Bad news on your patent claims? Consider 3 factors before spending more time and money

There are two aspects to the licensing value of your patent: the probability of salvaging the essential independent claim, and the value of that claim for licensing.


Here’s the scene: Your patent professional (patent agent or patent attorney) has invited you to his or her office to discuss the “first office action” received from the United States Patent and Trademark Office.

So, you meet and are shown a response that has rejected 11 of your 14 application claims. You ask if there is any hope of saving most of the claims through a rebuttal. The attorney promises to try.

You know that a rebuttal will take research and the writing of a good argument that convinces the patent examiner that his or her interpretation was wrong.

But there is no need to decide at the time of your meeting. Also, you haven’t done enough analysis to make the best decision. You need to take your time and consider three things before committing to more expense.

  • Which independent claim(s) was rejected?
  • Did that claim cover a feature of your invention that was essential to the patent’s value for licensing?
  • What are the “ballpark”’ odds of being able to salvage the essential claim(s)?

Determining the odds

The first point above was settled by the patent examiner. The second point must be answered by you. The third should be answered by your patent attorney.

Are the odds 10 percent or 50 percent that your rebuttal will prevail? This is a fair question, and it should be answered by the patent professional.

No one can say with certainty what the odds are, of course.

Remember, there are two aspects to the licensing value of your patent: the probability of salvaging the essential independent claim, and the value of that claim for licensing.

The probability question is answerable only by your patent professional. The commercial value of that claim is answerable only by you. Patent professionals are not experts in marketing a patent (licensing it or selling it outright).

Most patent applications that are drafted for independent inventors have only one or two independent claims, rarely three. Thus, the odds are high that any independent claim permanently rejected will change the marketing value of your issued patent dramatically.

My main point is that I’ve known many inventors who didn’t understand the key points of a patent application, or of the patent itself, and paid a lot of money for an essentially worthless patent.

If you don’t understand what independent and dependent claims are, ask your patent agent or attorney. Better yet, purchase a copy of David Pressman’s book, “Patent it Yourself.”

Know what is covered

Although I don’t advise you to attempt to write your own patent, I urge every inventor who is not experienced in filing for a patent to study Pressman’s book before talking to a patent agent or patent attorney. Remember, attorneys charge by the hour, and the more you know about the essentials of patentability and application filing, the less you’ll be charged for your patent.

Now, if your patent agent or attorney tells you that the odds of salvaging the initial rejection are low and you decide to abandon the application, your main option is to produce and market your invention on your own. But to be sure that you will not infringe on another patent holder’s patent, you must obtain a “freedom to operate” opinion from your patent professional.

In other words, are there current patents, or published patent applications, that cover features of your invention that you will use in your produced design?

In my opinion, this question should be answered before filing. It should be a regular part of the application process. Here’s why: If your patent issues, and your potential licensee has to pay royalties to you and to another inventor for features that are included in your invention, but not claimable by you, your chances of landing a licensee are reduced. Even if a producer is willing to pay, say, a 5 percent royalty, if that producer has to pay two inventors, your royalties will be cut in half, or thereabouts.

6 crucial cautions

Let’s take the position that even though your patent application suffered final rejection, no infringement complication was found. You then are free to produce and market without the fear of infringing on another inventor’s current patent. Is that practical?

During the years I worked for corporations, I witnessed the launching of several new products. And, of course, I’ve launched a few of my own. I’ll conclude with six cautions to consider before deciding to produce on your own.

  • Some production processes don’t require an investment in tooling. If your product will be injection molded of plastic, although you won’t have to invest in an injection molding machine, you will have to invest in a mold that is used in that machine. Tooling up for production always costs much more than you estimate.
  • Nearly all production processes offer a range of several different tooling options, the choice of which depends largely on the anticipated volume of sales. Low tooling cost generally means a high cost per unit produced and hinders your ability to compete. High tooling cost generally means low unit cost.
  • The vast majority of plastic components are made by the injection molding process. The cost of a mold may range from $10,000 to more than $100,000. The economics of molding are based on the number of parts produced per molding cycle. The more parts per cycle, the less expensive is each part. But more parts requires more cavities in a larger mold, and a greater cost for that mold. I urge you to buy at least one book on injection molding.
  • The great majority of metal parts are either stamped or die cast. Both processes have economic calculations that are essentially the same as those of injection molding.
  • Short-run methods are OK to determine whether you have a market. But short-run methods mean that your selling price is often higher than your customers’ perception of what they think is fair value for how much they are willing pay. This limits your market, and you may never raise the business to a practical volume and profit level without a better compromise between tooling investment and cost per piece produced. Retooling as sales volume increases is a very expensive option.
  • Tooling decisions require knowledge of the options that are available; a target for return on investment plus profit; and a forecast of sales, let’s say, for the second and succeeding years ahead. I’ll show you the explicit math in next month’s issue. Meanwhile, invest in books that explain the key processes.