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Going Global: Tips on Building a Patent Portfolio Outside the United States

Posted in Intellectual Property

I occasionally hear an inventor or businessperson talk about how his or her company has a “global patent” or an “international patent.” Unfortunately, there is no such thing. While some companies have filed patent applications around the world (or at least in many corners of the industrialized world), most of the time these statements refer to filing a Patent Cooperation Treaty (PCT) application.

To clarify, a PCT application is neither a patent nor is it truly global/worldwide. PCT applications are a way to file a single patent application covering your invention in contracting states. Note that the PCT application is a vehicle for gaining patents in the future. It grants no patent rights in itself. A PCT application is, for lack of a better explanation, a placeholder. Further patent applications are needed subsequent to the PCT application to secure patent rights in various parts of the world.

That’s not to say that PCT applications don’t have benefits. PCT applications can delay attorney costs and official fees. A PCT application can sit for up to thirty months without official fees in nearly all states that accept PCT applications. So rather than paying attorneys to file patent applications in multiple states at an early date, these costs can be delayed to determine an invention’s feasibility, sales, or importance in the marketplace. The PCT application also comes with a search report, which includes references that may cause your company to adjust its filing strategy or even let the PCT application go abandoned. Again, this can save money.

See below for a graphical representation. Chart 1 illustrates a filing strategy to potentially gain patent protection in nine states. The eight patent applications filed from the U.S. provisional patent application must be filed twelve months after the U.S. provisional patent application.

chart-1

Chart 2 illustrates a filing strategy to again potentially gain patent coverage in those same nine states, but delay costs using a PCT application. Now only two patent applications (the PCT application and Taiwanese patent application) filed from the U.S. provisional patent application must be filed twelve months after the U.S. provisional patent application. The seven patent applications filed from the PCT application can be filed at least thirty months after the U.S. provisional patent application.

chart-2

If you assume that a patent application in each of these states/regions will cost $3,000 to $12,000 (or more, as complexity and page count increase), then you can see why delaying costs or having a built-in decision point to avoid additional costs can be beneficial.

As you might have noticed in the previous graphics, not every state accepts PCT applications. While not an exhaustive list, two of the more commonly encountered states that do not accept PCT applications are Argentina and Taiwan. Separate patent applications must be filed to obtain patent protection in such states. There are other states that do not accept PCT applications, but filing in those states is less common.

At the thirty-month mark, the PCT application typically enters “national phase.” This means that a copy of your PCT application is filed by local attorneys in the states you choose. While translations and fine-tuning to local rules are inevitable, it’s possible to make a PCT application more “generic” to all states you are seeking protection in, or at least attempt to avoid common problems in those particular states. For example, a PCT application can be drafted with multiple claim dependencies (e.g., “the device of any of claims 1-6”), which can be beneficial in Europe or Japan. These multiple claim dependencies can be removed in the United States. upon entering national phase to prevent excess claim fees, but can avoid allegations in Japan or Europe that the various claim combination are not fully supported by the original text of the patent application.

As an added benefit, the individual states where a PCT application will enter national phase do not need to be selected when the PCT application is filed. It is possible to designate all of the states as a possibility in the future, but then tweak the exact list later.

As seen in the previously mentioned range of costs, entering national phase can become very expensive depending on the total number of states or which particular states are selected. The locations of competitors, sales, manufacturers, or potential copycats usually dictates where to consider filing. The strength of the local judiciary, cost of official fees, or other documentary requirements also should be considered. For example, India requires copies of all references and official patent correspondence from every corresponding case around the globe, which can become burdensome and costly if your company’s fight with other patent office(s) becomes protracted or your company files corresponding cases in multiple other states.

Even though a PCT application enables your company to file a patent application in most of the world, that doesn’t necessarily mean filing in all 148 contracting states is a good idea. Your company’s desire for wider coverage needs to be balanced against costs and the potential value of having protection (or at least a piece of paper saying you have protection) in that state. So consider whether spending money on patent coverage for your company’s new greentech invention in North Korea, Zimbabwe, Papua New Guinea, or Mongolia is worth the cost. Furthermore, consider whether spending money on patent coverage in, for example, Brazil, China, or Australia is worth the cost when you don’t foresee much business or competition there. A PCT application can only delay costs while your company plans its global patent strategy. To potentially gain patent coverage, costs will eventually be incurred in the parts of the world your company wants to focus on. As the old saying goes, “you need to spend money to make money.”

Spend wisely.