KSR v. Teleflex: The Future of Non-Obviousness in the U.S.
This Blog is known to be somewhat Euro-centric. Therein lies the very reason why I don't bother to blog much on the case KSR v. Teleflex pending before the Supreme Court in the U.S. where the entire interpretation of the concept of non-obviousness as a prerequisite of patentability is put to test. The case is of greatest importance, and perhaps the outcome thereof might by some way or the other indirectly influence also the patent discussion in Europe.
Thanks to some U.S. Bloggers there is a broad coverage available on the Internet. Take, for example, this posting by Mr. Dennis Crouch on his Blog Patently-O as a starting point.
"[...] If some of the finest judicial minds in the US and probably anywhere in the world find it difficult to get to the bottom of patent law and practice, should we be blaming them or the law itself? Obviously patent law is always going to be very technical, but surely its main tenets - such as obviousness - have to be accessible to more than those who specialise in patent law. When you see Supreme Court justices struggling, hasn't something gone very wrong? If they don't get it, what hope for anyone else that has not spent years and years studying the subject? What hope for inventors, company executives, the general public, politicians and just about anyone else outside the rarefied world of the patent law? It seems to me that we do have a problem. [...]"
The European Patent Office (EPO) has published, on the website of the European Patent Academy, the conference proceedings Quality in the European Patent System - a conference at the EPO, The Hague, November 21 and 22, 2005, i.e. before one year nearly up to the day. Nevertheless, the bulk of material still appears to be of some relevance.
Presentations documented in the proceedings include:
Opening speech of the President of the European Patent Office, by Professor Alain Pompidou
The concept and meaning of quality in the European patent system, by Professor Joseph Straus, Director, Max Planck Institute
Point of view from the patent attorney profession "All that glisters is not gold ...", by Mr. Chris Mercer, President of epi
Point of view from the European business community: industry, by Mr. Jacques Combeau, UNICE representative
Point of view from the European business community: small and medium-sized enterprises, by Ms. Manuela Loidl, UEAPME representative
Point of view from a national litigation and enforcement judge, by Dr Klaus Grabinski, Düsseldorf Regional Court, Germany
The EPO rules and standards, by Mr. Thomas Hammer, Vice-President, DG 1 Operations, EPO
The point of view of a user's needs, by Mr. Roland Hill, Chairman and Managing Director, Contra Vision Ltd.
EPO Quality Management System for examination area, by Mr. Pantelis Kyriakides, Vice-President, DG 2 Operational Support, EPO
EPO Quality Management System for examination area, by Mr. Colin Philpott, Principal Director, PD Quality Management EPO
EPO Quality Management System for examination area: Internal Audit, by Mr. Rolf-Peter Spiegel, Director, Quality Audit, EPO
Chairman's comments, by Mr. Jan Brinkhof, attorney and former judge
The role of the Boards of Appeal of the European Patent Office in the quality system, by Mr. Peter Messerli, Vice-President, DG 3 Appeals, EPO
Perspectives of a national judge regarding patent quality, by Sir Hugh Laddie, consultant and former judge
Attorney perspectives: Quality downstream of the EPO - respect for granted rights, by Mr. Roy Marsh, British and European Patent and Trademark Attorney, Hoffmann Eitle
Attorney perspectives: "Qualidity" - Quality meets Validity, by Mr. Rainer Böckelen, Patent Attorney, TBK Patent
A quote from Mr. Pompidou's opening speech:
"[...] I would like to call to your attention during the next few minutes the standards governing patentability in the European patent system and quote from a recent study issued by the Fraunhofer Institute, a leading German applied research organisation, on "Innovation versus Patents" comes to 4 significant conclusions, which I describe as:
a. The exorbitant increase in the filing activity occurring since the nineties can be explained only in part by a corresponding growth of investment or increase of efficiency in R&D activities. It is rather a shift in the motivation of applicants for seeking patent protection that comes under consideration.
b. Protection of intellectual property is an essential precondition for promoting the innovative strength of our society, which is faced with global competition.
c. Such protection must, however, be reserved to real creative achievements. Patent protection in particular must be granted only for inventions which are truly innovative and contribute to the state of the art. In this context, the legal requirements of inventive step (Art 56 EPC) and sufficient disclosure (Art 83 EPC) play a decisive role. If patents were granted for inventions, which represent trivial developments or are not sufficiently disclosed or with claims that are too broad, this would impede new competitive developments.
d. An inflation of low quality patent rights would lead to increased research costs and obstruct competition unnecessarily. At an advanced stage, it could even lead to a collapse of the entire patent system. These conclusions have also recently been underlined by some delegations of the Administrative Council of the European Patent Organisation. We have to take them very seriously. Therefore, the new Quality Management System my colleagues will present to you in Session III of our programme will provide the Office with better instruments for taking action in this respect. In addition to what classical patent theories have ever conceived in the global knowledge economy, patents no longer merely sustain competitiveness on markets for products and technical services, but play an ever-increasing role in financial markets as well.
As is well known, the global patent licensing business has, in the past decade, grown four times faster than trade with tangible goods with a global turnover of some 100 billion Euro. At the same time, large patent portfolios rather than individual patents play an increasing role in the market capitalisation of companies and in other forms of access to external financial resources including risk capital. They have a strong bearing on the respective positions of companies engaged in friendly or hostile takeovers or merger negotiations.
This relevant shift of motivation in the filing strategies of applicants obliges all of us to put a basic question on the table: should patent systems produce the maximum of exclusive rights that financial markets apparently call for, or should they take the opposite direction and strictly apply the patentability requirements provided by law, so as to give truly innovative R&D the necessary room to breathe? It is not the law that is at stake here, but the standards of patent practice which give the system its economic meaning and impact. [...]"
Well, I can't find this Fraunhofer paper titled "Innovation versus Patents" on the Internet. Perhaps it has not been published yet.
At the other end there was a remarkable intervention by Mr. Pantelis Kyriakides, Vice-President, DG 2 Operational Support, EPO, as to be read on page 221 of the report:
"[...] Everyone is seeking perfection, but could we live with a European patent system that applies the 80/20 rule as in industry? Is it worthwhile spending two or three times the cost to find a needle in the haystack as it is sometimes the case with some very complex applications?
To Pantelis Kyriakides, there is a law of diminishing returns with respect to the amount of relevant prior art which may be found, and the length of time spent searching. For the EPO it is a balance between ensuring that the available prior art has been found, and spending the appropriate amount of time on the searching activity. It is an overall quality issue for the public, not just classical theoretical quality. There must be a balance between legal certainty, timeliness, cost and consistency. You cannot ignore one of those four, or sacrifice one for the other. The users also want a good balance between these aspects. [...]"
