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One of the most frequently asked (and expensive) questions facing a patent attorney is where in the world to seek patent protection on an invention. This article attempts to answer that question by considering three primary issues for developing a prioritization process, by discussing recently observed trends in foreign filing practice and by suggesting a tiered approach for determining where in the world to file a patent application. Although this article will focus on the biotechnology and pharmaceutical industries, many of the factors will be the same in electronics and software. The most comprehensive starting point for determining a foreign filing strategy considers every country in the world as a potential country in which to obtain patent protection. However, this position is quite extreme and ultimately untenable in terms of both monetary and human resources. Instead, patent counsel should develop a prioritized list of countries that takes legal, business and cost considerations into account. The first consideration is the strength of the patent law system in a given country. Patent counsel should determine whether the patent law system in that country will provide for the enforcement of an issued patent in a way that is economically beneficial to the patent owner. This requires an evaluation of the country’s patent law system. Factors to consider in this evaluation include whether the country has established patent laws and examination procedures; whether the country has an established system of jurisprudence, including, for example, a legal system, courts, administrative procedure and an appeals process; and whether the country has a history of patent enforcement. Nonlegal criteria In addition, certain nonlegal criteria also may be important. Such criteria may indirectly but significantly affect the soundness of the country’s legal system. Important criteria to consider include whether the country has a stable government, and whether it has a history of bias, corruption or unfairness. A major business criterion is the location of the competition. For example, in the pharmaceutical and biotechnology areas, one should file in countries in which the major pharmaceutical companies have established research-and-development facilities. These countries would include the United States, the United Kingdom, Japan, Switzerland, France and Germany. Other countries with significant research sites are Belgium, Italy, Israel, Ireland, Australia, Hungary, Canada, Spain, Austria, China, Sweden, Singapore and New Zealand. Another business criterion is the location of the market. Not surprisingly, the United States, Japan, Germany, France, Italy, the United Kingdom, Spain, Brazil, China and Canada, together, are responsible for 80% of worldwide pharmaceutical sales. Accordingly, filing applications on key biotechnology and pharmaceutical inventions in at least those countries makes sense. On the flip side, from a business perspective, countries in which the invention has no or very low potential for use, manufacture or sale can be readily eliminated. Similarly, countries in which the applicant has no reasonable expectation of discovering the existence of infringement can also be eliminated. Finally, cost should be considered. Costs for filing, obtaining and maintaining foreign patents can be very high, but will vary depending on the page length of the application and the number of claims. Another relevant factor is the requirement for a translation, and size has an impact here as well. Thus, the length of the application will have an impact on the filing and prosecution costs and will also be the prime factor in determining translation costs. Generally speaking, the cost to file and maintain a patent application on a single biotech/pharmaceutical invention in the 50-plus major countries of the world is more than $500,000 over the 20-year life of a patent. For example, according to the Orange Book, Lipitor (atorvastatin calcium) is covered by five U.S. patents. Each of those patents was broadly foreign filed. If the cost for a foreign filing is estimated to be about $10,000 per country, the total cost for simply filing the foreign counterparts to those listed U.S. patents would be more than $500,000. The total costs for worldwide filing, prosecution and maintenance could be several multiples of that $500,000.
INTELLECTUAL PROPERTY Counterfeits: Beyond the Knockoff FTC’s recent ruling in ‘Rambus.’ Cases decided since ‘Philips.’ Open-source software disputes. Emergence of Science Commons. Global patent-filing options. Keeping inventive-act records.

