What are the top 2 things a business person should know about patent rules if they’re going to be manufacturing or selling internationally?
To elaborate on each of these points:
What constitutes a ‘public disclosure?’
A ‘public disclosure’ means you’ve told someone else about your invention, written about it where others could read about it, or sold or used it publicly. There are exceptions; if you have a Non-Disclosure Agreement (NDA), sometimes called a ‘secrecy agreement’, then you can talk to whomever signs the NDA and it won’t be considered a public disclosure. So for instance, you can work with an app developer or a product designer, a marketing person or even a whole team, and if every one of them has signed an NDA you won’t have disclosed your idea publicly. Who owns the work is another area of the law completely, but you should make sure you have a clear understanding and ideally a contract for that as well.
What happens if you haven’t filed a patent application and you’ve made a public disclosure?
Depending on how much you disclosed, you may have forfeited your rights in Europe and other countries that have what’s called an ‘absolute bar.’ That means that you must have a patent application on file before any public disclosures or you can never get a patent on your idea in those countries. The application doesn’t have to be filed in those countries, it can be filed in the US, it just has to be done.
It’s not all bad news, though. You can still preserve your patent rights in the US if you file a patent application within one year of your public disclosure; the US has a one-year bar.* Australia, Japan and Canada have exceptions to the absolute bar as well. All countries have a unique set of patent rules, so depending on the form your public disclosure took, you may still be able to get some protection in select other countries too.
Why so different? The US system acknowledges that innovation and product development aren’t achieved overnight, and that inventors may need a year to perfect their product and test their markets before spending the money on a patent application. Indeed, the product may change substantially during that year and those changes must be captured in the patent application. The lucky inventor may even be able to get some funding, but this is hard to do without a patent application on file. As for countries with the absolute bar, their systems consider an absolute bar the best way to ensure novelty, which is a requirement for a patent in all countries.
Where do you have to be the most cautious? – pitch competitions and crowd funding sites! Those are some of the major venues for disclosing an idea, and many times the inventors don’t know they need a patent on file first. I’ve heard of inventors not only losing their patent rights in Europe because of pitching their product to a room full of people or posting it on funding websites, but some have had their ideas stolen. One person I spoke to pitched to a company without an NDA and saw her invention on the store shelves under their brand a few months later. You can bet she carried an NDA with her to all subsequent pitch meetings. Yes, she could have sued, but instead went on to her next (very successful!) idea.
What is the PCT?
The US patent system is a federal system housed under the Department of Commerce. As such, the US federal government can enter into treaties with foreign governments regarding patents. The PCT is such a treaty, the Patent Cooperation Treaty, and is administered by the World Intellectual Property Organization (WIPO). As of today, 148 countries, including the US, have signed on to the treaty. “The Patent Cooperation Treaty (PCT) assists applicants in seeking patent protection internationally for their inventions, helps patent Offices with their patent granting decisions, and facilitates public access to a wealth of technical information relating to those inventions. By filing one international patent application under the PCT, applicants can simultaneously seek protection for an invention in 148 countries throughout the world.”1
1 from the WIPO website – http://www.wipo.int/pct/en/
What is a PCT patent application and why is it useful to me?
A PCT application is a copy of the patent application that you filed in the US. It has to be filed in the PCT system within one year of any US patent application filing. Basically your patent attorney fills out the paperwork and files the papers with the appropriate government fee. This acts as a place holder for all 148 PCT countries; you get the filing date of your original US application in all 148 countries, and you then get 18 months to decide which of the countries you want to file your patent application in, or ‘nationalize’ in. The advantage is this: the PCT government filing fee is a fraction of the combined filing fees for all 148 countries. This can help if you started out with the idea to file your patent application in 50 countries, but during the course of 18 months of marketing and selling your product you realized that you really want to concentrate on just 5 countries. You only pay nationalization fees for 5 countries (it’s still thousands of dollars), but you’ve cut your patent expenses by an order of magnitude.
ONE MPORTANT NOTE – If you invented your product in the US, just be sure to file in the US first, or at least on the same day as the PCT filing. The law states that if you invented your product in the US, you must file here first or lose your patent rights here. And that would mean losing a huge market!
If you want international patent protection, you should file your patent application in the US before any public disclosures, then file a PCT application within one year. (The timing depends on whether your initial filing is a provisional or utility application). You should revisit the PCT about a year later, and prior to the 18 month filing deadline decide which countries to nationalize your application in, and file the paperwork accordingly.
*Even though you have one year from a public disclosure to file your patent application in the US, you may want to file as soon as possible. This is because in 2013 the US went to the ‘first to file’ system; if another inventor has the same or a very similar idea to yours and files their application first, you won’t be able to get a patent. For questions, call Gearhart Law at 908-273-0700.