03 Patents

03 PatentsIntroduction

First formal patent was in Venice in 1474

The Rights of InventorsRationale for Patent Law

Incentive-based rationale

Motivate inventors to invent -- economic incentive

Give inventors prospect of recuperating costs spent in developing their inventions

Prospect Theory

Facilitate more efficient use of resources by centralizing control/mgmt over the invention in

one entity

That entity will have an economic interest in ensuring that it is used, maintained, licensed, and

improved efficiently

Flaw

Someone else may have better knowledge; better ability to improve the patent, but can't,

because patent controlled by an entity

Natural Rights Theory (see p. 259)

So far, there is not much natural rights justification for patents (contrast to Copyright)

Often, inventions come from incremental updates to knowledge -- harder to ascribe an

invention to "one inventor" than it is to attribute a copyrightable work to 'one author'

Explanations?

Copyright is more protecting "creativity/expression"

Very few moral rights protections related to patents

Patents are more 'useful' -- not seen as an 'extension' of the inventor (vs. artistic/literary

works being considered an 'extension' of the author)

All patent systems today require the invention must be:

New

Sufficiently inventive

Useful

Reduced to practice (i.e. Sufficiently developed to allow someone to make and use the invention)

International Agreements: TRIPS, the Paris Convention, and the Patent Cooperation TreatyParis Convention (1883)

Formal name is the "International Convention for the Protection of Industrial Property"

First signed in 1883

Covers

"Industrial Property" - patents, tm, industrial designs, unfair competition

Established Minimum Standards

03 Patents file:///C:/Users/lherard/SkyDrive/DePaul/Fall 2013/International IP/Min...

1 of 33 12/9/2013 8:53 PM

Set forth 'some minimum standards'

Priority (Paris Art 4) to file patent applications in other countries w/in 1 yr of the first

filing

Possibility for inventor to file in one country and claim priority in foreign countries if

filing occurs w/in 12 mo's of country of origin

Independent Treatment (Art 4bis)

Establishes 'territoriality'

Patents granted based on patent law of individual countries where patent filed

Did NOT establish substantive minimum stds (i.e. minimum stds on subject matter, validity,rights, or term)

Enforcement

No enforcement mechanism (similar to Berne for Copyrights)

Membership

As of 2011, 173 countries are members

US joined early -- had strong interest in patent protection abroad (Industrial Revolution)

As opposed to Berne -- during Berne convention, US was importing int'l content, and

didn't want to be subject to int'l laws)

TRIPS (1994)

Covers

Same as Paris (i.e. TRIPS Incorporates Paris Articles 1-12, and 19)

(see TRIPS Art 2, CB p. 254)

Standards

Incorporates Paris Convention (see Art 2 TRIPS)

Sets forth substantive minimum stds

Requires that countries allow for the patenting of processes

Requires that countries may NOT deny patents based on the field of technology (e.g.

biotechnical, pharmaceutical)

Sets forth exclusive rights; length/term of protection; limitations on compulsory licenses

Requires countries to afford judicial review of any revocation/forfeiture of a patent

Enforcement

TRIPS has an enforcement mechanism (see the Council for TRIPS, below)


2 of 33 12/9/2013 8:53 PM

Patent Cooperation Treaty (PCT)

It is a special agreement among the members of the Paris convention to simplify filing multiple

patent application for the same invention in different countries around the world

The General Approach of Paris + TRIPSPatents are Territorial in Nature

Patents effective only in territory where they are created and granted patent rights

Paris Art 4bis - Patents for the same invention, applied for by the same person, in different countries,are to be treated "independently", both as regards the grounds for nullity and forfeiture, and as regardstheir normal duration

i.e. patent duration is treated separately in different countries (unlike Berne, which establishes

a common term of copyright protection)

National Treatment

Foreigners treated same as citizens in WTO countries

Nationals of any country of the Union shall enjoy, in all other countries of the Union, the advantagesthat their laws now (or hereafter) grant to nationals (TRIPS Art 3, Paris Art 2)

Formalities

Formalities are ALLOWED (unlike Berne + TRIPS for Copyright)

Inventors must typically file separate patent applications in each country in which they want patent

protection

Rationale: Patents generally always require filing; Paris presupposes that patent filing systems

require formalities

National Treatment: Countries treat foreigners same as nationals -- i.e. formalities MUST BE

the same for foreign applicants as domestic applicants

Non-Retroactive

Countries have "no obligation to restore protection to subject matter which, on the date of application ofthis Agreement [TRIPS] for the Member in question, has fallen into the public domain (TRIPS Art70(3))

(unlike Berne, which DOES allow retroactivity w.r.t. copyright)

The Council for TRIPS

TRIPS Art 68 and 71 establish a Council for TRIPS

The Council is open to all Members

The Council monitors the member countries' compliance with, and implementation, of the TRIPS

Agreement

Member nations are obligated to notify the Council of the "laws and regulations" of their nation that


3 of 33 12/9/2013 8:53 PM

implement their obligations under TRIPS

Council reviews the implementing laws and identifies any perceived problems in the implementing

laws.

"Utility Models" / "Petty Patents"

Some countries allow "utility models" or "petty patents" or "innovation patents"

Usually subject to relaxed requirements (e.g. no inventive step needed) and to more speedy

registration (e.g. examination occuring after grant); usually get shorter duration of protection

TRIPS does NOT directly address utility models

Patents and Economic DevelopmentLessons from Studying the International Economics of IP Rights (p. 261)

e.g. what would the effect of requiring developing countries to enforce TRIPS in a more stringent

way

The Problem with Weak IP Rights (IPRs) in Developing Countries

Weak patent rights are significant barriers to trade with developing countries, esp. with

IPR-sensitive goods

Poor countries w/o much ability to imitate products are not a competitive threat. However, as

they adopt stronger patents, their economies could be exposed to monopoly impacts w/ negative

effects on their terms of trade

Author's Proposed Solution

Increase patent rights in developing countries -- get more countries to adopt TRIPS

Short Term Effects

Potential issues w.r.t. cost of licensing

Redistribution of patent rents among developed countries

MNEs will have higher incentive to license in developing countries

That might reduce MNEs' presence in developed countries (as a trade-off -- e.g.

