Budgeting for a Patent

Most new applications we draft typically fall into one of the following categories:

Informal patent application – approx. $2000

Typically these applications cover simple mechanical inventions for which the inventor has already built a working prototype and/or has computer aided design (CAD) drawings explaining the principle of operation.

An informal patent application is essentially a placeholder application to preserve patent rights for 1 year. This time can be used by the inventor to obtain market and investor feedback.

At the end of the year, the application must be formalized. Usually this involves preparing a formal patent application that has additional description, formalized figures, and claims ready for examination.

Grant-funded patent application - $3000 to $4000

If you are a small to mid-sized business planning to apply for a patent to protect your intellectual property, you may want to apply for financial assistance from Alberta Innovates in the form of a micro-voucher. The up to $10,000 micro-voucher goes towards paying for your patent assessment and/or formal patent application. ATMAC has previously worked with several companies who have received the micro-voucher funding. If you are awarded the grant, you still need to contribute 25% of the total project costs + all GST amounts upon approval. Expect your contribution to be in the range of $3000-$4000.

See Applying for a $10,000 grant for patenting for more information.

Formal patent application - $8000 to $10,000

For protecting a single invention, a formal patent application with detailed description and several embodiments for solid protection will typically range from $8000 to $10,000. For best value, we work with you to ensure these patents are drafted to cover design choices and variations that are possible in addition to your original idea. Including variations and other embodiments that achieve the same result as your invention, even when those alternatives are not (or not yet) present in your go-to-market product, helps prevent others from easily designing around the patent.

Treat patents as an ongoing investment

When considering the costs of filing a patent application, it’s important to note that the initial filing costs are not the end of the costs.

There are further costs associated with a variety of tasks required during other stages in the patenting process. For example, if the patent application is rejected by the Examiner (this is very common), there will be costs associated with overcoming those rejections in order to reach allowance. There are costs for allowance in order to the have the patent granted. There are also costs for maintaining the patent. Likewise, if protection is desired in multiple countries, there will be separate costs for the patenting process in each country.

Example investment for protecting invention in North America for 20 years - $45,000

The following table illustrates an example of the investment required to protect a single invention in both Canada and the United States for twenty years. The numbers are rough but realistic estimates given typical complexity. The example assumes the patent applicant is an individual inventor or small business with 99 or fewer employees (i.e., qualifying for “small entity” discounts at both the Canadian and US patent offices).

Year 0: Small entity filing in Canada

Year 1: Small entity filing in U.S.A

Year 2-4: overcoming rejections & issuance

Years 2-19: Maintenance

Download a PDF of this example of patent costs

Monthly patent budget

We suggest allocating an initial investment to get a first application drafted and filed in a first country. Set up an ongoing monthly patent budget and accumulate the unused funds from the budget in the months when no costs are incurred so you’re ready to pay larger sums at later times when required.

R&D teams don’t naturally recognize patentable subject matter

The research and development (R&D) teams in many small and medium sized companies are generating patentable ideas without even knowing it. To a busy developer or engineer, creating inventive solutions is routine and nothing special. It’s just what they do.

Employment agreements should require disclosure of all potentially patentable ideas to company management; however, R&D team members often don’t recognize when the very projects they are working on and the brainstorm ideas they are having are patentable.

Without a patenting process in place to capture these ideas, patent rights evaporate into thin air. Failure to capture patentable ideas represents a tremendous loss of value to the company.

Ongoing strategic patent capture from R&D teams – $10,000 to $20,000/month

Our strategic patent capture service to protect inventions from R&D teams is designed to solve this problem. Especially suited for companies with innovating teams of 20+ individuals, we come to your office and work with your developers and managers to capture patentable ideas before they are lost.

We attend your feature brainstorming sessions and interview team members on an ongoing basis. As new ideas come to light, we fill out invention disclosure forms documenting the ideas and recording that they belong to the company. We guide you in developing a patent filing strategy to maximize return on investment and put in place a process for selecting which of the collected ideas are valuable enough to make the investment of a patent application. For the selected ideas, we draft and file the applications at the patent office.

Depending on the size of your R&D team and the number of captured and selected ideas, you can build a portfolio of ten to twelve pending patent applications within a year at a total cost of around $120k to $240k.

As time goes on, the pending applications are examined by the patent office and we work to overcome rejections and allow the applications to grant as issued patents. We also propose and file continuations and divisional applications to further bolster your portfolio at very little additional incremental cost.

Within a five-year period, your company can build up a portfolio of close to one hundred granted patents and pending applications – all generated from a sustained investment comparable to adding a full-time employee to the R&D team.

Return on invention (ROI)

When you average the costs out over the full twenty-year period and consider the benefits that you can obtain by having a strong patent portfolio, you should find it’s not expensive.

Done properly, patents generate more in value than they cost to obtain. They are an investment. The world’s biggest innovating and most profitable corporations continually invest in patent applications. Many file thousands of applications each year. They do this because of the increased value that is created from the investment.

Ready to get started?

Request a Clarity Session or contact us to get the process started.