Developing an International Perspective:

Using the PCT

Jay Erstling

Director, Office of the PCT

World Intellectual Property Organization (WIPO)

Geneva, Switzerland

Overview

• Importance of an international patent strategy

• Role of the PCT

Importance of an international patent strategy

• Intellectual property = a valuable business asset

• Must be:– Planned for– Protected strategically– Managed effectively

in order to be profitable

A successful international patent strategy will allow a company to:

• Steer R&D in worthwhile directions

• Acquire appropriate patent rights in the

“right” countries

• Exploit and enforce patent rights

effectively

• Manage costs

Goals

• Protect core technological advantage• Secure R&D pipeline• Reinforce products’ differentiating features

– Build patent walls

• Control key methods and processes– minimize risk of being blocked

• Leverage product and technology platforms• Balance benefits and costs

Why patent?

• To exclude competition and block copying• To facilitate market entry• To protect/expand market share• To earn income

– Profits from sales of products– Royalty income from licenses

• To raise money– Value of a good search report

• To serve as a negotiating tool in– Strategic alliances, joint ventures, cross

licensing, sales of assets

Managing costs

• Patent wisely by:

– Prioritizing inventions

– Carefully selecting countries

A country-by-country balancing act

• Analyze and balance:– Cost and complexity of obtaining rights– Cost of patent maintenance– Ability to obtain and enforce patents– Strength of the rights available– State of the law

• Against:– Value of the invention– Size of the market– Competitive landscape

Role of the PCT

Traditional patent systems

• Local patent application followed within 12 months by foreign applications in all countries in which protection is sought:– multiple formality requirements– multiple translations– multiple national fees– multiple patent agents

Fileapplications

abroad

120File

applicationlocally

National phase

(month)

PCT filing

Priority

Publication

181612 0 30

Written Opinion of the ISA

International SearchReport

International Preliminary Report on Patentability

(IPRP ch.II)-established by IPEA-

International Preliminary Report on Patentability

(IPRP ch.I) -established by IB-

Overview of the PCT procedure

ch.II international preliminary examination

?

22

No

Yes

28

Benefits of the PCT

• PCT provides time, defers costs, provides valuable information and preserves options:– One application– One Office– One language– An early effective filing date– An information-rich search of the prior art– An opportunity to amend the description and

claims– 18 additional months for patenting decisions– Easy entry into the national phase

Benefits of the PCT (continued)

• PCT:– Delays filing fees– Delays national attorney fees– Delays translation costs– Provides more time:

For testing and technical development

For marketing and commercialization

For licensing and financing

For finalizing selection of countries

– Permits early evaluation of inventions– Facilitates reallocation of IP budget resources

PCT Growth

0

20000

40000

60000

80000

100000

120000

140000

2000 2001 2002 2003 2004 2005

2000 2001 2002 2003 2004 2005Total IAs filed 93,240 108,231 110,390 115,198 122,607 134,073Percent increase 16.1% 2.0% 4.4% 6.4% 9.4%

Country ranking - 2005Applications Growth

USAJapanGermanyFranceUnited KingdomRepublic of KoreaNetherlandsSwitzerlandSwedenChinaCanadaItalyAustraliaFinlandIsrael

45,11125,14515,8705,5225,1154,7474,4353,0962,7842,4522,3152,3092,0221,8661,438

3.9%24.1%4.3%6.5%1.7%

33.5%4.7%6.9%-2.1%43.8%9.8%5.1%

10.0%11.6%17.2%

Ranking based on population - 2005Applications Applications

per million population

Switzerland 3,096 413Finland 1,866 357Sweden 2,784 309Netherlands 4,435 270Israel 1,438 227Japan 25,145 197Germany 15,870 193USA 45,111 152Australia 2,022 100Republic of Korea 4,747 97France 5,522 91United Kingdom 5,115 85Canada 2,315 70Italy 2,309 40China 2,452 2

Top applicants - 2005

1. Philips

2. Matsushita

3. Siemens

4. Nokia

5. Bosch

6. Intel

7. BASF

8. 3M

9. Motorola

10. DaimlerChrysler

11. Kodak

12. Honeywell

13. Ericsson

14. Samsung

15. Procter & Gamble

16. Sony

17. Mitsubishi

18. Dupont

19. Toyota

20. Thomson

Contracting States

• Non-stop growth: over one million applications• Non-stop expansion: 132 Contracting States

PCT: One million applications and still counting---------------------

Thank you