CSG Law Alert: USPTO to Assess Statutory Penalties for False Assertions or Certifications of Entity Status
The United States Patent and Trademark Office (USPTO) published a notice in the Official Gazette on July 8, 2025, announcing that it will begin to assess statutory penalties for the false assertion or certification of small or micro entity status, in accordance with 35 U.S.C. 41(j) and 123 (f).
Entities that qualify for small or micro status may be entitled to discounts of 60% or 80% on many USPTO fees, but these entities are required to conduct a reasonable inquiry before asserting qualification of either status.
The USPTO, at its discretion, may undertake a review of the entity status asserted by an entity. If the review leads to a preliminary determination that an application contains a false assertion of entity status that resulted in the payment of an unentitled reduced fee paid on or after December 29, 2022, the USPTO will issue a combined notice of payment deficiency and order to show cause as to why a fine should not be assessed. The combined notice and order will set forth the USPTO’s basis for its preliminary determination and provide the entity with an extendible period of two months to respond. Following the response, the USPTO will issue a final determination indicating the fine amount, if any, being assessed. Under 35 U.S.C. 41(j) and 123 (f), the fine shall not be less than three times the amount the entity failed to appropriately pay the USPTO, unless the assertion was made in good faith. In addition to fines, the USPTO may also issue sanctions under 35 U.S.C. 11.18(c), such as, for example, referring an attorney or agent for disciplinary action or terminating examination proceedings in the application.
Upon issuance of a combined notice and order, the associated patent application will be removed from examination. The application will not be returned to examination until the fee deficiency and fine, if any, are resolved. A final determination that the application contains a false assertion of entity status that resulted in the payment of an unentitled reduced fee may result in a reduction in patent term adjustment.
If you have any questions about how this development may affect your patent applications, please contact the authors of this alert or your CSG Law attorney for more details.