International Intellectual Property

Student No: 0502952

It is a general perception, in the minds of several Small and Medium size Enterprises (SMEs) that Intellectual Property (IP) protection system is painfully long, time consuming, esoteric and expensive. One of the main reasons behind this perception is the lack of awareness and sufficient information among the SMEs in relation to the importance of Intellectual Property rights. Due to these reasons sometime SMEs are slow to protect their intellectual property assets. In this essay paper, IP law, IP rights and IP theory, along with different steps involved in IP protection, filling and difficulties that arise out of this process will be discussed. The role of different conventions in the protection of IP rights will also come under discussion. A brief comparison between UK and US patents law will also be talked about. Intellectual Property (IP) is a term broadly used to the creations of human mind. It refers to the intangible products of human creativity, ingenuity and effort such as images, symbols, inventions, literary and artistic works, designs and names used in commerce 1. Basically the concept behind IP is to protect the results, products and rewards of the exercise of human intellectual and commercial endeavour. These intangible property rights are like any other property right comprised of legal rights to stop others from using owners property without permission. They also provide the owner, monopoly rights to exploit the property commercially. It is frequently argued that these assets represent the future of the developed economies and there adequate protection by the IP regimes is essential to the national, regional and global, prosperity. These rights are also outlined in the Universal Declaration of Human Rights2 and they allow its owner or creator to profit from his work or investment, in a creation. Importance of IP rights was first acknowledged in Paris 3 and Berne Conventions4. Both Paris and Berne Conventions are administered by the World Intellectual Property Organization (WIPO)5. Out of all the IP rights, the main focus of our discussion will be Patents, Industrial Design and Trade Marks. Patent can be defined as an exclusive right granted for of a solution to a practical problem, which can be put to practical use6. Patentees are given an absolute right to make, use and exploit there inventions for 20 years, but only in return for disclosing and describing it in clear terms. If patent is of a product then it confers an exclusive right to prevent third parties from
1 2

World Intellectual Property Organization, <http://www.wipo.int/about-ip/en/> accessed 1st December 2011 Article 27 of the Universal Declaration of Human Rights. 3 Paris Convention for the Protection of Industrial Property (1883). 4 Berne Convention for the Protection of Literary and Artistic Works (1886). 5 World Intellectual Property Organization, What is Intellectual Property?<http://www.wipo.int/freepublications/en/intproperty/450/wipo_pub_450.pdf> accessed 2nd December 2011. 6 World Intellectual Property Organization,<http://www.wipo.int/patentscope/en/patents_faq.html#patent> accessed 1st December 2011.

International Intellectual Property

Student No: 0502952

using, making, importing or selling the product without owner's consent7, but if patent is of a process then it prevents the third parties from using that process, offering it for sale or importing products obtained directly by that process.8 Patents are considered as the strongest IP right as they confer extensive market and monopoly power, thats why strict conditions must be met before a patent can be granted. An invention to fall within the category of patentable inventions, it should be new, show an inventive step, be industrially applicable and be disclosed with sufficient clarity. An application is carefully examined against these criteria before the decision to grant a patent is made. Patents provide an incentive for technological improvement, which is a key factor in trade competitiveness9. Over the time, a number of different justifications have been given about the importance of the patent system. The proponents of patent protection have emphasized the natural right of inventors to the products of there mental labour10. Others have argued that, justice demands that, efforts of an inventor should be acknowledged through the grant of a reward11. The main source of patents is Research and Development12, meaning that when the expenditure related to research and development activities increase so does the quantity of patents13 applications. The basic idea behind the grant of patent is that the public should only ever have to endure the harm caused by the grant of a patent if the public receives some corresponding benefit. Patents encourage information to be disclosed in a way that is particularly useful14. Patents have been justified by the fact that they provide an incentive for the production of new inventions15. Patented products are often used by retailers trying to gain a competitive advantage by showing the innovative nature of their products. Acquiring a patent can generally be quite beneficial; most of the benefits attached to patents are economic. Patentee can get a quick pay back in a very short time. Patent offers the inventor or inventing organisation an indisputable advantage by providing a head start of 18
7

