Controlling Patenting Costs

• Author: John Richards
• Profession: Ladas & Parry LLP
• Pages: 37-59

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CHAPTER 3

Controlling Patenting Costs

John Richards

Ladas & Parry LLP

Now more than ever one needs to ensure value for money in creating and main-

taining a patent portfolio. Not only are budgets decreasing or stagnant, but the

number of countries that need to be considered is increasing. Who today can afford

the risk of ignoring the potential of Brazil, Russia, India, and China (the so-called

BRIC countries) in addition to the traditional list of countries of the North American

Free Trade Agreement, Japan, the Europe Patent Office (EPO), and Korea?

Key steps to accomplishing this are the following:

1. A clear understanding of the objective that is desired to focus on productive

goals.

2. Preparing properly in advance of incurring costs.

3. Avoiding duplication of effort.

4. Being ruthless in cutting costs if it seems that the objectives cannot be achieved

and there is no other reason for continuing.

This chapter discusses ways in which such steps may be implemented. This

chapter does not address the costs of patent litigation. This is, of course, a factor to

be borne in mind, but since one can derive benefit from a patent without actually

litigating it, such costs are normally a subsidiary factor at the filing and prosecution

stages.

Defining the Objective

Realistic assessments of the potential benefit of securing patent protection are

needed early. Not every invention requires a patent to protect actual or potential

products.

1

Neither does every invention have the potential to be licensed or

cross-licensed, nor is every invention for which patent protection is justified

equal. Some will justify maximum effort to secure the broadest possible claims. In

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other cases, relatively narrow claims directed to a specific embodiment may be all

that is needed to achieve the applicant’s objective, for example, if the applicant

already has patent protection for related inventions. A proper assessment involv-

ing research, financial, and marketing management is needed at an early stage to

make such a determination.

In making such assessment, it sh ould be borne in mind that the main val ue of a

patent is to enable one to excl ude others from doing what i s patented. As a corol-

lary, this gives the right to license others to use the patented technology and to

charge them for such use. In bo th contexts, it is important to id entify the actual ac-

tivity for which one needs to secure patent protection in order to achiev e the de-

sired degree of control. This may not necessarily mean that one has to secure

patents for every feature of a product one intends to sell. If there is one key element

that is necessary, it may suffice to secure patent protection for that element alone.

Before deciding on this course, however, it would be prudent to consult an expert

as to exactly what type of protectio n is likely to be obtained in any given cou ntry.

Some jurisdictions requ ire more detail than other s to secure broad protectio n. It is

therefore helpful, even at this early stage, to make a tentative decision as to the

countries of interest.

In some cases, one may be seeking patent protection not so much to protect

one’s own investment but to provide bargaining counters for use in cross-licensing

deals. In such cases, a similar analysis applies, b ut one would be looking to deter-

mine what are likely to be key elements in a competitor’s product.

University and nonprofit research organizations may have other factors to bear

in mind, for example, the need to be able to establish their reputation in a field by

securing patent protection in it as well as the need to establish a licensable portfolio.

In other cases, the impetus for seeking protection for an invention in a country

derives not so much from the legal right to exclude others but from other considera-

tions. These include marketing, the desire to have a statutory intellectual property

(IP) right to anchor what is otherwise know-how, or a consulting agreement. In

some such cases, alternative cheaper forms of protection such as utility models, de-

signs, or even copyright protection may suffice.

A proper assessment of these factors will also assist in determining whether any

additional experimental workis needed before filing. In the chemical and biochemical

fields, the scope of obtainable protection will, in many countries, depend on what

experimental data are presented in the application and what one can plausibly argue

would be expected to function in the same way as what one has exemplified. If one’s

objectives call for broad protection, it may be that an application is not ripe for filing

until such experimental work has been carried out. Simply filing a narrow application

based on the original experimentation, and then filing a later application to broaden it

out when further experimental results are available, may be a feasible option if one is

interested only in countries that provide protection against ‘‘self-collision’’ such as the

United States and Japan. However, it is of no help if the countries under consideration

include Europe or China, because if the prior registration is citable against the new

registration, the lack of protection against "self-collision" would preclude the latter

registration.Therefore, such an approach may be a waste of money.

As noted earlier, there can be situations where a narrow claim is as valuable as a

broad one. In such a case, further experimental work maynot be needed. In any case,

38 Intellectual Property Operations and Implementation