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

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Thursday, May 24, 2007

EU Parliament Demanding EPO To Be Integrated Into European Community.

"[...] that reasonable and reliable copyright protection and patent systems are crucial elements in building an innovative knowledge-based economy and society; confirms the need to reform patent policy in Europe, recognizes, however, that patent policy reform is a long-term process; calls on the Commission to set up, in cooperation with the Member States, a group of experts, including also economic experts, to review the situation including the question of patentability; calls on the Commission and the EIF to examine the possibilities for providing small businesses with adequate financial support for their patent applications;[...]"

"[...] Calls on the Commission to draw up, in cooperation with the Member States, measures that are alternative and complementary to patent right legal protection measures which will defend inventors and emerging models of creation against blackmail and law abuse (such as FLOSS (free/libre/open source software) licensing systems); [...]"

"[...] Recalls the definition of open standards adopted by the Commission pursuant to which (i) the standard is adopted and will be maintained by a not-for-profit organisation, and its ongoing development occurs on the basis of an open decision-making procedure available to all interested parties; (ii) the standard has been published and the standard specification document is available either freely or at a nominal charge; (iii) the intellectual property - i.e. patents possibly present - of (parts of) the standard is made irrevocably available on a royalty-free basis. [...]"

"[...] A new European strategy on patents is needed that will safeguard copyright but will not monopolise knowledge in the field of innovation or the scope for small and medium-sized enterprises in particular to make use of it. This strategy must review the existing patentability criteria established by the European Patents Convention of 1973 with a view to making them more precise and perhaps providing more details, thus leaving no scope for different legal interpretations, as happens at present in connection with the introduction and use of concepts such as the 'technical contribution', which are not defined in the Convention. The patent process itself needs to be simplified and speeded up. Perhaps it could be a two-stage process, whereby the expensive development work needed for obtaining a patent could take place once the proposed invention had found a sponsor, or if its originality was in doubt. The first phase of the patent process would be confined to registration of the idea, guaranteeing its author precedence, and to making his blueprint available for public inspection by those interested in its practical application. [...]"

"[...] I have been fiercely critical of European patent owners on many occasions for their failure to engage adequately with policy makers and the general public. That sentence shows what they are up against and just why they need to do more. The people who approved that are elected politicians who could, at some stage, have a direct say in Europe's patent future. They don't half need some educating and if they do not get it, all I know is that patent owners will end up wishing they had tried harder when they had the chance. [...]"

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Monday, May 21, 2007

Mr. Mark Shuttleworth's Thoughts on Linux and Patents on CIIs.

"[...] And I'm pretty certain that, within a few years, Microsoft themselves will be strong advocates against software patents. [...]"

"[...] So, Microsoft is not the real patent threat to Linux. The real threat to Linux is the same as the real threat to Microsoft, and that is a patent suit from a person or company that is NOT actually building software, but has filed patents on ideas that the GNU project and Microsoft are equally likely to be implementing. [...]"

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EU Council: Less Expensive Trade Mark Protection in Europe in Sight.

"[...] The fees of the Office for Harmonization in the Internal Market (Trade Marks and Designs) in Alicante, Spain (OHIM) are going to be reduced. This decision was adopted by Member State ministers at today's meeting of the EU Competitiveness Council in Brussels, which was chaired by Federal Minister of Justice Brigitte Zypries.

This fee reduction strengthens Europe as an economic location. In the future, it will be possible to register trade marks and designs through OHIM at significantly lower cost. This helps all those who wish to protect their rights against unauthorised counterfeiting, not only within their own countries but also throughout all of Europe. The Community trade mark system in Europe is a ten-year success story. In the past year alone, 77,500 trade marks were registered in Alicante. Thus the use of the system has far exceeded expectations, which has led to a substantial revenue surplus. We will now distribute this surplus to users of the system,' stated Ms. Zypries. [...]"

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WIPO Broadcasting Treaty in Trouble.

