Use of the PCT system, and advantages and benefits of International Preliminary Examination (IPE)

There are a couple of ways to file a patent application in a country of interest. The choice is usually based on a commercial strategy, and balanced by cost considerations. If protection of the invention is required in only a few countries, it is usually most cost effective to file directly into those countries and claim priority to any provisional patent application which has been filed – known as (Paris) Convention applications.  Alternatively, where an applicant requires more than a few countries, it is more common to file a Patent Cooperation Treaty (PCT) patent application (and claim priority). It is also possible to pursue Convention applications in parallel with a PCT application.

 

The strategy of filing Convention applications incurs the relatively-expensive filing costs sooner compared to filing a PCT application, where the major filing costs are deferred for 18 months – a period referred to as the International Phase. In other words, the PCT application takes the place of the individual foreign patent applications that would otherwise have been required. After the International Phase, in a period referred to as the National/Regional Phase, the PCT application is converted into individual foreign patent applications, one in each country where patent protection is to be sought.

What is the PCT system?

The PCT is an international agreement administered by the International Bureau (IB) of the World Intellectual Property Organisation (WIPO) and covers most of the major industrial countries of the world. A list of the PCT contracting/member states can be accessed here. The IB receives all of the PCT applications, wherever they were originally filed, maintains compliance with PCT rules, maintains an official record of all PCT applications, forwards copies of relevant papers in PCT applications to regional and national patenting authorities, and publishes PCT applications.

Advantages of the PCT system

One significant advantage of a PCT application is deferral of the cost of the national phase applications, allowing Applicants more time to explore the commerciality of the invention. The PCT is also an attractive option for applicants who intend to find licensees for their foreign patent rights, as the PCT keeps the options open in many countries and then the licensee can pay the costs of prosecution in any countries in which the licensee is interested.

Another advantage is that a PCT application is automatically subject to both search and examination, and therefore provides some information for assessing the prospects of actually obtaining granted patents, and their potential scope of protection, before the major filing and prosecution costs are incurred. The PCT system permits a central prosecution before a single patent office, and can be used to reduce the number of objections that will need to be addressed later, before individual patent offices, thereby lowering prosecution costs. The PCT application route is costlier initially due to the filing costs of the PCT application itself, however it may be more cost effective overall due to streamlined prosecutions.

The PCT system can also be used to manage risk. For example, if the invention disclosed in the PCT application is subsequently found to be unpatentable in view of the prior art, an early decision can be made to withdraw/abandon the application, thereby avoiding the national phase filing costs.

The PCT system is also flexible in that if the applicant requires further time to raise funds or assess the potential of the invention the priority claim can be withdrawn close to the national/regional phase entry deadline, effectively extending the deadline to file national/regional phase applications. Of course, the applicant should only take this step if unaware of any relevant publications.

Examination of PCT applications

The PCT system does not examine patent applications fully, and it does not grant patents. The examination may be without interaction between the applicant and the Examiner (under Chapter I) or with interaction between the applicant and the Examiner (under Chapter II). By default, the examination is performed under Chapter I, unless a Demand is filed under Chapter II.

  • Chapter I: The main steps include: filing the PCT application, preparation of the International Search Report (ISR) and the Written Opinion (WO) of the International Search Authority (ISA), and the publication of the international patent application, with the ISR and any amended claims which have been filed. If a Demand is not filed (see below), the WO is later reissued as the International Preliminary Report on Patentability (IPRP) under Chapter I (IPRP/ Chapter I).
  • Chapter II: Chapter II is optional and is also known as International Preliminary Examination (IPE). The main steps include: the filing of a Demand including amendments and/or arguments to address any objections raised in the WO, and the subsequent preparation of the IPRP/Chapter II. Obviously if the WO is clear of issues of patentability, there is no need to file a Demand and undertake IPE.

What is International Preliminary Examination?

