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Should I Apply for a PCT Application?

There are a couple of considerations in the decision to file a PCT application.

1. What is the value of the IP in different countries?

Patent protection is territorial. That is, a U.S. patent provides no IP protection in any other country of the world. Although the PCT process offers convenience in making world wide patent applications and will result in an aggregate savings for multiple applications, there will still be individual prosecution and maintenance fees for each country.

2. Is it desirable to delay patent prosecution?

The PCT process allows for the patent application to individual countries (i.e. entering the national stage for that country) to be delayed as long as 30 months after the priority date. It may be desirable to delay patent prosecution if there is market uncertainty.  Accordingly, there may be a benefit to evaluate the market for the IP, before incurring the prosecution expense. This market evaluation can we world-wide, so that the judgment of which countries to obtain patent protection can be honed.

Also, a delay in patent prosecution can be beneficial if the IP requires a government or industry certification/approval. For example, Big Pharma routinely utilizes the PCT system to postpone the prosecution as long as possible, while they seek FDA approvals.

Of course, the knowledge gained in these market and technical evaluations can be useful in driving the patent prosecution.

Relative to the actual PCT application, there are two fundamental ways to proceed.

1. Apply for a patent in your country, and then make a PCT application based upon that country group application. In the case of the U.S. , one can make a utility or provisional application under 35 U.S.C.111, and then use that application as a basis for the PCT application.

This was procedure utilized by Babak Daneshrad in his application for a Universal Rake Receiver. First, a U.S. utility application was filed, application 10/057,430, filed January 25, 2002. This U.S. filing date became the PCT priority date. Second, a PCT application was filed on January 15, 2003, resulting in the publication WO 2004/057763. Note that this application meets the requirement that the PCT application must be filed within 12 months of the priority date.

Based on these facts, the Applicant had until June 25, 2004 to enter the national stage of the 100+ PCT member states, i.e. 30 months after the priority date.

2.The second method for making a PCT application is to simply make the application directly to the PCT, without a national priority application. This is the process followed by Big Pharma, inasmuch as it gives the applicant the maximum use of the 30 month time line to enter the national stage of the member PCT countries.

In this situation, a U.S. patent application will be made based upon 35 U.S.C. 371.

Regardless of the method used to apply for a PCT application, the procedures for prosecution of the PCT application will be the same. This includes the steps of Chapter 1 and 2 of the PCT procedure.

“What is the value of the IP in different countries?”. One method I have used with clients is to analyze the IP relative to its importance to the business plan of the company. For this activity, the IP was categorized as follows:

• Core IP – File U.S. and PCT application, and plan to file in multiple foreign countries.
• Important IP - File U.S. and PCT application, and plan to file in a few foreign countries, e.g. UK, Germany, and Korea.
• Routine IP – Only file in the U.S.

Another factor is the strength of IP protection in some countries. Of particular consideration and discussion is India and China. Both of these countries may have importance to the business plan, but their ability to provide IP protection is not yet at the level of the U.S. or Western European countries.

Costs are highly volatile for PCT applications, foreign applications and maintenance fees.  For example, 1 ½ years ago, the cost of a U.S. plus PCT application was essentially the same as a U.S. application by itself. That is no longer true. As a ballpark, the cost for preparation and prosecution of a U.S. plus a PCT application is $20-24K. Other country application, prosecution, and maintenance fees are additional. At the moment, the cost to support foreign applications is challenged by the U.S. exchange rate relative to the Euro.

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