"[...] WASHINGTON, DC - Practically no one participating in a recent government forum here liked the proposed broadcaster protection treaty under negotiation at the World Intellectual Property Organization (WIPO) in Geneva. [...]"

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Thursday, May 17, 2007

UK SMEs Challenging UK-IPO's Policy on Patentability Of CIIs.

"[...] LONDON, May 17, 2007 (PR Newswire Europe via COMTEX) - A group of five small hi-tech companies are taking on the UK Patent Office at a hearing today challenging a change in Patent Office policy on the protection of computer implemented inventions.

The five companies, Astron Clinica Limited, Cyan Holdings Plc, Inrotis Technologies Limited, Software 2000 Limited and Surf Kitchen Inc have all developed technology which the Patent Office accepts is patentable. The companies' inventions range from skin imaging and printer drivers through to drug discovery, telecoms and micro-controllers which reflects the diversity of the companies involved. The only thing which links the inventions is that in part each of the inventions is reliant on novel software and it is the extent to which patentees can control the distribution of such software which is at issue at today's hearing.

Up until November 2006, law in this area was clear. [...]

Then in a surprise move, the British Patent Office announced that it would no longer accept claims which covered disks and downloads. The change places the British Office in direct conflict with the European Patent Office which also grants patents which have affect in the UK. Filing at the European Patent Office is however more expensive than filing at the British Office and any such patents tend to take longer to grant. The British Patent Office's decision disproportionately affects British industry which normally chooses to file first at the UK Patent Office. [...]"

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Wednesday, May 16, 2007

IP Auction in Europe.

"[...] Malte Köllner, who writes the IP VC column for IAM, was at the first European IP auction which was held in Munich yesterday. Organised by IP Auction GmbH, the headline figures created have to be seen as disappointing, especially given the pre-auction reports that the total value of what was on sale exceeded $6.5 million. [...]"

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Monday, May 14, 2007

Mr. McCreevy Can't Get Off The EU Community Patent.

"[...] We need to focus on making markets for knowledge - and technology-intensive goods and services work better. They are vital for our future prosperity. So if we can secure agreement to it, the Community patent will be a huge step forward for the Single Market. [...]"

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COREPER On The Future Of OHIM.

• analyze the use of certain criteria which could facilitate further adaptations of Community trade mark fees and possible ways of their application in the Comitology procedure; these criteria should in particular contribute to a long term balance of the OHIM's budget, ensure a continuous high quality of OHIM's performance, and take account of OHIM's cooperation with the trade mark offices of Member States; the criteria should respect the principles of prudence and sound financial management; in addition these criteria should keep the fee system reliable and transparent for users and its future adaptations predictable;
• evaluate the existing framework of cooperation of OHIM and national trade mark offices, with a view to intensifying and broadening the existing instruments of cooperation in the interest of the overall functioning of the Community trade mark system;
• explore possible instruments to finance such cooperation, including the establishment of a cooperation fund, if necessary by means of amending Regulation (EC) No 40/94;
• assess the coexistence of the Community trade mark system and national trade marks, including the territorial requirements for genuine use of Community trade marks;
• evaluate the effects of the Community trade mark system on the overall functioning of national trade mark systems, as well as the contributions of national trade mark offices to the overall functioning of the Community trade mark system;
• evaluate the effects of the recent reforms;
• evaluate the effects of the Community trade mark system on its users, in particular on SMEs and start-up enterprises, and in particular with regard to competitiveness and innovation.

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Microsoft Issues Statement On Patent Infringement Committed by Linux Distributors And Users.

"[...] Microsoft claims that free software like Linux, which runs a big chunk of corporate America, violates 235 of its patents. It wants royalties from distributors and users. [...]"

