EU survey now open for participation

Every two years the European Commission conducts a survey in order to identify the most important obstacles met by EU citizens applying for and enforcing intellectual property rights in countries outside the EU.

The 2010 survey is now open and anyone may participate using the online questionnaire found here.  

The results of the survey together with data from other sources, such as customs authorities, will be compiled into a report identifying the countries where the problems encountered have reached "worrying proportions and are seriously harming EU right holders". This will help The Directorate-General for Trade to prioritize its efforts and to identify countries with which the cooperation on IP should be strengthened.

In the last report published in 2009, which was based on the 2008 survey, China once again came out as the highest priority country regarding IPR enforcement, not least because 54% of all suspect goods detained at EU borders at that time originated from China. This was not much of a surprise. But western countries such as Israel, Canada and the U.S.A. were also to be found on the list. Israel and Canada amongst other due to deficiencies regarding pharmaceutical-related IPR issues and the U.S.A. i.a. for disrespecting WTO dispute settlement decisions.

It shall be particularly interesting to see whether the efforts of the Chinese government, which include the enactment of a new patent law and a new trademark law as well as a reform of the court system in IPR related matters, have had enough of an impact for them to hand over the top of the list to somebody else. The fact that in 2009 China's share of goods seized at EU borders rose to 64% does not promise well.

The survey is open until 31 October and the report may be expected in the fall of 2011.

Vibeke Warberg Rohde
European Patent Attorney

Please feel free to send Vibeke an e-mail if you have any questions or want to comment on her blog entry.

China to drive on to the Patent Prosecution Highway

According to a USPTO press release, the intellectual property offices of China (SIPO) and USA (USPTO) have signed a Memorandum of Understanding on 19 May 2010, which includes establishing a bilateral Patent Prosecution Highway (PPH) agreement between the two offices.

The PPH agreement will be SIPO’s first, thus driving China onto the Patent Prosecution Highway and opening up for the SIPO and the USPTO taking advantage of each other’s examination results to achieve a faster prosecution of patent applications.

Further new PPH-agreements
Furthermore, four new PPH-agreements have been established in 2010 so far, namely between Finland (NBPR) and South Korea (KIPO), NBPR and Hungary (HPO), Germany (DPMA) and KIPO (to take effect on 1 July 2010) and, most notably, between the EPO and Japan (JPO).

Thus, the complete overview of existing and working PPH agreements at the time of writing can be seen on the graphic below, courtesy of the PPH web-page compiled by the Japanese Patent Office, JPO:

Link to the USPTO press release
Link to the PPH-web page

Troels Peter Rørdam

Associate Patent Attorney

If you have any questions or want to comment on Troels' blog post, please feel free to send him an e-mail.

Software piracy in China declining

A survey released by the State IP Office reveals that the percentage of pirated software installed on Chinese computers decreases for the fifth year in succession:

• 2005: 66 %
• 2006: 63 %
• 2007: 56 %
• 2008: 47 %
• 2009: 45 %

The survey was based on 4,700 telephone interviews with consumers and business users carried out by Chinalabs.com. They estimate the 2009 value of the copied software to be 130 billion yuan.

A decline in copying is noted by the Business Software Alliance (BSA) too, although they arrive at the figure 80 %, down from 82 % last year and 86 % in 2005. BSA's method is to predict the cost for supplying a country with legal software (yes, the model for this is very complex) and compare it with the value of the actual, paid-for software market. Measured on this scale, copied software installed in Denmark and Sweden amounts to 25 %. The USA is top of BSA's list, at a mere 20 %.

Experts explain the decrease by a combination of the following: 

• Commercial suppliers, including Microsoft Corp., have lowered their prices in China specifically.
• Legitimate free office programs and operating systems are improving and spreading.
• By law, manufacturers may only install genuine operating systems in made-in-China computers. This entered into force in 2006. 
• The Chinese authorities are getting better at enforcing IP.

Other plausible factors are the emergence of domestic software suppliers and the rising IP awareness in China noted by many observers.

