inovia's Foreign Filing Blog

“International Patenting Strategies” Program Now Available for Download

Last week inovia had the opportunity to participate in an audioconference sponsored by Technology Transfer Tactics entitled: International Patenting Strategies – Cost-Effectively Expand Your Market and Boost Your TTO’s Revenues.

During the 90-program, Jeff Sweetman, Head of Professional Services and a Patent Attorney at inovia, gave an overview of the PCT and European validation processes, shared foreign filing best practices, and highlighted results from inovia’s 2010 U.S. IP Trends Report.  Susanne Hollinger, Ph.D., J.D. of Emory University then shared insights from the university perspective, including an overview of Emory’s patent filing practices and a discussion on licensee issues.  

The program is now available for download on the Technology Transfer Tactics website.  Click here for more information.

A look at the 2008 Berkeley Patent Survey

Looks like we're not the only ones conducting surveys on US IP trends.  Researchers at the Berkeley Center for Law & Technology, the University of San Diego Law School and the Georgia Institute of Technology released a paper detailing the results of a 2008 survey where they polled over 1300 start-up companies on their patent strategy; one of the researchers recently commented on some major findings here.  The paper in its entirety can be downloaded here.  We found the following results to be of particular interest.

Page 1299 lists the motivation of respondents for pursuing patent protection.  In order of importance, the reasons cited were to:

• Prevent others from copying their products or services;

• Improve chances of securing investment;

• Improve chances / quality of liquidity (e.g. IPO / acquisition);

• Enhance company reputation / product image;

• Improve negotiating position with other companies (e.g. cross-licenses);

• Prevent patent infringement actions against themselves; and

• Obtain licensing revenues.

Based on the above, it's clear that many start-ups rely on patents not just for the obvious purpose of protecting their intellectual property, but also for numerous secondary benefits as well.

The Berkeley poll also asked respondents, taking the scenario where they chose not to patent their last major technology innovation, why they decided not to pursue patent protection.  Not surprising given the economic climate, nearly 57% of respondents cited the cost of getting a patent as the deciding factor for not seeking a patent.

This strategy, however, comes with long-term consequences. Companies must remember that patents last for 20 years and letting their right to seek patent protection expire opens the door forever to their competitors.

If costs are a concern, sounder strategies exist which can allow a company to pursue patent protection while minimizing costs.

 

 

Improving the Functioning of the PCT System: WIPO's recent study

During the week of 14 to 18 June 2010, PCT Member states considered proposals to improve the PCT potential contribution to higher quality and more efficiently granted patents at the national/regional level.

The recommendations that came out of the meeting were based on a WIPO study entitled, "The Need for Improving the Functioning of the PCT System."

Some practical steps endorsed by the meeting's attendees include the development of computer systems that:

• allow third parties to submit information that is potentially relevant to patentability

• support technology transfer by promoting the licensing of inventions

At inovia, we are always delighted to see news like this - in line with the general momentum we've seen building towards getting patent offices working smarter together.

Whether it's the ever-expanding Patent Prosecution Highway (PPH) programs or the Vancouver Group (the UK, Canadian and Australian patent offices sharing search and examination outcomes), there's clearly no going back to the days when patent offices worked alone.

Whether any of this will be enough to get backlogs under control is yet to be seen, but at least there seem to be some steps in the right direction.

US IP Trends: Global Patent Protection in 2010

Our survey results are in!

And it looks like belts have been tightened as far as they will go... with IP budgets now stabilizing for 2010.  72% of respondents (US companies, primarily small to medium-sized enterprises) plan to maintain or increase foreign patent filings for 2010.  This is a bit of bright news after a difficult year: over 40% of respondents filed fewer patent applications in 2009 as compared to 2008, according to our survey results.

Other key findings include:

• 60% of respondents had their IP budget cut in the last 12-18 months, with nearly 40% experiencing a cut of 30% or more!

• 72% brought some patenting procedures in-house in the last 12-18 months.

• For those who did reduce foreign patenting costs in 2009, the measure most cited was to reduce the number of foreign countries entered. Specifically, the average was 6.6 countries in 2008 and 6.3 countries planned for 2010.

Of course at inovia we know foreign filing can be costly, but filing less is not the only solution!  (The phrase "cutting off your nose to spite your face" comes to mind...) Run our PCT calculator for an fast and accurate estimate.

 

From here you can download the complete, 6-page report.

