An engineer who works for an SME has invented something and the company is now considering patenting the innovation. We take a look at the expected costs, from applying for the patent up until it is granted.
The costs of investing in a patent consist of fixed fees as well as costs resulting from strategic decision-making.
The subject of our fictional example is ‘High Tech Ltd’. Company engineer John Smith has developed an innovative mechanism for a machine. Management immediately recognises the potential of the technical innovation and is eager to patent it. It’s the young company’s biggest breakthrough to date, but it’s not long before the question arises – how much will this actually cost?
Using the example of applying for a Swiss patent at the Swiss Federal Institute of Intellectual Property (IPI), we run through the costs that High Tech Ltd. can expect to pay. First of all, there is no flat fee for the patent application, apart from the fixed filing fees. However, these make up only a small part of the expenses. The additional investments depend on the chosen route, for example, in which markets or countries the invention will be commercially marketed. It is recommended to discuss key questions with a patent attorney. A list of experts is available on the IPI's IP Advisory Network.
1. Assisted Patent Search – the invention under the microscope
Coming back to John Smith, engineer at High Tech Ltd. He would like to learn about the market potential of his innovation. Has another engineer already published the same idea? To find the answer to this and other questions, he participates in an Assisted Patent Search at the IPI. John obtains valuable results that help him to make decisions and provide clarity on the way forward.
Costs – 300 Swiss francs
2. The patent specification – no room for error
The text and illustrations in the patent specification are a key component of the application documents. They describe how the invention works and what should be protected.
Inventor John Smith could write the text himself. This would be a cheap solution which could, however, become expensive as there is an increased risk that the protection of the invention will not be formulated precisely enough. A formulation lacking in meaning compromises the strength of a patent. High Tech Ltd. decides to err on the side of caution and consults a patent attorney.
A wise decision. The application documents form the basis of the entire granting procedure, as well as possible opposition procedures or disputes. Anyone who slips up in their application has wasted an opportunity. “As a rule, additional information cannot be incorporated into the documents. There is only a limited possibility of extending or altering the scope of protection,” says Dr. Philipp Rüfenacht of Keller & Partner Patent Attorneys AG.
Attorney fees for the patent specification – 3500 to 7000 Swiss francs
High Tech Ltd. applies to patent the invention. The application fees for a patent valid in Switzerland and Liechtenstein amount to 200 Swiss francs.
Costs – 200 Swiss francs
4. Verifying novelty
A Swiss Patent Application Search allows anyone who files for patent protection in Switzerland to find out whether their invention is novel and involves an inventive step. The search is recommended because these requirements are not officially examined in Switzerland.
Costs – 500 Swiss francs
5. Filing in other countries – where are my markets?
It’s important to think about strategy, as a patent is only valid in the country of filing. If High Tech Ltd. would like to protect their invention in other countries, they must submit the Swiss patent specification in the national language of each country. Costs are therefore incurred for translation and procedural and renewal fees must be paid in each country. Before they make a decision, the management of High Tech Ltd. reflects on its market strategy. The aim is to only choose the countries in which there are potential markets. It is therefore worth developing a marketing strategy at an early stage.
After the filing, the Swiss patent is examined and, ideally, granted by the IPI.
Costs – 500 Swiss francs for the examination fee
7. Renewal fees – keeping the patent in force
A patent is valid from the filing date for a maximum of 20 years. To keep the patent in force in Switzerland, renewal fees are payable from the fourth year. If High Tech Ltd. does not pay, the patent protection lapses. The renewal fees increase progressively and were recently lowered in Switzerland. The fee for the fourth year is 100 Swiss francs, which then increases annually by 20 francs up until the eighth year, and then by 40 francs etc. If the patent is active in other countries, renewal fees must also be paid there. The amount varies from country to country.
Costs for 10 years of patent protection in Switzerland – 1180 Swiss francs
The finishing line – High Tech Ltd. is aware of its options
John Smith and management now know that the costs heavily depend on the level of support provided by a patent attorney and the markets in which the invention should be protected. “It is worth carrying out a cost-benefit analysis,” says patent attorney Philipp Rüfenacht. If the expected profit (market advantages due to exclusivity, revenue, marketing value etc.) exceeds the costs, it makes sense to submit an application. At their next meeting, High Tech Ltd. will decide whether they are going to place responsibility for all tasks relating to the patent application in the hands of a patent attorney. On average, a Swiss application costs 7,000 to 12,000 Swiss francs – from the preparation of the application documents up to the grant of the patent.
Three requirements for patentability
An invention can be protected by a patent if it meets the following requirements:
1. The invention is new
The invention must not belong to the state of the art (also known as prior art). The state of the art means all knowledge that has been made publicly available anywhere in the world prior to applying for a patent.
2. The invention is inventive
The invention must not be obvious to a person skilled in the art. In patent law, a “person skilled in the art” is a hypothetical person who knows the prior art in his specialist field but is unimaginative. If you show the purpose of your invention to a person skilled in the art and he readily comes up with the same solution as you, then your solution is not inventive.
3. The invention is industrially applicable
The invention must be industrially applicable and practicable, and it must be possible to replicate its implementation.