How to determine in which countries to apply for a patent?

How to determine in which countries to apply for a patent?

In the Netherlands, you can apply for a patent at the Netherlands Patent Office. However, the Patent Office can only grant a patent for the Netherlands. If you also want a patent in another country, then in principle you need to apply for one separately in each country; there is no such thing as a worldwide patent.

However, an invention will rarely be limited to a single country. Just think of global supply chains for making products to sell to pretty much everyone in the world who can buy these products. If you are at the stage of wanting to patent your invention, strategically selecting the countries is a must in order to manage the costs. This blog post will help you to make a strategic decision when it comes to countries.

A chain approach

To reach a decision, it is useful to establish the countries where the supply chain is located. First, these are the countries where your own company and your competitors produce the product. Second, the countries where strategic and critical suppliers of your company and your competitors are based. After all, an invention can relate to a part of an end product.

It also provides insight to know the sales market and logistic flows. Insight into logistics hubs, in particular, can lead to strategically choosing a country with a small sales market where the product is not made. In many cases, it is enough to protect part of the sales market in order to make it less attractive for competitors to enter the market.

Using the above information, it is possible to make four lists of candidate countries for applying for a patent:

  • Suppliers: countries where parts of the product are made;
  • Competitors: countries where the product is made;
  • Logistics hubs: countries where there is central transhipment or distribution;
  • Sales markets: countries where the product is distributed and used.

The next step in making a decision is to determine, for each list, the expected influence of patent protection on your own company. As a guideline, a number of focus areas and insights are discussed below for each list.

Suppliers

Suppliers of strategic and bottleneck items can acquire a strong position of power in a supply chain. It may be possible to change this position of power by applying for a patent in a country where such a supplier is based.

Take, for example, a patent that relates to the further development of a part that is supplied by such a supplier. This patent can be seen as a way of preventing the supplier from supplying the invention to competitors. Alternatively, the patent may possibly serve as a bargaining tool for improving the supply conditions in exchange for a licence.

An important prerequisite for a strategy focused on suppliers is that there is a high threshold for relocating the business activities. This threshold is usually high for capital-intensive industries such as the steel industry and the semiconductor industry. If your supplier can relocate relatively easily, this strategy will probably not be very effective.

Competitors

A very common reason to apply for a patent is to block competitors. This is usually focused on preventing the product from being made by the competitors without having recourse to the sales market and suppliers. Of course, this is only possible if you are aware of your competitors and their production sites.

In this case, too, a high threshold for relocating the production site is an important prerequisite for making the most of your patent. Particularly where manufacturing is outsourced in the case of companies such as Foxconn, Flextronics or Jabil Circuit, there may be a relatively low threshold for relocating the production to countries with lower wages. If the manufacturing site is in a relatively small sales market, then your patent will possibly have little value after the manufacturing site is relocated.

If you are not aware of your competitors’ production sites or suppliers, then all that remains is a strategy focused on the sales market and logistics hubs. It usually makes little sense to apply for a patent in a country where your competitor only carries out research. There are, for example, no restrictions on applying patented inventions to research in the Netherlands.

Logistics hubs

The starting point for a strategy focused on goods flows is that a relatively large sales market is served from a fixed logistics hub. This can include ports, airports and distribution centres. Using a Dutch patent, it is thus possible to cover a significant part of the European sales market for goods that enter Europe via the port of Rotterdam.

However, a patent in the Netherlands will not make an impression on a competitor that can easily use several routes and distribution centres. In that case, a patent targeting the production site or sales market will probably be a better investment.

A point to consider in this strategy is that it may be necessary to approach your company’s (potential) customers. Needless to say, distributors who are forced to cease a lucrative trade will not always be keen to switch over to the patent holder.

Sales market

As explained above, a strategy focused on the supply chain is not always readily possible. In that case, the ‘only’ remaining option is to protect the sales market. This is a sound strategy particularly for consumer goods. After all, it is far harder for the population to relocate than a factory.

