Time: a competitiveness factor on patented innovation

Vicente Zafrilla Diaz-Marta
Intellectual Property expert at the Latin America IPR SME Helpdesk

Why should some Latin American IPOs improve their patent granting procedure?

According to OECD´s Oslo Manual innovation is defined as “the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations”.

Therefore a country´s ability to innovate does not exclusively rely on how much research is developed in a country but on how much of this research reaches the market, directly or indirectly.

Despite a certain degree of debate concerning patents as boosters of innovation, it is true that there is a relevant percentage of innovation that reaches the market by means of patents.

Delays in registration are traditionally perceived as barriers for the entrance of foreign innovators and companies. However, this is only a partial view, since such deficiencies also entail a negative impact on their national innovation and entrepreneurship environment.

Effect on the Industrial Application analysis: the priority period

Since Paris Convention patent applicants in any of the member countries of the convention, enjoy a 12-month priority period to file their patent in any other member countries, while keeping its first application date as the priority date.

In terms of market entrance, 12 months is a very short period of time to assess whether the market accepts a product or not, especially if it is an innovative one. Therefore, only those companies that are very sure of the success of the product and/or have the means to predict such a success will invest their resources in seeking patent protection.

In such a scenario, only few SMEs and inventors would decide to invest their time and money to protect their inventions abroad and/or, once decided, would limit the number of international filings.

Fortunately, the Patent Cooperation Treaty extends the priority period. Once the PCT filing fee has been paid (around €1200) applicants can decide in which countries they want to protect their patent within approximately 30 months (depending on the country). Under this timeframe, even SMEs can assess if they want to enter certain countries.

Therefore, Latin American countries that are not members of the PCT (Argentina, Bolivia, Paraguay, Uruguay and Venezuela) are not only discouraging foreign IP applicants to protect their inventions, but also limiting the access of their own nationals’ patents to international protection.

This barrier has a stronger deterrent effect for foreign SMEs and inventors rather than big companies, which file their applications regardless of there being a PCT or not.

Effect on Application: Search and Examination Report

All those IP offices that are able to provide the Search and Examination Report within a short period of time are giving their applicants a competitive advantage.

If the IP office is able to issue the Preliminary Search Report and/or the Examination Report in a short timeframe, the IP applicants will be able to save money by:

  • Withdrawing the application and/or not filing the PCT if the patent is not new or inventive or;
  • Limiting or erasing claims that lack novelty or inventiveness to prevent facing delays related to other IPOs’ objections.

Thus, Latin American IPR Offices that cannot issue the PSR and/or the ER in twelve months from the priority/filing date are forcing their nationals to face the International Phase of the PCT or the filing in third countries without information concerning the strength of their patents or at least an overview of the expectations of succeeding in the granting of the patent; this is a scenario that may lead to losing all the amounts invested in the application, translations and any other administrative costs.

In recent years some Latin American IP Offices seemed to notice this negative impact and have started to take measures to improve their performance at internal level; by improving their internal practices, and thanks to international cooperation both at interregional level (e.g. the PPH agreements signed with EPO, Spanish IP Office and USPTO) and at intraregional level, with tools like the Prosur PPH or CADOPAT. 

Effect on Exploitation and Enforcement: Granting

Delays in granting the patent also have direct consequences in the use and defence of the patent. Despite the “standard” 20-year term of a patent, a patent’s lifecycle in certain sectors, such as smartphones, tends to be shorter. In some cases, a patent granted five or six years from the filing date have no or very reduced economic interest.

In addition, and generally speaking, pending patent right holders benefit from very little or any rights concerning enforcement until the patent is granted. Such a circumstance prevents them from bringing actions against infringers, which does not only harm their interests, but also their licensees’, including local companies.

Furthermore, long granting periods also harm competitors. A pending patent operates as a “warning” advice for competitors, who are very likely to avoid incurring in acts that may be prohibited by the patent owner once the patent is granted. Hence, a patent office that incurs in delays in rejecting a null patent creates uncertainty to its nationals about whether or not they are able to use the invention.

For instance, in the case were the same patent is rejected by National IP Offices, if country A rejected it in year 2 from filing date and country B rejected it in year 5, country A competitors would enjoy three additional years when they can freely use and exploit the invention in the country, whereas country B competitors will be subject to uncertainty until the patent is rejected.

To conclude, time is a key factor for the patent system. Although inefficiencies in patent registration procedures may harm foreign companies and innovators’ interests, the harm caused to its own national innovation system is even worse. Moreover, very long and formal procedures lead to a negative perception over the patent system in general, and discourage national innovators from protecting their inventions both nationally and abroad, which directly affects the country´s ability to compete in a knowledge-based economy.

