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[Tvoivozhd <tvoivozd AT infionline.net>]

Patents are expensive---the last one cost me $13500 and I did most of 
the work.  They are even more expensive to litigate---you can win a 
couple of patent suits and go bankrupt.  Maintaining your invention as a 
trade secret  is a good and cheaper alternate, but only if you are 
making a product, or licensing your invention under an agreement 
specifying confidentiality.

v. 8, 2004
        
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 The Process of Patenting


    From start to finish, patents may cost more time and money than you
   think | By Peg Brickley <mailto:pbrickley AT the-scientist.com>


        

The cost of obtaining a patent in the life sciences is high and likely 
to get higher, even as a growing legal complexity and regulatory logjam 
lengthen the amount of time it takes to get the patent in hand.

"Most people don't like to hear it, but they know it is going to cost 
quite a bit," says Robert Hunter, a registered patent agent who 
practices out of Kamuela, Hawaii. "Quite a bit" generally means more 
than the price of a minivan but less than the sticker on a Hummer, or 
somewhere in the neighborhood of $10,000 to more than $30,000. This 
includes legal and other fees for applying for a patent, as well as US 
Patent and Trademark Office (USPTO) fees. The wide variability in cost 
stems from biotech patents typically having lots of claims, and many 
fees are per-claim, not per-patent.

While landing a patent may not break the bank at a small biotech, 
litigating patent infringement cases might, the experts say. The most 
recent survey of legal service charges by the American Intellectual 
Property Law Association showed patent application costs for relatively 
complex biotechnical and chemical inventions came in at about $10,000.

It's a good idea to invest in an objective evaluation of how an 
invention stacks up against already patented ideas, says Hunter. "Many 
inventors are in a state of denial about what is already out there. For 
very little money," he says, "you can hire searchers to comb through 
similar art. These guys really want to pop your balloon. The ones with 
the personality and rigor to do the dirty work are the ones you want to 
have on your team." Without novelty, there's no point in going forward, 
he adds. Hunter estimates that the patentability search will cost from 
$800 to $1,200 for a chemical or biotech invention, compared to an 
estimated $300 to $700 for a mechanical invention.

Some inventions are protected even without a patent, says Alexander 
Poltorak, founder of a New York intellectual property management firm, 
General Patent Corporation International. Poltorak has written 
extensively on patent valuation issues. "If an invention is novel and 
secret, it is already an intellectual property [that] could be protected 
under the trade secrecy laws," he says. "If you can keep your process 
under seal and away from competitors' eyes, you actually may be better 
off protecting it as a trade secret rather than as a patented invention."

However, most scientists in academia, biotechnology companies, and the 
government do not have the means to commercialize a discovery, making 
trade-secret protection irrelevant, Poltorak says. A patent gives a 
scientist the right to bargain for license fees, and it gives a biotech 
startup something to show venture capitalists. "Academics, institutions, 
and startup biotech companies are invariably better served in getting 
patents," says Poltorak.

University technology transfer offices negotiate favorable rates with 
law firms and other patent professionals, bringing the power of volume 
buying to bear on behalf of academic researchers. As a group, nonprofit 
research institutions spend millions each year to add to their patent 
portfolios, many of which rival those held by for-profit companies.

Pursuing a patent takes time. For complex scientific and biotechnical 
patent applications, the average wait from the time of application to 
the first action by the patent office is about three years, says Hunter. 
"The patent office is totally overwhelmed as an organization by the 
rapid increase in the number of patent applications being filed," he 
says, "because innovation is the way companies compete these days."

And remember, says Poltorak, that patents obtained in the United States, 
Russia, or Japan are generally recognized only in those countries. In 
calculating the war chest you will need for international protection of 
a true scientific blockbuster, magnify the US costs many times. However, 
Australia and certain other jurisdictions are known for their lower 
patent application costs, making them inviting places for cash-strapped 
biotech inventors to debut their intellectual properties.

Waiting can be tough on small companies trying to line up financing to 
take the patented invention to the next level. But patent professionals 
don't like it either, says Hunter. "By the time you call your clients to 
inform them that the Patent Office has taken its first action, they 
can't even remember your name."