"Down with the Patent Lobby" or how the European Patent Office has mutated to controlling engine of the European Economy

I. Table of contents

II. List of tables

III. List of figures

IV. Bibliography

V. List of abbreviations

1. Introduction

2. Legal Framework
2.1. Treaty of Lisbon
2.2. The European Patent Convention
2.3. Enforcement Directive 2004/48
2.4. London Protocol

3. Elements of the patent-system
3.1. The European Patent Office
3.1.1. History
3.1.2. Legal department
3.1.3. The Board of Appeal and the independent appeal division
3.2. The Community Patent Court
3.3. The European Court of Justice

4. The grant procedure for European patents
4.1. 1st Step
4.2. 2nd Step
4.3. 3rd Step
4.4. 4th Step
4.5. 5th Step
4.6. European Community Patent

5. Effects on competition in the market
5.1. Regulative effects
5.2. Financial effects
5.3. Exemplary judgments
5.3.1. Software-Patents
5.3.2. Biotechnical and pharmaceutical patents

6. Closing words

II. List of tables

1 Steps for a Community Patent

2 Categories of intellectual property

3 Comparison of actual costs and fees (in Euros) payable for obtaining patents in the EU, the United States and in Japan

4 Contracting States to the EPC

III. List of figures

1 The organizational structure of the EPO

2 The form 1001

3 Scar-free

IV. Bibliography

BMJ [PUB], German Bundesministerium für Justiz Press release, 30.01.2008

BURGER, Durch gezielte Schutzpolitik zur Weltmarktführerschaft, Linz 2002

BURNS, To a mouse, on turning her up in her nest with the plough, poem 1785

Commission [PUB], The European Commission Press release, IP/07/463, 04/03/2007

Council of the EU, 7119/04, 2000/0177CNS, Brussels 2004

EPA (PUB), Fakten und Zahlen, München 2006

EPA [PUB], Der Weg zum europäischen Patent, 10.edition, München

EPA [PUB], Europäische Patente und das Erteilungsverfahren, München 2006

EPA [PUB], Jahresbericht 2006, München 2007 EPO [PUB], The EPO Press release, 04.06.2007 EPO [PUB], The EPO Press release, 29.06.2007 GOETHE, Faust eine Tragödie von Goethe, 1. edition, Tübingen 1808 HALL, Exploring the patent explosion, Cambridge 2004 HARMANN, Die patentrechtliche Offenbarungswirkung einer inhaltlich falschen technischen Lehre, Linz 2007 HAYBÄCK, Das Recht am geistigen Eigentum, Wien 2004 IAM [PUB], Patents in Europe 2006, London 2006

JENSEN/THURSBY, Patent licensing and the research university, Cambridge 2004

KINNE, Rechtsschutz für Software, Linz 2007

LEWINSKY, Deutscher und europäischer Patent- und Markenschutz,

München 1987

MAURER/SCOTCHMER, Profit neutrality in licensing: The boundary between antitrust law and patent law, Cambridge 2004 MOSER, How do patent laws influence innovation, Cambridge 2003 OPPENLÄNDER [PUB], Patentwesen, technischer Fortschritt und Wettbewerb, Berlin 1984

SAKAKIBARA, Do stronger patents induce more innovation?, Cambridge 1999

SCHULTE, Patentgesetz, 5. edition, München 1994 SCHWAIGER, Patente, Gebrauchsmuster, Schutzzertifikate, Linz 2001 VALLE, Der sachliche Schutzbereich des europäischen Patents, Frankfurt 1996

