Business Development · Patents

When does it make sense to file a patent?

Svyatoslav Dormidontov Web-developer

October 2nd, 2016

I heard they are very expensive and they also take a long time to complete from beginning to end. At what point does it make sense follow through with the process?

Chris Kwan & Inventor 10 US Patents in FinTech, P2P Prepaid Cards (US PATENT 8,650,126)

October 2nd, 2016

I have about 10 US Patents from over 30 patent applications. Whenever people asked me how long and the costs it took me, I tell them average about 7-12 years and the costs of a new BMW for each but not that I mind as I did all the prosecution myself. My first patent application in 1999 is also the last to been granted a patent in 2014 just before "Alice" was decided at the Supreme Court. See US Patent 8650126 or I took everything the USPTO could legally dish at me, including an examiner who personally told me that he will never issue this patent as long as he is the examiner (vide a telephone call). I went to the Board and there was a 2.5 years waiting time to be heard. I learn a lot from USPTO's examiners and the system. However the issue is that the patent system in the US had changed so much since 1999 when I started, that in my view it is a very difficult area now for small time inventors when it comes to securing a patent and enforcement. The enforcement part has new rules (currently also being challenged in the Supreme Court). My personal advice and is not legal advice here is that if you are a startup in the software or hardware space, file a provisional (you can do this yourself as there is no CLAIMS made at this stage). I have seen a provisional application in the form of lines of code filed by a major bank in the US. Assuming your invention is at least "novel" (you need to conduct prior art search), and if you think others will (must) use your method, system or product and you have spare cash (like 25% of your overall budget) then file a non-provisional at the end of 12 mths. Remember your CLAIMS is most important, have more eyes to check them before filing. Once you file a provisional, you don't need a NDA and in fact you should market or advertise as much as you can to check market interest. But be prepared to understand how patent applications are prosecuted by the USPTO as you need to spend a lot of time reading the prior arts and giving comments back to your lawyer to draft responses once the examination starts.  

Tom DiClemente Management Consulting | Interim CEO/COO | Coach

October 3rd, 2016

Hi Svyatoslav,

Remember the following:

1. There are disclosure laws, generally, you must file within one year of making a disclosure for a US patent. But many other countries still require filing before making any disclosure of the invention.

2. A provisional patent is a good way to preserve an early effective filing date before going through the expense of a non-provisional patent. However, it only has a one year life. If you do not file the non-provisional within one year the provisional is automatically abandoned as is the earlier effective filing date.

3. Keep in mind we are in a first to file world now, not a first to document the idea.

4. Keep in mind too that a patent only gives you the right to defend your idea and is often a good roadmap for competitors to reverse engineer and design a route around your claims. Make an informed decision about what you want to patent and what is better left a trade secret. Defending a patent is a very expensive endeavour.

5. The term patent pending has lost all meaning with many professional investors since the definition was loosened. 

Hope that is helpful, Thanks, Tom

Shobhit Verma Ed Tech Test Prep

October 2nd, 2016

Chris, Not every startup is "Patent pending".
"Patent pending" means that you have applied for a full or provisional patent but your case has not been reviewed yet.
If you have the core IP in the patent pending status then you can talk openly about it, hence you do not need NDAs. 

Joel Williams Entrepreneur at EZBadge

October 4th, 2016

If you have some intellectual property that you believe is truly an invention and you don't want others to use it, either by copying or figuring it out on their own, then you need to protect it with a patent BEFORE you publicly disclose it. If it is central to your product, then it is critical to patent in order to protect your business. It typically takes several years to get a patent to get approved (if it does), however your protection starts the day you apply for the patent. The first person to file an application on a particular invention gets priority, so timing is important. (Look up Philo T Farnsworth for a good story on just how important this is.) Before spending money on a lawyer (or patent agent), do some homework: 1. write down what you think the invention in - in your own words 2. do a google search to see if anyone has done this. - probably someone has. This is called a "prior art search" 3. modify your definition of the invention to be different from what you can find. 4. repeat steps 1-3 until you are satisfied that you have something truly inventive. Then you should also draft a description of the invention, including the background, why it is important, and how someone would make or use the invention. There are many self-help books on patents to guide you. Giving this to the attorney to start with will save time & $$. They will probably rewrite it. Then find an attorney or patent agent that understands the subject matter of your invention. This is important, In my experience, if attorneys will tell you they can handle anything, move on. The success rate and number of (costly) changes required by the patent office varies greatly. I prefer an agent, they are usually easier to work with, more responsive and charge less. In my experience, they are just as good as an attorney, and often better. I would avoid "offshore" patent houses (usually in India), I have heard more horror stories than accolades, and have had a bad experience myself. The attorney or patent agent will perform another prior-art search, that may well require more modifications to the invention. Then they will then draft the actual invention "claims" that describe the invention in very detailed legal form. You can save some money, if you are clear on what the invention is by filing a "Provisional" patent application. Think of this as an incomplete application, that "saves the date", and give you time to deal with more completely later. However, this is tricky because it limits what you can change later when you are ready to upgrade to a real application. Good luck. Joel Williams - inventor an expert witness on patent cases

Johnathan Proffer Engineer, Innovator, Visionary, Entrepreneur

October 2nd, 2016

They cost about $3,000 to file yourself, more if with a lawyer. If you believe you have something unique, non-obvious, and marketable, I'd file one as soon as possible.  Depending on your market, it could be your ammo against larger companies trying to keep you out of the competition.

Arthur Lipper Chairman of British Far East Holdings Ltd.

October 2nd, 2016

The filing of a provisional patent by the highly qualified patent law firm I have used successfully is a simple and relatively quick process. The cost is less than US$5,000 and the time period less than a month. The being "patent pending" frequently allows you to avoid executing Non-Disclosure Agreements (NDAs) Arthur

Christopher Brunner Founder - Payments

October 2nd, 2016

Art, can you explain why "patent pending" impacts a companies ability to sign an NDA? We are patent pending (as is every start up..:) but sign NDA with some very large partners. Are we at risk?
Thank you - Chris 

Dane Madsen Organizational and Operational Strategy Consultant

October 2nd, 2016

It also depends on the product in question.  If it is software, usually you have changed the platform well before you have had a patent examined.  If it is hardware, you should engage the lawyer and ask for them to hire an outside prior art research firm.  Usually for less than $2500 you will know if this is actually patentable in the major countries. If it is a method or application of a business model (such as the Amazon One Click Buy) it gets more complex and reasonably more expensive. In one instance, a method and application of a chemical product, we had nearly $200,000 invested in the patent before it was issued. 

Christopher Brunner Founder - Payments

October 2nd, 2016

Thank you for the clarification..makes sense..
And I was being fascitious about every start up being patent pending. :)

Thomas Sutrina Inventor at Retired Pursue Personal interrests and family

October 2nd, 2016

A patent give you the right to fill suit for someone using the patent.  So the patent needed to have sufficient value, create an income in excess of the cost of creating the patent, defending it against law suits that first it violates other patents or you violated the requirement for filing, and finally define against use of the patent.

Now the last one seems simple to apply but consider that you make multiple products and one of your major customers starts buying a product that violates your patent.  If you demand they stop they could and most likely stop purchasing ALL YOUR PRODUCTS.  I have talked to one customer when I worked for a consulting design firm that found them self in this situation.  Also your customer may use the violating product to get you to reduce your price.  And if they are your major customer then the loss of sales will effect your ability to defend the patent.

Now I am not against patents  and in fact I have about three dozen patents,  but you need to understand the limits.