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Strategies to Defer Costs of Patenting -- Use Provisional, 'PCT' Applications


Though it is difficult to know whether to patent a new invention, there is no question that patenting it will be expensive. Patent costs include those of preparing an application and the subsequent prosecution costs to convince the patent office that it should issue a patent. The total cost to obtain a U.S. patent may be as little as $15,000 or as much as $ 100,000 or even more, depending on the complexity of the technology.

Both the startup entrepreneur and the established company are caught between the proverbial rock of high patent costs and the hard place of losing patent rights if the invention is publicly disclosed or offered for sale too soon. A strategy for dealing with these realities takes advantage of the characteristics of the U.S. provisional patent application (provisional) to delay a significant part of the patent costs until there has been sufficient time to develop the invention and to conduct test marketing.

The above figures do not include the costs of obtaining foreign patents, which may be needed if the product or process to be protected will be used or marketed out side the U.S. If foreign patents are needed, the use of the Patent Cooperation Treaty (PCT) application should be considered, which commonly is known as an international application. Provisional and PCT applications can be used together to extend the deadline for incurring the greater costs of both foreign and U.S. patents.

Two Kinds of Applications

There are at least two kinds of U.S. patent applications, provisional and non-provisional (or 'regular). Provisionals are simpler than regular applications, which require: (1) a detailed written description of the invention, i.e., a specification; (2) a set of drawings; (3) an introduction entitled 'Background of the Invention'; (4) a set of claims defining in a legal sense the scope of the invention; and (5) an abstract. Provisionals must include only the specification and the drawings and, thus, may be prepared at a lower cost.

Provisionals, unlike regular applications, expire one year from the date of their filing, are not examined substantively by the U.S. Patent and Trademark Office (USPTO) and cannot become an issued patent. To secure an issued patent, it is necessary to convert a provisional into a regular application by adding any missing part to the provisional and by filing the regular application during the one-year life of the provisional.

Most applications are filed in the USPTO as regular applications. Preparation costs are incurred immediately and prosecution costs are incurred to respond to rejections issued by the USPTO.

If foreign patent protection is needed, some sort of additional filing must be made within one year of the filing of the regular application for any foreign patent to receive priority to the regular application's filing date. Individual patent applications may be filed in the patent offices of foreign countries where protection is desired. Alternatively, a single PCT application may be filed that designates those countries where patents may be sought. Generally, the initial filing of the regular application results in the issuance of a U.S. patent as quickly as possible, when filing completed applications immediately in the foreign patent offices results in the quickest issuance of foreign patents.

PCT With Provisionals

If deferring costs is desired, a strategy of using provisional and PCT applications will achieve this goal. Initially, a provisional is prepared and filed in the USPTO. Lower preparation costs will be incurred if various sections, such as the claims and background, are not prepared. Since provisionals are not examined, no prosecution costs will be incurred for this application.

During and, most typically, at the end of the one-year life of the provisional, it may be converted into (i.e., replaced by) a regular U.S. application. Alternatively, if it is desired to defer preparation of the regular application even longer, a PCT application can be filed at this time that designates the U.S. and those foreign countries where patent protection may be needed. The PCT application minimally includes the contents of the provisional and at least one claim and, thus, extensive preparation costs should not be incurred. There also will be very little prosecution costs for the PCT application since there is no obligation to review or respond to any PCT examination report that may issue.

By filing a provisional and then a PCT application, a delay of 30 (and sometimes 31) months is gained before it is necessary to file completed or national phase (national phase) patent applications in the patent offices of the countries designated in the PCT application. In addition to delaying the preparation of the U.S. national phase application (which generally is equivalent to a regular U.S. application), the delay provides more time to permit the technical and marketing development of the invention before incurring the high cost of foreign filings.

