Entity status refers to the size of the business concern or business interest applying for a patent, conducting a patent validation/verification procedure, or paying a patent maintenance fee. The United States Patent and Trademark Office (USPTO) offers fee discounts for most fees. When it comes to entity status at the USPTO, smaller entities get larger discounts.

There are three entity status possibilities when paying fees at the USPTO. The default (regular) is just called fees at the USPTO. These regular fees are discounted by 60% if you qualify as a small entity and by 80% if you qualify as a micro entity. For example, application filing fees or patent maintenance fees can be reduced by as much as 80% if the applicant qualifies for the micro entity status.

Not all USPTO fees are given an entity-based discount. However, nearly all patent application prosecution fees, patent maintenance fees, and search fees are reduced according to entity status. Given the large amounts of some patent prosecution and maintenance fees, getting a discount on USPTO fees can save you thousands of dollars.

Patent Attorney Filing the Patent Application

How to get USPTO Fees Reduced with Entity Status

In order to get your patent application filing fees or patent maintenance fee amounts reduced with entity status, all that is needed is to file (submit) a written assertion (statement or form) to the USPTO. The assertion is a written statement of your entitlement to file under the small entity status because you qualify as a small entity.

The assertion is pretty simple. According to 37 CFR 1.27, “a written assertion must:

(i) Be clearly identifiable;
(ii) Be signed; and
(iii) Convey the concept of entitlement to small entity status, such as by stating that applicant is a small entity, or that small entity status is entitled to be asserted for the application or patent. While no specific words or wording are required to assert small entity status, the intent to assert small entity status must be clearly indicated in order to comply with the assertion requirement.”

Patent Attorney help with Patent Applications

To claim small entity status and get the 60% reduction applied (if applicable) on a new patent application, you claim small entity entitlement by checking a box on the application data sheet (ADS). To claim micro entity status, there is a certification (form) that is signed by a person authorized to do so which is submitted to the USPTO.

Qualifying for USPTO Small Entity 60% Discounts

Who: Any person (independent inventor), small business, or nonprofit organization will generally qualify to be considered for small entity status. There are some limitations, but nearly all people (independent inventors), small businesses, and nonprofit organizations will likely qualify for small entity status. Check out our article on the role of patents in startups and small businesses.

Details and Definitions:

Person Definition for Small Entity Status: 37 CFR 1.27(a)(1) defines a person as “any inventor or other individual (e.g., an individual to whom an inventor has transferred some rights in the invention), who has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention.”

Note: “An inventor or other individual who has transferred some rights, or is under an obligation to transfer some rights in the invention to one or more parties, can also qualify for small entity status if all the parties who have had rights in the invention transferred to them also qualify for small entity status either as a person, small business concern, or nonprofit organization.” Manual of Patent Examination Procedure (MPEP), Chapter 500: Section 509 Payment of Fees.

Small Business Entity Definition: 37 CFR 1.27(a)(2) defines a small business concern as “any business concern that:

(i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify for small entity status as a person, small business concern, or nonprofit organization; and
(ii) Meets the size standards set forth in 13 CFR 121.801 through 121.805 to be eligible for reduced patent fees.” Generally this means having less than 500 employees.

Nonprofit Organization Entity Definition: 37 CFR 1.27(a)(3) defines a nonprofit organization as “any nonprofit organization that:

(i) Has not assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention to any person, concern, or organization which would not qualify as a person, small business concern, or a nonprofit organization; and
(ii) Is either:
- (A) A university or other institution of higher education located in any country;
- (B) An organization of the type described in section 501(c)(3) of the Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) and exempt from taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 501(a));
- (C) Any nonprofit scientific or educational organization qualified under a nonprofit organization statute of a state of this country; or
- (D) Any nonprofit organization located in a foreign country which would qualify as a nonprofit organization under paragraphs (a)(3)(ii)(B) of this section or (a)(3)(ii)(C) of this section if it were located in this country.”

Qualifying for USPTO Micro Entity 80% Discounts

If applicant qualifies as a small entity, applicant may also qualify for micro entity status increasing the discount to a 80% reduction in most patenting fees.

Who: Any person (independent inventor) who qualifies for small entity status, is named on three (3) or fewer other patent applications, and whose income is less than three (3) times the median household income for the year prior will generally qualify for micro entity status. There are some limitations, but nearly all people (independent inventors) will generally qualify for micro entity status and get a 80% reduction for most USPTO fees.

Details and Definitions: To establish micro entity status under 37 CFR 1.29, “the applicant must certify that:

(1) The applicant qualifies as a small entity as defined in § 1.27 ;
(2) Neither the applicant nor the inventor nor a joint inventor has been named as the inventor or a joint inventor on more than four previously filed patent applications, other than applications filed in another country, provisional applications under 35 U.S.C. 111(b) , or international applications for which the basic national fee under 35 U.S.C. 41(a) was not paid;
(3) Neither the applicant nor the inventor nor a joint inventor, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986 (26 U.S.C. 61(a)), exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census; and
(4) Neither the applicant nor the inventor nor a joint inventor has assigned, granted, or conveyed, nor is under an obligation by contract or law to assign, grant, or convey, a license or other ownership interest in the application concerned to an entity that, in the calendar year preceding the calendar year in which the applicable fee is being paid, had a gross income, as defined in section 61(a) of the Internal Revenue Code of 1986, exceeding three times the median household income for that preceding calendar year, as most recently reported by the Bureau of the Census.”

Micro Entity or Small Entity Changes – Update the USPTO

If the status of the entity changes, be sure to tell the USPTO or your patent practitioner. Getting the entity status fee reduction is easy to do and so is changing it. All that you need to do is claim the entity status with the appropriate statement submitted to the USPTO. Note that small entity status needs to only be claimed and asserted once. This entity status will remain connected to the applicant. However, micro entity status must be claimed prior to, or more typically at the time of, paying the reduced fee.

Important Note: Fees must be paid based on the current entity status at the time the fee is paid. Changes in entity status may affect fee amounts paid between time of initial application and the conclusion of patent prosecution.