Statement by Samson Helfgott USPTO Roundtable Meeting December 19, 2002

Statement by Samson Helfgott USPTO Roundtable Meeting
December 19, 2002

In addressing the action need to help small businesses to obtain foreign patent protection, I believe there are three areas that must be analyzed:

1. Improving the International Patenting System;

2. Understanding how to utilize the International Patenting System; and

3. Addressing the costs involved in obtaining foreign patents.

Each of these will be addressed below.


At present there does not exist any international patent. Patents are national in scope. However, there are existing procedural methods for simplifying obtaining foreign patent protection in individual national countries. Each of these procedures have been effective to reduce costs and simplify matters.

Noteworthy of these is the Patent Cooperation Treaty (PCT). For small businesses, the PCT has been particularly useful in deferring the high cost of foreign patenting during which time they ccan decide on the importance of the invention, obtain additional capital to support their business and at the same time obtain information on the potential patentability of their invention. To the extent the PCT can be further streamlined and further reductions in costs introduced, it would make the PCT yet further useful to small businesses.

For example, to the extent that all of the Searching and Examination Authorities can have a common set of guidelines to provide uniformity in their Search and Examination Procedures, would be helpful. To the extent that a common database can be utilized by all offices involved, would also be useful. The ultimate goal being the avoidance of duplication of work in providing multiple searches and examinations. Such duplication of search, examination and replication of documents add unnecessarily to the cost of obtaining foreign patent rights and can be eliminated to the extent that PCT provides more uniformity so that national governments will accept a single search and examination provided during the PCT process without requiring duplication at the national level.

To the extent patent harmonization on a substantive level can be achieved, would also significantly assist in providing uniformity, and avoidance of duplication of search, examination and paper work, which would again reduce the cost to small businesses in obtaining foreign patents. However, until a WIPO Harmonization Treaty can be achieved, harmonization on a trilateral level should be attempted. The use of common electronic filing systems, common electronic databases, common search strategies and guidelines for search and examination, even on a trilateral level would be helpful. To the extent possible, each of the trilateral partners should be willing to accept the search and examination of the other two partners to avoid duplication at least in these three major patent offices. This alone could trigger the start of more global acceptance of common search and examination routines and results.

As there appears to be greater diversity between the European Patent Organization on the one hand, and U.S. and Japan on the other hand, if trilateral cooperation is not achievable, efforts should be made to harmonize the Pacific Rim countries and at least avoid duplication of search and examination and other paper work within that region. This might serve as a first step and thereafter might bring in Europe as a second step, and possibly thereafter other countries.

Another area that must be addressed is the translation problem. The need to provide multiplicities of translations for every country in which foreign filing protection is desired provides a tremendous cost burden, especially for small businesses with limited funding. To the extent possible, the United States should exert its influence to encourage all countries to accept English as a second language and permit all filings in the English language. English is already accepted in most countries. Most patent office examiners must understand English in order to cite and understand references, many of which are in the English language. Thus, the English language capability is already present in most patent offices and requiring them to accept the patent application in English would not be an undue burden. Furthermore, the translation of the granted patent into the local language should only be required when the applicant desires to enforce the patent. Otherwise, the patents should remain issued in the English language.


Small businesses do not have an adequate understanding and appreciation of the patent system in general. Although nowadays there is a greater sensitivity to the significance of patents, the difficulties and complexities of the system, accompanied by the high cost of legal advise in this area, often precludes small businesses from obtaining the necessary information needed to obtain patent protection domestically, and even more significantly internationally. Because of the lack of a grace period in foreign countries and the absolute novelty bar in many foreign countries, small businesses often lose their intellectual property rights overseas, inadvertently, through public disclosure. Simple acts of disclosure in trying to raise joint venture capital or disclosure in trying to initially market a product, may cost the small business all of its international patent protection capability.

It is suggested that additional steps be taken to provide the necessary warnings and education to small businesses. This could be achieved in a number of ways. For example, the USPTO could prepare a printed booklet for small businesses providing guidance and information on how to protect intellectual property, not only domestically but internationally. The USPTO should also provide speakers and submit written articles to all associations in which small businesses participate and publications to which they subscribe.

Likewise, the USPTO should encourage all patent bar associations, both national and regional, to institute a program to address small businesses in their area of service. This should include special committees to address small businesses, special recognition to those patent bar associations that undertake such programs, and nationwide advertisement of the availability of such programs.

Furthermore, education in the importance and understanding of patents should be included in regular curriculums in school study. Whether it be on a high school level or a college or university level, programs in creativity, the importance of innovation, and the understanding of patents domestically and internationally should be included in school curriculums, so at an early age, people will have a better understanding of the intellectual property system, and be stimulated for creativity and innovation at an early age.


One of the greatest impediments to small business in their attempt to obtain international patent protection is the cost involved. As the recent GAO report on Small Business (GAO-02-789) found, while a small business could obtain and maintain a relatively simple patent in the United States for 20 years for about $10,000, extending this patent to nine other countries could cost between $160,000 and $330,000. These costs far exceed the budget of small businesses. Especially when their business may require multiple patents, which is often the case in a research and development project. These high costs cause a tremendous loss of international patent rights. This is a detriment not only to the small business itself but to the overall U.S. economy, by reducing exports, tipping the balance of payments, and harming U.S. economy.

