BLOG@IP::JUR

"Patent Trolls" and the Separation of Knowledge from Production.

It is well-known that language concepts are sometimes utilised as a weapon in political disputes. As currently there are many such disputes ongoing in the field of Intellectual Property law nobody should really be surprised that certain concepts are utilised or even coined for such usage.

One of such concepts seems to be the

patent troll.

But what exactly is a "patent troll"?

Wikipedia offers a definition as follows:

"[...] Patent troll (also 'patent pirate') is a derogatory phrase coined by former Intel assistant general counsel Peter Detkin in 2001. Originally, it described an individual or company with a patent portfolio containing important, fundamental software patents, which it never intended to commercialize. Instead, a 'patent troll' would actively pursue a strategy of looking for potential infringers and proposing license agreements to companies. Where the patent troll is unable to achieve a licensing agreement, it threatens, or enters, patent infringement litigation. To avoid litigation, companies often choose to settle by purchasing a license. Today, 'patent troll' is used to describe a number of businesses using similar patent strategies. [...]"

And

FFII

says as follows:

"[...] Some people at Intel and other large companies have recently been talking about "patent trolls". They are typically referring to companies that develop or acquire patents in order to look for infringers. The FTC report of 2003 refers to them as "non-producing entities" (NPE). [...]"

Is it really justified to denounce non-producing patent holders as "patent trolls" or "patent pirates"?

Mr. Hartmut Pilch,

Ex-President of the FFII,

gives advice as follows:

"[...] The term 'patent trolls' should really be reserved for those corporate patent lawyers who now, after they succeded in lobbying governments for unlimited patentability, appear dismayed to find their company on the wrong end of the stick and start calling the winners bad names. Acacia, Eolas and others only implemented successfully what the losers from the corporate patent departments had preached. Or did we hear wrong? Who was it who told us just five minutes ago that in the information society patents are the currency of knowledge? that this allows people to receive a reward for their work independently of whether they produce or not? Who did we just hear arguing that the patent system is there to help the small guy? Was it the CEO of Acacia, who, by buying patents from small people helped small guys turn their ideas into money? No, it was, without doubt, one of the patent trolls from IBM, Siemens or the European Commission. [...]"

Does such "lawyer-bashing" really help?

Wikipedia correcly remarks:

"[...] The 'patent troll' strategy is lawful. Patent protection grants an inventor or his assignee a right to exclude others from making, using and selling the patented invention for the term of the patent. As far as the United States is concerned, this is enshrined in the United States Constitution (Article I, Section 8). Moreover, patents are transferrable entities which can be sold, bought, assigned to anybody and so on. Important to the patent troll strategy, an owner of a patent does not have to commercialize the patented invention in order to obtain protection. Moreover, courts have held that enforcing patent rights is not patent misuse. [...]"

By its ability to enable a separation of knowledge, the patent system is one of the cornerstones of any truly globalised "knowledge economy" wherein knowledge is transformed into some kind of commodity which can be exchanged in trade. Such separation of abstract functional problem-solving knowledge on the one hand from implementation-oriented craftsman knowledge on the other hand is a key feature of globalisation: Products are developed in one country by some company, and the production is made elsewhere by others. I can't see why such doing is 'evil' per se.

There is a lot of romantic attitude with some of the anti-globalisation critics also attacking the patent system, thereby glorifying the sweaty transformation of matter while downplaying the intellectual efforts which are a prerequisite of all material transformations.

There appears to be something like a strange coalition of some lawyers employed with very well-known mega-corporations fearing their business might be hampered by independent patentees, on the one hand, and romantic antagonists of the economic exploitation of knowledge under the conditions of a globalised capitalistic economy, on the other hand.

In my view, enterprises like

BTG represent proper ways to commercialise Intellectual Property without running a production shop.

Technorati Tags:

Patents, Globalisation, Patent Troll

[UPDATE] From recent edition of

The Economist:

"[...] One of the most contentious of these new relationships is outsourcing?the handing over to others of what were once considered to be core functions of the company. First to be transferred to more efficient providers were companies' manufacturing operations. Firms such as Nike have stretched this idea to such an extent that some of them now make nothing: all Nike's shoes, for instance, are manufactured by subcontractors. Nike employs few people directly. Such companies have become the orchestrators of a brand. Their baton has only limited control over the musicians who play for them, but that does not prevent them from producing great music (or shoes).

