Managing IP with a tighter belt – things to consider in difficult financial times

Managing IP with a tighter belt – things to consider in difficult financial times

Managing IP with a tighter belt – things to consider in difficult financial times

Many patent budgets are slimmer than last year, or need to achieve more with the same amount of money. With a tighter patent budget, strategic decisions are required to effectively manage your patent portfolio. Here are some practical suggestions to help you effectively spend your budget.

Patent strategy

Having a clear patent strategy is paramount. Patents should ultimately provide your business with a commercial benefit, and therefore should always be considered as a part of your business strategy.

And so it follows that patent protection should not be sought for an idea simply because the idea underlying the patent is something new. Unless there is potential for the envisaged patent protection to provide you with a commercial benefit, there is no reason to seek patent protection. Of course, a commercial benefit may be selling or licensing the patent rights to another entity, but this approach still needs to align with your business strategy or else it is unlikely a commercial benefit will be attained.

Existing patent families should be considered similarly. Seven years ago, the decision to seek patent protection may have made sense. But if no attempts at commercialisation have been made, or have been without success, then it would seem a good time to review whether more money should be spent on the patent family. This situation is often the case where granted patents are set for “automatic renewal“ but are lying dormant on your books. A review of these ‘dormant’ assets may prompt the activation of a commercialisation strategy for the patent family, which could lead to recovery of some of the sunk costs (or better), or at least should avoid unnecessary spending in this year’s budget.


Assuming you decide to go ahead with a new patent application, the first stage is to assess the patentability of the invention at hand. To be patentable, an invention must be both new and non-obvious when compared to the existing publicly available information.

Huge volumes of publicly available information can be found using free, readily available search engines such as the GoogleTM and BingTM search engines, and also through the online databases of some patent offices such as the US Patent and Trademark Office (USPTO), found at

This means you can do a lot of the patentability assessment before contacting your patent attorney to work on the patent application. Documents you locate that describe similar concepts to those of your invention will help in the assessment of the patentability of the invention, and also in framing the patent to correctly encompass your invention.

Communicating with your patent attorney

Assuming the searching is clear and patent protection is still the business-sensible thing to do, you will then seek a patent attorney to prepare your application.

If you have worked with patent attorneys drafting previous patent applications, then you will know that we like to ask lots of questions! There are good reasons for these questions. A robust patent is one that has been drafted to take into account all variations and modifications of your invention, and contains as much information as possible to show how to carry out the invention. Our questions are designed to extract as much of this information from the relevant contributors to the invention.Therefore one way to reduce costs during the patent process is to prepare a detailed summary of the invention, how it differs from similar existing concepts, and all the ways you envisage the invention could be put into practice, before visiting us. This may involve a bit of time extracting information from various contributors but it will help reduce a lot of the time spent going back and forwards with questions from the patent attorney, thus reducing costs, not to mention reducing the time in having the patent application drafted.

Filing decisions

If you have decided to proceed with patent protection, you are likely to file an initial application (often a provisional application), followed by a complete (or non-provisional application) twelve months later.

At the twelve months stage, you have the option of filing a PCT international application which means national applications derived therefrom must be filed 18 months later. A second option is to file national applications directly and bypass the PCT route.

The PCT route is used by many applicants to defer the large national phase filings costs, providing more time to complete a commercialisation strategy. However filing direct national applications is a good option if you already have a clear idea of the markets for which you would like patent protection, especially if there are only one or two markets for which patent protection needs to be sought.

The filing costs for national applications are the largest single cost incurred during the life of a patent family. Each country selected can add significant expense. Therefore in addition to assessing whether the country is a desired market for your commercialisation goals, the following patent-relevant assessments should be made:

  • Can this type of invention be protected in this market? In some countries, there are restrictions on the types of protection available, such as for software and biotechnology inventions.
  • Is a translation required? Translation costs are expensive and will be incurred when the application is filed, but also for every piece of correspondence to and from the local patent office.
  • Are there other filing costs that I can reduce? Some countries charge excess claim fees upon filing, which can be reduced or eliminated entirely by filing an amended claim set during (or shortly after) national phase filing.
  • Are other types of patent protection available? Australia, for example, offers a second tier of patent protection called an innovation patent which has a lower threshold test for patentability and is significantly cheaper than a standard patent (the sacrifice is the patent term: 7 years rather than 20 years available for the standard patent).

We can help you to answer these questions.

Existing patent families

If you are managing a patent portfolio with existing patents and patent applications, there are ways you can reduce or at least delay costs.

Where possible, consider co-ordinating the prosecution strategy of applications in different countries. European and US applications undergo fairly stringent examination, and once allowed, may motivate the examiner in another patent office to consider the application more favourably. It makes sense to co-ordinate applications of the same family for a number of reasons, although differences in local patent laws should be taken into account.

The practice of co-ordinating applications has been formally provided for with the introduction of a Patent Prosecution Highway (PPH) between some patent offices such as the USPTO and the Australian patent office. The PPH is an agreement between the two patent offices that expedites examination of a second application before a patent office once it is amended to contain claims allowed in the first application before the other patent office. An application examined under the PPH can be significantly cheaper than the standard examination route. At this stage, there are a few PPH agreements between some patent offices, but the concept is gathering momentum and it is likely that future PPH agreements will be signed.

You can also delay patent costs where it is prudent to do so, for example, by not requesting examination until the deadline for doing so and by taking advantage of grace periods if no extension fees are payable.

However, where extension fees must be paid, it is often better to act quickly. Assuming, for example, you have a US patent application and are considered a large entity under US law. A restriction requirement issues setting an initial deadline that can be extended by up to five months, and you are having difficulty deciding how you want to proceed commercially with the application. The first month of extension fees is US$130, which may be a justified expense to give you more time to decide how to proceed. But if your response is delayed for the full five months, the extension fee costs escalate to US$2,350. Extension fees of this amount should be avoided wherever possible.

These suggestions should help you make sensible money decisions when managing your patent budget. DCC patent attorneys are always available to discuss your patent portfolio, and means to ensure effective money spending.