The quality question might become a decisive point for the future of the entire patent system. Mr. Kyriakides might perhaps be tempted to overlook that today the quality of the patent examination process is, by wide circles of the general public, no longer seen as some sort of traditional tradeoff between costs and the result obtained but as a measure of overall fairness of the patent system.
Anyway, it appears to be quite clear that the European Patent Office has understood the gravity of the situation and is determined to take appropriate action.
Google Trends: Public Awareness of "Patent" is on the Decline.
An experiment with Google Trends: The number of queries targeting the English and/or German word "patent" is slightly on the decline over the past three years. Maybe that is because of the broad stream of a public debate on so-called "software patents" has converted into a trickle, at least for now.
But, can please tell me someone why the corresponding French word "brevet" shows such distinct peaks at quasi-regular intervals?
"[...] Today many of the issues coming before the European Parliament have a scientific or technological theme. They may be proposals directly relating to research or innovation policy, or measures concerning the many ways in which science and technology impact on society, the economy or the environment.
[...]
The European Parliament defines its position on these issues through reports prepared by its Committees. If Committees decide that it would be helpful to their policy making role to seek out expert, independent assessments of the various scientific or technological options in the policy sectors concerned, then they have STOA at their disposal: the Parliament's own Scientific and Technological Options Assessment unit.
[...]
STOA is an official organ of the European Parliament, but its work is carried out in partnership with external experts. These can be research institutes, universities, laboratories, consultancies or individual researchers contracted to help prepare specific projects. These increasingly comprise round-table expert discussions, conferences and workshops with associated or consequent studies at which members of Parliament and invited experts from EU institutions, international institutions, universities, specialist institutes, academies and other sources of expertise worldwide can jointly participate in the analysis of current issues. [...]"
Hence, findings of STOA may well have some considerable influence on the position taken by the European Parliament. The conclusions of the workshop comprise, inter alia, items listed below:
Distinction per sector
Patentable subject matter
Patentability standards
Yardstick
Economic mission [in preamble EPC]
General clauses
Patent quality
Patentability standards: raise bar
Cost: reallocation of resources within the EPO[who carries the burden?]
Role EPO: widen approach on patent quality
Abuse
Tackle within patent law, not within competition law
Tackle on the national vs. Community level?
Re-assess existing remedies
Research exemption: Fit for current technologies?
Compulsory licenses: Efficient?
Alternative mechanisms
Within the patent system: IBM proposal
Outside the patent system: Should rewards take the shape of a monopoly? Other incentives
Actors
List of members advisory + policy bodies public
Patents
External audit check - Opening up the 'black box'
Transparancy register
Law making
Representation of 'outsiders' (users, scientists, consumers) patentable subject matter, ..
Ad hoc committee within European Parliament
'Feedback loops'
Examination: centralisation vs. decentralisation
(New) roles national patent offices
Jurisdiction: harmonization vs. equal access
Integrated European Patent Court, National designated courts
WIPO: Mobile Phone Companies on Patents & Standards.
On November 29, 2006, WIPO will host a colloquium on selected patent issues under the title Standards and Patents.
Mr. Tim Frain, Director of Intellectual Property Rights, Regulatory Affairs, Nokia Corporation, Farnborough, Hampshire, has provided a presentation dealing with this issue. A corresponding paper is also available. Mr. Frain explores the current debate about the perceived shortcomings in the patent regime in the standardisation context, specifically concerning the policy question of ensuring access to essential patents for interoperability purposes in the public interest. He explores possible approaches that might be available from both a legislative and self-regulatory standpoint:
From the legislative perspective the paper proposes a possible new solution based on introducing a Patent Misuse doctrine into the patent law domain. This would have the potential to render a patent unenforceable for interoperability purposes having regard to both the public interest in allowing access to the patent, and to the patent owner's behaviour in seeking to allow or block access.
From a self-regulation perspective the paper discusses the current project in ETSI to review the ETSI IPR policy, and specifically presents the so-called Minimum Change Optimum Impact (MCOI) proposal jointly contributed by Ericsson, Motorola and Nokia.
Vodafone suggested outcomes of a further political evaluation are to reconcile protection of genuine innovation and proper functioning of competition thanks to:
Greater transparency of licensing terms - to allow the market to work properly
Earlier transparency of relevant patents - to create legal certainty and allow risk assessment and technical/business decisions
Greater quality - to be able to determine what is a relevant or not a relevant patent
According to Mr. Davey, policymakers should consider in particular measures as follows:
Greater transparency
Promote the use of strong disclosure policies by SDO
Earlier transparency
Support the adoption of early publication rules (less than 18 months!) by SDO
Foster faster processes to produce patents and patent decisions
Greater quality
Harmonise protection regimes and interpretation practices
Grant quality patents, not numerous patents, to promote innovation
Statements concerning the ETSI Intellectual Property Rights Policy can be found in Annex 6 on pages 39pp. of ETSI Rules of Procedure, 23 November 2005.
EU Task Force on ICT Competitiveness and Uptake: More Interoperability Needed to Boost the European ICT Industry's Competitiveness.
The European Commission's Task Force on ICT competitiveness and uptake have published a report under the title Fostering the Competitiveness of Europe's ICT Industry. It was announced in a press release, stressing thatpatent costs need to be reduced. Moreover, given the diversity of IPR models in the ICT sector, according to the report, wide consultation should take place before changing EU legislation. Also, a demand is made to limit criminalisation for IPR infringement to wilful counterfeiting of trademarks, copyright infringement and design piracy. Promotion of the the adoption of the London Protocol is endorsed.
"[...] It is essential for fostering ICT investment and innovation that Europe maintains a balanced and effective regime of intellectual property protection that takes into account various business models in the ICT sector. Compared to other regions Europe already enjoys a reasonable IPR regime that is marked by high quality patents, which should be maintained. Nevertheless, Europe must improve the legal certainty and accessibility of its patent system for all players, including SMEs. Furthermore, the EU should continue and even increase its efforts against counterfeiting and piracy and reform the copyright levies system to enhance ICT uptake. [...]"
In the report, there apparently is no room for any wholesale anti-patent agitation like that fostered by FFII or other anti-patent activists.
FFII About to Return Back Again on the Political Stage.
Since the final shipwreck of the EU Draft Directive on the patentability of computer-implemented inventions last year anti-patent campaigners of FFII are looking for a new project which can be communicated to the general public as well as to the policymakers in order to raise awareness, funds, and political influence. Recently FFII have come forward with a plan to shape the political discussion on Intellectual Property on an EU-wide scale by organising a series of public conferences:
"[...] November 25, Munich - EUPACO-0
Launch
The first in a series of events to open the discussions on a new EU patent system. EUPACO-0 will be held in Munich, before the FFII Annual General Assembly. Key speakers: Hartmut Pilch (vice-president of the FFII), Pieter Hintjens (president, FFII). The format is two conference blocks, one looking at the European patent system today, and one discussing the FFII's proposals for a new EU patent system. [...]"
