R. Joseph Trojan
Olga Kay
Trojan Law Offices

Consider this scenario: Two inventors walk into a bar. One is Tom Edison; the other, Gil Marconi. Tom invented an ingenious bandage that he wants to sell all over the world. Gil invented a robotic surgery tool that likely would be used only in industrialized countries. Both have just filed US patent applications. Of course, Tom and Gil know that a US patent is good only within the US territory. Therefore, they entice Rex, a patent attorney, to join them for a drink and discuss international patent protection.

First, Rex confirms that a US patent offers little protection in the globalized economy. In other words, a copycat can set up shop and manufacture the patented product just on the other side of the US border. Although the company may not legally import such a patented device into the United States, policing becomes difficult after the product has been made.

Tom recalls Elliott Ness stopping Al Capone’s trucks with bootleg Canadian whiskey. He doubts that his patent rights to a bandage would be enforced as vigorously as the Prohibition. Gil also knows that a US patent is entirely toothless against any sales or use of the product in foreign countries. He envisions “medical tourism” to countries where his surgery tool would not be covered by the US patent.

Fortunately, Rex explains, the Patent Cooperation Treaty (PCT) allows an inventor to file a single application that may result in a patent in every country that joined the treaty. Although this is a costly undertaking, the PCT process is much less expensive and more efficient than sending an application to each country separately. In addition, the PCT process takes place in several stages, spread over several years—which spreads the cost over time. The inventor may use the time to secure capital investment or even bail out with only a small loss if the invention turns out to be unmarketable.

First Stage: PCT Chapter I Filing

This step must be taken, at the latest, by the one-year anniversary of the US application. As residents of the United States, Tom and Gil must file their PCT applications to the PCT Receiving Office at the US Patent and Trademark Office (USPTO). At this stage, one can “designate” all 121 countries covered by the treaty at no extra cost. Later, Tom and Gil can sit down and decide which countries are worthwhile targets for getting a patent. The total cost for this step is about $4,000.

After the PCT application is filed, Tom and Gil will receive International Search Reports containing any prior art found in the worldwide search as well as an opinion on whether their inventions are patentable. If the opinion appears favorable, the applicant must request International Preliminary Examination. As with the examination at the USPTO, this process may involve amending the application in order to get around the prior art.

Second Stage: PCT Chapter II Filing

This stage starts two-and-a-half years or 30 months from the filing of the US application. At this point, Tom and Gil will have to choose individual countries where they want patent protection and send the application to the local patent offices. Each country will conduct its own examination and decide whether the invention is patentable under local laws.

Although each country uses its own patent law, PCT greatly simplifies examination. First, an application that came down the “PCT pipeline” will never be rejected for informalities. Second, the local offices will rely on the same International Preliminary Examination Report to judge whether the invention is patentable. For a patent attorney, this usually means using the same arguments and amendments with each office. For the applicant, this translates into savings. In addition, very often by the time the national offices start examination (three to five years from the US filing), the US patent already has been issued. If the applicant makes the same corrections as requested by the USPTO, the local offices agree to issue the patent. Selecting all the industrialized countries of the world can cost $65,000. This is just for the filing of an application—it does not include costs to respond to challenges from individual patent examiners in each country, fees for requesting examination, annuity fees to maintain the application in force or issue fees.

Of course, each country has its own flavor. Many countries prohibit certain types of claims permitted in the United States. In Mexico, for example, you cannot patent a “method of treatment of humans.” For Gil, this would mean that he could patent his surgical tool but not the method of using it. Other countries, such as India, have stricter rules regarding whether slight improvements of existing inventions are patentable. However, if their US patents were allowed to issue, patents likely would issue in every country requested by Tom and Gil.

Logistics of the PCT Process

Tom and Gil feel overwhelmed by the complexity of the process and start to worry about this undertaking and the costs. They are familiar with Rex and would trust him with the USPTO representation, but does he really know how to argue patentability in China? In Mandarin? Rex explained that he would file the Chapter I application with the USPTO and deal with the International Preliminary Examination. For Chapter II, it is true that each national office conducts prosecution in its own language. To that end, Rex has established connections with law firms all over the world. The local counsel receives office actions and translates them for Rex. He drafts responses, which the local counsel translates back and corrects to comply with the local laws. Rex pays every local counsel from his account and sends Tom and Gil a single bill.

As to the costs, the Chapter I PCT filing (one year from the US filing) will cost Tom and Gil about the same as writing and filing their US applications. The Chapter II PCT filing—the national stage (two-and-a-half years from the US filing)—would be much more costly. Each country would charge its own filing fee and translation fee. Then each country would have its own costs of patent prosecution and issue fees. Finally, each country would charge its own annuities (patent maintenance fees). By this time, Tom and Gil hopefully would have fully appreciated the commercial potential of their inventions. They may have raised capital to pay for the patents. If there is no commercial interest, the applications simply may be abandoned at this stage.  

Tom is thinking about getting patents in as many countries as possible. He envisions his bandage selling everywhere in the world. Every sale would generate royalty income for Tom and be free of competition. He also would be protected from copycat manufacturers almost everywhere. Gil has a different plan. He would get patents where his surgical tool is likely to be used—in industrialized countries such as those in the European Union as well as in Israel, Australia, New Zealand, Canada and perhaps Brazil. He also may get patents in the countries where the tool may be manufactured, such as China and maybe India.

Now Tom and Gil are confident that international patent protection not only is feasible, but also is a necessary investment. They are looking forward to seeing more of Rex during the next four to five years.

R. Joseph Trojan is a registered patent attorney and intellectual property trial lawyer with 18 years of experience. He supervises a staff of five intellectual property attorneys in Beverly Hills, CA. He can be contacted at [email protected]. Dr. Olga Kay is a registered patent attorney and an associate at the Trojan Law Offices, specializing in patent prosecution and litigation with a focus on biomedical inventions. She can be contacted at [email protected].