Are patents that protects inventions appropriately designed to encourage Starts-ups and SMEs?

Abstract Background and potential value of the topic Patents are part of Intellectual Property Rights protecting inventions. The protected inventions not only improve our life, but also stimulate innovation and competition allowing us to get "la crème de la crème" of inventions. Obtaining a patent is an arduous process, that not only is long and demanding but also doesn"t guarantee a positive result, which is why is so hard on the people who want to acquire them. Among people that wants to file patents internationally there is still the question of which is the best international filing procedure suited for their objectives. The aim of this research is to answer that question.

Purpose The goal of this research is to provide some insight to the creators of inventions, Start- ups and SMEs, as to what are their best option to filing patents internationally, taking into account their needs and considering pros and cons of the current patent rules design at the international level, mainly PTC and the European Filing Procedures rules.

Methods In this paper an interdisciplinary research method will be used by combining different academic disciplines such as law, international trade, business management and economics, interpretation of legal text, and a comparative analysis of some of the procedural legal texts that regulates patents.

Introduction

On 2007 a regular worker copied some files to his external storage device (USB) and went for lunch. When he wanted to access the information he realized that he had lost the device where he had important information about security protocols and algorithms for personal content digital rights management. He was worried about who might access this unprotected data and try to find a solution so that the situation would never be repeated in the future. Some options like free software on Internet, require usernames and passwords, so it was a thing that people didn"t really like, since they already had many usernames and passwords to remember already.

He began to work on a secure way to transfer data between two computers, and came to the idea of the incorporation of a remote access software application with USB, so that with two USB you could access information while one of the USB is connected to the computer and the other carried around with the user. He told his idea to a friend, and they realized after a search, that nothing like that was invented. Hence they invented two USB that while connected among each other, " they are electronically paired and create a randomly generated encryption and decryption code that is mutually shared between the two units that allows them to communicate securely with each other – and only each other – over a virtual cable through the Internet."1 When these USB are apart however, one remains connected to the computer, while the other can access the data that is on the computer securely, through internet. The iTwin came a long way before being profitable, it is an example of success and how good ideas when protected can generate revenues. Stories like this are the ones that inspired this work.

Nonetheless patents are not a new subject, despite our believes they are also found in 1772 BC to the Hammurabi Code, where in law number 188 it reads: "If an artisan has undertaken to rear a child and teaches him his craft, he cannot be demanded back", while the next one read: "If he has not taught him his craft, this adopted son may return to his father"s house", it was an antique way of protecting not only inventions, but also their process.2 Furthermore in Europe there is "historical evidence that patents originated in Venice in the 15th century (…) Patents had already been granted prior to 1474 when Venice promulgated its patent statute, probably the 1st patent modern law."3

On the other side of the ocean, "after the US where independent from England, they made a Patent Law in 1790"4. Next century the United Kingdom made their "Patent Paw Amendment Act in 1852"5. Patents rules as all the legal rules aims to set rules that will control the specific area they are related to, in this case patents law. Things as we know have only been improving since then as we will see on the next"s chapters.

Not only research on pharmaceutical products or other substantial patent-related questions are important, procedural aspects are also crucial.

Chapter 1:

Background and Literature

Intellectual Property is a vast field, usually unknown for non-lawyers. This chapter will provide you an introduction of the main topic, by guiding you through some of the most important things one needs to know before going deeper, like definitions of the key subjects that are related to this research, like: invention, intellectual property, technological engineering patents, starts-ups, SMEs, regional economic agreements. Advantage and disadvantage of alternatives to protect inventions.

This paper is about a specific field of Intellectual Property, therefore the first question that needs to be asked is: what is intellectual property? Intellectual Property (hereinafter IP), is "the creations of the human mind"6, intangible creations, they have no material form. For instance is not an object or a gadget, but the invention or inventions therein contained.7 IP is divided in two branches: Industrial Property8 and Copyright9. So IP is very wide protecting a variety of different rights like: patents, trade secrets, copyrights, trademarks, and others.10

In order to understand what is a patent, we need to know what is an invention. An "Invention refers to a technical solution to a technical problem. It may be an idea or may be in the form of a working model or prototype"11 Then there is also the distinction between invention and innovation, that"s relevant because people tend to confuse them, "Innovation refers to the translation of the invention into a marketable product or process"12, as we can see innovation13 includes the invention, whereas invention could say have a goal of becoming innovation.

