Software patenting questions

Question

I am a student and I don't have enough money (not even nearly enough) to file a patent. I strongly believe in my idea and therefore I would give and do anything in my power to secure this patent. I have a couple of questions though:

• I am from the EU, can I file a worldwide patent in my country?
• What are the benefits of hiring a patent attorney? I have huge trust issues and I would rather do this on my own.
• What are the chances of my patent being rejected? I know this it is hard to assess the probability on a specific basis, but what are general rejection percentages?
• Would a bank (EU) give me a credit in order to file this particular patent?
• Is it correct that it would cost me 15-25k USD to file this patent in its entirety?
• How long does it take for the patent to take effect (in general) from the initial filing to successfully being granted?
• Let's say I would not patent my idea and roll it out myself. What is the likeliness of big players crushing me like the cockroach I am?

There already are very similar (software-)'products' on the market. Is it likely that they are going to accept it if my idea is different in its nuances but these define and make the software unique?

Answer 1

It is great to hear from an innovator! I feel I've been in your shoes and hence can answer your questions. Each of your bullet points has a heading here:

EU / worldwide patents

No, you cannot file a worldwide patent in your country. The general idea is that every country has its own patent system, and you need to file in every country where you do want patent protection. This may not make much practical difference for you, as naturally you can file in every nation you want without ever leaving your country. But it does mean that each application is separate and incurs separate fees.

The EU is, as so often, a special case in that it is indeed possible to apply for EU-wide patent protection in just a single EU country, and this is not significantly more expensive than filing for patent protection only for your own country.

Worldwide patent protection is often, despite what you may think, not required. The patent protects against using something. That usually includes commercial use. So even if some rogue state hosts a business refusing to honor your foreign patent, they will typically only be legally allowed to do so in their own little country. As soon as they sell their service or products to the US or the EU, you can sue them (or their importer or reseller) there, even if you only have patent protection in the US or only in the EU. In fact, "selling" is not even necessary, but then you may have to find a way to put a price tag on the damages done that convinces a court.

Patent attorney

Technically, you do not need a patent attorney to file a patent; all this person would do is, essentially, to avoid beginner's mistakes. He will have more experience in doing all the things you should do anyways, and probably already have. In particular, I'm thinking about patent research (has the idea or aspects of it already been patented or published?) and formulating your claims. The details here determine just what is protected, how defensible the patent is in court, and what chances you have to salvage some claims if others are found invalid or you choose not to defend them in court. I suppose there is a chance that a patent attorney might also be able to help, at least with contacts, towards monetizing your patent (assuming you are willing to consider giving licenses).

Rejection percentages

Sorry, I don't know. It happens; historically, patents for perpetuum mobiles have been consistently denied. In recent decades, however, you'll easily find people expressing concern that many patents have been granted for ideas that clearly cannot work.

In my experience, policies can be surprisingly well predicted by simply considering the incentives. Both the EU and the US have moved to financially incentivise their patent offices for granting patents, but not, as far as I know, for rejecting them or analyzing how granted patents stand up in court (which for valuable patents is usually the real test). Go figure.

My best guess is that save for obvious defects, such as a similar idea already being known or your application not conforming to some formal requirements or failing to address what is novel and useful about your idea, your chances of rejection are remote. You may take additional comfort in knowing that you would be the source of this financial incentive to grant patents: If you chose not to hire a patent attorney, your expenses will be lower for a rejected patent application than for a successful one.

Bank credit

I don't know if a bank in the EU would be willing to finance your patent. There's only one way to find out: Inquire!

I suspect banks would want the following: 1. A business plan detailing how and when you expect to recoup your expenses plus a profit. This could be from using your patent (but then the credit will presumably be for the business as a whole), or from a plan to sell or license use of your invention (which, again, could be seen as a business where the actual patent is merely an important part of a bigger operation). 2. Collateral. Banks, despite often curious about your intentions, are so risk adverse, they may well decide not to take a risk regarding the success of your patent venture. So they'll ask you what property or other assets (parents' ?) you're willing to (partially) bet on your success.

You may be better off getting funded by an investor. If you figure out how to attract one, let me know for my own ideas!

Total cost

If you do not hire a patent attorney and do not pay yourself for your time and effort, expect to incur fees around 1 kUSD for each of the EU and the US per granted patent, not counting increasing costs for keeping the patent after five years or so. If you hire an attorney, I suppose it really depends on the actual workload your application requires. Ask! I think the figure you mentioned may well be sufficient for both a EU and a US patent application using a patent attorney.

Please appreciate that a patent is essentially a title. Depending on your intentions and other market participants, there is a certain danger that using it involves disputes, which can mean costly lawsuits, either to bring competitors to respect your patent and licensing terms, or to prevent someone else from having your patent declared invalid by court.

Time to get a patent granted

It generally takes too long. It is rather frequent for a patent to not be granted within the first 12 months of the application. Sometimes applicants seem to want to drag out the process themselves, though. Under certain conditions, you can retroactively change details of your application without changing the formal initial application dare used to decide priority. If an applicant cares more about how long to extend the patent protection in the end rather than what date the patent is formally granted, this can be advantageous. It also may allow clever legal departments to have their company file a patent before they have completely worked out all relevant aspects of what they have invented---ask your patent lawyer if ever you want to optimize to this point yourself. This is an area where knowing how to write patent claims widely to the point of being almost unacceptably broad comes in.

It would be great to get patents granted in under a year, because I believe there is a one-year grace period for you to decide in what other countries to seek patent protection besides the one where you initially applied. But please seek another source for this (patent attorney?) because I am unsure about the details; maybe this deadline only starts ticking when the patent is granted, not when you initially file for it.

