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USPTO guide

Small entity vs micro entity status

By , Co-founder, PatentAssist.ai
Updated

Entity status decides whether you pay the full USPTO fee, 40% of it, or 20% of it. Over the life of a utility patent, that is the difference between $17,760, $7,034 and $3,552 in official fees. Status is also one of the easiest things to get wrong: one license, one co-inventor, or one year of higher income can change it. This guide sets out the rules in 37 CFR 1.27 and 1.29, the traps, how to fix a mistake, and a checker.

Quick answer

  • Small entity: 60% off. Individuals, businesses with up to 500 employees (with affiliates), nonprofits and universities, if no right in the invention has gone, or must go, to a larger party.
  • Micro entity: 80% off. A small entity where every applicant and inventor had gross income of no more than $262,380 last year and is named on no more than four earlier applications, or one with a qualifying university link.
  • Forms: small entity needs only a written assertion. Micro entity needs form SB/15A (income) or SB/15B (university).
  • Mistakes: good-faith errors are fixed by paying the deficiency (37 CFR 1.28(c), 1.29(k)).

Side by side

Small entity and micro entity status compared
Small entity Micro entity
Discount on most fees 60% (35 U.S.C. 41(h)(1)) 80% (AIA section 10(b), as amended by the UAIA)
Who Individuals, businesses with 500 or fewer employees including affiliates, nonprofits and universities Small entities that also meet the income and application limits, or have a university link
Income limit None $262,380 gross income in the previous calendar year, for each applicant and inventor (gross income basis)
Earlier applications No limit No more than 4 earlier US nonprovisional applications per inventor and applicant (gross income basis)
How to claim Written assertion, or paying the exact small entity basic filing fee Signed certification: form PTO/SB/15A or SB/15B
When status is checked At filing, and again when the issue fee and each maintenance fee are due On the date of every fee payment
Rule 37 CFR 1.27 37 CFR 1.29; 35 U.S.C. 123

Who is a small entity (37 CFR 1.27)

37 CFR 1.27(a) recognizes three kinds of small entity:

  • A person: an inventor or other individual.
  • A small business concern: one whose employees, including affiliates, do not exceed 500 persons (13 CFR 121.802).
  • A nonprofit: a university or other institution of higher education in any country, a 501(c)(3) organization, or a nonprofit scientific or educational organization under US state law or the law of another country.

In each case, the entity must not have assigned, granted, conveyed or licensed any rights in the invention to anyone who would not qualify as a small entity, and must not be under an obligation to do so. Every party with rights has to qualify. There is one exception: a license to the US Government under certain funding statutes does not count, if the application is filed and maintained at no expense to the Government (1.27(a)(4)).

How to claim it. Any signed written assertion that you are entitled to small entity status will do; no form or set wording is required (1.27(c)(1)). Paying the exact small entity basic filing fee also counts as the assertion, but paying any other fee at the small entity rate does not (1.27(c)(3)). The assertion must be made again in every continuation, divisional and reissue (1.27(c)(4)).

When it is checked. Once established, small entity status lasts until the issue fee or a maintenance fee falls due. At that point you must decide afresh whether you still qualify. If you do not, file a notice of loss of entitlement before or with that payment; paying the full fee alone is not notice (1.27(g)).

Refunds. If you paid a full fee and only then realized you were a small entity, you have 3 months from the payment to assert status and ask for the difference back. That period cannot be extended (37 CFR 1.28(a)).

Who is a micro entity (37 CFR 1.29)

There are two routes, both set out in 37 CFR 1.29 and 35 U.S.C. 123. Both require small entity status first, without relying on the government license exception.

Gross income basis (form PTO/SB/15A)

The applicant certifies that no applicant, inventor or joint inventor:

  • is named on more than four previously filed patent applications. Foreign applications, provisionals and PCT applications for which the US basic national fee was not paid do not count, and nor do applications assigned because of a previous employment;
  • had gross income above $262,380 in the calendar year before the fee is paid. Gross income has the meaning in section 61(a) of the Internal Revenue Code, and income in another currency is converted at the IRS average exchange rate for that year;
  • has assigned, granted or conveyed a license or other ownership interest in the application to an entity whose gross income was over that limit, or is obliged to.

