NAIP Patent Blog

by Charl Goussard, NAIP Legal Research

Recently released statistics by the European Patent Office (EPO) confirm a trend that we have noticed over the past 10 years: Asian patentees, specifically Taiwanese and Chinese, are waking up and exploring the possibilities of the European market.

As one of the leading patent prosecution firms in Taiwan, NAIP has helped promote this growth. Since 2000 NAIP's European patent applications have grown at a faster rate than Taiwan's overall rate and, based on recent statistics, currently we manage approximately 10% of Taiwan's EPO applications.

EPO Patent Applications: 2000 to 2009
The following is a selection of data released by the EPO showing total patent applications:

Taiwanese Applicants:

Only recently have Taiwanese companies shown interest in obtaining European patents. Looking at (Fig. 1) below, which indicates the percentage increase in the number of applications filed with the EPO by Taiwanese applicants, the number has leaped from 261 applications in 2000 to 1077 applications in 2009. Taiwan has had steady year-on-year increases in applications filed with the EPO – the exceptions being 2007 and 2009, which can be contributed to economic meltdowns.

Fig. 1: Percent Change in Patent Applications for Taiwanese Applicants

Chinese Applicants:

China on the other hand, started off with only 162 applications in 2000 (99 applications fewer than Taiwan), but has outdone Taiwan in applications filed with the EPO since 2007. Also, China is also the only country listed above that, despite the economic meltdown, has maintained its year-on-year increases in applications filed, (Fig. 2).

Fig. 2: Percent Change in Patent Applications for Chinese Applicants

EPO Patent Grants -2000 to 2009

Fig 3. Patents Granted by the EPO: 2000 – 2009

Figure 3 shows that the number of patents granted by the EPO to Taiwanese applicants has steadily increased from 20 in 2000 to 201 in 2009. Taiwan's growth is second only to China, who has grown from 11 patents granted in 2000 to 351 in 2009.

Please note that, tempting as it may be, it is not possible to compare grants with applications as we do not have the statistical data needed to trace the success rate of each application. Generally speaking, the EPO grants approximately 50% of all applications.


The Big Picture

Having a look at the bigger picture (Fig 4), Taiwan and China are still minorities compared to the major players at the EPO – the United States, Germany, and Japan respectively. Korea files nearly triple that of China, but far less than the BIG 3 (US, Germany, and Japan).

Fig. 4: European Patent Applications Globally

Although the numbers might seem insignificant at first, this growth trend signals a rising awareness among Taiwanese and Chinese companies of the importance and potential value of patent protection in Europe. In the past the numbers were likely low because Taiwanese companies were traditionally focused on the US-market for commercialising their inventions. Now, the shift in roles from passive manufacturers to own-brand companies and exploration of new markets has led them to increase their focus in patents. For China, their delayed entry can likely be attributed to a learning curve in intellectual property rights. In addition, many prospective applicants are put off by the relatively more expensive cost of obtaining a European Patent. Finally, among the many other reasons, a general lack of experience with European Patents may also have contributed to the past apathy.

What is causing this growth? A plethora of possibilities– some of which include: globalisation of the world economy; the shift of market resources to Europe due to competition in the US; overall growing awareness of the importance of IP, better quality patents granted by the EPO and so on.

Whatever the reasons, reality dictates that both the number of applications filed with the EPO by Taiwanese and Chinese applicants and the number of patents granted to them have made gains over the past 10 years. At NAIP, we believe that Taiwanese and Chinese companies are finally recognising the market opportunities in Europe and more importantly, are taking action and investing money to secure their European intellectual property rights.

In Search of Effective Filing

Fig. 5: Total European Patent Applications Globally

A final interesting note from the data is that, as a percentage of the total number of patents applications at the EPO in 2009, Taiwan
's applications represent 0.75% and China's 1.21%, both up from previous years. However, when looking at the actual patents granted, Taiwan's granted patents represent only 0.39% of the total number of patents granted to the countries listed. China's 0.68%.

Germany on the other hand represents 18.66% of the total number of applications filed, but managed to achieve 21.9% of the patents granted. The success rate of other countries is also similar or higher than their application rate.

Does this mean the quality of applications filed by Chinese and Taiwanese companies are of lower quality or patentability than those filed by Germany, US or even Korea? Not necessarily. The figures may be representative of the learning curve associated with implementing IP strategy in a new market. The applicant's may not be familiar with procedures, drafting differences and so on.

That is why it is imperative Taiwanese applicants have access to reliable, quality European patent partner. NAIP provides such a service. Early on we embraced the opportunity to expand our specialized patent filing services to EPO applications. Through ongoing European patent training NAIP has ensured a strong knowledge base among our patent engineers and administrative staff. That allows us to process our clients’ European patent applications effectively, focusing on quality above all. Furthermore, to maintain and guarantee high quality patents, we collaborate with a reputable German Patent Firm for the direct filing and prosecution of all of our European Patent Applications.