MNEs would be spending more time/money in developing countries)

Long Term Effects

Stimulation of intl economic activity

Increase of technology transfer to developing countries --> Developing countries

will eventually become developed

Larger economies = more trade

Elimination of barriers to trade

Increase of Foreign Direct Investments in Developing Countries

As developing countries' economies strengthen, MNEs will invest in companies

there, or build / buy companies, etc.

Technology transfer (licensing) would rise

Special Discussion: Transitional Provisions for Developing Countries


4 of 33 12/9/2013 8:53 PM

TRIPS attempts to accommodate the needs of developing countries by allowing them delay their

compliance with certain TRIPS patent requirements

Developing Countries in General

Get 5 yrs from date of entering TRIPS into force (which was 1/1/1995) (Trips Art 61(1) and (20)

i.e. deadline = Jan 1, 2000 to implement TRIPS obligations

Developing Countries That Had Previously Denied Patents To Certain Fields of Technology

e.g. India used to deny patents based on the subject matter -- biotech /pharmaceuticals

Got extra 5 yrs to implement TRIPS (TRIPS Art 65(4))

i.e. deadline = Jan 1, 2005

Least Developed Countries

At first: 10 yrs from the date of application of Art 65(1) of TRIPS TRIPS Art 61(1) and (2)

i.e. deadline was Jan 1, 2006

That deadline was extended first to 7/1/2013, and then to Jan 1, 2016 to comply with the TRIPS

provisions re: patenting pharmaceutical products

Note: The Jan 1, 2016 deadline does not change/negate the right of least-developed countries to seek

other extensions

Rules Governing the Transition Period

During transition pd, countries are obliged to accept patent applications for pharmaceuticals and

agricultural chemical products, under the "mailbox rule" of TRIPS Art 70(8)

The Mailbox Rule (Art 70(8))

The countries must provide a means of filing the application, AND

The patent applications must be treated with the same priority as the original filing date, or if

priority is available and claimed, the priority date, AND

Provide patent protection for those patents (as from the grant of the patent, counted from the

filing date)

India--Patent Protection For Pharmaceutical and Agricultural Chemical Products (WTO

Appellate Body 1997) (p. 269)

Facts

India did not allow patents for pharma and agricultural chemical products before

TRIPS was enacted (1/1/1995)

WTO Panel agreed with US and ruled against India

India appealed to the Appellate Body

Issue

Did India fail to establish a "mailbox" under TRIPS 70(8) during the transition pd

that ended on Jan 1, 2005?

Held

Yes (WTO Panel upheld) -- India's administrative instructions for receiving


5 of 33 12/9/2013 8:53 PM

mailbox applications are inconsistent w/ Article 70(8) of TRIPS

India must provide a legal mechanism for the filing of mailbox applications,

which provides a sound legal basis to preserve both the novelty of the inventions and

the priority of the applications as of the relevant filing and priority dates.

Rule

Mailbox rule (see p. 270)

"Provide a means" - See p. 271

Must allow for the entitlement to file mailbox applications and the

allocation of filing and priority dates to them

Requires a "sound legal basis" for the preservation of priority and

filing date

Analysis

The Panel found

Art 70(8) requires Members to establish a means that allows for (1) the

filing of mailbox applications, (2) the allocation of filing and priority dates to

those applications, and also (3) the provision of a "sound legal basis" to

preserve novelty and priority, as of those dates.

That way, India would eliminate any reasonable doubts re: whether mailbox

applications (and eventual patents based on them) could be rejected/invalidated

because, at the filing or priority date, the subject matter was unpatentable

The text of Art 70(8) states that the mailbox rule applies, notwithstanding

the provisions of Part IV of TRIPS, which is the area that allows for the

transitional period. i.e., the Mailbox rule applies, even though India was in the

transitional period.

Appellate Body's analysis of WTO Panel

Appellate body agreed that the mailbox rule required a "means" for filing

patent applications for pharma/ag chem products, and for the allocation of

filing and priority dates to them.

Appellate Body also agreed that the "means" had to provide a "sound legal

basis" for the applications to preserve novelty/priority as of those dates

Appellate Body DISAGREED that mb rule requires a Member to establish a

means "so as to eliminate any reasonable doubts . . . "

"No sound legal basis"

Indian "administrative instructions" require Indian officials to ignore certain

mandatory provisions of the India Patents Act

India's Patent Act says that pharmaceutical products are not patentable.

India claims that its "administrative instructions" say that the patents should

be granted, but the App Body was not convinced that India's "admin

instructions' would prevail over the contradictory mandatory provisions of the

Patent Act

Thus, Appellate Body is not convinced that India's "administrative


6 of 33 12/9/2013 8:53 PM

instructions" would survive a legal challenge under the Indian Patents Act

Notes

India did not patent pharmaceuticals, because they wanted higher access to int'l

pharma

Ownership and Formalities: Obtaining Domestic and Foreign PatentsTwo Approaches to acquiring Patent Rights & Priority

First-to-file approach

Priority goes to first to file documentation in the proper office

First-to-invent approach

Priority goes to first "inventor"

i.e. the invention works for at least one of its stated goals

If inventor cannot prove the actual date of invention

Filing date = date of the "constructive reduction to practice" of the invention

In this case, F2I resembles F2F

Pros/Cons

Pros F2F

Easier to prove

Reduces uncertainty

Fewer litigations

Pros F2I

Protects small inventors -- those w/o means to compete w/ companies that can file sooner (but

may take longer to develop a product?)

Cons F2I

Requires diligent, detailed note-keeping; research records; etc.

