Can a subsidiary of a large entity qualify for small entity status?

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.

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.