Patenting and Selling your product in Foreign Countries
In the past, while the international marketplace increased the potential for greater sales, it also raised the stakes for protecting intellectual property.
A product may be protected by a patent in the manufacturer’s home country, but patent protection did not cross borders. A seller had to go through the patent process in each country where protection of IP rights is desired. Under an international agreement known as the Paris Convention, the patent application in each country had to be filed within a year of the filing at home. So if a manufacturer applied for a U.S. patent and a year goes by without filing for protection anywhere else, the intellectual property will be protected only in the United States. The manufacturer had effectively donated the design of the product to the rest of the world.
Filing patent applications in all the likely overseas markets could cost into the hundreds of thousands of dollars.
There are a number of critical timing issues that new product introducers had to consider as they attempted to capture intellectual property rights and facilitate an early sale. Generally, the drivers for an overall IP protection strategy for a new product were:
(1) The existence of the one-year Paris Convention, which allowed patent applicants to file in other countries within one year of the domestic filing date;
(2) The potential to attract foreign purchasers or licensees within the first one-year period after filing; and
(3) The provision of a more rapid and, hopefully, more efficient license or sale of the product in each country.
During Phase I, the following tasks would have needed to be completed:
1. Completely finish the product.
2. Complete a comprehensive business plan
3. Gather all information needed to promote the product.
4. Identify competitors, customers, and related entities for:
(a) Product-related trade associations;
(b) Product-related professional associations;
(c) Related government branches, elected officials and bureaucrats, including test organizations and standards-setting groups (local, state and federal);
(d) Related trade shows (very important for Phase III activities after filing);
(e) All trade-related magazines, including paid and free subscriptions, trade sales, and trade-related product publications, especially those which may carry a news story relating to the product after the patent is filed;
(f) All newspapers and magazines in any way related to the applicant or product, including those associated through geography or language, for example;
(g) A list of product endorsers, particularly those who might endorse without compensation, and even local elected officials, comedians, radio personalities, and other public figures.
These efforts should not have been limited to home country or home language. Where the product admitted to use anywhere, the entire world should have been considered the potential market and the information database should have been expanded accordingly.
5. Integrate information gathered in Steps (1) through (4) to determine which markets to enter. Using all of the above information, make a list of why the product is better than others currently available, comparing all versions of the product (both high-end and basic) to the next-best alternative. This information will be used by the patent attorney in drafting the case.
To begin Phase II, they needed to submit all product information, especially the information outlined in Step 5 above, to the patent attorney and allow two months for the patent to be completed (both first and final drafts), executed by the inventor and then filed.
During Phase II, there should have been no disclosure or transmission of information, but fully prepare all media which can possibly be used to market the product so that it will be ready for dissemination immediately after the patent application is filed.
Trade shows should have been scheduled during Phase III, only after the patent is filed, yet you should have tried to attend trade shows in the first year early enough so that you had enough time in the year left over for negotiation, but not so early that the publications wouldn’t have time to publish your news items.
You should have chosen shows early in the Phase III cycle to allow sufficient time to determine what foreign distributors were interested in your product. You would need to have made all the relevant foreign filings within your deadline—one year from the home country filing date.
Filing the patent was a prerequisite for beginning Phase III; absolutely no activities in Phase III should have taken place until it could be established with certainty that filing had occurred. To do otherwise would forfeit rights in other countries. It may have been preferable to devote a few days after the patent filing to secure a postal or computer filing receipt or other proof of filing in hand.
Once the patent filing could be established with certainty, you’d begin Phase III which entailed all aspects of selling and marketing the product.
by Curtis L. Harrington and Kathy E. Harrington, Mechanical Engineering Magazine,
[The article is adapted from a Mechanical Engineering web exclusive by Curtis L. Harrington and Kathy E. Harrington and can be found at ASME]