How does licensing affect small entity status for patent fees?

This page is an FAQ based on guidance from the Manual of Patent Examining Procedure. It is provided as guidance, with links to the ground truth sources. This is information only: it is not legal advice.

Licensing can significantly impact small entity status for patent fees. The MPEP provides specific guidance on this matter:

Rights conveyed by an applicant or patentee to a Government agency are not considered to be license for purposes of this paragraph. A Government agency includes any agency of the Federal Government or military department of the Government.

This means that licensing to a government agency does not affect small entity status. However, licensing to other entities can impact your status:

• If you license rights to a large entity, you may lose your small entity status.
• Exclusive licenses to large entities typically disqualify you from small entity status.
• Non-exclusive licenses may not affect your status, depending on the terms.

It’s crucial to review any licensing agreements carefully and consult with a patent attorney to determine how they might affect your small entity status.