Some patent applicants and patent owners (“entities”) qualify for a discount on patent fees charged by the United States Patent and Trademark Office (USPTO). The discount is determined by the status of the entity as defined by the USPTO.
Patent applicants/owners must designate one of three entity statuses created by the USPTO to determine fees due: large (undiscounted), small, or micro.
Large Entity Status
Any entity that does not qualify for small entity status or micro entity status is a large entity. These entities do not receive a discount on patent fees set by the USPTO. This category includes for-profit businesses with more than 500 employees, as well as entities that have assigned, granted, conveyed, or licensed, or are under an obligation under contract or law to assign, grant, convey, or license, any rights in the invention (that is the subject of the patent or patent application) to an entity that does not qualify for small entity status.
Small Entity Status
Applicants who qualify for small entity status are eligible to receive a 60% reduction on most patent fees.
Who qualifies for small entity status?
To quality for small entity status, all applicants, inventors, or joint inventors of a patent application must be one of the following (37 CFR 1.27):
- A person who has not assigned, licensed, or otherwise conveyed an interest in the invention to a non-small entity; or
- A business that has not assigned, licensed, or otherwise conveyed an interest in the invention to a non-small entity, and, including affiliates, has no more than 500 employees; or
- A non-profit organization that has not assigned, licensed, or otherwise conveyed an interest in the invention to a non-small entity and is either:
- A university or other institution of higher education located in any country;
- 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));
- Any nonprofit scientific or educational organization qualified under a nonprofit organization statute of a state of United States (35 U.S.C. 201(i)); or
- 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.
If you qualify for small entity status, you may be eligible to claim micro entity status, which receives a steeper discount on fees.
Micro Entity Status
Applicants who qualify for micro entity status are eligible to receive an 80% reduction on most patent fees. To qualify for micro entity status, the patent applicant must first qualify for small entity status.
Who qualifies for micro entity status?
A patent applicant can qualify for micro entity status under the Gross Income Basis or the Institution of Higher Education Basis (37 CFR 1.29).
Gross Income Basis
Here are the requirements to qualify for micro entity status under the Gross Income Basis:
- Neither the applicant nor the inventor nor a joint inventor has been named as an inventor on more than four previously filed U.S. patent applications (applicants are not considered to be named on a previously filed application if he or she has assigned, or is obligated to assign, all ownership rights as a result of previous employment. Applications filed in another country, provisional applications, or international applications for which the basic national fee was not paid do not count as previously filed applications);
- Neither applicant nor the inventor nor a joint inventor had a gross income in the previous year from when the fee is paid of more than the Maximum Qualifying Gross Income set by the USPTO, which is three times the median household income in the United States (for fees paid in 2024, the Maximum Qualifying Gross Income is $223,740); and
- Neither the applicant nor the inventor nor a joint inventor has assigned, granted, or conveyed, nor is under an obligation to assign, grant, or convey, a license or other ownership interest to another entity that does not meet the same Maximum Qualifying Gross Income limit.
Institution of Higher Education Basis
Here are the requirements to qualify for micro entity status under the Institution of Higher Education Basis:
- The Applicant obtains the majority of their income from a United States institution of higher education as defined in section 101(a) of the Higher Education Act (20 U.S.C. 1001(a)); or
- The Applicant has assigned, granted, or conveyed, or is under an obligation by contract or law to assign, grant, or convey an ownership interest in the application to such a United States institution of higher education.
*The information on this webpage is not legal advice and should not be relied on. The content of this webpage is for informational purposes only and is meant as a starting point in your search for answers to your legal questions.
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