Q & A: File a Patent Application Before Market Evaluation?

By Gene Quinn
January 25, 2010

Below is a question that we received recently, which is one that many folks likely have. Thus, I thought it might make a good article, particularly given that there is no “right” answer.

Question (in edited form):

Should I file a patent application and obtain a patent before I submit my invention to a company like Lambert & Lambert for their review?

Answer:

You ask an age old question, which is really the patent/invention equivalent of the chicken or the egg. Moving forward with a patent doesn’t make a lot of sense if the invention is not likely to be marketable. I always tell folks that the best invention to patent is one you will make money with regardless of having a patent, so I do believe there needs to be market considerations factored into the analysis.  After all, the goal is to make money and investing in a business or to obtain a patent makes sense only if there is a reason to believe more money will be made than spent.  Having said that, without a patent pending you have absolutely no protection, at least unless you obtain a signed confidentiality agreement and even then the protection will be applicable only to those who have signed the agreement.

A provisional patent application does not give you any rights other than to say you have a patent pending, it defines your invention by disclosing the parameters of the invention and allows you to do certain things without fear of losing the right to obtain a patent later. Under 35 USC 102(b), for example, if you publicly use your invention or offer it for sale more than 12 months before a patent application is filed you cannot obtain a patent. Similarly, if others who may be working on the invention unknown to you publicly use or offer for sale the invention more than 12 months before you file a patent application you cannot obtain a patent. This is why it is typically viewed as best to file at least a provisional patent application as early in the process as possible.


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Allow me to elaborate. I say it is preferable to file at least a provisional patent application as early as possible based on personal experience as well as professional experience. On a patent application where I am the inventor there was another who publicly used at least a variation more than 12 months before I filed my first provisional patent application. The fact that I invented it before that public use by another is of no importance. I am prevented from obtaining a patent on that aspect of the invention. This can and does happen with more frequency than you might expect, even to those like me who are familiar with the law.

Assuming you are the only one working on things and doing it behind closed doors unknown to anyone else can and does from time to time to lead to what is called a 102(b) bar. That is why patent attorneys frequently suggest at least a provisional patent application as early as possible. In my case, at first I didn’t think the invention warranted a patent application because I didn’t view it as having enough value initially to warrant a patent application. In such a situation keeping a trade secret is an appropriate way to proceed, and a choice that companies and individuals make all the time. But then as I continued work on the invention and saw the full potential I filed an application. Hindsight is always 20-20, and no one is perfect. On some level whether to keep a trade secret, pursue a patent or file a patent application immediately is a business judgment.

In any event, this personal story is an illustration of why I am a fan of at least filing a provisional patent application as early in the process as possible. Then you limit your exposure and prevent, to at least some extent, others from cutting your rights off. You also prevent yourself from doing things that unknowingly could lead to no patent ever being able to issue. You can also typically talk more openly about the invention, you can start to sell it and use it publicly. It would still be best to get a confidentiality agreement in place, that way if you ultimately do not proceed all the way to a patent you still have a trade secret.

Unfortunately, many times those you most want to share the invention with will not sign a confidentiality agreement, such as potential investors. Engineering firms and licensing firms typically will sign a confidentiality agreement, but investors get proposals from many people and if they sign a confidentiality agreement with you and another who has a similar idea that could lead to liability on their part where there was no liability present absent them signing an agreement. Essentially, those who see a lot of ideas and inventions are justifiably reluctant to sign confidentiality agreements. Thus, if you want to show someone your invention you have to weigh the pros and cons. If you at least have a provisional patent application pending you have defined your invention and memorialized with a filing date a date upon which you were in possession of the invention described. Thus, if you need to prove when you invented you have a solid date backed up by a United States Patent filing.

So the decision is really not hard and fast one way or another. What you can do is ask yourself whether you would pursue the invention even if you get a negative review from Lambert & Lambert or another licensing firm. If the answer is yes, then there is no reason not to at least file a provisional patent application and a number of benefits in so doing. If on the other hand you will abandon the invention if you get a negative review you may wish to get a confidentiality agreement in place and then if you get some positive feedback pursue a patent application, perhaps a provisional patent application.