"[...] January 24, Brussels - EUPACO-1
European Conference
EUPACO-1 assembles a range of powerful speakers from the US and across Europe in a one-day conference. Under the spotlight: the patent system in Europe and abroad. The goals: to discuss the way forward to a new EU patent system. The format is two conference blocks, one looking at the European patent system today, and one discussing proposals for a new EU patent system. [...]"
"[...] May, Brussels - EUPACO-2
International Conference
EUPACO-2 assembles a range of powerful speakers from the US and across Europe in a 2-day conference. The conference presents proposals for a new EU patent system, from the FFII and related and other workgroups. The format is one day of conference speakers, one day of workshops. [...]"
Even from these very brief abstracts it becomes absolutely clear that this campaign is no longer restricted on patents on computer-implemented inventions or, as they prefer to call it, "software patents". It is plotted to discuss details of an attack on the heart of that what makes up the present patent system. Topics include:
Desirability of patents in various fields
Replacement of planned EPLA court with judicial harmonisation agency
Privatisation of the patent examination system
Copyright instead of patent protection for innovation
Moreover, there is another website titled Power to the Parliament proposing Europe's legislators to ensure - in their own words - that:
The European Patent Office stop granting patents on software and business methods, stop lobbying for its supposedly independent judicial arm, and start following the lead of the national courts and the European Parliament;
The European patent system be organized as unbureaucratically as possible; this could be achieved by privatizing examination and making polluters pay;
As long as there is no constitutional framework with democratic lawmaking at the European level, final decision power not be transferred to a European court; the national judicial systems must remain available as cheaper alternative paths with a corrective function;
All statutory laws and rules applied by any new European supreme courts be subject to review by elected legislators; the signatory states should in such cases transfer the related legislative power to the European Parliament, while assigning veto rights to a quorum of national parliaments.
"[...] Once again, it seems to me, the FFII is stealing a march on those who wish to see reform to Europe's system occur within its current framework. I suppose that many in the pro-patent camp (for want of a better description) will be content to sneer from the sidelines and to say that what the FFII is proposing is ridiculous. And maybe it is. But the FFII is shaping the debate again and arguments against their ideas are going to have to be developed. Can you imagine, for example, the European Parliament being opposed to an increase in its powers? No, neither can I; or not unless it is given some very good reasons.
What is also worth pointing out is that in the press release announcing the launch of the EUPACO site, the FFII's president Pieter Hintjens makes clear that it is not only software patents that are the issue, but all patents and the entire system. 'The unrestricted expansion of patentability into non-traditional areas together with the rising flood of poorly granted 'soft' patents in biotech, pharma, and software have throttled innovation,' he said. The fight, in other words, is being broadened, and the FFII is looking for allies beyond its traditional base.
Do the pharmaceutical and biotech industries want the European Parliament to have the final say over what should and should not be patentable? Is the auto industry happy for that to happen? Does the chemical industry believe that politicians should be able to second guess judges? If not, they had better start doing something about it. How about starting by asking how the FFII knows that innovation is being stifled by the current system. What evidence does it have? [...]"
Hope that patent people won't oversleep again.
BTW: I'm inclined to plainly deny that currently the EU has no constitution. The various treaties in force are functionally serving as a de-facto constitution by setting up the bodies (Commission, Council, Parliament etc. pp.) of the European system as well as their competences and responsibilities.
EU Parliament Might Reject Inclusion of Patents into IPRED.
The Draft Report by Mr. Nicola Zingaretti on the amended proposal for a directive of the European Parliament and of the Council on criminal measures aimed at ensuring the enforcement of intellectual property rights (COM(2006)0168 - C6-0233/2005 - 2005/0127(COD)) to the European Parliament's Committee on Legal Affairs has recently been published on the web. A particular proposal as set out therein to amend the Draft Directive now says (emphasis added, --AHH):
"[...] The Community legislator has the power to take the criminal-law measures that are necessary to guarantee the full effectiveness of the rules it lays down on the protection of intellectual property, as defined by this directive, other than patents. [...]"
Justification is given as follows:
"[...] 3. The statement by the Commission (2005/292/EC) concerning Article 2 of Directive 2004/48/EC lists the property rights concerned in order to establish more precisely the exact scope of the directive. The list includes 'patent rights, including rights derived from supplementary protection certificates'.
4. However, applying criminal penalties laid down at Community level to infringements of patent rights does not seem to be either particularly appropriate in itself, or consistent with the approach followed in recent years by the Community legislator.
5. There is no evidence of any urgent need to intervene by imposing criminal penalties, since many Member States already enforce patent protection by means of criminal penalties (i.e. fines and custodial sentences). This applies, for example, to the German, Austrian, Danish, Spanish, French, Hungarian, Italian, Dutch and Portuguese legislation. Consequently, though attention should be drawn to the absence of any protection in criminal law under other legal systems (for example under English, Belgian and Greek law), the introduction of provisions of this kind at Community level would duplicate existing provisions and make the system even more cumbersome, unless we suppose that, either through the insertion (by means of an appropriate amendment) of an explicit provision to that end in the directive or as a result of the 'automatic primacy' of Community law, Community legislation on the subject could completely replace the corresponding national legislation.
6. Secondly, seeking to apply criminal penalties in the area of patent law seems to be plainly in breach of the position taken by the European Parliament when, at its plenary sitting of 6 July 2005, it rejected the Commission proposal for a directive on the patentability of computer-implemented inventions (2002/0047(COD)). Given that an overwhelming majority of the European Parliament considered at that time that it was inappropriate to adopt legislation on the subject, any attempt now to provide for criminal penalties to protect patents (which are not currently regulated) would be a limited and dangerous foray into a very complex area which, for that very reason, requires a regulatory framework that it as systematic and widely endorsed as possible.
7. In the light of the foregoing, the rapporteur proposes amendments to Articles 1 and 2 of the proposal for a directive in order to demarcate its scope and provide the relevant definitions. In practical terms, the effect is to exclude from the scope of the directive the subject of patents by establishing that, pending the adoption of more comprehensive rules on patents at Community level in future (in the form of a suitable directive), the provisions of the present proposal should not apply to patents. This would avoid prejudging the content (including the criminal aspects) of any future legislation on patents. Moreover, it would restrict the scope of the directive to those intellectual property rights provided for by Community legislation. [...]"
I think that the result is correct - criminal law is in many (if not most) cases inappropriate when dealing with patent infringement matters. However, item 6 as quoted above sounds strange, and I must admit that I do not understand the logic behind it. Maybe that Mr. Zingaretti has seen certain political reasons encouraging him to recite the Parliament' voting on the failed Directive on patentability of computer-implemented inventions.