Art. 28 (1) (a) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (Annex 1C of the Marrakech Agreement Establishing the World Trade Organization, signed in Marrakech, Morocco on 15 April 1994.) (TRIPS)<http://www.wipo.int/clea/docs_new/pdf/en/wt/wt001en-ctc1.pdf> accessed 3rd December 2011. 8 Art. 28 (1) (b) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (Annex 1C of the Marrakech Agreement Establishing the World Trade Organization, signed in Marrakech, Morocco on 15 April 1994.) (TRIPS)<http://www.wipo.int/clea/docs_new/pdf/en/wt/wt001en-ctc1.pdf> accessed 3rd December 2011. 9 Gerald J. Mossinghoff, The Importance of Intellectual Property Protection in International Trade, 7 B.C. Int'l & Comp. L. Rev. 235 (1984) 10 Fritz Machlup & Edith Penrose, The patent controversy in the nineteenth century , page 11-17 11 Ibid, 17-21 12 Scherer, Research and Development Expenditures and Patenting, 10 AM. PAT. L.Q. 65, 70 (1982) 13 J. BOUND, C. CUMMINS, Z. GRILICHES, B. HALL & A. JAFFE, WHO DOES R&D AND WHO PATENTS? 3lf (National Bureau of Economic Research working paper no. 908, 1982). 14 The information function of the patent system was reinforced by the Patent Act 1977 and the EPC. 15 Kitch emphasised the way in which the grant of patent could be analogized to the grant of mineral rights giving the grantee an incentive to invest in the exploitation of the prospect.See E.Kitch, An Economic Review of the Patent System (1977) 20 Journal of Law & Economics 265.

International Intellectual Property

Student No: 0502952

months from competition and also from secrecy point of view. Licensing and sublicensing of patents can be a source of substantial amount of income and it can also help a business to expand internationally. Due to the number of economic benefits attached to them, in case of a dispute, they are defended vigorously. They provide inventors, right to decide the destiny of their invention and also provide the patentee, an opportunity to manufacture and sell the products him self or assign his right to anyone else. Businesses give following rationales for their interest in patents system 16. By monitoring patent publication it is easy for a business to monitor the progress of its competitors and also it helps in evaluating the level of technology in the manufacturing sector. Patents also provide the basis for continued and stable manufacturing process. Patent publication can be used in a new product development. To register a valid patent there are few requirements that need to be fulfilled. A patent can only be granted if it is novel, involves an inventive step and is capable of industrial application. In the UK and most other countries, an invention to be patentable, it must be novel17 and does not form part of the "state of the art"18. If the invention is introduced in a presentation or is published in a scientific paper by the inventor or someone else, then inventors right to get a patent for invention is lost on the basis that it is made available to the public. Patent laws in USA are less strict then many other countries. Under the US law patent may still be granted even if the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States"19. Another condition for the grant of patent is that it must involve an inventive step 20, this means that the difference between the invention and prior art must not have been obvious to a person skilled in the field of the invention at the relevant date. There is no requirement that the inventive step be particularly high. There is also no need for the invention to be complex. Some apparently trivial ideas can be inventive. An invention to be patentable it must be capable of

16

Dr. Kari Sipila, Intellectual Property Information for SMES: Types, Availability, Form, Sources, Access and Cost < http://www.wipo.int/edocs/mdocs/sme/en/wipo_ip_tal_03/wipo_ip_tal_03_3.pdf > accessed 30th December, 2011. 17 Art 33(2), Patent Cooperation Treaty (PCT), < http://www.wipo.int/pct/en/texts/articles/a33.htm> Accessed on 31 December, 2011. 18 S.7 (2) of the UK Patents Act 1977 defines the state of the art in the case of an invention as "all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way." 19 35 USC 102 (b), <http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_102.htm> accessed on 30th December, 2011. The case of Boston Scientific Ltd and Another v Palmaz and Another (2000) EWCA Civ 83 (20 March 2000) illustrates the dissimilarity in approach among the two jurisdictions where patent of Professor Palmaz's was challenged on the ground that he had disclosed the invention in a presentation to 40 members of the Radiological Society of North America. 20 Art 33(3), Patent Cooperation Treaty (PCT), < http://www.wipo.int/pct/en/texts/articles/a33.htm> Accessed on 31 December, 2011.