This research is devoted to the Industrial Property part of Intellectual Property, known as patent. Patents has been given many definitions14, however one of the best places to look for a definition on patents is WIPO, that stands for World International Property Organization, their definition is: "A patent is an exclusive right granted for an invention, which is a product or a process that provides, in general, a new way of doing something, or offers a new technical solution to a problem. To get a patent, technical information about the invention must be disclosed to the public in a patent application"15. However we must be clear that this is the typical EU definition, on the other hand, the US definition is much broader, a thing that to some extent have an impact on what is patentable. We can say that is a right given to a person who has an invention that has been properly registered, registered because, an invention that has not been registered is an unprotected one by patents16, that is under the constant risk of someone stealing it, copying it, or damaging its reputation. These are some of the reasons why inventors try to patent as soon as possible, when patented the invention turns into rights of the creators.

Even though all IP is relevant, some have a more lively filing activity than others. This filing activity can vary depending on many factors, but it"s a fact that IP keeps growing17. In 2012 for instance Trademark had more filing application, followed by Patents and then Industrial designs and Utility Models. Even so as we can see patents have an important position.

1 Global Intellectual Property Applications 2012. 18

Like in every other sector of IP, it behaves different in countries, and regions. Driven by many factors, but mainly by markets. Asia have always played an important role in this position, as have the North America and Europe.

2 Shares Across UNSTAT's

Geographical Regions 2012. 19

Patents are available for all areas of technology. TRIPS establishes that "Patents shall be available for any inventions, whether products and processes, in all fields of technology…"20. The European Patent Convention article 52 (1), that was amended to make expressly clear that included all areas of technology.

In this research we will be referring to the specific area of technology, called electrical engineering. Electrical Engineering, comprises the various fields of audio-visual technology; basic communication processes; computer technology; digital communication; electrical machinery, apparatus, energy; IT methods for management; semiconductors and telecommunications.21 Electrical engineering has the most number of priority patents and is also the one most associated with other technologies22.

3 Patent applications by field of technology (2011). 23

It is significant to say that WIPO report on IP Facts and Figures 2013 showed that: "In 2011, computer technology (134,272) and electrical machinery (122,697) accounted for the largest number of applications, with a combined share of nearly 15% of all published applications."24

This paper is devoted to the inventors, scientist and engineers creators of inventions as well as their Starts-ups, and Small and Medium Size Enterprises (hereinafter SMEs), since they usually lack of economic resources to make this big projects happen. Starts- ups are: "newly created companies in phase of development and research for markets"25, "is a fledging business enterprise with the key ability of growth, so they can be five years old"26. On the other hand SMEs or Small and Medium Business are already working business, so they have already began their main activity, to be categorized as one of them there are few requirements to be met: "account number of employee, annual turnover, annual balance sheet, and independency"27, that need to be taken into account, although the most common criteria is based on number of employees the threshold varies from jurisdiction to even international organizations. In the European Union small companies are up to 50 workers, medium size ones up to 250 and large or big ones from 250 onwards28.

Why is there such a big fuss about patents? Why do Start-ups and SMEs need a patent? Patents are also assets. People invent not just for their own benefit and accomplishment, but also to promote development, competition, innovation, employment, to make things easier, and of course to make money. Patents offer exclusive rights over inventions that allows using and benefiting from the invention for 20 years from the filing date. By having the exclusive right of the creation, you gain a relevant position29 in the market. Patents enables you to prevent others from commercially using you patented invention, to protect yourself against imitators and free riders. In return by commercializing your invention you are able to make up for all the money and time spent, and produce more revenues, you get a high income on investments. Even if you choose not to exploit your invention, it doesn"t mean you won"t have other options, you can sell it or license the rights to commercialize it. Selling or assigning the patent means to transfer the ownership rights. Licensing is the permission to use the licensed invention under agreed conditions.30 Licensing also can provide a new way to access new markets. Patenting also may grant access to technology through cross-licensing31. A successful invention can also offer a positive image in business by increasing your company"s value, gaining funds, and finding suitable partners. These are some of the positive benefits from patenting. Therefore, it only stands to reason that its application continues to growth with the years.

