I said in Part I that the foreign patent decision is often a tough one for small business. The issue is cost, as well as the basic question of whether you really need foreign patent protection.
Remember - a patent is used to exclude competition, not to grant you permission to make and sell. If you have a U.S. patent then you (in theory) are protected from anyone, including foreign competitors, from selling your invention in the U.S. market. So you, (again in theory) have protection in the biggest market in the world economy.. And you have that protection at a fairly reasonable cost. thus the smart decision for many businesses is to get a U.S. patent and forget foreign filings.
But there are businesses, and some of my clients are included, in which some foreign markets represent a significant part of the total opportunity. And if the invention is easy to reverse engineer and produce, they recognize that they may lose that opportunity if they do not get foreign protection.
These are the small businesses that have the more difficult decision, because of the cost. The cost question is complex so I will oversimplify it. Roughly it will cost you $5000 per country to file. Not that expensive per country but you need to be very selective about picking your countries. My guideline is that if you can capture 80% of the market opportunity with X countries (plus your U.S. patent) then you should keep your filing to those X countries. Beyond that you are rapidly getting into diminishing returns.
For some opportunities you might achieve the 80% with the U.S., Germany and Japan. For others it may not be that clear. The other cost factor to consider is that in addition to these filing fees you will be faced with annual maintenance fees in each country to keep the patent in force.
In summary I urge all of my clients to work with me and think through whether they really need foreign protection. It is an invention by invention decision. Roughly half of my clients get U.S. protection only. They frankly do not envision trying to sell their idea overseas.
That's all for now. But I think we will need at least a Part III.
Tuesday, March 11, 2008
Monday, March 10, 2008
Foreign Patents - Part I
A frequent question of first time inventors - "How do I get a foreign patent?"
The answer is not simple. But let me try to make it somewhat simple.
When you file a U.S. patent, a clock starts ticking. In 12 months you have to do something in order to file foreign. You should in fact make your decision by about month 10 so you have time to do it right.
Let's first talk about why you have 12 months. In 1883 an intellectual property treaty called the Paris Convention was ratified by many of the world's industrialized nations. The Paris Convention allows an inventor in any member country to file a patent in their home country and then be able to file foreign patents in other member countries 12 months later. The foreign filings will be assigned a priority date corresponding to the date of their home filing. This means that any information that becomes public after that priority date can not be used against those foreign filings. Or in patent parlance that public information cannot be part of the prior art for that patent.
The Paris Convention was a big step forward for inventors. Most inventors are reluctant to go to the big expense of filing both home country and foreign patents early in the patenting process. They don't yet even know if that have a valid patentable idea. Furthermore they don't know if there is a market for their idea. It is like playing poker and having to make all your bets before seeing all of your cards. And filing foreign patents is an expensive proposition. More on that later. The Paris Convention gave inventors a chance to see a few more cards before placing their big bet.
But only a few more cards. As the time needed to get a validity opinion from your friendly national patent office grew year by year, and the time required to commericalize ideas increased the 12 month reprieve was not that big of a benefit in most cases.
Enter the Patent Cooperation Treaty (the PCT). In 1977 the PCT was signed by many countries. The PCT process basically allows you to put a fairly modest (~ $2000) ante into the poker game to buy time to see more cards before your big bet. Twelve months after filing your home country patent you can now elect to not file foreign patents but instead to file a PCT application to the World Intellectual Property Organization (WIPO). After filing a PCT application (which never becomes a patent - it is only a placeholder) the inventor now can delay the foreign filing decisions an additional 18 months.
Thus foreign patent filings can occur 30 months after the original home country filing. But all of the foreign filings will have the priority date of the original filing. Again the inventor is protected as to prior art dates, and the protection is all the way back to the filing date in the home country.
That's enough for today. In part II we will talk about why the foreign filing decision is a tough one for small companies.
The answer is not simple. But let me try to make it somewhat simple.
When you file a U.S. patent, a clock starts ticking. In 12 months you have to do something in order to file foreign. You should in fact make your decision by about month 10 so you have time to do it right.
Let's first talk about why you have 12 months. In 1883 an intellectual property treaty called the Paris Convention was ratified by many of the world's industrialized nations. The Paris Convention allows an inventor in any member country to file a patent in their home country and then be able to file foreign patents in other member countries 12 months later. The foreign filings will be assigned a priority date corresponding to the date of their home filing. This means that any information that becomes public after that priority date can not be used against those foreign filings. Or in patent parlance that public information cannot be part of the prior art for that patent.
The Paris Convention was a big step forward for inventors. Most inventors are reluctant to go to the big expense of filing both home country and foreign patents early in the patenting process. They don't yet even know if that have a valid patentable idea. Furthermore they don't know if there is a market for their idea. It is like playing poker and having to make all your bets before seeing all of your cards. And filing foreign patents is an expensive proposition. More on that later. The Paris Convention gave inventors a chance to see a few more cards before placing their big bet.
But only a few more cards. As the time needed to get a validity opinion from your friendly national patent office grew year by year, and the time required to commericalize ideas increased the 12 month reprieve was not that big of a benefit in most cases.
Enter the Patent Cooperation Treaty (the PCT). In 1977 the PCT was signed by many countries. The PCT process basically allows you to put a fairly modest (~ $2000) ante into the poker game to buy time to see more cards before your big bet. Twelve months after filing your home country patent you can now elect to not file foreign patents but instead to file a PCT application to the World Intellectual Property Organization (WIPO). After filing a PCT application (which never becomes a patent - it is only a placeholder) the inventor now can delay the foreign filing decisions an additional 18 months.
Thus foreign patent filings can occur 30 months after the original home country filing. But all of the foreign filings will have the priority date of the original filing. Again the inventor is protected as to prior art dates, and the protection is all the way back to the filing date in the home country.
That's enough for today. In part II we will talk about why the foreign filing decision is a tough one for small companies.
Subscribe to:
Posts (Atom)
