Patent Engagement Letter

Thank you for your interest in our availability to provide you with patent law legal services.   As we discussed in an email or on the phone, we would be pleased to assist you in the task of establishing and protecting your intellectual property rights in your invention(s).  However, we are not engaged to handle your matter until you perform two tasks, (1) click on the link in this letter, and (2) provide us with the requested initial retainer payment.

This is to confirm our understanding with respect to our representation of you.

1. Nature of Services. Our firm will provide you with patent law legal services, concentrating initially on pursuing the patenting of your invention (either utility or design), and such other matters as you may refer to us from time to time.  To generally further acquaint you with the process and cost of assessing your freedom to operate and infringement clearance in connection with one identified enforceable patent, given below are the steps and legal fees and expenses in a typical freedom to operate and infringement clearance assessment matter.  These general quotes assume that the subject matter is of one invention (featuring only one embodiment) and that the initial invention remains the same without changes.  We propose to proceed in a step by step manner and you may elect to stop at any step in this process so as to not incur further legal fees:

General patent counseling services are provided and fees will be incurred for our services as soon as we are engaged.  These services may include providing advice on all matters relating to your patent matter, including general questions, consultation, review and evaluation of your invention materials, and advice provided in connection with your invention, patent protecting, marketing, licensing, etc. of the invention.  Legal Fee:  Charged at an hourly rate, below.

For a Utility Invention:

a. Completion of Reduction to Practice – Patent law says that the creator of an invention is not an “inventor” until he/she has “reduced to practice the invention” (i.e., built a prototype and documented its benefits or, without having built a prototype, documented the invention in its entirety with an “enabling” disclosure” [i.e., a description in enough detail {e.g., identify by name the various parts or elements of the invention and give the specifications for them if these are important to the functionality of the invention; if possible, provide one or more line drawings of the invention and label these such that they identify the invention’s various parts} to allow a person having ordinary knowledge in the technical area of the invention to make and use it without having to undertake extensive experimentation to resolve any technical details not fully provided in your disclosure]). If you do not meet these requirements of “inventorship” and assuming that you wish to do so by “making an enabling disclosure,” our first task will be to assist you in this documentation step. Because the amount of work required at this step can vary widely, it is difficult to quote a typical legal fee for this step. However, it is hoped that we can limit our fees for this step to $2,000 or less.

b. Novelty search – Perform a novelty search to initially assess whether patent coverage seems available for your “invention;” this would include writing a claim to your invention and assessing this claim against the patents that are on file as the U.S. Patent & Trademark Office (USPTO) and giving you an oral report of our findings: Legal Fee – typically capped at $1,000 and dependent on the necessary extent of the search (note: since you will give us a copy of your prior search; if it is useful & can reduce our search time – we will certainly reduce accordingly this cost for our search). If your novelty search were to come back negative, our representation of you in this matter would probably conclude at this step.

c. Options:

(A) Option 1: Two-Part Filing Option (i.e., PPA & RPA (filed within 12 Months of the PPA)) for a Utility Patent

(i) Preparation and filing of a Provisional Patent Application (PPA): Legal Fee – approximately $2,500 – $5,000 and depending upon the effort required to fully describe your invention (which often is a function of your invention’s complexity and the completeness of the written disclosure that you provide of your invention) and understanding that a legal description (i.e., a “claim”) of your invention will generally not be a part of a PPA, Expenses – USPTO Filing Fees – $130, assuming you are entitled to pay “small entity” fees, plus possible expenses for necessary line drawings (e.g., $100/sheet). Note: In rare circumstances, one may wish to file a PPA solely for the purpose of being able to lawfully put a “Patent Pending Notice” on all materials related to the invention and not to claim priority to this PPA’s earlier filing date – in this situation, these legal fees can possibly be halved.

(ii) Preparation and filing of a U.S. Regular Utility Patent Application (RPA) That Is Able To Use Some Of The Specification of Your PPA Filing & Asserts The Benefits of The PPA’s Early Filing Date: Legal Fee – approximately $4,000 – $13,000 or more and depending upon the complexity of your invention (e.g., for a simple mechanical product – $5,000; for a business method patent to protect, e.g., an internet service business – $15,000 or more) and the effort required to fully claim your invention, Expenses – USPTO Filing Fees – $800, assuming you are entitled to pay “small entity” fees, plus possible expenses, if additional line drawings must be prepared (e.g., $100/sheet).

