& Statutory harmonisation in patent law. Is the SPLT able to lead to effective harmonization?

Conference, Torino, 9 October 2006 Dr. Sven J.R. Bostyn, LL.M

De Clercq, Brants & Partners IViR, University of Amsterdam © Sven Bostyn 2006

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Why Harmonization?

• One set of rules; identical rules apply to a large number of countries. • Creates legal certainty; consequences can be better estimated • Legal certainty is important for those areas of the law which create economic incentives. • A harmonized legal system will also lead to much clearer limits and boundaries. © Sven Bostyn 2006

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Why Harmonization?

• Will lead in the long run to a more mature system, benefiting from the experiences and case law in the various member states, all applying the same set of rules. • The “best” and more “optimal” solution can be found in a much larger pool of experiences; a world-wide harmonized system becomes inherently superior in quality in the long run. • The search for legal certainty and cost effectiveness of legal systems © Sven Bostyn 2006

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SPLT: Historical background

• Starting point Patent Cooperation Treaty, 1970 • Mid 1980s, first drafts made by WIPO to harmonize substantive patent rules • In 1991, an approved text failed on the diplomatic conference • A new initiative limited to formalities was taken • In the mean time, Marakesh Agreement in 1994, TRIPs • In 2000, Patent Law Treaty • In 2001, new initiative to achieve substantive harmonization, with TRIPS already in place • SCP meetings on SPLT in May 2001, November 2001, May 2002, November 2002, May 2003, May 2004, June 2005, Open Forum March 2006 © Sven Bostyn 2006

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Goal and ambition of SPLT

• Exact goal/purpose has never been clearly expressed, nor the best way to arrive at it – No preamble, no explanatory memorandum – SCP/4/2: further harmonisation to lower cost • Ambition of the SPLT: to come to a system of mutual recognition: a patent granted in one country would automatically be recognized in another country. • Requires a full and complete harmonization of all substantive patent law rules, including formal rules having substantive effects. • Feasible? © Sven Bostyn 2006

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SPLT: bridging the differences

• SPLT deals with substantive patent law provisions • Such provisions differ substantially between countries – Different historical development – Different legal system/legal tradition • Harmonizing such provisions: – Is very difficult – Leads to compromise (which implies giving up certain principles for certain countries) – Makes a system often more complicated and less flexible – Does not always come to the benefit of legal certainty © Sven Bostyn 2006

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Harmonization

• SPLT attempts to harmonize substantive patent law rules • Europe is specialist “par excellence” in harmonization • In patent law, harmonization very unsuccessful – Most initiatives dealt with patentable subject matter – Biotech directive: various member states have incorporated provisions not in the directive – Computer implemented inventions (failed) – Community patent (story of failure for more than 40 years) © Sven Bostyn 2006

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Harmonization

• In terms of negotiation power, it is unrealistic to assume that countries with established patent law systems (i.e., Europe, US, Japan) will be prepared to sacrifice some of the established concepts • For Europe, additional hurdle is that the patent system is itself the consequence of partial harmonization, achieved after long and burdensome negotiations – Unlikely that European countries are prepared to give up the newly created balance © Sven Bostyn 2006

& • Overview of Draft SPLT • Article 1 Abbreviated Expressions • Article 2 General Principles and Exceptions • Article 3 Applications and Patents to Which of the Treaty Applies • Article 4 Right to [a][the] Patent • Article 5 Application.

• Article 6 Unity of Invention • Article 7 Observations; Amendments or Corrections of Application • Article 7bis Amendments or Corrections of Patents • Article 8 Prior Art • Article 9 Information Not Affecting Patentability (Grace Period) • Article 10 Enabling Disclosure • Article 11 Claims • Article 12 Conditions of Patentability • Article 13 Grounds for Refusal of a Claimed Invention • Article 14 Grounds for Invalidation or Revocation of a Claim or a Patent • Article 15 Review • Article 16 Evidence © Sven Bostyn 2006

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Patent applications

• Art. 3 • SPLT would be applicable to national, regional and international patent applications • SPLT would be applicable to patents which have been granted for a Contracting Party © Sven Bostyn 2006

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Infringement

• Art. 2: ‘Subject to Articles 9 and 11, nothing in this Treaty and the Regulations shall limit the freedom of a Contracting Party to apply any requirements in relation to infringement.’ • However, Art. 11(4): ‘(4) [ Interpretation of Claims – a) The scope of the claims shall be determined by their wording. The description and the drawings, as amended or corrected under the applicable law, and the general knowledge of a person skilled in the art on the filing date shall[, in accordance with the Regulations,] be taken into account for the interpretation of the claims.

