Sunday, August 1, 1999
A short time ago, few US companies would have considered filing patent applications in India. But now, many of them do. In particular, many high technology computer network based businesses frequently consider filing in India. Why? Two relatively recent events have contributed to this change in patent strategy.
The first event was the establishment of the information high technology area in Bangalore, India in the mid 1990s. Many US information technology companies employ and contract with software engineers outside the US. These consultants and employees easily communicate with the continental US companies through telecommunications links and are thereby assimilated into the corporate plans and products. This pan-national approach to information engineering was once substantially restricted to the Western European countries.
Now, however, the engineering expertise being used by American companies is global; many American companies are looking to India for engineering expertise. Bangalore provides the high technology engineering density necessary for such a distributed engineering approach to product development and maintenance.
The second event that contributed to the inclusion of India in many companies’ patent strategy is India’s having recently become a signatory to the Patent Cooperation Treaty or PCT. The PCT, which is administered by the World Intellectual Property Organization (WIPO), provides a relatively easy way for an applicant or inventor in a signatory nation to file a patent application in other signatory nations and obtain the benefit of the same filing date of a patent application originally filed in the applicant’s home country. Although there is currently no "world patent" enforceable worldwide, the roughly 100 nations that are signatory to the PCT grant reciprocal rights to applicants who are residents or citizens of another signatory nation.
Filing Options
An applicant wishing to file a PCT patent application with WIPO and wanting to receive the benefit of an earlier filed patent application must do so within one year of the filing date of a patent application filed in the applicant’s home country. This filing of a patent application occurs under Chapter I of the PCT (which is often incorrectly referred to as "filing an application in the PCT"), and includes the sending of a copy of the application originally filed in the applicant’s home country to WIPO, and to the designated countries for which patent protection is being sought.
In response to this filing under Chapter I of the PCT, an International Searching Authority (ISA) of WIPO performs a worldwide search for prior art (which is any published or publicly known reference relating to the invention) regarding the patentability of the invention. The ISA issues a search report 18 months after the filing date of the applicant’s initial national patent application (typically the patent application filed in the applicant’s home country) and WIPO "publishes" the application, that is, it makes the patent application available to the public. Upon the publication of the application, the applicant must decide, typically in view of the search report, whether to file national patent applications in the countries previously designated, abandon the application or proceed to Chapter II of the PCT.
If Chapter II is selected, a patent examiner in WIPO will consider whether the PCT patent application meets the technical requirements of the PCT, and whether the claimed invention is novel (meaning that no one had invented the exact claimed invention previously), and non-obvious (meaning that there is no reasonable combination of prior art references which can be argued to describe the claimed invention). The examiner will then issue a preliminary examination report. The applicant has an opportunity to comment on the report or to change the claims directed to the invention (modify the claims so that they describe an invention which is both novel and non-obvious). A final report is issued 30 months from the filing date of the applicant’s original patent application. The applicant then must again decide, typically on the basis of the final report, whether to seek patent protection in all, any or none of the designated countries. Again, as in the above example, assume that the final report indicates that the examiner thinks the invention is obvious and explains why in such a logical fashion, and that the patent attorney does not have a good argument as to why the examiner is wrong. In such a case, the applicant may decide only to file in Europe because the applicant’s research indicates that the potential market for the invention in Europe is large compared to Japan and India. As a result, the risk of not filing in Europe outweighs the loss of the filing costs for the application even if the probability of successfully obtaining a patent is low. If the decision is made to continue with the application, the applicant must contact attorneys in each of the countries in which protection is to be sought, supplying the attorneys with the results of the PCT Chapter I and Chapter II application phases and filing for patent protection in each of those countries based on the PCT application.
Benefits of PCT Filing
A PCT filing has several benefits. First, the Chapter I and Chapter II phases of the PCT are typically conducted by the attorney who first prepared and filed the original application for the inventor. Thus, in the case of US companies, the US patent attorney who prepared the original patent application in the US Patent and Trademark Office is typically the attorney who files the application in the PCT. As a result, the attorney who best understands the invention interacts with WIPO, and since correspondence with WIPO may be conducted in English, the cost and complications of needing correspondence translated are avoided.
Second, rather than having to deal with multiple national patent offices in parallel, potentially over the same issues, the applicant has the ability to determine from the examination report how WIPO views the patentability of the invention and therefore how other national patent offices may view the invention. Thus, if the WIPO search report and examination report are unfavorable, the applicant may choose to not seek patent protection and avoid the costs of filing in the designated offices. Third, if it is necessary to amend the claims in the patent application, such an amendment and arguments in support of the amendment may be made once, rather than in multiple national offices. This generally reduces the effort on the part of the attorney and results in cost savings to the applicant.
Finally, by filing through the PCT, the applicant can defer the costs associated with filing in foreign countries for as long as 30 months. It is important to understand that these costs may not necessarily be avoided, but applicants can – and often do — defer payments. The ease that comes from designating India as one of the states under the PCT for which patent protection may be sought, and its subsequent cost savings, have resulted in the inclusion of India in the patent strategy of many US high technology information companies.
Evaluation: Is Filing in India Worth It?
Although ease of filing and cost are two considerations that companies use in deciding whether to designate India as a country in which protection should be sought, another consideration is whether a patent obtained in India has any potential value. A few years ago Michael D. Bednarek, writing in les Nouvelles (March 1996), discussed the comparative worth of patents around the world. Bednarek ranked the importance of the countries by gross domestic product (GDP), population, economic size and best value, using total patent costs as one of the parameters upon which the ranking was based. Although the precise numbers may have changed in the ensuing years, India consistently ranked in the top 20, and most frequently appeared in the top 10 of nations, ranking only behind the US in the category of "best value" for patent protection. While one may argue against the criteria used in the ranking or point to underlying assumptions in Bednarek’s article, it is difficult to argue that India should not be considered one of the countries in which the cost-benefit analysis militates for the seeking of patent protection.
Because of its scientific and engineering expertise, its membership in the PCT and its excellent cost-benefit analysis, India is and will continue to be one of the countries that high technology information companies should seriously consider when determining how to allocate their intellectual property resources.
