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Provisional application for a patent was offered to inventors by the United States Patent and Trademark Office (USPTO) on June 8, 1995. It was designed to provide a lower cost first patent filing in the United States and to give U.S. applicants parity with foreign applicants. A provisional patent allows filing without any formal patent claims, oath or declaration, or any information disclosure (prior art) statement. Provisional application provides the means to establish an early effective filing date in a patent application. It also allows the term "Patent Pending" to be applied.
Once a provisional patent application is filed, you have 12 months to test your idea and decide whether or not filing a non-provisional patent application. You benefit from the earlier filing of the provisional application when you file a corresponding non-provisional application for patent during the 12-month pendency period of the provisional application. For example, if you filed your provisional patent application on January 1, 2006 and then file your non-provisional patent application on December 31, 2006, the priority date of the non-provisional patent application will be January 1, 2006. However, if you decide not to move forward with your non-provisional patent application, you can simply abandon it with a minimal upfront cost.
To summarize, provisional patent gives the inventors one additional year of protection or grace with low cost - maybe enough time to test the market of their invention before investing in the cost of a non-provisional patent.
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