment Of The Rules Of Practice In Patent Cases

• Published date: 06 January 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Oblon, McClelland, Maier & Neustadt, L.L.P
• Author: Ms Marina I. Miller

The USPTO is amending the rules of practice in patent cases to clarify and expand exceptions to the rule pertaining to government use licenses and their effect on small entity status for purposes of paying reduced patent fees. The USPTO explained that the rule change is designed to support independent inventors, small business concerns, and nonprofit organizations in filing patent applications and to encourage collaboration with the Federal Government by expanding the opportunities to qualify for the small entity patent fees discount for inventions made during the course of federally funded or federally supported research.

This final rule becomes effective on January 20, 2021.

The government use license exceptions in this rulemaking are the only exceptions to the general rule that every party holding rights to an invention must qualify as a small entity under 37 CFR 1.27 in order for small entity status to be claimed in a patent application.

The first exception covers a government use license that a Federal employee inventor is obligated to grant if he/she is allowed to retain title to the workplace invention. This exception applies to the use license reserved to the Federal Government when a Federal employee is allowed to retain title to the workplace invention. The exception intends to cover a government use license to a Federal agency, when the inventor is the employee of a small business or nonprofit organization contractor performing research under a funding agreement with the Federal agency, and the government use license is equivalent to that specified in 35 U.S.C. 202(c)(4).

Retention of rights by the inventor under 35 U.S.C. 202(d) becomes possible when the contractor performing research under a Federal funding agreement does not elect to retain title to the invention, and the Federal agency is not interested in pursuing the patent rights either. Provided the Federal agency receives no more than the government use license and there is no other interest in the invention held by a party not qualifying as a small entity, the inventor who otherwise qualifies for small entity status is not prohibited from claiming small entity status as a result of retaining rights under 35 U.S.C. 202(d), to his or her invention.

The second exception provides that a small business concern or nonprofit organization, which otherwise qualifies as a small entity for purposes of paying reduced patent fees under 37 CFR 1.27, is not disqualified as a small entity because of...