Patent Foreign Filing Guide

Patent foreign filing has become more important in the last few years.  As globalization continues, companies are finding more competitors in foreign countries than before.  In addition, the number of countries have increased where companies and their competitors are locating offices, personnel, manufacturing and where they are finding customers.  A carefully thought-out strategy is required for all companies that are interested in defending their intellectual property rights on the international stage.

1. Timing considerations for patent foreign filing

Foreign applications have to be filed before the one-year anniversary of the U.S. filing date in order for them to receive the benefit of the U.S. filing date.  The following figure illustrates the most common route for patent foreign filing into different countries:

Conversion Drawing 2

Or if you have first filed a provisional patent application, then the patent foreign filing sequence may be the following:

Conversion Drawing

2. Requirement for no public disclosure before first filing

Most foreign patent laws require that there be no public use or disclosure of the invention prior to the “effective” filing date. This is also referred to as the requirement for “absolute novelty”.  The effective filing date corresponds to the U.S. filing date, except in a few countries.

3. Claiming Priority

If the priority of the foreign application is based on a continuation, continuation-in-part or divisional patent application in the United States then it may or may not be possible to claim the benefit of the United States application and it may or may not be possible to file the application at all in certain countries that require no public disclosure.  The following chart can be used to determine patent foreign filing options in for United States’c2~continuation, continuation-in-part or divisional patent applications:
Patent Foreign Filing Considerations

4. International conventions and costs of patent foreign filing

The cost of filing a patent application in a foreign country varies from about $4,500 in Canada to $10,000 or more in Japan or in Germany, depending on factors such as application length, translation costs, the number of claims, and currency exchange rates. These estimates include filing fees, charges of foreign attorneys, translation costs, and our fees and expenses. Prosecution costs are not included. There will also be maintenance fees if a patent issues.

If you plan to file in more than four European countries, you can save money and defer a country by country selection by filing in the European Patent Office (“EPO”). An EPO filing typically initially costs about $10,000 to $13,000. An EPO filing can designate all the European countries except Norway.

A Patent Cooperation Treaty (“PCT”) application can often be advantageous in the patent foreign filing process. The PCT usually provides an additional eighteen months for one to enter the national/regional phase in member countries and regions. This allows one to defer most expenses of foreign filing. A PCT application also allows one to defer certain foreign filing decisions, which often results in decision-making that is more informed. The cost for filing a typical PCT application is about $5,000.  (The cost is about $6,000 if an optional EPO search is requested).  Most of the major countries are members of the PCT.  PCT members include, for example, Canada, the United Kingdom, Germany, the EPO, Japan, South Korea, Australia, the People’s Republic of China, Russia, Israel, and Brazil. Countries that are not members of the PCT include, for example, Chile and Taiwan.

All the above costs are rough estimates. We can generate more accurate estimates for the countries that you may be interested in.

5. Publication in foreign countries

Foreign patent application are usually published. This may have implications with respect to trade secrets and other future patent applications.

6. Requirement for “working” the invention

In addition, please keep in mind that countries such as Mexico, Brazil, Argentina, Spain, and Portugal require that a patent be “worked” in the country.

7. Picking countries for patent foreign filing

7.1. Various considerations

Companies often require that their patents be foreign filed in more than one country for purposes of broader protection of their inventions. Foreign-filing costs can become extremely high, and even the strongest companies usually have to produce a reduced list of patents to foreign-file and a select list of countries where to file.

Various considerations play into the choice of patents and the countries in which to foreign file. These considerations include:

1. The company’s financial position, in particular the cash flow prediction.
2. The importance of the invention.
3. Agreements with business partners.
4. Translation, filing, prosecution, and maintenance costs in individual countries.
5. The size of a particular country’s economy.
6. Strength of an individual country’s legal system.
7. Competitor locations.
8. Infringement laws in individual countries.

Specific consideration should be given to the final criterion on the list. Infringement laws differ from country to country, depending on the type of invention. Inventions can generally be grouped into inventions for consumer products on the one hand, and inventions for manufacturing equipment and processes on the other.

7.2. Consumer products – bet on economies of scale in the patent foreign filing strategy

There is a higher likelihood that a consumer product will end up in trade in one of the world’s larger economies. It makes sense, therefore, to first foreign file patent for inventions for consumer products in the economies of scale. The world’s larger economies are indicated below.

Country GDP (in billions)
United States $9,299
China 4,800
Japan 2,950
Germany 1,864
India 1,805
France 1,373
United Kingdom 1,290
Italy 1,212
Brazil 1,057
Mexico 866

Assuming that all other criteria are ignored, one can begin with the United States at the top of the list, and then add China and so on, until it is believed that a competitor will be adequately blocked out of all major markets. A competitor may, for example, have a manufacturing facility in a small country such as Taiwan; a balanced foreign filing approach might be to file in the United States, China, Japan, and, via a European patent, in Germany, France, the United Kingdom, and Italy, whereas a more cost-conservative approach would be to foreign file in the United States, China, and directly into Germany.

7.3. Manufacturing patents – less process patent cross-border extension protection in Japan and China

There are special considerations for choosing countries for purposes of foreign filing of patents relating to inventions for manufacturing equipment and processes. A patent in one of the larger countries, for example Japan, for manufacturing equipment or for a manufacturing process, would not necessarily be infringed by a consumer article manufactured in a smaller country, for example Taiwan, and then sold in the larger country. We therefore have to consider Taiwan and a host of other smaller countries for patent foreign filing purposes. But let us first look at the extent of protection for such inventions in larger countries.

