28 August 2010

The Advocates General's Statement on the Planned Unified European Patent Court System (updated)

Advocatus Diaboli interwiewing witness
The first persons that were honoured by the Christian Church as saints were their early martyrs. Later also other people were recognised as saints upon approval by a local bishop. In medieval times, the act of canonization by which a deceased person is declared to be a saint was reserved to the Holy See as a conclusion of a long process requiring extensive proof on the candidate's exemplary and holy life. In order to formalise and to improve the canonisation process, Pope Sixtus V. established the Office of the Promotor Fidei in 1557, popularly known as “Advocatus Diaboli”, who is a canonical lawyer whose task is to make the argument against canonization of a candidate by looking for weaknesses in the evidence for the miracles attributed to the candidate.

From a more global point of view, the person taking the role of an “Advocatus Diaboli” assesses the quality of the original argument and, by this, either improves or abandons the original position.

Now, within the more profane context of European patent politics, the Statement of Position by the Advocates General regarding the request of the EU Council for an opinion of the Court of Justice of the European Union (CJEU) on the planned European Patent and the European and EU Patent Court (EEUPC) has made publicly available. While the Statement says that it has been presented already on 2 July 2010, the general public had to be patient until 19 August 2010 when the eagerly awaited Advocates General’s Statement has finally been found and published on the EPLAW blog (see Opinion 01/09, Statement of Position, originally in French or informal English translation).

It is amazing how such important documents of EU authorities are “published” in a hide-and-seek way so that it takes another six weeks to find them on some EU internet servers. I have to agree with a related remark on the IPJur blog, according to which these are “childish games played by interested circles inside of and close to the EU Council in a futile attempt to withhold such important documents from the eyes of the general public”.

Anyway, much like an Advocatus Diaboli in canonical law, the Advocates General identified the weaknesses of the European Council’s Draft Agreement of 23 March 2009 (Doc 9076/09), and defined the conditions under which “canonisation” of the proposed European Patent Court System to the heavens of EU treaties may be obtained.

As reported earlier, the original request for an opinion of the CJEU on whether or not the envisaged agreement on a unified patent litigation system is compatible with the provisions of EU treaties was made by the EU Council on 6 July 2009. A preparatory oral hearing of the CJEU took place on 18 May 2010 (see official report) and showed that there exist reasonable doubts on
  • The compatibility of the Draft Agreement with the Lisbon Treaty under consideration of whether treaties with third party states are required for the functioning of the internal market;
  • The conditions under which European patents according to the European Patent Convention may be integrated with EU patents in a conjoint agreement;
  • The possibility of an appeal on decisions of the EPO to the European Court of Justice (as especially emphasised by the Advocate General).
Essential Objections: In § 123 of the Statement of Position, Advocate General Juliane Kokott concludes that the Draft Agreement in its current form is incompatible with EU treaties for the following reasons:
  1. The guarantees to ensuring full application and observance of the pre-eminence of EU law by the EEUPC are insufficient (see §§ 78 to 93 of the Statement).
  2. The remedies available in the event of the EEUPC’s infringement of EU law and in the event of non-observance of its obligation to effect a preliminary reference are insufficient (see §§ 104 to 115 of the Statement).
  3. The linguistic system faced by the central division of the EEUPC may affect the rights of defence (see §§ 121 and 122 of the Statement).
  4. The draft agreement […] does not satisfy the requirement of ensuring effective judicial control and a correct and uniform application of EU law in administrative proceedings concerning the granting of Community patents (see §§ 68 to 75 of the Statement).
However, Ms Kokott’s Statement also emphasised that an international body outside the institutional scope of the EU would, however, not per se be incompatible with EU treaties and especially points to the fact that for achieving compatibility an effective judicial control has to be ensured by an independent court observing EU law and being authorised to, if appropriate, refer a preliminary question to the CJEU.

Linguistic System: Among the above-identified critical points, the “linguistic system” appears to be the most political issue (see earlier postings here and here) and thus may require extensive and complicated negotiations to be solved, especially since Spain rather vigorously fights for consideration of the Spanish language by the system (see § 117 of the Statement):
116. Finally, the linguistic system faced by the PC deserves to be examined from the point of view of the rights of defence whose respect is a fundamental principle of Union law. […]

117. As pointed out by Spain in particular, it is not ruled out that a company may be summoned in law, before a local or regional division of the PC, in a language other than the official language of its country of origin. This aspect was also debated during the hearing before the Court.

121. The [linguistic] situation is clearly more delicate, however, when the country where a company must be assigned does not participate in any local or regional division of the PC Court of First Instance. In such a case, the dispute would be brought before the central division of the PC Court of First Instance, and the language of the proceedings would be that of the patent, namely German, English or French. Consequently, a company may be summoned in law in a language in whose choice neither its country of origin nor the country where it carries out its commercial activities has participated. [...] [T]his linguistic system appears to be unacceptable with regard to observance of the rights of defence.
Judical Control: Another important, though more structural, issue is the current EPC appeal system, which does not provide any remedies on decisions of the Boards of Appeal or the Enlarged Board of Appeal, which, apparently, is not acceptable for the European Union if the EPO should grant EU patents. The Statement of Position thus requires a further EU instance above the EPO in granting matters, perhaps the CJEU or the future EEUPC:
68. Secondly, one should check whether it would not have been necessary to include in the competences of the future PC a section on administrative proceedings. These proceedings concern in particular appeals against the EPO filed by companies making unsuccessful applications for the granting of patents, as well as appeals filed by third parties unsuccessfully opposing the granting of a patent.

69. We should recall that Community patents will be granted by the EPO according to the applicable rules under the EPC for the granting of European patents. […]

71. In fact, the decisions of the EPO concerning patents can only currently be reviewed by the internal chambers of appeal created within the EPO, excluding any judicial appeal before an external court. There is no possibility of the European Court of Justice ensuring the correct and uniform application of Union law to proceedings taking place before the chambers of appeal of the EPO. On this important point, the legal situation concerning Community patents is therefore fundamentally different from that concerning Community trade marks.

72. The European Union should not either delegate powers to an international body or transform into its legal system acts issued by an international body without ensuring that effective judicial control exists, exercised by an independent court that is required to observe Union law and is authorized to refer a preliminary question to the Court of Justice for a ruling, where appropriate.

73. These requirements can certainly be satisfied in different ways. A possible extension of the competences of the future PC to include administrative proceedings against decisions of the EPO is just one of the options […]. Another option […] is the creation of an administrative patent court which should be authorized, unequivocally, to refer to the European Court of Justice for a ruling on a preliminary question. […]

74. However, […] administrative proceedings against decisions of the EPO […] do not appear to play a role either in the draft agreement setting up the EC or within the scope of the European Union’s accession to the EPC.
Comments: With respect to the future developments of this matter, the Kluwer patent blog takes the rather pessimistic position that, if the Court follows the Advocates General’s Statement of Position, a unified patent litigation system including a EU patent could possibly not be achieved in the near future, due to the requirement to involve the CJEU in any EU patent litigation system and the inability of the system to limit the number of working languages. The IPJur blog adds to the discussion that, in view of the many objections by the Advocates General, it presently is the most realistic scenario that the CJEU’s final decision closely resembles the Advocates General’s Statement, in which case a re-drafting of the proposal of the EU Council would be most painful with regard to the language issue and the requirement that the EPO Boards of Appeal “do not any longer see the blue sky over their heads”.

