How Much Does a Patent Cost, And How Do I Pay for It?
Some of the simplest inventions have made millions. If you have a great idea, a patent can protect your work from being reproduced while you secure funding, production or sales for your invention.
But a patent can be pricey. Continue reading to learn about patent costs and financing options, including personal loans or secured loans.
- Your patent costs will vary
- Different types of patents
- What to expect during the patent application process
- Financing your patent costs
Your patent costs will vary
Patents filing fees start at $200, but that doesn’t include attorney fees or the cost of patent drawings the United States Patent and Trademark Office (USPTO) requires you submit with your application.
You’ll encounter various fees throughout the process of obtaining a patent, such as:
Generally, patents with more existing solutions and prior art — for example, if you wanted to patent an improvement on a lamp or another common product — are more expensive. When there are many patents already in effect, convincing an examiner that your invention is unique and meets the criteria for a patent is challenging.
Qualifying as a small entity or micro entity can lower the fees you pay. If you’re a small business, an independent inventor, a nonprofit organization, or if your income is below a certain threshold, you could benefit from reduced rates.
Adding on the cost of a lawyer
A patent attorney can help streamline the process of applying for a patent. As experts in their field, they can help ensure you follow all applicable laws and guidelines throughout the application process.
A patent lawyer can be obtained for around $200 to $400 per hour, according to UpCounsel, an online legal resource. However, the site cites an average cost of $380. Factors such as location, experience and complexity of your invention can also affect costs — for example, a small business owner’s costs are estimated to begin around $5,000.
Design patents are the least expensive with fees ranging from $2,500 to $5,000, including attorney fees. Utility patents start around $8,000 and can go up to $20,000 or more, depending on the complexity of your invention, whether there’s prior art and the cost of attorney fees.
What kind of patent do you need?
Different patents exist for differing needs. The most common are utility patents with almost 90% of patents falling in this category according to the USPTO.
To preserve functionality and appearance, applying for a utility patent and design patent at the same time is common. “A good example of this is a belt buckle,” said John Rizvi, an attorney based in Coral Springs, Fla., who specializes in intellectual patent law, “because it can be ornamental and functional.”
What to expect during the patent application process
Filing the application
The first step is to determine if you need a patent at all. The USPTO has a helpful guide to help you decide. Sometimes a trademark, service mark or copyright is sufficient.
To move forward with a patent, the USPTO offers resources to help you apply for a utility patent, design patent or plant patent. You’ll need to submit several items with your application, including drawings and a declaration and oath that identifies you as the inventor. The Inventors Assistance Center can help you correctly fill out the forms and provide answers to questions you might have throughout the process.
And it could be a lengthy one, according to Jingjing Ye, a Dallas-based attorney who specializes in patent prosecution and intellectual property. “There is a long queue [while] you wait your turn,” Ye said, estimating it could be a year before you might hear from the USPTO — but, she added, “sometimes even longer.”
Entering patent prosecution
Once the USPTO assigns a patent examiner to your case, you’ll enter the second phase, called patent prosecution.
According to Ye, it’s very rare for the examiner to approve your application on the first try. “Most of the time, the patent examiner will cite some prior art, meaning the technology or idea is already known.”
The USPTO will send you a notice in writing, called an Office action, with their decision. You can prepare a response to try to convince them that your claim is patentable.
When you respond, you must address every objection and rejection cited in the Office action. One minor mistake may affect the validity of your patent and cause you to lose your rights.
Communication between you and the examiner can be an exhaustive endeavor and an attorney can play a critical role at this stage. Patent attorneys are experts in the industry and can create an argument that follows laws and regulations.
If you succeed and the patent office issues your patent, you could wait for an additional two to three months for your patent to be shipped, according to Ye.
Maintaining the patent
The final stage is called maintenance. You’ll pay maintenance fees every 3-½, 7-½ and 11-½ years. Attorneys rarely stay involved after you receive your patent. Instead, an accountant or paralegal can manage the maintenance fees to keep your patent active.
Financing your patent costs
A personal loan can help you finance the price of a patent. With a personal loan, you borrow money from a bank, credit union or online lender. However, those with excellent credit will qualify for the lowest rates; if your credit is damaged, you may find personal loans are an expensive form of financing, if you’re approved at all.
With a personal loan, you repay the funds you receive over a specific period, generally two to five years or longer. The monthly payment amount is fixed, meaning it remains the same over the life of the loan.
How to apply: Before you apply for a personal loan, consider all the expenses you’ll encounter when filing for a patent. You can only borrow a set amount with a personal loan, not on a rolling basis.
Consult with an attorney to get an approximate price range and use that information to determine the best lender for your needs. You’ll also need your personal, financial and employment information when filling out the loan application.
When a lender asks for collateral to guarantee the funds you borrow, it’s a secured loan. You might use a paid-off vehicle or a savings account to secure the loan.
A secured loan can be an option if your credit score is less than stellar. Keep in mind that if you stop paying on your loan, the lender has a legal claim to take the collateral to recover the unpaid amount.
- Borrowers with something of value to pledge as collateral to the lender
- Banks may require you to be a customer before qualifying
How to apply: Online lenders, as well as banks and credit unions, can provide secured loans. LendingTree can match you with a list of approved lenders to compare interest rates and collateral requirements.
A credit card is a revolving loan you can use to finance the fees of getting your patent. You borrow against the limit when you use the card to pay for filing fees or attorney costs.
Credit cards can be a viable alternative to a personal loan. However, they generally come with high fees, so you’ll want to repay your debt quickly.
How to apply: When shopping for a credit card, pay special attention to the interest rate and annual fees the card might charge. You can review different credit cards in our marketplace.
Home equity line of credit
A home equity line of credit (HELOC) gives you access to the equity in your home to help pay for a patent. The interest you pay could be less than other loans because your home is used as collateral.
A HELOC works similar to a credit card — as you repay the money you borrowed, the amount of available credit is replenished. You can continue borrowing as little or as much as you need.
How to apply: LendingTree may be able to help you find a HELOC loan. Depending on the patent you’re applying for, a HELOC could provide sufficient funds to cover the cost of filing, drawings, and attorney fees.