What is BSA anyway? It's a non-profit trade organisation having as its mission to promote a safe and legal digital world. BSA was behind the 2008 lawsuit that put an end to the infamous Tomato Garden website. People downloaded not only unlicensed copies of commercial products, but also "improved" versions of MS Windows and others. Both are illegal under the copyright laws of China and virtually any country in the world, and both could be stopped.

Surely, you know that your software enjoys copyright protection from the moment you write it. But don't forget - the successful action against the Tomato Garden was meticulously prepared as far as preservation of evidence was concerned. In order for your company to be ready to fight piracy the day it happens, there are a few measures to take. My colleagues and I will be glad to assist you.

Anders Hansson
Patent Attorney, member of Awapatent's Specialist Team IP in Asia and Russia

The members of Awapatent's Specialist team "IP in Asia and Russia" are dedicated to ensuring our clients’ success in obtaining and defending intellectual property rights in major Asian markets and Russia by keeping up to date with recent developments and sharing our knowledge internally as well as externally, and maintaining a network of the best partners.

If you have any questions or want to comment on Anders' blog post, please feel free to send him an e-mail. 

Double patenting under the EPC may give one extra year of protection

Until recently double patenting was not allowed under European Patent Convention. However, in the decision T 1423/07 of 19 April 2010 a Board of Appeal decided that if a European patent application claims the priority of an earlier Euro-pean patent application, the Convention provides no basis to refuse the grant of both patents based on the concept of double patenting. This provides the opportunity for the applicant to obtain one extra year of protection in the Contracting States.

To summarize the case, the applicant filed a European patent application as a European phase of an International application claiming the priority of an earlier European application. Since the subsequent application contained a main claim identical to the main claim of the first application, which had been granted by the time the subsequent application entered the European phase, the subsequent application was refused with a reference to the Guidelines for Examination in the European Patent Office, which clearly states that it is an accepted principle in most patent systems that two patents cannot be granted to the same applicant for one invention.

The Board of Appeal found that while it is generally recognized in the Contracting States that double patenting arising from a granted national patent and a granted European pa-tent is not allowed there is no principle of law generally recognized in the Contracting States for refusing a European patent application on the ground of double patenting.

Furthermore, if a European patent application claims the priority of an earlier European application the applicant may obtain one extra year of protection, since the priority year is not counted in the 20 years term of the patent. Thus, the board recognized that the applicant has a legitimate interest in claiming priority from a European application.

The conclusion from this is that applicants can now advantageously file a first application as a European patent application and subsequently file another European application or a PCT-application claiming priority from the first. The first application will provide the applicant with provisional protection in the Contracting States, so that upon grant of the second application the invention may be protected for up to 21 years!

Anders Heebøll-Nielsen
Associate, Certified Danish Patent Agent

Maria Stenbäck
European Patent Attorney and head of the specialist team "European Patent Law". Our European Patent Attorneys and our Attorneys at Law work closely on all IP matters, e.g. preparing, filing and prosecuting European patent applications.

If you have any questions or want to comment on the blog entry, please feel free to send an e-mail.

IP in China? It’s not all bad

Recent statistics on the outcomes of reported IP litigations in the most important courts in China are encouraging:

The total number of trademark-related cases in 2009 handled by the Chinese courts was 6,906, up almost 11 per cent from 2008. 2008 was up by 79 per cent in relation to 2007.

Administratively, the numbers are on an equally steep climb. In 2009 there were an impressive 37,002 cases handled by the Chinese Intellectual Property Office (SIPO). This follows a substantial injection of funds whereby the backlog of cases has been reduced from a good 11-13 years to 1-1½ years. There is no question that there is still room for improvement. Still, seen from my point of view it is a dramatic improvement and one that promises well for the future. A backlog of 1-1½ years is better than what we encounter in many countries.

It is important to remember that these statistics relate just to reported cases, so they may not tell the whole picture. In fact, if anything, they may underplay the extent to which foreign parties are successful.