We believe that through our experience with EPO applications, our thorough consultations with our clients and our attention to detail, our clients can expect a much higher success rate with their EPO applications.

On 6 June 2010 Taiwan's Executive Yuan passed an amended version of the Taiwan IP Office Re-organization Statute. The amendments are aimed at tackling the patent backlog and delays in patent examination, and will increase the number of patent examiners, but maintain existing head count. This will be accomplished by reducing the number of administrative and secretarial personnel, training and transferring existing personnel, and loosening restrictions on the number of part-time patent examiners. The statute will now go to the Legislative Yuan for approval.
The announcement can be found here (Chinese).

Today, companies with strong, active patent and R&D divisions develop their patent strategies with a global perspective, often filing for patents in both the United States and in Europe.

To encourage and improve the inter-office "compatibility" of US and European Patent applications, both the United States Patent Office (USPTO) and European Patent Office (EPO) have introduced programs such as the Patent Prosecution Highway Programme. However, despite these efforts, the two systems remain fundamentally different, and without proper planning and consideration of each office's specific rules and procedures, an applicant risks losing valuable rights in the application process.

One Invention – Two Systems: An example
One potential landmine is the US Continuation-in-Part (CIP) Application. Companies often first file a patent in the US, then a corresponding application in Europe claiming priority to the US patent. Later, due to rapid market changes or previously unseen application of the technology, a company sees the opportunity to extend the subject matter in its application and does so though the USPTO's CIP application.

Does the applicant have a similar option for the corresponding EPO application? How does this affect the EPO application? First, a quick look at the US CIP application:


The USPTO Continuation-in-Part Application
The USPTO provides that an applicant/inventor may add new subject matter to an existing non-provisional application, provided that the new subject matter has not previously been disclosed and that the nonprovisional application is still "alive". In addition, the new application will repeat some or all of the substantial subject matter of the already existing non-provisional application.

This new application is known as a Continuation-in-Part Application.

An advantage of a CIP is that priority from the earlier non-provisional application may be claimed. Provided that the earlier application has not been patented, abandoned or terminated on the date that the CIP is filed, such CIP will receive the same filing date as the earlier application.

(To learn more about CIP applications, please see USPTO MPEP: 201.08 Continuation-in-Part Application [R-3])

At the European Patent Office
The first thing to know is that the EPO does not provide for Continuation-in-Part Applications. The EPO does have a few options that may seem similar to the CIP, but they cannot be utilized in the same way.

The options are limited, but available....


1. Divisional Applications:
Divisional Applications are used to overcome Unity of Invention problems – in other words, to overcome the objections of claiming more than one invention in one application. Thus, when filing a Divisional Application with the EPO, the subject matter disclosed in the Divisional Application must be directly derived from the parent application as filed.

The EPO provides for Divisional Applications to be filed "only in respect of subject matter which does not extend beyond the content of an earlier application as filed..." – EPC ~ Article 76(1)

When dealing with a USPTO CIP application, it is indeed NEW subject matter which is added to the earlier nonprovisional application. Unless the new subject matter, which is disclosed in the CIP application, is already disclosed in the earlier EPO application, it will not be possible to apply for a Divisional Application.

It is thus advised to disclose and claim as broad as possible when submitting your first application. Therefore, should the examiner object to the application on the grounds of unity of invention, the applicant would be in a position to claim divisional applications from the "parent" application. However, it should be noted that the EPO has introduced a time limit of 2 years from the first communication from the EPO regarding unity of invention for claiming a divisional application.

2. Amendments:
Amendments are similar to Divisional Applications in that no new subject matter is allowed to be added to the application. However, if the subject matter disclosed by the CIP application has been disclosed in the earlier EPO application, amendments may be applied for if such amendment will not give rise to any other objections (such as Unity of Invention).

EPC 123(2) – clearly states that no amendment to an EPO application may add new subject matter which extends beyond the contents of the application as filed.

Thus, it might be advantageous for the applicant in the EPO to file his/her application as close as possible to the expiry of the 12month priority period – claiming priority from the earlier US-application. In doing so, the applicant will have ample time to foresee and amend his/her EPO application to overcome disclosure of new subject matter (EPC –Article 87 ~ 89).


3. Filing a New Application with the EPO:
The last resort is filing a new EPO Application for the new subject matter disclosed in the CIP application.

Note that the new EPO application will be entitled to claim priority from the CIP only if filed within the 12 months priority period granted since filing of the CIP application. Also note that the priority date is the filing date of the CIP, not the filing of the date of the CIP's parent application

While this method is not ideal, it does provide a stronger measure of protection than a completely new EPO application.

Conclusion
As this example on USPTO CIP applications and EPO applications clearly shows, inventors and applicants of patents in multiple patent systems must be aware of the various subtle yet significant differences between the requirements of the various patent offices. Contact your patent agent or legal firm and plan ambitiously. You always scale down later.