WINISCHHOFER, Computersoftware und Patentrecht, Linz 2000

V. List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

The patent law is based on intellectual property rights. The groundwork for this was laid in 1883 by the Paris Convention for the Protection of Industrial Property^[1]. The international treaty allows for regional treaties, such as the Patent Cooperation Treaty (PCT) and the Agreement of the Trade-Relative Aspects of Intellectual Property Rights (TRIPs) of the WTO the European Patent Convention (EPC). These are all treaties devolving from the Paris Convention. The EPC covers Europe (in the broadest sense) (cf. Art. 45 PCT). The European Community (EC) is an entity, by international law (cf. Art. 281 EC) and may represent its constituent states in the concerns of the WIPO and WTO. The community has to respect International treaties such as the Paris Convention and many procedures and measures of the EC respond to those treaties. In this thesis only the EPC will be discussed. The EPC created a uniform body of substantive patent law for patents in Europe. It established a single European procedure for the grant of patents. A European patent is worth its fee, because the owner of the patent can use it to economic advantage. The EPC also laid the groundwork for the introduction of a Community Patent by the EC Council. The initial concept of a Community Patent was first discussed in 1960.

The last attempt to finalize the Community Patent was made in 2007. The member states agreed only on matters of principle, they couldn’t reconcile their differences. It was agreed that the Community Patent should protect inventions just like national patents do and the language problem has to be resolved. Effective legal sanctions for, and the rights and duties of the patent owners must still be defined by the Council.

None the less, the current European patent has already enormous advantages to its owner, compared to national patents. A patent protects technical inventions that are new, involve an inventive step and are susceptible of industrial application.

1 Steps for a Community Patent

Abbildung in dieser Leseprobe nicht enthalten

There is no definition of the meaning of “invention” in the EPC, but some subject-matter and activities are excluded from patentability (cf. Artt. 52, 53, 54, 57 EPC; GL C-IV, 2-8). A patentable invention is considered to be an absolutely new invention (principle of novelty), which does not form part of the state of the art (cf. Art. 54 EPC). An invention shall be considered as involving an inventive step if, in regard to the state of art, it isn’t obvious to a person skilled in the art (cf. Art. 56 EPC). The inventive step requirement is intended to prevent exclusive rights from forming barriers to normal and routine development.^[2]

The wide-ranging economic significance of patents confers the right to prevent third parties, such as competitors, from commercially exploiting the invention.^[3] The applicant is thus allowed time to recoup his development costs and to reap the rewards of his investment and work. The owner can benefit by granting licenses or selling the protective rights. Smaller companies and/or natural persons have herewith the power to protect their invention from theft and may profit greatly from their patents. Global players and Non Governmental Organizations (NGO’s) are abusing the patent laws to their advantage. They often use their patents to create and enforce a monopoly in a particular market. The patent doesn’t confer the right to make use of an invention; it allows the owner to prevent others from deriving economic gain from the invention. Many companies buy patents only to protect their current product line. For example, Henkel KGaA is marketing all kinds of cleaning products, and they are also buying materials patents for products that don’t need cleaning.^[4] The Ford Motors Company and General Motors Corporation^[5] are selling cars fueled with mineral oil, but they are also buying most of the patents for alternative fuels. DuPont, Monsanto, Syngenta and Bayer are well-known as chemistry companies, but they are all buying patents for grains in order to dominate those markets.^[6] “Many patents today are purely defensive”^[7] and are used close technological markets. “Excessive patenting can erode the public domain of open science, chilling the free exchange of knowledge and material which is necessary for the advancement of science.^[8] ” Patents are officially sanctioned monopolies on ideas. Big industry is striving for more and more patents with the express intent of preventing competition, both from their peers, as from upcoming companies. The monopolists are not interested in free markets, but in maximization of profits by shutting out competition through unrightfully acquired monopolies, enabling them to unilaterally dictate prices and licensing. Anti-globalization activists and critics of the existing system want to limit the abuse of patents for parasitic and unnecessary monopolies. After abolishing the Dutch patent system in 1869 the innovations in food processing increased to 37 percent (11 % before).^[9] Most of the existing studies^[10] prefer patents to increase innovation, but their studies bases on existing patent systems. The purpose of patents isn’t to establish long-term monopolies, but to encourage innovation. The standard term of protection is twenty years, starting from the filing date (cf. Art. 63 EPC, Art. 33 TRIPs). In return for this protection, applicants must fully disclose their invention. And that is an essential point of technology transfer. About 80% of the world’s technical knowledge can be found in patent documents.^[11] This inspires further inventions and prevents the duplication of research work. The publication requirement allows competitors to improve on patented inventions and come up with even better technical solutions.

