Procedure and Practice for Chinese Enterprises to Petition for Foreign Patents through PCT International Patent Applications
(Author: Wang Liang; Source: Watson & Band)
With the continuous development of China’s economy, more and more Chinese enterprises plan to develop international markets. Intellectual property, patents in particular, is an important tool for facilitating participation in international competition. Nevertheless, currently many Chinese enterprises are unfamiliar with foreign intellectual property systems. Some of them are not even aware that they need to protect their own patent rights, which causes them to fail to defend against lawsuits filed abroad by competitors. In this article the writer intends to rely on experience to comprehensively address（i） procedures and practices for petitioning for foreign patents using the PCT International Application; and (ii) the patent examination process of two hot areas: the United States and Europe, so as to provide useful information for Chinese enterprises that want to participate in international patent competition.
1. Introduction to International Petitions and the PCT
“Exchange” is the core value of the patent system: inventors/enterprises publish their own inventions and creations in exchange for a temporary monopoly on the exploitation of their invention. However, in the international market, this seemingly fair exchange always turns out to be unfair, because: (1) the inventors’ monopoly is recognized only by the country that accepts the patent application (because patents can only be approved by governments); and (2) the ‘absolute novelty’ requirement is applied all over the world. Once inventors publish inventions or creations incident to a patent application, such publication is usually regarded as disclosure to the entire world. In this circumstance, if inventors do not take countermeasures, their inventions or creations may fall into the public domain in countries other than the country that accepted the inventor’s patent application. This is obviously unfavorable to inventors who need to protect their patents in multiple countries.
In order to help inventors apply for foreign patents, most industrialized countries have signed the Paris Convention for the Protection of Intellectual Property (the “Paris Convention”), the most important article of which concerns the principle of “national treatment” or “foreign priority”. In accordance with this principle, when patent owners apply for a patent in any country that is signatory to the Paris Convention, they are permitted to file an application with another signatory country within 12 months of their first application, and the prior filing date will be applied to all applications in signatory countries. In other words, an applicant to a Paris Convention country enjoys a priority right of application to other signatory countries within 12 months. This system provides a legal basis and legal methods to apply for foreign patents.
Although the Paris Convention laid an important foundation for international patent applications, it is still far from perfect. During the mid to late 20th century the acceleration of economic globalization along with cross-border trade and investment became increasingly frequent. Consequently, the Paris Convention became increasingly inadequate to meet contemporary business needs for international patent applications. In 1970 the Patent Cooperation Treaty (“PCT”) was concluded in Washington D.C. between most of the world’s nations as a way of supplementing and developing the Paris Convention. China joined the Paris Convention and the PCT in 1985 and 1994, respectively.
Generally, the PCT is merely a procedural treaty that does not concern itself with substantive issues. In other words, under the PCT framework, physical examination and approval of patent applications is still carried out independently by individual countries. Under this circumstance it is certainly possible for a patent application that is examined by different national patent offices to be approved by one but rejected by others.
What are the advantages of the PCT? Compared with the Paris Convention, the PCT offers more comprehensive and feasible provisions concerning international patent application procedures, and establishes the PCT International Bureau under the authority of the World Intellectual Property Organization (WIPO), a move that greatly simplifies cross-border patent applications, particularly when several countries are involved. Moreover, PCT applicants are given more time to consider whether or not to submit foreign applications and which countries /regions they are interested in.
Other issues remain murky, such as whether the PCT will be further modified in the future or whether countries can agree on the substantive aspects of patent examination to create a so-called “world patent” (a patent applied for, examined and approved in one country that is valid worldwide). We’ll have to wait and see.
In light of application costs and strategies, the following section will address the procedure for the international phase of PCT patent applications as well as the substantive patent examination procedures in two hotspots, the United States and Europe.
Procedure for PCT International Applications
Generally, Chinese enterprises must take the following steps to submit a patent application to a foreign country:
1. Submit a Chinese patent application to secure a priority filing date.
2. Submit a PCT Patent Application to the Chinese Patent Office within 12 months of the priority filing date.
3. Submit the application to the target country within 30 or 31 months of the priority date.
I explain below the foregoing steps.
1. Submit a Chinese patent application to affirm priority rights.
Since Chinese enterprises are generally inclined to conduct technical R & D in China, they can first submit their technical innovations in a Chinese patent application and use it as the basis for future patent applications abroad. Under the PCT, a patent application submitted in China can serve as the basis for a priority right in a subsequent PCT application, and thus the priority date of the Chinese patent application will also be the priority date for the PCT application. This approach will help Chinese enterprises reduce application costs because at first they need only submit a patent application to the Chinese Patent Office.
Of course, if the technology is completed by foreign R & D institutions, Chinese enterprises can also submit an application in the jurisdiction of completion and later introduce it into China via the PCT.
Please note that once a priority right has been established, the scope of the technology protected by the patent will also be determined. Although there will be many opportunities for the applicant to modify patent application documents during subsequent application procedures, any changes must be “within the original scope of disclosure”. Accordingly, applicants must take care to draft the Chinese patent application documents as comprehensively as possible, so as to leave ample maneuvering room for subsequent revisions.
