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Patent Reality: Basement Prices Mean Basement Quality

Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog
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Posted: Aug 11, 2012 @ 12:41 pm
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Many corporations do exactly the wrong thing during a recession, namely downsize, spend less on research and development and essentially shoot themselves in the foot.  But myopic corporations are not the only ones who engage in activities that are contrary to their own interest.  Independent inventors and small businesses are struggling and for every encouraging economic sign there are many others that show a stalled recovery; a recovery that was already going to slow to start with.  There is nothing wrong with being cost conscious, but there is a difference between being cost conscious and being cheap.

As is the case with all recessions or economic downturns, more and more people are turning to inventing.  Just over the last several months, since at least late winter 2012, I’ve seen an uptick in the number of inquiries from inventors of various levels of experience who are interested in doing their own thing, starting a company or expanding the small business they already have to incorporate some new invention.   This is not at all surprising, and is in fact exactly what you would expect.  For many of these individuals and businesses, however, cost is the primary driving concern.  They want to succeed, but they need to keep costs down.  That is understandable and commendable, but when cost consciousness grows to the point where it interferes with proper execution of the plan then one has to at least ask whether it makes sense to pursue the plan.

When finances are difficult people look to themselves for assistance, and to figure out how they can make a better tomorrow without relying on anyone else.  But if you do not have enough resources to pursue a plan in a manner that is likely to succeed all that you have done is waste time and money.  Yes, the dirty little secret is that being cost conscious and seemingly financially responsible can lead exactly to the point where you didn’t want to be. The truth is that if you cut too many corners in the invention to patent to commercialization cycle your odds of succeeding go down dramatically.  Being cheap is not synonymous with being fiscally responsible.

The Internet has caused low cost providers in the patent service space, who are sometimes not even patent attorneys or patent agents, to offer ever lower prices.  For example, I spoke with an inventor the other day who paid $1,200 for the preparation of a non-provisional patent application.  The application is extremely short, has little information about the invention, no information about the nuances of the invention, no discussion of alternative versions of the invention and doesn’t have information relating to what the inventor says is actually the invention.  I wish I could say this is a unique conversation, but it is not.  For many new inventors the first time they realize there is a problem is when a Patent Examiner starts the prosecution process.  Unfortunately, by then it is almost always too late to do anything about a defective patent application.  Worse yet, there are frequently (if not nearly always) events that have transpired post filing of the defective patent application that will make it legally impossible to ever obtain a patent.

One thing that inventors and small businesses need to do is shop around for pricing, and you have to have an idea what a reputable patent attorney or patent firm would charge for your project.  That quote will likely be much higher than you want to pay, likely higher than seems reasonable.  Then you shop around more and find some bargain basement provider, who may or may not be a patent attorney or patent agent, who offers to do the job for 20 cents on the dollar, or less.  Many times the inventor will jump at this price and praise their good fortune.  What has really just happened is the inventor has selected the lowest bidder to do  the project.  To properly do the project may take 40 hours, so the way it is at all economical for the low bidder to undertake the work is to not only charge 20 cents on the dollar, but to also spend only 20% of the 40 hours necessary to do the job properly.  So that means you get about 8 hours of time, if that.  The truth should be self evident — you cannot competently do a job in 8 hours when the job requires 40 hours.



The more time you spend drafting a patent application the better, more detailed and stronger the application is.  That reality may not sit well with some, but it is the honest truth.  When most people stop and think about it they know in their heart of hearts that it is correct, yet they allow themselves to be lured in the savings they will receive.  They actually convince themselves that a highly skilled patent attorney who would spend 40 hours on the project will produce nothing more than an inexperienced patent attorney or patent agent who spends a fraction of the time.  Sometimes they will convince themselves that someone who is not even a patent attorney or patent agent will be able to do just as good a job as someone who has been practicing for years.