] – (b) For the purpose of determining the scope of protection conferred by the patent, due account shall be taken[, in accordance with the Regulations,] of elements which are equivalent to the elements expressed in the claims.’ • Takes same ambiguous position as EPC • Infringement is a crucial factor of harmonisation, but left aside by SPLT © Sven Bostyn 2006

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Exceptions

• Art. 2 SPLT – (2) [ Security Exception interests.

] Nothing in this Treaty and the Regulations shall limit the freedom of a Contracting Party to take any action it deems necessary for the preservation of essential security – – [(2) [ Exceptions ] Nothing in this Treaty and the Regulations shall limit the freedom of a Contracting Party to take any action it deems necessary for the preservation of essential security interests or to comply with international obligations, including those relating to the protection of genetic resources, biological diversities, traditional knowledge and the environment.] [(3) [ Public Interest Exceptions Regulations shall limit the freedom of a Contracting Party to protect public health, nutrition and the environment or to take any action it deems necessary to promote the public interest in sectors of vital importance to its socio-economic, scientific and technological development.] ] Nothing in this Treaty and the © Sven Bostyn 2006

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Exceptions

• The exceptions in Art. 2 very much look like a blank check • Undermines any attempt to arrive at harmonization • Demonstrates conflicting interests of negotiating parties -> irreconcilable • Demonstrates that initiative is doomed to fail – Developed countries are not prepared to jeopardize their patent system by signing such blank check © Sven Bostyn 2006

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SPLT – Patentable subject-matter

• Art. 12 SPLT – (1)[ Subject Matter Eligible for Protection • (i) mere discoveries; • (ii) abstract ideas as such; such; • (iv) purely aesthetic creations.

] (a) A claimed invention shall fall within the scope of subject matter eligible for protection. Subject matter eligible for protection shall include products and processes [, in all fields of technology,] which can be made and used in any field of activity.

(b) Notwithstanding subparagraph (a), the following shall not be considered as subject matter eligible for protection: • (iii) scientific and mathematical theories and laws of nature as – (5) [ Exceptions ] Notwithstanding paragraphs (1) to (4), a Contracting Party may[, in accordance with the Regulations,] exclude certain inventions from patentability. © Sven Bostyn 2006

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SPLT – Patentable subject-matter

• Major differences in various existing patent systems: – US patent act does not have statutory exclusions from patentability, but merely case law based exclusions (which more or less correspond to catalogue in Art. 12) © Sven Bostyn 2006

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SPLT – Patentable subject-matter

• European patent system has an even more stringent exclusionary catalogue See Art. 52 EPC: “(1) European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application. (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1: – (a) discoveries, scientific theories and mathematical methods; – (b) aesthetic creations; – (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers; – (d) presentations of information.

(3) Paragraph 2 shall exclude the patentability of the subject-matter or activities referred to therein only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.” • Art. 52(4) EPC (Art. 53c in new EPC 2000) excludes medical treatment methods, diagnostic and surgical methods from patentability © Sven Bostyn 2006

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SPLT – Patentable subject-matter

• Important differences between Europe and the US • In Europe, the exclusions are subject to debate and controversy • Art. 12(5) SPLT, allowing member states to introduce additional exclusions, defeats all harmonisation efforts © Sven Bostyn 2006

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SPLT – Technical character

• Art. 12 SPLT – (1) [ Subject Matter Eligible for Protection ] (a) A claimed invention shall fall within the scope of subject matter eligible for protection. Subject matter eligible for protection shall include products and processes [, in all fields of technology,] which can be made and used in any field of activity.

