The Patent Prosecution Highway: Strategic Considerations in Accelerating U.S. and Foreign Patent Prosecution
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1 The Patent Prosecution Highway: Strategic Considerations in Accelerating U.S. and Foreign Patent Prosecution ACC Quick Hits June 13, 2012 Dr. John K. McDonald Dr. Michael Schiff Kilpatrick Townsend & Stockton
2 Your Experience Question: Have you faced these situations? a) Budgetary pressures to decrease prosecution costs b) An infringer is undercutting product sales c) Frustration with a patent grant in one country but prosecution is taking years and is expensive in another country, such as Japan d) Your product could sell for a premium but patent allowances are delayed What can you do??? 2
3 Why Accelerate Prosecution? Reasons to accelerate examination Decrease prosecution costs and duration streamline world-wide budget Products with a short life cycle Infringing products already on the market Validate technology for partnering Increase IP portfolio value for investment Add value to goods & services 3
4 Tactics to Expedite Prosecution Tactics for expediting prosecution world-wide Patent Prosecution Highway (PPH) PCT - PPH Prioritized examination in the U.S. Expediting U.S. prosecution in regular track Accelerated exam in other jurisdictions such as PACE in the European Patent Office 4
5 Patent Prosecution Highway (PPH) TOPIC 1: Patent Prosecution Highway Question: Have you used the PPH? What is the PPH? A rapidly expanding multinational program with major implications for accelerating patent grants Claims determined as allowable in 1st country undergo expedited search and examination in 2nd country Examination in second country still done according to national criteria 5
6 6 Patent Prosecution Highway (PPH)
7 Patent Prosecution Highway (PPH) Mottainai agreement US; Japan; Canada; Australia; Russia EPO; UK; Finland; Spain Country of First Filing rule no longer applies (can run PPH either way) Works as a two way street: Expedite foreign applications with U.S. allowance Expedite U.S. applications with foreign allowance 7
8 Patent Prosecution Highway (PPH) Other PPH countries of commercial interest Mexico; China; Taiwan; Israel; Korea; Singapore (Country of 1 st filing rule still applies) 8
9 PCT - PPH TOPIC 2: PPH from a PCT application Between U.S. and: Australia; China; Japan; Korea; Russia EPO; Austria; Finland; Norway; Spain; Sweden Step 1: IPRP or Written Opinion indicating claims are patentable Step 2: PCT-PPH in National Stage with those claims and claim correspondence table 9
10 PCT - PPH To obtain indication of patentability in the PCT Stage: Present patentable claims File a Chapter II Demand for a round of prosecution in the International Stage Choose a timely and competent search and examining authority: e.g., IP Australia or EPO 10
11 PCT - PPH PCT-PPH can be used to expedite in the U.S. and foreign countries simultaneously 11
12 Expediting U.S. Examination Question: Have your U.S. applications been languishing in limbo for years and years and years? TOPIC 3: Prioritized examination program in the U.S. Cost = $5,100 ($2,700 for small entity) 30 claims; 4 independent claims 10,000 maximum per fiscal year Objective: allowance or final rejection in 12 months 12
13 Expediting U.S. Examination TOPIC 4: Expediting U.S. applications in the normal track Start with patentable claims First Full Action Interview Program Interview after each Office Action In-person interviews After-final practice (avoid RCE & potential delay of months) Current USPTO emphasis on compact prosecution 13
14 Options Abroad Question: Have you expedited prosecution outside the US? 14 TOPIC 5: Options in foreign jurisdictions PACE program in Europe Expedited exam programs in Canada, the U.K. and Australia Special programs: e.g., green technology in Canada and Korea Modified examination (based on allowance in first country): Australia; Singapore; Israel; South America; Malaysia
15 Coordination of Global Patent Strategy Example 1 PCT Application Pending Issued/Allowed Expired Text Colors Australia US Canada Europe Japan Korea 15
16 Coordination of Global Patent Strategy Example 1 PCT Application Text Colors Pending Issued/Allowed Expired Accelerated exam. Australia 1 st US Canada Europe Japan Korea Regular exam with broader claim scope. 2 nd US Filed 16 Prioritized exam with narrow claim scope.