Get your patent grant quicker with the Pacific Alliance and PROSUR PPH

Rebeca Nieto
IP Expert at Latin America IPR SME Helpdesk

Over the past few years, Intellectual Property Offices around the world have been busy preparing and negotiating Patent Prosecution Highways (PPH) agreements.

Better known by its abbreviation, the PPH is a system of bilateral and multilateral agreements particularly aimed at reducing the costs and time of patent examinations among applicants and participating patent offices. For doing so, the system enables an applicant with allowable/ granted claims in a patent application of an Office of Earlier Examination (OEE) to obtain an accelerated process examination of sufficiently corresponding claims in applications filed (but not yet examined) in other offices -Office of Later Examination (OLE)-.

It must, however, be noted that under PPH the OLE agrees to expedite the examination process by using the data and information provided by the OEE; but following the territoriality principle of patents, it reserves the right to grant or deny the patent.

In Latin America, two regional key networks have been created, namely, Pacific Alliance and PROSUR.

On July 1st, 2016 the PPH Pilot Program of the Pacific Alliance, made up of Chile, Mexico, Colombia and Peru, came into force. Some months later, on September 15th, the PPH Pilot Program of PROSUR, formed by Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and Uruguay, came into force. Nonetheless, Brazil adherence to the PPH was on December 19th, 2016, while the final entry into force of Ecuador still  awaits the internal approval of its Government.

These Pilot Programs are expected to last 3 years, and renewable for an additional one. As we will see below, their implementation is carried out according to the guides prepared by the participating Industrial Property Offices, which establish the requirements, conditions and procedures to participate in the PPH Pilot Program.

For the purpose of giving certain flexibilities to the applicants, both networks decided to follow the “Mottainai” and the “PCT- PPH” modalities.

According to the PPH MOTTAINAI modality, an applicant can request to expedite its patent examination process at OLE using the results of the OEE, regardless of the office in which the first deposit occurs, provided that the OEE and OLE have signed a PPH MOTTAINAI agreement. By eliminating the directional requirement of the original PPH model, this alternative relaxes the requirements related to the order in which the applications were filed and the priority which they claimed.

Regarding the PCT- PPH, the OLE could utilize the positive results obtained in the PCT international phase to request accelerated processing in the national phase. In particular, in this modality OLE´s patent examiners can use the following work products:

  • the written opinion of the International Searching Authority (ISA),
  • the written opinion of the International Preliminary Examining Authority (IPEA), or
  • the international preliminary examination report issued within the framework of the PCT, subject to certain conditions.

In this region, WIPO has designated INPI (Brazil) and INAPI (Chile) as ISA/IPEA offices. According to this, the country members of the Pacific Alliance and PROSUR may benefit from the international PCT work elaborated by those offices.

To get a closer look at the system, let’s now see how the Pacific Alliance PPH system has worked for the Mexican inventor Sergio Fernando Grijalva, who was the first applicant within the PPH of the Pacific Alliance in filing and obtaining a patent granted.

His application was filed on March 3rd, 2016 in the National Institute of Industrial Property (INAPI). Once the PPH was requested, it was necessary to check if the application met the requirements set in the INAPI- IMPI’s guide to participate, which are:

  • The Chilean and the Mexican application must be equivalent, which means that they must have the same initial date, either the same priority date or the same filing date.
  • The corresponding application must have been examined substantively and have one or more claims considered by IMPI as patentable/ allowable.
  • All claims submitted for INAPI’S examination -as originally filed or as modified- must sufficiently correspond to one or more of the claims found patentable/ allowable by IMPI.
  • The application filed before INAPI shall has been published in the Official Gazette.
  • The substantive examination of the application of INAPI has not yet begun. In other words, the PPH must be requested before the examiner is appointed.

In the present case, the Mexican applicant was required to modify his application before INAPI as to make its claims sufficiently corresponding to the ones granted by IMPI. Thanks to this correction, the research and examination results done by IMPI could be used during INAPI´s patent prosecution.

As result of the prosecution of this patent by the PPH, the substantive examination process was executed in less than 3 months, which contributed to grant the patent in less than 12 months, rather than the 36 months that non-contentious patent application may take.

As we have seen, the existing PPH networks in Latin America can contribute effectively to speed up the substantive examination process of the participating offices, by avoiding the repetition of unnecessary administrative actions, while at the same time reduce related institutional and applicants’ costs. Moreover, and not previously mentioned, using these services do not, as a general rule, require additional fees.

