A patent is a commercial tool giving you (the patent owner) the right to take action against anyone who makes, uses, sells or imports your invention without your permission. So, when we consider wider geographical coverage, it is important to evaluate the cost and time of securing patent protection against the risk a potential competitor could present.
A cost/value equation
How disruptive could the competitor be to your market position in a particular country? A patent is a right to stop others and is enforced by you taking legal action against an infringer and, if there is a risk of infringement, you may need to review whether the legal system of the country would meet your needs. It is also important to consider cost and, ultimately, what might be greater— the cost of obtaining and maintaining the patent right, or the income? This might be from licencing revenue you could obtain from a local company that exploits the local market on your behalf.
After considering these factors, most companies tend to focus on key sales markets— countries that have a developed manufacturing industry for the invention and countries in which competitors operate. However, even when the risk versus value assessment has been made, protection in a large number of countries may still be in the patent applicant’s interest.
Paris Convention— the Right to Priority
A patent is granted for inventions that are new and inventive. Patents are typically examined against the ‘state of the art’, which is everything that is publicly available before the date on which the patent application is filed. This would suggest that a patent application should be filed in all countries before any disclosure is made. However, this is where the Paris Convention can help.
The Paris Convention provides for the right of priority. This means that, on the basis of a first patent application filed in one country, the applicant may, within 12 months, apply for protection in any of the other countries that are party to the Paris Convention. These subsequent applications will be regarded as if they had been filed on the same day as the first application. Therefore, a patent applicant can file a single patent application, such as in their home country, and then have 12 months in which to file in each foreign country. As of March 2021, 177 countries1 have adopted the Paris Convention.
Therefore, the Paris Convention allows applicants 12 months to take on the task of implementing their patent filing programme.
The Patent Cooperation Treaty
The Patent Cooperation Treaty (PCT) is the closest option to a worldwide patent and it is important to understand why it is different. The PCT makes it possible to seek patent protection for an invention simultaneously in each of a large number of countries by filing an ‘international’ patent application. This application may be filed by anyone who is a national or resident of a PCT Contracting State. However, the PCT is an application process and, once a time limit is reached, separate patent application filings, in each country or region of interest, must be sought to continue the process of obtaining rights in those countries or regions.
The PCT covers 153 states2 and therefore other arrangements will need to be made to cover the non-PCT countries. Countries not included in the PCT, but that can be pursued by way of the Paris Convention, comprise3 Afghanistan, Andorra, Argentina, Bahamas, Bangladesh, Bhutan, Bolivia, Burundi, Democratic Republic of the Congo, Guyana, Haiti, Holy See, Iraq, Jamaica, Lebanon, Mauritius, Nepal, Pakistan, Paraguay, Suriname, Tonga, Uruguay, Venezuela and Yemen (as of February 2021). The PCT also does not cover Taiwan.
Regional patents
There are several patent systems, that apply to groups of countries, which can reduce the administrative burden and cost of applying for protection. The most well known is the European Patent, which can cover 38 European countries and be extended to cover Bosnia and Herzegovina, Montenegro and be validated to have effect in Cambodia, Moldova, Morocco and Tunisia. Africa has two regional patent systems – ARIPO and OAPI, each of which covers a specific group of jurisdictions. Protection in the Middle East can be obtained using the Gulf Cooperation Council system, which covers Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Counting the cost of global patent domination
As mentioned, even with the PCT route, there comes a time when the applicant must select in which of the 153 countries they wish to proceed. At this point, there are costs associated with the official fees of the local Patent Office as well as translation fees to have your patent application text translated into the local language if required. As a rough estimate, the cost is around £2,500-4,500 ($3,500-6,300)per country. In this scenario, you then must get the patent applications granted in each of those countries— which could be straightforward or complex, depending on whether or not you want to fight for the broadest protection possible for your invention.
By way of an example, if we consider proceedings in all 153 states, along with the costs to date, we see the total for (near to) global patent application domination could amount to more than £400,000 ($560,000) before the further cost of prosecuting the applications to a granted state. Once allowed and having paid any grant fees due, the patent rights typically need to be maintained by payment of annual fees to each national patent office for up to the 20-year maximum lifetime of a patent.
As such, in many scenarios, the cost and administrative burden of pursuing protection may simply outweigh the risk of a competitor interfering to a degree that significantly harms your market share.
Where are patent applications filed?
However, there are many other countries that receive far fewer applications, such as Barbados with 31, Madagascar with 30, Seychelles with 12 and Samoa with three.
Therefore, it can be concluded that it is very rare for companies to pursue truly worldwide patent coverage. What is more important is to evaluate where you will be able to make effective use of the patent right to maintain a dominant position against known competitors. Will you be using your rights to reduce the risk of new competitors in countries or regions, or to exploit opportunities to licence local companies in countries that are difficult for you to service yourself?
Where should battery technology companies file?
When determining a sensible geographic scope of patent protection for an innovative new lithium-ion battery development, for example, an applicant could look at including countries with the highest manufacturing capacity, which are China, Japan and South Korea. Typically cited next are Canada, the US and several European countries (Germany, UK Finland, France, Sweden)5. If we look towards the demand for lithium-ion packs in addition to these locations, Australia, India and Vietnam are also notable. The inventor could then turn their attention to the countries that consume the most electronic devices that may contain the innovative battery.
The historical patent filings of chemicals business, LG Chemical Ltd in the field of secondary cells, shows that the most popular countries for filings are South Korea, WIPO (which designates the use of the PCT system), USA, China, Europe and Japan. There are fewer patent filings recorded for Taiwan, India, Brazil, Russian Federation, Canada and Australia— essentially confirming the company is selective over where it pursues protection (see chart, below).
Ultimately, while global patent protection may, at first glance, appear to be the best form of protection, commercial realities will often dictate a more measured strategy. There is no universal formula for success because each innovation will require a considered approach, according to the breadth of applications, the territories in which it will have the broadest commercial appeal, and the resources at your disposal.
References
- https://wipolex.wipo.int/en/treaties/ShowResults?search_what=C&treaty_id=2
- https://wipolex.wipo.int/en/treaties/ShowResults?search_what=C&treaty_id=6
- https://www.wipo.int/pct/en/paris_non_pct.html
- https://www.wipo.int/edocs/pubdocs/en/wipo_pub_943_2020.pdf
- China-dominates-the-lithium-ion-battery-supply-chain-but-europe-is-on-the-rise
