The US Patent and Trademark Office allows some patent applicants to file and prosecute patent applications with reduced government fees by declaring “Small Entity” status.  Government fees may be further reduced for Small Entities further qualifying for “Micro Entity” status.  While declaring Small Entity or Micro Entity status may reduce costs for obtaining or maintaining a patent asset, patent applicants should be aware that, in some circumstances, the consequences of an improper claim of Small Entity or Micro Entity status can be severe and can include a patent being deemed unenforceable.  

A “Small Entity” may include an individual inventor who has not 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.  An inventor or other individual who has transferred some rights, or is under an obligation to transfer some rights in the invention to one or more parties, can also qualify for Small Entity status if all the parties who have had rights in the invention transferred to them also qualify for small entity status (either as a person, small business concern, or nonprofit organization). 

Parties claiming Small Entity status should be advised that Small Entity status is lost if the patent application or patent is subsequently assigned, granted, conveyed, or licensed (or becomes under an obligation to assign, grant, convey, or license) to an entity that does not qualify as a small entity, such as an entity with 500 or more employees (a so-called “large entity”), which may include any affiliates under the control of that entity.  Accordingly, parties claiming Small Entity status should monitor any changes or activities that may impact Small Entity status eligibility.

Unless a client explicitly requests that we pay Small Entity fees, we will automatically pay large entity fees.  If a client requests that we pay Small Entity fees, we will send the client a form concerning eligibility to pay Small Entity fees.  It is essential that the client review the form with care and that the client informs us immediately if there are any changes that may relate in any way to the client’s eligibility to claim Small Entity status.  Further, should a client elect to claim small entity status we will bill administrative charges associated with tracking and sending reminders to the client regarding the need to monitor whether the client continues to qualify for such status.