The Importance of Intellectual Property in the Industry

For manufacturers in this industry today, protection of new ideas and innovations by way of patents, copyrights and trademarks (collectively, “intellectual property,” or “IP”) is critical for survival. Smaller companies, in particular, must protect their new ideas and innovations to increase their financial worth and, hopefully, compete with larger manufacturers.

Many smaller manufacturers in this industry are initially able to find a niche in the market as a result of new, innovative concepts or technologies. If left unprotected, however, these innovations (which often comprise the largest assets of a smaller company) quickly lose their competitive value as larger, established companies freely incorporate these ideas and technologies into their own products as was explained in the article. Consequently, even if founded upon wonderfully inventive ideas, smaller companies often struggle to stay afloat if they can not protect the fruits of their R&D innovations.

The increasing importance of IP in the industry has manifested itself in many different ways, such as the proliferation of patent infringement lawsuits between manufacturers, the frequency of cross-licensing and patent pooling arrangements, and, in particular, the sheer number of patents issued to the industry. In the last 25 years, for instance, the number of industry patents has increased nearly fifteen-fold, and the percentage of industry patents issued during that timeframe relative to overall patents issued has increased nearly eight-fold. There is no question but that IP is a key economic component in this industry. That being said, however, in recent years the top industry companies (in terms of patents issued) still account for well less than one-half of the overall number of industry patents issued, suggesting that there is plenty of room for smaller companies to innovate, protect and, therefore, compete.

Intellectual Property generally falls into three common categories: patents (new or incrementally improved devices, designs, processes or methods), trademarks (slogans, logos, product names), and copyrights (songs, graphics, text). Certain ideas (such as software) may be protected in more than one way (copyright and patent). as explained in The processes, costs, difficulties and benefits associated with each type of protection vary from relatively simple and inexpensive (copyrights) to more complex and costly (patents). Whatever its form, however, protecting IP can provide game manufacturers with several competitive advantages, advantages which frequently take on disproportionately increased importance for smaller businesses.

Patent Filing Fees

The USPTO requires a filing fee with each application submitted. Applicants who qualify as a “small entity” enjoy a reduced fee schedule about 50% lower than the fees paid by large companies. Currently, the small entity fees are under $600, but fees are raised annually.

If you file a provisional application, you’ll pay a slightly lower filing fee for that application, then pay the full filing fee when you submit the regular application.

There are a variety of other possible fees that may be levied if the application includes an unusual number of claims or drawings, or if certain deadlines are missed for responding to the patent office’s requests for additional information or documents. (For a complete fee schedule, see

Patent Prosecution

After the application is filed, a government patent examiner begins the rigorous process of determining whether or not your invention qualifies for patent protection. Patent applications are routinely rejected initially because of some objection the examiner has. The patent attorneys or patent agents charge extra each time they are required to respond to the patent office’s action letters to clarify the examiner’s concerns or file an amendment to the application as described in this article. Their fees could range from $1,000 to $5,000 for each response, depending on the time each requires.

Patent Appeal

If your patent application is ultimately denied, there is a process for filing an appeal. This process could cost from $2,000 to $10,000 additional in filing fees and attorney or patent agent costs.

Patent Issuance

When your patent application is approved, final drawings and documents are prepared and submitted to the USPTO with the issuance fee. Altogether, the drawings, government fees and attorney/agent expense can be $1,500 to $2,500.

Patent Maintenance

To keep a patent valid and in force requires periodic payment of patent maintenance fees. The rationale for these fees is that if it is not worth it to the patent owner to pay the maintenance fee, then the invention should be released into the public domain to spur further innovation as you can see from

Maintenance fees are due 3 ½ years, 7 ½ years, and 11 ½ years after patent issuance. The first fee is currently about $1000, the second is about $2500, and the third is about $4100.


Given all the variables of invention complexity, optional choice of a provisional application, and responding to an unpredictable number of patent examiner concerns, it’s easy to see now why the cost of a patent can vary so widely.

Perhaps more helpful in predicting the patent costs for your invention, however, is the observation of one prominent patent attorney that for two-thirds of his clients, the entire patent application and issuance experience costs between $7,000 and $15,000 – maintenance fees extra.