Small Entity Status

Rules, Potential Savings & Risk

Potential Savings:

Canadian government patent fees depend on the size of the applicant entity, which may be either a “small entity” or “large entity”.

Over the life of a patent, under the current schedule of government fees, a large entity will pay well over $3000 more in government fees than a small entity.

Risk:

The consequences for incorrectly claiming small entity status are potentially very severe: if fees are paid on a small entity basis when large entity fees should have been paid, the patent may be invalidated. In cases of doubt, this will likely become an issue in any infringement litigation brought by the patent owner thereby increasing the cost of the litigation far more than the potential savings.

The Test:

An applicant is a large entity if at the date of filing the Canadian application, the applicant:

    • is controlled directly or indirectly by an entity, other than a university, that employs more than [50 employees – up to December 31, 2023 – or 100 employees from January 1, 2024]; or

 

  • has transferred or licensed or has an obligation, other than a contingent obligation, to transfer or license any right in the invention to an entity, other than a university, that employs more than [50 employees – up to December 31, 2023/ 100 employees from January 1, 2024].

Note: Unlike the United States, in Canada this is a “one and done” test. It is the size of the applicant as an entity at the time of filing of the application that matters, and entity size does not change thereafter during the life of the application/patent.

The Filing:

To benefit from the lower fees accorded to small entities, the applicant must submit a Small Entity Declaration.

Advice:

When the facts are clear, the applicant can choose to proceed on a small entity basis. If there is any doubt, we strongly recommend proceeding on a large entity basis.

Our Policy:

If you qualify, we will prepare the Small Entity Declaration for you for signature.  However, until we have received a signed Small Entity Declaration we will treat the applicant as a large entity.  Thus, if you want to claim Small Entity Status when filing the application we must have received the signed Declaration before the filing.

 

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