Filing for and Prosecuting Around the WorldParis System = First-to-File system

United States joined in 1887

The Period of Paris Priority

Paris Article 4

If person

Duly files for patent in a country of the Union

Then,


7 of 33 12/9/2013 8:53 PM

He gets a right of priority - i.e. the filing date in other countries is treated as the "prioritydate," which is earlier than the actual filing date in those countries

Time frame is:

12 months (granted to qualifying patent applicants)

Benefits

The patent application in other countries is treated as though it were filed on the Priority Date

Win priority disputes -- inventor can claim an earlier filing date

Preserve novelty

Prevent issues of novelty, prior art, obviousness from defeating the patent

There are activities that could otherwise defeat novelty

Example

Country X

Jan 5 - File in country X

Feb 1 - you give a presentation about your invention

May 1 - File in country Y

Without Paris Priority

You might lose novelty (because of your presentation)

But with Paris Priority

You keep novelty (in spite of the presentation that disclosed the invention)

Third-party activities that occur after the inventor's first filed application also do not

defeat novelty

Notes on United States

Originally, the United States was a "first-to-invent" country. Priority of invention went to the firstperson to reduce the invention to practice

However, sometimes inventors couldn't prove date of reduction to practice. They could rely ondate of "constructive reduction to practice", which was the date of filing a patent application

Thus, US sometimes resembled a First-To-File system

Since Mar 16, 2013, as a result of the America Invents Act (from Sept 16, 2011), the US has

been a "first-to-file" country

Dual-Priority System in US

Applications filed on/after 3/16/2013


8 of 33 12/9/2013 8:53 PM

Treated as F2F

Std

Filing date, or

Date of "constructive reduction to practice"

Applications filed before 3/16/2013

Treated as F2I

Std = Date of reducing the invention to practice

For US patent applications, originally filed elsewhere in the Union, the “Parispriority date” can be used as the date of the "constructive reduction topractice" of the invention

US Grace Period for Disclosures -- Not Deemed Prior Art (AIA §3(b))

US allows a 1-year grace pd before the filing of the patent app, for certain disclosures

made by inventors.

Disclosure of the invention during the grace pd will not be considered prior art if:

(A) disclosure was made by the inventor, joint inventor, or another who obtained

the subject matter disclosed directly from the inventor/joint inventor, OR

(B) before the disclosure, the subject matter had been publicly disclosed by the

inventor, or a joint inventor, or another who obtained the disclosed subject matter

directly or indirectly from the inventor or a joint-inventor

A similar 1-year grace period is provided for disclosures appering in patents and

applications

Compare to EU Grace Period

EPC Article 55 allows a very limited 6-month grace pd for "non-prejudicial disclosures:"

i.e. the following disclosures, made within 6 months of filing, will not be considered

prior art:

(1) unauthorized disclosures that constitute "evident abuse in relation to the

applicant", and

(2) authorized disclosures at an official international exhibit"

Independent Treatment of Patents

Grant of patent depends on specific country (i.e. Paris does not grant the patent. It only grants

priority of the filing)

i.e. even if your application is rejected in the first country you applied in, you still get

Paris priority


9 of 33 12/9/2013 8:53 PM

Whether the patent is eventually granted depends on the domestic law of the countries in which

the patent application is filed

Also note:

US provisional patent applications do not provide Paris priority

Provisional patents are 'placeholders' -- they are not actual patents (provisional owners

still need to file formal patent app to get full patent rights)

Filing an International Application Under the PCT

PCT (signed in 1970)

PCT = Special agreement among Paris countries (i.e. it is part of the Paris Convention)

Pursuant to Article 19 of Paris Convention

Purpose

Eases administrative burden of filing different patent applications for the same invention

in different countries

What it does

Extends Paris Priority period

Extends 12 month Paris Priority period to 30 months (or more, at the discretion of

countries) -- more time for inventor to file patent applications in other countries

Establishes common, uniform patent application form

PCT form must be accepted by every PCT country

Note:

Inventor has to pay the fees required by each country (application fees and

incidentals, e.g. cost of translating languages, etc)

To Qualify for Extended Priority Period

Patent applicant must file an "International Application" in the International Bureau ofWIPO, within 12 months of the first patent filing under Paris

Which Countries are PCT Members?

As of 2011, 144 countries are PCT members

The United States is a PCT Member

Phases of PCT

International Phase

Step 1

1. Inventor submits the international application w/ an International Search

Authority (ISA)

e.g. USPTO is a designated ISA


10 of 33 12/9/2013 8:53 PM

Filing the intl app with the ISA establishes a priority date

What is the Priority Date?

If PCT application is based on a prior national application

The "PCT priority date" is the Paris Priority Date, per the

national application

(Per Paris, you have 12 months, from the Paris priority date, to

file under PCT. The 30-month filing grace period is counted from

the priority date of the national application)

If PCT application date is filed alone:

The "PCT priority date" is the filing date of the PCT

international application

You still get 30 months from the priority date before having to

file in another country

Note: Keep in mind that "PCT priority date" may not always be the

Paris Priority Date, if the PCT application is not based on an earlier filing

2. ISA Patent Office Conducts an International Prior Art Search

ISA prepares a non-binding "International Search Report" -- evaluates

whether or not other prior art may defeat the novelty of the invention

This is a non-binding report

Issues "Opinion" on whether or not invention is patentable

This is a non-binding opinion

ISA sends search report and opinion to WIPO and applicant

ISA's Deadlines for Search/Report

If PCT Application is Based on Prior National Filing

ISA typically completes search report & opinion by the end of

16 months after priority date

If PCT Application is Filed Alone

ISA typically must complete search by 9 months after priority

date (a.k.a. PCT application filing date)

3. WIPO publishes the patent application and the search report "promptly" after

the end of 18 months after priority date

(But note: the Opinion remains confidential until the end of the entire PCT

process)

Step 2

1. Applicant decides whether to demand an "international preliminary

examination" of the patentability of the claimed invention


11 of 33 12/9/2013 8:53 PM

Deadline

3 months after receipt of search rpt, OR

22 months after priority date (whichever is later)

Requires further fees, but gives inventor 2nd chance

Inventor can amend the application

2. Examiner completes "International Preliminary Examination Report" by 28

months after the priority date; send report to International Bureau of WIPO and the

applicant

National Phase

Step 3

1. Applicant must decide whether to proceed with national patent applications in

other countries by 30 months after the priority date

Note: The 30 month deadline applies whether or not the applicant decides to

try for the Intenational Preliminary Examination

Failure to act w/in 30-month pd can negatively impact novelty and cause the

application to become prior art (which hurts the ability to actually patent the

invention)

2. If applicant filed national patent applications, then WIPO communicates the

international patentability report to the national patent offices

Note: Each country decides on its own whether to grant a patent to applicant

Priority Disputes

First-to-file approach

Determining priority disputes is easy

First-to-invent approach

Harder to determine

Especially with USA standard: first-to-invent-or-file + one-year grace period allowing certain

disclosures to be deemed as not-prior-art = confusing priority disputes (e.g. with the idea of

"constructive reduction to practice," who really was the first to invent, or reduce the invention to

practice?)

