Innovation Asset Blog

Managing Patent Application Costs Can Influence Your Margins

patent cost forecasting

The speed at which your business can develop protectable intellectual property (IP) can determine your survivability. If the competition does it faster, they’re able to launch their products and realize profits in your stead. But speed isn’t the whole business equation. As you pour resources into your new innovation, your margins steadily shrink. Patent creation costs and other protective measures contribute to that margin shrinkage. Luckily, just as organizations are able to forecast their development costs based on materials and personnel, they can also make some predictions for their patent spending and manage accordingly. While patent costs vary, here are a few characteristics that can help you maintain some cost control:

Invention Complexity

The type of invention you’re trying to protect is a contributing factor to the cost of that protection. Patent reviews require careful analysis often before they even reach patent attorneys. Careful review by patent or invention review committees (PRC’s or IRC’s) can pare down the complexity of an invention disclosure or add clarity through communications with the inventor(s). This can save time and expense when the invention finally makes its way into the hands of a specialized patent attorney.

Still, complexity is often inescapable depending on the technology field, and attorneys specialized in that field will be required. For example, a patent attorney with a degree or work experience in the field of medical technology would optimally review a patent for a new respiration device. Also consider that as inventions get more complex, they may require additional expert involvement. Part of the cost of the patenting process is accounted for by these experts’ time.

There are other aspects of invention complexity that affect the cost of the resulting patent:

Number of Claims, i.e. Patent Strength

More complicated inventions may be introducing more than one unique mechanical function, software application or other feature to the market. Each of these features needs its own claim. Without them, there will be no grounds for litigation and you have to just accept the market share. Every claim made strengthens your overall patent, but it also raises the patent cost.


A thorough description of the utility and characteristics of your invention also strengthens your patent, but untrained writers may leave out details that risk competitive exploitation later on, or outright rejection up front. Hiring a trained technical writer or professional familiar with patent filings may add to the patent cost, but it’s up to you to determine the value behind that cost. Remember that now the U.S. along with most other countries are “first to file” jurisdictions.  Can you afford to go back to the drawing board with your patent application?


In the same vein as description writing, technical drawings and diagrams will be an integral part of a strong and successful patent. A trained artist or designer who can study and understand your invention then subsequently adapt it as a drawing will be an important member of your patent filing team, and there will be attendant charges.

Patent Type

Various types of patents exist, and they aren’t all priced equally. The most common is a utility patent for the invention of “a new and useful process, machine, manufacture, or composition of matter.”  Utility patents are the most expensive type of patent to file for. The other forms are design patents, which protect aesthetic appearances only and do not cover product function, and plant patents, which protect the creation or discovery of a new species of flora. Filing for these patent types does not cost as much, but performing searches or examinations varies; utility patents cost the most, then plant patents, and finally design patents.

Prior Art

Your invention has to be unique in order to be patented. “Prior art” is any evidence that something identical or very similar precedes your application, and there is indeed a cost associated with prior art searches. Prior art is key to demonstrating the differences between your current invention and previous inventions. It includes such things as other existing patents or pending applications, and public pronouncements such as marketing collateral, press releases and scientific or other publications.

Size of Your Business

Finally, it should be noted that individual inventors and small businesses pay less than their enterprise or mid-size counterparts. The US Patent and Trademark Office lists thefull patent fee schedule on their website and features three cost categories based on the applicant’s entity size. This is weighted to minimize barriers for smaller entities.

After all of the investments organizations make into research and development, it’s crucial that they keep an eye on the costs associated with the process gaining protection for the great ideas that emerge – in turn protecting associated margins. For more on how to commercially value your intellectual property, download this free eBook on determining royalty rates.

Free eBook Download:  The Determination of Royalty Rates

Peter Ackerman

Peter Ackerman

Founder & CEO, Innovation Asset Group, Inc.