Even such a quintessential manufacturer as Procter & Gamble has joined this bandwagon. 'Our core capability is to develop and commercialise', its chief executive, A.G. Lafley, has said. 'We concluded in a lot of areas that manufacturing isn't [a core capability]. Therefore I let the businesses go do more outsourcing.' [...]"

This might be seen as an illustration of what I have thought of.

Patents, Patent Examiner, European Patent Office, computer implemented inventions

Monday, January 23, 2006

A Blog From Inside the EPO.

I have just stumbled across an interesting patent law related blog called

Inventive Step. It appears to be maintained by

Mr. Eugenio Archontopoulos, a Patent Examiner of the

European Patent Office (EPO).

Recently he has posted

an interesting text on

Decision T125/04 of the Boards of Appeal saying that comparative visual assessment of products is an invention, but does not involve inventive step.

Perhaps this blog can be seen as something like a European counterpart to

Just a Patent Examiner operated by some anonymous Examiner at the

US Patent and Trade Mark Office.

Technorati Tags:

Patents, EU Community Patent, Peer-to-Peer Patent Project, US-PTO, European Patent Office

(2) comments

Some Confusion on "Community Patents".

Since long I have been reporting in this Blog on

EU Community Patents, i.e. an approach undertaken on the political stage by the EU Commission to establish a new kind of patent in Europe that is not, like

the conventional "European Patent" as granted by the

European Patent Office, enforced as a bundle of national patents. This new "EU Community Patent" is planned to be a single homogenous exclusion right covering the entire territory of the European Union, i.e. there would be no "designations" of single Member States as currently provided by the

European Patent Convention (EPC).

Now, a group around the

US-PTO has come up with an approach

to augment the patent examination process with elements of social software. It can now be seen that those people (mostly Americans) also get used to call their project

Community Patent.

Hence, some confusion seems to be un-avoidable. Look out on what is acutally meant when reference is made to some "Community Patent".

Technorati Tags:

Thursday, January 19, 2006

Lobbying on IP Policy in Europe Re-Starting Again.

Mr. William New writes on the IP Watch Blog:

"Prague - Patent-dependent industries that spent heavily for lobbying on a failed directive on the patentability of computer-related inventions are learning from their mistakes as they prepare for the possible resurrection of the issue.

Lobbyists attending a Progress and Freedom Foundation (PFF) in Prague on 17 January signalled they will move early on the patent directive issue following the European Commission's release this week of a questionnaire asking for views on the patent system. Comments received by the 31 March deadline could lead to the formulation of a new proposed directive.

'It's starting again,' said Guenther Schmalz, director of IP for Europe for software maker SAP. 'And I hope this time we will be better prepared.'[...]"

here ...

Technorati Tags:

Patents, EU, Law

Germany to Amend the Rules of Patent Opposition Proceedings.

The German Government has launched a

Draft Bill to amend the regulations on patent opposition proceedings within the German Patents Act ("Patentgesetz") as well as to amend the German Act on Official Fees of the German Patent and Trade Mark Office ("Patentkostengesetz"). Furthermore, a number of other IP-related German Acts are also affected. The text is available in German only.

At the time being, patent opposition proceedings of the first instance are held before the German Federal Patents Court ("Bundespatentgericht"). This was made a couple of years ago in order to utilise spare capacities of the Federal Patents Court and to reduce the backlogs of the German Patent and Trade Mark Office. It is now intended to give back such proceedings to the German Patent and Trade Mark Office by July 01, 2006. However, in certain cases parties to the proceedings can request a transter of the proceedings of the first instance to the Federal Patents Court, e.g. if the proceedings before the German Patents and Trade Mark Office take too long a time (i.e. more than 15 months) or if an important legal question is to be decided.

Furthermore, the Draft Bill provides the removal of the procedural option for the bearer of a patent to divide a patent during opposition proceedings which had favoured the patent bearer and had caused much headache for the Courts because at the time being it is possible to divide a patent until opposition proceedings are closed, forming a divisional application from the full disclosure of the original application.

If so requested by a party to patent opposition proceedings, oral proceedings will in future be mandatory.

