For many years, the US Patent Office has provided a 50% fee discount to qualified “small entities.” That option was expanded as part of the AIA to now also include “micro entities” who receive a 75% fee discount. The result is a potential savings of thousands of dollars during the life of a patent. Small entities can be fairly large – business concerns having up to 500 employees. Universities and 501(c)(3) nonprofit organizations also qualify. However, a patent that is licensed (or obligated to license or assign) to a larger entity does not qualify for the fee reduction. For micro entity status, the applicant must qualify as a small entity and then either meet the income/experience limitation (~<$150,000 in household income) or else be assigned (or obligated to be assigned) to a university or qualifying institute of higher learning. Although this fee reduction is important for small business interests, attorney fees still tend to constitute the majority of patenting costs (especially prior to issuance).
The chart below shows the percentage of recent patent applications filed by each entity type.