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Patent Attorney Axel H Horns' Blog on Intellectual Property Law.

 

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Sunday, December 31, 2006

 

2006 Review.

I think it is proper to say that in view of Intellectual Property politics in Europe 2006 was a year of reflection, not of action. There have been numerous public consultations, the INTERNAL LINKPublic Hearing on Future Patent Policy in Europe conducted by the European Commission and, on a UK national level, INTERNAL LINKGowers Review on Intellectual Property, being the most prominent examples of them. Some other public consultations are listed INTERNAL LINKhere.

And what appeared to be the result of them?
  • At first, I would like to note down that those times appear to be over when anti-patent campaigning groups managed to exploit public consultations by motivating thousands of their followers to send in very similar statements e.g. against patentability of computer-implemented inventions derived in a boilerplate fashion from a few templates provided and distributed over the Internet by those groups, thereby overwhelming in sheer quantity any other groups of stakeholders not so savvyly utilising the Internet for campaigning. The responses obtained in 2006 look as if they might represent a broader range of stakeholders than that what was received, for example, in response to the EXTERNAL LINKconsultation of the EU Commission on the patentability of computer-implemented inventions more than six years ago.

    The said anti-patent groups, some of which should be better described as anti Intellectual Property organisations, suffered a major problem in 2006: They had no actual and reliably workable campaigning project. The year 2005 saw the final showdown on the EU Draft Directive on the patentability of computer-implemented inventions or, as some prefer to say, software patents. There was nothing like that this year. Some tried to create a new campaigning project around the EPLA by arguing INTERNAL LINKthat the entire EPLA is nothing else than a most sinister plan to make software patents enforceable throughout Europe. But the argument was not only pointless (that alone would not have consititued a bar to exploit it) but also long winded, difficult to communicate and thus probably not very well suited to stir emotions for mobilising the masses again as they had managed to implement in the previous years. Others fancied some radical politics of patent law abolishment (INTERNAL LINKlike Mr. Hartmut Pilch, former Vice-President, now Treasurer of FFII) or of shutting down the European Patent Office (INTERNAL LINKlike Mr. Pieter Hintjens, President of the FFII). It appears to me as if none of these proposals has won the hearts of a majority of the crowd. Now they are EXTERNAL LINKdoing some research on how to go on in 2007. Furthermore, a INTERNAL LINKpan-European network of Pirate Partys has emerged with unclear prospects, a part of them fostering patent abolition projects, others demanding reforms. Patent people should stay tuned.
  • Secondly, it has become apparent that many users of the patent system in Europe would very much like to see the EXTERNAL LINKLondon Agreement to enter into force as soon as possible in order to reduce the translation costs for European Patents. There is also considerable support for the EXTERNAL LINKEuropean Patent Litigation Agreement, or EPLA. Although it was a blow for Mr. McCreevy, the support for his European Community Patent pet was virtually nil. However, that does not mean that the London Agreement or EPLA will become reality very soon. At least with regard to the EPLA but perhaps also in view of the London Agreement, there are bitter and entrenched backstage fights between various vested interests. Also Mr. McCreevy had to admit feeling that INTERNAL LINKthe patents area is a minefield, fraught with difficulties.

    There might, however, be some reasons for cautious optimism with regard to the London Agreement because of the French Constitutional Court INTERNAL LINKhas given its nod so that the crucial ratification by France might happen in 2007. But INTERNAL LINKthe EPLA is still in trobled waters.
  • Thirdly, it appears that the sectoral topic of reforming the law of patents on computer-implemented inventions is virtually dead. INTERNAL LINKGowers Review recommends that a policy of not extending patent rights beyond their present limits within the areas of software, business methods and genes should be maintained.
The actual use as well as the political support of the patent system by established companies in more traditional branches of the industry appears to be unbroken, and the numbers of patent filings in many countries are still on the rise. Moreover, I have the impression that as much as China launches its self-transformation from something like an extended workbench of the old industrialised west into a knowledge society in its own right, patent awareness in China by local Chinese companies might steadily improve.

So, let's take full steam ahead and damn' the torpedoes?

Not exactly.

The fact that various groups of anti-patent campaigners did not gain much ground in 2006 does not necessarily mean that there haven't been any problems with the present system of IP protection. While there are also severe hotspots in Copyright law, in particular in view of negative side-effects of DRM protection and of the anticipated INTERNAL LINKWIPO Broadcasting Treaty, I shall confine my discussion now to patent matters.

In particular, there appears to be a problem where no workable solution seems to be devised so far. As it is (or should be) well known, the patent system has four interfaces to the general public:
  • A first interface directed towards those who have invented something and are seeking for patent protection (patent application).
  • A second interface directed towards those who want to enforce a patent (patent litigation).
  • A third interface directed towards those who want to assess the validity of a patent by establishing the proper relationship between claim language, on the one hand, and prior art, on the other hand, anywhere outside of the Patent Office (prior art search, opposition, and nullification procedures).
  • A fourth interface directed towards those who want to reseach their freedom to operate with regard to some piece of technology and are seeking advice as to whether or not that technology might fall under any to be unearthed patent of some third party (patent reconnaissance and analysis).
Whereas the first and second interfaces are well recognised and developed further, the third, and very in particular, the fourth one look as if they would still suffer a somewhat murky and shadowy existence.

One of the most exciting projects within this context undertaken in 2006 was, in my humble opinion, launching the INTERNAL LINKCommunity Patent Review. It attempts to attack specific scaling problems concerning the third interface as mentioned above. I do not know as to whether ot not it will eventually become a success story. But it is utmost interesting because the general principles underlying its approach might in future also be utilised for improving the fourth interface of the patent system.

Several problems associated with those second and third interfaces of the patent system have caused much trouble in the past. There is a broad feeling that, in view of the third interface, scrappy patents might perhaps have been granted by various Patent Offices in the world during the past decade because of their unability to cope with massive surges in order of magnitudes of patent applications and prior art. In Europe, the Patent Offices seem to be highly aware of the perils for the entire patent system coming from that direction, and in particular the European Patent Office has made public INTERNAL LINKseveral efforts to improve the situation. But with regard to the fourth interface there appears to prevail silence, bewildering and driving away from the patent system in particular high-tech start-ups.

