We copycat IPKat*:
An interesting study by Brent Allred and Walter Park, “Patent rights and innovative activity: Evidence from national and firm-level data", published in the Journal of International Business Studies 38(6): 878-900, is one of those economist studies that shed some interesting light on the relationship between patents and innovation, a much underexplored area in Europe.
read Roger Smeets’ summary of the study. Roger is a PhD student at the Nijmegen Centre for Economics (Radboud University Nijmegen, Netherlands).
Yesterday, December 13, 2007 the revised European Patent Convention (“EPC2000”) came into effect. It simplifies the patent application procedure before the EPO by eliminating unnecessary requirements and generalizes the BEST system (Bringing Search and Examination Together). It further makes the EPC itself more adaptable by transferring detailed provisions of a procedural or administrative character to the Implementing Regulations.
Changes for users
A radical change? No not quite but a considerable one. The new “refinements” of the EPC reflect the demands of the users of the system, the inventors and scientists that ensure continued progress through their work. Patent applications can now be filed in any language, though subsequently (within 2 months) a translation has to be submitted in English, French or German. Moreover, all EPC contracting states are now automatically designated when filing a European patent.
A useful new feature is that patentees also have the right to limit their patent." A new feature is the limitation procedure, which lets proprietors restrict the scope of their patents in central proceedings before the EPO and with effect for all the contracting states.
It will be interesting to see:
* A new limitation and revocation procedure will be introduced. This will provide a way for the owner of a European patent to limit the claims at any time after grant. The question remains what degree of scrutiny will be given to amendments sought under the central limitation (amendment) procedure and how speedily applications for central limitation will be dealt with. We expect amendments to be handled simply, and relatively quickly, at least at the outset
* what consequences will arise when a national court has found infringement but the European patent is subsequently limited (amended) in scope following the new centralized procedure. Such an amendment will be deemed to have taken effect from the date of the grant of the patent. In the UK at least, an injunction granted may be discharged but any award of damages would stand
* the extent to which a consistent approach to post-grant amendment in national proceedings will be achieved in all contracting states. For example, in the UK, the Comptroller / Court will enjoy only an extremely limited discretion to refuse amendments in light of the amended UK requirement that they should "have regard" to any relevant principles applicable under the EPC
* whether second medical use claims drafted in the new form will be construed by the EPO and national courts as having the same scope as the old 'Swiss form' claims. In particular, direct infringement will take place in the country of use, not the country of manufacture;
* how, when construing a patent claim, national courts will interpret the requirement that they must take "due account" of so-called 'equivalents' to elements specified in the claim. The Dutch and German courts, for example, already apply a doctrine of equivalents. The likelihood is that the English Court will not change its current practice at all. The English Court asks the question "what would the skilled person understand the patentee to mean by using the words of the claims". This may or may not result in a broad construction - all depends upon the invention and its context.
Not later than the nineteenth century patenting of the automobile by Rochester patent attorney George Selden paper patents and marginally developed patents have been obtained for the principal purpose of suing major manufacturers. Whether good or bad, providing a nasty buzz word to describe such activities in a generalized fashion merely inflames the rhetoric.
Thus was born the term “patent troll” to widely define the enforcement of patents by those who do not themselves manufacture and sell products. The originator of this nomenclature has now switched to the dark side and, not surprisingly, says that he “refrain[s] from using [the term “patent troll”] today. It has become too emotionally charged and too often hurled carelessly as an epithet to disparage just about every kind of plaintiff in a patent suit.” See Peter N. Detkin, "Leveling the Patent Playing Field", 6 The John Marshall Review of Intellectual Property law 636, 642 (2007). (*)
Prof. Hal Wegner, December 8, 2007
IPEG's comment:
I have used the term patent troll many times in my blogs (just type in the word “troll” in the search column above and you will see all the previous posts).
That Peter Detkin is trying to refrain from using the term is quite understandable, as he is managing director of Intellectual Ventures, seen by many as a patent troll in optima forma. Intellectual Ventures likes to see themselves as “a combination of a private-equity fund and an innovation hothouse”. So says Nathan Myhrvold, IV’s creator. The Wall Street Journal wonders: “will the company begin launching patent-infringement lawsuits to pressure companies to pay for use of its IP?” Myhrvold says that his firm hasn’t sued anybody for patent infringement but that he can’t rule it out in the future.
And that is exactly what a patent troll does. That it has obtained a negative connotation can hardly be a surprise. Amassing patents with the sole purpose to assert them against industries and users of patented technology by forcing them either by carrot or stick licensing into paying money, has nothing to do with “innovation”.
The relation between patents and innovation is still an area of heated policy debates and theoretical controversies, and empirical studies of the consequences of patenting for innovative activity are scant. Most economic studies and seem to concentrate on the effects of patenting for innovative strength of developing and developed countries (**). One of the most recent studies - and one worth reading(***) - comes to the conclusion that the effects on innovation of patenting is far less in developing countries than it is in developed countries. However there is still a lot of unknowns what the effect is of patenting on innovation between competing undustries.
It’s a far cry from the truth to claim that amassing patents in an organization that in itself does not produce any innovative products, improves working methods or produces any other economically relevant progress, is contributing to “innovation”.
(*) See Hal Wegner on “Who is the Original “Patent Troll”?”
(**) see: Nagesh Kumar, “Intellectual Property Rights, Technology and Economic Development: Experiences of Asian Countries”, Research and Information System for Developing Countries, New Delhi, India.
(***) by Brent B Allred and Walter G Park (“Patent rights and innovative activity: evidence from national and firm-level data”, Journal of International Business Studies (2007) 38, 878–900)
Associated Press reported this week about Macrovision's (MVSN) acquisition of Gemstar. MVSN CEO Fred Amoroso commented:
"There is a transformation of home entertainment going on and we want to give consumers the ability to find in and easily across a variety of devices"
Actually the leap of logic required to understand that statement has to do with the fact that MVSN has been steadily acquiring IP and treating it more strategically. Wall Street is valuing the transaction based on Gemstar’s existing revenue streams, a big part of which is the TV Guide magazine, which is a printed weekly magazine of TV listings in the US that has been around forever. Macrovision has utterly no idea what to do with this business, as even its CEO admitted during the analyst call for the acquisition, and it is considered – even by magazine publishing industry standards -- a dying business that has not adapted to the times.
CEO Fred Amoroso didn't provide any definitive answers in a conference call with analysts, saying he didn't know much about publishing and needed more time to assess how TV Guide could fit into his strategy. Fred doesn’t know anything about publishing – his background is accounting/consulting. This is why the stock tanked. It’s a visceral reaction to the long legacy of TV Guide.
More importantly, Gemstar has and EPG (electronic program guide) business – technology and IPRs (patents). Because of Gemstar's declining TV Guide business, their potential as a "patent troll", holding many patents on (e.g) EPG (electronic programming guides) makes it a powerful player in the IPR market.
