Patents grant the exclusive right to make, use, and sell an invention. But such rights are limited to the jurisdictions that grant them. For example, United States patent rights do not extend beyond its borders. In order to obtain patent protection outside of the United States, patent applications must be filed outside of the US. Filing in the US and in foreign jurisdictions can be very expensive. Accordingly, inventors must decide on a the best investment strategy for protecting their invention, marketing and developing their product lines, and maintaining or increasing the valuation of their company short- or long-term.
State of the Art Search
A state-of-the-art search may consist of a survey of relevant documents published in a given technical field or fields, or of patents (or patent applications) filed by particular applicants. These searches may also include searches in non-patent literature, such as scientific articles, theses and dissertations, the press, and in product-related literature such as instruction manuals and promotional literature. The search may reveal many documents, may be analyzed in detail depending on the objectives of a particular search. A state-of-the-art search is typically intended to establish a general sense of the knowledge and information that is available to the public in a specific area of technology. When the results of state-of-the-art search are analyzed and organized, the client may obtain an understanding of the landscape of the field at issue in terms of patent coverage and other technical documentation. BHW attorneys have extensive experience in all aspects of this entire process.
Filing a patent application in the United States is usually a first consideration for a US inventor, and has certain obvious advantages. For example, the United States has one of the most robust patent systems in the world, and offers patent protection across a broad range of subject matter (e.g., apparatuses, methods, processes, and others). Also, the court system in the United States has a reputation for strong enforcement of patents. Moreover, the United States is one of the largest and most active markets in the world, with access to millions of consumers with high average disposable incomes.
Weighing against obtaining a US patent is the significant cost and time that is involved. For example, simply preparing and filing a patent application in the United States Patent and Trademark Office can cost $10,000 to $15,000. Prosecuting the patent to allowance before the USPTO can require another $15,000 to $20,000. The entire process to obtain a US patent can take two to four years. Accordingly, an inventor must consider expected return on a patent that may cost $35,000 and take years to obtain.
In many situations, however, investments in patents is critical to the success of a company – especially one that is in a competitive market or where other players in the market are investing significantly in patents. Investments in patents can also be important when considering potential exit strategies for a company and the value of its intellectual property assets. Such an effort serves to add value to a company and further serves to protect the company in a competitive market. Patents can heavily influence the valuation of a company.
Oftentimes, the decision to obtain a US patent is a more simple and straightforward decision, especially in view of the strong leverage obtainable from a right to exclude sales in the US market. The more difficult decision may be whether and where to seek patent rights outside of the United States. Obtaining US patent rights can be expensive, but obtaining patent rights in several foreign jurisdictions can be even more expensive. For example, in addition to foreign patent office fees, there are fees charged by foreign counsel, and sometimes also translation fees. Also, while the US offers discounts for small companies, most foreign patent offices do not. Moreover, many foreign patent offices charge annuities ranging up to $300 for maintaining the pendency of a patent application.
Fortunately, there is a more convenient and cost-effective process for filing international patent applications provided by the Patent Cooperation Treaty (PCT). By filing a single international patent application at an additional cost of approximately $4,000, an inventor can reserve rights to subsequently prosecute patents in over 100 countries including the most popular countries for patent rights such as those in Europe and Asia. Moreover, by filing the international patent application, an inventor can have up to 30 months to decide wither to move forward in any particular country. This can be a significant advantage when seeking to decide whether to go forward with further investments in intellectual property.
It is important to note, however, that filing an international patent application through the PCT will not directly lead to a patent within its member countries. Filing of an international patent application essentially allows an inventor to subsequently seek patent rights in a member country at a later date. For example, where after the initial 30-month period, a company decides to go forward with a German patent, the international patent application would enter the National Stage in Germany. The National Stage patent application would then be substantively reviewed in Germany and, if successful, would lead to a German patent. That could similarly be done with any of the member countries.
A 30-month waiting period can provide a significant advantage when deciding whether to seek international patent rights. Upon initial innovation, it can be very difficult to forecast the success of a product. Moreover, a company may want to first invest in the innovative product to assure its success in the market. After 30 months, a company can have a much better idea about the value of an invention and whether it is sensible to move forward with international patent rights at a significant cost.
As noted earlier, costs can add up very quickly when prosecuting a patent application in several national stages. The choice of countries for national entry should, therefore, be done carefully. Considerations for national stage prosecution can include where products will be made and where products will be sold. Large manufacturing centers, especially for electronics and consumer products, exist in Asian countries such as China, Japan, Korea, and Singapore. Also, large consumer markets exist in Asia and Europe, for example in Germany and the United Kingdom.
The professionals at BHW law can assist you in making the right decisions whether and where to international patent rights. We have decades of experience providing guidance to large and small companies and can provide a customized approach that meets your individual needs.