 

 

 

Eastern Migration: Patent Filing and Protection in China

As one of the largest filers of PCT national stage applications in the world, inovia often observes firsthand global trends occurring in the foreign filing industry. One noteworthy development in the past decade is the emergence of China as both a major source and destination for patent applications. For instance, China was the top national stage entry country in 2009 among our clients, surpassing Europe for the first time in our history.

 

Why File in China?

This is a common question we field from our clients. After all, applicants have historically associated China (and by extention perhaps other BRIC countries) with lax IP law enforcement, and many wonder whether patent protection there is worth the expense of its pursuit.

To aid in changing this global perception, China passed the Third Amendment to Chinese Patent law, effective October 1, 2009. The Third Amendment significantly strengthens protection of patent rights, including increasing infringement penalties, granting officials the authority to conduct investigations and patent infringement raids, and establishing an evidence preservation system. These new laws, along with the recognition of China as a commercial and industrial behemoth, help explain the surge of applicants seeking patent protection in China, even during these troubling economic times.

 

Increased Patent Applications Originating from China

Increased awareness of the need for IP protection and an environment fostering innovation will also designate China as a leading source of patent applications. In 2008, the top PCT patent filer worldwide was Huawei Technologies, a Chinese telecommunications company, with 1,737 applications. The next year, they were surpassed by another Chinese telecommunications manufacturer, ZTE Corporation, which filed 1,164 applications. Coincidentally, the one millionth PCT application was one filed by a Chinese corporation.  Needless to say, we expect China's PCT momentum will only continue for the coming years.

PCT Filings in 2009

Overall Decrease in PCT Filings

The World Intellectual Property Organization (WIPO) recently announced its statistics for PCT filings in 2009, and it's clear that international patent filings have not been immune to the global economic downturn.

Overall, the number of PCT filings dropped by 4.5% (155,900 PCTs filed in 2009 vs. 164,000+ in 2008). Additionally, sharper-than-average declines were seen in the number of filings originating from industrialized countries.

Country of Origin	% Change
United States	-11.4
Germany	-11.2
Israel	-17.2
Sweden	-11.3
Canada	-11.7
Australia	-7.5
Italy	-5.8

A Silver Lining in Eastern Asia
Despite the current economic climate, several East Asian countries were able to buck the trend and increase their number of filed PCT applications.

• Most striking is the 29.7% increase seen in PCT applications originating from China, which has now surpassed France as the 5th largest PCT filer.

• Smaller increases in PCT filings were observed in Japan and South Korea (3.6% increase and 2.1% increase, respectively), though in today's economy, any growth at all is a refreshing departure from the norm.

• Additionally, 6 of the top 10 PCT applicants are corporations based in one of these three countries.

Forecast for the Future
Insofar as patent filings are linked to the global economic state, it appears that at the very least, companies and individuals have been, and will continue be, examining their inventions with greater scrutiny in terms of marketability and profitability. The present economic climate has challenged applicants to reconsider the notion that filing foreign patents through traditional channels is the only option.

Top national stage countries for 2009, by industry

In this earlier blog post, we ranked our top countries for 2009.  We've also broken down the top countries by the Industry type of our client base.  The rankings come out as follows:

Mechanical / Engineering:

1. Brazil

2. Europe

3. China

4. Australia, USA

 

Electrical / Electronics:

1. China, Japan

2. Korea

3. India

4. Australia

 

Pharma / Biotech:

1. Europe, Japan

2. Australia

3. Canada

4. India

 

Chemicals / Materials:

1. China, Europe

2. Canada

3. Australia

4. Brazil

 

IT / Software / Media:

1. China

2. Europe

3. India

4. USA

5. Japan, Korea

 

Business / Finance:

1. China

2. USA

3. Europe

4. Australia, India

 

 

PCT National Phase Entry Deadlines

What's the national phase entry deadline?

It seems a simple enough question, but we hear it often enough that we thought we'd address it.

The deadline by which you need to enter the national phase is either 30 or 31 months from the earliest filing or priority date associated with the PCT application.  The choice of 30 or 31 month period is set by individual countries, and significant numbers of major countries use each period.  For example, the US and Canada are 30 month countries, whereas Europe and Korea are 31 countries.

The 30/31 month periods are measured from:

• the filing date of the earliest patent application to which the PCT application claims priority under the Paris Convention; or

• the International filing date of the PCT, if no Paris Convention priority was claimed.

Unfortunately, this deadline is relatively firm in nearly all countries.  If it is missed, the PCT application usually cannot enter the national stage.  However, there are a number of countries that offer some relief in this respect.

CANADA

Canada offers a generous one year late-filing period.  To use this, it is simply a matter of paying a small additional government fee at the time of filing, any time in the 12 month period following the 30 month deadline.

