Cost management strategies for filing, prosecution ...

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Submitted for online publication on SSRN: 27 Sept 2016

Cost management strategies for filing, prosecution and maintenance of patents Yogesh Dhoble1 Abstract Cost management always remained the key concern for the patent managers. As per the best Technology Transfer offices, only 5% of the patents could get commercialized. Therefore there exists a need to strategize the filing in-order to manage the cost of patent. In this paper, several aspects for minimizing the cost are suggested like nature of applicant, where to file first, which office to choose for patent filing, translation requirement, patentability of the invention in a specific country, number of pages, drawing and figures in the specification. Two cases studies are presented to provide the understanding on the expenditure on the patents. Strategies described in the article would help applicants, patent managers, analyst, and portfolio managers to manage the cost of patent. Keywords: patent, examination, cost, filing, strategies, analyst, applicant Introduction Patent provides monopolistic rights to the patentee upto a period of its expiry. Patented goods or the goods produced through patented processes are often expensive as those goods inherit royalty component in their overall pricing. Non-Governmental organizations (NGO) or societal benefit organizations like Aids Access Coalition in Thailand , Médecins Sans Frontières (MSF) and Treatment Action Campaign in South Africa are often seen opposing the policies of the government over the concern of access to medicines to the public 1. Companies owning those patents also find them in difficulties to maximize the profits from the patented goods due to governmental pressures through compulsory licensing. Also, it is evident that not all the patents get commercialize. Only 5 % of the patents are licensed at most of the universities.2 Patents provide good opportunities for research collaborations, licensing, cross-licensing, forming strategic alliance, joint ventures and using them for defensive stratergy.3 It is also said that, patents can be more valued when the portfolio of patents exist. 4 Therefore, keeping patent with the firm may not be purely a decision taken on the basis of cost-benefit analysis and is required to be seen 1

Senior Scientist, Innovation Protection Unit, Council of Scientific and Industrial Research, New Delhi-110067. Email: [email protected]. The opinion suggested here are the suggestion of author only and does not in any way reflect the opinion of the organization.

1

Electronic copy available at: http://ssrn.com/abstract=2844093

how particular patent may be contributing to their overall portfolio of patents. Expenditure on the patent protection is the concern for most of the firms. Universities often find it difficult to fund their patent portfolio.

In such scenario, cost management is the main issue in the protection of

intellectual Property. Cost management requires strategies to be adopted by an applicant, that would optimize the requirement of cost and as well as keep a healthy portfolio of patents. Applicant for patent is required to pay official fees, attorney’s fees and taxes if any. For the quick understanding of the expenditure pattern percentage wise, we can consider percentage expenditure for applicant equal to revenue earned by the patent office. It can be seen that, USPTO earned 42.5 % revenue from maintenance fees and 31.3% from Filing, Search and Examination fees and rest fees are for petty matters.5 This shows that, more expenditure is made by the applicants toward the maintenance of the patents. Some interesting facts is also observed that, more than 84 % applicants renew their patent in the first stage (end of the third year after the initial patent is issued) of its renewal, more than 63 % patents are renewed in second stage (end of the seventh year after the initial patent is issued) of the renewal and 46 to 60 % patents are renewed upto 20 years. 5 This shows that, applicants were making choices in keeping their patent live. In a study done by Berrier in 1995, the author considered a chemical case with no drawings, twenty pages of application, and ten claims. The author estimated the total costs for these fifty-two countries as $ 472,414. His finding showed that, out of these costs on an average 30% cost is incurred in the first five years, 20% cost is incurred in the next five years, 22% cost is incurred in years eleven through fifteen and rest in the last five years. 6 Park evaluated a sample of patent procurement and maintenance fees for a patent with 25 pages, including 5 pages of drawing and 15 claims in different jurisdictions and analyzed cost trends in patenting, policy options and litigation. Harhaffa et al for example, assessed that validation, renewal and translation cost in the EP jurisdiction might significantly affect the behavior of the applicant and justifies the ratification of the London agreement. EP Validation fees were found on the higher side in DK, DE, ES and GR amongst the other EP countries. They also found that Netherlands and Switzerland request the highest renewal fees. They also reported that 60 % EP countries don’t require translation for validation in EP countries. Denmark, Sweden and Finland were found to be most expensive due to high translation costs.7 In reducing the cost of the patents intergovernmental agreements helps a lot. Berrier identified the need to have the harmonization of patent laws inorder to reduce the cost of the patent. 6 Jaiya and Kalange mentioned the factors such as length of patent specification, number of claims, nature and number of objections raised by the examiner, number of countries to be covered, the route to take for filing applications, translation affects the cost of the patent. 8 Cost saving measures like filing of provisional application, meeting deadlines and review of patent portfolio are suggested. 2