Another interesting tendency that become visible in 2006 was the INTERNAL LINKincreasing interest of the financial world in the system of Intellectual Property. Insurance companies and even banking companies doing technical research (e.g. in the context of risk modelling) are discovering patenting as a viable business tool, and patent holding trusts, sometimes denounced as "patent trolls", are busy to create new ways of funding research. Workable patent auction formats have emerged conveying the prospect of creating more liquidity in patent-based technology markets.

With regard to the day-to-day business of advancing international treaties on the field of patent law, no substantial progress has been achieved in 2006. The WIPO approach to a Substantive Patent Law Treaty appears to be quite dead, and more informal attempts INTERNAL LINKto gather together a coalition of the willing might also be futile.

Note to self: In my view patent attorneys appear to be traditionally very concentrated on the first and second ones of the four interfaces as mentioned above, risking to lose influence by neglecting the two others. Moreover, the profession seems not yet to have grasped the potential changes of the attorney-client relationship if trusts based on venture capital should step in as intermediator between the engineers and other technical staff doing the actual inventions, on the one side, and the patent authorities on the other side. Very few patent attorneys appear to be really interested in economics, e.g. patent valuation problems and due diligence work. What will happen to them if the attorney-client relationship should, in future, no longer be determined by the technical management of the client companies alone but also by managers with MBAs running patent financing trusts? And, on the Internet there is still few contents concerning Intellectual Property originating from the patent people. Journalists and politicians querying their respective favourite search engine for IP-related topics will also in 2007 most probably get a skewed and biased impression of the real situation. Hiring an advertising agency does not look like a viable solution. The factual requirement of our time to act not only as a practitioner but also as a publisher without prospect of immediate remuneration for such activities has not been acknowledged widely in the profession. Many websites of law firms in the field resemble something like a static prospectus turned into a web presence, not content usable in the given context. Statistically, blogging (or something like that) remains a rare exception.

I wish the readers of my blog a happy and prosperous new year 2007.

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Friday, December 22, 2006

 

Issue 04/2006 of epi-Information Now On-Line.

The recent issue 04/2006 is ready for download EXTERNAL LINKhere (PDF).

This issue brings a report on the 61st epi Council Meeting held in Istanbul, 16th and 17th October, 2006. Remarkably they say that "bearing in mind the advances in electronic communication, and perceived difficulties in electronic filing, Council re-established the Online Communications Committee". Er, what does that mean in cleartext? Where there are fumes there must be fire, at least some kind of smouldering. Probably despite various success stories launched by the EPO, the epoline on-line filing system runs somehow less than optimal. And, Council decided that the compromise package solution for the SPLT proposed by the Chair of the Group B+ countries, is deemed not acceptable.

The Report of EPO Finances Committee comprises some interesting discussion of the EPO's financial situation:
"[...] The EPO's financial position could be good, or it could be bad, depending upon your outlook. The accounts for 2005 show a patent office that is earning more than it is spending and it appears that the EPO is heading for a large operational surplus in 2006. However, the accounts for 2006 will have to be presented under International Financial Reporting Standards [IFRS] and the 2005 accounts will be re-stated under IFRS at that time for comparison. On an IFRS basis the accounts will at first sight look poor since several conditional items currently treated as income or assets will not be permitted to be so treated in future.

For example, pre-payments [e.g. refundable fees such as examination fees] will not be treated as income under IFRS until the relevant service is performed.

Also, under IFRS, assets can only include reasonably certain amounts due. This means that the present value of future income from renewal fees cannot be factored into the EPO's 'wealth'. The abandonment of renewal fees by Italy, and the reduction in renewal fees by Switzerland, show this approach to be prudent.

This will result in the EPO showing more liabilities than assets in the 2006 accounts [i. e. it will appear insolvent]. The accounts can carry notes showing additional items off balance sheet to give a clearer picture than the balance sheet alone - but many people place an undue weight on numbers and insufficient weight on what lies behind the numbers. In summary the EPO could appear anything between: -
  • a solvent patent office with a well run pension fund
  • an under provided pension fund with an inadequate source of income.
Given the EPO's monopoly status and the apparent continuing growth in demand, the latter assessment would appear somewhat pessimistic. [...]"
Furthermore, there is an article by Mr. W. Noske "Überlegungen zur Strategie weltweiten Patentierens" ("Considerations on a strategy for world-wide patenting") but in German only.

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OHIM Drowning in "Disproportionate Cash Reserves"?

A EXTERNAL LINKrecent press release taken from the RAPID database:
"Commission proposes regular review of EU trademark fees

The European Commission has set out, in the form of a Communication, its vision for the long-term financing of the EU agency responsible for granting EU-wide trademark and design rights, OHIM (Office for Harmonization in the Internal Market, located in Alicante, Spain). The Commission proposes the introduction of a regular and automatic review of trademark fees in order to ensure a reasonable balance in OHIM's budget. In the shorter term, this should mean lower trademark fees and a reduction in OHIM's surplus cash reserves.

Internal Market and Services Commissioner Charlie McCreevy said: 'OHIM is showing that it is keenly aware of the need to run its affairs efficiently and offer value for money. In a way, it has become a victim of its own success. I welcome a structural solution to avoid disproportionate cash reserves and other future imbalances in the OHIM budget. This approach is also great news for businesses, which will soon be able to get EU-wide trademark protection at even more attractive rates.'

Why introduce a structural fee reform?

As a self-financing EU agency, OHIM has a budget that is independent from the Community budget and is subject to the requirement that the revenue and expenditure in the budget shall be balanced. The budget of OHIM is mainly funded by the fees that businesses have to pay for its services.