We are betting that MVSN is preparing to launch a series of very aggressive patent assertion moves both in the US as well as in Europe. This is not something that it can bake into its revenue projections for Wall Street, nor is this the kind of thing that the typical Wall Street analyst understands how to include in his “turn the crank” formula for valuing acquisitions. Ergo, Wall Street tanked both companies’ stocks on the announcement.
As to potential targets for Gemstar's (or better: MVSN) more aggressive approach on IPR: be aware and prepared.
Ever tried to find anything interesting on patents at You Tube? You would be surprised
A somewhat curious mixture of issues in patent law, ranging from Sisvels' enforcement on mp3 patents where Fraunhofer in Germany was the reail inventor on wasting money on R&D what has already been patented ("60,000 million euro, or the combined yearly revenue of Microsoft and Apple") and similar ostensibly IP mismatches, in "Patent Wars":
In our October 1 blog “Is Patent Exhaustion The Big New Thing?” we referred to the “exhaustion” argument as a pretty powerful tool for Nokia against Qualcomm in their negotiations on a continuation of the CDMA/WCDMA license.
Nokia has not come very far in Europe with this argument. This week in the UK the trial between the two started before Mr. Justice Floyd, likely to last 3 weeks. On October 23 , the Landgericht Mannheim in Germany dismissed Nokia’s claim that Qualcomm’s patent rights were “exhausted”. Nokia’s further request to the court to refer the issue of exhaustion of rights to the European Court of Justice, was also denied.
Nokia faced the same fate in The Netherlands, where the District Court denied Nokia’s claim that Qualcomm’s patents were “exhausted” because the chipsets that are used in the Nokia mobile handsets are being obtained from a third party (Texas Instruments) that has a license from Qualcomm under the alleged infringed patents. (for the English translation of the The Hague judgement, see here).
The argument ran parallel to a case in the US between LG Electronics and Quanta Computer Inc. currently before the US Supreme Court. In the Dutch case, the court found against Nokia, e.g. by deciding that Nokia had failed to specify both the products and the patents that were exhausted and which specifics of the products that would be covered under the TI license.
Our take from this is that last word has not been said on this complicated issue, but that clearly Qualcomm has the upper hand now in the negotiations. One wonders whether the Nokia strategy was smart enough to not (try to) agree before the German and Netherlands court would rule (see our October 1 blog).
The case in the UK, from what we could derive from pubic sources, is slightly different than in Netherlands and Germany in that Qualcomm is suing Nokia in the UK under 2 patents (EP 0,629,324 and EP 0,695,482) both related to power control. Qualcomm’s claim under '324 is limited to contributory infringement as the product claims require both a handset and a base station. They also seek a declaration of essentiality in respect of '324 re the 3G standard.
The infringement claims relate to specific handsets purchased by Qualcomm, but these are cited merely as 'examples' i.e. they claim the same arguments apply to all Nokia handsets. However, CDMA handsets are excluded as Nokia is licensed for these.
Nokia has counterclaimed for revocation. It also has other arguments to the effect that Qualcomm must grant FRAND licenses, and as to what the terms of those should be. Other Nokia arguments include waiver, estoppel, competition law and non-availability of injunctive relief. However, all these issues have been put off to a 2nd trial in the event that Qualcomm succeeds in the current UK trial.
click here for US ITC decision of December 13, 2007 in favor of Nokia agaisnt Qualcomm.
EPLA proponent Jochen Pagenberg delivers fierce criticism on lack of progress on EPLA. Will the European Patent Litigation Agreement have a chance in 2008? Read his critical review in "International Review of Intellectual Property and Competition Law (IIC) 2007, 7).
He seems not particularly optimistic:
"Industry is certainly not willing to waste another year in fruitless discussions. If nothing happens, it will be better to drop EPLA and the Community patent for good - sooner rather than later. The Community patent will be even more difficult to adopt politically because the involvement of all Member States is indeed necessary. But the Community patent should be easier to discuss, when Member States have experience of how EPLA operates. Therefore, if EPLA is not achievable, it would be preferable to maintain the status quo and not even to start on an overhaul of the Community Patent Regulation. None of the Member States and nobody in the Commission will be willing and able to prepare any paper that could even come close to the detailed content of the EPLA draft. Therefore it must be feared that participants will grow tired of continuing discussions on one small item after another - and no end in sight."
On Wednesday, 31 October 2007, the Federal Patent Court (FPC) in Germany invalidated Pfizer’s Lipitor Patent in a first instance decision. This crucial decision for pharmaceutical companies contains some importantaspects regarding the patentability of secondary patents in Germany.
Background
The parties of the invalidity proceedings have not been published by the FPC, but it is known in the market that the generic drug makers Ranbaxy Laboratories Ltd. and Basics GmbH filed the revocation action against Pfizer’s Lipitor Patent (EP 0 409 281/DE 690 33 840). Lipitor is a popular cholesterol drug, which belongs to the most successful drugs in Pfizer’s drug portfolio. According to secondary sources, Pfizer achieved a turnover of nearly 11 billion USD in 2004 with its drug Lipitor (in Germany known under the trade mark “Sortis”).
Subject of the patent is the hemicalcium salt of R(R*R*) acid for the preparation of pharmaceutical compositions useful for treating mammals, including humans, suffering from hypercholesterolemia or hyperlipidemia. The plaintiffs argued in their revocation action that the invention of the patent is not new due to novelty destroying prior art documents. In particular, a prior art document disclosing the basic chemical compound was seen as novelty destroying by the plaintiffs. Pfizer, however, argued that the preparation of the hemicalcium salt R(R*R*) out of the basic chemical compound is new and patentable. In particular, Pfizer brought forward the argument that a prior art document, that allows an expert to make a selection on how to achieve a specific salt from the basic compound is not novelty destroying. Additionally, Pfizer argued that the European Patent Office confirmed the validity of the patent within prior opposition proceedings.