IP Policy: EU Commission Will Shortly be Publishing a Communication Setting Out Proposals.
Mr. Charlie McCreevy, European Commissioner for Internal Market and Services, has held a speech to the European Parliament JURI Committee European Parliament JURI Committee (Committee on Legal Affairs) in Brussels on November 21, 2006:
"[...] The protection of intellectual and industrial property - copyrights, patents, trademarks or designs - is at the heart of a knowledge-based economy and central to improving Europe's competitiveness. This is a priority for reform: grounded on sound economics, not just legal concepts, and concentrating on solutions that foster innovation and investment in real life.
On patents, there is an overwhelming desire for a system which is simpler, more cost-effective and that maintains the highest standards in the quality of its examination and grant procedures. All stakeholders went to great length to convey their views to us. Now, quite rightly, they expect action. This was the gist of my message to the plenary where I addressed this issue on 28 September.
The Commission will shortly be publishing a Communication setting out our proposals for the short and longer term. The initial focus will be on jurisdictional arrangements. We have carefully assessed Parliament's resolution of 12 October on future patent policy in Europe. I share Parliament's wish to explore all possible ways of improving the patent and patent litigation systems in the EU.
I agree that the proposed text for a European Patent Litigation Agreement (EPLA) needs significant improvements in order to bring it in line with Community requirements. I have taken note of concerns about democratic control, judicial independence and litigation costs under the current EPLA proposals. We also believe that there is a need for common implementing provisions such as uniform Rules of Procedure. And we are aware of the constitutional requirements and limitations of certain Member States. The specific concerns of SMEs also need to be taken into account.
My intention is to harness the momentum in the search for a workable compromise. The Community Patent and the EPLA are not mutually exclusive initiatives, indeed our aim should be to ensure that they eventually converge with the Community patent as the ultimate objective.
In both cases our goal is the same: a better, cheaper, more reliable patent system. And we need to deliver now in order to catch up with Europe's main competitors in terms of promotion of innovation and competitiveness. That is what industry expects from us.
But intellectual property is not just patents alone. Copyright is economically just as important.
As you may be aware, the Commission will shortly bring forward an initiative on copyright levies. There has been a great deal of discussion about this measure - not all of it has been well-informed - so I am very pleased to have this opportunity to explain my thinking to the Committee.
We have monitored the application of the Copyright Directive carefully since its adoption in 2001. We have had several consultation exercises, including on the specific question of fair compensation and copyright levies - I was pleased to send the most recent questionnaire to the Committee before the summer. As a result of this work, we have identified a number of problems.
Our point of departure is very clear. We are not in any way challenging the fair compensation provisions of the Directive. Where a rights holder suffers harm as a result of the private copy exception, they should be remunerated.
The Commission has made clear its strong commitment to creativity and innovation, and has stressed the need to have systems in place to ensure that it is properly rewarded. This applies every bit as much in the copyright industries as in any other sector.
However, we are concerned that the operation of some fair compensation schemes may be disrupting trade in the internal market. We also wonder whether consumers are getting as fair a deal as they should, and whether full account is being taken of the increased use of technological means to protect copyright protected works. We also feel that greater clarity and accountability in how schemes operate is in the best interests of all stakeholders.
We are looking for a balanced way forward that protects the interests of all concerned - rights holders, industry, consumers. We want a system of compensation that is predictable, fair and sustainable into the future.
My final remarks are on spare parts and the Commission's proposal on a designs directive. You will agree that it is not sufficient just to talk about creating opportunities for small and medium-sized firms. Here is an opportunity to do something about it.
Now that the study on safety aspects which was commissioned by your Committee has been finalised, I very much look forward to you resuming the discussion on this issue. The study confirms our understanding that the safety aspect is unrelated to the issue of design protection. I therefore hope for the European Parliament's full support for the Commission's proposal. This would have a positive effect on the debate in Council.[...]"
No doubt, in a near future we'll see some discussion concerning amendmends still to be proposed by the Commission or other stakeholders. FFII appears already being gearing up.
The Rated Patent Exchange - Another IPR Internet Project.
On the conference, a co-attendee pointed me to a new Internet project attempting to commercially establish some sort of proprietary patent exchange with specific features.
The Rated Patent Exchange or RPE is designed as a venue for a trusted community exchanging patent assets in standardized transactions. It is apparent that this project shares some aspects as they were discussed on the conference.
According to the website, a holder of a patent may make an offer of a standardised patent asset to the public by using RPE as an intermediary providing an independent survivability rating based on the official file maintained by the European Patent Office. The patent asset may be a single patent or patent application, a patent family, or even a patent portfolio. A patent seeker may make a request to a holder by using RPE as an intermediary.
RPE says they believe that a seeker does not need to explain who he is and why he buys. Therefore, they pledge never to disclose the identity of the unsuccessful seeker.
As the website in question appears to be brand-new I do not have any idea as to whether this project really works. Time will tell us.
EPO-OECD-UKPO International Conference on Patents: Realising and Securing Value.
Tonight I am blogging from London. Over the day I had attended a conference titled "EPO-OECD-UKPO international conference on patents: realising and securing value" and jointly organised by the EPO, UK Patent Office and OECD. A brief quote from the conference invitation:
"[...] Description
This conference will critically assess the challenges facing the financial sector in coping with the emerging opportunities and risks in valuing, trading and securing patents. The financial tools used to protect patents and maximise their value will be examined and appraised.
Patents are a source of revenue via licensing and sale, are used as a bargaining chip in negotiations and are used to attract external financing. Furthermore, patents increasingly appear as assets on the balance sheet.
To create an ideal platform for sharing the latest thinking in patent valuation and securitisation, examining current trends and assessing the likely changes for the future. [...]"
Presentations have been given, inter alia, on the following topics:
Appreciating the value of IP in Growth Companies: VC investor perspectives
Valuing patents and licenses from a business-strategy perspective
Entering the patent arena
Patents - From collaterals to assets
Developing patent markets and auctions - US, Europe and Asia
Monetisation of IP in the context of IFRS
Managing risk to maximise patent value
IP holding jurisdictions - a comparative analysis
Insurance for economic loss
Insurance for litigation and liability risks
The need for a patent litigation insurance scheme
The conference had been announced as of particular importance, and indeed some political heavyweights were on the list of speakers. However, Lord Sainsbury of Turville, UK Parliamentary Under Secretary of State for Science and Innovation, did not appear due to his recent resignation from Office. On the top level, Mr. Alain Pompidou, President of the European Patent Office, not only served on one of the panels but also actively participated in the conference up to its closure.
