How to Control Spiraling Patent Costs

by: Natalie Giroux

Cost is often the main deterrent to growing a good IP portfolio.  There are straightforward ways to control patent costs each step of the way, from drafting applications to prosecution. Here are some money-saving ideas for innovative but cost-conscious firms.

Drafting

For new applications, drafting the specification and rendering the drawings are the most tedious tasks. These can be simplified, with significant cost savings, if the inventors contribute as much material as possible. Writing a complete invention disclosure form with clear explanations using drawings and flow charts creates a log of the invention, but also ensures that the right information is transferred to the drafting partner.  The drafting partner can then focus her time on writing proper claims.  [Here’s another money-saving tip:  in some cases, it’s possible to claim drafting work as part of research tax credits.]

Filing

There are several ways to save or delay filing fees.  Filing the complete application as a provisional application provides low-cost protection as long as the description is complete and one main claim has been written to specify all the key elements. However, the application will not be queued for examination until it is filed as a conventional application, which, in turn, delays the issuance of the application.

The trick here is establishing a priority date, generally by filing in the USA.  Before the one-year anniversary of the filing, different options are then available such as direct filings in other countries of interest, or a Patent Cooperation Treaty (PCT) filing which provides another 18 months before incurring filing fees in other countries. The PCT filing also provides a search report that can help speed up prosecution.

The costs for international filings can add up fast.  Maintain a four-quarter budget of the fees for each filing so you can run sensitivity scenarios for broader or narrower filing strategies.  When a patent portfolio gets large, consider dividing it into two or more categories of importance, each with different filing strategies.

If an application issue is needed quickly, such as for company valuation purposes, the USPTO offers several options including the Fast-Track Program and the First Action Interview Program.  International programs like the Patent Prosecution Highway (PPH) can also be used to speed up international filings and significantly lower costs.

Prosecution

Responding to the patent examiner’s office actions can be costly if not properly managed.  When a lot of prior art is involved, inventors should review it carefully and provide guidance to the advisor in order to save time and money.

The quicker the response is filed, the quicker the application will issue.  In most cases, it is advisable to have a phone or in-person interview with the patent examiner to avoid several cycles of office actions and achieve faster allowance. Bear in mind however, that in some cases, it may actually be advisable to delay the response (e.g. for continuations).

Legal Costs

A significant part of IP costs are the legal fees for things like drafting, docketing, prosecuting, reporting, writing and answering emails.  So find advisors and partners that understand your company’s business goals and can translate them into an appropriate IP portfolio.  A good partner will agree to fixed upfront fees for all the tasks involved and will minimize administrative costs.  Maintenance fees can be paid to patent offices using third party services like CPA Global to save even more on the overall legal bill.

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