wipo acts to repair the pct system

OCTOBER 2009 WWW.MANAGINGIP.COM42

COVER STORY: THE FUTURE OF THE PCT

The PCT was designed to benefit applicants and officesby minimising duplication in the patent system. Morethan 30 years on, is it still up to the job? Emma Barraclough reports

WIPO acts to repair the PCT system

I f yours is one of the 4.2 million patent applications pending around the worldyou might agree that the global patent system is in trouble: despite the economicdownturn backlogs are mounting as patent offices begin to process applications

filed in the boom years. The slowdown in new applications offers little comfort topatent officials – fewer applications and lower renewal rates mean less revenue foroffices, just when the backlogs are putting more pressure on resources than everbefore.

The PCT was designed to offer offices and applicants a solution by eliminatingunnecessary duplication of work, thereby allowing offices to work more efficient-ly: a PCT applicant armed with an international search report and written opin-ion gives examiners in one office the chance to reuse much of the work alreadyperformed by counterparts overseas. It has proved popular with applicants (seechart on page 46), not least because of the 30-month priority period that a PCTapplication buys them.

Yet users and WIPO, the international organisation that administers the system,agree that the PCT system is, if not in terminal decline, at the very least ailing. Thisis not the fault of the PCT system, say WIPO officials, but of the way that officesaround the world are using it.

“The resulting PCT system has been extremely popular with applicants andachieved great success in bringing together formal and procedural requirements ofStates,” wrote WIPO staff in a document prepared for a meeting of the PCT work-ing group in May. “If it has not been as effective in addressing [the challenges fac-ing the international patent system] as its founders hoped, the main difficulties donot stem from deficiencies in the international legal framework, but from the factthat many national Offices (both as International Authorities and as designatedOffices) have chosen not to use it as it was intended.”

Writing a roadmapWhen Francis Gurry was elected director-general of WIPO last year, he committedthe organisation to getting the PCT system back on track. WIPO staff drafted aroadmap for doing so and urged member states to do their bit. At a meeting of thePCT working group, IP offices of contracting states were given a checklist of tasksincluding implementing their Treaty obligations fully; eliminating duplication with-in their own offices, either directly or by providing better incentives for applicants


WWW.MANAGINGIP.COM OCTOBER 2009 43

The PCT allows applicants to seek patent protection in a large number of countries by filing aninternational patent application either with the applicant’s local patent office, with WIPO’sInternational Bureau in Geneva or with regional patent offices such as the EPO and the AfricanRegional Industrial Property Organization.

Once filed, the international application undergoes an international search, which is carried outby one of the patent offices appointed by the PCT Assembly as an international searching authori-ty (ISA). The ISA then prepares an international search report and a written opinion on patentabili-ty. If the inventor decides to proceed with the application then it, along with the internationalsearch report, is published by the International Bureau.

By using the PCT system, the applicant is given up to 18 months to decide whether to seekpatent protection abroad. This gives the applicant the chance to assess the invention’s commercialviability and its likelihood of being granted protection, to appoint local patent agents to processthe application in each country and to prepare necessary translations.

What the PCT offers



What is the function of the Office ofPCT Legal Administration?CP: We decide on petitions to revivePCT applications, do training bothexternally and internally, provide adviceand information within the office andrepresent the USPTO at internationalmeetings. We get about 40,000 calls peryear at the PCT help desk [which pro-vides information and assistance on thePCT process]. There are about 28employees working in the department.

Who does the search work? CP: We outsource work to two privatecompanies – Cardinal Law Group andLandon IP. Between 2006 and 2007,we also used the Australian andSwedish IP offices.

MN: We were using US patent exam-iners prior to 2006, but our timeliness ismuch better now. At one point, we weregetting 4% of cases out in 16 months ofthe priority date. Now I think it’s about80%. That’s a drastic turnaround. Ininternational meetings, WIPO hasacknowledged that the US has madegreat strides in improving timeliness.

Doesn’t this affect quality? CP: In the recent past, the USPTO’sOffice of Patent Quality Assurance hasreviewed all of the searches done bythe outside companies. As to what thenew administration might order, I can’treally give my opinion on that. Thecontractors have certainly played alarge part in reducing the backlog ofPCT work at the Office, but I knowthere has been some criticism as to thequality of outsourced work.