"[...] It seems obvious that the threat is designed to issue a clear threat against the GPL v3, and perhaps it attempts to influence the draft's discussion. This may be the reason why the FSS, Stallman and Moglen have answered forcefully, almost with a 'bring it on' attitude. They know that the pendulum is swinging against unfettered software patents, and that this case could very well prove to be the silver bullet that fatally wounds the current system. Imagine a situation where large numbers of corporate Linux users are sued by Microsoft. The result could very well be a legislative push against broad patentability. Microsoft is also playing with fire by entering into IBM's turf. As one of open source's corporate patrons, IBM has an impressive software patent arsenal that it could deploy if things get to an all out litigation battle. It is an open secret in the industry that as things stand, everyone is infringing someone else's patents, and what sustains the balance at the moment is a complex network of cross-licensing between industry giants. I have always believed this is one of the reasons why FOSS projects have managed to remain litigation-free so far. If Microsoft sues, will IBM retaliate? What would such a case look like? [...]"

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Patent Attorneys in Scotland Shall Gain More Rights.

"[...] The Scottish Executive has bowed to pressure from patent attorneys and accepted that they should be given right of audience in the Court of Session, along the same lines as the privileges accorded to advocates and QCs. [...]"

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Sunday, May 13, 2007

U.S.: A New Field for Activities of Patent Attorneys.

"[...] Hedge fund managers are always looking for an edge. Lately they've found one by sending patent litigators to court - not to try a case, but as highly informed (and highly paid) observers. Their task: to pick up and quickly report back to the money managers any intelligence that could move a stock. [...]

Hedge fund managers consider their investment strategies to be trade secrets, and none would comment on the record for this story. But Edward Black, a partner in the corporate department of Ropes & Gray and co-head of the firm's Fish & Neave IP Group, says that his firm has done this type of work for several clients. [...]"

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Thursday, May 10, 2007

"Race Conditions" in the Patent System.

• If the validity proceedings become final before the infringement proceedings do, then the infringement proceedings can be properly terminated in full knowledge that, from a legal point of view, there is no and has been no patent at all because of it has been nullified ex tunc before.
• However, if the infringement proceedings become final before the validity proceedings do, then the infringement proceedings might be terminated on the assumption of validity of the patent without actual knowledge that at some later point in time there there will be some knowledge that there is no and was no patent at all because of it is nullified ex tunc.

• Firstly, in Germany infringement and validity are dealt with by separate courts, namely a District Court ("Landgericht") for infringement proceedings and the Federal Patents Court ("Bundespatentgericht") for general post-grant validity issues (except opposition proceedings in the first instance).
• Secondly, with regard to national German patents granted by the German Patent and Trade Mark Office, an infringement case may be pending before a competent District Court while an opposition case is pending or is made pending before the Opposition Division of the German Patent and Trade Mark Office or, in the second instance, before the Federal Patents Court.
• Thirdly, with regard to European patents granted by the European Patent Office with effect on the German territory, an infringement case may be pending before a competent District Court while an opposition case is pending or is made pending before the Opposition Division of the European Patent Office or, in the second instance, before the Board of Appeal of the EPO.
• Fourthly, with regard to German parts of European patents, post-grant challenging of validity theoretically is possible by launching simultaneous oppositions proceedings before the Opposition Division of the EPO, on the one hand, and nullity proceedings before the Federal Patent Court, on the other hand.

• A District Court dealing with an infringement case has the option, upon request of the defendant challenging the validity of the patent, to suspend infringement proceedings until the result of the nullity proceedings has become final. The judges are not obliged to suspend the proceedings; they will exercise some latitude of judgement by granting a suspension only if the validity case prima facie looks promising. The best way to avoid race conditions would, of course, be to give the defendant in infringement proceedings an undeniable right to a suspension of the proceedings as soon as the validity of the patent is challenged. However, lawmakers were afraid that such broad right might turn out to be a gateway for illegitimate delay tactics of defendants in infringement proceedings, and a great scale of discretion was given to the judges. In consequence, there are certain District Courts in Germany (e.g. Düsseldorf) where general wisdom assumes that a suspension in patent litigation cases is much harder to get for the defendant than before other Courts.
• If a race condition should really have occurred e.g. because of a District Court did not grant suspension of infringement proceedings but the patent in question nevertheless later on gets anulled in nullity of opposition proceedings, restitution proceedings are possible according to leading opinions for unwinding illegitimate gains of a claimant of infringement proceedings.
• Any potential race conditions between opposition proceedings pending before the Opposition Division of the EPO, on the one hand, and nullity proceedings ("Nichtigkeitsverfahren") pending before the Federal Patents Court, on the other hand, are excluded by a provision in German patent law blocking initiating of nullity proceedings before the Federal Patents Court for the German part of a European patent granted by the EPO as long as the term for filing a Notice of Opposition has not lapsed or, if opposition proceedings are pending before the Opposition Division of the EPO, as long as these proceedings are not terminated by becoming final.