One thing is for sure though, I would recommend that you have some reason for believing there is a market for the invention prior to filing a non-provisional patent application. That is when things really start to get expensive. You can do a patent search to see what the likelihood of obtaining a patent is and file a provisional patent application. This is a more economical way to proceed, which still preserving rights and positioning yourself as best you can for the next phase, which will need to be a non-provisional patent application, assuming you ultimately wish to obtain a patent.

When we do a provisional patent application we always assume a nonprovisional patent application will follow, and we can pick up where we leave off so there is no duplication in legal work. Thus, a provisional patent application can be used as part of a good overall strategy to start to secure rights, cut off the dreaded 102(b) problems and move forward investing sums in a piecemeal, step-by-step way. That way if the project ceases to make sense at some point you can walk away having taken responsible steps but without putting all your money down on the table and at risk immediately.

I hope this helps.

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 22 Comments comments.

  1. David Boundy January 27, 2010 12:08 pm

    Gene –

    You hit the nail on the head. Different inventors and commercial realities need different options. Sometimes (a) a non-provisional is the right answer, sometimes (b) a document exists for business reasons so that a provisional is cheap and easy and low-risk and is a no-brainer, sometimes (c) a provisional is costly (because there’s no preexisting document that would fill the bill) but the risks are worth the cost, and sometimes (d) wait-a-year is the right answer because the costs of preparing a provisional are greater than the risk being hedged. Sometimes you want a provisional in place before you start testing or talking to VC’s or strategic partners, sometimes you don’t. Excellent! You’ve got it! Ron Katznelson looked at a big sample of startups and university inventions, and found that inventors exercise (d) a pretty high percentage of the time – I don’t remember the number, it was in the 20-30-40% range.

    So I assume you’re now ready to reconsider your views on S.515. The weak grace period of S.515 is a disaster for small companies, precisely because it takes away option (d) and forces everyone into options (a) (b) or (c). The need to spend thousands of dollars on a provisional before obtaining any commercial reality check is super-expensive cost that will fall heavily on small companies, individual inventors, university spin-offs, and inventions that need external testing, VC funding, or strategic partner lined up before there’s money to spend on it.

    David

  2. Gene Quinn January 27, 2010 12:55 pm

    David-

    My personal and professional opinion is that waiting to file is a mistake. While having a 12 month grace period is nice, the truth is that it may not really exist because of the actions of others that are unknown to you. So I believe it is best to file rather than wait. The cost of filing an appropriate provisional patent application that discloses the invention and provides priority is far less than the cost of filing a nonprovisional patent application. There are ways to enable even those who are not lawyers to create appropriately disclosing documents, and if they are pursued and attorney time added to check, supplement and enhance, even complicated inventions can be adequately covered in a provisional for a modest and affordable amount.

    -Gene

  3. David Boundy January 27, 2010 8:05 pm

    In a world where patent attorneys charge $0 and the time the inventor diverts from business-useful purposes to writing a patent document that ends up having no value to the business, your personal and professional opinion is sound.

    Gene, notice what you did: I want to focus on case (d) (situations (a) (b) and (c) are the same under current law or S.515, so there’s no point in discussing them). You addressed only cases (b) and (c), where either a document exists (or can be prepared inexpensively), or the cost is worth the risk attenuation. But that’s not situation (d). Lots of times the risk is small, but cost of preparing an application is large. If your professional advice is not taking business reality into account, then ….

  4. Gene Quinn January 28, 2010 11:01 am

    David-

    Documentation can always be prepared inexpensively and without much expenditure of time and by the inventor. See:

    http://www.ipwatchdog.com/patent/invent-patent-system/

    If you are interested I will send you a link and you can try it out for yourself. It takes about 60 minutes to answer the questions and then you have one heck of a disclosure, even if you are not a patent attorney. I have shown this to several very large corporations who bemoan the cost of patent applications and the response is that they could never require their engineers and scientists to spend 60 minutes answering questions.