I know very well what the capabilities are of those with minimal experience.  I have been an attorney for nearly 17 years, and a patent attorney for nearly 14 years.  I have taught various patent drafting courses, patent claim drafting courses and patent prosecution courses at various law schools for at least a decade.  I have also taught a patent bar review course for PLI for over a decade.  I deal with new attorneys and engineers wanting to become patent attorneys or patent agents all the time.  They are eager to learn, but have a long way to go.  Even after an entire semester in a law school class students are unable to draft something that wouldn’t need significant editing by an experienced practitioner.  And yet inventors somehow manage to convince themselves that anyone can do this patent stuff, even someone without any training.  Extraordinarily naive.

If you are skeptical allow me to discuss this reality in terms of the patent search process.  Do you really think that you are going to get the same detailed search and analysis for $250 as you will for $2,500?

Those who are serious inventors and business people know that a $250 patent search is not as good as a $2,500 patent search and opinion.  You simply cannot have highly trained, competent people spending the amount of time necessary to do even an adequate job if you are paying only $250, and serious folks understand that.  Serious inventors also understand that the goal is not to do an “adequate job.”  The goal is to protect innovations and build a business, so serious inventors do not want to and simply will not shop for the lowest price, whether it is for a patent search or a patent application.  Doubt that?  One of the best, most busy patent attorneys I know charge $900 per hour and he has more work than he can almost handle.  He is a computer genius (and I mean that literally) and highly sought after.  Those who need quality and can afford it get the best and pay whatever it takes.  That isn’t a realistic strategy for individuals or small businesses.  Being cost conscious is prudent, but not to the point where it compromises the entire plan.

Sophisticated inventors know that you will not receive the same thing in terms of patent service if you pay $2,000 for an patent application instead of paying $8,000 for a patent application.  From the perspective of a novice or not yet savvy inventor a $2,000 patent application will look identical to the $8,000 patent application.  In a patent application, however, the devil is in the details, and the single most important part of a patent is the claims, which the uninitiated simply cannot read and understand.  Thanks to crazy rules patent claims need to be written in what approximates a foreign language, or perhaps the equivalent of Shakespearean English.  Cheap patents can be obtained because the claims are extremely narrow and provide little, if any, useful rights.  Unless you hit a grand-slam home-run in terms of inventing you will never know if your patent claims are good, bad and/or ugly.  But imagine the horror of hitting said grand-slam home-run in the bottom of the 9th inning to win Game 7 of the World Series, only to miss first base and be called out!  That is unfortunately what happens to those inventors who race to the low cost provider and eventually wind up with a worthwhile, economically viable invention.

There is a reason why low cost solutions are in a free-fall race to zero, or what I typically refer to as a race for the bottom.  If what you are providing to people is low quality you naturally must keep prices low; no one would pay otherwise.  In such a market where there is an endless stream of market entrants who cannot compete on high quality or expertise, they compete on price, which further drives the price down, leaving less margin, less time to provide the services promised and as a result quality continues to suffer.  So before you consider going with a low cost provider thought really should be given to why the market is pushing prices down on the low end.

So the moral of the story is this: inventor beware!  Some of you will pursue inventing as a hobby, and if that is you whatever you do is fine.  My uncle used to hang his issued patents on the wall, and after some disappointments and missed opportunities due to circumstances beyond his control he stopped inventing for profit.  He was extremely gifted mechanically and electrically, his talents made a career for him and his own business, and he was an extremely proud inventor.  If that is you, follow your dreams and do what you want, including getting a patent from the lowest bidder.  If, however, you are trying to invent for profit and to start a business you need to take note of the reality Thomas Edison learned early on.  Invent where there are market and business opportunities, not because what you are creating is cool.  I don’t think Edison actually used the word “cool,” but you get the idea.  You need to see the inventing and patent process as a part of an overall business strategy, and if you do that, and are honest with yourself, you will realize that blindly choosing the low bidder without thought is not a winning strategy calculated to succeed in the overwhelming majority of circumstances.