• Unilin's Patent involved was granted on 26th June 2002, and
• Unilin sued Berry Floor, IMC and B&Q (the "Defendants") in the Patents County Court as soon as it was granted. Two types of product known as "Berry" and "Snap-fit" were alleged to infringe.
• The claim included a claim for financial relief for infringements committed between the date of publication of the patent application (2nd August 2000) and its grant. Such relief is provided for by s.69 of the Patents Act 1977, implementing Art. 67 of the European Patent Convention ("EPC").
• In addition to defending the infringement claim the Defendants counterclaimed for an order for revocation of the Patent.
• In September 2003 HHJ Fysh gave judgment for Unilin, holding claim 20 of the Patent valid and infringed by both the Berry and Snap-fit products, [2004] FSR 14.
• i)This Court dismissed the Defendants' appeal by a judgment and order of 30th July 2004, [2005] FSR 6. The Court differed somewhat in its construction of the claim from that of the Judge below, but that made no difference to the result.
• The House of Lords dismissed the Defendants' Petition for leave to appeal in February 2005.
• That left Judge Fysh's order, and the order of this Court, in place. Besides an injunction (which by then did not matter commercially because the Defendants had changed to a non-infringing product) the key features for present purposes of the order as varied and the order of this court were that:
• It was declared that claim 20 of the Patent as granted and claims dependent thereon were valid;
• It was declared that claims 20 and 21 had been infringed by all of the Defendants;
• Permission was given to Unilin to amend the Patent so as to limit its scope to that of claim 20;
• The Defendants were ordered to pay 80% of Unilin's costs before HHJ Judge Fysh and all of Unilin's costs in the Court of Appeal;
• "There shall be" at Unilin's election an inquiry as to damages suffered by Unilin or an account of profits made by the defendants "by reason of [the Defendants'] infringements of the Patent."
• The costs orders and the inquiry or account order were stayed pending the determination of the issue of whether the specification of the Patent had been framed in good faith and with reasonable skill and knowledge.

• In March 2003 Berry Floor's parent company ("Berry Finance") started opposition proceedings against the Patent in the EPO. This was close to the end of the nine month period from grant. At the time of the Decision, the opposition proceedings are still not over - and are unlikely to be so for a year or more. It is possible that they will ultimately result in the Patent being revoked or limited so as not to cover the Berry products.

• "That the Defendants are estopped from challenging Unilin's entitlement to an account of profits, whatever the ultimate result in the EPO;
• Even if there were no estoppel, past orders as to costs could not be challenged and so the liberty to the Defendants to apply for an order for repayment of costs should be discharged;
• The Defendants' appeal for a stay of proceedings relating to the account should be dismissed."

"[...] First and foremost, the estopped defendant has had a full and fair opportunity of attacking the validity of the patent in his own proceedings. Next there is a very very strong public interest in the finality of litigation. Finally a party who had lost would have a strong motive for finding further or better reasons for attacking a patent and getting some third party to do so, thereby undermining the first decision. It is much better that he knows that the first litigation about validity is the time and place for him to get his best case together - that he knows he will have no second chance.

[...]

Now a purist may say: it is a nonsense, and moreover an unjust nonsense, for a man to have to pay for doing what, with hindsight, we know to have been lawful. The purist might, I suppose, also say that a licensee who has paid royalties under a patent subsequently revoked ex tunc should get his money back. He might even say that a man who lost profits by refraining from some commercial activity by reason of a fear, now known to be groundless, of infringing the patent should have some remedy.