A patent isn’t the guarantor of commercial success; it only provides a save window of opportunity for success.

2. Legal Framework

The European Union was established in 1993 by the Treaty of Maastricht adding new responsibilities to the EC. One purpose (relevant to this thesis) of the Treaty is the progressively establishing of an Internal Market (cf. Art. 14 EC). The internal market isn’t concerned only with goods as in case of a Customs Union or free trade area. It provides a framework for the free movement of goods, persons, services and capital. The primary objective is the creation of better living conditions for the citizens of the Union; therefore, innovation and capital investment are to be encouraged. This can be expedited by the abolishment of national legal restrictions and differences. A major influence for the success of this internal market is the protection of intellectual property rights. Patents foster technical innovation, which is crucial to world market competitiveness and overall economic growth. A worldwide concept can be found in TRIPs and PCT. All member states, as well as the Community itself in regard to^[12] matters within its competence, are bound by the Agreement on Trade-Related Aspects of Intellectual Property (the TRIPs Agreement), approved as part of multilateral negotiations by the Council Decision 94/800/EC and concluded in the framework of the WTO. The TRIPs contains, in particular, provisions for the means of enforcing intellectual property rights, which are common standards applicable at an international level and implemented in all member states.

The European Community is based on the principle of limited authority. A regulation of any substantive-matter is only allowed, if the explicit authority thereto is delegated to the Community in the treaty. Patents are not specifically mentioned in the EU Contract. Since they are definitely related to subjects which are defined in the contract, such as consumer protection, health, and coherence in the EU-internal Marketplace, the theme is deemed to be an area of shared competence. The European Union started efforts to harmonize this matter in 1991. Original ideas and creative work are assets which may be of commercial value in the same way as material goods.^[13]

2 Categories of intellectual property

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The first regulation was done to copyright (R 1991) followed by the commercial legal protection of semi-conductor contractor (Directive 1986), Flag (R 1994), plant variety right (R 1994), designs and models (R 2002) and competition law and antitrust law.^[14] A complete harmonization of the intellectual property hasn’t been done yet. The patent law, the utility models and trademark law shall be finished soon. "We are working with governments and businesses across the European Union to secure agreement to a Community patent, which would grant innovators intellectual protection throughout the single market," European Commissioner McCREEVY said. “We are also working to establish a unified jurisdictional system for litigating patents in Europe. Such a system should bring more legal certainty. It should also simplify the patent litigation landscape and render the patent system more attractive to users.” The comments echoed Commission Vice-President VERHEUGEN's statement to the European Patent Forum in April that “an incomplete European patent system puts European businesses at a competitive disadvantage”.^[15] An effective patent protection encourages further investment in research and development and is the key requirement for raising venture capital in Europe.

“Every European patent undergoes substantive examination and can be obtained for countries which otherwise have “registration- only” systems, thus providing strong protection.”^[16] A harmonization is needed. “The term, scope of protection, binding text and grounds for revocation of European patents are the same for all contracting states to the EPC.” The European procedure shall not supersede the national grant procedure. Within the allocation of rights and duties the competence is shared between the EC and the member states. Actually there is no harmonization based on Artt. 94, 95, 308 EC, but of course the contracting states have adjusted their patentability requirements to the EPC^[17] norm. However, as grant procedures continue to be nationally structured and are conducted in parallel by multiple countries, the national patents lead to a disparity of protection.¹⁸

2.1. Treaty of Lisbon

The 2007 Treaty of Lisbon introduced a jurisdictional reform. The European Court of Justice (ECJ) shall be responsible for all actions of the European Union without the EU Common Foreign and Security Policy. The Patent system falls within the jurisdiction of the ECJ. Therefore the Council with the assent of the Parliament can establish a Patent Court (cf. Art. 225a EC). The ECJ may appeal against restrictive measures and offer an opinion of international treaties (cf. Art. 240a EC).

Additionally, intellectual property is now an essential part of the Artt. 17, 52 para. 3 CFR.

