Newsletter For Leaders In The Medical Device Industry - June 2009

Patent Portfolio Management in a Down Economy

— A Guide to Efficiency

By Andrew E. Rawlins and Sheena Conners

In difficult financial times, IP presents a special challenge.

The need to decrease IP expenses tugs at one shirtsleeve of

corporate counsel, who expect a 4.3 percent cut in IP budgets in

2009. (BTI Consulting Group's Mid-Year Legal Spending Update

and Outlook for 2009, survey of 1,200 corporate counsel). Tugging

at the other shirtsleeve, a large majority of companies (79

percent) believe that IP has heightened value in an economic

downturn. (November 2008 Price Waterhouse study of companies in the

United Kingdom, Germany, and France). Faced with this tension, we

all must seek increased efficiency and cost-effectiveness while

remaining mindful of the high perceived value of IP rights in these

difficult times.

The following procedures and practices can help your company

manage its patent portfolio in a more efficient and cost-effective

manner during the economic downturn and beyond:

Travel the Patent Prosecution Highway (PPH)

Patent rights may be secured more quickly and more cost

efficiently by traveling the PPH. Typically, patent applications

for a single invention are prosecuted separately and in parallel in

each country, with the large costs and prolonged pendency expected

of such separate, parallel proceedings. The PPH is a cooperative

program providing an opt-in procedural alternative to standard

patent application examination procedures. By requesting to travel

the PPH, an applicant who has had a claim allowed in a patent

application in one PPH-participating country can speed up the

examination of corresponding applications in other

PPH-participating countries. For example, an applicant may file a

Canadian patent application and a corresponding U.S. patent

application. If one or more claims are allowed in the Canadian

application, the applicant can request to participate in the PPH to

have the corresponding claims in the U.S. case be examined more

quickly. These corresponding claims are more likely to be allowed,

and the corresponding patent application typically issues more

quickly than those applications examined under standard examination

procedures. Further, the expense of prolonged pendency of

corresponding applications can be avoided. Countries participating

in the PPH cooperative program include Australia, Canada, Denmark,

the European Patent Office, Germany, Japan, Korea, Singapore, the

United Kingdom, and the United States.

Insist on Complete Invention Disclosures

Incomplete invention disclosures increase internal and external

costs for a company. For example, an incomplete invention

disclosure may make it more difficult for a company to determine

upfront if an invention is properly aligned with its business

objectives. As a consequence, the company may make significant

monetary commitments to acquiring IP assets that turn out to have

little commercial value for the company. The incomplete invention

disclosure also may fail to provide outside counsel with sufficient

information to efficiently draft an application covering the

disclosed invention. The efforts of outside counsel to acquire more

information about the invention and/or to write an application

based on insufficient information will cost the company time and

money.

Instituting procedures utilized before and after an invention

disclosure is drafted can help minimize these costs. At the front

end, a company is more likely to receive complete invention

disclosures from personnel who fully understand the make-up of a

complete invention disclosure. Providing formal training to

personnel (e.g., from a patent attorney) is one way to help get

personnel, business, and counsel on the same page. The training

should include an explanation of the information that a patent

attorney needs in each section of the invention disclosure form and

may include a review of an actual patent to provide personnel with

a clear idea of the depth and scope of information that is required

to prepare a patent application.

At the back end, it is important to promptly follow-up with an

inventor who has submitted an invention disclosure. This provides

those on the business side the ability to ensure receipt of

sufficient information in the invention disclosure while the idea

is still fresh in the inventor's mind. This further provides

the opportunity to evaluate the patentability of the invention and

its commercial prospects. For example, an inventor may be asked to

explain why this invention will meet the United States standard for

patentability. In addition, the inventor can engage in a dialogue

with those on the business side about design around options and the

company's business objectives, helping to ensure that the

invention is not so narrow that it has little commercial value. In

this way, filing decisions can be based on optimal data and

unnecessary costs can be avoided as some inventions that may have

otherwise been filed are weeded out.

Use a Patent Cooperation Treaty (PCT) Application for a Cheap

Search

An agreement amongst various nations, the PCT provides

recognized benefits when filing a patent application. For example,

by filing just one PCT application, the applicant will receive a

patent office's assessment of the pertinent prior art before

the applicant has to decide upon the countries in which it will it

pay the price to pursue patent protection. Cost savings can be

achieved by an applicant's careful selection of the patent

office that will conduct the initial assessment of the prior art in

the PCT application. For example, the cost of a search by the

Korean Intellectual Property Office ($609) is far less than that of

other competent patent offices such as the United States Patent and

Trademark Office (USPTO) ($2080) and the European Patent Office

($2164). Use of the PCT also delays the deadline for deciding upon

countries to be pursued, which gives the applicant more time to

evaluate the potential markets for commercial embodiments of the

invention while still preserving the option for extensive worldwide

filing. In this way, a company can avoid irrational exuberance over

an invention and avoid investments that may not provide the

initially...