NAIP Patent Blog

• What is The Price of Forgoing Basic Research? - An argument that claims basic research conducted by industry has, contrary to popular belief, has been in decline. Additionally, academia has begun a subtle but significant shift toward applied, "industry-relevant" research. So what do these trends portend for innovation? Unless they are corrected soon, nothing very promising.... (from BusinessWeek)

• Trademark attorneys in China will soon be able to celebrate with Taiwan Beer. - Or maybe not. In February 2009, Taiwan Beer will finally be sold in Mainland China, but does that mean the trademark issues surrounding it will be solved? Maybe not. A brief history is available here. (from IP Dragon)

• Traditional Knowledge, IP Law & Biopiracy. - When knowledge from centuries of culture points towards solutions that are eventually patented, do those cultures benefit? Unfortunately, no. For example, "121 patented drugs globally are made from plants, 74 percent of which were 'discovered pursuing claims from native fables.'" Yet drug firms reap and keep all the benefits, and even sue to prevent the innovations from being used in those regions. (from Harvard International Review)

• What's the Cost of Misconduct in a Patent Lawsuit? - This one has an answer: Almost US$17 million. Two pharmaceutical companies looking to produce generic versions of a popular anti-diabetic drug attempted to play the invalidity game and paid for it dearly. Download the brief here. (from Patent Baristas)

• Do Patent Pools Encourage Innovation? (Un)Surprisingly, No. - This paper released by the Economics department at Standford looks at the Sewing Machine patent pool that lasted from 1857 to 1877 and finds that innovation slowed as soon as the pool was form. After the pool dissolved, innovation picked up.

• A rare font copyright case goes to court in China. - Founder Electronics claims that Proctor & Gamble used their "Qian" and "Cartoon" fonts without permission and therefore are asking for 1.478 million RMB. The news article can be found here. (from IPKat)

• A primer on Protection and Enforcement of Well-Known Mark Rights in China. This paper co-authored by Brad Luo of China Business Law blog offers the history, analysis, examples, suggestions for changes and more on China's actions toward trademarks. Read the paper online here. (from IP Dragon)

• Forget about 2008, 2007 was a banner year for patent lawsuits. - Data released by the Stanford Law School shows 78,000 patent, trademark and tradesecret suits in 2007, which may be attributed to holding companies rushing file suit before any patent reform legislation takes effect. (from The Prior Art)

by Charl Goussard, NAIP Legal Research

For even the most practiced professionals, the European Patent System is an extremely complex system. Yet for those who manage to navigate its complexities, a market of almost 500 million people (versus 300 million in the US) and an economy with an estimated GDP of $18.5.trillion for 2008 (versus $14.5 trillion in the US) awaits. As a result we will attempt to detangle this complex system in a series of articles targeted at businesses and companies who are interested in patents in Europe. We will begin with this brief introduction to the system and then follow up with more in-depth discussions on specific areas.


European Patent System: Historic Overview

In 1973 Belgium, West-Germany, France, Luxembourg, Netherlands, Switzerland, and the UK agreed to a multilateral treaty called the European Patent Convention (EPC). The purpose of the convention—as indicated by its previous name, "Convention of the Grant of European Patents" (and also sometimes referred to as the Munich Convention)—was to form a unified patent system in Europe.

The EPC lead to the establishment of the European Patent Office, and in 1978, the EPO received its first patent application. Currently, the Convention is in force in 34 countries and as of 1 January 2009, Macedonia will be the 35th member state.

Important to remember is that the EPC is not linked to the European Union (EU). The EPC consists of different member states. Croatia, Iceland, Liechtenstein, Monaco, Norway, Switzerland and Turkey are all EPC member states, but are not members of the EU.


Filing Options & Routes

Let us clear up another common misconception: no single patent provides protection across the whole of Europe. Each country grants and enforces its own patents. Consequently, obtaining patent protection in Europe means registering for patents individually in each desired territory. This method is commonly called the National Route.

Fortunately, if applying for patents in multiple European countries, a simpler option exists: the European Patent Office route. The European Patent Office grants the so-called "European Patent", which is nothing more than a simplified way of prosecuting patents in EPC member states. This "European Patent" may be enforced once it is validated in the individual countries designated during application.

Putting a discussion of the advantages and disadvantages of each route aside, the National Route is advisable if patent protection is needed in only one area. The EPO route is advisable if you wish to have a patent registered in more than one European country. In today's globalizing economies and markets, most businesses and inventors pursue protection in multiple countries. Consequently, this article will focus on the EPO route.


The European Patent: A Simplified Way of Prosecution

A reminder: don't be confused by the term "European Patent".

The term "European Patent" does not carry the same meaning as its equivalents in other countries like the US, Japan or China. European Patents were created to simplify the prosecution of patents for EPC member states. A European Patent is indeed prosecuted and granted. However, they are not enforceable unless they have been further validated by individual member states. Once validated, these "European Patents" become nothing more than National Patents which then must be enforced on a National basis.

Aside from this one major difference in function, the fundamental patent application process at the EPO is similar to the processes at most other patent offices: the application is searched, and then published; thereafter it is examined and then finally granted.

Patent applications may be filed at the EPO office in Munich or at one of its branches in The Hague or Berlin. Some National Offices may also accept EPO applications.


The Language Minefield / La langue des champs de mines/ Die Sprache Minenfeld

EPO applications may be filed in any of the official languages of the EPC member states, but the official languages for prosecution and communication are English, French and German. Thus, if an application is filed in any European language other than English, French, or German, a translation has to be filed at a later stage for prosecution purposes. Furthermore, the claims section of each European Patent has to be translated into all three official EPO languages.

