Options for Obtaining Patent Protection Outside the U.S.

Options for Obtaining Patent Protection Outside the U.S.In deciding whether to obtain patent protection outside the U.S., there are a number of factors a company should consider. As a preliminary consideration, it is important to understand that most foreign filed applications will be published eighteen months after their priority date. As such, if a company files an application outside the U.S., it will eventually forfeit any trade secret protection for the subject matter disclosed in that application. If, however, the company files only in the U.S., it has the option of maintaining the secrecy of that subject matter until the application issues as a patent, assuming proper steps are taken. Thus, a company must decide if publication of the invention before any patent is granted is an acceptable consequence of filing for patent protection outside the U.S.

The next step is to determine in which countries would patent protection likely provide value. Questions to ask here include: In what countries will products embodying the subject invention likely be sold or manufactured? In what countries will other companies likely manufacture or sell competing products? In what countries will enforcement of patent rights be effective, both from cost and legal standpoints? Although this determination will vary from company to company, conventional wisdom suggests that foreign patent protection is most commonly sought in Australia, Canada, China, Japan, Korea, and various countries of Europe. A related issue to consider here is cost, which can be significant depending on factors such as the selected country and translation costs. Thus, a cost benefit analysis should be performed to determine what and where patent filings are justified.

Once it is determined that foreign patent protection is desired, a number of filing options are available. One option is to timely file a patent application directly in the patent office of a selected country. A company should consider filing patent applications directly in national patent offices if the company: (1) is absolutely certain in which countries patent protection is desired; (2) does not desire to reserve the right to seek protection in other countries at a later date; and (3) is prepared to pay the associated filing and translation costs. Typical costs for directly filing a patent application in a national patent office range from about $4,000 to $12,000 per country, including attorney fees and translation costs. Canada tends to be at the lower end of the range, while Japan tends to be at the higher end. The costs associated with directly filing patent applications in other countries are generally somewhere between the costs for these two countries. Note that these estimates only reflect the costs for filing a patent application, and not for obtaining or maintaining a patent, each of which is associated with additional cost. For example, in Japan the maintenance fees range from several hundred dollars in the first year of the patent term to several thousand dollars in the last year.

Another foreign filing option is to timely file an application for patent directly in the European Patent Office (EPO). Filing in the EPO allows the company to file one application designating up to eighteen or so European countries instead of filing a separate application in each of the desired national patent offices. The EPO conducts an examination of the application and “grants” the patent. The company must then “perfect” that grant in the various individual countries of the European Patent Convention (EPC) in which protection is desired. Perfecting the patent grant usually entails paying various administrative fees and translating the patent into the appropriate language. Interestingly, some countries require only the claims be translated, while others require translation of the entire patent. Translation costs average about $100 per page of the U.S. application.

From a strategy standpoint, if the company is: (1) only interested in European countries; and (2) intends to file in three or more those countries, then the company should generally file and EPO application designating those countries, rather than filing individual national applications. This will allow the company to avoid multiple examination fees, and to defer payment of translation fees until the patent is granted. The cost of obtaining a patent grant in the EPO and perfecting it in five countries typically runs about $20,000-$30,000, depending upon the particular countries chosen, the length of the application, and the duration and extent of the prosecution. Note that the above estimate only applies to the cost of obtaining and perfecting the patent, not to the costs of maintaining it.

A third foreign filing option is to timely file an application under the Patent Cooperation Treaty (PCT). The primary advantages associated with filing a PCT application are to delay having to make a decision on where to foreign file a patent application, and to defer payment of regional or national filing and translation fees. Generally, a company should consider filing a PCT application when any one or more of the following applies: (1) the company wants to preserve its patent rights in various PCT countries and regions, while assessing the commercial potential in the various foreign markets, and while deferring costs associated with a regional or national patent filings; (2) the company is uncertain of the countries in which patent protection is desired; or (3) the company wants to assess the results of the U.S. prosecution before filing in other countries, and/or wants to assess the results of a preliminary search and examination before filing in several countries.

