Patenting Costs vs. Timeline

Patenting cost timelineNo less important than the volume of patenting costs, are their distribution over time. Successful patented inventions create significant return on investment, however, usually profit comes much later than the priority application is filed.

It should be clear, that in most cases, total patenting expence is way too high for independent inventors as well as for majority of small companies. Thus, many patent applicants consider attracting investment or selling licenses as soon as the technology is disclosed to the public.

We’ve heard western patent attorneys saying that they even don’t take independent inventors as customers, unless they have a proven track record of prior successful patenting…

However, patent timeline and patenting strategy can both be ‘tuned’, from the cost perspective, according to the financial situation of the patentee.

Patent owners, who are seeking to reduce risk, are usually choosing a patenting strategy, where they file cheap priority applications in countries without substantive examination. Such filing usually results in no more than 200 GBP in terms of official fees. In some countries, for example Lithuania, it results to around 100 GBP of official charges, yet compliance with the patenting strategy has to be maintained.

Key Components of A Patenting Strategy

After priority filing, one year of worldwide priority period is provided for filing of further applications. This period has to be properly used to attract investment or to begin selling patented products.
At the end of the priority period, there are just few :

  • filing of PCT application
  • filing of regional application (EP, AO, etc.)
  • filing of national applications in selected countries

A wise combination of the listed items can be and are usually implemented.

For applicants, seeking relativelly wide protection (6 countries or more) , PCT is a reasonable route. This step incurs costs equivalent to approx. 2000 to 3000 GBP. PCT deffers further, even bigger costs by another 1.5 years (if filed after national priority application) or 2.5 years (if filed as a priority application).

Cost Defferment Tactics
Initial Low Patenting CostsAs described above, the route of national priority and PCT application filing is convenient for cost defferment. Such strategy is often used by applicants, who need to raise funds or still need time to prove success of the patented product in order to decide and prepare itself for heavy investment in further patent prosecution.

The costs of patent specification drafting together with national priority application is the minimum ‘package’ in order to get started with patenting. In the figure (right) we show it in green column. It usually comes to around GBP 800 – 2000, depending of complexity of the invention and service providers chosen for patent specification drafting and application filing. The later step is quite easy to be done by the applicant her/himself. Therefore the cost can be reduced by another GBP 200.

Lower Total Costs
Lower Total Patenting CostsNational priority filing is not effective from the cost perspective, especially if the country, where the priority is to be filled in, is not in line with the overall patenting strategy.

Usually national priority patent application is filed in the country, where the applicant is national. That is usually done for number of reasons: easier to prepare specification in a native language, easier to prosecute with patent examiners speaking your own language, etc. However, filing in the homeland country might not match with the patenting strategy, therefore the cost, might be excessive.

So, what the applicants tend to do to reduce total patenting cost, but still want to validate the patent broadly? They tend to file PCT patent application as the priority.

In the figure (right) we drew first column quite high as to represent patent specification drafting and PCT filing costs. It might be equivalent to GBP 3000 to GBP 5000. Then the second year features just very low PCT prosecution costs; whereas third and fourth year represents entry into the national phase or regional phase (EURO-PCT) of PCT application.

Lowest Costs Strategy for Small Number of Countries

If the number of countries, where the patent has to be validated is relatively small (2-5) and no deferment of costs is desired, PCT application is of little use and would rather increase total patenting costs. Still, in this scenario, national priority application can be filed and it is rather common practice to do so.

Consultations 

If you are planning to file your first patent application, and need an unbiased assessment on commercial viability of your product from the perspective of invention patenting, contact us at info@ideaprotection.co.uk for short advice or exhaustive consultation.

Ways to reduce patenting cost

Expenses related to invention patenting are undoubtedly the biggest barrier for individual inventors willing to protect their ideas. Paradoxical, but young inventors often have more ideas and less money than their older colleagues. Therefore it is vital for them finding ways to reduce patenting expense or at least postpone the major part of patenting cost for the moment when the inventor finds proper funding resources or an angel investor.

Patent cost may be reduced or distributed over time in many different ways, the most common of them being:

  1. By personal participation in the patent drafting stage
  2. By choosing cost effective patent prosecutors
  3. By selecting proper patenting strategy
  4. By applying for governmental funds
  5. By raising investment

A combination of methods listed above can give dramatic savings up to 50%. In future posts we will analyze each component one-by-one.

 

IAM consultants, Ltd. are top tier IP consultanting and technical writing company. The patent professionals of IAM provide cost effective patent drafting services as well as consult on patenting strategy and prosecution. If you need help with IP matters, contact them now.

 

US patent drafting cost is so high!

