Pct Patent Assignment Vs License

11.065A.   What steps must be taken when an applicant fails to meet a time limit?  The applicant must take the relevant actions (submission of documents, responses to invitations or the payment of fees) as soon as reasonably possible.  Generally, this means within a short period of the cause of the delay ceasing to apply.  For example, in cases where a strike prevented an agent from reaching his office, it would be expected that the action should, in most cases, be taken either the next working day or shortly thereafter, depending on how much preparatory work had been disrupted.  On the other hand, where a disaster has resulted in the complete destruction of an agent’s files, it would reasonably be expected to take longer to reassemble all the necessary documents and systems to allow the necessary action to be taken.  In the case of general unavailability of electronic communications services, the applicant must establish that the outage affected a widespread geographical area rather than being a localized problem, that it was unexpected or unforeseen, and that there was no alternative communication means available to him. The request for the excusing of the delay and the relevant evidence must be submitted to the competent Office or Authority or the International Bureau as soon as reasonably possible and, in any case, not later than six months after the expiration of the applicable time limit. 

As to the form of evidence, for example, a news report from a reliable mass media outlet, or a statement or announcement from the relevant national authority is normally acceptable for this purpose. In the case of general unavailability of electronic communications services, a statement from the provider of Internet services or the company providing electricity to the applicant may also be acceptable.

Authored by Shing-Yi (Cindy) Cheng, Ph.D.

To view this article in English and Chinese click here.

International patent protection is important for organizations in Taiwan.  Patent Cooperation Treaty (PCT) offers a convenient way for applicants to obtain international patent protection.  In order to file a PCT application, either an inventor or assignee of the application must be a national or resident of a PCT member country.  Unfortunately, applicants from Taiwan face special burdens because Taiwan has not yet been recognized by the PCT.  Paying careful attention to these burdens will allow these organizations to obtain valid and enforceable patents in many countries, which can either protect products or generate licensing revenue.

In cases where both the assignee is from Taiwan and inventors are both citizens and residents of Taiwan, the safest way to enter the PCT is to add an additional assignee, who is a resident of a PCT member country, as an additional applicant.  Organizations can establish a subsidiary or holding company in a PCT member nation and assign at least a portion of the rights in their technologies to that holding company.  The holding company would then serve as a PCT-qualified applicant. 

If the organization has concerns about making an assignment to a holding company it is possible to assign a small percentage (e.g., 1%) of the interest in the invention, in only one PCT member country of little significance.  However, some substantial rights must be transferred.  It is also possible to insert a term into the assignment that if the organization licenses the invention to a third party, that the holding company must license it with the same terms, and cannot otherwise transfer rights in the invention.  Further, the assignment can require that the holding company join in any patent enforcement action.  Nevertheless, for the purpose of filing a PCT application, the assignment to the holding company should provide a permanent and non-revocable transfer of an interest in the invention.  Documents purported to be assignments that transfer only a revocable interest could be disregarded, jeopardizing the PCT application as well as any national stage applications.

Instead of following these recommendations, some organizations take shortcuts to the PCT.  We understand that in certain instances, U.S. attorneys are naming themselves or their firms as applicants for these PCT applications.  This approach is inappropriate as there is no legal basis for the patent attorney to serve as a PCT applicant.  If this was permitted, it would erase the requirement for the applicant to be a PCT national.

In addition, some organizations have filed PCT applications in the China PCT Receiving Office (SIPO) claiming that the organization and the inventors are all nationals of China.  However, we have concerns that this might jeopardize the PCT application.  Specifically, while China may accept PCT applications filed by companies from Taiwan with inventors from Taiwan, it is unclear whether, in other jurisdictions throughout the world, patent offices will issue or courts of law will enforce patents filed as national stage applications from a PCT application filed in China by solely Taiwan applicants.  In other words, the fact that SIPO accepts the application may have no legal bearing on other countries’ Patent Offices’ interpretation of the facts.  PCT Rule 18 states that the question of whether an applicant is a resident or national of the Contracting State of which he/she claims to be a resident or national shall depend on the national law of that State and shall be decided by the receiving Office.  If in national stage examination, another country has a different interpretation and concludes there was no proper PCT applicant, that application could be considered abandoned for not meeting basic PCT requirements.  Nevertheless, it is also possible that another jurisdiction would respect SIPO’s decision on this matter. However, such treatment is not guaranteed and different countries may draw different conclusions.

Additionally, even if such a patent is granted, if the organization or a later licensee attempts to enforce the patent, an alleged infringer could potentially argue that the patent was invalid and/or unenforceable because the basic filing requirements of the PCT were not met.  While the authors are not aware of any cases invalidating a patent in a national stage country based on PCT application where citizens of Taiwan claimed Chinese citizenship, such a decision is within the realm of possibilities. 

Finally, given the difficulty in entering the PCT, it could be possible to name inventors primarily because they have citizenship in a PCT member country.  Naming an incorrect inventor for the purpose of securing a PCT application would be fraudulent and jeopardize both the PCT application and any national phase applications.

Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws.  This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm’s clients.


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