An idea is only as strong as its protections. When you want to build a company on one, you need to ensure it has strong foundations. This article explains why and how start-up founders and executives need to budget for patenting, including:
- The initial and ongoing costs of patent protections for your innovations.
- Who needs international patents, and how much that will set you back.
- How much you should budget for various levels and extents of patent protection.
What Are The Initial Costs Of Filing A Patent?
Patents are an important investment that can become a priority for early-stage funding, though not every business owner, entrepreneur, or innovator realizes this. The initial costs come in two forms: drafting fees and filing fees.
- The Drafting Fee
It’s important to hire a drafter or, ideally, a lawyer to draft the patent properly so that it will be accepted and complete. For a simple patent on a straightforward invention (such as many mechanical patents), the drafting fee could be as low as $4,000 to $5,000. More involved or intricate patents could cost over $10,000 or even $12,000.
Typically, you will receive an estimate of the amount of work involved and the cost before agreeing on a final price. While there is room for negotiation, be wary of anyone suggesting they can do it for significantly less.
- The Filing Fee
The second cost associated with obtaining a patent is the filing fee at the United States Patent and Trademark Office (USPTO). These fees are not extremely significant, ranging from less than $200 to around $700 to $800, with higher fees being rare.
Fortunately, small entities, meaning companies with fewer than 50 employees, or micro companies, often qualify for reduced fees, which can benefit start-ups.
Attorney John Lin is a passionate intellectual property lawyer based in California who was himself a technical innovator and engineer before moving into patent law. His tech background combined gives him a unique insider perspective on the difficulties and costs startups face in terms of intellectual property protections like patents, but also on their value and importance for success.
Are you looking to take your innovation to the next level? Ready to scale?
Contact John Lin today to schedule an initial consultation.
What Are Search Fees?
Before filing a patent, it is wise to carefully search existing patents to ensure your innovation is genuine and qualifies for protection. You can hire a search firm for about $1,400 to $2,000, but conducting your own search is also an option.
Searching through patents is not difficult, and you generally know your invention, market, and market space better than anyone else. Therefore, you can conduct a thorough search on your own and save the fee. Conducting this search can also help you realize if your invention cannot be patented due to existing patents, saving you money and sparing you from an expensive patenting process.
While an attorney can certainly do the search for you, they must report everything they find, which might not always be to your benefit.
What Are The Costs Of Maintaining A Patent After It Is Granted?
In addition to the initial filing and drafting fees, utility patents have long-term costs, most notably maintenance fees. After a patent is granted, there are three scheduled maintenance periods during which these fees must be paid to obtain the maximum of 20 years of patent protection.
- First Maintenance Fee: Due after 3.5 years, ranging from $400 to $2,000, depending on the size of the company.
- Second Maintenance Fee: Due after 7.5 years, costing around $3,700 to $750.
- Final Maintenance Fee: Due after 11.5 years, with fees between $7,700 and $1,500 or so.
While some attorneys offer to handle this for an extra fee, it is not difficult to do on your own. Beware of scammers trying to obtain payment information by pretending to assist with renewal fees. Either manage this yourself or work with a trusted attorney.
What Budget Should Be Reserved For International Patent Filings?
Patents filed in the U.S. only protect your product or innovation within the U.S. If you want your innovation protected against copying or use in foreign countries, you must file for patent protection in those countries separately.
In most countries, this costs between $10,000 and $30,000. Some countries, like China, are cheaper, while others, like Japan or Europe, are more expensive. What you need for meaningful coverage depends on your product and market.
A common strategy is to cover the big five: Japan, Korea, China, Europe, and Taiwan. To do so, you should budget around $100,000.
Is It Necessary To Get International Patent Protections For US Startup Innovations?
Deciding whether to file for international patent protection must be evaluated on a case-by-case basis. One factor to consider is the location of your competitors, which can help determine where you need protection.
For example, if your competitors are only in Canada, there is no need to pay for protections outside Canada, saving you a significant expense.
For more information on What Tech Startups Should Budget For Patents, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (949) 844-5505 today.
Attorney John Lin is a passionate intellectual property lawyer based in California who was himself a technical innovator and engineer before moving into patent law. His tech background combined gives him a unique insider perspective on the difficulties and costs startups face in terms of intellectual property protections like patents, but also on their value and importance for success.
Are you looking to take your innovation to the next level? Ready to scale?
Contact John Lin today to schedule an initial consultation.