I won't go into the details of the various presentations and other contributions here: the EPO has pledged to provide the related materials of the conference on its website within a week or so.
The subject-matter of the conference seemed to be of some strategic importance: The organisers appeared to be eager to demonstrate the functioning of the patent system in a globalised economy in a very detailed view but with a broad scope going well beyond perceiving the Patent Offices merely as some sort of "patent factories" producing mass-series of patents, one after the other. However, contrary to some theories of anti-patent campaigners (which were, after all, not present at this conference). Re-iterating over and over again that the quality of patent examination is absolutely crucial the various experts from finance and insurance fields presented their approaches to potentials and problems of the patent system.
In my view it eventually become clear that we are living in exciting times: Slowly but steadily the static patent system of the 20th century is about to be replaced by some more dynamic dealing with IP values as actively utilised assets that can (and will) be traded with low transaction costs. For example, creating functioning markets for patents with substantial liquidity is a challenge, and some of the presentations were tackling this problem from one perspective or another. Another point was the field of patent insurances where experts from the insurance sector explained their views, thereby mostly rejecting or at least challenging a view according to which such insurance schemes can be successful only if they are made mandatory.
Patent Attorneys should be well aware that some of the developments sketched during the conference might - in some future, maybe in ten or fifteen years - well affect their business environment in which they operate. Maybe that later on in particular SMEs might prefer to make their deals concerning patenting of inventions no longer primarily with their local patent attorney but with some sort of a patent holding company (maybe even based on third-party money), buying inventions, doing the prosecution work in-house or, at their discretion, by outsourcing to patent attorneys, and perhaps (re-)licensing the resulting patents.
Mr. Pompidou, in an intervention after a presentation of another speaker, openly addressed this point by asking some panelists what they would think of the idea that a new sort of counsel might be emerging one day at the side of patent attorneys, this counsel guiding the client through the economic aspects of the patent utilisation, but no conclusion was reached. But I am convinced that time has come for patent attorneys not only to think about the law but also of the role of patents as economic assets.
On Average a Patent in EU-8 Countries is Worth About 3 Million Euros.
The EU Commission has published the final Lot 2 of a study on patents under the title "What are patents actually worth? - the value of patents for today's economy and society":
"[...] This Report summarizes the results of detailed technical studies about the value of patents in Europe. From the results of these studies it highlights some policy implications.
The analysis focussed on four major areas that are particularly important for understanding the impact of patents on today's knowledge economy and societies at large, viz.:
Monetary value of patents
Economic and social impact on patents, and articularly
Share of patents used for commercial and industrial purposes
Patent licensing
Creation of new firms from patents, and implications for employment
Relationships between patents, R&D, and innovation
Inter-industry differences. [...]"
The study concludes as follows:
"[...] This Report showed that the value of patenting, i.e. the difference between having a patent or not, can be quite high, and in this respect it can significantly encourage innovation. This is certainly so for the large firms, but it is even more so for smallmedium technology specialists, spin-offs or start-ups who have no other means of appropriating rents from their innovations than a legal right.
Specifically, we found that on average a patent in our EU-8 countries is worth about 3 million euros. In fact, since the distribution of patent values is very skewed only very few patents are worth this much or even more. However, we also found that the median patent is worth 300 thousand euros, which means that the typical patent can be quite valuable too.
Such high values make patents a natural target for policy. In particular, we found that there is room for increasing the economic utilization of patents, as almost one third of them are not used. In this respect, we found two policy targets for enhancing the rate of utilization of patents:
a) the large firms, which have sizable shares of unused patents. Some of them are not used, but play a strategic role, as they are employed to block the use of technology by rivals. Yet, they also produce several technologies as by-product of their large R&D activities. These 'sleeping' patents amount to a significant reservoirs of unused technologies that could be exploited by the patent holder or by other parties.
b) the small technology-based firms, which have a higher shares of licensed patents than the large firms. More generally, the so-called 'open innovation systems' (Chesbrough, 2003) can seriously help the diffusion and the widespread use of patented technologies.
We also argued that to enhance the rate of utilization of patents the most effective strategy is to encourage the growth of technology markets. Other means, like reducing the patenting costs of small firms, may only induce them to patent less valuable, and hence less usable technologies, thereby aggravating rather than solving the problem.
To encourage technology markets a first important policy target should be the reduction of transaction costs in technology trade. Our analysis showed that they produce serious impediments to patent licensing. Tools for achieving this goal range from the creation of standard contracts for technology trade that reduce contractual ambiguities; to the formation of intermediating companies that facilitate the match of buyers and suppliers; to actions that define standard prices for technologies according to their characteristics, as well as public information about technology prices.
Actions to favour the licensing and diffusion of large firm patents are also important, but they are also less obvious. The paradox here is that these firms have many unused technologies, and they would even like to license some of them. Yet, our technical studies found that either they do not make enough efforts to do so, or even when they do others are not so easy about buying technologies from a company that is seen as a threatening potential rival in the same field. The large reservoirs of technologies of these firms however calls for serious thoughts about how to make them available more widely, as other studies like Rivette and Kline (2000) have noted.
Our analysis also confirmed the conventional wisdom that there are different trends in Europe in terms of utilization of patents, effectiveness of technology markets to enhance their use, and the formation of new technology-based companies. The UK model is closer to the 'open innovation' model than Germany. France and Italy are closer to the latter, while Denmark and the Netherlands are more similar to the former. Spain is approaching the UK model. In this respect, an ideal combination of the two models is to encourage the use of large firm German technologies along with the diffusion of technologies from small firm UK technology specialists. Clearly, things are not black or white, and large firm UK technologies, as well as smaller technology makers in Continental Europe can play a role too.
A final important remark is that we uncovered a potentially interesting role for the New Member States. Hungary shows high rates of technology licensing and formation of new companies from patented technologies. This was not unexpected. Less advanced economies find it relatively easier to concoct new technologies and ideas in areas in which they have some specialization and expertise, than making costly investments in large scale downstream assets to develop them. Technology markets can then become a means by which these countries sell their technologies without having to incur these costly investments. In turn, if these markets exist and function, companies in these countries are motivated to invest in the initial ideas as they know that they can profit from selling them. They do not need to make the full downstream investments, which can discourage them to carry out the initial investment in the innovation. Israel and Ireland are good examples. [...]"
The term "open innovation" has been coined for an increasing focus of firms on knowledge produced outside their own domain either from the public sector or more importantly from other private firms including knowledge generated abroad.
UK: Will The Lords Have Their Say on Patentability of CIIs?
In some earlier posting I had pointed to a recent decision in the UK concerning the patentability of computer-implemented inventions and business model inventions. Now Out-Law reports:
"[...] The businessman behind a patent application that failed on the grounds of being a software program has applied to appeal the case to the House of Lords. [...]"
