USPTO will also examine patent applications  to, among other things, determine whether the claimed invention is “new  and nonobvious.” USPTO provides information about the U.S. patent  system to independent inventors that are considering whether to obtain a  U.S. patent, but it does not provide any information about foreign patent  systems. These applications must conform  to the patent laws and requirements in the countries where protection is  desired. Factors they identified include costs, benefits, location of  foreign markets and manufacturing sites, and foreign patent laws and  enforcement, among others. Small Businesses Should Identify and Assess Long- Term Costs

Most of the experts said that it is important for small business owners to  understand the full “cradle-to-grave” costs of holding and enforcing foreign  patents and weigh whether such an investment is appropriate for their  company. Among the small businesses we surveyed, foreign patent costs were a  significant factor in, and often the biggest impediment to, their decisions to  patent abroad. Small Businesses Need to Understand Foreign Patent Laws and International Treaties

In addition to commercial concerns, the nature of foreign patent laws and  systems is also important in selecting foreign patent locations, many  experts said. The availability or nature of patent protection – Some  technologies or processes that can be patented in the United States,  such as business methods and certain software processes or  biotechnology inventions, cannot be patented elsewhere. Experts Identify Key Steps for Small Businesses to Improve Their Foreign Patent Efforts

Given the challenges that small businesses face in acquiring foreign patents  and the limited resources (including time) that some small businesses  have, we asked the patent law experts to identify and rank various steps  that these businesses could take to improve their foreign patent efforts. First, the experts were unanimous in stressing the  importance of not divulging information about an invention before filing for  U.S. patent protection. Objectives, Scope, and Methodology

After we issued a July 2002 report on foreign patent impediments that small  businesses face, the Chairman of the Senate Committee on Small Business  and Entrepreneurship and the Chairman of the House Committee on Small  Business asked us to (1) identify the factors that patent law experts believe  small businesses should consider as they decide whether to seek patent  protection abroad and provide information on how small businesses  viewed these factors and (2) identify the steps that small businesses should  take to improve their foreign patent efforts, according to our survey of  patent law experts. One panelist suggested it may be  worthwhile to patent an invention in countries where companies do not  intend to develop or produce their product just to prevent their  competitors from doing so.
Why GAO Did This Study

Small businesses, which are important to the U.S. economy for their roles in job creation and technological development, must be able to protect and profit from their innovations. One way to protect their innovations on a global basis is to obtain U.S. and foreign patents. These businesses, however, face numerous impediments when trying to patent their goods or processes abroad. These impediments, which GAO identified in a July 2002 report, include high costs, limited resources, and limited knowledge among small businesses about foreign patent laws and systems. Because of concern that small businesses, particularly high technology firms, were not obtaining patent protection abroad and thus were losing potential sales in foreign markets, GAO was asked to (1) identify the factors that patent law experts believe small businesses should consider as they decide whether to seek patent protection abroad and provide information on how small businesses viewed these factors and (2) identify the steps that small businesses should take to improve their foreign patent efforts, according to our survey of patent law experts.

What GAO Found

According to the expert panel of patent law attorneys that GAO surveyed, small businesses that are considering whether to seek patent protection abroad should identify and assess the full "cradle-to-grave" costs of acquiring, maintaining, and enforcing foreign patents. Other considerations should include the locations where small businesses intend to sell or manufacture their invention and whether the range of benefits obtained from foreign patents, such as increased sales or higher company value, is sufficient to justify their cost. Furthermore, small businesses should try to understand foreign patent laws and systems and the quality of foreign patent enforcement, the expert panelists said. The small businesses that GAO surveyed agreed that foreign patent costs, benefits, and potential locations were important factors in their decisions to patent abroad. However, some small businesses did not properly evaluate long-term costs and could not determine whether foreign patent benefits outweighed the costs. The most important step that small businesses could take to improve their foreign patent efforts, according to GAO's survey of patent law experts, is to avoid disclosing information publicly about an invention before filing a U.S. patent application. The United States permits such disclosure, but doing so can invalidate an applicant's right to patent protection abroad. The second most important step is to be aware of filing deadlines, which are specified in foreign laws and international patent treaties. Other important steps included integrating foreign patents into long-range business planning and seeking patents in countries where meaningful protection is available and a return on investment is likely.