If everyone in the world is a potential customer, you of course need to have criteria for making a selection. Roughly speaking, there are two approaches: a budget limitation or a desired market share. In the case of a budget limitation, a patent is usually applied for in the countries with the largest sales markets until the budget is reached.

The purpose of an approach based on a desired market share is to make it less attractive for competitors to offer the product in the small sales market that remains. For the European market, such an approach usually means that a patent is required in at least the United Kingdom, Germany and France.

Supply chain prevention

Protection for an invention preferably focuses on the top of the supply chain. After all, addressing one or a couple of competitors or suppliers usually bears no comparison to addressing distributors and customers in many countries.

However, this strategy only works well if the threshold for a producer to move to another country is relatively high. Further prerequisites are that the country has a well-functioning patent system and that the threshold for new producers entering the market is high.

If this condition is not met, then protecting part of the sales market is probably a better option. After all, it is harder for the population of a country to relocate than a competitor.

If you want to patent your invention and have further questions about which route to follow, please don’t hesitate to contact me. 

Also take a look at my previous blog post that helps you decide which countries to choose when applying for a patent. 

If you would like more information about patents, download the (free) Patent Handbook! The Patent Handbook deals with the most frequent questions from business owners on protecting inventions from counterfeiting.

What are the different strategies when applying for a patent?

Apart from the question of “what” needs to be protected with a patent, other essential questions when applying for patents are “where” and “when” this should be done. This blog post will define strategies to help you decide where and when to file your patent application.

It is fairly common for a successful invention to be patented in several countries, for example to protect several sales markets. The patents in these countries usually come after a so-called first filing of a patent application. To choose an organization for a first filing, it is useful to know the countries in which you eventually want to have patent protection.

It is also important to properly estimate potential future changes to your invention. Changes to the invention can lead to a filed patent application becoming less relevant or worthless.

Four strategies

Using the above information, four strategies for filing a patent have been formulated, which will be explained below.

Strategy 1: Early filing 

Applying for a patent at an early stage of an innovation is particularly important if you expect that a competitor could beat you to it. A good indicator of this, for example, is the attention paid to patents in the sector in question. After all, a patent is granted to the first to apply for it, not to the first to create the invention and keep it secret.

A risk of filing a patent application early is that it is no longer relevant at a later stage, for example because the invention has changed or the product does not reach the market. Therefore, if it is not yet clear in which country a patent will be of value in the future, it might be better to keep the costs for a first filing as low as possible.

The costs for a first filing consist of the costs for the organization chosen to deal with the patent application, plus any costs for a patent drafter such as a patent attorney. Given the relatively low costs compared to the EPO and WIPO, the Netherlands Patent Office (OCNL) is an attractive option for a first filing in this case. 

The costs for drafting a patent application are usually much higher than the filing costs. Searching for a patent attorney who is well-acquainted with the subject matter or who works in a country with relatively low labour costs may be an attractive way to keep costs down. 

Strategy 2: Chain development

In the event of a radical innovation or diversification of business activities, it may be the case that the invention is clear before it is known in which countries a patent for the invention could potentially be useful. In particular, if it is not expected that another party will file a patent for the same invention, it may be interesting to delay a first filing of a patent. 

To develop a new supply chain or sales market, it may be necessary to share the invention with third parties. As a result, it is possible to postpone a first filing to a limited extent. Sharing the invention in a supply chain while maintaining secrecy is often possible, but not without risk. However, maintaining secrecy does not offer a solution for a successful patent strategy that focuses on consumer markets. 

If the focus is on developing the chain, it is important to have options for a patent in as many countries as possible at the lowest possible costs. It is possible to obtain an option for more than 150 countries by filing an International patent application via WIPO. This option has a term of at least two and a half years after the first filing. A more limited option for more than 40, mostly European, countries is obtained by filing a European patent application with the EPO. 

As is customary for options, it is necessary to decide whether to exercise the option before the term expires. For an International patent application, this means the actual commencement of procedures in countries or for regions such as Europe. Given the costs of these procedures, it is advisable to develop the chain before the option expires. 

