Strategic Concerns When Pursuing Foreign Patents In The Computer Arts
By: Michael J. Mehrman
Copyright 1995 - 1999 Jones & Askew, LLP All Rights Reserved
The Basic Facts
A United States patent provides protection for an invention only within the geographic boundaries of the United States and its territories. Although computer-based inventions are patentable in virtually every foreign country that has a patent system, the owner of the invention must obtain a national patent in each country individually.
Obtaining a patent in a foreign country requires that the owner of the invention file a patent application in the country of interest. This patent application must have a proper "priority date." The priority date of a patent application is the filing date of the first patent application (the priority document) that discloses the invention, and to which priority is properly claimed in the country of interest. Generally, the priority document must include a written description of the invention in enough detail to allow one skilled in the relevant art to make and use the invention.
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The most important treaty governing patent procedures is the Paris Convention, which allows the owner of a U.S. patent application to file foreign patent applications in Paris Convention member countries within one year following the U.S. filing date, which serves as the priority date for the foreign patent applications. At present, 143 foreign countries are members of the Paris Convention. But at last count another 59 countries are not members of the Paris Convention. With the exceptions of India and Taiwan, U.S. applicants cannot claim priority to their U.S. filing dates when filing patent applications in these Non-Paris Convention countries
Some 94 Paris Convention countries are also members of the Patent Cooperation Treaty (PCT), which provides for an international search and examination process. The PCT examination process typically costs several thousand dollars, but is well worth the cost in most cases. An important advantage of PCT examination is that it delays the date on which national patent applications must be filed in PCT member countries until up to 30 months from the priority date. This delay gives the owner of a U.S. patent application an opportunity to delay the considerable expense of filing foreign national patent applications until after the PCT examination process concludes with a Preliminary International Examination Report concerning patentability of the invention. If the Examination Report is negative, the applicant is usually well advised to give up on the notion of obtaining foreign patent protection for the invention.
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Patent Cooperation Treaty (PCT)
The PCT provides a centralized filing and examining, but not patent-granting, procedure that often serves as an advantageous route for obtaining foreign patents in the 94 PCT member countries. The PCT includes all of the major economies of the world except India and Taiwan. Under the PCT, an applicant can designate specific countries or regional conventions by filing an international patent application in the appropriate receiving office. The U.S. Patent and Trademark Office (USPTO) serves as the PCT receiving office for U.S. nationals and residents.
Upon filing, the applicant selects an International Searching Authority to conduct an international patentability search. After the search and at the applicant's election, the applicant may select a Preliminary Examining Authority to conduct a non-binding examination to determine whether the invention is patentable. U.S. nationals and residents may select the USPTO or the European Patent Office (EPO) as the International Searching Authority. Both the USPTO and the EPO allow the proceedings to be conducted in English and also allow the applicant to be represented by a U.S. patent practitioner during the PCT examination process. If the applicant selects the EPO as the International Searching Authority, the applicant may also select the EPO as the Preliminary Examining Authority.
The PCT examination process typically costs several thousand dollars, whereas obtaining national patents in foreign countries typically costs several thousand dollars, and up to several tens of thousand dollars, per country. Many applicants therefore prefer a strategy that delays the filing of foreign national applications until the latest possible date. This strategy gives the applicant the longest possible time to evaluate the commercial prospects of the invention before committing very substantial funds to the foreign national application process. The PCT is the vehicle that allows the applicant to delay the filing of foreign national applications until the latest possible date.
As noted above, the Paris Convention allows the filing of foreign national applications to be delayed until one year from the U.S. filing date. Under the PCT, the filing of national phase applications can be further delayed until 20 or 30 months from the U.S. filing date, at the applicant's election. The decision to enter the national phase cannot ordinarily be extended beyond 30 months from the priority date.
At the time the PCT application is filed, the applicant typically selects the International Searching Authority and also designates countries for the future national phase application process. The designation fee is presently $105 per designation, and the regional conventions only count as a single designation. The designation fees are capped at the cost of 11 designations, which allows an applicant to designate all of the PCT member countries by paying the maximum designation fee of $1,150.
