Interviews: Google Speaks On Need For Balanced IP System; EPO On “Tomato II” Case, Board Of Appeal Revamp

COPENHAGEN – Google is “really looking for a balanced IP system,” the company’s head of litigation told the Global Patent Congress, while the European Patent Office elaborated on the “Tomato II” case, which for civil society has become the very symbol of an imbalanced IP system. Intellectual Property Watch spoke with senior officials at both Google and the EPO at the conference.

The director of litigation at Google, Catherine Lacavera, said this week that with 500 patent litigations during the past 10 years, Google does care about “the evolution of patent law.”

But she says many of the cases are unwarranted, a waste of time and money and constitute indeed an abuse of the patent system.

Lacavera spoke in the context of the Global Patent Congress, held in Copenhagen, Denmark on 27-28 September.

“None of these cases are special, but there are just so many of them. Of over 500 patent lawsuits, we have only one verdict against us. That should give you an idea of the poor quality of the claims being asserted against us. It’s abusive and distracting,” Lacavera told Intellectual Property Watch.

“The one and only time we asserted patents was in response to a lawsuit against us,” she said. We want patent peace.”

Lacavera said litigations are drawing funds away from where they would be better spent, namely on developing products.

Google wants to ensure that the products continue to be available to consumers at the right price. An example is a mobile phone that may have some 250,000 patents. If each patent holder demands some $2-3, it will become an expensive product for the consumers.

IP-Watch asked Lacavera what kind of image Google would like to have. She answered:

“One of balance. We are a huge rights holder, but we are also on the receiving end of a lot of litigation that we think is not warranted. So we’ve been careful to try to propose a balanced approach to IP and one that works for industry, works for small players, works for large players, and works for innovators,” Lacavera said.

Influencing Policy

Google has advised on the EPC as well as US patent reform. Moreover, Google has a person working specifically on policy in Washington DC. And Lacavera is convinced the patent system could be improved.

“We are not alone in saying this. In fact, our coalition was 22 members strong including some trade associations speaking out on the EPC,” Lacavera said. “All of us really want a system that works in a balanced way and we’re pushing for that.”

But there is no quick fix for the patent system.

“There is no silver bullet for solving the problem of abusive patent litigation. The patent system is absolutely functioning, but there are some areas of inefficiencies that are being taken advantage of, and one of them is the high cost of discovery,” she said.

US versus Europe

Lacavera said there are major problems with “discovery” in the US patent system, which means that in litigation, you are required to turn over any documents that the other side asks for that may be deemed relevant to the lawsuit. This system does not exist in Europe or China. Also, the low cost of filing a case in the US makes it too easy to go for what Lacavera calls the “lottery.”

“Patent litigation in the United States often involves low filing fees and high damage demands, almost like a lottery ticket. It is inexpensive for a plaintiff to bring a case and unfortunately without fee shifting, there are few consequences if their case lacks merit,” she said. “Discovery is also cheaper for non-practicing entities than practicing entities, because they don’t have any documents. This imbalance creates an arbitrage opportunity.”

Close Eye on China

Google has more than two-thirds of its patent lawsuits in the US, but still keeps a close eye on China, which had 9,000 patent lawsuits last year, as opposed to 6,000 in the US.

“There were 9,000 patent cases filed last year in China, but we have only a small number of suits there. Because it has become such an important venue for patent litigation, we’re absolutely making the same kinds of suggestions about achieving a balanced system and one that does not have opportunity for abuse,” Lacavera said.

Positive Signs, But …

The number of cases is dropping, however, and Google is down to some 150-200 patent litigations at the moment, compared to 250 at its height. But there is one catch to this; it could seem like they have moved to easier targets.

“My docket is down to about 150 pending cases, from its height of about 250, which is a positive trend. But the number of patent suits in the US has not declined, and it’s not a positive trend if the cases are still being filed against defendants that are less able to defend themselves, such as retailers and downstream consumers. Plaintiffs just may be shifting their targets,” Lacavera said.

And Lacavera is clear on what she and her team of over 25 patent attorneys and technical advisors at Google are fighting for:

“Defending our products against claims that are unwarranted. And making sure that our products are available to consumers at the right price.”

Controversial Plant Patent in Europe

Separately, the Director of Patent Law at the European Patent Office (EPO), Heli Pihlajamaa, acknowledged that there is “quite a heavy political discussion of patenting in the biological area in Europe at the moment.”

The so-called “Tomato II” case involves a Syngenta-patent on a certain characteristic of a tomato that has been produced through conventional breeding. The process in itself, however, is not patentable in Europe, and the case has therefore drawn strong reactions (IPW, Biodiversity/Genetic Resources/Biotech, 1 April 2015).