The PCT process is broken into an “international” phase and a “national” phase. The international phase includes two sub-phases, referred to as “Chapter I” and “Chapter II.” Chapter I is required, and includes a preliminary international search for prior art. The search can be done at any designated searching authority, but is usually conducted at the United States Patent & Trademark Office (USPTO) or at the EPO. Conventional wisdom suggests that the EPO search is more thorough than the U.S. search, but it costs about $1,200 more. More recently, however, and in response to an overwhelming search and examination backlog (primarily due to the previously stated perception as to quality), the EPO restricted the types of applications for which it is competent to search and examine. In addition, the USPTO is sensitive to the stated perception, and has taken steps to improve the quality of its searches and is currently considering contracting with professional search firms. The search is typically carried out within 3 to 6 months of filing the PCT application, and a resulting search report is provided to the company.

One strategy here is to simultaneously file both a U.S. application and a corresponding PCT application, designating the USPTO as the search authority. Often times, the examiner that is assigned to carry out the PCT search is also assigned to examine the U.S. application. Thus, if the PCT search report is favorable, then the examiner may be inclined to grant an early allowance of the corresponding U.S. case. Note, however, that this strategy is by no means a sure bet, and a less than favorable PCT search report can just as likely result in an early rejection of all claims. In any event, such a strategy can be employed to jump start an early prosecution of the corresponding U.S. application, which would otherwise not be examined for two to three years. In addition, and as with most foreign applications, the PCT application will be published approximately 18 months after its priority date. Once published, this application can be used as prior art to reject patent filings of competitors.

Chapter II of the international phase is optional and includes an International Preliminary Examination, where the prior art identified by the PCT search report is applied to the claims. If the company chooses to enter Chapter II, a Chapter II “demand” must be timely filed. If a Chapter II demand is filed, the company will receive an International Preliminary Examination Report regarding the patentability of the invention. This Report is a non-binding opinion as to the patentability of the claimed invention. Thus, by entering Chapter II, the company can gain better insight into the patentability of the invention before entering the national phase. In addition, the company can further delay entry into the national phase and the associated costs. If a Chapter II demand is not filed, the company will not receive an International Preliminary Examination Report. However, given recent changes in the law, the company can still defer entry into the national phase of most countries, despite not having filed a demand. One caveat: a few remaining countries still require a demand to be filed in order for the company to obtain this deferral. With no timely demand filed, the national phase for these few countries must be entered about 10 months sooner than other countries. Otherwise, the PCT application will go abandoned.

In the National phase, which is typically 20 or 30 months from the priority date (depending upon whether a Chapter II demand was required and/or filed), the company must timely file a regional or national patent application in each region or country where protection is desired. Note that each region or country has various requirements that must be satisfied for a patent to issue. Each national patent office may use the PCT search results, and/or may also conduct further searching. A binding examination is then conducted, which may provide results similar to the non-binding International Preliminary Examination Report, but may also be very different.

Including legal fees, the cost of filing a PCT application usually ranges from about $3,000-$5,000, depending upon which searching authority (USPTO or EPO) is chosen, the number of countries designated, and the number of pages in the application. If the company enters the second phase of the PCT process by filing a demand, then additional costs will be incurred. Including legal fees, the cost for filing a demand typically ranges from about $1,500-$3,000, depending upon which examining authority (USPTO or EPO) is chosen to prepare the Preliminary Examination Report. If the USPTO is selected as the examining authority, the examination fee is less expensive than if the EPO was selected. Note, however, that the costs for an international EPO search and examination can be partially recovered during the prosecution of an EPO national phase application.

Thus, a company has various options for pursuing patent protection outside the U.S. Such options should always be discussed with the company’s patent counsel to ensure that strategic and timely filings are obtained. The provided estimates are approximate, and actual costs will depend on many factors, such as the fees charged by foreign authorities, the length of the application, the number of claims, the particulars of the prosecution, the translator service used, and the foreign counsel used. A separate determination should be made for each invention for which foreign patent protection is desired.