The Draft Bill will have to pass the German Parliament before entering into force. Obviously, the Government is confident to manage this before the summer of this year.

Technorati Tags:

Patents, Law, Germany

Wednesday, January 18, 2006

Amendments to the Regulations Under the Patent Co-operation Treaty (PCT).

There are some

Amendments to the Regulations under the Patent Cooperation Treaty (PCT) which will enter into force on April 01, 2006.

For some related background information see the

Documents of the Assembly of the PCT Union - Thirty-Fourth (15th Ordinary) Session held from 26-09-2005 to 05-10-2005 in Geneva, Switzerland.

Technorati Tags:

Patents, PCT

EU to join TLT.

There is a new

Document SEC(2005)1793 final of the Secretary-General of the European Commission titled "Recommendation for a COUNCIL DECISION authorising the Commission to open negotiations for Community participation in the Diplomatic Conference to be held in Singapore on 13 to 31 March 2006 by the World Intellectual Property Organisation (WIPO) to adopt the revised Trademark Law Treaty".

"[...] A Diplomatic Conference is to be held in Singapore on 13 to 31 March 2006 by the World Intellectual Property Organisation (WIPO) to prepare and adopt a revised Trademark Law Treaty.

The Trademark Law Treaty concluded in Geneva on 27 October 1994 (hereinafter referred to as 'TLT 1994') deals with procedural provisions intended to simplify administrative procedures regarding trademarks. It does not address substantive rules related to trademarks. There are no compatibility problems with other international instruments, in particular with the Agreement on Trade-Related Aspects of Intellectual Property Rights (the 1994 TRIPS Agreement), which it supplements. [...]

The planned revised Treaty concerns the European Community in that the provisions in question could apply to the Community trademark1 if the Community were to decide to accede to the Treaty in future. As for national trademarks, the current Community harmonisation concerns aspects which are not covered by the planned Treaty. It is therefore up to the Member States to express themselves with regard to the issues related to national trademarks.

The Community trademark justifies the exercise of jurisdiction by the Community. [...]"

Technorati Tags:

Trade Marks, TLT

Monday, January 16, 2006

"Liberty Or Death": A Frist Draft of GPL V 3 has been Published.

The Draft is availabe

here. It has some interesting points on patents:

"[...] Finally, every program is threatened constantly by software patents. We wish to avoid the special danger that redistributors of a free program will individually obtain patent licenses, in effect making the program proprietary. To prevent this, the GPL makes it clear that any patent must be licensed for everyone's free use or not licensed at all. [...]

This License gives unlimited permission to privately modify and run the Program, provided you do not bring suit for patent infringement against anyone for making, using or distributing their own works based on the Program. [...]

Distribution of the Corresponding Source in accord with this section must be in a format that is publicly documented, unencumbered by patents, and must require no special password or key for unpacking, reading or copying. [...]

Aside from additional permissions, your terms may add limited kinds of additional requirements on your added parts, as follows:

[...]

e) They may impose software patent retaliation, which means permission for use of your added parts terminates or may be terminated, wholly or partially, under stated conditions, for users closely related to any party that has filed a software patent lawsuit (i.e., a lawsuit
alleging that some software infringes a patent). The conditions must limit retaliation to a subset of these two cases: 1. Lawsuits that lack the justification of retaliating against other software patent lawsuits that lack such justification. 2. Lawsuits that target part of this
work, or other code that was elsewhere released together with the parts you added, the whole being under the terms used here for those parts. [...]

When you distribute a covered work, you grant a patent license to the recipient, and to anyone that receives any version of the work, permitting, for any and all versions of the covered work, all activities allowed or contemplated by this License, such as installing, running and distributing versions of the work, and using their output. This patent license is nonexclusive, royalty-free and worldwide, and covers all patent claims you control or have the right
to sublicense, at the time you distribute the covered work or in the future, that would be infringed or violated by the covered work or any reasonably contemplated use of the covered work.

If you distribute a covered work knowingly relying on a patent license, you must act to shield downstream users against the possible patent infringement claims from which your license protects you.

12.[7] Liberty or Death for the Program.

