Founding Partner
Hi! I’m Elizabeth Gearhart. I’m here with Richard Gearhart, founder of Gearhart Law, an intellectual property firm that does patents trademarks and copyrights, both domestically and internationally, and we’re going to talk about a frequently asked question. So people often call and ask, “what is a PCT application?”
Richard – It is one of the more frequent questions we get. PCT stands for Patent Cooperation Treaty and it’s a way to file your patents internationally. So if you file a patent first in the US and you want to protect your idea in different countries, Europe, Japan, Canada, Mexico, you can do that and the PCT application is one way that people are able to protect their intellectual property internationally.
Elizabeth – So it’s actually a treaty between the United States and all these other countries.
Richard – Right. And virtually every country is a member of the PCT treaty. There’s a few that aren’t, in Latin America, I think Argentina is not, but for the most part filing an application under the PCT allows you to delay filing individual applications in each country where you want patent protections.
Elizabeth – So if I come to you and I want to get a patent on an invention and we file in the United States, say we start with the provisional application because that’s normally what we would do, right? And then a year later we file the utility application, when do I have to decide whether or not to file a PCT application? How much does that add to the cost?
Richard – So usually you’d want to file a PCT application within one year of your first filing, so when you file the utility, if you’ve done a provisional, right, you would file it at the same time as you file the utility application. Typically that gives you an additional 18 months to make a decision about whether or not you’re going to file the application in countries outside the US, so the PCT is a way to defer your foreign filing decisions for an additional 18 months.
Elizabeth – So how much does that cost?
Richard – Typically it depends on a lot of factors, it depends on the page length, depends on the Search Authority, that is which country actually does the patent search that comes with the PCT, but in general it’s around $2,500 for the WIPO fee or the International Search Authority fee and then Gearhart Law also charges a fee on top of that to process the paperwork and monitor the application.
Elizabeth – So let’s say I had a typical 25 page application with 20 claims and I wanted to file a PCT, about how much would that one be?
Richard – Probably about twenty to twenty-five hundred dollars.
Elizabeth – And then what would the Gearhart law fees be?
Richard – It would be about eight hundred dollars, so a little over three thousand.
Elizabeth – And then I have a year and a half, so I guess the purpose of this is to say, okay let me see if I can commercialize this in the US. And if it looks like it’s catching on in the US and I’m getting sales, then maybe there are some other countries I want to file in.
Richard – That’s part of the reason for filing the PCT. In the patent world the name of the game is deferring fees and costs as long as you can, because you do want to see if there’s a market for your product in Europe or China or Canada before you pay the patent fees to prosecute the application there. Another piece of it too is if you’re looking for investor funding and the product has global appeal and you’re trying to appeal to investors, lots of times having the opportunity to file globally with your technology makes your project more appealing.
Elizabeth – So basically what you do is you take the patent application that I filed in the United States and you send it to like the Korean Authority or somebody right?
Richard – For PCT there’s a receiving office and then there are search authorities, and we’ll help figure out which receiving office it would go to. Normally we would file it with the US as the receiving office, then they’re the ones that receive the application and process it, then there’s also a search that goes with the PCT application. You can choose Europe or the US or Korea or Australia to actually do the search and then you get a search report back. It’s an international search report that all the other patent offices typically review and take into consideration as your application would go through their countries.
Elizabeth – So if I’ve done a patent search before I started my U.S. application, how is that international search different, or is it very different?
Richard – They may be slightly different and you would have then two searches.
Elizabeth – Okay, so then I’ve done that and now it’s 18 months and I decide well, I would really love to file in a hundred different countries, but I think it’s kind of expensive so let me just pick one other country right now to file in and get the cost on that. And then see how many countries I can actually do. So let’s pick the EU, how much would it cost? So then is that called nationalization?
Richard – Not yet. If you want to receive patent protection in Europe we would file the application with the European Patent Office. The cost of that is usually between six and seven thousand dollars. It goes through an examination at the European Patent Office and at the end you decide then which countries in Europe you want the patent granted in so you would go through the European Patent Office. And then at the end if you’re successful you might want the application in the UK, in France and Germany, Spain, any one of the many EU countries. That’s what the nationalization process is, so when you pick the final country where you want it to be filed then that’s called nationalization.
