International or foreign patent filing strategies

By Donal O’Connell

The territorial nature of patents:

The “territorial” nature of patents refers to the fact that countries enact their own patents laws, typically by statute, and these patent laws have no application or force outside the country in which they are enacted. For example, a U.S. patent grants enforceable exclusionary rights in the U.S. but not outside the U.S. and its territories. Similarly, an Indian patent grants enforceable rights only in India. The exact statutory definition does differ between different countries, but the principles are generally the same.

Many issues to consider:

This paper gathers together some thoughts on the subject of international or foreign filing strategies, basically asking in which jurisdictions should you try to obtain patent protection, and on what basis should you make such decisions. It pulls together comments from some colleagues those working in Corporate IP Departments, in Academia, in intellectual property private practice, in some IP service providers as well as my own experiences and learnings in this space.

As far as international or foreign filing strategies are concerned, there are indeed a lot of things to consider such as what are the key markets of interest to your business; what are the key markets of interest to your competitors, your suppliers, and your customers; what jurisdictions have mature and sophisticated patent regimes; and where are the key strategic manufacturing locations for your core technologies. What filing route to select and how to balance time and cost issues are also factors to be taken into consideration.

Key considerations:

I suggest that there are a few key considerations in this process before actually diving in and deciding in which jurisdictions to file.

• What is your overarching patent strategy?
• Where can you get reasonably infringement?
• What is your available budget?
• What resources do you have at your disposal?
• What time pressure exists?
• How should you draft your patent applications so as to guarantee success across all of the jurisdictions of interest?

Firstly, what is your overarching patent strategy? How are you going to use the patents? Are you going to a) stop others from copying, b) hurt your competitors to get competitive advantage and tip the balance, c) obtain revenue from licensing or selling, d) use the patents and applications in acquiring funding, e) something else?

Secondly, where can you reasonably get infringement, or at least, where can you make it look like you can get infringement? Where do your “targets” operate in such a manner that they infringe? Can you get sufficient protection for your invention in these countries as some countries do limit this? Can you reasonably enforce your patent in the countries you choose? Is your invention relevant for the particular country of interest?

Thirdly, what is your available budget? Is it unlimited, large, or focused? Do you want to spend money on translations or do you want to spend the money on actually obtaining patent protection? Are you prepared to fight for a patent in difficult jurisdictions, or would you rather just get it registered?

Fourthly, what about resourcing? Do you have the IP professionals in-house with the skills and competencies to handle all of these international or foreign filings, or do you have an IP Agent network available in the jurisdictions of interest? Are you prepared to manage a large external IP Agent network yourself or perhaps utilise a Managing Agent?

Fifthly, what time pressure exists? When do you need these patents? If you need to have the patents in say 4 years from starting the process, your choice of countries needs to reflect this as well as the route you select to get there. If time is of no importance, do you still want to “synchronise”, if possible, the process across different countries, and do you therefore need to drop some slow countries? Not doing this right may lead to a) not having the patents when you need them or b) losing a whole family of patents because of prior art from a single country.

Lastly, what kind of filing routes are available? What kind of claims need to be written, and how should the application be drafted as a whole in order to guarantee success across a number of different jurisdictions.

Rule of thumb approach:

Most times, companies or organisations make choices regarding international or foreign filing which are not really that strategic in nature, because they do not have detailed overview and understanding of the global market.

A colleague of mine working in the IP profession produced the following simple categories to help his clients with their decision making …

• Must-have: USA & European Patent Office
• Very large economies: China, Japan & India
• Large economies: Russia (possibly Eurasian Patent Office), Brazil, South Korea & Mexico
• English-speaking : Canada, Australia & South Africa
• Far-eastern economies: Indonesia and Thailand

In his opinion, any international or foreign filing program that goes beyond these jurisdictions listed tends to be pretty advanced. His simple categories may be seen as a  ‘rule of thumb’ approach to international or foreign filing, but in his experience that is often how these decisions are made.

National, regional or global route:

Some years ago, there was only one way to do international or foreign filing, and that was to go directly to the country of interest and file an application there within one year of your national filing date. Now, there are more options available. Firstly, there is the European Patent Office, which permits you to file a single application which can result in individual patents in several European countries. Also, it is possible to file an application under the Patent Cooperation Treaty (PCT), listing most countries of the world and to wait until search results are received from the international searching authority before having to spend large sums of money filing in the European Patent Office or in many individual countries.

If you only wish to file in a few jurisdictions, then it is suggested that you file directly in those countries before the twelve month deadline. If you want to file in several countries in Europe, then filing in the European Patent Office is the most efficient and effective route to take. If you want to file in a large number of jurisdictions, or if you want to reserve the option to obtain foreign rights while you wait to see how the invention does in the market and what prior art search results you get, then the Patent Cooperation Treaty (PCT) is the best approach to take.

Typical international or foreign filing routes selected:

Many traditionally take the route of filing a national application in their own country, with occasionally a parallel US application, followed by entry into the PCT phase.

Others have moved away from this approach as when they came off PCT, they found that they seldom filed outside a small number of countries (for example the USPTO and EPO) due to budget constraints. In addition the option of an EPO search report at 6 months has proved increasingly valuable due to the high quality of the search report. These companies have therefore shifted their strategy to filing an EPO application, with occasionally a parallel US application, and rely on the 6 month  search report to give evidence of novelty and inventive step.

