I’m not an expert. I’m just a guy who likes to think about stuff.
For those of you who are interested in filing a patent application, be mindful of your filing status. There are three filing statuses to choose from: large entity, small entity, and microentity. Which entity are you? It depends.
Up until the passage of the America Invents Act (AIA), there were only two filing statuses: large entity and small entity. If you’re filing a patent application on behalf of a business that has over 500 employees, you’d file under large entity status. To be considered a small entity, you’d have to be one of the following:
- Independent inventors
- A small business of at most 500 employees
- A non-profit organization
Independent inventors who have not assigned their invention to a large entity qualify for small entity status. Universities and 501(c) organizations qualify as non-profit organizations. If a non-profit organization has not assigned its invention to a large entity, it can file as a small entity.
The AIA introduced a third filing status: the microentity. To file as a microentity, you either qualify based on experience and income or institute of higher learning. To qualify based on experience and income, you must meet the following criteria:
- The inventors must qualify as a small entity
- None of inventors can be a named inventor on more than four applications
- None of the inventors’ gross income from the year preceding the filing can exceed three times the median US income (currently $160,971)
- None of the inventors must be obligated to assign the invention to those with a higher gross income than three times the median US income
To qualify based on institute of higher learning, you must meet either of these criteria:
- The inventors’ employer is an institute of higher learning
- The inventors are obliged to assign their invention to an institute of higher learning
What’s the big deal with entity status? Money. Microentities pay half the patent office fees that small entities pay. Small entities pay half the patent office fees that large entities pay. If your entity status changes during the application process, you can file a change request asking for the new filing status.
Bottom line: File using the correct entity status. It pays to do so.