Imagine this situation: You are one of a group of three Inventors. You are all smart, impressive people. One of you holds a PhD in chemical engineering and has a long career in industry Another of you is a computer scientist. A third runs her own AI development company. You all share a surname.
The three of you have a great idea relating to self-driving automobile technology. So you do the sensible thing to protect and commercialize your idea – you decide to apply for patents. You have a choice. You could hire a patent attorney to help you out, or you could proceed on your own, without help; that is, ‘pro se.’ You elect to skip the patent attorney and to go it alone. How hard can it be?
You file eight different utility patent applications in your own names and certify that each of you meets the requirement for “micro entity” status. You pay the ‘micro entity’ filing fees. Whether you qualify for ‘micro entity’ status, usually an easy question, is about to become the subject of substantial controversy. And the answer to our earlier question ‘how hard can it be?’ Pretty hard, as it turns out. The case is Nesarikar v. USPTO, No. 2026-1167 (Fed. Cir. May 12, 2026) (nonprecedential).
The USPTO has three categories of fees; namely, “micro entity,” “small entity,” and “large entity.” “Micro entities” pay the least, small entities pay more, and large entities pay the most. Large entities are big companies with more than 500 employees. Small entities are smaller companies and individuals who do not qualify as ‘micro entities.’ ‘Micro entities’ are academics or individuals who have a gross income of less than a specified amount ($251,190.00 for applications filed in 2026), who have filed fewer than five patent applications (not counting provisionals and not counting applications assigned to a former employer), and who have not assigned and have no obligation to assign the patent or application to someone who does not qualify as a micro entity. The fee discount for micro entities is substantial. The reason for the ‘micro entity’ category is to encourage individual inventors to protect their inventions, particularly those individual inventors who are new to patenting.
For the application addressed by the Federal Circuit Court, the USPTO sent notices to the Inventors that they had filed more than five prior patent applications, did not qualify as ‘micro entities,’ and owed more in fees. The USPTO eventually found twelve prior patent applications by one of the Inventors, eleven different applications by the other two inventors, and no evidence that the applications were assigned. Although given the opportunity, the Inventors did not (and apparently could not) provide evidence of assignments of any obligation to assign the applications to former employers. The Inventors did not timely respond to the USPTO notice and the application was abandoned.
The Inventors filed in suit in U.S. District Court, again acting entirely on their own and without a lawyer. The USPTO pointed out that the Inventors’ admission in court documents that the Inventors had an obligation to assign the applications (whether or not that statement was true) meant that the Inventors had no ownership interest in the applications To be able to file suit in Federal court, a plaintiff must have a real interest in the outcome, known as ‘standing.’ If the Inventors were obliged to assign the applications, then they did not own the applications and had no real interest in the outcome of the lawsuit and no ‘standing.’ The District judge dismissed the lawsuit. It was an easy case for the judge. The Inventors then appealed to the Federal Circuit Court of Appeals, which hears appeals in patent matters. The Federal Circuit dismissed the appeal for the same reasons, again an easy case. The Inventors asked the U.S. Supreme Court for relief. The Supremes declined without explanation.
There the story ends. That’s a lot of work, time, and expense for the Inventors, all with no return.
What could the inventors have done differently?
Assuming that the incorrect assertion of micro entity status was an honest mistake, the inventors could have just said “oops,” paid the (higher) small entity fee and been on their way. That would have been pretty expensive, since the inventors filed a total of eight patent applications on the same day, all descended from the same provisional application. If filed today, the filing fees for a small entity for all eight applications would have totaled close to $6,000.00, less the micro entity fees that the inventors already paid of about $3,200.00, for a difference of about $2,800.00. Not a lot of money to keep eight patent applications pending. However, remember that the inventors’ future fees to the USPTO would be at the higher ‘small entity’ rate rather than the lower ‘micro entity’ rate. The higher costs would follow the inventors through the entire patent process.
Alternatively, the inventors could have said “oops,” paid the small entity fee for one of the eight utility patent applications and allowed the other seven utility applications to go abandoned. The inventors would then pursue only one patent application, not eight. If filed today, that would have cost $730.00 less the $400.00 micro entity fee already paid, for a total additional fee of $330.00. The inventors would maintain ‘patent pending’ on every invention taught by the application, which would presumably include every invention in the provisional application and every invention in the seven other utility applications.
But by abandoning the seven other applications, wouldn’t the inventors lose the inventions addressed by those seven applications?
Not at all. If an invention is taught in a pending patent application, then that invention is ‘patent pending’ whether or not the pending application specifically addresses that invention. For example, let’s say that a patent application teaches how to make and use buckets and sand boxes, but only claims buckets. The sand box inventions are also ‘patent pending’ under that application. At some time in the future, within limits, the inventor can file another application to claim the sandboxes taught by the bucket and sandbox patent application.
Finally, the inventors could have evaluated whether these eight applications address inventions that could even be the subject of a patent. The Supreme Court has restricted the patenting of ‘abstract ideas’. Most software is, therefore, excluded from patenting. Here’s claim 1 from the application that was before the Federal Circuit Court:
1. A system comprising: at least one processor configured to: execute at least one instruction of a basis comprising at least one equivalence of at least one awareness to at least one category theoretic morphism; and exercise, based on the executed at least one instruction, at least one category theoretic intelligence.
Yours truly deals with mechanical, electrical and aeronautics inventions rather than artificial intelligence, but that looks like a pretty high level of abstraction to moi. If that’s as concrete as it gets, the inventors may have been well advised to save their money and their time.
The bottom line? Be careful with micro entity status. And get professional advice.
— Robert Yarbrough, Esq.