Eligibility for reduced fees should be assessed in light of the specific regulations that govern that eligibility. Although eligibility requirements depend on a number of factors, many of which are not covered in this post, the figure above illustrates some of the key concepts that govern eligibility for small entity status and micro entity status at the United States Patent and Trademark Office.
When there are doubts regarding eligibility, it may be very valuable to consult a Baton Rouge patent attorney. When an applicant incorrectly takes advantage of Patent Office discounts, it can damage the potential patent rights the applicant is seeking.
How much can I save?
Most USPTO fees are discounted by 50% to those claiming small entity status and most USPTO fees are discounted by 75% to those claiming micro entity status. However, applicant should remember that Patent Office fees may only make up a small part of the cost of seeking patent protection. Patent office fees may be viewed at the USPTO fee page.
Small Entity Status
The regulation governing the business size requirement for small entity status is reproduced below.
13 CFR 121.802 What size standards are applicable to reduced patent fees programs?
A concern eligible for reduced patent fees is one:
(a) Whose number of employees, including affiliates, does not exceed 500 persons; and
(b) Which has not assigned, granted, conveyed, or licensed (and is under no obligation to do so) any rights in the invention to any person who made it and could not be classified as an independent inventor, or to any concern which would not qualify as a non-profit organization or a small business concern under this section.
Just being a small company is not enough, because activities such as licensing the invention may destroy eligibility. Being a small business is not the only way to become eligible. Individuals and nonprofit organizations may also be eligible for the reduced fees.
Micro Entity Status
Micro entity status may be established under either a Gross Income Basis or under an Institution of Higher Education basis. In either case, the applicant must also be eligible to claim small entity status.
And applicant wishing to claim micro entity status based on income will need to meet the eligibility requirements established in the certification form.
The most obvious of those requirements is the income requirement:
The “Maximum Qualifying Gross Income” for purposes of paying any eligible fee at the micro entity discount rate is currently $160,971.
– USPTO.gov November 2015
Micro entity status at the Patent Office under gross income basis also requires that “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 U.S. patent applications.” Further details and qualifications of that requirement may be found on the form and through a review of the detailed Patent Office requirements.
Applicant should be wary of certifying micro entity status in any case where all parties do not meet the eligibility requirements. One of the reasons this is true is the broad applicability of the income requirement. The income requirement applies against applicants, inventors and parties with an ownership interest. Applicants should seek qualified patent counsel if there is doubt about eligibility.
Further, it is important to remember that claiming either small entity status or micro entity status when an applicant is not eligible for that status can lead to severe consequences potentially including invalidation of any patent granted from the application.
Micro entity status may also be claimed in certain educational contexts, but that topic is not dealt with in detail in this post.