Well, I am a patent attorney and have been doing this for about 15 years, so I might be able to add something here.
First, there is a lot of information on patents at the USPTO website (
www.uspto.gov) so I won't rehash it all here. There is even a special section to deal with independent inventors who want to file an application. You can also do a search at the USPTO website of issued US patents and published US applications.
WHAT IS A PATENT?
One thing most people do not understand is that a patent is NOT a right to do anything, it is RIGHT TO EXCLUDE OTHERS. You can have an improvement on something that is already patented by another and simply because you get a patent on the improvement does not mean that you have a right to make your improved version of the product. If it is a significant improvement, you will probably be able to come to some contractual arrangement with the patent owner of the original device to market the improved version or else you have to wait until the underlying patent expires.
STEP 1: FIND A PATENT ATTORNEY TO HELP YOU
If it is worth filing a patent on, it is worth having someone do it right. The scope of the protection your patent gives you is defined by the claims. Writing the claims is an art in itself. Arguments and amendments made in prosecution (the written correspondence you have with the patent office) can be deadly to the enforceable scope of the claims ("prosecution history estoppel"). You can shoot yourself in the foot here without even knowing it. Big firms are not necessarily any more expensive than the mom and pop firms and are likely to have someone with expertise in your area. There is no point in paying someone to learn your technical field if there is somebody already with the knowledge.
STEP 2: BEFORE DRAFTING AN APPLICATION, DO A SEARCH
I heartily agree with the earlier comment about getting a patent search done. You can do a quickie search yourself but don't rely on it. Have the search done by a search company (there are several in the DC area) and review the results. Plan on spending about $1,000 for it to encompass both the US and foreign patent literature as well as the commercial and technical literature. Get copies of the stuff that looks the closest to your idea and then bring it to your patent attorney to look at with you. It is a lot cheaper for you to do the legwork than the lawyer. Your understanding of what is taught in the literature ("the prior art") is not necessarily accurate.
STEP 3: THINK BEFORE YOU LEAP!
Understand that you will not be able to enforce your patent until the patent ISSUES. From the time you first file your application, you will likely not receive a patent for at least one year and likely longer (assuming that your invention is patentable!) 2-3 years is not uncommon even in the simple mechanical arts. You can "petition to make special" to expedite prosecution. Your patent APPLICATION will "publish" 18 months from the first filing date. Under the revised law, you can begin to accrue damages against an infringer (that you sue successfully once your patent issues).
So, if this is a short term idea, the market may be gone by the time you can actually get a patent to enforce. Is the technology moving so fast that your idea is going to be outdated in two years -- the technology will be outdated by the time you get your patent and nobody will care if you have a patent or not.
The expenses in preparing and prosecuting a patent application can vary a whole bunch. If you have a relatively simple application it can be filed for only a couple thousand dollars. The filing fee at the USPTO for a "provisional application" is very low ($160.00) last I checked. However, the "prosecution" (ie arguing with the patent office) can be very prolonged and there is no way to predict this. Sometimes you get a good examiner who is very reasonable. Sometimes you get an examiner who is stubborn and it takes a long time. I would plan on spending at least $10,000 for the US application and a relatively simple prosecution.
However, probably the biggest expense is if you plan to see patent protection in foreign countries. Filing in the United States as your first (priority) application gives you one year until you need to either file the foreign national or a PCT application. The only advantage of the PCT over the national applications is that it delays the enormous cost of entering the "National Phase" up to 30 months from your first filing date (everything in patent law is about dates). You have to do foreign translations at this point and this can be whompin' expensive. The Japanese translators charge about $250/page for translations. So if you have a 20 page application, you are out $5000 just for the Japanese translation, then you have the filing fees at the JPO, the Japanese associate fees (another couple thousand) so you can spend an additional $10K just to file in Japan. Multiply that by a bunch of countries plus the annual maintenance fees and you can really rack up the dollars in foreign applications.
LICENSING:
This is not for the novice either. It is not uncommon that negotiations for a patent license will extend for many months. Unfortunately, I have never been able to get anybody to agree to a nice form license agreement. So, you will need professional help even in the licensing stage.
BE EXTREMELY CAUTIOUS ABOUT THE CONFIDENTIAL DISCLOSURE BIT. The fact that you disclose an invention to someone with the opportunity to purchase the invention even under obligations of confidentiality does not mean that the invention is published or known in the art, but you can trigger the "on sale" bar without even knowing it which can ruin your ability to get a patent in the US (if you wait) or overseas. It is always better to have an application on file (even a simple provisional) prior to having any discussions with a third party. Have your stake in the sand before you go out yapping with others.
Understand what the standard licensing terms in the industry are. You are not going to get 40% of the sales price of anything. Most companies run on a much smaller margin. The licensee cannot give you more than his profit margin and is not going to give you much of that. I would say that the royalty you might receive will be in the single digits as a percentage of total sales and likely less than five percent (if you get a good deal). So, just because your licensee sells $10MM/year of your product, you are probably not going to get a royalty check much more than a couple hundred thousand.
ENFORCEMENT:
Are you willing to file a lawsuit to enforce your rights? Is it even worthwhile? Depending on the complexity of a lawsuit (my field is biotechnology so it gets really complex fast), you will plan on spending at least $1.0MM to enforce the patent through trial. I was involved in a matter where my budget was $3.0M for the first three months (and that was many years ago). However, if you have a great idea (like the intermittent windshield wiper patent litigation), some firms will take it on a contingency basis. unless you are going to file a lawsuit to enforce your rights you might want to reconsider your idea.
If you have a mechanical device, likely someone in Southeast Asia is going to manufacture it and sell it somewhere else (including the US). Can you even sue them for infringement? Who can you sue -- the distributor? What if they sell it in the US over the Web? Can you get jurisdiction over the foreign party? A US patent is only enforceable in the United States. If someone in Japan is making it and selling it in Europe, a US patent doesn't give you any right to sue someone overseas. If you want to enforce your patent overseas, you need foreign patents (see comments above about costs). And, if you think US litigation is difficult, just wait until you try it in some foreign countries.
SO, the bottom line is that this a very complex matter and will largely be determined by the facts of your situation. If nothing else, I would just write off a thousand dollars and just go talk to a patent attorney about the specifics of your idea. It is the only way to try to figure out if something is worthwhile or not. It will be money well spent. Example: I'm a lawyer, my wife is a lawyer, half my friends are lawyers, my father in law is a lawyer, my brother in law is a lawyer, but when we came to California and looke to buy our house, WE STILL HIRED A LAWYER. We probably spent about $1000 out of our own pocket but he saved us many many times his fee.
Do it before you tell your friends, before you do a confidentiality agreement, etc.
Rich