Electronic copy available at: http://ssrn.com/abstract=2844093

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However, the above studies doesnot provide detail impact of each cost element in the current scenario and present a comprehensive study. In another study performed in 2003 showed that evaluation of the cost of a patent is a complex when it comes to international comparison. Depending on the size of the specification and technological complexity, choosing the patent procedure to be followed, duration for the patent protection, choice of patent attorneys depending on the quality and the geographical location to be covered by the protection. They concluded that cost of a patent is tentative and broad average must be considered for evaluation. 10 We here present several strategies, which would help an applicant to keep their cost low as well as how delaying the certain fees can help in reducing the cost by proper management is suggested. We are taking into account broadly US, Europe, China, Japan and India for different type of studies. All figures converted to US dollar and the conversion applied is 1 JPY = 0.0084 USD for Japan, 1 INR = 0.016 USD for India, 1 Euro = 1.11 USD for Europe, 1 RMB =0.16 USD for China and 1 USD = 1 USD for US filed patents, 1 GBP = 1.55 USD for GB patent and 1 CHF = 1.07 USD as on 30 April, 2015. Country codes are used to represent IN for India, US for United states of America, GB for Great Britain, JP for Japan, EP for Europeon Union. Almost all patent office adopt different pricing for different applicants. An applicant as a natural person, fees are lower and for other it is on higher side. Similarly, two types of fees system are found to be adopted by the attorneys representing client’s application. Cost management starts with the type of an applicant itself. Many other strategies are further discussed in the following sections. Territorial rights When cost is deciding factor for patent filing, an important factor is the choice of the country in which an applicant should protect their rights, since the patent right are the territorial rights limited to the country were the patent has been filed. It is important to perform preliminary studies like 1. 2. 3. 4. 5. 6. 7. 8.

Market survey/analysis, Analyzing of various reports, Knowing concerned companies/industries in a territory of the interest, Utilizing the time available from provisional filing till complete filing and after PCT filing till its national phase for the search of appropriate territory. Availability/easy access/cheapness of raw material for an invention, Knowing patentable subject matter in particular jurisdiction before applying. Enforcement of IP laws in particular county. Technological need of that society i.e. looking at the technological lag present in that region.

In studies, it has been suggested that US market for technology is three times more attractive than the European market for technology, if analysis is done only on the basis of the number of filings. Secondly, if cost of a patent which designates 13 EPO Member countries is 5 to 11 (6 to 14) times more expensive than in the USA. In a research done it is found that, cost is not the only driving force, as several indicators lead us to conclude that the EPO is more selective in its granting process as it takes longer examination time and has smaller granting rate than the USPTO. 10. It is also evident 3

that, during 1995 and 2003 UK, DE and FR have more number of granted patents which signifies that those countries are favorite for filing patent by the patent managers. 7 Time First to file is the criteria for awarding a patent in almost all countries. It is extremely important to have a priority. Article 4 C of Paris Convention 11 for the Protection of Industrial Property gives 12 months period to file an invention in other countries. This provision provides an advantage for cost saving. Furthermore, applicant can discuss the invention after its first filing with prospective clients for interest in the invention. This may be of advantage as applicant can find a financing partner for patent cost. In case, it appears to an applicant that, still more time is required to decide on the countries to proceed, an applicant may choose to file PCT application wherein it would be eligible for filing in 148 countries 12 and provides an extended time period of 30 to 31 months in most of the countries and in some countries it may be extended even more as in case of Australia and Indonesia by payment of additional fees.13 Ample amount of time period is at the disposal of an applicant to decide on the countries. PCT provides other advantages that are discussed separately. Figure 1 shows general process from filing to grant and maintenance of a patent. Within PCT system also, one can save on cost if an applicant is sure in which countries an applicant needs to proceed. Table 1 shows variance of fees in the PCT schedule and how one can take an advantage of the system. It can be seen clearly that, apart from filing fees (almost constant but varies due to currency conversion) one can see huge difference in the fees structure of not only in Search fee and examination fee but also in transmittal fee. Moreover, discounts up to 90% are available in the fees to certain type of applicants. It is therefore, very important decision for an applicant in terms of cost saving to choose receiving office for filing of patent in PCT, International searching Authority (ISA) and International Preliminary Examining Authority (IPEA) for search and examination.

