Entrepreneur's Toolkit - Patent Costs
What Is the Cost?
As an entrepreneur, you understandably want to know what it will cost to obtain patent protection for your invention(s). Many people consider patent protection to be one of the more-expensive types of intellectual property (IP) protection. The formal cost can be significant, but costs are usuallyspread out over a period of years. It is important to know, however, that each invention and each patent varies due to issues such as complexity, closeness of what has gone before, and other issues, so this page is intended only to give you a general idea of what to expect.
Stages
Because patent costs are often spread out over time, it can be helpful to consider costs in stages:
Initial or Later Research
Because of the costs involved in preparing and prosecuting applications, you might consider some research to see whether someone has already done something similar that could keep you from getting a patent before committing to the next stage of wherever you are in the process. You can do this on your own, ask your patent attorney or agent to do this, or hire any number of companies to do this. Costs: free or several hundred dollars to several thousand dollars or more, depending on how thoroughly you want to search.
Application Preparation and Filing (U.S.)
If you prepare and file a provisional application on your own, the cost may be only a few hundred dollars in actual filing fees. Once you decide you need to hire a patent attorney or agent, costs vary greatly depending on things such as the complexity of the technology, attorney costs in your area, the amount of patent activity in your field that needs to be considered in the application. Nevertheless, you should probably expect costs on the order of about $5,000 to $15,000 for a nonprovisional application or a well-crafted provisional application (the filing fees for a provisional application are typically about $700 less than for a nonprovisional application). For many entrepreneurs, the cost of an attorney-prepared application occurs approximately twelve months after the very start of the application process (the provisional filing date).
International (PCT) Application Preparation and Filing
Preparation costs for preparing a PCT application only (as opposed to a U.S. nonprovisional application only) are similar to those discussed above for having a patent attorney or agent prepare the application. You can expect PCT application filing fees to be approximately $2,500 greater than the costs for filing a U.S.-only nonprovisional application. Note: the PCT cost is typically incurred approximately twelve months after the very start of the patent process, and costs other than filing fees can be shared with U.S. preparation costs.
Nationalization of a PCT Application
The PCT application itself is only a placeholder: it cannot mature into a patent and needs to be nationalized in any countries and regions (e.g., Europe) where protection is sought. Costs vary greatly depending on country and length of the application, but anticipate roughly $2,000 to $8,000 per country to file, plus roughly $2,000 to $5,000 to translate your application in countries where English is not an accepted application language, depending on application length. These costs are typically incurred approximately thirty months from the very start of the patent process.
Prosecution (Fighting the Patent Office)
These costs are among the most variable, depending on the issues raised by the Patent Office in examination, the closeness of the prior art located by the examiner, and other things often beyond your control. Some patents are issued after minimal work, but it typically takes at least one and sometimes as many as five or six rounds of back-and-forth. Plan on roughly $3,000 to $4,000 per round of communication.
Speeding Up the Process
In some instances, you can speed up the examination/prosecution process either by paying additional fees up front (approximately $1,700) or by relying on favorable examination in another country. Extra costs involved include the costs for your attorney/agent's time in preparing applicable amendments and requests, but relying on favorable action elsewhere generally reduces costs. Note that if you obtain prioritized examination by payment of the special fee instead, you will also speed up the frequency at which costs arise for fighting with the patent office; in other words, you pay the same amount, but sooner.
Maintenance
In the U.S., you'll need to pay maintenance fees at 3.5, 7.5, and 11.5 years to keep your patent in force. Outside the U.S., you will need to pay annuities each year even at the application stage to keep the application or patent alive. Fees vary by country (and sometimes by the number of claims in your application or other factors), but generally increase over time. Examples (not counting attorney or agent fees): U.S. (currently as of December 2023): $800, $1,504, and $3,080; Japan (15 claims): ~$60 yearly for first 3 years after earliest filing date, ~$160 yearly for years 4-6, ~$370 yearly for years 7-9, ~$890 yearly thereafter; Australia (starts only 4 years after grant): ~$200 at 4th year, gradually increasing to ~$322 at 10th year, gradually increasing to ~$850 at 15th year; Europe (application stage only): ~$570 for 3rd year after earliest filing date, gradually increasing to ~$1,700 to 9th year (once issued, annuities will be paid in each country of validation).
Enforcement (Litigation against Infringers)
Patent litigation is notoriously expensive, and non-litigation options are typically explored first. Additionally, settlement is often chosen to avoid some or all litigation costs. AIPLA publishes an economic survey, available for a fee, if you want detailed information. Litigation costs depend on the stage of litigation reached and the amount of money at issue. Many cases settle once claim construction is complete, and estimates indicate that getting to that stage will cost each party about $250,000 if less than $1 million dollars is at risk to as much as $2.375 million dollars if more than $25 million dollars is at risk. If the parties go all the way to trial, costs range from $700,000 to $4 million dollars for each side, depending on how much is at risk. Appeal costs and costs for alternate patent challenges at the Patent Office can add add to those numbers. Patent litigation counsel will be able to give you more-specific estimates based on your situation, so this is only to give you a rough idea.