The PPA as a Stock Option on Your IP
A provisional patent application is a low-cost, 12-month option on a future patent. For a filing fee of $82-$325, you purchase the right, but not the obligation, to file a full patent within one year. If your idea gains traction, you exercise the option. If it doesn't, you let it expire and move on.
This is the most capital-efficient way to protect your intellectual property while you build, validate, and fundraise.
Last updated: February 2026. This page is informational only and not legal advice. Consult a patent attorney for your specific situation.
The Analogy
If you've ever received stock options, you already understand how a provisional patent application works. The mechanics are the same.
| Stock Option | Provisional Patent Application |
|---|---|
| Premium (cost to buy the option) | USPTO filing fee ($82-$325) |
| Strike price (cost to exercise) | Non-provisional filing ($10,000-$30,000 with attorney) |
| Expiration date | 12 months from filing (cannot be extended) |
| Underlying asset | The patent itself, and the market it protects |
| Exercising | Filing the non-provisional utility patent |
| Letting it expire | Abandoning the PPA. You lose the premium, nothing more. |
| Time value | 12 months of market validation and "patent pending" status |
Where the analogy breaks down
- Stock options can be traded. PPAs cannot be transferred independently (though the rights can be assigned).
- Stock option pricing is transparent. Patent value is uncertain until tested in the market.
- Most stock options expire worthless. Most PPAs will too. That's fine. That's how options work.
The Math
The USPTO charges a single filing fee for provisional applications. No search fee, no examination fee, no issue fee. The amount depends on your entity size.
Most individual developers and early-stage founders qualify as micro entities. That means the "option premium" on your intellectual property is $82.
What exercising costs
If you decide to convert to a full utility patent within 12 months, the costs increase substantially.
| Stage | Typical Cost |
|---|---|
| Non-provisional filing (with attorney) | $10,000-$20,000 |
| USPTO examination + search fees | $825-$3,700 |
| Office action responses (prosecution) | $5,000-$15,000 |
| Issue fee | $600-$2,400 |
| Total through issuance | $15,000-$40,000+ |
When to Buy the Option
Five scenarios where a PPA is the right strategic move.
Before fundraising
File before demo day or VC meetings. "Patent pending" signals IP awareness and demonstrates that you've thought about defensibility. Investors increasingly expect at least provisional filings at pre-seed stage.
Before any public disclosure
A product launch, blog post, conference talk, or demo starts the clock on your right to file. Filing a PPA before going public locks in your priority date without relying on the one-year U.S. grace period.
Rapidly evolving technology
File a PPA for your current design, then file additional PPAs as you iterate. Each captures the invention at that point in time. When you file the non-provisional, you claim benefit of whichever PPAs support each claim.
Multiple inventions, limited budget
Identified three patentable innovations but only have budget for one full patent? File PPAs on all of them ($250-$975 total as a micro entity), then convert the most commercially valuable one at the 12-month mark.
Market validation
Not sure whether the invention has commercial value. The PPA buys you 12 months to ship, get customers, and measure traction before committing $15,000+ to full prosecution.
When to Skip It
A PPA is not always the right move. In some situations, going straight to a non-provisional utility patent is more efficient.
Invention is fully developed
If your specification is complete, all embodiments are documented, and you have the budget, filing a PPA just adds cost and delays examination by 12 months.
Speed to issuance matters
If you need an issued patent quickly (for licensing, enforcement, or investor due diligence), a PPA delays examination by a year. Consider Track One prioritized examination ($1,000-$4,000 depending on entity size) for a 6-12 month path to grant.
Design patents
Provisional applications cannot be filed for design patents. Design patent only.
Simple, stable inventions
If the invention is unlikely to change and you have the resources, the two-step process just adds overhead.
What Makes an Option Worthless
A bad PPA is worse than no PPA. It gives you a false sense of security while potentially creating prior art that undermines your own future patent. These are the mistakes that turn your "option" into waste paper.