OHIM is generating substantial cash reserves arising from several causes including steadily rising numbers of trade mark and design applications, increased productivity and improved efficiency of the agency, as well as growth in e-business. Despite recent fee reductions these cash reserves are expected to grow further in the coming years. By the end of 2005 cumulative cash reserves reached more then EUR 130 million, while cumulative reserves could easily reach EUR 375 million by the end of 2010 and nearly EUR 700 million by the end of 2016. A significant annual surplus which causes structural year-on-year increases in the accumulated cash reserves is not acceptable in the long run. [...]"
EXTERNAL LINKWiener Zeitung reports [in German only, sorry] that not all EU Member States are happy with this proposal of the EU Commission. Spain is said to oppose, and other countries fear that if the Community Trade Mark takes too much credit for its operations then the money for national trade mark institutions might be reduced to a trickle, drying up trade mark departments of national Patent Offices.

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Amended Implementing Regulations for EPC 2000.

The INTERNAL LINKAmended Implementing Regulations for EPC 2000 as agreed by the Administrative Council at its meeting on December 07, 2006, are available online:
"THE ADMINISTRATIVE COUNCIL OF THE EUROPEAN PATENT ORGANISATION,

Having regard to the Act revising the Convention on the Grant of European Patents of 29 November 2000 (Revision Act, MR/3/00 Rev. 1) and the decision of the Administrative Council of 28 June 2001 adopting the new text of the European Patent Convention (EPC 2000),

Having regard to the decision of the Administrative Council of 12 December 2002 adopting the Implementing Regulations to the EPC 2000,

Considering that amendments of the Implementing Regulations to the EPC 2000 as adopted on 12 December 2002 are necessary and useful in the light of more recent developments,

Having regard to the European Patent Convention (EPC), and in particular Article 33(1)(b) thereof, On a proposal from the President of the European Patent Office,

Having regard to the opinion of the Committee on Patent Law,

HAS DECIDED AS FOLLOWS:

Article 1
The Implementing Regulations to the EPC 2000 shall be amended to read as shown in the Annex to this decision.

Article 2
The Implementing Regulations to the EPC 2000 shall apply to all European patent applications, European patents, decisions of departments of the European Patent Office and international applications, in so far as the foregoing are subject to the provisions of the EPC 2000. However, Rule 62 shall only apply to European patent applications and international applications entering the European phase filed on or after 1 July 2005.

Article 3
This decision shall enter into force upon entry into force of the revised text of the European Patent Convention in accordance with Article 8 of the Revision Act and amend the Implementing Regulations adopted by the decision of the Administrative Council of 12 December 2002.

Done at Munich, 7 December 2006"
After of the revision of the articles of the EPC by the EXTERNAL LINKDiplomatic Conference in 2000, a complete overhaul of the EPC Implementing Regulations was carried out. The EXTERNAL LINKoriginal version of new Implementing Regulations to the EPC 2000 was adopted by the Administrative Council on 12 December 2002.

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[UPDATE 2006-12-22 17:45] The EXTERNAL LINKImplementing Regulation as well as the EXTERNAL LINKRules Relating to Fees are now available also on the website of the EPO in portrait A4 format.

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Thursday, December 21, 2006

 

Issue 12/2006 of the Official Journal of the EPO has been Published on the EPO Website.

Today, EXTERNAL LINKIssue 12/2006 of the Official Journal of the EPO has been published on the EPO website.

This issue comprises, inter alia, a EXTERNAL LINKDecision of Technical Board of Appeal 3.2.03 dated March 23, 2006, T 1040/04 - 3.2.03 concerning amendment of a patent granted on a divisional application:
"[...] The following question is referred to the Enlarged Board of Appeal:

Can a patent which has been granted on a divisional application which did not meet the requirements of Article 76(1) EPC because at its actual date of filing it extended beyond the content of the earlier application, be amended during opposition proceedings in order to overcome the ground of opposition under Article 100(c) EPC and thereby fulfil said requirements? [...]"
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Tuesday, December 19, 2006

 

UK About to Allow Law Firms to Raise Capital from Outside?

A EXTERNAL LINKsnippet from the website of EXTERNAL LINKKerma Partners:
"[...] The UK government's proposal to allow law firms to raise capital from outside investors has received somewhat muted response from the legal community. On the one hand there is a small group who are keen to explore this possibility, on the other a much larger group who see it as of little interest to them. [...]"
Irrespective of whether or not one can agree to such proposals, in any case they surely would lead to a major change in the landscape of law business. Tendencies towards commodisation might then be on the rise, and smaller firms would get more problems under the proposed regime unless they are highly specialised. However, I don't believe that on the long run any such de-regulation can be avoided at all.

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Friday, December 08, 2006

 

Mr. Hintjens, FFII: Patent System to Vanish into thin Air within Ten Years if Certain Conditions not Met.

As Dr. Krempl EXTERNAL LINKreports in Heise Newsticker [in German only, sorry], Mr. Pieter Hintjens, President FFII, has announced at the occasion of his presentation at the EXTERNAL LINKIP Summit that he expects the patent system to vanish into thin air within ten years if the proponents of the present system of protection to not undertake, inter alia, to stop their polemics, solve conflicts of interests within their own ranks and return to the basics of the incentive procedures of Intellectual Property rights.

So, we are all lucky, noticing that at least for now Mr. Hintjens is President of FFII and not of any European state.

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[UPDATE-0 2006-12-10] Perhaps EXTERNAL LINKthis posting provides a more precise description of Mr. Hintjens' statement than Dr. Krempl's report.

[UPDATE-1 2006-12-10] There is an interesting EXTERNAL LINKreport on the IP Summit by Mr. Joff Wild of IAM. Just two quotes:
"[...] Someone else to speak at the event was Pieter Hintjens, the president of the FFII. Having heard him and spoken with him, I still do not agree with what he says. I think he ignores much of what has happened in countries such as the US when he makes his arguments, his view of SMEs is too narrow when he underplays their need for patent protection and I am not sure he completely understands what patents can and cannot do. However, Hintjens is definitely not a raving anti-capitalist and he is not anti-IP in general. He has a problem with the patent system, or what he perceives to be the patent system, mainly because he thinks it harms businessmen - for that is what he is - such as him. He is clever, articulate and holds his beliefs sincerely. As such, he cannot be dismissed. He makes his points powerfully and one of them is that groups such as the FFII have a great deal of support, and are very well organised.

