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Recognition as a micro entity can be a big deal

by | Feb 20, 2020 | Uncategorized

Large companies may be giants in the patent space, but that doesn’t mean there isn’t room for everyone when it comes to government fee amounts at the US Patent Office. Small organizations could get in while paying less, but why stop at small when you can go smaller?

As of 2013, the U.S. Patent and Trade Office (USPTO) recognizes qualifying parties as “micro” entities, which allows them to pay one-quarter the fees of their larger counterparts. This can shave some of the costs off what can be a pricey process, but qualifying means meeting several requirements.

Downsizing business

The first step to micro classification is meeting the standards for a small entity, which itself allows for a 50% reduction in most official fees. You can make the grade if you’re an independent inventor, you’re applying on behalf of a non-profit, or your business qualifies as a small business by the Small Business Association (SBA).

Shrinking standards

The SBA bestows the label of small business depending on a few explicit guidelines. Your average number of employees must be less than 500, and everyone counts, regardless of time worked. Also, any business affiliations can affect the final outcome. External control by non-qualifying companies or contractual agreements may put your classification in jeopardy.

Even smaller allowances

If you do classify as a small entity, you may be able to take the next level down. Micro entities pay even less in fees, as long as you meet even finer criteria on top of the small entity standards:

  • Not named on more than four previous US patent applications
  • Gross income less than three times the median household income of the previous year
  • Under no requirement to hand over ownership to an entity that doesn’t meet income rules

You’ll need to show that you are indeed worthy of the classification, and that can be tricky, especially when you’ve got external ties of any form or associate with a university. But if you do qualify, the savings can be very helpful.