Figure 1: General process from filing to grant and maintenance

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Another thing that requires due consideration is that, it would be better to choose ISA and IPEA from the country where you intend to file its national phase, as it provides discounted rates for examination in national phase. In EP 20 % reduction in search fees is available if search report is provided by US, JP, RU, and AU or by CN and 50% reduction is provided where IPEA is chosen as EP. It is also important to note that IPEA is not compulsory for the applicant even if the written opinion is not good. Taking in to consideration the above strategy one can decide how to proceed in the International Phase of PCT. Therefore, it is an applicant to decide which country to file, search and examine his patent application in PCT. Table 1: Table showing variable fees in PCT schedule2

Search

Examination including Competent ISA Handling fees

1384 1413.03 1469.4 1413

163

400

2125

2354

80

1423.1

342

454

240

1384

2080

968

Country

Transmittal Filing# Fees

India* EP* GB DE

281.6 130 116.25 99.9

CN US*

AT,AU,CN,EP,IN,SE,US EP EP EP CN AU,EP,IL, KR, RU, US

# Filing fees is standard for all Receiving offices, variance is due to currency conversion in USD *Transmittal fees for large entity are shown for other applicants please refer to Fee Schedule

Patentable subject matter An invention patentable in one country may not be patentable in other country. It is recommended that an advise of an attorney may be taken in this regard as patent law in most of the countries are governed by Acts, court rulings, guidelines and interpretation by the patent office. Also, it is required to understand how stringent are the requirement of inventive step. An amount of data required to prove that, a particular compound is having efficacy over an existing is required to be understood. A prior study on patentable subject matter would save the cost at the stage of examination, opposition and infringement. However, it is the examiner and the patent office which decides on how the citations (prior art) are interpreted and objections are raised. A good care taken during drafting stage could help in early grant of the invention. Applicant’s perspective

2

http://www.wipo.int/export/sites/www/pct/en/fees.pdf (Accessed on 10/05/2015)

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Applicants can be of two or three types depending on the patent law of the respective country. One is natural person, other is organization or industry and the third is small scale industry. The fee structure of different category of applicants for standard application is as shown in table 2. In this table it shows that, not all the countries provide reduced rates for small entity and natural person. So, in order to save on cost of fees one can decide which country to file first. In countries like US, EP,DE and GB it is required to pay the fees for search and examination, which is not required to be paid in India and China for sufficient amount of time. However, some countries like India, under section 39 of Indian Patent Act, 1970, permission is required for residents to apply for patents outside India. Therefore, prevailing laws of the applicant’s country must be read carefully. Table 2: Filing Fees structure of various countries. Request for Examination (at the time of filing, if Applicable)

Official Filing Fee Country Industry/ Small Entity organization

EP

JP

organization

876.9 (233.1 Filing fee + 643.8 designation fee)

876.9 (233.1 Filing fee + 643.8 designation fee)

1001.7 2 ,2003.5 , 3 3224.5

126

126

126

1327.2

5

46.5

46.5

46.5

279

6

66.6

66.6

66.6

166.5

7

164.8

164.8

164.8

400

8

280

140

70

1320

4

GB

CN US

4

AU IN

Industry/

876.9 (233.1 Filing fee + 643.8 designation fee)

3

DE

Natural person/ Micro entity

9

10

4

296.4 , 376.5 128

5

1

#

Natural person/ Micro entity

Small Entity

1

1001.7 2 ,2003.5 , 3 3224.5

1327.2 279

#

#

#

1327.2 279

166.5 400

1

1001.7 2 ,2003.5 , 3 3224.5

#

166.5

#

400

660

#

#

330

4

296.4 , 5 376.5

296.4 , 5 376.5

392.5

64

25.6

320

#

#

392.5 #

160

#

392.5

#

#

64

3

http://www.epoline.org/portal/portal/default/epoline.Scheduleoffees (Accessed on 10/05/2015)

4

https://www.jpo.go.jp/tetuzuki_e/ryoukin_e/ryokine.htm (Accessed on 10/05/2015) https://www.gov.uk/government/publications/patent-forms-and-fees(Accessed on 10/05/2015) 6 http://dpma.de/english/patent/fees/index.html(Accessed on 10/05/2015) 5

7

http://www.liu-shen.com/docs/SFBEN.pdf (Accessed on 10/05/2015)

8

http://www.uspto.gov/learning-and-resources/fees-and-payment/uspto-fee-schedule (Accessed on 10/05/2015) 9 http://www.ipaustralia.gov.au/get-the-right-ip/patents/time-and-costs/fees/(Accessed on 10/05/2015) 10 http://ipindia.nic.in/ipr/patent/patent_formsfees/Fees.pdf (Accessed on 10/05/2015)

6

#

1 EPO as ISA and IPEA 2 EPO as ISA and no IPER 3 EPO not as ISA and IPEA/ Convention Application 4 Electronic filing 5 Paper filing # -Request for Examination after filing the Application

