Patents are really expensive

I rang a patent lawyer today to discuss my upcoming business, to check whether any part of what I’m doing is patentable. There’s a lot of existing systems and papers that describe part of what I’m doing, but not all.

In any case, he told me that if I decide to pursue and Australian patent, I could expect to spend around $3000, and for an international patent, at least another $10,000. Both with no guarantee of success of course.

It makes me wonder. The popular image of patents is a canny fellow thinking up a clever doodad in his garage. But in practice it doesn’t work that way — the vast majority are lodged by large corporations. In software they are generally lodged defensively, creating a situation of mutually-assured patent wars if one big firm decides to sue another big firm. Then the little guy loses out because he doesn’t have any patents to swap.

So a question for the lawyers and economists: would it be worth changing the patent system so that only individuals could file in their own name?

This entry was posted in Business, IT and Internet, Law, Startup. Bookmark the permalink.

12 Responses to Patents are really expensive

  1. JM says:

    Did your lawyer tell you that you can make a preliminary filing with a brief description (can’t remember the exact term) that costs about $70 and is valid for 12 months after which you have to make a complete filing?

    That gives you 12 months to develop the idea, and build a business on it before deciding whether a full commitment is worthwhile.

    Even once you’ve done that, you don’t have to pay everything immediately. Full fees are usually only due when the application is examined. Many people leave the application unexamined (ie. “patent pending”) for quite some time and only get it examined when they want to enforce it.

    OTOH – the Patent Office will take it on themselves to examine (and refuse) the patent if they think it’s spurious (I’ve seen that a couple of times*)

    BTW – there is no such thing as an “international patent”, you have to apply separately in each country with the proviso that it is usually a formality as under the Berne Convention (?) all recognize the priority of the first application.

    What most people mean when they say “international patent” is simply an entry recording the existence of the patent in a Swiss clearing house register. That entry just records the title and patent number, you have to go back to the original country to see the details.

    * With start ups. They claimed “international patents” to impress investors but all they really had was unexamined claims. In a couple of cases the “unexamined” claims turned out to have been formally rejected by the Patent Office – they were trite and laughable. I wouldn’t have believed they were valid patents even if they hadn’t been rejected.

  2. JM says:

    Postscript: As far as I know you have to file in an individual inventors name – company employees usually assign the patent to their employer in return for support in lodging the claim.

    At least that’s the way most intellectual property clauses in employment contracts read.

  3. Jacques Chester says:

    JM

    Yes, he did mention preliminary filings and also Innovation Patents, which are particular to Australia. He also pointed out that ‘international’ patents are really patents individually lodged in various countries.

    But a most of the price is in drafting the documents. That’s why it costs thousands and thousands of dollars; you’re paying a lawyer to be an engineer, approximately.

    I’ve asked a few of the local firms to tell me if what I have is even patentable in the first place. Personally I don’t think so.

  4. Richard Green says:

    I think we’re better off doing away with patents at all. The whole concept is based on an illusory notion of innovation. That there are a few special people who have unique insight and singlehandedly advance technology, rather than innumerable gifted people tinkering around the edges. Even in the rare cases when we do have an individual that makes fundamental breakthrough, rather than managing to add something or synthesise something, they usually haven’t 3% of the conception of the applications of what they’ve done.

    Hey, if we did have such heroic, superintelligent/knowledgeable people who can gather together complexities involved in innovation, we could put them in charge of a command economy!

    But of course, tacit knowledge is the same in innovation as it is elsewhere in economic processes, and patents just needlessly slow the application of this knowledge to innovation. Those who can details that can be changed, or different contexts in which to place it.

    I guess if we think that government still needs to intervene to spur innovation, prizes and tax breaks are a better option than intangible property rights. Maybe this can still be done with your proposed restriction to individuals if we want to protect the heroic garage tinkerer of legend.

    The main concern is how messy the legislation will be if you want to prevent scenarios like the following (alluded to by JM).

    Mr A works for Company B.

    Company A and company B produce technology X.