There is, however, one overshadowing problem: enforcement. It has been hard to get favourable decisions enforced. This also means that decisions do not act as a deterrent.

In the past year China has had more than its share of embarrassing – and in some cases fatal - domestic cases, especially when it comes to drugs and additives. We remember the counterfeit diabetes medicine, the blood thinner Heparin to which an unlawful and dangerous chemical was added, and – not the least – the scandal about powdered baby milk where Melamine had been added. These cases originated in China and the victims were also Chinese; in a very unpleasant way they stress the fact that trademark abuse and counterfeit products are not just belts, sunglasses and watches.

There is hardly a question that consumerism in China is on the rise and that this will equally reflect on IP. China is no longer just a provider of cheap labour and cheap goods to consumers in the West; China is a nation of increasingly demanding consumers – and the counterfeit cases to match will follow in the foot paths of the consumers.

So where does this leave us for the moment? Well, the statistics are very persuasive: China has allocated more resources to the IP authorities. One can hope that the sad drug piracy cases will also ensure that enforcement will get equal attention.

Thorbjørn Swanstrøm
Attorney at Law

Please feel free to comment on this blog post by sending Thorbjørn an e-mail!

Is use of a Community trademark in one of the EU member states sufficient?

As is well known, a Community trademark (CTM) must be put into genuine use within five years of the registration date in order to maintain protection. When the Community trademark was launched in 1996, it was decided politically that use “in the Community” was satisfied by use in one member state. This decision was laid down in a Joint Resolution from the European Commission. The European trademark authority, OHIM, decided to follow this resolution in practice and still does today.

Since then, the EU has expanded as a lot of countries, including smaller countries such as Cyprus and Malta have joined. Consequently, it is ever more discussed whether use in one member state remains sufficient or whether it is time to change this practice. In addition, the Court of Justice of the EU has laid down in a case concerning another legal area that a Joint Resolution is not legally binding. Naturally, this has contributed to the uncertainty as to whether use in one member state is sufficient notwithstanding that OHIM adhere to their practice.

Trademarks in Belgium, the Netherlands and Luxembourg are managed by one communal regional authority. In connection with a trademark case (the ONEL case) in Benelux, this authority has made a decision stating that documentation of use in one member state of the EU is not necessarily enough to document genuine use of a CTM.

The reasoning of the Beneluxian authority is that a trademark right is an exclusive right. In order for this right to endure, it must be put into genuine use. Consequently, it would be contrary to the fundamental consideration of trademark protection if the scope of the protection by far exceeds the geographic area in which the trademark is used.

The delivered judgment will most likely be appealed to the Appellate Court in The Hague. In this connection, the Appellate Court will presumably ask the Court of Justice a number of preliminary questions concerning the interpretation of the geographical requirement in connection with documenting use of a CTM. Hitherto, the Court of Justice has ruled that genuine use in Austria could be sufficient in order to document use of a CTM.

So far the ONEL case leaves an uncertainty concerning the existing practice for documenting genuine use of a CTM. For the time being, OHIM adheres to the practice that use in one member state is sufficient. In addition, OHIM has expressed criticism against the judgment in the ONEL case. Supporters of the opposite point of view argue that a CTM must be put into genuine use in all 27 member states. The relevant Danish authority (the DKPTO) believes that the answer must lie somewhere in between.

An important consideration of the CTM system is the fact that markets/countries are open to competition, i.e. that trademark owners do not have to apply for trademark protection every time they enter a new market within the internal market of the EU. In addition, an intensification of the geographical requirements could make it more difficult for smaller companies to achieve and maintain a trademark registration in the EU. Furthermore, the cost of a trademark protection will increase if smaller companies are forced to protect their trademarks nationally in a number of member states on account of the fact that it is uncertain whether their CTM will endure.

We regard a change of the existing practice as a threat under the current CTM System. Consequently, we have worked in International forums at maintaining the existing practice according to which genuine use in one member state is sufficient to document use of a CTM. Of course there is a risk that the CTM register will be filled with trademarks that are only in use in few member states. However, a regulation hereof should be handled differently, e.g. by intensifying the existing practice concerning lists of goods and services.