Filing Stage Sufficient amount of disclosure is necessary for the grant of an invention. Patent application having too much disclosure and no proper claims would be wastage of efforts of filing. Claim portion is an essential section of the specification which provides legal protection. Claim portion is critically seen by the patent offices and the technopreneurs, so it is required to be written with due care. Claims must be neatly drafted to cover all the essentials of the invention. Claims are required to be supported by the specification and sufficient examples. Well drafted claims could be searched in the granted patent of the relevant area on databases. This could act as a guide for good drafting. However, if attorney is at help, applicant is advised to take their help in drafting as well as in filing an application. This would save lot of cost during prosecution. Number of Claims and number of pages exceeding certain limits attracts additional fees. From the table 3 it can be seen that on an average 30 pages and 10 claims are allowed in a standard fee structure. Typically, USPTO charges fees on number of dependent and independent claims exceeding certain limit. Discounts are provided by the patent office on Electronic filing for example 10 % reduced fee is required if the application is filed electronically. Table 3: Country-wise comparison for pages and claims in official fees for filing patent Application.

Country

Pages

Claims

IN

12.8 USD for each page exceeding 30 25.6 USD for each claim exceeding 10 pages 260.85 USD for each claim from 16th claim to 50 claims and exceeding 50 claims on each subsequent claims 643.8 USD

EP

16.65 USD for pages excess of 35

GB

No mention in fee schedule

DE

No mention in fee schedule

CN

8 USD on each page in excess of 30 400 USD for every 50 sheets or fraction thereof of the specification 420 USD for each in excess of 3 and drawings that exceeds 100 independent claims and 80 USD for sheets (excluding any sequence dependent claim in excess of 20 claims. listing or computer program listing filed in electronic medium)

US

No mention in fee schedule 22.2 USD for each claims in excess of 10 claims 24 USD on each claim in excess of 10

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Note: Fees are indicative and may differ if filed online or filed by natural person or small entity. It is required by the patent office to file the patent in their national language as in the case of china, Japan, Korea, Germany and Russia. In India, US, AU and EP, filing of patent application in English language is allowed. So, translation of patent application is another cost factor, while filing the patent application in a particular country. Due to incorrect or not precise translation of the patent application may receive objections from the patent which may amount to addition of cost during prosecution. Examination stage Patent Office examines the patent application for its compliance with their patent law before the grant of a patent. Examination of patent application starts early in EP and US. In India, examination on an average starts after 3 to 4 years from the date of filing of request for examination, however expedite process is available for the early grant of a patent. The applications which are filed through PCT route generally get in to prosecution much early then the cases filed directly in the patent office, as in case of Germany. As discussed earlier, some of the patent office takes search and examination fees at the filing stage, as in case of EP and US. Request for examination is required to be filed in most of the countries. In case of China request for examination is required to be filed within 3 years from the date of filing or the date of priority if claimed. In Japan request for examination is required to be filed within 3 years from the filing date, for India request for examination is required to be filed within 4 years from the earliest priority date, in Australia it is within 5 Years from the filing date and in Germany it is within 7 years from the filing date. So, a definite time lag can be seen in taking up the case for examination between filing till request for examination. Further, several patent offices are overburdened with the applications for examination, which further adds up to actual take-up of the patent application by the examiner. Request for examination provides an advantage to the applicant to proceed for a grant or not. Some of the patent application may not worth to continue further, may be discontinued without payment of request for examination. This procedure should be encouraged as it saves on cost of the applicant, and also the examiners burden of search and examination of patents that are not worth to be continued. As soon as the examination report is issued by the examiner, applicant is required to fulfill the requirement of the examiner on the formal rejections, drafting of claims, dependencies of claims with other claims, novelty, inventiveness and the most important is utility rejection. Patent application where biological material is involved it is required to deposit the material is International Depository authorities under the Budapest Treaty. In certain patent offices like India and Brazil it is required to provide the source of Biological material used in an invention. Rejections are required to be properly addressed by providing complete response to each and every rejection, this would help examiner in not issuing further office action/rejection, which would help in early grant with less expenditure. An interview with an examiner or declaration by a person skilled in art can reduce the cost of prosecution.