AIA (September 16, 2011)

Starting in March 16, 2013 the US will switch from a first-to-invent to a first-to-file system

The new standard regards applications filed on or after March 16, 2013

The old standard has relevance for: (1) all existing patents and (2) any patent application

filed before March 16, 2013

Consider also: Paris priority; PCT applications

Frazer v. Schlegel (Fed Cir 2007) (p. 293)

Facts


12 of 33 12/9/2013 8:53 PM

Frazer & Zhou = scientists, developing a vaccine for use against HPV

Frazer/Zhou published their idea/work in a scientific journal on May 21, 1991

Note -- at this time in US, system was First-To-Invent (not file)

Frazer filed patent app in Australia, July 19, 1991, based on the work in the May 21

article

Schlegel filed patent app in US on June 25, 1992, for the same vaccine

Frazer filed PCT on July 20, 1992

Frazer presented his research in the US on July 22, 1991

Frazer filed patent app in US on Jan 14, 1994

Interference action btwn Frazer's patent application and Schlegel's patent application

Issue

Priority battle - Is Frazer entitled to priority based on Australian filing date?

Held

Frazer is entitled to the priority benefit of the Australian filing date

Rule

First-to-invent system

When the priority claim is based on subject matter disclosed in a foreign patent

application whose filing date is properly claimed, 35 U.S.C. 119(a), the foreign application

has the same effect as if filed in the US

Disclosure must be made "in the manner provided by the first paragraph of §112)

Principle of Independent Treatment"

The application must sufficiently disclose the subject matter of the application

Disclosure must be made in the manner provided by the first paragraph of 112 =>

written description and enablement

[Principle of Independent Treatment]

Analysis

Constructive reduction to practice (CRP) does not invoke a different standard whether

the priority document is foreign or domestic

Schlegel could not prove date of reduction to practice

So he had to use the 'constructive' reduction to practice date, which was the date of

the patent application filing

The Board erred in denying Frazer's priority entitlement

The Board said the patent was invalid due to insufficient description because, at

the time Frazer filed in Australia, he believed he needed the expression of 2 proteins

from a specific gene to create the vaccine

Btwn 1991 and 1992, the level of knowledge in the art changed -- at that time, it

was known that you could obtain the vaccine only 1 protein


13 of 33 12/9/2013 8:53 PM

The Board ruled that Frazer was not entitled to any date of disclosure until he

accurately and fully understood the mecahnism

Fed Cir said

Frazer's Australian application contained complete details of the method that is the

subject of the interference action

Frazer testified that at the time, he believed both proteins were involved. His later

discovery that the either 1 protein, or both, does not negate or contradict his

disclosure and constructive reduction to practice of the method

Working Requirements(see pp. 298 - 300) -Paris Art 5, TRIPS Art 27(1)

What is a Working Requirement?

A law that obligates a patentee to produce an/or sell the patented good locally, as a condition of the

patent

Failure to "work" the invention may result in the grant of compulsory licenses for others to

manufacture the patented good locally

e.g. this is the law in India

Working requirements are controversial! The issue tends to arise in the Developed/Developing

Country debate

Developed countries tend to disfavor them

Developing countries tend to favor them

Paris Contemplates Local Working Requirements

Paris Convention Art. 5(A):

(1) Countries cannot impose forfeiture of a patent based on importation of the product into the

country from another Paris country (or lack thereof) (well, they actually can... see below)

(2) Each Country shall have the right to [legislate to grant] compulsory licenses (CL) can to

prevent abuses of the exclusive rights conferred by the patent, such as failure to work the

patent/invention

(3) If the grant of compulsory licenses is not sufficient to prevent the said abuses in (2), then

the Country may impose forfeiture, but only after two years have passed since the grant of the

compulsory license

(4) A compulsory license may not be applied for, on the ground of failure to work, until after

(i) four years from the pass from the date of filing of the patent application or (ii) three years pass

from the date of the grant of the patent, whichever period expires last

No CL if there is justification

CL shall be non-exclusive and not transferable

No compulsory license can be granted for failure to work "if the patentee justifies his inaction

by 'legitimate reasons'"

TRIPS Qualifies (if not Prohibits) Working Requirements


14 of 33 12/9/2013 8:53 PM

TRIPS Art. 27(1) => “ ... patents shall be available and rights enjoyable without discrimination as to

... whether products are imported or locally produced” => NO forfeiture for violation of working

requirements

Open issue: is the grant of a compulsory license for failure to work a “discrimination” under

art. 27 TRIPS?

TRIPS art. 31 provides under which condition a country may order the grant of a compulsory license for a

patented invention

OwnershipTRIPS Art. 28 says

A patent shall confer on its owner certain exclusive rights

Patent owner has the right to assign the patent to others

But TRIPS does not specify who the owner is

Art. 4ter Paris says

Inventor shall have the right to be mentioned "as such" in the patent (i.e. as the inventor)

WTO countries have discretion to decide who is the owner

But Paris also does not delineate a standard for initial ownership of patent

Important Issue

How a country's law determines the initial ownership of patent rights in the context of

employment

Teets v. Chromalloy Gas Turbine Corporation (Fed Cir 1996) (p. 303)

Facts

GE Aircraft Co hired DRB Industries (a division of Chromalloy) to design new jet engine

blades

DRB project manager assigned Teets (an employee) as project lead. Teets spent 70% of his

time on the project

Teets was employee at will

No contract regulating ownership of invention

Teets had designed some changes to the design, on his own time, while also working on

designs that DRB instructed him to make

The DRB designs failed tests (e.g. structural/stress tests), but Teets' designs worked

GE had final say in whether to accept Teets/DRB's designs

GE used the Teets designs

Teets filed for patent

At one point, Teets had listed DRB as the developer of the designs, but later he sued, seeking a

declaration of ownership

Dist Ct held that Teets owned the design

Issues


15 of 33 12/9/2013 8:53 PM

Who is the owner of the invention?