A further concern is many companies with their international or foreign filing is their route to market. They route to market may be primarily via licensing. They are in a stronger position if we are able to license a granted patent over a patent application, and the EPO route is faster than the PCT route.

Presently some companies operate in this mode are reviewing the UK patent system where a granted patent can be issued before the application is even published.

There are of course issues around the specific technology in question. Biotech patents for example take longer to develop and the patent strategy is typically adapted to suit. Specific jurisdictions of course are key to some companies and organisations with many filing in China and Taiwan if the patent applications relates to technologies with high volume applications, primarily because the main manufacturing sites are likely to be in those countries, but also because in themselves they are emerging as significant markets. Certainly, China is of crucial importance to many industries and needs to be seriously considered when deciding on your international or foreign filing strategy. Applications filed in China have grown substantially in recent years actually preventing worldwide applications from having negative growth year on year, and this is without even considering utility model applications.

Impact of developments in enforcement IP strategies:

Recent development in enforcement IP strategies may impact your international or foreign filing strategies. Samsung & Apple are fighting in US, Europe and Australia at the present time. There is new activity about the creation of a single court to handle European patent issue. Two Chinese companies, Huawei and ZTE are fighting in Europe at present. The cost of litigating in US remains very high. There have been no major court wins for patentees in the USA recently. Other changes are perhaps giving an indication that the US is not anymore the one and only place to enforce patents, although this may be a dangerous assumption to make.

Pharma versus ICT approaches to international or foreign filing:

It is always an interesting exercise to compare and contrast ‘pharma’ versus ‘ICT’ when it comes to how they play the IP game, and it is no different when one delves down into the details and considers international or foreign filing profiles.

In the pharma industry, it is not uncommon to have 50 to 100  countries in a patent  family. This is driven by their desire to prevent generics being made in the county, as much as the local market size, and to prevent having generics shipped into legitimate markets to be sold by licensees. In the ICT industry, it is not uncommon to see much more focused international or foreign filing profiles, say 5 to 10 countries in a patent family.

The impact of the rating of the case:

Best practice shows that the concept of rating or scoring can be applied in the world of intellectual property, and specifically to inventions, patent applications and granted patents. Intellectual property rights are valuable assets for any business, possibly among the most important that it possesses.  It is therefore imperative that the relative importance of each and every case is known. This should not be a surprise to anyone involved with intellectual property, but still there are many organisations who have not embraced this concept and who do not rate their cases, thus in essence treating all their cases as being of equal importance.

Benchmark data also suggests that it is best to first rate a case when it is first reviewed at a formal patent board or patent committee meeting when the decision is taken to file a patent application. This rating should however be reviewed and updated as necessary at all key milestones in the patent processes, for example when the case is to be filed in foreign jurisdictions,

Basically the lower the rating of the case, the more focused the international or foreign filing profile should be. The higher the rating of the case, then a more comprehensive international or foreign filing profile should be selected.

Deciding about international or foreign filing:

A patent board is a formal review meeting, the purpose of which is to evaluate inventions and to determine which ones should be submitted as patent applications. The decision to file a patent application is ultimately a business investment decision, so some kind of professional decision making process is needed.

The actual terminology used within companies and organisations varies with ‘Patent Boards’, ‘Patent Review Boards’ and ‘Patent Committees’ being some of the names commonly used to describe such meetings.

As with any meeting, when they are conducted properly, they can be a powerful management tool, but poorly conducted meetings can be a drain on time and resources, as well as an activity that increases hostility, apathy, and stifles new ideas.

It is therefore imperative that the patent board, as a decision making body, is properly resourced, that the objectives of  the meeting are clear to all participants and that such meetings are well planned and organised, in order to run efficiently and effectively, and that there is consistency and transparency throughout all proceedings and decision making.

Many patent boards serve multiple purposes:-

• To evaluate invention reports and determine which ones should be submitted as patent applications
• Setting of time-lines for preparation and filing of the patent applications
• To decide on the international or foreign filing strategy (in which countries to file)
• To review existing patents due for renewal/annuity fees (continue or abandon)

Summary:

Unfortunately, many people think that there is an all encompassing international or global patent. Unfortunately there really is not. Your U.S. filed patent application is only good in the United States. Your UK filed patent is only good in the UK and so on. Therefore, in order to obtain international or foreign patent rights, you must file separately in each foreign country because the patent laws of each country are different. These are national laws these patent laws have no application or force outside the country in which they are enacted.

I trust that this paper has gathered together some useful and insightful thoughts on the subject of international or foreign filing strategies, helping you to better understand in which jurisdictions you should try to obtain patent protection, and on what basis you should make such decisions.

Acknowledgments:

I wish to acknowledge the contribution of a number of people who helped me as a researched this subject of international or foreign filing strategies, namely …

• Paul Dillon, Director Technology Transfer Office @ University of Limerick,
• Matt Dixon, Partner at Harrison Goddard Foote,
• Sami Saru, Head of Patenting at Renesas Mobile Corporation,
• Kim Simelius, Managing Director at Tampereen Patenttitoimisto Oy

[Originally appeared at Chawton Innovation Services.]