The decision
The FPC revoked the patent in first instance mainly on the bases of two novelty destroying prior art documents. The FPC is of the opinion that the prior art document comprising the basic chemical compound is novelty destroying in this case. The FPC reasons its decision by stating that novelty destroying state of the art has to be determined not only by considering the wording of the prior art document, but also by any connotation what is a matter of course even if it is not explicitly mentioned in the publication. Additionally, anything which have to be necessarily supplemented or what a person skilled in the art would contemplate by reading the publication needs to be seen as novelty destroying as well. The FPC says that these principles apply for chemical compounds as well, provided that the prior publication contains at least an allusion to the salt from the perspective of a person skilled in the art. In other words, it is novelty destroying if a person skilled in the art understands by reading the prior publications that it would be possible to obtain the salt to which the patent in suit extends. It is not required that the salt itself has already been manufactured. It is sufficient that the option of manufacturing the salt can easily be contemplated by a person skilled in the art by reading the prior publication. In the case in question, the FPC is of the opinion that according to the first prior art destroying document the hemicalcium salt automatically accrues in a composite of stereo isomers with a certain percentage of single isomers. Hence, single stereo isomers are necessarily a product of the chemical reaction within the composite itself. in consequence, the novelty of stereo isomers has to be denied, if an expert contemplates the stereo isomers by applying the teaching of the prior art document. An explicit reference to single stereo isomers as a product of the composite itself is not necessary in the view of the FPC. According to the FPC, there is also a second novelty destroying publication. In this regard, the court made some interesting statements regarding selection inventions. Pfizer argued in its defence that it is not novelty destroying if a person skilled in the art needs to make selections between several options in order to achieve the patented hemicalciumsalt, as this is the case in the second prior art document. The FPC denied this argument, because in its view the selection to be made in this case is anticipated in the relevant prior art document. The court argued that the selection of several carboxamide and their acid forms with pharmaceutical salts are already mentioned in the prior art document. Additionally, the FPC is of the opinion that the selection of calcium as a salt composing cation among only a few metal salts makes the hemicalcium salt of R(R*R*)-enantiomeres not new.
Regarding Pfizer’s argument that the European Patent office confirmed the patent within opposition proceedings, the FPC argued that the criteria for novelty set by the European Patent Office are too narrow and can not be applied under German case law. The FPC underlines that in the light of the decisions of the German Federal Court of Justice, there is no standardized European interpretation guide lines for novelty and inventiveness. Hence, the FPC is of the opinion that the question of novelty and inventiveness has to be interpreted under national standards.
Pfizer is said to appeal the ruling, so that it can take up to another 3 years to get a final
decision in this case. Pfizer does currently not see an immediate commercial impact of the decision. According to Pfizer, neither Ranbaxy nor Basics have received a regulatory approval by German authorities to sell a generic copy of Lipitor yet. Additionally, the patent is going to be expired in July 2010, so likely before a final judgement of the German Federal Court of Justice.
Effects of the decision
Although it is only a first instance decision, it shows that it might be difficult to maintain the validity of secondary European patents in Germany, comparable to the legal situation in UK. Should the decision of the FPC be confirmed by the German Federal Court of Justice, pharmaceutical companies must reconsider their patent strategy in this regard.
Dr. Peter Meyer, Dr. Kaya Köklü
Simmons & Simmons, Düsseldorf
The rumor goes that France is due to make a sea change shift towards supporting the EPLA, an initiative to harmonize the way patents are being litigated in Europe. The French Research Minister (heading the French Ministère de l'Enseignement supérieur et de la Recherche”) Valérie Pecresse, has sent a letter (or is about to do so) to her German counterpart, expressing the French support for EPLA. We have not been able to find any confirmation or hard evidence for this rumor from anyone yet, nor from the French delegates to the AIPPI ExCO meeting currently taking place in Singapore. They do agree though, that such a letter would implicate a sea change in the position of France, who has been the most vocal of antis against the EPLA proposal. One wonders whether the French Minister – in indeed she sent the letter, or is about to do so – could do this without the backing of Nicolas Sarkozy, the French President (not if you are fond of your job as a French Minister, we imagine).
The support would not only be for EPLA, but also for the London Agreement. The London Agreement was concluded in London on 17 October 2000 with the aim of creating a cost attractive post-grant translation regime for European patents. It is the fruit of the work on reducing European patent costs, which was set in motion at the Intergovernmental Conference held in France in June 1999.
EPLA has been on a bumpy road so far. McCreevy, the EU's internal market commissioner, told the Financial Times in 2006 that "anything remotely concerning this patent area is fraught with minefields at every turn of the road". He said the failure to secure backing from national governments made him "pessimistic" about the prospect of making progress on the issue. Should pessimism now turn euphoric? Not yet, I am afraid. Let us see what the position of France, the major non voter so far, is. Does Sarkozy now lets his influence count on this subject as well?
Anyone in the position to (if necessary namelessly) confirm or deny this rumor? Please reply to this blog (below, push the envelope).
other IPEG blogs on EPLA: see http://ipgeek.blogspot.com/2007/02/negative-opinion-on-powers-of-eu-member.html and the column on the right of this blog, called "EPLA - everything you always wanted to know but was unable to find"
Increasingly, big oil companies use their Intellectual Property to achieve competitive advantage over their state-owned rivals (NOC’s). Why is that so? More than 80% of the world’s oil reserves are in the hands of state-controlled companies. Big Oil is loosing its grip on those energy rich countries and their NOCs. NOCs learned over the years how to handle their natural reserves themselves, using service companies like Schlumberger and Grifco. Rob Cox and Cyrus Sanati suggested three options for the industry to counter this (in “Big Oil, Big Problem” in BreakingViews.com)
The better one, I would say, is using their extensive patent portfolios more aggressively against NOCs and when necessary, also against these service companies. Technological advances and R&D achievements are crucial for the international oil companies to optimize the extraction of oil from the reserves under their control while convincing the NOCs to let them help exploit their resources. By doing so they could more actively rely on their IP, alleging infringement against NOC’s and their service industries.“There at least three logical responses by the oil majors to the rise of National Oil Companies (NOCs). The first, already underway, is to invest in countries where they're unlikely to see assets expropriated. The second is to consider buying service firms themselves. Lastly, they could seek mega-mergers, along the lines of an Exxon-Chevron or BP-Shell, to counter the increasing heft of the NOCs.”
“Patents will be as valuable as reserves in the future, particularly for the International oil companies”, said Robin West, chairman of PFC Energy. “Technology is critical to unlock the value of reserves”.A survey by the Financial Times shows an sharp increase in R&D spending by many oil companies. Shell increased their Technology R&D budget 50% over the past three years to US$ 1.2 bn in 2006. Chevron’s R&D has more than doubled over the last 5 years. It is very likely that those increased R&D spending has translated in increased IP portfolios. The strategy behind it must be to provide a greater grip on NOC’s and oil service providers to shield against attempts to cut them out of national reserves exploitation, nationalization and other threats to their market position. By using IP more as a offensive competitive weapon, the oil companies can extend their market share. I expect to see an increase in licensing activity, and, as licensing does not provide the competitive edge, infringement claims may be on the rise in oil and gas the industry.
It can be no coincidence that both in the US as well as in Europe “patent exhaustion” has been brought in the legal limelight. Last week in the US the US Supreme Court allowed certiorari in a case Quanta Computer Inc. v. LG Electronics Inc., 06-937.
On 24th September, the European Union submitted its instrument of accession to the Geneva Act of the Hague Agreement to the World Intellectual Property Organization. The Geneva Act of the Hague Agreement establishes a system for the international registration of industrial designs. After joining it, economic actors will have the possibility to use a single application to obtain protection of a design not only throughout the EU with the Community Design, but also in the countries that are members of the Geneva Act. This will simplify procedures, reduce the costs for international protection and make administration easier.