As recent events have shown, the IP community cannot dismiss the FFII and it will have to develop some powerful arguments to defeat a message that many in Europe find enticing. In other words: what benefits do patents and patenting bring? How do they create wealth? How do they ensure employment? How do they help companies to grow? How do they add to the greater good? And so on. The IP community has yet to develop such arguments. It needs to do it quickly. The good news, however, is that such arguments can be made very well if there is a will to do so. [...]"
And, in the context of lack of progress towards EPLA / London Agreement:
"[...] From conversations I had with a few in-house people in Brussels, I am not sure how long they are going to be happy giving work to attorneys who are resisting changes that companies believe will be of significant benefit. After all, is it wise to employ someone who you believe does not have your best interests at heart? [...]"
Well, those times where patent attorneys could even dare to think of defining themselves as some sort of notabilities appear to be definitively over.

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Should we have a European Version of a Peer-To-Patent Pilot?

As I had INTERNAL LINKreported a few days ago, the UK Gowers Review published earlier this week comprises a somewhat bold proposal, namely to make UK Patent Office conduct a pilot of Beth Noveck's Community Patent Review in 2007 in the UK to determine whether this would have a positive impact on the quality of the patent stock.

The UK Government had asked Mr. Gowers to lead an independent review to examine the UK's intellectual property framework. On the basis of such starting point I understand that it must be completely clear that there was no mandate for Mr. Gowers to investigate or even discuss any measures specifically on EU or EPC level. However, the question which - at least in my view - is immediately arising from his proposal concerning a pilot of Beth Noveck's Community Patent Review in 2007 is whether it should be installed - additionally - on a pan-European scale at the European Patent Office (EPO). This would lead to a much larger testbed than any project strictly limited to the UK.

Ms. Noveck has published an interesting article on the EXTERNAL LINK"Peer To Patent" project in the Havard Journal of Law & Technology which is available EXTERNAL LINKon-line. Ms. Noveck writes primarily in view of the situation in the U.S.:
"[...] There is a crisis of patent quality. Patents are being issued that are vague and overbroad, lack novelty, and fail the constitutional mandate '[t]o promote the Progress of Science and useful Arts.' Low quality patents generate excessive litigation and confer the economic rewards of monopoly on patent holders while providing little benefit to the public. [...]"
Her starting point might be encircled by this further quote from her article:
"[...] We have arrived at a unique moment in history when five factors converge to make this kind of reform proposal possible [bullets added, --AHH]:
  • first, the state of patenting has become so problematic as to meet with almost universal opprobrium;
  • second, the majority of patent applications are published after eighteen months whether ultimately granted or not, providing the legal foundation for open review;
  • third, expert public participation in the form of peer review is widely practiced in the public sector and therefore is a familiar model;
  • fourth, we have social reputation and networking technology that makes open review on this scale possible; and
  • fifth, we have the necessary expertise with collaborative decision-making systems to be able to design and construct a new model of administrative practice for the USPTO.
This Article describes the patent system's information deficit problem and outlines a detailed draft blueprint for the Community Patent Review pilot. [...]"
She justifies her approach in particular as follows:
"[...] In other domains, the combination of open technology and well-defined process has successfully enabled a distributed group to share expertise. Open self-selection, rather than closed peer review, makes it possible for Wikipedia to harness public knowledge and create an encyclopedia with over one million entries of quality comparable to that of traditional, centrally edited encyclopedias. New technology has enabled Amazon to create a marketplace, not just for the sale of goods and services, but also for the aggregation of expertise and recommendations about those goods and services. CNET offers a platform to share expertise about electronics and technology. The Internet Movie Database, the largest repository of information about cinema, draws much of its content from volunteers submitting data about films and movie stars. The Public Library of Science, the pioneering open access publisher of scientific journals, is launching PLoS ONE, a distributed knowledge network to enable scholars of biology and medicine to discuss published research literature.

These experiments with online collaboration have shown that often 'ordinary' people possess extraordinary knowledge that they are willing to share when it is easy to do so. Making participation open and subject to self-selection can leverage not only the 'wisdom of the crowd' but also its enthusiasm. Experience with the tools now available is undermining traditional assumptions about how expertise must be organized and pointing the way toward the use of open models of scientific review to inform legal decision-making. [...]"
The intended procedure can be sketched as follows:
"[...] Under the terms of the program, patent applicants may request review of their patent application under the Community Patent Review process. Once an applicant makes the request and files a consent with the USPTO, a copy of their patent application will be transferred to the Peer-to-Patent software system for a period of review. Each application will reside on a webpage where users can submit relevant prior art for two months. The two-month window tracks the amount of time currently available to members of the public wishing to submit written prior art under Rule 1.99. Limiting the time for submission will ensure that excessive volume does not overload the patent examiner or delay substantive patent examination. It may also create an impetus to participate by offering enough time for thoughtful work without inducing delay. On the basis of experimentation, the window for input may be increased to four or more months.

To ensure that those with the necessary know-how can navigate to the right patent application, the design of the software system must be optimized to ensure participation. Potential contributors can search applications, share them with colleagues, and subscribe to receive notifications and updates. Visualization aids will help contributors track the level and contentiousness of activity around a particular patent application. These aids may not only help to make information about the patent application visible to participants, but also make help the community involved in submitting prior art more self-aware. To suggest patents to review, the system might employ a collaborative filtering system akin to Amazon's - prompting users with statements such as 'People who submitted prior art for this patent also read Patent X.' [...]"


(Fig. taken from Noveck, op. cit.)

I would like to seize the opportunity to put a question in analogy to Gowers Review: Should we have the European Patent Office to conduct a pilot of Beth Noveck's Community Patent Review in 2007 in Europe to determine whether this would have a positive impact on the quality of the patent stock?

