Worldwide: Seven Ideas For Reducing Foreign Filing Costs

Last Updated: 30 July 2009
Article by Jeff Sweetman

Many of the patent owners, their IP departments and patent attorneys we speak to are under budget pressure. This is especially the case in the essential – but relatively high-cost – area of international patent protection.

A recession might last a year or two, but patents last for twenty years. It's therefore a delicate balancing act to reduce costs whilst maintaining a pipeline of patent rights that will avoid leaving an IP hole in years to come.

The experts at have come up with seven great tips for controlling your foreign patent filing costs that are drawn from industry best practice, shouldn't compromise your IP strategy and will put a smile on your face - and that of your boss, partner or CFO!

One thing though: before implementing any of these strategies, talk to your patent attorney. They are experts and should have a sense of whether any of the following suggestions might have a negative impact on your business and intellectual property aims.

Rule 1: File a PCT application instead of direct foreign filings

As the convention priority year comes to a close, decisions need to be made about the invention that is the subject of the priority filing. Is there sufficient commercial interest (or advantage) to justify the costs of continuing with the patent process? Is so, in how many countries is patent protection to be pursued – and in which one?

In some cases it might make sense to just maintain protection locally, or perhaps to add only one or two other major countries.

However, if broader foreign filings is required– or if you're not sure and you want to keep your options open! – a PCT application can help you maximise the number of countries in which your rights are kept alive.

Filing a PCT application effectively delays the most significant costs associated with foreign filings by at least 18 months. This critical additional period may allow you to develop a clearer commercial picture before you need commit to the substantial costs of foreign filings by entering the national phase.

The International Search Report can also give an indication (albeit with no guarantees!) of the sort of prior art that might be faced during national examination.

The total cost of using the PCT may be slightly higher, because the initial filing fees are relatively high. However, all costs associated with individual national filings are deferred. The ability to keep your options open for so much longer will in many cases more than outweigh the cost difference.

Rule 2: Select countries intelligently

Before selecting countries, do your homework on the competitive landscape, market opportunities and IP system that each potential jurisdiction offers.

For consumer goods, first cover existing markets (typically including your home country if not already covered). For many products, that will mean the USA and Europe, possibly followed by secondary markets like Canada or Australia.

The so-called "BRIC" countries (Brazil, Russia, India and China) have large and growing populations. The growth of the middle class in India and China alone makes them worthy of consideration. Even if the current market for your product isn't huge, a patent lasts 20 years, and that's a long time given the rate of demographic change in those countries.

Markets where distribution or licensing opportunities are likely should be next on your agenda. You might, for example, have contacts in certain countries that might lead to licensing opportunities over time. Certainly it is preferable to pursue such countries before considering those in which you have no contacts and little prospect of making any.

Manufacturing jurisdictions can then be considered. The reason for considering them less important (in relative terms) is that it's often relatively easy for potential competitors to avoid protection in a given country by having a product manufactured in another country where there's no patent protection.

For a relatively simple consumer product, it may be impractical to cover all jurisdictions where the product could theoretically be manufactured.

There is also the issue of detection: is it going to be easy – or even possible – in a particular jurisdiction to determine where goods are being made? Is the enforcement system effective and not too costly? There's no point having a patent if it's impractical to use it against an infringer due to the local legal system not being up to the task!

Of course, there are some technologies where it may be practical and desirable to get patent coverage in manufacturing jurisdictions. An example is certain types of integrated circuit that can only be fabricated in a limited number of fabrication plants, most of which are located in a small number of Asian countries. In that case, it may be practical and commercially useful to obtain patent protection in all those countries.

Of course, if your technology is not consumer-related, you should cover whichever jurisdictions make the most sense to your business. Suitable jurisdictions for mining roof-bolts may be distinctly different to those for a pharmaceutical composition!

Rule 3: Ace the patent application process

Sometimes it is not only what you do right but what you don't do wrong that counts! Plan your decision-making and funding processes to ensure instructions are sent well ahead of deadlines. This will avoid translation urgency fees, and late fees for submitting executed powers of attorney and assignments (where required).

In some cases, translation surcharges can add 50-100% to the associates' fees for lodging an application, so it is really important to get instructions sent as early as feasible.

Similarly, review the application to determine whether significant savings can be made in particular countries. For example, Europe, the USA and some other countries have per-claim fees for each claim above a certain number. Reducing the number of claims may save a significant amount of money, even if the foreign associate charges you to make the amendment (which may be the case if entering the national phase from a PCT application). Is every claim in your application important, or are some just "filler"?

Rule 4: Choose a foreign filing service that's on your side

Many patent applicants and attorneys don't realise that there is choice available as to who to use for the foreign-filing component of the patent process. The emergence of specialist foreign patent filing providers utilising technology and purchasing power has created significant efficiencies that translate into cost and time savings for patent applicants.

Whilst much of the work associated with foreign filings is administrative, it's still worth checking that the organisation you choose is run by patent attorneys. They can provide an extra level of oversight, identifying potential issues and helping smooth minor matters at the most cost effective time.

It's also important that they allow you to keep your local attorney in the loop. Your patent attorney drafted the patent application, and no-one knows your invention and business better than him or her. Any foreign filing service should encourage you to keep them involved.

There may be similar cost-saving opportunities in areas such as annuities and patent searching.

Rule 5: Batch file to create economies of scale

If you have multiple filings due in a given month or quarter then do a batch filing to maximise efficiency and minimise costs. And don't be afraid to ask your patent attorney for a discount if you can instruct a significant number of cases simultaneously!

The same goes for external service providers: most foreign filings and annuities providers will offer discounts for significant volumes of work.

Rule 6: Consolidate providers

Selecting only one or two local firms to handle your patent work can sometimes increase your buying power, giving you more favourable rates.

Asking those attorneys to use the same foreign attorneys (ideally with whom favourable rates have also been negotiated) for all your work can help too.

In general, if you are providing a significant amount of work, you should see whether your patent attorney will agree to fix their charges in advance for certain actions. This will help with budgeting, which is a serious issue for many of the companies we speak with at the moment!

Rule 7: Bring tasks in-house – or out-source!

When you look at organisations with larger portfolios a pattern emerges: IP functions begin to be taken in-house. 

Given sufficient volume it often makes more financial sense to pay in-house paralegal or patent attorney salaries than to pay the hourly rates charged by patent firms.

However, a sense of balance needs to be maintained. There's little point employing an experienced patent attorney full time (they aren't cheap, as I'm sure you know!) if you don't have enough work to keep him or her completely employed.

Instead, you should look at the different parts of the patent process and determine which tasks you can (or should!) take in-house.

For example, taking patent drafting in-house may not be practical due to the intermittent nature of drafting work over the course of, say, a year. However, coordinating foreign filings may be possible with the help of a specialist service provider. Costs can be reduced whilst the level of control can be maintained – or even increased.

Of course, you should also remember that your patent attorney (depending on the country) may also be a lawyer in a more general sense. Your business may not have enough patent work to keep a patent attorney going fulltime, but could a patent attorney fulfil other legal services requirements you have on an ongoing basis? Contract drafting and review, compliance, IP strategy and general legal advice are all areas where a patent attorney may be able to provide useful input. Indeed, some patent attorneys will revel in the opportunity to work in broader areas than just patent drafting and prosecution.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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