4 Trend in patent applications worldwide. 32

Not patenting however, may have its negative effects. Someone can apply first for patenting an invention similar or the same as yours, and then you will lose the right to exploit the invention commercially, because you will not have the rights, due to prior date, you will only be able to use it, if you prove you had by yourself reached the same invention. The same can happen if someone steals it. Competitors also will want to profit from your invention, since it won"t be protected there won"t be a need to pay for its commercial use. The owner of the invention that should be patented, will only be handicapping himself to the many possibilities of licensing, selling and transferring the technology if he does not protect his invention.33

It is important to be clear that in this field an attorney specialized in patents is needed, not only for filing the patent, but also for all the contracts and agreements that will be needed to protect yourself and your invention. Contracts are tricky and they need to be as well drafted as possible. Involving the people who knows or are involved with the patent is crucial, and contracts and agreement once signed by yourself and these people will be binding, be protected by law, and if breached have consequences, on the subjective plane, people that sign documents feel more inclined to do as their promised by signing.

When a patent is used without authorization of the owner is the responsible for monitoring the use of his invention in the marketplace, identifying any infringers and deciding how and when to take action against them. Is always important to be prepared for any eventuality, in case of an infringement is important to collect information about the infringers, and their use of the invention. There is always the need to get legal assistance if anything of the sorts occurs. There are always some actions to be taken like send a cease and desist letter34, negotiating a licensing agreement35, if there is the idea that the breach have been done consciously and maliciously is important to take immediate action and to ask for an interim injunction36, then there is also the judicial alternative to initiate civil proceedings, however is important to know that there are also other friendlier dispute resolution mechanism like arbitration and mediation.

When you have a patent, you have what everyone calls a legal monopoly over the invention37, for a period of time generally 20 years38 from its registration, and if you pay your yearly sum to hold this right. While you hold this right you can allow people to use your invention, under your conditions, for an economic benefit, you grant its use by a licensing agreement/contract39. But licensing is not the only way to make money with an invention you can also do an assignment that is basically a transfer of ownership, you sell your patents economic rights. Partnerships are also considered a good option, if you are short on the cash flow, you associate with a stronger partner, to be able to have funds to make your project possible. Hence, there are several reasons why people are so cautious when dealing with inventions. There are many ways of protecting inventions during the research or creation process that all persons involved sign a Non-Disclosure Agreement40, or a Proprietary Agreement mostly used by companies to ensure that any novelty achieved while working for the enterprise will belong to the company.

Generally companies, business or enterprises have an economic goal. When we think about a profitable business the first thing that comes to mind are big international companies, because we all know that international enterprises make more money if they are successful. In patents is the same if you registered your patent internationally you have a much better opportunity to make more money, always suitable to your needs be it directly, by yourself producing your invention and then selling it in that territory or by licensing the use of the patent, either way you make money on your own terms. SMEs are no different by protecting their invention internationally they have a better chance of exploiting it, but generally funding the whole and costly process is the problem, which is why big business don"t have this problem, they count on a significant number of resources to make it happen allowing them to increase their revenues considerably. A positive fact to consider however is that SMEs are applied discounts by some nationals or regional offices when they enter the national phase.

Unfortunately, filing internationally for patents is a costly process that needs funding. Patents financing is done both at the private and governmental level. Private financing is mostly the same in all sectors, in patents is mostly related to companies that operates in the same sector, people don"t invest in things they are not certain it will produce earnings. Usually governments in favor of technological development provide funds for start-ups and the like. Institutions, organizations and entrepreneurs also encourage innovation by providing financing.41 For instance the EU recent funding programs that run from 2014 to 202042 are: Horizon 2020, a funding program for research and innovation running with a €80 billion budget; COSME a Program for the Competitiveness of Enterprises and SMEs of a planned budget of €2.3billion; the European Investment Bank EIB and the European Commission has created InnoFin that provides "financial instruments and advisory services to help innovative firms access finance more easily"43.

