Patent Cost

Unlike other intellectual property rights, a patent application and the patent costs associated with that application is necessary in order to obtain patent rights. Whereas copyright rights arise from the moment of fixation of an original work in a tangible medium of expression, and trademark rights arise from the moment a mark is used in commerce, patent rights arise only from registration with the United States Patent and Trademark Office (USPTO). As a result, it is important to view patent costs as an investment in the overall patent application process, which in turn is an investment in your tech start-up. Even if you are still in the infant stages of business development, seemingly burdensome patent costs may be a savvy investment.

Of course, there are a number of costs to consider. First there are the filing costs, but bear in mind that small businesses are eligible for a reduced fee. Specifically, any small business concern as defined under section 3 of the Small Business Act as well as any independent inventor or nonprofit organization may be entitled to a 50% reduction in the typical fees associated with patent filings. Section 3 of that Act defines a small business concern a for-profit business operating in the U.S., formed as an individual proprietorship, partnership, LLC, corporation, association, trust or cooperative, or certain kind of joint ventures, is at least 51 percent owned and controlled by one or more U.S. citizens or residents, and has less than 500 employees. If eligible, as many tech startups may very well be, you will be entitled to reduced filing fees to the USPTO; for example, a filing of a basic utility patent is associated with a standard fee of $390, but for those that qualify for the small business exception, the fee is $195. There are fees associated with practically every kind of filing submitted to the USPTO, and for a full list of the fees associated with patent filings, visit the USPTO fee schedule online.

Another major patent cost relates to the patent attorney hired to file the patent, conduct due diligence, and respond to office actions when necessary. The attorney costs for the filing of a patent application will typically range from $10,000 to $15,000, depending upon the type of patent sought and the complexity of the subject matter. Flat fees may be negotiated and may very well be preferable, given that attorneys are notorious for the billable hour and can very quickly rack up fees on an hourly basis.

Finally, you should consider the costs of a patent application in terms of making an investment in the future of your company. Determining what is patentable by way of a patent application may very well influence your decisions when it comes to research and development, and could save you a lot of time and money in the long run. These days, companies prefer to make investments and conduct research in areas they know will yield patentable inventions, as this allows for effective long-term and low-cost monetization of the invention over the lifetime of the patent. As a result, the “costs” of a patent, when viewed as an investment that will avoid larger costs further down the road, may seem far more palatable than before.