So now what?  The pages or IPWatchdog.com are filled with information to educate inventors about what needs to be in a patent application and how to do a patent search.  This article is not intended to say that cost should not be a consideration, that in and of itself would be naive.  Rather, you cannot expect cheap services to lead to the same high quality patent as would be obtained from an experienced, quality patent attorney who has the time necessary to do the job properly.  Thus, you need to appropriately move forward with a budget and spend money that is justifiable from a business standpoint.  Conservative spending is fine, but being cheap and fooling yourself into believing you are getting high quality for a bargain basement price is foolish.

For some tips and suggestions on how to move forward responsibly yet economically please see:

  1. The Business Responsible Approach to Inventing
  2. Top 5 Mistakes Inventors Make
  3. Starting the Patent Process on a Limited Budget
  4. Inventor Pitfalls: Causing Irretrievable Patent Damage

Even if you never draft your own patent application it will still be useful to understand as much as possible about the process.  That will make you a better inventor and put you in a position to more meaningfully work with the patent attorney or agent you hire to represent you.  For information about what needs to go into a patent application please see:

  1. Tricks & Tips for Describing An Invention in a Patent Application
  2. Defining the Full Glory of Your Invention in a Patent Application
  3. Patent Drafting: Describing What is Unique Without Puffing
  4. The Key to Drafting an Excellent Patent – Alternatives
  5. Patent Drafting: Language Difficulties, Open Mouth Insert Foot
  6. Patent Illustrations and Invention Drawings, What do you Need?
  7. An Introduction to Patent Claims
  8. Drafting Patent Applications: Writing Patent Claims
  9. Drafting Patent Applications: Writing Method Claims
  10. Patent Claim Drafting for Inventors

If your invention deals with software, business methods or computer related technologies please see:

  1. Writing Software Patent Applications
  2. Defining Computer Related Inventions
  3. The Information Needed to Avoid Writing Bad Software Patents
  4. Software Patents and Murphy’s Law: Uncertainty is Where Patentability Resides
  5. Patenting Business Methods and Software in the U.S. 
  6. Patent Drafting: Defining Computer Implemented Processes 
  7. Business Methods: Concrete & Tangible Description a Must

 

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For information on this and related topics please see these archives:

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Posted in: Educational Information for Inventors, Gene Quinn, Inventors Information, IP News, IPWatchdog.com Articles, Patent Basics, Patents


About the Author

is a US Patent Attorney, law professor and the founder of IPWatchdog.com. He is also a principal lecturer in the top patent bar review course in the nation, which helps aspiring patent attorneys and patent agents prepare themselves to pass the patent bar exam. Gene started the widely popular intellectual property website IPWatchdog.com in 1999, and since that time the site has had many millions of unique visitors. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, USA Today, CNN Money, NPR and various other newspapers and magazines worldwide. He represents individuals, small businesses and start-up corporations. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

 

15 comments
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  1. You can have two of the three: fast, cheap, and quality. My clients have control of two of the three.

  2. Gene -

    Back when I began practice, a general practice attorney friend told me of a call he had received. The first thing out of the caller’s mouth was “How much do you charge an hour?”

    My friend replied, “One Hundred Fifty Dollars.”, a common rate back then.

    The caller responded, “I know a guy who charges only Fifty Dollars an hour.”

    My friend, witty as ever, replied, “He must know what he is worth.”

  3. Very well said/written Gene-

    You generally get what you pay for, and if the client doesn’t understand that, They have a problem, and Not the practitioner. By way of an analogy, consider the purchase of tools for and by a talented craftsman. Patents are just business tools, after all.

    Analogies can be iffy sometimes, but it seems to apply here. I can either buy a cheapo $30 jigsaw at the local hardware store, that Might last for about 4 months of diligent use, or I could buy a Bosch jigsaw for about $350 that will probably last for at least ten years, and the accuracy of the angle of the cuts will be at least 4 times better than the cheapo saw. Case closed as far as I am concerned.