One of the "hot" issues in the electronics industry (and earlier on in the semiconductor business) is the relationship between standards and patents. Recent examples of clever standard setting policies and the enforcement of patents that come to mind are the way Sisvel enforced Philips’ mp3 patents, reading on an international audio compression standard. Here the comfortable position Philips was in to enforce patents that seem to read on that audio standard. It the reminds me of a saying by the English judge Mr Justice Pumfrey: “Nothing would be pleasanter for a patentee than to participate in the setting of a standard compliance with which would inevitably involve infringement of his patent.” That’s exactly what Philips made all the mp3 manufacturers as well as the Courts in Germany believe: simply comparing all mp3 products with the relevant standard, rather then the patent, by saying: “you - trader in mp3 players- are bringing to practice the specs the standard requires for any mp3 player to work and as it happens to be, I, Philips have those – “padding bits” - patent that exactly read on that standard, so there is my evidence of patent infringement”.
A carefully crafted strategy that worked well and made wonders to Philips and its co-owners of the mp3 patents at stake, making them hundreds of millions of licensing income. So why not using the same trick for compression of camera images on mobile phones, known as the “Baseline” method which is the subject of a JPEG standard discussed by study groups of the International Telegraph en Telephone Consultative Committee (CCITT), The International Standards Organization (ISO) en de British Standards Institution? O, Lucky Me, Philips must have thought as they are the owner of European patent EP 0 260 748, also knows as “Vogel” (named after the inventor).
So, Philips sued LG Electronics in the Netherlands over the use of its Vogel patent – covering the JPEG compression standard - in a large number of its mobile handsets. After the Sisvel miracle this sounded like a done deal. Apparently, that was exactly what happened, as the Dutch court impressed - as the German courts were at the time of the mp3 “padding bit” patent - by Philips’ thoughtful enforcement of the Vogel patent against LG who admitted to have used (no choice, remember, it’s a standard!) the Baseline method, covered by the JPEG standard for that method. LG’s attempts to invalidate the patent were doomed to fail (knowing Philips clever use of study group en engineers outcome of standard meetings to subsequently draft - and redraft if necessary - claims covering that standard setting meeting results).
No surprise then that LG lost its patent infringement case. Philips obtained an infringement injunction against LG in April 2007. The court found infringement on a valid Philips patent (be it a little bit helped by the court in redrafting the claims in a way that made it novel and inventive over the prior art). So far, so good, Philips must have thought.
However, LG had the feel that Philips must have played the standard setting procedure a little too clever, and alleged that Philips had taken part in the engineers and study group meetings and had failed to declare the Vogel patent to the relevant standard setting body (with the result that they could still sue under the patent which they would not have been entitled to do would the Vogel patent be declared prior or pending the standard setting meetings. In that case Philips could only claim licenses (monetary relief, no injunction) under the Standard Setting Rules to license against RAND conditions).
LG sued Philips for that same The Hague District Court, asking in preliminary proceedings (“kort geding”) to order Philips not to enforce the injunction it obtained in April against LG. It succeeded. LG was finally able to deliver evidence that Philips did participate in the Standard committee meetings. Philips tried to save its face by trying to convince the court that the “disclosure rules” are only for “proposers” (parties who provide technical proposals in the committees). It made the Court – in a humorous snub against Philips – say it should have been aware of the disclosure requirement “as a listener”. It added that, had the court known about the convincing evidence that Philips did participate (contrary to what Philips made the court belief in the earlier court case) it would not have rendered the infringement injunction against Philips in the first place.
Interesting to note that in a similar case in the US in 2003 - Rambus Inc. v. Infineon Technologies, 318 F.3d 1081 (Fed. Cir. 2003), the US Court of Appeal for the Federal Circuit (CAFC) said although the JEDEC policy itself (presumably the written policy) did not specify when to disclose patent that read on a standard it took from testimony of witnesses, that the actual practice required that disclosure be made at the time of “formal balloting” with respect to the standard. The question then arose whether JEDEC’s disclosure requirements applied to a member’s intentions or attempts to file patent applications covering the proposed standard? The CAFC found that a member’s subjective beliefs, hopes and desires are irrelevant. Philips beliefs –being not a “proposer” - would in CAFC’s view be irrelevant, the same result as the Dutch court, be it along different lines.
Philips must hope it will not be under the same scrutiny as Rambus has been - and still is – over its standard setting policies, but it will ring the alarm bells in Eindhoven, no doubt.
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The following is a Korean translation of the above blog post: "Philips defeated on JPEG patent after non-disclosure to standard setting bodies"
규격 기준 기관에 비공개로 인해 JPEG 특허 건에서 패한 Philips
전자제품 업계(또한, 최근의 반도체 업계)내에서 “뜨거운” 이슈 중의 하나는 규격 기준과 특허간의 관계이다. 최근의 한 예로 Sisvel이 Philips의 mp3 특허를 국제 오디오 압축 규격에 적용하게 한 예가 기억에 남는다. 이 경우, Philips는 오디오 규격을 적용하는데 별 문제가 없었던 걸로 보인다. 영국의 판사, Mr. Pumfrey J가 말했듯이, “특허를 가진 사람에게는 별 문제 없이 규격기준을 적용하는 것이 어쩔 수 없이 특허권을 침해해야 하는 경우보다 더 좋은 것이 없을 것이다.” Mp3 제작자를 비롯한 독일의 법원도 Phillips에 의해 위의 글을 적용하여 mp3 플레이어들을 특허가 아닌, 적당한 규격과 비교하게 되었으며 또 말하길, “mp3 플레이어 거래인들은 mp3 플레이어 규격에 맞는 성능을 갖춘 기종을 업계에 소개 하는데, Philips가 그 규격에 꼭 맞는 특허를 가지고 있으므로 위의 mp3 플레이어들은 특허권 침해의 증거가 된다.”
심사 숙고해서 짜인 전략은 Philips와 mp3 특허 공동소유자에게 수억의 라이센스 수입을 가져다 주었다. 그렇다면, 연구 그룹 International Telegraph Telephone Consultative Committee (CCITT)와 The International Standards Organization (ISO) 그리고 British Standards Institution (BSI)의 JPEG 규격의 토론으로 떠올랐던 “Baseline”이라 불리는 휴대폰 카메라 이미지 압축 방법에 관해서도, 동일한 전략을 쓰면 되지 않는가? Philips는 자신들이 유럽 특허 EP 0 260 748, “Vogel”(발명가의 이름)의 소유권자라고 생각했던가.