Foreign patent costs include filing fees, foreign associate fees, translations in non-English speaking countries, issuance fees, maintenance fees and converting the provisional into a national phase application. When these fees are multiplied by the number of foreign patent applications to be filed, the total cost usually is very high. Once filed, the national phase applications are examined by the respective patent offices and prosecution costs will be incurred. Even so, these costs, which represent a significant part of the preparation and prosecution costs of the entire process, have been delayed for nearly two and half years.

Regardless of whether a PCT application is filed, the regular or national phase application should be prepared to include the that are missing from it. For example, if the provisional does not include a set of claims, a background section and an abstract, then these parts will need to be prepared and included in the regular or national phase application. By omitting these sections from the provisional, the costs related to their preparation is deferred for either a year, in one case, or 30 months in the other.

Priority Date Significance

The priority date of a patent is often critical to the validity of that patent, whether U.S. or foreign. The public disclosure, publication or offer for sale of the invention before the priority date, whether by the inventor, the patent holder or a third party, will bar the issuance of most foreign patents and will bar U.S. patents if made more than one year before the priority date that attaches to that patent. For example, patents, published applications or articles that have been published anywhere in the world will bar a foreign patent if published before its priority date and a U.S. patent if published more than one year before its priority date.

As discussed above, the filing of a provisional secures, at the lowest cost, a priority date for that application as of its date of filing in the USPTO. The priority date of the provisional then attaches to all of the related national phase and regular applications which are timely filed in their respective patent offices, and attaches finally to all of the patents that issue from these applications.

Adequate Specification

Provisionals must describe an invention to the same extent as regular applications. The disclosure of provisional and regular applications must 'enable any person skilled in the art' to make and use the invention. This 'enabling requirement,' if not satisfied, can invalidate the resulting patent. If the specification of a provisional is non-enabling, its early priority date will not attach to the subsequently filed national phase and regular applications. A patent issuing on that non-enabling provisional may then be invalid for a number of reasons, including public disclosure of the claimed invention more than one year before its effective filing date.

Since the provisional is not examined by the USPTO, whether it is enabling will not be decided until the related national phase or regular application is tested by the USPTO or in litigation by a federal district court, when it is too late to cure the non-enabling disclosure. The time to act is when the provisional is being prepared. At that time care must be taken to ensure that the written specification completely and accurately describes the invention.

In addition to meeting the enabling requirement, the provisional should also include sufficient disclosure of the details of the invention to support all of the recitations of the claims and a wide range of embodiments of the invention, whether presently deemed to be important or not. Appreciating that provisionals do not require the inclusion of claims, a patent attorney at minimum needs to mentally draft the claims. A failure to provide disclosure of an important recitation or feature will prevent the inventor or application holder from later reciting that feature in a claim of the national phase or regular application, whether U.S. or foreign.

A substantial portion of the costs associated with preparing a provisional, a nation al phase or a regular application relates to the cost of preparing the specification. The preparation of the specification can in many instances be done by the inventor or other technically trained personnel of the application holder, thereby reducing the patenting costs. The inventor is the person most familiar with the invention and can prepare it most efficiently and typically at a cost to the application holder less than that charged by a patent attorney. However, an experienced patent attorney should prepare the claims, as well as check the provision al to ensure that its specification is enabling and supports the recitations of all present and future claims.

Preventing Marketing Bar

Often the inventor or patent holder need to publicly disclose or offer to sell its invention. While such disclosure may be made for business purposes, such disclosure may bar a foreign patent that might be later filed to protect the disclosed invention. By contrast, U.S. patent law provides a grace period of one year from such a disclosure in which to file a patent application.

Public disclosure typically takes place at technical or marketing conventions, whereas offers for sale are often made privately to a prospective customer. Often the content of the disclosure takes the form of a written document, such as a handout, a technical paper or a set of slides. The offer preferably should be reduced to writing. The handout, the set of slides, the paper or the written offer may be filed as part of a provisional application as late as the date of disclosure, with the remaining part of the provisional providing sufficient disclosure to ensure that the provisional is enabling. Collectively, this will secure a priority date that will prevent the barring of most foreign patents.