In order to obtain financing it"s crucial to prove that the invention will produce money44; a factor through which this is done is by doing an IP evaluation. There are several sites online where you can do this even by yourself like IP score45 and IP Response46.

Today filing for a patent registration internationally is easier than before. The world is not just viewed as countries, but also through economic regional integration agreements, and international organizations; all of which offers considerable benefits. Economic Regional Integration Agreements, aims to reduce or remove tariff and non-tariff barriers to free flow of goods, services and factors of production, is done generally between geographically proximate countries. There are several levels of integration like: Free Trade Areas, Customs Unions and Economic Unions, which we will not be explaining in detail because of space, but is worth mentioning some examples of them to comprehend their impact on the patents system. One of the largest economic regional integration agreement on territorial extension and also on the IP sector, is the EU with 28 members47, featuring a huge market that makes the others competitors beware of them. Even scholars have a difficult time choosing a model for their researches between the US laws on IP, and the European IP laws. One of the many advantageous point of the EU, is that it have more modern and recent laws, directives, regulations, and case law's. An example of Free Trade Agreement is NAFTA, North America Free Trade Agreement, and agreement made between the United States, Canada and Mexico. Economic regional integration agreements facilitate patents international protection to the countries that are part of the agreement, by: regulating common rules on the subject, by extending, in this case, patent protection to all the territories of the regional agreement, by having a regional office.

In the next chapter, we will explain the interaction between substantial and formality related rules, along with another ways of protecting the invention, there will be a especial attention dedicated to filing patents internationally by analyzing the PCT and PLT, and TRIPS.

Chapter 2:

Interaction between substantial and formality related rules.

In this chapter it will be addressed the requirements and rules to file patents, patents application, the routes that are available for patenting, lastly we will explain some of the patent international laws related to patenting internationally PCT and PLT, what patenting procedural uses WTO for IP.

Laws are usually divided in a substantial part and a procedural part. Substantial part deals with the rules, the rights, the obligations, while the procedural part is about the steps, the procedure to make the substantial part happen, to implement it, also the legal resources like appeals. For instance inventions being protected by patents and utility models, have several important international agreements, some of the most renowned are Paris Convention for the Protection of Industrial Property dated 1883, Budapest Treaty on International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure from 1977, and Strasbourg Agreement Concerning the International Patent Classification from 1971, all of these examples are from the substantial part of patents laws and of WIPO but in 1994 the WTO had his TRIPS, to regulated IP. On the procedural part of patent law two relevant examples will be: the Patent Cooperation Treaty 48 from 1970, with 148 contracting parties49; and Patent Law Treaty50, from 2000, with 36 contracting parties51.

Before filing for a patent there is one thing we must want to be sure about, since patents protects inventions that are patentable, we have to ask ourselves: Is this patentable? Does it meet the requirements? For an invention to be patentable some substantial requirements needs to be met: industrial applicability52, novelty53, and inventive step54, are usually the mostly named ones though it should also be included that the invention needs to be a patentable subject matter.55 56 57 58 If we don"t think about this before filing for a patent, we may well be wasting our money.