Strategy 3: Product development

A situation where the chain is known but the invention is not yet fully developed is quite common in the case of incremental innovations. This is the case, for example, if existing products are further developed. Applying for a patent at an early stage is attractive in particular if there is strong competition and innovations in rapid succession. 

In contrast to the early filing as explained above, it is possible in the case of product development to choose a country where the invention must be protected in any case. As this is done at a relatively early stage, this is preferably a country with a relatively large impact on the supply chain or sales market, where it is possible to apply for a patent at acceptable costs. 

If the invention is completed within 12 months of the first filing, patent applications can be filed in the selected countries. Alternatively, it is possible to choose a European or International patent application in order to thus reduce the costs over the short term. The costs for the individual countries are then incurred at a later stage. However, the total costs do increase in the case of this latter option. 

Strategy 4: Late filing

Applying for a patent at a late stage of development is by far the most attractive scenario. During the course of development, risks are scaled back and it becomes clear which countries are important for a patent. Unfortunately, in view of the competition, it is not always possible to keep an invention secret for so long. 

Should you find yourself in this fortunate position, the total costs for applying for patents can be reduced by applying for a patent directly in the countries chosen. If there is a relatively high degree of uncertainty regarding market demand, a European or International patent application may still be attractive in order to reduce the costs over the short term. 

An additional advantage of a relatively late first filing is that it is possible to get the maximum benefits from a patent. After all, the life of a patent is limited to a maximum of 20 years. A patent application that is filed too early can drastically shorten the useful period in the absence of market introduction.

Conclusion

It strikes me that the term of two and a half years for an International patent application is often on the short side. Particularly if the supply chain still needs to be developed, the option often expires before even one product is sold. In my opinion, this is often the result of focusing too intently on the invention and therefore leaving it too late to establish a supply chain. 

As is the case with many investments, the costs will come before the benefits. One disadvantage of patent protection that is often mentioned is that the costs come a very long way before the benefits. It is possible that one of the above scenarios will be able to soften the blow.

If you want to patent your invention and have further questions about which route to follow, please don’t hesitate to contact me. 

Also take a look at my previous blog post that helps you decide which countries to choose when applying for a patent. 

If you would like more information about patents, download the (free) Patent Handbook! The Patent Handbook deals with the most frequent questions from business owners on protecting inventions from counterfeiting.

Intership SEO and Content Specialist.

Today, the internet is the key media form to promote your international business.  If you want to promote your brand, attract customers and compete with your competitors, merely hosting a website will not suffice.  In order to even be found by search engines, you need to be a specialist who monitors your presence in online marketing, enhances your content and creates brand awareness on social media.

Are you interested in online marketing, content creation, and social media?  Would you like to be a part of a small, fun and motivated team?  Is your written and spoken English good?  If so, apply for this vacancy for an SEO- and Content Specialist!

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Exchanging your driver’s license as a foreign national

Driving in the Netherlands is pretty easy. The roads are safe, drivers give each other enough space (unless you came across a so called “bumperklever”) and the rules are clear. Or aren’t they..?

Not everybody is aware of the fact that, if you don’t have an EU / EFTA (‘European Free Trade Association’) country driving license which has been issued less than 10 years ago, you will need to exchange the license within 185 days (for citizens from outside the EU / EFTA) or 2 years (for EU / EFTA citizens) after your registration at the town hall or Expat Center, even if you have been registered at the temporary address.
For instance: German license, issued in 1985? Exchange it within two years. South Africa, issued in 2015? Exchange it within 185 days. But ha! Iceland, issued in 2014? You can keep it until the license expires. But, if you would prefer to, you can choose to already exchange it for a Dutch one.

The exchange process can be easy in some situations. If you are eligible for the 30% ruling, and this has been approved by the Dutch Tax Office, you (and your partner and children, nice detail!) can use the confirmation letter to easily exchange the license. If this is the case, then there’s nothing much more to do than the following:

‘Eigen Verklaring’

At first, you need to go to your municipal office of the municipality where you have been registered, to obtain a document called the Health Form (‘Eigen Verklaring’). Did you register in Amsterdam at first, moved to Haarlem in the meantime and changed your address a couple of days before? Check https://mijn.overheid.nl/?r=1 (login with your Digi-D code, I will explain more about this in my next article), and check whether or not the address change has been processed. This may take a couple of days.

