What Does it Mean to be a “Small Entity” or a “Micro Entity”?
Small Entity – The “default” entity status at the USPTO is to be a large entity. But a patent applicant can be a “small entity” if the patent application owner is a person, a non-profit organization, or a company having 500 or less employees. In addition, the patent cannot be assigned, conveyed, licensed (or even a legal obligation to license) to an entity that itself would not qualify as a “small entity.” Qualifying as a “small entity” allows the applicant to pay most government fees at the rate of 50% of the “large entity” rate.
Micro Entity – A patent applicant can qualify as a “micro entity” if they qualify as a small entity, and also if they have filed 4 or less previous patent applications in their life and they make less than three times the median household income for the preceding year. (As of 2020, that figure is currently USD $189,537/year.) In addition, the applicant must have not assigned, granted, conveyed or licensed the rights in the patent to an entity that would not qualify as a micro entity itself. In addition, there are exceptions to the “4 or less” rule.
An applicant can also qualify as a “micro entity” if the applicant’s employer is an institution of higher education from whom the applicant receives most of his or her income and the applicant has assigned or licensed (or is obligated to do so) the patent to the institution of higher education.
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