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Use of IP5 patent prosecution highway (IP5-PPH), 14 Global Patent Prosecution Highway System (GPPH) 15 whose members as of 1st of Nov 2014 are 19 countries and PCT-Patent Prosecution Highway Pilot (PCT-PPH) wherein several bilateral agreements between countries have taken place. 16 The PPH mechanism helps save burden of search and examination of an examiner, save the time and efforts for responding to the complex queries of the examiner and helps further in saving cost of an applicant. One can expect early grant with less hassles, however, the decision of grant vest with the country and their laws inforce. A well learned local attorney could help an applicant to draft patent application with the requirements of examination under consideration, which would invite less rejection(s) by the patent office and eventually save on cost to an applicant for the grant of a patent. Generally, patent office cost is zero during examination, if an extension to respond to examination report is not taken. If attorney is hired for responding the said reports by an applicant, professional fees for his services can be expected. Maintenance fees The fee that is due to be paid at certain time interval during the pendency of the patent application at the patent office is known as maintenance fee. Many of the patent offices do not charge those fees till the grant of an application, but are required to be paid as soon as it is granted. For Instance, in India as soon as a patent is granted an applicant is required to pay the fee due after the expiration of the 2nd year from the date of patent in respect of 3rd year till the grant date. In US, no maintenance fee is required to be paid till the grant at USPTO. In EP, DE fees are required to be paid before the grant annually. So, tracking of the requirement of fee at the patent office and due date for its payment are an essential task of an applicant. In case, the fee due at patent office are not paid within the time frame including the extended period in some countries an applicant would lose the rights of their patent. Grant Stage Grant to a patent occurs after all formalities are satisfied of the patent office in accordance with their country law. Grant of a patent is desirous stage as it provides several advantages over the pending application. Almost all Patent office requires an applicant to pay issue fee, grant fee and any other maintenance fee due before the grant of a patent. Later the grant stage, to continue the rights over the patent it is required to pay the renewal fee as and when due. Grant stage fees are provided in Table 4, wherein it is observed that, either Issue fees or grant fees or registration fees or annuities due up to grant are required to be paid by an applicant. Countries like GB and DE don’t take grant fees or issue fees at the time of grant of a patent. Therefore, it is essential to make decision at this point of time, whether to obtain a grant to an application or not.

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Table 4: Grant stage fee details Country

Issue fees/ Publication fees Annuity

Industry / organization

Small Entity

Natural person/ Micro entity

EP

1015.65

1015.65

1015.65

JP

108.36

108.36

108.36

GB

NA

NA

NA

CN

40.8

40.8

40.8

US

960

480

240

depending on the year in which the patent gets granted NA

AU

200.3

200.3

200.3

NA

NA

Payment of all due in respect of third year from the date of patent before the expiry of second year

IN

NA

NA

NA 1st -3rd year paid as registration fee Cumulative fee from 5th year to year of grant

Patent may be granted sooner or later depending on in which country the patent application is filed, further it also depends whether an application is filed in divisional/branch/zonal Patent office. In case, an application is filed with a zonal office which is having sufficient staff and less pendency, an early grant may be expected. Early grant can also be expected for the cases filed through PCT route, wherein search and examination is already done, the national patent office feels less burden on their part to take up those cases for its examination and hence an early grant can be expected. Particularly for the cases filed in US and EP an early grant may be expected where the International Searching Authority is EP or US in their corresponding PCT application. As mentioned above use of PPH would help in an early grant. Renewal fees Patent rights are subject to the payment of renewal fees to the respective patent offices. Fees are required to pay within their due dates; else the rights would be jeopardized. These fees are incremental in nature and required to be paid annually. In India, China, Germany, United Kingdom the renewal fee is to be paid annually. In US renewal fee is required to be paid 3 and half years, 7 and half Years and 11 and half years after the grant of a patent. The table below shows the cost of renewal of patent in some important countries. The table 5 shows that, no significant rise in maintenance cost of patent till first 10 years of the patent life. From 11th year onwards a noticeable rise in the renewal cost is seen. It can also be seen that, a last renewal fee in US is too high, as no further fee is payable with respect to renewal in this country.

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Table 5 : Annuity charges only official fees (all in USD) Annuity Year US EP DE 1 2 3 516.15 77.7 4 643.8 77.7 5 899.1 99.9 6 1154.4 144.3 7 1600 1282.05 199.8 8 1404.15 266.4 9 1531.8 321.9 10 1731.6 388.5 11 3600 1731.6 521.7 12 1731.6 688.2 13 1731.6 843.6 14 1731.6 1010.1 15 7400 1731.6 1176.6 16 1731.6 1365.3 17 1731.6 1565.1 18 1731.6 1764.9 19 1731.6 1953.6 20 1731.6 2153.4 The table indicates that, it would commercial interest in the patent.

GB

IN

64 64 108.5 64 99.9 64 122.1 192 144.3 192 166.5 192 188.7 192 210.9 384 233.1 384 277.5 384 321.9 384 388.5 384 455.1 640 510.6 640 566.1 640 621.6 640 666 640 be unjustified

CN 144 144 144 192 192 192 320 320 320 640 640 640 960 960 960 1280 1280 1280 1280 1280 to renew after the 10th year, if there is no

Attorney fees Compliance of legal formalities, meeting the due dates of the event in a patent process and paying the required fee to the patent office are the work required to be done by the attorney in handling of patent work assigned to them. However, an advice of an attorney may help an applicant in overcoming the complex legal formalities. Attorney fee is a big component of the total expenditure on the patent. Attorney fee varies from country to country and they may charge some component on fixed basis and some component on hourly basis for the work done by them. Attorney may also have preferential rates for some applicants and discounted rates for the inventor as an applicant. Table 6 indicates average charges of attorney for performing some activities.