Held

Teets was not sole owner (dist ct erred in holding that Teets owned the process)

Analysis

Ownership springs from invention

i.e. inventor owns his own invention

Teets repeatedly acknowledged DRB's involvement in the development of the process (Hot

Forming Process -- HFP)

Even the patent application listed that Teets worked with a co-inventor

There was an implied-in-fact contract between Teets and employer (DRB) -- so Teets cannot

be deemed to have developed invention on his own

Shop rights

Rights that permit employer to use employee's invention w/o liability for infringement

Nakamura v. Nichia Kagaku Kogyo K.K. (Tokyo District Court 2004) (p. 306)

Facts

Ptf = researcher who invented the Blue LED light when working for def

Def = leading manufacturer in the Blue LED industry, and a registrant of the patent that covers

the invention of the Blue LED

Ptf claimed that he invented the Blue LED and never transferred ownership to the def

Ptf sued Def for transfer of ownership of the patent

Issue

Who owns the patent?

Held

The company owns the patent

But Inventor was entitled to at least 50% of company's profits (in this case, 60 billion yen, But

since he only asked for 20 billion, that's what he got)

Rule

Japanese Patent Act

The inventor has the right to obtain a patent on his/her invention

An employer may request assnment of the right to obtain a patent for the invention made

by its employee, without making any further separate assignment, if:

The invention, by its nature, falls w/in the scop of business, and

The invention fell w/in the present or past duties of both the employer and the

employee, and

The employer sets out a contract, service regulation, or other agreement by which

employee assigns the right to obtain the patent to the employer


16 of 33 12/9/2013 8:53 PM

Analysis

Japanese ct found that the def had been properly assigned the right

However, the ptf's contribution to the patent was huge (company had weak R&D; employee

did most of the work)

The inventor has the right to obtain a patent for his invention

The inventor participates in the profit that the employer makes based on his invention

Assignment occur in case of:

Service invention

Separate contract

Reasonable remuneration

Is determined by considering the profits which the employer will obtain from the

invention and the degree of contribution of the employer in making the invention

Harmonizing Scope and Allocation of Patent Rights in Europe -- Towards a New European Patent

Law

European Law: no harmonized rules

National Law

Germany:

Both inventions made as service invention and inventions outside the share of

employment belong to the employee

The employer has the right to use the invention but needs to pay remuneration

UK: statutory right to compensation in cases where the invention belongs to the employer

France: distinguish:

Inventions made as required by the employment contract => employer

Other inventions in which there is some contribution of the employer => employee, but

the employer can claim the invention after payment of compensation

Different countries have different law

Examples

Germany

United Kingdom

France

TODO Add notes for Harmonizing Scope article -- p. 308

Patent RequirementsTRIPS’s minimum standards:

Subject matter

Novelty


17 of 33 12/9/2013 8:53 PM

Nonobviousness

Utility

Enablement

Subject MatterGeneral Rules

Art 27(1) TRIPS

Patents available for

Any inventions

Whether products or processes

In all fields of technology

Art 27(2)

Members MAY exclude inventions from patentability

To protect "ordre public" or morality

e.g. to protect human, animal, or plant life

Such exclusion may not be made merely because exploitation is prohibited by their law

i.e. countries MUST have a reason that ties into protecting "ordre public" or

morality

Art 27(3)

Members MAY also exclude

Diagnostic, therapeutic, and surgical methods for the treatment of animals

Plants and animals other than micro-organisms (and more -- see p. 314)

BUT!

Members SHALL provide for the protection of plant varieties either by patents or by an

effective sui generis system

Patentability of Higher Life Forms

Harvard College v. Canaca Comm'r of Patents (Supreme Ct of Canada 2002) (p. 315)

Facts

Harvard tried to patent:

Genetically-modified mouse (more prone to get cancer, for cancer research)

Process of modifying the mouse

Canadian patent statute allows for the patentability of "manufactures" and "compositions

of matter"

Patent examiner rejected the mouse as being outside the scope of "invention" in the

Canadian Patent law, but allowed the process claims

Issue

Can a 'higher life form' be considered a "manufacture" or a "composition of matter" for


18 of 33 12/9/2013 8:53 PM

the purpose of the patent act?

Held

No -- The "oncomouse" is NOT patentable subject matter

Parliament of Canada did not intend to include "higher life forms" witin the

definition of "invention" found in the Patent Act

Dissent

The oncomouse should at least be considered patentable subject matter

This does not mean the claims should be granted

Other countries have held the onocomouse patentable

Canada needs uniformity in the law

Furthermore, Canada has sought to harmonize it concepts of IP with other

like-minded countries

(so why not with the oncomouse?)

Analysis

Chakrabarty case

Patent issue re: man-made oil-eating bacteria

Held that the US Patent Act allows patentability of "anything under the sun that is

made by man"

Very broad understanding of patentable subject matter

Canadian court REJECTED Chakrabarty reasoning

Parliament chose to adopt an exhaustive definition that limits invention to any

"art, process, machine, manufacture or composition of matter"

} i.e. no qualifiers to show that that list was _NOT_ exhaustive

Parliament did NOT indicate that invention included anything new and useful

made by man

} i.e. Parliament intended to exclude certain subject matter from the Patent

Act

"Manufacture"

Oxford Dictionary definitions:

Manufacture -- does not connote 'higher life forms'

"Composition of matter"

Connotes "mixing" of compounds to create matter

The actor doing the mixing should be a human

A mouse is alive -- the "mixing" of the essential ingredients to make a mouse

takes place on its own (except for the spliced gene part -- humans made the gene, but

humans don't make the mouse)

The Scheme of the Patent Act


19 of 33 12/9/2013 8:53 PM

The Canadian Patent Act was ill-equipped to handle this type of patent case

It is up to Parliament to assess the validity of the distinction drawn by the Patent

Office between higher life forms and lower life forms

Rule

Patentable subject matter includes any "art, process, etc…" (see p. 318)

Notes

Motivation for trying to patent the mouse itself

Prevent someone from buying the mouse, and then breeding the mouse

Proving infringement

If you control the PRODUCT, you have an easier time proving infringement

If you only control the METHOD, it's harder to show that someone else infringed

on your method of creating this type of mouse

Moral Issues?

Patenting a living thing?

Assigning IP rights to a living thing? What about a person?

