Reduction in fees in at the US Patent and Trademark Office

The fee reductions provided for small and micro entities are a great example of steps taken to enable smaller companies and individuals to innovate and seek intellectual property rights in the US.

Those qualifying as small entities can now enjoy a 60% reduction on most fees. This has been increased from 50%. The fee reduction for micro entities is now 80%, up from 75%.

These improved fee reductions are a welcome change, as smaller companies and individuals may now see patent and design protection in the US as being more affordable.

The legal requirements for qualifying as a small entity or as a micro entity remains unchanged, and is summarised below. Small entity status or micro entity status may be claimed by filing a statement at the USPTO, for example, when a US patent application is filed.

Small entity

Small entity status is generally available to individuals, small businesses and non-profit organizations. The definition of a small business is complex and defined by the US Small Business Administration (SBA). The SBA’s definition of a small business varies by business classification. The SBA does however state that most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million USD, will qualify as a small business. Universities are classed as non-profit organizations.

It is important to note, however, that an owner of a patent or patent application does not qualify for small entity status if he/she/it has assigned, granted, conveyed or licensed rights in a patent/patent application to an organization that would not qualify for small entity status (or the owner is under an obligation to do so).

Micro entity

To qualify for micro entity status an owner of a patent or patent application must qualify as a small entity and also fulfill a number of other requirements relating to being named as inventor on previous patent applications and gross income.

Getting it right

A patent may be unenforceable if small entity status or micro entity status has been improperly claimed, or if the USPTO has not been informed of a relevant change in status. Consequently, if you are claiming small entity status or micro entity status it is imperative that any relevant changes in your status (e.g. an increase in the number of employees to over 500) and of relevant changes in the status of your patent/patent application (e.g. the grant of a licence under your patent) is properly recorded.

If you would like to claim small entity status or micro entity status in respect of your patents/patent applications, or would simply like to know more, please feel free to contact us.