The Eigen Verklaring will cost you around € 35,- and is in Dutch, but via the The Hague website https://www.denhaag.nl/en/driving-licence/driving-licence-statement-of-health.htm, you can find the translation on the second page of the PDF document.

‘Verklaring van Geschiktheid’

If the answer at one of the questions is “YES” in the health form, you will need a health check by a doctor. After approval from the doctor, you can send the form to the CBR (Centraal Bureau Rijvaardigheid – Central Road Aptitude Bureau). The CBR will then process the declaration and send you the confirmation that the certificate of fitness (‘Verklaring van geschiktheid’) has been registered. As soon as you have received this confirmation, you can return to the town hall office (probably by appointment), where you will need to submit:

  • Your original, valid foreign driving license (if necessary: with translation or a statement from the embassy);
  • The confirmation from the RDW, that the certificate of fitness has been registered;
  • One identical, recent colored passport photograph;
  • And the approval for your 30% ruling.

Sometimes, depending on the town hall and in case your license has been issued outside the EU / EFTA, you will also need to show proof that you have indeed been living in the country that issued your license for more than 185 days. You can do this by bringing a rental agreement, employment contract, salary slips, et cetera.

As soon as the municipal fees (around € 40,-) have been paid, the municipal office will send the entire application and your foreign license for evaluation to the RDW. If the application is granted, the RDW will send a letter to your home address within two to three weeks that you can collect your new Dutch driving license at the municipal office. During these two to three weeks, you are officially not in the possession of a valid license, meaning that you are not allowed to drive and you are not insured if you decide to drive after all. The police can also give you a fine for this, worth € 360,-.

Important: if you would like to keep your original driving license, you must submit a request with your application, for instance, that you will need it in your home country. This won’t guarantee that you will get it back, but at least you tried.

If you are not eligible for the 30% ruling, or your license has been issued in one of the countries that have specific rules and regulations, it might be easier to ask us to assist you on this. Interested? Call our office on 020 – 70 70 551 or send me an email: vankempen@expatmanagementgroup.com. We are happy to help!

 

Miriam Van Kempen
Expat Management Group

Scientific researchers and students from third countries enjoy more mobility and flexibility within the EU

On 23rd May 2018 the EU implemented Directive 2016/801 which will increase mobility for students and researchers within the European Union. Researchers that fall under specific programs as part of the EU already enjoy work permit exemptions in certain circumstances if the program is funded by the EU and if the researchers possess a valid employment agreement from the host institution.

For students who have recently graduated or who graduated 2 years ago, it will be easier to obtain a work permit for an internship as they no longer need to provide any proof of the internship being necessary or relevant but only that it serves an educational purpose. Foreign students with a valid residence permit for ‘study’ will also be allowed to work 16 hours per week next to their studies with a valid work permit. This used to be 10 hours per week or during the summer months full-time.

Mobility for researchers within the EU will be stimulated as well as researchers will be allowed to remain longer periods in the other EU Member State than previously. The condition is however that the researcher has a valid residence permit as a researcher in another Member State and that the research is part of the same research program.

Another change is that students and researchers with a valid permit for research or study in another Member State, can stay in the Netherlands for longer than 90 days. In this case students and researcher no longer have to apply for a Dutch residence permit for their research or study at a Dutch university. This is also applicable for family members accompanying students and researchers to the Netherlands. Should this be the case, please let us know and we can inform you on the steps that needs to be taken when students and researchers have arrived in the Netherlands.

