From CBIA News, July/August 2003

Foreign patents: 
Protect your inventions while 
keeping costs down

By Chris Amorosino

Free-lance writer in Unionville

Often, innovative small businesses fail to protect their inventions in the global marketplace. As a result, they lose revenue, miss commercial opportunities and risk losing control of their inventions. 

A new study from the Office of Advocacy of the Small Business Administration shows that small businesses protect their inventions from foreign competition less frequently than do midsize and large firms. Yet another Advocacy Office study says patents from small businesses are cited more often than those of larger firms. More highly cited patents represent economically and technically important inventions. 

The reason small businesses don’t apply for foreign patents often has to do with cost. Applying for and securing a U.S. patent typically costs from $6,000 to $10,000. Foreign patents can cost just as much or more, per country. And foreign patents normally provide access to smaller, less lucrative markets. It’s also difficult to know if an invention will lead to a commercially successful product; where the major markets might be; and whether your invention will qualify for a patent.

Nevertheless, obtaining foreign patents may be the best way to protect your company’s inventions from being co-opted by competitors. 

Avoid public disclosure

There are ways to protect your inventions without overspending. Rick Harris, a partner in the Hartford law firm Day, Berry & Howard LLP, advises small businesses not to make any public disclosure before applying for a U.S. patent. Public disclosure could involve a news release, a trade show presentation, or a demonstration or discussion of the invention with a prospective buyer. 

“If you have not filed for a patent before public disclosure, then you are precluded from getting valid patents in most major countries other than the U.S.,” Harris says. “That’s a major problem.”

Harris also suggests filing a foreign patent application within a year of your U.S. filing date. Doing so will probably allow you to claim the priority of your U.S. filing date for the foreign case. 

Use the PCT process 

Take advantage of the Patent Cooperation Treaty (PCT). Mike Cantor, a partner at Cantor-Colburn LLP, an intellectual-property law firm in Hartford, says most major countries honor this international treaty. It allows you to deal with just one patent office during the initial examination phase of the patent process. Although the PCT’s examination isn’t binding, it provides an indication of how strong a case you have for securing a patent. 

Perhaps the biggest benefit of using the PCT process is that you can delay your decision to file any foreign patent applications for up to 30 months. Essentially you can put off the major decision of where to secure patents, and most expenses associated with that decision, for up to two and one-half years to see if your invention is worth protecting.

“We advise most clients to go the PCT route,” Cantor says. “It costs about $8,000. Doing so buys you time to assess the commercial viability of your product.” 

Use the provisional process

Another smart move is to explore the provisional patent application procedure the U.S. has begun to offer. This procedure is much quicker and more cost effective than the full U.S. patent process. 

The provisional application involves a technical description of the invention without any substantial legal drafting. It provides no legal rights unless you follow up with a regular application within a year. But it forms the basis for priority, both in the U.S. and in other countries; is typically less than half the cost of a U.S. patent; and can be done in as little as a few days. 

Other considerations

Also consider the economic shelf life of your invention. Some technologies have a commercial life of only five years or so. In the United States, most patents issue two to two and one-half years from the date of filing. It’s not unusual for the patent process in foreign countries to take four years or longer.

Rather than filing throughout Europe, some businesses apply only in the United Kingdom, Germany, France and Italy, which collectively have 60% of Europe’s population. Or, to be even more cost effective, some companies file only in the U.K. and Germany. According to Cantor, competitors who can’t market in those two countries probably will choose not to market throughout Europe.

While obtaining foreign patents will cost some money, consider what you stand to lose without them. “I’ve seen a lot of small businesses who felt they couldn’t afford foreign patents, then really regretted that decision,” says Cantor. “It’s the only weapon you have to stop your competition in foreign sales.” 

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Sidebar: Patent treaty streamlining effort under way