17 Coordination of Global Patent Strategy Example 1 PCT Application Text Colors Pending Issued/Allowed Expired Enter PPH Australia 1 st US Canada Europe Japan Korea No PPH as examination has begun 17 Regular exam with broader claim scope 2 nd US Allowed/Issued
18 Coordination of Global Patent Strategy Example 2 Text Colors Europe US Pending Issued/Allowed Expired Accelerated exam. US OR Europe 18
19 Coordination of Global Patent Strategy Example 2 Europe Accelerate with PACE US Accelerated exam. Pending Issued/Allowed Expired Text Colors Accelerated exam. US OR Europe 19
20 Coordination of Global Patent Strategy Example 2 Europe Allowed Claims US Allowed Claims Text Colors Pending Issued/Allowed Expired Enter PPH US OR Europe 20
21 War Stories #1 Client wanted to launch a filter product in Japan with a premium price. We filed US and PCT applications Aggressively prosecuted the US application to allowance Requested examination and entered the PPH in Japan with the allowed US claims WAR Received allowance STORI from JPO in 6 months (saved 2-4 years and $$$). Product launched with desired price 21
22 War Stories #2 Client required patent in Japan. PCT and US apps were filed Filed European application early, used PACE procedure to expedite. Upon European allowance, filed request for examination and entered PPH in Japan Received allowance in 3 weeks! (saved 2-4 years and $$$) US app was then allowed with broader claims Option to file divisional app in Japan to pursue broader claims 22
23 Patent Strategy and your Business Objectives Strategic Overview Benefits of expediting exam: Decrease prosecution costs and duration (e.g., Japan) Speed to obtaining the first patent, exclusivity Eliminate or reduce competition Enhance ability to eliminate or reduce competition Faster market entry at a premium Increase licensing value Enhance company and patent portfolio valuation added shareholder value 23
24 Patent Strategy and your Business Objectives Disadvantages of expediting exam: Up-front costs are greater PPH 2 nd country constrained by claims allowed in 1 st country Extra time needed for R&D? Extra time needed to generate funds for prosecution? 24
25 Question: Would your company accept claims of more modest scope in exchange for rapid allowance? Question: Would your company accept higher upfront costs for long term savings in prosecution? 25
26 Patent Strategy and your Business Objectives Business Considerations: Is the perception of potential broad claim coverage more valuable than the reality of narrowed actual claim coverage? Early stage start-ups in the process of raising financing Newly public, pre-revenue companies 26
27 Patent Strategy and your Business Objectives Define Business Concerns: Are the business objectives clearly defined? Don t expedite exam as an academic exercise Dangers of saying too much too early on the record Wasting scarce resources pursuing claims which don t cover the core products and services 27
28 Patent Strategy and your Business Objectives Develop realistic international plans: Overly optimistic projections may place greater emphasis on foreign jurisdictions than warranted Important to allocate legal resources in line with realistic operational plans Location of markets Location of competitors Your manufacturing locations 28
29 Global Patent Strategy Business Considerations It is strategically important to implement and coordinate a global patent strategy Work with patent counsel who understands the PPH and has close ties to competent and responsive foreign counsel who use the PPH Consider importance of invention and claim coverage to business Consider the activity of competitors (e.g., sales, manufacturing, market) Consider coordinated strategy to take advantage of accelerated examination in different jurisdictions and the PPH. Each country is different 29
30 THANK YOU The Patent Prosecution Highway: Strategic Considerations in Accelerating U.S. and Foreign Patent Prosecution ACC Quick Hits June 13, 2012 Dr. John K. McDonald Dr. Michael Schiff Kilpatrick Townsend & Stockton
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