For companies developing new technology, deciding to seek patent protection is only the beginning. An equally important and often more difficult question follows:n In which countries should the invention be protected?
Patents are territorial rights. A patent granted in one country does not automatically provide protection elsewhere. Companies seeking international protection must therefore decide, country by country or region by region, where patent rights are worth pursuing.
This makes foreign filing decisions an important part of a company’s broader business and IP strategy.
In theory, an invention could be protected in a large number of countries. In practice, doing so is rarely commercially justified. Each additional jurisdiction brings costs associated with filing, prosecution and, ultimately, maintaining the patent. The objective should therefore not be to obtain the widest possible geographical coverage, but to identify the jurisdictions in which patent protection can create meaningful business value.
In this first part, we concentrate on the strategic approach to foreign filing decisions. It is followed by a second part, “More time for better patent decisions,” which explores ways to postpone the final decision on target countries.
A natural starting point to define the territorial protection is to consider where the company does or expects to do business.
Patent protection is particularly relevant in countries where products incorporating the invention are sold or where the company expects significant future commercial activity. However, the analysis should not be limited to the company's position today. Patent applications can remain pending for several years. A market that is relatively unimportant when the first application is filed may have become strategically important by the time a patent is granted. Companies should therefore look ahead and consider questions such as:
The answers can provide a first indication of where patent protection may be commercially justified. The patent budget should therefore be treated as an investment allocation decision, with resources directed toward those countries or regions where protection has a clear business rationale and is expected to create meaningful strategic or commercial value.
Foreign filing decisions should not be based on the company's sales markets alone. A patent is ultimately a right to prevent others from exploiting the protected invention within the relevant jurisdiction. It can therefore be strategically valuable in countries where important competitors operate, even if those countries are not currently major markets for the patent owner.
The relevant question is not simply: “Where do we sell?”. It is also: “Where could a patent most effectively restrict the activities of our competitors?”
Understanding where competitors manufacture, sell and develop competing technologies can materially change the geographical priorities of a patent strategy.
Another factor that is sometimes overlooked is where products and components are manufactured. In some circumstances, patent protection in a strategically important manufacturing country can be more valuable than protection in several individual sales markets. Addressing potentially infringing activity at the manufacturing stage may affect products that would otherwise be distributed into multiple markets. The analysis should therefore consider where:
For companies operating in manufacturing-intensive industries, these considerations can be central to the foreign filing strategy.
Not every invention merits the same level of international protection. An invention that forms the technological foundation of a company's core product or business may justify protection across a relatively broad group of strategically important jurisdictions. By contrast, an incremental feature with a shorter commercial life may justify protection in only a few key markets.
Relevant considerations include the invention's importance to the company's products, its expected commercial lifetime, how easily competitors could copy it or design around it, and its potential value in future licensing, financing or mergers and acquisitions (M&A).
Foreign filing decisions should therefore be made not only at the country level, but also at the invention level.
The appropriate geographical scope of patent protection depends not only on the characteristics of the invention, but also on how the company intends to commercialize its technology and derive value from its intellectual property (IP). The same invention may therefore justify a different foreign filing strategy depending on the company’s business model.
For a company that develops and sells its own products, the most relevant jurisdictions may be those where its principal customers, competitors and manufacturing activities are located. By contrast, for a company whose business model is based primarily on patent licensing, the geographical scope of protection should support the company’s anticipated licensing program and the patent portfolio it intends to build and maintain. This may require considering where existing or potential licensees operate, where the technologies covered by the patents are likely to be practiced, and where patent rights could provide meaningful leverage in future licensing activities.
Similar considerations may arise where a company expects to commercialize its technology through partnerships, technology transfer or other forms of collaboration. In such cases, patent protection may be valuable in jurisdictions that are important to prospective commercial partners even if the company does not itself intend to establish significant operations there.
Foreign filing decisions should therefore be made in the context of the company’s broader business model, commercialization strategy and IP strategy. The relevant question is not only where the invention can be protected, but also: “where patent protection can best support the way the company intends to create and capture value from the invention.”
Not necessarily. The United States, major European markets and China are important patent jurisdictions for many technology businesses. That does not mean that filing in all of them should become an automatic rule. The appropriate geographical strategy depends on the business and the invention. For a B2B company, a relatively small number of major customers or competitors may determine which jurisdictions matter most. For an industrial technology company, manufacturing locations may carry considerable weight. For consumer products, market size and exposure to copying may be particularly important. The better question is therefore not: “Where do companies normally file patents?” but: “Where would patent protection for this particular invention create the greatest strategic value for our business?”
A strong international patent strategy is not necessarily the one with the largest number of countries. It is the one in which the geographical scope of protection reflects the company's business strategy, competitive environment, manufacturing footprint and the commercial importance of the invention. For some inventions, this may justify relatively broad international protection. For others, carefully selected protection in a handful of jurisdictions may create substantially better value.
When foreign filing decisions are approached as business investment decisions rather than routine patent-prosecution decisions, companies can direct their patent budgets toward the jurisdictions where IP is most likely to support growth, competitive advantage and long-term company value.
Berggren's patent professionals assist companies in evaluating foreign filing options and developing international patent strategies based on their technologies, target markets, competitive environment and business objectives.