If you are thinking about expanding abroad or bringing in an outside investor, you have probably considered patenting some of your technology, inventions or know-how. Early on, you will no doubt be asking how much it will cost, what types of patent exist, what a patent will allow you to stop competitors doing and how much a granted patent will add to the value of your company. When it comes to patenting, you have two options: 1) a provisional US patent, or 2) a full patent.
Advantages
Patent protection offers major benefits: you can either stop competitors from offering rival products and services altogether, or make them pay you royalties out of the profits from their products or services. A provisional patent is a shortened application with simplified claims that can be expanded into a full application within 12 months. A provisional patent does not let you enforce any rights against third parties, and it lasts only those 12 months. It can, however, be prepared at low cost. On the other hand, the claims in a provisional are decisive for the full application and cannot be changed later. A provisional prepared on a shoestring budget will not be good enough to serve as the basis for a full patent. Unless you invest significantly in developing the claims from the outset, a provisional will not help you obtain patent protection; with only a small initial outlay, its value is purely reputational. In practical terms, a provisional lets you put the “Patent Pending” label on your marketing materials.
Patent pending
If you are looking for an investor, “Patent Pending” can also make your company look more credible. You can refile a provisional every twelve months, paying only around $150 per application in later years. Writing a provisional can also be an educational exercise for your company, helping you build the critical mass of knowledge without which you might never move on to filing a full patent. A patent that is truly valuable is expensive, because its claims must be drafted to block every competing technical solution, and the drafting process should also reveal whether substitute solutions exist. Done well, however, a patent can increase the value of your company tenfold. As for the EU, once you have high-quality claims written for the US, filing a patent in the EU is relatively inexpensive, although some types of patent – notably certain software and business-method patents – cannot be obtained there. As for China, it is questionable whether translating the claims into Chinese and filing there is worthwhile, since patent enforcement in China is still limited: you would be paying for an application that grants protection but does not enforce it. Most applicants therefore end up not investing in Chinese patents. In short, while the USA sees the largest number of patent filings, it is rarely pointed out that most of them come from applicants who spend money on several applications.