WEB PATENT NEWS - April, 2003

by Robert M. Hunter, Registered Patent Agent

News about patents, licensing and seed capital sources for inventors and innovating organizations.


I. INTERNATIONAL PATENT APPLICATIONS - Filing your patent application via the Patent Cooperation Treaty (PCT) route can have some surprising advantages.

II. SMALL BUSINESSES: BIG INVENTIONS - Small businesses are granted U.S. patents that are more important than those of large firms.


With the globalization of trade, many inventors have adopted the goal of obtaining patent protection for their inventions in multiple countries. Filing an international patent application under the Patent Cooperation Treaty (PCT) can delay the considerable expense of filing in individual national or regional patent offices by up to 30-31 months from the filing date of the U.S. patent application (provisional or regular) that created your priority date. Filing a PCT application can also significantly decrease the pendency of a regular U.S. utility patent application if the subject matter is the fields of biotechnology or software, where 36+ month pendencies are now the norm. This article explains how inventors (and particularly inventors who want to eventually file a regular application in the U.S.) can use the PCT process to their maximum advantage.

A critical issue to most inventors is cost. While the filing of a PCT patent application can delay the need to file and prosecute (and sometimes translate) national and regional (e.g., European Patent Office) applications at a cost that can range from $5,000 to $15,000 from application to issue, the costs of filing an international patent application are not insignificant. Currently (2003), the U.S. Patent and Trademark Office (USPTO) and World Intellectual Property Organization (WIPO) fees for filing a PCT application Request designating all 115+ member countries (you only have to pay for designating five of them) containing 30 to 150 sheets can range from about $2,000 to $3,000. The time required to fill out the forms and convert your provisional application(s) into an international application can add $1,000 to $10,000 to the total. If your priority application is a regular U.S. application containing patent claims, only filling out the Request forms is necessary. If examination of a PCT application is desired during the international stage, USPTO fees for filing a Demand for preliminary examination (normally by 19 months after the priority date) currently range from $490 to $750, depending whether the USPTO performed the search. Prosecution (negotiating claim amendments, etc.) can involve $1,000 to $5,000 of a practitioner's time. (Filing of a Demand is no longer necessary to postpone for 30-31 months filing of the application in many regional and national patent offices.)

Offsetting the initial cost increase associated with filing via the PCT route is the potential cost savings in reduced USPTO national filing fees and in USPTO issue fees and maintenance fees (if multiple inventions are claimed). For a small entity, the basic USPTO filing fee is currently $360 if the USPTO prepared the International Preliminary Examination Report (IPER), $375 if the USPTO prepared only the International Search Report (ISR) and $530 if some other patent office and not the USPTO, Japanese Patent Office or European Patent Office prepared both of those reports. Significantly, the basic USPTO filing fee (for 20 total claims with 3 independent claims) currently drops to $50 under 37 CFR 1.492(a)(4) if all the claims presented in a national application were found to be novel, to have industrial applicability, and to constitute an "inventive step" in an IPER prepared by the USPTO. Entry into the U.S. national phase is straightforward - just fill out and file a two-page form, PTO/1390.

A reduction in USPTO issue fees and maintenance fees is sometimes possible because of the different way in which claiming different inventions (termed "lack of unity of invention") is handled under the PCT. The PCT requirement of unity of invention is met when there is a relationship among the claimed inventions that involves one or more of the same or corresponding technical features that define a contribution which each of the claimed inventions, considered as a whole, makes over the prior art (MPEP 1850). (Got that?) This is a much more lax standard than that normally used in prosecuting U.S. regular applications, during which claims to different inventions that are "distinct" and "independent" are restricted and must be prosecuted in different (divisional) applications.

In accordance with 37 CFR 1.475, however, if unity of invention is found in a PCT application under PCT rules, then restriction cannot be required at the U.S. national level, thus effecting savings in issue fees and maintenance fees that would otherwise have to be paid to the USPTO in the national stage. Even if unity of invention is found lacking under PCT rules, payment of nominal additional fees (currently $210 for searching each additional invention and $140 for examining each additional invention, if the search was conducted by the USPTO and $270 for examining each additional invention otherwise) is all that is required for all claimed inventions to be searched and examined in the international phase.