Note 3, p. 321

The Harvard court said the egg itself COULD be a "composition of matter" --

there was enough manipulation made by the inventor (human)

Conceivably, Harvard could have patented the genetically-modified egg of the

mother

Note 8, p. 322

Monsanto case

Patentability of Business Methods

US Approach

Patent Act does not explicitly specify that business methods are not patentable (though the

court

Bilski v. Kappos (US Supreme Ct, 2010) (p. 337)

Note - we read this for IP for Corp Transactional Lawyer

FP

Company wanted patent for business method

For protecting/hedging against the risk of price changes

Key claims = Claims 1 & Claim 4

Claim 1 describes steps instructing how to hedge risk

Claim 4 puts Claim 1 into math formula

Patent examiner rejected

Board of Patent Appeals & Interferences affirmed patent examiner


20 of 33 12/9/2013 8:53 PM

US Ct of App for Fed Circuit (CAF) heard case en banc, and affirmed BPAI

Ct of App ruled that the machine-or-transformation test was the sole test to

be used

Ct produced 5 opinions

Plurality

Concurrence

3 Dissents

Sup Ct granted certiorari

Issue

Was the method/business 'process' patentable?

i.e. was it a patentable "process"?

Was it an unpatentable "abstract idea"?

Rule

Statute: 101 of Patent Act defines patentable subject matter

4 categories of inventions/discoveries eligible for protection:

Processes

Machines

Manufactures

Compositions of Matter

3 Exceptions to patent-eligibility principles

Laws of Nature

Physical Phenomena

Abstract Ideas

Machine-Or-Transformation Test

If the method (i) is tied to particular machine or apparatus or (ii) transforms

a particular article into a different state or thing, then the method may be

patentable

Held

HELD - Majority Opinion: In general, business methods may be patented.

However, in this case, the method cannot be patented, because it is an abstract idea

Sup Court applied statutory construction (Patent Statute)

S Ct directs lower courts not to grant patents to abstract ideas

Analysis


21 of 33 12/9/2013 8:53 PM

Plain Language of Statute

There is no express exclusion of Business Method Patents in US law

The statute, on its face allows "methods" to be patented

Precedent

State Street Bank case

Fed Cir held

Business method = patentable

Before State Street Bank, ct precedent held that business methods !=

patentable

BUT!

w Nothing on face of Statute §101 prevents patenting of

business methods

The "machine or transformation" test is not the sole test to apply. Still need to look

to see whether or not the subject matter is an abstract idea

An abstract idea can be defined as “a principle, in the abstract,” or “a fundamental

truth; an original cause; a motive,”

EU Approach

What may be Patented?

Any "inventions" which are capable of "industrial application", which are "new" , andwhich involve an "inventive step" (EPC Art 52(1))

What Is NOT Considered an Invention? (EPC Art 52(2))

Discoveries, scientific theories, mathematical methods

Aesthetic creations

Schemes, rules, and methods for performing mental acts, playing games, or doing

business

Computer programs

Methods for treatment of the human or animal body by surgery or therapy

Diagnostic methods practiced on the human body

(But note: products, substances [drugs, e.g.] related to medical treatment MAY be

patented)

BUT!

Business methods "of technical character" may be patented

("Technical character" is decided by the European Patent Office)

(The methods would still need to meet the inventive step and new/novel test)

The provisions of EPC Art 52(2) exclude patentability of the listed subject-matter only


22 of 33 12/9/2013 8:53 PM

to the extent to which a European patent application or European patent relates to the

subject matter "as such"

Countries in EU refer to the physical implementation of the business method as its "technical

feature" or "technical character", and the pure-abstract concept as the "non-technical" feature of

the method.

Hitachi, Ltd (Technical Board of Appeal, European Patent Office, 2004) (p. 342)

Facts

Claim 1 was an "automatic auction method executed on a server computer"

Claim 3 is a "computerized auction apparatus", comprising a server computer

The "examining division" rejected a patent claim for an auction method, calling it

a "business method as such," which is not patentable under the EPC (European Patent

Convention)

The ED also said that even if the claimed subject matter were an "invention"

within the meaning of the Art 52(1) EPC, it did not involve an inventive step as

required by Art 56 EPC

Issue

Were the claimed methods/apparatus "inventions" within Art 51 EPC?

Held

The apparatus of claim 3 is an invention -- it has technical features, such as

"server computer," "client computers" and a "network"

The method of claim 1 is not excluded -- it is in invention

HOWEVER, the court later found that the "invention" was obvious. Therefore, the

appeal was dismissed, because it lacked the required "inventive step"

Rule

A method involving technical means is an invention w/in the meaning of Article

52(1) EPC

Analysis

Per EPC Art 52(2), the business methods are only excluded from patentability "as

such." However, a mix of technical and non-technical features may be patentable

Prior art should not be considered when deciding whether claimed subject-matter

is such an invention (referring to "mixed technical/non-technical inventions"??)

Note

This case is fucking confusing to read

This case does not say

Compare Art 52 EPC and Art 27 TRIPS

There is no conflict between Art 52 and 27 (business vs technology)

Art 27 does not discuss "business methods" -- it only discusses "fields of technology"

Art 52 applies "technology" to business methods


23 of 33 12/9/2013 8:53 PM

So there's really no issue

Patentability of Computer Software and Computer-Implemented Methods

TODO -- see pp. 347 - 350

Utility of Capability for Industrial ApplicationNote--this wasn't assigned on the syllabus. Just know you need it, in order to patent stuff

NoveltyArt 27 TRIPS

... patents shall be available for any inventions, whether products or processes, in all fields oftechnology, provided that they are new, involve an inventive step, and are capable of industrialapplication

Two Conceptions of Novelty

(1) No geographic limitation on prior art (EPC Approach)

A prior foreign public use or knowledge of an invention anywhere in the world defeats novelty

EPO Case - Opposition Division Decision Revoking the European Patent No EP-B-0436257

(p. 357)

Facts

December 20, 1990: US filed for patent in Europe (on fungicide)

Claimed priority of an earlier US application

June 14, 1995: EU Opponents filed of opposition filed

Issue

Paris Priority dispute

Held

Not novel

Analysis

There were field trials conducted in India that constituted prior use, which

defeated the novelty of the patent

Notes

This case illustrates the world-wide EPC approach

The field tests would not defeat novelty in the United States (because this

happened before 3/16/2013)

If the same thing happened later (say, May 2013), then the same result would

occur in USA and Europe

(2) Prior art is geographically limited in all or some respects (US Approach)


24 of 33 12/9/2013 8:53 PM

Before AIA Geographical limitations on novelty under §102(a) (i.e. date of first INVENTION

Before March 16, 2013)

Foreign knowledge and public use did NOT constitute prior art in the US (i.e. did not

defeat novelty)

Under the AIA patent applications filed (i.e. date of FILING On March 16, 2013 or later)

NO geographic limitations. Foreign knowledge and public uses DO constitute prior art,

and can defeat Novelty

Using Patent Filings as Prior Art, To Defeat Novelty

Issues

Are patent applications considered prior art by countries around the world?