There are however similar exclusions to patentability in almost all laws. One of those exclusion to patentability common to most, if not, all legislations are the ones that goes

58 According to article 27 (1) of the TRIPS agreement: " Patents shall be available for any invention (…), provided that they are new, involve an inventive step and are capable of industrial application" against ordre public or morality59. Public order has been defined as "expresses concerns about matters threatening the social structures which tie a society together i.e. matters that threaten the structure of civil society as such" and morality means "degree of conformity of an idea to moral principles"60. Methods for treatment of Humans and Animal, are another example of exclusion, and are prohibited in most of European and Latin America countries law. 61 Plants and animals are also an exclusion62, modern legislation provide them a broad definition, in European patent law and others the scope is reduce to include only plant varieties and animal races. Biological processes have been considered by European law.63 Microbiological processes is recognize as an exclusion in several legislation like the European, however in the TRIPS agreement the exclusion only refers to the classical breeding methods. Other example quite popular in legislations is the security exception, related to security interest, like for instance those taken in a time of war or other emergency in international relations.64 These are some of the main examples of exclusion to patentability; however each country has the right to regulate their own.65

After checking if the invention meets the patents requirement, it is important to see if there is any invention with the same or similar characteristics to yours, not only will this save you time and money if such thing has been already invented, but also you will have lots of information on prior art66, or background information on the future application. Some important data search webs on IP subject are: APEC Property Explorer67, to identify and protect IP assets; UK Intellectual Property Office: IP Healthcheck68 with the same function as the APEC one; and lastly but not least WIPOs Patentscope69. Similar searches will be conducted, by professional organizations, once you file to obtain a patent, but doing it before it gets to this stage allows you to refine your patent application.

2.1 Alternatives to patents Patenting is not the only way to protect an invention, though is the most used. There are other legal instruments that allows to protect inventions that are also within the IP, it all goes down to what do you want to achieve. Inventions can be also be protected by Utility Models and Trade Secrets, it will be explained the pros and cons of each one.

Utility models are also known as patents, petty patents or innovation patent, "in many countries, some types of incremental inventions or small adaptations to existing products are protectable as utility models"70. Utility models are more flexible than patents are: the "inventive step condition" is less severe, the procedure for its grants are simplier and quickier compare to those of patents, and the acquisition and maintenance fees are generally lower than those applicable to patents. On the other hand is important to know that: the duration of utility models is shorter than patents, in some countries utility models may only apply for products and not processes, and lastly the utility model application may be converted into a regular patent application.

When an inventions meets the patentability requirements, the owner of the invention always have to ask the question if he wants keep the invention as a secret or if he wants to patent it. Trade Secrets71 doesn"t required registration cost, it doesn"t also involve disclosure or registration with a government office, the invention is not published because it remains a secrets, is an advantage as long as it"s not discovered, secrecy is the main element that gives its value, which is why legal ways to protect this information is available through confidentiality and non-disclosure agreements. Trade secrets are not limited in time, and they have immediate effect Patents on the other hand provide "for a better quantification of technology and a better qualification of rights (…) by providing disclosure patents reduce the enormous transactions cost that trade secrets involve (…) the cost of acquiring information."72 Trade secrets are another alternative to protecting an invention, but they represent a couple of difficulties. Trade Secrets are contained in an innovative product but through the reverse engineering process others are entitled to use it, it can only be effectively protected "against improper acquisition, use or disclosure of the confidential information, […] trade secret is difficult to enforce, as the level of protection is considerable weaker than for patents, and they may be patented by others who may independently develop the same invention by legitimate means"73. Doesn"t allow a good assessment of the invention"s value. There is also the highly discuss subject about the secrecy and its implementation, because once a trade secret is out there is no going back. Although it is true that they are a cheaper way of protecting your invention, it only applies if is not discovered.

2.2 Patent Application Once the inventor is sure he wants to patent, because he has reviewed that: his invention meets all patentability"s criteria, has done a search and has confirmed that there aren"t other inventions like his, and has considered all the alternatives to patenting; then he can start worrying about the patent application, what kind of protection he wants to have:

international, regional or national, and the lawyer that will assists him.

Patent applications have different lengths , what is important is not how many pages has, but that it respects the application structure, "Patent Applications are similarly structured worldwide and consists on a request, a description, claims, drawings and an abstract"74. The filing process is one of the most crucial steps and it"s required without a doubt the help of a specialist, since it"s a complicated thing. The filing document by general rules contains the invention"s title, and the technical field to which this invention belongs to, there is also the question about the invention background and its description75. Claims are another important part of the application, and they "contain the extent of protection to be granted by the patent"76.

