Patent fees are a necessary evil. But the U.S. government seeks to help smaller businesses and inventors to be able to afford the patent process by lowering their fees relative to multinational corporations. Inventors paying patent fees at the U.S. Patent and Trademark Office ("USPTO"), can choose from Column A (Regular Fee), Column B ("Small Entity Status"), and Column C ("Micro-Entity Status").
If the filer qualifies for Small Entity Status, the USPTO offers a half-price discount. For example, instead of paying $260 to file a provisional patent application, a Small Entity would pay only $130 (2017 figures). A filer that qualifies as a Micro-Entity would pay $65, a 75% discount.
The goal of this multi-tiered system is to provide a break for smaller companies and independent inventors, and to encourage innovation.
If you or your business qualify as a small entity, you need only verify that status by executing a declaration when paying the fee. If, however, you are obligated to license or assign the patent to a bigger entity that does not qualify as a small entity, then you could not claim small entity status.
A common example of this is when someone licenses a patent to a large company such as Microsoft or Apple. Improperly claiming small entity status would be considered inequitable conduct and could result in the loss of patent rights.
To qualify as a small entity you must either be:
To qualify as a Micro Entity, the filer must be a Small Entity and must also meet the following criteria:
How do you determine micro-entity status for multiple inventors? The rules apply individually to each joint inventor. So, no joint inventor can have been named as an inventor on more than four applications, and no joint inventor can have a gross income (as defined by the IRS) exceeding three times the median household income for the preceding calendar year. (In recent years, the median has hovered at around $50,000, so three times the median is approximately $150,000).