In addition, since substantive provisions and examination standards vary by country, it is best for the applicants to draft a Chinese application with reference to the corresponding patent laws of the countries in which they want to register the patent so as to obtain maximum protection under the patent laws of these countries. Of course, this is a tough job, since applicants must separately analyze the patent features of different technical fields. Since this is beyond the scope of this article, the author will not discuss this process in detail.
2. Submit the PCT patent application to the Chinese Patent Office within twelve months of the priority date.
On the basis of the Chinese patent application’s priority right, applicants have 12 months to decide whether or not to file PCT patent applications. Because of this, the PCT’s advantage is obvious — applicants at this stage can acquire many rights and great profits at relatively trivial expense.
In particular, the Chinese Patent Office is empowered to act as the PCT Receiving Office, the International Preliminary Examination Authority and the International Searching Authority. Since Chinese is also one of the official languages of the PCT, Chinese applicants can submit Chinese PCT applications to the Chinese Patent Office. In other words, applicants who have filed Chinese patent applications can submit the original Chinese versions as PCT applications after a simple revision of forms. In this step applicants merely need to fill out a PCT application form and pay the inexpensive application fees charged by the Chinese Patent Office.
Once applicants complete this step, they are granted a valid, registered priority right on their technology in all major countries (for patent applications filed under the PCT, generally all PCT members can act as a designated country). During the next 18 months, applicants can carefully and methodically decide whether their technology is worth the additional investment. If it is, they can submit applications to all major countries; if not, applicants only need to abandon their applications at limited cost.
Please also note that as is the general worldwide patent law practice, technology to be submitted abroad for patent applications must undergo a local confidentiality examination before being submitted abroad. Currently, the Chinese Patent Office automatically considers all PCT applications it receives as applications for confidentiality examinations. Of course, a confidentiality examination is easy to pass as long as the patent application does not include military, nuclear or other sensitive technology.
Submit the application to the target countries within thirty or thirty-one months of the priority date.
Under the PCT treaty, the deadline for a PCT patent application to enter the national stage varies from 30 to 31 months after the priority date, depending on whether a country recognizes certain additional treaty provisions concerning entry into the national phase). Specifically, among the major countries and regions the United States and Brazil provide 30 months while Europe, Russia and India provide 31 months.
Generally, to submit a PCT application to the national phase the applicant must:
(1) translate the original Chinese patent application into the official language of the country it intends to enter;
(2) initiate certain necessary amendments; and
(3) pay for a substantive examination.
In this phase applicants incur high costs including translation fees, substantive examination fees and other expensive official fees.
The advantages of the PCT lies in the fact that while the Paris Convention requires applicants to submit the application to foreign authorities within 12 months, the PCT greatly extend this deadline, giving applicants more time to pay the necessary fees. When completing the second phase of the PCT application process, applicants can easily observe market changes and technology developments, and decide on this basis whether or not it is worth it to pay the necessary fees. During this phase applicants do not need to worry about losing the right to submit an application to foreign authorities by waiting too long.
In practice, before submitting PCT application to several countries, applicants must first translate their applications, a job that is typically considered the most onerous aspect of the entire process. In recent years Chinese applicants have been increasingly concerned about markets in Brazil and Russia (the two BRIC members besides China and India). In most cases they are willing to submit crucial PCT technology applications to Brazil and Russia as well as English-speaking countries. Consequently, applicants must translate Chinese patent documents into Portuguese or Russian. However, since professional translators that can directly translate Chinese patent documents into Portuguese or Russian are quite scarce, in practice applicants usually translate Chinese patent applications into English and then engage Brazilian or Russian agencies to translate the English text into Portuguese or Russian. Of course, this method requires a certain amount of time. Chinese enterprises need to take this time lag into consideration against the framework of the 30-31 month deadlines, so that they can avoid forfeiting their applications due to failure to complete the translations by the deadline.
In addition, the PCT national phase also provides applicants with a great opportunity to revise their applications so that they comply with the patent laws of the countries they apply to, and so that they can meet the applicant’s own demands. Consequently, after a PCT application enters the national phase, applicants generally need a translation of the original Chinese patent application, along with a version amended by the applicant that is based on the original application.
Specifically, in the author’s experience, common amendments initiated by applicants include:
(1)Revising or deleting claims that may incur extra official fees in the countries where the patent application is submitted.
Both the United States and Europe may charge additional official fees for claims exceeding a certain limit (20 in the United States, for example, and 15 in Europe). The U.S. Patent Office will also separately calculate accessory rights and charge additional fees on this basis. For these reasons applicants need to revise their claims to save unnecessary expense.
(2) Revising the sequence of claims during the PCT European Entry Phase
The European Patent Office usually examines the unity of patents under the principle that each classification of a claim can only involve one independent patent claim. If the European Patent Office considers a claim classification to comprise two independent claims (such as two independent method rights claims), it will conduct a search on the first claim but will refuse to conduct a search on or examine the second one. In this case, if a European patent application consists of several independent claims under the same classification, it would be best for the applicant to adjust the order of the claims and place the most important claims first. That way, if a unity dispute is arises the examiners will examine the most important claims first.