2.3 Filing patent internationally Patents rights are territorial, an invention is only protected where the patent has been obtained. If a patent owner wants to have a national, regional or international protection it needs to file through the adequate route. There are three routes to file a patent: national, regional patents offices and international organizations.

The national route for obtaining a patent in other country than your own is by filing for a patent in the national patent office of the country where you want to your invention to be protected.77

Regional Route is when a number of countries are members of a regional patent system having their own regional offices. The process is done for several countries at the same time, with the same application, and the same fee. As you can see like the economic regional integration agreements, patents also have regional patent system, for instance the African Intellectual Property Organization (OAPI), the African Regional Intellectual Property Organization (ARIPO), Eurasian Patent Organization (EAPO), European Patent Office (EPO), and Patent Office of the Gulf Cooperation Council. For a better understanding of how regional offices work, we will be taking in this research about EPO .

On the international level, the biggest patent system to file: is the PCT, that allows a single filing of one international patent application, for multiples national applications, as long as those countries are signatories. Now we will explain how the PCT works.

2.4 PCT System

The PCT is an international treaty that allows filing for patents, with some elements of patents examination procedure, at the same time in a considerable big amount of countries, even though the granting of the patent itself depends on the national or regional patent offices. It was signed in 1970, and came into force later on June 1978. It has been a success it has only continue to gain popularity among applicants which is why the PCT"s applications continue to grow yearly.

5 PCT international applications (2008-2012). 78

As we already mentioned above the PCT is one of the biggest patent"s international agreement. As of 1 March 2014 it has 148 signatories" countries.79

6 Contracting states 148, on March 2014. 80

The PCT procedure: 81 82 The 1st thing is to file for a patent. The application to obtain a patent is done in a national patent office83, by regional offices or WIPO, in a single language and one set of fees, this applies to all PCT member states and their nationals and residents. Patents can be filed also electronically,84 when done so you are even entitled to a fee reduction on top of the benefit of being able to manage your application electronically, for things as time limits. The 2nd step is the formality examination, where the application office makes sure that all PCT formality requirements are met. The 3rd step is the international search, that is done by the "ISA", the International Searching Authority85, that does the research regarding the prior art and the patentability criteria.86

After the International search is done, a report is issue with a reference list off all published reference and technical journal related to the patent in question, and that may affect its granting. The international search report and the written opinion are usually receive after four month from the filing, they provide much valuable information that allows inventors to know if their invention meet the novelty and inventive step requirements, or not. The 4th thing is the international publication that goes after the 18th month from the priority date where the content of the application is disclosed, this is called patent information87. Then the International Preliminary Examination Authority, IPEA, reviews all the preview steps, also based on the claims done by the applicant. Afterwards the applicant decide in which countries it want to proceed to the national phase, where is taken into account the national fees, the filing translations, and getting a local patent attorney, usually done before the end of the 30th month from the priority date. The rest is up the national patent offices, whether to grant or not the patent. In order to picture better most of the explained information above we provide the following figure.

As you can appreciate all this process is done in two phases: an international one, that is supervised and administered by WIPO, and the second phase is the national phased conducted in the established offices following their respective national laws and procedures.

7 PCT System and time frame. 88

Among the fees that have to be paid for PCT are: the international filing fee of 1330 Swiss francs (hereinafter CHF), and a fee per sheet over 301cost 15 CHF.89 WIPO offers a detailed fee table in their website.90 Search fees can go from 150 to 2300 CHF.91 It is a costly process of course, but there are some reductions and refunds also available.92 Another attractive fact about PCT is that after a certain quantity of designation, there is no extra fee. "After January 2001, the maximum amounts payable are 6 designation fees,"93 so if you applied for 7 or 100 countries the tariff was the same. There are foreseen some discounts in the PCT.94 Much like the TRIPS agreement that foresee provisions in favor to some extent of developing countries, the PCT also does so, making available for natural persons, a discount fee for developing countries of 90%, for certain fees, as well as the international filing fee. Furthermore a 90% discount is applied to nationals and residents of contracting states as long as they are classified as least develop country by the United Nations.95 These requisites have to be satisfied even when there is a plurality of applicants. Some countries nationals or residents applicants get a reduction fee from some ISAs.96

