[Code of Federal Regulations]
[Title 37, Volume 1]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 37CFR1.27]

[Page 33-35]
 
              TITLE 37--PATENTS, TRADEMARKS, AND COPYRIGHTS
 
                         DEPARTMENT OF COMMERCE
 
PART 1--RULES OF PRACTICE IN PATENT CASES--Table of Contents
 
                      Subpart A--General Provisions
 
Sec. 1.27  Definition of small entities and establishing status as a small

entity to permit payment of small entity fees; when a determination of 
entitlement to 
          small entity status and notification of loss of entitlement to 
          small entity status are required; fraud on the Office.

    (a) Definition of small entities. A small entity as used in this 
chapter means any party (person, small business concern, or nonprofit 
organization) under paragraphs (a)(1) through (a)(3) of this section.
    (1) Person. A person, as used in paragraph (c) of this section, 
means any inventor or other individual (e.g., an individual to whom an 
inventor has transferred some rights in the invention), who has not 
assigned, granted, conveyed, or licensed, and is under no obligation 
under contract or law to assign, grant, convey, or license, any rights 
in the invention. An inventor or other individual who has transferred 
some rights, or is under an obligation to transfer some rights in the 
invention to one or more parties, can also qualify for small entity 
status if all the parties who have had rights in the invention 
transferred to them also qualify for small entity status either as a 
person, small business concern, or nonprofit organization under this 
section.
    (2) Small business concern. A small business concern, as used in 
paragraph (c) of this section, means any business concern that:
    (i) Has not assigned, granted, conveyed, or licensed, and is under 
no obligation under contract or law to assign, grant, convey, or 
license, any rights in the invention to any person, concern, or 
organization which would not qualify for small entity status as a 
person, small business concern, or nonprofit organization.
    (ii) Meets the standards set forth in 13 CFR part 121 to be eligible 
for reduced patent fees. Questions related to standards for a small 
business concern may be directed to: Small Business Administration, Size 
Standards Staff, 409 Third Street, S.W., Washington, D.C. 20416.
    (3) Nonprofit Organization. A nonprofit organization, as used in 
paragraph (c) of this section, means any nonprofit organization that:
    (i) Has not assigned, granted, conveyed, or licensed, and is under 
no obligation under contract or law to assign, grant, convey, or 
license, any rights in the invention to any person, concern, or 
organization which would not qualify as a person, small business 
concern, or a nonprofit organization, and
    (ii) Is either:
    (A) A university or other institution of higher education located in 
any country;
    (B) An organization of the type described in section 501(c)(3) of 
the Internal Revenue Code of 1986 (26 U.S.C. 501(c)(3)) and exempt from 
taxation under section 501(a) of the Internal Revenue Code (26 U.S.C. 
501(a));
    (C) Any nonprofit scientific or educational organization qualified 
under a nonprofit organization statute of a state of this country (35 
U.S.C. 201(i)); or
    (D) Any nonprofit organization located in a foreign country which 
would qualify as a nonprofit organization under paragraphs (a)(3)(ii)(B) 
of this section or (a)(3)(ii)(C) of this section if it were located in 
this country.
    (4) License to a Federal agency. (i) For persons under paragraph 
(a)(1) of this section, a license to the Government resulting from a 
rights determination under Executive Order 10096 does not constitute a 
license so as to prohibit claiming small entity status.
    (ii) For small business concerns and nonprofit organizations under 
paragraphs (a)(2) and (a)(3) of this section, a license to a Federal 
agency resulting from a funding agreement with that agency pursuant to 
35 U.S.C. 202(c)(4) does not constitute a license for the

[[Page 34]]

