Entity Designation For the purposes of paying fees, the USPTO permits inventors and applicants to specify an entity status. Depending upon entity status, one is entitled to a reduction of fees required for patent application processing. Prior to October 2011, there were only two entity types including 'small entity' and 'large entity'. The new America Invents Act introduced a third entity: the 'micro entity'. A micro entity will have a 75% reduction in most standard patent fees.
Micro Entity status for patent fees Micro-entity status may be claimed by an independent inventor 1) with a previous calendar year gross income of less than 3 times the national median household income (approx $50,000 in 2010), 2) who has previously filed no more than four non-provisional patent applications, not including those the inventor was obligated to assign to an employer. A micro-entity status may also be claimed by either a university or an inventor under an obligation to assign her inventions to a university. A micro-entity is entitled to a 75% reduction in many (but not all) of the patent fees payable to the USPTO during prosecution and examination of US patent applications. While there is no such thing as a free patent, the micro entity is certainly the next best thing.
Small Entity status for patent fees If you are not qualified as a micro entity, for example if you made over $150,000 last calendar year, or you filed five or more patent applications (provisional applications do not count), then you do not qualify for the micro entity status. However, if your company nevertheless has fewer than 500 employees, you do qualify for the 'small entity' status. Small entity similarly entitles you to a reduction in patent fees. Particularly, you will pay 50% of the standard fee for most transactions. Indeed, small entity will save many people a considerable amount of money in the patent process.
Large Entity status for patent fees Large corporations (i.e. greater than 500 employees) will be required to pay the standard patent fees. These are usually set each year and they are published on the USPTO fee page at the USPTO website.
Entity Status Updates If during the prosecution of a patent application there is a change in one's entity status, then appropriate declaration is made and one is required to pay the fees associated with the new status for the remainder of the prosecution.