For individual inventors and companies of all sizes, the decision to seek patent protection outside the United States can involve some difficult choices. Additionally, once the decision has been made to pursue protection abroad, the individuals or corporate entities must then decide in which countries to file their patent applications and in which countries their issued patents should be maintained.
The following foreign patent filing options are usually available: 1) U.S.-only protection; 2) file a Patent Cooperation Treaty (PCT) international application; 3) file one or more regional applications; and 4) file national applications in selected countries. Options 2) through 4) can be done individually or in combination.
The second option listed above involves the filing of an international application under the Patent Cooperation Treaty (PCT). The PCT established a framework for cooperation in the filing, searching, and examination of patent applications. What should be emphasized, however, it that the PCT does not by itself provide any patent rights. Filing an application under the PCT provides applicants with an understanding of the potential patentability of the disclosed invention through a search report and written opinion, but does not result in an international patent. After approximately 20 or 30 months from the priority date of the patent application, depending on the country, a separate application must be filed in each of the countries in which patent protection is sought.
Over 140 nations are members or “contracting states” of the PCT and, therefore, the PCT application can serve as a mechanism for extending the deadline for filing national applications in many countries and deferring the associated cost. This extension of the national filing deadline provides time for product development, marketing, establishing sources of funding or identifying a licensee.
Additionally, the search and examination that is conducted on the PCT application can provide the applicant with an opportunity to amend the patent claims in the application to place the application in better condition for entry into national phase patent examination.
There can be some disadvantages when filing a PCT application. First, there will likely be more time involved in obtaining national patents from an international application. Because published PCT applications provide at most only provisional claim protection in most jurisdictions, such a delay gives competitors the ability to market and sell competing products during that time period. Additionally, all PCT applications are published 18 months from their priority date. This pre-grant publication provides advance notice to the competition of the applicant’s products and potential scope of protection.
One way to reduce the costs associated with filing a PCT application is through the applicant’s selection of the International Searching Authority (ISA). On November 1, 2008, the Australian Patent Office (IP Australia) became the fourth agency designated as a competent International Searching Authority (ISA) and International Preliminary Examination Authority (IPEA) under the PCT for applications filed in the U.S. With this addition, U.S. applicants can select the U.S. Patent & Trademark Office (USPTO), the European Patent Office (EPO), the Korean Intellectual Property Office (KIPO) or IP Australia as the ISA or IPEA. Currently, the search fees for these agencies differ significantly. For example, the U.S. and EPO fees are $2080 and $2164, respectively, while the fees charged by IP Australia and KIPO are $1091 and $609, respectively. Thus, an applicant can save roughly $1555 dollars simply by selecting KIPO as the ISA, in lieu of the EPO (note that cost is just one factor to discuss with your patent attorney, since other considerations may warrant choosing a higher-priced ISA).
The third option listed above involves the direct filing of regional patent applications. Regional patent organizations, such as the European Union, consist of groups of countries (i.e., “members states”) that have agreed to apply a unified set of patent laws. As a result, a regional patent application will mature into an issued patent, which then only needs to be validated in the desired members states (countries) to obtain full national patent protection in the selected countries. The cost associated with validating the European application can be reduced by selecting a European associate that has offices in the desired member states.
The fourth option listed above involves the direct filing of national patent applications (also called direct convention applications) in the countries of interest or in those countries that are not contracting states of the PCT or member states of a regional patent union. Before a decision is made as to whether to incur the expense associated with one or more direct foreign filings, one must first determine if foreign protection for the invention is available.
Unlike U.S. law, patent protection is only available in many foreign countries if a patent application was filed prior to any public disclosure. This rule is often referred to as the “absolute novelty” standard. Once it has been determined that the invention was not publicly disclosed prior to the filing of an initial patent application, the costs associated with filing abroad must be considered. The estimated cost to prosecute a foreign language patent application to issue is approximately $6,000/country. Further, the estimated cost to prosecute a foreign language patent application to issue is approximately $15,000/country if Asian language translations are required. These costs do not include annual maintenance fees or annuities that each country charges in order to keep the pending application or issued patent alive or in force.
One important factor to consider when determining whether to file abroad is whether there is a licensee for the technology. That is, if the U.S. rights have been licensed, does the licensee desire foreign protection or does the license require the pursuit of foreign protection and will that party pay for the associated costs?
Another factor that must be considered when making a determination as to whether foreign protection is desired is the pendency of foreign applications. In Europe it is not uncommon for applications to be pending for 5 to 10 years. The application process often takes even longer in Japan. As a result, if the applicant is seeking to patent technology that will be outdated by the time a patent grants in a foreign country, it may be advantageous to forgo foreign filings and maintain the technology in confidence as a trade secret.
Once the initial decision to seek protection abroad for the technology has been made, the applicant must determine in which countries protection should be sought or maintained. An obvious guideline is that protection should be pursued in countries where a substantial market for the invention exists. Of course, the definition of “substantial market” will differ from applicant to applicant.
Another significant factor for determining where to file abroad is where the applicant and its competitors are doing business or will be conducting business. Commercially available reports and patent databases can often be used to provide intelligence on a competitor’s activities.
Applicants should first look to protect and maintain their intellectual property in countries where they have a manufacturing facility. Next, applicants should consider seeking protection in countries where the competition has manufacturing facilities. For example, if an applicant manufactures a special type of semiconductor chip and its biggest competitor has only one factory capable of making the semiconductor chip and the factory is located in the United Kingdom, the applicant should seek patent protection in the United Kingdom. In this scenario, a UK patent would be effective at restricting the competitor’s worldwide sales.
Finally, an important factor to consider when deciding where to file abroad or whether a foreign portfolio is to be maintained is the ability to monitor and enforce the patent once issued. Although worldwide improvements in intellectual property protection are slowly being made, some governments may not have the resources to properly police intellectual property rights.
In conclusion, there are several important factors associated with foreign patent filing decisions. Such decisions require consideration of the present and future value of the patented invention in different countries, the costs associated with the filings, the activities of the competition and the enforcement policies of foreign nations, to name just a few examples. Your patent attorney can be invaluable in guiding you through the foreign patent filing decision-making process.