The Top Five Reasons You Shouldn't File Foreign Patent Applications. Episode 127

Who This Episode Is For

In this episode, I’m going to go through the top five reasons you shouldn’t file foreign patent applications. And when I say you, I don’t mean companies like Apple, IBM, or Microsoft. I’m talking to most of the people listening to this podcast — solo inventors with a great idea.

The reality is, there’s really just one reason not to file foreign patent applications: money. If you told me you just inherited $5 million and your dream is to file patent applications all over the world — or if there were some magical free pass to file globally without spending a dime — then sure, go for it.

But for most people, there are three major stages where foreign patents can destroy your bank account.

Reason 1: Filing Costs

The first hit to your wallet comes with just filing the patent application.

Let’s assume you already have a U.S. application, so you don’t need to rewrite anything — you’re just filing the same application somewhere else. What’s that going to cost you?

It depends on the country. You’ll need a local attorney in that country to file it for you. If the official language isn’t English, you’ll also need a professional translation. Google Translate isn’t going to cut it — patent language needs to be precise.

Then there are the government filing fees, search fees, examination fees, and, if you want someone like me to coordinate everything with the foreign attorneys, my coordination fees as well.

Here are some rough estimates (assuming you’ve already done the U.S. application and you’re filing a relatively short patent with no extra page or claim fees)(These numbers are from 2021 and may have changed since this podcast first aired):

• Australia: $3,200

• European Regional Patent: $8,800

• India: $2,800

• Israel: $2,700

• Mexico: $2,200

• Russia: $2,700

• Taiwan: $2,600

• Canada: $3,400

• Japan: $5,800

Most countries will run between $2,500 to $4,000 — but some, like the European regional patent, are significantly more expensive.

When you see cheaper costs online, you’re probably are just looking at government fees, not factoring in the attorney, translation, or other filing costs.

Reason 2: Prosecution Fees

Let’s say you’ve paid those initial filing fees and you still want to move forward. Now come the prosecution fees — all the costs between initial filing and getting your patent granted.

There’s a good chance you’ll get a rejection, and your foreign attorney will charge you to respond. It’s impossible to predict the exact amount, but expect a few thousand dollars in back-and-forth before it gets allowed — if it gets allowed. And once it’s allowed, there will still be government issue fees to pay.

Reason 3: Maintenance and Annuity Fees

You’ve got your patent! Congratulations — but guess what? You don’t automatically get 20 years of protection. In almost every country, you have to pay annual maintenance or annuity fees to keep your patent active.

These usually start small in year 3 or so, and increase every year. Some examples (these costs are from 2021 and may have changed):

• Australia: Starts around $200 per year. By year 16, it’s $900 per year.

• China: Starts around $100, ends over $1,200 in year 20.

• Japan: Starts at $60, rises to almost $1,300 by year 20. Total over 20 years = ~$15,000.

• Saudi Arabia: Starts in the $100s, hits $1,000 by year 8, and over $2,600 by year 20. Total = ~$30,000.

And don’t forget — you’ll also have to pay attorney fees just to handle and track these payments in each country.

Reason 4: Enforcement Costs

Let’s say you have a patent in Saudi Arabia. Great — but how are you going to enforce it?

Are you monitoring the Saudi market? Do you have a team checking for knockoffs? Are you ready to hire a Saudi law firm to sue infringers?

Enforcing a foreign patent isn’t just difficult — it’s expensive. If you’re not actively monitoring those markets and ready to pursue legal action, then your patent may be useless.

Reason 5: Opportunity Cost

Think about the opposite of spending all that money. What if, instead of spending tens (or hundreds) of thousands of dollars on foreign patent filings, you spent that money on U.S. marketing or development?

Sure, someone might legally copy your product in another country, but is that worse than running out of money trying to prevent it?

Most of my clients are better off investing in their U.S. business and being first to market, instead of spending a fortune on foreign filings.

But What About the Upside?

Of course, I can’t only give you the negatives.

Sometimes, foreign filings do make sense. You may have done the cost-benefit analysis and determined that, even with all the expenses, foreign patents will earn you more than they cost.

Also, you don’t have to file in every country. If you’re manufacturing in China and doing most of your business in Europe, it might make sense to protect yourself there.

There’s also the PCT (Patent Cooperation Treaty) application — an international application that lets you delay foreign filings while getting an early examiner report. I’ve talked about that in other episodes.

But for most solo entrepreneurs, filing foreign patents is not the best use of your resources — unless you’re prepared to spend between $15,000 to $50,000 per country from filing to full 20-year protection.

Final Thoughts

If you still want to file foreign patent applications, that’s fine — I’ll gladly help. It’s in my financial interest to tell clients to file lots of applications all over the world. But I’m not going to recommend something that, in most cases, isn’t the right move for your business.

I’m Adam Diament, and until next time, keep on inventing.