What is a Small Entity?

Mary McMahon
Mary McMahon

For the purposes of the United States Patent and Trade Office (USPTO), a small entity is an individual or organization that qualifies for reduced fees on patent applications. There are several categories of individuals and organizations that are considered small entities. In addition to receiving discounts on fees associated with filing, small entities are also entitled to a discount on maintenance fees. This makes it easier to file and maintain a patent for a person or organization that cannot afford the full patent fees, ensuring that everyone has the ability to secure the rights to intellectual property.

Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

If a business has fewer than 500 employees, it is considered a small entity. Likewise, independent inventors filing patents for their work are small entities, as are nonprofit organizations. When small entities file, they must provide a statement declaring their status. Many patent forms have checkboxes people can use and a detailed formal statement is not necessarily required. If an organization's size or nature changes, it must file paperwork to indicate this, whether it is becoming a small entity or losing this status.

If a small entity licenses the patent to an organization that is not considered a small entity, it will lose small entity status. Likewise, if the USPTO reviews an organization and determines that it does not qualify, it will also be declassified. Furthermore, the USPTO will treat the case as fraud and will revoke the patent and associated rights; misfiling, in other words, can result in loss of patent protection.

The discount offered to small entities is 50%, although there are certain fees that will not be discounted. A complete fee schedule is available from the Patent and Trade Office for people who wish to review the fees associated with patent applications. Patent attorneys can also assist people with determining the cost of filing and maintaining a patent. Patent applicants should also take note of the maintenance schedule so that they can take actions at the right time to retain their patents.

When filling out patent applications, it is important to be accurate. Businesses that are not sure if they qualify as small entities can ask a patent attorney or patent examiner for assistance. The USPTO prefers to help people avoid mistakes, rather than being forced to revoke a patent, and can provide guidance and assistance with the application process. Status changes should be carefully documented with the USPTO to ensure that a business's status is accurately reported.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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