Dave Kappos mentioned in a recent talkgiven at the IPO Annual Meeting thatthere were plans being developed toimprove PCT operations – do you haveany more details about that yet? CP: This is still in the infant stages, butDirector Kappos is working on creating atask force to deal explicitly with PCT mat-ters (see box). One of the plans is torequest a public hearing or forum toimprove the PCT. I expect you’ll see aFederal Register Notice about it request-ing written comments in the near future.

What is the relationship between thepatent prosecution highway (PPH) andthe PCT? Can duplication be better or

more easily avoided via the PPH? [ThePPH allows corresponding claims in theoffice where the application was firstfiled to be presented for acceleratedexamination in an office of second filing].CP: At the Trilateral offices workinggroup meeting in Vienna recently, theOffices supported efforts to use PCTwork to support the PPH. I expectsomething on that front in the foresee-able future. Using the PCT in conjunc-tion with the PPH should give majorbenefits. Director Kappos has been astrong supporter of this (see box).

At the WIPO meeting in Geneva in May,the US suggested a long-term planwhereby a patent approved in oneOffice should be approved in anotherunless an Office rejects it within a settime frame. This was unpopular with alot of the contracting states. Do youstill believe this is a realistic goal? CP: The WIPO meeting was a con-tentious one. The developing countriesare suspicious of anything having to dowith harmonisation. So with the politicalrealities as they are, we’re going to haveto look at less far-reaching plans forimprovement. Given the fact that FrancisGurry is relatively new in his role withWIPO, we want to show support for himand for WIPO. We’re hopeful that undera new administration, steps will be takento move forward on improving the PCT.

What is your view of the roadmap pro-posals and what are you doing to worktoward meeting them? CP: Eliminating repetition of work isalmost a self-evident goal. Since con-tractors do the searches right now,there are different examiners workingon the same applications, which is notideal. We’re working toward integrat-ing that via the PCT Task Force thatDirector Kappos is developing. We alsosupport reducing the number of reser-vations, although we can’t remove allof them. For instance, we can onlyaccept PCT applications in Englishbecause that’s required by statute, sowe have little flexibility to change that.We’re working on other areas though.

The most important item in theroadmap is perhaps the goal of achiev-ing collaborative examination, whichour new director spoke about last fall atthe Trilateral meeting in The Hague.

Now that he’s the head of the Office,we’re looking at this possibility morefully. This would allow the TrilateralOffices to work on an applicationsimultaneously in real time. The idea isstill in the formative stages, but we’vebeen discussing a pilot programme.

What has been the main barrier to imple-menting such a system up to this point? MN: Collaborative searching was part ofthe original US PCT proposal. The mainbarrier to implementing it right now isprobably the cost. The application feewould be higher if multiple offices areinvolved. So the pilot will show whetherthe benefit would be worth the cost. Thewhole point of the road map is to pro-vide consistency and quality.

CP: We have to examine what’sinvolved, but I’m really excited aboutthis possibility. Under this new admin-istration, the PCT seems to be at theforefront once again.

Charles Pearson, director, and Michael Neas, supervisory PCT legal examiner, Office of PCT LegalAdministration, tell Eileen McDermott about PCT operations at the USPTO.

The US and the PCT

In a blog post sent to USPTO employees onSeptember 21, Kappos revealed more about hisplans for improving PCT operations at the Office

A Report from GenevaThis week, I will be in Geneva, Switzerland,leading the US delegation to the annual meet-ing of the World Intellectual PropertyOrganization (WIPO) ....

I am certain that with 141 members, thePCT offers the best and most comprehensiveframework to address the challenge of grow-ing backlogs. In Geneva, we will be consider-ing how PCT applications can be included inworksharing efforts such as the PatentProsecution Highway (PPH). I hope to increaseparticipation in such projects so we can trulysee the benefits of worksharing.

To help accomplish this goal, I have estab-lished a USPTO PCT Task Force. The task forcewill examine our role as a PCT receiving officeand international searching and preliminaryexamination authority. The task force is reach-ing out to PCT applicants, large and small, tosolicit their input. We also will be publishing aFederal Register Notice soliciting public com-ment and will have one or more public meet-ings seeking stakeholder views. My ultimateaim is to integrate the PCT into all of our work-sharing efforts.