Mr Leo Steenbeek, Principal IP Counsel at Philips IP Department, comments on some of the cited blog postings by emphasising that the Advocates General “do believe that the idea as such is compatible with EU law” and that “the changes that need to be made are basically rather straightforward”, while “the principles of the EEUPC agreement are not affected”. To overcome the four critical issues as identified in § 123 of the Statement of Position, he suggests that
  1. The “observation of EU law” requires a provision that EU law prevails over the wording of an EEUPC agreement and that the EEUPC have to take the entire EU law into account.
  2. The required “remedies” may be provided by a provision to allow the European Commission and EU member states to file an appeal in the interest of the law with the CJEU.
  3. Improving the “linguistic system” would only require that parties may obtain translations of documents in the file of the Central Division.
  4. Sufficient “judical control” would be obtained by (i.) a new EPC rule to the effect that the Boards of Appeal must refer questions on EU law to the CJEU and (ii.) a provision that the EU Commission and EU member states can file an appeal in the interest of the law with the CJEU.
Mr Steenbeek also stresses that, beyond the Statement of Position and the coming Court Opinion, it is the political reality that only about 50% of the EU member states are positive about the EEUPC approach, so that it may be the most straightforward approach to form something like a “coalition of the willing” to at least achieve an agreement between those EU member states that are enthusiastic about a unified patent litigation court system in Europe.

Conclusion: The Statement of Position of the Advocates General is clearly a setback for the EEUPC project. The national views on the language regime has proven once again to be a major obstacle for its implementation, while the required judical control over EPO decisions appears solvable in an administratively way. In the near future, most likely before the final opinion of the CJEU, we will definitely obtain a reaction of the current Belgian presidency and the coming autumn meeting of European patents judges will surely comment thereon as well.

Update: Meanwhile, the Chartered Institute of Patent Attorneys (CIPA) has issued a press release concerning the Advocate's Generals negative Statement, in which CIPA urges the CJEU to take a more pragmatic view on legality of proposed European patent and patent courts (see comments on IPKat blog). Further, the PatLit blog reports on an article on ScienceBusiness in a similar cadence, according to which "Belgian Presidency pledges to press ahead on patents".

17 August 2010

Two Opinions of the US Board of Appeals (BPAI) on "Broadest Reasonable Interpretation"

(Hermes, messenger of the Gods)
Only recently, the USPTO has published the BPAI decision ex parte Givens as an informative opinion on the importend question as to how broad patent claims may be interpreted by USPTO examiners.

As summarised on Peter Zura's 271 Patent Blog, an application relating to a "method and apparatus for reducing noise associated with acoustic sensor outputs" has been rejected during examination due to alledged lack of novelty over a prior art reference pursuant 35 U.S.C § 102(e). While the rejected claim comprised a "sub-band spectral subtractive routine", the Examiner argued that, since the application did "not provide a specific definition of 'sub-band spectral subtractive routine', thus, giving the term its broadest reasonable interpretation, the term can include any adaptive filter".

The Board of Appeal (BPAI) found that this is a rather liberal application of the demanded 'broadest reasonable interpretation', and argued:
Although Appellant’s Specification does not specifically define the term “sub-band spectral subtractive routine,” this is a specific claim term for a specific type of filtering (Spec. ¶[0032]). Any interpretation that fails to give weight to “sub-band,” “spectral,” “subtractive,” and “routine” deprives the words in this claim term of their normal meaning.
Thus, the term “sub-band spectral subtractive routine” does not include just any adaptive filter, but rather refers to a specific filtering. In fact the prior art circuit is fed to a summer and not to a sub-band spectral subtractive routine and the reference does not describe the summer as operating on a sub-band. The reference thus did not disclose each and every element of the invention.

Another interesting BPAI opinion on claims interpretation, this time relating to software, is ex parte Peyrelevade issued 17 March 2010, in which the BPAI found that, prima facie, the claims are novel and non-obvious, but certain claims were rejected as being directed to non-statutory subject matter.

The relevant claims recited a "computer program product" that includes code. Under the doctrine of "broadest reasonable interpretation", the BPAI found that the claims
encompass [] a computer program per se [and] also encompass [] the computer program product being embodied on a carrier wave [since the claims recited] the open transitional phrase 'comprising and do [] not preclude the computer program product from being embodied in a carrier wave.  
As reported on Justin Gray's Gray on Claims blog, the BPAI found that the claims encompassed both a computer program per se as well as a signal, and were therefore directed to non-statutory subject matter.

In Greek mythology, Hermes, from whose name the term "hermeneutics" is said to be derived, is the inventor of language and speech, an interpreter and a liar. As messenger and translator of the Gods he was especially experienced in interpreting the Delphic Oracle, through which the Gods spoke to men. As an European Patent Attorney, I must confess that the US patent law as practised by the USPTO sometimes appears as an oracle to me, which is why I am glad that the BPAI is experienced in interpreting those spells such that they better match with what one may call a common sense of patent practise.

15 August 2010

US CAFC says that a Computerized Method is not Infringed when a Step is Performed by Hand

(Photo shows a court room of the US CAFC)
Thanks to a tweet of "PatentLawFirm", I came across an interesting US case law relating to infringement of computer-implemented inventions.

The US Federal Circuit (CAFC) found in case no 2009-1403 (Lincoln National vs. Transamerica) that a computerized method claim of Lincoln National's patent US 7,089,201 was not infringed because one of the required steps of independent claims 35 was not computer-implemented - and was instead performed manually rather then automatically. The CAFC thus reversed and remanded the appealed district court decision. (Please refer to the full opinion in pdf or html).

The patent relates to “computerized methods for administering variable annuity plans" to ensure guaranteed minimum annuity payments. Claim 35, the only independent claim at issue, reads as follows:
35.  A computerized method for administering a variable annuity plan having a guaranteed minimum payment feature associated with a systematic withdrawal program, and for periodically determining an amount of a scheduled payment to be made to the owner under the plan, comprising the steps of:
(a) storing data [...],
(b) determining [...],
(c) periodically determining [...],
(d) monitoring [...]; and
(e) periodically paying the scheduled payment to the owner for the period of benefit payments, even if the account value is exhausted before all payments have been made.
 The district court construed step (e) of Claim 35 to mean:
At the regular intervals required by the plan, paying the scheduled payment to the owner for the period of benefit payments, even if the account value is less than the scheduled payment amount or zero before the payments guaranteed under the plan have been made. [Further, step (e)] does not require actual exhaustion of the account value, but is merely a circumstance in which the guaranteed payment must still be made.
That is, the district court believed that the annuity account value did not have to be exhausted, but the method had to ensure that when the annuity account was exhausted, the computer method still issued an annuity payment. 

On appeal, Transamerica explained that it did not implement "a computer system that will make a payment in the event an account becomes exhausted" since its payment system issues a manual check when the account was exhausted. 

The Federal Circuit took the position that a method claim is directly infringed only if each step of the claimed method is performed, while Transamerica’s payment system does not make automatic payments once a policy owner’s account value is exhausted. Rather, a different department produces a manual check and sends it to the policy owner.

Since, consequently, Transamerica does not practice a computerized method according to claim 35, includion step (e), the Federal Circuit reversed on infringement because Lincoln did not prove that Transamerica actually practiced every computer-implemented step of computerized-method-claim 35 (further coverage here).

The patent in suit was granted on August 8, 2006. According to my understanding of current US case law, independent claim 35 would nowadays not any more be found to represent eligible subject matter pursuant 35 U.S.C. § 101. This claim, in fact, appears to be a great example for a claim both encompassing an abstract idea according to the Bilski opinion of the US Supreme Court and not meeting the requirements of the machine-or-transformation test of the Federal Circuit.  

