How is gross income calculated for micro entity status when dealing with foreign currency?

When calculating gross income for micro entity status involving foreign currency, the USPTO provides specific guidelines:

• If an applicant’s, inventor’s, or entity’s gross income in the preceding calendar year is not in U.S. dollars, the average currency exchange rate reported by the Internal Revenue Service (IRS) for that calendar year must be used for conversion.
• For income received partially in U.S. dollars and partially in foreign currency, the foreign portion must be converted to U.S. dollars and added to the U.S. dollar amount.

The MPEP states: “If an applicant’s, inventor’s, joint inventor’s, or entity’s gross income in the preceding calendar year is not in United States dollars, the average currency exchange rate, as reported by the Internal Revenue Service, during that calendar year shall be used to determine whether the applicant’s, inventor’s, joint inventor’s, or entity’s gross income exceeds the threshold specified in 37 CFR 1.29(a)(3) or (a)(4).“

The IRS provides yearly average currency exchange rates on its website, which should be used for these calculations.

To learn more:

• micro entity
• gross income
• foreign currency
• currency exchange rate
• USPTO