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IP Blog / Your ultimate guide on how to manage the high costs of obtaining patents

Your ultimate guide on how to manage the high costs of obtaining patents

The rights afforded to inventors through patent protection make Patent Filing a very valuable proposition for companies of all sizes. However, the process of obtaining a patent is often fraught with fees and costs that can be intimidating. While experience is the best teacher, any inventor should understand a few things before filing a patent application.

1. Learn about the different stages of patent management

If you are not already well acquainted with the patent filing process, you might be unaware that filing an application is only one of many points along the way where fees will accrue. The prosecution process at a patent office can become increasingly costly as more office actions are issued. While it is good news to receive a notice of allowance, there are typically issue fees that have to be paid before the patent is granted. Patent annuities or maintenance fees must be paid throughout the life of the patent as well.

A good patent management strategy budgets for these stages and understands how these costs vary from country to country. For example, in Europe and Japan, patent application filing costs can make up about one-third of total patent management costs, whereas filing costs in India and the US will only be about 10 percent of the total budget for a single patent. Additionally, there may be hidden service fees, such as legalization, that add costs; this is particularly true in such countries as the United Arab Emirates and Saudi Arabia, where notarized and legalized documents are required at the time of filing, with the process including steps of legalizing the documents at the US State Department and the embassies of the country, and adds hundreds of dollars to the costs.  

2. Research your intended market

Having broad patent protections across the world may seem like an ideal situation, but the added costs might not outweigh the benefits in certain countries. You will want to explore market conditions in any country in which you plan to seek patent protection. For instance, if you have a method of manufacture that is only applicable to an industry that is not particularly strong in a given country, you can save a lot of money by being judicious in deciding not to file there.

Market conditions are not the only consideration in analyzing a market. Patent laws can vary widely from country to country, and an invention that might have strong patent protections in one region might have more uncertain protections elsewhere. In India, for example, patents in the biopharmaceutical sector receive limited protections while recent legislative proposals in the US have raised concerns about the predictability of drug patents.

3. Consider keeping your translation costs down

Translating a patent application into a foreign language requires a specialist with a good deal of technical knowledge. Such specialized talent usually costs a premium. The fees for translating a patent application into Japanese, Chinese or Russian can eat up about 75 to 80 percent of the total filing costs in those countries. The high cost of a patent application translation should factor into your filing decisions. The most cost-effective option may be filing patents into a group of countries that share the same language, such as English or Spanish.

Patent translation requires a specialist with technical skills and a good command of the legal language. The most cost-effective option may be filing patents into a group of countries that share the same language.

4. Include only the most important claims in your application

Filing fees for patent applications begin to climb quickly as the number of claims included increases. In some cases, the number of excess claims can outpace the basic fees of the patent application. For instance, the US Patent and Trademark Office’s fee schedule lists a $300 basic filing fee for utility patent applications. However, that only covers a utility patent that has a maximum of three independent claims and 20 total claims. The agency also charges $460 for each independent claim above three such claims and $100 for each claim over 20 total claims. As an invention increases in complexity, this can easily cause filing costs to triple or quadruple. It might require a difficult conversation with your patent attorney, but paring back on the number of claims in your patent application might keep you from breaking the bank.

5. Take advantage of international agreements to manage costs

If you plan to file patent applications in multiple countries, there are a couple of legal frameworks of which you can take advantage to cut the costs. Not only does the Patent Cooperation Treaty (PCT) give inventors a streamlined system for filing patent applications in various jurisdictions, it includes certain mechanisms that provide inventors the potential to reduce costs. PCT gives patent applicants the option to add at least 18 months to the period between the first patent filing and the date by which an applicant must choose whether to file into other countries or regions. While that option comes at a cost, it could help an applicant save money if the additional market research time leads them to decide against filing into a particular country. At the very least, the PCT system gives an applicant the ability to spread costs over a longer period, aiding the budgeting process.

Patent applicants looking to file in multiple countries may also be able to take advantage of Patent Prosecution Highway (PPH) agreements between national patent offices. If a patent applicant has any patent claims issued by a patent office that has a PPH agreement, that applicant can request a fast-track examination of the allowed claims by PPH-partnering patent offices. That fast-track examination can be requested without a fee and can help an applicant realize significant cost savings over a typical patent prosecution effort.

6. Do not be afraid to abandon a patent application 

Discretion is sometimes the better part of valor. No one files a patent application in the hopes of someday abandoning it, and it is hard to let go when you are sure that you have a winning idea. However, not every patent application is going to end up being relevant to your business strategy. The costs of pursuing patent protection on a technology that might be ancillary to your strategy could wind up draining resources that you could instead use on patenting inventions that hold greater promise. Even after a patent has been granted on your invention, it might be worth analyzing the cost savings that can be achieved by abandoning the patent and keeping maintenance fees, you would have otherwise paid to protect an invention that is not achieving commercial success.

Working with an experienced partner throughout the patent prosecution process is the best way to ensure that you are employing the best possible strategy. At Dennemeyer, we are dedicated to making the patent application process valuable to your company’s bottom line and getting you the greatest possible return for your investment in your company’s future.

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