If conditions are imposed on you (whether by court order, agreement or otherwise) that contradict the conditions of this License, they do not excuse you from the conditions of this License. If you cannot distribute the Program, or other covered work, so as to satisfy simultaneously your obligations under this License and any other pertinent obligations, then as a consequence you may not distribute it at all. For example, if a patent license would not permit royalty-free redistribution by all those who receive copies directly or indirectly through you, then the only way you could satisfy both it and this License would be to refrain entirely from distribution.

It is not the purpose of this section to induce you to infringe any patents or other exclusive rights or to contest their legal validity. The sole purpose of this section is to protect the integrity of the free software distribution system. Many people have made generous contributions to the wide range of software distributed through that system in reliance on consistent application of that system; it is up to the author/donor to decide if he or she is willing to distribute software through any other system and a licensee cannot impose that choice. [...]"

So, it looks as if RMS and his team would have, under real-world conditions with valid and enforceable patents also on computer-implemented inventions, effectively choosen "death" for OSS under the GNU GPL instrad of accepting any kind of a reasonable compromise. This discussion on GPL V 3 has just started. There is still a real chance for improvement.

Technorati Tags:

GNU

UK: Patentability Of Games.

The UK-PTO recently has

published an interesting Practice Notice concerning the UK Patents Act 1977 with regard to the patentability of games.

This notice announces a change to practice at the Patent Office in examining patent applications for inventions relating to games. It follows the judgment of Pumfrey J in Shopalotto.com Limited's Patent Application [2005] EWHC 2416 (Pat).

The Comptroller has previously considered the patentability of games in light of Official Ruling 1926(A) (1926) 43 RPC Appendix page i. Under this ruling, an apparatus for playing a game comprising one or more playing pieces and a board marked in a particular manner substantially as shown in drawings accompanying the specification, with the playing piece(s) being moved in accordance with specified rules, was considered to meet the requirements of an invention, subject to any other objections such as lack of novelty.

In Shopalotto, Pumfrey J said in paragraph 4:

"The Official Ruling cannot provide a valid guide to the interpretation of the 1977 Act, the more so since the 1977 Act is, as I have indicated, to be interpreted having regard to the provisions of the European Patent Convention".

The Comptroller will therefore no longer use the Official Ruling 1926(A) when assessing the patentability of games.

The Shopalotto case concerned a computer game. The approach Pumfrey J used in this context appears to be the same as that set out in the Comptroller's Practice Notice of 29 July 2005 "Examining for Patentability". For example, in paragraph 9, Pumfrey J concludes:

"If there is a contribution to the art outside the list of excluded matter, the invention is patentable, but if the only contribution to the art lies in excluded subject matter, it is not patentable".

He makes a similar point in paragraph 10, where he also stresses that the contribution must be considered as a matter of substance. Accordingly the Comptroller will now apply this approach to games as well.
[...]

Technorati Tags:

Patents, Games

Story Time.

Yesterday,

Groklaw edited by

Ms. Pamela Jones has published a nice piece of anti-patent propaganda titled "Quietly Tying Down Gulliver - The SW Patent Fairy Tale". This text is said to be authored by Mr. Cristian Miceli who introduces himself as an "IT Lawyer". The whole story is placed in between a grid of seven antithesis called "myths".

"Myth 1: the European Competiveness Council, the European Commission and the Council of Ministers, as the white knights of European democracy and with our (European) best interests at heart, gallantly proposed a directive which, in its several drafts, sought to do nothing more than to codify and unify our existing laws on patents (commendable) in the area of computer related inventions whilst at the same time not extending the scope of patentability."

The author wants us to tell that this statement is a myth because of "if the actual words of the various drafts were so clear, why did the EU Parliament propose substantial amendments at the first reading, why did the Legal Affairs Committee of the European Parliament (JURI) vote overwhelmingly to restart the legislative process and, finally, why was a directive rejected for the first time in European history at its second reading?"

Well, in my view cross-party groups of MEPs in the European Parliament, influenced by the immense propaganda efforts of the FFII, intended to cut back patent protection available for computer-implemented inventions in Europe. In contrast, the EU Commission as well as the EU Council have worked hard in order to preserve the status quo. I can hardly see any logic so far in the statement of Mr. Miceli concerning this so-called "Myth 1".

"Myth 2: Patents for 'software inventions' have been granted for many years by the EPO so they must be valid and part of the 'existing law' which the Commission was trying to unify and codify."