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Table 6: Charges of attorney for patent related work.(All figures in USD)

Average Attorney charges

US

EP

IN

Filing of complete specification Hourly charges Filing of legal documents

500-2000 200-500 150-250

600-1500 250-500 300-450 100-200 110 50-100

CN 850-1380 130-350 70-100

0.19 to 0.3 per translation charges Nil Nil Nil word Payment of Renewal fees 150-200 100-150 100-150 100-150 Charges of attorney also depends on complexity of the patent application, reputation of an attorney, attorneys experience i.e. senior attorney or a paralegal person working on your patent. Almost all attorneys’ work on the time spent model and choose hourly charges. Depending on the credibility of the applicant, attorney may waive of the requirement of upfront payment and may provide 30 to 45 days for payment of the dues. Attorney may charge you 50 USD for just sending a reminder for some response to be filed or any activity due in the patent procedure. In some countries like India, Srilanka the filing fee of the patent office may be much lower than the attorney fee. Accordingly, applicant may choose patent attorney which is economical and has strong background in handling of patent related work. Applicant may prefer to choose an attorney who is associated with a reputed law firm or organized team of lawyers. This would provide reliability of service for applicant even if a specific attorney is unable to attend the patent application. Normally, the professional fee of the attorney is the range of 55 to 70 percent of the official fees for developed countries and 100 to 150 percent in case of developing countries. Renewal fee of a patent can be paid through the law firms which specifically does the work of renewal. Attorney firm may provide offers/ discounts if the bulk of renewal of patents is done through them. Cost of patent filing till grant and further renewal The cost of patent filing is explained through two case studies. One case study would showcase an expenditure on simplest case and other study would showcase an expenditure on complex case. Simplest case means, patent granted with less examination hassles; and complex case means, patent granted through several office actions. Both Inventions are picked up from chemical sciences. The fees indicated in the below table 7 is all inclusive cost (filing fees, attorney fees and any other taxes) incurred on that case. The expenditure is based on the applicant as a large entity/corporate and is filed through a local IP firm based in India and their counterpart attorneys in other attorneys. Both the cases were filed first in India, then in PCT and then filed in national phase countries in EP, JP and other countries. Case study would provide information on how the cost would vary in two inventions filed during the same period.

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Table 7: Cost data of Case study I and II Case study –I India Filing Cost in USD

Sr.No

Date

1

Aug-09

384

Filing Indian specification in respect of Patent Application.

2

Dec-11

320

Filing Request for Examination

Sub-Total

Purpose

704 PCT filing

1

Nov-10

2993

2

Mar-11

110

3

Jul-11

2099

4

Jul-11

249

Sub-Total

Filing a new PCT application with IB-WIPO. Submitting certified copy of priority document and power of attorney at IB-WIPO. Filing a demand before IPEA/EP. Filing of response under Art.34 before IPEA/EP.

5452 EP filing

1

Apr-12

2974

2

Jun-12

722

Attending to 3 annuity.

4

Jun-13

977

Attending to 4

5

Oct-13

2643

6

Dec-13

198

7

Jan-14

620

Sub-Total

Filing the application including the official fee. rd

th

annuity.

Filing the translation of the claims and responding to the official communication. Receiving and recording an official communication under Rule 71 (3)EPC Reporting R 161 communication and Publication.

8135 Germany Validation

1

Feb-14

1245

2

Jul-14

394

Sub-Total

National Validation by appointing a local attorney in Germany. th

Attending to the 5 annuity.

1638 Spain Validation

1

Feb-14

4782

2

Jul-14

374

Sub-Total

Preparing translation of specification and official fee. ( Validation in Spanish) th

Attending to the 5 annuity.

5156 France Validation

1

Feb-14

1108

2

Jul-14

297

Sub-Total

National Validation appointing a local attorney in French. th

Attending to the 5 annuity.

1405 Japan Filing

1

May-12

7305

Preparing and filing application including official fee and translation charges.

2

Jun-13

2083

Filing a request for examination including official fee.

Sub-Total

9388 13

US Filing 1

May-12

2398

2

Oct-12

917

3

Jul-13

603

4

Jan-14

3507

5

Aug-14

1464

Sub-Total

8889

Grant Total

40767

Preparation of preliminary amendment with amended claims and requesting clarification and filing an application. Reviewing the status of the application preparing and sending reminders including official fee. Review prior correspondence and the executed assignment and drafting the correspondence. Request for instruction and drafting response to office action with additional claim amendments. Review notice of allowance and issue fee.