그런 이유로, Philips는 네덜란드 LG 전자를 상대로 Vogel특허의 –JPEG 압축 규격 기준을 포함한–많은 휴대폰에 적용했다는 사실에 소송을 제기했다. Sisvel 기적 이 후, 충분히 가능한 일이라고 믿었다. 실제로 네덜란드 법정은 Baseline 방법을 사용했다고 인정한 (표준 규격이기 때문에!) LG를 상대로 Philips의 영리한 집행에 감명받았다. –독일 법정이 mp3 “padding bits” 특허의 소송시기에 그랬던 것처럼–. LG의 특허를 무효로 만들려는 시도는 실패로 돌아갈 것이 예상되었다. (Philips의 엔지니어들의 규격 기준의 영리한 연구에 따라서 소송내용을 수정하거나 보류할 것으로 알았기 때문이다.)
이변 없이 LG는 특허 침해 건을 지고 말았다. Philips는 LG를 상대로 2007년 4월에 침해 금지명령을 얻었다. 법정은 Philips의 유효한 특허에 대한 LG의 침해라고 결정했다. (이것은 소송내용을 수정 함으로 약간의 법정의 도움을 받은 것이라고도 할 수 있겠다). 여기까지 Philips는 모든 것이 잘 풀렸다고 믿었다.
그러나, LG는 Philips가 규격기준의 결정 행로를 자신들에게 유리한 쪽으로 몰아갔다고 믿어, Philips는 엔지니어들과 연구 그룹들의 미팅에 참여했고, Vegel 특허를 적절한 규격 기준 기관에 신고하지 않았다고 주장했다. (그 결과를 가지고 Vogel이 아닌 다른 특허에 한해서, Vogel특허가 규격 기준 미팅에 신고되기 전이나 보류되었을 경우 소송을 제기할 여지가 남아있었다. 그 경우엔 Philips는 RAND conditions에 대한 규격 지준 지정 법에 한해 라이센스만 요구할 수 있다. (금지 명령이 아닌 금전상의 보상)
LG는 같은 The Hague District Court에 Philips를 상대로 Philips가 4월에 얻은 금지명령을 이행하지 못하도록 preliminary proceedings 을 신청하였다. 그리고 성공하였다. LG는 Philips가 규격 기준 위원회 미팅에 참여했던 것을 밝혀내었다. 이에 Philips는 “disclosure rules”는 “proposers”(기술적인 제안을 위원회에게 제공한 쪽)에게만 적용됨을 법정에 납득시키려 했다. 법정은 공개 요구조건을 “청취자의 입장에서” 인식하고 있어야 했음을 표했다. 또, 법정이 Philips가 미팅에 참여했다는 확고한 증거를 알고 있었다면 (Philips가 전의 케이스에서 법정을 설득시킨 것과는 달리) 특허침해라는 결정은 처음부터 없었을 것임을 더했다.
흥미로운 부분은 2003년에 미국에서 비슷한 케이스 -Rambus Inc. v. Infineon Technologies, 318 F.3d 1081 (Fed. Cir. 2003) 의 경우, the US Court of Appeal for the Federal Circuit (CAFC)가 말하길 JEDEC 정책은 증인에 의해 언제 특허가 공개되었는지는 지정하지 않고 있고, 실제로 규격에 관련된 공개가 “formal balloting”의 시기에 행해지는 것이 요구된다고 밝혔다. 그렇다면 의문이 생기는 부분은 JEDEC의 공개 요구사항이 멤버의 의도, 또는 제시된 기준을 포함하는 특허 신청서를 제기하려는 시도에 적용되었는지 다. CAFC는 멤버의 신념, 바램, 그리고 욕구는 무관계 하다고 밝혔다. Philips의 신념 – “proposer”가 아닌 – 은 CAFC의 관점에서 무관계 한 것이었고, 네덜란드 법정에서도 동일하게 적용되었다.
Philips는 Rambus가 그랬던 것처럼 (아직도 그렇듯이) 기준 지정 정책으로 인한 엄격한 감시가 있지 않기를 바래야 할 것이다.
The European Patent Office (EPO) published statistics on European patents and patent applications during 2006. It’s a shame that on the EPO site one cannot easily get a comparison with Patent data of 2005 and so follow the development an grow in patent applications nor compare the listings of the companies that are the largest “users” of the EP system.
The results show again that Germany leads as the EU country with the highest number of patent applications filed, not much different than the figures analyzed and published in 2007 by EuroStat, EU's Statistics Bureau, for 2000.
Worldwide patent applications are growing at an average rate of 4.7% per year. WIPO Director General Dr Kamil Idris considers this as “clearly one indicator of the level of inventiveness and innovation that is occurring around the world and signals those areas in which technological development is most pronounced." This is a hightly contested view. Innovation measuring by numbers of patents is in my view (and that of many others) flawed. A debate in economics about how best to measure innovation is going on for quite a while. Most economists are well aware of the shortcomings of patent data as a measure of innovativeness.
On firm-level, as one would expect, common-sense dictates that not input to the innovation process (employess, money) or byproducts (patents) but rather final output and success is the most useful measure of innovation
"The three metrics that executives consider most valuable are time to market,
new product sales, and return on investment in innovation." (Boston Consulting
Group "Innovation Metrics Survey", 2006)
BIZZ, the blog and magazine for small and medium sized enterprises (SMEs) in The Netherlands, published by Reed Business provides a shortlist of the 100 most innovative companies in Holland for 2007, the “Innovatie Top 100” (“Innovation Top 100”). We wonder how many of the 10 most innovative companies have filed one or more patents for their invention. The - preliminary results - are at best scanty, at worst: troubling. We checked the data, using the database for the German Patent Office (Depatisnet) and Espacenet (of the EPO).
For five out of the ten “most innovative” SMEs in The Netherlands we were unable to find one or more patent filed. If this trend would be true for all of the 100 most innovative companies, only 50% applies for a patent. So basically half of Netherlands most innovative companies simply ignore intellectual property or have decided not to use IP for their companies.
Here are the top 10 of BIZZ's "Most Innovative" SMEs, out of the 100 as published by BIZZ:
1. Mampaey Offshore Industries - Dyamic Oval Towing System
One patent filed, (“Sleepboot met ovale ring”, inventor Gerard Mampaeij NL1027414)
2. Bouwbedrijf Kooi - Het 1-2-3 Huis
One patent filed (by “1-2-3 Huis B.V”) , inventor Jaap Kooi NL1029449
3. Claves - Novulo
No patents, nor any (published) application
4. EVOLVE & Vriezema Betonprodukten - Lichtgewicht beton
No patents, nor any (published) application
5. E.V.A .Products - Dieselmotorcycle De Track
No patents, nor any (published) application
6. Wilmink Product Ontwikkeling - Dynamische gehoorbescherming
Two patent applications (“Gehoorbeschermer”), inventor Engbert Wilmink (originator of the patents is TNO), EP 1682059 and EP 1527761
7. SENZ Umbrellas - Stormvaste paraplu
One (Dutch) patent nr. NL1029225, inventor Gerrit Hoogendoorn, pending applications for other countries
8. Van Ruysdael - Isolerend enkelglas voor de restauratie
Two (Dutch) patents NL1020845 and NL1024339, inventor Michel Trompert. One European patent application EP-A-1388413 which is in limbo for years now, does not seem to lead to a patent anytime soon.