As always, I welcome your thoughts andsuggestions as well.

to avoid dual processing; ensuring that practices and workproducts encourage work sharing and reduction of duplicationbetween different offices; and taking steps to ensure the avail-ability of high quality search and examination reports.

The USPTO comes in for particular criticism from bureau-crats in Geneva. Its decision to outsource PCT search work toprivate companies (see interview opposite) affects the qualityof the searches to the extent that not even USPTO’s own exam-iners take them seriously, say critics. As a result, patent exam-iners often repeat the search stage from scratch once the appli-cation enters the national phase, which means that a PCTapplication no longer spells an opportunity to slash wastefulrepetition of work. It can also result in more immediate prob-lems for applicants, says Justin Simpson, executive director ofinovia, a company that coordinates national stage filings forPCT applicants. He says he has experienced situations whererelevant prior art discovered by the non-US internationalsearch authority (ISA) was disregarded by the USPTO andreplaced by a far less relevant piece of prior art by the USexaminer. “Aside from the duplication of effort within theUSPTO, it can also leave the applicant in an awkward posi-tion. The best way to ensure good quality patents is robustprosecution based on the most relevant available prior art.That doesn’t happen if the US examiner focuses on prior artthat is less relevant than the ISA uncovered,” Simpson says. “Isuspect that there is a lack of trust between patent offices as totheir relative abilities. It seems there is a ‘not searched here’attitude that leads to a duplication of work.” That is a viewshared by Michael Brunner, a partner of Gill Jennings & Everyin London and secretary-general of the InternationalAssociation for the Protection of Intellectual Property (AIPPI):“National patent offices often do not respect the work done inthe international phase,” he says.

Political problemsAlthough the PCT’s problems appear technical and, as such,easy to fix, at the heart of them are a range of complex, inter-twined political concerns relating to work sharing, harmonisa-tion and bilateral deals that have dogged the international IPsystem for a decade.

Harmonisation by the back doorThe rift between developed countries – who, in general,want a greater degree of international patent harmonisa-tion to ease the regulatory burden on patent applicants –and developing countries – many of whom oppose whatthey see as an attempt by rich countries to impose inappro-priate patent systems on them – has led to something of animpasse on many issues at WIPO. The PCT is no exception.When WIPO officials discussed their draft road map withthe PCT working group in May, many developing countriessuspected it was an attempt to introduce substantive patentlaw harmonisation through the back door. One officialadmits that the organisation had not been sensitive enoughto their concerns, but says that arguments set out in a doc-ument submitted by the US delegation did little to improvethe tense atmosphere. The USPTO had proposed reformingthe PCT so that an international application would auto-matically issue as a national patent if it had received a pos-itive international report on patentability unless a nationaloffice issued a notification of refusal within a specified peri-od of time.

“Developing countries saw that document, and the lan-guage in the WIPO document, and the whole thing ended in abig mess,” the WIPO official says.

Although the US proposal was killed off during the meet-ing, WIPO has had to battle scepticism from developing coun-



tries about the final destination of the PCT roadmap. InAugust, Claus Matthes of WIPO’s PCT InternationalCooperation Division took part in a debate in India’sEconomic Times in which he denied that PCT reform wasdesigned to remove flexibilities under the TRIPs Agreement.His opponent, Y K Hamied, managing director of Indiangeneric drugs company Cipla, said he strongly subscribed tothe view that the reform of the PCT “is an attempt to under-mine the sovereign rights of the Indian government to makelaws to suit its domestic needs”.

Mapping the patent prosecution highwaysAs developed countries lost confidencein WIPO’s ability to give the lead onimproving the global patent system forapplicants, increasing numbers of themdecided to take the initiative by negotiat-ing bilateral and plurilateral deals. Therapid expansion of patent prosecutionhighways (PPH) that now stretchbetween IP offices including those in theUS, UK, Japan, Germany, Denmark,Hungary and the EPO are one example.Work-sharing initiatives in ASEAN andSouth America are another. But suchdeals risk sidelining WIPO and the PCT,especially since PCT applications are, sofar, ineligible for inclusion in the PPHprocess, which allows correspondingclaims in the office where the applicationwas first filed to be fast tracked in anoffice of second filing. Given that WIPOrelies on PCT income it has a keen inter-est in ensuring that the system remains

popular with users and is not bypassed by bilateral dealsbetween national offices. For officials in Geneva, the growthof the PPH shows that the PCT is not working as intended: ifit was, such initiatives would not be needed.