International Intellectual Property

Student No: 0502952

industrial application21. Industrial application is interpreted very broadly and range from simple gadgets and complex technologies. Fields that are not considered to be capable of industrial application include surgery, therapy or diagnostic methods carried out on the human or animal body. Nevertheless, these exclusions are interpreted narrowly and it is a routine to patent drugs and many types of devices used in surgery, therapy and the study of the human or animal body. At the time of filling a patent application it should be made sure that the subject matter of the invention falls within one of the categories of patentable subject matter. Getting a patent can be quite expensive. European Patent Office (EPO), in 2004 commissioned a report to determine the cost of registering and maintaining a patent in Europe, for a period of ten years. The research showed that, a European company will pay Euro 31,600 while a US company will be expected to pay around Euros 10,250 for a similar patent 22. The reason for this difference was the cost of translation into languages of the each designated member state where the patent was required. This requirement has been reduced as a result of London Agreement23. A very important principle regarding the filling of patent, worth mentioning here is the principle of priority, which was established by the Union Convention24 in 1883. Under this convention, a patent filled with the national patent office of any signatory country will have the priority from the date of filling and it can be submitted within one year of the filling date to any patent office of other country which has ratified the treaty25. As a result of Union Conventions revision, in 1967, the WIPO was established in Geneva and also the Patent Co-operation Treaty (PCT) came into existence on 19 June 1970 in Washington. Due to the enactment of PCT26, patent application filling was made easy and it was made possible to file a single patent application with WIPO for all the designated member states with having the same effect of application filled individually to those countries 27. At European stage, a comparable level was achieved through European Patent Convention (EPC) 28. This made possible to file a single patent application with European Patent Office (EPO) for the grant of a Euro patent in all the signatory counties29. Patent protection is not automatically granted for a maximum duration but requires a periodic extension at the payment of a fee. Calculations show
21 22

Ibid Art 33(4). Roland Berger Market Research, Study on the Cost of Patenting, EPO Munich 2005. < http://www.3pod.cz/download/cost_analysis_2005_en%5B1%5D.pdf> Accessed on 30 December, 2011. 23 Agreement on the application of Article 65 of the Convention on the Grant of European Patents. 24 The Paris Convention for the Protection of Industrial Property, signed in Paris, France, on March 20, 1883, 25 As of 31st December,2011, 174 countries signed the convention. The latest member is Brunei Darussalam. See < http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=2 > Accessed on 31st December 2011. 26 Patent Co-operation Treaty (PCT) came into force on 1 June 1978. 27 OECD 'Using Patent Data as Science and Technology Indicators - Patent Manual', OECD working papers vol. II, no. 66, Paris. 28 European Patent Convention (EPC) was signed on October 5, 1973 in Munich and came into force on 1st June 1978.

International Intellectual Property

Student No: 0502952

that fee for filling a patent application in three of the EPC countries through EPO costs less then making two direct national applications30. A significant part of this fee consists of translation cost31. After Patents, Trade Marks are also very important type of IP right. Trade Marks can consist of any Letters, Words, Symbols, Numbers, Shapes, Labels, Pictures, Words, Logotypes and Colours used to distinguish goods and services of one business from those of the other. It provides its owner an exclusive right by ensuring that only its owner has the right to use it to identify his services or goods. The owner of the Trade Mark can authorise others to us the mark in return for a payment. Protection period of Trade Mark varies but it is possible to have an indefinitely protection by renewing it on payment of an additional fee. In case of infringements, it can be blocked by making an application to the courts, which have the power to enforce trade mark rights and provide protection. Trade Marks consist of different categories e.g. collective mark, which can be owned by an association. These associations can be one, representing engineers, accountant, architects or lawyers. Certification marks are another example which is granted to anyone who can certify that the products involved meet certain established standards. ISO32 9000 is an example of such certification which is used for internationally accepted quality standards. As mentioned earlier Trade Marks can be a very important business assets having different characteristic. Trade Marks help customer recognise and identify products. It also helps them to identify the origin of the goods. Trade Marks are not just symbols but are very effective agents for the creation of the good will. It is often said that Marks actually sells goods. Trade marks eliminate confusion and help customer to distinguish similar goods. They also assure a certain level of quality as customer purchasing goods holding the same mark expects that all the goods will be of the same quality. Trade Marks can be a very important intangible asset of a business with there value running from hundreds of dollars to billions of dollars. An example of which can be the value of Apple Trade Mark which is estimated to be $ 83,153 million33. They are a very important marketing tool and can also be a source of revenue through licensing. They also are a very important component of franchising agreements. Registration of Trade Marks provides a ten year legal monopoly renewable in perpetuity. They bless its owner exclusive legal ownership of the brand name in chosen markets nationally and internationally. Owner can stop others from using
29