Some time ago I was shocked reading an article from IPwatchdog about average hourly rates of US patent attorneys. According to the article, average attorney’s hourly rate varies from around $200 to more than $400. Thus preparation of a full patent application might start from around $5000 for the most simple invention and goes up to $20,000 and more for sophisticated descriptions of software and business model inventions!

Simple calculation shows that an experienced patent agent writes the most simple invention patent in something like 12-25 hours?!
I could not believe it – probably most of the time is spent for thinking and paper lifting. In my practice I’ve translated more than 300 patents of such respected companies like Siemens, Telia Sonera, Bosh, etc. I’ve found there no ‘magic’, which could be worth 10 kUSD or even 5 kUSD. The patents are well drafted with an average number claims equal to 7 or 8 (Siemens often likes 3-4 claims), well OK, telecom companies like Telia Sonera tend to have more claims for complex inventions covering system, method and novel use, typically 10-15. But one has always remember that each claim above 10 is charged additionally in each individual validation country as well as in the regional and PCT stages. Long time ago I have made my calculations, which showed that at certain amount of claims (like 15 or something) it is rather worth to split the application into two patents. It is at least more beneficial from cost perspective.

Slogan: Patent drafting at a cost of technical writing

The slogan written above represents our ideology. Drafting of patents is a specific way of technical writing. Although it has some specifics, especially in claim drafting, there are several paragraphs (like short description, detailed description and abstract) where parts of text can be copied with just some minor changes (this is teaching of seminars organized by FORUM Institut für Management, EPO and others) and prior art descriptions is nothing else than copied abstracts of the prior art patents…

We are doing both – technical writing and patent drafting and our pricing is similar for both types of writing. Although patents are much more difficult to learn, writing it self is not so much different. I would rather criticize the author of said article – writing a patent for electric switch is really not worth 5 kUSD, since it is a piece of work for not more than 8 hours without using any facilitating content management tools. Our service would be charged around $300-400 in total with 2 weeks of total turn around. That is basically 8-10 times more cost and time efficient comparing to the figures indicated in said article.

I would accept a challenge now

I would encourage an inventor, who was recently duly served by a US or UK patent agent  – to give the same initial information to us, so that we could draft the patent specification and claims, in order to compare to the work provided by our foreign competitors. The results could be a topic of one of the future posts.

US patent attorney charges are very high, therefore it is advisable for individual inventors to look for a patent draftsman outside US. Why not, for example, in Lithuania?

National Patent Application cost

One by one various patenting strategies will be reflected in separate posts with the perspective of patent cost. For the very beginning – the most simple patenting strategy, wherein the inventor is interested to obtain a patent only in a single country, in order to protect his or her business environment in that country.

Basically national applications are most simple patenting strategies with lowest cost, which differs only from country to country. Key parts of the patent expenditure in the case of solely national application:

  • Preliminary search (optional)
  • Patent specification and claim drafting (patent draftman’s fee)
  • Patent drawing preparation fee (patent draftman’s fee)
  • National application filing (attorney + official fee)
  • Search (and examination) fee (official fee)
  • Publication fee (official; sometimes – attorney)
  • Anual fees starting 3rd year after filing date (attorney + official)

In US the refference cost of the above indicated list would be from USD $5000 to $10000 for average inventions. In UK the price starts with approximatelly GBP 4000 and goes up to GBP 8000 or more. By using services of patent draftsman outside UK, one can save around GBP 2000 to 3500 per application. Saving occurs in specification and claim drafting part, which is undoubtedly the most expensive.

Please contact us for more detailed information on national patent application cost. All collected information will be formed into a patent cost calculator, hopefully by sommer.

Patent Cost Calculation

Patent costPatent cost includes:

  • Preliminary search fee
  • Specification and claim drafting fees
  • Drawing drafting fees
  • Patent application filing fees (attorney charge + official fee)
  • International search fee (official)
  • Response to official actions (attorney charge)
  • Publication fee (attorney charge + official fee)
  • Validation fees in designated countries (local patent attorneys’ charges + official fees)
  • Translation of claims and description to official local languages
  • Validation fees (attorney charge + official fee)
  • Annuity fees in each country (local attorneys’ charges + official fees)

Indicated above are just key components of the patent cost. Actual cost depends on the patenting strategy and might involve additional items, such as those related to examination opposition, change of claims, oral proceedings, etc.

The aim of this website is to provide comprehensive information, how the patent cost is calculated. In the future we plan adding a simple-to-use patent cost calculator. One has always calculate the patent cost and adjust the patenting strategy accordingly, to fit budgets, achieve effectiveness and plan expenses.