(B) Option 2: Dispense With PPA & Make First Filing a RPA

Preparation and filing of a U.S. Regular Utility Patent Application (RPA): Legal Fee – approximately $5,000 – $15,000 or more and depending upon the complexity of your invention (e.g., for a simple mechanical product – $5,000; for a business method patent to protect, e.g., an internet service business – $15,000 or more) and the effort required to fully claim your invention.  The cost for filing a RPA could be less depending upon the quality of a PPA that was not drafted & filed by us.  Expenses – USPTO Filing Fees – $730, assuming you are entitled to pay “small entity” fees, plus possible expenses, if additional line drawings must be prepared (e.g., $100/sheet) and assuming the applicant is a “small-entity.”

(C) Option 3: Expedited Examination Of A Regular Patent Application

Depending on the subject matter of your invention and the type of technology applicable, it can take anywhere from 20 – 30 months after your application’s filing date to get any initial feedback (i.e., a First Office Action) from the USPTO regarding whether they will or will not grant a patent for the invention. The receipt of this feedback usually begins a sort of negotiation process with the USPTO regarding what form any to-be-allowed claims will take; this process can add another 8 – 16 or more months to the time of when the applicant will eventually be granted a patent.

For those applicants who do not want to wait approximately 2.5 to 4 years for their patent to issue, the USPTO does offer two somewhat costly options to expedite this process. These are:

(i) Request For Prioritized Examination – for an additional USPTO application filing fee of $2,000 for a small-entity applicant, the USPTO will advance your application ahead in the normal lineup of applications waiting to be examined and will continue to give your application prioritized treatment in order to try to arrive at a final decision on the allowance of a patent within 12 month of an application’s filing date. An additional approximately $200 in legal fees may also be incurred in preparing the paperwork necessary to make this request. Please note that in order to prioritize the application the government also requires that the applicant pre-pay additional fees that are usually incurred later on in the prosecution process – including the Notice of Allowance fee of approximately $900.

(ii) Petition To Make Special – for an additional USPTO application filing fee of only $70 for a small-entity applicant and the additional expense of the patent attorney’s preparation and filing of an “Accelerated Examination Support Document” and a “Pre-Examination Search Statement,” the USPTO will advance your application ahead in the normal lineup of applications waiting to be examined and will continue to give your application “special” treatment in order to try to arrive at a final decision on the allowance of a patent within 12 or fewer months of an application’s filing date. However, we have found from experience that this option is usually only appropriate for those inventions for which there are not an extensive list of prior patents that are somewhat similar to your invention, since each of these prior patents must be analyzed and discussed in great detail in the documents your attorney has to prepare and file with this petition – otherwise the legal fees to prepare these documents can easily exceed $3,000 or more. Nevertheless, for those inventions for which this option is financially practical, we have found it to be very effective means of getting a positive First Office Action and patent issuance in as little as 6 months.

d. USPTO responses. Response to USPTO Office Action/s which gives the USPTO’s feedback on the Regular Patent Application (A necessary step in >95% of utility applications): Legal Fee – because the amount of work required at this stage will be a function of the USPTO’s feedback, it is difficult to quote typical legal fees for this step; recognizing that a Response to more than one Office Action may be required, it is hoped that these legal fees can be held to $5,000 -$10,000 or less.

e. Notice of Allowance. Filings In Response to a Notice of Allowance & the subsequent Issuance to you of a Patent: Legal Fee – approximately $800, Expenses – USPTO Issuance & Publication Fees – $1,190 (assuming the patentee is a “small-entity”).

f. Extensions. To extend the term of the life of your patent to its maximum of 20 years, you will need to pay “small entity” maintenance fees of $800, $1,800 and $3,700 on the respective 3rd, 7th and 11th year anniversaries of the date of issuance of your patent (assuming the patentee is a “small-entity”).

g. Foreign applications. Depending upon your interest in foreign patent protection, within twelve months of filing a U.S. regular or provisional patent application or your invention’s public disclosure, you will need to apply for your foreign patent rights – typically by filing what’s known as a Patent Cooperation Treaty (PCT) Application. Legal Fee – it is hoped the initial legal fees can be held to $2,000 or less, Expenses – typical initial PCT filing expenses are on the order of $3,000.