Professional Representation of non-EU Applicants before the OHIM (updated once)

The OAMI Users' Group sees itself in the important role of encouraging regular consultation and feedback between users and OHIM with regard to all aspects of the Community trade mark and design systems. Members of the Users' Group are international non-governmental organisations that represent interested parties from the sector, such as AIPPI, BusinessEurope, FICPI, GRUR, INTA, LES, MARQUES, to name just a few.   

Currently, according to Art. 92 (2) CTMR, natural or legal persons not having either their domicile or their principal place of business or a real and effective industrial or commercial establishment in the Community must appoint a qualified representative pusuant Art. 93 (1) CTMR to act for them in all proceedings except the filing of an application for a CTM.

For the latest OAMI Users' Group meeting on 15 March 2010 at the OHIM in Alicante, OHIM proposed a significant change regarding the professional representation of non-EU applicants to reduce their costs:
There is little objective justification for insisting on representation when there is no need for exchanges between the Office and the applicant. The rationale behind requiring professional representation relies on two principal ideas. Firstly, non-EU entities should have advice available from EU professionals in dealing with their applications. There is no requirement for representation at the point of application. If there are no deficiencies there is no need for advice. [...]

In the light of this the Office proposes to change its practice and will no longer insist on professional representation of non-EU entities where an application for a CTM or RCD has no deficiencies. [...] The Office will continue to insist on representation where there is a deficiency or where inter partes proceedings (e.g. an application for invalidity) are launched.
On behalf of MARQUES, the meeting was attended by Mr David Stone, Mr Jochen Höhfeld, and Ms Paola Tessarolo. According to their memo for the meeting, this change would apply to two third of all CTM applications. While a number of Users' Group members asked for more time to comment, others were able to articulate their view:
  • FICPI submitted a formal position paper, according to which such change is not a change in practice but that this would constitute a change in law, there being no basis in the law for the changed practice.
  • INTA mentioned that such change could be an advantage for the users, however, that this could create problems when one wants to contact e.g. a Chinese applicant to negotiate before filing an opposition. 
  • APRAM found it desirable if their was reciprocity between the different countries that will take advantage of this new practice, while OHIM pointed to the fact that there was reciprocity e.g. already in the Madrid System. It was agreed that this is a highly political issue.
While OHIM anounced a draft on this issue from the European Commission, we now learn from the IPKat about an interesting communication regarding this delicate issue, according to which
[...] on sharing this point of view with user associations, [OHIM] found there were strong objections from some of them. In order to allow these objections to be fully considered, we have decided not to introduce this change of practice. Instead, we will be asking the European Commission to consider the question as part of the ongoing review of the functioning of the trade mark system in Europe [...].
As the IPKat assumes that this change of mind may be due to the fact that "users' associations" in fact consist of "people who get paid by clients to represent them in matters concerning Community trade marks" (which is a bit exaggerated, since many of above NGO's equally represent trademark owners), Gareth Dickson, a commercial IP litigator, adds that applicants should be required to appoint a foreign representative, since he "can't imagine the turmoil applicants would have to endure if they were given the option of appointing a properly qualified representative whose place of business is physically located outside the EU". 

In fact, the matter will now be reviewed within the much broader context of the "Study on the trade mark system in Europe" initiated by the European Commission and conducted by the Munich-based IP thinktank of the Max Planck Institute for Intellectual Property, which provides a platform for input and observations and to inform stakeholders and the interested public about the course of the Study.

However, after a number of activities (e.g. reviewing statements, holding workshops, preparing surveys on a questionnaire, visiting and interviewing National Trademark Offices), the Max Planck Institute is now already in the process of preparing the final report of the Study. Nevertheless, statements of relevance and further contributions are still welcome by e-mail.


UPDATE:In a reply to the IPKat's suggestion that professional bodies object to the removal of the restriction because it denies them work, Filemot of the SOLO blog counter argerued that 
[t]he difficulty [...] is that the European entrepreneur does not have a similar privilege to do the same in the rest of the world. If WIPO thinks its worth taking up, then compulsory representation for out-of-territory applicants could become a thing of the past but, until then, I do not see why OHIM should go unilateral.
and offers "to represent an out of state applicant who needs a representative for free". The concrete terms of this invitation to treat can be studied here.

12 August 2010

Hearing of EU Court of Justice on EU Patent System did not Address Representation before Patents Court

In 2007, the European Commission presented different options regarding the creation of a unified patent litigation system in Europe [COM (2007) 165 final]. The following discussion in the
Council Working Party on Intellectual Property based on various working documents presented by the Portuguese, Slovenian, French and Czech Presidencies, resulted in a first, preliminary Draft Agreement prepared by the Slovenian Presidency in May 2008 [Doc. 9124/08], which was then further elaborated and revised to yield the latest version of the Draft Agreement as proposed by the Czech Presidency on 23 March 2009 [Doc. 7928/09].

In the course of the discussions on creating a unified patent litigation system and due to requests by various delegations (and the French Presidency), an opinion by the European Court of Justice (ECJ) was requested on the compatibility of the envisaged Agreement with the EU Treaty [Doc 9076/09].
 
The related Oral Hearing of the ECJ took place on May 18, 2010 and showed that there exist doubts whether a number of essential issues of the Draft Agreement are compatible with the EU Treaty and related EU law, as already reported by eminent IP bloggers Jeremy Phillips (here) and Axel Horns (here).

For the sake of completeness and in completion of my earlier posting on the controvercy between lawyers and patent attorneys regarding the entitlement for representation before the future European and EU Patent Court (EEUPC), I briefly summarise the issues discussed at this important hearing below.

Apparently, the representation arrangement pursuant Art. 28 (2) Draft Agreement, according to which "parties may alternatively be represented by European Patent Attorneys [...] pursuant Article 134 EPC and who have appropriate qualifications such as a European Union Patent Litigation Certificate", has not been discussed or objected at the hearing. This fact may be interpreted in such a way that neither the ECJ Judges nor the EU member states (appear to) have any concerns about certified EU/European Patent Attorneys representing cases before the future EEUPC on their own.

The actually discussed issues were: 
  • The admissibility of the request for an opinion according to Art. 28 (11) TFEU (Treaty on the Functioning of the European Union or, more common, Lisbon Treaty);
  • The compatibility of the Draft Agreement with the Lisbon Treaty under consideration of whether or not treaties with third party states are required for the functioning of the internal market. Some EU member states completely negated the compatibility of the Draft Agreement, while others saw compatibility in view of Art. 353 TFEU;
  • If and under which conditions may European patents according to the EPC be integrated with EU patents in a conjoint agreement;
  • The Draft Agreement does not stipulate the possibility of an appeal on decisions of the EPO to the European Court of Justice. This issue has been especially emphasised by the Court and was controversally discussed. The Advocate General asked a number of questions regarding legal remidies to decision of the EPO issued in an examination proceedings for a EU patent.
  • The crucial translation arrangement has been excluded from the Draft Agreement and could thus not be covered in the hearing. However, based on the language regime of the European Patent Convention (Art. 14 EPC), a proposal for a translation arrangement of the European Commission has been published on June 30, 2010 (see earlier posting). 
For further reading, please refer to the official report for the hearing or the private notes of Mr Jochen Pagenberg, current President of EPLAW.

The opinion of the ECJ is not expected before the end of this year.