Some recent trends in the area of pharmaceutical and biotechnology patenting may influence counsel’s foreign filing decisions. The emergence of Malta One of the most significant trends of recent years is the emergence of Malta as an important country to consider when foreign filing. As a reminder, Malta is a small country, about 316 square kilometers in area, situated south of Sicily with a population of about 400,000. So, why file in Malta? The answer lies in a 2004 pharmaceutical initiative promulgated by Malta Enterprise, the Maltese government’s exclusive agency focused on attracting inward investment and supporting enterprise in Malta. The purpose of the initiative was to expand the generic pharmaceutical manufacturing sector in Malta. As part of that initiative, the generic companies and the University of Malta established basic training courses to prepare the Maltese people to become process chemists. But more importantly, Malta Enterprise actively advertised the fact that, because of the small size of the country, relatively few pharmaceutical companies have sought patent protection on their medicines in Malta. The Maltese market, in itself, was simply too small to warrant the expense of the patent filing. As a result, the lack of issued patents provides a significant window of opportunity for generic pharmaceutical companies to develop and produce their medicines in Malta. Those medicines can be easily exported to Europe upon expiry of the relevant patents. In the meantime, because of the geographical location of Malta, the generic pharmaceutical companies can access existing trade routes and commercialize their medicines in African or even South American countries where there is no existing patent protection on the medicines. The response of the branded pharmaceutical industry to the Maltese initiative has been to begin filing patent applications in Malta to protect the next generation of medicines. That response, of course, is not unexpected. Indeed, in a 2004 statement, Malta’s competitiveness and communications minister indicated that Malta expected the number of patents being registered at the Malta office to surge from the then-current annual average of 200 to as high as 3,000. But beware: Malta is not a member of the Patent Cooperation Treaty (PCT). As such, to claim priority to an earlier filed application, the Maltese application must be filed within 12 months of the filing date of that earlier filed application. Malta is a member of the European Union, but as of yet, has not joined the European Patent Organisation. Maltese is an official language of Malta and is used in most sectors of public life, including the government. However, patent applications can be filed in the other official language, English. A change in Indian patent law A second trend is a significant increase in the number of biotech and pharmaceutical applications filed in India over the past five years. Why the trend? Why file in India? Again, the answer is clear in light of the criteria discussed above. In terms of business considerations, in 2004, India was among the top 15 pharmaceutical manufacturing countries in the world. Notably, much of that manufacturing was to produce generic medicines. In addition, a recent change in the Indian patent laws makes it a more attractive country in which to file pharmaceutical and biotechnology applications. Originally, only patent applications on processes could be examined; applicants seeking protection for pharmaceutical compounds and compositions filed under the “Mailbox” or “Blackbox” facility, which held the application in stasis until such time that the law changed to permit the examination of applications on compounds and compositions. This filing preserved the ability to claim the benefit of a filing date (or earlier claimed priority date). The Blackbox facility has been available to applications filed after 1995. Just last year, on April 5, 2005, the Patents (Amendment) Act of 2005 was ratified by the parliament of India and was made effective from Jan. 1, 2005, and examination has now begun. However, there is a 10-year backlog on applications on pharmaceutical products. Indeed the first product patent, on Roche’s Pegasys (Peinterferon alpha-2a), was only granted in February 2006. That patent can be enforced against future market entrants. However, companies that had introduced the drug prior to the law change in January 2005 do not need to stop production. Finally, a few specifics: India is a member of the PCT. As with Malta, applications can be filed in English. Prosecution generally takes from three to five years, although again there is a significant backlog of applications in the area of pharmaceutical products. Similar, earlier change in China It is interesting to note that a similar change in the patent law to allow patents on pharmaceutical products occurred in China, albeit some years ago, in 1993. According to statistics from the China State Intellectual Property Office, in that year, after the change in the law, there was a 91% increase in the number of applications for drugs over the previous year. Biotechnology and pharmaceutical companies have filed steadily in China since that time. Certainly adding to the attraction of filing in China is its position as one of the top 10 countries in pharmaceutical sales as well as the existence of patent protection on pharmaceutical products. Thus, China should be considered for foreign filing purposes. Brazil: a pro-generic attitude A final trend observed over the past five years has been a significant increase in patent filings in the areas of biotechnology and pharmaceuticals in Brazil. This trend is consistent with data from the Brazilian Industrial Property Institute (INPI) which reports that 17,000 total patent applications were filed in 2000 as compared with 12,000 applications a mere five years earlier, in 1995. Why the increase? Business considerations certainly contribute most strongly to the trend of increased filing in Brazil. Brazil is the world’s 10th largest economy, ahead of Canada, and its GDP tops $500 billion. There is no doubt that the industrial sector of Brazil is one of the most advanced in Latin America. Moreover, Brazil is the 10th largest pharmaceutical market among countries that protect intellectual property. However, a patent attorney in the biotech and pharmaceutical industry today might want to balance those strong business considerations against the legal climate toward pharmaceuticals in Brazil. The Brazilian government actively promotes the sale of generic medicines. Indeed, generic sales in Brazil increased more than 10-fold during the period of 2000 until 2002. One might think that, as in Malta, the significant generic market would further motivate one to file on pharmaceutical applications in Brazil. However, the government’s pro-generic attitude has affected the ability of the biotech and pharmaceutical company to obtain certain patents in Brazil. Specifically, by law, ANVISA (National Agency for Sanitary Surveillance) must provide its prior consent for INPI to grant pharmaceutical patents. Even if the applicant is successful in prosecuting its claims with INPI, prior to grant of the patent, a further governmental agency must consent to issuance of the patent. That consent is not simply a rubber stamp. Rather, the Brazilian government has declared that second pharmaceutical use and selection patents are harmful to the public health and has been reluctant to issue those patents. As such, one should consider the type of invention being claimed prior to deciding to file in Brazil. As to the specifics for Brazil, it is a member of the PCT. Although one can file the application with a partial Portuguese translation (abstract/claims), a full translation should be filed within 30 days. Prosecution generally takes from five to six years from the filing date. Although there is a significant backlog at the INPI, the Brazilian government is expected to authorize funding to more than double the number of examiners over the next 12 to 18 months. Having looked at various considerations that might affect a decision of where to foreign file and certain trends observed over the past few years, one should ask again: Where in the world should this application be filed? There is no simple answer to that question, and this article does not purport to recommend any particular strategy for specific cases. Each situation is different, depending on the particular facts, the market and the applicable legal principles. However, a sample foreign filing tier may guide the foreign filing practices for biotechnology and pharmaceutical inventions. Three filing tiers The first tier is for defensive filings, i.e., applications that do not encompass commercial embodiments or products, but rather form part of a defensive patent wall around a commercial product. The purpose of those defensive filings may be to hinder market entry or to hem in a competitor’s initial market lead. According to a sample foreign-filing tier system, first-tier cases would be filed in the United States, Europe and Japan. Those three places account for the majority of the biotechnology and pharmaceutical market. Thus, filing in just those jurisdictions should adequately cover the market while controlling patent-filing costs. The second tier is for those applications that are more than defensive, but do not encompass commercial embodiments or products. Alternatively, that tier may be for applications that do cover commercially important inventions but that cannot be more broadly foreign filed because of budgetary constraints. The second tier comprises the tier-one jurisdictions (i.e., the United States, Europe and Japan) as well as Australia, Brazil, Canada, India and Mexico. The third tier is for those applications covering commercial embodiments or products. Because of the relatively high cost for filing and prosecuting applications in the third-tier countries, this tier is generally reserved for the “crown jewels” of a patent portfolio. The third tier comprises tier-one and tier-two jurisdictions (i.e., the United States, Europe, Japan, Australia, Brazil, Canada, India and Mexico) as well as Argentina, Malaysia, Malta, Pakistan, Thailand, Taiwan, China, Colombia, Egypt, Hong Kong, Israel, South Korea, New Zealand, Norway, Philippines, Russia, South Africa and Singapore. Finally, regardless of how one undertakes an analysis of where in the world to foreign file, it is equally as important to review one’s foreign filing decisions on an ongoing basis. Compounds that were thought to be possible commercial embodiments may lose favor because of market or scientific factors. In such a case, it may be appropriate to drop applications covering those compounds from tier three to tier two, or even tier one. So, where in the world should an application be foreign filed? Continuous review of the patent portfolio, the business objectives, the markets, the available budget and the legal environment will provide an answer. Jean Burke Fordis and Lauren L. Stevens are partners in the Palo Alto, Calif., office of Washington-based Finnegan, Henderson, Farabow, Garrett & Dunner, an intellectual property law firm. Fordis provides strategic intellectual property counseling in the biotech and pharmaceutical area. Stevens emphasizes strategic client counseling and patent procurement in the pharmaceutical area.

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