Another issue is timing. The Request for your PCT application (essentially a request that the invention claimed in the application be searched) must be filed within 12 months of the priority date created by the filing of your first provisional or regular U.S. utility patent application (or other priority application). You do not get another 12 months for the same subject matter by filing a regular patent application within 12 months of filing your provisional application or by filing a continuation (continuation-in-part, CIP) application. Twelve months is it. The rule is that you can rely on a second patent application covering the same subject matter as a priority document only if the first application is abandoned and has not been published (and has not been relied upon to establish priority of invention in a subsequent application) before you file the PCT application. That pretty much nails shut the timing loophole sought by many inventors. Here is the rule (as it is stated in Article 4 of the Paris Convention):

"(4) A subsequent application concerning the same subject as a previous first application within the meaning of paragraph (2), above, filed in the same country of the Union shall be considered as the first application, of which the filing date shall be the starting point of the period of priority, if, at the time of filing the subsequent application, the said previous application has been withdrawn, abandoned, or refused, without having been laid open to public inspection and without leaving any rights outstanding, and if it has not yet served as a basis for claiming a right of priority. The previous application may not thereafter serve as a basis for claiming a right of priority."

If you think about it, the rule makes sense. If the rule did not exist, people could use a string of co-pending regular U.S. applications to maintain priority in a "submarine" U.S. patent application that could rise to the surface (taking the PCT route) and issue all over the world long after the priority document was filed. That would not be fair. (If you keep your invention a secret, you can, of course, directly file non-U.S. national applications after the 12 month priority period has elapsed, but your priority date for those applications will be their filing dates and any prior art that has arisen in the meantime can be used against you.)

A related issue is pendency. PCT applications are searched and examined on a rigid (and fairly short) schedule. For example, the International Search Report (which is roughly analogous to a first Office action on the merits of a regular application by the USPTO, although a patentability opinion is not stated) must normally be completed by the later of 3 months from the date of receipt of the application by the International Searching Authority or 9 months from the priority date. If a Demand for Preliminary Examination is filed within 19 months of the priority date, the International Preliminary Examination Report (roughly analogous to a Final Office action by the USPTO) must normally be completed within 28 months of the priority date (because your national applications must be filed by the 30 or 31 month mark). Moreover, if a problem with novelty, industrial applicability, inventive step, or form is noted, a Written Opinion containing examination conclusions is issued several months before the IPER deadline.

As "icing on the cake," in accordance with 37 CFR 1.496(b), a national U.S. application filed via the PCT route that contains or is amended to contain only claims that meet PCT criteria for novelty, industrial applicability and inventive step "will be taken up out of order." That means examination work on the application will occur before work on other applications, and an immediate allowance is likely. (Another way to have your application examined out of order is to file a "petition to make special" that is granted by the USPTO. Criteria for obtaining such preferential treatment include availability of capital for manufacture, infringement, applicant's age or health, materially enhancing the quality of the environment, materially contributing to the development or conservation of energy resources, involving a single, searched invention, or the invention being related to recombinant DNA, superconductivity, HIV/AIDS, cancer, or countering terrorism by a large or small entity, or biotechnology by a small entity, etc. (MPEP 708.02)).

Thus, you can actually reduce the pendency of certain types of U.S. applications by filing a PCT application designating the U.S. instead of filing a regular U.S. application during the pendency of your provisional. If the time to first Office action is expected to be 42 months, as it is in some arts, and you need certainty about what your patent claims will cover, then filing via the PCT route may make sense, even if you only want a U.S. patent.

By the way, it is good idea to cite background art references in the Background Art section of a PCT application, even though there is no duty of disclosure under PCT rules (as there is under USPTO rules). In this way, you can be assured that, when the U.S. national application (along with your Information Disclosure Statement listing the references) hits the desk of the Examiner, he or she can feel that the PCT search and examination was thorough.

