Patents are territorial; a patent granted in one country has no force beyond its territorial boundary. Simply put, there is no such a thing called “an international patent.” Therefore, if a startup has its eyes set on a global market, it needs to obtain patent rights in each and every country where it wants to protect its inventions against potential infringement. Unfortunately for cash-strapped startups, obtaining patent protection in multiple countries is time-consuming and costly, especially since patent law regimes oftentimes differ vastly from each other.

Although no international patent exists, startups can look towards the Patent Cooperation Treaty (PCT) for some assistance.[1] The PCT is an international patent law treaty that is intended to reduce the burden an inventor faces in seeking patent protection internationally. It provides a unified, streamlined procedure for filing patent applications simultaneously in its member countries. As of 2018, 152 countries have acceded to the PCT, covering most of the major industrialized countries and areas in the global economy like the United States, the European Union, China and Japan (Argentina and Taiwan being notable exceptions). Compared with the alternative approach of filing national patent application for each country, the PCT process has two significant advantages: 1) it establishes a common, international patent application that must be accepted by every PCT country; and 2) the PCT extends the time period before an applicant must file national applications.

  1. PCT: A Streamlined, Unified Filing System

Traditionally, to obtain patents in multiple countries, an applicant would need to file a patent application independently in each of these countries within a certain period of time. This type of application is called a “national patent application,”[2] as it is only operative within the country where it is filed.

By contrast, under the PCT, an applicant may only file one application – a PCT application, also known as “international application.”[3] The PCT application may then be converted into a national patent application in each of the countries where patent protection is sought.

So, what good is the PCT application if in the end it still needs to be converted into a number of national patent applications? Well, if an inventor chooses to file a series of national applications in different countries, then each of these applications must be tailored separately to comply with the patent law of the country where it is filed. Because patent regimes may differ, this could be time-consuming and expensive. By contrast, the conversion of a PCT application –the so-called “entry into the national phase” – is significantly easier. The conversion process requires little more than translating the language of the PCT application to that of the receiving state and can be easily handled by local patent attorneys. Thus, the PCT’s two-step process represents a streamlined alternative to the conventional process with multiple independent filings.

As of September 1, 2018, the electronic filing fee for the PCT application is $1,161 (USD)[4]; whereas fee for filing the US provisional patent application is only $280 (USD) for big entities and $140 (USD) for small entities.[5] Although filing a PCT application itself costs more money than a single national patent application, the overall cost for getting patents in more than one country via the PCT process might still be lower than filing multiple independent patent applications combined due to its uniform filing system.

  1. Another Eighteen Months Before the Next Move

Another big benefit of the PCT process is about timing. The PCT application provides an applicant an extra 18 months to dwell upon the application before taking the next step. This 18-month period is crucial, albeit a little counterintuitive. Isn’t getting patent a race against time? To answer this, first we need to explain how a provisional patent application works.

(a) Provisional Patent Application and “Freezing Period”

First, let’s be clear: one should always file an application as early as possible! Otherwise, the invention risks losing its novelty required to be patentable. This, however, often causes a national patent application to be filed so early that even the inventor himself hasn’t fully decided what to do with the invention. For example, should the application be filed in other countries? Which part of the invention needs patent protection? Is it economically viable to invest in prosecuting the patent application? A lot of decisions like these must be made as the inventor files his initial application.

Thus, instead of taking an all-in approach, which starts with an expensive, full-fledged national patent application (i.e., permanent patent application) as the first filing, American inventors are generally advised to take an incremental approach first by filing a provisional patent application.[6]

A provisional patent application is much cheaper and easier to file than a permanent application. The filing date of a provisional patent application establishes a priority date for the invention. This priority date essentially “freezes” the clock for the applicants so that he/she could delay the difficult decision-making for as much as 12 months.  Within this freezing period, the applicant can freely discuss and disclose the invention, tweak it, study the market or raise more capital, which could help them make the final decisions.

Once the provisional patent application is transformed into a permanent patent application, the latter will be treated as if it was filed on the filing/priority date of the provisional patent application, hence the term “freezing the clock”. And now the clock starts to tick again.

(b) PCT Extension of Freezing Period

Now that we understand how important the 12-month freezing period is for inventors, let’s revisit the PCT process. A PCT application can extend a provisional patent application’s 12-month freezing period by another 18 months. In particular, by the end of the first 12-month freezing period, instead of transforming a provisional patent application into a permanent patent application, the applicant may also transform into a PCT application that has the same priority date. Then the applicant will automatically have another 18-months to further delay the decision on whether he would like to enter the national phase in any PCT country.[7] Together, the applicant ends up having a freezing period lasting for up to 30 months (strictly speaking, if taking this route, at some point during the 30-month period, an applicant does need to take at least some action by filing and paying for the PCT application)!

Another route less frequently used is to file a PCT application as the first filing, rather than piggybacking it on a prior provisional patent application. A PCT application itself can initiate the 30-month freezing period.[8] However, keep in mind that filing a PCT application is generally much more expensive than a provisional patent application.

In sum, a PCT application may be used in combination with a provisional patent application or by itself. Either way, the applicant will have a maximum of 30 months before taking the next step.

III. Conclusion

The PCT process is not always going to be helpful. Either filing a PCT application or entering a national phase subsequently is by no means cheap. The overall assessment depends on many factors, for example how many and which countries patents are wanted in, and how important is the patent term for the inventors. As a result, the PCT process may prove to be cost-effective in some cases but not others.

Nevertheless, the PCT process represents an appealing alternative for at least some, if not most, startups that are aiming to compete in a global market someday, therefore need to protect its technology around the world.

Finally, the longer freezing period of the PCT gives inventors more time and control over their inventions to strategize before making necessary investment in patent applications. This benefit could be substantial. After all, in the patent world, sometimes slowing down a bit could turn out to be a good thing.

 

Further Information

The PCT Fee Arrangement:

https://www.uspto.gov/patents-getting-started/international-protection/patent-cooperation-treaty/pct-fees-us-dollars

 

The Provisional Patent Application Fee Arrangement:

https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule

 

The PCT Rule:

http://www.wipo.int/pct/en/texts/articles/atoc.html

 

US patent act:

https://www.bitlaw.com/source/35usc/index.html

 

 

[1] http://www.wipo.int/wipolex/en/treaties/text.jsp?file_id=288637

[2] PCT, Article 2(iii)

[3] PCT, Article 2(vi)

[4] https://www.uspto.gov/patents-getting-started/international-protection/patent-cooperation-treaty/pct-fees-us-dollars

[5] https://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule

[6] See 35 U.S.C. § 111.

[7] See PCT Article 22.

[8] See PCT Article 2.