International Patent Strategy: Springboard to Going Global

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fenwick & west \x2 Introduction In today 9s global marketplace, patent protection continues to be an important part o, a company 9s overall business and intellectual property strategy. However, protection provided by any one patent is limited to within the country in which it was granted. For example, a U.S.

patent provides no protection against in,ringing activities that take place in Great Britain or Japan, or even just over the borders in Canada or Mexico. Thus, to secure patent rights in countries other than the U.S., the company must apply ,or and be granted patent protection within each particular country o, interest. This article provides a basic overview o, applying ,or patent protection outside the U.S.

and strategies ,or determining which countries provide the most value ,or a particular business. In reviewing the options below, keep in mind that an application led in the U.S. may be led outside the U.S.

under certain conditions: (1) the subject matter o, the patent application was not publicly disclosed prior to the U.S. ling; (2) the application is led under a treaty between the U.S. and another country that recognizes the U.S.

application ling date, i.e., the priority date. Evaluating Whether to Pursue Protection Outside the U.S. ... more. less.

In deciding whether to obtain patent protection outside the U.S., a company must consider a number o, ,actors. As a preliminary matter, it is important to understand that most ,oreign led applications will eventually be published in the U.S. and abroad. As such, a company will ,or,eit trade secret protection ,or the subject matter disclosed in a ,oreign led application. I,, however, the company a, rmatively elects to only le in the U.S., it has the option o, maintaining the secrecy o, that subject matter until the application issues as a patent. Hence, a company should rst decide i, publication o, the invention be,ore any patent is granted is an acceptable consequence o, ling the ,oreign application. Next, the company must evaluate in which countries patent protection would likely provide value. Example inquiries ,or this evaluation include: (1) what countries will products embodying the invention likely be manu,actured or sold?; (2) in what countries will other companies likely manu,acture or sell competing products?; (3) in what countries will en,orcement o, patent rights be cost e,,ective and practical? Note that a company 9s situation may vary by country. Nevertheless, generally ,oreign patent protection is sought in one or more o, the ,ollowing industrialized countries: Australia, Canada, China, India, Israel, Japan, Korea, Taiwan, and various countries in Europe, including Germany and Great Britain. Once particular countries are considered ,or patent protection, the company must evaluate the costs o, ling ,or protection in each country. These costs can be signi cant depending on ,actors such as ling ,ees in the selected countries and translations necessary in countries that do not conduct business in English. Thus, the company must per,orm a cost bene t analysis to determine what and where patent lings are justi ed. For ease o, discussion, the cost estimates provided herein assume the ling is based on an earlier led U.S. application. Pursuing Patent Protection Outside the U.S. Once it is determined that patent protection outside the U.S. is desirable, there are a number o, available options. The rst option is to timely le a patent application directly in the patent o, ce o, each country where patent protection is desired. The second option is to le a patent application in a regional patent o, ce. The third option is to le a patent application under the Patent Cooperation Treaty (PCT), to which the U.S. and most other industrialized countries are members. Each option and possible strategies are ,urther described below. International Patent Strategy: Springboard to Going Global by rajiv p. patel and neil f. maloney \x3 international patent strategy fenwick & west Turning to the rst option, in determining whether to le a patent application directly in the patent o, ce o, a selected country, a company should consider three ,actors: (1) certainty with respect to which countries patent protection is desired; (2) a willingness to ,orgo the option to seek protection in other countries at a later date; and (3) a willingness to pay the associated ling ,ees and language translation costs, where necessary. Average costs ,or directly ling an application in a national patent o, ce range ,rom about $2,000 to $12,000 per country. The wide range is due to ling ,ees, attorney ,ees, and translation costs where necessary. It is important to note these estimates do not include periodic costs to maintain the application and subsequent patent. These ,ees can range ,rom a ,ew hundred to several thousand dollars. For example, maintenance ,ees in Japan typically range ,rom several hundred dollars in the rst year o, a patent term to several thousand dollars in the last year o, the patent term. The second ,oreign ling option, timely ling o, an application directly in a regional patent o, ce, o,,ers economies o, scale o, examining the application within a single authoritative agency and therea,ter ,ormalizing protection in the member countries o, the regional patent o, ce. The most well known regional patent o, ce is the European Patent O, ce (EPO) and its members include Finland, France, Germany, Great Britain, Italy, Sweden, and Spain, among others. Filing in the EPO allows the company to submit one application designating any o, the member countries o, the European Patent Convention instead o, ling a separate application in each o, the desired national patent o, ces. The EPO conducts an examination o, the application, which can take several years, and cgrants d the patent. Therea,ter, the company must cper,ect d that grant in the speci c member countries o, the EPO in which they seek protection. Per,ecting the patent grant usually entails paying administrative ,ees and translating the patent into the appropriate national language. Some countries only require translation o, the claims, while others require translation o, the entire patent. From a strategy perspective, i, the company is: (1) only interested in European countries; and (2) intends to le in three or more o, those countries, then the company should generally le an EPO application designating those countries, rather than ling individual national applications. This allows the company to avoid multiple examination ,ees, and to de,er payment o, translation costs until the patent is granted. The cost o, pursuing and obtaining an EPO patent grant and per,ecting it in three countries typically runs about $10,000-$30,000, depending upon the selected countries, the application length, and the duration and extent o, the prosecution. Again, as previously noted, these costs are exclusive o, ,ees necessary ,or maintaining the patent application