How many small businesses and individual inventors are ready to commercialize their inventions immediately after their patent application is filed? The answer is, not many. Quite often, such folks need to obtain more capital, develop a viable business plan, etc. They may have achieved the status of “Patent Pending”, but still do not know whether their invention is in fact patentable, and would like to not be spending a lot more money in the patent-prosecution process until they are on better business footing. For many entrepreneurs, filing a Patent Cooperation Treaty (PCT) application from the start, in lieu of a US patent application, can provide a strategic way to give some temporal and financial monetary breathing room.
When inventors initially file a US patent application, they realize the significant commitment of time and money to prepare and file the patent application. Unfortunately, when the US patent application is actually reviewed by a Patent Examiner, the “patent-prosecution” phase of the patent application starts, and virtually all utility patent applications are subjected to at least one round of patent-claim rejections. Overcoming such rejections costs money. Many inventors would prefer to put off the “pain” of such prosecution costs as long as possible until such inventors have a chance to:
• Further develop and refine their invention;
• Figure out whether their invention will have commercial legs, and in which countries patent protection would be beneficial and viable;
• Figure out whether their invention can attract investment capital;
• Try to save/obtain more capital in preparation for the eventual patent-prosecution phase; and/or
• Try to establish a market beach-head by trading on the inventors’ “Patent Pending” status, and giving potential competitors “cause for pause” based on that status (even if the inventor(s) do not think that their chances of actually obtaining broad-based patent coverage are very good).
The PCT allows an inventor to delay the entry into the “National Stage” of any of the member countries (which then begins the patent-prosecution phase) for a minimum of 30 months after the inventor’s priority filing date. Some foreign countries, such as Canada, allow even longer delays.
Conversely, if an inventor files a US non-provisional patent application, then in some technology areas, he or she can expect to receive an Office Action detailing Examiner rejections within about 18 months — occasionally even sooner. (However, in some technology areas representing a huge backlog within the United States Patent and Trademark Office (USPTO), such as software, a first Office Action might not arrive for 2-1/2 to 3 years!) Adding roughly 18 months on top of 30 months means that an inventor can strategically delay the US patent-prosecution phase for nearly four years. This may be particularly desirable to businesses whose main goal is to be “Patent Pending” for as long as possible. In addition, sometimes evidence of great commercial success can help overcome certain rejections, based on supposed “obviousness”. Delaying the patent-prosecution phase might give a business a chance to establish a sales and/or licensing track record while they wait.