© Sven Bostyn 2006

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SPLT – Technical character(2)

• Technical character is currently non negotiable for Europe (and controversial) – Is important in the area of computer-implemented inventions and business methods – Appears to be difficult to define • US has different approach: – concrete, useful and tangible result (State Street Bank, CAFC 1998); – everything under the sun made by man is patentable (Chakrabarty, US Supreme Court 1980) © Sven Bostyn 2006

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SPLT - First-to-file v first-to-invent

• Non-negotiable for Europe – First-to-file is the easier system, providing more legal certainty, also avoiding costly interference proceedings – Many features of the US first-to-invent system, particularly in respect of priority, relate to filing date – Does not seem to be a major hurdle, as US might change to first-to-file system © Sven Bostyn 2006

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SPLT - Novelty and Prior Art

– Europe defends absolute novelty concept, see Art. 54(2) EPC: • The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application. – US system still excludes certain types of prior art, section 102 • (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or • (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States © Sven Bostyn 2006

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SPLT - Novelty and Prior Art(2)

• Art. 8(1) SPLT: • [ Definition ] The prior art with respect to a claimed invention shall consist of all information which has been made available to the public anywhere in the world in any form[, as prescribed in the Regulations,] before the priority date of the claimed invention.

© Sven Bostyn 2006

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SPLT – Grace period

• Arguments in favour: – Allows research community to publish without being novelty destructive • Is also true for governmental bodies, and publicly funded research institutions – Provides solution for the inherent conflict between high level scientific research and necessary funding, often requiring patent protection as return on investment – Protects against inadvertent making available of details concerning invention – Protects againts disclosing details concerning invention in the framework of trials or technical assistance, and prevents flood of secrecy agreements © Sven Bostyn 2006

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SPLT – Grace period (2)

• Arguments contra – Legal uncertainty • Difficulties in determining whether a patent application or subsequent publication is based on the original publication • Difficulties in determining what the exact scope of the invention is which is laid down in the publication; plays a role in case of improvements – Might give a false idea of being free to communicate without taking into account potential competitors – a competitor may learn from the early publication, work on the subject and make a further patentable invention using the published information. The original inventor might then be blocked if he also tries to get his invention patented.

© Sven Bostyn 2006

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SPLT – Grace period (3)

• Art. 9 SPLT (1) [ General Principle invention shall not affect the patentability of that claimed invention, in so far as that item was included in the prior art on a date during the [12][6] months preceding the priority date of the claimed invention, ] An item of prior art with respect to a claimed (i) by the inventor, (ii) by an Office and the item of prior art was contained have been made available to the public by the Office], or the inventor by a third party which obtained the information contained in the item of prior art directly or indirectly from the inventor, or (a) in another application filed by the inventor [and should not (b) in an application filed without the knowledge or consent of (iii) by a third party which obtained the information contained in the item of prior art directly or indirectly from the inventor. © Sven Bostyn 2006

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SPLT – Grace period (4)

(2) [ Invoking Grace Period [Alternative A] The effects of paragraph (1) may be invoked at any time.

[Alternative B] A Contracting Party may require that the applicant submit a declaration invoking the effect of paragraph (1) [as prescribed in the Regulations].

(3) [“ Inventor ] ”] For the purposes of paragraph (1), “inventor” also means any person who, at or before the filing date of the application, had the right to the patent.

© Sven Bostyn 2006

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SPLT – Grace period (5)

(4) Third Party Rights ] [Alternative A] A person who in good faith had, between the date on which the item of prior art was included in the prior art under paragraph (1) and the priority date of the claimed invention, used the claimed invention for the purpose of his business or started effective and serious preparations for such use shall have the right to start or continue to use the invention for that purpose. The claimed invention shall be considered to be used where the person performed any acts that would otherwise constitute an infringement under the applicable law.

[Alternative B] No provision in the Treaty and the Regulations.

The Practice Guidelines would clarify that the issues concerning third party rights remain a matter for the applicable law of the Contracting Party concerned.

[End of Alternative B] © Sven Bostyn 2006

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Enabling disclosure

• Art. 10 SPLT: – (1) [ General Principle ] The application shall disclose the claimed invention in a manner sufficiently clear and complete for that invention to be carried out by a person skilled in the art. The disclosure of the claimed invention shall be considered sufficiently clear and complete if it provides information which is sufficient to allow that invention to be made and used by a person skilled in the art on the filing date, without undue experimentation [as prescribed in the Regulations].

