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FAQ: For patents, what's the cutoff for Small Entity status?

Postby Work2XL » Thu Nov 01, 2007 3:49 pm

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Location: Denver
My dilemma. To get a bank loan for my company (S-Corp) I first need to file the articles of incorporation. In doing so, does that remove my status as a Small Entity when filing a PPA and/or RPA? What happens if you change status between filing a PPA and filing the RPA. Can I file as a small entity if I personally am the sole inventor and I don't assign rights to my corp.? Can I assign rights to a corp. at a later date? How expensive is it? How hard to do is it?


Postby Scrupulous » Fri Nov 02, 2007 1:04 pm

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This was taken from Title 13...

    § 121.802 What size standards are applicable
    to reduced patent fees programs?
    A concern eligible for reduced patent
    fees is one:
      (a) Whose number of employees, including
      affiliates, does not exceed 500
      persons; and
      (b) Which has not assigned, granted,
      conveyed, or licensed (and is under no
      obligation to do so) any rights in the
      invention to any person who made it
      and could not be classified as an independent
      inventor, or to any concern
      which would not qualify as a non-profit
      organization or a small business concern
      under this section.

It basically says that the combined interest, at the time of filing, cannot exceed 500 employees, if non-profits are not involved. For most people here, this is well beyond their scope. I would say 99% of all independent inventors qualify as small entities.

It can get a little dicey for those who have entered into some agreement prior to filing. This may include pre-employment agreements. See Hey, can my employer gank me for my invention??!

An older standard was based on yearly income generated by the applicant (where $1,000,000 was the cut-off, I believe).