Generally, yes. Foreign patents and applications are considered prior art by countries

around the world

When does a patent application become prior art?

Domestic Patent Applications

Patent application becomes prior art as of the Filing Date

Caveat:

The patent application must later be published OR the related patent must

be granted

i.e. if the patent application is abandoned and never published, then it

cannot defeat novelty

Foreign Patent Applications

Patent application are treated as prior art on the day they are published

In USA

Foreign Patent Apps must fall w/in the category of "printed publication" in

order to be prior art (this makes it harder for foreigners to establish prior art, so

that US inventors could patent the same invention more easily)

How Does the Paris Priority Date Affect Prior Art?

What happens if an inventor filed several patent applications within the Paris

Priority period? Can a 3rd party use the Paris priority date (i.e. the filing date),

established by the first foreign filing, as the date that subsequent national applications

became prior art?

In Europe and Japan

Yes, a 3rd party can rely on the Paris Priority date in someone else's foreign

patent application, as the date on which all subsequent national filings become

prior art, as long as the application is later published or a patent is granted

The FILING DATE of the foreign application becomes the eff date

for establishing prior art as long as the application is later published or a

patent is granted.

In US (BEFORE Mar 16, 2013):


25 of 33 12/9/2013 8:53 PM

Hilmer Doctrine: --> filing date of foreign application DOES NOT become

the effective date for establishing prior art in the US (this is the rule from the

Eastman Kodak case)

The PUBLICATION DATE counts

(The Hilmer rule makes the prior art date later -- i.e. a foreign inventor

would have a harder time obtaining patent, because riskier -- greater chance of

being defeated by prior art)

Note: The AIA harmonizes US law w/ Europe and Japan for Patent Applications

filed on/after 3/16/2013

Note -- we skipped Studiengesellschaft Kohle v. Eastman Kodak -- but see above -- it illustrates the

Hillmer doctrine, which was abolished by the America Invents Act

Patenting or Biopiracy?(Only 1 assignment here -- pp. 369 - 376)

NOTE: We didn't talk about this during class...

Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge

and Folklore (p. 369)

Nonobviousness / Inventive StepArt. 27 TRIPS:

... patents shall be available for any inventions, whether products or processes, in all fields oftechnology, provided that they are new, involve an inventive step, and are capable of industrialapplication

The "Inventive step" is synonymous with "non-obvious" analysis

Nonobviousness requires examination of prior art

Key Dates

First-to-file countries

Key date = Filing Date

US

Patents Existing or Applications Filed Before 3/16/2013

Date of invention or reduction to practice

Patents Filed On/After 3/16/2013

Filing Date

Paris Convention

The US, EU, and Japan

Paris Priority Date of a foreign application should NOT be used to establish the date on

which it becomes prior art in the domestic country


26 of 33 12/9/2013 8:53 PM

so we don't have the same issue as we have with novelty

Rules

US Law

Patent Act §103

(The KSR case -- not assigned)

Held

A person of "Ordinary skill" in the art means someone with an undergraduate

degree

"Non-obvious" means that a person of "ordinary skills" would not have seen the

'inventive step' as obvious

EU Law (see casebook p. 381)

European Patent Convention Article 56

An invention shall be considered as involving an inventive step if, w.r.t to the state of theart, it is not obvious to a person skilled in the art.

If the state of the art contains "documents w/in EPC Art 54(3)", those documents

(namely, patent applications) are NOT to be considered in determining whether there has

been an inventive step

EPC 54(3)

The content of European patent applications, as filed

Sandoz GmbH v. Roche Diagnostics GmbH (High Ct of Justice Chancery Division (England &

Wales 2004) (p. 381)

Facts

Invention was a method for preserving proteins when being prepared for multi-dose medical

application

Priority is claimed from Aug 15, 1991

Issue

Was the process "obvious" at the priority date?

i.e. was the claimed process obvious to the skilled man as at the priority date or it required any

degree of invention?

Held

Yes, obvious

Rule

4-step Test

Identify the Inventive Concept

The "Skilled Person" standard


27 of 33 12/9/2013 8:53 PM

(see p. 383)

Person/Team must have general knowledge of the field, AND must not be creative

enough to apply for the patent on their own

Differences between the "known/used" and the alleged invention

Determine what the "common knowledge is

Assess the differences -- would the skilled person have considered the differences

obvious (at the time of invention, given the general knowledge)

Analysis

Inventive Step

No dispute -- this test is satisfied

Step 3

(See p. 385) journals etc represented the common knowledge at the time of invention

Determine in the context of the present invention:

The identity of the PHOSITA => The common general knowledge => the content of

eight works that were current in 1991

Obviousness over common knowledge => would have been obvious to any formulation

scientist (including his team) in 1991 to try to combine what were conventional

preservatives and test their reaction upon a protein based formula?

NO. In 1991 to try a range of preservatives and their synergistic combination was

the product of hindsight

Notes

Note 8, p. 387 - Paris Priority Dates for Obviousness purposes

EU, US and Japan agree that the Paris priority date of a foreign application should NOT be

used to establish the date on which it becomes prior art in the domestic country, for determining

nonobviousness.