Discounts on the case of Start-ups and SMEs, are quite few and then only apply to some countries a fee reduction: 97 of "60% where the international application is filed by a natural person, a small or medium-sized enterprise, a cooperative, an academic institution, a non-profit-making entity or a public institution"98, by 25% if the applicant is a natural person, a small or medium enterprise, a public or private university recognized by the National Ministry or a non-profit entity promoting the development of scientific and technological research"99, "by 50% where the international application is filed by a public university, a small or medium enterprise (in accordance with the criteria of the charter for small or medium enterprises) or a natural person who is a national of and resides in one of the States entitled to a reduction under the PCT"100, "by 60% where the international application is filed by a natural person, a small or medium enterprise or an academic institution"101, and other offices have available discounts "for natural persons, universities, not for profit, research institute, and SMEs for fees you will need to pay as you enter the national phase".102 But these discount are always limited to some countries or some specific cases.

Patents are not only expensive but also time consuming. It takes 18 months from the filing time before the national phase begins. However this time provides an opportunity to obtain patents and exploit the invention commercially, also to review the technical value. The following chart will provide a visual understanding of the time lapse also by giving a comparison with PCT and the time where payment has to be done. PCT offers more than the double of time margin before fees for translations, office fees and local agents have to be paid, payments requirement of the national phase. This extra time103 allows any inventor the time to search for investor and to research further into the invention possible revenues, while preparing to pay the fees of the national phase.

8 Time frame Paris vs PCT. 104

After the international phase is done, the national phase begins once the desired countries where the invention wants to be patent protected are named, and the payments we mentioned above are done, always before the 30th month from the priority date.105

Usually patents are filed first in a national or regional patent office, and within 12 month after this filing date, because of the Patent Convention, the patent is filed under the PCT. Having by doing this guaranteed the patent claim of priority, the date where the patent was filed first.

9 Top 10 PCT Applications Countries in 2013. 106

Being the PCT he biggest treaty in the international area, regarding procedural patent law, it"s only natural that his top 15 applicants are important and renown companies, where Japanese companies hold an important place in numbers on this list.

10 Top 15 PCT Applicants 2013. 107

2.5 TRIPS Agreement. The World Trade Organization, WTO, entered into force January 1st, 1995. Under the so called "umbrella", which refers basically to the areas that are covered under the WTO, is TRIPS which is one of the areas, and regulates the "Trade Related Aspects of Intellectual Property Rights".

TRIPS is a highly relevant treaty in the international field. Being a significant IP substantial law, that obviously applies to patents, leaves open the question as to what procedural law uses for patent? The answer to this question is in article 2 (1) TRIPS in relation to Article 19 of the Paris Convention: TRIPS uses PCT, a fact that stands to reason since TRIPS have to respect Paris Convention, and Paris Convention allow their members to sing special agreements. It is however highly impressive that "over 90% of the PCT contracting states are either WTO members or currently negotiating to join the WTO".108

WIPO being the dominant organization that rules the IP world, have other procedural rules that applies to the international area like the PLT.

2.6 Patent Law Treaty, PLT. PLT was signed after a diplomatic conference on June 1st, 2000, then entered into force on April 28, 2005"109. It only regulates procedural matters, fact that has been clearly stated in its Article 2. The PLT tries to harmonize the requirements of national and regional offices patents applications.110 It hasn"t had the same range of ratification that the PCT had, PLT has only 36 applicants111.

11 Patent Law Treaty ratified Status on July 15, 2014. 112

A PLT contracting state must comply with the Paris Convention.

It has been widely commented that PLT is that simplifies the office procedures113 and the patent maintenance later on. A Model International Form has to be accepted by all the contracting parties, with the goal of facilitating the patent application. The application form is standard and as long as they fulfill the general requirements established in the PLT they cannot be refused by any office. This harmonization enables to diminish errors, loss of rights, a better functioning of the offices and less costly114.