Incremental Developments

Unlike Venus, most inventions do not spring fully formed from the forehead of Zeus. Rather, the designing and redesigning of an invention most often occurs in a series of steps over a period of time, each step providing hopefully an improved version of the inventive product or process. Provisionals are readily adapted to such incremental development.

If one or more of the developed versions is of a particular marketing and/or technical significance, it may justify the filing of a further provisional application on that version. Typically a new provisional will comprise the original provisional and any succeeding provisional, plus an additional written description and drawings of any improvement to the latest version.

If more than one provisional has been filed, it is necessary to bundle all of them into a single PCT or regular application, which is filed before the one-year life of the first-filed provisional expires in order to secure the benefit of the earliest priority date.

European Requirements

Though a provisional does not require claims, at least one claim must be included in the PCT application before it is filed, and a full set of claims should be included in the national phase applications before they are filed in the respective patent offices. However, the lack of a full set of carefully drafted claims in a provisional and its PCT counterpart application may raise a particular problem when a national phase application is filed in the European Patent Office (EPO).

Filing in the EPO offers significant benefits. A single English language application will be examined by the EPO. If allowed, it will result in the issuance of patents in all or selected countries of the 20 regular and six additional extension countries presently covered by the European Patent Convention (EPC).

However, compared to the standards of the USPTO or the Japanese Patent Office (JPO) for determining whether a sufficient disclosure has been provided, the EPO disclosure standard is significantly stricter. The EPO requires that the identical, or nearly the same, claim language be found in the parent provisional and PCT applications, whereas the USPTO and JPO standards are satisfied if the substance of the national phase claims is fairly disclosed by the specification of their provisional and PCT applications, regardless of whether the identical language is present. Appreciating that new language may be introduced into claims that are included with a national phase application, there is a greater chance that the EPO national phase application will not be awarded the early priority dates of its provisional and PCT applications and, therefore, be held invalid in view of an intervening public disclosure.

There are at least two ways of avoiding these EPO disclosure problems at relatively modest cost. First, a Summary of the Invention section may be added to the first filed provisional at a cost significantly less than preparing a corresponding set of claims. The Summary should include statements variously characterizing the inventions in both broad and detailed fashions. Mindful that the EPO does not permit the broadening of a claim, there should be at least one statement that includes the absolute minimum of elements or steps. Second, rather than filing in the EPO, a national phase application may be filed in those European national patent offices (including among others the United Kingdom and France) that do not require a precise basis in the provisional for the subsequently presented claims.

Thus, if marketing requires filing extensively in Europe, then filing of a national phase application in the EPO may be a reasonable choice, if a Summary of the Invention as described above (or a full set of claims) is included in the original provisional. If filing in many European countries is not required, the use of a provisional with out claims and a PCT application with a limited number of claims may be acceptable.


Provisional and PCT applications provide a cost-effective strategy to secure early priority dates in inventions for a period of time until those inventions may be developed technically and their markets established to an extent that will warrant payment of the high preparation and prosecution costs in the U.S. and abroad. As soon as it is realized that the worth of an invention does not justify such costs, then business sense dictates that further preparation and prosecution be terminated. The unspent patenting costs are saved. On the other hand, if the patent process continues until the national phase applications are filed, then this strategy will not save any money and may even be slightly more expensive than traditional routes. However, the reality is that more inventions fail than succeed, which makes the use of this strategy worthwhile.

* R. Lewis Gable and Mark Montague are partners of Cowan, Liebowitz & Latman PC, and Mr. Gable is the author of Chapter 4, 'Practice under Alappat (and Its Progeny) and the PTO Guidelines, ' Electronics and Software Patents (Bureau of National Affairs, Inc., 2000).
This article appeared in the March 5, 2001 issue of the New York Law Journal, Silicon Alley Special Insert, pp. S7, S11-12.

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