Lessons from the AIA Foreign Filing “Aftershock”

Matthew SekacSenior Director, Sales Strategy

Park IP Translations

Overview• The implementation of the America Invents Act’s key provisions

triggered an unprecedented spike in US priority filings.

• As a consequence, a historically large number of applications came due for National Phase Entry on or around September 15, 2015.

• This created a challenge as well as potential risk for both our organization and patent applicants worldwide.

• In confronting this challenge we gained a great deal of insight into how patent departments manage their foreign filing activities across different organizations.

• The experience highlights several features of the most effective patent filing operations, and what many organizations can do to improve.

Background: “Old Rules” Spike in US First Filings

• Key provisions (most notably the change from first-to-invent to first-to-file) of the America Invents Act (AIA) went into effect on March 16, 2013.

• In the weeks leading up to the effective date, many applicants sought to file as many applications as possible under the “old rules.”

• The result was an unprecedented spike in the daily volume of US priority filings with the USPTO in the days leading up to March 16, 2013.

• Per estimates from Intellectual Property Watch, daily filings of provisional and non-provisional apps peaked dramatically in the days leading up to March 16th:

The “Main Shock”

The 30-Month “Aftershock”

A spike here… …means a spike here.

PriorityApplication

Is Filed

PCTApplication

Is Filed

30-31 months

12 months 18-19 months

China

EPO (31)

Japan

Eurasia (31)

Korea (31)

Canada

Mexico

Brazil

PCTNational

Phase Entry

• The spike in US priority filings generates a corresponding spike in US-originating applications due for PCT National Phase entry 30 months later (Sep 15, 2015).

0

1000

2000

3000

4000

5000

6000

US-originating PCT Apps due by day in 2015

Apps Due - US-Originating Average US (excludes weekends)

Prepared by Park IP based on PCT application data from WIPO

Key Datapoints• Average number of US-originating PCT applications due for

National Phase entry per day: 230*.• Apps due Sep 13, 2015: over 1,200.• Apps due Sep 14, 2015: over 2,400.• Apps due Sep 15, 2015: over 5,700.

• Daily (non-w/e*) average from Jan – Aug: 196 apps.• Daily (non-w/e*) average from Sep 1 – 15: 1,116 apps.• Monthly volume increase forecast at approx 250% in Sept.

*Averages omit dates corresponding to weekend dates 30 months prior. Source: Park IP analysis prepared using published PCT data from WIPO.

Challenges & Potential Risk• Many of these applications would require translation. • Patent translation requires specialized linguistic

resources; translators must possess linguistic, technical/scientific, and patent-specific expertise.

• The global supply of these resources is limited and could face challenges in accommodating a large, sudden spike in short-term demand.

• This introduced a risk for applicants. Possibilities:• Inability to access qualified resources.• Resources only available at additional expense.• Quality may suffer if suppliers were forced

to use less qualified translators.

Managing The Risk - Internally• Park IP’s preparations began in earnest in Q3 of 2014, with

both internal & external elements:• INTERNAL: Production Capacity Preparations• Resource recruitment, training, positioning, preparation.• Internal Project Management and Quality Review Team

preparation and scheduling guidelines.

• These preparations allowed us to successfully manage: • Nearly four-fold increase (3.79x) in monthly volume of PCT

National Phase translation orders due this September.

• Nearly five-fold (4.77x) increase in monthly volume by words.

Managing the Risk - Externally• EXTERNAL PREPARATIONS: working together with clients.• Engaged directly with clients to establish a proactive strategy for

management of 2015 translation needs.• The message was simple: make filing decisions for 2015 as early

as possible, to eliminate risk, ensure access to the most appropriate resources, and likely generate cost savings.

• The effort was a success: less than 10% of our clients’ “AIA projects” were started in the same month as the filing deadline. Normally such cases account for 25% to as much as 70% of PCT National Phase translations prepared by Park IP.

• The experience was eye-opening, and suggested several key takeaways that organizations may find useful in improving their foreign filing operations.

Lessons Learned• In engaging with clients proactively to “get ahead” of the

September 15 spike, some organizations had a much easier time adjusting their process than others.