Any answer to this question might be directed to two different aspects:
  • A first aspect is directed to the question as to whether or not the EPO process of substantive examination needs or deserves improvement by a peer to peer project. In this respect I do not see any difference between any conceivable justification to conduct such a project in co-operation with the UK Patent Office, on the one hand, and with the EPO, on the other hand. In any case it should be borne in mind that it would be a pilot project set up for gaining additional experiences and insight. It should not be construed in any way to the effect of a prejudgement against the level of quality as delivered today. The situation at the USPTO surely can not be set equal to that at the UK Patent Office or at the European Patent Office.
  • A second aspect is directed to the transformation of the rootedness of the patent system in the technology-skilled class of Europe. Those engineers and/or scientists having participated in such a "Peer To Patent" project might perhaps thereafter not be the same as before. It is widely known that in particular skilled engineers working in SMEs often have less or no knowledge of the patent system. Providing incentives for some active involvement in the patenting process by offering participation in a peer-to-peer network might well help not only to improve patent quality but also help to spread throughout society some knowledge about the system of Intellectual Property protection. There surely would be some sort of a return flow in terms of knowledge and insight from the peer-to-peer project into the European industry. This might, hence, help to fight pointless anti-patent activism or event patent abolitionist politics.
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[UPDATE 2006-12-09] Mr. Tilo Bachmann, Administrator, European Patent Office, has just been appointed Member of the EXTERNAL LINKAdvisory Board for Community Patent Review - whatever this news might mean for any future involvement of the European Patent Office.

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Thursday, December 07, 2006

 

EU Commissioner Mr. Charlie McCreevy on EU Patent Strategy.

Mr. Charlie McCreevy, European Commissioner for Internal Market and Services, on EXTERNAL LINKEU Patent Strategy at the occasion of the PanEuropean Intellectual Property Summit, Brussels, December 07, 2006:
"[...] I will not over-dramatise the situation. But I will put it to you straight. If we are not able to find more fertile ground for a proposal over the coming months, then we might as well put our energies to better use.

Those of you who read the FT, will know that I am not optimistic. My own experience is that the patents area is a minefield, fraught with difficulties. But I am a man of my word. When I took up office I said I would make one last attempt to make progress on the patent system, when the time was ripe.

I've been a politician long enough to know that, if there is a will, there is a way. But that is precisely the question. Is there a will to find a solution at EU level in the interests of the overall competitiveness of the EU economy?

Initiatives such as the recently submitted report commissioned by Thierry Breton for the French government on the 'Intangible economy' and the Gower Report in the UK show that Member States may be waking up to the challenge. This gives me some hope.

But a good solution will require compromises from all involved. The Commission will play its part in trying to find a workable solution. The next few months will be critical in this respect.

I call on Member States to be active and not 'counter-active'. Industry must also play its role. What you told us in the consultation must be repeated at home to all those who are involved in the decision-making process in your capitals.

I would like to take this opportunity to remove any lingering doubts there may be that initiatives on the jurisdictional arrangements might have a negative impact on the quality of patents in Europe. This is not the case.

The quality of patents in Europe, particularly in new technology sectors, is of paramount importance to the users of the system. Any initiative aiming at reduction of patenting costs must be accompanied by patent quality enhancing solutions. We must make sure that patent applications are properly searched and examined. Also, any future jurisdictional arrangement must contain safeguards against Community-wide or even larger enforcement of low quality patents, including protection against the destructive practices of 'patent trolls', especially dangerous for the ICT industry.

Last, but certainly not least, we must make sure that small and medium enterprises, the backbone of European economy, have access to the patent system, unhindered by complex procedures and high costs. In that respect, we will look carefully into the idea that many SMEs put forward in their contributions: an alternative dispute resolution system, in the form of mediation or arbitration, for certain patent cases.

This is why, above and beyond any Communication on an EU patent strategy on jurisdictional arrangements, we will be producing a further Communication in 2007 on a range of flanking measures in the area of IPR that we need to consider, most of them directed at smaller companies. The Communication will include key issues such as:
  • Quality of patents in Europe;
  • Patent litigation insurance;
  • Alternative dispute resolution schemes;
  • General awareness actions on IPR;
  • Use of patents including licensing;
  • Better management and financial reporting of patents;
  • International enforcement of patents.
Our objective is to produce a system that, at all levels - national, European and Community - meets the needs of all stakeholders and provides a fair balance between the diverse interests involved.

Ladies and Gentlemen, we are now at a fork in a very long and winding road. The next few months will be critical if we are to make progress. I sincerely hope that there is a 'will' and that we will find a 'way'. But I will not beat about the bush if that proves not to be the case. [...]"
Who is to be blamed if all pending initiatives aimed at improving the European Patent Strategy should eventually fail?

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Professor Harhoff on "Intellectual Property Rights in Europe - Where Do We Stand And Where Should We Go?"

EXTERNAL LINKDr. Dietmar Harhoff is Professor at the EXTERNAL LINKLudwig-Maximilians-Universität (LMU) Munich, Germany. He is head of the EXTERNAL LINKInstitute for Innovation Research, Technology Management and Entrepreneurship. Earlier this year, he has contributed a paper under the title EXTERNAL LINKIntellectual property rights in Europe - where do we stand and where should we go? to the project Globalisation Challenges for Europe and Finland organised by the Secretariat of the Economic Council. The project is a part of Finland's EU Presidency programme and its objective is to add momentum to the discussion in the European Union on globalisation, Europe's competitiveness policy and the Lisbon strategy. He concludes:
"[...] There are three major challenges to the future design of European IPR policies. The first is harmonization. If the EU is to become a region in which innovation can be undertaken without being impeded by national barriers, there is a clear need for coming to truly European IPR policies and institutions. That includes harmonized interpretation of IPR laws, harmonized court proceedings and the introduction of legal institutions (final instance courts) which resolve cases that have been highly controversial. [...]

A second important requirement is the focus on balance. The naive notion that more and stronger IPRs are always good for innovation has been refuted by scientists in empirical and theoretical work over the last decades. Balance in copyrights means that fair use rights of consumers have to be taken seriously. In an age of increasing importance of user-generated content, the public domain should to be strengthened. Balance in the patent system may require to strengthen the position of follow-on inventors who build on earlier inventions. But it also means not to crowd out processes (such as open source software) which depend on a vibrant public domain which is not 'burdened' by IPRs. Balance also means to avoid policy capture - IPRs can become the instrument of entrenchment in the hands of established players. Competition policy needs to analyze IPRs carefully in order to prevent their abuse quickly when it becomes apparent.

