MX: Device Patents: Think Globally, File Locally

The United States entered a new phase of patent harmonization when the America Invents Act (AIA) was signed into law in September 2011. As a result of AIA’s passage, the first-to-invent standard unique to U.S. law will fade away. Under this standard two parties claiming the same invention were required to prove which of the parties was, in fact, the first to invent. Starting in March 2013, the U.S. will use a standard similar to the first-to-file standard used elsewhere in the world, and the party that files first will be granted the right to seek a patent with few exceptions.

Paul Craane

January 19, 2012

9 Min Read
MX: Device Patents: Think Globally, File Locally

The United States entered a new phase of patent harmonization when the America Invents Act (AIA) was signed into law in September 2011. As a result of AIA’s passage, the first-to-invent standard unique to U.S. law will fade away. Under this standard two parties claiming the same invention were required to prove which of the parties was, in fact, the first to invent. Starting in March 2013, the U.S. will use a standard similar to the first-to-file standard used elsewhere in the world, and the party that files first will be granted the right to seek a patent with few exceptions.

Differences between patent processes used in the U.S. and the rest of the world will remain, however. These differences are relevant because patents are a local matter. A company cannot use a U.S. patent to stop production in China or sales in either Europe or South America because a U.S. patent’s protection generally ends at the border. If a device manufacturer wants to stop companies in China, Germany, and Brazil from using its technology, the manufacturer needs to have a patent issued in those countries.

To address these concerns a device company must know the answers to the three fundamental questions covered here: In what ways do patent systems differ? What strategies can be used to ease the costs of filing in multiple countries? How do different patent systems address medical technology inventions?

Similarities And Differences

To obtain a patent, a manufacturer must file an application with the responsible governmental authorities. Most countries examine the patent application to determine whether a fundamental threshold of novelty and inventiveness has been met. While certain countries, most notably South Africa, will issue a patent without determining novelty and inventiveness, such countries are a distinct minority.

The specific legal standards applied regarding novelty and inventiveness vary. European law and that of other countries apply an absolute novelty standard, i.e., any public disclosure of the invention before the filing of a patent application will prevent a patent from issuing. Certain countries except or exclude disclosures made within a certain period before filing. This period, referred to as a grace period, may extend from six to 12 months before the filing date.

In most countries, this grace period covers only the applicant’s actions and does not extend to the public disclosures of others. Under current U.S. law, a one-year grace period exists relative to the disclosures of the applicant and others. Under the AIA, a one-year grace period exists relative to the applicant’s public disclosures only, but the AIA also permits the patent application filings and public disclosures of others to be excluded from consideration if they occurred after the applicant’s disclosure. The U.S. standard, sometimes referred as a first-to-publish standard, thus remains unique relative to the standards applied in other countries.

A patent is not a self-executing form of protection. Rather, enforcement must be sought through the appropriate legal authorities. Again, experiences vary. For example, Germany has a remarkably swift and efficient mechanism for resolving patent disputes. On the other hand, many foreign companies continue to find China a difficult country in which to enforce patent rights, although this situation is changing.

Patent systems also differ in the options they offer for protecting a product beyond the traditional patent. It may be easier to obtain these optional forms of protection, in that a lower threshold of inventiveness may be required than for the traditional patent, or they may be issued without any examination at all. Typically, these forms of protection have a shorter life or other limitations that must be considered in deciding whether the protection will be adequate in a particular circumstance. Whether referred to as a utility model or an innovation patent, these mechanisms may provide patent strategies not available under U.S. law.

Think Globally, File Locally

International treaties and conventions have been established to level the playing field for domestic and foreign applicants. For instance, there are several conventions and bilateral agreements that permit a U.S. applicant to rely upon its U.S. filing date when determining novelty and inventiveness, as long as the foreign application is filed within one year. The availability of the U.S. filing date can be important, especially in a country where any prior public disclosure can prevent a patent from issuing.

Because of the costs involved, applying for foreign patent protection is a focused, targeted undertaking for all but the most valuable products that can justify filings in the U.S., Europe, and Japan. This situation exists as well in Brazil, India, China, Russia, and other, smaller countries. For example, while it is not necessary to prepare the patent application from scratch for each filing, each application will have a separate set of associated costs and fees. Moreover, many countries require that the patent application be translated into the local language and that correspondence with the patent office be conducted in that language, further adding to the filing costs.

