18 April 2012

The One-Stop Shop - Our Nemesis?

My profession is stirring with tales of doom. There are a few organisations out there, for example, Innovia and Applied Patents Inc who are offering low cost national phase entry services. Having just seen a quote, I can certainly see why the profession is nervous.

Here is a flowchart of the international (PCT) application process. Here's a link to my web page explaining the process. We practitioners often file the International Application within 12 months of filing a provisional patent application. Here's another flowchart in case you're interested. In other words, there is usually an established relationship with a client at the time of filing the International Application.

WIPO, via their Patentscope portal, publishes all International Applications. It follows that details of the Applicant are readily available to any member of the public. For these organisations, it's a simple matter of scraping the applicant details and making contact.

Entering national phase is largely procedural. It follows that there is no reason why an entrepreneurial spirit should not be able to build a profitable business with a well built system.

All good? Well, not quite.

There has been much talk of harmonisation. But the reality is that most patent jurisdictions guard their requirements and specific procedures quite jealously. In fact, to enter national phase in most countries, an address-for-service is required in that country. This is an opinion piece and I am not privy to the inner workings of these organisations. However, it must be the case that these organisations have selected certain firms to represent their clients in the various jurisdictions.

It would seem to follow that there should be little reason why they should be cheaper than us. It is important to bear in mind, though, that achieving patent protection is a process. The initial steps of national phase entry are indeed mainly procedural. However, there remains the prosecution. These are the stages where the patent authorities issue examination reports (office actions for some countries). It is at this point that practitioners are tested. It is here when we draw upon our knowledge of the client's unique situation and needs. This knowledge is often gleaned over a period of 3 to 4 years since that first meeting when the invention was all that mattered.

That knowledge is relevant because we can draw on it to argue our clients' case before the examiner. Not only that, but we are familiar with the patent specification and its often subtle nuances, strengths and weaknesses. This is important because failure to convince an examiner will elicit a further report or office action, easily doubling the cost of the prosecution. Alternatively, a practitioner looking for quick patent allowance could have the client ending up with a patent that is too narrow to be effective.

Once the matter is transferred to one of these organisations, that knowledge and the leverage it represents is lost. The file will arrive on an allocated desk and the specification and various communications will be foreign to whoever has to deal with it. The ability to hone in on various aspects or simply to pick up the phone and communicate efficiently with the client will be lost.

The prosecution stages usually cost clients significantly more than the national phase entry itself. That's because a professional service is required, at professional rates. I can only assume that this is the bait used by these organisations to achieve the required business relationship with the firms in the various jurisdictions.

If you are considering transferring your International Application to one of these organisations, you should ask the following questions:

  1. What firm will be handling the matter for you in the various countries?
  2. What is the hourly rate of that firm?
  3. What sort of costs can be expected during the 2 years following national phase entry?
  4. Who is your main contact at one of these organisations and what experience and qualifications does he or she have?
  5. Will the organisation be transparent with its downstream charges - for example, will it provide copies of invoices generated by the various firms?

Never forget that each patent application is, by its very nature, unique. At the end of the day, some practitioner is going to be sitting at a desk scratching his or her head over your application. You will want to know as much as possible about that person, since he or she will determine, to a large extent, what sort of protection your patent, if granted, will provide. In other words, the value of your patent can depend on the quality of work generated by that person.




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