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“What US Design Patent Applicants Can Expect From Hague”

Law360 By Carl R. Schwartz

U.S. applicants will soon have the opportunity to streamline procurement of design patent protection in foreign jurisdictions. The Hague Agreement Concerning International Registration of Industrial Designs, which enables applicants to obtain international protection for design patents by filing a single application, will take effect Dec. 18, 2013, barring diplomatic delays.

The U.S. Patent and Trademark Office has advised that in about two months it will publish a set of proposed rules that will describe in more detail various aspects regarding how it will handle such applications. Since the treaty has already operated for a number of years for members of certain other countries (e.g., Europeans), we can also predict much about how it is likely to operate for U.S. applicants.

The Hague System operates in a manner analogous to the Madrid Protocol process for trademarks. The applicant will file an application with the USPTO, which will automatically transmit the application to the World Intellectual Property Organization. WIPO will send the application to the designated national or regional patent offices. About 60 countries and regional jurisdictions are currently members. At the present time, the members are concentrated largely in Europe, Africa and Asia, but it is very likely that more will join soon, and that the geographic scope of the Hague System will expand.

Fees for filing a Hague System application include a basic fee, publication fee and designation fee. The basic fee is about $425 for one design, a publication fee of about $18, and a standard designation fee, which varies between about $45 and $95 depending on the level of examination, if any, carried out by the office of the designated country or office. There is an additional basic fee of about $20 for each additional design for each additional design in the application, and additional designation fees which vary between $2 and $50 per design.

There are a number of cost-saving advantages to using the Hague System.

The application, for example, can be in English, and each application can include up to 100 different embodiments, provided the embodiments are all in the same Locarno class. WIPO will review the application for formalities, and collect maintenance fees, centrally payable at five-year intervals on patents deriving from the international application. There is no central searching authority, and substantive examination is left to national and regional offices. This process therefore allows the applicant to bypass each jurisdiction’s local patent office to initiate the filing process, and to avoid translation costs, and foreign filing licenses, which may result in a substantial cost saving. In locations where the national or regional office does not substantively examine applications, local counsel fees can be avoided entirely.

The Hague System also provides advantages for patentees in enforcing rights. The Hague System includes provisional rights to damages, which begin as of the publication date of the international application. These rights enable the registrant to collect royalties for infringement if a competitor copies a design after publication but before the patent has a chance to issue, and the patent later issues. This additional term of enforcement could be very valuable for those businesses having designs that only have a very short-term product life. In this regard, some jurisdictions take two years or more to issue a patent, and their procedures for expediting prosecution in the case of a potential infringement are not as speedy as would be desired.

Unlike the Madrid Protocol, where a U.S. applicant must typically have a U.S. trademark/service mark application or registration in order to use the Madrid Protocol internationally, the Hague International Design System will not preempt the existing U.S. design patent system, but rather will operate in parallel with the U.S. system. The term of U.S. design patents has also recently been extended to 15 years to be equivalent to the minimum Hague term. Thus, one could choose to use either system, or both, to achieve U.S. design protection.

There are different advantages to using each system. For example, a standard U.S. design patent would still not be subject to payment of maintenance fees to keep it alive for its full term, whereas a Hague international design patent extended to the U.S. would. Also, if the Hague filing also designates many other countries the U.S. design patent could be somewhat cheaper to obtain.

On the other hand, as noted above, the Hague system provides provisional protection between the date of publication and the date of issuance. The standard U.S. design patent system will not. Also, U.S. design applications aren't published before issue, whereas Hague filings are. Thus, a Hague filing may give a competitor somewhat earlier information about a patentee's commercial plans.

A wild card is that we already know certain tendencies regarding how U.S. courts enforce standard U.S. design patents. We don't yet have experience regarding how courts will enforce Hague rights covering the U.S.

Just as the Patent Cooperation Treaty system for utility patent rights became more valuable (and more frequently used) as the number of countries that became members grew and the fee structure was changed to avoid adding additional marginal costs for the number of countries after a base fee was paid, it is expected that the Hague System will similarly become more valuable (and more frequently used) over time.

The addition of the U.S. is likely to spur countries and regional organizations to join. Particularly worth watching is whether Canada, Mexico and more Asian countries, such as China, Japan, and South Korea, will join. Also of interest is whether these Asian countries will accept the Hague Agreement drawing content rules without reservations with respect to drawing content.

For example, many Asian countries do not accept dotted lines and shading, which are frequently used in U.S. design applications. A U.S. applicant, therefore, frequently must change those aspects of the drawings before using them in various Asian countries. Although there are no known plans to change local rules of any member countries at this time, use of the Hague Convention could become even more desirable if these jurisdictions joined and began to accept either standardized or U.S. format drawings.

In sum, it is expected that just as U.S. applicants quickly became interested in using the PCT process to facilitate international protection for utility patents, and the Madrid Protocol process to facilitate international protection for trademarks, we can expect the Hague System to be a very popular development for U.S. applicants.

Given the present fee structures, restrictive set of member countries, and the fact that local and regional requirements are typically not standardized with U.S. requirements, in some cases it will remain desirable to file in individual countries rather than using the Hague System.