    It works, those who have tried it know it works and works beyond anyone’s initial belief. But you are right, at the end of the day if individuals and companies are not willing to spend either an extremely modest amount of time or an extremely modest amount of money there is really nothing that anyone can do to help them.

    If you have any clients interested in me demonstrating this process let me know. When used by professionals and done in a streamlined way corporations could get extraordinarily detailed provisional patent applications on file, with drawings and the filing fee, for less than $500. So the choice is theirs. They can either pretend there is no solution or they can implement a solution. Those who implement a solution like this will be able to file 5X or 10X the number of applications, instantly create assets and then pick and choose over time which to then pursue. It will take out of the mix missing and not filing on the right inventions and provide early priority dates. It can als be used as a mining tool by programming a version that stores the data and is searchable but other inventors, scientists and even corporate officers who might want to know how many projects are ongoing relating to X, or is there any information in abandoned projects relating to Y that we can build upon.

    -Gene

  5. David Boundy January 28, 2010 11:33 am

    Your analysis starts with a counterfactual in the first sentence.

    Documentation can always be prepared inexpensively and without much expenditure of time and by the inventor.

    Always? Enabling sufficient to meet § 112 ¶ 1? In an hour? For a complex invention (software, a complex multi-party business process, a pharma invention with some in vitro testing but before any in vivo)? For a complex invention with no extant document (we’re only talking about category (d), remember)?

    In category (d), all you’re going to get in an hour is a disclosure suitable for an advertising brochure, but totally useless as a patent disclosure. For a category (d) invention, filing a one-hour document as a provisional puts the client in a worse position than filing nothing at all.

  6. David Boundy January 28, 2010 12:27 pm

    Gene —

    In an offline email, you noted an example of “invent-patent-system/” at Motorola. I believe something like this could work at Motorola. If Motorola is like the other big computer companies I’ve done work for (IBM, Digital, and HP), then the project was thoroughly documented all the way along. Also, Moto has big market volume at product introduction, and big dollars to spend. Thus, unless you tell me different, any case you did for Motorola was almost certainly in category (b) (an extant document that can either be used directly, or massaged gently to be useable as a provisional), or category (c) (costs of preparing a document from scratch exceed the value of § 102(a)/(b) risk).

    But I keep trying to focus you on category (d). Startups dont have the documentation process of an IBM or HP (and I assume, Motorola). They almost never fall in category (b). They also don’t have the dollars-at-risk and dollars-available today. They almost never fall in category (c). Startups look for every possible way to stretch the dollars they have until their first income or liquidity event. Startups, university tech transfer offices, etc. often fall in category (d). Every minute you ask an inventor to spend on patent issues is a minute the inventor takes away from keeping the business from going bust.

    S.515 takes away that ability to control the date of an expenditure, and takes away the ability to use one year’s worth of 20-20 hindsight to make good business decisions.

    If you represent small companies, call your senator. Tell him/her how S.515 is going to kill startups, university spinouts, and other technology transfers in your state.

    David Boundy

  7. Gene Quinn January 28, 2010 5:08 pm

    David-

    At this point I don’t know what else I can say, but I will give it one more try.

    Your (d) is: “wait-a-year is the right answer because the costs of preparing a provisional are greater than the risk being hedged.”

    I completely, 110% disagree. As I explain above waiting a year can mean that you will never be able to obtain a patent. Everyone thinks they can wait a year but under 102(b) you simply cannot wait a year. You have UP TO a 12 month grace period, but you are NOT guaranteed a 12 month grace period. You must file a patent application within 12 months of certain events, such as public use, offer for sale or publication. Since third parties unknown to you can and do create 102(b) bars there is absolutely no way to know whether you will be entitled to a full 12 month grace period based on your own activities. Continued belief that a full 12 month grace period exists is simply incorrect on the law and leads to disaster.

