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Achieving Additional Harmonization of Patent Laws

Question 1:
(a) What can be done at the domestic level to assist small businesses in obtaining foreign patents or otherwise better protecting their intellectual property? (b) Is there a need for legislation in this area? (c) What current programs are considered successful?

(a) The options at the domestic level for assisting small businesses in obtaining foreign patents are rather limited. The principal hurdle is costs. These include attorney fees in the United States and in each foreign country in which protection is sought, official fees to be paid to the foreign patent authority in each foreign country in which protection is sought, and translation costs in each non-English speaking country in which protection is sought.

Some cost savings can be realized by using the Patent Cooperation Treaty (PCT) to seek protection in foreign countries. By filing one international patent application under the PCT, and designating any or all of the PCT Contracting States, you can simultaneously seek patent protection for an invention in each of a large number of countries. In addition, the small business applicant will receive an "international search report," which contains a list of relevant "prior art" documents. In addition, the applicant will be able to defer the national stage entry (when translations and official fees are due) for at least 20 months from filing, and 30 months in an increasing number of countries. This prior art information and added time enable the small business applicant to make an informed decision whether to proceed with knowledge about the likely scope of patent protection that can be obtained and more informed information about the commercial prospects for the invention. Further information about the advantages of the PCT can be found in a pamphlet "Basic Facts about the Patent Cooperation Treaty (PCT)" on the website of the World Intellectual Property Organization (WIPO):

In addition, some savings can be achieved by filing for patent protection in European countries through the European Patent Office (EPO). An applicant can file a single application in the EPO (usually by designating the EPO in a PCT international application) and have it mature into national patents in each EPO member state designated by the applicant. While not inexpensive, it is generally less expensive to go the EPO route than to file separate national applications if an applicant is seeking patent protection in four or more member states of the EPO.

One of the major hurdles facing all applicants in obtaining patent protection in foreign countries is translation costs, and neither the PCT nor the EPO provide much relief in this regard apart from delaying such costs for a period of time.

(b) We believe that legislation to address this question would be premature at this time. There are discussions currently being conducted under the auspices of WIPO to harmonize patent laws globally (discussed below), which, if successful, would result in a treaty that would better align the patent laws of the world. It could reduce costs by significantly limiting the need to comply with differing substantive and procedural rules and should also permit patent offices to give greater credence to the work carried out by other offices. Such a treaty would undoubtedly require the United States to modify its patent law if it adhered, but this must await the conclusion, if any, of these on-going discussions in WIPO.

(c) Apart from the PCT, and to a lesser degree the EPO, there are really not any successful programs for aiding small businesses in obtaining foreign patent protection, and even these avenues are not focused on small businesses.

Question 2:
What are the major obstacles faced by small businesses when attempting to obtain patents in foreign countries (i.e., translations, formalities requirements, and different substantive requirements from the United States) and what order of priority would you assign to addressing such obstacles?

The costs faced by U.S. small businesses in obtaining foreign patent protection are the same costs that are faced by anyone anywhere in the world seeking foreign patent protection. Over the years there has been a continuing effort to address this obstacle to effectively doing business abroad not only for the benefit of U.S. small businesses but for the benefit of all the users of the world patent systems. While foreign patent costs are a significant impediment that small businesses face in trying to protect their inventions abroad, it is equally a significant impediment for anyone seeking foreign patent protection, even the largest businesses.

According to the GAO study, the minimum cost to a small business to obtain and maintain a relatively simple patent in the United States for 20 years could be about $10,000. According to GAO, extending that patent to nine other countries, which could be a typical small business foreign patent strategy, could cost between $160,000 and $300,000. These costs apply equally to even the largest businesses and are of equal concern to all users of the patent systems of the world.

Given this international concern, the countries of the world have concluded various international conventions addressing patents that bear on the costs of obtaining foreign patent protection. While the existing conventions do much to reduce some of the costs associated with obtaining patent protection in a multiplicity of countries, there is a significant on-going effort to reduce these costs further by attempting to further harmonize both formalities and substantive requirements for the grant of patents. It is apparent that only when each country for which patent protection is sought is able to avoid duplicating the formal and substantive effort associated with granting patent protection that many of the costs now associated with the process might be eliminated. Of course the elimination of these costs for applicants would depend on the fee structures of each country being reduced accordingly, which may or may not follow given the proclivity of the law makers in various countries to tax those seeking patent protection by charging fees in excess of costs.

To date the most progress in addressing the major obstacles faced by U.S. small businesses (translations, formalities requirements and different substantive requirements from the United States) has been achieved in regard to formalities requirements. While the overall effort to address the substantive requirements has resulted in some as yet non-binding agreement in some areas there remains major differences in other substantive areas. A significant and growing number of foreign countries adhere to a substantive requirements agreement that differs in a number of significant respects from United States patent law. This trend brings increased pressure on the United States to rethink some aspects of U.S. patent law. Translation costs continue to be a concern and while deferral of the cost is often possible, as of now it has not been possible to significantly reduce or avoid this cost. Some look to computer-generated translations as an eventual solution to greatly reducing this cost.

Question 3:
Are any existing programs successfully helping small businesses to obtain patents in multiple countries? In particular, is the Patent Cooperation Treaty (PCT) sufficiently used by small businesses when seeking patent protection overseas? How should the PCT be improved?

The most significant existing program for helping small businesses obtain patents in multiple countries is through use of the patent application filing process under the Patent Cooperation Treaty, as explained in the answer to Question 1. The use of the Patent Cooperation Treaty offers certain advantages for facilitating the filing of an application in many countries and avoiding or greatly reducing much of duplicative examination effort in different countries. The Patent Cooperation Treaty process is well known to patent practitioners and it is recommended to small businesses where its use would be beneficial. Information on the benefits and use of the Patent Cooperation Treaty is also widely available to the public.

At present the Patent Cooperation Treaty is undergoing changes to make it easier to use, less costly and more beneficial. This includes the development of a system to provide for the electronic filing of PCT international applications.

Question 4:
Should any new initiatives (beyond current patent harmonization efforts) be undertaken internationally?

The problems faced by U.S. small businesses in obtaining foreign patent protection are equally faced by all businesses in other countries. It may be useful to determine how this problem is addressed in other countries, particularly in those countries that are heavily dependent on developing foreign markets. The problem could also be raised with and studied and addressed by international business organizations, both intergovernmental and non-governmental, having small business participation or mandates.

There are presently a number of international efforts to provide information about patents and patent-related problems and some of these efforts are particularly directed to small businesses. In particular, the World Intellectual Property Organization has a Small and Medium-sized Enterprises (SME) division with a program directed to the more effective use of the intellectual property system by SMEs worldwide. Information about and from the program is available at <>. The International Chamber of Commerce, the world business organization, studies and offers information on the intellectual property concerns of businesses of all sizes (See the ICC web site and <>.)