Mr. Miceli argues again in a circle by stating that "When an act that is illegal gets carried out repeatedly without sanction it is understandable that many might subconsciously or otherwise consider such act legitimate. For our storytellers, the granting of patents for 'software inventions' has never been seen as prohibited but instead as 'part of the existing law'. Therefore, they could declare that Myth 1 was correct because for them, if the CII Directive allowed software patents it would not be an extension of patentability."

So if he, in perfect accordance with all the relevant lines of the FFII propaganda, considers the Case Law of the Boards of Appeal of the European Patent Office (EPO) to be "illegal" or, what might be the same in this context and sometimes used by anti-patent activists, a result of perversion of justice, then, but only then the grant of patents on CIIs in the past would have been contrary to law.

However, this is of course only wishful thinking of Mr. Miceli. The power to interpret

the European Patent Convention (EPC) resides in a legitimate way with the Boards of Appeal of the European Patent Office. This Office including its Boards of Appeal has been properly created on the basis of this multilateral treaty duly signed on behalf of all of its Member States and also duly ratified by their respective Parliaments. Arguing that the entire Case Law of the Boads of Appeal is contrary to law is a negligible dissenting minory opinion, indeed.

"Myth 3: The only interest group protesting about the CII Directive allowing software patents through the back door were open source software companies and individual developers."

There was no "back door". Patents on CIIs have been allowed by the competent Boards of Appeal for many years.

"Myth 4: Software patents are good for the IT industry and necessary for innovation"

Economy is not science. You can't simply set up some differential equations bearing economic variables, solve them, and use the result to run an economy. Politics deals with the power and the declared intention to give public affairs a shape.

"Myth 5: SMEs support software patents"

No all SMEs do support patents on CIIs. However, some SMEs utilising the patent system have managed to be a larger enterprise after some years of strong growth.

"Myth 6: Europe has over 40,000 software patents and the IT industry continues to thrive"

Mr. Miceli argues: "The negative effect that software patents have on the software industry has not yet manifested itself in Europe precisely because of the dubious legality of the software patents granted by an administrative body, the EPO. For software patents to work their destructive magic, they must be no doubt as to their legal status yet in Europe not one software patent has been successfully enforced. Therefore, without 'legal bite' in Europe (compare this to the US situation of the very real threat of triple damages for infringement) these software patents have been worthless pieces of paper - they would have become very valuable had the Common Position been accepted since the EPO's unlawful extension of the patent system would have received the formal seal of approval - which could not be used by IT companies to demand licence fees and/or block new entrants to the market." This is again a circular argiung based on some thesis wich shall be proved, namely that patents on CIIs as granted by the EPO are contrary to law. This is not true, and such patents are already enforced.

"Myth 7: TRIPS and article 27"

Mr. Miceli argues: "However, this argument is fundamentally flawed for it requires us to accept that 'technology' includes software. As noted above, software is not 'technology' for patent purposes and is expressly excluded from the scope of patentable inventions in Article 52 EPC." Again, circularity. If CIIs are of a technological nature, then they are patentable not only in accordance with the Case Law of the Boards of Appeal of the EPO but also in accordance with TRIPS.

Well, the entire article looks as if it was from the first line to the last line deliberately drafted to be precisely aligned with the usual propaganda dispersed by FFII and other anti-patent activists like Mr. Florian Müller. It appears not to have that conceptional, concise and logic-driven style texts written by a lawyer normally tend to have. And the name "Cristian Miceli" seems to be rather unknown even to

Google when taken in conjunction with "law" or something similar. Not to forget that the LASP blog redirected from

http://www.lasporg.info/ has been opened only recently, being rather silent with regard to the person of Mr. Miceli. And what does the plural form "Lawyers" in LASP intend to mean? Are there more lawyers lurking behind the scenes? Ok., I have to admit that nevertheless it might well be that an IT Lawyer Mr. Cristian Miceli is just now sitting somewhere in the UK, perhaps in York, watching what happens after the launch of his article. But I must confess that, under these circumstances as set out above, I would not be overly surprised if some day news would emerge saying that "Cristian Miceli" was in fact a pseudonym for somebody else.

Technorati Tags:

Patents, EPO, Law, Europe, CII

Patents, European Commission, EU Community Patent

FT.com: Mr. Charlie McCreevy Undertaking 'One Final Effort' to Create a Low-Cost EU Patent.