Bare-bones filing
Filing a 2-page description "just to grab a date" gives you a filing date worth nothing. If the PPA doesn't adequately describe the invention, the non-provisional cannot claim its priority date. You end up with patent pending status that protects nothing.
Missing embodiments
Describing only one version of your invention. If you later want to claim a variation (a different algorithm, a different architecture, a different data structure), and it wasn't described in the PPA, that claim doesn't get your priority date.
Failing enablement
The PPA must describe the invention in enough detail that a person skilled in the field could make and use it. High-level descriptions and marketing language fail this test. Treat the PPA like the specification of a full patent, minus the claims.
No drawings
Drawings are technically not required for a filing date, but the USPTO strongly recommends them. You cannot add new drawings later that introduce new matter. Include flowcharts, system diagrams, and architecture illustrations at the time of filing.
Missing inventors
Not listing all contributors to the conception of the invention. If someone contributed to the inventive concept and isn't named, it can create grounds for invalidation later. List everyone who contributed ideas, not just who wrote the code.
Two Strategies: Quality vs. Frequency
Patent attorneys disagree on the best approach to provisional filings. Both strategies have merit, and the right choice depends on your situation.
Quality-first
Each PPA should be near utility-application quality. Thorough specification, multiple embodiments, detailed drawings. One strong filing that can support robust claims at conversion.
Best for: Single inventions with clear commercial value. Situations where you'll likely convert to a full patent.
Frequency-first
File PPAs monthly or quarterly as the technology evolves. Each captures new features and improvements. At the 12-month mark, file a non-provisional claiming benefit of all relevant PPAs.
Best for: Fast-moving software teams shipping continuously. When you're not sure which innovations will matter most.
Frequently Asked Questions
What does "patent pending" actually mean?
It means a patent application (provisional or non-provisional) has been filed with the USPTO. It does not mean a patent has been granted or is guaranteed. It does not give you enforcement rights. You cannot sue for infringement based on a pending application.
What it does provide: a deterrent (competitors know you may eventually have an enforceable patent) and a priority date (if someone files a similar application later, your earlier date takes precedence).
Important: Marking a product as "patent pending" without a filed application is false marking under 35 U.S.C. 292 and can result in penalties.
Can I file a PPA myself without an attorney?
Yes. The USPTO allows individuals to file provisional applications pro se (on their own behalf). The filing process is straightforward: submit a written description, cover sheet (Form PTO/SB/16), and filing fee.
The risk is quality, not legality. A PPA drafted without patent expertise may fail enablement requirements, miss embodiments, or use language that limits future claim scope. If the PPA doesn't adequately describe the invention, it can't support claims in the non-provisional.
Best practice: File the PPA yourself to secure the priority date, then engage an attorney before the 12-month conversion deadline.
What happens if I don't convert within 12 months?
The PPA is automatically abandoned. You lose the priority date. There is no standard extension.
The USPTO does allow a petition to restore priority if you file within 14 months, but this is an emergency fallback with additional fees, not a strategy.
If you file a new non-provisional after the 12-month window, it gets a new filing date. Any public disclosures you made during those 12 months (relying on the PPA's priority date) may now count as prior art against your own application.
Should I file one comprehensive PPA or several small ones?
It depends on how fast your technology is changing. If the invention is stable, one thorough PPA is more efficient. If you're iterating rapidly, file multiple PPAs as the technology evolves.
When you file the non-provisional, you can claim priority from multiple PPAs. Each claim in the non-provisional gets the priority date of whichever PPA adequately describes that particular claim element.
Important: Each PPA must independently satisfy written description and enablement requirements for the subject matter it covers. A PPA that says "see previous filing" doesn't meet the standard.
Sources
- USPTO: Provisional Application for Patent (Official Guide)
- USPTO Fee Schedule (Current)
- BlueIron IP: Patents Are Similar to Stock Options
- BitLaw: Should You File a Provisional Patent Application?
- Outlier Patent Attorneys: Top Mistakes with Provisional Applications
- Cooley GO: Provisional Patent Applications FAQ