2.2. The European Patent ConventionIn

the past, patents were exclusively part of sovereign national lawgiving. All countries had their own systems and protective legislation. An inventor has had completely different legal environments in each country. Starting in 1973 many European States banded their patent systems together with the European Patent Convention. (cf. Table 4). This act could be seen as an act of enhanced cooperation and is done in form of an international treaty. The Contracting States set up a European Patent as a bundle of sovereign patents. The patent will have the same formal and material legal effect as each national patent.^[19] A patent also gives its owner the same protection as would be conferred by a national patent (cf. Art. 64 EPC), but furthermore any infringement of a patent is dealt with by national law. The Convention concludes to establish a European Patent Organization (EPO) and which constitutes a special agreement within the meaning of Art. 19 PCT. In this Convention, the problem of different languages was underestimated. Currently, under Art. 65 EPC, any contracting state may require that, if the text in which the EPO intends to grant a patent is not drawn up, in one of its official languages, the applicant must supply its central industrial property office with a translation of this text in one of that countries official languages. The patent will be deemed to be void ab initio if the translation is missing. This problem that we have had has been solved by the London Protocol.

2.3. Enforcement Directive2004/48

The objective of this directive is to align the legislative systems of the member states to ensure a highly consistent and homogeneous level of the protection in the Internal Market. National courts will adjudicate any litigation relating to a European patent. Awareness of the value of intellectual property assets, of the necessity to stop any infringement on, and the necessity of adequate compensation for damages to intellectual property owners is growing.^[20] The European Union is also confronted with the problem of infringement in Europe. The Directive 2004/48/EC of the European Parliament and of the Council on the enforcement of intellectual property rights was designed to regulate this matter. Based to Art. 95 EC in accordance with the procedure laid down in Art. 251 EC the regulation entered into force on April 19 th 2004. In accordance with the Regulation 2003/1383 on customs action against infringing goods, the directive was extended to patents. The achievement of the Internal Market entails eliminating restrictions on freedom of movement and distortion of competition, while creating an environment conductive to innovation and investment²¹. The Enforcement Directive should not affect international agreements such as the TRIPs or member states obligations. Even the directive should not interfere with Artt. 81, 82 EC, D95/46, D99/93, D2000/31, D91/250/ECC, D2001/29, the rules for judicial co-operation, the recognition and enforcement of decisions in civil and commercial matters or deal with applicable law. It is necessary to define the scope of the directive 2004/48 as widely as possible in order to encompass all the intellectual property covered by Community provisions in this Preface of the Directive 2004/48/EC. field. All measures, procedures and remedies shall be fair and equitable, shall not be unnecessarily complicated, costly, entail unreasonable time-limits, or unwarranted delays and should also be effective, proportionate and dissuasive (cf. Art. 3 D2004/48). Infringements carried out on commercial scale are those carried out or directly or indirectly for economic or commercial advantage. These actions should be prosecuted in court. The alleged infringer should be forestalled from any imminent infringements of intellectual property by an interlocutory injunction (cf. Art. 9 D2004/48).

Also, at request of the applicant, the court should ensure that appropriate measures, e.g. recall, definitive removal from the channels of commerce, or destruction, will be enforced to discontinue the infringement. The infringer who knowingly engaged in an infringing activity must pay the patent owner damages appropriate to the actual loss suffered as a result of the infringement (cf. Art. 13 D2004/48). Measures, procedures and remedies provided for in this directive should be preventive. To act as a supplementary deterrent to future infringers and to contribute to the awareness of the public at large, decisions should be publicized. In addition to the civil and administrative measures, procedures and remedies provided for under this directive, criminal sanctions also constitute, in appropriate cases, a means of ensuring the enforcement of intellectual property rights.^[22]