“The Enlarged Board of Appeal did an interpretation of the law as a legal analysis and came to the conclusion that the exclusion of the process from patenting doesn’t affect the patentability of the product,” Pihlajamaa told Intellectual Property Watch.

“When a plant variety is claimed, no patent will be granted, as varieties are not patentable. But plants in general are patentable. That is stated explicitly in the EPC as well as in the Biotech Directive of the European Parliament,” Pihlajamaa said.

“So plants in general can be patented, but specific plant varieties cannot be patented, there is a different protection form for them. Essentially biological breeding processes involving crossing and selection are not patentable,” she said.

The Tomato II case has now been referred back to the Technical Board of Appeal, where an oral proceeding will be held on 8 December. For a related Broccoli case, the Technical Board of Appeal will issue the decision in writing, according to the EPO.

The Board of Appeal Continued

But the EPO Board of Appeal (BOA) was not only referred to in relation to the Tomato II case. This summer there has been a hearing on the BOA, to which the EPO received “a lot of feedback,” Pihlajamaa said in her talk.

“The results give further support for the envisaged changes,” she told Intellectual Property Watch, adding that the work concentrates on the structural aspects.

The hearing has been conducted so that it will be “better perceived that” the BOA is independent of the EPO, and also to look at how effectiveness may “be improved,” Pihlajamaa said in her talk.

Participants at the conference, who wanted to stay anonymous, told Intellectual Property Watch that there are a lot of disruptions going on at the EPO at the moment, including strikes and talks about the BOA moving to Berlin. They attributed the perception that the EPO and the BOA are too close to interferences and interlinks at the managerial level.

The Unitary Patent System: Fee Issue

As for the European Unitary Patent, Pihlajamaa said the EPO is ready with its share of the work.

“From the EPO side, the necessary IT tools, they are almost ready and it’s also work well in progress. Significant process was made this summer with the agreement in principle on the renewal fees,” she said.

However, the renewal-fee issue is still not resolved, but is expected to be agreed upon this autumn, according to Kevin Mooney, chairman of the Drafting Committee for the Rules of Procedure at the Unified Patent Court.

A select committee set up by the contracting states to the European Patent Convention that participate in the Unitary Patent system, will decide on the renewal fee. The EPO is working as the secretariat for the committee.

At the moment, the suggestion is that the fee be based on the four largest countries’ current fees and then be divided between the member states according to a certain key. But there have been major disagreements about how this should be done, according to Mikael Bergstrand of Gambo Lundia, a participant at the congress. Some countries, like Poland, would like it to be based on the population, while other countries find that unfair.

Bergstrand believes companies will continue to file important patents nationally and smaller patents through the Unitary Patent system.

The Unified Patent Court – in 2017?

The ongoing work with the European Patent Court was also on the agenda.

The court needs 13 ratifications to come into force, including Germany, the UK and France. After that it needs four months’ time to come into force, according to Article 89. So far, eight countries have ratified it but not the United Kingdom, for example.

It seems like Germany will delay ratification, which could mean that the court will come into force only in January 2017, according to Mooney. Another issue is whether and how the UK’s upcoming referendum on its overall EU membership will influence the court.

Moreover, the language is still controversial. A compromise could be that the official language is English but certain aspects could still be conducted in the local language, in parallel.

“I am still sceptical about the European Patent Court until we see how it is functioning. There are very many aspects that are still not clear,” Maria Stenbäck from BioInvent International told Intellectual Property Watch.

“I hope someone else who wants one patent for the ‘country Europe’ will try out the system before we have to,” Stenbäck said.

The European Commission will decide on the court fees. Today, the court fees are very high in the UK, for example, and low in Germany, according to sources.

Only 35 Percent in Europe

Pihlajamaa said that it has become more and more important for the EPO to look at non-European data and non-European state of the art. The EPO granted 274,174 patents in 2014, which was in increase of 3.1 percent on 2013, according to Pihlajamaa. Only 35 percent of these were granted to EPO member states.

On the question regarding the EPO’s possible involvement in reforming the patent system, she said:

“The EPO is there to examine patent applications and grant patents. That is the task of the EPO. The EPO is an international public authority so it cannot close its ears and eyes from what happens. But the work is based on the law.”

Of the patent applications filed at the EPO, about 46 percent are granted, whereas in the area of biotechnology, for example, the number is below 30 percent. The 2015-edition of the EPO Guidelines for Examination will be published in October on the EPO website and enter into force on 1 November, according to EPO.

 

Image Credits: Tove Gerhardsen