Patenting Your Invention: the Ugly Truth – Page 4

Patenting costs

 

   We’ve complained a lot about the cost of patenting, so what exactly is it? Unfortunately, it’s impossible to be exact because there are so many variables – for example, the length and complexity of the patent, where and how you apply, and the particular combination of countries for which you want cover – but it is possible to indicate the sort of costs you could be looking at.

   Some patent attorneys make a valiant effort to provide guidance on costs: for example, Urquhart-Dykes & Lord have some excellent factsheets which provide cost breakdown guidance for UK, European and IPC applications.

   And in 2005 the European Patent Office published two cost models for guidance. These indicated that:

  A ‘Euro direct’ patent application of 18 pages valid in six European states for ten years would cost around €32,000 including patent attorney costs and translation and renewal fees.

  A PCT application of 26 pages valid in eight European states for ten years would cost around €47,000, again including patent attorney costs, translations and renewal fees.

   However, the notes to the calculations state that for both applications the total cost might vary considerably, in some cases by up to 100 per cent, depending on the technical field. Excluded too are all costs for patenting outside Europe, and for additional states and languages within Europe. And most costs will have gone up since 2005.

   Thus, you might not be much further forward predicting your own patenting costs, but the direction of travel seems clear. It’s safe to regard €32,000 for ten years as a bare minimum for an idea with international potential. For cover in more European and non-European countries, expect that cost to multiply two, three or maybe more times. (See the examples below.)

   An early point to make is that if you’re lucky enough (or unlucky enough, maybe) to have an invention that will only sell in one country, patenting in that one country can be reasonably cheap. A bargain, in fact. 

   But not many patentable ideas or products would sell only in one country. Plenty of products might sell mainly in one country, and on that basis it might be worth patenting only in that country. Many US inventors patent only in the USA for that reason, and good luck to them. But these days, many products have multinational sales potential, so if you’re going to patent at all, you may need to patent in several countries. And as you may have no idea which countries will be good markets, the temptation is to patent in more rather than fewer countries. That’s when costs start going through the roof.

   (NB: for simplicity we’re talking here about the cost of one patent. Some inventors and small companies may have more than one idea that they need to protect. The costs then don’t bear thinking about.)

 

Example 1:

   A UK inventor has designed a radically new version of a familiar and essential bicycle accessory. After ten years of self-funded development he spent a further £40,000 of his own money on getting a trial batch of product to market. His company is now financially at its weakest. A lot is at stake, and every penny counts.

   He has recently received a bill from his patent attorney for almost £20,000 including VAT. This is the total (and presumably typical) cost of translating his patent into ten European languages and filing it, using local patent attorneys, with 17 European patent offices. On average, the cost of translating his whole patent (required by some national patent offices) is about £1500+VAT, while the cost of translating only his claims (acceptable to other patent offices) is around £900+VAT.

   The inventor can’t currently afford anything remotely like £20,000, let alone any later costs of translation into non-European languages such as Japanese, Chinese and Korean. Unless other sources of funding can be found, he may have no choice but to reduce his patent protection drastically, leaving his product wide open to copying.

 

Example 2:

   Another product with international potential – basically, an improved concrete breaker. Again, a self-financed company was formed by its inventor. Again, development took many years. Again, patent renewal renewal fees in excess of £20,000 a year began rolling in before the product was ready to earn its keep. Eventually, a potentially multi-million pound turnover business had to be sold off cheaply to an overseas buyer because the company couldn’t afford to carry the patent fee debt any longer.

 

Example 3:

   US inventor John Smith – see page 28 – has written up his experience of spending $25,000 on US patent applications, only to be repeatedly refused a patent. Read about it in detail in his book ‘DON’T File A Patent’.

 

Example 4:

   A miscellany of US patent cost statistics – probably not significantly different from costs in the UK and Europe – can be found at Invention Statistics. For example:

   ‘The GAO [General Accountability Office] estimates that it costs a small business about $10,000 to obtain and maintain a relatively simple patent in the United States. Extending this patent to nine other countries could cost $160,000 to $330,000.’ (‘GAO: Cost of foreign patents is too high for small businesses’, Sacramento Business Journal, 30 August 2002)

   ‘Getting even a simple patent approved […] can cost up to $10,000 domestically and $100,000 or more for worldwide rights.’  (University of California licensing director, quoted in San Francisco Business Times, 5 December 1997)

   ‘Simply filing patents can be a costly and time-consuming process, making it imperative for small companies to be selective about what patents they file.  [Filing] patents internationally can cost a company anywhere from $10,000 to $100,000.’  (‘Healing the Patent Process’, Wireless Week, 15August 2005)

   And the unattributed but plausible: ‘About 97 per cent of patents generate less revenue than the patent costs.’

   Examples 1 to 3 are not isolated sob-stories or exceptions to the rule. They’re typical of what is happening at the grassroots level of innovation, to brave small ventures run by intelligent, resourceful and dedicated people. In many respects the high cost of patenting is crippling innovation. At the very least, it’s adding a thick extra layer of risk to projects that already have more than average levels of risk to contend with.

 

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