Legal Definitions - small entity

In the context of U.S. patent law, a small entity is a classification that allows certain applicants to pay significantly reduced fees to the U.S. Patent and Trademark Office (USPTO) when applying for, issuing, and maintaining patents. This status is designed to support individual innovators, smaller businesses, and non-profit organizations by making the patent process more affordable.

To qualify as a small entity, an applicant must fall into one of the following categories:

• An individual inventor who is applying for a patent on their own behalf.
• A small for-profit business concern that, including any affiliates, has no more than 500 employees.
• A university.
• A non-profit organization that meets the criteria of a 501(c)(3) organization under the Internal Revenue Code.

It's important to note that if a patent granted under small entity status is later assigned or licensed to a "large entity" (a for-profit organization with more than 500 employees), the reduced fee status may be lost, and standard fees would then apply.

Here are some examples illustrating how the term small entity applies:

• Example 1: Individual Inventor

  A retired engineer, Dr. Anya Sharma, spends her evenings in her home workshop developing a novel, energy-efficient water filtration system. She decides to seek patent protection for her invention. As an individual inventor applying for the patent in her own name, Dr. Sharma qualifies as a small entity. This status allows her to pay lower application, examination, and maintenance fees to the USPTO, making the patent process more accessible for her personal project.

• Example 2: Small Business Concern

  "GreenTech Solutions Inc." is a startup company with 45 employees that has developed a groundbreaking biodegradable plastic alternative. The company wants to patent its manufacturing process and the material itself. Since GreenTech Solutions Inc. has fewer than 500 employees and is not affiliated with any larger corporations, it qualifies as a small entity. This enables the company to significantly reduce the costs associated with obtaining and maintaining its patents, freeing up capital for research and development.

• Example 3: University Research

  Researchers at the fictional "Midwest State University" discover a new compound that shows promise in treating a rare autoimmune disease. The university's technology transfer office decides to patent this discovery to facilitate its development into a marketable drug. Because universities are specifically recognized as small entities under patent law, Midwest State University can file and maintain its patent applications for the new compound at a reduced cost, supporting academic innovation and the public good.