• The organizations best able to make adjustments to their decision-making timelines were those with formalized procedures, documented lead-time targets, and an existing routine of acting in advance of deadlines.

• Other organizations found responding to these circumstances extremely challenging, despite being extremely receptive to the information. These organizations generally rendered filing decisions in a less-formalized, ad hoc manner.

A Snapshot of Existing Practice• As part of Park IP’s campaign to educate industry professionals about

the AIA’s Foreign Filing Aftershock, we delivered a webinar in February of 2015 during which we shared data and recommendations for mitigating potential risk.

• The webinar was attended by more than 80 patent practitioners situated predominantly in North America and Europe.

• During the webinar we asked participants: “How far in advance of the applicable deadlines do you typically send foreign filing instructions?”

• 0-30 days before the deadline: 49% of respondents• 30-60 days before the deadline: 30% of respondents• 60-90 days before the deadline: 19% of respondents• 90+ days before the deadline: 2% of respondents

Deciding When to Decide• Initiating foreign filing procedures close to the deadline

potentially increases cost and introduces risk.• Many organizations routinely pay official fees for late

filing of documents and/or expedited service charges to their agents or other service providers.

• The quality of work performed under tight deadlines may suffer, potentially compromising the strength of protection while increasing cost of patent ownership.

• Short timetables make it difficult to incorporate procedural safeguards against human error—i.e. “things being missed”—that increase the likelihood of missed filings and loss of priority.

Deciding When to Decide• Organizations do face legitimate challenges in initiating

foreign filing procedures in advance:• Decisions may depend on forthcoming data from

research/studies pending completion.

• Decisions involve multiple stakeholders in different departments who must be gathered to reach consensus.

• Budget impact assessments and cost/benefit analysis may be complex or uncertain.

• Funds may not be immediately available to cover major expenditure (i.e. broad filing of a large biotech application).

• Institutional Inertia

Institutional Inertia:“The Way We’ve Always Done Things”

“The truth is that the filing decisions on most of these applications are already made… they’re just in peoples’ heads.”

- Chief IP Counsel of a Fortune 500 company during a discussion about 2015 foreign filing & translation needs.

“I’m going to do everything I can to get the team to act in advance, I’m just not sure whether it’s going to be possible.”

- Foreign Filing Coordinator at a Fortune 500 company during a conversation about the AIA spike.

Example Best Practices• Over the past year we’ve encountered the following examples of

successful practices at various organizations we work with:

• Establish a process. The most efficient filing operations we’ve encountered have implemented formalized procedures and documented workflows for the entire patent lifecycle.

• Set targets and expectations. As a component of developing your process, establish timeline expectations both internally and with service providers, as well as systems for verifying compliance.

• Look ahead, act early. Take a forward-looking view of your docket, beyond just the applications with imminent deadlines; evaluate whether there’s enough information to make foreign filing decisions on future applications, and start the process early where possible.

Example Best Practices (Cont.)• Involve your partners and service providers early.

• Your partners can be a resource for budgeting and forecasting by providing forward-looking cost information which can facilitate decision making.

• Your service providers may benefit from (and will probably appreciate) the guidance and opportunity to prepare and ensure resource availability, even if the final “go” is still pending.

• Build in “buffers” and “sign posts” throughout the process. • Establishing a structured timeline that incorporates a buffer of time

ahead of deadlines affords flexibility to manage unforeseen circumstances and reduces risk.

• Especially with high volumes, incremental progress validation points or “sign posts” throughout the process help identify potential issues and ensure that things aren’t missed.

How Organizations Benefit• Reduced cost. Avoid official/professional fees for late filing and/or

expedited service charges.• More visibility. Improved budgeting and better informed

cost/benefit assessments.• Improved service quality. The process takes time—especially

when translation is involved—and a robust quality control process incorporates multiple layers of review. More time = better results.

• Reduced risk of error or missed deadlines. Increased likelihood of spotting issues in time to fully address them.

• Fewer surprises, better results. Internal stakeholders and service providers have the flexibility to confront unanticipated circumstances, whether internal or exogenous.