When is One Entitled to Small Entity Status (Reduction of Various USPTO Fees by 50%)? Small entity status entitles Applicants who satisfy specified criteria to reduced government (United States Patent and Trademark Office – USPTO) fees of 50% for various items.
Requirements
To qualify as a small entity, it must be determind whether the Applicant “assigned, granted, conveyed, or licensed, and is under no obligation under contract or law to assign, grant, convey, or license, any rights in the invention” to a for-profit organization which has over 500 employees. The following entities would qualify for small entity status: 1) independent inventor; 2) small business with fewer than 500 employees; and a 3) nonprofit organization (e.g., a university). Further, in certain instances, “a license to a Federal agency resulting from a funding agreement with the agency pursuant to 35 U.S.C. 202(c)(4) will not preclude the proper claiming of small entity status.” (see MPEP 509.02 Small Entity Status – Definitions)
Reduced Fee Items
Entities which qualify for small entity status enjoy reduced USPTO fees as indicated hereafter:
“The fees which are reduced include patent application filing fees >including the basic filing fee, search fee, examination fee, application size fee, and excess claims fees< ( 37 CFR 1.16), extension of time, revival, and appeal fees ( 37 CFR 1.17), patent issue fees ( 37 CFR 1.18), statutory disclaimer fee ( 37 CFR 1.20(d)), and maintenance fees on patents ( 37 CFR 1.20). Other fees, established under section 41 (c) or *>(d)(2)< of Title 35, United States Code, are not reduced for small entities since such a reduction is not permitted or authorized by 35 U.S.C. 41(h)(1).” (MPEP 509.02)
Recognizing Change in Status
Small entity status is lost if the rights to an invention are transferred to an organization which does not qualify as a small entity. If an Applicant no longer qualifies as a small entity, they will not need to recognize this change in status until: 1) an issue fee/maintenance fee is due; or 2) a related, continuing, or reissue application is filed (see MPEP 509.03 – Claiming Small Entity Status). Upon the occurrence of any of the foregoing events, the Applicant is required to provide the USPTO with written notification of a loss of entitlement to small entity status. Further, the “submission of a request for continued examination (RCE) under 37 CFR 1.114 does not require a new determination or assertion of entitlement to small entity status since it is not a new application.” (MPEP 509.03)
Improper Small Entity Designation
A thorough investigation must be performed to ensure that the Applicant does indeed satisfy the requirements for such a designation. Establishing small entity status improperly may result in the loss of patent rights as such an activity may be considered as a fraud practiced or attempted upon the office.