Large, small and micro are the types of entity, depending on which an applicant will pay a different fee to the USPTO. If each party holding rights in the invention qualifies as a small entity (e.g., independent inventor, a small business, or a nonprofit organization), federal fees for filing, searching, examining, issuing, appealing, and maintaining patent applications and patents may be reduced by half. Only applicants qualifying as a small entity may potentially qualify for micro entity status discussed below. In other words, qualification for small entity status is a baseline requirement for qualifying for the micro entity discount. A third party is not eligible for the micro entity discount.

To qualify as a small entity for purposes of paying patent fees, you must be an individual, a small business concern having no more than 500 employees with affiliates, a university, or a nonprofit organization. If you or your business qualify as a small entity, you need only to verify that status by executing a declaration when paying the fee. An exception to this filing status is when you are obligated to license or assign the patent to a bigger entity that does not qualify as a small entity, such as a multinational corporation, then you could not claim small entity status.

In order to qualify as a micro entity, the applicant must be a small entity and must also meet the micro entity criteria. That is, the applicant has not been named as the inventor on a total of more than four utility patents (regular utility patents, as opposed to provisional patent applications), design patents, or plant patents. This also does not include certain international applications and applications owned by a previous employer. In addition, the applicant must have had a gross income in the previous year of less than three times the median household income reported by the Bureau of the Census. In the event that the patent application has been assigned, the assignee must have had a gross (not net) income of less than three times the U.S. median household income. An applicant may refer to Micro Entity Status Gross Income Limit. If the applicant is a foreign resident and wants to know the gross income in local currency, please refer to Yearly Average Currency Exchange Rate Translating Foreign Currency into U.S Dollars.