The limit is three times the median household income last reported by the Census Bureau. It is $262,380 for fees paid from September 15, 2026, up from $251,190 (USPTO). For a fee paid in November 2026, the test is your 2025 income against $262,380.

Institution of higher education basis (form PTO/SB/15B)

The applicant certifies that its employer, from which it gets the majority of its income, is an institution of higher education as defined in 20 U.S.C. 1001(a), or that it has assigned, or is obliged to assign, a license or ownership interest in the application to such an institution (1.29(d)). There is no income or application limit on this route, but small entity status is still required.

Losing it. Micro status must be true on the date of each payment. Before or when paying any fee after you stop qualifying, file a notification of loss (the USPTO publishes form PTO/SB/460). That notice does not end small entity status unless it says so (1.29(i)).

Applicants outside the US. Since July 20, 2026, applicants and patent owners domiciled outside the United States must be represented by a registered patent practitioner (91 FR 13510), and the USPTO says the practitioner signs the micro entity certification.

Entity status checker

Answer for every applicant and inventor on the application, and anyone who holds rights in it.

Does the business have 500 or fewer employees, counting affiliates?
Has anyone assigned or licensed rights in the invention, or agreed to, to a party that is not a small entity (ignoring a US Government funding license)?
Did every applicant, inventor and joint inventor have gross income of $262,380 or less last calendar year?
Is each of them named on four or fewer earlier US nonprovisional applications (not counting ones assigned to a former employer)?
Has anyone licensed or assigned the application, or agreed to, to an entity with gross income over $262,380?
Is the applicant's main employer a university or college, or has the application been assigned (or must it be) to one?

A guide to the rules, not a determination. You certify status yourself and answer for it; if in doubt, ask a registered practitioner or pay the higher fee.

License and assignment traps

A license to a big company

An individual inventor who grants even a non-exclusive license to a company with more than 500 employees is no longer a small entity for that invention. Status is lost for licenses and assignments, and also for obligations to grant one, such as an option in a term sheet or an employment contract that requires assignment.

Affiliates count

A 40-person startup whose majority investor controls a 2,000-person group may fail the 500-employee test, because affiliates' employees are counted (13 CFR 121.802).

One co-inventor over the limit

On the gross income basis, every inventor, joint inventor and applicant must be at or under $262,380. One senior co-inventor above it removes micro status for everyone.

The applicant company's income

When a company is the applicant, its own gross income is tested against the same limit. A small but profitable company can be a small entity and still fail micro.

Status changes between payments

Micro status must be true on the day each fee is paid. If you sign a license with a large company, the next payment must be at the correct rate and you must file a notice of loss of status first.

University spin-outs

The higher education basis covers an applicant whose main employer is a university, or who has assigned or is obliged to assign the invention to one. It does not cover a spin-out that has taken an exclusive license and then sublicensed to a large company: that sublicense ends small entity status.

What the discount is worth

The small entity reduction has been 60% since the Unleashing American Innovators Act of 2022 raised it from 50%, and the micro entity reduction is 80% (35 U.S.C. 41 and notes). A small entity filing a utility application in Patent Center also pays the micro rate on the basic filing fee. Some fees, such as the terminal disclaimer fee and the IDS size fees, have no discount at all.

USPTO fees by entity size, in US dollars
Fee Large Small Micro
Provisional filing fee $325 $130 $65
Utility basic filing fee small entity pays $70 if filed in Patent Center $350 $140 $70
Utility search fee $770 $308 $154
Utility examination fee $880 $352 $176
Each claim over 20 $200 $80 $40
Each independent claim over 3 $600 $240 $120
Request for continued examination, first $1,500 $600 $300
Utility issue fee $1,290 $516 $258
Maintenance fee, 3.5 years $2,150 $860 $430
Maintenance fee, 7.5 years $4,040 $1,616 $808
Maintenance fee, 11.5 years $8,280 $3,312 $1,656
Terminal disclaimer no entity discount $183 $183 $183

Worked example: a utility patent filed in Patent Center with 20 claims, granted, and kept for its full term costs $17,760 in USPTO fees at the large entity rate, $7,034 as a small entity and $3,552 as a micro entity. Most of the gap is in the maintenance fees, which is why status has to be rechecked when they fall due. The full schedule is on USPTO patent fees, and the wider budget in how much a patent costs.