The designations at the time of filing are not binding, but rather preserve the applicant's right to file national phase applications in the designated countries and regional conventions. For this reason, many applicants prefer to maximize their options by designating all of the PCT member countries. The big-dollar decision of entering the national phase can then be delayed until the end of the PCT examination process. This is a particularly good strategy for an applicant who hopes to sell or license the patent rights to a large multi-national corporation, which will hopefully place a higher value on the transaction if all of the PCT patent rights are intact.
A better strategy for many U.S. applicants is to designate only those countries in which the applicant is likely to exploit the invention. A further consideration is designating only those countries in which the legal system is sufficiently sound to be an effective vehicle for enforcing patent rights. The decision to pursue a patent should be evaluated in a cost-benefit analysis, and many applicants can eliminate many countries from consideration at the designation stage of the PCT process.
Even for many multi-national companies, only three or four designations can often cover the countries in which patent protection will likely be cost effective. For example, the following designation strategies are often employed: EPC, Canada, Mexico, and Japan; EPC, Canada, and Mexico; and EPC and Canada. Designations that include Australia, Israel, South Africa, and Brazil are also fairly common.
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European Patent Convention (EPC)
The most important regional convention for many U.S. companies is the European Patent Convention, which provides unified patent examination and issuance for its 18 member countries. The EPC, which is administered by the EPO, is a centralized filing, examining, and patent-granting procedure for its member Western European countries, including all 15 members of the European Union, formerly known as the European Community. Filing in the EPO results, if successful, in a bundle of identical national patents that are enforceable in each designated country of the EPC. This bundle of patents is less expensive to obtain than individual national patents if the applicant designates three or more countries in the EPO application.
Significant savings are realized in translation costs alone through the end of the examination procedure. These costs are, for the most part, deferred until the patent examiner has approved the English version of the patent application. After approval, the application is published, and competitors have an opportunity to oppose grant of the patent, resulting in an administrative proceeding in which both opposer and applicant participate. Rejections by the examiner can be appealed.
After approval by the EPO, the allowed application may be registered in each member country designated at the time of filing the EPO application. Most member countries require complete translation of the allowed EPO patent application. At most, three languages are required, English, French, and German. Costs after allowance can be substantial, but those costs have been deferred until the applicant knows that the patent application will be allowed.
From a claim format standpoint, European countries differ from the U.S. in that European countries do not allow so-called "Beauregard" claims, which are directed to a computer storage medium storing an inventive computer program. Although European countries will allow claims directed to a patentable method or system in which the novelty resides in a computer program, the EPO will not allow claims that read on a storage medium, such as a diskette or hard drive, containing the inventive program. Because filing fees are based in part on the number of pages and the number of claims included in the application, U.S. applicants can often reduce their EPO filing fees by dropping the "Beauregard" claims from the application prior to filing. This is particularly true for software patent applications that include parallel sets of "Beauregard" and method claims. The same holds true in most other foreign countries, which as a general rule, do not allow "Beauregard" claims.
European countries also differ from the U.S. in that European countries require independent claims to be phrased in a traditional two-part format. Claims in the European two-part format have a preamble, typically set forth as a single clause, that includes the elements that the invention has in common with the single closest prior art reference. The preamble ends with a delimiter, such as "Characterised by," followed by a listing of elements, typically set forth as separate clauses, that are not found in the single closest prior art reference.
European claiming conventions also prefer that each patent be limited
to one independent claim in each statutory class; namely, method, apparatus,
article of manufacture, and composition of matter. The Europeans also prefer
the use of multi-dependent claims to reduce the number of claims. Accordingly,
European patent applications typically include significantly fewer claims
that their U.S. counterparts. And so, U.S. applicants can often reduce
their EPO filing fees by placing their claims in the European format prior
to filing. Again, this is particularly true for software patent applications
that, under the U.S. claiming conventions, often include several independent