10 August 2010

Representation Before The Future European and EU Patents Court (EEUPC)


At the EU Competitiveness Council on 4 December 2009, the Swedish EU presidency had achieved a "political breakthrough" (see press release) in negotiations concerning the Community Patent (now EU Patent).Among the key elements agreed on was a Draft Regulation on the EU patent, according to which the EU will accede to the European Patent Convention as a contracting state, and patents granted by the EPO will, when validated for the EU, have unitary effect in the territory of the EU.

However, the agreed package did not comprise a solution to the controversal translation arrangements for the EU patent, which still is subject to intense political negotiations (see e.g. here and here).

Also in the the complementary Draft Agreement on the European and Community Patents Court (now European and European Union Patent Court, EEUPC), proposed by the Czech Presidency on 23 March 2009, a number of issues remained open, including the composition of the panels, the competence of the divisions of the Court of First Instance, the notion of technical judges and the language regime. In June 2009, the Council submitted a request to the European Court of Justice on the compatibility of the draft agreement with the EU treaties, on which an opinion is not expected before summer 2010 at the earliest.

And there is another intense debate among stakeholders relating to the regulation of representation before the new EEUPC, which is controversally discussed among the legal professions involved - lawyers (attorneys-at-law) and patent attorneys.

The related paragraphs 1 to 2 of Article 28 (Representation) of the Draft Agreement read:
(1) Parties shall be represented by lawyers authorized to practise before a court of a Contracting State.

(2) Parties may alternatively be represented by European Patent Attorneys who are entitled to act as professional representatives before the European Patent Office pursuant to Article 134 EPC and who have appropriate qualifications such as a European Union Patent Litigation Certificate.

(2a) Representatives of the parties may be assisted by patent attorneys who shall be allowed to speak at hearings of the Court in accordance with the Rules or Procedure.
According to Art. 28 (2) of the Draft Agreement, European Patent Attorneys (EPAs) in the sense of Art. 134 EPC will be, besides lawyers, alternatively entitled for representation if they have proven their approprite qualification by a "EU Patent Litigation Certificate", whereas other patent attorneys not being European Patent Attorneys may only assist the respective represantative, i.e. the respective lawyer or certified European Patent Attorney. 

Here's what three relevant stakeholders think about the draft provisions on representation of EPA's before the EEUPC.

I.  Council of Bars and Law Societies of Europe (CCBE)

Quite naturally, the lawyer's lobby groups, especially the Council of Bars and Law Societies of Europe (CCBE), are "concerned" about the suggested representation regime, even though it introduces the Litigation Certificate as a further hurdle for European Patent Attorneys. For instance, Jonathan Goldsmith, Secretary General of CCBE, critisised in the UK Law Society Gazette that Art. 28 "says nothing about the qualification criteria for such attorneys, regulatory and disciplinary consequences for misconduct, or the position relating to privilege". In a more official position paper, his organisation suggested to amend Article 28 (2) to read
The lawyers representing the parties may be assisted by European Patent Attorneys who are entitled to act as professional representatives before the European Patent Office pursuant to Article 134 EPC provided that the lawyers assisted in this way maintain full responsibility for complying with all obligations to the Court required of legal representatives.
CCBE then went on to explain why European Patent Attorneys should not be entitled to representation before the EEUPC:
  • Disputes involving patents also involve many other areas of law in which a patent attorney will have no training or experience. Such disputes should be carried out by a suitably qualified and properly trained professional lawyer that can guide the client through all aspects of the case.
  • The vague concept of a European Union Patent Litigation Certificate cannot address and provide the required level of training and no guarantee of appropriate standards can be given to the public;
  • Professional representatives have to be subject to clear, consistent rules of behaviour backed by an effective disciplinary procedure, whereas a certificate provides no guarantee for a behaviour in accordance with such principles. Since in a number of EU countries patent attorneys do not belong to any legal profession, they do not bring the same additional guarantees of professional behaviour as provided by bar members.
II.  The European Patent Institute (epi)

In a recent positional paper of  the European Patent Institute (EPI), which may be seen as a direct reply to the CCBE's observations, the professional body of registered European Patent Attorneys expressed an opposed point of view and stressed that 
the [EEUPC] will be a technical court with new procedures. European Patent Attorneys have technical qualifications, are highly experienced in patent matters, are regulated by a code of professional conduct, and will have training in the new procedures. The adoption of European Patent Attorneys as representatives will have significant cost benefits and provide effective litigation.
In detail, epi worked out the following advantages of representation by EPA's: 

Cost Benefit: The numbers of those representing the parties in a patent action would be reduced with significant cost-benefit, as mentioned in the Final Report "Economic Cost-Benefit Analysis of a Unified and Integrated European Patent Litigation System" by the Institute for Innovation Research of the Ludwig-Maximilians-Universität, 26 February 2009. This is because Art. 28 would allow the client to choose whether to be represented by an EPA, by a lawyer or by a team. This would lead to more competition among representatives and, thus, limit the cost of litigation. By this and other cost effects, smaller businesses would be attracted to patent litigation leading to an increase in the demand for patent litigation. 

Quality of Representation: Besides a number of years training and practice in patent law, EPA's, unlike lawyers, will have an appropriate qualification such as the European Union Patent Litigation Certificate, which will guaratee quality of representation before the EEUPC. No lawyer is at present familiar with the specialised procedural law before the EEUPC. EPA's will have to familiarize themselves with this new procedural law in the same way as lawyers should do so, the difference being that the EPA's will have to satisfy the requirement for the EU Patent Litigation Certificate. 

Lawyers: The cadre of lawyers will include many who have no knowledge of technology, patent law (e.g. the EPC) or of the procedural law of the unified EEUPC. While a lawyer’s education in the field of law is general and broad, it is not specific to the field of intellectual property or patents. Although litigation before the EEUPC will relate to and raise many complex and specific questions of law, the necessary experience, knowledge and expertise to deal with them will not be held by most lawyers, especially if the lawyers come from a state with little or no tradition in the patent field.

Specific expertise: EPA's are trained to defend or attack the validity of patents. Analysis of the scope of protection of patents and the doctrine of equivalents are part of EPA's everyday practice, as well as formulating or considering arguments against the enforcement of a patent, rules concerning the exhaustion of a patent, and classic defence arguments. EPA's have to provide the lawyers with the necessary arguments on both validity and infringement in litigation and also represent in opposition and appeal proceedings patent before the EPO. 

EPA's already act before European Court: The Boards of Appeal of the EPO are an autonomous authority, comprising a Presidium and various Chambers hearing the individual cases, such that already today EPA’s are considered competent to represent parties before a European authority whose Chambers act according to common Rules of Procedure, hear witnesses and experts, like any other civil court, and conduct the proceedings in any of the three official languages. 

Disciplinary procedures: Article 11 of the “Regulation on the establishment of an Institute of professional representatives before the EPO (epi) and the “Regulation on discipline for professional representatives” prescribe rules of professional conduct for EPA's. The “Additional Rules of procedure of the Disciplinary Committee” govern a Disciplinary Committee of the epi and the procedures of the Committee. It is possible that additional special rules of professional conduct may be proposed for EPA representatives before the EEUPC. For lawyers, the rules of professional conduct and the disciplinary procedures vary considerably throughout the EU Member States.

III.  Centre d'Études Intern. de la Propriété Intellectuelle (CEIPI)

In support of such statements in favour of representation by EPA's before the EEUPC, Walter Holzer, course coordinator at CEIPI, University of Strasbourg, emphasises that "adequate representation rights for EPA's in any proceedings before the new pan-European courts is the more relevant, because before these courts infringement and validity issues will be taken together, in order to expedite the proceedings". He further made the following contributions in a presentation on a conference having the promising title "Towards a European Patent Court", held on 16-17 April 2010 at the European Parliament in Strasbourg (see also this report):

A pan-European profession: EPA's up to now form the only harmonised pan-European fully academic profession organised according to international law, with a pan-European training and qualification. The special attributes and thus the common competence of patent attorneys is their scientific/technical background as well as legal training, which enables them to encompass a technical and legal mode of thinking.