Third, IPRs that are awarded on the basis of an examination process should be of high quality in the sense that they create legal certainty, rather than uncertainty. European institutions, in particular the European Patent Office, should seek to grant high-quality patent rights which are based on tough standards for novelty and inventive step. Contrary to some reports, a transition to tougher standards is supported by many users of the system. Cutting back on strategic patenting, abusive tactics and strategic manoevring by applicants would make the system more transparent and also support European SMEs. These are at a financial disadvantage when it comes to the buildup of strategic patent portfolios. The response should not be to cheapen the creation of strategic patent portfolio and patent thickets for all players, but to sanction and reduce those activities that are deemed harmful for innovation and competition. [...]

IPRs have a very important function, and without proper design of the European IPR system, innovation will suffer. Somewhat paradoxically, the greatest danger is not - at this point - that IPRs become too weak to support innovation. A far more serious concern at this point is that by strengthening IPRs in a naive fashion, the system becomes unbalanced. In that case, sequential innovation - in the field of creative works and inventions - may be deterred by overly strong and broad rights. In the area of copyright, a new balance between commercial and private, non-commerical interests needs to be sought. A free flow of ideas and information needs to be maintained in order for Europe to achieve its ambitious objectives in the field of innovation. In the area of patents, focus on quality and tough standards is required in order to thwart off increasing tendencies towards abuse of the system. Towards the improvement of both systems, it is helpful to recall that they are meant to serve the citizens of Europe at large, and not a particular group of stakeholders or users."
Mr. Harhoff's pleading for pan-European harmonisation appears to be uncontroversial if taken on a more general level. The problems start, however, when going into the gory details of practical harminisation politics. This has become clear once more EXTERNAL LINKonly a few days ago.

With regard to the problem of establishing a proper balance between private Intellectual Property and the Intellectual Commons, most probably an agreement on abstract concepts might be reached amongst many stakeholders with regard to patents (but surely only if Mr. Stallman is not involved). However, in this context it should not be forgotten that with the failed EU Draft Directive on patentability of CIIs the EU Commission had intended nothing else than to codify some sort of status quo as defined by a snapshot of the case law of the Boards of Appeal of the European Patent Office. What actually had happened then was a vigorous approach conducted by various groups of anti-patent activists to cut back the realm of patentable subject-matter well beyond what had been deemed patentable for long years. Hence, the situation in the patent theatre might be somewhat different compared with that in the copyright game where the deployment of DRMs in the market as well as attempts to extend the lifetime of copyright exclusive rights gave a different picture. In reality, the patent community in Europe is nowadays in a defender's position struggeling to maintain some status quo, not playing the agressor's game to extend the realm of patentable subject-matter, indeed.

Mr. Harhoff's demand for high quality patents appears to be in perfect alignment with Mr. Pompidou's position.

But I do not see the point in that what Mr. Harhoff calls "strategic patenting, abusive tactics and strategic manoevring by applicants". Maybe that doing so is nothing else than legitimate exercise of exclusive rights.

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Wednesday, December 06, 2006

 

EPO Examiners on Strike Again.

The EXTERNAL LINKsame story as EXTERNAL LINKbefore:
"[...] At all four places of employment, Munich, The Hague, Berlin and Vienna, SUEPO members have voted by large majorities in favour of industrial actions, which are currently ongoing. In particular, this week, on 5th, 6th and 7th December, strikes again take place at all 4 places of employment. On 6th December there was a picket reception of the Administrative Council delegations in front of the Isar building in Munich: [...]

The actions have been sparked off by a number of issues, especially a move by the Office for the introduction of a new reporting system for examiners, ironically labelled PAX. Staff are objecting to the focus on and drive for production (measured in patents granted) at the expense of recognition of quality and the time required to examine patentability to a high level of legal certainty. So far, the cumulative participation of strike actions this year is conservatively estimated at well over 10000 man-days. [...]"
See also EXTERNAL LINKthis report on Heise Newsticker [In German only, sorry].

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UK: Gowers Review Has Been Published.

At the Enterprise Conference on December 02, 2005, the UK Chancellor of the Exchequer had announced that, as part of the Pre-Budget Report 2005 package, he had asked former Financial Times editor EXTERNAL LINKMr. Andrew Gowers to lead an Independent Review to examine the UK's intellectual property framework.

Today, the EXTERNAL LINKChancellor of the Exchequer, Rt Hon Gordon Brown, MP, has EXTERNAL LINKpublished Gowers' Review in the context of the presentation of the EXTERNAL LINKPre-Budget Report 2006.

At a first glance this might appear to the observer from the continent as a piece of regional politics without much importance for Europe in its entirety. However, such reviews have been carried out in the UK from time to time, perhaps once per one or two decades or so, and in the past many aspects of UK Intellectual Property policy have been shaped by the reports given by Mr. Gower's predecessors. And, of course, those various reports have, in their times, also heavily influenced the British position on the international theatre, e.g. in view of the European Patent Convention and other treaties. It might well be that also Gower's Review will create a substantial impact on international politics concerning Intellectual Property. Gowers writes:
"[...] It is expensive to obtain and defend IP rights in the UK, and costs spiral when securing rights internationally. These costs are onerous for all businesses, and for SMEs in particular. The Review recommends:
  • better provision of IP information to UK businesses at home and abroad. This will extend from greater information provided to firms on how to use IP strategically when they register at Companies House, through stronger support and better information via the Business Link network, to expert advice provided by UK Trade and Investment and the Patent Office for UK firms abroad;
  • consulting to enable fast-track litigation to be used in IP cases. This should mean that capped fees, limited disclosure and time limits will apply to IP cases, greatly reducing the cost; and
  • supporting the establishment of a unitary Community Patent (COMPAT). This will substantially reduce the cost of patent applications in Europe, which are currently twice as expensive as in the USA. [...]"
Furthermore, Gowers points out that a policy of not extending patent rights beyond their present limits within the areas of software, business methods and genes should be maintained.