(3) Correcting clerical errors
During the PCT national phase, applicants may correct any obvious clerical errors they might have made in the Chinese applicant documents.
Below this article briefly introduces examination procedures for PCT patent applications in the United States and Europe.
2. Examination Procedure After a PCT Patent Application Enters the United States
In the United States, patent examination and approval formalities fall under the jurisdiction of the United States Patent and Trademark Office (the USPTO). Generally, after a PCT patent application enters the United States, the applicant will have to pay a substantive examination fee and will be granted two opportunities to answer an Office Action (OA). One of these is granted to answer a non-final OA, while the other is granted to answer a final OA. If the final OA rejects the patent application, the applicant may petition for another two OA answer opportunities by paying a fee for a Request for Continued Examination (RCE). Please note that the latest US Patent Law, effective in May 2013, increased the RCE fees. If applicants need to petition for more than one RCE for the same patent, application fees will be higher than they were before (far higher than the fee for a new application, in fact). Accordingly, applicants should file an RCE application to obtain an opportunity to correct mistakes that result from weak arguments in the previous answer or a misunderstanding of the examiner, rather than merely for the purpose of repeating the previous statements.
If the final OA rejects the patent application, then in addition to paying for another answer opportunity, applicants also have the option to submit an appeal to the Patent Trial and Appeals Board. If the applicant is not satisfied with the decision of the Patent Trial and Appeals Board, a complaint can be filed with the US Court of Appeals for the Federal Circuit for a patentability ruling.
On a related matter, there is a difference between the U.S. patent application procedure and the Chinese patent application procedure. U.S. patent law requires all patent applicants to disclose prior art or background information that may be relevant to the patentability of the applicant’s invention by submitting an Information Disclosure Statement (IDS). In general, applicants are only obligated to submit the number of and technical literature concerning the related patent, rather than analyze whether this information will have an impact on patentability. This obligation endures throughout the whole application process. Applicants not only need to submit an IDS for a PCT application in the U.S., they also need to submit one if they acquire a new related patent (such as a comparison documentation cited by Chinese Patent Office in its new examination comments).
Finally, the United States and China concluded a Patent Prosecution Highway Agreement (the PPH). Put simply, to take advantage of the PPH, a patent application entering the national phase in the United States must include at least one claim affixed with affirmative written commentary (to prove patentability) that was issued by the International Searching Authority during the international phase of the examination. Generally, if a PCT application is filed with the Chinese Patent Office, the Chinese Patent Office will also act as the International Searching Authority. Many Chinese PCT applications comply with the foregoing requirements, which allows the PPH to expedite patent applications filed in the U.S.
3. Examination Procedure after a PCT Application Enters Europe
European countries concluded the European Patent Convention (the “EPC”, the members of which are also PCT countries) and established a European Patent Office (the “EPO”) under the EPC. Generally speaking, PCT applications can enter Europe (1) via the European Patent Office or (2) directly via any European country.
(1) Via the European Patent Office
Applicants can file their application in any official language of the European Patent Office (English, French or German). The first substantive examination commentary issued by the European Patent Office is entitled the European Supplementary Search Report, and applicants only need to answer it as they would answer an ordinary first examination commentary. Apart from the foregoing, the examination process is almost the same as in China.
Currently speaking, after the European Patent Office grants patent approval by issuing a Notice of Allowance, applicants must register their patents with the patent offices of the European countries for which patents are sought (after receiving a registration petition, European countries no longer conduct substantive patent examinations). Finally, applicants will obtain a group of patents approved by the European countries that the patent will enter. Correspondingly, a subsequent infringement action (if any) will be regarded as an internal affair of the country where the infringement occurred, and the dispute will be under the jurisdiction of that country’s courts.
It is widely recognized in Europe that the current European patent system is too cumbersome for patent owners, and that it is expensive to enforce patent rights. Consequently, European countries are actively advancing reform by planning to empower the European Patent Office to grant a “European patent” and establishing a unified European Patent Court whose judgment on patent disputes will prevail across Europe. At this point, related agreements have been signed and are waiting for the approval of individual countries.
In addition, although Europe has not officially signed a PPH agreement with China, it has drafted its own procedure (“PACE”) to speed up the patent examination process. Applicants using the PACE procedure do not need to pay extra fees, but are obligated to answer the examination commentary by the deadline designated by the Europe Patent Office. If the applicant delays or applies for an extension of this deadline, it will automatically be deemed to have exited the PACE procedure. Consequently, Chinese companies can expedite their European patent applications by applying for PACE and answering the examination commentary by the deadline established by the European Patent Office.
Directly via a European Country.
Since members of the European Patent Office are also members of the PCT, applicants can bypass the European Patent Office and directly submit PCT applications to the Patent Office of a European country for examination and approval.
Generally speaking, the second method takes less time and expense than the first method, but its drawback is that it will yield a patent in only one country. The second method is appropriate Chinese enterprises that are merely concerned with one European market or expect a European country to grant a patent without delay.