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Tuesday March 02, 2004
2004 PCT CHANGES, Pros AND Cons
As many of you have heard, on January 1, 2004, the PCT implemented a number of significant rule changes. The rule changes primarily affect cases filed on or after January 1, 2004, however, some changes impact currently pending cases.Refresher on Recent Changes prior to January 1, 2004: As a reminder, the PCT eliminated the need to file a Demand, and many member countries of the PCT have now amended their laws to allow national phase filings even if the Demand was not filed by the 19 month deadline. In essence, if you do not file a Demand by 19 months, you will still be allowed to file a national phase application after 30/31 months, but you will not get an International Preliminary Examination Report (IPER). If the PCT is being used as a vehicle of delay, not filing the Demand is a good option. But, if you intend on completing two or more national phase filings, it will be more beneficial to file a Demand. Filing the Demand entitles you to a written opinion, and then amendments under Article 34 can be consolidated at a single office (i.e., the PCT IB) before the case is filed in several national offices. The following post January 1, 2004 changes build on the above changes. January 1, 2004 Changes: A. A significant change is that designations will no longer be needed on a per-country basis. An all inclusive default is set for each PCT case filed on or after January 1, 2004. A problem with this change is some member countries have laws that would require abandonment of an earlier filed priority national case if a PCT is filed designating that country. For instance, if an original Japanese case is filed, and later a PCT case is filed with the all inclusive designation, the act of filing the PCT case will cause the original Japanese case to become abandoned. This is also a problem for Russia, Germany, and South Korea. To handle this problem, the PCT recommends that those countries be specifically excluded from the designations. Although this is an easy solution, it is an additional complexity that can have a major negative impact. B. The time periods for examinations, responses to examinations and Demand filing have now been changed. Under the new rules, the PCT will issue an examination now referred to as an International Preliminary Report on Patentability (IPRP), under both Chapter I and Chapter II. The IPRP issued in Chapter I is the International Search Authority (ISA) opinion that is equivalent to previously issued written opinions, but is not equivalent to previously issued IPERs. The IPRP made under Chapter II (if a Demand was filed) is substantive because the Applicant's response is considered. Previously, the PCT did not examine the case unless a Demand was filed. Although recently the quality and depth of PCT examinations (by the EP) has been questionable in substance, this is not going to be discussed here. If the Applicant wants the substantive examination, the Demand and the response to the ISA opinion (i.e., written opinion) will be due at the same time. In particular, the Demand and the response will be due within 3 months of the mailing of the ISA opinion or no later than 22 months.
If no Demand is filed, the PCT will not prepare a substantive examination report. Although it is not critical to get confirmation of patentability from the PCT by issuing a favorable report, some contracting states place a lot of weight on the PCT patentability report, especially countries that have a less rigorous examination infrastructure (e.g., Singapore). Cons: The new rule changes continue to add complexity and pitfalls for attorneys and agents that are not completely up to speed on the rules. This is especially harsh if certain designations are not specifically omitted, which could cause a previous case to become abandoned. Although the PCT designated case will remain, and conceivably one could file again in the country that had its original case abandoned, this will be an expensive proposition for Applicants. For instance, the cost of preparing and filing the original abandoned case, such as one in Japan, can be very substantial. The new rules place an added burden on the Applicant to timely prosecute applications to tight non-extendable deadlines. Under prior rules, it was possible to seek extensions to reply to written opinions, for example. Now, however, such extensions would not be customarily granted. Filing a Demand brings in another level of consideration. Before, the act of filing a Demand entitled the Applicant to examination and an examination report after amendments, if any. Now, the written opinion is completed in Chapter I. Thus, the client will have to determine whether it is prudent to not respond to the written opinion, and whether the client wants to receive a substantive examination report (i.e., IPRP). For clients that want to automate the PCT filing procedure, these new changes place a number decision points in the road way. Thus, client will be forced to be more involved in making decisions in a more timely manner. Pros: A. The new rule changes can be beneficial to clients that are interested in speeding up the patent procurement process. Both in the USPTO and in the EPO, delay has continued to increase.
1. In the USPTO, for example, it may take 3-4 years before a complicated technology case is even examined. Then, during examination, examiners continue to find ways to delay the process. In our current practice, we have noticed that examiners continually find ways of requiring an Applicant to file an request for continued examination (RCE). This is done by preparing a quick examination with possibly less than the best art presented with the first Office Action. Upon minor amendments by the Applicant, the Examiner finds a new reference and issues a final Office Action. To adequately respond to the new reference, an RCE is most likely required.
2. In another example, the Appeal process has also favored examiners to the point of adding further delay and cost. When an appeal brief is filed, the examiner is encouraged to do another search. In light of this practice, the examiner can find a new reference and withdraw the case from appeal. If the art is good, the Applicant is left with no option but to file a response to the office action and prosecute the case outside of appeal. If the examiner holds his position, the Applicant will then have to consider filing an appeal again. A problem with this process is that it rewards examiners that do a less than acceptable job during the first examination with counters (i.e., examiner case disposition points) for continuing to require RCE's and Appeals. 3. In the EPO, the inherent process can have cases pending for 5-8 years on average. In the meantime, annuity fees will continue to mount no matter whether the case is granted or is still in an un-examined state. B. If the new PCT timelines are looked at with the above delays in mind, the relatively quick processing can be used as an advantage. For instance, the PCT can be used to combat certain aspects of the above delay drawbacks.
1. For important cases in which the Applicant wants to solely expedite prosecution of a U.S. case before the USPTO, the Applicant can opt to file a PCT application with a U.S. search (US is designated by the all inclusive rule). The Applicant will receive examination, i.e., the ISA opinion, in about 19 months. For complex hardware or software cases, examination in the USPTO has been taking, as noted above, 3-4 years on average. If the Applicant files a complete response to the ISA opinion and the files a Demand, the Applicant can possibly receive a favorable IPRP by the 30 month timeframe. At that point, the Applicant can file a national case in the United States from the PCT filing. From experience, we have noticed a high likelihood that the examiner that examined the PCT case will also examine the U.S. case. Thus, if the examiner had already issued a favorably examination, the U.S. examination will most likely go much smoother and faster.
2. For cases in which the Applicant wants to file in several countries, including an EP regional filing, the Applicant would be wise to request an EP search and file the Demand in the EPO. The grant process through the EPO will be substantially streamlined and faster if the EPO examiner had issued a favorably report. Consequently, the PCT process can actually be a time saver and cost reducer compared to filing directly in the EPO. In the past, many clients opted to file directly in the EPO to save money, but in light of inherent delays in the EPO and the expedited procedures set forth by the new PCT rule changes, such common thinking should be revisited.
CONCLUSION:
Although the PCT continues to add complexity, the PCT can be used beneficially by Applicants to execute their desired result. While the PCT can still be used as a vehicle to delay national filing decisions, if your desire is to issue an original U.S. case of complex technology faster, or to expedite foreign grant procedures (e.g., in the EPO), the PCT's rigid timelines can be used to your benefit.
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