2.4. London Protocol

In the London protocol of 2000 all Contraction States agreed to an amendment. The protocol goes into force on May 1st 2008. “On translation costs, the Commission will explore with Member States how to improve the language regime with a view to reducing translation costs while increasing legal certainty.” Patents will become much less dear, because of the translation fees. “A Community Patent would be far more attractive than models under the present system which is a bundle of national patents. A European patent designating 13 countries is 11 times more expensive than a US patent and 13 times more expensive then a Japanese patent. The existing system of patent litigation in the EU, with the risk of multiple patent litigation in several countries on the same patent issue, leads to unnecessary costs for all the parties involved and causes lack of legal certainty.”²³ Patents will become much less dear, because of the translation fees.²⁴ Community Patent would be far more attractive than models under the present system which is a bundle of national patents. A European patent designating 13 countries is 11 times more expensive than a US patent and 13 times more expensive then a Japanese patent. The existing system of patent litigation in the EU, with the risk of multiple patent litigation in several countries on the same patent issue, leads to unnecessary costs for all the parties involved and causes lack of legal certainty."²⁵

3 Comparison of actual costs and fees (in Euros) payable for obtaining patents in the EU, the United States and in Japan²⁶

Abbildung in dieser Leseprobe nicht enthalten

Almost all Contracting States will abstain from translations.²⁷ They will accept one of the three language versions of the EPO.

Only the claim itself has to be translated in special cases. The considerable costs of translations will now be seriously reduced. The patent applicants from the German economy, and very many small and middle-sized companies generally, will profit from the new version. The savings can be applied effectively to new research and development, which will strengthen the European economy and creates new jobs²⁸. The Communication is intended to draw operational conclusions from the stakeholder consultation and to allow the Council to launch deliberations on patent reforms, in particular on the Community Patent and jurisdictional arrangements. It addresses various supporting measures for an improved patent system, such as patent quality, knowledge transfer and enforcement issues. A separate and comprehensive Communication on Intellectual Property Rights (IPR) is planned for 2008, to complement the Patent Communication and address outstanding non-legislative and horizontal issues in all fields of intellectual property.²⁹

3. Elements of the patent-system

The subject-matter of the patent system is very complex. The various interests of the many groups in the EC must be regulated by an equitable judicial system. The EPC as part of the PCT defines its own litigation and infringement procedures. The WTO defines rules according to the TRIPs. The EPO isn’t member of the WTO, so they don’t have to allow for TRIPs. The European Community and European Union need to improve the Internal Market. The inventor must be given the possibility to protect his intellectual property and owners of patents need to have the tools to defend a claim against infringements. The competitors or any third person should have the possibility to gain due process. All of the member States want to retain jurisdictional independence. The current system has existed for centuries, but in future there must be change.

3.1. The European Patent Office

The EPO (European Patent Office) is the official board for patents in Europe. The headquarter is located in Munich (Germany). There are also branch offices in Den Haag (Netherland), Berlin (Germany), Vienna (Austria) and Brussels (Belgium). The more than 6000 employees of the office come from more than 30 states. The core activity is the examination of patent applications; therefore, most of the employees are graduates in the natural sciences or a technical discipline. The objectives of the EPO are to support innovation, competitiveness and economic growth in Europe.

The official languages are English, German and French. The choice wasn’t done to be discriminatory, but to make a more cost effective system. Like the European Union, a translation department is very expansive and there are always translation errors. That unwanted effect would be a great problem for technical patents and will make automatically void.

The EPO is an International Organization (cf. Art. 5 para. 1 EPC) and no part of the European administration. The EPO is one of the world’s leading providers for technical information and stands out as a model international public-service organization and promoter of a knowledge-based society in Europe³⁰. To improve that position the EPO has agreed on a more strongly strategic focus for co-operation with the Japan Patent Office (JPO) and the United States Patent and Trademark Office (USPTO). The EPO has the mandate to permission further prosperity, innovation, economic growth and competitiveness of the citizen of the Union. 30 EPA, Fakten und Zahlen, p. 2. The EPO’s mission is to set up patent protection standards which respond to the needs of the system’s users, therefore the EPO has to maintain its position in the international patent world, setting a benchmark for best patent practice. The EPO is automatically responsible to all Contracting States of the EPC shown in Table 4. The EPO is self financing, i.e. its fee revenue covers all its expenditure and capital investment³¹. The EPO offers additional services. The EPO provides the Esp@cenet for free public access. The database includes more than 57 million patent documents from all over the world, including Japanese and also traditional Chinese medicine. The second special service focuses on training. The European Patent Academy offers courses for the European Qualifying Examination for European patent attorneys and courses for staff of the national offices. The Academy also arranges patent-related events at universities.