7.3.1. United States

In the United States, under the 1988 Process Patents Amendments Act, one can infringe by importing into the United States, or selling or using within the United States, a product which is made by a process patented in the United States. Although the holder of a U.S. patent for a process can only sue an actual importer, who is not necessarily the actual manufacturer, United States law still provides substantial clout against the importation of articles into the United States that are manufactured outside the United States according to a process patented in the United States. The Process Patents Amendments Act is limited to processes. It might have been extended to products by patented machines, but was not.  The Process Patents Amendments Act’s limitation to processes creates an incentive for patent draftsmen to include process claims covering an invention.

Considerable protection is thus provided for manufacturing process patents in the United States. Due to the size of its economy, it is likely that a consumer article would be imported into the United States, and so would infringe a process patent even if that process is carried out outside the United States. It is also likely, due to the size of its economy, that the patented process will be carried out inside the United States.

7.3.2. Europe

Patent laws in most European countries provide that the offering, putting on the market, or use or importation or stocking for any of these purposes, of a product directly obtained by a patented process, is an infringement. European countries should, accordingly, also feature high on the list of candidate countries for patenting manufacturing processes. Of particular interest would be those countries with larger economies, because of the higher likelihood that manufactured articles would be imported into those countries.

7.3.3. China

Chinese patent law does not appear to provide similar protection. It may thus be possible for a competitor to manufacture in Taiwan, for example, and import the manufactured product into China. Such importation would not be an infringement of a Chinese patent.

7.3.4. Japan

According to Japanese law, in the case where the imported product was publicly known in Japan at the time that a patent owner applied for a process patent, the act of the importing party would not result in infringing upon the patent owner’s patent rights. Conversely, if the imported product was not publicly known in Japan at such time, the importing party’s act would result in infringement. It would be prudent to err on the side of caution and assume that there will be no infringement of a product imported into Japan and made according to a process covered by a Japanese patent.

7.3.5. India

The Indian Patents Act does not have an express provision relating to process patents and importation. It has been held that if a patent is not for an article manufactured, but for the mode by which the article described is brought into existence, the sale by the defendant of an article manufactured by the plaintiff’s process is an infringement, whether made in the jurisdiction or elsewhere. Accordingly, the import of a product by the defendant manufactured outside India by a process for which the plaintiff is holding a valid process patent in India, will be deemed to be an infringement.

7.3.6. Korea

Under the Korean Patent Act, for an invention of a process of manufacturing a product, working of the patent right provides protection against acts of importing of the product manufactured by the process, as well as acts of using the process. Therefore, an importation of a manufactured product is a direct infringement of a process patent. There is thus a high possibility that a court would find that an importing party is directly infringing the patent right of a holder of a Korean patent.

7.3.7. Canada

In Canada, the courts, in general, have held that the importation into Canada of a product that is manufactured elsewhere in accordance with a process defined by a Canadian patent claim, constitutes infringement of a Canadian patent.

7.3.8. Summary of process patent cross-border extensions

The following list contains the largest economies of the world that provide patent protection under manufacturing process patents against the importation of an article manufactured elsewhere:

Country Patent Protection
United States Yes
China No
Japan Assume No
Germany Yes
India Yes
France Yes
United Kingdom Yes
Italy Yes

7.4. Costs are higher in Japan and Korea

The costs for obtaining and maintaining patents differ considerably from country to country and should be considered before coming to any conclusions. Let us assume that an application is first filed in English in the United States. Filing, issuance, and maintenance fees paid to the U.S. Patent and Trademark Office over the life of such a patent are usually around $15,000. The filing and official fees in countries where no translations are required, such as the United Kingdom and Canada, are also around $15,000, except that India is around $7,000. Translation, filing, and official fees in countries such as in China, Germany, and France are usually between $25,000 and $30,000. Similar fees in Korea and Japan are usually between $56,000 and $70,000.

7.5. More for less by combining select countries when foreign filing

One course of action may be the following when considering the countries in which to foreign file patents relating to manufacturing processes:

1. File first in the United States, because of the size of the market, protection under process patents against importation, and relatively low cost;
2. Give serious foreign filing consideration to countries such as Germany and India, for the same reasons as the United States;
3. Consider foreign filing in France, the United Kingdom, and Italy via a European Patent;
4. Consider foreign filing in countries where competitors are likely to manufacture during the remaining life of the technology; and
5. Last, but not least, consider foreign filing in China, Japan, and Korea.

A typical example is where a competitor has a manufacturing facility in Japan. A common approach is to file in the United States and, at great expense, foreign file in Japan and in Korea. When the competitor then moves its manufacturing facility to Taiwan, the competitor is still prevented from importing into the United States but can freely import into Europe, India, Korea, and Japan. A more effective and less expensive alternative would be to only file in the United States, Germany, and India.par

7.6. A special word about test and analysis method patents

The patent protection extensions that many companies provide for process patents are very useful for the owner of a process patent because the laws provide the owner to stop importation into the country of the patent if the process was carried out in another country. Unfortunately, this does not also hold true for the owner of a patent for an test or analysis method.  The countries mentioned above that provide for process patent cross-border reach extensions do not also provide for test and analysis cross-border reach extensions.  What that means in a practical sense is that the owner of a patent application for a test or analysis method will have to foreign file the patent application in every country where a competitor may carry out the process.par

7.7. Conclusion

Early-stage companies often tend to be very aggressive when considering foreign-filing of their patents. Cash-flow problems during economic downturns then play havoc with their entire patent portfolio. I suggest that companies plan their patent foreign filing efforts conservatively and carefully, and keep cash in reserve to prosecute and maintain foreign patents during economic downturns.