For many startups, patents seem like a necessary but one-time expense. However, the reality is far more complicated. Filing a patent might appear straightforward, but the costs involved are anything but. From legal fees and government charges to international filings and ongoing maintenance costs, the true expense of a U.S. patent can easily exceed $50,000 over its lifetime.
This hefty price tag raises questions for founders: Is patenting worth it? I’ve seen firsthand how many entrepreneurs hesitate to move forward with patent filings, uncertain whether the return on investment justifies the expenditure. However, skipping patents altogether can present even more dire consequences for your business:
A competitor could beat you to the patent office, locking you out of your own market.
Investors may lose interest if they don’t see a clear intellectual property (IP) strategy.
A legal battle might emerge just as your business gains momentum, forcing you into costly litigation.
So, the question isn’t whether you should patent, but rather how you can do so without draining your resources.
Strategies for Smart Patent Filing on a Budget
The key to navigating the patent process effectively is knowing where to focus your budget. Fortunately, it’s easier than you think. Here are some proven strategies to help you patent without overspending.
1. Identify High-Value Innovations for Patent Protection
Startups often make two costly mistakes when it comes to patents: over-patenting or under-patenting. Both can harm your business.
Under-patenting happens when startups fail to document and protect innovations, allowing valuable ideas to slip through the cracks. Without a structured process like Invention Disclosure Forms (IDFs), innovations may not be patented in time, especially when funds are limited.
Over-patenting involves filing patents for ideas that don’t significantly strengthen your market position. It’s akin to betting on every horse instead of choosing the one with the best odds of winning. Instead, focus on innovations that have the potential to generate revenue or block competitors.
To avoid these pitfalls, use a structured patentability assessment. This process, which involves input from R&D, legal teams, and business leaders, evaluates the patent’s business value, the likelihood of patenting success, and the associated costs. Only the most valuable ideas should move forward.
As a rule of thumb: If losing an idea wouldn’t hurt your business, don’t patent it.
2. Plan Your IP Budget Wisely
Filing a patent without a clear budget is risky and irresponsible. Many startups rush into patent applications, only to run out of funds midway through the process, leaving their filings incomplete or allowing issued patents to expire.
Patent costs accumulate in phases—drafting fees, prosecution costs, government fees, and maintenance costs after the patent is granted. The total cost can soar, especially when foreign patents are involved. If you only budget for the initial filing, you may be forced to abandon a patent midway as costs balloon.
To prevent this, set a comprehensive patent budget before you file. Ensure you account for all phases of the patenting process, from drafting through maintenance. It’s also crucial to discuss fixed-fee structures or end-to-end budgets with your attorney to avoid any surprise costs. Once the patent is in progress, use cost estimation tools to track your ongoing expenses.
A well-planned budget ensures that your patents work for you, not against you.
3. Use Smart Filing Strategies to Cut Costs
Cutting corners on patent filings can be tempting, but it often leads to rejections, poor strategy, or patents that are ineffective when needed most. Here are some smarter ways to save:
Provisional Patents: Start with a provisional patent. For as little as $140 in USPTO fees (with lower legal fees as well), a provisional patent locks in your filing date and gives you 12 months to refine your invention before committing to a full application.
Government Fee Discounts: If you qualify as a small or micro-entity, you can save 50-75% on USPTO fees. Many startups overlook this, leaving money on the table.
Foreign Filings: Avoid rushing into international filings unless you’re committed to those markets. Foreign patent costs can range from $5,000-$10,000 per country initially, with total costs reaching $25,000-$75,000. Start with U.S. filings, then use the PCT (Patent Cooperation Treaty) system to delay foreign decisions for up to 30 months, giving you more time to assess demand.
Avoid Excessive Prosecution: Don’t waste money on tough examination areas. Use predictor tools to steer clear of technologies where patenting is challenging. You can also analyze examiner statistics and request interviews to improve your chances of success. If your application is unlikely to succeed, consider abandoning it early to avoid sinking more money into a lost cause.
4. Prune Low-Value Patents to Cut Unnecessary Fees
Many startups waste up to 20% of their patent budget on patents that no longer serve their business needs. If a patent is no longer protecting a key technology or providing a competitive edge, there’s no reason to keep paying for it.
Review your patent portfolio annually and study does this patent still align with my business strategy? If not, consider dropping it, selling it, or licensing it to recover costs. If your business has exited a market, stop paying for patents in that market.
5. Use Data, Not Guesswork
Smart patenting isn’t about making intuitive decisions—it’s about using data to guide your moves. The right tools can assess the likelihood of approval, predict overall patenting costs, and reveal cost-saving opportunities. This data-driven approach helps you determine which patents are worth pursuing and maintaining.
Successful innovation managers don’t file patents blindly; they track, analyze, and adjust based on data. If you want to win, adopt the same strategy.