Patents are big business. Kodak sold its portfolio of patents for $525 million. Nortel sold a portfolio of its patents for $4.5 Billion. Valuation of startups and early-stage companies is heavily influenced by its patent and intellectual property portfolios. This article is a short guide to help you understand U.S. utility patents and the patent procurement process so you can start strategizing to build your own portfolio.
A utility patent Protects new machines, processes, systems, and manufactured items, and allows its owner to stop competitors from making, using,or selling the subject matter disclosed in the patent.
“A patent, or invention, is any assemblage of technologies or ideas that you can put together that nobody put together that way before. That's how the patent office defines it. That's an invention.”
– Dean Kamen, Inventor of the Segway
Technically a utility patent is a property right granted by the government to an inventor "to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States" for a limited time in exchange for public disclosure of the invention when the patent is granted.
Article I of the Constitution authorized Congress to “Promote the progress of science and useful arts.” Congress created the Patent Act, the basis for patent rights.
A utility patent gives its owner a monopoly over the subject matter of the patent for 20 years from filing! Monopoly’s are the cheat code for capitalism because the monopolist can avoid competition. Competition tends to drive price down, but the monopolist can side-step this by-product of capitalism. The upshot is that you can give competitors permission to use your invention via a paid license.
The United States, like the other major Patent Offices, is a first inventor to file jurisdiction. The provisional patent is a mechanism to preserve an early filing date for your invention.
A provisional patent is a low-cost mechanism to secure a filing date for a later non-provisional patent. Since the United States is a first-to-file jurisdiction, it is critical to secure the earliest filing date possible for your patent. Under US Patent law, a subsequently-filed non-provisional patent can claim the filing date of the provisional patent as long as the provisional patent disclosure supports the claims of in the non-provisional patent disclosure. Provisional patents are not examined so they do not need to be organized in the form of a non-provisional patent. However, a patent attorney will probably conform to the non-provisional patent style conventions to make it easier to write the non-provisional application later.
A provisional application is pending until its expiry on the anniversary of the filing date. Between the provisional filing date and the anniversary you need to a) decide whether you want to file the non-provisional; and b) prepare and file a non-provisional application claiming the benefit of the provisional application.
The budget for a provisional patent can range from $4700 - $5000. The USPTO’s basic filing fee range is $75 - $300 depending on whether you qualify for a discount based on you and/or your business’s gross income. The remaining budget is for attorney’s fees (based on prevailing market rates in the DC metropolitan area).
Our phased approach to utility patent procurement is as follows:
According to a recent survey of attorneys, median fees to prepare and file a nonprovisional patent of normal complexity is around $10,000. The government’s total filing fees for normal/small/micro-entities is $1820/$910/$455.
Should you apply for a patent?
You should strongly consider applying for whatever non-provisional patent protection you can get, whether design, utility, or both! Not every patent application will be granted. Before we file any applications, we will help you determine i) is your invention is eligible for a patent at all; and ii) does your invention either solve a new problem or solve a known problem in a new way.
We help inventors and businesses protect their inventions with patents to maximize competitive advantage and stop competitors from using your ideas without your permission. Tinch Law can help you determine what intellectual property protection is right for your ideas, build a portfolio of assets and leverage your intellectual property to grow your business
Getting started with us is easy – book a complementary intellectual property assessment here: https://calendly.com/tinchlaw/cc.