The patent protection law remains under national concern. Patent protection under European law was introduced with the Luxembourg Convention on December 15, 1975. However, this convention is not in force yet because it has not been ratified by all signing countries. 30 Kaufer, E, The Economics of the Patent System, (Harwood Academic Publishers, 1988) p.15. 31 Roland Berger Market Research, Study on the Cost of Patenting, EPO Munich 2005. < http://www.3pod.cz/download/cost_analysis_2005_en%5B1%5D.pdf> Accessed on 30 December, 2011. 32 International Organization for Standardization. 33 BRANDZ, Top 100 Most valuable global brands 2010 <http://c1547732.cdn.cloudfiles.rackspacecloud.com/BrandZ_Top100_2010.pdf> Accessed on 29th December 2011.

International Intellectual Property

Student No: 0502952

his Trade Mark for similar products or services that he provides without his permission. Trade Mark allows a business to build its goodwill on definite legal grounds of brand ownership. Owner of a registered Trade Mark can gain a financial benefit by selling it or by permitting agents, licensees and others to use it at his own discretion. Trade Mark registration also provides legal protection against counterfeiters. It will be not be wrong to say that, Trade Marks promote initiative and enterprise worldwide by rewarding the owners of Trade Marks with recognition and financial profit. It provides people with skill and enterprise to produce and market services and goods in the fairest possible conditions, thereby facilitating international trade. SMEs can protect their Trade Marks locally and internationally through registration at the intellectual property office. Although the protection is also available through the law of passing off but this is only available if a business has been in operation for a certain period of time. Where as a chief advantage of registration is that protection can be obtained before any use is made of a Trade Mark. A SME can choose between a purely domestic, community Trade or international Trade Mark through Madrid Protocol. In UK, an applicant can file a Trade Mark application under the Trade Marks Act 1994. The contents of the application are governed by sec 32 of TMA 1994. The applicant must make a declaration that the mark is being used or that there is a bona fide intention to use the mark. Once the registrar is satisfied that all the requirements of the registration are met the mark is then registered. The mark is registered for 10 years and is renewable in 10 yearly periods. For a wider EU wise protection an application is made directly to the OHIM34 or through the Trade Mark Registry of the member state. The application process is similar to the UK application process, though there is no requirement for a declaration of use or bona fide intention to use the mark. Opposition to the application must be made with in three months of publication. The community Trade Mark is granted for a period of 10 years and may be renewed in 10 years cycle. Protection on the international level is available through The Madrid system35. It is administered by the International Bureau of WIPO located in Geneva, Switzerland. Protection through the protocol36 route is available to the applicants who are nationals of, domiciled in or have a real and effective industrial or commercial establishment in a protocol country. To apply for an international Trade Mark, a national application must first be made and then the international application may be submitted to the WIPO requesting protection in as many Protocol States as are designated by the applicant. After conducting a formal examination of the application, WIPO
34 35

The Office of Harmonization for the Internal Market. The Madrid system for the international registration of marks (the Madrid system) established in 1891 functions under the Madrid Agreement (1891), and the Madrid Protocol (1989). 36 Implemented in the UK under ss53 and 54 of TMA 1994 by Trade Marks (International registration) Order 1996, SI 1996/714, amended by the Trade Marks (International Registration) (Amendments) Order 2000, SI 2000/138.

