Foreign protection is recommended if there is a concrete pathway to monetize the invention in foreign markets. For example, global corporations often have established marketing channels to seek foreign patent protection and the potential for future revenues justifies the expenses. However, it is often difficult for solo inventors and startups to make money abroad. In this case, foreign patent protection may not be fruitful for solo inventors and startups. Nevertheless, one reason to pursue foreign patent protection is that potential licensees or future buyers might want to file in foreign countries. In this case, filing a Patent Cooperation Treaty (PCT) application may make sense to further preserve an inventor’s ability to file a patent application in foreign countries later.
Foreign patent protection is an intricate process. It requires significant funds to file a patent application in a foreign country and secure the patent and often makes more sense for larger companies with established business relationships and distribution networks in foreign countries. For multinational companies, the countries in which foreign patent protection should be sought is known and can be projected with reasonable accuracy, which is often not the case for startups and solo inventors. For solo inventors and startups, I generally do not advocate that they seek foreign patent protection without a good reason to do so.
If a large corporation, solo inventor, or startup wants to secure foreign patent protection, preserving the right to file in foreign countries later on is not cost prohibitive and it may be beneficial. Future investors and licensees may find a patent portfolio more desirable if there is a still a right to file patent applications in foreign countries. The following discussion explains one strategy for seeking foreign patent protection. Although there are many ways to acquire foreign patent protection, most inventors go through the following process.
Relative novelty versus absolute novelty
Most foreign countries require “absolute novelty” (i.e., marketing efforts for the invention start after filing a patent application) of an invention if foreign protection is to be sought. In contrast to “absolute novelty” countries, the United States is a “relative novelty” country because, by utilizing the one-year grace period, inventors can commercialize the invention for up to one year before the patent application must be filed. In other words, the invention is not “absolutely,” but only “relatively” novel at the time of filing due to the inventor’s own marketing efforts. If marketing efforts are conducted before filing the patent application, foreign patent protection is generally waived (see Waive Foreign Protection in Figure 3).
To secure foreign patent protection, an inventor should file a patent application prior to marketing efforts, which ensures absolute novelty of the invention. The filing of a U.S. patent application preserves, by treaty (i.e., agreement) with foreign countries, the inventor’s ability to file a patent application in foreign countries and claim priority back to the filing of the U.S. patent application within certain statutory timelines (see Figure 3). The marketing efforts done prior to the filing of the foreign patent application, which would normally destroy absolute novelty, are not counted against the later-filed foreign patent application when a foreign patent application is filed based on the previously filed U.S. patent application. This course of action falls in line with recommendations from Chapter 5 (i.e., file patent application before marketing) and avoids any issue related to third-party actions that might block an inventor’s ability to secure patent protection in the United States under the first-inventor-to-file regime.
Figure 3: Three foreign protection routes are (1) waive foreign patent protection, (2) maintain absolute novelty and file patent applications within twelve months in specific foreign countries, and (3) maintain absolute novelty, file a PCT application, and enter the national stage after thirty months.
Patent cooperation treaty (PCT) application
After filing a patent application in the United States, the inventor has twelve months (see Direct Route in Figure 3) to decide in which countries or regions to file an application for patent. The twelve-month period begins on the date of the first-filed patent application within the chain of priority, whether a provisional or nonprovisional application. An inventor may file a patent application directly in each country, though for many, this is cost prohibitive. Filing a patent application in Canada, for example, may cost about 2,000 dollars, while filing a patent application in Europe may cost an additional 8,000 dollars. The cost will likely be particularly burdensome if there are multiple countries in which the inventor wants to protect the invention. The cost may not be worthwhile if the inventor’s knowledge of the market is unclear. Twelve months is a relatively short period of time to market a product and many inventors do not know where it would be best to seek foreign patent protection. Fortunately, there is a way to further delay filing in specific countries. An inventor can choose to file a PCT application within twelve months after filing the U.S. patent application (provisional or nonprovisional). (See PCT Route in Figure 3).
When the PCT application is filed, this is referred to as “entering the international stage,” or the part of the process before filing one or more country specific patent applications. Although the PCT is referred to as an “application” and it is examined, the predominant function of the PCT application is an extension of time that delays the due date when a country specific patent application must be filed. The application enters the “national stage” when the patent application is filed in that country. In other words, filing the PCT application delays for eighteen months the due date for filing a patent application in a specific country (see Figure 3). Instead of having to decide after twelve months where to file, an inventor would have thirty months (i.e., twelve plus eighteen months) after filing of a U.S. patent application to decide in which countries or regions to seek patent protection.
For startups, smaller companies, and solo inventors, I recommend a PCT application to preserve the ability of the inventor to file in foreign countries if there is a good reason to do so. Future buyers or licensees may find that the option to pursue foreign patent protection adds to the value of any deal with the inventor. However, due to the substantial costs of filing and prosecuting a patent application in a foreign country, good reason should exist to justify the expense of filing and pursuing a patent in a country.
Costs and consequences of pursing foreign patent protection
Foreign patent protection is more expensive than patent protection in the United States. One reason is the cost of annuities during the national stage. Many countries require the inventor to pay an annual fee, which ranges from 500 to 3,000 dollars, to maintain the pendency of the patent application in that country. The cost of multiple annuities adds up. Moreover, the annuity only maintains pendency of the foreign patent application. It does not grant any enforceable rights that the inventor can assert against third parties. Even after the foreign patent applications mature into patents, maintenance fees or annuities must still be paid to maintain the patent grant.
Declining to pursue foreign patent protection not only avoids costs, but the U.S. patent application can remain confidential until it matures into a patent. Until recently, U.S. patent applications were not published until they matured into a patent, unlike other countries that published patent applications before they were granted. In 2000, the U.S. started to publish patent applications before they were granted to harmonize U.S. patent laws with the laws of many other countries. However, there is one exception to this rule. If, at the time of filing a nonprovisional application, the inventor indicates that he or she does not intend to seek patent protection in foreign countries, the USPTO will not publish upon request the patent application before granting the patent. If the inventor’s intent changes before the filing date in foreign countries, the non-publication request can be withdrawn and foreign filing can occur.
The upside to keeping an unpublished U.S. patent application confidential until it matures into a patent is that competitors cannot find out whether the examiner at the USPTO is rejecting the application for patent. For example, if the inventor opts to keep the patent application confidential and the examination is not going well, a third-party cannot know that the inventor is having difficulty in securing patent protection. If a third-party had access to this information, and if prosecution was not proceeding favorable for the inventor, the third-party may feel emboldened to start competing in the marketplace.
The disadvantage of keeping a U.S. patent application confidential is that the patent owner cannot collect damages for infringement that occurred prior to the issue date of the patent. If the patent application is published, however, the inventor can conceivably collect on infringement that occurred since publication, provided the published claims remain substantially the same as the granted claims. This is not common, however, as most claims are amended during examination. Although important to consider, these are not usually sufficient reasons to forgo confidentially in the U.S. application process.
In sum, though it may be a good idea for some solo inventors and startups to preserve the ability to pursue foreign patent protections, I do not generally recommend that they aggressively pursue foreign patent protection in the national stage due to substantial costs and the uncertainty of making money in foreign markets.