Case study -II India filing Cost in USD

Sr.No

Date

1

Mar-07

720

Filing of Indian patent application

2

Jan-08

160

Filing Request for Examination

Sub-Total

Purpose

880 PCT filing

1

Mar-07

2442

2

Dec-07

1773

Sub-Total

Charges and fees towards preparing and filing of a PCT application with IB-WIPO. Professional charges, official fees and disbursements towards filing a demand with EPO.

4216 EP filing Reviewing claims and entering application into the European regional phase and reporting including the official fee.

1

Feb-09

4375

2

Aug-09

434

3

Nov-09

1290

Payment of 4 annuity fee.

4

Nov-09

2708

Towards validating the patent in Germany and France.

7

Oct-10

523

Sub-Total

Reporting an EPO communication under Rule 71(3) EPC. th

Towards the professional charges for German and France.

9330 Germany validation th

1

Nov-10

363

Payment of 5 annuity fee.

2

Mar-12

364

Payment of 6 annuity fee.

3

Jan-13

478

Payment of 7 annuity fee.

4

Jan-14

658

Payment of 8 annuity fee.

Sub-Total

th th th

1860 France validation th

2

Nov-10

160

Payment of 5 annuity fee.

3

Feb-12

177

Payment of 6 annuity fee.

4

Jan-13

223

Payment of 7 annuity fee.

5

Feb-14

326

Payment of 8 annuity fee.

th th th

14

Sub-Total

889 Japan filing

1

Dec-08

4342

Preparing and filing the application including the translation charges.

2

Mar-10

2428

Filing request for examination.

3

Jul-12

1738

Filing an amendment and argument and request for extension of period and translation of the office action.

4

Oct-12

526

Sub-Total

Attending Annuity

9035 US filing Preparing a preliminary amendment, argument and filing the necessary document and preparing an Inventor declaration and reporting the filing details including the official fee.

1

Oct-08

3758

2

Jun-10

582

3

Oct-10

846

4

Jan-12

557

5

Nov-12

837

6

Nov-12

548

7

May-13

2623

8

Sep-13

655

9

Feb-14

4026

10

Jun-14

596

11

Sep-14

2545

Reviewing the history, claims, final office action; finalizing the response and filing the response with USPTO and reporting the same.

12

Oct-14

2583

Reviewing client instruction to file RCE.

13

Oct-14

342

4

Jan-14

3275

Request for instruction and drafting response to office action with additional claim amendments.

5

Aug-14

1541

Review notice of allowance and issue fee.

Sub-Total

25313

Grand Total

51683

Preparing an information disclosure statement and reviewing official filing receipt and checking for accuracy. Preparing IDS and reviewing executed assignment and submission of late declaration. Reviewing restriction office action and preparing a reporting letter. Preparing and filing written response the restriction requirement and reporting. Receiving the latest office action and reviewing the rejection. Analysing the pending claims and drafting a response to the office action. Receiving the latest office action and reviewing the rejection and reporting. Analysing claims and drafting response to office action. Receiving the final office action and reviewing the rejection.

Receiving the advisory action from the USPTO.

Since the scope of the paper is limited to cost of patent, patentability of a patent application in detail is not considered under the discussion. As discussed earlier and is evident from the case studies that, inventions filed during same time and in same countries a cost difference of USD 10916 has been observed. The factors, which affect mostly, are attorney fees and the strength in the patentability criteria. It is observed that in Case study 1 that Indian patent filing fees and examinations fees required were more as compare to Case study 2, due to revision in the Indian patent office fees. 15

