If you are considering expanding abroad or bringing in an external investor, you have no doubt already thought about patenting some of your technology, inventions or know-how. At this early stage, however, you are probably asking yourself questions such as: how much will it cost, what types of patent are there, what will a patent allow me to prevent competitors from doing, and how much will a granted patent increase the value of my company? When it comes to patenting, you have two options: 1) a provisional US patent, 2) a full patent.
Advantages
Patent protection offers considerable benefits: you can either prevent your competitors entirely from offering products and services that compete with yours, or require them to pay you royalties in the form of a share of the profits from selling their products or services. A provisional patent is an abbreviated patent application with simplified claims, which can be expanded into a full application within 12 months. A provisional patent does not allow you to assert any claims against third parties, and it lasts only for those 12 months. On the plus side, a provisional patent can be prepared with relatively low service costs. On the other hand, the claims set out in a provisional patent are also decisive for the full application and cannot be altered. A good provisional patent cannot be produced on a makeshift budget, and a poor one cannot later be relied upon for a full patent. Unless you invest substantial sums in developing the patent claims right from the outset, a provisional patent will not help you obtain patent protection. Where the initial investment is low, the value of a provisional patent is merely reputational – specifically, it allows you to mark your marketing materials with the words “Patent Pending”.
Patent pending
Likewise, if you are looking for an investor, “Patent Pending” can lend your company greater credibility. A provisional patent can be refiled every twelve months, and in subsequent years you pay only around $150 per application. Drafting a provisional patent can also be educational for your company, helping to build up the critical mass of knowledge without which you might never progress to filing a full patent application. A patent that is genuinely valuable is expensive. The claims must be drafted so as to rule out every competing technical solution, and the drafting process should also reveal whether any substitute solutions exist. On the other hand, a well-crafted patent can increase the value of your company tenfold. As for the EU, once you have high-quality claims drafted for the USA, the cost of filing an EU patent application is relatively low, although certain types of patent cannot be protected in the EU (chiefly some kinds of software patents and business methods). As for China, it is debatable whether it is worth translating the claims into Chinese and filing there, given that China does not yet protect patents particularly effectively. In other words, you would be investing in a Chinese application that grants you protection but offers no real enforcement, which is why most applicants ultimately decide against investing in Chinese patents. In summary: it is true that the USA sees the largest number of patent filings, but what is rarely emphasised is that most of them come from applicants who spend money on several applications.