The entire CTM system is under review by the European Commission this year. In this connection, the Max Planck Institute is carrying out surveys concerning use of a CTM among other things. It shall be interesting to learn if the users of the CTM system demand a clarification of the practice and in such case if that practice will be laid down in a new legislation instead of being left for interpretation by the Court of Justice of the EU. We will be following the progress and hope that the existing practice will be laid down legislatively.

In any case, we will encourage CTM owners to put their trademarks into genuine use in as many member states as possible – and to make sure to save all documentation of genuine use.

Anette Rasmussen and Line Wittendorff
European Trademark Attorney and Trademark Attorney

Please feel free to comment on this blog post by sending Anette and Line an e-mail!

Software inventions may still be patented – referral G03/08 found inadmissible

For many years, applicants, practitioners and third parties affected by the status of software patents have requested and hoped for guidance from the Enlarged Board of Appeal on the issue of patentability of software. Some were hoping for a restricted practice, some for a more liberal approach. In the end, status quo prevailed. In a 55 page decision, issued on May 12, the EBA found the referral from the President of the EPO to be inadmissible.

The main reason for finding the questions inadmissible was lack of divergence in the cited decisions. In three of the four questions, the EBA came to the conclusion that the alleged divergence identified by the President was based on misunderstandings of the cited decisions, leading to incorrect assertions. Between the lines, the EBA indicate that they believe that this referral to the EBA could have been prepared with more care.

Only in one of the questions, the EBA admitted that there existed a difference in the reasoning between two TBA decisions. The question was related to the influence of claim wording on the exclusion from patentability, and more specifically asked whether the exclusion of computer software as such in Article 52(2) EPC is applicable only when a computer program was claimed as a computer program, and not, for example, as a record on a carrier.

The EBA recognized that the cited decisions (T1173/97 and T424/03) followed different approaches on this point. However, the EBA considered this to be a deliberate development of jurisprudence, and thus not cause for guidance from the EBA. As motivation for this conclusion the EBA made reference to numerous decisions citing T424/03 or cases following the same approach, and noted that no decision cited T1173/97 on this issue.

Although formally finding the question inadmissible, the EBA with their reasoning clearly accepts and confirms the approach presented in Comvik (T641/00) and Hitachi (T258/03), and developed and elaborated in Duns (T154/04). According to this approach, any technical means in a claim will be sufficient to avoid the exclusions in Article 52(2) EPC. At the same time, any individual feature may be disregarded when assessing inventive step with reference to Article 52(2) EPC. In practice, therefore, very few applications are refused as relating to software as such, but instead many software related applications are refused for lack of inventive step.

The EBA also noted that even if would be desirable to improve legal uniformity in Europe, as suggested by Lord Justice Jacob, judiciary-driven development of law is only possible to a certain limit. Beyond that limit, the legislator must take over. This has to be seen as a clear message from the EBA to the contracting states, that if there is any discontent with the current approach of the EPO regarding patentability of software, then the EPC should be amended.

Fabian Edlund
European Patent Attorney and member of the specialist team "Software".

The Awapatent software team is especially focused on the specific conditions of the software sector, and provides counsel across the entire IP spectrum. Our specialities include patent prosecution, copyright, Open Source, licensing and commercialization.

Please feel free to comment on Fabian's blog post by sending him an e-mail!

BRCA patents in Europe

An ongoing lawsuit in the US has attracted a lot of attention worldwide. The American Civil Liberties Union has, together with other parties, sued the US Patent and Trademark Office, Myriad Genetics and others. On Monday 29 March 2010, a judge in a federal District Court in New York ruled that the “Myriad patents” in the USA are invalid, and that patents on isolated genes are not lawful. The verdict is likely to be appealed to the Court of Appeals for the Federal Circuit.

The controversy centers on patents on breast cancer genes BRCA1 and BRCA2. In 2009, when a decision was reached about the BRCA1 patents in Europe, Niklas Mattsson had the following to say about the European situation. The article has been previously published in Swedish in the magazines Pharma Industry and Onkologi i Sverige.