    With patent applications, the possible consequences of the cheapo approach would seem to be radically magnified, wherein saving say $4000 on the application might equate to the inventor having Nothing to show for their efforts, instead of possibly a very generous reward for their efforts. This is a very difficult game to play, and only the strongest and smartest are likely to survive, in a business sense.

    Cheers,
    Stan~

  4. Thanks Stan.

    Being fiscally responsible and cost conscious is a fine line with patents. Getting someone with a good reputation who can save you money is one thing, but racing for a $1,200 nonprovisional is quite another. This stuff takes a lot of time to get right, and it is the nuances that make all the difference in the world.

    Stay well.

    -Gene

  5. Is what is wanted an enforceable patent or a mere number?

    Those who elect the second choice may not end up with an inexpensive patent as at first hoped. True the document may be inexpensive to file, but sorting out the 102, 103 and 112 issues may be surprisingly costly and difficult.

    And those who elect the first choice should realize that good patents do not come cheap. The patent specification has to be of a quality that is fit to put before a court. Specifications of the Bilski and Prometheus quality simply do not meet the required standard – and foreseeably so. It is worth repeating in block capitals:

    THE SPECIFICATION HAS TO BE GOOD ENOUGH TO PUT BEFORE A COURT!

    It suffices to quote the Federal Circuit in Sage Products v Devon Industries:

    “Given a choice of imposing the higher costs of careful prosecution on patentees, or imposing the costs of foreclosed business activity on the public at large, this court believes the costs are properly imposed on the group best positioned to determine whether or not a particular invention warrants investment at a higher level, that is, the patentees.”

    If we do not follow the Court’s advice and adopt appropriate care in the serious matter of drafting our patent specifications we have only ourselves to blame.

  6. Paul, has the USPTO taken to heart this analysis from the Federal Circuit? Is it implementing it? I mean, is it still diligently “imposing the costs” on Applicants? Or is it losing interest once more?

  7. It is for the patentee to expend all necessary cost and effort to create a well-written specification and for his or her attorney to help him.

    It is not for any patent office to needlessly add to the costs of any applicant. Raising the bar is appropriate for the entrance to a car park, not for a patent office.

  8. I smiled but I’m not sure I understand you there Paul. Are you in favour of a “Registration Only” system, or one in which surviving PTO scrutiny gives you a Presumption of Validity that only clear and convincing evidence can undermine, or do you like the EPO system, in which the statutory task of the EPO is to grant patents but that of its Examining Divisions is to resist issue of a patent until the application complies with all requirements of patentability imposed by the European patent Convention? I was merely thinking that the higher the Presumption of Validity, the more carefully the PTO should be, before it goes and issues a patent on the application in view.

  9. Max-

    It used to be that all granted US patents were presumed to be valid, since they had already been hopefully thoroughly *examined* by the USPTO, as regards to prior relevant art, and also having survived 101, 102, 103 and 112 objections to patentability. Now suddenly the Supreme Court and even Congress has decided that that standard is not good enough, allowing several new ways to substantively challenge the validity of US patents, apparently just to *protect* the interests of large corporations that have been whining for years about all those nasty *patent trolls* that are harming them so much financially through litigation expenses, which term the large corporations *invented*.

    Do you happen to realize that all of the whining is all about them losing One Half of One Percent or less of their profit margins? Meanwhile small entities are being driven into the dirt, because large corporations can just take a very small sliver of their profits, as in say $50,000,000 to *buy* legislation or Senators to make the laws more favorable to their precious bottom line, so that the CEO’s can continue to reel in their yearly multi-million dollar bonuses.

    Perhaps you and others don’t get that too much, because it is mostly a North American sort of thing, as far as I can tell. Where are the British or German MickySofts and Apples? Let alone the Cisco’s and Intel’s and on and on, who worked so hard to make small entities just go away forever, and who cares about US patent rights being worth anything? I for one Do Care, which is why I doth protest so much at times, when I think my concerns might actually be heard by some.