That means that it’s a patent in that nation. So if at the end of the eighteen month period you decide which countries you would want to enter from the PCT and you may select China, the EU, Canada, Brazil, and then we would file individual patents in each one of those countries through patent agents and attorneys that are located in those countries.
Elizabeth – It’s costs about ten thousand a country?
Richard – We estimate ten to fifteen thousand per country from start to finish per application. In some countries like Canada it’s relatively inexpensive; in other countries like Brazil it’s more expensive because the application has to be translated into Portuguese and so the costs become higher for the applications. The costs start to rise the more countries you select and in addition, unlike the US, most other countries have taxes or maintenance fees that need to be paid on a yearly basis, which add another five to seven hundred dollars per year on to the cost of the application per country. So if you want to do a large international filing you want to select maybe ten countries. That cost over time would probably end up to be around one hundred and fifty thousand dollars to globally protect the technology from one application.
Elizabeth – So I guess it’s really pretty much the big companies that do that. So then another question. Let’s say that I’m going through this process here and maybe in England. My application gets granted here but gets rejected in England. Will that affect my application here at all?
Richard – No. Normally the patent offices don’t pay attention to the prosecution of the application in different countries. So it’s really just what happens in that individual country.
Elizabeth – So then if I’m British and I’m living in England and I file my application in England and I want to do a PCT and I want to file in the United States then that’s called a US nationalization for me right?
Richard – Yes.
Elizabeth – How many countries belong to the PCT treaty, it’s over 150, right?
Richard – I think it’s over 180. The whole purpose of the treaty really is to give people that time window to decide how much money they have for the process. And that helps everybody by deferring costs and making that big investment only when it makes sense from a business perspective.
Elizabeth – So how many of your clients do you think actually do the PCT placeholder?
Richard – I would say 50 percent of our clients file the PCT placeholder and then of those probably about half actually end up filing patents in foreign countries.
Elizabeth – So what happens if I don’t file the PCT application within a year of my first filing of any type of other application, provisional or utility? I don’t file it in time and then I decide, maybe a couple of years later, that I really do want to do this in England or somewhere, what happens?
Richard – Well unfortunately you’re in a little bit of a bind. You probably wouldn’t be able to file internationally if you don’t file the PCT application within that one year period. There are some exceptions to that. It’s possible depending on the circumstances to file the PCT application as late as six months after the priority date or the conversion date is missed, but it’s really best to file the PCT application within one year of the originally filed application. Most countries are not so forgiving if you missed the nationalization deadline of the PCT. So for example the PCT allows you to defer filing in foreign countries for a period of 18 months, but if you missed that 18 month deadline and you don’t file in Japan or Australia or Canada then most countries don’t give you a grace period. There’s a few like the European Union that give you an extra month. Canada gives you extra time too but countries like China, Japan, and most other countries don’t allow you to file international applications off a PCT past the 18-month extension. So you really have to make up your mind within that time frame and make a decision. Unfortunately the rights can be lost if you don’t file the applications in time.
Elizabeth – Let’s say I feel like I want to file in the US and I want to file in England and those are the only two countries I’m ever going to want. I file my utility application in both the US and England and I get the date, the filing date, which is important as we’ve discussed before. Should I still do a PCT just in case, what would you advise a client in that situation?
Richard – It depends on your budget. If you have the money to file a PCT application anyway, and the two or three thousand dollar investment is a small part of your overall budget, then it may make sense to do that just to keep your options open. If, on the other hand, you’re a startup and that two or three thousand dollars could be better spent on marketing or some other expense, then if you’re pretty confident that you’re not going to sell the product anywhere except the US and in England it may make more sense just to spend it on other business expenses.
Elizabeth – Is there anything else about PCT, Patent Cooperation Treaty applications?
Richard – I would only say that it’s a great option. It’s a great way to manage your intellectual property budget and relative to all of the other expenses of starting a business, two or three thousand dollars that you might spend for the PCT application is a good investment if you think there’s any chance that your product might be sold overseas someday. And investors like to see it too.
Elizabeth – Okay, well thank you Richard.
Richard – Well thank you.
Elizabeth – And if you need any help with foreign or domestic patent applications, foreign or domestic trademarks or copyrights, this is the guy to call.
Richard – Absolutely. We’re available on our website, GearhartLaw.com, or you can call me, my number is 908-273-0700.