Commercialization of Inventions Worldwide

Lecture by Dr. Farag Moussa
President
International Federation of Inventors' Associations (IFIA)

Riyadh, Saudi Arabia , April 6, 2003

Let me first clarify two notions before tackling the subject of my talk.

My first remark is that an idea is not an invention, and therefore cannot be commercialized, even at the local level. Nevertheless an idea can sometimes have a certain value. For instance, some enterprises have boxes where their employees can submit "suggestions" which, if considered useful by the management, may be rewarded, including financially.

To be commercialized an idea must be more than a concept. It must be the basis of either a tangible product (for instance a new electrical fan) or a process (for instance a new cosmetic cream).

This being said, not all new products or processes, even if excellent, can be successfully commercialized. For instance, they may be too expensive to sell to the public. Imagine a new perfume based on a local flower: quite cheap to produce, but to commercialize it that is another business. To sell this new perfume you need small bottles which you will have to import (often from Italy). And you can well imagine that all the costs involved in importing those bottles are extremely high.

Another point which I would like to clarify is that when we speak of worldwide commercialization, we do not mean all or even most of the countries in the world. The right expression would be to speak of foreign markets, that is markets where there is a population who has enough money to pay for the new product.

Many would be delighted to sell their new product in the USA and Germany. Preferably than in India, Pakistan and Indonesia, even though the population in these three Asian countries is several times bigger!

Let us now consider two main aspects of our subject.
I. Initiating patent protection before commercializing an invention is essential.
II. Making known the existence of the invention is the first step in the commercialization process.

I. Initiating patent protection before commercializing an invention is essential

Some may say that you don't need such a protection. A typical example is Coca-Cola. This soft drink was invented in 1886 and was never protected by a patent, only by a trademark (for the name Coca-Cola) and by an industrial design (for this very special design of the Coca-Cola bottle, supposed to be in the shape of a woman wearing a long skin-tight dress).

The process of the Coca-Cola drink is secret and is only known by two persons in the world. They are not allowed to travel together, so that there is no chance of them dying at the same time in an accident. The secret of the Coca-Cola process was well kept during all these years, and nobody is able to produce a drink with exactly the same taste still today. You all know that Pepsi Cola, its biggest competitor, has a different taste.

But most inventions when produced and sold can be easily copied. Think of the ball pen, for instance, which was invented by Mr. Biro, an Argentin of Hungarian origin, who patented it in 1943.

This brings me to another point. A patent can protect the invention only in the country where the patent was granted. The fact that you have to obtain a patent in each country you seek protection in is at the basis of all the difficulties inventors face when they want to commercialize their invention worldwide. I shall mention the three most important difficulties.

1. The costs involved are simply prohibitive for most independent inventors. There are the official fees requested by the patent administrations of each country. There is also the patent attorney fees, as well as the translation fees. All in all, the inventor may need to pay something in the range of 70,000.- to 100,000.- US$ just to obtain patents in 5 to 10 important countries. And I am not speaking here of the fees connected to the maintenance of the protection during the years of protection, that is about 20 years.

2. The patent system is also very complicated. The procedures, the formalities and the fees vary from one country to another. First you have to address yourself in your country to an expert called patent agent or patent attorney. And when you decide to protect your invention in foreign countries, it is often necessary to submit your different patent applications in the language of each country, that means you have translation fees. In many foreign countries you can't use your local patent agent: only a patent agent in each of the foreign countries can represent you. In the USA, it is quite often necessary for the inventor to travel personally to Washington, D.C. to answer to questions put forward by the patent examiner. Etc, etc. All these procedures are time and energy consuming which can affect your nerves, not to speak of your pocket money.

3. The inventor has very little time between his first application, usually done in his country, and the filing of patent applications in the foreign countries. If he uses the traditional route, under the Paris Convention, for filing foreign applications, he has 12 months to do so. Today, another route exists, namely the system under the PCT - Patent Cooperation Treaty. If the inventor uses this international system of patent application, he has 30 months before filing in each of the countries he seeks to obtain a patent. That period is a great relief to the inventor. Unfortunately, because Saudi Arabia is not yet a member of the PCT, its residents cannot take advantage of it. The same applies to Saudi nationals, except if they reside in a country member of the PCT, like the USA or the UK.

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It is for all these reasons that I, as spokesman of inventors worldwide, have launched the idea of a World Patent, a single patent, granted by an international authority and recognized by all the countries who will have accepted this system.

But in the meantime, we have to live with the system that exists. In the case of Saudi Arabia, inventors have to use the traditional international patent system, which obliges the inventor to apply for patent protection during a period of 12 months in all the countries he wants to protect his invention in. A very short period, particularly when we know that filing patents in the countries you hope to market your invention in, is a necessary and preliminary step to its commercialization.

II. Making known the existence of the invention is the first step
in the commercialization process

Depending on the personal situation of the inventor and the stage of protection and development of his invention, here are are the main business alternatives offered to him.

1. Finding a person ready to cover the cost of patenting the invention in foreign countries. I indicated the timelimit for Saudi residents: 12 months from the day the inventor applied for a patent in Saudi Arabia. A very short period to find such a partner.

2. Selling the rights on the invention. Not an easy thing. But a good way to give the inventor time to concentrate on inventing other things. This is the only alternative for an inventor who has no money and no time.

3. Looking for investors ready to help develop the invention, for instance to build a prototype, undertake experiments, etc.

4. Offering licenses to produce and/or sell the product in certain countries. This kind of contract between the inventor and his partner is the most common thing to do when the inventor has time, but no money..

5. Looking for distributors if the inventor has managed to produce his invention.

Each one of the above business intentions needs special knowledge, expertise and skills. But all of them are based on a preliminary condition: the invention must not stay in the drawer! Others than the inventor must know of its existence through all forms and methods of contact, of publicity and advertisement that come to our mind.

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