37 C.F.R. § 1.28

Refunds when small entity status is later established; how errors in small entity status are excused

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(a) Refunds based on later establishment of small entity status. A refund pursuant to § 1.26, based on establishment of small entity status, of a portion of fees timely paid in full prior to establishing status as a small entity may only be obtained if an assertion under § 1.27(c) and a request for a refund of the excess amount are filed within three months of the date of the timely payment of the full fee. The three-month time period is not extendable under § 1.136. Status as a small entity is waived for any fee by the failure to establish the status prior to paying, at the time of paying, or within three months of the date of payment of, the full fee.

(b) Date of payment. (1) The three-month period for requesting a refund, pursuant to paragraph (a) of this section, starts on the date that a full fee has been paid;

(2) The date when a deficiency payment is paid in full determines the amount of deficiency that is due, pursuant to paragraph (c) of this section.

(c) How errors in small entity status are excused. If status as a small entity is established in good faith, and fees as a small entity are paid in good faith, in any application or patent, and it is later discovered that such status as a small entity was established in error, or that through error the Office was not notified of a loss of entitlement to small entity status as required by § 1.27(g)(2), the error will be excused upon: compliance with the separate submission and itemization requirements of paragraphs (c)(1) and (c)(2) of this section, and the deficiency payment requirement of paragraph (c)(2) of this section:

(1) Separate submission required for each application or patent. Any paper submitted under this paragraph must be limited to the deficiency payment (all fees paid in error), required by paragraph (c)(2) of this section, for one application or one patent. Where more than one application or patent is involved, separate submissions of deficiency payments (e.g., checks) and itemizations are required for each application or patent. See § 1.4(b).

(2) Payment of deficiency owed. The deficiency owed, resulting from the previous erroneous payment of small entity fees, must be paid.

(i) Calculation of the deficiency owed. The deficiency owed for each previous fee erroneously paid as a small entity is the difference between the current fee amount (for other than a small entity) on the date the deficiency is paid in full and the amount of the previous erroneous (small entity) fee payment. The total deficiency payment owed is the sum of the individual deficiency owed amounts for each fee amount previously erroneously paid as a small entity. Where a fee paid in error as a small entity was subject to a fee decrease between the time the fee was paid in error and the time the deficiency is paid in full, the deficiency owed is equal to the amount (previously) paid in error;

(ii) Itemization of the deficiency payment. An itemization of the total deficiency payment is required. The itemization must include the following information:

(A) Each particular type of fee that was erroneously paid as a small entity, (e.g., basic statutory filing fee, two-month extension of time fee) along with the current fee amount for a non-small entity;

(B) The small entity fee actually paid, and when. This will permit the Office to differentiate, for example, between two one-month extension of time fees erroneously paid as a small entity but on different dates;

(D) The total deficiency payment owed, which is the sum or total of the individual deficiency owed amounts set forth in paragraph (c)(2)(ii)(C) of this section.

(3) Failure to comply with requirements. If the requirements of paragraphs (c)(1) and (c)(2) of this section are not complied with, such failure will either: be treated as an authorization for the Office to process the deficiency payment and charge the processing fee set forth in § 1.17(i), or result in a requirement for compliance within a one-month non-extendable time period under § 1.136(a) to avoid the return of the fee deficiency paper, at the option of the Office.

(d) Payment of deficiency operates as notification of loss of status. Any deficiency payment (based on a previous erroneous payment of a small entity fee) submitted under paragraph (c) of this section will be treated under § 1.27(g)(2) as a notification of a loss of entitlement to small entity status.

[65 FR 54661, Sept. 8, 2000]

Notes of Decisions

Cited in 12 cases, 1996–2012 · leading case: Outside the Box Innovations, LLC v. Travel Caddy, Inc.

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Outside the Box Innovations, LLC v. Travel Caddy, Inc. (2012) cafc · cites it 8× “Instead, 37 C.F.R. §1.28 provides that good faith mistakes can be remedied by making a deficiency payment.”

Dh Technology, Inc. (Now Axiohm Transaction Solutions, Inc.) v. Synergystex International, Inc., Defendant/cross-Appella (1998) cafc · cites it 18× “317 limited the time for corree *1338 tion of the erroneous payment of the small entity issue fee or whether 37 C.F.R. § 1.28 (c) (permitting correction of the erroneous, but good-faith, claim of small entity status and payment of small entity fees at any time) was the sole…”

Ulead Systems, Inc. v. Lex Computer & Management Corp. (2003) cafc · cites it 14× “We also hold that the erroneous payment of small entity fees may be excused under 37 C.F.R. § 1.28 (c), so long as the patentee is not guilty of inequitable conduct relating to its inaccurate assertion of small entity status.”