International Intellectual Property

Student No: 0502952

transmit the application to the designated national offices, where the applications are treated in the same way as the domestic applications. Designated offices have 18 months plus any time required to oppose or reject the application. If the application is not rejected then the Trade Mark is treated in the same way as national mark. Trade Mark is registered for a duration of 10 years on the WIPO register and registration is also published through WIPO. Industrial Design rights are also a very important part of IP system. These rights provide exclusiveness to the visual designs of items which are generally not popular utilitarian. This right safeguard the style, appearance and design of the industrial object such as furniture, spare parts and textiles. These designs do not offer any safeguard to the technical characteristics of the article as they consist of the aesthetic features. These rights were originated in the UK through the introduction of 'Designing and Printing of Linen Act' (1787). They are used across different industries in the manufacturing of different products like jewellery, electrical appliances, handicraft etc. Industrial designs do not include any artistic type of work or trademark. Both the Paris Convention, and the TRIPS Agreement 1994, requires their Member States to provide protection for Industrial Design. The Hague system37 provides a mechanism for registering an industrial design in several countries by means of a single application, filed in one language, with one set of fees through WIPO. Each contracting state grants or refuses protection according to their national law and for the national duration. In July 1999 a Diplomatic Conference adopted the Geneva Act38 of the Hague Agreement39. This permits a single application to be made to the WIPO, resulting protection in all Member States specified in the application. The Geneva Act accommodates the system of states which examine applications for registered protection. Examining States are given 12 months to process applications. Provision for Geneva Act was made in UK by Design regulation 200740. Additionally, the EU acceded to the Geneva Act in December 2006 and provisions were made for the International Recognition of Community Designs, which came into force on 1 January 200841. The registration of Industrial Design helps safeguard an articles aesthetic elements. Registration gives its owner exclusionary rights against unauthorized use by a third party without his consent. It also helps to facilitate effective and fair competition and trading
37 38

The Hague Agreement Concerning the International Deposit of Industrial Designs 1925. Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs, Adopted by the Diplomatic Conference on July 2, 1999. 39 Came into force on 23 December 2003. 40 Design ( International Registration Designating the European Community) Regulations 2007. 41 Commission Regulation (EC) No 876/2007 amending Regulation (EC) No 2245/2002 implementing Council Regulation (EC) No 6/2002 on Community designs following the accession of the European Community to the Geneva Act of the Hague Agreement concerning the international registration of industrial designs; Commission Regulation (EC) No 877/2007 amending regulation (EC) No 2246/2002 concerning the fees payable to the Office of Harmonization in the Internal Market (Trade Marks and Designs) following the accession of the European Community to the Geneva Act of the Hague Agreement concerning the international registration of the industrial design.

International Intellectual Property

Student No: 0502952

practices. Protections of Industrial Designs help in the overall economic progress which promotes creativity in the industrial sector. Now lets turn to the role of different convention in the protection of IP rights. The UK has the longest and continuous patent tradition. Patents originated from the Royal prerogative whereby the monarch granted traders and their guilds exclusive privileges by Letters Patent to encourage inventions and introduction of new industries. In 1449, the earliest patent is thought to have been granted by Henry VI to John of Utynam. It provided a 20 year monopoly over the stained glass making method, not previously known in England. The first UK patent statute was the Statute of Monopolies 162342. Patent was granted for a period of 14 years to the true and first inventor so that the patentee can enjoy exclusive manufacturing of his invention. The process of application for registration was developed later on. The officers of the crown established that a specification must be provided of the invention43. The system became increasingly expensive, bureaucratic and protracted. It was also criticised by Charles Dickens44 in his A Poor Mans tale of a Patent. Afterwards a patent office was set up by the Patent Law Amendment Act 1852. Examinations on a limited scale and a requirement for claims in the specification were introduced in 188345. Afterwards examination for novelty46 and grounds of invalidity were established by the Patents Act 1907. Later acts codified the law but made no considerable changes until the requirement of inventive step was introduced by the Patent Act (PA) 1977. Till this very day PA 1977 is the foundation of British patent law. With the enactment of this Act, British patent system received the largest cultural shock in its history. In UK, one of the main purposes of patent system introduction was the establishment of foreign industry. As a result, applications from foreign national were allowed. Compulsory licensing provisions were introduced in 1883 to secure the benefit of foreign patents. The Paris Industrial Property Convention (PIPC) 188347 was designed to facilitate easier access to national systems and granted nationals of member states the same treatment as nationals of the state in which a patent was sought. It also introduced the system of priority for applications, begun in any one of the member state. Further progress towards streamlining patenting procedures was made

42 43

Statute of Monopolies 1623, 21 Jac 1, c3. Puckles 1718 patent of a machine gun was one of the first to be required to provide a specification. In 1785 Arkwrights patent for the spinning Mule was revoked after 10 years for lack of adequate specification. 44 Charles Dickens, A Poor Mans tale of a Patent reprinted in Jeremy Phillips, CHARLES DICKENS AND A POOR MANS TALE OF THE PATENT 15 (ESC Pub Ltd., 1984) 45 Patent, Design and Trade Marks Act 1883. 46 After the Fry Committee established that 40% of patents were granted for inventions already described in specifications. The examination was confined to searching UK specifications in the previous 50 years. Examination for novelty began in the US in 1836 47 Revised in 1900, 1911, 1925, 1934, 1958, and 1967 (Stockholm)