WIPO particularly dislikes the decision by national offices toexclude PCT applications from the process. “It shows that PCTwork is perceived as less good than work done by nationaloffices in direct filings,” says one WIPO official. It was the trig-ger for Gurry to launch his PCT roadmap to see what needs tobe done with the PCT to fix the perception of low quality.



0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

1978 20081980 1985 1990 1995 2000 2005

Source: WIPO statistics database, April 2009

Note: Counts are based on the international filing date.

Trend in PCT filings

On September 22, Gurry told the WIPO GeneralAssemblies that PCT roadmap “aims to bring all these ini-tiatives ultimately under the multilateral umbrella of thePCT”. That aim may be easier to achieve after representa-tives of the world’s three biggest offices – the JPO, EPO andUSPTO – agreed in principle at a symposium in Geneva lessthan a week before to integrate PCT work products into theirPPH projects. Pilot projects will start in early 2010. Such amove will also make it easier for the EPO to take part in PPH

programmes. Given that more than half of the applications ithandles originate from the PCT (see chart above), a policy ofexcluding PCT work from patent prosecution highwaysrisked leaving it stranded on the roadside. As some of theEPC’s own member states – including Hungary, Germanyand the UK – had signed up to PPHs independently, therebygiving themselves a competitive advantage in the search forpatent business, the EPO’s potential sidelining looked partic-ularly unfortunate.



EPO: 18.1%

Rest of the world: 18.8%

JPO: 17.2%

USPTO: 31.9%

International Bureau: 5.5%

KIPO: 4.8%SIPO: 3.7%

Source: WIPO statistics database (the figures for 2008 are provisional)

Receiving office share of total PCT filings in 2008 (%)

EPO: 55.6%

JPO: 13.6% USPTO: 12%

Source: JPO, EPO, USPTO

Patent filings coming via the PCTroute in 2007 (%)

For the first time, Managing IP lists the patentfirms filing the most PCT applications in the14 biggest markets

T he tables listing the top PCT filers published in this arti-cle rank firms according to the number of PCT applica-tions that they filed that were due for national stage

entry during 2009.The tables are based on details of PCT applications pub-

lished on WIPO’s website. To compile the tables, PCT appli-cations with a priority date between July 1 2006 and June30 2007 were extracted. These correspond to applicationsdue to enter the national phase from January 1 to December31 this year.

Once extracted, these applications were sorted accord-ing to the law firm or patent agency that filed the PCTapplication, based on the “agent name” and “agentaddress” categories in the PCT form. A manual checkingprocess ensured that all cases filed by each firm wereincluded, even where it used different names or addressesduring the period in question.

The firms are listed in order of the number of applica-tions filed in their jurisdiction. Firms with offices in morethan one country may be included in the table in eachjurisdiction.

The overall table ranks the firms with the most PCT appli-cations worldwide.

Managing IP acknowledges the help of inovia in com-piling and verifying the data on which the tables are based.In the interests of full disclosure, comparable statisticsrelating to the number of PCT applications inovia willintroduce into the national stage this year are included inthe relevant tables.

Managing IP also invited other service providers to submit

details of the number of PCT applications they will introduceto the national phase. However none did so.

The tables are provided for readers’ information only.Managing IP does not recommend or endorse any particularfirms for PCT or other work.

Top PCT filing firms revealed

Work sharing worriesAlthough the EPO is regarded by WIPO as something of a rolemodel when it comes to implementing PCT work into its busi-ness model, the EPO has internal reservations about worksharing that could stymie efforts towards more of it at aninternational level. The Office’s Administrative Council (madeup of representatives of EPO member states) thrashed out aplan for a European Patent Network and a utilisation projectmore than three years ago to encourage sharing of work prod-ucts between examiners in the EPO and those in its memberstate patent offices, but its discussions were sensitive and pro-tracted. The Office, concerned to maintain its reputation forquality, is likely to support the PCT only if the search reportsand written opinions prepared by examiners in other officesare deemed to be sufficiently reliable.

