Are Patents Still Worth the Time and Money?

Many inventors are asking themselves if it is worthwhile to file patent applications.  The answer to this question depends on the subject matter of the patent application.  Virtually every software patent that is litigated now is being attacked for not having patent-eligible claims under 35 U.S.C. Section 101.  Invalidation of such patents is now very common, no matter how unjust, even for exceptionally worthwhile software inventions.  The message for inventors is that software patents are now virtually unenforceable and therefore practically worthless as a defense against infringers.

Hardware patents are a different case.  Hardware patents have a better chance of withstanding invalidation attacks and having enforceable claims that are patent-eligible.  However, it is still strongly recommended to point out the differences and advantages over the prior art, both for negotiations with the Patent Examiner for allowance of a patent, and for defending the patent in court if you try to enforce the patent.  And of course, you should be totally honest in your dealings with the Patent Office and the court, because any wrongdoing will definitely be uncovered and brought to the attention of the court if you ever try to litigate the patent.

A Reason Why a Patent System Is Necessary

With so many companies and courts attacking the patent system and seeking to effectively gut the entire value of the patent system, the question arises as to whether the patent system does any good at all.  One answer can be seen from history.  The Roman Empire had no patent system and most of the really valuable and practical technology was essentially composed of trade secrets directly passed on by one craftsman to another.  One example was concrete – the Romans knew how to make and use concrete, both regular concrete and concrete that could set underwater.  When the Roman Empire collapsed, this technology was lost because there was no patent system to act as a repository of technical knowledge.  The secret of how to make and use concrete was not re-discovered until well into the 19th Century in England.  In other words, the entire human race took an astounding 1400 years to re-discover technology once known to the Romans.  If the human race was to once again descend into a dark age, the technology currently known and stored in the patent system is unlikely to be fully lost.  But if the patent system is effectively destroyed, then the loss of technical knowledge for centuries or even millennia could once again be repeated.

Advantages of a Prior Art Search Before Filing a Patent Application

Below is a list of some of the advantages of a prior art patent search:

(1)   To determine if a patent can be obtained to protect a large investment in development and marketing of the invention, while waiting for the Patent Office to grant a patent.

(2)   To avoid investing time and money in preparing a patent application without novelty.

(3)   To provide background information about the field of technology for the person writing the patent application.

(4)   To determine which components of the invention are novel, needing detailed description.

(5)   To obtain more technical information to improve or refine the invention.

(6)   To determine the economic value of the invention.

(7)   To obtain proof of non-obviousness to persuade the Patent Office to grant the patent.

(8)   To tailor the patent application to distinguish it from the prior art to obtain a patent.

(9)   To determine which invention features are novel to emphasize for the Patent Office.

(10) To persuade potential licensees that the invention is likely to receive a valuable patent.

(11) To determine the actual scope (large or small) of what has been invented.

(12) To make a stronger patent by finding patents that could be used to challenge it in the future.

(13) To enable a petition to “make special” to accelerate examination and speed up the issuance of a patent to allow the patent applicant to go after infringers for damages.

(14) To determine if the invention will infringe in-force patents, and the identity of the owners.

Should you file foreign patent applications too? In most cases – probably not.

There are some important practical considerations about filing foreign patent applications in addition to filing a US patent application.  Here are some personal observations that individual inventors and small companies should keep in mind.

(1) Unless the invention is as revolutionary as Alexander Graham Bell’s telephone invention (which was so valuable that it was worth the cost of the foreign patent applications), the total legal cost in time and money of enforcing a foreign patent is likely to be greater than the licensing fees gained by enforcing the foreign patent.  The US economy is quite large in itself, and the licensing fees gained from legally enforcing a US patent are more likely to be worthwhile.  And it appears to be easier to find a litigation law firm in the US that will take a patent infringement case on a contingency fee basis (i.e., they get paid only if they win), compared to trying to find a litigation law firm in a foreign country to take a patent infringement case in their country on a contingency fee basis.

(2) If you foreign file, you will have to rescind your US patent application’s non-publication status within 45 days (assuming you requested non-publication when you filed).  Non-publication of a US patent application (until the actual issue of a patent), because of several years delay in the US Patent Office, is almost always a great advantage in terms of avoiding a published US patent application giving foreign copycats a chance to rip-off your invention and file patent applications for it and sell it in the US and other countries before you even get your own US patent issued.

(3) As for the assertion that foreign patent offices (such as the European Patent Office) do a better prior art search than the US Patent Office – there is actually far more variability between the quality of a prior art search conducted by two individual patent searchers within a specific patent office, than there is variability in the quality of a search between the US Patent Office and a foreign patent office.  In other words, after conducting hundreds of prior art searches ourselves and comparing our results to the official results, we have seen many inadequate prior art searches conducted by foreign patent offices too.

NOTE – There can be other considerations, and the observations made above are not intended or given as specific legal advice for your own particular case.  So you should discuss these matters with your own hired legal counsel.

Micro-entity Fees and the Requirements to Qualify as a Micro-entity

Since March 19, 2013, a new “micro-entity” status has been available to some new patent application filers.  With very significant restrictions that needlessly exclude many inventors, it offers a subset of individual inventors a steep discount on fees associated with filing and prosecuting U.S. patent applications before the United States Patent and Trademark Office (USPTO).

To qualify as a micro-entity, an applicant must meet all of the following criteria:

  • Qualify as a USPTO-defined small entity.
  • Not be named on more than four previously filed applications.*
  • Not have a gross income more than three times the median household income in the previous year from when the fee(s) is paid.  This limit is now approximately $170,000.
  • Not be under an obligation to assign, grant, or convey a license or other ownership to another entity that does not meet the same income requirements as the inventor.

If an inventor is fortunate enough to meet the micro-entity requirements, the inventor became eligible for a 75 percent reduction on most fees.  As of January 2018, the base filing fee for a provisional application is $280, for large entities having more than 500 employees.  For small entities, the new price became $140; however, for individuals qualified for micro-entity status and the 75 percent reduction, the provisional application fee is $70.

The cost of filing a non-provisional patent application usually includes three components: the basic filing fee, the search fee, and the examination fee.  A small entity filing fee is a minimum of $860 for filing a non-provisional utility application, while a micro- entity filing fee is a minimum of $430.  These prices will remain until they are adjusted by the USPTO.

* The micro-entity definition states that applicants are not considered to be named on a previously filed application if he or she has assigned, or is obligated to assign, ownership rights as a result of previous employment.  Applications filed in another country, provisional applications, or international applications for which the basic national fee was not paid do not count as previously filed applications.  The definition also includes applicants who are employed by an institute of higher education and have assigned, or are obligated to assign, ownership to that institute of higher education.