Global Patent Protection - At An Achievable Cost

By: PHILIP M. GOLDMAN

Fall 1995

The business world is truly becoming global in nature, with increasing numbers of U.S. companies involved in the worldwide marketplace. Those that rely on proprietary technologies are quick to find that global patent concerns can play an important role in their ultimate success. Others are not fully prepared for the processes, or costs, of establishing this protection. These companies might spend many thousands of unnecessary dollars while achieving far less than adequate protection.

This article will provide a brief overview of key considerations that go into establishing a cost-effective approach to the issue. In particular, it will address the questions of "why, what, and how" as they relate to global protection.

Why is 'global patent protection' important?

Patents protect inventions and proprietary technologies. A patent granted in the U.S., for example, allows the patentee to prevent others, for a limited time, from making, using, or selling the claimed process or product.

Patents, however, are also territorial in nature. They only allow the patentee to prevent infringement that occurs within the country or region granting the patent. It is not unusual, therefore, for the owner of a process patent in one country to stand helplessly by as a competitor uses that process in another country (where the patentee has no protection), and imports the final product back into the first country to be sold.

Yet no one can be expected to file each of their patents in every country. The most effective strategy is one that best protects the patentee in key countries and regions of the world, in a strategic and cost-effective manner.

How does one strive for 'global protection'?

The process of obtaining patent protection abroad is based on a number of multi-national treaties that have led to a fair degree of reciprocity, uniformity and predictability between various nations.

In a typical scenario, a patent application covering a new invention is prepared and filed with the U.S. Patent Office. The initial U.S. filing date will be significant in many respects, and begins the timetable for filing corresponding applications abroad. After this filing, the patent owner has one year in which to file foreign applications corresponding to the U.S. application - each claiming "priority" back to the U.S. application filing date. The benefits of claiming priority to an earlier date cannot be understated. They include the ability to prevail over the 'prior art' of others and the competing rights of other inventors.

The process of filing abroad has evolved to the point where a single application, filed under the Patent Cooperation Treaty, can suffice as the initial filing in most desired countries. Once filed, the PCT application proceeds for several months as a single application, filed under the Patent Cooperation Treaty, can suffice as the initial filing in most desired countries. Once filed, the PCT application proceeds for several months as a single application, subject to a single prior art search and an optional examination process.

Many months down the road, the PCT application blossoms out into 'national stage' applications in each desired country. At this point, the individual applications are each subject to review under the respective national laws and processes. Over a time frame that can span several more years, these national applications themselves progress and mature, with hope into patents.

Over these months and years, the patent owner is faced with continual and ever-increasing costs-prosecution and translation costs, filing fees, taxes, maintenance fees, and the like. The combined cost of filing, prosecuting and issuing applications into patents abroad can often run many times more than the original filing and prosecution costs for the U.S. application.

What can we do to achieve cost-effective global protection?

Your attorney should be able to help you develop cost-saving strategies at each of three critical stages in the process. These are:

• preparing and filing the initial U.S. application,

• making the foreign filing decision, and

• the ongoing prosecution and maintenance of applications and patents here and abroad.

At the same time, the attorneys of Fredrikson & Byron work with clients to establish the three-part approach of "Review, Revise, and Reassess" described below.

Review - Doing the Necessary Homework

This step should begin at or before the actual development of the invention. The owner must be sure that a proper foundation is laid for protecting and owning inventions and for effectively preserving foreign filing options.

The later decision of whether and where to file abroad is one that should fit within the owner's strategic plan, based on considerable information, review and deliberation. All too often, multi-thousand-dollar filing decisions are made hurriedly, with little or no rationale. Working deliberately and with an attorney, the patent manager should be able to explore and balance such key factors as national population and business demographics, costs (translations, filing and other fees), and the scope and type of protection available in countries of interest.

Revise - Putting the Application in Shape

Once filed, international patent offices differ considerably in their substantive requirements of what should, and should not, be in the application. Many require that scientific units be in the metric system. Many others require a particular look and feel. Still others charge large fees for exceeding a certain number of pages or claims. Making these changes in each international patent office can add considerably to your costs.

The prudent patent manager will be sure that his or her patent attorney is aware of these requirements and accommodates them in advance. An astute and cost-conscious patent attorney will draft the initial U.S. patent application with the ultimate requirements of key foreign countries clearly in mind.

Reassess - Being Willing, and Able, To Revisit Your Decisions

Once key decisions have been made regarding where to file abroad, the patent manager should periodically review and reassess the wisdom of continuing those applications and patents. The company's priorities can change as can market conditions, technologies, demographics, and the like. The application process described above is spread over several years, in large part to facilitate this ongoing reassessment.

However, the process of reassessing decisions is far easier to understand than it is to implement. Once a decision has been made to file an application abroad, it is unlikely to ever be reconsidered. This in spite of the fact that a single foreign application may cost tens of thousands of dollars over its life, and the original justification for filing may have long since ended.

The prudent patent manager must continually reassess the wisdom behind filing particular applications in particular countries, and be willing and able to alter patent decisions when more cost-effective options arise. Again, the patent attorney can work with the manager to project these costs, and weigh the available options.

In Closing

Although this summary only begins to address the issue, we hope that it provides a bit of insight into the process of obtaining global patent protection. In a future issue of this Focus, we will provide corresponding considerations that underlay the protection of a company's trademarks, both here and abroad. If you would like to discuss these or any other aspects of U.S. or foreign protection, give one of our attorneys a call.