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Tricks of the Trade: 4 Rules for Reducing Patent Spend

Published 25 February 2015, from EverEdge IP

Four simple rules can reduce overall patent spend by 15% - 40% without impacting patent quality.

Every week we see a steady stream ofbusiness owners and managers frustrated (and frequently shocked) at the amountthey are spending on patents. As one client put it: "it's not death by athousand cuts but death by a thousand gashes". They approach us to stem this flow,which generally means asking two questions:

1. Are you spending your money protectingthe right things?

2. Are you spending your money the rightway?

The first is a big question however assumingyou are protecting the right things, you can still reduce spend withoutcompromising patent protection. Read on for my comments on some of the tricksof the trade to give you the "Top 4 Rules to Get More Bang for Your Patent Buck".

1. Limit Thy Claims

The most important part of a patent isits claims. The patent's claims define the legal scope of your 'invention' and areused in court to determine if someone infringes your IP. Patent attorneys oftenencourage clients to file patents with lots of claims on the (apparent) logicthat more claims = more coverage or at least more flexibility. DON'T. Havinglots of claims means your patent is likely to attract excess claim fees at thepatent office, which can be extremely high (in the EU it's €235 per claim over 15claims, so 10 extra claims will cost you an extra NZ$3,700. We've seen NZdrafted EU patents with over a 100 claims! Second, more claims = more ofeverything else in the patent (description, drawings etc) which all require moredrafting and, in non-English language jurisdictions, more translation which againis very expensive (a client recently approached us after they were presentedwith a $20,000 translation bill for one patent).

2. Ask for the Claims First

When a patent attorney drafts yourpatent ask them to draft just the claims first and hold on the rest of thepatent (description, drawings etc). If on reflection the claims don't stack upthen there is no point taking the patent further. The claims constitute roughly50% of the patent so not drafting the remainder saves you big bucks in draftingfees if you decide not to proceed. Further getting the claims right first upreduces costly rewrites later.

3. Ask for the TCO

When instructing a patent attorney tofile few applicants look beyond the initial filing cost to ask what the patent willcost over its life (its Total Cost of Ownership). Over the long run an averagepatent filed into Tier 1 jurisdictions around the world is likely to cost inexcess of $500,000, much more if there are excess claims or if you file into Tier2 countries (Brazil, Russia, South Korea etc). About 30% of those costs willoccur in the first 5 years. So get an accurate estimate – knowing the full costmakes for better decisions.

4. Manage Thy Overseas Associates

When a patent goes "international" your NZpatent attorney will be liaising with patent attorneys in each country it hasfiled into. The patent is now governed by that country's local IP law and workon it is largely done in that country, not NZ. Your NZ attorney is nowessentially performing two functions: 1) receiving mail from the overseasassociate and forwarding it on with a covering letter and 2) potentiallyproviding strategy advice. In regards (1) these NZ costs (which can be substantial)can be reduced or eliminated by using your own administration resources to liaisedirectly with offshore associates – there is no reason you can't talk to themdirect.

Applied together the Four Rules can reduceoverall patent spend by 15% - 40% without impacting patent quality.

Paul Adams is CEO of EverEdgeIP, one of the world'sleading intellectual property strategy, management and technologycommercialisation firms. Paul has been named one of the world's top IPstrategists and was the recipient of the Outstanding IP Leader Award 2012. www.EverEdgeIP.com.