Patenting costs

September 24, 2020
Patenting costs for one invention can vary to anywhere between US$30,000 to US$120,000 over the 20-year life.

Although many articles simply talk about the cost of obtaining patent rights, there are significant additional costs keeping the patent right alive over their 20-year lives. Also, the costs can vary a lot depending on factors like complexity of the invention, attorneys used, or number of jurisdictions.

Simply, patenting costs are incurred over many years, and highly variable.

Yet, the decision to file in additional countries must be made in the first year or two of the life of the invention.

The financial and strategic implications of whether to file patent applications and where to file them are significant, and the decision should not be made lightly.

Here, I show some scenarios on patenting costs over their 20-year life.

Overview

Patenting costs can be broken down by types, or by stages.

By types - I mean official (government) fees and attorney fees.

By stages - I mean pre-filing (preparing the application), application (getting the patent), and post-grant (maintaining the patent).

Typically, the biggest costs in the application and pre-filing stages are attorney fees, and the post-grant stage costs are dominated by official fees.

Filing in one country (United States) only - low cost

The U.S. is likely to be the country to file in if only one filing is to be done, on a limited budget for instance. An estimate of costs over a 20 year life of a patent comes to US$30,000 for a small company, as in this graph:

Filing in major jurisdictions (US, Europe, China) only - moderate cost

To cover the major jurisdictions, patent applications could be filed in the United States, Europe and China which would cover potentially about 35% of the world's GDP.

As for the European option, we assume that the rights will be sought in Great Britain, Germany and France only.

We assume going through an international (PCT) application process which delays some of the cost that is incurred. Still, the overall costs are significantly higher than the single country option - this scenario comes to approximately US$120,000 over the lifetime of the patents.

Just looking at these two graphs highlight the immediate financial impact of varying your patent strategy for years to come.

Filing in additional countries - worth it?:

On top of these, filing in additional countries will incur additional costs. The bulk of additional fees will be incurred in local attorney fees, translation costs where necessary, and annual maintenance costs to keep the patent alive.

The overall costs can easily double the above estimate, which may be somewhat conservative according to some.

I always recommend that the decision be made taking account both your financial situation and strategic considerations for your business. Read more about strategic considerations.

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