Now more than ever one needs to ensure value for money in creating and maintaining a patent portfolio. Not only are budgets decreasing or stagnant, but the number of countries that need to be considered is increasing.
Key steps to accomplishing this are the following:
1. A clear understanding of the objective that is desired to focus on productive goals.
2. Preparing properly in advance of incurring costs.
3. Avoiding duplication of effort.
4. Being ruthless in cutting costs if it seems that the objectives cannot be achieved and there is no other reason for continuing.
Defining the Objective
Identify the actual activity for which one needs to secure patent protection in order to achieve the desired degree of control. This may not necessarily mean that one has to secure patents for every feature of a product one intends to sell. If there is one key element that is necessary, it may suffice to secure patent protection for that element alone.
In some cases, one may be seeking patent protection not so much to protect one’s own investment but to provide bargaining counters for use in cross-licensing deals.
University and nonprofit research organizations may have other factors to bear in mind, for example, the need to be able to establish their reputation in a field by securing patent protection in it as well as the need to establish a licensable portfolio.
In other cases, the impetus for seeking protection for an invention in a country derives not so much from the legal right to exclude others but from other considerations. These include marketing, the desire to have a statutory intellectual property (IP) right to anchor what is otherwise a know-how or consulting agreement. In some such cases, alternative cheaper forms of protection such as utility models, designs, or even copyright protection may suffice.
Deciding Where to File
Filing decisions will depend on the nature of the invention, location of the competition, markets for one’s products, and possibly where one manufactures one’s own products. If there is natural dominance in one country, there may be less need for patent protection there than in a market into which one is trying to gain access.
The decision tree shown below may be of assistance in considering the issues to be evaluated when deciding where to file a patent application for a product invention. For a process invention, one needs to take into account the question of how easy or difficult it will be to determine whether someone is actually infringing the patent. In countries such as Germany and Japan where there is no effective discovery, this may be difficult.
The state of the patent system in a country, such as the quality and speed of examination, the impartiality of the courts and their attitude to patents should also be considered.
Filing a ‘‘provisional-type’’ application may be useful as a holding operation while assessments on filings outside one’s own country are made.
Alternative Means of Protection
In assessing what and where to file, it is worth bearing in mind that in some countries, lower-cost protection may be available by way of utility model or even registered design or copyright protection for some types of inventions. It should, however, be noted that utility model protection is not available in some countries, including Canada, the United Kingdom, and the United States. The table below lists the countries in which utility model–type protection is available.
Filing utility model applications in countries prone to patent racketeering may also be helpful in avoiding business disruption later, and so, filing for utility model protection early can avoid future costs.
Design protection is available in most countries, and some, such as the European Union (for which a single registration covers the entire EU), permit up to 100 designs to be included in a single application, In general, however, design protection is not available for features whose shape is dictated by their function.
The most important factor in securing good patent protection is that the person drafting the patent application has a good understanding of what the invention is and how it is distinguished from the prior art. Once the draftsperson understands the broad concept of the invention, it is essential that a proper search of the prior art is carried out to see what limitations this places on the original broad concept. Desirably, such a search will cover not only American and European art but also East Asian and Russian art.
The single most important step that can be taken to reduce the total cost of obtaining a patent is to begin with a good set of claims. Consideration of patenting costs too often focuses on the cost of filing rather than the overall cost of securing patent protection. In most countries, the cost of patent prosecution exceeds that of filing. The key to avoiding significant prosecution costs lies in minimizing objections that an examiner can raise. First and foremost is making sure that the claims are clear of all of the art that can readily be found.
Statements of advantage that may be beneficial in Japan can cause problems if stated in the form of ‘‘object’’ clauses in Australia or the United States. Discussing the failings of the prior art may be useful in establishing the problem to be solved and therefore advantageous in an application filed in the EPO, but can have unexpectedly limiting effects of the claims if incorporated in a U.S. application. This can mean that in some cases it may be preferable to use a different specification for the United States than the rest of the world.
The EPO, China and Japan have strict rules on amendment during prosecution of an application. Insertion of a couple of paragraphs when drafting the specification setting out intermediate generalizations of the invention and making it clear that particular features disclosed in a specific embodiment may have more general applicability in other embodiments will help in such jurisdictions.
Translation costs form a large part of the filing costs in multi-country filings. Avoiding duplication of the same text in different parts of the specification can be helpful in reducing such costa.
If design patent or registration is chosen as the preferred means of protection in a given country, it should be remembered that while some countries, such as the United States and Japan, permit the use of broken lines to disclaim features that are not essential to the design; others, such as China, do not.
Logistics of Filing
Once one has a good specification and claim set or sets, the question often becomes PCT, or not PCT? There are other logistical choices that may need to be made, in particular whether to take advantage of various regional patent systems that are available. These include the EPO, the African Intellectual Property Organization (known from its initials in French as OAPI), African Regional Intellectual Property Organization (ARIPO), the Eurasian Patent Convention, and the Gulf Cooperation Council (GCC).