For all of the reasons above mentioned, companies and inventors are encouraged to benefit from the existing PPH schemes. As for this purpose, if you are seeking patent protection internationally, you are highly recommended to verify the PPH agreements of those countries you are planning to expand your patent protection, as well as check out the modalities they adopted (i.e. “Mottainai” and “PCT- PPH”), as they can provide you an additional chance to successfully accomplish your patent registration in Latin America.

Nuestro interés por patentar en el extranjero

Maximiliano Santa Cruz Scantlebury
National Director of the National Institute of Industrial Property – INAPI

Han pasado poco más de dos años desde que el Instituto Nacional de Propiedad Industrial, INAPI, empezara a operar como Administración encargada de búsqueda y examen preliminar internacional (ISA/IPEA) del Tratado de Cooperación en materia de Patentes (PCT), tanto para los solicitantes chilenos como para aquellos pertenecientes a los países de Latinoamérica y el Caribe, miembros de PCT.

El sistema PCT es la columna vertebral del registro de patentes internacionales. Es el Tratado más importante en materia de tramitación de patentes. Chile ingresó a este Tratado en 2009, y actualmente 148 países son miembros, y de ésos solamente 21 son ISA/IPEA (Autoridades de búsqueda y examen preliminar internacional), una categoría que habilita a emitir una opinión que puede ser utilizada por las oficinas de patentes de los restantes países miembros del tratado. Una de esas 21 oficinas es el INAPI, lo que la hace la segunda en la región en conjunto con la oficina de Brasil y la segunda en tener como idioma de trabajo el español, junto a la oficina Española.

Durante el primer año que INAPI ha funcionado como ISA/IPEA, desde el 22 de octubre de 2014 a diciembre de 2015, se presentaron 169 solicitudes internacionales PCT que designaron a INAPI como ISA, de las cuales 123 fueron chilenas y el resto de países latinoamericanos, quienes eligieron y confiaron en INAPI para realizar búsquedas internacionales.

Al respecto, debo destacar que de las solicitudes que nos han designaron como ISA/IPEA en ese periodo, 44 corresponden a universidades chilenas (más 5 extranjeras). Ese número es muy alto, y reafirma las cifras que se tuvieron durante ese período como Oficina Receptora, en donde 22 solicitudes de un total de 90 que se recibieron (equivalente a un 24,4%) fueron de universidades nacionales. Estos números superan claramente en forma porcentual las cifras globales respecto del patentamiento de universidades en PCT y, por otra parte, confirma el acierto de INAPI de fijar tasas diferenciadas y de menor valor para las casas de estudios superiores, como una manera de facilitar y promover la acción de las universidades en la innovación. Ello queda demostrado con las solicitudes presentadas por universidades con menos experiencia en el patentamiento de sus innovaciones, como la Universidad de Talca, la Universidad Andrés Bello y la Universidad del Biobío, las que se unen a otras ya más consolidadas como la Pontificia Universidad Católica de Chile, la Universidad de Concepción y la Universidad de Santiago.

Las universidades son la fuente primaria de la mayoría de las innovaciones tecnológicas y son el puente perfecto para establecer un intercambio de doble vía entre la investigación por un lado y los negocios y la comercialización por el otro. En Chile las universidades están haciendo un buen esfuerzo en patentar y que deberían seguir haciendo y promoviendo.

La generación de nuevo conocimiento a través de la actividad científica de las universidades es un instrumento fundamental para llegar al desarrollo económico, social y cultural. Chile posee una tradición científica que lo sitúa en posiciones de vanguardia en términos de productividad a nivel latinoamericano y eso es lo que reflejan estas cifras.

Quiero decir que en INAPI estamos muy satisfechos con el número de solicitudes que nos han designado durante dicho período como ISA/IPEA de PCT, ya que ello da cuenta de la alta confianza que despierta INAPI en la comunidad de la Propiedad Industrial tanto chilena como de la región y a la vez nos genera una enorme responsabilidad con aquellos solicitantes que confiaron en nosotros para prestarles un servicio de búsqueda de calidad y eficiente.

Gold Medal for Chile

Maximiliano Santa Cruz Scantlebury
National Director of the National Institute of Industrial Property – INAPI

In 1986 the world heard the breaking news on the field of medicine. The Food and Drug Administration (FDA) announced the approval of the first recombinant vaccine, product developed to fight the Hepatitis B virus, a potentially mortal infection.

The Chilean biochemist Pablo Valenzuela Valdés was behind this historic scientific achievement. He became a referent of the genetic engineering as well as a pioneer on the technology transfer at the University of California, San Francisco.