At the national stage, however, patent claims must be translated into the official language of the member state. An applicant who has designated multiple countries would therefore have to translate the claims into the official language of each designated country.

To make things easier and more cost effective for applicants, several countries signed the London Agreement, which entered into force on 1 May 2008. These countries now accept claims in one of either English, French or German, although they retain the right to request a translation if desired. This and other changes has reduced translation costs considerably and made the European Patent application procedure more cost attractive and less time consuming.


Opposition and Revocation

Once a European Patent is granted, the EPC provides for centralized opposition, limitation, and revocation procedures. Within 9 months from grant, any third party may oppose such grant at the EPO. While the EPO hears the opposition, infringement litigation may be instituted on a national level in an EPC member state and national courts may decide to stay the proceedings pending the outcome of the EPO opposition procedure.


Litigation

Currently there is no distinct, centrally enforceable patent or enforcing entity for the whole of Europe. European Patent enforcement of ownership, validity, and infringement is conducted on a country-by-country basis and only in the countries where the patent has been validated.

For a brief period in the 1990s some European Courts issued cross border injunctions—the so-called Pan-European relief—but this practice has been seized by an order from the European Court of Justice. It is thus not possible to get cross border enforcement of patents. Each needs to be individually enforced.

Because of the difficulty and costs of enforcements, most patentees have protection in only a selected number of EPC member states. The choice as where to instigate litigation is predominantly motivated by market factors, applicable judicial procedures, the language of the courts, and legal procedure in various member states.


Conclusion

The European Patent System has come a long way since its initiation in 1973. Much reform however, is planned to make this system even more efficient and cost effective.

On the minds of all concerned with the European Patent System is the possibility of a European Community Patent–a single patent covering all EPC contracting states–with centralized application, opposition, limitation, revocation and infringement procedures. Indeed an EPO work group that aims at a unified Patent Litigation System has drafted the European Patent Litigation Agreement consisting of proposals for a single European Patent Court, a European Patent Court of Appeals and Administrative Committee. Whether the EPC countries sign the agreement is another issue, but regardless of what happens, Europe remains a vital market because of its well developed systems for IP development, enforcement, and commercialization.

• Think Godzilla's Scary? Meet His Lawyers. - A fascinating article detailing some of the lengths that Godzilla trademark and copyright holder Toho has gone to protect the cult classic monster's image--and the company's profits. (from Wired)

• Do big corporations secretly support Patent Trolls? - In a way, yes. According to this article, patent trolls, or NPEs, are not just easy scapegoats and targets for negative media, but are also helping make it harder for small companies to compete. (from Patent Fools)

• How To Go To China For Innovation. - A summary of a Business Week article here, that suggests four steps to keeping pace with innovation in Asia: 1) Globalize your research and innovation; 2) Devise a "talent strategy" up front; 3) Protect intellectual property; and 4) Shift R&D responsibilities away from your home country to global centers. (from China Law Blog)

• IP is a key to an Indian and Chinese challenge of US leadership. - IAM blogs that India and China will only fulfill their potential if they can match the US on IP--something a recent report released by the US National Intelligence Council (NIC) reports is still a long way off--although they may match the US in some areas in a few as 10 years. Download the NIC report here. (from IAM Magazine)

This week RPX released a wealth of new details about its business model on its website, and much discussion is already occurring on the web (and likely in business board meetings as well). Read the updates here.

• China Gets Grilled on Copyright Law. - And by the US, Japan, EU and Canada. As part of its ascension to the WTO, China undergoes an annual Transitional Review Mechanism (TRM) by the TRIPs Council. IP Dragon reports on some the QA session. (from IP Dragon)

• What if geniuses just got lucky? - Malcolm Gladwell brings new attention to the argument that many geniuses are more the product of society than their own talent. See how he applies this theory to inventors and IP in an earlier article here. (from Newsweek)

• One of Obama's transition team members has strong ideas on the US Patent System. - Among them: completely scrapping the system. Slashing the number of patents granted by 90%. And tripling the USPTO budget. (From 271 Patent)

• How about a review of the USPTO's own performance review. Although the USPTO gave itself high marks (100%) in its own performance report, the statistics tell another story. Download the USPTO press release here. (from Patent Docs)

In another step toward stronger economic relations between China and Taiwan, a historic conference on cross-strait patent issues is being held this week at the National Center for Traditional Arts in Ilan, Taiwan.

From November 16^th to 23^rd, members of China's State Intellectual Property Office (SIPO), Taiwan's Intellectual Property Office (TIPO), IP scholars and industry professionals will convene for informal discussions and a formal two-day forum on cross-strait patent issues.

Nine high-ranking officials from SIPO, including Deputy Director Li Yuguang have flown to Taiwan to join the conference. TIPO officials, including Director Wang Mei Hua will also participate, marking the first time these high-ranked officials will have met for face-to-face discussions.

The stated goals of the conference include enabling better understanding of each side's IP protection and regulation systems; sharing experiences with patent examination, examiner training, and quality control issues; and building a channel for communication.

At the forum and during discussions, the two sides will put forward and discuss three topics: mutual recognition of patent examination results; mutual recognition of priority rights; and allowing Taiwanese citizens to participate in the qualifying examination for Mainland China patent agents.

However, during this meeting, officials expect only to first proceed with administrative-related issues, including formal establishment of cross-strait relations within the offices; beginning formal correspondence and business relations; creating a channel for exchange of documents, and so on.

The forum, held on November 18^th to 19^th, and the discussions, ending on the 23^rd, were organized and run by Taiwan's Chinese National Federation of Industries (CNFI) on behalf of the Ministry of Economic Affairs.