Secrecy is an issue for many inventors. If you file a PCT application designating any country other than the U.S., your application will be published by the World Intellectual Property Organization (WIPO) 18 months after your priority date occurred. If your PCT application designates only the U.S., it will not be published by the WIPO. Only by remembering to file a non-publication request with your regular U.S. application can publication by the USPTO be delayed until your patent issues. You cannot file a non-publication request after your application has been filed.

Another issue is representation. PCT applications can be filed through a Receiving Office (e.g., the USPTO) or through the International Bureau. Practitioners who can practice before the USPTO (U.S. registered patent agents and attorneys) can file PCT applications only for U.S. residents or nationals. The rule for who can represent you before the International Bureau is as follows:

"Where the international application is filed with the International Bureau as receiving Office, any person who has the right to practice before the national (or regional) Office of, or acting for, a Contracting State of which the applicant (or, if there are two or more applicants, any of the applicants) is a resident or national may be appointed as agent (see Annex C)."

For example, if all of the PCT applicants are residents or nationals of India, then only a patent attorney or patent agent who has the right to practice before the India Patent Office can represent them before the International Bureau. Only if one of the applicants is a national or resident of the U.S. (or a U.S. successor to title to the invention, a U.S. company assignee, for example) could I represent them. I can prepare the PCT application for applicants who cannot file through the USPTO only with the acquiescence of the non-U.S. practitioner who will be representing them.

At issue until recently was the point in time when the invention(s) disclosed in a PCT application would enter the prior art (in the sense that it could be used by the USPTO or a court under 35 U.S.C. 102(e) to destroy the patentability of the inventions of others or to invalidate another's issued patent). The good news is that, under current U.S. patent law, the Section 102(e) date of a PCT application is now the earlier of its filing date or its priority date (if the priority date was created by the filing of an earlier U.S. application or an international application designating the U.S.), if the PCT application designates the U.S. and is published during the PCT process in English (MPEP 2136).

I hope this article helps you decide whether filing your patent application through the PCT route will be advantageous to you. For changes in the PCT process that became effective on January 1, 2004, see my January, 2004 newsletter.


A recent study by the U.S. Small Business Administration, entitled Small Serial Innovators: The Small Firm Contribution to Technical Change, has confirmed that small U.S. businesses are granted U.S. patents that are more technically and commercially important than the patents of large U.S. firms on average.

Of the 1,071 firms that were awarded 15 or more U.S. patents between 1996 and 2001, one third were small businesses. The patents awarded to the small business "serial innovators" were twice as likely to be among the top one percent of patents most widely cited in other patents, a measure that has been shown to be an indicator of the economic and technical importance of an invention. These small firms also produced 13-14 times more patents per employee than did the large firms in the sample. Persistence (as indicated by higher numbers of patents granted over a long period of time) distinguishes these small patenting firms from innovative small firms in general.

Small firm patenting is particularly strong in health-related technologies (e.g., biotechnology, pharmaceuticals, medical equipment, medical electronics) and in play- or sport-related technologies (patents that include the words toy, game, gaming, snowboard or golf in their titles). Small firm patents are twice as likely to be closely linked to scientific research as large firm patents, on average, and are substantially more high-tech or leading edge. While small firms made up more than one third of the serial innovators in the information technology field, large firms (like IBM, which generates over $1 billion a year in royalties) evidenced a higher propensity to patent in this field (even when R.A. Katz Technology Licensing LP, which invents in the telecommunications field and extracts $2 billion a year in royalties from large companies, like IBM, is considered).

Small firm innovation is more extensively linked to outside technology, while large firms tend to "grow their own." Significantly, small firms are more dependent on the local technological environment than are large firms. So, communities that seek to foster clusters of innovation in particular fields are doing economic development right.


Robert M. (Bob) Hunter, Ph.D.
Licensed Professional Engineer
Registered Patent Agent
65-1116 Hoku'ula Rd.
P.O. Box 2709
Kamuela, HI 96743
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