Four rules for reducing patent spend

Four simple rules can reduce overall patent spend by 15-40 percent without impacting patent quality. Your patent attorney won’t be happy, but your bank balance certainly will be.

Four simple rules can reduce overall patent spend by 15-40 percent without impacting patent quality.

Every week we see a steady stream of business owners and managers frustrated (and frequently shocked) at the amount they are spending on patents. As one client put it: “It’s not death by a thousand cuts but death by a thousand gashes.” They approach us to stem this flow, which generally means asking two questions: Are you spending your money protecting the right things? And are you spending your money the right way?

The first is a big question and the subject of our first Idealog column; however, assuming you are protecting the right things, you can still reduce spend without compromising patent protection. So as a patent attorney now independent of the industry read on for my comments on some of the tricks of the trade to give you the top four rules to get more bang for your patent buck.

1. Limit thy claims
The most important part of a patent is its claims. The patent’s claims define the legal scope of your ‘invention’ and are used in court to determine if someone infringes your IP. Patent attorneys often encourage clients to file patents with lots of claims on the (apparent) logic that more claims equals more coverage or at least more flexibility. Don’t. Having lots of claims means your patent is likely to attract excess claim fees at the patent office, which can be extremely high (in the EU it’s 235 euros per claim over 15 claims, so 10 extra claims will cost you an extra NZ$3,700. We’ve seen New Zealand- drafted EU patents with more than 100 claims! Second, more claims equals more of everything else in the patent (description, drawings etc) which all require more drafting and, in non-English language jurisdictions, more translation which again is very expensive (a client recently approached us after they were presented with a $20,000 translation bill for one patent).

2. Ask for the claims first
When a patent attorney drafts your patent ask them to draft just the claims first and hold on the rest of the patent (description, drawings etc). If on reflection the claims don’t stack up then there is no point taking the patent further. The claims constitute roughly 50 percent of the patent so not drafting the remainder saves you big bucks in drafting fees if you decide not to proceed. Further getting the claims right first up reduces costly rewrites later.

3. Ask for the TCO
When instructing a patent attorney to file few applicants look beyond the initial filing cost to ask what the patent will cost over its life (its Total Cost of Ownership). Over the long run an average patent filed into Tier 1 jurisdictions around the world is likely to cost in excess of $500,000, much more if there are excess claims or if you file into Tier 2 countries (Brazil, Russia, South Korea, etc). About 30 percent of those costs will occur in the first five years. So get an accurate estimate – knowing the full cost makes for better decisions.

4. Manage thy overseas associates
When a patent goes international your New Zealand patent attorney will be liaising with patent attorneys in each country it has filed into. The patent is now governed by that country’s local IP law and work on it is largely done in that country, not New Zealand. Your New Zealand attorney is now essentially performing two functions: receiving mail from the overseas associate and forwarding it on with a covering letter and potentially providing strategy advice. Regarding the latter, as we have commented before, your patent attorney should not be defining your IP strategy. As for the former, these New Zealand costs, which can be substantial, can be reduced or eliminated by using your own administration resources to liaise directly with offshore associates – there is no reason you can’t talk to them directly.

Applied together the four rules can reduce overall patent spend by 15-40 percent without impacting patent quality. Your patent attorney won’t be happy, but your bank balance certainly will be.

Paul Davies is director of IP at EverEdge IP and a registered patent attorney. EverEdge IP is New Zealand’s largest and most successful technology and IP commercialisation firm, winner of the Outstanding IP Leader Award 2012, China