The decision whether to file a patent application is not just limited to whether an innovation has been achieved, but whether there is enough of an advance to make it worthwhile to undertake the cost of preparing and ultimately obtaining a patent. For universities the question is an even more difficult one than you might think because universities are almost universally engaging in early stage, highly-speculative research. Thus, the decision to file typically needs to come very early on in the process so that the inventor, typically an academic or researcher affiliated with the university, can publish findings and share information with the world.
Universities produce a lot of patentable inventions, but the patent laws around the world do not provide special treatment for those innovations that are based on foundational scientific research that may be years away from fruitful commercial application. What this means in patent terms is that once a university files a patent application the clock starts ticking. If, for example, a university files an international patent application there will be 30 months from that filing within which to decide whether to pursue patent rights in the Member Countries that have signed on to the Patent Cooperation Treaty. That same 30-month deadline applies even if the first filing is a U.S. provisional patent application or a U.S. nonprovisional patent application, both of which can provide support for a later filed international patent application. For more information see PCT Basics: Obtaining Patent Rights Around the Worldand PCT Basics: Understanding the International Filing Process.
Scientifically speaking, there is really very little time the point in time that work in a university laboratory is concrete enough to call “an invention” and capable of description in a patent application until the 30-month deadline to pursue rights in various countries around the world. What that means is that universities are constantly faced with a difficult decision. Do they undertake the expense of seeking patent protection in a variety of locations or do they forego the invention? This decision is particularly problematic for universities engaged in the life sciences where there is of necessity a very long time horizon from conception of the invention to even knowing whether there is a legitimate opportunity for commercialization.
Given the sluggish economic recovery and continued budget pressure on IP departments, it makes sense to consider new strategies for lowering the steep costs related to international patent filing. Translations can account for up to 50% of the cost of national stage entry, so cost-cutting strategies could make a significant difference in the bottom line. Strategic costs savings can then be used to stretch a diminishing budget, or offer opportunities to expand patent protection into other countries without busting your budget.
Before moving into discussion about ways to cut cost it is important to focus on the end goal. It is one thing to cut costs, but to borrow a popular political phrase – you want to cut with a scalpel, not a cleaver. Thus, keeping in mind the ultimately end goal at every step will allow you to engage cost cutting strategies without compromising your patent project. Of course, the end goal is to obtain the broadest, strongest patent portfolio; obtaining patents in a variety of jurisdictions where meaningful business opportunities exist.
For many companies the best course of action is to file an International Application under the Patent Cooperation Treaty (sometimes referred to as a PCT application) and pursue patent protection around the world with the filing of a single, uniform patent application. The PCT process is favored by many companies because of the long processing time. The international stage of the PCT application can last for up to 30 months, which puts off when you have to make a decision about where to pursue rights. This is particularly helpful if the innovation is early stage or encompasses basic scientific research that will need to be translated into a commercially useful innovation, or scaled in order to be feasible. In these scenarios so much can go wrong from scientific breakthrough to commercially useful invention that it does not make sense to spend vast sums of money early in the process when the invention may still fail to prove itself.
Typically there are a logical set of countries where maximum market opportunity exists for any innovation and you are likely to want to pursue protection in those countries where the economy is well adapted to provide the most economic potential for exploitation. With some innovations there are many countries that are capable of supporting a market for high-tech innovations, which sometimes causes people to want to apply for patents in a variety of jurisdictions.
There is no such thing as a world-wide patent, although there is something that approximates a world-wide patent application that can result in a patent being obtained in most countries around the world. This patent application is known as an International Patent Application, or simply an International Application. The international treaty that authorizes the filing of a single patent application to be treated as a patent application in countries around the world is the Patent Cooperation Treaty, most commonly referred to as the PCT. You can file an International Application pursuant to the rules of the PCT and that application will effectively act as a world-wide patent application, or at least a patent application in all of those countries that have ratified the PCT, which is virtually all of the countries where you would want a patent anyway.
So how is it possible that there is a single world-wide patent application but no world-wide patent? Patents are granted by individual countries, not by any international authority. The application process can be streamlined and uniform, but individual countries have different patent laws, which makes a uniform patent granting process impossible. For example, in much of the world living organisms are not patentable, but in the United States living organisms are patentable if they are the product of human engineering. Similarly, in much of the world computer software is not patentable, but it is widely patentable in the United States. Thanks goodness for that because if software were not patentable I’d have to figure something else to do professionally; upwards of 80% of my clients have innovations that relate to software and Internet technologies.
