The Value of a Patent
The primary advantage of obtaining a patent is the ability to prevent your competitors from selling the same product. This grants you exclusive rights as the sole supplier, allowing you to sell your product at a higher price due to the laws of supply and demand.
If your sales are strong, then obtaining a patent is definitely worthwhile. However, if your sales are weak, it may not be worth pursuing. In such cases, you may even consider shutting down your business.
One challenge is that you cannot predict sales before launching. Therefore, it may be beneficial to start the patent process to secure your place in line to obtain a patent.
To determine if it’s worth spending money to reserve your place, you can conduct a patent search. This search will show if you have the potential to obtain a patent. If the search is positive, you can proceed with submitting a patent application to secure your place in line.
Submitting a patent application provides a priority date for your invention. In the event of competing patent applications, the one with the earlier priority date will be granted the patent.
By conducting a patent search and submitting an application, you are minimizing initial costs while reserving your place in line. If your sales are strong, you can invest more money in defending the patent. Without reserving your place, you won’t have the opportunity to fight for the patent later on. If sales are weak, you’ve minimized your startup costs.
Is a Patent Search Worth the Expense?
A patent search, also known as a novelty search or patentability search, is valuable because it provides crucial information:
- It determines if your invention is new.
- It identifies key areas to focus on.
If the patent search finds no evidence of prior art, it suggests that your invention is new, and you may have a chance to obtain a patent.
However, it’s important to note that a patent search cannot cover everything, and the USPTO may find more prior art during the examination process.
The search results also guide your patenting activities by highlighting areas where there’s a lack of innovation. This information helps you decide where to pursue patent protection.
Option 1: Conduct an Informal Patent Search
Conducting your own informal patent search is always worth it because it’s free. Before spending money on a patent attorney or search service, search the internet yourself to determine if your invention already exists. If it does, you can save a significant amount of money on legal fees and business expenses by halting the patent process.
You can perform a quick patent search by using resources like Google Patents or Free Patents Online. For a more comprehensive search, you can follow my patent search tutorial, which explains the 7 Step Patent Search Strategy. If you conduct your own search, I recommend using Free Patents Online instead of the USPTO database or Google Patents since it is more user-friendly and comprehensive.
Option 2: Hire a Patent Attorney for a Patent Search
Hiring a patent attorney has its pros and cons. On the positive side, a patent attorney can perform a more thorough search compared to what you can do on your own. They have the expertise to brainstorm search terms and identify relevant information related to your invention.
However, the downside is the cost. Although the cost of a patent search is relatively minor compared to legal and business expenses, hiring a patent attorney can be expensive. But if you discover that someone else has already thought of your invention, the cost of the search will be justified.
Option 3: Skip Hiring a Patent Attorney for a Patent Search
Not hiring a patent attorney eliminates an expense. However, in most cases, the cost of a patent search, whether conducted independently or with professional help, is worth the fees.
Is a Patent Application Worth the Cost?
Option 1: Don’t File a Patent Application
You are not obligated to submit a patent application or obtain a patent to develop and commercialize your invention. It is important to understand this basic fact, as many people come to our office with misconceptions.
The benefit of not filing a patent application is avoiding the cost associated with seeking a patent. Utility patent costs can range from $10,000 to $25,000. To learn more about the expenses involved in obtaining a utility patent, click here.
However, not seeking a patent means that if your product becomes successful, you will face competition from others. You would have to rely on being the best in your class to survive. Your competitors can freely sell the same invention and compete against you, forcing you to lower your prices.
Option 2: File a Patent Application
If you anticipate a successful launch, you can pursue patent protection from the start. Seeking a patent has multiple benefits, such as preventing competitors from entering the market. Obtaining a patent motivates you to defend your invention, especially when sales are strong.
Another advantage of filing a patent application is establishing your priority date. Your application establishes prior art, which can be used against others seeking patent protection for the same invention.
Although rare, it is possible for a competitor to file a patent application for your invention, wrongly claiming it as their own. This presents a complex challenge in invalidating their patent and defending your rights.
With a patent application, you gain priority over those who file applications after you.
However, the cost of filing a patent application can be a significant barrier, ranging from $10,000 to $20,000. This may seem substantial for startups.
In my opinion, it makes sense to pursue patent protection if you want to make substantial profits. If your plans align with your invention, and revenue potential is significant, filing a patent application is a logical step.
Choosing not to seek a patent may give the impression that you are not fully committed to success. Ultimately, the decision is yours to make, and I’m here to present you with the options and their pros and cons.
Keep in mind that patent protection is not suitable for all types of protection. For example, trade secrets should not be protected with a patent because patents are public documents that would expose your trade secret. Design patents are not appropriate for functional inventions, while utility patents are not suitable for designs.
Option 3: Wait to File a Patent Application
You can launch your product and delay filing the patent application. Under US patent laws, you have one year to test market your product before filing the application.
Waiting before filing allows you to gather valuable market data about your product or service. It also delays the expenses associated with filing a patent application until you have sufficient evidence that it’s worth pursuing.
In the past, when the United States followed the “first to invent” rule, startups often waited a year to accumulate sales before justifying the patent expenses. However, in 2013, the US transitioned to a “first inventor to file” rule, awarding the patent to the first applicant.
While there are exceptions that still allow marketing before filing, these exceptions have not been fully litigated, and the outcome remains uncertain. Furthermore, to utilize these exceptions, you would need to invest the money to prepare a regular nonprovisional patent application, making the cost similar to filing the patent application upfront.
The downside of waiting is the risk that someone else may observe your marketing, device, or service, and file their patent application for the same invention, beating you to the patent office. In such a case, not only would you lose the patent, but your business expenses would also be at stake.
Option 4: File a Low-Cost Provisional Patent Application
The last option is to file a bare-bones, low-cost provisional patent application. This approach may provide some degree of patent protection, but it’s important to note that it is not foolproof.
A bare-bones application lacks critical aspects such as variants, alternative versions, and minimum viable product details. These crucial elements are necessary for comprehensive patent protection.
The advantage of this option is its affordability. Filing a provisional patent application incurs a government fee of $65 or $130, plus attorney fees if you choose to hire one.
The downside is the uncertainty regarding the adequacy of patent protection in the long run. Simply having a patent-pending status does not guarantee sufficient protection in the event you obtain a patent.
Is a Patent Necessary?
Selling a product or offering a service does not require a patent, as long as you do not infringe on someone else’s rights. To determine if a patent might be beneficial in your case, schedule a consultation with us.
Are Patents Useless?
In certain cases, patents may be useless. For example, using a patent to protect trade secrets is ineffective. Consider Coca-Cola attempting to safeguard their closely guarded formula with a patent; it would not work since patents are public documents.
Similarly, patents are not suitable for protecting books or brands. Books should be protected through copyrights, while brands require trademark protection.
It’s important to identify the right type of intellectual property protection for your idea. Utility patents are useful for protecting new functional features, while design patents are suitable for protecting the visual appearance of a product.
To determine if a patent is useful for your situation, schedule a consultation with us.