Failure to get agreement on a proposal to harmonise national patent laws by World Intellectual Property Organisation members will not impact the functioning and credibility of the organisation, a top WIPO official said today.

Failure to agree “is not necessarily the end of the world for WIPO,” Francis Gurry, WIPO deputy director general, said in a press briefing at WIPO headquarters. The issue will come up at the WIPO General Assembly to be held from 26 September to 5 October.

WIPO has been under pressure to help move a narrow “trilateral” proposal by the European Union, Japan, and the United States to bring patent practices closer together in four areas. The United States and Japan have signalled a willingness to take the effort outside WIPO. Key developing countries have resisted the trilateral proposal in favor of a broader plan that incorporates additional issues of concern to them. The proposal was shot down in the June meeting of the Standing Committee on the Law of Patents.

The trilateral countries contribute significantly to WIPO’s funding, and patents are its biggest money maker. But Gurry said that a lack of harmonisation likely would not have much impact on the organisation’s revenues.

The debate over harmonisation has been going on for 20 years, and governments reached another impasse earlier this year. “It remains to be seen if that impasse can be broken [at the General Assembly],” he said.

Gurry defended the actions of WIPO in holding informal consultations that led to the body’s members having to address (and reject) the trilateral proposal in the June patent committee meeting. Small groups of member governments meet on issues “all the time,” he said.

He said the question for any issue is whether it is ready for discussion at the multilateral level or must be dealt with at the national level. In the case of patent harmonisation, Europe and the United States still have differences to work out, and not all countries are ready to put these questions to multilateral negotiation, he said.

The four main areas of the trilateral proposal are: 1) prior art, which is the preceding science and technology that an invention is assessed against to determine whether the invention qualifies for patent protection (it must be found to be new, non-obvious and industrially useful); 2) grace period, which allows disclosure of the invention by the inventor prior to filing of the patent application; 3) novelty; and 4) inventive step.

Differences persist between Europe and the United States. For instance, on prior art, the United States does not recognise prior oral disclosures, while the European Patent Convention does, plus the two sides have different approaches to the treatment of applications that were previously filed but have not been published, according to an official. On grace period, the United States offers 12 months while the European Patent Convention does not the same kind of grace period.

Developing countries have sought a more comprehensive approach to negotiating a patent law treaty that starts with all member states’ proposals, and includes provisions on technology transfer, anticompetitive practices, and safeguarding of flexibilities for governments to act in their public’s interest.

IP Legislation Fatigue?

The General Assembly will address the report of the patent committee and determine the fate of the harmonisation issue. For instance, it could decide that the committee should reconsider patent law harmonisation for another two years, he said.

A continuation of the impasse could lead to a shift in the debate at WIPO, Gurry said. But he said there may just be “legislation fatigue” after a decade that has seen “an orgy of policy issues” related to intellectual property rights in different international bodies, such as WIPO and the World Trade Organization, and at the regional and national levels.

But legislative fatigue is “not necessarily a bad thing,” Gurry said, because it could shift the policy focus to a “concrete debate about rights.” He gave the issue of database extraction as an example.

Another issue that could get stuck at the General Assembly is a debate over rights related to traditional knowledge, which is linked to a similar debate at the WTO. The WIPO General Assembly is due to evaluate progress on the issue but Gurry said that with the WTO ministerial coming up in December, officials might be cautious. He noted that all parties appear to generally agree that there should be some sort of international instrument related to traditional knowledge, but that the differences lie in the timing with developed countries saying it is too soon. In addition, there are other venues where the traditional knowledge issue is being debated, he said. The intertwined nature of the bodies “makes it difficult to go forward,” Gurry said.

Gurry asserted that there is “functional stress” in the patent system due to an explosion in demand, an explosion in counterfeiting and piracy, and radical new technologies and economic changes affecting delivery and the ability to copy or imitate protected material. In addition, the growing recognition of the enormous value of intellectual property rights has led to more political attention being paid to it.

But these stresses are not necessarily bad, he said. “I would say it’s stress caused by success, not stress caused by failure,” he said.

The increased attention has led to a push for policy from two sides: rightsholders targeting piracy and technology, and consumers seeking greater flexibility from strict measures, Gurry said. But those perspectives may converge once the “clouds of ideology” are cleared away, he argued, as those who do not want encroachment on the public domain may recognise that accomplishing this begins with a better system for intellectual property protection.

Gurry took the opportunity to defend the international intellectual property system, taking aim for instance at the argument that intellectual property rights put fences around information and knowledge in the public domain.

He argued that a property right cannot be placed over anything that already exists because novelty is a criterion, and that the recording of patents has contributed significantly to the development of opportunities since searching the patent database can reveal expired patents on unexploited ideas or show that a patent is not valid in certain countries.

Healthy Global Demand For Patents

The global demand for patents is “healthy,” reflecting in particular growth from Northeast Asia, Gurry said. This year should see approximately 130,000 patent applications, a rise of 6 to 8 percent. Gurry predicted that rate should continue at a slightly lower level for the foreseeable future, likely hovering around the 5 percent mark.

Most of the growth is from the Northeast Asian countries, such as Japan, which in 2004 rose 16.6 percent over the previous year to account for 16 percent of global demand; Korea, which rose 20.4 percent to account for 2.9 percent globally; and China, which increased its patents by 31.8 percent to reach 1.4 percent of the global total. Europe collectively had the highest number of patents globally with 36.1 percent, an increase of 1.3 percent, and the United States accounted for 35.2 percent overall, rising 4 percent.

Gurry said an implication of the faster rise in Asia is that a higher number of patent applications are in Japanese and Chinese, and greater amount of prior art and technology to be measured against in searching a patent is in those languages, increasing the necessity for others to search in them. Overall in 2004, the number of patent applications in English was 66.8 percent, a drop of 0.3 percent. In response to the rise in Asia, WIPO is considering a “supplementary search facility” allowing the search of 12 search authorities around the world. A decision on the new facility may come next year, Gurry said.

Gurry also said there is a backlog in international search reports especially in particular regions and caused by overall demand rather than by the origin of the application.

Gurry also discussed the deployment of information technology in the patent system, stating that this year, 25 percent of applications have been file electronically. This makes it easier to manage the data and make it available, he said. He also cited a technology called PatentScope, a fully searchable, linguistically diverse database of Patent Cooperation Treaty applications.

Internet Domain Name Disputes

Separately, on WIPO’s long-standing mechanism for resolution of disputes over the rights to Internet domain names, the arbitration and mediation centre handled 1,176 disputes in 2004. The centre has seen 23,000 disputes since 2000, he said.

WIPO handles about 60 percent of all domain name disputes, and continues to differentiate itself from competitors, Gurry said. There is no pressure to reduce the organisation’s activity in that area as member states recognise the usefulness of the service, he added.