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Costs to Expect during the Patent Application Process

As with any step or component of a business plan, the value of seeking a patent must be evaluated in light of associated costs. A patent application process can often take a couple of years, with professional and government fees arising at various stages. Consequently, it is important to understand the costs associated with applying for and maintaining a patent to best align these costs with one’s finances and commercialization strategy.

In the following we discuss costs associated with a typical application process, some additional considerations relating to applications in foreign jurisdictions, and a few ways to manage costs.

1.0 A Typical Patent Application Process

1.1 Pre-Drafting

As a preliminary step, prior to preparing an application, many inventors have a patentability assessment conducted for their invention. A patentability assessment is a chance for an inventor to get an idea of whether their invention is likely to be considered to constitute patentable subject matter, and to be useful, new, and inventive so as to be patentable in Canada. In other words, a patentability assessment can shed light on the risk associated with filing and prosecuting a patent application for a given invention. If the assessment is not favourable (i.e., suggests that the invention may not satisfy all of the requirements for patentability), that risk is elevated. An inventor stands to invest in the application only to have it fail to issue to a patent.

At a high level, most patentability assessments involve summarizing the key features of an invention, searching for similar public disclosures including those key features, and providing an opinion on whether the invention is likely to be considered novel and inventive as compared to the closest public disclosures uncovered. The assessment will also consider whether the subject invention constitutes patentable subject matter. A patentability assessment is useful in identifying the risk associated with applying for a patent and understanding what sort of objections a patent application may face during prosecution. In some cases, patentability assessments may include general suggestions on how to overcome potential objections in order to distinguish the proposed invention from the existing prior art. In reviewing a patentability assessment, a prospective applicant should consider their own risk tolerance in view of the prior art identified and any remarks from legal counsel. A prospective applicant may also want to consider their resources, as, as will be detailed below, there are additional costs involved in responding to objections to an application. Where these objections are many, or are difficult to overcome, these costs can be substantial.

A variety of patentability assessment services are usually available to an inventor, from a brief prior art search resulting in a set of references (most often, published patents and applications) for the inventor to review on their own to a thorough review of public disclosures resulting in a written opinion on patentability. Corresponding costs can range from a few hundred dollars to several thousand, with more thorough services attracting higher costs.

When deciding how much to invest in a patentability assessment, consider that all future patent expenditures as well as decisions to proceed with investing time and money into the development of the product may be based on the results of this initial assessment. As such, understand that patentability assessments are useful for understanding risk associated with pursuing a patent and making informed business decisions about how best to proceed with protecting your intangible assets.

1.2 Drafting an Application

Regardless of whether an inventor starts with a patentability assessment, the inventor will need to prepare a patent application to be filed. Most jurisdictions require that applications include a detailed description of the invention which would enable a person who understands the field of the invention to make and use the invention. A set of claims clearly defining the boundaries of the invention or, more particularly, the scope of the exclusive rights sought to be obtained will also be required.

Drafting an application is an exercise in precise writing with carefully thought-out intent. Many applications are rejected for being unclear, and many applications result in very narrow patent protection as a result of describing the invention in too limited a way. If the scope of patent protection ultimately granted is very narrow, the value of the patent will be relatively low compared to a patent providing broader exclusivity.

The cost of drafting an application typically depends on the complexity of the invention itself. Where the invention is a complex or technically advanced invention, the application may need to contain a greater amount of description in order to sufficiently describe how to make and use the invention. If a patent application requires images of the invention to be drafted by a professional technical illustrator, this further adds to the cost. If the disclosure material provided is not in a format easily convertible to drawings that meet the standards of the relevant intellectual property office, the costs of this drafting will likely be higher. The cost of drafting an application can accordingly range from several thousand dollars to ten thousand or more.

The cost of drafting an application also depends on the degree of formality required. Many applicants choose to start the patentability process with a provisional application, which can be used as a priority document for a later regular patent application. In other words, it can be used to hold an applicant’s place in line while they work out the remaining details of their invention and prepare to submit a subsequent non-provisional application. Provisional patent applications are not examined and can often be much less formal than regular applications, and accordingly cost less to draft. Provisional applications also generally don’t require the drawings of the invention to be in any particular form (the drawings can be hand drawn illustrations, or even photographs), enabling the deferral of the cost of professional illustrations. In addition, provisional patent applications do not require claims or an abstract, although including patent claims in a provisional is beneficial should the provisional application later be shown confidentially to potential investors or business partners. Provisional patent applications can thus be used to secure an earlier filing date while deferring some of the costs associated with finalizing a patent application to a later time. In both cases, whether it be a non-provisional patent application or a provisional patent application, applicants may use the term patent pending during the period between filing the patent application and the issuance of the patent.

The cost of drafting an application will also depend on the amount of disclosure provided by the applicant to the patent agent drafting the application. Clear and complete disclosure from the outset can expedite the drafting process and thereby reduce the legal fees associated therewith.

1.3 Filing an Application

Filing an application typically involves preparing the required administrative forms, gathering substantive documentation about the invention, and submitting the application to the patent office. Most patent offices charge a filing fee of several hundred to a couple thousand dollars. Professional fees are also associated with preparing and filing the required administrative documentation that accompanies a copy of the substance of the patent application.

1.4 Examination

Some patent offices, most notably the United States Patent Office, examine an application automatically. In such cases, the offices often include examination fees as part of the fees paid at filing. Other offices, such as the Canadian Patent Office, allow inventors a period of time during which they can choose to request examination (in Canada, inventors have 4 years from the date of filing the application to request examination). This gives inventors the opportunity to wait and see what happens in other jurisdictions in which they’ve filed for a patent before requesting the formal examination of the patent application in another country. Where requesting examination is not part of filing, the cost to request examination is usually several hundred dollars in government fees and a few hundred dollars in professional fees.

