MASTERCLASS Patents for Entrepreneurs – Part 4: Patent Budgeting
Ola Wassvik treats patents as business insurance: expensive before you need it, but far more costly if you skip it and someone copies you or blocks your product with their own patent. The number that actually matters is the total cost from filing to grant, which averages around four years. Getting rejected at least once along the way (called an office action) is the norm, not the exception. Trying to DIY a patent to save money usually backfires, since a poorly drafted application can get rejected, disclose things it shouldn't, or end up too narrow to actually protect you.
Key basics
Ask your attorney for real cost transparency: the average and worst case cost from filing all the way to grant, including official fees, attorney fees, and translation costs. Budget somewhere between average and worst case, never best case. There's a real cost cliff after the initial filing: the PCT stage adds a roughly $3,500 official fee, and then the national stage, which hits around 30 months in, is where costs multiply, since you're now dealing with multiple countries in parallel. Official fees alone can run $5,000 to $7,000 for the US and Europe, $1,000 to $3,000 per additional country, plus $3,000 to $5,000 for translations, before attorney fees are added. Filing in 10 countries can easily reach $30,000 in official fees alone.
Strategy
Don't spread a single patent across many countries. Use a 90 to 95 percent rule: cover the countries where that share of your revenue actually comes from (often the US and Europe, plus one or two more), rather than filing wherever an engineer happens to want a patent. It also helps to tier your whole portfolio: mission critical patents (a small share, maybe 10 percent, covering close to 98 percent of your market), important but limited-scope patents (roughly half your portfolio, covering 80 to 85 percent of markets), and a defensive baseline (the rest, typically filed in the US and sometimes Europe).
Decide these tiers upfront with your management team, not on the fly, since deciding case by case tends to fall into sunk cost thinking. Revisit tiers at most once a year. Some geographies also need special handling: China favors domestic players heavily unless you have a local partner or joint venture, while India and Brazil can be slow and unpredictable, though still valuable for specific industries like life sciences or forestry.
About the Host
Ola Wassvik is CCO and co-founder of Lightbringer, a serial entrepreneur, and an M.Sc. in Engineering Physics. Before Lightbringer, he spent 20+ years as a tech entrepreneur, including as CTO and co-founder of Flatfrog.
Across that time he's managed over 300 patent families and helped raise more than €84 million for deep tech ventures, giving him a founder's-eye view of how patent strategy actually plays out in the room with investors, competitors, and boards.
Read more →
FAQ
Why are patents described as business insurance?
Because they're expensive before you need them, but the cost of not having them, like being copied or blocked by someone else's patent, can be company-killing. Like insurance, the value shows up when something goes wrong.
What's the one number I should track for patent costs?
The total cost from filing to grant, roughly a four-year window. Ask your attorney for the average and worst case, and budget between the two.
Why do costs jump so much at the national stage?
Because that's when you start filing in multiple countries in parallel, each with its own official fees, translation costs, and attorney fees. Filing in 10 countries can hit $30,000 in official fees alone.
How do I decide which countries to file patents in?
Cover wherever 90 to 95 percent of your revenue comes from, not wherever an engineer wants a flag. For most Western companies that's mainly the US and Europe.
What is portfolio tiering, and why does it matter?
Splitting your patents into tiers (mission critical, important but limited, and defensive baseline) based on real value. Deciding this upfront, with input from management and sales, avoids overspending on lower-value patents due to sunk cost thinking.
DISCLAIMER: THIS IS NOT LEGAL ADVICE. YOU SHOULD CONTACT A PATENT ATTORNEY IF YOU NEED A FORMAL ASSESSMENT OF PATENT INFRINGEMENT OR FREEDOM TO OPERATE.
.png)
.webp)