Gullible Angel Investors and Provisional Patent Applications

Last time, we discussed the provisional patent application hoax perpetuated by patent attorneys. In this post, we look at the scam from the inventor/entrepreneur side.

Many so-called inventors/entrepreneurs like to file their own provisional patent applications, then shop these to gullible angel investors, hoping that the angel investors will bite. The “inventor” is hoping that the gullible angel investors will not recognize the problems with provisional patent applications – and pay for the non-provisional patent that the inventor did not think was worth the original investment.

In many cases, gullible angel investors do not realize the problems with provisional patent applications and actually believe that they make good business sense.

To be clear: provisional patent applications never, never, never make good business sense for startup companies.

Filing a Provisional Patent Application Proves You Don’t Believe in the Invention.

Very simply put, if the eventual patent has value, it is worth the investment. If it is not worth the investment, put as little effort into it as possible. Provisional patent applications are the quintessential way to put as little effort as possible in your patent.

Every patent application, provisional or non-provisional, must have the exact same content. If you do a provisional and then a “full” application later, you do not have protection until AFTER the second application is filed.

The only difference between a provisional and non-provisional at the USPTO is about $600 in small entity filing fees.

Any provisional patent application filing says – out loud – that the inventor did not believe their provisional patent application was worth the extra $600.

As an angel investor, you need to recognize that the inventor’s actions speak volumes. If the inventor did not think it was worth the extra $600, why are they trying to sell me on investing $100,000 or more based on it? It is because it is a scam.

The Excuse of “No Money” is No Excuse.

Many so-called entrepreneurs claim poverty as an excuse for filing provisional patent applications. This is not an excuse.

If the patent were worth tens or hundreds of millions of dollars, they would move heaven and earth to make sure it was as perfect as possible. Since only 2% of all patents are transacted, licensed, or enforced, they would do everything in their power to make sure that their patent is in that coveted one out of fifty patents.

A true entrepreneur who believes that their patent would be worth millions of dollars would take a second mortgage, pick up some extra shifts at McDonald’s, drive a few weekends for Uber, or do whatever it takes to ensure they did everything they could.

Like everything in business and in life, there are tradeoffs. If someone really, really thought their patent would be valuable, they would never throw it away by doing a shoddy job on it.

On the flip side, if they cut corners and file a “thin” provisional, that may be a very legitimate business decision. I have no problem with that.

Just don’t push the narrative that the patent will be valuable in any way, other than to enrich their patent attorney.

In other words, do not think that you have created anything of value.

And, do not commit fraud (and go to jail) by promising investors that you created something of value. See: Theranos.

An Early Filing Date vs an Early Allowance Date.

Many so-called entrepreneurs like to brag about their “early filing date” with their provisional patent applications. But there is something far more valuable: the early allowance date.

Provisional patent applications were created for one purpose only: to DELAY examination of your patent.

You file a provisional patent application only because you do NOT want your patent examined.

I would argue that the faster you get your patent, the better off you are.

My preferred route is the Patent Prosecution Highway, which can often get you a patent within 6-12 months (if your patent attorney puts in the effort). The costs are compressed, but the faster you have your patent, the faster you can raise money, borrow against the IP, enforce your patent, license your technology, etc.

It is immeasurably short sighted to delay getting your patent asset by filing a provisional patent application.

As an angel investor, you need to ask: is this the kind of decision making I want to see in an entrepreneur? Is this entrepreneur going to be a good steward of capital?

Provisional Patent Applications Create Lots of Problems.

Most angel investors are unaware of the problems by filing provisional patent applications. These include:

Poorly drafted “thin” provisional patent application leads to invalidating the patent. New Railhead Mfg. v. Vermeer Mfg. Co. 298 F.3d 1290 (Fed. Cir. 2002)

Using provisional patent applications as “placeholder” looses everything. Dynamic Drinkware LLC v. National Graphics Inc., 800 F.3d 1375 (2015).

Provisional patent applications do not always give you an “early filing date.” In re Riggs, Case No. 2022-1945 (Fed. Cir. Mar. 24, 2025).

There is never, ever, a good reason to cause these kind of problems with your patents. If you think the patent will be valuable, make the investment. If you don’t think the patent will have value, that is OK.

However, do not promote a provisional patent application as something that has value. It does not. In fact, it can de-value your non-provisional filing, putting your whole investment at risk. All that for being too cheap to pay an extra $600 filing fee.