International Intellectual Property

Student No: 0502952

under the Patent Cooperation Treaty 197048. It considerably diminished the duplication of effort and expense of making multiple national applications. It allowed one application to be filled for all sates in which protection is desired, but made no provision for the harmonisation of substantive patent law. It is administered by WIPO in Geneva. On the EU level, European Patent Convention (EPC) 197349 forwarded the idea of single application and harmonised the substantive criteria relating to validity and patentability leading to extended protection in a European Patent, and established the regional European patent Office (EPO). On its grant, the European patent effectively becomes a bundle of national patents, enforced domestically in member states. EPO proceedings were much criticised for being extremely slow. In year 2000, the revision of EPC took place and which came into force on 13 December 2007. In UK, revisions introduced by the Patents Act 2004 came into force on the same date50. The London agreement came into force on 1 May 2008, which amends the EPC to simplify the language regime by waiving the need for translations of granted patents, thus reducing costs, particularly to the small and medium size enterprise. While the EPC is completely separate from the EU, there is a substantial overlap in the membership of both institutions. Since there is no unitary patent either on a regional or international basis. The Community Patent Convention (CPC) 1975 did proposed a single community patent but it was not ratified by the sufficient Member States to come into force and the question related to the proposed system of litigation and operative languages proved insurmountable stumbling blocks. Any duplication in the number of translations of the patents documents served to undermine any advantages in savings of administrative burdens and costs. The revision of CPC took place in 1989 but it too suffered a similar fate. Substantial difference remains between the cost of obtaining Japanese, American or European patent, and one major factor is the translation cost. An additional drawback in the enforcement of the patent lies in the burden and expense of litigation in separate national jurisdictions. These factors have put the European innovation at a disadvantage. In 2000 the European Commission revived proposals for a community patent51. Implementation was to be by way of Regulation, replacing the CPC, which would have direct effect within member States. Subsequent progress of the proposal foundered under disputes over languages and jurisdiction of
48

Came into force in 1978. Came into force on 1 June 1978, current members are Albania, Austria , Belgium , Bulgaria , Switzerland , Cyprus , Czech Republic , Germany , Denmark ,Estonia , Spain , Finland , France , United Kingdom , Greece , Croatia , Hungary , Ireland , Iceland , Italy , Liechtenstein , Lithuania , Luxembourg , Latvia , Monaco ,Former Yugoslav Republic of Macedonia , Malta , Netherlands , Norway , Poland , Portugal , Romania , Serbia, Sweden , Slovenia ,Slovakia ,San Marino , Turkey. 50 Article 6 of the EPC Revision Act provided that it will come into force 3 months after ratification by all Member States, or 2 years after ratification by 15th Member State. 51 Proposal for a Council regulation on a community patent, COM (2000) 412 final, 2000/0177 (CNS)
49

International Intellectual Property

Student No: 0502952

the proposed Community Patent Court and so no agreement was reached52. A consultation on the future action in patent policy was issued by the European Commission in 2006, and as a result of this a communication, enhancing the patent system in Europe was adopted in 200753. In April 2009 the Commission issued a recommendation to the European Council to authorise the Commission to open negotiations for the adoption of an Agreement creating a Unified Patent Litigation System54. This was followed by the economic study Economic Cost-Benefit Analysis of a Unified and Integrated European Patent Litigation System55. This would enable the creation of a unified system for litigation of European and European Union patents, with jurisdiction over both validity and infringement, by providing a single appeal jurisdiction and a role for ECJ in ensuring consistent interpretation and application of patent law. The Commission remain committed to seeking a cost effective unified patent for Europe. In 1994, the TRIPS agreement introduced a harmonisation measure of substantive rules and enforcement procedure on a wider, global basis. Based largely on the EPC, other than imposing limits on compulsory licences, it had a very little impact on UK law. It provides for the patentable subject matter, the patent terms, disclosure and the scope of the rights acquired. ECJ in the case of Merck Genericos v Merck & Co56 held that EU Member States may apply TRIPS directly, provided that to do so does not conflict with community law. The initiatives of WIPO are also advancing international protection and world harmonisation, both in relation to substantive provisions and procedures. The World Patent Law Treaty57 (PLT) standardise procedure worldwide58. It harmonises and streamlines formal requirements in patent offices for maintenance of patents, filling applications and other requirements. It reduces the cost of patenting as national offices share results of examinations and searches. There is also a proposal for Electronic filling of applications59. Further substantive harmonisation in the form of another treaty is under discussion, even though national differences towards grant of first to invent or first to file and grace period have proved to be stumbling blocks. A world patent has been mooted, but is some way off.

