Can your business afford international patent protection?

Do you intend to file patent applications internationally because you believe in the commercial success of your product? Before doing so, you should understand that this is a serious investment with some downsides.

First, consider the cost of obtaining a patent in foreign countries. Even if you originally file through an international agency such as WIPO, the attorney fees and administrative expenses are high. Thereafter you must file in countries individually. These filings require additional attorney fees to firms which specialize in foreign law, or a regional office of a global firm. After these expenses, there is no guarantee that you will in fact obtain a patent in that country. Furthermore, invention protection in other countries may be radically different from that of the United States, and so your expectations of foreign protection may be unrealistic.

Second, what is the cost to enforce patent rights in another country? Many people are aware of the high costs and fees of patent infringement suits in the United States. These costs and fees may be the same or higher in another country, and remedies may be different than those in the United States. Even large companies must evaluate potential international patent enforcement if costs will significantly diminish potential profits. Also, remember that if you can barely afford filing patent applications internationally, then most likely you will not have sufficient resources for enforcement.

So, what is a small or medium sized business or individual entrepreneur to do? If you have high sunk costs and equipment investments, then you could distribute your product in other countries without protection. You could then hope that your lower price and the tooling up investment will discourage potential infringers. My office has clients who have found some success with this approach. On the other hand, if you have a product with minimal production investment, such as a party favor or ceramic utensil, then you could flood a particular market for maximum sales before competitors ‘move in.’

Another approach is determination of your market share in the United States and other countries for your invention. If there is a significant share in the United States and your business is a startup, you should bite the bullet and only invest in patent protection in the United States. This means you MUST decline protection in other countries so you do not spread your resources too thin. Until your business acquires sufficient funds to invest in other countries, conserve your resources to survive in the United States arena.

One other point: Under United States law, if you file in most other countries, you forfeit the confidentiality of your patent application unless and until you obtain a patent. Consequently, the exposure of your technology, without necessarily obtaining a patent, should also be part of your decision to file internationally.

© 2010 Adrienne B. Naumann. Ms. Naumann does not sponsor or endorse advertisements posted at adriennebnaumann.wordpress.com.

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