During the examination process, a patent office will likely correspond with an applicant through their agent. Such correspondence is likely to include one or more prior art-related or formality-related objections from the office, to which an applicant is typically permitted to respond with a combination of arguments and amendments. Professional fees associated with the reviewing, advising on, and responding to correspondence from the patent office often sum to several thousand dollars over the months and years of the examination process. Conversely, self-drafting responses to office actions may initially reduce the costs associated with answering issued patent office objections, but, if the self-drafted responses are ultimately unsuccessful, it may be that an applicant ends up assuming the costs associated with professionally drafted responses in order to move prosecution forward.

1.5 Issuance

When a patent office decides to grant a patent, they typically require a final issuance fee to be paid. This fee typically depends on the size/categorization of the applicant or patent owner and can range from a few to several hundreds of dollars. Related professional fees can also come to a few hundred dollars.

1.6 Maintenance

One cost of the patent process that is often overlooked is the cost of maintaining an application or issued patent. Many patent offices begin requiring maintenance fees within the first couple of years of an application being filed, with fees coming due periodically while the application is pending and after it has been granted. Failure to pay maintenance fees can result in the application or patent becoming abandoned.

Maintenance fees in some jurisdictions are due annually, while in others they are due every few years. Fees often start in the low hundreds and then increase with each periodic payment, such that fees near the end of the life of a patent are in the high hundreds or few thousands of dollars.

2.0 Seeking Protection Internationally

2.1 An International Application

Often when an applicant intends to seek patent protection in multiple jurisdictions, the applicant begins with an international application under the Patent Cooperation Treaty (PCT). While applicants will still be required at some point to seek protection separately in each jurisdiction (a process which will be much less involved after filing an international application), an international application allows an applicant to delay the deadline for beginning the national/regional patent process by a period of time and can be a helpful tool in coordinating multiple applications. That being said, professional and government fees associated with an international application typically sum to several thousand dollars, and most fees associated with filing in each individual country/region are not reduced as a result of beginning with a PCT application.

2.2 Foreign Filings

Whether filing directly in a foreign jurisdiction or entering your international application into a foreign jurisdiction, you are likely to encounter a couple of costs associated with foreign filings. Many patent offices require that the application, or at least the claims, be translated into an official language of the jurisdiction. In addition, many foreign offices also correspond in the language of their jurisdiction. Translations costs can often come to several thousand dollars. Often there are also professional fees associated with coordinating several foreign filings, typically in the range of a few hundred to a few thousand dollars.

3.0 Managing Costs

3.1 Preparing for the Patenting Process

One way to manage the costs associated with the patent process is to be prepared. This means understanding what rights and opportunities a patent provides, the timeline associated with securing patent rights, how to fund the commercialization of an invention, and how to effectively generate revenue from a patent once granted.

Take time to thoroughly review public patent databases to see if your invention or similar inventions have already been disclosed; many inventions have not been commercialized, but the patent office does not consider only commercially available disclosures when assessing patentability. Develop a detailed business plan outlining which jurisdictions are important to you, so that your costs and investment are focused on jurisdictions where you anticipate doing business. Find an intellectual property professional with experience specifically in patent prosecution and who is part of a patent professional network that encompasses your jurisdictions of interest. Work on developing the technical aspects of your invention so that you can differentiate between core features of your invention and additional features which are handy but not essential. Be able to describe why particular features were chosen and how the features of your invention solve a problem not otherwise adequately addressed in the prior art.

3.2 Seek Funding Opportunities

There are many grants and loans available to aspiring inventors in Ontario and Canada, both through government and non-government organizations. Inventors should seek to finance patent prosecution using research and development grants, awards, loans, or other external funding as much as possible in order to minimize the risk of downstream budgetary issues resulting from, for example, responding to multiple objections raised by a patent office.

In addition, most inventors seek patent protection in order to help them in commercializing an idea, making the process a great fit for investors seeking a return on investment. Conferences, conventions, summits, tradeshows, and similar events offer ample opportunity to connect with private investors in your field, so consider attending if you wish to find investors that operate in the same industry or that share similar business ambitions.

One thing to bear in mind when seeking investment is the possibility of disclosing your invention in a manner that could be considered public, and thus destroying the novelty of your invention. A judicious use of non-disclosure agreements, research agreements, and practical safeguards should be employed to protect the confidentiality of an invention prior to a patent application being filed.

3.3 Small or Micro Entity Status

Many jurisdictions provide for small or even micro entity status for qualifying applications, allowing applicants to pay only a fraction of the usual government fees. For example, a qualifying small entity in the United States is entitled to 50% off many government fees, and a qualifying micro entity in the United States is entitled to 75% off many government fees. Over the entire patent process, qualifying for small entity status can save an applicant several thousand dollars.

4.0 Conclusion

While the patent process can involve substantial expense, expenses typically arise over a period of a few years and are often a necessary part of the expenses arising from running a commercial enterprise. While it may seem tempting to cut corners early in the process, correcting mistakes made in the patenting process can be particularly difficult and expensive, resulting in government and professional reinstatement fees or even the loss of potential patent protection. A good patent strategy will include at least a rough assessment of the associated costs and several strategies for managing costs and matching your patent prosecution strategy to your budgetary constraints.

Contact us for a complimentary and confidential initial telephone appointment with a member of our team if you would like to learn more about what a patent might cost in your particular circumstances.