Data on high costs to obtain patents of small, high-technology companies

A recent article by Gillian Hadfield cited an in-depth empirical study of patent activity by small technology companies. The excellent study compiled data and explanations about patent costs for those companies. “The average out-of-pocket cost for a respondent firm to acquire its most recent patent was over $38,000. This figure is significantly higher than the averages for patent prosecution reported in the literature, which vary from a low of $10,000 to a high of $30,000.”

The study, published in the Berkeley Tech. L.J., Vol. 24, No. 4, pp. 255-327 (2009) by four authors cites the “literature” as AM. INTELLECTUAL PROP. LAW ASS’N, REPORT OF THE ECONOMIC SURVEY 2007 78–81 (2007) (reporting average attorneys’ fees for prosecuting an original patent application, filing one amendment, and issuing an allowed application as between $10,000 and $20,000, depending on the complexity of the technology); Mark A. Lemley, Rational Ignorance at the Patent Office, 95 NW. U. L. REV. 1495, 1498 (2001) (estimating the cost of prosecuting a patent to issuance as between $10,000 and $30,000).

The law review articles suggests why the patent costs were approximately double. One executive stated that “startups often pay significantly more than incumbents to their prosecuting attorneys, because startups (1) tend to file for patents on inventions that are more important to the company’s core business model than large firms; (2) usually use outside instead of in-house counsel for patent prosecution; and (3) often have difficulty monitoring outside counsel to limit overall costs.”