Contingency Fee Patent Applications
We recently had an inquiry in regards to whether or not we would consider going “in on” an invention idea with a client. Simple answer is we don’t take a percentage for doing the work on a client’s patent idea. This is why:
The two biggest problems with ” contingency fee ” patents or patent applications are
• The need for a number of warning documents to the inventor regarding attorneys going into business with their clients
• You are “betting” on the inventor being successful. With respect to the second point, betting on an inventor can be very risky, as so many times the inventor is some combination of the following:
- • not business savvy
• underfunded
• will lose interest and enthusiasm,
• did not do a prior art search and/or USPTO finds additional prior art which requires additional,unexpected time to be spent on the invention
• tries to “DIY” on things he/she should hire others to do
• hires others to do things he/she should “DIY”
The odds of succeeding as an inventor are small, and the problem for most is not a patent. If patents were a license to print money, I’d be a full time inventor and not a patent attorney. Most of our clients who have succeeded have done so with help from IP, but not because of it. On the other hand, I have many clients who got a patent but did not make a reasonable amount of money (if any) off their invention.
A final problem is that many inventors have an overly inflated idea about the “worth” of their idea. A good article on one entrepreneur Derek Siver’s opinion here. So, the inventor thinks his idea is worth $10,000,000,000, so by offering the patent attorney 1% of the invention, he thinks he is offering the attorney many times the attorney’s normal rate for a patent application and prosecution. The patent attorney, on the other hand, probably sees things more along with lines of Derek, and thinks the idea is worth maybe $20 at most. So, the attorney is not enthusiastic about putting in $5,000 to $15,000 of time into a $20 idea, knowing full well that unless the inventor has what it takes to succeed, the attorneys may get their name on a patent but nothing more.
So, what kind of inventor will succeed? Briefly, here are my top characteristics in order of importance:
1. Has an invention that works
2. Adequate funding
3. Good Luck
4. Inventor tenacity
5. Quality invention.
Have other questions about patent applications or the patent application process, feel free to contact us at ICIP.