For a Design Invention:

a.  Legal Fees – generally, we do not conduct a full novelty search in connection with design patent applications due to the unreliable and arbitrary nature of design patent titles and subject matter of the designs categorized in the USPTO database, which is why we encourage clients to investigate whether the product exists and perform at least internet searching and in-person product searching in stores.   We do conduct a brief and limited common law search (e.g., inventions that are publicly sold or available but do not necessarily have patent protection) and may from time to time come across common law products and prior art that we will bring to your attention before proceeding further with the matter.  You will be billed for our time in connection with these efforts.  We generally try to limit our time to one-hour or less.

b.  Preparation and filing of a U.S. Design Patent Application: Legal Fee – approximately $1,500 – $3,000 and depending upon the effort required to fully describe and claim your invention, Expenses – USPTO Filing Fees – $380, assuming you are entitled to pay “small entity” fees, plus possible expenses for necessary line drawings (e.g., $100/sheet).

c.  Response to USPTO Office Action/s which gives the USPTO’s feedback on the Application (A necessary step in >90% of utility applications): Legal Fee – because the amount of work required at this stage will be a function of the USPTO’s feedback, it is difficult to quote typical legal fees for this step; recognizing that a Response to more than one Office Action may be required, it is hoped that these legal fees can be held to $2,000 or less.

d.  Filings In Response to a Notice of Allowance & the subsequent Issuance to you of a Patent: Legal Fee – approximately $500, Expenses – USPTO Issuance Fees – $510.

e.  Maintenance Fees – there are none for a design patent whose life is 15 years from its date of issue.

f.  Foreign Application. Depending upon your interest in foreign patent protection, within six months of filing a U.S. patent application or your invention’s public disclosure, you will need to apply for your foreign patent rights – typically by making one or more Paris Convention (PC) filings. Legal Fee – it is hoped the initial legal fees can be held to $1,000 or less for each PC filing, Expenses – typical initial PC filing expenses are on the order of $1,000 per filing.

2. General Patent Counseling Services: General patent counseling services are provided and fees will be incurred for our services in providing advice on all matters relating to your patent matter, including general questions, consultation, review and evaluation of your invention materials, and advice provided in connection with your invention, patent protecting, marketing, licensing, etc. of the invention.  Legal Fee: charged at hourly rate, see below.

Fees. For the above listed steps and our general patent counseling services, we bill for our services on a monthly basis, calculated in 0.1 increments using the hourly rates set forth below:

Attorneys: Rates
Larry J. Guffey $ 395.00
Pamela K. Riewerts $ 300.00
Paralegal $ 150.00

We reserve the right to increase our hourly rates from time to time. It may be necessary for additional attorneys of this firm to perform work on other matters that you may refer to us.

3. Fixed or flat fees. Some of Our services are offered on a fixed fee basis.  In some cases We also quote fixed fees for specific work.  All fixed fee services will be confirmed in an electronic communication; in the absence of such confirmation all fees are billed hourly, and include among other services, billable time for telephone calls and reviewing and responding to emails.  For the above listed steps and our general patent counseling services, unless otherwise specially noted in writing, we work on a time and materials basis.  Even if we have estimated the time or cost requirements on a matter, provided a budget, or otherwise responded to a request for a range of expected fees and costs, there is no guaranty that such estimate, budget or other amount will be the actual cost incurred – because often we cannot anticipate when and what action the USPTO and foreign patent offices will take in reviewing and processing any patent applications that we file on your behalf.

4. Retainer. Before we can begin to provide our patent law services, you will need to augment the retainer amount that the firm is currently holding for you. The amount of this additional retainer payment will be a function of the magnitude of the initial assignment that is to be undertaken for you.  The amount of this additional retainer will normally be in the range of $1,000 – 5,000 and is payable at the inception of our work for you and will typically be due at the time that you sign below to indicate your agreement with and acceptance of these terms for providing our patent law services to you. Any moneys remaining in an escrow account, that will be created to hold your retainer payments, upon the completion of our representation of you, and after all fees and expenses have been paid, will be returned to you without interest.  Retainers are maintained in an Interest On Lawyers Trust Account (IOLTA) and pursuant to applicable law all interest on such funds is paid to Legal Aid. If on the completion of Our engagement You have remaining funds in Our retainer We will promptly repay them to You upon request, unless We have an outstanding balance in which case We will first pay Our invoice from such remaining funds.  We may (and You authorize us to) use Your retainer to pay any invoice We have issued on any matter We are engaged on.  We may (and You authorize us to) use Your retainer to pay any invoice We have issued.  We will make those deductions typically in the middle of each month and We will report such use in Your next invoice.

