So, your engineering department informs you that it just developed a new product that can perform a task in half the time of competitive products, that no one else markets such a product, and that they believe it is patentable. The marketing department sees a large global potential – and most certainly if the product can be protected by a patent. Your company is positioned to entertain marketing abroad, and in fact, you have marketed and sold various goods in a number of foreign countries in the past. However, your company has never attempted to patent a new product abroad, and you are unsure if, and to what extent the product can be protected. On the one hand, you know that having foreign patents can give you a jump on the market in those countries. However, you’ve also heard that obtaining foreign patents is difficult and complicated, that foreign patents are expensive, and that enforcement is expensive and unpredictable. Making matters worse, no one in your office handles patents, much less international patents. What do you do? The prospect can be daunting and the decision can be critical.
In today’s global economy, this is a common dilemma. While the ultimate answer may turn on a detailed analysis of complex considerations best put to a patent law specialist, and may require more risk than many other legal questions, a basic understanding of international patent law can certainly help.
Patents protect inventions (such as new instruments and machines, methods and processes, and combination systems), and designs (such as a cell phone shaped to look like a cat)1. Unfortunately, patents are creations of national law, and there exists no unified “global” or “worldwide” patent available to inventors. Rather, each country across the globe establishes its own national patent laws, including prosecution rules and enforcement rights, and those rules and rights extend no further than that country’s borders. Not surprisingly, these national patent rules and laws can and do vary considerably from country to country. Yet, virtually all countries with patent laws allow foreign persons and legal entities to directly file for a patent (i.e. the “direct file” approach). Not surprisingly, each such country will require that an application for a patent be filed in that country’s patent office, that the application will be reviewed under that country’s rules and laws, and that any patent that issues will only be enforceable in that country. Further, such applications must be filed in that country’s particular language. It is also not surprising that the costs of filing for, and obtaining, patent protection varies greatly from country to country. The cost may be as low as $5,000 – $10,000 in smaller market countries, but is more often substantially more in most others.2
Making this situation even more unmanageable is the fact that most countries have very strict and limited timelines for filing an application relative to when the invention is commercialized or publicly disclosed. That is, in most countries a patent application must be filed shortly after the invention has been commercialized or publicly disclosed in some way – usually in under one year. In other countries, a patent application cannot be filed at all once commercialization has occurred. Failure to meet such deadlines will cause the application to fail or to result in an unenforceable patent.
Enter the “PCT” and the “Thirty Month Breather”
In an effort to provide some stability and a bit of a respite to this confusing and chaotic situation, most countries have signed on to the patent practice provisions of the Patent Cooperation Treaty (the “PCT”), which was enacted in 1970. The PCT allows an inventor (or an assignee of an inventor’s patent rights) to file an International patent application and obtain a preliminary review by a certified patent examiner that is approved to examine PCT Applications. These PCT examiners are found in the offices of International “Search Authorities” located across the world. The PCT process can take up to 30 months, or a shorter period of time at the applicant’s option. Thereafter, the PCT Application can be filed for review in any of some 200 countries. Of course, the applicant will have the benefit of “patent pending” protection through the entire 30-month period, unless the PCT Application is abandoned.3
More specifically, approximately 16 months after the PCT Application is filed, the Search Authority will conduct and then issue a written Search and preliminary Written Opinion, opining on the potential viability of the application and patentability of the invention. Approximately 2 months later, the PCT Application will be published. The applicant can then have the PCT Application examined for patentability at an additional cost. In any event, the applicant must by the end of the 30-month PCT period identify each country that has signed on to the Treaty in which the applicant seeks patenting. This is known as the “national stage” or “national phase” of the PCT Application process. The applicant can then pursue patenting in each named country. However, the applicant must still follow the patent review rules in each such country and pay the costs and fees for each such prosecution. Moreover, foreign language translations will still need to be obtained and filed where necessary.
The PCT “Priority Potential”
When pursuing patent protection, a critical consideration is whether there exist any references that predate the patent application filing date that disclose any aspect of the invention by someone else. Such references are known as “prior art”. Because a patent is only available to previously unknown inventions, the presence of “prior art” that is close to the invention can severely limit the scope of a patent, or even prevent patenting altogether. Consequently, because technologies perpetually continue to develop and grow, it is usually advisable to file a patent application as soon as possible in order to limit the amount of potentially damaging “prior art” that could surface. One trick available to applicants considering foreign patent protection is to secure an early filing date in the U.S. and use that “priority date” for associated foreign application filings.
One of the benefits of a PCT Application is that it can secure the filing date of a previously filed U.S. application. While a PCT Application can be filed independently, it can also be filed as a dependent application from a previously filed national application (such as in the U.S.) if the PCT Application is filed within one year of the parent application to thereby gain the benefit or “priority” of the earlier filed application. When the PCT Application is filed independently, any patent rights that arise from the application will be deemed to accrue from the PCT Application filing date. On the other hand, when properly filed as a dependent application, the PCT Application gains the benefit of the prior filing date of the “parent” application under another international treaty (the Paris Convention of 1883), which can give the PCT Application “priority” of up to a year earlier than the actual PCT Application filing date. This can be very important when it comes to avoiding newly emerging technologies that might undermine the patentability of the invention.
So, What’s the Cost?
As can be seen, when implemented properly, a PCT Application can provide a very useful tool to help guide patent applicants across the foreign patent landscape. Surprisingly, the cost of preparing, filing and prosecuting a PCT Application is relatively modest. That is, if the PCT Application depends from a pending U.S. patent application, the PCT Application costs will typically range from just under $5,000 to somewhat under $10,000, depending on if an examination is requested during the PCT process. Thus, although the PCT Application cannot be considered an “inexpensive” option, in many instances its benefits far outweigh its cost, and the PCT Application should be given very careful consideration.
1 Some countries also offer patents to protect unique new plants. This article focuses on inventions and designs.
2 By comparison, in the U.S., filing for a patent (i.e., a nonprovisional application) typically costs between $5,000 and $20,000, and the overall cost to obtain a patent typically ranges between $25,000 and $40,000.
3 In the U.S. as well as other PCT countries, patent applicants have what are known as “provisional rights”. Provisional rights enable a patent owner to seek damages for patent infringement that occurs during the review and prosecution of the patent application.