Intellectual property is often the most valuable asset of a technology startup. While limiting the upfront costs can be very important for small companies, choice of the proper strategy for preparing patent applications can significantly impact both the bottom line and the ultimate value of the company's IP portfolio.
Some applicants choose to file provisional patent applications to secure an early filing date while deferring the costs associated with preparing and filing formal U.S. and foreign patent applications. Provisional applications do not require formal structure or claims, and have a low filing fee, so immediate costs are generally smaller than for a utility application. Formal applications filed within one year of the provisional application filing date retain the benefit of this earlier priority date.
However, in many instances the total expenses associated with filing a provisional application followed by a later utility application can exceed the cost of filing a formal utility application in the first place. Duplication of effort occurs from preparing a second application almost a year after the provisional application. Inventors may have moved on to newer projects and not have the time or the focus to fully assist with preparation of the formal application. Many patent practitioners draft patent applications by first preparing a claim set and then writing the description to support it. Filing a provisional application without claims reverses this process and often complicates preparation of the formal application.
Additionally, delaying a careful analysis of the scope of the invention and its patentable features can limit the value of patents that eventually issue. Drafting effective patent claims includes determining exactly what the invention actually is and how best to describe it. Filing a provisional application before deciding how to structure the claims risks reliance on a disclosure that fails to fully support the claimed invention.
Historically, problems associated with an incomplete provisional disclosure might not arise until the patent's file history was scrutinized by an accused infringer. However, with the U.S. Patent & Trademark Office transitioning to the electronic age, patent examiners now have the ability to effortlessly access and review provisional disclosures relied on for an earlier priority date. Especially for fields in which innovation occurs quickly, reliance on a provisional filing date can be crucial for avoiding prior art that might otherwise limit the scope of allowable claims or possibly even render the disclosed invention unpatentable.
The claims of a formal U.S. patent application must be supported by a specification including "a written description of the invention ... in such full, clear, concise and exact terms as to enable any person skilled in the art to which it pertains ... to make and use" it. The provisional disclosure must meet this standard to provide the intended benefit of an earlier priority date. The difficulty of preparing such a disclosure without fully analyzing how the invention should best be claimed reduces the cost deferral benefits of provisional applications.
Considering the costs associated with filing two applications instead of one, the benefits of filing provisional applications can dwindle further. Budgetary and time constraints might merit filing of a provisional application, but maximizing the return on an IP investment involves avoiding this strategy whenever possible.
Submitted by Michael Van Loy of Mintz Levin