7.1 Territorial Treatment of Intellectual Property Rights
7.1 TERRITORIAL TREATMENT OF INTELLECTUAL PROPERTY RIGHTS^
Each nation typically has its own laws governing the protection of intellectual property. The rights granted by one nation do not extend beyond the nationís border. As a result, one must secure intellectual property rights in every individual nation of interest. Generally, foreign intellectual property protection should take place only in those countries where one is or is planning to actually market goods or services. Because foreign intellectual property protection is usually expensive, the decision whether to file foreign patent or trademark applications must balance the cost of filing against the anticipated market value.
Most foreign nations are "absolute novelty" countries which, in practi-cal terms, mean a patent application must be filed before any public disclosure of the invention. Fortunately, almost all commercially significant foreign nations are members of the Paris Convention -- an international union which facilitates foreign patent filings.
Under the Paris Convention one may file patent applications in mem-ber nations after public disclosure of the invention if a patent applica-tion was initially filed in a member nation before the public disclosure and the subsequent patent filings are made within a year of that first patent filing. Thus, if a company files a patent application covering a new invention before the first public disclosure of the invention, foreign patent application filings can be postponed until a year after the original filing date.
The ability to postpone filing foreign patent applications is a tremen-dous benefit. Otherwise, a company would be forced to file domestic and international patent applications before a new invention is even marketed.
The Patent Cooperation Treat ("PCT") provides a system which facilitates obtaining patent protection in many important markets around the world. Under the PCT, a single international application is filed which "designates" the various nations for which regular national filings are desired. Each international application receives an international search. The applicant may optionally request that the PCT international application receive an international preliminary examination and obtain an opinion whether the claimed invention meets standardized patentability criteria.
With the international search report and the international preliminary examination report, the applicant is in a much better position to decide whether to file national patent applications in the various designated patent offices. Only if the applicant is convinced, in light of such reports, that it is worthwhile to seek patent protection in the various countries, will it be necessary to pay the national filing fees, the translation costs, and foreign patent agent fees. This needs to be done thirty months from the original priority patent filing date. Thus, under the PCT, the decision and cost of filing national patent applications can be postponed for an additional eighteen months beyond the Paris Convention filing deadline.
The European Patent Convention or "EPC" is a system to make protec-tion of inventions in Europe easier, cheaper, and more reliable. The EPC provides a procedure for the searching, examination, and grant of a European patent having effect in one or more European nations. Under the EPC, a single application is filed with the European Patent Office or "EPO" which "designates" the various European nations for which patent protection is desired. The application is searched to identify relevant prior art. The applicant may request that the European application be examined. During the examination phase of a European patent application, arguments and amendments can be made to obtain allowance of the application. Once the European patent is granted, the applicant must then validate the patent in any or all of the nations originally designated. A European patent confers on the applicant, in each designated country for which it is granted, the same rights as would be conferred by a separate national patent granted in that country.
A few simple steps can dramatically improve the effectiveness of foreign patent efforts.
1. Do not commercially use or disclose information about the invention before filing a U.S. patent application. Small businesses often disclose information about the invention to evaluate market potential and to attract interest or funding. But non-confidential disclosures or sales of the invention before a U.S. application is filed may limit or bar the ability to obtain foreign patents for the invention.
2. Understand and comply with deadlines established under U.S., foreign, and international laws. Specifically, the Paris Convention requires foreign patent applications to be filed within one year of the first-filed patent application for the invention. Most foreign countries require payment of annual maintenance fees at specific deadlines. Some foreign countries require other steps, like request-ing examination, within specified deadlines.
3. Develop a sound foreign patent strategy based upon a careful review of long-term business plans and foreign market interests. Regularly review foreign patent holdings and assess whether the business value provided by the patents justifies their annual maintenance costs, and abandon foreign patents and applications that lack sufficient value.
4. Assess the nature and patentability of the invention when deciding to file foreign patent applications. If the invention is a core item
or very important to the companyís business, then foreign patents may be justified. Similarly, if the technology or invention is unlike anything on the market and provides substantial cost or functional benefits, then foreign patents may be justified. Inventions with a short lifespan or of marginal improvement may not warrant foreign patents. Some technology may not be patentable abroad, such as certain types of software or biotechnology and medical treatments.