That would be a great opportunity to clarify the UK position, indeed. I have, however, no idea as to how big the chances really are the Lords taking up that case.
In my earlier posting I reported that the Italian Parliament had, 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.
Now I have seen (off-line) reports from Italian Patent Attorneys saying that, under the new Prodi Administration, the Italian Government now in charge has drafted a decree to be submitted to Parliament re-introducing application and maintenance fees on Italian patents (maintenance fees starting from the fifth annuity), utility models, and design registrations (maintenance fees starting from the second five years period).
According to one source there are even rumours to the effect that the Italian Government might plan to request payment of maintenance fees for 2006. There appears, however, to be no confirmation on the web or elsewhere.
"[...] Patent authorities from Japan, the United States and Europe will begin discussions toward the introduction of a system for mutual recognition of patents, government sources said Thursday.
If the system is realized, patents awarded in one country, such as Japan, would be issued in the other regions - in this case, the United States and Europe - as well, according to the sources.
Heads of three patent authorities, Japan's Patent Office, the European Patent Office and the U.S. Patent and Trademark Office, will sign an agreement at their Trilateral Cooperation conference to be held next Friday in Tokyo on setting up a working panel for the purpose.
The standardized application forms would be introduced for trial by the three parties from spring of 2007, with the official introduction planned for 2008, said the sources.
If the system is realized, Japanese companies, for instance, will save about 84 billion yen annually in costs necessary for taking patents in the United States and Europe, including charges for filing applications and expenses for chartered patent agents. The new process also will speed up the process of taking foreign patents considerably.
Under the patent mutual recognition system, if Japan's Patent Office approved and registered an invention, the U.S. and European patent offices would register it without examination.
According to a draft for the written agreement obtained by The Yomiuri Shimbun, patent applications, which differ among the three parties, will be standardized in 2008. [...]"
Well, a Japanese pet projekt, as far as I know. I am a little bit in doubt as to whether it will become reality in any forseeable future.
See also this Document from 2002 titled "Comments from Japan to Patent Agenda":
"[...]
Towards Realization of World Patent
In order to reduce the patent offices' workload and applicants' cost for obtaining patent, which are mainly caused by the recent increase of worldwide patent applications, the discussions on the PCT reform and the SPLT have been already conducted.
Although the PCT system, which enables filing to plural countries through one application, has been greatly successful, it is time to explore the possibility of the reform into the more efficient system through streamlining the procedures including coordination of IS and IPE.
Along with the discussion of the reform, it is also an urgent issue to review the competencies of the ISA and the IPEA from the view point of maximizing productivity of the limited resources in the ISA/IPEA to tackle the rapidly increasing PCT applications.
On the other hand, the discussion of the SPLT was resumed based on the concept of "deep harmonization in the limited items." This aims at enabling each patent office to get same search/examination results through detailed harmonization of substantive requirements in both legislative and practical aspects as a basic premise, which could be considered a promising solution to the increasing workload/cost problems.
Although mutual usage of search/examination results does not mean that patent offices automatically accept other offices' results as legally binding ones without their own examination, it could eliminate duplicated works conducted by related patent offices, to some extend. In proportion to the usability of other offices' results, applicants can enjoy the reduction of costs, not only the cost for domestic search/examination, but also the cost for corresponding actions and/or translations which have to be submitted to offices. In order to promote the usage of search/examination results, it is necessary to take measures to maintain or develop the qualities of patent offices' works in an objective manner and bring the reliability between offices.
Such trends are shown in "Modified Substantial Examination"(MSE) system which has already been introduced to some countries and has been advantageous, especially, to the small and medium sized patent offices with limited search/examination resources.
Furthermore, such trends would be accelerated by establishment of deep harmonization of substantive requirements, which include practical level, through the SPLT, and finally would realize "mutual recognition" as a binding nature, which would be automatically accepted from other offices' examination result. This mutual recognition mechanism can be especially applicable in an effective manner to Paris route applications.
With regards to PCT route applications, the usage of ISR and IPER at the national phase would be facilitated in the framework to be established by the SPLT. Moreover, if the practice under the SPLT is incorporated into the practice under the PCT system and the both practices become fully harmonized, it would be possible to recognize automatically IPEA's decision as a binding decision in every national phase.
Recent developments of information technology as well as machine translation have gradually prepared the technological infrastructure as a basis for mutual use/recognition of search/examination results. This infrastructure will enhance facilitated access to prior art databases in patent offices and private sectors and enable even small patent offices to have an equal search environment that will make their search/ examination abilities homogenized with other large-sized offices.
Such measures with workload/cost reduction may contribute to a present approach toward ultimate realization of world patent system, which allows patent rights valid in each country through one search/examination procedure based on the same patent requirements among countries on respective applications basis with the same contents. If mutual recognition system is introduced as a multilateral system, we should put forward future patent system which is not the centralized office collecting the present offices' facilities but the virtual office based on a networked linkage of the present offices' facilities.
This virtual world patent system, which could minimize the workload/cost, could also enable possible reallocation of the unevenly distributed workload in a detailed and flexible manner. At that stage, it would be possible to explore more progressive solution of the review of the competency for PCT route applications and of the question which country's search/examination results should be made available first in Paris route applications. It is no doubt that this principle could be applicable not only to international applications but also to domestic applications, leading to the possibility to make domestic workload shared with other offices. [...]"
"[...] The way patent disputes are resolved could be radically reshaped by plans drawn up by senior judges.
The proposed rules would cover a new unified European Patent Court and impose strict time-limits on litigating parties. The aim would be to resolve disputes - including any appeal - within two years.
The court would consider evidence and arguments supporting the merits of a dispute mostly on paper. Oral hearings would generally be restricted to as little as one day. [...]"
The text of the Second Venice Resolution is available here.
I am very much in doubt as to whether it really is a good idea to impose ultra-short deadlines on the proceedings. The more pressure is exerted on the parties and their representatives, the more money will have to be spent in early stages of the proceedings in order to make sure that no option is left out. If the Rules of Procedure are tailored more liberal, the parties are free to concentrate at the beginning on those aspects they consider most relevant, knowing that they still can file other observations later on. If the case can be decided on the basis of such essential key facts, no money was wasted in dealing with some more far-fetched aspects of the case.
On the other hand it does not come as a surprise that exactly a council of judges makes such a proposal as conferred with the Second Venice Resolution. It is entirely to the benefit of the courts if harsh Rules of Procedure can be enforced. Would it be also an advantage for potential parties to the proceedings and for the general public?
Group B+ Draft Patent Harmonisation Treaty: Substantive Differences Remain.