Mr. Tobias Buck

writes in

FT.com:

"[...] Charlie McCreevy, the European Union internal market commissioner, will on Monday launch an initiative to help European companies secure better protection for their intellectual property.

Mr McCreevy wants to make 'one final effort' to resolve years of deadlock over the creation of a low-cost EU-wide patent, in an effort to bridge the innovation gap between Europe and the US. [...] Mr McCreevy will begin a formal round of consultations with businesses and other interested parties in order to fine-tune the Commission's patents policy.

The consultation document, a copy of which has been seen by the Financial Times, seeks responses on issues ranging from patent litigation to mutual recognition of different national patents and even possible improvements to the proposed EU-wide community patent. [...]"

Mr. McCreevy had already

announced this move in 2005:

"[...] Accordingly, I would like to use the next three months to launch and engage in a dialogue to determine what might usefully be done to provide Europe with a sound IPR framework. [...]"

This has now is now been tagged as a 'final' attempt, and Mr. McCreevy surely will not try again anything like this during his term of Office should he fail now. The outcome will most probably not only depend on the high-level diplomacy on the language issue (you remember: how many languages to translate a EU Community Patent, and the legal status of such translations) but partly also on how strong the various grassroots organisations of the anti-patent movement will perform with regard to this issue.

I further guess that the industry will give a warm welcome to the EU Community Patent if and only if:

No translation requirements at all, or, at most, requirement of translation of EU Community Patents into English;
No EU-wide centralised court for the first instance of infringement and cancellation cases; and
There is a binding assertion that also in future for applicants there will be a free choice between the "conventional" EPO patent and the EU Community Patent.

We shall wait and see.

[UPDATE_0] 2005-01-16 The Official Questionnaire "On the patent system in Europe" can be viewed

here. It offers a pretty broad range of questions, touching the fundamentals of patent law as well as approximation and mutual recognition of national patents. On the basis of the feedback the Commission intends to organise a hearing in Brussels in early summer 2006. The consultation is open to all, and will be closed on 31 March 2006. The Commission services will publish a report on the outcome of this consultation. It will be available on the Internal Market and Services Directorate's General website. A RAPID press statement is available

here.

Technorati Tags:

Thursday, January 12, 2006

Changing the Landscape of Patent Practise?

Two days ago I happened

to point to an article in the New York Times reporting on a project to co-operate with open-source software developers on three initiatives that might improve the quality of certain patents. As summarised in

Groklaw the initiative has three elements as follows:

Open Patent Review - a program that seeks to establish an open, collaborative community review within the patenting process to improve the quality of patent examination. This program will allow anyone who visits the USPTO web site to submit search criteria and subscribe to receive regularly scheduled emails with links to newly published patent applications in requested areas. Established in conjunction with the USPTO, this program will encourage communities to review pending patent applications and to provide feedback to the patent office on existing prior art that may not have been discovered by the applicant or examiner. Professor Beth Noveck of New York Law School will lead a series of workshops on the subject. For more information, visit Professor Noveck's project website at http://dotank.nyls.edu/communitypatent.
Open Source Software as Prior Art - a project that will establish open source software - with its millions of lines of publicly available computer source code contributed by thousands of programmers - as potential prior art against patent applications. OSDL, IBM, Novell, Red Hat and VA Software's SourceForge.net will develop a system that stores source code in an electronically searchable format, satisfying legal requirements to qualify as prior art. As a result, both patent examiners and the public will be able to use open source software to help ensure that patents are issued only for actual software inventions. Information for this project is available on the OSDL web site at: http://developer.osdl.org/dev/priorart/.
Patent Quality Index - an initiative that will create a unified, numeric index to assess the quality of patents and patent applications. The effort will be directed by Professor R. Polk Wagner of the University of Pennsylvania with support from IBM and others and will be an open, public resource for the patent system. The index will be constructed with extensive community input, backed by statistical research and will become a dynamic, evolving tool with broad applicability for inventors, participants in the marketplace and the USPTO. Information about the Patent Quality Index is available at: http://www.patentqualityindex.org.

