Overview of Entity Size at USPTO

The entity size of a patent applicant/owner is important for determining the amount of government fees paid to U.S. Patent & Trademark Office (USPTO).  If a patent applicant/owner is considered a small entity then they are entitled to a 50% reduction with most USPTO government fees.  37 C.F.R. 1.27 defines what qualifies as a small entity.  If an entity does not qualify as a small entity, then it is a large entity.

Small Entity Status

The owner of a patent application or patent is a small entity if they have not assigned, granted, conveyed or licensed (and is under no contractual obligation to do so) any of the patent rights to a large entity and they qualify as one of the following entities:

• Person.  Any inventor or other individual that owns the patent rights individually or jointly.
• Small Business Concern.  Any business with 500 or less employees (including affiliated companies).
• Nonprofit Organization.  
  • Any university or other institution of higher education located in any country;
  •  Any organization of the type described in section 501(c)(3) of the Internal Revenue Code and exempt from taxation under section 501(a) of the IRC;
  • Any nonprofit scientific or educational organization qualified under a nonprofit organization statute of a state of the United States; or
  • Any nonprofit organization located in a foreign country which would qualify as a nonprofit organization if it were located in this country.

Loss of Small Entity Status

Once status as a small entity has been established in an application or patent, fees as a small entity may thereafter be paid in that application or patent without regarding to a change in status until the issue fee is due or any maintenance fee is due.  Once an issue fee or maintenance fee is due, you must (1) notify the USPTO of the change of status and (2) pay the large entity fees.

Fraudulent Establishment of Small Entity Status

Any attempt to fraudulently establish small entity status at the USPTO is considered fraud practiced or attempted on the USPTO.  Fraud on the USPTO can result in the loss of your patent rights.  It is therefore important to ensure that you have the proper entity status when paying USPTO fees.