Current national situation: In a number of EU an EPC Member States, e.g. in Germany, Austria, Poland and the Netherlands, patent attorneys have traditionally and by law been able to represent on their own before national courts, e.g. in invalidity proceedings or actions for declarations of non-infringement. For historical reasons, in litigation before the national civil courts representation by an attorney-at-law still mandatory. In practice, however, patent attorneys play a major role in these proceedings, in particular in those countries where they enjoy a Right of Audience and can address the court, e.g. in Germany. In some countries, patent attorneys enjoy further going rights, like in the UK or Poland, where they are allowed to represent on their own in infringement proceedings. Also Litigator Certificates for patent attorneys are not new. They already exist, e.g, in the UK, where CIPA fellows have to take an appropriate examination.

Techincal expertise: The involvement of patent attorneys would guarantee that all technical aspects of the case, of which patent attorneys have an intimate knowledge, can fully be taken into account, which is reflected in the technical definition of the infringement or the wording of the claims. After all, any legal argument must be based on the underlying technical facts of the case.

Procedural law expertise: Representation by patent attorneys from all over Europe before a unified European patent court will require an additional legal training, mainly as concerns civil and procedural laws, especially as a unitary EU civil law as such does not exist.

It does not come as a surprise, that Mr Holzer already has a fairly concrete idea about what training should be required for European Patent Attorneys to obtain the European Patent Litigation Certificate.

08 August 2010

New Zealand Allows Patents on "Embedded Software" but Fails to Provide a Definition

Back in April this year, the parilament of New Zealand voted for a major Patents Reform Bill that tightened the standards of patentability of software-implemented inventions, such that they would have been broadly eliminated in New Zealand.

The bill was drafted by the Select Commerce Committee after consulting the country's (open source) software industry, represented by the Computer Society (NZCS) and the Open Source Society, which obviously convinced the lawmakers that patents are detrimental to open source software development. In this regard, the bill summarises that
Protecting software by patenting is inconsistent with the open source model, and its proponents oppose it. [...] They felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general we accept this position.
Unsurprisingly, there were not only happy faces in New Zealand and some buisiness voices expressed their fear that the decision damages investments in New Zealand's software development industry, among which was the NZICT, which claims to represent "New Zealand's ICT industry" and, as such, also the local subsidiaries of a number of international patent holders (e.g. Microsoft, IBM, HP).

Further, Chris Auld, director of New Zealand software developer Intergen, critisised that the Bill would “suck the lifeblood” out of the New Zealand software development industry and added that the justified criticism agains software patents should better have led to improvments of the quality of search and examination of software-related patent application by the NZ Intellectual Property Office (IPONZ). The Commerce Select Committee was especially critisised for particularly listening to the rather passionate open source lobby.

In the end the bill suggested to explicitly exclude software from patentability: "We recommend amending clause 15 to include computer programs among inventions that may not be patented."

When the Select Commerce Committee issued its report on the Patents Bill in early July 2010, it also mentioned the possibility of an exception for "embedded" software. i.e. software whose only purpose is to control a machine. During its consideration of the Bill, the Committee received submissions that inventions relating to "embedded" software as part of a machine should be able to obtain patent protection. But, since the Commitee found that too difficult to define, such a distinction was not put in the Bill, whereas the Committee added “that our recommendation [...] would be unlikely to prevent the granting of patents for inventions involving embedded software".

Then reports occured that NZ Commerce Minister Simon Power publicly indicated that the government would support the computer program exclusion, but that the Ministry of Economic Development (MED) is backing away from the Commerce Committee’s recommendation and instead plans to redraft the Bill along the lines of the European Patent Convention (see reports here and here), which indeed would have been a step in the right direction.

Even more rumours on a European approach towards software patents were planted by reports on a letter in which a New Zealand patent attorney reports from the NZICT discussing this shift. While the blog post has been deleted soon after publication, some were quick enough to reconstruct it from Google cache and to extract that a government official made the points that the MED "had serious concerns" and "the intent had never been to ban software patents outright". Instead, "the signal that the Government wants to send is to follow European law and practice [according to which] software [...] should have a technical purpose and be an inventive step to be patentable".

Now, after all this back and forth, the MED has decided that it was the real intent of the Committee, all along, to treat machine-controlling software as a special class that may be patentable. Consequently, it was then confirmed by Minister Power on July 15, 2010 that "further amendment to the bill is neither necessary nor desirable" and that he "instructed the IPONZ to develop guidelines to allow inventions that contain embedded software to be patented", since it was accepted by the Committee and the Minister that companies investing in inventions involving "embedded" computer programs should be able to obtain patent protection for these inventions (see also reports here and here).

Apparently, like in other juristictions before, also the legislative of New Zealand has failed to clearly specify the distinction between patentable and unpatentable software in a Bill and now handed the problem down to the executive authority, the IPONZ, to manage this by (presumably more or less vague) guidelines, which will be subject to another round of lobbing (as already announced by the NZCS) and public discussion and then most likely be covered by court proceedings as soon as the first patent application is rejected based on these guidelines.

In the same context, Mark Summerfield of the Patentology blog pointed to the fact that "it is the experience of every government, patent office and court that has ever attempted to draw a 'bright line' between patentable and unpatentable computer-implemented inventions, that this is a futile exercise" and, consequently, it has taken more than two decades of jurisprudence in Europe, the US and Australia to develop their respective present positions on so-called "software patents", while grey areas still remain as to where the respective boundaries lie.

In the light of this history, it appears highly doubtful whether the IPONZ can succeed where the Select Committee found it "too difficult to define such a distinction" and competent legal and technical minds across the world have failed as well. In any case, it will be exciting to follow how New Zealand tries to set up an embedded/non-embeded doctrine competing with the technical-character paradigm of the EPO Appeal Boards (see e.g. here) and the increasingly similar technical-problem paradigm of the German Federal Court of Justice (see e.g. here), on the one hand, and the abstract-idea paradigm of the US Supreme Court (see e.g. here) and the machine-or-transformation paradigm of the US CAFC (see e.g. here), on the other hand.

In the end, maybe after another two decades of intense discussions and lobbying, it will eventually turn out that all theses appraches only represented different "compromises around linguistic traps" (as former CAFC Chief Judge Paul Michel called his Bilski decision) and meanwhile have converged into a common "theory" on software patent eligibility. First tender indications of such conversion migh be the increasing interchange of "indefinite legal concepts" between the various judical approaches, such as the notion of "software as such" as codified in Art. 52 EPC, which has recently been used by the BPAI in ex parte Proudler to reject claims based on the US Supreme Court's abstract idea approach, or the fact that the German Federal Court of Justice recently analysed under which circumstances "embedded software" may represent statutory subject-matter and, by this, convered towards the EPO approach.

From a more political point of view, the IAM blog added that, if the final law and guidelines (and possibly also court proceedings) confirm the non-patentability of computer programs in New Zealand, "anti-software campaigners will have a legislative template and a real live working example of a software patent-free environment on which to base their arguments in future".



