Cash Rules Everything in IP

Like many other engineering graduates in the state of Michigan, I started my engineering career in the automotive industry. Lucky for me, I landed a pretty fun job in vehicle safety. The crash lab located in the space behind my office ran full speed crash tests on a daily basis. However, I spent most of my day behind a computer analyzing vehicle structures for crashworthiness.

Courtesy of Pixabay

Money (That’s What I Want)

As an ambitious recent grad, my interest piqued when I heard about an opportunity to earn extra cash at work. My colleagues and I already came up with many innovative solutions to design challenges on each of our projects. All we had to do was fill out an Invention Disclosure form describing one of these inventions, explain what made it awesome, and submit the form to our employer.

A mere 2-3 years later, if a patent issued based on my Invention Disclosure, I would not only have my name next to the “inventor” field on a U.S. patent, but also a check for $1,000! I was sure I was about to have my name on more patents than I would be able to count and a proportionately huge pile of cash alongside them.  Intellectual property law sure sounded like an intriguing field to me.

Prototype by Louis Mornaud licensed under Unsplash

I asked around to my friends in various industries and found that my employer’s offering was not unique. Many companies in fields from telecom to consumer electronics and medical devices were offering invention incentives to their employees.

My experience as an engineer also reminded me of memories from my childhood. Every year or two, my dad, an electrical engineer for a large corporation, was listed as an inventor on a new patent. When this happened, we would often go out to a nice dinner. At the time, I believed the dinner to be a celebration of his accomplishment. While I’m sure that was a component of it, the extra money he received for being named on the issued patent surely helped fund the festivities.

All of this new knowledge and these overdue realizations put dollar signs in my eyes. To me, the baby engineer, obtaining a U.S. patent seemed like a surefire get rich quick scheme. Invention + Patent = Money!

US Dollars by Alexander Schimmeck licensed under Unsplash

A few years down the road I took a position in applied research at a university. My new role provided just as much opportunity for innovation as my previous one did. Fortunately, my new role was also eligible for invention incentives. Unfortunately for me, the university was less eager to pursue patents for inventions than my previous corporate employer. If invention incentives weren’t typically paid out until the invention disclosure matured into a patent or at least a patent application, how was I to continue amassing patents and payouts? It turns out, I had not considered the patent payment equation from the patent owner’s point of view.

I’ll Allow It

What I hadn’t realized was all the resources that went into the process of converting that Invention Disclosure into a granted U.S. patent. This process of obtaining a patent, referred to as patent prosecution, generally begins with a patent attorney taking information from an Invention Disclosure and turning it into a patent application. If seeking a U.S. patent, the patent application is filed with the U.S. Patent and Trademark Office (USPTO) for a USPTO patent examiner to review. The examiner can either allow the patent to be issued or send an office action indicating one or more problem(s). In that case, the patent attorney tries to revise the patent application to make it patentable.

Photo by Wesley Tingey licensed under Unsplash

Of course, all these resources cost the party seeking patent protection a pretty penny. First are the fees payable to the USPTO. Currently, it costs over $1,800 in filing fees for a large entity to submit a patent application to the USPTO. If a patent application is allowed, a $1,200 issue fee is required for the patent to be issued. Not to mention the $13,000+ in maintenance fees due during the 20 year life of the patent to keep the patent in force. In addition to the USPTO fees, legal fees can range from $8,000 to $15,000 for the cost of a patent attorney to draft and prosecute the patent application.

As an inventor, I profited off the patent filings of my inventions via bonuses from my employer. My employer, however, was paying a hefty sum to obtain the patents for my genius inventions. For my employer, the equation was different. Invention + Money = Patent.

Mo Money Mo Patents

And why go through all this trouble to obtain a patent at all? Well, a patent grants the patent owner the right to exclude others from making, using, and selling the invention claimed by the patent in the country that granted the patent.

For a corporation, patents allow the company to benefit financially from its investment into research and development. On the other hand, a university may license its patents to allow a third-party the legal right to use the patented invention in exchange for a royalty fee. For the corporation, protection of their intellectual property via patents may be a key aspect to its success since the patents often cover their product or service and bar others from being able to sell that identical product or service. But for the university focused on education and research, licensing deals may be a way to bring in extra cash, but are small in comparison to tuition, endowments, and other sources of funding.

Courtesy of Pixabay

As an aspiring patent attorney, an ever-increasing trend of patenting activity evokes a slightly different financial enthusiasm in me: a feeling of job security.

Corinne Macnichol
Assistant Blogger
Loyola University Chicago School of Law, J.D. 2026