[...]

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^[1] Founding states: Belgium, Brazil, France, Guatemala, Italy, Netherlands, Portugal, San Salvador, Serbia, Spain, Swiss (Austria joined in 1909).

^[2] EPA, Der Weg zum europäischen Patent, para. 36.

^[3] EPA, Europäische Patente und das Erteilungsverfahren, p. 6; BURGER, Durch gezielte Schutzrechtspolitik zur Weltmarktführerschaft, p. 12.

^[4] That includes the so called Lotus-Effect or other microstructure materials. Henkel noticed that they won’t sell any cleaner, if no one will need them. Self-cleaning dishes and clothes are already invented, but Henkel avoids the selling to public. That is against the conservation of nature and natural resources.

^[5] The Franz-Nebenstrom-Ölfilter-Patent which conserves the motor was also bought by GM. The filter may consist out of toilet-paper and will last for 100.000 km. GM noticed that the motors of their cars would have a greater operating time, so they bought the patent to keep the short operating time of their motors to sell more cars. Today most trucks do have those filters, but no car.

^[6] Those chemistry companies will produce the insecticides and gen-manipulated grains. Every farmer must use one of those to have an economic cultivation. They are depending on the chemistry concerns.

^[7] CONTZEN (Special Adviser to the Minister for Science, Technology and Higher Education of Portugal, Lisbon) in EPA, Jahresbericht 2006, p. 10.

^[8] SCHNEIDER (Senior Researcher, University Hamburg) in EPA, Jahresbericht 2006, p. 49.

^[9] MOSER, How do patent laws influence innovation? p. 8, p. 13.

^[10] NORDHAUS 1969, KLEMPERER 1990, GILBERT and SHAPIRO 1990.

^[11] EPA, Europäische Patente und das Erteilungsverfahren, p. 8.

^[12] EPO, The EPO Press release on 29.06.2007.

^[13] Preface of the Directive 2004/48/EC. Patents are concerned with the technical and functional aspects of inventions. The first regulation was done to copyright (R 1991) followed by the commercial legal protection of semi-conductor contractor (Directive 1986), Flag (R 1994), plant variety right (R 1994), designs and models (R 2002) and competition law and antitrust

^[14] HAYBÄCK, Das Recht am geistigen Eigentum, p. 112 et seq.

^[15] EPO, Press release, 04.06.2007.

^[16] EPA, Europäische Patente und das Erteilungsverfahren, p. 12.

^[17] EPA, Europäische Patente und das Erteilungsverfahren, p. 12.

^[18] EPA, Der Weg zum europäischen Patent, para.15.

^[19] EPA, Europäische Patente und das Erteilungsverfahren, p. 12.

^[20] MOUTARD in IAM, Patents in Europe 2006, p. 17.

^[21] Preface of the Directive 2004/48/EC

^[22] BURGER, Durch gezielte Schutzrechtspolitik zur Weltmarktführerschaft, p. 110.

^[23] Commission, Press release 04/03/2007, GZ: IP/07/463.

^[24] BMJ, Press release 30.01.2008.

^[25] Commission, Press release 04/03/2007, GZ: IP/07/463.

^[26] http://europa.eu/rapid/pressReleasesAction.do?reference=IP/00/714&format= HTML&aged=1&language=EN&guiLanguage=fr (02.02.2008).

^[27] CARVER, STOATE in IAM, Patents in Europe 2006, p. 32.

^[28] ZYPRIES (German minister of justice) in BMJ, Press release 30.01.2008.

^[29] Commission, Press release 04/03/2007, GZ: IP/07/463.

^[30] EPA, Fakten und Zahlen, p. 2.

^[31] EPA, Fakten und Zahlen, p. 6.