CHINA

In China, the 30 month deadline can be extended by two months upon payment of a surcharge.  It's important to note that, although the deadline is delayed by two months, it is necessary to file the translation with the rest of the national phase documents.  Care should therefore be taken provide instructions early enough that the translation can be prepared in time.  For a typical 30 to 40 page specification, a month's notice is fairly comfortable

EUROPE

The European patent office allows revival of applications that have failed to enter the European regional phase by the 31 month deadline.  However, this is not a cheap option, as the European patent office adds a surcharge to the official fees of more than 50%.  Given how expensive the European official fees already are, this can make late filing into Europe an expensive proposition.  However, the importance of Europe as a filing destination could make the additional expense worthwhile.

OTHER COUNTRIES

Elsewhere, it might be possible to revive applications that have missed the national stage deadline due to an omission or error in spite of all due care being taken by the applicant and its representatives.  However, given the onerous standards applied by many countries, and the often subjective nature of the decision, this is not an option to be relied upon.

Indeed, some countries offer no revival right at all.  Japan, for example, simply does not have any mechanism by which an application that has missed the national phase deadline can be revived under any circumstances. 

LATE-FILING OF TRANSLATIONS

Assuming an English language PCT application, the majority of translation countries offer a period of one or two months (after either the national phase entry deadline, or national phase entry itself) within which the translation can be filed.  We use these extensions ourselves quite frequently if we can't get instructions early enough to comfortably complete the translation by the deadline.  There's an additional cost (usually $100-200) in most countries for taking this option. 

Please contact us if you'd like more information about national phase deadlines.

PCT Applications - Top national stage countries for 2009

It's that time of year again; where did the year go?

inovia handles the 3rd largest volume of PCT applications at the national stage, according to an MIP Ranking in October '09.  The countries our clients filed into for 2009 broke down by the following ranking:

1. China - 11%

2. Europe - 10%

3. Canada and Japan - 9%

5. Australia and India - 8%

7. Brazil - 6%

8. Korea - 5%

9. Mexico, South Africa, Russia and USA - 4%

The <4% countries included Singapore, New Zealand, Israel and Malaysia.

Look for a future post with a break-down by Industry type against country selection(s).

The PCT: A "forgettable" convention??

One of my PCT alerts today included a CBS News blog on green issues... Curious about why a green-issues blog would refer to the Patent Cooperation Treaty (PCT), I had a look.

I was amused to find the blogger placing the Patent Cooperation Treaty in the same category as the Convention on Psychotropic Substances - a category he refers to as "forgettable" treaties "that achieve some progress but essentially serve to remind signatory nations that they passed the same national laws".

An interesting interpretation, to say the least!

The number of applications filed via the PCT has increased every year since PCT applications were first accepted in 1978. Over 1.6 million applications have been filed since then (to 2008) and over 160,000 applications were filed last year, according to WIPO.

Excluding the recent international financial turmoil that has affected filing of all sorts of patents (local, direct foreign and PCT), the annual growth rate of filings via the PCT has averaged something like 5% per annum for the last decade.

In the absence of the PCT, what would have happened to all these applications? Some would have been filed only in the home country of the applicant. Some would have added perhaps one or two foreign countries. Some would have been filed in a larger number of foreign countries, with the applicant betting a very substantial amount of money that no prior art would surface after all the foreign filings fees, translation charges and foreign attorney fees had been spent. In all these cases, the decision on how many countries to file in must be made an average of 18 months earlier than via a PCT application.

You see, without the PCT and its 30/31 month national phase deadline, there is simply no practical way for applicants to delay (beyond the 12 month Paris Convention period) the substantial costs of foreign applications. They'd either have to limit themselves to a smaller number of applications or commit a huge amount of money very early in the commercial life of the invention to cover a large number of countries at relatively great risk.

As for the PCT "essentially [serving] to remind signatory nations that they passed the same national laws"... well, let's just say that is not my understanding of the intent or practical impact of the PCT.

And in any event, I suspect many of the countries presently protesting that WIPO is attempting to use the PCT to standardise national laws would vigorously dispute such a conclusion.

Now I'll admit intellectual property isn't that interesting a subject for most people. For some it holds an interest mainly because they disagree with some aspects of it to one extent or another. The PCT mightn't even be as interesting as the psychotropic drugs the CBS's green blogger lumped it in with. But to suggest the PCT is "forgettable" ignores what the PCT has achieved for inventors and technology businesses of all sizes over the last thirty years.