With regard to patent-related operational aspects, Gowers recommends:
  • The Government should encourage the EPO to pursue work sharing with the USPTO and JPO.
  • The Patent Office should pursue work sharing arrangements with EPC member States, and trilaterally with the USA and Japan to reduce cross-national duplication of effort.
  • Continue to support and expedite the establishment of a single Community Patent through negotiations in Europe.
  • Government should support the London Agreement as an interim step towards COMPAT, and as an improvement in its own right.
  • Maintain a high quality of patents awarded by increasing the use of 'section 21' observations: streamlining procedures and raising awareness.
  • The Patent Office should conduct a pilot of Beth Noveck's Community Patent Review in 2007 in the UK to determine whether this would have a positive impact on the quality of the patent stock.
  • The Patent Office should develop stronger links with universities and other research institutions, including through short placements, to ensure that IP examiners are aware of recent developments in technology.
  • Introduce accelerated grant process for patents to complement the accelerated examination and combined patent search and examination procedures.
In particular, Gowers' reference to the EXTERNAL LINKPeer To Patent Project of EXTERNAL LINKProf. Beth Noveck appears to be far-reaching and exciting.

In addition to Gowers Review, Lord Sainsbury has been asked by the UK Chancellor to carry out EXTERNAL LINKa review of science and innovation policies across government. The Review will take a forward look at what needs to be done to ensure the UK's continued success in wealth creation and scientific policy-making. The Sainsbury Review will report to the Chancellor of the Exchequer and the Secretaries of State for Trade and Industry and Education and Skills, in time for the Comprehensive Spending Review in summer 2007. It looks as if there might be some overlap with Gowers Review, in particular because of the Sainsbury Review will cover patent politics.

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[UPDATE 2006-12-06 2000] Statement EXTERNAL LINKon the website of CIPA:
[...] CIPA spokesman and main author of the submission, Alasdair Poore also urged the members of the Chancellor of the Exchequer appointed Review team to: 'think very carefully before making proposals for change since much of the system is working well and our reading of the Treasury document which accompanied the setting up of this Review gives us cause for concern since it strikes an unnecessarily negative attitude. Anyone who has studied the system knows the UK has a huge positive balance of payments from copyright; trade marks are crucial to branded products sold across the world by UK companies; and patents ensure that profits from research-based innovation are not undercut by competitors riding on UK Research and Development.' [...]
[UPDATE 2006-12-06 2015] EXTERNAL LINKStatement of the UK Government::
The Government welcomes the Gowers Review of Intellectual Property (IP) and will be taking forward the recommendations for which it is responsible to ensure that the United Kingdom (UK) IP regime is fit for the digital age. The Government firmly believes in the importance of strong enforcement of IP rights to support the UK's most creative industries. At present the music industry loses around 20 per cent of its annual turnover to piracy and counterfeiting. The Review's recommendations on IP enforcement will bring significant benefits for UK businesses. In order to allow copyright law to be effectively enforced, the Government will allocate an additional GBP 5m to Trading Standards in 2007-8 to support the implement of new powers and duties to tackle copyright infringement.

The Review also recommends a number of measures to improve access and reduce costs for businesses using the IP regime. An independent Strategic Advisory Board for IP policy will be established to raise the performance of IP policy-making. This Board will receive GBP 500,000 from the Patent Office to commission research on emerging IP trends.
[UPDATE 2006-12-06 2015] EXTERNAL LINKStatement of the UK Patent Office::
Ron Marchant, Chief Executive and Comptroller General, said: 'The Patent Office joins others in welcoming the Report and I look forward to the Patent Office playing a full role in implementing the recommendations for which it is responsible. Andrew Gowers and his team have done a comprehensive and thorough job in a very open-minded way. We congratulate them. The Report has confirmed the crucial importance of IP to the success of the UK in the global knowledge economy and we are pleased that the report sees the system as operating broadly satisfactorily. We are very pleased that the report recognises the important role played by the Patent Office and supports our own programme 'Patent Office for the 21st Century', identifying the programme as an appropriate vehicle for some of the recommendations.'

In particular, the Patent Office will revise its role in the following areas:
  • Advice for UK Businesses as they seek to obtain and protect their rights both domestically and in other countries
  • Fast track rights processing
  • Seeking to make progress on European and Community Patent proposals
  • Continuing to improve patent quality
  • Working with other Patent Offices, particularly the US and Japan, to make multinational patent processing simpler
  • A better match between fees and the costs of the services covered by them
  • Raising public awareness of the wider impact of IP crime
Ron Marchant added 'Thanks to the work we began with our Patent Office for the 21st Century programme we are ready to rise to the challenge. That challenge is highlighted by the proposed change of name to the UK Intellectual Property Office as this will signal to all customers and stakeholders the true range of our activities and contribution. I am delighted that the Patent Office for the 21st Century will be "The UK Intellectual Property Office'.

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Tuesday, December 05, 2006

 

Materials Now On-Line: EPO-OECD-UKPO International Conference on Patents - "Realising and Securing Value"

Some time ago I had posted INTERNAL LINKa report on the EPO-OECD-UKPO International Conference on Patents: "Realising and Securing Value" held in London on November 21, 2006. Now an EXTERNAL LINKExecutive Summary as well as EXTERNAL LINKvarious presentations are available on-line.

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2769th Council Meeting, Brussels.

The EU Council just has published EXTERNAL LINKDocument 15717/06 (Presse 337) which is a press release concerning the 2769th Council meeting Competitiveness (Internal Market, Industry and Research) held in Brussels, December 04, 2006:
"[...] An effective IPR framework at European level is essential for innovation. The Council therefore welcomes the Commission's intention to present, in the course of 2007, a comprehensive IPR Strategy. The Council stresses the need for such a strategy covering all forms of IPR and ensuring synergy with other policies. Regarding patents, the Council invites the Commission to present its Communication on patents, which will be based on ongoing consultations, as soon as possible. The Council will respond to the Commission's initiatives in due course. [...]"
Well, not very much details so far. However, EXTERNAL LINKGulf Times have EXTERNAL LINKanother version of the story:
"[...] The European Commission has been forced to delay its proposals for breaking a 20-year deadlock over how to create a cheap and simple pan-European Union patent system, a top official said yesterday.

