Large entities may be giants in the patent space, but that doesn’t mean there isn’t room for everyone. Small organizations could get in while paying less, but why stop at small when you can go smaller.
The U.S. Patent and Trade Office (USPTO) can recognize qualifying parties as micro entities, which allows them to pay one-quarter the fees of their larger counterparts. This can shave large costs off what can be a pricey process, but qualifying means meeting plenty of requirements.
The first step to micro classification is meeting the standards for a small entity, which itself allows for a 50% reduction in certain fees. You can make the grade if you’re all alone in your business, you’re applying on behalf of a non-profit or your business qualifies as a small business by the Small Business Association (SBA).
The SBA bestows the label of small business depending on a few explicit guidelines. Your total income plus the cost of goods sold make up your annual receipts, and that amount has to come in under limits specified for different industries. Your average number of employees will also enter scrutiny, and everyone counts, regardless of time worked. Lastly, any business affiliations can affect the final outcome. External control by non-qualifying companies or contractual agreements may put your classification in jeopardy.
Once you prove the size of your business, you’ll have to round out the list with a few additional points:
- A for-profit business
- Operating and located in the U.S.
- Independently owned and operated
- Not nationally dominant
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 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. Once the USPTO acknowledges your entity size, you could find the right fit in the system.