What Does it Mean to be a “Small Entity” or a “Micro Entity”?

USPTO patent fees are significantly reduced for qualifying small and micro entities — savings of 60% and 80% respectively.

One of the most important — and often overlooked — aspects of filing a patent application is determining your entity status. The USPTO charges different fee rates depending on whether you qualify as a large entity, small entity, or micro entity. Getting this right can save you thousands of dollars over the life of your patent.

Fee Comparison: Large Entity vs. Small Entity vs. Micro Entity

Here is how entity status affects two of the most common USPTO fees (as of April 2026):

These are government fees only and do not include attorney fees. Additional fees apply throughout prosecution, including issue fees and maintenance fees — all of which are also discounted for qualifying entities.

Large Entity

The default status at the USPTO is large entity. If you do not qualify as a small or micro entity, you pay the full government fee rate. Large entities include companies with more than 500 employees and any applicant who has licensed or assigned rights to a large entity.

Small Entity

A patent applicant qualifies as a small entity if they are one of the following:

• An individual person
• A small business with 500 or fewer employees (including affiliates)
• A nonprofit organization

In addition, the applicant must not have assigned, licensed, or otherwise conveyed rights in the invention — or be obligated to do so — to any entity that would not itself qualify as a small entity. Small entity status provides a 60% discount on most USPTO fees.

Micro Entity

Micro entity status provides an 80% discount on most USPTO fees. To qualify, an applicant must first qualify as a small entity, and then meet additional requirements under one of two bases:

Gross Income Basis

• Each applicant and inventor must qualify as a small entity
• Neither the applicant nor any inventor has been named as an inventor on more than 4 previously filed U.S. nonprovisional patent applications
• Neither the applicant nor any inventor had a gross income exceeding $251,190 in the preceding calendar year (current limit as of September 2025)
• Neither the applicant nor any inventor has assigned or licensed — or is obligated to assign or license — rights to any entity exceeding that income limit

Institution of Higher Education Basis

• The applicant’s employer is a U.S. institution of higher education and the applicant receives the majority of their income from that employer, or
• The applicant has assigned or is obligated to assign ownership rights to such an institution

Important Considerations

• Status must be reassessed each time a fee is paid. Entity status is not set-and-forget — you must confirm you still qualify every time you pay a USPTO fee.
• The micro entity income limit changes annually, typically in September or October, based on median household income data from the U.S. Census Bureau.
• Provisional applications do not count toward the 4-application limit for micro entity purposes.
• Applications assigned due to prior employment generally do not count toward the 4-application limit.
• Incorrectly claiming a discounted status can have serious consequences, including issues with patent enforceability. When in doubt, consult a registered patent attorney.

Frequently Asked Questions

What happens if my company grows past 500 employees?
You lose small entity status and must notify the USPTO before paying your next fee at the higher rate. You cannot simply start paying the large entity rate without filing written notification.

Can I switch from micro entity to small entity status?
Yes. If you no longer qualify as a micro entity — for example, because your income exceeded the limit or you filed a 5th application — you must file a notification of loss of micro entity status and pay fees at the small entity rate going forward.

Do foreign applicants qualify for small or micro entity status?
Yes. Small entity status is available to individuals and small businesses anywhere in the world, not just in the United States.

Does the 4-application limit include design patents?
Yes. U.S. nonprovisional utility and design patent applications both count toward the 4-application limit. Provisional applications, foreign applications, and PCT applications do not count.

Not Sure Which Status Applies to You?

Determining the correct entity status is an important part of the patent filing process. I help inventors and businesses assess their status and file their applications correctly from the start.

Contact me to discuss your situation or get started with a patent filing.