But I think there are good and pragmatic reasons why the purist approach makes bad business sense. You cannot unravel everything without creating uncertainty. And where a final decision has been made on a fair contest between the parties, that should stand as the final answer between them.

In a sense a patent is always potentially at risk - someone may come up with a bang on but obscure piece of prior art (my favourite pretend example is an anticipation written in Sanskrit wrongly placed in the childrens section of Alice Springs public library), or simply with better evidence on known prior art. That is no reason for undoing what has been done or regarding a final decision as merely provisional. After a final decision businessmen should be able to get on with their businesses, knowing what the position is. [...]"

"[...] The strongest phrase in the European Patent Convention (EPC) that supports the contention of the defendants that revocation of the patent in opposition proceedings in the European Patent Office would affect the judgment already given in this action is the expression 'as from the outset' in article 68. At first sight, these words appear to envisage that, once the patent has been revoked in opposition proceedings, the patent will be treated as having never had any existence. On that basis, there would be no basis on which a judgment in infringement proceedings could be maintained and enforced. The fact that article 68 does not provide that the effects specified in article 64 and 67 should be disapplied only with effect from the date on which the patent is revoked provides some support for the defendants' argument [...].

In my judgment, however, there are a number of answers to this point. First, in so far as the EPC enables national courts to entertain proceedings relating to European patents, the national courts are given autonomy as regards procedure (see article 64(3)). The effect of the prior judgment for infringement is thus a matter for national law. Secondly, as Jacob LJ has recorded, once the cause of action for infringement is given, it is as a matter of English law merged into the judgment and the owner of the patent becomes entitled to a new piece of property, namely the judgment. As I see it there is nothing in the EPC to suggest that revocation is to take away this property right.

Thirdly, it is a general principle of the rule of law that legislation should not have retrospective effect without good reason. There may be said to be a presumption against retrospectivity. It is difficult to see any reason for treating article 68 as retrospective in the factual situation in this case, and accordingly this court should not give it that effect. [...]"

"[...] He is not a human rights lawyer and does not pretend to be, but he can't help speculating whether one's money is a protected possession, in the context of him being deprived of it for the sake of being made to pay damages to compensate a patent owner for infringing a right that should never have been granted in the first place. [...]"

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Wednesday, May 09, 2007

Mr. Bruno van Pottelsberghe de la Potterie on The Economics of the European Patent System.

"EPO Chief Economist Bruno van Pottelsberghe de la Potterie has joined forces with his predecessor Dominique Guellec (now at the OECD) to analyse the economics behind the European patent system. The result of their work was published recently by the Oxford University Press. [...]"

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Tuesday, May 08, 2007

Patentability of CIIs: New Developments.

"[...] Third step

As I have explained above, I believe the third step of the test requires me to ask whether the contribution resides solely in excluded matter, in this case a computer program or a mathematical method. As is clear from paragraph 43 of Aerotel/Macrossan, I need to consider this as a matter of substance rather than the particular form of the claims.

Computer program

It seems to me that, irrespective of whether the invention is claimed as a test system, a method for controlling the test system or a test management server for the test system, the contribution of the invention is in substance a set of instructions for a networked computer system or a stand-alone personal computer, whose hardware in either case is entirely conventional, to select problems from a database, present them to a testee and estimate the ability of the testee in the light of his or her responses. (Claim 16 makes no mention of a computer as such, but it has not been argued, and I do not think it is realistic to suppose, that the invention could be carried out other than by means of a computer.) In my view these instructions constitute a program for a computer.

The contribution will of course fail the third step only if it relates solely to excluded matter. I accept that the invention has the advantage that less memory is required and that the processing is quicker as a result. However, notwithstanding Mr MacDougall's argument on the basis of Merrill Lynch, I do not think that the increase in processing speed is sufficient to take the invention outside of excluded matter. In my view the increase in processing speed arises solely because a program has been devised which requires the computer to do less work, not because of any improvement to the operation of the computer itself. The advantages of the invention would seem to me to be realised wholly in the program.

