What is a flat rate patent application?
Flat rate initial filing
A flat rate patent application generally refers to a patent application that is initially drafted and filed for a fixed fee. While I don’t have statistics, it seems that flat rates are more common for design patent applications where the initial preparation of the specification requires minimal “brainwork.” Design patent applications also have a higher allowance rate and lower probability of Office Actions in comparison to utility non-provisional patent applications.
Ongoing patent prosecution after the initial filing
Keep in mind that filing a utility non-provisional patent application is only the beginning of the journey. You will likely encounter multiple Office Action rejections which will incur additional costs.
How are patent fixed fees determined?
How much is the flat rate for filing a utility non-provisional patent application?
Our firm determines the flat rate based upon a number of factors, with the greatest factor being the complexity of the invention. The number of embodiments (e.g., examples of the invention) will also factor into the flat rate estimate. Accordingly, our flat attorney’s fees for an initial utility patent filing may range from:
- $6,000 to $9,000 for an invention of low complexity;
- $10,000 to $15,000 for an invention of medium complexity; and
- $16,000 and up for invention of high complexity.
The above rates do not include out-of-pocket costs such as USPTO and patent illustrator fees.
Fixed fee Office Action responses
Based on years of experience, we can provide a flat rate estimate for responding to a particular Office Action. Cost factors will include:
- the type of rejection (e.g., Section 112 cleanup, prior art rejections under Sections 102 and 103, Section 101 ineligible subject matter, etc.)
- number of prior art references cited in the claim rejections
- whether any claimed allowable subject matter was identified
An Office Action response that merely cleans up indefinite claim language under Section 112 or takes allowable claims will cost substantially less (e.g., $1,000 or less).
On the other hand, a response that counters prior art rejections will cost more since such a reply will likely involve claim amendments and/or extensive technical arguments on why the claimed invention is unique and non-obvious over the prior art. Such substantive Office Action responses may range from $1,400 to $2,800 for each response, not including any USPTO fees (e.g., extensions of time, additional claims, etc.).
Why do so many US law firms disfavor fixed fee patent prosecution?
My hunch is that the vast majority of US lawyers and law firms, whether in IP or any other practice area, are still accustomed to the old school hourly rate. I think there are still certain legal matters where hourly billing is appropriate and fair to both the attorney and the client, e.g., patent litigation, trademark litigation, capital raises and other more complex deals.
The hourly rate reduces risk for the attorney because the attorney knows that whatever time spent on a matter will be captured. For clients, the hourly rate increases risk because the client may be liable for higher fees than expected for a particular matter. Hourly rates also makes budgeting a challenge for clients.
When it comes to patent prosecution, which carries less uncertainty in comparison to IP litigation or an M&A deal, an IP firm may can make flat rate billing profitable by running an efficient process. Streamlined docketing and reporting procedures enable a firm to “no charge” for such administrative tasks while only billing when real legal work is involved. Clients benefit from the transparency as they know when and how much their IP attorney will charge.
Is there an IP firm that bills flat rates for patent applications?
While I can’t speak for others, our firm bills flat rates for preparing patent applications. We also offer flat rate billing for ongoing patent prosecution, including Office Action responses, Examiner Interviews and appeal briefs.
How flat fees facilitate teamwork
It seems that the prospect of multiple attorneys billing on a single matter really scares clients. Even if it’s justified, no client likes getting a legal bill that appears to contain duplicate billing. With flat rate billing, a client can rest assured that the attorney’s fees for a patent case are fixed even if multiple attorneys are participating in a conference call or reviewing a draft application.