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The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, start-ups and general business topics.

Patent Protection Outside of the U.S.
By Haim Factor Wednesday, December 29, 2010

There is no such thing as an international patent.

In previous blogs, we discussed patent procedures in the US. The title of this blog already hints that filing a patent in the U.S. alone does NOT give the inventor protection in another country. Whereas years ago, patent protection in another country was not a concern for most American inventors, the global marketplace has changed that picture dramatically. The only way to obtain patent protection outside of the U.S. is to file in the country or countries where you want protection. There is no such thing as an international patent.

What is a PCT patent application?

That being said, there is a method of filing internationally, which can reserve your rights to a filing date for other countries. Reserving the filing date, also called a priority date, is usually very important for most inventors because most countries grant patents based solely on the priority date.  This method of filing internationally is called PCT—or Patent Cooperation Treaty.  The U.S., as well as about 150 other countries worldwide are members of the PCT. A patent filing in any country is frequently called a “national phase” or “national stage” filing. Generally speaking, a PCT patent application serves as an “umbrella” which can serve to maintain priority of an initial national phase filing (such as a U.S. filing) for future national phase filings of the same or similar patent application other countries.

According to PCT rules, following an initial national phase filing, you have up to 12 months in which to file a PCT application claiming priority from the initial national phase filing. Once the PCT application is correctly filed, you then have up to an additional 18 months in which to make national phase filings in other countries. In other words, the PCT mechanism affords the inventor up to a total of 30 months time in which to decide which, if any, additional national phase filings to make worldwide—all while preserving his priority date.

Advantages and considerations for a PCT application

The major advantage of a PCT application is as explained above—maintaining the priority date and having up to 30 months to make national phase filing decisions. Other advantages include a PCT examination and search report (which is roughly similar to a U.S. “Office Action”) which can give useful feedback to the inventor regarding patentability of his idea.

However, the decision to file a PCT and subsequent national phase applications claiming priority must take into account PCT filing fees and PCT procedures.  PCT filing fees can easily exceed $2,000.

No matter what, if you wish to file in other countries—within the PCT framework or outside of it—take into account that other countries’ national phase filing fees can also become quite significant. Finally, in some cases, a given national phase filing could involve prosecution (and attorney costs) distinct from the U.S. prosecution.

Most inventors proceeding with a PCT and/or foreign national phase application turn to a registered patent attorney or patent agent, who in turn work with foreign associates for the subsequent national phase filings.

An excellent resource for more information on this subject can be found at the PCT website:  http://www.wipo.int/pct/en/

Haim Factor is a registered USPTO Patent Agent with nearly a decade of experience in patent drafting, prosecution, and overall IP strategies. His clients take advantage of his rich experience of over 25 years in business development of a wide array of B2B and B2C products and his experience with intellectual property protection both within the US and internationally.

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Meet the HBS Team: Kim Robbins, Filings Specialist
By HBS Tuesday, December 28, 2010

Kim RobbinsKim is a filing specialist. Prior to joining HBS in 2006, she spent 20 years working in the banking industry. She obtained her Associates Degree in Office Administration from Goldey Beacom College in Wilmington, DE. Kim is active with her heritage and currently holds the title as Secretary with the Nanticoke Indian Association. She is responsible for membership as well as educating the public about Native American history through performances with the local dance troupe.

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Business Nightmare: Fraud
By Brett Melson Monday, December 27, 2010

The holiday season makes people want to spend money on the ones they love. Sometimes this desire to be generous can tempt an honest employee into cleverly stealing from the company.

Small or large, any business faces many threats, from economic changes, competition, rising costs, and a long list of related challenges. But one threat is often overlooked when dealing with pressures of others, that silent, looming killer: fraud. From shifty employees and unscrupulous customers to faceless hackers and phishers, taking measures to safeguard your company is imperative.

Unfortunately, employee fraud is one of the most difficult to detect and can occur right under your watchful eye. That seemingly dedicated, trusted employee just may be your worst nightmare. Busy small business managers or owners are very concerned with expanding growth of their business, and may not be as detail-oriented as they should be. Sometimes employees take advantage of the fact that that the boss isn’t looking and thinks they are doing a great job. (Even honest employees can be tempted when they see large sums of money right in front of them.) Being proactive and having a written code of conduct in place is the first line of defense. Access to financial assets and information should be restricted and carefully controlled, making sure there is a separation of duties where no single employee has too much responsibility within the system. Internal, external, as well as surprise audits should be conducted. Accounting can be altered before regular internal or external audits, but knowing surprise audits may occur helps to remove temptation and increases fraud detection.

