Rules, Potential Savings & Risk of Small Entity Status
Potential Savings of Small Entity Status:
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 $4000 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].
The Filing:
To benefit from the lower fees accorded to small entities, the applicant must submit a Small Entity Declaration.
Advice on Small Entity Status:
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. Contact us here for more information.
Save money onpreviously filed applications:
Effective January 1, 2024 the threshold for “small” entities has moved from 50 to 100 employees.
Applicants who filed applications before December 31, 2023 as large entites and have 50-99 employees may change this status to small.
This change will reduce all subsequent government fees resulting in substantial savings.
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.
