Inventors Beware: Yugo Prices Suggest Yugo Quality

By Gene Quinn
August 15, 2009

As is the case with all recessions or economic downturns, more and more people are turning to inventing.  This is not at all surprising, and is in fact exactly what you would expect.  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.  This is also true for professional inventors, many who lose jobs during difficult economic times.  As more and more corporations do exactly the wrong thing during a recession, namely downsize, spend less on research and development and essentially shoot themselves in the foot, there are a lot of creative, intelligent and energetic people who lose their jobs.  Many of these people have had ideas of their own, but did not have time to pursue them since they are employed full time.  As these people get laid off or outright released, opportunity costs approach zero and they figure that rather than spending endless days looking for work that does not exist, perhaps the better approach is to dust off old ideas and plans and turn them into a reality.

Savvy professional inventors, who are typically scientists and engineers, all too well know that when difficult economic times hit they could find themselves unemployed.  It is a tried and true reality that when the economy tumbles large corporations, who are largely only concerned with producing dividends and shareholder value today, will do less research and development, look less toward the future and basically kill any chance they have of succeeding in a post-recession economy.  That is why during recessions energetic inventors who are no longer bound to corporate lunacy, and who have long made contingency plans, find themselves inventing the new technologies that will lead to the many new products and services that carry us forward and out of a recession.

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This all being the case, it is not at all surprising to see that those who cater to independent inventors, small businesses and start-up companies are keeping extremely busy during these rough economic times.  In fact, as far as I can tell, those that are suffering in the innovation space are the law firms with marble flooring and mahogany conference tables and with spectacular views of downtown – insert city name here.  The only other sector that seems to be suffering are those that offer extremely low end services.  No matter what you say or how you package it, those who are serious inventors and business people know that a $200 patent search and opinion is not as good as a $1,500 patent search and opinion.  You simply cannot have quality people spending the amount of time necessary to do even an adequate job if you are paying only $200, and serious folks understand that.  Serious folks also understand that the goal is not to do an “adequate job.”  The goal is to protect innovations and build a business, so serious folks do not want to and simply will not shop for the lowest price.  If you don’t understand this to be true ask yourself this — if you had a rare but curable disease, would you be looking for the cheapest doctor for assistance?  Of course not.  While there is no need to spend irresponsibly, paying very little and then ultimately getting poor quality or having to start over from scratch is not responsible, but rather is penny wise and pound foolish.

As readers of IPWatchdog.com know, I frequently use the calls and e-mails we receive as guidance with respect to what I should be writing about for the inventor community.  Increasingly over the past weeks and months we have been getting a lot of calls regarding the cost of pursuing a patent from start to finish.   A lot of times these calls are from people who do not have much money and are quite surprised by the overall cost.  In each case like this those making inquiries are explained the costs and then some completely free counseling is provided with respect to whether they really should be considering pursuing a patent in the first place.  New inventors frequently do not like to hear that the patent process is cheap compared to the overall cost of going from idea/invention to commercial success.  A lot of people will announce that our prices are too high and they can get the same thing elsewhere for much less.  Obviously, this is not the case on at least several levels.  While cheaper prices can always be obtained, if you pay for a vehicle with four wheels you cannot be surprised when it turns out to be a Yugo, or a go-cart, although those two are largely synonymous I know.

The prices we charge and the prices charged by other reputable patent professionals are not too high.  In a market based economy prices are by the value provided.  If prices were too high then they would naturally need to be lowered because people would see what you are providing as being unacceptable and if you stuck with such pricing you would have no work.  Notwithstanding, let me be completely clear.  I do not offer low cost services, and the services we provide are definitively not cheap.  I offer expensive services and extremely high quality.  I have, however, over the years managed to streamline a lot of processes and, in fact, have several patents pending on various streamlining processes and systems.  So to the extent that we offer services that are below what many law firms quote it is because of efficiency, not because they are cheap or inexpensive.

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.  Much like you will never know if the will you paid for is defective (although your next of kin will surely find out) you may never know if the patent you received has useless claims.  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!

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 serious inventors consider going with a low cost provider thought really should be given to why the market is pushing prices down on the low end.  Prices are being pushed down on the top end because they are ridiculously over priced.  Prices are being pushed down on the bottom end as well for the same reason.  In the middle, where personal, quality service is being provided there is no such downward movement in price.  I personally believe that is because those between the poles offer quality services that are reasonably priced and competitive.

So the moral of the story is 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 I think 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.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments.

  1. Mark Nowotarski August 15, 2009 6:46 pm

    Gene,

    I think we are seeing the same trends. http://bit.ly/10pt0X (TV interview on trends in inventing)

    Our economy adapts as inventors, many “liberated” from their former employers, realize that now is the time to start a new company and pursue that dream they’ve had.

    But I caution my fellow members of the patent bar from getting too complacent. Someday someone will invent a way to automate claim drafting and examination. When that happens, low cost “patents for the masses” will become a reality.

  2. Gene Quinn August 15, 2009 11:49 pm

    Mark-

    I know what you are saying, and I certainly don’t want to sound naive, but we are a long way from an automated process for writing claims. I have been working on this myself for a long time, and it is getting better and better no doubt, but the wordsmithing and need to reference a thesaurus and define around prior art and stay up to date with the latest strategies and cases that shift the law will make a truly automated process exceptionally difficult. Having said that, I can teach anyone to write claims and do it in a largely step-by-step process, so what you speak of is certainly possible. I do have doubts that it will ever replace a skilled practitioner though. Getting to an 80% solution is not hard, the other 20% is what makes it art, and with a homerun invention being worth so much I don’t know that it will ever make economic sense to rely completely on automation.

    -Gene

  3. Tom Dickey August 16, 2009 8:05 am

    For a budget-conscious “little guy” just getting started, is $255 enough for a “bare-bones” prior art search? The PTO charges small entities that sum for searching their applications. Once their patents issue, can these inventors have faith in the $255 search they get from the PTO?

  4. Gene Quinn August 19, 2009 12:22 am

    Tom-

    If you were paying $255 for a prior art search in the private sector it would be hopelessly inadequate. This is a huge problem. The PTO does not believe they have a fee for service model. I can’t believe $255 is an adequate price for the work that should be done, and if the PTO needs more funds and more time they could start with charging a fair wage for a fair amount of work. That would make the entire system better.

    As for reliance, if you really want to know you should be spending more than $255 for a patent search and interpretation of the search.

    I hope this helps.

    -Gene