The future of the PCTWIPO staff are now preparing a new study on the PCT to dealwith some of the concerns raised at the meeting of its workinggroup in May – particularly by developing countries. Thereport will outline the background to the need to improve thefunctioning of the PCT system, identify the challenges facingthe PCT system and their causes, and consider the impact ofthe proposed options. This will be presented to the working

group early next year. Gurry, who was previously deputydirector in charge of patents at WIPO, will be succeeded byJames Pooley, a US patent attorney, on December 1. The for-mer Morrison & Foerster partner and AIPLA president ishighly regarded and is expected to drive forward PCT reform.

If WIPO can find renewed vigour under Gurry’s leadershipand assuage the concerns of developing countries it may beable to boost the effectiveness of the PCT. This, in turn, shouldhelp offices to deal with the backlog of applications – a back-log that Gurry last month told the General Assemblies was“unsustainable”.

That the USPTO is now being led by David Kappos (who,while patent counsel at IBM, last year oversaw the company’sdecision to file more than 600 PCT applications) should alsogive renewed impetus for the PCT. Kappos has already toldUSPTO staff that he will set up a task force to consider its roleas a receiving office and international searching and prelimi-nary examination authority (see interview). But in the long-term, even a reinvigorated system may not be enough to enablepatent offices around the world to deal with growing patentpendency. “Ultimately what we really need,” says the AIPPI’sMichael Brunner, “is a truly international searching authoritywhere offices search in all the major languages and contributeto the process.” ■