Idea theft by corporations

The likelihood of your idea being stolen depends on many things. Only if you can be seen as successful or solve a problem plaguing others, there is a chance they will even want to. And only if they can easily replicate your invention can they copy it rather than be inventive themselves. So depending on whether your invention is some magic under the hood or something self-evident, and if its effect is something the big players even care to notice, the answer can range all the way from no chance at all to very likely indeed.

Despite whatever worries you may have in this regard, and despite not knowing any details of your invention, let me try to encourage you to take a much broader view. If you can come up with one great invention, you will be very useful and valuable in lots of areas. If your idea is great enough to be stolen, and not stolen by just anyone but by the big players, this could be your greatest personal breakthrough ever, towards getting future ideas funded or landing a great job. Not necessarily with a company that prefers stealing your idea rather than asking you to consult and license them in this regard, but certainly elsewhere.

I know that it probably would not seem like an adequate compensation for what must feel like the prospect of being cheated out of something that should be yours. Yet sadly, despite your expectations being the very justification for our patent laws, the reality of it just doesn't necessarily conform to the spirit of the law or one's likely views as an innovator. Being right isn't always sufficient to get the entire cake, so unless you have the legal and financial muscle to fight a corporation, you may have to settle for sharing, negotiating, or otherwise living with it.

Answer 2

First, if you are from the EU you should be able (administratively ) file an EPO application on-line for 115 euros according to their step by step instructions. There are more costs between that and getting enforceable patent rights but the fees to take the first step aren't bad. Also anyone in the world can file a U.S. provisional application on-line for $130. That fee can be cut in half if you qualify as a micro-entity. Writing and filing yourself is a big job that will require you to learn a lot and, particularly for a software idea, is still not likely to come out very well.

The benefit of a patent attorney is to greatly increase the chance something good comes out of this. Patent practitioners meet someone who thinks they have a billion dollar idea every week but know that taking any idea to fruition is hard work with no guarantee of success. Most inventors spend their time trying to convince a doubting world they have something great.

Software related patents can be particularly hard to get allowed and can be vulnerable to layer being declared too abstract to have been patented in the first place. The allowance rate if done professionally is probably around 40%.

In the U.S. a bank might give you a loan against an issued patent with a proved royalty stream. Not to file a patent unless there was some good collateral put up.

If you use a professional it could cost you that much to go through the whole process of getting a patent issued. Price-sensitive inventors who shop around can probably get that down to 8-12k USD. Of course you can spend the money and not ever get the patent. To go into multiple countries will multiply the costs.

The USPTO has a goal to get the typical time from application to issue to come down to three years.

If you have a great idea for a product that can be developed by you a few friends why not go for it?

I'm not sure if the last part was asking if patent offices will see the nuanced differences or if consumers will appreciate the differences and switch to your system. I'd worry about the consumers. But from both sides of the patent debate what is "obvious" compared with what has been done is one of the hardest things to get a good grip on.

appended

Regarding "world wide" patent applications: This is a confusing topic. While there is essentially a world wide (147 country) patent application there is not a world wide patent. The WIPO via the Patent Cooperation Treaty (PCT) has a mechanism to file, from your country, an single application that holds your place in 147 countries and, with enough money and work, could result in an enforceable issued patent in any of those places you latter choose to take the next steps in. It is expensive. Most people look for the biggest market they can address with the most enforceable rights and just go into one or two places directly without using the PCT process.

Actual cost of filing fees in the U.S.:

The fees are 50% off for a small entity (less than 500 employees) and are now 75% off if you qualify as a "micro entity". Initial filing of a non-provisonal utility application is $730 for small entities, $365 for micro. When it gets initially rejected, as almost all application do, there is no fee to reply as long as it is within 3 months. If and when you get a notice of allowance the issue fee is $890 or 495 for micro. The un-discountable publication fee is $300.

In answer to a question in a comment, I am a USPTO registered practioner who is not also an attorney. That makes me a patent agent. Same rights, duties and privileges at the USPTO but no power to be involved in any court related matters.

Regarding doing it yourself: When five years ago I passed the all-day patent bar exam that has a 50% pass rate a senior colleague congratulated me and said "after three year of doing this you will know what you are doing", he paused then added "because you are so quick at learning".

Answer 3

On the grant / rejection rate, The Register gave these figures for the EPO:

The total number of filings grew by 3.1 per cent in 2014 to more than 274,000, of which 64,600 patents were granted.

Which implies 76% have either been rejected, or are still under consideration.

Answer 4

I don't have enough money (not even nearly enough) to file a patent

This point seems to come up in many questions. While patent applications seem expensive, they are often only a small part of the cost of doing business or starting a company. Even in the software fields, the opportunity cost of starting your own company probably dwarfs the cost of hiring a patent agent to do the work for you. If you do not have money for a patent agent, let alone just official fees, how will you have money to market, to chase investors, etc.?

On the flip side, having a professionally written patent application and representation by an agent known to be competent+ gives you additional value when talking to investors, probably in considerable excess to the cost of hiring that agent in the first place.

So, if you have a great idea, sit down and figure out your business plan and its true cost and the value of a professional vs. amateur filing. Once you figure out if and how you have enough money for the overall plan, I suspect that in 90+% of the cases, going professional will win.

BTW, if you have no money and are worried about approaching investors without any coverage, by all means file something on your own. Many jurisdictions offer cheap options, like the USPTO provisional applications.