What kind of initial patenting costs should we calculate?

Hi, there. Good question, as it is pretty difficult to answer without knowing more. You are indeed correct that preparing and filing a patent application, and then prosecuting that application to grant, can be a pretty expensive venture. In my experience, the highest cost is the initial upfront cost of preparing and filing the application. Preparing the application alone can amount to >$10k easily, and the official filing fees can be a few to several hundred dollars depending on your entity size (micro, small, or large). Prosecuting the application tends to be less expensive and is stretched out over a number of years, which helps reduce the financial burden. You must also decide if you would like to file an international application and/or any foreign applications, which could greatly increase the overall cost, depending on the number of countries in which you want to file your application.

There are, however, ways of reducing these costs, such as getting yourself involved in the overall process. When I am approached for patent prosecution work by individual inventors or small businesses that don't have much money, I advise them to prepare many of the documents themselves. This enables me to spend a lesser amount of time revamping the documents to conform to U.S. patent practice and ensuring all the necessities and formalities are disclosed. Also, the type of technology can greatly factor in to the overall cost of preparing the application. Obviously, preparing an application involving a more complex technology takes more time and effort than preparing an application involving a simpler technology.

As for the other facet of your question, it is very difficult to access the risk of filing a patent application. One way to determine the likelihood of your success is to approach a patent professional for a patentability search and opinion. However, there is never a guarantee that the patent professional will not fail to find a piece of prior art that a USPTO Examiner may find, and there is also no way of knowing how an Examiner may interpret a particular reference. Nevertheless, a patentability opinion remains one of the best ways to assess your risk as it tests the novelty and non-obviousness of your invention.

In addition to this, certain types of technologies stand a better chance at being patented than others. For example, recent case law developments in patent eligibility standards (e.g., the Alice decision) have made it much more difficult to patent software and computer-based technologies (although it is still possible).

Feel free to reach out to me with any additional questions.

With all due respect, I have to take issue with the statement made by Andrew to the effect that it is advisable to permit the inventors to prepare many of the documents themselves - this is usually a recipe for disaster. Inventors are not usually adept at drafting a specification, and certainly not adept at drafting claims. The specification must be in a particular format, and it is important that the specification properly disclose what the invention is, how it works, why it works the way it does, and the like. It is also to be noted that the most important part of the application going into the patent office is the specification, while coming out of the patent office, the most important part of the application is the claims. Why? Because once an application is filed, the specification cannot be changed in any meaningful or fundamental manner. Therefore, the specification needs to be complete, accurate, and thorough. The claims, going into the patent office, or while being examined, can always be changed or amended, but coming out of the patent office, that is, when the application has been allowed and is being processed for grant, issuance, and publication, the claims are the most important because they define your invention. It is best that an experienced patent attorney or agent therefore draft both the specification and claims. Plus, sometimes it requires more time to "revamp" or "revise" an inventor's application than to draft one initially, so I doubt that the time and cost savings is that substantial. Sometimes, an inventor's disclosure may be sufficient to serve as a provisional application, although, again, a provisional application should ideally be as good as a non-provisional application. You also mentioned the fact that you were dealing with a first prototype - a provisional application may therefore be more appropriate for your needs at this time - if you are going to modify or improve the prototype, you can file additional provisional applications with respect to the subsequent improvements, but note that you must file a non-provisional application, preferably including the original prototype and any subsequent improvements or modifications, within one year of the filing date of the first provisional application. If you are also planning to foreign file for foreign patents, you will also need to file a PCT application, or individual country applications, within the one year time frame.

Both of the previous answers posted by Steven and Andrew are very well written and provide very helpful and useful information, particularly with regard to the details of the specification and the overall process. To touch further upon your specific question regarding what are the initial costs, including costs to have an initial assessment, as a rule of thumb (without knowing any specifics), one can generally budget and expect to pay the following: approximately $600+/- for an initial prior art search and assessment (opinion); approximately $5,000-$7,000 for patent application drafting, preparation, and filing; and approximately $125/drawing for each high quality patent drawing of the patent application -- all depending on the complexity of the technology. As correctly noted in the previous answer, preparing an application involving a more complex technology takes more time and effort than preparing an application involving a simpler technology. The noted prior art search and assessment (opinion) as to patentability would be the first step the process, and would serve to help in your decision as to whether to proceed with a patent application.

In moving forward with a patent application, one can also expect to pay the initial filing fees of the United States Patent and Trademark Office (USPTO) according to its published USPTO Fee Schedule, which is located here: http://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule

As an example, for an electronically filed utility-type non-provisional patent application with three independent claims, the USPTO initial fees for a Micro-Entity would include: a Basic filing fee of $70.00; a Utility Search Fee of $150.00; and a Utility Examination Fee of $180.00. If a provisional patent application is filed (instead of a non-provisional patent application) in this example, then the initial USPTO fee for a Micro-Entity would only include a Basic filing fee of $65.00. (There would be no Utility Search Fee and no Utility Examination Fee for a provisional patent application filing).

So I have 2 published patents and 4 pending patent applications and I have been through more patent litigation/enforcement/brokering then I care to remember. At this point in time, I really think you need to consider all the ramifications of "patent protection" prior to spending money therein.

First, I have yet to see a patent published for less than $25K. Sure an ideal patent with limited office actions and a blessed specification might, somehow, go out the door for $10K (good luck). Instead, especially if you are in software land, your patent is going to be relentlessly challenged, responses are going to cost more than you expect and 3 years later you will be in the hole $25K.

Now you are protected during this time...right?

Unfortunately your protection is only as good as your lawyer and your ability to pay said lawyer. A typical IP case can take 5-7 years and literally cost millions - especially if you go up against a large corporation. And that was before the whole reexamination nightmare that the patent reform fiasco threw upon us. There is no such thing as an airtight IP case. I have literally seen memos from defendants blatantly saying that they stole IP - and still the prosecutors lost the case.

Now having a patent does provide some sense of security, albeit a false sense at times, and most people do pay attention to said protection. In the end, you need to figure out how deep your moat is, how long it will take somebody to copy what you created and where you will be financially at that point in time.

If your moat is deep and your work impossible to easily copy then perhaps a patent is not required. If you are creating something that is downloaded to a client and can be reverse-engineered overnight then perhaps you do want that patent after all. Sure investors still clamor for patents but a very detailed prior art review combined with a good legal opinion can suffice in many cases - especially is your secret sauce is hard to obtain without laying it out in a patent.

On the other hand, if you know your company is going big fast then file away as you will have at least a year until you need to start paying money into your prosecution. If you know you will have the money to fight people later then get your patent(s) filed now so you have something with which to fight.

Finally, determining patentability comes down to a thorough prior art and current state of the art analysis. Can somebody as smart as you easily combine current options together to create your solution? Are there prior patents out there that are one simple, fairly obvious, step from your invention? Are your competitors already selling highly similar products with a small change here or there? If you answer yes then you have nothing to patent. If you answer no, well then the question is how much do you believe in your startup's ability to succeed?