purposes of paragraphs (a)(2)(i) and (a)(3)(i) of this section.
    (b) Establishment of small entity status permits payment of reduced 
fees. A small entity, as defined in paragraph (a) of this section, who 
has properly asserted entitlement to small entity status pursuant to 
paragraph (c) of this section will be accorded small entity status by 
the Office in the particular application or patent in which entitlement 
to small entity status was asserted. Establishment of small entity 
status allows the payment of certain reduced patent fees pursuant to 35 
U.S.C. 41(h).
    (c) Assertion of small entity status. Any party (person, small 
business concern or nonprofit organization) should make a determination, 
pursuant to paragraph (f) of this section, of entitlement to be accorded 
small entity status based on the definitions set forth in paragraph (a) 
of this section, and must, in order to establish small entity status for 
the purpose of paying small entity fees, actually make an assertion of 
entitlement to small entity status, in the manner set forth in 
paragraphs (c)(1) or (c)(3) of this section, in the application or 
patent in which such small entity fees are to be paid.
    (1) Assertion by writing. Small entity status may be established by 
a written assertion of entitlement to small entity status. A written 
assertion must:
    (i) Be clearly identifiable;
    (ii) Be signed (see paragraph (c)(2) of this section); and
    (iii) Convey the concept of entitlement to small entity status, such 
as by stating that applicant is a small entity, or that small entity 
status is entitled to be asserted for the application or patent. While 
no specific words or wording are required to assert small entity status, 
the intent to assert small entity status must be clearly indicated in 
order to comply with the assertion requirement.
    (2) Parties who can sign and file the written assertion. The written 
assertion can be signed by:
    (i) One of the parties identified in Sec. 1.33(b) (e.g., an attorney 
or agent registered with the Office), Sec. 3.73(b) of this chapter 
notwithstanding, who can also file the written assertion;
    (ii) At least one of the individuals identified as an inventor (even 
though a Sec. 1.63 executed oath or declaration has not been submitted), 
notwithstanding Sec. 1.33(b)(4), who can also file the written assertion 
pursuant to the exception under Sec. 1.33(b) of this part; or
    (iii) An assignee of an undivided part interest, notwithstanding 
Secs. 1.33(b)(3) and 3.73(b) of this chapter, but the partial assignee 
cannot file the assertion without resort to a party identified under 
Sec. 1.33(b) of this part.
    (3) Assertion by payment of the small entity basic filing or basic 
national fee. The payment, by any party, of the exact amount of one of 
the small entity basic filing fees set forth in Secs. 1.16(a), (f), (g), 
(h), or (k), or one of the small entity basic national fees set forth in 
Secs. 1.492(a)(1), (a)(2), (a)(3), (a)(4), or (a)(5), will be treated as 
a written assertion of entitlement to small entity status even if the 
type of basic filing or basic national fee is inadvertently selected in 
error.
    (i) If the Office accords small entity status based on payment of a 
small entity basic filing or basic national fee under paragraph (c)(3) 
of this section that is not applicable to that application, any balance 
of the small entity fee that is applicable to that application will be 
due along with the appropriate surcharge set forth in Sec. 1.16(e), or 
Sec. 1.16(l).
    (ii) The payment of any small entity fee other than those set forth 
in paragraph (c)(3) of this section (whether in the exact fee amount or 
not) will not be treated as a written assertion of entitlement to small 
entity status and will not be sufficient to establish small entity 
status in an application or a patent.
    (4) Assertion required in related, continuing, and reissue 
applications. Status as a small entity must be specifically established 
by an assertion in each related, continuing and reissue application in 
which status is appropriate and desired. Status as a small entity in one 
application or patent does not affect the status of any other 
application or patent, regardless of the relationship of the 
applications or patents. The refiling of an application under Sec. 1.53 
as a continuation, divisional, or continuation-in-part application 
(including a continued prosecution application under Sec. 1.53(d)), or 
the filing of a reissue

[[Page 35]]

application, requires a new assertion as to continued entitlement to 
small entity status for the continuing or reissue application.
    (d) When small entity fees can be paid. Any fee, other than the 
small entity basic filing fees and the small entity national fees of 
paragraph (c)(3) of this section, can be paid in the small entity amount 
only if it is submitted with, or subsequent to, the submission of a 
written assertion of entitlement to small entity status, except when 
refunds are permitted by Sec. 1.28(a).
    (e) Only one assertion required. (1) An assertion of small entity 
status need only be filed once in an application or patent. Small entity 
status, once established, remains in effect until changed pursuant to 
paragraph (g)(1) of this section. Where an assignment of rights or an 
obligation to assign rights to other parties who are small entities 
occurs subsequent to an assertion of small entity status, a second 
assertion is not required.
    (2) Once small entity status is withdrawn pursuant to paragraph 
(g)(2) of this section, a new written assertion is required to again 
obtain small entity status.
    (f) Assertion requires a determination of entitlement to pay small 
entity fees. Prior to submitting an assertion of entitlement to small 
entity status in an application, including a related, continuing, or 
reissue application, a determination of such entitlement should be made 
pursuant to the requirements of paragraph (a) of this section. It should 
be determined that all parties holding rights in the invention qualify 
for small entity status. The Office will generally not question any 
assertion of small entity status that is made in accordance with the 
requirements of this section, but note paragraph (h) of this section.
    (g)(1) New determination of entitlement to small entity status is 
needed when issue and maintenance fees are due. Once status as a small 
entity has been established in an application or patent, fees as a small 
entity may thereafter be paid in that application or patent without 
regard to a change in status until the issue fee is due or any 
maintenance fee is due.
    (2) Notification of loss of entitlement to small entity status is 
required when issue and maintenance fees are due. Notification of a loss 
of entitlement to small entity status must be filed in the application 
or patent prior to paying, or at the time of paying, the earliest of the 
issue fee or any maintenance fee due after the date on which status as a 
small entity as defined in paragraph (a) of this section is no longer 
appropriate. The notification that small entity status is no longer 
appropriate must be signed by a party identified in Sec. 1.33(b). 
Payment of a fee in other than the small entity amount is not sufficient 
notification that small entity status is no longer appropriate.
    (h) Fraud attempted or practiced on the Office.
    (1) Any attempt to fraudulently establish status as a small entity, 
or pay fees as a small entity, shall be considered as a fraud practiced 
or attempted on the Office.
    (2) Improperly, and with intent to deceive, establishing status as a 
small entity, or paying fees as a small entity, shall be considered as a 
fraud practiced or attempted on the Office.

[65 FR 54659, Sept. 8, 2000]