(Photo (C) 2007 by Unofficialenglandrugby via Flickr under the terms of a CC license)

04 August 2010

EPO Tightens Information Disclosure Requirements

Since the entering into force of the revised European Patent Convention (EPC 2000) on 13 December 2007, the EPO may "invite the applicant to provide information on prior art taken into consideration in national or regional patent proceedings and concerning an invention to which the European patent application relates", as specified under Art. 124 (1) EPC.

The EPO now announced in a Notice dated 28 July 2010 that the Administrative Council decided to introduce a permanent utilisation scheme (see CA/D 18/09 of 28.10.2009, OJ EPO 2009, 585) so that work carried out on a first filing by a National or Regional Patent Office during the priority year can be utilised by the EPO for its own search. For this reason, amended Rule 141 EPC and new Rule 70b EPC will apply to EP/PCT applications that are filed on or after 1 January 2011.

The permanent utilisation scheme as defined by amended Rule 141 EPC is an outcome of the Utilisation Pilot Project conducted from April 2007 to August 2008 and part of the agenda of the European Patent Network in which National Patent Offices (NPOs) of the EPC member states agreed on "utilisation by the EPO of work done by NPOs". 

Amended Rule 141 EPC (Information on prior art) reads:
(1) An applicant claiming priority within the meaning of Art. 87 shall file a copy of the results of any search carried out by the authority with which the previous application was filed together with the European patent application, in the case of a Euro-PCT application on entry into the European phase, or without delay after such results have been made available to him.

(2) The copy referred to in para. 1 shall be deemed to be duly filed if it is available to the European Patent Office and to be included in the file of the European patent application under the conditions determined by the President of the European Patent Office.  

(3) Without prejudice to para. 1 and 2, the European Patent Office may invite the applicant to provide, within a period of two months, information on prior art within the meaning of Art. 124 (1).
Paragraph 1 requires that for an EP application claiming one or more priorities, copies of the related search results from the Office(s) of first filing have to be filed directly upon filing the EP application or upon entry of an PCT application into the European regional phase. Further constraints are:
  • translation of the search results are not required;
  • filing copies of the revealed prior art is not require;
  • search reports not available upon filing have to be filed "without delay after they are made available";
  • for a priority of a PCT application, the search results of the ISA have to be filed.
Paragraph 2 relates to cases in which the search results are automatically included in the EPO's file of the EPO, so that the applicant is releaved from the obligations to file copies of search results, e.g. if those search results were drawn up by the EPO itself.

At this point the "European Patent Network" will come into as soon as the required electronic communication environment between NPO's and the EPO is set up that allows automatic forwarding of such search results from an NPO to the EPO.

Paragraph 3 allows the EPO to request any information on prior art taken into consideration in further parallel national/regional examination. The notice explains under section 2.3 that "this in particular encompasses search results with respect to filings whose priority is not being claimed in the European patent application", because amended Rule 141 (3) refers to Art. 124 (1) EPC, which explicitly relates to "information on prior art taken into consideration in the examination of national or regional patent applications and concerning an invention to which the European patent application relates".

New Rule 70b EPC (Request for a copy of search results) reads:
(1) Where the European Patent Office notes, at the time the Examining Division assumes responsibility, that a copy referred to in Rule 141 (1) has not been filed by the applicant and is not deemed to be duly filed under Rule 141 (2), it shall invite the applicant to file, within a period of two months, the copy or a statement that the results of the search referred to in Rule 141 (1), are not available to him.

(2) If the applicant fails to reply in due time to the invitation under paragraph 1, the European patent application shall be deemed to be withdrawn.
Paragraph 1 clarifies that, if the information pursuant amended Rule 141(1) neither is filed upon filing/European entry of the EP/PCT application nor is deemed to be duly filed under amended Rule 141(2), the EPO sets a (non-extendable) two-months time limit to either file the search results required under amended Rule 141(1) or a statement of non-availability of such search results.

Paragraph 2 clarifies that, if the applicant fails to reply in due time to the invitation under new Rule 70b(1), his application will be deemed to be withdrawn. Thereafter, further processing (Art. 121 EPC) is available as a remedy.

For divisional applications claiming a priority, the EPO will automatically issue an invitation under new Rule 70b(1). If the relevant search results have already been filed for the parent application, a reply is not required. If for the parent application a statement of non-availability according to new Rule 70b(1) EPC has been filed, the copy of the relevant search results or a new statement of non-availability has to be filed for the divisional application.

02 August 2010

In the Commercial World, FOSS Companies must Learn to Act as Businesses (updated once)

A recent article on the IP Jur blog addressed, in a different context, the popular myths that "patents are a tool to steal a software developer his hard-earned fruits of labor" and that "patent owners all of a sudden jump out of the bushes armed with a patent certificate [...] demanding to cease and desist commercially using the poor developer's software". It was then clarified that, generally, much in the same way in that you have to make sure that the estate on which you desire to build your house is not owned by any third party, software developers need to ensure that there are no patents covering technical aspects of a planned software project, i.e. that they have the freedom to operate.

The current conflict between IBM and TurboHercules, a french company selling an emulator that allows conventional computers with mainstream operating systems to run software that is designed for IBM System Z mainframe hardware based on the open source Hercules project, is a good example for both the cultivation of the patent myths by (parts of) the FOSS community and the trueness of the clarifying advice on ensuring freedom-to-operate. 

In March this year IBM mainframe CTO Mark Anzani sent a warning letter to TurboHercules, according to which IBM has "substantial concerns" that the Hercules project infringes on its patents, with 173 of theses patentes being specified in a nine pages enclosure to that letter.

According to the background information on Ars Technica, IBM's software licensing model ties its mainframe operating system to its underlying System Z hardware, guaranteeing that customers cannot easily migrate to other hardware options, whereas this lock-in strategy is the reason why IBM's mainframe business is still profitable despite the declining relevance of the technology. While IBM has shown a fair amount of goodwill to Hercules' projects in the past, TurboHercules then came up with a rather obsure idea to circumvent the licensing restrictions by interpreting parts of the license in a way that it could make it legally permissible to use IBM's mainframe operating system with Hercules in some cases. Following IBM's initial threats of legal action, Hercules filed an antitrust motion with the European Union, to unbundle IBM's mainframe operating system from its mainframe hardware, which was answered by IBM with the above-referenced warning letter (the full correspondence between Roger Bowler, President of TurboHercules, and IBM can be reviewed here).

Now prominent FOSS campaigner Florian Müller came into play when TurboHercules disclosed the letter to him for broad publication. Müller covered the mythical Big Blue vs. Little Hercules story by  a series of articles on his FOSS Patents blog (see here, here, here, and here), in which he complained that "IBM is using patent warfare in order to protect its highly lucrative mainframe monopoly" and that
[t]his proves that IBM’s love for free and open source software ends where its business interests begin. In market segments where IBM has nothing to lose, open source comes in handy and the developer community is courted and cherished. In an area in which IBM generates massive revenues (an estimated $25 billion annually just on mainframe software sales!), any weapon will be brought into position against open source. Even patents, which represent to open source what nuclear arms are in the physical world.
Müller went on to claim that IBM had violated its public pledge not to sue open source software projects for patent infringement, since two of the 173 patents/applications cited in the warning letter were plegded to the Linux community in IBM's 2005 "patent pledge".

In reply, Groklaw called Müller's assertions nothing more than FUD: "The complaint against IBM was filed with the EU Commission by TurboHercules. At that exact moment, did they not take themselves out from under the patent pledge's safety umbrella?"