If you employ researchers from other EU Member States as a research organization and/or have further queries please do not hesitate to contact EMG directly

Dutch House for Whistleblowers Act

Research among works councils: employees do not dare to report wrongdoings

One in three employees does not feel comfortable to report misconduct. One in seven says there is a culture of fear within their organization. This is revealed by the Outlook Reporting procedures and Integrity provisions 2017 (Verkenning Meldprocedures en Integriteitsvoorzieningen 2017), an investigation among more than 430 works councils, conducted by the in 2016 founded Dutch House for Whistleblowers. Since 1 July 2016 whistleblowers are granted protection by the Dutch House for Whistleblowers Act. This law stipulates, among other things, that organizations with more than 50 employees must have a reporting procedure for suspicions of misconduct, which also protect whistleblowers against detriment.

Internal reporting procedure

Organizations still have to take substantial steps to comply with the law: only 48% have drawn up an internal reporting procedure for misconduct that meets the new regulations. And there is every reason to speed up. In many organizations, employees do not want to report. This is evident from the research of the House for Whistleblowers.

Incidentally, only having a reporting procedure is not sufficient. Employers must inform their employees about the procedure and ensure a secure reporting climate, in which employees also feel comfortable to address misconduct. Employers still do not pay enough attention to this. A quarter of the works councils gives insufficient support to the efforts of the own organization to promote integrity. Also, not every organization has a safe reporting culture, according to the works council: • One in three thinks that employees do not feel comfortable to report abuse. • One in seven says there is a culture of fear in their own organization. • In the semi-public sector, the works council is least positive about the organizational culture.

Confidential advisor

Employers must also provide a good infrastructure for reporting. This includes, in addition to a reporting procedure, a confidential advisor, a code of conduct and a research protocol. The House for Whistleblowers also studied these aspects. In almost all organizations a confidential advisor can be found (89%), just like a code of conduct (80%). At the same time, there is enough to say about the current reporting structure. The counselor is still insufficiently visible and are not relied upon enough. Codes of conduct are insufficiently updated. Only 60% of employers have an internal research protocol. As a result, organizations are too often not prepared for internal investigations. And the most effective measures are taken the least: 46% have a written integrity policy, 47% have an ethics, compliance or integrity officer. This image is confirmed by the Eurobarometer on corruption of Transparency International, which gives an overview of the current state of corruption in Europe. The barometer shows that one third (68%) of Europeans thinks that corruption is widespread in their own country and the vast majority (79%) says that the links between the business community and politicians in their country lead to corruption. Just under three-quarters (73%) say that there is corruption in the national public institutions and that the measures against corruption are inadequate. Only a minority of all respondents says that there is sufficient transparency and supervision of the funding of political parties. A third (33%) of the respondents thinks there are enough successful prosecutions.

Organizations have every interest in a good reporting infrastructure. Through reports of alert employees, organizations can solve the problem internally, learn from it and prevent it from getting worse.

JahaeRaymakers provides advice to organizations for formulating integrity policy and the drafting of adequate reporting procedures.

Joyce Boonstra-Verhaert

Public accessibility UBO register further expanded

By Madelon Stevens & Yvette Hermans

Fourth Anti-Money Laundering Directive

On 19 December 2017, the European Commission published a revision of the Fourth Anti-Money Laundering Directive (2015/849) with the result: public access to the national (‘ultimate beneficial owners’) UBO registers and interconnection of these register within the EU.

The fourth anti-money laundering directive yet created obligations in the area of ​​identifying UBOs of legal entities and legal constructions, storing that information and the different levels of access to the registers. The revision aims to go even further than the current Fourth Anti-Money Laundering Directive.

  • The UBO register of companies and legal entities operating in the European Union becomes publicly accessible. A legitimate interest in accessing the UBO register is no longer necessary;
  • For trusts and similar legal constructions, a separate UBO register is made mandatory, which only becomes accessible to persons with a legitimate interest;
  • In order to increase cooperation between the authorities of the different Member States, national registers will be better aligned with the registers of Member States;
  • Information about bank accounts, safes (‘safe deposit boxes’) and ownership of immovable property must be recorded.

