Patenting an invention takes considerable time and money. You need to carefully consider if a patent is right for your business or if you need to consider other IP options.
Obtaining a patent is an investment decision that will impact the viability of your business. It will become an asset and give you a monopoly to commercialise your invention. But you’ll have to weigh up the opportunities, costs and risks.
Can your invention be patented?
To patent an invention, it needs to be new, useful and inventive/innovative (depending on the type of patent), according to Federal Government agency IP Australia:
- New: the invention must not be in the public domain in any form. So, it’s important you keep your invention a secret before you apply.
- Inventive (for a standard patent): this is defined by IP Australia as meaning the invention “must not be obvious to someone with knowledge and experience in the technological field of the invention”.
- Innovative (for an innovation patent): defined by IP Australia as existing “when the invention is different from what is known before and the difference makes a substantial contribution to the working of the invention”.
- Useful: another way of saying that the invention must do what you say it will do.
Don’t patent the wheel
If your invention isn’t a world first, don’t waste your money on the expense of a patent application (see ‘Cost of application’ below). It’s essential to search online patent databases and do a general search on the internet to see if your idea, or something similar, is already in the public domain.
IP Australia warns that effectively searching the databases of major overseas IP offices is a specialised skill and suggests using a patent attorney or professional searcher to undertake searches.
Will your idea make money?
If your idea won’t make money, there’s little point in seeking a patent. The key question to ask yourself is: does your market research and business plan indicate that you’ll be able to at least cover your costs (including the patent)? Make sure your market research is based on solid data, rather than over-optimistic guesstimates.
Cost of applications
A patent can be a significant cost so you need to be aware upfront of the typical pricing and risks of cost blowouts associated with the patent application process.
IP Australia says that while the cost of obtaining a patent can vary, the typical cost of drafting and filing an initial patent application (known as a provisional application) lies in the region of $3000 to $6000. It’s a similar cost for a full patent, known as a standard patent.
Costs associated with acquiring a patent will vary depending on:
- patent attorney fees
- the class of protection
- the nature or complexity of the invention
- how many countries you want patents in
- the complexities of any opposition to your patent application.
Uncontrollable cost variations
Nigel Cocliff – CEO of Idea To Reality (I2R), a Perth company that develops clients’ ideas into products – says the patent application process can often catch people out financially.
The review process offers the opportunity for other parties to oppose your application. IP Australia says oppositions are uncommon. However, should an application be opposed, then hiring a patent attorney to develop and subsequently submit the necessary supportive arguments will cost you money.
“People are often surprised when they are told there has been opposition to their claim and that additional costs will need to be incurred in addressing the relevant concerns should the client wish to proceed,” Cocliff says.
“I think it’s fair to say that while this information about the process is not common knowledge, it would be given freely if it was asked for – but most people don’t ask for that information.”
Can you afford to defend your patent?
IP Australia says most patent infringements never make it to court, instead end in a commercial settlement.
However, when a breach does make its way to court, it can be a costly exercise to prosecute, according to Cocliff. “I believe more can and should be done on educating individuals on how potentially expensive that process can be”, he says.
“As a company, we’ve seen people who end up completely disillusioned with absolutely nothing to show for their efforts other than a significant hole in their bank balance.”
Scott Vilé, principal at patent attorney firm Wrays, says a patent represents sound business practice – even if you don’t have the capital to prosecute a breach.
Having a patent, or a pending patent, provides the owner with the opportunity to secure licensing royalties, enable cross licensing and to sell the technology. It also provides a level of security for potential investors.
Alternatives to patents
Before applying for a patent, you may want to consider other options that may be a better fit for your business.