    Right now in the InventHelp lawsuit against me they say that I should be telling clients that confidentiality agreements are superior at protecting rights than patents. That is absurd for the same reason. If I have a confidentiality agreement that you sign I am only getting your agreement not to disclose or use without permission. A confidentiality agreement only is useful to restrict those who are in privy of contract. There will be many others working on the same or similar thing and if they offer for sale, publicly use or disclose in a publication then the 12 month clock starts ticking and you could never know. Then you wait because you know that you have not started the 12 month clock and then you can’t get a patent.

    The responsible thing to do is to file early. That is my personal and professional belief. The story I tell above is true and happened to me. Because I waited I could not get that aspect of my invention patented even though I invented it and kept it secret. I filed within the 12 month grace period of my own actions, but there were others unknown to me who started the 102(b) clock ticking before I thought it started ticking.

    I respect your opinion and I respect that you think the risk is an acceptable one, I just happen to disagree and will likely never change my mind on that. Of course, if InventHelp gets what they want I may be judicially ordered to change my professional opinion.

    -Gene

  8. Gene Quinn January 28, 2010 5:12 pm

    Just for the record, I have never represented Motorola and my private e-mail did not suggest that I did. An early version of the Invent & Patent system was demo-ed to some attorneys at Motorola. They really liked it, saw the value, but corporate culture was such that they didn’t think they could get scientists, engineers and others to spend the time to answer questions. Other top tech companies expressed the same thing. So they all complain about the costs of patent applications but an approach to cut the drafting cost in half was not deemed acceptable because an inventor would have to spend 60 minutes answering questions. Most companies prefer the patent attorney actually do the inventing, which is a problem in and of itself. You get cryptic 1 paragraph disclosures and then need to blow it out into a patent application. In many cases the scientists and engineers are not likely the “inventor” in the eyes of the law, but rather that patent attorney is the inventor (in my opinion).

    -Gene

  9. step back January 29, 2010 5:48 am

    Gene and David,

    Thank you for an excellent discussion re provisionals!

    You both reminded me of one point in favor of provisionals, which point I had forgotten about; namely, that the EPO and many foreign patent laws offer no grace period (they require absolute novelty) but at the same time the EPO and many foreign patent laws have no section 112 law other than to require enablement.

    So as Gene aptly argued about the (d)–wait a year option, if you intend to file in EPO (via PCT or whatever), a provisional let’s you obtain at least some security of preserving some absolute novelty even if one of the parties to an NDA breaches the confidentiality agreement. You can file in Europe off the Provisional even if you decide that you need to file a CIP in the USA.

    Generally I try to dissuade small entity clients (who don’t have in house counsel) from going the Provisional route because they always get the wrong ideas about the “quick and dirty” option. They are not lawyers and they are not going to “get it” about why full compliance with 112 is near impossible when you are going the “quick and dirty” route.

    Again, thanks to both of you for the excellent discussion.

  10. Gene Quinn January 29, 2010 12:09 pm

    Step-

    Glad to have helped.

    I would just add that I agree that a quick and dirty provisional patent application is not the best way to go. When I do a provisional patent application for a client I explain it typically using the 80-20 rule. When writing software it takes about 20% of the time to get to 80% complete and then 80% of the time to finish the other 20%. At least the way I approach patent applications that same rule applies. Now I know I am somewhat of an odd-ball because I don’t start with the claims, but rather start with the disclosure and then write claims for the disclosure, ultimately circling back to the disclosure and back and forth. Done this way I can get an exceptionally detailed disclosure spending about 20% of the time. I also get a lot of help from the inventors and typically have them go through my electronic patent questionnaire (aka “the Invent & Patent System”) at least twice. I have them start it when we do a patent search and again after the patent search.

    So I get about 3 pages of disclosure from a client before a search, which makes the search quite focused and in my opinion better. Then I engage in a back and forth with the client going over the patents and learning more about the invention. Then I write a patentability assessment that explains what I think can reasonably be anticipated. If I get a green light then the client goes back to the electronic questionnaire and I again get 3 pages single spaced in terms of disclosure. Then I can take all of this and do one heck of a provisional.

