3 Values of a Patent

The Value of a Pending Patent: Chilling the Marketplace

While a patent is pending, the patent can remain secret. Since your competition cannot know exactly what you believe is new and different about your invention, they will face uncertainty if they choose to copy you. They cannot attempt to design around your patent. They will not have the advantage of knowing the exact details of your invention. Certain consumers are also savvy about the words patent pending. For these consumers, the words, patent pending, indicate that the product is unique. If they like a patent pending product, they do not price shop – they buy now. This can create an additional retail benefit for certain products marketed to certain consumers. Because of the value of marking a product patent pending, it is criminal fraud to mark a product patent pending or patent applied for without filing a patent application. Many small, innovative businesses choose to maintain the benefits of patent pending as long as possible. You can strategically use a provisional patent application to lengthen the patent pending by one year. When a formal application is filed under the informal, there is no significant, additional risk to the patent application. This also lowers the initial investment in the patent application by most of the governmental costs, which can be considerable savings. Courts frequently invalidate patents that originate from informally-filed provisional patent applications. Provisional patent applications allow for almost any kind of informality, but courts require certain legal formalities are always followed. Perhaps the most important formatility is “detail.” Courts requires sufficient details are included to adequately describe the invention, such that, the invention can be practiced without too much experimentation. Many informal provisional applications do not give sufficient detail. Do not take advantage of these informalities if you are merely trying to extend your patent pending period. You should file a provisional application that follows all the rules and requirements for a formal, utility application.

The Value of a Published Patent: Provisional Rights

After your patent is published, you have the right to collect a reasonable royalty from anyone who infringes your patent. The patent must issue without substantially changes from the patent publication. Patent applications automatically publish after they have been pending for 18 months. You may request early publication. You can also not publish the application if you promise to waive your patent rights in foreign countries.

The Value of an Issued Patent: When to accelerate prosecution, spend money faster, and have your patent issue quickly.

While a patent is pending, you cannot use the patent application to sue your competitor in court. The patent office must issue your application before you can enforce your rights. If you use the patent to sue your competitor in court, your competitor will spend money trying to uncover prior art to invalidate your patent. It is not unusual for these costs to approach or exceed seven figures. This is one of the values of an issued patent. One of the threats a patent presents to competitors is an expensive lawsuit. The lawsuit costs will include high legal fees, technical research fees and high damage awards. For this reason, you may wish to have your patent issue as quickly as possible. The Patent Office can accelerate the processing of an application for several common reasons: you previously conducted a search, competitors are infringing, if the inventor is over 65 years of age or in poor health. By accelerating the examination of your application, you are also accelerating your legal expenses. While an issued patent might have a higher intrinsic value to a business that can afford to file a lawsuit on a moments notice, other businesses may benefit from contingency-fee patent litigators. Contingency-fee patent litigators earn a percentage of any settlement or award in your patent case. This usually means low or no out-of-pocket expenses. Finding a contingency-fee patent litigator can be a time-consuming experience. The ability to find a contingency-fee patent litigator can depend on the strength of your case. Another common reason for wanting a patent to issue quickly is venture capital. Since the value of the patent is much higher after issue, some venture capitalists may require an issued patent prior to making any sort of investment. A pending investment is a valid reason for requesting accelerated examination at the patent office.

Other articles that may be helpful:

• Live Auction of 81 Patents, February 28, 2009: Ocean Tomo is starting its 4th year of patent auctions. A catalog of 81 patents for the spring auction is available for review....
• Time is of the Essence: Speedy filing best preserves your patent rights., February 24, 2008: Filing a patent application has a number of legal effects. Competitor’s activities, which would have been Prior Art before your patent application was filled, may eventually be found to infringe your patent. The patent application is a licensable, transferable property right. Patent rights...
• Prior to Filing: the Secrecy Problem, February 24, 2008: To encourage inventors to quickly file patents, many foreign governments require that the inventor file a patent application prior to any of these events: the first public use of the invention; the date of publication of any description of the invention; or the date of any sale, or...