Patent Law FAQ

The qualification of a subsidiary for small entity status depends on several factors. According to the MPEP:

A business concern or organization is affiliates of another concern or organization if, directly or indirectly, either one controls or has the power to control the other, or a third party or parties controls or has the power to control both.

This means that:

• If a subsidiary is controlled by a large entity, it generally cannot claim small entity status.
• The control can be direct (e.g., majority ownership) or indirect (e.g., through contractual arrangements).
• Even if the subsidiary meets the size standards on its own, affiliation with a large entity typically disqualifies it from small entity status.

However, there may be exceptions in complex corporate structures. It’s advisable to consult with a patent attorney to evaluate your specific situation and determine eligibility for small entity status.

To learn more:

• subsidiary
• large entity
• small entity status
• affiliation