Mr MacDougall also argued that in view of his identification of the contribution (with which I agree), that contribution was in the field of test systems and methods and not computer programs or mathematical methods as such. I do not think this analysis is correct. It seems to me what has been devised is a computer program which is intended for use in a testing system or method, and that (to use the language of paragraph 73 of Aerotel/Macrossan) there is no contribution beyond that program up and running. I do not think that the use of the program in testing systems takes it outside the exclusion, and more than did the use of the program for creating company documents in the Macrossan appeal. [...]"

"[...] There is no dispute between the parties that gaming is a business and that therefore a 'gaming apparatus' is an apparatus for performing the specific business of gaming.

I take first the question of whether the contribution lies solely in a method of doing business. It seems to me that it does. [...] The applicant has contributed an apparatus for performing a new method of conducting business (gaming) transactions. The advantages relied on by [the applicant] [...] are advantages of the new method of doing business and so fall wholly within the exclusion. Althgough they can be described as 'technical', they do not count as such: they are not a relevant technical approach. They are merely the consequence of putting the new business method into effect. The hardware involved is standard and forms no part of the contribution. [...]"

"[...] The patentability of software or, in the broader wording of the EPC, 'programs for computers', has been the subject of prolonged and intensive discussion among patent law professionals and interested sections of the public. This debate has also been fuelled by the efforts of some, mainly larger, companies in the field to obtain protection for software - although the Convention expressly excludes the patenting of computer programs as such - by relativising the rules, even if they cannot be abolished. This trend has been reflected, unfortunately, in the legal discussion. The relevant provision of the Convention is not a model of clarity, and legal sophistry has been employed with some success to obscure its meaning still further, in a way that in effect colludes with the efforts to extend patenting to software. [...]"

"[...] In several decisions over the past few years, the FCJ has sought to address this problem by looking again at the wording and purpose of the legal provision. These decisions have brought the developments in Germany to a conclusion, at least for the time being, which, unlike the efforts of, for example, the European Commission, limits the relevant industrial property rights to the area which - to us - appears legitimate.

The FCJ proceeds from the assumption that the prohibition on the patenting of software 'as such' means what the law says. Software cannot be protected merely because it achieves, inter alia, technical effects when used in conjunction with a technical device. Conversely, the prohibition means that, despite the technical effects normally associated with the use of software, these effects alone do not imply that the software contains a teaching for which patent law offers protection - or, more simply, software is not patentable merely by virtue of being used in conjunction with a general-purpose computer.

This broadly corresponds to the earlier approach of the European Patent Office, which held, albeit on the basis of different thinking, that patentability required a technical effect beyond the normal use of a standard computer in conjunction with a program. The main difference in approach consists in the fact that the EPO boards of appeal resorted to the term 'technical' for the purpose of assessing software: the FCJ found this unhelpful, firstly because, precisely when assessing software as such, the program's interdependence with the technical device makes technical content hard to deny, so that the Court had to fall back on the expedient of the 'not so technical teaching'. In particular, resorting to the term 'technical' was unhelpful because it shifted the focus of discussion from 'programs as such', a concept which was already unclear, to a further, equally ambiguous term, the meaning of which was inherently evolving and, moreover, would become further obscured as a result of the necessary distinction from subject-matter of a 'not so technical' nature. [...]"

"[...] The FCJ has not advanced beyond its early decision on the patentability of, for example, an anti-blocking device formed from a braking device and the control thereof by means of software; and it sees no reason - considering the requirement for a technical teaching directed to the solution of a specific technical problem, and the intention of the legal provision - to deviate from its established position. With a system in which software serves to control a technical device with a technical effect, the software is not protected as such, but only as part of that system, although a sufficient basis for novelty and inventive step can be found in a novel concept of control realised especially in the software, if all the parts interact. [...]"

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