Correcting a mistake

If you claimed small entity status in good faith and later find you were not entitled to it, the error is excused once you pay the deficiency under 37 CFR 1.28(c). The rule is strict about form:

  • one separate submission for each application or patent;
  • the deficiency is the full fee in force on the date you pay it, minus the small entity amount you paid, so a fee increase in the meantime raises it;
  • an itemization of each fee: its type, the current full amount, the amount and date of the small entity payment, the deficiency for that fee, and the total.

A submission that does not comply gets either a processing fee charge or a one-month, non-extendable period to fix it. Paying the deficiency also counts as notice of loss of status (1.28(d)). Micro entity errors are corrected the same way under 1.29(k), where the deficiency is measured against the small or large entity fee, whichever applies.

Bad faith is a different matter. Claiming status to deceive the Office is treated as fraud (1.27(h), 1.29(j)), and since the UAIA an entity found to have falsely asserted a fee reduction can be fined at least three times the amount it failed to pay, unless it shows the assertion was made in good faith (35 U.S.C. 41(j)). Fix errors as soon as you find them; an unpaid deficiency can surface years later when the patent is asserted.

Keep the claim count where the fees stay low

Entity status sets the rate; the application sets how many fees you pay at it. PatentAssist.ai drafts claims and the specification in USPTO format from your disclosure, so you can see the claim and independent claim count, and the length, before anything is filed. It does not decide your entity status; that certification is yours.

Try drafting free for 7 days How to patent an idea

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Small and micro entity status: frequently asked questions

What is the difference between small entity and micro entity?

A small entity (37 CFR 1.27) is an individual, a business with 500 or fewer employees including affiliates, or a nonprofit, that has not licensed or assigned the invention to a larger party. It pays 60% less than a large entity. A micro entity (37 CFR 1.29) is a small entity that also meets income and application limits, or has a qualifying university link, and pays 80% less.

What is the micro entity income limit for 2026?

$262,380 of gross income in the previous calendar year, for fees paid from September 15, 2026. It was $251,190 from September 9, 2025 to September 14, 2026. The limit is three times the median household income published by the Census Bureau, and the USPTO updates it each year.

How do I claim micro entity status?

File a signed micro entity certification: form PTO/SB/15A on the gross income basis or PTO/SB/15B on the institution of higher education basis. It has to be filed in each application, and it must be true on the date of each fee you pay at the micro rate. If you are domiciled outside the United States, your registered practitioner signs it.

Does a provisional application count toward the four-application limit?

No. Provisional applications, foreign applications, international (PCT) applications for which the US basic national fee was not paid, and applications you assigned because of a previous employment do not count toward the limit of four earlier applications (37 CFR 1.29(a)(2) and (b)).

What happens if I paid small or micro entity fees by mistake?

If the status was claimed in good faith, you can correct it under 37 CFR 1.28(c) (small entity) or 1.29(k) (micro entity) by paying the deficiency: the difference between the correct fee on the date you pay and the amount you paid, with an itemized list, in a separate submission for each application or patent. A false assertion made without good faith can bring a fine of at least three times the unpaid amount under 35 U.S.C. 41(j).

Can a company be a micro entity?

Yes, if it qualifies as a small entity, its gross income for the previous year was not over $262,380, every inventor also meets the income and application limits, and nobody has licensed or assigned the invention to an entity over the limit. Many early-stage startups qualify; most companies with revenue do not.

Sources: 37 CFR 1.27, 1.28 and 1.29; 13 CFR 121.802; 35 U.S.C. 41 and 123; USPTO micro entity gross income limit; USPTO fee schedule; 91 FR 13510. Checked October 26, 2026. This page is general information, not legal advice.