9. PayDutch - Veilige online koop/verkoop methode
No patents, nor any (published) application
10. LSB Groep - Kunststof steigerplanken
No patents, nor any (published) application
So, 50% has a patent, 50% has none. Is the glass half empty or half full? Half empty is the right answer. Remember, we are talking about the best innovations by Dutch SMEs. What does it tell us? A faulty view on what IP can do for your company? Maybe management thought they could keep the product characteristics secret? Isn’t that naïve? Worst of all: all these innovations can be easily copied and used without any compensation to the originators of these innovative ideas. Is that what innovation is all about? Is that where Europe spends millions of euros on, to stimulate new inventive products and services which can be copied by anyone doing some reverse engineering?
Netherlands politicians: go do your homework and start thinking how to improve this lack of use of IP and lack of full understanding of what IP can do for the SMEs.
Patent professionals: get finally out of your professional cocoons and start telling and educating the politicians and policymakers as well as SMES what patents can do for you.
Academic world: start educating the students at (technical) universities what patents are, how they can be strategically used, what the difference is between freedom-to-operate and patents as a strategic tool.
Universities and Business Schools: start promoting academic research into the exact role of patent in the innovation process.
This should be a wake-up call for all those involved in the innovation process.
Today starts, in Munich, a two day Symposium: “The Future of European Patent Jurisdiction” organised by the German Federal Patent Court, in consultation with the Federal Ministry of Justice, The meeting is expected to bring together 200-250 participants from all over Europe who are actively engaged with this issue in their work as judges and lawyers, as members of the business or scientific communities, or as decision-makers in EU Member State governments and the European Commission. Federal Minister of Justice Brigitte Zypries will attend the symposium and deliver the opening speech.
If only Germany could be as effective in brokering a EU Treaty consensus as they can be on reaching a common view on EPLA, wouldn't that be what the European patent community is waiting for too long?
We hope to be able to get you news from the conference later today.
Joff Wild reported on his blog (June 19) of an internal memo of the EPO (European Patent Office) reporting on the attitude of staff to the way in which the EPO is being run. Almost simultaneously, the head of legal affairs at the EPO stated that it is now too easy to obtain patents and there needs to be a shift towards fewer, but higher-quality, rights.
Joff wrote: “And to add a certain spice to the situation, as well as handing valuable ammunition to the EPO’s opponent’s, Wim Van der Eijk, Principal Director of the International Legal Affairs and Patent Law Department, was last week quoted as saying: “Patents are granted too easily … We need to have a more critical look, and steer policy in the direction of less, but stronger patents.” Now I don’t know in what context he was talking and if he was referring to the EPO or not, but it strikes me that at a time when the EPO is awarding more patents than it ever has before, this was not a particularly clever thing to say.”
Another view is possible. The criticism makes sense when one reads in the internal memo:
“There is a strong belief amongst staff that the financial benefits to the
Member States arising from the renewal fees motivate the Administrative
Council, and consequently the EPO administration, to focus on the quantity
rather than the quality of the granted patents.”
Tony Fish of AMF Ventures commented in his blog on Eric Schmidt, the CEO of Google, who spoke about “mobile, mobile, mobile” as the next opportunity at the O’Reilly Web2Expo in San Francisco last month.
Philips c.s. mp3 patent litigation by Sisvel has mostly come to an end in Europe and the US, as most bigger players in the electronics space have settled with Sisvel (on behalf of the patent holders Philips, France Telecom, IRT and TDF). When Sisvel settled with most vendors of mp3 consumer goods they did that after seizing goods at consumer fairs, starting patent infringement cases, using the European Border Detention Regulation 1383/2003 for blocking incoming mp3 enabled consumer goods from Hong Kong and China and other Asian countries. Many companies were basically forced into license deals, despite the fact that they had very good validity challenges to the patent. This blog has access to prior art that has been found that only a very limited number of companies have been able to get access to. The prior art is extremely powerful and valuable against anyone wanting to challenge the Philips mp3 patents being asserted by Sisvel.
Although many companies agreed to pay substantive royalties for the lifetime of the patent, no one is seeking invalidity. Why would any company not challenge the validity of the patent after signing the license thus saving substantial future royalty fees? The answer is quite simple. In the settlement agreement Sisvel included a clause giving them the right to terminate the license if the licensee challenges the validity of the patent. The clause reads:“10.03 Audio MPEG and SISVEL shall have the right to jointly or independently terminate this Agreement forthwith or to revoke the license respectively granted under any of the US Patents and Non-US Patents in the event that LICENSEE or any of its Controlled Companies, directly or indirectly (e.g. via its customers and/or suppliers) brings a lawsuit or other proceeding to contest the validity or enforceability of any of the US Patents and/or Non-US Patents.”
Most US companies and those European companies with substantial US exposure refrain from even looking into the possibility of seeking invalidity as this could result in a termination of the license something they do not want to get into, endangering the continuous supply of phones, handheld or other consumer goods with their mp3 functionality. Most US attorneys advise their clients not to be part of any attempt, by whomever, to challenge the Philips/Sisvel patents, despite the very powerful prior art available, wary of the risk of termination and subsequent further business disruption. Besides who cares anymore when everyone pays the license which is in all cases been passed on to the end consumer?
Earlier we pointed out that a direct non-challenge clause is contrary to almost every antitrust legislation in the world. So how come Sisvel can get away with this quasi no-challenge clause? Strictly speaking clause 10.3 above is not a no-challenge clause. The licensee is still allowed to challenge the underlying patents in any court. However, doing so gives Sisvel under this challenge-clause (see above) the right to terminate the license agreement. Under previously held US law, a licensee cannot have it both ways: and getting patent peace by obtaining a license from the patent holder and at the same time challenging the patent’s invalidity while enjoying the license (as that would prevent the patent owner from seeking an injunction to use the patent pending the license) . However the US Supreme Court changed that in MedImmune vs. Genentech. According to the US Supreme Court, language promising to pay royalties on patents that have not been held invalid "does not amount to a promise not to seek a holding of their invalidity."
Although one would expect a challenge to the clause 10.3 in the Sisvel license (settlement) agreement, we do not know of any.
Reverse Patent Troll
Both the public in general as well as al the mp3 electronics consumers that now pay the price for the Sisvel licenses need to have a “Reverse Patent Troll” act against the Sisvel patents, seeking invalidation of the Philips c.s. patents. The Reverse Patent Troll can then use prior art that has only been used by two companies in their EU proceedings (which were subsequently withdrawn after settlement with Sisvel) which is very convincing, very powerful and not yet publicly known, so useful as it cannot be used by everyone to invalidate the Sisvel patents, making the Reverse Patent Troll a very attractive one.