    Mr A patents technology X and immedietly licences it to Company B for 99 years.

    Company B sues Companies D through K and individuals Mssrs P,Q,R,S,T and U on behalf of Mr A.

    Company B’s lawyers cackle wickedly.

  5. JM says:

    Jacques I’m not talking about innovation patents (ie. short term patents for small ideas, rather than 20 year patents for big ones)

    The normal patent process as I understand it (I am not a lawyer) is that if you’re the guy in the garage with the bright idea you have the following problem:-

    * you can’t talk about your idea to anyone without losing it,
    * you have to talk to people to get funding for it

    So the first step in a patent application is to jot down some simple outline in your own words and lodge it (fee $70, but could be more now as it’s a few years since I did this).

    You’ve put your paw on the bone. Now spend 12 months developing the idea and put in a more complete application and description later.

    During that time you can talk to investors without threatening your priority to your idea.

    At the end of 12 months you have 3 choices:-

    1. drop the whole thing
    2. go for a full patent (which you can extend internationally)
    3. go for an innovation patent (which you will find difficult to internationalize)

    Email me and I’ll put you onto a pretty good, and pragmatic IP lawyer. He won’t rip you off but he is very competent and will do a good job for you.

  6. Jacques Chester says:

    JM

    My understanding is that a lot comes down to how the thing is phrased, which is what the lawyers want bulk $$$ for.

    One law firm has written back to me to say they think I’ve got a patentable idea. All very well. They want $3000 to lodge the preliminary for me.

    I wouldn’t mind more opinions. Can you email me at [email protected] with your fellow’s details?

  7. Tel_ says:

    Jacques, it’s not the actual patents that are expensive, it’s the (purely optional) lawyers who help you with the wording of the patent (and possibly help you defend it later on down the track). The price of patent filing is low by government decree, the price of lawyers is what the market will stand (given a throttle on supply thanks to various restrictions). Thus, the high price that concerns you is high because other people believe they get some return on that.

    If you do decide that a patent is NOT the right way to go, then you really should publish as much as possible to scuttle the chances of anyone else getting a patent. Defensive disclosure and all that. Remember that someone else can still patent your business out from under you, even when you had the idea first. Even after you do get a patent, then publish all the almost-same variations on the idea to scorch the earth around yourself (be very, very sure to publish AFTER you get granted the patent).

    As for what is patentable and what is not, from what I have read, if there is no prior art after some reasonable search, and the idea is not totally obvious then the patent office grants the patent. They just leave the details for the courts to handle when someone challenges it. The standard for “obvious” is so low that a snail could jump over it. The “forbidden” areas such as mathematics and software patents are not really forbidden anymore, make it sound like a machine and everyone is happy.

    BTW, I’m an engineer, not a lawyer. I’ve read a lot of patents but not written any. The level of legal mumbo-jumbo has rendered the patent database pretty much useless as a body of knowledge and (like everything else the lawyers get hold of) turned it into a silly pointscoring game. Sadly, for many endeavors it’s a compulsory game (like the tax system).

  8. Jacques Chester says:

    Well there’s the odd thing about patents. The whole idea is to advance science and industry by rewarding disclosure with a limited monopoly. Yet these days (in software at least) the only reason to get them is to prevent other people from suing you with their patent portfolios. How does that advance science and industry? If anything it slows it all down.

  9. Tel_ says:

    I would posit that the whole idea is to advance the legal revenue share, by using the plausible cover of advancing science and industry. From this perspective the system is working pretty darned well. Any system of this nature will be able to benefit a few people sufficiently generously that they become great advocates of the system that supports them.

  10. Pingback: frase clave

  11. LED Headlamp says:

    We absolutely love your blog and find almost all of your post’s to be exactly I’m looking for. Would you offer guest writers to write content for you? I wouldn’t mind composing a post or elaborating on most of the subjects you write with regards to here. Again, awesome weblog!

  12. USV says:

    Thanks for the article, how can I make is so that I receive an update sent in an email whenever you publish a new post?

Comments are closed.