and patent on a periodic basis. A third ,oreign ling option is timely ling o, an application under the Patent Cooperation Treaty (PCT). Generally, all o, the major industrialized countries are members o, the PCT. However, a notable exception to PCT membership is Taiwan. Hence, patent protection in Taiwan only can be pursued through a direct national ling and not a PCT ling. The primary advantages o, a PCT application include delay having to make a decision on where to ,oreign le a patent application and de,er payment o, regional or national ling and translation ,ees. Generally, a company should consider ling a PCT application when any one o, the ,ollowing apply: (1) the company wants to preserve its patent rights in various countries or regions around the world, which are members o, the PCT, while assessing the commercial potential o, those markets and de,erring costs o, national or regional patent lings; (2) the company is uncertain o, the countries in which patent protection is desired; (3) the company wants to assess the results o, the U.S. prosecution be,ore ling in other countries; and/or (4) the company wants to assess the commercial viability o, the invention in the U.S. be,ore ling in several countries. The PCT process is broken into an cinternational d phase and a cnational d phase. The international phase includes two sub-phases, re,erred to as cChapter I d and cChapter II d, the procedures under which have recently changed ,or PCT applications led as o, January 1, 2004. Chapter I is required, and includes an international preliminary search ,or prior art. Prior art typically includes public documents that are prior to the priority date o, the present application and that appear to disclose in whole or in part the invention o, the application. The search is carried out by an international search authority (ISA), which is usually the United States Patent & Trademark O, ce (USPTO) or the EPO. The search is typically carried out within three to nine months o, ling the PCT application, and a resulting search report is provided to the company. \x4 international patent strategy fenwick & west The ISA establishes a written opinion based on the search report. The opinion is a preliminary non-binding opinion as to the patentability o, the claimed invention. I, no Chapter II cdemand d is led, the written opinion is converted into an cinternational preliminary report on patentability d (IPRP- Ch.1), which has the same content as the ISA 9s written opinion. A company may respond to the written opinion, but without a led demand, the company can only in,ormally comment on the opinion. I,, on the other hand, a demand is led, then Chapter II commences, where the cinternational patent examination authority d (IPEA) generally uses the ISA 9s written opinion as its initial opinion. Unlike Chapter I, the company can amend the application and ,ormally argue against the written opinion. The IPEA may respond with ,urther written opinions, at its discretion. The IPEA then issues a nal cinternational preliminary report on patentability d (IPRP- Ch.2). This report is also a non-binding opinion as to the patentability o, the claimed invention. Filing an optional Chapter II demand allows the company to ,ormally argue the merits o, the PCT application be,ore the IPEA. This may be desirable in order to obtain a ,avorable IPRP, which may ,acilitate smooth prosecution at the various national patent o, ces that show de,erence to the IPRP. A caveat here is that a ,ew remaining countries still require a demand to be led in order ,or the company to de,er entry into the national phase. With no timely demand led, the national phase ,or these ,ew countries must be entered about 10 months sooner than other countries. Otherwise, the PCT application will go abandoned. However, this requirement ,or a Chapter II demand is not applicable to most major member PCT countries in which companies typically pursue protection. The next phase in a PCT application is the national phase, which is 20 or 30 months ,rom the earliest priority date ,or most countries. At this time the company must le the application in each region or country where protection is desired, as previously described. Each national patent o, ce may use the PCT search results and/or conduct ,urther searching. A binding examination is then conducted by that patent o, ce, which may or may not provide results similar to the non-binding IPRP, depending on the various patentability requirements o, that country and additional prior art that is ,ound. One strategy some companies pursue is simultaneously ling a U.S. patent application and a corresponding PCT application, in which they designate the USPTO as the ISA. O,ten, the examiner that is assigned to carry out the PCT search is also assigned to examine the U.S. application. Thus, i, the PCT search report is ,avorable, then the examiner may be inclined to grant an early allowance o, the U.S. application. Note, however, that this strategy is by no means a sure bet, and a less than ,avorable PCT search report can just as likely result in an early rejection o, all claims. In any event, such strategy may jump start an early prosecution o, the corresponding U.S. application, which would otherwise not be examined ,or two to three years. Re,erring briefy to legal costs, the cost o, ling a PCT application usually ranges ,rom about $2,000-$6,000, depending upon which chosen ISA, the number o, countries designated, and the number o, pages in the application. In addition, the cost ,or ling a demand runs about $1,000- $3,000, depending upon the chosen IPEA. Conclusion A company has various options ,or pursing patent protection outside the U.S. Pursuing and securing patent protection outside the U.S. can take on average three to eight years ,rom the initial U.S. ling depending on ,actors such as the countries in which protection is sought and the legal requirements and procedures ,or pursing the application through issuance be,ore each respective country patent o, ce. In an increasingly global marketplace, companies with long-term vision must seriously evaluate whether patent protection outside the U.S. is a necessary element o, their overall patent strategy. With the aide o, patent counsel, a company can evaluate the cost-bene t analysis o, patent protection outside o, the U.S. and determine whether such protection is o, value, based on business goals. Therea,ter, the company can work with patent counsel to ensure strategic and timely lings o, applications outside the U.S. based on their selected options. For more in formation on developing and executing a global patent strategy contact Rajiv P. Patel at +1.650.335.7607 or rpatel@ fenwick.com. Rajiv is a partner in the IP/Patent Group o f Fenwick & West LLP, a Silicon Valley based high technology and biotechnology frm which global reach. Fenwick & West LLP is on the web at www. fenwick.com. Neil Maloney is patent counsel at St. Gobain Corporation in Worcester, Massachusetts.

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