    In terms of cost, the search w/ assessment typically runs $900 to $2,100. Software/Internet stuff is always at the top end of the range. Then if they want me to do a provisional patent application I charge $1,500 to $3,000 plus filing and drawings. The way I determine the cost of the provisional is using the 80-20 rule. I estimate what the cost for a full nonprovisional would be and then 20% of the cost is for the provisional with the other 80% being the nonprovisional. So for software/Internet a provisional typically runs $2,500 to $3,000. If I ultimately do the nonprovisional the fees paid for the provisional are credited toward the nonprovisional because we pick up and run with it from there.

    There are ways to even streamline the process more and reduce costs if they were to be implemented in bulk for a company.

    I like doing this because David is right, early on you don’t always know what should be followed up on with a patent. So I try and chart a course that is responsible to initiate rights protection without breaking the bank. If ultimately you decide to walk away it is better to do so after the search or after the provisional, that way risk has been minimized. At the end of the day this needs to be a businesses decision and in business I believe it is responsible to take steps early if the project looks fruitful and continue with time, money and energy as warranted by future developments.

    I do think we can likely all agree that a bargain basement provisional is not the way to go. Unfortunately, for many inventors they can’t afford anything else, so it is do nothing or at least try. That is why I created the self-help Invent & Patent System. It creates very good disclosures even for those who are unfamiliar with the law. It is no substitute for hiring a lawyer.

    If anyone wants to take a test spin of the system let me know. I would be happy to show you the system and what it can do and let you give it a try. I have long thought it would be an excellent tool for new patent agents and new patent attorneys to use themselves to create at least a first draft of an application.

    -Gene

  11. David Boundy January 29, 2010 1:13 pm

    The real dispute here is situation (d) exists (my view) vs sitution (d) never exists (Gene’s view).

    In my world, (d) isn’t often, maybe 10-20% of cases, but it’s a lot more than zero. Since (d) exists, the law should permit a company to exercise business judgment, and the law should give time to gather the information necessary to exercise good business judgment, rather than forcing premature filing of patent applications on inventions that may be discarded a few months later.

    Gene’s view is that situation (d) never exists. Gene’s view is that the cost of filing is never greater than the value of the § 102(a)/(b) risk. Gene’s view is that no matter how the company weighs its various opportunity costs, the patent attorney has first claim on the company’s assets and resources. Gene’s view is that filing sooner, before any disclosure outside the company, is always the one and only right view. Since that is always true, Gene thinks it’s OK if the law takes away option (d).

    The objective data from at least one company is that (d) does exist in economically significant numbers:

    http://www.rearden.com/public/090924-Innov_and_IP_in_Todays_Biz-3.pdf see esp slide 35

    If S.515 had been the law, this company would have had to file over 50 patent applications on speculative inventions, instead of a half-dozen on only the inventions that proved their worth.

    Every patent attorney has everyday experience with the existence of (d) situations. We’ve all had it happen. We give the client the “sooner is better” advice, and advise of the risks. Then the company’s management weighs the risks — the risk of going out of business if dollars flow out of the company to the patent attorney vs the risk of a § 102(a)/(b) bar. Company management makes its best risk weighing decision, and life goes on.

    Somehow Gene insists that his “personal and professional opinion” trumps the business judgment of his clients, and he’s comfortable taking options away from his clients.

    That’s totally foreign to my way of practicing law. My view is that a patent attorney has to be an ally of the business, working within all constraints on the business. A good business lawyer tries to develop preserve options for our clients, rather than forcing them into a one-size-fits-all legal mold. A good business lawyer recognizes that different clients need different advice and different options. I guess that’s the fundamental difference between me and Gene.

    David

  12. Gene Quinn January 29, 2010 1:40 pm

    David-

    Your assertions are false and what you are saying could be construed to be libelous. I would expect someone in your position to be more careful and not so reckless with the truth. You do realize you are accusing me of acting unethically without any factual basis to support your assertion?