    A free glass of my new Avid Apricot kewl-aide for any that might care to imbibe, and leave all of their worries and concerns behind them. What? Me worry? Never a care as long as I have some high-test Avid brewing up out in the shop. Free samples gladly sent the next business day, as long as you are willing to sign a product liability disclaimer.

    Sincerely yours,
    Stan~

  10. Ah, the good old days,eh? Gone, gone, gone. So, today, are we all now doomed?

    What’s the answer Stan? Trust your local PTO to do the right thing? In that case, who shall watch the watchers?

    Me, I’m optimistic. Till two weeks ago, most people (including many British) thought the British of today were effete lazy cynical greedy immoral, and useless at everything, except perhaps financial engineering, drinking and making music. Now, following The Olympics, people (including many British folks) are not so sure of that.

  11. Please refer to the word “needlessly” in post 7.

    Patent examination is carried out with necessarily limited resources and cannot be as thorough as the examination which is made in inter partes proceedings where resources are typically 100-1000 times more. But within that limitation an examiner should be satisfied that there is a case in favour of novelty and inventive step. It is not the examiner’s job to be unduly harsh and obstructive, or as in some examining groups according to reports that I have seen on this blog refuse to issue any patents whatsoever.

  12. Sometimes you get what you pay for.

  13. Paul I see “needlessly” and now I see “unduly”. What does the typical inventor (or Stan Delo) regard as “due” harshness and obstruction, I wonder?

    I like the EPO system, in which your application is examined by a 3-member Examining Division, with all 3 members signing the Decision (to grant or refuse). One can point to idiosyncrasies of individual EPO Examiners, but not of an Examining Division. After more than 30 years, EPO Examiners by now all do it increasingly the same way, regardless which of the 40 EPC Member States they come from to take up their posts in the EPO.

  14. Max-

    I am more than willing to take my lumps and dings to my proposed claims, just like everyone else here in the US. As you probably know full well, it is perhaps wise to ask for the Moon with the claims included in the application, because you never know if they might just give it to you, in the improbable situation where there is no obstructing prior art found! With my current application we did just that, and even after my finding a very recent publication that hints at what I am doing, my very experienced patent agent doesn’t seem to think we have much to worry about. We might just have to give up a quadrant of the Moon to get it allowed, judging from a comparison of the claims.

    I believe most of this invalidity *insurance* recently enacted or decided in the courts is due to the USPTO being so badly “managed” prior to David Kappos taking the reins, and the US Congress stealing funds out of the PTO budget to the tune of $100,000,000 or more per year over the last 12 years or so. Is it any wonder they haven’t been able to hire enough examiners to handle their burgeoning backlog of patent applications? Congress has finally been shamed into keeping their mitts Off of the PTO budget, but it will take many years to repair the damage done. It is not my or any other inventors’ fault that the PTO has not been able to do a good job of examination over the last decade or so.

    Actually I would prefer a three member examination team, instead of the American practice of the solo Maverick examiner reporting to a supervisor, because it would tend to average the *bad examiners* and maybe even some of the less that impartial suprvisors out of the system, and it would create a larger experience factor during the examination. Whether or when the PTO could afford to use that approach is anyone’s guess, as they are still dealing with damage control from the past, as near as I can tell, as well as trying to handle a Major change in US patent law. But I guess Senator Leahy and et al couldn’t be bothered with those kinds of nit-picky details when they passed the AIA.

  15. Stan thanks. The only reason the EPO has a 3-member team examination system is because it started from scratch in 1978, with Examiners drafted in from the national Patent Offices of all the Member States. Those from the UK had no experience of examining for obviousness and it was felt that consistency was best achieved by getting the Examiners to talk to each other, and justify to each other the positions they were taking, on patentability. Unique situation, unique solution I’m afraid. No reason for any other PTO to do anything quite so expensive. Or is there?