Foreign patent decisions are complex because of the many factors and issues that must be weighed before deciding whether the investment in foreign patents is appropriate. Businesses that carefully apply sound foreign patent strategies may obtain meaningful patent protection that will produce a return on investment.
Trademarks may be registered in foreign countries in much the same way as they are registered in the United States, that is, by filing an application for trademark registration with the trademark office of the foreign nation. If goods or services bearing trademarks are sold or there is an intent to sell such goods or services in foreign markets, then it may be advisable to register the marks in those foreign countries. The Paris Convention may be used to gain the benefit of an earlier United States filing date if foreign trademark applications are filed within six months from the original United States filing date.
Unlike patents, public disclosure and domestic use of a trademark does not affect the ability to obtain foreign trademark protection. Foreign trademark rights are generally given to the first party to apply for the trademark ("first-to-file"). Before marketing a product in a foreign country, one should investigate the freedom to use any trademarks associated with the product in the country.
The European Community Trade Mark Convention is a useful procedure for obtaining trademark protection in Europe. Under this convention, a single application is filed, which if registered as a Community Trade Mark ("CTM"), will extend to all countries that are members of the European Union ("EU"). Use of the CTM in one country is sufficient to maintain the trademark in all member countries. The CTM registration is granted, renewed, assigned, surrendered or revoked for the whole of the European Union. If there is a prior conflicting trademark in one or more member countries, the CTM application or registration will fail, but it may be converted into national applications in other member countries without loss of priority or seniority. Advantageously, a CTM registration can be enforced in a single legal action to restrain infringement in all of the EU countries.
A CTM application should be considered if one is already planning on filing national applications in three or more EU countries. Similarly, a CTM registration should be considered to consolidate several national registrations of a mark into a single CTM registration, so that main-tenance is easier and less expensive. A CTM registration is also useful to block registration of a mark in any EU country by another party (bearing in mind that a registration will normally be granted to the first party to apply). Finally, a CTM registration should be considered when rights in existing registrations in one or more EU member countries are vulnerable to revocation for non-use.
Another recent international convention, The Madrid Agreement on the International Registration of Marks or the "Madrid Protocol," also facilitates international trademark protection. To be eligible to file an application under the Madrid Protocol, the applicant must be a resident of a country (or have a real and effective industrial or commercial establishment in that country) which is a member of the Madrid Protocol and have a registration (or an application which matures into a registration) in that country. The United States recently became a member of the Madrid Protocol. Currently, trademark protection under the Madrid Protocol is available in the European Union, Eastern Europe, Russia, some Asian countries, and some African countries.
Under the Madrid Protocol, a single registration may be obtained covering a substantial number of countries. A distinct advantage of an international registration under the Madrid Protocol is that it may be assigned and renewed centrally. Unlike a CTM, an International Registration under the Madrid Protocol does not fail because of a prior right in one or more member countries. That country or countries may be omitted or a restriction on the specification of goods or services may be made in these countries without affecting the scope of protection in other countries. Only if the registration in the country of origin
is successfully attacked within an initial five year period will the International Registration be cancelled, but, like the CTM, it can be converted into separate national applications. Unlike the CTM, use of the trademark in one country does not extend to all member countries under the Madrid Protocol.
The most common basis for protecting copyrighted works internation-ally is through either of two multilateral copyright treaties -- the Universal Copyright Convention or the Berne Convention for the Protection of Literary and Artistic Works. Although these conventions dominate international copyright relations, bilateral treaties and special arrangements between the United States and other countries continue to be important, particularly for works that originate in the United States and were published before the Berne and Universal Copyright Conventions came into force. Basically, if the copyright to a work is registered in the United States, it may also be registered in other countries which are parties to one of the foregoing treaties.
If products or services covered by intellectual property are to be sold internationally, it is advisable that international protection of that intellectual property be considered. Early competent advice on interna-tional protection for intellectual property can avoid unintentional loss of valuable intellectual property rights.