Whereas Müller's moves and interpretations were closely followed by online media, such as PC World, ZDNet, The H, and even the Wall Street Journal, anti-Microsoft blogger Roy Schestowitz didn't hesitete to produce a conspiracy theory in order to link this conflict to his anti-Microsoft universe: "TurboHercules was a member of organisations funded by rivals such as Microsoft Corp 'to attack the mainframe', which is IBM’s main business. [...] TurboHercules is a member of a non-profit trade group called the Computer and Communications Industry Association (CCIA), which counts Microsoft and Oracle Corp as members, but not IBM". Further, based on Müller's LinkedIn connections, Schestowitz winded another conspiracy when accusing Müller of being a lobbyist of CCIA and Microsoft, since "Müller set up his anti-IBM blog when he got connected [on LinkedIn] with CCIA’s Executive VP, who works with Microsoft", which was answered by Müller by raising "serious doubts about whether I can expect a minimum standard of reasonableness on BoycottNovell's part". But that's just skrimish.

Now returning to the above freedom-to-operate advice, one has to agree with bnet blogger Erik Sherman's opinion that "[FOSS] companies must still learn to act as businesses":
If FOSS companies want to compete, they’ll have to do it the old fashioned way: creating their own intellectual property and using that as a leverage against better-established corporations. Sometimes the wise choice will be to avoid a market because getting in commercially will be impossible. Or it might be that a TurboHercules notices that all the patents asserted are in the US, possibly leaving room to operate in other parts of the world.
Similar voices, as collected on Technewsworld, called Roger Bowler's strategy "a bit naive" and assume that IBM "is rightfully concerned that a commercial enterprise is attempting to make money off of their IPR". Consequently, "the Hercules project obviously contains processes and technology that is covered by IBM's IPR. For Mr. Bowler to state otherwise is either total naivety or unwise business practice."

Meanwhile, following complaints by Turbo Hercules and T3 Technologies (another emulator software vendor), the European Commission has initiated formal anti-trust investigation against IBM, alleging it might have abused its dominant position on the mainframe computer market. In a press release of July 26, 2010, the Commission declared that it has "concerns that IBM may have engaged in anti-competitive practices with a view to foreclosing the market for maintenance services [...], in particular by restricting or delaying access to spare parts for which IBM is the only source." 

UPDATE: According to a recent article in the New York Times, IBM assumes that "the companies that filed the complaints [are] proxies of Microsoft" (the same term that Schestowitz used to describe Müller's interest in the case - another conspiracy here?) and accused Microsoft of orchestrating the complaints to promote sales of its Wintel servers: "Let there be no confusion whatsoever: there is no merit to the claims being made by Microsoft and its satellite proxies. [...] Certain IBM competitors, which have been unable to win in the marketplace through investments in fundamental innovations, now want regulators to create for them a market position that they have not earned".

Bloomberg further reported that, following up these accusations, Microsoft spokesman Frank Shaw took the position that Microsoft "invests in startup companies such as T3 Technologies to give customers greater choice" and that they "share T3’s belief that there needs to be greater openness and choice for customers in the mainframe market".




(Photo (C) 2009 by v1ctory:1s_m1ne via Flickr under the terms of a CC license)

01 August 2010

Former President of German Patent Bar Critically Comments on European Patent System

Under the strong headline "the current European patent system does not match the applicant's reality any more", the Staff Union of the EPO (SUEPO) recently published an interview (in German) with Dr. Eugen Popp, President of the German Patent Bar Association (Patentanwaltskammer) from 2004 to 2009. 

Mr Popp articulately expressed his critical view on current developments in the European patent system and reported that, as a consequence thereof, a tendency exists among applicants to increasingly file applications with selected National Patent Offices (NPOs) instead of centrally with the European Patent Office. He advocates for more transparency in the EPO's decision-making process and calls for restructuring the Administrative Council of the EPO and for recruiting more examiners to reduce the backlog and increase patent quality.

As a request to the new President of the EPO, Mr Benoit Battistelli, Mr Popp wishes for a return to the sovereign functions of the EPO and asks that the EPO should not be viewed as a profit center any longer. He further said: 
The European Patent Office certainly was a huge success, the EPO certainly was very user-friendly and the EPO has therefore been truly accepted. The way the EPO dealt with users of the system really was perfect. But currenly that is changing to the detriment of users, so that there now exists a competition between the EPO and National Patent Offices (NPOs). It might be the case that the NPO's become increasingly user-friendly and thus more attractive to applicants.
The interview focussed on three interrelated topics, namely
  1. the internal structure of the EPO - Information and influence;
  2. the relation between applicants and the EPO; and
  3. the quality of patents;
followed by a short concluding section under the headline "future, ideas, opportunities".

This interview is remarkable, since it is one of the rare cases in which a high-ranked representative of the patent community expresses his severe concerns in an exceptionally definite way. I wonder if a sitting President of the German Patent Bar Association would ever make such clear statements in an interview. It appears to be the privilege of former office holders to express clear attitudes without being regarded captious. In any case, we should be grateful to Mr Popp for sharing his sensible thoughts with us, which, according to my opinion, are worth being supported by both industry and legal professions - not to mention the Staff Union of the EPO. The current Administrative Council, however, will most probably not welcome Mr Popp's analysis overly enthusiastic.

Below please find my personal compilation of Mr Popp's comments:


1.  The internal structure of the EPO - Information and influence

Composition of the AC: The members of the Administrative Council (AC) are representatives of the Nation Patent Offices of the 37 EPC member states, usually their Directors or Presidents. Mr Popp considers this construction extremely problematic, since it leads to increasing conflicts of interests, especially with respect to the allocation of fees. Besides this, the patent system is part of economic policy and thus national political interests are also at play and, in fact, seem to increasingly dominate European patent policy. Instead, the economic policy of the EPO should be formulated by the AC on the basis of true European interests and not so much based on special national interests.

Mr Popp therefore agrees with Bruno van Pottelsberghe's suggestion as to open the AC to representatives of politics, industry, legal professions or sciences. The AC should be restructured, to adapt its composition to the higher-order interests of the EPO, which are not only represented by the NPO's but also by industry, academia and the legal professions involved. 

Influence of interest groups in the AC: It is a matter of fact that the so-called observers, e.g. epi or Business Europe, have only very little influence on the AC's decision making process, which leads to increasing frustration among the observers' members. Meanwhile, the growing dissatisfaction forced attorney's organisations from Germany, France, Britain and possibly also from the Netherlands to establish a „European Patent Attorney Network“ in order to gain additional influence in the AC. The concerns of the patent attorney community are shared by industry, whose corresponding associations start to cooperate on this issue as well. 

The EPO's information policy: There is no general lack of documentation regarding the work of the AC, in fact, the EPO even "spams" the individual organisations with information. The problem is not the quantity of information but its lack of structure and sometimes late arrival, which makes a feedback from individual epi members practically impossible. In fact, comments must be prepared by individuals, that often are overwhelmed, in particular because of time constraints. 

Public access to documents of the AC: This would, on the one hand, increase both transparency and input from different perspectives and other stakeholders and, on the other hand, not be unmanageable for the EPO, since meaningful observations would most likely only be prepared by very few parties, such as legal or industrial organisations from England, France, Germany, the Netherlands and perhaps also from Austria. This would certainly enrich the decision-making process with additional substance.

Conclusion: The AC must be completely reformed and the transparency of its work must be increased. Only this measure would ensure that all relevant parties are involved in the decision-making process. This, in turn, would also ensure that the wishes of applicants are considered to the required extent. Currently, one gets the impression that the AC essentially focuses on the internal structure of the EPO and the proper functioning of the office, whereas the applicants's needs only play a secondary role. 


