Intellectual Property Owners Association (IPO) Responses to Four Questions for Public Roundtable Discussion at USPTO on December 19, 2002 Herbert C. Wamsley IPO Executive Director 1. What can be done at the domestic level to assist small businesses in obtaining foreign patents or otherwise better protecting their intellectual property? Is there a need for legislation in this area? What current programs are considered successful? Response: The most significant barrier facing small and large businesses that seek to protect inventions abroad is cost. The Patent Cooperation Treaty (PCT) has been an important benefit to small and large U.S. businesses that need to protect an invention in multiple countries. PCT enables a patent applicant to apply for protection in a large number of countries and defer or avoid substantial expenses that would be incurred in applying for patents directly through national patent offices. In recent years the PCT has become better known in the U.S. and much more widely used. The U.S. should encourage countries that have not yet joined the PCT to become members. At least a few opportunities exist to enact U.S. legislation, in advance of a patent law harmonization agreement, to adopt features from foreign laws that are widely considered "best practices." Adoption of such best practices in the U.S. would make U.S. patent law more closely resemble patent laws in other countries and eliminate some expense caused by the current lack of uniformity of laws. Examples of changes that would improve U.S. law and at the same time move toward uniformity with foreign laws include (1) adopting a first-to-file system in the U.S. for determining priority among rival inventors, and (2) permitting the assignee (i.e., owner) of an invention to file a U.S. patent application, with appropriate statutory safeguards for the rights of inventors. It should be noted that many aspects of current U.S. patent law already represent the best practice, so opportunities for harmonization through unilateral legislation are limited. Foreign governments commonly divert fees paid by patent applicants to purposes other than operating their patent systems. This is a significant factor contributing to the cost of foreign patents. Since about 1992 the U.S. also has followed the practice of diverting patent fees to unrelated government programs. Legislation preventing diversion of fees from the USPTO would set an example that might influence other countries to eliminate the costly practice of fee diversion. 2. What are the major obstacles faced by small businesses when attempting to obtain patents in foreign countries (i.e., translations, formalities requirements, different substantive requirements from the United States) and what order of priority would you assign to addressing such obstacles? Response: Four major obstacles for both small and large businesses, in order of decreasing importance, are: (1) different substantive requirements from the U.S. (2) difficulty in enforcing patents in many foreign countries, which may cause applicants to elect not to even obtain patents in those countries, (3) expense of translations, and (4) expense of formalities requirements. With regard to formalities requirements, prompt U.S. implementation of the Patent Law Treaty, which could cause other countries to follow our lead, would be helpful. 3. Are any existing programs successfully helping small businesses to obtain patents in multiple countries? In particular, is the Patent Cooperation Treaty (PCT) sufficiently used by small businesses when seeking patent protection overseas? How should the PCT be improved? Response: As noted, the PCT has been successful in helping small businesses obtain patents in multiple countries. Although the IPO Board of Directors has not considered PCT improvements in detail, a number of PCT improvements now underway or proposed would appear to be helpful to large and small inventors. These include automatic designation of all countries, an expanded international search, and search quality standards. Further improvements should be pursued that would encourage mutual recognition of search results by PCT members. 4. Should any new initiatives (beyond current patent harmonization efforts) be undertaken internationally? Response: Current efforts to achieve a common standard for electronic filing should be accelerated as much as possible. Common efforts on electronic filing and other international standards should continue to be pursued through the Trilateral cooperation program of the USPTO, the European Patent Office and the Japan Patent Office. Also, continued improvements in the PCT should be pursued as a way to obtain greater harmonization. In IPO's opinion, current substantive harmonization talks in the World Intellectual Property Organization (WIPO) Standing Committee on Patents are not progressing at a satisfactory pace. Indeed, many U.S. observers now are questioning whether WIPO's proposed Substantive Patent Law Treaty, which could involve more than 100 countries, will become a reality in the foreseeable future. The U.S. should examine all possible options for harmonization among the substantive patent laws of the U.S. and its trading partners. If the U.S. and even a small number of other countries could reach agreement on common substantive law governing the granting of patents, it would be an important step forward. Such an agreement, for example, could take the form of a bilateral or multilateral agreement consistent with the Paris Convention and containing substantive patent law provisions agreed upon as best practices. In IPO's view, a first-to-file priority rule and a 12-month grace period to protect inventors against patent-barring disclosures would be essential ingredients. Such an agreement should enable small and large businesses to prepare a single set of patent claims that could be filed in the U.S. and other countries parties to the agreement. Such an agreement also should facilitate mutual recognition of search results. In short, IPO urges the USPTO to pursue every possible mechanism for obtaining greater harmonization of U.S. and foreign patent laws, in order to reduce the cost and complexity for U.S. small and large businesses seeking patents abroad.