52 53

Progress of the proposal can be followed at http://ec.europa.eu/internal_market/indprop/patent/index_en.htm. European Commission Comunication, COM (2007) 29 March 07. The proposals were examined by Arnull, A, and Jacob, R, in European patent litigation: out of the impass? [2007] EIPR 209. 54 European Commission Recommendation, SEC (2009) 330 final. 55 Harhoff, D, 2009. <http://ec.europa.eu/internal_market/indprop/docs/patent/studies/litigation_system_en.pdf> >accessed on 3 December 2011. 56 Merck Genericos-Productos Farmaceuticos, Lda v Merck & Co. Inc and Merck Sharp & Dohme, Lda Case C431/05. 57 Adopted 1 June 2000, Will come in force when ratified 10 states. 58 The Regulatory Reform (Patents) Order 2004. SI 2357/2004 and the Patents act 2004 make the necessary changes to the PA 1977. 59 Phillips Electronics became the first company to file a PCT application electronically on 25th Aug 2003; www.wipo.int.

10

International Intellectual Property

Student No: 0502952

Further, a lot of European states provide Intellectual Property rights for inventions which do not meet the rigorous criteria for patents, but are nonetheless worthy of protection, known as petty patents, utility models or registered inventions. There is no direct UK equivalent requiring registration60. In 1997 the EU Commission proposed harmonisation of these regimes61 and if eventually adopted, a new right will be required in the UK. In the original proposal there is a recommendation for a ten year term for process and products, but excluded computer programs, chemical, biological or pharmaceutical inventions. Examination on application would be restricted to formalities. The proposal included a Community utility Model. Consultations on this have not yielded a favourable response62. As compared to UK, USs patent laws are considered to be friendlier for individual inventors or employees of the small businesses. This can be illustrated by the fact that, in 2006, US Patent and Trademark Office received 425,966 applications out of which 47.9% were from nonresidents, where as out of 25,745 applications received by UK Intellectual Property Office only 32.1% were from non UK residents63. Under both UK and US jurisdictions, patent obtained provides a monopoly right for a new invention, which can be a product or process. In the US a patent can be granted for any "new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement"64. This is a very broad definition and it can include any object created by man. Under the US patent legislation, a patent of new and distinct verities of plants which are hybrid, cultivated, newly found seedlings, mutated or plants found in an uncultivated state65 and for new, original, and ornamental designs for articles of manufacture66 can also be granted. New plant varieties in UK are protected as plant breeders' rights under the Plant Varieties Act 1997. New registered design having an individual character is protected by the Registered Designs Act 1949. In the US patents granted for inventions are called as utility patents and this is to differentiate them from plant and design patents. Where as Sec 1(2)(c) excludes from
60 61

Although unregistered design protection provides an alternative. Proposal for a European Parliament and Council Directive approximating the legal arrangement for the protection of inventions by utility models, 1997. The proposal was amended in (1999) 309 final/2,97/0356 (COD). 62 Summary Report of Replies to the Questionnaire on the Impact of Community Utility Model with a View to Updating the Green Paper on the Protection of the Utility Model in the Internal Market (SEC (2001) 1307), 1 March 2009. 63 WIPO World Patent Report 2008, See <http://www.wipo.int/ipstats/en/statistics/patents/wipo_pub_931.html >accessed on 30 December 2011. 64 35 U.S.C. 101 Inventions patentable. <http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_101.htm> accessed on 31 December 2011. 65 35 U.S.C. 161 Patents for plants, <http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_161.htm> accessed on 31 December 2011. 66 35 U.S.C. 171 Patents for designs, <http://www.uspto.gov/web/offices/pac/mpep/documents/appxl_35_U_S_C_171.htm> accessed on 31 December 2011.