(This is to prevent foreigners from getting the prior art key time too soon, and making it more

difficult for domestic inventors to get patents)

Exclusive RightsNote -- we skipped a lot of stuff here.. picked up from Compulsory Licenses

Compulsory LicensesGeneral Doctrine

Art 31 TRIPS: Compulsory Licenses (see p. 419 - 420)

Compulsory Licenses are Exceptions to exclusive rights provided by patent law


28 of 33 12/9/2013 8:53 PM

Allows a 3rd party to use patent w/o owner's permission

Each case shall be decided individually

Can only be used if

Proposed user has made prior efforts to get authorization from rights holder, on reasonablecommercial terms

Efforts have not been successful w/in reasonable pd of time

Scope

Use must be limited to the purpose for which the Compulsory License was authorized

Predominantly for the supply of the domestic market of the Member authorizing use of

the compulsory license

Duration

Compulsory license ends when the need ends

Exclusive/Non-Exclusive

Must be non-exclusive

Transfer

Must be non-assignable (except with the part of the enterprise or goodwill which enjoys

such use)

License Fees

Licensee must pay Right holder "adequate remuneration"

Decisions about remuneration are subject to judicial review

Waiver of Compulsory License

In case of emergency, circumstances of extreme urgency (patent holder must be notified

as soon as practicabaly possible), and non-commercial use

Validity

Validity of CL is subject to judicial review

Anti-competitive practice

Compulsory licenses can be used to remedy anti-competitive practices (e.g. antitrust)

The "Second-Patent" Rule

Where use of the compulsory license is authorized to permit the exploitation of a

"second patent", which will infringe a "first patent", then:

The invention claimed in the 2nd patent shall involve an "important technical


29 of 33 12/9/2013 8:53 PM

advance" of "considerable economic significance" in relation to the inventionclaimed in the 1st patent, AND

The owner of the 1st patent shall be entitled to a cross-license on reasonable termsto use the invention claimed in the 2nd patent

The use/rights authorized by the 1st patent shall be non-assignable except with theassignment of the 2nd patent

Compare Compulsory Licenses for Copyright vs Patent

Compulsory licenses for patents encroach more on patent holders' rights - issues

Matter of scale?

e.g. potentially millions of say, drug users ==> losses for patent holder?

Licensor/Licensee relationship

Much more is transferred to licensee (with patents vs copyright)

W/ compulsory licenses, companies lose ability to choose licensees carefully --

licensees they can trust

Possibility to create competition for yourself

You're essentially giving the licensee the tools to become a competitor in the

future

Compulsory Licenses and Patented Life-Saving Medicines

Working Requirements (Note this was also covered above)

e.g. product must be produced/sold in the country

Motivation:

economic incentives -- e.g. ensure that the patent owner provides jobs

Prevent owner from merely blocking others from making the product

PARIS Conv Art 5

Importation of the product into the country from another Paris country cannot constitutethe reason for forfeiture of the patent

At least, if the product is imported (without being made/produced, etc in the

country), then the patent won't be forfeited

Compulsory licenses can be granted to prevent abuses such as failure to work

If CL not sufficient to prevent said abuses then --> forfeiture after 2 yrs from grant of CL

i.e. if you didn't solve the problem of abuse (i.e. not importing product) w/in 2

years, then patent can be forfeited


30 of 33 12/9/2013 8:53 PM

No CL b4 4 yrs from date of filing, or 3 yrs from date of patent grant, whichever expires

last

No CL if there is 'justification'

"Justification" can be, e.g.

e.g. lack of infrastructure to produce product; lack of resources

e.g. war

CL shall be non-exclusive and non-transferrable

TRIPS Art 27(1)

"Patents shall be available and rights enjoyable w/o discrimination as to whether

products are imported or locally produced"

i.e. no forfeiture for violation of working requirements

Open issue: Is the grant of a compulsory license for failure to work a

"discrimination" under Art 27 of TRIPS?

TRIPS Art 31

A Country may order the grant of a compulsory license for a patented invention

Brazil -- Measures Affecting Patent Protection (WTO 2011) (p. 424)

Facts

Brazil AIDS compulsory license led to successful program

Other developing countries wanted to use similar compulsory license

Large US pharma co's challenged the validity of the compulsory license to the WTO

Issue

Is the Compulsory License valid?

Held

No holding. Both sides dropped the issue

Analysis

Ultimately, the Pharma co's were taking an unpopular position

The Doha Declaration (pp. 428 - 429)

Point (4)

TRIPS does not and should not prevent members from taking measures to protect public health

TRIPS should be interpreted and implemented to support protection of public health and

promote access to medicines

WTO co's have the right to fully use TRIPS provisions that provide flexibilities In this context

Point (5)

TRIPS should be integrated in light of its objective and purpose


31 of 33 12/9/2013 8:53 PM

Countries have

The right to grant compulsory licenses

The freedom to determine the grounds upon which such licenses are granted

The right to determine what constitutes a national emergency or other circumstances of

extreme emergency

The right to establish their own regimes for exhaustion of IPRs

Point (6)

TRIPS Council must find an expeditious solution to the problem of countries w/ insufficient or

no manufacturing capabilities

Reconcile w/ TRIPS Art 31 -- Compulsory license is limited to the domestic market

where needed; but what happens if they can't manufacture?

Point (7)

Developed countries commit to transfer technology to least-developed Members

The Implementation Decision

TRIPS Incorporated Paragraph 6 of the Doha Agreement

Definition of “pharmaceutical product” (see p. 430)

Definition of “eligible importing member”

Least-developed countries

Other members with insufficient manufacture capability

Definition of “exporting member”

The obligations of Art. 31(f) shall be waived for pharmaceutical products and in the case of

“eligible exporting countries” based on the following terms:

Notification by the importing country

Name of the product and quantity ...

Compulsory licenses’ conditions:

Specified amount and importing country

Labeling, special packaging ...

Information on website

Notification by the exporting country

Measurers to prevent importation in markets other than those indicated in the compulsory

license

Thailand's Compulsory Licenses and Retaliation (see pp. 434 - 438)

Note: I don't have lecture notes on this.. Also, it's not in Prof's lecture slides

But I DO remember talking about it. sooooo

Thailand had mandated several compulsory licenses for drugs


32 of 33 12/9/2013 8:53 PM

US drug companies retaliated by withdrawing other drugs from the marketplace


33 of 33 12/9/2013 8:53 PM

03 Patents

Documents

Transcript of 03 Patents