From Mr. William New and Mr. Tove Iren S. Gerhardsen on IP-watch.org:
"[...] The wealthy members of the World Intellectual Property Organization (WIPO) have created a draft patent harmonisation treaty to be negotiated outside WIPO in the hope of removing basic differences in national and regional practices. But while the countries say they have the momentum and political will to change their laws, the draft text obtained by Intellectual Property Watch shows that substantive differences remain.
The draft patent treaty text, drawn up the United Kingdom, and based on several pre-existing documents, shows there is substantial work left to do to bring the so-called Group B+ members to accord. The group follows WIPO structure, where developed nations act collectively as Group B, plus additional countries represented at the European Patent Office.
A PDF version of the Chair's text is available here.
As the negotiations on the SPLT at the WIPO theatre appear to be stalled the recent report is bad news for further patent harmonisation policy. It looks as if no progress is likely to be expected very soon.
U.S. Computer & Communications Industry Association on Patent Reform.
On November 01, 2006, the Computer & Communications Industry Association (CCIA) has hosted a briefing seminar on Capitol Hill and released a new report on the current patent crisis and how to reform the system authored by Mr. Brian Kahin, Senior Fellow at the Computer & Communications Industry Association, where he advises on issues in standards and patent policy. He is also Adjunct Professor and Research Investigator at the University of Michigan School of Information, where he recently directed a project on Patents and Diversity in Innovation. He was previously founding director of the Harvard Information Infrastructure Project, General Counsel for the Interactive Multimedia Association, and Senior Policy Analyst at the White House Office of Science and Technology Policy (1997-2000). He has edited ten books on the Internet and the digital economy.
"[...] 'Patent reform has been paralyzed by deep divisions in perspective between pharmaceutical interests and IT,' said Kahin, 'but in reality the reforms on the table are targeted at symptoms rather than underlying structural problems. The system is broken, because it is currently subsidizing pharmaceuticals at the expense of IT, especially software.' Among other things, the report advocates raising the threshold standard of patentability so that it is no longer judged by the person of 'ordinary' skill, a standard ill-suited to today's innovation-driven economy. [...]"
However, surely Mr. Kahin should not blindly be identified with FFII policy. His recent proposals appear to be moderate and well worth to be considered carefully. At least Mr. Kahin is miles away from any patent abolitionist activities as provided by Mr. Pilch, Vice-President of FFII.
New UK Case Law on Patentability of CIIs (cont'd.).
In my earlier posting I had reported that The Honourable Mr. Justice Mann of The High Court Of Justice - Chancery Division / Patents Court - in London had handed down a Decision cited as [2006] EWHC 705 (Ch) dated April 03, 2006. The decision was about UK application GB 0314464.9 filed as a UK national phase of PCT Application PCT/AU2001/001526 and titled "Automated method of acquiring the documents necessary to incorporate a company" which had, on March 22, 2005, previously been rejected by the UK Patent Office. In April 2006, Judge Mann had dismissed the Appeal filed by the Applicant.
I am now a bit late to mention that there is a further Decision in the Supreme Court of Judicature Court of Appeal (Civil Division) on Appeal from the High Court of Justice Chencery Division (Patents Court) concerning this matter - Neutral Citation Number: [2006] EWCA Civ 1371 - given by The Hon Mr Justice Lewison, The Rt Hon Lord Justice Jacob, and by The Rt Hon Lord Justice Neuberger. The matter wals delat with together with another case in re Aerotel. A patent on a method of making a telephone call from any available telephone was allowed (in re Aerotel) whereas an automated method of acquiring the documents necessary to incorporate a company was ruled non-patentable. This does not come to me as a surprise.
In the court Decision there is also a brief remark concerning a certain Decision of the German Federal Supreme Court ("Bundesgerichtshof", "BGH"):
"[...] Two cases of the German BGH were brought to our attention. The first was Sprachananlyseeinrichtung (language analysing device) 11th May 220 X ZB 15/86 GRUR 200 1007, 454 OJ EPO 8-9/2002. The headnote accurately states the holding:
'(a) An apparatus (computer) which is programmed in a specific way has technical character. The applies even if texts are edited on the computer.
(b) For the purpose of assessing the technical character of such an apparatus it is not relevant whether the apparatus produces a (further) technical effect, whether technology is enriched by it or whether it makes a contribution to the state of the art.'
For reasons we confess we do not fully understand the BGH considered that the case was not concerned with the computer program as such exclusion. It therefore did not find it necessary to consider the EPO case law on the point.
Significantly, in the more recent case of Jesco Schwarzer 28th September 2004 17 W (pat) 31/03, the BGH appears to have some reservations about Sprachananlyseeinrichtung, refusing to extend it to the image processing system of the claim because it was basically a claim to mathematical method as such even though it would implemented by a computer. Most significantly, however, the BGH declined to follow Hitachi (see para 3.2.2.). [...]"
Well, but the Decision 17 W (pat) 31/03 appears not to originate from BGH but from the Federal Patent Court ("Bundespatentgericht").
Mr. Manny W. Schecter, IBM: "Open Collaboration Is Medicine for Our Ailing Patent System".
Mr. Manny W. Schecter is associate general counsel, Intellectual Property Law for IBM Corp., Armonk, N.Y. In view of the Peer to Patent Project he recently wrote:
"[...] Litigation of invalid patents drains the economy of resources that would be better spent on innovation. One way to improve patent quality is gather public submissions of prior art that patent examiners might otherwise overlook. The author discusses an open source project for collaborative peer review of prior art that is already underway, providing responses to concerns that have been raised about such a system.
[...]
Project Concerns and Solutions.
Concern: Peers lack the knowledge to effectively participate in the review process.
Explanation: Peers need not attempt to substitute for patent practitioners. Plain language patent education and process instruction will be provided and the rating system will deemphasize the impact of poor prior art reference submissions.
Concern: Peers will not participate because they are not paid to do so.
Explanation: The same was once said about open source software developers that have since collaborated extensively. The broad public impact of wrongfully issued patents will catch the interest of many potential peers, including peers from businesses, individuals, professors, students, etc. Peer review participation would appear to be an excellent university participation project.
Concern: Peers will cause their employers to be subject to enhanced damages for willful infringement.
Explanation: Peers will not be reviewing issued patents. One cannot be liable for willful infringement unless one has knowledge of an issued patent. At most, participation as a peer will demonstrate knowledge of a published patent application and the law specifically excludes enhanced damages for provisional royalties relating to knowledge of published patent applications. In addition, peers will be able to participate anonymously, many potential peers are not employed by businesses fearing willful infringement, and pending patent reform legislation would requires one be on formal notice of infringement or have deliberately copied a patented invention to willfully infringe.
Concern: Patents issued after the review process will enjoy an enhanced presumption of validity.
