The value of deferring patent costs

Patenting is expensive.  I often receive calls from inventors who are new to patenting their inventions and they are surprised at the initial cost of drafting a patent application and then filing it at the Patent Office.  However, patenting an invention is difficult and complex and it takes years of experience to prepare a patent application properly.  In addition, spending the money up front on a thorough and well drafted patent application is worth the time and money since it is not possible to make substantive changes (except in limited instances) to a patent application after filing.

Having said that, the costs escalate even more a few years down the road after the initial filing, particularly if you want to get a patent in a number of countries.  In many jurisdictions, a patent application has to be translated before it can be filed at that country’s patent office.  Subsequent examination of patent applications by patent examiners in multiple countries is also costly since laws vary among different countries regarding what is patentable.  Maintenance fees are also due throughout the term of a patent in each countries.  These costs can really add up.

However, the patent system was designed with these costs in mind.  An international treaty called the “Patent Cooperation Treaty” (PCT for short) allows for the filing of an international patent application called a “PCT patent application”.  The PCT patent application includes an automatic designation of all countries party to the treaty, which includes most countries of the world.  (Countries that are not party to the PCT can be found at http://www.wipo.int/pct/en/paris_non_pct.html).  Within one year from filing a patent application, a PCT patent application can be filed that benefits from the filing date of the earlier patent application.  Typical applicants file a U.S. provisional patent application and follow up a year later with a PCT application that “claims priority” from the earlier-filed U.S. provisional.

However, it should be noted that a PCT application never actually issues.  It can be conceptualized as a “place-holder” patent application that allows a patent applicant to file a single “world-wide” patent application for the future filing of patent applications in multiple countries down the road.  After a PCT application is filed, a PCT patent examiner merely conducts a search of patent and other literature databases and draws up a search report.  However, within 30 months from the original filing date of the first patent application, it is still necessary to file patent applications in each country of interest.  After a patent application is filed in each country, it then undergoes examination in each country.  After filing in each country, it usually takes 3-6 years from that date to then get an issued patent.  Measured from the initial patent filing, this can add up to 5.5-8.5 years to get an issued patent in a given country.

Why so long?  It should first be appreciated that waiting this long is only optional.  Measures can be taken to obtain a patent much more quickly.  For instance, it is possible in Canada to file a first patent application, request expedited examination for a fee and get an issued patent within about 6 months from filing assuming all goes well (this scenario is actually based on a real world case).  Similar mechanisms for speeding up issuance are available in the United States (called Track I expedited exam).  Again, expediting issuance costs money.

As to the original question of why wait so long, the answer is that the system takes into consideration that business goals and objectives evolve over time.  For example, say you invented a new mousetrap and filed a patent application immediately after making the invention.  Say you spent the extra time and very considerable expense filing all over the world within a few months from the originally filed patent application.  Then say when you put your invention on the market after getting issued patents and it was a total bust.  Nobody bought it.  In the meantime, you have spent all that time and money on an invention that is a dud.  Unfortunately, none of the fees are refundable.

However, say instead you filed a first patent application and one year later filed a PCT patent application.  If you found out that the invention was a dud shortly after filing the PCT application, you could simply forfeit filing in multiple jurisdictions at the 30 months deadline.  By doing this, you would avoid the considerable costs of filing translations and other fees that would be otherwise due when filing in each country.  As you can see from this example, deferral of filing decisions and avoiding the accompanying hefty fees would save the patent applicant a lot of time and money.  Put another way, the patent system gives you an option to sort out your business objectives before spending extensively on patenting endeavours.  While I’m not a big procrastinator, sometimes procrastinating can prove to be a good thing.

Of course there are always caveats in the legal world.  You should keep in mind that if deadlines are missed then often it is not possible to reinstate your patent rights.  Even if it is possible, late or penalty fees are usually payable to the Patent Office.  I cannot stress enough how important it is to work with a qualified patent agent to adjust your patent strategy as your business objectives evolve.  Good communication is a must.  On that note, if you wish to file patent applications for your invention, the above should not be taken as legal advice.  A patent agent in our IP group would be pleased to assist you and tailor a strategy specific to your particular needs and objectives.

 

 

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