16 August 2006 is a significant date for the Malaysian and International business community as this was the date in which Malaysia’s accession to the Patent Cooperation Treaty (PCT) became in force.
The PCT system is a system which renders patent filing in numerous countries more effective and economical. It has to be stressed that the PCT system is not a system which grants international patents or world patents. There is no such universal protection system which gives patent protection in every country in the world merely by one single filing. Instead, the final responsibility of granting patents remains exclusively with the Patent Office in each respective member country.
During the pre-PCT days, under the Paris Convention route, Malaysians had to file a patent application in Malaysia or another Paris Convention country and thereafter they had twelve months to file corresponding patent applications in other PARIS Convention countries allowing the applicant to claim the filing date in the earlier application as the priority date. (The priority date is important as it is the cut-off date in determining novelty of the invention; and for determining who stands ahead in the queue if they file patents for identical inventions). Similarly foreigners from other PARIS Convention countries also had twelve months to file their earlier application in Malaysia.
The major setback in the PARIS Convention System is that applicant had to incur heavy costs in filing applications in other countries within twelve months without knowing the likelihood of a patent being granted (unless the applicant himself carried out a detailed examination on the patentability of his invention). Expenses such as translation costs, payment of Government fees and agent fees are paid without any certainty of the patentability of the applicant’s invention or whether a market exists for the invention.
The PCT System was first introduced in 1970. Now the membership stands at 135 countries, with all the economically and industrially important countries being members of the Treaty. The PCT has been said to be the most significant advance in international cooperation in the field of patents since the adoption of the Paris Convention itself. It is a simple but extremely useful system especially for those who need patent rights in several countries.
The way the system works…..
A Malaysian applicant intending to seek patent rights in several countries, would have to start by filing either a Malaysian patent application or a PCT International Application in Malaysia. If he started by filing a Malaysian patent application, then he should within twelve (12) months file a PCT International Application if he intends to claim the date of filing of the Malaysian patent application as the priority date. The PCT International Application would be sent to an International Searching Authority (ISA) who would conduct a prior art search and issue an International Search Report together with Written Opinion (ISA-WO) on the patentability of the subject matter of the application. This report would enable the applicant/ inventor to know whether he has “reinvented the wheel”, or whether some or all the patent claims would be allowed. At this stage the applicant can either proceed with the next stage or abandon the PCT application. If he decides to proceed further, he can do so by filing “National Phase” application in each of the country where he wants to obtain patent rights. Optionally, he can file a Demand for International Preliminary Examination before filing the “National Phase” application if he decides to amend the International application based on the report (ISA-WO) and wishes to know his chances of obtaining patent rights after amending the application. Entering “National Phase” is where substantial expenses would be incurred. Each country would then process the “National Phase” application as though it is filed as a local national application. The applicant has to file the “National Phase” application within thirty (30) months from the priority date (in some countries it is within thirty one (31) months).
To publish or not to publish? Strategic planning is required at this stage.
The PCT application is published in the PCT Gazette within eighteen months of the priority date of the PCT application. In the event the search report (ISA-WO) is not favourable, the applicant has an opportunity to withdraw the application, thereby preventing any publication, and at the same time the details of the invention as disclosed in the patent application can be kept as trade secret.
If the PCT search or opinion report (ISA-WO) is favourable, then the applicant can demand a higher value or royalty for the invention, as the probability of obtaining patents in other countries is very high. Because the search report (ISA-WO) is issued within (18) eighteen months, the applicant has the advantage of entering into joint-venture, licensing, distribution agreements or other commercial agreements at a very much earlier stage. The royalty income, upfront payment, licence fees etc. can be utilised to finance the filing and prosecution of patents in many countries.
Significance of PCT on Malaysia
The PCT system is a much awaited and welcomed move in the right direction for the global expansion of Malaysian business, in particular manufacturing businesses. The PCT System will encourage more Malaysians to seek patent rights overseas as now Malaysians have better opportunities to fully exploit their inventions or technology abroad. In many areas of knowledge based business securing patents is a precondition to invest or trade in a country.
Conversely, more foreign businesses would also be encouraged to seek patent rights in Malaysia. This would pave the way for more foreign investments in the country and which would further strengthen the country’s economy.