Applications can be done in paper form or digitally. A Contracting Party could not be forced to accept electronic filing or to abolish paper filing115. This is done as to ensure that the procedures and access of the Office can be done also electronically, to ensure an easier way to file electronically at a global. Also if a contracting party allows filing electronically in a specific language "for national, regional and PCT applications, the office of this state must accept the electronic filing of national and regional applications that comply with the PCT requirement in that language"116.

PLT and PCT are different from each other. While PCT uniform filing procedures in the international level, PLT uniforms the filing procedures in the national and regional level, but it also applies to PCT international filings once they enter the national phase.117 The contents of the "request" of an international application under the PCT are also incorporated by reference into the PLT.118

PLT establish a restriction on mandatory representation. Meaning that some countries demand the appointment of a representative for the processes before the office. Even though is true that a specialist in the field protects better private interests, these costs are considerable for applicants and "may be particularly burdensome for small and medium enterprises and private inventors"119.

Contracting states are permitted to ask for a copy of earlier application or a certification where a priority is claimed.120 This document translations if is a "country of the Paris Union may require such a translation in accordance with Article 4D(3) of the Paris Convention"121. Translations cost that continue to be burdensome upon the applicant.

The most important international organization in the IP field is the WIPO, which we have already mentioned, but there is also WTO one of the biggest organization in the world that deals with IP through TRIPS, because undeniably IP is related to trade. It is important to bear in mind that the ICC and WIPO provide services regarding IPR.

In the next chapter we will commence a declination from regional to national patents applications, taking as example the E.U. and the United States.

Chapter 3

Regional and National Declinations.

In this chapter we will like to offer the reader some insight as to how the patenting system works on regional and national level, by taking a look at the E.U. and then the U.S.A, this will allow to find difference between each route of application for patenting and also a better view at what could be the best choice for specific cases.

3.1 European Union and patents.122

European Union is one of the most advance regional agreements. It has its own Office for patents: European Patent Office (EPO), that has accomplish, not only great things, but also has a great position among the rest of the Patent"s Offices.

12 Top 10 offices patents applicants 2012

The EPO also have distinguished SMEs from the rest of the applicants is clear in Rule 6 Filing of translations and reduction of fees, where it says: "Where a person referred to in Article 14, paragraph 4, files a European patent application or a request for examination in a language admitted in that provision, the filing fee or examination fee shall be reduced

in accordance with the Rules relating to Fees. The reduction referred to in paragraph 3 shall be available for:(a)small and medium-sized enterprises; (b)natural persons; or (c) non-profit organizations, universities or public research organizations."124 Fees in general however are regulated in 15 Articles.125

The European Union"s uniform laws still encounter challenges for the same reason the EU provide an advantage: the fact that integrates many countries together, it also has a downside: the application of uniform laws. According to some academics in the field "IP laws are still being applied differently in the EU's national"s courts, due to the application of different approaches and procedural rules…e.g. The Improver case"126.

However some of this legislation"s goals seek: the main one is the harmonization of the IP laws, but also we must not forget the union's goal itself: the creation of internal market without borders, and the promotion of free competition, these last two goals are to ensure same treatment and improved circulation of goods and services within the internal market.

The EPO acting as ISA. On October 7th, 1987, WIPO and EPO made an agreement where in article 2 was established that the EPO would be guided by PCT guidelines in international searches.127 The EPO doesn"t act just act as an office for itself, but it may be use also for international applications under the PCT, some call it Euro-PCT application.

128When an international application doesn"t meet the requirements, the filer is invited by the ISA to pay an additional fee129, that the applicant is entitle to pay under protest130, paying is mandatory and the non-complying to the request may as well put an end to everything.

13 Contribution of offices to growth in patents worldwide.

3.2 United States and Patents EPO plays an important part in the contribution of patents application"s growth worldwide. Since we will be explaining next the United States interaction with patents, that"s why we felt oblige to illustrate131 how the growth on patents applications worldwide.