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The Impact of PCT Documents on the US Patent System, the Child Living Under the Stairs, or a Valued Family Member?

The Impact of PCT Documents on the US Patent System, the Child Living Under the Stairs, or a Valued Family Member?

It sometimes seems like PCT applications, often referred to as WO documents, are a little like Rodney Dangerfield, they don’t seem to get much respect. They never grant, so that’s a knock against them, and they have special, National Stage, filing rules that can be confusing to inexperienced users. For instance, many analysis projects focus on patents from a particular country, but don’t consider PCT applications, which might designate that country. In almost all aspects the PCT applications are given the same deference as non-provisional applications generated within the country itself, and should be thought of as valuable family members. Even though this is the case I am sometimes met with a blank stare when I suggest that even if the analysis is country specific PCT applications designating that country should be included, and reconciled when performing a family reduction. To some, PCT applications are like the cousin living in the room under the stairs, they know they’re there, but they would just as soon ignore them if they could. In order to understand the impact that PCT applications have on the US patent system this post will examine filing patterns associated with them.

According to data in Thomson Innovation, as of September 10th, 2013, there are 2,906,588 WO applications in their system. These documents are differentiated by kind codes, a complete list of which, can be found here, but the first three are the most significant, and account for 97% of the total number of documents. Kind codes A1-A3 are defined as:

A1 – International application published with ISR
A2 – International application published without ISR
A3 – Later publication of ISR with revised front page

Based on the kind codes, it immediately becomes apparent that A2 and A3 documents are associated with one another, and in almost all cases when an application is published without an International Search Report (ISR), the A2, a corresponding copy of the ISR, the A3 document, will follow. When counting these documents this relationship needs to be factored in.

Looking at all PCT applications the following distribution among the top three kind codes is found:

A1 – 1,772,948 documents
A2 – 535,166 documents
A3 – 515,756 documents

This analysis suggests that ~70% of the WO documents have a kind code of A1, were published 18 months from their priority filing date, and included an ISR. Things begin to get more interesting when these numbers are studied using the lens of how many of these documents list the United States as the priority country.

A1 with US as priority country – 598,065
A2 with US as priority country – 358,229
A3 with US as priority country – 345,536

It is immediately apparent that while 70% of all PCT applications have an A1 kind code less than 34% of these list the US as the priority country. Alternatively, A2, or A3 documents with US as the priority country account for about 67% of the total number of documents of these types. Looking at documents with the US listed as priority country published over the last 30 years starts to suggest some interesting patterns with regards to the importance of WO documents to the US patenting system as seen in the line drawing below:

WO DOCUMENTS WITH US AS THE PRIORITY COUNTRY PUBLISHED OVER THE PAST THIRTY YEARS BY KIND CODE
WO DOCUMENTS WITH US AS THE PRIORITY COUNTRY PUBLISHED OVER THE PAST THIRTY YEARS BY KIND CODE

Up until 2001 the majority of the WO documents with the US listed as the priority country were published as A1 documents. This suggests that for inventions,  which an organization thought they would be filing internationally, a PCT application was initially filed. These documents could take advantage of the full 18 months from priority filing before publication, for a ISR to be generated. This trend changes dramatically staring in 2001, and culminates in 2007 when the majority of the published WO documents were listed as A2 documents instead of A1s. This could represent a change in filing strategies suggesting that US non-provisional applications were being filed first, and twelve months later a PCT application was filed. This would only leave six months from the priority filing date for an ISR to be generated, and would likely cause the increase in A2s versus A1s. After 2007, A1s have re-emerged as the kind code most frequently seen but it would be difficult to speculate whether this represents applicants reverting to pre-2001 filing behaviors, or if it can be accounted for by other variables introduced in the worldwide patenting ecosystem.

Most people working with patent information will recognize the 2001 time frame as the period when the United States began publishing pending patent applications 18 months after their priority filing date. This provision was covered in the American Inventor’s Protection Act (AIPA), which was signed into law on November 29th, 1999. The specific provision was Subtitle E – The “Domestic Publication of Foreign Filed Patent Applications Act of 1999” and details on this portion of the law are provided below from the USPTO:

This subtitle provides for publication of patent applications 18 months after filing unless the applicant requests otherwise upon filing and certifies that the invention has not and will not be the subject of an application filed in a foreign country. Provisional rights are available to patentees to obtain reasonable royalties if others make, use, sell, or import the invention during the period between publication and grant.
If the foreign-filed application is less extensive than that filed with the PTO, the applicant may submit and request publication of a redacted version by the PTO.
This title also provides a prior art effect for published patent applications; requires the GAO to conduct a three-year study of applicants who file only in the United States; and requires the Director to recover the cost of early publication by charging a separate publication fee after notice of allowance is given.
The subtitle’s provisions take effect one year after the date of enactment and apply to patent applications filed on or after that date.

In addition to providing insight on changes in filing strategies, the line drawing, as expected, also shows that trends associated with the A2, and  A3 documents mirror one another, with a predictable time lag associated with the additional time needed to produce the missing ISR, and publish the A3 document.

It is also interesting to look at the percentage of WO documents, with the US listed as the priority country, by kind code over the same 30 year period, as seen in the next line drawing:

PERCENTAGE OF WO DOCUMENTS WITH US AS THE PRIORITY COUNTRY OVER THE PAST THIRTY YEARS ALONG WITH PERCENTAGES OF A1 AND A2 DOCUMENTS
PERCENTAGE OF WO DOCUMENTS WITH US AS THE PRIORITY COUNTRY OVER THE PAST THIRTY YEARS ALONG WITH PERCENTAGES OF A1 AND A2 DOCUMENTS

Regardless of whether the A1 or the A2 is the primary kind code associated with WO documents, the overall percentage of documents with a US priority stays reasonably consistent over the years, until it drops beginning in 2010. The chart below looks at WO priority countries for publication years 2004, 2008 and 2012, and clearly shows that increased use of PCT applications from Japan, China and Korea accounts for the share being lost from the US as a percentage.

TOP PRIORITY COUNTRIES REPRESENTED IN WO DOCUMENTS FOR SELECTED PUBLICATION YEARS FOR THE PAST TEN YEARS
TOP PRIORITY COUNTRIES REPRESENTED IN WO DOCUMENTS FOR SELECTED PUBLICATION YEARS FOR THE PAST TEN YEARS

Looking at this using a slightly different approach, it can be seen that the use of PCT applications by US applicants follows an upward trend until 2007, when overall, the use of PCT applications drops off. In 2010 though, when the overall number of WO documents begins to increase again, the number of applications by US applicants stays at a reduced level. This trend can be seen in the line drawing below:

TOTAL NUMBER OF PCT APPLICATIONS PUBLISHED PER YEAR COMPARED TO THOSE FILED BY US APPLICANTS
TOTAL NUMBER OF PCT APPLICATIONS PUBLISHED PER YEAR COMPARED TO THOSE FILED BY US APPLICANTS


It is clear from this analysis that while the use of the PCT system by US applicants has flattened out recently, and as a percentage is not dominated by them as much as it used to be, WO documents still play a critical role in the filing strategy of US organizations. The transition within the US to a fast publishing country, from a slow publishing one, can be seen in this analysis, and this change in the law appears to have had a major impact on the use of PCT applications, at least initially. Without a doubt the use of PCT applications by applicants, as it applies to US filings, should be considered when doing patent analysis, and continues to be necessary when studying the inventive output from US applicants. In the next post, I will look at what impact PCT documents have on extended patent families, especially when the applicant comes from outside of the United States.

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