[...] But France, backed by Italy, Spain and several other EU states are opposed, saying EPLA would not be part of EU law.

'We have made proposals to you concerning having a community jurisdiction for dealing with disputes with European patents,' French Industry Minister Francois Loos told the meeting. 'This ... offers the best legal security and political legitimacy.'

The French proposals would involve the European Court of Justice, the EU's top court, playing a role alongside national patent courts in resolving disputes.

Too few member states support EPLA, Loos added.

Belgium said if no solution was found in coming weeks, it would propose that a group of states move ahead with a common solution that others could also adopt later.

Britain, Austria and the Netherlands said they backed EPLA as it would deliver quick and cheap benefits to business.

Brigitte Zypries, a federal justice minister for Germany, which assumes the EU presidency in January, questioned whether the French proposal was practical.

Zypries said the EU treaty would have to be changed to allow the ECJ to rule on disputes between two individuals, a step that would take a long time and the top court is already complaining it is understaffed and overworked. [...]"
It is quite disappointing, in particular in view of Mr. Loos' statement. This all might perhaps indicate that despite general support for EPLA from the industry's side there will be a long way to go. I think that Ms. Zypris is right with her remark concerning the ECJ and I am inclined to say that a 'core club' of vanguard countries should go ahead alone, if necessary.

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[UPDATE 2006-12-06] Mr. Tobias Buck EXTERNAL LINKwrites in FT:
"[...] Hopes fade for EU patents reform initiative

Published: December 6 2006 00:43 | Last updated: December 6 2006 00:43

A long-running campaign to set up an efficient, pan-European patent regime is in danger of collapse, Charlie McCreevy, the European Union internal market commissioner, said on Tuesday.

Mr McCreevy told the Financial Times he was frustrated that his initiative to set up a simpler system to settle patent disputes had been shelved owing to pressure from France and other member states. [...]"

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Ms. Viviane Reding on 'Patent Ambushes'.

Ms. Viviane Reding, Member of the European Commission responsible for Information Society and Media, EXTERNAL LINKspeaking on a Conference of the International Telecommunications Union (ITU): 'Telecom World 2006', Hong Kong, China, December 04, 2006:
"[...] But governments do have a role to play. Most important, we have to provide certainty where we can. We have a duty to eliminate uncertainty by insisting that standards setting procedures are open, streamlined and independent. We have a duty also to make sure that the standards that are adopted are open and interoperable.

Governments can also help the process of standard setting by working with standards agencies to adapt legal systems to combat problems such as 'patent ambushes'. Standards should also offer legal certainty as to the IPR rights that are embedded in standards to make sure that they are fair, reasonable and non-discriminatory.

Governments also have a duty to reduce unnecessary uncertainty and delays in standard setting procedures. We should certainly all condemn the abuse of standards as a non-tariff barrier to market access. If we can achieve this, we will have taken off an important brake on development. [...]"
Apparently Ms. Reding hs been silent about how to adapt legal systems to combat problems such as 'patent ambushes'. Maybe that there are even diverging opinions within the EU Commission on that subject, effectively discouraging her from going into any details.

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Friday, December 01, 2006

 

Enforcing Patents on CIIs in Germany.

Unlike in the U.S. and the UK, in Germany there is a general rule that court files in civil proceedings are treated as confidential and opened for inspection only if a legitimate interest supporting such a request is demonstrated by third parties. As a habit of tradition, with regard to lower and regional courts only selected decisions are anonymised and then published in law journals in order to keep professionals up to date. Only recently more and more courts start on a large scale publishing shortened and anonymised decisions on the Internet. In practice, this makes it in particular quite difficult to obtain an overall view on numbers and outcomes of patent infringement proceedings based on patents on computer-implemented inventions in Germany.

Anti-patent activists are used to claim that patents on computer-implemented inventions or so-called "software patents" are not only "illegal" but also "unenforceable". See, for instance, EXTERNAL LINKthe presentation of Mr. James Heald, FFII UK, at the conference EXTERNAL LINKSoftware Patents: A Time for Change? held on November 16 and 17, 2006, at MIT and Boston University stating that there are "no examples (yet) of successful litigation in court for infringement". In this context I just stumbled over EXTERNAL LINKa publication on EXTERNAL LINKplayfuls.com:
"[...] A District Court in Germany (Landgericht Düsseldorf) today announced verdicts finding that German DVD disc manufacturer Optical Disc Service ('ODS') has infringed certain patents licensed in the MPEG-2 Patent Portfolio License offered by MPEG LA as a result of ODS's manufacture of DVD discs. The verdict of infringement as a result of DVD disc manufacturing issued in eight of nine cases brought by six patent holders who are Licensors to MPEG LA's MPEG-2 Patent Portfolio License. [...]"
OK, one single case does not make up full statistics but at least it shows that FFII is wrong when asserting that so-called "software patents" are generally unenforceable in Germany.

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Group B+ Draft Patent Harmonisation Treaty: No Conclusions Reached in Tokyo.

In INTERNAL LINKmy earlier posting I had noticed that with regard to the so-called Group B+ Draft Patent Harmonisation Treaty further substantive differences remained. As a follow-up I today would like to point to EXTERNAL LINKanother interesting article on IP Watch reporting on a conference recently held in Tokyo:
"[...] At a Tokyo meeting last week of the developed countries of the World Intellectual Property Organization (WIPO), the issue of patent harmonisation was kept alive though no specific decisions were reached, a source said. [...]"
The Tokyo Conference had been scheduled on a EXTERNAL LINKprevious meeting held in Geneva, Switzerland on 24 September, 2006; see also EXTERNAL LINKthis report by the UK Patent Office. MIP puts the Group B+ meeting EXTERNAL LINKinto relationship with the well-establihed trilateral co-operation.

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