I have some mixed feelings with regard to these initiatives. First of all, I would like to insist on obeying the usual rules of due process when conducting the examination of a patent application. And, in my view, this means that the Patent Examiner should be responsible alone for the decision to grant a patent or to reject a patent application, under full review by the courts or equivalent bodies. It must not be allowed that some variable peer-to-peer community accroaches this act of exercising administrative power.

Nonetheless, harnessing peer-to-peer communities over the Internet in order to provide more transparency to the patenting business might perhaps well be already overdue.

There are, however, many open questions. Why on earth should experts spend un-remunerated hours for contributing to this peer-to-peer approach? Well, perhaps because of an employer pays for such work. Why could this happen?

Well, I think transforming the patenting business to an Internet-based network exercise under the supervision of the patent examiner might also help to solve one of the big problems of today's patent practise: It turns out to be very hard and expensive to research on patents which might be relevant for the freedom to operate of a company. Potentially thousands or even tens of thousands of granted patents might need to be scrutinised for infringement by a given product in the course of a freedon-to-operate analysis. If, in a company, nobody has taken care of the patent situation before, it might even be impossible in practical terms to determine whether or not relevant patents do exist which have to be respected.

If in the industry there would be a generally accepted culture of participation in a peer-to-peer-assisted patent system, then I should be inclined to assume that this not only would effectively reduce the number of illiegitimate patents but also significantly increase the general awareness and knowledge amongst engineers employed by the industry about important patents in a given field of technology. This might well pay off for the employer not only by avoiding unnecessary infringement lawsuits but also by benefiting from a broader knowledge of the employees with regard to the technology of the competitors.

Of course, in any case it will be a long way to go. Neither a majority of the engineers, patent examiners, and patent attorneys might today be prepared to even only think of such a shape of future patent business. And the law would have to be amended, eg. by abolishing the 18 months waiting period before publication of a patent application during which the application is kept as a secret unavailable for any public scrutiny.

But there is a mounting pressure to improve the patent system coming from the various quarters of critics of the patent system as it stands now. And, of course, I think that this industry-sponsored approach of developing a peer-to-peer assisted and Internet-based patent business is much, much better than all of the utopias of the hard-core anti-patent fundamentalists like

Mr. Stallman.

What are Patents Actually Worth?

Did I mention this paper before? The Report is the output of a research project (ETD/2004/IM/E3/77) conducted for the European Commission, Directorate-General for Internal Market. The project was administered by the CERM Foundation (Siena, Italy) with the following partner institutions to develop the project: LEM, Sant'Anna School of Advanced Studies, ZEW and Inno-tec, Ludwig-Maximilians-Universit�t, Universitat Pompeu Fabra, Eindhoven University of Technology, SPRU, University of Sussex, Universit� Lyon2, INSEAD, University of P�cs. Its title is 'Study on evaluating the knowledge economy - What are patents actually worth? The value of patents for today's economy and society.' and it has been drawn up on EU funds under Tender n� MARKT/2004/09/E. We see the

'Final Report for Lot 1' dated May 09, 2005:

"[...] This Report deals with the economic value of European patents and offers a comprehensive analysis of the 'state of the art' on this issue. It provides a complete survey of the existing scientific literature in economic and business studies, and it uses original data to present descriptive statistics and elaborations on the value of European patents. [...]

The analysis of the background literature helped us refine the plan for research in Lot 2 of this Project. Moreover, by summarising the main contributions on the four Themes of our study, the survey of the literature highlighted the main gaps in the existing literature that would need further investigation either from the theoretical and empirical point of view. [...]

It is worth stressing that the analysis of the background literature and the empirical work with patent data performed in Lot 1 provided useful suggestions to guide the research in Lot 2. On the one hand, as noted above, they suggested that there are still many open problems and questions to be addressed, and they showed the gaps in the empirical literature. For instance, we found that an important gap in the literature concerns the impact of patenting activity - and in particular the impact of specific characteristics of patents, applicants and invention processes - on R&D. This will inspire the empirical models to be developed in Lot 2. On the other hand, the analysis of the data in Section 3 and Section 4 of Lot 1 provided a general base for guiding the empirical investigation in Lot 2, and the search for policy suggestions that are expected to arise from the results of the studies in Lot 2.

