Appendix B – What Good Patents Cost
This is a reproduction of Investing in Patents by Russ Krajec. For the complete book, get it on Amazon.
The patent cost of $56,525 comes from a cost model based on the industry average for patents. These data are based on the American Intellectual Property Law Association (AIPLA) semi-annual report on fees charged by intellectual property lawyers for various functions.
The average patent in the US costs $56,525.00 over its lifetime.
The semi-annual AIPLA report is the best standard for judging reasonable fees for IP work, including patent and trademark preparation and prosecution, litigation, and other IP-specific work. This report is used by lawyers nationwide as the benchmark for fees and includes breakdowns of fees from different locales, number of attorneys in a firm, practitioner experience, and other breakdowns of data.
This analysis uses the national average of all respondents as the baseline for setting fees. This cost model assumes small entity status and the 50% discount that the USPTO gives to small entities.
The cost of a patent has one large unknown: the cost of the examination. Some patents will be allowed at the first look by the examiner while others will languish as there are endless office actions and responses. It is not unusual for a patent to be pending for 5 or even 10 years.
The average patent application has 4.2 office actions. This value reflects the experience of several experienced attorneys as well as data from a very large company’s 30,000+ patent portfolio. From this number, the number of Request for Continued Examinations (RCEs) are anticipated to be 1.5.
The likelihood of filing a pre-appeal brief is determined to be 0.75 per case. This value is again derived from analysis of approximately 300 recent cases prosecuted by surveyed practitioners. Of those cases for which a pre-appeal brief is filed, approximately 1/3rd are appealed to the full board and the remainder are either allowed or prosecution is reopened.
The fees used in the cost model are current as of the date of publication, and are based on small entity rates where applicable. Some of the fees, most notably PCT fees, can vary widely based on the case, and for this analysis, an approximate mean value is used.