The invention was patented and then licensed to pharmaceutical firms who were responsible for distributing the vaccine to dozens of countries. The license agreement has become the most prolific in term of economic results for the University of California, San Francisco in almost two decades, allowing funding new discoveries and further technology development.

Later the protection of industrial property on the vaccine, based on research about yeast, produced a number of tests which transformed the blood banks in a safer source.

Dr. Valenzuela´s contribution still gathers praise. On last October 22nd he became the first Chilean scientist to be awarded with the Gold Medal for Inventors, given by the World Intellectual Property Organization (WIPO). The award was promoted by The National Institute of Industrial Property of Chile (INAPI), due to Valenzuela significant contribution to the creation of new knowledge and its appropriation, which has meant a truly entrepreneurship engine for development.

The award had a special meaning for the patent system, as was given at the first anniversary since INAPI began operations as International Searching and Preliminary Examining Authority (ISA/IPEA) under the Patent Cooperation Treaty (PCT). This new role, reserved only for 21 national agencies in the world, has meant a stimulus for Chilean universities and inventors in order to globalize their inventions and reach bigger markets.

During this year, 11 countries from Latin America and the Caribbean, which are PCT members, have designated the Chilean office as the mandated office to search and conduct the preliminary examination on patents.

Thus, the Chilean agency of industrial property provides services beyond their borders as well as Chile paves the way for the proliferation of new inventors who might impact the world with their technological developments as Pablo Valenzuela did almost three decades ago. He is the undisputed winner of the WIPO Gold Medal.

PCT: The backbone of the international patent system

Maximiliano Santa Cruz Scantlebury
National Director of the National Institute of Industrial Property – INAPI

It has been over six years from the entry of Chile to one of the most important and successful agreements of intellectual property. The 2nd of June of 2009 our country was incorporated into the 148 member nations of the Patent Cooperation Treatment (known as PCT), managed by the World Intellectual Property Organization (WIPO) and which saw the light over 40 years ago, in 1970.

Practically all of our major commercial partners like United States, the European Union, Brazil and China are PCT members. In addition, it can be highlighted that countries with very different economic developments such as Australia, Mexico, Canada, South Africa, Japan, Malaysia and India are members as well. This proves the trust put in this international agreement, which also foster innovation and technology transfer, through the free and efficient access to an enormous database of technology information on patents.

The incorporation of Chile to the PCT has completed a triad of significant events that have strongly impacted on the intellectual property system in our country. Besides the implementation in Chile of the intellectual property agreement from the World Trade Organization´s (WTO), during 2005, as well as the signing of a couple of free trade agreements, remarkably the one with United States, the PCT has closed a cycle of important transformations within our intellectual property system.

The PCT is a strategic tool in two aspects. On one hand, facilitates the patenting of our nationals overseas; as counterpart the foreigners obtain a much more easy access to patent in Chile. On the other hand, expedites the work of industrial property offices and improves the quality on granted patents.

This agreement concentrates a large interest from the Chilean innovators, expressed on the 48 patent applications at INAPI during the very first year of the enactment entry. Such figure is one of the highest at the Latin American level, during the first year of the enactment of this treaty.

Before this agreement, Chileans should make the patent application on every single country where they wanted to have protection, immediately after the first 12 months to its application in Chile; in that form, the invention still was considered a novelty, and if they would intend to use the PCT, Chileans should associate or find administrative loopholes.

Nowadays Chile is part of the PCT and national innovators can simply apply with an only solicitude at the National Institute of Industrial Property (INAPI), which will be considered as simultaneously applied in each of the 148 country members of this treaty.

This allows saving costs, because they are not required to make multiple translations on the application, nor undergo to diverse procedures and neither make payments on multiple currencies according to where they would like to protect. Today they can apply in Spanish, in a single procedure to be paid in Chilean pesos.

The PCT is a good example of globalization and internationalization of the intellectual property system. Its virtue resides in the enhancement of the international patenting and the cooperation of the industrial property offices, and at the same time it does it respecting the whole sovereignty of the member countries which can freely determine the patentability conditions and deciding whether an invention is finally patentable.

The PCT is a crucial tool to achieve the goals of the Ministry of Economy in Chile, about strengthening the institutional framework for intellectual and industrial protection, promoting the invention as well as patenting among Chilean scientists and entrepreneurs.

If the WTO intellectual property agreement in 1994, known as TRIPS or ADPIC, was probably the most transcendent milestone of the past century for substantive harmonization, the PCT was the equivalent on the matter of cooperation and infrastructure on the global patent system. So much so that Francis Gurry, current WIPO Director General, has called it the “backbone of the international patent system”.