11

International Intellectual Property

Student No: 0502952

patentable invention definition a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer 67. The reason for this exclusion is to prevent such matter from being treated as an invention for the purposes of the Act only to the extent that a patent or application for a patent relates to that thing as such. Although the words "as such" has enabled the Court of Appeal, to establish guidelines, that allow some software and business method inventions to be patented68. Despite the fact that the US Supreme Court has recently in the case of Bilski69 limited the scope for software patents, it is likely that at least some of these inventions disallowed in the UK would have been patentable in the US. The Patent Cooperation Treaty (PCT) 70 made further progress towards streamlining patenting procedures. The key feature of the treaty is that it provides for a system of international application and preliminary examination procedure. It diminished the considerable duplication of effort and expense of making multiple national applications. It makes no provision for harmonisation of substantive patent law, but allows one application to be filled for all sates in which protection is desired. It is administered by WIPO in Geneva and has 144 contracting states. 71 The patent Cooperation treaty only provides for international application and search, while the authority to grant the patent remains with the national patent office . PCT provides a second route through which applications for patents, which operates in the United Kingdom and the EPO, can be made. Under the PCT, application is checked for formal requirements and is published 18 months after filing. An international search and preliminary examination is conducted by one of the designated international search authorities72 . Thereafter, applicants designate Member States where they desire a patent, after designation, application is sent to the national offices to decide whether to grant the national patent against their national criteria. The centralised procedure is particularly useful for countries where the patent office is not capable of carrying out its own examination. A second chapter of the PCT also allows for an international preliminary examination, which is of use to Member States that do not have an examining infrastructure. The PCT therefore allows applicant to initiate the process of obtaining international protection by submitting a single application. This allow the applicant to delay there final decision regarding the choice of countries in which to proceed, for up to 30 months after the filling date, along with the fees and translation costs entailed. However, it does not give international protection; only a
67 68

Sec 1(2)(c), of Patent Act 1977. Symbian Ltd v Comptroller General of Patents (2008) EWCA Civ 1066 (8 Oct 2008) [2009] Bus LR 607, (2008) EWCA Civ 1066, (2009) RPC 1, <http://www.bailii.org/ew/cases/EWCA/Civ/2008/1066.html> accessed on 29 December 2011. 69 Bilski v. Kappos, 130 S. Ct. 3218, 561 US __, 177 L. Ed. 2d 792 (2010) 70 Signed in 1970 and Came into force in 1978. 71 As of 1st Dec 2011. <http://www.wipo.int/pct/en/pct_contracting_states.html> accessed on 1st December 2011. 72 Primarily, the US, Australia, Russia, Japan or European Patent Office.

12

International Intellectual Property

Student No: 0502952

73

portfolio of national patents. Reforms

which came into force on 1 January 2004 have simplified

and streamlined the process. The patent cooperation system is attractive because it reduces the fees payable and provides a lengthy period between the initial application to the International Office and the time when that application is forwarded to the relevant national offices. The extra time, which varies between eight and eighteen months, gives applicant time to decide whether the invention is likely to be successful enough to warrant the translation costs that arise when the application is transferred to the national offices Intellectual Property is a very vast topic and covering an enormous topic like this in such a limited time and space is not possible. To conclude it can be said that Intellectual Property provides its owners, whether inventor or creator, exclusive ownership rights. This security of ownership rights persuades them to share and distribute data and information which would have otherwise been kept classified. Rights granted under different national and international intellectual property laws and treaties helps in the socio economic advancement of the individuals, corporations and countries. In todays sophisticated technological sector, this type of protection plays a very important and crucial role in the financial growth and advancement of a business. It will not be wrong to say that Intellectual Property protection is good for the economy, benefits the public at larger and act as a medium for technological advancement. For growing SMEs, IP rights can be very important and economically beneficial business assets. With the expansion and growth of SMEs operations, the need to protect their IP rights also becomes necessary. From the above discussion it can be assumed that IP protection can be a very expensive and lengthy process, especially international protection. To some extant the registration process under the PCT has been streamlined and relatively made less expensive making it possible for the SMEs to get their IP rights registered. Despite of all the difficulties that the registration process poses, registration of IP rights can provide a sense of security and certainty which can help SMEs to grow and expand their operations into the wider world. Whether intellectual property rights are advantageous or not, it seems like developed world has come to an accommodation with them.

73

Implemented by Regulatory Reform (Patents) Order 2004 , SI 2357/2004 and the Patent (Amendment) Rules 2004, SI 2358/2004, which came into force on 1 Jan 2005.

13