23 Aug 2013

What happens after you file a patent application?

0 Comment

A client of mine recently received their first USPTO action responsive to a patent application that we filed about two years ago. She asked how much it costs to continue with the patent application. I see Office Actions from the USPTO every day, but I realize, that for individual inventors and small businesses, an Office Action can be somewhat confusing. So here is an overview of what to expect after you file a patent application.

As alluded to above, the first thing you do after filing is wait. Sometimes you wait a long time, over 3 years in some cases. The USPTO is really behind with examining patent applications, and so new applications have to wait in line, typically 2-3 years, before a new application is taken up for examination. If there are formality problems with the application, those problems are sometimes caught right away, and you may receive correspondence in just 3-4 weeks asking that you correct a simple problem, such as poor quality drawings, an abstract with too many words or outright missing, lack of the required USPTO fee payment, etc.

Eventually, you will receive a first action on the merits responsive to the new application. You have a limited period of time to respond without a fee, after which the USPTO will begin to charge “Extension of Time” or “EOT” fees if you reply late. For instance, for small entity (discounted) inventors, the patent office will charge an EOT fee of $75 for the first month late. The EOT fee will be $300.00 for the second month, it increases to $700.00 the third month late, $1100 on the fourth month late, and $1500 for the fifth month it is late. After all EOTs have been exhausted, the patent application will go abandoned for failure to reply.

Some actions allow up to three month’s late fees, others allow four or five months. Three months is most common, but different actions have different periods for reply. Also, note that for large entities (un-discounted), the above fees are all doubled by the USPTO.

If you reply on time, there is no late fee, of course, but it likely will not be totally free. For some items, the USPTO charges other official fees, and for other items, the USPTO will charge nothing. It’s all a bit chaotic, but your attorney can quickly tell you whether a fee will be due, and if so, then how much. If you ask an attorney to handle your application, then it will of course cost attorney fees to have them prepare a response to the USPTO action. Again, your attorney should be able to quickly give you a budget, or negotiate a fixed amount for you based on the complexity of the task.

Just because you respond to the USPTO action does not mean the patent office will allow the case. The case must be “prosecuted” through to issuance. A process which could take up to 1.5 years and cost a grand total of between $6,000 to $12,000 for a typical case, depending largely upon how the Examiner attacks your application. Less complex patent applications would be slightly less expensive since they take less time to handle.

In a very very small percentage of cases, the patent office will allow the case outright (perhaps 1% of the time) as a first action on the merits. This would be relatively inexpensive to respond to, but is not likely to occur.  More likely, the Patent Office will issue what is called an “Office Action,” in which an Examiner at the USPTO reviews your claims and searches public domain records to find anything that they can use against you to reject your application. This is normal. We must then respond to the USPTO with our reply, which may be amendments to the claims, or arguments in support of patentability of your claims versus the prior art, or most likely, both.

It is typical for there to be 2-3 Office Actions total, on average. Each will cost between $2000 and $4000 to handle, inclusive of official fees to the USPTO and attorney fees. Obviously it costs nothing in attorney fees to respond yourself, pro se, and it may be possible to find a patent agent or another attorney that will charge less than the above average, but the above fees are highly typical. If your invention is not technically complex, then the fees would be on the *low* end of that estimate. More complex inventions, such as software, electromechanical devices, etc., would be on the higher end.

In my opinion, your attorney should agree to review the case with you ahead of time and agree upon a budget or fixed amount in advance so that you know exactly how much you will be billed. That way, you are not surprised by any bill, and if you don’t want to use the attorney, then you can take your case elsewhere or respond to it yourself, pro se.

Eventually, once the Examiner is satisfied with your claims and arguments, then the case advances to “allowance,” responsive to which you must pay the patent office another fee, called an “issue fee,” and then the case grants as an issued “patent” along with a patent number.

New inventions with a patent application filed at the USPTO are called “patent pending,” and once issued by the USPTO, they are called “patented.” Any products, if you have any, should be marked accordingly. Also, you can sell, license, or otherwise commercially exploit both a patent application as well as a patent, but only an issued “patent” has enforceable rights associated with it.