One mechanism used to control the costs is the international, or Patent Cooperation Treaty (PCT), application. A PCT applicant can extend the time for making a final decision about whether to file a national application for up to 31 months in most countries. The additional time permits the applicant to determine the commercial viability of the product or method, research potential markets, and scout manufacturing locations that will assist in guiding the national filing strategy.

On the downside, the international application cannot mature into an international patent. At some point, the international application must be converted into national or regional patent applications in order to secure patents in selected countries. Moreover, while some of the costs of the process will be recovered when filing those national or regional applications, other costs cannot be recovered.

Another mechanism used to control costs is the regional patent application. The most well-known regional patent application is the European Patent (EP) application. Like the international application, the EP application will not result in a patent that is automatically enforceable in all member nations, although a movement is afoot to provide a patent enforceable throughout Europe. While an EP patent can be obtained through examination by the European Patent Office (EPO), for the time being the patent must be validated or nationalized in a selected member state in order for it to be enforceable within that country.

The examination of the EP application can be carried out entirely in English, which has the benefit of reducing the costs of the examination process for U.S. applicants. As a rule of thumb, if protection is desired in three or more European countries, the cost of filing and prosecuting an EP application followed by national validation may be less than the costs of filing and prosecuting national applications directly in those countries.

In addition, several patent offices have banded together to create work-product sharing arrangements intended to shave thousands of dollars off the cost of a multinational patent family and decrease the time for obtaining patents in the individual countries. The programs are referred to as Patent Prosecution Highways (PPH). The programs permit an applicant to use a first country’s determination to allow a patent application in order to expedite the examination of a counterpart patent application in a second country. At present, the United States has PPH programs with Australia, Austria, Canada, China, Denmark, the EPO, Finland, Germany, Hungary, Iceland, Israel, Japan, Mexico, Norway, Russia, Singapore, South Korea, Spain, Sweden, Taiwan, and the United Kingdom. There are also several programs that work in conjunction with the PCT process.

Disparate Treatment For Medical Devices

Medical technology, like computer software, is a topic on which countries have agreed to disagree. As a consequence, what may be patentable in the U.S. may not be patentable in Europe, for example. Even when a country might permit a patent to be issued, the patent may not be enforceable against all parties.

For instance, if protection is sought not on a medical device but on the method of carrying out a procedure using the medical device, protection may be difficult or impossible to obtain in Europe because European authorities generally consider medical treatment methods to be unpatentable. By contrast, methods of medical treatment are generally patentable in the U.S., but enforcement against an individual medical practitioner may not be possible. To illustrate why such limitations might be important, consider a well-known medical device that is in the public domain but for which a new method of use has been discovered. Under European law, this method may well be unpatentable; under U.S. law, the method may be patentable, but enforcement may be complex.

A trade agreement with South Korea that was recently ratified by the U.S. Congress exemplifies this disparate treatment of medical technology. Chapter 18 of the agreement deals with intellectual property rights, and, in particular, the issue of exclusions from patentability. In this regard, the agreement recognized only two categories of subject matter that may be excluded from patentability—inventions contrary to public order or morality, and “diagnostic, therapeutic, and surgical procedures for the treatment of humans or animals.” While this provision is not interpreted as a change in the U.S. position, it clearly highlights the sensitivity of the issue to authorities in other parts of the world.

In addition, consider a situation, not uncommon to many medical devices, where the basic structure and operation of the device are known early on, but the exact details of the commercial device may not be known for some time. Caution may suggest filing early, even though the exact details of the commercial device are not yet known, in order to prevent the applicant’s own activity from becoming a problem relative to the validity of any patent to issue from the application.

In the U.S., it may be possible to change or adapt the language of the claims later in the process to attempt to cover the basic device and then the developed commercial device. By contrast, European laws (as presently applied) may make later alteration of the claim language difficult, if not impossible. Moreover, because of recent changes to the European application process, it may be more difficult to maintain a European application pending in order to address later developments than is possible under U.S. practice. Consequently, differences in U.S. and European practices may lead to different levels of patent protection for the same product in different countries. This state of affairs makes it imperative that medical device manufacturers understand the differences in patent systems and formulate the proper strategies.

This article is intended to be informative and should not be interpreted as legal counsel for any specific fact situation. Views expressed are those of the author and not necessarily the opinions of Marshall, Gerstein & Borun LLP or any of its clients. Readers should not act upon the information presented without consulting professional legal counsel.

Paul Craane is a partner in the medical device group at Marshall Gerstein &Borun LLP (Chicago). He can be reached at [email protected].

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