Nilssen v. Osram Sylvania, Inc. (2006) ilnd · cites it 2× “See 37 C.F.R. § 1.28 (c). While the PTO is not required to make an inquiry into whether the patentee has established good faith as a condition of accepting a late payment, if a patentee seeks to correct an incorrect payment of fees as a small entity pursuant to Section 1.”

Ulead Systems, Inc. v. Lex Computer & Management Corp. (2001) cacd · cites it 2× “However, the fact that no reported decision had specifically found inequitable conduct under these circumstances in no way diminishes the clear language of 37 C.F.R. § 1.28 (d) (“If small entity status is claimed fraudulently or with intent to deceive, that is treated by the PTO…”

Ulead Systems, Inc. v. Lex Computer & Management Corp. (2001) cacd · cites it 3× “37 C.F.R. § 1.28 . “Inequitable conduct includes affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive.”

DH Technology, Inc. v. Synergystex International, Inc. (1996) cand · cites it 4× “When the PTO enacted 37 C.F.R. § 1.28 , which provides guidance as to the effect of improperly claiming small entity status, it received a comment from an attorney objecting to § 1.”

Jewish Hospital of St. Louis v. Idexx Laboratories (1996) med · cites it 2× “See 37 C.F.R. § 1.28 (c). These procedures do not contemplate a lapse of the patent, but rather permit correction of the error if the status was originally established in good faith.”

Cell Genesys, Inc. v. Applied Research Systems ARS Holding, N.V. (2007) mad “See 37 C.F.R. § 1.28 (c); Tropix v. Lumigen, 53 U.”

Ladatech, LLC v. Illumina, Inc. (2012) ded · cites it 2× “120 at 32) As defendants acknowledge, the Federal Circuit has considered the issue and held that a district court has no obligation or authority to analyze whether a patent has expired where the submission of a deficiency fee payment is accepted by the PTO pursuant to 37 C.F.R.…”

TurboCare Division of Demag Delaval Turbomachinery Corp. v. General Electric Co. (1999) mad “” 37 C.F.R. § 1.28 (b). Defendant avers that Brandon was not entitled to pay the small entity fee when the patent issued in 1991.”

McGinley v. Franklin Sports, Inc. (2000) ksd “37 C.F.R. § 1.28 (d). The court notes that neither party has chosen to brief this issue, and no proposed conclusions of law or of fact regarding plaintiffs alleged inequitable conduct before the PTO have been submitted by the parties for the court’s consideration.”

— 37 C.F.R. § 1.28(b) — 1 case

Nilssen v. Osram Sylvania, Inc. (2006) ilnd “See 37 C.F.R. § 1.28 (c). While the PTO is not required to make an inquiry into whether the patentee has established good faith as a condition of accepting a late payment, if a patentee seeks to correct an incorrect payment of fees as a small entity pursuant to Section 1.”

— 37 C.F.R. § 1.28(c) — 3 cases

Dh Technology, Inc. (Now Axiohm Transaction Solutions, Inc.) v. Synergystex International, Inc., Defendant/cross-Appella (1998) cafc “317 limited the time for corree *1338 tion of the erroneous payment of the small entity issue fee or whether 37 C.F.R. § 1.28 (c) (permitting correction of the erroneous, but good-faith, claim of small entity status and payment of small entity fees at any time) was the sole…”

Ulead Systems, Inc. v. Lex Computer & Management Corp. (2001) cacd “However, the fact that no reported decision had specifically found inequitable conduct under these circumstances in no way diminishes the clear language of 37 C.F.R. § 1.28 (d) (“If small entity status is claimed fraudulently or with intent to deceive, that is treated by the PTO…”

Ulead Systems, Inc. v. Lex Computer & Management Corp. (2001) cacd “37 C.F.R. § 1.28 . “Inequitable conduct includes affirmative misrepresentations of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive.”

— 37 C.F.R. § 1.28(e) — 1 case

DH Technology, Inc. v. Synergystex International, Inc. (1996) cand “When the PTO enacted 37 C.F.R. § 1.28 , which provides guidance as to the effect of improperly claiming small entity status, it received a comment from an attorney objecting to § 1.”

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