Case study II shows that USPTO issued several examination reports before the case is granted, however, EPO granted the case with no examination, since EPO was the ISA and IPEA and had provided good International Preliminary Report on Patentability (IPRP). In case study I, USPTO granted an application with only one office action. A good attorney can help an applicant in reducing the level of prosecution/examination of the patent application, which would lead saving of cost. Evaluation of patent Patent filed, pending, granted or under maintenance must be periodically reviewed for its licensing/commercialization. Patents that are of no use or become obsolete may be removed from patent portfolio. Patent pending for grant may be reviewed as an when any activity related to a patent is due. Cost of an activity and the expected return from patent should be reviewed constantly. Conclusion The society provides an opportunity for 20 years to enjoy the exclusive rights over the patent with some social responsibilities, for instance in the India, in case if patent is not sufficiently exploited for a public good, government may issue a compulsory license. Following is a conclusion drawn based on the cost consideration. 1. Drafting of patent application, filing of patent application in patent office, examination, grant and its renewal are the important stages of the patent. It is advisable to take services of best attorney to go through the complex process of patenting and patent filing as different patent offices have unique patent law and its procedures, which would be very difficult for an applicant to understand. A good attorney would help in reducing the cost at various stages of the patent. 2. Strategize filing of patent by selecting jurisdiction through proper market survey, analysis of applicants claims in an invention can help in saving cost on patent filing in the unfruitful countries. 3. File priority patent application (Provisional application) first, then PCT application and then regional patent application in European Patent office (EPO), African regional Intellectual property organisation ( ARIPO), Organisation Africaine de la Propriété Intellectuelle (OAPI), Eurasian Patent Organization (EAPO) would also help in delaying the cost on the patent. 4. First 12 months after filing of provisional patent application is most important in order to decide to make a complete specification or filing of convention application or PCT application is required to be done. This period of 12 months can be exploited thoroughly towards better drafting, enablement issues for a patent or finding a funding agency or looking for commercial working prospects for an invention so that choice of Jurisdiction is narrowed for further filing of patent. 5. Use of PCT filing route would be advantageous, if an applicant intend to file patent in more than 3 countries. In case, PCT application is filed, 30 to 31 months from priority can be used for identifying the commercial partner/jurisdiction. Till this time, most of the strategic work of an applicant must be over. At this stage an applicant needs to be confident over the countries where it needs protection.

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6. Mechanism like IP5-PPH, GPPH or PCT-PPH for fast tracking a grant of a patent application may be used. Incase, a licensing partner is not found and it is also required not to incur more cost, best practice would be to delay the initiation of examination. 7. Regular assessment is required to be done at every stage of patent. If a patent is not providing any commercial benefit to an applicant, it may be abandoned at any stage of its patenting. 8. Grant of a patent provides rights, but if granted patent does not provide any strategically or commercial benefit/advantage, it is better an applicant relinquish its rights, as holding those rights would only incur unfruitful expenditure in patenting and paying maintenance fees. 9. Strong evaluation/review of patent must be done after the 10 Years of patent filing as steep increase in renewal fees is charged by most of the countries. 10. It would be better if a Madrid protocol like system as in case of trademark protection exist is made, it would save lot of hassles and cost of an applicant.

Bibliography 1. Ford, N. Patents, access to medicines and the role of non-governmental organisations. Journal of Generic Medicines: The Business Journal for the Generic Medicines Sector 1 2004, 137-145. 2. Heidi, L. University struggle to make patents pay. Nature 2003, 472. 3. Tidd, J. a. K. P. a. J. B. Managing innovation, volumn 3; Wiley: Chichester, 2001. 4. Gideon, P.; R. Polk, W. Patent portfolios. University of Pennsylvania Law Review 2005, 1-77. 5. USPTO. PERFORMANCE AND ACCOUNTABILITY REPORT; USPTO: Dulany Street Alexandria, Virginia, 2015. 6. Berrier Jr, E. F. Global Patent Costs must be reduced. IDEA 36 1995, 473. 7. Harhoff, D.; Karin, H.; Bettina, R.; Bruno, v. P. d. l. P. patent validation at the country level-the role of fees and translation costs. Research Policy 38 2009, 1423-1437. 8. Kalanje, C. M.; Jaiya, G. S. IP and Business: Managing Patent Costs. WIPO Magazine, September 2006. 9. Jaiya, G. S.; Kalanje, C. M. World Intellectual Property Organisation. http://www.wipo.int/sme/en/documents/managing_patent_costs_fulltext.html (accessed Feb 16, 2016). 10. Potterie, d. l.; Pottelsberghe, B. v.; François, D. The cost factor in patent systems. Journal of industry, competition and trade 9 2009, 329-355.

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11. WIPO. Paris convention treaty. http://www.wipo.int/treaties/en/text.jsp?file_id=288514#P113_13775 (accessed May 2015, 2015). 12. WIPO. PCT Contracting states. http://www.wipo.int/pct/en/pct_contracting_states.html (Accessed on 19/05/2015) (accessed May 19, 2015). 13. WIPO. Time Limits for Entering National/Regional Phase under PCT Chapters I and II. http://www.wipo.int/pct/en/texts/time_limits.html (accessed May 10, 2015). 14. FiveIPOffices. IP5-PPH. http://www.fiveipoffices.org/activities/ws/ip5pph.html (accessed May 18, 2015). 15. JPO. GPPH. https://www.jpo.go.jp/ppph-portal/globalpph.htm (Accessed on 19/05/2015) (accessed May 19, 2015). 16. WIPO. PCT-PPH. http://www.wipo.int/pct/en/filing/pct_pph.html (accessed on 18/05/2015) (accessed May 18, 2015).

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