The Patent Light

This is a difficult question to answer for a variety of reasons.  First, patent costs vary based on differences in technology.  Second, patent costs vary due to the intended use of the patent and the client’s requirements.

By way of background, patents are not like copyrights or trademarks in that if you are the first to think of and use a logo, you own rights in it.  Patents are only granted if your invention increases the general knowledge of the public (at least theoretically).  In order to increase the general knowledge, a patent application must do more than simply present an idea.  By law, the patent application must teach others skilled in the art how to make and use the invention.  In exchange for the increase in public knowledge, the inventor is granted a monopoly which is (theoretically) proportional to the increase in public knowledge.

Some areas of technology simply require more drawings and descriptions to enable “one skilled in the art” to make and use an invention than other technology areas.  Drawings and descriptions are expensive and costly – especially if an attorney drafts them.  Obviously, the longer the application, the more costly, it will be.

A simple mechanical invention with a short specification will likely be much less expensive to draft than a complex biotech invention.  On the other hand, in my experience, simple inventions with short specifications are typically harder to get allowed.  It seems that U.S. patent examiners have a bias against short applications.  It almost appears that the examiners require the applicant put in a certain amount of “sweat” labor into the application.  So, I often advise clients to “beef up” their shorter descriptions in order to overcome the examiner’s bias against short applications.  A short application can be beefed up by adding more embodiments or by making the invention part of a system or “kit.”  (These are often useful for legal reasons too).  The more description added, the higher the costs.  This means that often simple inventions become expensive.

With rising hourly legal rates, some law firms have extolled the benefits of short applications.  Generally, however, I believe short applications are not as strong and do not provide the depth and flexibility needed if the patent is used in licensing or litigation.  For instance, the majority of patents typically asserted by successful NPEs have lengthy specifications. (Lengthy specifications are usually harder to invalidate and provide support for numerous continuations.)

Another cost factor is that different clients use patents differently.  For instance, the goal of many large companies with thousands of patents is to keep costs down for every patent or patent application.  No one single patent will be that important to them.  Consequently, these clients want what is called “defensive” patents.  (If they are sued by a competitor, they can counter sue by claiming infringement of 20 to 50 patents.  Since no one can defend against so many patents, a settlement involving cross licensing is often reached.)  In this scenario, the quality of each patent, although important, is not as paramount because each patent is likely to be just one of a large group of asserted patents.  Obviously, this scenario only works when the defensive patent owner has a very large number of patents in their portfolio and, thus, is able to claim infringement of many patents.

On the other hand, a small start-up company will only have a few patents in their portfolio.  Consequently, the patent quality must be paramount – especially if they go up against an industry giant.  Obviously, patent quality is often a function of the time involved in its preparation.  The longer a patent application takes to draft, the better the quality is likely to be (as a general rule). In the legal world, time equates to cost.

This often means that a small company (who is likely to use its few patents offensively) should expect to pay more per patent (for better quality) than large companies who can also rely only on the quantity of their patents.

For more information, contact Bill Naifeh at www.naifeh.com.