– (2) [ Parts of Application to be Taken Into Account for Assessing Disclosure sufficiency of disclosure under paragraph (1), the disclosure contained in the description, claims and drawings, as amended and corrected, shall be taken into account.

• Not very controversial ] For the purposes of assessing © Sven Bostyn 2006

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Grounds for refusal

• Art. 13(4) SPLT: “[(4) [ Compliance With Applicable Law on Other Matters technological development.]” ] A Contracting Party may also require compliance with the applicable law on public health, nutrition, ethics in scientific research, environment, access to genetic resources, protection of traditional knowledge and other areas of public interest in sectors of vital importance for their social, economic and © Sven Bostyn 2006

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Grounds for invalidation or revocation

• Art. 14(3) SPLT: “[(3) [ Compliance With Applicable Law on Other Matters technological development.]” ] A Contracting Party may also require compliance with the applicable law on public health, nutrition, ethics in scientific research, environment, access to genetic resources, protection of traditional knowledge and other areas of public interest in sectors of vital importance for their social, economic and © Sven Bostyn 2006

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Refusal and invalidation

• Accepting Art. 13 and 14 would imply signing another blank check • For the same reasons as mentioned earlier, such provisions block any attempt to arrive at a consensus © Sven Bostyn 2006

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SPLT: Will the construction hold?

© Sven Bostyn 2006

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Why such harmonization does not work

• SPLT covers too many political agenda’s – Is perfect recipe for failure – The patent system is not devised to regulate non patent issues – The necessary compromise will not serve the interest of those countries who most eagerly, and unsuccessfully, wish to introduce exceptions and concepts unacceptable to many other countries – Substantive patent law harmonization does not help development agenda © Sven Bostyn 2006

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Why such harmonization does not work

• A system of mutual recognition assumes a high quality standard of the patent grant procedure • Is not guaranteed everywhere – European patent system is recognized to be qualitatively the best system – In view of the cost-price not feasible in many regions of the world © Sven Bostyn 2006

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Why such harmonization does not work

• In some regions of the world, the patent system is seen as a tool for development – Is probably not the preferred strategy – When using such strategy, why externalising this strategy to other countries?

• In history, countries which have used the patent system for development (CH and NL) have not externalised their strategy • Externalising strategy is doomed to fail -> harmonization is only feasible for countries with comparable legal systems • Utopia to think that externalising strategy can be successful • ύβρις to think that established patent systems will be prepared to amend their system © Sven Bostyn 2006

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Why such harmonization does not work

• Exclusionary provisions have no effect in a mutually recognition system -> a patent refused in one country is not by definition refused in another country -> any rule to the contrary would foreclose a patent application once refused to ever obtain patent protection in any other country • No fully independent patent offices, cooperate in strategy -> is key to failure of any harmonization exercise © Sven Bostyn 2006

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Why such harmonization does not work

• Exclusions for ordre public, morality and environmental reasons are in essence very weak attempts to harmonize – Will in effect have no harmonizing effect – Current practice will continue – Only countries which are strong proponents of such exclusions will apply them • Can better be achieved by national legislation © Sven Bostyn 2006

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Why such harmonization does not work

• Only means to protect certain interests (e.g., biodiversity, environment, morality, etc.) is in national legislation, – if necessary in patent legislation – Better solution in appropriate regulatory framework • Stands at odds with TRIPs – Is the only reason why such international harmonization is perceived as necessary – Abolish the one system fits all in TRIPs?

© Sven Bostyn 2006

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Why such harmonization does not work

• Statutory harmonization has only limited effect • Enforcement and interpretation of patents is crucial test for harmonization • In the absence of any harmonized jurisdictional system, effect of any harmonization is limited (e.g. European patent system) © Sven Bostyn 2006

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Solution: do not harmonize

• Only effective harmonization is one which leads to uniform interpretation • Is not possible by harmonizing statute • Is only possibly by equally harmonizing enforcement • Worldwide harmonization is not what is needed • No harmonization of patent law is needed – Leaves no room for local differences and needs – Harmonization is effective in regional context (these countries share a common level of developments and consequential needs) • Developing countries currently need no harmonized patent system • Developed countries already have a partially harmonized system, and are not prepared to depart from what has been achieved and established © Sven Bostyn 2006

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Thank you!

© Sven Bostyn 2006