5. Our obligations to You. If You are executing this letter as a representative of an entity, You represent that You have authority to bind your entity, and You acknowledge and We agree that Our engagement is with the entity only, and not with You individually (if this sentence applies, “You” or similar pronouns in this letter refer to the entity).  We will only perform work You request us to perform, We will keep accurate records of Our work, We will communicate with You regarding Our services, We will comply with Our ethical and legal obligations to You, We will bill You a fair and reasonable fee, and We will use Our best effort to reach a successful conclusion to any matter in which We are engaged.  We encourage communication and if You ever feel We are not meeting these obligations You agree to let us know.

6. Your obligations to us. You agree to keep us informed and disclose to us all material facts related to matters in which We are engaged, and to pay Our fees.

7. Expenses. If We incur external costs on Your behalf, such as filing fees, delivery charges, and similar expenses, You agree to pay those expenses.  Except as noted in the next section on intellectual property filing fees, We do not mark up any cost We incur, and We do not charge separately for paper, fax, phone expenses (other than conference call fees We incur on Our bridge).  For large expenses We may request that You prepay those costs, or pay them directly.  We may charge a separate expense fee for online computer research when We use services like Westlaw, Lexis or similar services.

8. Patent, Trademark, Copyright and associated maintenance fees. If We are engaged in a matter that involves maintaining an intellectual property filing, Your account must be fully paid up before we will pay these fees for you.  In addition, in our discretion, we may require that you pre-pay both the filing fee and the fees associated with our work to make the filing (we will typically require prepayment for filing fees in excess of $300).  We will advise You of the nature and amount of the filing fees before You incur them, provided that if We are unable to reach You, or You do not respond, We may not pay such fees and Your filing may go abandoned.  In that case, if We cannot reach You, We may also advance these filing fees for You, to prevent an abandonment, and You agree to pay said fees.  Often these maintenance fees are only due at periods that are long after the initial registration, so You should keep Your contact information with Us up to date.

9. Invoices, payments. We will render invoices for services and expenses periodically (typically monthly) and You generally agree to pay Our fees and expenses within 30 days of Our invoice for them.  However, for the filing of a regular U.S. or PCT patent application, we will typically provide you with a “pre-application filing” invoice for such services just prior to your application’s planned filing date (at which time your account will usually have accrued an appreciable outstanding balance) and will expect that you will pay this invoice before we make the actual filing.   We are entitled to Our fees regardless of the outcome of the matter.

10. Discounts. If You keep a credit card on file and allow us to charge that to pay Our fees within 15 days of the date of Our invoice, We will discount the fee portion of the bill by 5%.  Please note that this must be a VALID credit card so that the transaction is completed at the time of processing.  This discount does not apply to reduced rates, capped fees, or flat rate arrangements.

11. Confidentiality. We are under the highest fiduciary duty of care to maintain Your client confidences. We will comply with this duty, unless You expressly or impliedly waive it. We also have a privacy policy related to use of Our Website.

12. Electronic communications. We communicate (and You agree to communicate) using electronic communications.

13. Records retention; file security; paperless files. We operate on a paperless basis, meaning that We store Your records electronically. We use off site email storage, We use online banking, and We use online and cloud based document storage. While We use reasonable effort to maintain such records securely, and Our vendors have covenanted to us that they will also make such reasonable efforts, We advise You that no computer system is free from risk of data breach.

14. Termination. You may terminate Our representation at any time on notice to us.  We may terminate Our representation of You, subject to the Maryland Rules of Professional Conduct, and any applicable rules of the Patent & Trademark Office, upon written notice to You. On a termination, You agree to pay all accrued fees through the date We terminate work.  As long as Our fees are paid, We will return or make available Your electronic files at the end of Our representation.

If the foregoing correctly sets forth your understanding of the terms of our engagement, please click on the link in the email above to note your acceptance of the terms.  If we have indicated a retainer is due, please also make arrangements for that payment.  We look forward to serving you in this matter.