Dutch UBO Register

On 31 March 2017, the Netherlands offered the UBO register bill for consultation. The Netherlands is lagging behind the implementation of the fourth anti-money laundering directive. At the moment it is still unclear how the Dutch UBO register will exactly look like, but it is expected that the UBO register will be implemented in Dutch legislation before the summer of 2018. As far as the implementation of the current revision is concerned, it should be noted that it must at first be approved by the Council and the European Parliament. The tightened rules will then probably apply to the UBO register for companies and legal entities by the end of 2019, and for trusts and similar legal constructions in early 2020.

De Breed & Partners financing opportunities: WBSO and MIT

How does De Breed & Partners fit into DBI?

De Breed & Partners helps technology companies understand the funding puzzle: crowdfunding, equity, subsidies, grants, tax incentives. Revolutionary innovations cannot be invented without funding. Companies often unfortunately lack the expertise necessary for successful funding applications and finding the required R&D budget can be difficult.

De Breed & Partners seeks to support both the entrepreneurs of today and entrepreneurs of the future. In addition to subsidy applications, De Breed & Partners offers active leadership in the managing of the most important forms of capital investment, namely, personnel costs. They help solve the funding puzzle between equity, loans, subsidies and government grants for a solid base of finance for your company.

Who?

De Breed has a database of a few thousand clients which are mostly SMEs, startups and freelancers. They stress, ‘whatever growth phase you are in, together we find the right tools to make innovation and growth possible.’

The core customers of De Breed & Partners are SMEs in technology innovation. The industry trend is towards software development because less capital is required. A software company is smaller, the projects are more scalable and hence advantageous for investors.

Over the last fifteen years, De Breed & Partners has submitted over 15,000 applications with a 99% success rate for more than 2,000 clients. The total subsidy sum exceeds € 300 million.

If a DBI relation was to approach you for help regarding financing, what would be the process?

We typically have innovative companies approach us. Then we solve their financing puzzle with a combination of equity from investors, bank credit, crowdfunding. We assess what financing best suits their business and file the appropriate applications. We have ongoing customer relationships as some funding requires yearly applications and financing needs are subject to change.

De Breed & Partners is most active in WBSO applications. The WBSO is a wage subsidy from the Dutch government to promote R&D for the salaries of developers.

The RVO is natural opponent, however, the RVO doesn’t provide much help for applications. SMEs of typically 10-20 employees can’t write the applications with any better than a 10% success rate. This is where De Breed & Partners enters the ecosystem; to …the brick wall which exists between SMEs and funding. It is De Breed & Partners which enables innovative companies to access the pot of money over the rainbow.

Which subsidies or funding applications?

Two of the most important financing opportunities with De Breed & Partners are the WBSO and the MIT.

  • The WBSO is a wage subsidy for developers from the Dutch government.
  • The MIT is a subsidy with feasibility requirement. Applications for MIT funding will open on April 17. It is necessary to have applications in by this date as it is ‘first in, first served.’ Companies are eligible for up to 25,000 EUR. To be ready on time, De Breed & Partners encourages interested parties to contact them ASAP.

Industry insights and predictions

Having a client base of technology innovation companies, De Breed & Partners are in a prime position to keep up to date with industry trends. They see AI, ML, algorithms, Virtual Reality, Augmented reality, blockchain and drones as big themes across the spectrum.

But we’ve heard all these buzzwords before. Raf Grubben, a consultant at De Breed & Partners says ‘the next step is quantum computing. Once that is mainstream it will change everything again.’  In the landscape of financial services, there is a changing concept of business. Advertising, media and PR companies are increasingly becoming tech companies.

Another significant industry trend according to Grubben is the open API and data revolution which means that for instance fintechs can take market share from banks. Additionally, a challenge perceived in the current market is a shortage of software developers and technical personnel. This slows development.

The Netherlands Ranks #1 at the Good Country Index

The Good Country is an index that measures what each country contributes to the common good of humanity and to the planet.

The idea of the Good Country Index is pretty simple: to measure what each country on earth contributes to the common good of humanity, and what it takes away, relative to its size. Using a wide range of data from the U.N. and other international organisations, we’ve given each country a balance-sheet to show at a glance whether it’s a net creditor to mankind, a burden on the planet, or something in between.

The Netherlands ranks #1 in the index, due to its overall score. See here the results.