In recent years, use of the Patent Cooperation Treaty (PCT) to defer costs has resulted in most applicants interested in international filing using it as their normal modus operandi for securing protection in all but the few countries that are still not members of the PCT, such as Taiwan, Kuwait, Saudi Arabia, and Argentina and a few other countries of South America. Use of the PCT can become a trap for the unwary—because it is easy to file a PCT application at the last minute, there is a tendency to delay foreign filing decisions and simply file the same text as a corresponding home country application as the PCT filing. Unfortunately, one is then effectively locked into this text for all countries without taking account of the requirements of the specific countries where protection is desired. Furthermore, under the PCT, there is a risk that in some countries only the first presented independent claim will be searched without payment of extra fees, which makes the order that claims are presented important for obtaining the best value for one’s money. If cost deferral is not an issue and if one is confident in the search that has been carried out, proceeding directly with international filing can expedite the grant of a patent in some jurisdictions and also reduce costs.
If obtaining a European patent is one of the objectives, having the search carried out by the EPO and then obtaining a refund of the EPO’s search fee can often be the optimal way to proceed. However, if immediate cost control is the primary objective, having the international search carried out in Korea, the United States, or Australia may be more appropriate.
PCT Formality Advantages
A big advantage of the PCT, which can result in cost savings by avoiding duplication of effort, is taking advantage of the possibility under PCT Rule 51bis2 of filing declarations that may be needed later in national patent offices at the time of filing the PCT request. Declarations that are permitted under this provision are:
Identity of the inventor
Applicant’s entitlement to file the patent application
Applicant’s entitlement to claim priority from an earlier application
Applicant’s entitlement to claim inventorship
Nonprejudicial disclosures or exceptions to lack of novelty.
For those outside the United States seeking patent protection in it, again a decision needs to be made as to whether to use the PCT. There are a number of factors to consider:
If one proceeds with national-phase entry out of PCT, one is locked into the text of the PCT application (unless entering the U.S. national phase as a continuation-in-part application), whereas an application claiming only Paris Convention priority from the foreign application could be amended if any changes are desirable and priority claimed only for what is described in the PCT application.
Avoiding Duplication of Effort
The so-called Patent Prosecution Highway (PPH), a collaboration between patent offices, can serve to reduce costs. An applicant who has received a ruling from the patent office of one member of the highway pair that at least one claim in an application is patentable, may request that the patent office at the other end of the highway accelerate the examination of corresponding claims. This PPH extends to patent offices in PCT countries that serve as an International Search Authority or International Preliminary Examination Authority. This should, hopefully, not only accelerate prosecution but also reduce prosecution costs.
Duplication of effort can be avoided by coordinating prosecution so that a single person having a good grasp of all of the relevant laws can consider all of the issues while deciding an appropriate overall strategy. What happens in one country may or may not have an impact on what can be accomplished elsewhere because of the differences in laws in different places. Thus, prior art that is highly pertinent in the EPO may, because it was a publication of the same inventor that occurred within one year prior to the filing of a corresponding U.S., Australian, or Korean application, be irrelevant in the United States, Australia, or Korea. Ladas & Parry has long experience in this role.
Many countries permit deferment of costs by allowing the applicant to delay examination.
Brazil for three years from filing
Canada for five years from filing
China for three years from priority
Japan for three years from filing
South Korea for five years from filing
Russia for three years from filing
Taiwan for three years from filing.
Taking advantage of this possibility may enable one to avoid paying fees that would be wasted if interest in the invention drops or prior art is found that jeopardizes the grant of the patent.
Particular Issues in the United States
In the United States, restriction requirements in which examiners assert that there is more than one distinct invention present in an application are common. If a restriction requirement is raised, opting for the easiest subject matter to prosecute (often a method claim), rather than the most encompassing, may be a way to delay costs until the first application is close to grant. Then, one could file a divisional application on the more difficult subject matter.
If the application is one where broad protection is not essential, it may be that making some concession to the examiner in response to the first action represents a cheaper way to reach one’s objective than the traditional view that one should argue for broad protection at least once.
Particular Issues in the EPO
Two big problems exist in prosecution in the EPO. Both relate to what is permitted by way of amendment to the claims.
The first is the EPO’s rigid approach to amendment. The way to avoid these problems is to draft the application with appropriate language providing basis for intermediate generalizations if one’s broad claims turn out to be unpatentable.
The second problem lies in the new rules that came into effect on April 1, 2010. Under these rules, unless the claims are directed to:
a. a plurality of interrelated products,
b. different uses of a product or apparatus, or
c. alternative solutions to a particular problem, where it is inappropriate to cover
these alternatives by a single claim,
only a single independent claim is permitted in each category. This means that one must make sure that the claims are in the best format before entering the EPO. The situation is further complicated by the limitations that have been placed on filing divisional applications, which in most cases must now be filed within 24 months of the first substantive official action on any application in the family of applications to which the application being divided belongs. This places considerable limitations on one’s ability to redirect the application easily should the search results indicate such redirection to be desirable. It is therefore important to ensure that the claims are in the best possible form before filing or regional phase entry under the PCT.
Particular Issues in Japan
Japanese practice is very reluctant to permit functional definitions in claims, and prosecution can be made easier if such language is replaced by something more concrete before examination is commenced. When dealing with the obviousness issue, Japanese examiners tend to be less impressed by arguments based on motivation than they are by data showing that the difference from the prior art has some real-world advantage.
Pruning the Portfolio
Regular reviews as to the current and potential value of each patent and application in a portfolio is desirable for avoiding waste. Patents of the same family may have different values, depending on the country in which they exist.
Licenses of Right
If one is not commercializing an invention in a given country oneself, but is willing to grant a license, many European countries provide that maintenance fees may be cut in half by endorsing the patent as being open to licenses of right.