Prior Art
Prior Art has been found that is unique and a powerful tool against the Sisvel patents. For further information, contact bonanza@ipeg.com.
Interested in the use of Intellectual Property as a trade barrier? Listen to an interview on China Radio international with Jasper Helder, of Simmons & Simmons at http://english.cri.cn/4026/2007/06/06/1241@235394.htm
When the first patent auction by Ocean Tomo was held in San Francisco, it caused a huge media hype in the US. It looks that the next one, in London on June 1, will receive the same attention from European media (if by then, we do not have an overdose of hype already because of the Michael Jackson auction on Wednesday and Thursday). The reason it will is, no doubt, because of the esoteric nature of the goods being auctioned. We can imagine old cars, antique books, art, wines and other “tangible” goods being sold on an auction. Even 3G wireless licenses. But patents?
Trading products of the mind, like an invention embedded in a patent, or “intellectual assets” (or “intangible assets”) are much harder to imagine when it comes to putting value on it. “Value” makes most intangible assets indeterminate. But how come we can value 3G wireless licenses (be it too high) but we have trouble valuing patents? There are over 100 methods of putting a value on patents[1]. What is the “value” of a patent, or more broadly, value of intangible assets? In case of the 3G the value must have been driven by market (and profit) expectations. But what profit can be made from patents?
These and other problematic issues make the auction of a patent a daring event. Or are we too much of an iconoclast to take issue with conventional wisdom that a patent is by itself and stripped from its application of the patented invention has no value at all?
Intangibles represent “immaterial” value, such as relationships of companies with its business partners, and its ability to innovate (R&D capital). Stripped from its context, however, the “value” of a patent is nothing but a assertion of a right to an invention, a monopoly right granted by the government for an innovation that is both new, inventive and contributes to the “art”. It is a long way from a “right” to “value”. For some the sole right to exclude others to use the same invention for which a patent has been obtained is what the real value of a patent is. Contrary to this view, licensing officers, business development and financial people interested in monetizing IP, see the real value of patent in its potential to add value to the organization (e.g. by shorten its own R&D time), or by establishing relationships in open innovation projects or by using it to realize financial value (e.g. lowering the cost of capital by securitization the license income stream that (some) patents generate.
So a smart buyer will ask himself some tough questions. Am I really interested in buying a right without the product that is the result of the patented invention, or the certainty that what is being described in the patent actually works for you? What is the value of that (paper) right that is being auctioned? Is it the right it conveys to exclude others and how sure can you be of that (have you not misread the claim, do you have a full overview on the closest prior art and did you do your due diligence on validity of what is being claimed? Or, do I buy to enlarge my own portfolio and to what extent? Does the offered patent grant me access to other players in the market by leveraging this new patent against the rights other companies have whose cooperation I seek? Although patents are meant to be useful, studies show that almost 95% of all patents have never been used in any product and have created no economic value. They are being filed as a guarantee (actually rather an expectation) that it deters competitors from copying the invention. Patent as a “freedom to operate” mechanism. But how does that confer value to any other party than the originator of the invention?
So, one wonders, who is interested in a patent without some proof attached to it that the invention has potential applications or is capable of rendering a commercially viable product? Yes surely patents are being traded, actually in quite large numbers. These patents are being traded (either sold or exclusively licensed) after detailed negotiations and careful due diligence on behalf of the buyer, in private dealing rooms.
But how about auctions? Tim Harford, in the Financial Times Magazine (“Under the hammer”) cites economist Paul Klemperer, Europe’s best known auction expert, who showed that trivial seeming features of an auction can have big (and sometimes disastrous) effects by repelling bidders. Take the question whether there should be an open or secret reserve. Auction theory offers an argument that a secret reserve price is better (IPA did that during the Munich patent auction, however, no bidders). The idea behind it is that bidders, confronted with gradually ascending bids will draw confidence that a bidder is not alone in valuing the item, even if the bids are too low to reach the reserve. In 2001 Katkar and Reily put this theory to the test by selling 50 matched pairs of collectible cards, 50% open and 50% secret reserve of the same level. They concluded that secret reserve is counterproductive. Far from stimulating interest they seem to put off bidders, fearing that a secret reserve is secret because it is far too high.
A further misconception is that small inventors or SMEs when seeing the figures for which patents in total have been auctioned (as Ocean Tomo did), might be lured into thinking that having a patent will make them rich. As we wrote earlier, there is a lot more needed to make money out of a patent than selling it on an auction.
In that respect IP auctions will not be the value driver of IP that some will make you belief it is.
[1] Relief from royalty, Excess profits or notional maximum royalty payable, Capitalization of earnings, Net present value of incremental cash flows, Gross profit differential, Premium sales price , Comparable market transactions, Cost based, etc. etc
Was the first IP auction in Munich, yesterday at Kempinski hotel, a success? Well, it depends how you define “success”. Certainly the German organizers, Intellectual Property Auctions GmbH (IPA) did a great job. You must be courageous to organize an auction in Europe, where the notion of selling and buying patents is still in its infancy and general IP awareness is at minimal levels. So yes, it was a success in the sense that IPA has been the first one to create greater awareness that patents are more than rights you acquire to then shelve them.
In terms of proceeds, no, the auction was a washout. Out of the 81 lots of patent(families) covering 12 fields of technology as well as one (!) trademark, the highest bid – 50K euros, by an absentee bidder – was for a patent on a reduced light scattering ultra phobic material, owned by a German company. Most sellers were, by the way German companies and institutions, among which Fraunhofer. Fraunhofer did relatively the best business, out of 11 patents auctioned, 10 were sold, be it for an average of an abysmal 17K euros, for a total of 188K euros. The lowest amount for which a patent was sold was for 5K (can you imagine, that’s not even 1/100th of the costs for an average European patent application covering 5 countries).
There were some exotic patents as well. A patent for making leather out of fish skin, wouldn’t that be great to support Europe’s fishing industry’s competitive edge? No bids however, an inevitable fate for most lots as it was clear from the start that, again, more tyre kickers than buyers frequented the auction. Or a patent offered for sale by a German patent attorneys firm for wound treatment, asking price 80K, no bids.
The only trademark auctioned was NUTRI-CARE of BASF, sold for 14K, after a (telephone) bidding with increments of 1,000 euro. Not a bad result though for a trademark if you compare it to the results for patents were (almost exclusively telephone) bidders did not want to pay more for any patent than a paltry 15k-17K euros. The only bid that was made on a certain patent from the audience was - guess what – from Ocean Tomo, the US auction organizer, who will have its first European action on June 1 in London. The bid failed as it was overturned by a telephone bid. How sad can it be?
What can we learn from this first auction?