 IPE is used to obtain “a preliminary and non-binding opinion on the questions whether the claimed invention appears to be novel, to involve an inventive step (to be non-obvious), and to be industrially applicable”[1].  It is carried out by an International Preliminary Examining Authority (IPEA) at the request – called a “Demand” – of the applicant, and gives the applicant the opportunity to evaluate the prospects of obtaining patents in the countries of interested before incurring the expense and trouble of entering the national phase. Fees are payable for making the Demand, and it must be filed within a certain time limit and accompanied by a response to the WO. The examination is “preliminary”, since a final opinion will be formulated only in the national phase by the national or regional patent office, and is “non-binding” on anyone, including national/regional patent offices.

It is not necessary to file a Demand if you the applicant is content with the WO being reissued as an IPRP, and is happy to address any objections raised during the regional/national stage. For example, where the objections raised in a WO relate to matters of inventive step the applicant may choose not to respond to the WO.  This would allow the applicant to address the inventive step issues separately before each national office, and in accordance with national inventive step law and practice.

The PCT application is filed with a Receiving Office (RO) and is followed by search of the application by the ISA (who prepares the ISR and WO). For nationals and residents of Australia, the choice of RO is IP Australia or the IB, and the choice of ISA (and IPEA) can be IP Australia or the Korean Intellectual Property Office (KIPO).

What is examined?

 There is not a uniform approach to the criteria for examining patentability in the national laws of each of the 150+ countries that are currently party to the PCT. Therefore, the criteria on which IPE is based correspond to internationally accepted criteria for patentability, namely: novelty[2], inventiveness[3], and whether the invention is industrially applicable[4]. A secondary objective is to identify whether there appear to be any defects in the form or content of the international application, for example with regard to clarity (claims, description, drawings), whether the claims are fully supported by the description, or whether there are multiple inventions claimed (lack of unity of invention). Additional objections can relate to inconsistencies in the description (ambiguous syntax, relative terms, etc.), whether there are too many independent claims in one category (conciseness), and whether the claims are framed in a result to be achieved (stating the desired result without explaining how the result is achieved).

 What are the benefits of IPE?

According to the PCT guide[5], while the IPRP is not binding on a patent office, “it carries considerable weight … and a favorable report will assist the prosecution of the application…” Also, an application “… will generally proceed rapidly to the grant of a patent” where the IPRP is favourable. In practice, this is generally true for many countries, although many countries will use the IPRP as the starting point for further examination in the national/regional phase, especially the larger jurisdictions such as the US, Europe, China, and Japan, and will effectively start “from scratch”. Despite starting from scratch, the IPE procedure is of some benefit as many of the issues will have already been addressed prior to national phase prosecution, thereby potentially expediting prosecution in these countries and reducing overall costs.

From a risk management perspective, obtaining a clear IPE can also be of benefit to licensees, who can take some comfort from a clear report, and can make commercial decisions based on the likely scope of the claims.

What happens after the international phase?

The normal deadline for entering the National/Regional Phase is 30 or 31 months from the priority date, depending on the country, although it is possible to enter the National/Regional Phase “early”, before the deadline. The requirements for entering the National/Regional Phase are different for each country/region, and usually involve appointing a foreign attorney to handle the application, filing formal documents signed by the inventor/applicant, and paying official fees to the patent office of that jurisdiction. Once filed, the application is handled and examined according to the usual treatment of patent applications in the countries/regions involved, and all of the local time limits, laws, rules, and procedures must be observed.

Closing comments

The decision of whether to file Convention applications or a PCT application (and subsequently enter the national/regional phase) depends on the budget and the commercial strategy. Assuming a PCT application is filed, there is a further decision on whether to file a Demand, which depends on factors such as the commercial stage of the product, the interest of licensees, the scope of the planned national/regional filings, the budget, and the scope of the prior art cited in the ISR. We recommend that you discuss these important matters with your Shelston IP attorney early in the patenting process so that there is a targeted strategy for your innovation.

The content of this article is general in nature and must not be relied on in lieu of advice from a qualified professional in respect of your particular circumstances.

PCT system


[1] Article 33(1)

[2] Article 33(2), and Rule 64

[3] Article 33(3), and Rule 65

[4] Article 33(4)

[5] http://www.wipo.int/pct/en/appguide/text.jsp?page=ip10.html