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The Politicization Of The US Patent System

The Washington Post story, How patent reform’s fraught politics have left USPTO still without a boss (July 30), is a vivid account of how patent reform has divided the US economy, preempting a possible replacement for David Kappos who stepped down 18 months ago. The division is even bigger than portrayed. Universities have lined up en masse to oppose reform, while main street businesses that merely use technology argue for reform. Reminiscent of the partisan divide that has paralyzed US politics, this struggle crosses party lines and extends well beyond the usual inter-industry debates. Framed in terms of combating patent trolls through technical legal fixes, there lurks a broader economic concern – to what extent ordinary retailers, bank, restaurants, local banks, motels, realtors, and travel agents should bear the burden of defending against patents as a cost of doing business.


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    Brimelow Stresses Need For Better Patent System; Discusses Harmonisation

    Published on 17 September 2009 @ 8:26 pm

    By , Intellectual Property Watch

    The way the patent system is currently structured rewards slowness and low quality, but the needed changes will have to include a new revenue model, a top European patent official said today.

    “Running a second-rate patent system is a waste of everyone’s time and money,” said Alison Brimelow, president of the European Patent Organization (EPO) in Munich. “Under the current regime, the slower we are, the more we earn; the lower quality we are, the more we earn.”

    The system, she said, “doesn’t seem to be delivering quite the effect on innovation and competition it was supposed to.” It is instead creating uncertainty. With an extensive backlog of patent applications before the EPO, Brimelow said she “would like to know what’s going on in those dark, unexamined depths.”

    Brimelow was speaking at the World Intellectual Property Organization Global Symposium of Intellectual Property Authorities, taking place from 17-18 September. WIPO said it plans to continue such symposiums in the future on the two days immediately preceding the annual General Assemblies, which this year take place from 22 September to 1 October.

    This problem needs to be eliminated, she said, which means that it is necessary to pay attention to the source of funding. What is needed is “fewer, better” applications that “pay what it costs.”

    The backlog of patent applications is counter-productive to legal certainty, and that has a negative effect on the innovation process, said Brimelow. Patent quality is also an issue.

    About 60 percent of the 200,000 applications received in 2008 are expected not to proceed to grants, said Brimelow. They are not self-financing, meaning that in effect the remaining 40 percent will subsidise the entire system.

    Such a system helps are those that are “gaming” it, she added. Part of the expectation of the market is that innovative companies have pending patents, so that it is economically helpful to have applications filed, explained Brimelow. She said she had quotes to the effect of “I don’t really care if you grant or not, I just need the patent pending.” But, she said, “this isn’t what the IP system is meant to do.”

    Brimelow said the financial crisis might have a slight benefit of allowing change to the system. “Any period of challenge is axiomatically a period of opportunity if you wish to use it and have the courage to do so,” Brimelow said.

    The United States Patent and Trademark Office also is facing questions of backlog, patent quality and revenue. It has a $200 million shortfall in funding, said Lois Boland, who directs the USPTO Office of Intellectual Property Policy and Enforcement.

    Global Harmonisation Still a Goal; India to Share Patent Information

    Brimelow raised the “harmonisation word,” as she called it, referring to a longstanding effort by developed countries to bring about substantive harmonisation of national patent systems through WIPO, which has historically met with resistance from developing countries.

    “Naturally, we need effective harmonisation of our patent regimes,” Brimelow said. “But while we wait for … true harmonisation to be visited upon us, there are other things we can do.” These include patent work-sharing and the elimination of duplication. The so-called “IP5” offices – from China, Europe, Japan, South Korea, and the United States – are undertaking projects to this end, she said.

    The IP5 is open to the participation of more countries, Brimelow said. Asked whether India would like to participate, the country’s Controller-General of Patents, Designs and Trademarks Shri P. H. Kurian did not give a clear answer.

    The WIPO Patent Cooperation Treaty is the framework under which collaboration should happen, Brimelow said. She cautioned that the Patent Prosecution Highway (an information sharing network between certain patent offices) “can teach us things” but should not interfere with the PCT.

    “The standardisation of practices” in IP infrastructure can make significant contributions to cost reduction, both for applicants and offices, said WIPO Director General Francis Gurry.

    Koichi Minami, the deputy commissioner for the Japan Patent Office, said that plans with the group are beginning to reflect the “growing demand for work sharing,” and are undertaking 10 foundation projects on matters such as a common application format, common access to search and examination results, common rules for examination practice and quality control, and common classification systems. These projects are in part to relieve duplication. The IP5 receive much of the world’s applications, 1.4 million in 2007. Of these 420,000 were duplicate applications, Minami said.

    India’s intellectual property authorities have been working on the creation of an IP database that should be ready to go up next month, according to Kurian. “We’re already in agreement with the EPO to share it,” he said.

    There are also plans to provide the data in a public platform, to improve dissemination of information. “Just like the EPO, we’ll have [the data] available online,” said Kurian, adding that the system would be implemented by 1 January. This news should please many lawyers in India who have been hoping for such a resource for over 10 years (IPW, Patent Policy, 17 December 2007).

    There are also plans to share the Traditional Knowledge Digital Library more widely. The TKDL, India’s online database of traditional knowledge prior art, is already being shared with the EPO (IPW, IP Burble, 13 February 2009).

    “We need to look at incorporating PCT work products” in our own systems, said Boland. The trilateral strategic working group, which met last week “came up with an agreement to do just that in 2010 with the patent prosecution highway,” she added.

    Michael Brunner, secretary general of the International Association for the Protection of Intellectual Property (AIPPI), said “effective searching is the keystone to good patenting,” he said, adding searches of a “limited extent” and “limited veracity” can lead to applications of “dubious validity.”

    Economics of IP

    Dominique Foray of the École Polytechnique Fédérale de Lausanne said that also critical to improving the international patent system is an understanding of the economics of innovation. Patents are doing good in some sectors and harm in others, he said.

    “A truly unitary patent law would treat unlike things alike,” he added, but argued that there is already enough flexibility in the system as it to cope with differences in technologies and industries. The key is just to get policy makers to use those flexibilities effectively.

    William New contributed to this report.

    Kaitlin Mara may be reached at kmara@ip-watch.ch.

     

    Comments

    1. wackes seppi says:

      Puzzling analysis by Ms. Brimelow. She spoke more clearly last year on the need to improve the system, and the need to achieve harmonisation at the international level to allow better cooperation and thereby respond to the increased workload (I would add: to also cater for the needs of a globalised economy). See in this respect http://news.bbc.co.uk/2/hi/business/7461597.stm.

      See also, on the notion of backlog, http://ipkitten.blogspot.com/2008/06/patents-delayed-alison-brimelow-worried.html.

      However, to suggest as she did an increase in the initial fees to reduce the number of applications so as to get fewer applications – actually without any guarantee whatsoever that they would be “better” – is to favour the affluent and penalise “small inventors”, as they are called, SMEs and inventors from developing countries. Reducing annual fees would also delay the surrender of patent rights of limited value and thus the movement of inventions into the public domain.

      According to the report, Ms. Brimelow has also resorted to a large extent to anecdotal evidence of, say, bad behaviour and practice. Of course, a bad behaviour or a practice is not anecdotal to the one who suffers from it, but policy-making should not address it at the expense of the bulk of honest players. Higher initial fees are in any event not the solution.


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