2.  The relationship between applicants and the EPO

User's reactions on the priorities of the EPO: During recent trips to Japan and the U.S. Mr Popp received questions on whether it still makes sense to file European patent applications or whether one should better file nationally. In fact, after the recent amendments to the Implementing Regulations to the EPC one indeed has to ask whether or not European filings are still advisable.

If the application is long and complex, if the invention is particularly important, and if it is sufficient to have protection in a few European countries only (like in the automotive industry), the applicant should carefully consider to file nationally. According to a private survey carried out by Mr Popp, a European patent application is only about 4.000 to 5.000 EUR cheaper than national filings in Germany, England, France and Italy. The national way, though, appears more flexible, especially when considering the new rules for filing divisional applications (Rule 36 EPC) in Europe and the pressure that is put on applicants under new Rule 62a and 161 EPC. This should indeed alarm the EPO.

Competition between EPO and NPO's: The EPO was a huge success, the EPO certainly was very user-friendly and the EPO has therefore been truly accepted worldwide. The way the EPO dealt with users of the system really was perfect. But currently that is changing to the detriment of users, with respect to both the way proceedings are conducted and the relationship that is established with the users. In this regard, the EPO competes with the NPO's which become increasingly user-friendly and more attractive for applicants. At the EPO, examiners must be relieved from the current workload pressure in order to enable them to discuss an invention in detail with the applicant or his representative. This is the only way to ensure granting of high-quality patents in favour of the public and the competitors.
 
Further weaknesses: The new limitations to filing of divisional applications under new Rule 36 EPC are unacceptable. There surely was a (negligible) abuse of divisional applications, but now all applicants suffers under the amended rules, which have not yet been accepted by the applicants at all. It also is a matter of fact that applications become more and more complex, simply since the underlying technology is becoming more complex. In this situation it is not acceptable that the EPO only calls for simpler applications in order to facilitate examination. The system now in force simply does not match the user-reality any more.

According to new Rule 36 EPC, a 24-month time limit for filing divisional applications is set upon receipt of the first substantive Office Action. Very often it is not possible to decide whether a divisional application is necessary or appropriate within this limit. If, for instance, a second Office Action is issued after expiry of the 24-months term, an applicant may realise that he has to further limit his claims by an additional feature, which possibly has not been searched, so that the applicant cannot any more file a divisional application to utilise such non-searched features, since the 24-months time limit has already expired. In such cases, a sufficiently disclosed invention is actually "stolen" from the applicant for purely formal reasons. In fact, the applicant is "expropriated" to the respective extent.

Attractiveness of national filings: The pharmaceutical/chemical industry has really complex applications and they often need a long time to decide which of their compositions are ultimately accepted and need to be protected. Regularly, the application is filed when the experiments, which may take about five to ten years, are still ongoing. If it then turns out that the best composition relates to a non-searched embodiment of the invention, the patent protection is gone. This is not acceptable for industry. The previously existing flexibility of the European system does not exist any more, so that national routes become more attractive, e.g. German patent applications for which examination can be requested within seven years after filing and divisional applications can be filed anytime before grant of the parent application.


3.  The quality of patents

Increase of filing fees: The increase of filing fees is counterproductive; it is, in fact, a paradigm shift. Promotion of innovation and education has been advocated worldwide for ten or fifteen years. Now everybody is surprised that this lead to an increase of patent filings. Indeed, what really is surprising, is the fact that now the EPO is unable to cope with the respective (and predictable) increase of work. One cannot demand protection of innovation on the one hand, and, on the other hand, do nothing to manage the related higher workload. Thus, the statement that the work is no longer manageable is not acceptable.

The EPO now tries to tackle the workload by higher filing fees, which does not appear to be the right way. So far, the approach was to have low "entry fees" for innovation protection, so that also individual inventors and SMEs can afford protecting their intellectual assets. The patent application always is the beginning of a business development and costs hurt at such early stages. A system can of course be completely killed if it becomes unattractive for potential users.

The claims fees as an example: One such example is the new scheme of claims fees. It is understandable that an application with 110 claims requires more work than one with only 20 claims. Thus, the application with 110 claims may cost more. But a payment of 210 EUR for the 16th to 50th claim is not acceptable. Applicants consider this a "rip-off". An application usually comprises about 25 claims, such that other gradations of claims fees are certainly required. The current filing fees may sum up to 18.000 EUR to 20.000 EUR, which is extremely hard for an applicant and not comparable to the respective figures from the U.S., Japan, or China. As a consequence, foreign applicants ask their European representatives to reduce the number of claims, which may result in very strangely drafted and difficult to understand claims, since the re-drafted claims often comprise the subject-matter of numerous original claims. Such claims are confusing for the examiners, complicate their work and avoid the claims fees, which might not have been the original intention of the new scheme.

Staffing policy and backlog: Mr Popp reported that he recently asked the Commissioner for Patents of the USPTO (Mr Robert L Stoll) why the grant rate dropped from 72% to about 45% within two years. The Commissioner answered that his predecessors wanted to reduce the backlog by making the patent system less attractive to applicants, which Mr. Popp considers the wrong way. Fortunately, the USPTO now re-thinks this strategy and currently increases the number of examiners again, which is a strategy that Mr. Popp has already recommended to Ms. Alison Brimelow, predecessor of Mr Battistelli as President of the EPO, on a related panel discussion. If the work - for whatever reason - increases, the staff must be increased as well in order to meet the requirements. Like in industry, where the number of employees is increased in order to serve high demands if business is running well. This should not be different in a Patent Office. If innovation and its protection is stimulated the structures and organisations involved have to be extended as well. One gets the impression that the EPO instead considers to utilise other resources, e.g. those of the NPO's via establishing a European Patent Network (EPN).

European Patent Network:  As to the idea to build the European Patent Network (EPN) allowing the EPO to utilise searching and examination resources of NPO's, Mr Popp is very strongly opposed. If an applicant pays filing and examination fees to the EPO, he expects the work to be done by the EPO. Of course, sharing certain resources is always possible, but not in the sense that a European patent search is replaced by a search of the Swiss or the Danish Patent Office. No applicant would ever object that existing search results may be used to improve the EPO's quality of search, but for this an EPN is not needed.

Today, examiners can immediately check existing search results of family member applications to be in a good position for an own search. Additionally there also exists the so-called "Patent Prosecution Highway". These measures should be sufficient for sharing search results. The EPO should do its work basically itself, that is examination and seach.


4.  Future - Ideas - Opportunities

The EPO as a profit center: The EPO should not be viewed as a profit center any longer but return to the sovereign functions of a Patent Office. The EPO must not be run solely under economic aspects, but also based on the respect for applicants, their work, and the public. It even wouldn't be a problem if the EPO would have to be financially supported by the EPC member states, because like any other Patent Office, the EPO does not only serve applicants or users, but also serves the public as a platform for distributing technical teachings and as being responsible for free competition by properly examined patent applications. Since the EPO provides such services to the public, it may, if necessary, also be supported by the public, i.e. by national tax payers.

It is absolutely the wrong way, to organise a European authority to be profitable for national authorities or EPC member states in the first place. It is fine if the system turns out to be profitable, but this must not be the general maxime.

Responsibilities of the EPO: The President of an Office does not only have to ensure that his Office works efficiently, but he also has to ensure that his office's system is consistent with general political framework and responsibilities. If innovation and protection of innovation is to be promoted, especially in a global context, the Office has to be appropriately supported and the President must be committed to obtaining the required resources. Otherwise, the system runs out of control.