Explanation: The reviewed patents will be treated like any other issued patents. Use of prior art made of record will not be barred for demonstrating invalidity in subsequent litigation and the presumption of validity will remain unchanged (that is, the review process does not change current law in this regard). Of course, the likelihood that the issued patents will be found valid will be increased because of the concomitant increase in the likelihood that the best prior art references have already been appropriately considered.
Concern: Peers will flood patent examiners with large, unmanageable volumes of prior art.
Response: As already described, only the ten best submitted prior art references will be forwarded to patent examiners. In addition, because the comments explaining the references will also be forwarded, patent examiners should be able to quickly determine the relevance of each reference. Finally, it is likely that peers will only submit prior art references for the most controversial - not all -patent applications.
Concern: Applicants' fear of inequitable conduct will cause them to forward to patent examiners all prior art references identified by peers. That is, applicants might forward to patent examiners the references beyond the ten best identified by peers.
Response: Applicants cope with this issue today. Applicants that become aware of large numbers of prior art references already determine whether to forward all of same to patent examiners, or whether to eliminate forwarding of some references as irrelevant or merely cumulative. Furthermore, applicants will not automatically be forwarded all of the references identified by peers, thereby reducing the likelihood that they could be found to have committed inequitable conduct. Finally, during the pilot, it would be contrary to the spirit of the project to charge an applicant with inequitable conduct after applicant's having consented to protest to help identify the best prior art references for patent examiners.
Concern: The review process will delay patent examination and, possibly, patent issuance.
Response: Patent application pendency is a legitimate concern, but given the broad impact of invalid patents not one that should trump patent examination quality. There is a time limit for protest measured from the publication date of patent examinations. Generally, prior art references will be forwarded to patent examiners before substantive patent examination begins, or very shortly thereafter. As a result, patent examination efficiency, and patent application pendency, may actually improve as patent examiners will be able to more quickly "zero in" on the best prior art references. The pilot will test the efficiency of the review process, and the focus on patent applications for software inventions should ensure that the pilot itself does not negatively impact pendency (because pendency is already so long for software patent applications).
Concern: Participants will subvert the process for their own benefit.
Response: The same concern applies to our current patent system. Patent applicants already game the patent system in various ways. Subversive acts can be addressed as they are discovered. A code of conduct can be created to describe proper behavior, internet addressing can be used to trace improper behavior of anonymous peers, and discrediting prior art references to benefit one's own patent applications should be considered inequitable conduct.
Concern: The submission of prior art references, to the extent done outside of the PTO, will violate copyright.
Response: Patents are not copyrightable and the forwarding of non-patent references to patent examiners is not restricted by copyright. In addition, the principle of fair use may protect the copying and distribution of copyrighted references strictly for the review process, education about proper handling of references can be provided, consent can be obtained for the handling of references, and web links can be used where available instead of making and forwarding actual copies of references.
[...]"
Provided that such kind of open collaboration would thrive in the coming ten years or so - what would that mean for the business model(s) of patent attorneys and law firms? Would there be any effect at all?
Issue 10/2006 of the Official Journal of the EPO has been Published on the EPO Website.
A few days ago, Issue 10/2007 of the Official Journal of the EPO has been published on the EPO website.
This issue brings Decision T 190/03 - 3.X.X - Partiality/XXX stating that the existence of partiality under Article 24 EPC can be determined on the basis of the following two tests:
Firstly, a "subjective" test requiring proof of actual partiality of the member concerned.
Secondly, an "objective" test where the deciding Board judges whether any circumstances of the case give rise to an objectively justified fear of partiality.
In the absence of exceptional circumstances, any procedural error in admitting requests would relate simply to flaws in the steps that the Board necessarily has to take to reach a decision. Thus, under the objective test, not admitting amended claims, regardless of whether the Board has correctly used its power or discretion to do so, does not give rise to any objectively justified fear of partiality.
Altogether, it appears as if is is not that easy to bring down any Member of some Board of Appeal (BoA) unsympathetic to one of the parties involved.
Another Decision of the Technical Board of Appeal 3.4.3, T 514/05 – 3.4.3 dated September 08, 2005, says that the use of other means of communication (Rules 24(1) and 36(5) EPC) must be expressly permitted by the President of the EPO, before parties may use those means of communication for filing documents with a department of the EPO, including the EPO Boards of appeal. In particular, an appeal filed via epoline cannot have any legal effect absent explicit permission of the President of the EPO.
A notice from the EPO dated July 04, 2006, concerning the exclusion from patentability under Rule 23d(c) and/or Article 53(a) EPC - human embryonic stem cell culture - explains that in its decision T 1374/04, Technical Board of Appeal 3.3.08 has referred questions to the Enlarged Board of Appeal pursuant to Article 112(1)(a) EPC. They essentially pertain to the scope of the exclusions from patentability under Rule 23d(c) and Article 53(a) EPC. One of the key questions is whether claims directed to products which could be prepared exclusively by a method which necessarily involved the destruction of human embryos are patentable under Rule 23d(c) and/or Article 53(a) EPC. The case is pending under G 2/06. Proceedings before EPO first-instance departments (examining and opposition divisions) will be stayed until issuance of the decision of the Enlarged Board of appeal only where the two following conditions are met:
the stay of proceedings has explicitly been requested by at least one of the parties to the proceedings, and
in the opinion of the examining or opposition division, the outcome of examination or opposition proceedings depends entirely on the decision of the Enlarged Board of Appeal.
BTW and well beyond the contents of the Official Journal, Mr. Tibor Gold on behalf of CIPAwrites that the Rapporteur of the EPO's Enlarged Board of Appeal requested the President to answer questions arising from this appeal concerning human embryonic stem cells. The President did so on 28 September 2006, arguing that Rule 23d (c) EPC has immediate effect and thus applies to the future consequences of situations which arose under the former law. Since the provision has immediate effect, it applies to European patent applications and European patents filed before its entry into force. And, furthermore, the principle of legitimate expectations and/or acquired rights cannot be extended to the point of generality preventing Rule 23d (c) EPC from applying to the future effects of situations which arose under earlier rules. Moreover, Mr. Pompidou argues that Article 52 (1) EPC does not enshrine a general principle of the narrow interpretation of exclusions from patentability (emphasis added, AHH). And, again according to Mr. Pompidou, when Article 53(a) EPC is applied, it would appear that a judgment by the relevant departments on the issus of ordre public and/or morality is necessary and a variation in time of ordre public or morality may be taken into consideration. This contrasts with the situation when Rule 23d (2) EPC is applied, because of the legislator has predetermined a genuine European ordre public and morality in substance and in time (absolute patenting prohibition - moral consensus). The President further says that Article 53(a) EPC is only contravened where the conflicting norm constitutes one of the fu
oral proceedings have been held.
follow an abolitionist line, including