In addition to trying to reduce costs by improving the International Patenting System (as described above) and until such international harmonization and uniformity can be obtained, the U.S. should consider direct positive steps to subsidize the high international patent costs incurred by small businesses.

The costs involved in obtaining international protection can be broken into three areas:

a. Official fees;
b. Translation fees; and
c. Legal service fees.

It is suggested that the U.S. Government consider undertaking subsidies to small businesses in all three of these areas.

Specifically, in connection with the official fees, the U.S. already has a program of subsidizing official fees (small entity fee) when filing domestically in the United States. Specifically, there is a 50% reduction to small businesses filing in the U.S. on generally all domestic patent filing fees. While this may be looked at as simply a reduction in fees, essentially it is a subsidy to small businesses which must be paid for by others. The budget of the USPTO must be covered by a fee. Since the USPTO fees are generally set on a cost recovery basis, to the extent that small entity pays 50% of the fees, they are not paying for the full cost of that particular service. Thus, others utilizing the USPTO are already effectively subsidizing the cost for small businesses. This demonstrates the acceptance that it is important to aid small businesses in getting patent protection as being significant towards the economic advancement of the United States.

However, it is suggested that the United States Government likewise to consider that there is also a required a subsidy in connection with foreign fees as well. In that case, it would be an outright grant. To the same extent that the small business provides an economic advantage to the United States economy domestically, their obtaining international protection would likewise benefit the economy of the United States. It is thus suggested that criteria be established for small businesses to obtain subsidies from the United States in connection with the costs for foreign filing.

As an alternative to direct subsidies on foreign filing costs, the U.S. could establish a program along the lines of present U.S. Government grants for research and development. U.S. Government agencies provide money to assist in research and development. In return for such grants, the U.S. takes back some type of a license on intellectual property rights to permit the government use of such rights for themselves. A similar subsidy could be provided to small businesses in the form of a grant to assist them in intellectual property protection in foreign countries. The U.S. Government might take a grant back either in the form of a royalty free license under such foreign patents or to the extent such foreign patents are utilized either in the form of licensing or sales, the U.S. could take back a percentage of such potential future income. Alternately, as in the case of subsidizing education loans, the U.S. could take back the grant money itself after a certain number of years, so long as the small business remains in existence.

In connection with translation fees, while endeavors should be undertaken to eliminate the unnecessary multiple translations (as discussed above), to the extent they still exist, the U.S. should consider establishing a translation service which can be used by small businesses on a cost basis. By eliminating the profit in translation costs, and by providing such service on a mass scale, it is believed that considerable reductions in translation costs could be obtained through this government service. In most foreign countries, translations are done by attorneys or by their outside translation staffs and the profit markup is quite considerable. To the extent such markups can be eliminated by a government sponsored, non-profit translation service for small businesses, such high cost of translations could be substantially reduced.

With respect to the legal service fees, these include U.S. patent attorney fees and foreign patent attorney fees. Concerning domestic legal fees it is noted that in many areas, especially the criminal area, but in some civil areas as well, free or reduced costs legal services are provided to those who are incapable of affording it. This is either done through encouraging law firms to provide pro bono work, or through various legal societies which are funded through government or private foundations. It is suggested that similar assistance be provided in the patent area to such small businesses. The U.S. Government could provide incentives to law firms to provide pro bono activities for small businesses in assisting them in protecting their intellectual property. Additionally, legal aid societies should be established through federal grants or private collections which could also provide reduced cost patent legal services to small businesses.

While this addresses the domestic legal costs, activities must also be undertaken to address foreign legal service fees. It is believed that the U.S. Government could also assist in reducing such costs overseas for small businesses. The U.S. already has a program of obtaining the services of U.S. firms who will handle U.S. Government work at reduced costs subject to the guarantee by the U.S. Government of providing them a quantity of work. The U.S. might also undertake negotiations with foreign patent law firms to obtain low cost services for small businesses on the guarantee that the U.S. would direct to them quantities of work from such small businesses. In this way, the U.S. could provide a list of law firms in each foreign country that are cooperating with this program and encourage small businesses to utilize these firms whereby the small business could obtain reduced legal service fees in foreign countries.

It should be noted that the Japanese Government has issued an Intellectual Property Policy Outline which was published by the Strategic Council on Intellectual Property of the Japanese Government. To a great extent the Japanese have appreciated the need to increase innovation and creativity and to strengthen intellectual property in Japan. As part of this program, they are providing enhancement of education and assistance to research personnel for the purpose of encouraging creativity. They are providing assistance to universities, small businesses and encouraging startups and joints ventures. This plan is being implemented by the Japanese Government itself with adequate funding being provided over the next three years.

It is believed the United States must likewise address the needs of small businesses in obtaining intellectual property protection in foreign countries in order to maintain the economic advantage of the United States and its technological capabilities so that the United States can continue its leadership role in the world.