Major Changes Made to Patent Cooperation Treaty Practice[1]

Reported in July 2004 by Jim Pravel

Background

The Patent Cooperation Treaty (“PCT”) is a multilateral treaty that was concluded in Washington, DC in 1970 and entered into force in 1987.  The PCT provides a framework for obtaining protection of inventions where such protection is sought for any or all of the 123 PCT contracting countries (hereafter referred to as “states”).   A PCT application can also designate regions that include multiple states, the most common being the European Patent Organization (“EPO”).

The Old PCT System

The old PCT system, shown in Fig. 1, provided phases, referred to as Chapter I and Chapter II.  Under the old PCT system, if an applicant wanted to postpone entry of its international application into the national stage, a Demand had to be filed by the 19^th month after the priority date.  The Demand caused the application to enter Chapter II.  Entry into Chapter II provided either 30 or 31 months for entry into the national stage in each elected state, depending upon the individual state’s national law.  If the Demand was not made at 19 months, the PCT application would remain in Chapter I and the application would enter the national stage at 20 months from the priority date.

Under the old PCT system, most applicants filed using Ch. II to delay prosecution until 30 months from the priority date.  Such a delay provides the applicant extra time to investigate the commercial potential for its invention in foreign markets, arrange financing or arrange commercial development prior to deciding which states to enter in the national stage.

Previously, you were required to designate the desired states (countries) or regions.  Because WIPO would charge a maximum of three designation fees, the standard practice was to designate all states and then elect the desired states 19 months after the priority date.

The Revised PCT System

Effective Date

The revised PCT System became effective as of January 1 of this year.  However, Serbia and Montenegro (formerly Yugoslavia) have not amended their national laws and still require the Demand of Chapter II to extend the national filing date to 30 months from the priority date.  However, if these countries are of interest to the applicant, it is still possible to avoid the Chapter II Demand so long as the international stage is entered in Serbia and Montenegro prior to 20 months from the priority date.  Also note that the states of CH, FI, LU, SE, TZ UG, YU and ZM require the filing of the Chapter II Demand to delay national stage entry to 30 months. The national stage can then be entered in the remaining states 30 months from the priority date.    

The timeline for the Revised PCT System is shown in Fig. 2.  The major changes of the Revised PCT System are: all states/regions are automatically designated in the Request of the application, a search report and opinion are provided for both Chapter I and Chapter II, and a longer period is provided for filing the Demand for entering Chapter II.

Designation of all states automatic

Under the revised PCT System, all states and regions are designated automatically as of the time of filing the international application.  This eliminates the routine of designating all states and can prevent the inadvertent omission of desired states.

To enter the national stage in the desired states and/or regions, the national or regional fees must be paid and a translation of the application as originally filed must be filed if it was filed in a language different than the language of the state.  The PCT Applicant’s Guide should be reviewed for any specific requirements for each state.[2]

Opinion on Patentability Provided for Both Chapter I and Chapter II

A non-binding opinion on patentability is now provided by the International Search Authority (“ISA”)[3] under both Chapter I and Chapter II. 

New time limit for filing Demand to enter Chapter II

The Demand must now be filed within 3 months of the issue date of the International Search Report (“ISR”) or 22 months from the priority date, whichever is later.[4]  This allows for the applicant to review the ISR prior to deciding whether or not to file a Demand to enter Chapter II. 

Pros and Cons of Chapter I versus Chapter II of the Revised PCT System

There are several reasons why it may still be desirable to use Ch. II.  Under Chapter II, the applicant has a second opportunity to amend the claims and may also amend the drawings and specification.  This may be helpful to streamline prosecution at the international stage by putting the PCT application in better form for allowance at the national level.  According to Article 34(2)(a) of the PCT Rules, the applicant has a right to communicate orally and in writing with the International Preliminary Examining Authority, but it is unclear at this time, whether USPTO examiners will routinely allow interviews under Chapter II.[5]  The examiner also has the discretion to issue more than one opinion under Chapter II.[6]

If the non-binding ISA opinion is favorable and no amendments to the drawings or specification are deemed necessary, Chapter I may be the preferred route.  The cost of Chapter II will be avoided [7] and for US Festo purposes[8], the file history can be minimized.

Additional Issues

Withdrawal of Designations

Designations of states may be withdrawn at any time.  The withdrawals may be desirable to remove Festo file history problems in the US or to satisfy joint venture or licensing limitations.  It is critical to have multiple applicants assign a common representative, particularly if the applicants/inventors are citizens of different states.          

Bypass versus National Stage Entry

 It is possible, and many times recommended to bypass the PCT for US patent applications.  Such an approach bypasses the PCT national stage entry into the US and instead follows the national laws of the US (35 USC Section 111(a)).  The bypass procedure allows a US application to depend upon the PCT either as a continuation or as a continuation-in-part.  The bypass route has the added benefit of avoiding the potentially problematic procedures in Chapter II under the PCT (35 USC Section 371) where the USPTO must coordinate the processing with the International Bureau in Geneva.

Access to the file of International Applications

For competitive intelligence purposes, it is possible to access the written opinion of the International Searching Authority and the International Preliminary Report on Patentability under Chapter I 30 months from the priority date.[9]  The International Preliminary Examination Report under Chapter II will also be available 30 months from the priority date.

Conclusions

This report does not consider many aspects of the PCT that were included prior to this year’s changes.  The changes that have been made are an improvement to the extent that Chapter II is no longer necessary if the objective is only to enlarge the time before entering the national stage.

Disclaimer: This Report does not constitute any specific legal or business advice.  Because of the complexity and nuances of the PCT, specific recommendations for each client should be tailored for that client’s situation.