1 839 Fish & Richardson PC US

2 687 Unitalen Attorneys at Law China

3 681 inovia US

4 589 Townsend and Townsend US

and Crew LLP

5 550 Shiga International Patent Office Japan

6 495 Deqi Intellectual Property Law China

Corporation

7 490 Foley & Lardner LLP US

8 449 YP Lee, Mock & Partners South Korea

9 437 Schwegman Lundberg Woessner US

10 436 Knobbe Martens Olson & Bear US

11 434 Marks & Clerk LLP UK

12 409 KBK & Associates South Korea

13 390 Aoyama & Partners Japan

14 359 Blakely Sokoloff Taylor & Zafman US

15 350 Eikoh Patent Firm Japan

16 329 Vereenigde Netherlands

17 322 Harness Dickey & Pierce US

18 319 Harakenzo World Patent Japan

& Trademark

18 319 Fukami Patent Office Japan

20 311 Brinks Hofer Gilson & Lione US

WORLDWIDERANKING PCT APPS FIRM NAME COUNTRY

1 236 Griffith Hack

2 221 Davies Collison Cave

3 107 FB Rice & Co

4 95 Shelston IP

5 94 Phillips Ormonde & Fitzpatrick

6 92 Spruson & Ferguson

7 68 Cullen & Co

8 64 Fisher Adams Kelly

8 64 Freehills Patent & Trade Mark Attorneys

10 58 Wrays



AUSTRALIARANKING PCT APPS FIRM NAME



1 165 Smart & Biggar

2 160 Bereskin & Parr

3 155 Borden Ladner Gervais LLP

4 152 Ogilvy Renault LLP

5 127 Gowling Lafleur Henderson LLP

6 77 Husky Intellectual Property Services

7 70 Ridout & Maybee LLP

8 65 Oyen Wiggs Green & Mutala LLP

9 56 MBM Intellectual Property Law LLP

10 53 BCF LLP

CANADARANKING PCT APPS FIRM NAME

1 687 Unitalen Attorneys at Law

2 495 Deqi Intellectual Property Law Corporation

3 235 Beijing Tongdaxinheng Intellectual

Property Agency Ltd

4 172 Kangxin Partners

5 165 Beijing Cataly IP Attorney at Law

6 115 AFD China Intellectual Property Law Office

7 109 Guangzhou Scihead Patent Agent Co

8 108 China Science Patent & Trademark Agent Ltd

9 83 Leader Patent & Trademark Firm

9 83 China Patent Agent (HK) Ltd



CHINA1 221 Cabinet Regimbeau

2 205 Cabinet Lavoix

3 198 Cabinet Plasseraud

4 176 Cabinet Beau De Lomenie

5 162 Marks & Clerk France

6 106 Santarelli

6 106 Cabinet Germain & Maureau

8 89 Saint-Gobain Recherche

9 88 Brevalex

10 72 Cabinet Laurent & Charras

FRANCERANKING PCT APPS FIRM NAME RANKING PCT APPS FIRM NAME



1 258 Isenbruck Bösl Hörschler Wichmann LLP

2 193 Epping Hermann Fischer

3 175 Boehmert & Boehmert

4 158 Mitscherlich & Partner

5 150 Grünecker, Kinkeldey, Stockmair

& Schwanhäusser

6 138 Kutzenberger & Wolff

7 111 Meissner Bolte

7 111 Reitstötter, Kinzebach & Partner

9 107 Cohausz & Florack

10 106 Witte, Weller & Partner

GERMANY

1 240 Ehrlich & Fenster

2 175 Reinhold Cohn and Partners

3 126 Dr Mark Friedman Ltd

4 104 Sanford T Colb & Co

5 77 Pearl Cohen Zedek Latzer

6 74 Luzzatto & Luzzatto

7 56 Webb & Associates

8 47 Dr Eyal Bressler Ltd

9 44 Appelfeld Zer Fisher

10 30 Wolff, Bregman and Goller

ISRAEL

RANKING PCT APPS FIRM NAME




1 135 Studio Torta

2 133 Barzanò & Zanardo

3 125 Bugnion

4 110 Jacobacci & Partners

5 86 Modiano & Associati

6 72 Notarbartolo & Gervasi

7 66 Società Italiana Brevetti

8 55 APTA

8 49 GLP

10 47 Bianchetti Bracco Minoja

ITALY1 550 Shiga International Patent Office

2 390 Aoyama & Partners

3 350 Eikoh Patent Firm

4 319 Harakenzo World Patent & Trademark

5 319 Fukami Patent Office

6 309 Miyoshi & Miyoshi

7 279 Soei Patent and Law Firm

8 267 Seiwa Patent & Law

9 265 Maeda Patent Office

10 258 Sakai International Patent Office

11 256 Suzuye & Suzuye

12 253 Itoh International Patent Office

12 199 Wakabayashi Patent Agency

14 185 Ohtani Patent Office

15 173 Washida & Associates

JAPANRANKING PCT APPS FIRM NAME RANKING PCT APPS FIRM NAME



1 449 YP Lee, Mock & Partners

2 409 KBK & Associates

3 203 KJ Lee International Patent

& Trademark Office

4 194 You Me Patent and Law Firm

5 147 Sunyoung International Patent & Law Firm

6 130 FirstLaw Lee & Ko

7 126 C & S Logos Patent and Law Office

8 118 Park, Kim & Partner

9 104 Muhann Patent & Law Firm

10 95 S&IP Patent & Law Firm

KOREA

1 329 Vereenigde

2 176 Nederlandsch Octrooibureau

3 106 Arnold & Siedsma

4 62 Exter Polak & Charlouis BV

5 57 De Vries & Metman

6 48 Algemeen Octrooi- En Merkenbureau

7 47 Patentwerk BV

8 22 Howrey LLP

9 18 Deltapatents BV

10 17 Akzo Nobel NV

NETHERLANDS



1 73 Isler & Pedrazzini AG

2 37 André Roland SA

3 33 Rentsch & Partner