For example, the descriptive statistics pointed out that there are interesting differences across European countries and regions, technological classes, and types of inventors' employers (i.e. private firms vs. public organisations; companies vs. universities and other research institutions; large vs. small firms; domestic vs. foreign applicants) concerning the value and the cost of the European patents, their use, the formation of new firms, and the occurrence of spillovers and collaborations among inventors and institutions in the innovation process. More systematic empirical analysis is needed to explore these differences and their causes. More precisely, in order to identify the net effect of different factors on the variables of interest (i.e. the value of patents, the propensity to start a new company, etc.), we need to perform multiple correlation analyses based on specific econometric models.

Against this background, we plan to produce a series of scientific studies concerning the advantages and disadvantages of the patent system, and in particular the direct and indirect impact of patents on the economy and society. For each Theme we will develop aggregate econometric contributions and contributions at the level of specific countries, technological classes and inventors? employers. We will also integrate the datasets used in Lot 1 with additional data required for the specific purpose of the different studies. The remaining part of this Section presents a detailed research plan for Lot 2 in line with the original research project. [...]"

Hm. Wait for the report on Lot 2 and see ...

Tuesday, January 10, 2006

NYTimes.com: U.S. Office Joins an Effort to Improve Software Patents.

Mr. John Markoff

writes in the

New York Times:

"[...] The United States Patent and Trademark Office plans to announce today that it will cooperate with open-source software developers on three initiatives that it says will improve the quality of software patents. [...]"

According to Mr. Markoff, two of the initiatives would rely on recently developed Internet technologies. In particular, an open patent review program would set up a system on the patent office Web site where visitors could submit search criteria and subscribe to electronic alerts about patent applications in specific areas.

The report then says that the third initiative is focused on the creation of a patent quality index that would serve as a tool for patent applicants to use in writing their applications. It is based on work done by

R. Polk Wagner, an intellectual property expert at the University of Pennsylvania.

"[...] One frequent critic of the patent system, Gregory Aharonian, publisher of The Internet Patent News Service, said it was unlikely that the new initiatives would have a significant impact, because the patent office was not able to deal efficiently with the information it already had. [...]"

OK, let's wait and see. I think that altogether it is an interesting initiative.

[UPDATE_0 2005-01-10] See also news and debate at

Groklaw.

Thursday, January 05, 2006

Tide Change in EU IP Policy?

With

my earlier posting I had pointed to an

evaluation paper on the protection EU law gives to databases recently drawn up by the EU Commission. In the context of this evaluation report,

Mr. James Boyle

writes in the

FT:

"[...] Commission insiders hint that the study may be part of a larger - and welcome - transformation in which a more professional and empirically-based look is being taken at the competitive effects of intellectual property protection. Could we be moving away from faith-based policy in which the assumption is that the more new rights we create, the better off we will be? [...]"

Actually I have no clue who those "Commission insiders" might be and whether or not

other activities as announced by the EU Commission might also be linked to this matter in question; see

my earlier posting. Well, I do not buy any general doctrine saying that in politics it must always be possible to precisely distinguish between something like a "faith-based policy" and an "empirically-based look". Of course, it can never be a bad thing to attempt to look at the particular effects of a given policy. And I do not promote any borderless extension of IP rights. But politics in general and economics in particular are not science where you repeatedly can set up and run various experiments in order the learn on the network between causes and their related effects. For example, it is entirely unclear as to whether or not any relative decrease of EU database production compared to the U.S. is caused by different systems of legal protection or by other factors of economy. Misguided empirics might, under suitable circumstances, well be utilised as a gateway for other influences fuelled and guided by value-based political motivations but cloaked as pseudo-scientific empirically hardened law of economics. Hence, I would be in favour of some more balanced approach, looking at the effects of politics where such effects are clearly and reliably identifiable but refraining from reducing politics to some sort of pseudo-science.

IT-PTO Abandoning Official Fees??

I have seen some off-line reports saying that the Italian Parliament has, by means of a decree dated December 22, 2005, lifted all Official fees in 2006 for patents, utility models, and designs, including application fees and maintenance fees.

It sounds quite unbelievable but my sources are normally deemed to be trustworthy.

Neither can I see this confirmed anywhere on the web nor do I understand the political background of such undertaking.

Does any of the readers of my blog have more precise information suitable to shed more light on the present situation in Italy?