From Left to Right: Matthew Bryan, Alan Kasper, Derek Eberhart and Susanne Hollinger.
Recently, the Association of University Technology Managers (AUTM) held its annual meeting at the Anaheim Marriott in California. Last year’s AUTM venue was Las Vegas, which offered attendees a variety of dining and nightlife options, and Anaheim was no different. With Disneyland just around the corner, attendees at the Anaheim AUTM meeting had plenty of options for nightlife and networking.
I attended on behalf of inovia; it was our third year exhibiting at AUTM and our second year presenting a panel titled “Cost-Effective International Patenting Strategies” for AUTM attendees. The panelists for this session were Matthew Bryan (Director, Patent Cooperation Treaty (PCT) Legal Division, World Intellectual Property Organization), Derek E. Eberhart, Ph.D., (Senior Licensing Manager, University of Georgia Research Foundation, Inc.), Susanne Hollinger, Ph.D., J.D., (Chief Intellectual Property Officer and Associate Director, Office of Technology Transfer, Emory University) and Alan J. Kasper(Partner & Director of the International Department, Sughrue Mion, PLLC). The panelists discussed IP portfolio strategy, cost-effective foreign filing, Patent Prosecution Highway (PPH) programs, and effective use of the Patent Cooperation Treaty (PCT).
Despite difficult economic conditions worldwide, international patent filings under the WIPO-administered Patent Cooperation Treaty (PCT) set a new record in 2011 with 181,900 applications – a growth of 10.7% when compared with 2010, and the fastest growth since 2005. China, Japan and the United States accounted for 82% of the total growth, and the Chinese telecommunications company ZTE Corporation was the largest filer of PCT applications in 2011. 2011 also saw the filing of the two millionth PCT application, which was filed by US-based mobile technology company Qualcomm.
“The recovery in international patent filings that we saw in 2010 gained strength in 2011,” said WIPO Director General Francis Gurry. “This underlines the important role played by the PCT system in a world where innovation is an increasingly important feature of economic strategy. It also shows that companies have been continuing to innovate in 2011 – reassuring news in times of persistent economic uncertainty.”
Several weeks ago the United States Patent and Trademark Office (USPTO) issued a report to Congress on International Patent Protections for Small Businesses. The report examined how the capacity for American small business to create jobs is at risk due to the high costs of acquiring, maintaining and enforcing patents outside the United States. The report’s findings suggest that many small businesses may benefit from extending patent rights outside the U.S., but few are aware of the need to do so, or are unable to fund the high cost of international patenting.
The USPTO report states what virtually everyone knows — small businesses are the primary driver of job creation in the United States. Young start-up companies create on average three million U.S. jobs per year, and one of the most significant ways these companies grow is to compete internationally. Indeed, competing globally is a prerequisite to success for most companies in what is an ever increasingly global marketplace. To compete globally American firms engage in licensing, franchising, or exporting. For many small companies it is patent protection that provides the only means to obtain an advantage over established industry leaders. Patent protection prevents established industry leaders from simply copying new innovations, and aids small businesses and start-ups in attracting investor capital needed to grow, build market share, and create jobs. Unfortunately, small companies face significant financial challenges in acquiring, maintaining, and enforcing patents outside the United States. What they need is a strategy to lay the foundation for foreign rights, building off a credible and appropriate U.S. patent filing.
The Patent Cooperation Treaty, or the PCT as it is typically referred to, came into existence in 1970, and has been subsequently several times. It is open to States party to the Paris Convention for the Protection of Industrial Property (1883). The Treaty, which like any other Treaty is a legal agreement entered into between various countries. The purpose of the PCT is to streamline the initial filing process, making it easier and initially cheaper to file a patent application in a large number of countries. By filing through the PCT process you can embark on the path to seek patent protection for an invention simultaneously in every country that is a member to the Treaty. You accomplish this by filing an “international patent application.” Indeed, the term PCT is largely synonymous with “international patent application.” So you will sometimes hear people talk of filing an international patent application or a PCT application.
An international patent application may be filed by anyone who is a national or resident of a Member Country. A Member Country, also referred to sometimes as Contracting States, are simply those countries that are members to the international Treaty. In PCT speak, which can sometimes seem to be a language all to its own, those countries that have ratified the Patent Cooperation Treaty are referred to as Member Countries or Contracting States.