3 33 Frei Patentanwaltsbüro AG

5 31 Bohest AG

6 28 Schmauder & Partner AG

7 27 E Blum & Co AG

7 27 Troesch Scheidegger Werner AG

9 23 Hepp Wenger Ryffel AG

9 23 GLN Gresset & Laesser Neuchâtel

SWITZERLANDRANKING PCT APPS FIRM NAME



1 177 Awapatent AB

2 129 Valea AB

3 126 Albihns AB

4 93 Brann AB

5 74 Groth & Co KB

6 60 Bjerkéns Patentbyrå KB

7 56 Aros Patent AB

8 49 Ehrner & Delmar Patentbyrå AB

9 47 Kransell & Wennborg KB

10 44 Zacco Sweden AB

10 44 Bergenstråhle & Lindvall AB

SWEDENRANKING PCT APPS FIRM NAME

>>> AIPLA Annual Meeting, Washington DC, October 15–17

>>> LES US and Canada Annual Meeting,

San Francisco, October 18–22

>>> ASIPI XVII International Congress,Lima, October 25–28

>>> 2009 BIO IP Counsels’ Fall Conference, Washington, October 26–28

>>> INTA Leadership Meeting, Miami Beach, November 11–14

>>> FICPI-China Symposium 2009,Shenzhen, November 15–17

>>> FICPI India Symposium, Delhi, 9-11 December

>>> ITMA International Meeting, London, March 24–26 2010

FORTHCOMING EVENTS



1 434 Marks & Clerk LLP

2 167 Murgitroyd & Company

3 160 Page White & Farrer

4 154 Mewburn Ellis LLP

5 147 Gill Jennings & Every LLP

6 141 AA Thornton & Co

7 133 Boult Wade Tennant

8 129 Harrison Goddard Foote

9 126 Frank B Dehn & Co

10 123 Barker Brettell LLP

11 113 Kilburn & Strode

12 110 Reddie & Grose

12 110 D Young & Co

14 99 Urquhart-Dykes & Lord LLP

15 98 Carpmaels & Ransford

UNITED KINGDOMRANKING PCT APPS FIRM NAME



1 839 Fish & Richardson PC

2 681 Inovia

3 589 Townsend and Townsend and Crew LLP

4 490 Foley & Lardner LLP

5 437 Schwegman Lundberg Woessner

6 436 Knobbe Martens Olson & Bear

7 359 Blakely Sokoloff Taylor & Zafman

8 322 Harness Dickey & Pierce

9 311 Brinks Hofer Gilson & Lione

10 270 Baker Botts LLP

11 260 Greenberg Traurig

12 239 Nixon Peabody LLP

13 237 Wolf, Greenfield & Sacks

14 226 Banner & Witcoff

15 217 Fulbright & Jaworski LLP

16 216 Morrison & Foerster LLP

17 206 Cooley Godward Kronish LLP

18 198 Kenyon & Kenyon LLP

19 189 Edwards Angell Palmer & Dodge LLP

20 187 Perkins Coie LLP

20 187 Lowe Hauptman Ham & Berner

UNITED STATESRANKING PCT APPS FIRM NAME

Chinese companies have become big users of thePCT. Peter Ollier considers which law firms areadvising them and whether these companies couldbe making more use of the international phase

As many IP firms in the US and Europe contemplate redun-dancies and office closures, the prospect of 40% growth in2009 must seem like a dream. But that is the confident pre-

diction of Yang Shengping, partner, patent attorney and vice-president of Beijing Tondaxinheng Intellectual Property Agency.Founded in 2004, this firm is one of a group benefitting fromthe rapid rise in PCT applications coming from China.

Chinese telecommunications company Huawei has come tosymbolise this rise. The firm topped WIPO’s PCT rankings in2008 after filing 1,737 applications (eight more thanPanasonic). Although this still falls far short of IBM’s 4,186filings at the USPTO last year, the growth demonstrates theambition of China’s companies and government, which hasurged domestic firms to seek patent protection abroad.Samson Yu, a partner of Kangxin Partners, another of thefirms that has captured a sizeable chunk of China’s outboundPCT work, says that SIPO wants Chinese companies to file50,000 PCT applications by 2015, up from 6,089 in 2008.

Yes the impressive data may not be conclusive proof ofChinese companies’ commitment to overseas expansion.Government subsidies on offer to businesses that file for IP pro-tection abroad may be distorting the system, and the apparentreluctance on the part of some companies to convert their PCTapplications into national and regional phase filings suggestthat the statistics may not be as dramatic as they first appear.

New firms for new clientsWhen it comes to the law firms advising China’s PCT filers,the clear number one is Unitalen, which was established in1995. At the time, only a small number of firms were permit-ted to work with foreign clients, leaving the rest to focus onbuilding a strong domestic client base. Unitalen was awardeda licence to provide services to foreign clients in 2003. It isnow one of China’s largest IP firms and has about 500 staff,120 of whom are patent attorneys.

