_1 STRATEGIC USE OF THE PATENT COOPERATION TREATY Samson Helfgott Katten Muchin Rosenman LLP New York, NY WIPO Services and Initiatives Princeton, N.J. November, 2014

2 WHY FOREIGN FILE? Patents are national in scope and protection - U.S. Patent only covers U.S. borders. Expansion of Foreign Commerce - Foreign competition - Foreign Markets - Offshore Manufacturing - Worldwide licensing programs Strengthening of Patent Laws in Foreign countries - Pressure from U.S. - TRIPS - part of GATT treaty -Harmonization efforts -WIPO efforts _1

3 - There are at least 190 countries in the world -The cost for foreign patents is substantially more than the cost for U.S. coverage. -About 50% of U.S. applications are filed by foreigners -High Tech companies may file in 4-5 countries/regions; Biotech and Pharma may file in 120 countries. FACTS _1

4 HIGH COST OF FOREIGN FILING Translation Costs Claim fees Agent Fees Government fees Examples -Japan – about $300 per page (typing and translation) -Germany – about $200 per page (translation) -Claim fees Europe – $300 for every claim above 15 (further increases in the future) -Japan – $50 per claim _1

5 Lifetime costs (not including cost of writing application) -U.S. approximately – $25,000 -Europe (8 countries) approximately – $150,000 (will be less in the future using the London Protocol) -Japan approximately – $75, _1

Costs for today’s costs multiply by times “Patent Filing Costs Around the World,” Samson Helfgott, JPTOS, Vol. 75, No. 7 July, _1

7 FOREIGN FILING (National/Regional Phase) Japan Filing with translation $7,000 - $10,000 prosecution $6, yrs Canada Filingprosecution $3, yrs grant Korea filing with translationprosecution $8, yrs $8,000 EPC filingprosecution $8,000 - $11,000 $8, yrs England $2,500 Spain$4,500 $500 - $2,500 $400 - $2,500 Germany$4,500 $4,000France $800 - $3,000 $1,000 - $2,000 Grant Maintenance/yr. deferral 3 yrs grant Maintenance/yr. $1,000 - $3,000 Maintenance/yr. $500 - $2,000 Maintenance/yr. $700 - $2,500 grant deferral 4 yrs Translations and filing (less with London Protocol) _1

8 CHALLENGES Foreign Filing is economically important Must file ASAP because of first-to-file Must file before any disclosure since generally no grace period overseas Must decide on foreign filing within 1 year Foreign Filing is expensive _1

9 HOW TO FOREIGN FILE? Paris Convention Route 1 year U.S. filing - costly -within 1 year you rarely have enough information on the importance of invention -within 1 year you rarely have enough information on the selection of countries -generally, the deferral of money is important for clients -often cases are dropped early on Australia Japan Korea Canada England Germany EPC _1

10 FOREIGN FILING USING THE PCT 1 yr. Priority (Paris Convention) 18 mos. International Search and Optional International Exam National & Regional Filing Patent Cooperation Treaty U.S. Filing EP JP CA KR EP JP CA KR _1

11 BENEFITS OF PCT PCT is generally being used because client is considering foreign filing. -Buying time and deferral of costs Strategic uses of PCT -Selecting how to file your application -Selecting which searching authority to use -Selecting which national/regional countries to enter -Selecting use of PPH _1

12 BenefitsConcerns HOW TO FILE YOUR APPLICATION Classical Route File US as Non-provisional File PCT within year & Paris for non PCT countries Use PCT for foreign countries and continue with US non-provisional PCT search may get earlier search results than U.S. case Can get PCT search from another Patent Office Can still use PCT into US for a second U.S. case Significant upfront costs for complete U.S. preparation and prosecution Term of US patent one year less than foreign X X US non-provisional Direct for non PCT countries EP JP KR PCT 18 mos 12 mos X X X _1

13 Benefits Concerns File US as Provisional but do not file the US non-provisional at 12 months File PCT within year and Paris for non PCT countries Use PCT for US and foreign filing Lower up front costs Can choose when to prosecute in U.S. May get search results before big investment Get benefit of extra year of term of U.S. Patent. All patents will expire at same time May delay prosecution in US Provisional and PCT X X US Provisional Direct for non PCT countries JP US PCT 18 mos EP X X X _1

14 Benefits Concerns File US as provisional and within year file both US non-provisional and PCT, and Paris for non PCT countries Limited front end costs PCT search may get earlier result than U.S. case If use EPO for PCT search can get U.S. & EPO search before foreign filing Can still get a second US case from the PCT All patents will expire at the same time Must invest in U.S. filing without benefit of search More expenses come sooner Provisional, then Non-provisional and PCT X X US Provisional Direct for non PCT countries EP JP KR PCT 18 mos 12 mos US non-provisional X X _1

15 Benefits Concerns PCT First File PCT first Cheap way to start the process Can get search before any real investment Longest time for amending claims Can file US case during International Phase, do not need to wait 30 months Will lose one year on term for all patents Delay in getting U.S. patent PCT Direct for non PCT countries 12 mos JP US EP 18 mos X X _1

16 FACTORS TO CONSIDER IN CHOOSING AN ISA Can you get PPH benefit? Cost Timeliness Effect on later national/regional stage Quality Who does the work (outsourcing) Provision of cited references Competencies Keep in mind that some clients do not care at all about the ISR/WO _1

17 WHAT and WHERE TO FOREIGN FILE Evaluate the invention Evaluate Countries for foreign filing - General Evaluation - Patent Evaluation Many companies prepare matrix of product/country for foreign filing _1

18 PRIORITIZING COUNTRIES 1. Protect local manufacture 2. Cover competitor’s home countries or major investment manufacturing countries 3. Cover major markets 4. Cover export sales _1

19 A SUGGESTED SET OF RECOMMENDATIONS Type of Invention/ProductRecommendation System, assembly, complex machineLimited filing in industrialized countries Components and materialsBroad filing in all major countries High technology productLimited filing in industrialized countries and sourcing countries World-wide consumer productBroad filing in major market countries Industrial productLimited fling in industrialized countries Pharmaceutical/chemical productsBroad filing especially where product is easily producible Labor-intensive productLow-cost manufacturing countries _1

20 Can use PCT Results in domestic US Priority Application US Application PCT RO/-- ISA/-- WO IPER Priority Claim DO DO/US PPH Can also use PCT Results for PPH in other PPH-PCT partner countries OK US Application PCT RO/-- WO IPER Priority Claim OK PPH ISA/-- (2) _1 STRATEGIC USE OF PPH

21 (3) “Double Dipping” EP US Application PCT RO/-- WO IPER Priority Claim OK PPH ISA/-- JP US allowance CA PPH PCT - PPH PCT PPH _1

22 BE SENSITIVE TO USES OF PPH Foreign Agents send you application for National Phase Entry with favorable search report - Check if PPH can be used You receive favorable PCT search report - Is there a US pending application? - Are you foreign filing? _1

23 BENEFITS OF PPH Reduces duplication of effort via patent office worksharing Increases grant rate Reduces pendency and legal uncertainty Compacts prosecution Reduces cost Increases applicant patent strategy flexibility Overall – will always get quicker and faster results, and probably more favorable results as well _1

v2 24 Contact Information for Samson Helfgott Director of Patents Katten Muchin Rosenman LLP 575 Madison Ave. New York, N.Y., (212) Disclaimer: This presentation does not constitute any specific legal or business advice.