Wednesday, November 28, 2012

Patent Costs Timetable for the Independent Inventor - Be Prepared Before You Draft!


As an experienced patent professional and a proud father of nine children, I like to compare writing a patent to having a baby. Like having a baby, the patenting process starts with great difficulties and expenses, and, like children, the difficulties and expenses increase over time. Like children, proper preparation before you start can save a lot of money and heartache later.

Many applicants invest significant money into a patent's application in multiple countries and later realize that they don't have enough money to prosecute examination and are forced to abandon the applications. The result is loss of all money investments, and loss of the idea (which has been published and becomes public domain).

In Short: before you start writing a patent application: 1) make sure that you are sure what you are patenting and that it is really a valuable idea; 2) make a thorough patentability search (see our previous blog); 3) plan what you are going to do with the idea sell/license/or market; 4) Make a cost timeline for Searching/Drafting/Prosecuting/Litigation; and 5) plan how you are going to get the money to cover costs.

The amount of time and cost of patenting an idea is variable. It is possible (and sometimes advantageous) to draw out the patenting process. It is also possible (and sometimes advantageous) to hurry the process. Acquiring a patent in a foreign country is generally much more expensive than acquiring a patent in the US. Patenting strategies and foreign filings are complex issues which I will not discuss here.

Before you put out a lot of money on patents, plan for upcoming expenses and be prepared to pay. Request from your attorney/agent an estimate of costs before you agree to any work. Make sure you know what is and is not covered in the estimate. If there are technical errors or corrections to the drawings, who will pay? Do you have to pay extra for filing the IDS (Information Disclosure Statement)? Herein I present a rough cost estimate for acquiring a new patent (in the United States):

1) Make a thorough prior art search. To do a proper search you need to have a clear idea of your invention. You should start by doing a search yourself and if you remain convinced that your idea has value hire a patent agent/attorney to do a more thorough search. Beware of cheap, one-shot searches. They are almost never sufficient. (More detailed on searching and some on-line resources are available in my previous blog.)

2) File a US provisional application: minimum cost = $100 USPTO fee. I recommend writing your own description of your invention and giving it to a patent agent to check for enablement. You can file it yourself or have your agent file. By the end of a year the provisional expires and you must file a full application to preserve your rights. Make use of that year. Be sure that well before the end of the year you have your invention in a final working form and you have enough money for the filing the full application.

3) Draft and file a US application. The USPTO filing fee is around $500, you may file yourself, but drafting a patent is a tricky process and not recommended for the uninitiated. Law firms charge from $5000 to $15,000 to draft a typical application. Individual patent agents can be found who will often do a better job at a lower price. You can help your attorney/agent by supplying a clear description of the invention. You can save money by supplying your attorney with patent quality drawings (BLACK and WHITE no color no gray shading) (for more on how to make drawings see How to Make Patent Drawings by David Pressman). There are numerous good books for the layman on patent drafting e.g. Patent It Yourself by David Pressman, and The Patent Writer by Bob DeMatteis et al.

A word for the wise It is tempting to save money on patent drafting, but it is not recommended. A poorly drafted patent may be invalid or unenforceable. A clear, concise, well written application will save time and money during examination. Also a well written application is more likely to attract investors.

4) Patent examination (prosecution) costs are extremely variable and hard to predict. In the best case scenario, after 1-3 years a patent undergoes examination entailing 2 to 4 office actions costing from $2000 to $4000 each for a total of about $10,000 to $20,000. Be aware, if you think your patent is worthwhile, you need to have much more money available, because sometimes it is necessary to apply for an RCE (request for continued examination) a divisional application or an appeal of a decision of the examiner. In such cases the costs could be considerably more.

After an application is allowed, you must pay an issuance fee of about $1500 and maintenance fees at 3.5, 7.5 and 11.5 years after grant.

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