    Let me ask you this… have you ever been present when I consulted with a client? Allow me to answer that for you, the answer is NO. Yet you say with authority that I am “comfortable taking options away from his clients.” Please provide the factual support for that statement. Please provide the proof you have that I do not appropriately inform clients of the options they have and work with them to make the appropriate business judgment for them given their unique situations.

    Please also provide a citation to where I say that your “(d)” never exists. You can’t because I have never said that.

    You are upset because you don’t want patent reform. Fine. I get that, but you continue to ignore the fact that reform will present real opportunities for those who see possibilities. For you and apparently your clients, who see this as a disaster and seem to have a defeatist attitude, reform will not be good. Any change requires an equal and opposite reaction. I know I can help inventors and businesses take advantage of any change to first to file. The fact that you won’t be able to do that doesn’t make me unethical or a bad attorney who ignores the needs and desires of clients.

    Regardless of what you say and how you try and distort my position and whether you chose to recklessly disregard the truth and throw out libelous statements you will NEVER change my mind. I think the best course of action is to file as early as possible. That cuts off 102(b) problems and it preserves foreign rights. It also creates an asset. Obviously, there are times when filing as early as possible is something that cannot be done and business realities do matter. I do discuss reality and the law with clients and I thank you in advance for immediately ceasing with the reckless misrepresentations about me and my practice.

    You have never been present during a private consultation, so why don’t you stick to talking about what you know. If you want to challenge my position and opinions, fine. But I will not allow you to spread lies about me. I hope I am making myself clear.

    -Gene

  13. step back January 29, 2010 2:25 pm

    Gene-

    You’re not an odd ball.
    I never start with the claims either.

  14. David Boundy January 29, 2010 3:05 pm

    Gene, my characterization is exactly the consequence of your position. You’ve used words like “always” to describe the availability of cost-effective provisional filings. You’re advocating a statute that as a practical matter takes away the option to wait.

    If you don’t like the end result of your position, then rewind your logic a couple steps, and see whether each step really is as “always” as you thought.

    I’m sorry, I don’t see “real opportunities for those who see possibilities.” All I see is options taken away. Please identify a “new opportunity” under the new statute that doesn’t exist today. (If your answer is something that does exist today, you haven’t answered the question.)

  15. David Boundy January 29, 2010 3:16 pm

    Ah, I see your objection. Where I wrote –

    he’s comfortable taking options away from his clients

    I should have said

    he’s comfortable if Congress takes away options from his clients.

    I stand corrected, and apologize.

  16. Gene Quinn January 30, 2010 11:33 am

    Step-

    We are kindred spirits, huh? Glad to know I am not alone. I just have never been able to think in terms of claims, at least from the start.

    -Gene

  17. Gene Quinn January 30, 2010 11:37 am

    David-

    That is a fair characterization. I am OK with Congress taking that option away. I believe that for those who are willing to think outside the box this presents real opportunity.

    You are a passionate guy, and I love that about you. Had the entire InventHelp thing not been going on I probably would not have called you on what otherwise might have been (or seem) a minor point. To the extent I may have over reacted I too apologize.

    No need for circular firing squads where the good guys are firing at each other, and I do believe you are a good guy and the patent bar owes you great gratitude for fighting the long-shot battle at OMB, which was an enormous victory.

    If you would like to write up an op-ed piece for publication I am happy to give you and your views a forum.

    -Gene

  18. cash advance online July 14, 2010 7:04 pm

    I think It depends on the business in which you have, but at the same time I think it’s always a good idea to get some kind of outside evaluation to see how marketable your product will be and have them sign a confidentiality agreement. Patents can be expensive, so make sure your product will make money, before you spend money on a patent, a lot of it is common sense at the end of the day. For the newbies also check out the overview of a patent http://www.ipwatchdog.com/patent/patent-prosecution/ and patent cost: http://www.ipwatchdog.com/patent/patent-cost/

  19. american biologics July 27, 2010 8:22 pm

    what you can do is ask yourself whether you would pursue the invention even if you get a negative review from lambert and lambert or another licensing firm. if the anser is yes then there is no reason not to at least file a provisional partent application.