Other firms have followed a similar pattern of consolidatinga domestic client base and then helping the companies to expandinternationally. Guangzhou Scihead Patent Agent was founded in1986, but did not receive a foreign filing licence from SIPO until2000. The second-ranked firm in our list is Deqi, which beganlife in 1984 as the patent service centre of the Ministry ofInformation Industry. In 2001 it was relaunched under the Deqiname and won the right to handle overseas work one year later.

Having a strong regional network is also important in win-ing PCT work, given that many of China’s most innovativecompanies are based outside of the capital. According to theOECD Compendium of Patent Statistics 2008, Guangdongwas the top-ranked region among all developing countries forPCT applications between 2003 and 2005, with more than2,300 PCT filings. This is more than Beijing (1,074) andShanghai (934) combined and helps to explain the high rank-ing of Guangzhou Scihead Patent Agent.

In it for the money? One barrier for companies based in developing countries whenit comes to using the international patent system is cost. That

is equally true for businesses in China. Says Yang of BeijingTondaxinheng: “I think the PCT is relatively expensive forChinese companies, especially for smaller companies.”

To help companies cope with the high costs of filing abroad,many local governments, under pressure from officials inBeijing to boost domestic innovation, have set up a system ofsubsides for foreign filing. These vary from region to region butare often Rmb10,000 ($1,460) for each international filing.

“This is a lot of money” says Yu of Kangxin Partners.According to data obtained by Managing IP, some provinces goeven further. Hubei province, for example, offers Rmb30,000for successful international applications. There is no doubt thatthese subsidies have helped smaller Chinese companies maintaintheir overseas filing rates during the economic slowdown. “Ithink that they play a role. How much of a role they play real-ly depends on the nature of the company you are talkingabout,” says Elliot Papageorgiou, partner of Rouse in Shanghai.

Would removing the subsidies limit the growth of PCTapplications coming from China? Probably not, says Yang,who points out that the main filers – Huawei, ZTE, ChinaMobile and Datang – are big Chinese companies that aredetermined to expand internationally and do not need subsi-dies to encourage them. Xu Tianyi, a patent attorney withUnitalen, agrees: “I don’t think the subsidies play an importantrole in the decision making of Chinese companies.”

The conversion problemThe way in which Chinese companies convert their technologies atthe national phase depends on the technology that they cover. Xusays that patents on telecommunications technology, for example,which form the majority of China’s PCT applications, are filed inthe US, Japan, the EPO, Korea, India and Japan. Huawei some-times adds Brazil to that list, says Xu. Pharmaceutical and chemi-cal inventions are filed in the same countries and in south-eastAsia, particularly Malaysia and Vietnam.

But many lawyers in China are sceptical of how extensive-ly Chinese companies convert their PCT applications. AsPapageorgiou points out: “Filing a PCT application is only thefirst step. But I suspect many Chinese companies don’t take itfurther than this.”

His suspicions have some basis. EPO statistics show thatabout 30% of Chinese PCT applications enter the regionalphase at the EPO – a figure that a spokesperson at the Officedescribes as “relatively constant”. This contrasts with around60% from the US and Japan.

Data from WIPO confirms that Chinese companies are notconverting their PCT applications at the same rate as foreignrivals. In the Organisation’s 2008 Review of developments andperformance, China’s conversion rate of international applica-tions to national phase entries is only 0.86. This means that it filesonly 0.86 national phase entries for each PCT international filing.Of China’s rivals at the top of the PCT filing list, the US has a ratioof 2.5, Japan 2.48, Germany 2.59 and Korea 1.55. The othercountries that fall under one national phase entry for each appli-cation are the Russian Federation, Colombia and Algeria.

As ever with patent statistics, by the time they are compiledand presented they are out of date, which means that Chinesecompanies may have already increased their conversion rate. Butit is likely that Yang and his patent attorney counterparts in Chinastill face the challenge of persuading more Chinese companies notonly to file PCT applications, but also to take full advantage ofthem. ■

The story behind China’s PCT rise



wipo acts to repair the pct system

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