First and foremost that a successful sale of patents is still the terrain of the patent brokers and IP merchant bankers, rather than the auction houses. Secondly, that the big issue that need to be overcome is: where are the buyers? In that respect it does not help that the organizers have waited too long before making the auction catalogue available on the internet free of charge (only after filling in forms, paying entry fees, etc). How else would a potential buyer know about what is being offered, leaving sufficient time for due diligence? Instead, IPA was much too secretive and restrictive about who is selling what, for what price and what details could be provided for any interested party to get him to bid. Thirdly, crucial details in the catalogue were missing, price indication, value estimators, valuation analysis that IPA must have done before accepting the lots, etc.
Let us wait how Ocean Tomo does the London auction before giving the final verdict.
If a newly identified work of Vincent van Gogh would be auctioned, would it be noticed by the bloggers, the press, any attention at all? Probably only when a new record is being set by the auctioned price. No the picture for this blog does not represent the proceeds of one of the patents auctioned today in Munich. The auction is organized by IP Auctions GmbH, a German IP valuation group. It is very much modeled after the Ocean Tomo auction, held in San Francisco, Chicago and New York. It was announced that next to patents, also trademarks and licenses would be auctioned. The appetite for trademarks seems to be low, as only trademark, “Nutri-Care” will be under the hammer. The auction, held today at 2:00 p.m in Kempinski hotel, will be both an English and a Dutch auction, the latter known from the first auction of flowers, whereby the auctioneer starts to call the object at the highest price, slowly lowering it until the first bidder raises it hand.
What is striking about the auction is that the sellers are predominantly German companies, including Fraunhofer, Germany’s top technological research institute, comparable to TNO in the Netherlands, ABB Group, Merck Patent GmbH, the German Rolls Royce company, some German academics and the University of Saarland (also Germany). Volkswagen AG offers one non-exclusive license under a European patent for the manufacturing of a plastic autopart. One of the few non-German sellers is (I presume) a Spaniard, Salvador Perez, offering a patent “Pay-as-you-drive” as it is described, filed in 1994 (so with a limited lifetime left) “for evaluating the risk of a motor vehicle”. No details of the patent are being given, expect a link to a website where some unclear references are made in a rather clumsy way, to anything to do with car insurance. Hardly the sort of patents, one would expect to raise great interest for.
The other non-German sellers include an interesting Dutch invention of a Netherlands based electro technical company, Wolters Engineering, for a reuse of paper waste. And belief it or not, who thought Chinese only copy are mistaken, a real Chinese patent is being sold for pharmaceutical wastewater treatment. Sounds like something the Chinese seller could license in China quite successfully (aren’t we hearing about massive pollution issues in China?). Why buying, if even the Chinese patent owner rather sells his patent than to enforce its own invention nationwide?
To be continued after the actual auctions has taken place
On the Munich auction, see also Frontrunner, a technology blog by Bert van Dijk, editor for Het Financieele Dagblad, Netherlands largest financial daily.
Europe’s first Intellectual Property merchant banking, delivering services to monetize IP, whether it are patents, trademarks or copyrights, has its corporate website now in Korean and Japanese, see http://www.ipeg.com/
특허, 상표, 저작권을 막론한 지적재산의 경제적 효용을 위한 서비스를 제공하는 유럽 최초의 지적 재산 상업 은행, IPEG가 한국어와 일본어 웹사이트를 개설하였습니다. http://www.ipeg.com/을 방문해 보세요.
特許、商標、著作権を問わず、知的財産の経済的効用のためのサービスを提供するヨーロッパ初の知的財産商業銀行、IPEGが韓国語と日本語のウェブサイトを開設しました。http://www.ipeg.com/ を訪問してみて下さい。
“We build and create by bringing to the tangible and palpable reality around us new works based on instinct, simple logic, ordinary inferences, extraordinary ideas, and sometimes even genius.” A citation from the opinion of the US Supreme Court in KSR vs. Teleflex of April 30, 2007. The court gave its opinion in a closely watched case on “obviousness”. It is the fifth patent case in the past two years in which the Supreme Court has reversed the Federal Circuit, all of them unanimous or near unanimous decisions. The Supreme Court not only rejected the Federal Circuit’s test for obviousness, it proceeded to apply the correct test that it had just enunciated to the facts of the case before it and rule for the defendant below rather than remanding to the Federal Circuit and allowing it to apply the Supreme Court’s test to the case. The Court’s opinion suggests that patents which are based on new combinations of elements or components already known in a technical field are quite likely to be found obvious under its view of the correct analysis – a development that will likely lead to many more patents being found obvious in the electronics field but should have less impact in the life sciences field. The Court explicitly rejected the Federal Circuit’s longstanding view that a patent cannot be proved obvious merely by showing that the combination of elements was “obvious to try.” Again, this holding may have more impact on patents in the electronics field than in the life sciences technologies.
Many comments have already been published on patent blogs. See for Hal Wegner’s comments on the case his column on the right side of this blog.
For European practice the decision may not be very important other than that it gives additional ammunition in the current debate in Europe whether patents are granted too easily leading to low quality and stifling of innovation. The Supreme Court uses the word “innovation” eight times in its opinion:
“These advances, once part of our shared knowledge, define a new threshold from
which innovation starts once more. And as progress beginning from higher levels
of achievement is expected in the nor-mal course, the results of ordinary
innovation are not the subject of exclusive rights under the patent laws. Were
it otherwise patents might stifle, rather than promote, the progress of useful
arts.”
“Granting patent protection to advances that would occur in the ordinary course
without real innovation retards progress and may, for patents combining
previously known elements, deprive prior inventions of their value or utility.
Since the TSM test was devised, the Federal Circuit doubtless has applied it in
accord with these principles in many cases. There is no necessary inconsistency
between the test and the Graham analysis. But a court errs where, as here, it
transforms general principle into a rigid rule limiting the obviousness
inquiry.”
“When there is a design need or market pressure to solve a problem and there are
a finite number of identified, predictable solutions, a person of ordinary skill
in the art has good reason to pursue the known options within his or her
technical grasp. If this leads to the anticipated success, it is likely the
product not of innovation but of ordinary skill and common sense.”
“Although common sense directs one to look with care at a patent application
that claims as innovation the combination of two known devices according to
their established functions, it can be important to identify a reason that would
have prompted a person of ordinary skill in the relevant field to combine the
elements in the way the claimed new invention does. This is so because
inventions in most, if not all, instances rely upon building blocks long since
uncovered, and claimed discoveries almost of necessity will be combinations of
what, in some sense, is already known.”
“If this leads to the anticipated success, it is likely the product not of
innovation but of ordinary skill and common sense. In that instance the fact
that a combination was obvious to try might show that it was obvious under
§103.”
“These advances, once part of our shared knowledge, define a new threshold from
which innovation starts once more. And as progress beginning from higher levels
of achievement is expected in the normal course, the results of ordinary
innovation are not the subject of exclusive rights under the patent laws.”and by far the best:
"A person of ordinary skill is also a person of ordinary creativity, not an automaton. [page 17]
