Under the “Act to Revise a part of the Unfair Competition Prevention Act (May 30, 2018 Article 33)”, the JPO has greatly simplified the existing procedure to reduce fees, for the purpose of helping small and micro entities. As previously, the discounts are applicable for both Japanese and foreign applicants and are to be provided for examination fees and annuity fee payments “Patent Annuities (1-10th years)” in which a Request for Examination is filed after April 1, 2019.
Most significantly among the changes implemented under the new law, the JPO has lifted the requirement to provide documents proving small entity status in order to receive a discount, which was often prohibitively burdensome for foreign applicants. We generally did not recommend filing a request for mall entity discount in the previous system because attorney fees would often surpass any discounted fee amount, and furthermore separate requests for fee discounts were required for each request for examination, registration and annuity payment.
In the new procedure, a simple statement on the form for request for examination or annuity or registration payments by the Applicant indicating the category under which the Applicant qualifies for the discount is sufficient to apply for the discount.
We have summarized the categories and requirements below.
1. Who May Apply and Discounts Given for Patent Applications?
| Categories | Applicable Discount |
| Large Entities | No discount applied |
| Small Entities 1 (including Academic Institutions and Researchers) | 50% discount of examination fee 50% discount of 1-10th year annuities |
| Small Entities 2 (Start-up Companies) | 60% Discount of examination fee 60% Discount of 1-10th year annuities |
| Micro Entities (Corporations and Sole Proprietorships) | 60% Discount of examination fee 60% Discount of 1-10th year annuities |
2. What Are the Precise Qualifications for Small and Micro Entity Status?
“Small and Micro Entity” status applicants must satisfy the following criteria to qualify for the discounts:
| I. Small Entities 1: Companies and Sole Proprietorships | ||||
| Industry | Employees | or | Total Capital or Investment | |
| (Company only, not applicable to sole proprietorship) | ||||
| A | Manufacturing, construction, transportation, etc. (excluding those listed under B-G) | 300 or fewer | 300 million JPY or less (Approx. US$2,700,500) |
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| B | Wholesale Industry | 100 or fewer | 100 million JPY or less (Approx. US$9,250,00) |
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| C | Service Industry (excludes industries listed in F and G) | 100 or fewer | 50 million JPY or less (Approx. US$460,000) |
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| D | Retail Industry | 50 or fewer | 50 million JPY or less (Approx. US$460,000) |
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| E | Rubber Manufacturing (excluding manufacturing of automobile or aircraft tires and tube and industrial belt manufacturing) | 900 or fewer | 300 million JPY or less (Approx. US$2,700,500) |
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| F | Software or Information processing service Industry | 300 or fewer | 300 million JPY or less (Approx. US$2,700,500) |
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| G | Hotel Industry | 200 or fewer | 50 million JPY or less (Approx. US$460,000) |
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| II. Small Entities 1: Academic Institutions such as Universities and University Researchers, etc. | ||||
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| III. Small Entities 2: Start-up Companies: Corporations and Sole Proprietorship | ||||
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| IV. Micro Entity: Corporations and Sole Proprietorships | ||||
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For the above listed categories I, III, and IV, the JPO stipulates that a larger controlling entity is not permitted, specifically entailing:
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a) A single large entity cannot have the entirety or 50% or more of the total shares or investment capital or
b) Several large entities cannot have the entirety or 2/3rd or more of the total shares or investment capital
3. Examples of Discounted Fees
(1) Examination Fees
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A) For Small Entities: If an application has 25 claims, the regular examination fee would be approximately US$2,130 (196,000 yen). A qualifying Applicant would receive a 50% reduction of this fee, paying only US$1,065.
B) For Small Entities (Start-up Companies) and Micro Entities: If an application has 25 claims, the regular examination fee would be approximately US$2,130 (196,000 yen). A qualifying Applicant would receive a 2/3 reduction of this fee, paying only US$710.
(2) Annuity Payments
- A) For Small Entities: If an application has 25 claims, the registration fee for the 1-3rd year would be approximately US$230 (21,300 yen). A qualifying Applicant would receive a 50% reduction of this fee, paying only US$115.
B) For Small Entities (Start-up Companies) and Micro Entities: If an application has 25 claims, the registration fee for the 1-3rd year would be approximately US$230 (21,300 yen). A qualifying Applicant would receive a 2/3 reduction of this fee, paying only US$77.
4. How to Apply
As noted above, with the JPO’s simplification of the procedure, Applicants are no longer required to provide documented evidence of small entity status or even to file a separate Request for Small Entity Discount.
Furthermore, with the simplification of the fee reduction procedure, extra service fees towards preparing a small entity request are eliminated.
Have your patent attorney state the category by which the discount is applicable on the Request for Examination or Registration or Annuity Payment submission form.
* The information provided on this website is for informational purposes only and is not intended as legal advice.
** For questions or consultation, please contact us for more information.
Taro Yaguchi