Besides employee fraud, businesses are more aware that they are often the target of a host of schemes that customers and contractors perpetrate. Owners and managers must be ready to combat bad checks from customers, use of stolen credit cards, returning items not purchased at a business, and filing fraudulent injury or liability claims. Contractors may overcharge, over bill, attempt kickbacks, or simply not provide the work or service as agreed.

And, of course, businesses as well as individuals must be increasingly protected from fraud perpetrated by electronic means. Research and consider a number of safeguards, not just one, as there is no silver bullet that covers everything. Many businesses are now using a computer data storage facility with round-the-clock security to store critical information. Thieves also use low tech methods, so don’t overlook the importance of shredding all documents containing personal information with a cross-cut shredder.

For small businesses, preventing fraud may be especially tricky because of limited time and resources. But experts agree, research and identify risks ahead of time. Then follow through, taking measures to protect yourself and your company. Remember, shortcuts can cost a lot in the long run!

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Process for Obtaining a Patent—Part 2
By Haim Factor Wednesday, December 22, 2010

This is the second part of the two-part blog on the process for obtaining a patent.  An excellent flowchart describing this process was introduced in the first blog and it is reproduced here. Steps 1 through 8 of the flowchart were discussed in Part One of this two-part blog. (Note that the flowchart below is full of referenced links on the USPTO site.

The real nitty gritty of the patent process is found between steps 8 and 11. By now, you’ve reviewed the prior art (step 1) and you have decided to proceed to file a non-provisional patent (step 4).  Your non-provisional patent application filing typically involves, at a minimum, 2 or more documents. They are:

  • a signed declaration (also called an “oath”);
  • a specification; and  one or more claims and drawings.

You can access the declaration form (as well as all relevant patent forms) online. The general format and requirement of the specification, claims, and drawings—all of which make up the “application”—are specified in patent law. If an attorney or agent is filing the application for you, a signed power of attorney is also filed along with the application.  Also, either at the time of filing or soon thereafter, a USPTO filing fee is paid.  A typical minimum filing fee presently totals just under $500, although the fee can be higher for larger organizations and/or for larger patent applications filings.Patent Process

Once your application is successfully filed you will receive a patent application number. Initially, your application is checked to see that it conforms to overall formatting requirements. If there is a formatting or other problem, you will be notified of the “informalities” and you will be given a time period of a month or more to file necessary corrections. If the application conforms, it is placed in line for a USPTO Examiner to examine the application—step 9.

The time to receive a response from the Examiner after filing is quite variable. A “fast” response is considered 9 months or less, whereas a typical response can be longer and well over one year.  The vast majority of patent applications today go through a so-called “prosecution” process (steps 10 and 11), where the Examiner can point out other prior art and/or other reasons why parts of the application are objected to or rejected. The prosecution phase, which can take one or more back-and-forth rounds with the Examiner and can span months or longer, involves carefully reviewing the Examiner’s comments and responding to them. This phase typically calls for the experience of a registered attorney or agent—as a skilled response can make the difference in receiving an allowance (ie. receiving a patent—steps 11 and 12) or a rejection or abandonment (not indicated in step 11, but certainly possible).

Steps 12 and 13 (paying fees) are part of a “happy ending” –meaning the USPTO grants your patent!

Haim Factor is a registered USPTO Patent Agent with nearly a decade of experience in patent drafting, prosecution, and overall IP strategies. His clients take advantage of his rich experience of over 25 years in business development of a wide array of B2B and B2C products and his experience with intellectual property protection both within the US and internationally.

He can be contacted at: haim.factor@1st-tech-ideas.com and at 302.200.1424.

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Heather Manerchia Business Filings Director at HBS
By HBS Tuesday, December 21, 2010

Heather Manerchia

Heather graduated from Chichester High School in Boothwyn, Pennsylvania in 2003. She started working at Harvard Business Services, Inc. as a filing clerk in March 2004. She quickly proved she could handle more responsibility and was promoted to process the document filings and retrievals. Her attention to detail led to her next role, International Filings Specialist; as such, she catered to the specific needs of clients worldwide. In 2009, after continuous dedication and hard work, Heather was promoted to Director of Business Filings. She currently oversees the daily operations of all aspects of Delaware filings, encompassing many hundreds of monthly transactions.

Heather plays a key role in the reputation Harvard Business Services, Inc. enjoys for industry-leading speed in the same-day filing of companies. She attends regular user meetings at the Delaware Division of Corporations and is in charge of internal training on the state system.

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