Patents on genes, especially human genes, have been a focus of fierce debate over the past ten years or so. The debate has been profoundly influenced by the controversy surrounding the “Myriad patents”, a number of patents covering the BRCA1 and BRCA2 genes, and the use of the genes in the diagnosis of cancer. The patents were initially held by Myriad Genetics Inc and a number of research institutes and US government agencies. Through two decisions in November 2008 the European Patent Office (EPO) decided the proper scope of the patents for the BRCA1 gene in Europe. See also our previous blog post.

Different views on gene patents

According to established jurisprudence in Europe, patents on isolated genes and their use are permissible, as long as the general requirements on novelty and inventive step are fulfilled. Detractors of the patenting of gene inventions often refer to the Myriad case, claiming that it illustrates the undesirable consequences of the current situation. These detractors argue that the system should be changed so that gene inventions can no longer be patented, or at least so that the possibilities are strictly limited. Proponents, on the other hand, have argued that the current patent system works well. According to the proponents, the problems arising in the Myriad controversy have more to do with business ethics and licensing policies than with a perceived but non-existent problem in the patent system.

Myriad and the BRCA patents

Myriad was established in 1991 as a spin-off from the University of Utah. The founder, Mark Skolnick, was a researcher at the university, and member of an international consortium that sought to find genetic links to breast cancer. Through extensive research, scientists from Myriad, the University of Utah and other institutions succeeded in identifying and sequencing the two genes BRCA1 (in 1994) and BRCA2 (in 1995). In addition, they identified links between certain mutations in the genes and an increased risk of breast and ovarian cancer.

Based on this genetic information, Myriad was able to develop diagnostic tests and start commercializing them. Naturally, the company had an interest in protecting its investment with the aid of patents.

Consequently, Myriad and its partners filed a number of patent applications in the USA, following these up with applications in other countries. In Europe, they made use of the EPC, filing the applications with the EPO. The scope of protection in the patent applications was directed to the genes as such, as well as the use of different gene variants to determine the risk of breast and ovarian cancer. In 2001 after what, in the circumstances, may be regarded as a more or less normal prosecution time, the EPO granted the patents with some amendments.

Broad BRCA1 patents granted in Europe

Through three different BRCA1 patents, Myriad was awarded exclusive rights to the isolated BRCA1 gene (European patent, EP, 705 902 B1), to use of the gene in cancer diagnosis in general (EP 699 754 B1), and to some 30 different mutations in the gene that are associated with an increased risk of cancer (EP 705 903 B1). Regarding BRCA2, there is one patent (EP 785 216 B1) covering detection of one specific BRCA2 mutation in a particular population, and a pending application (EP 1 260 520 A1). The present article is concerned only with the BRCA1 patents.

Having obtained these patents, Myriad contacted healthcare providers throughout Europe and offered licenses for the patents. Many people felt, however, that the prices that Myriad asked for using the technology were excessive: fees of up to 3,000 USD per sample were reported. Also, the licensing terms did not allow licensees to perform tests themselves, but mandated sending samples to Myriad for analysis. Myriad, on the other hand, has pointed out that its analysis is very accurate, and that the company provides a level of confidence that cannot be equaled in a general hospital or clinical laboratory that does not specialize in the analysis.

In addition to the controversies surrounding Myriad’s demands, some commentators held that the situation illustrated a more general problem; namely, the negative consequences of granting this type of patent in the first place. Interestingly, very few other gene patents have attracted the same amount of attention, despite the fact that thousands of such patents have been granted in Europe, both before and after Myriad’s patent applications (see for example Caulfield et al, Nature Biotechnology 24(9):1091-1094 (2006)).

Opposition against the patents

Embodied in the EPC is a possibility to question the decision of the EPO to grant a patent through the filing of a notice of opposition within nine months from grant. The opposition is examined in a form similar to a lawsuit, and the EPO determines whether the patent owner or the opponent is right. The possible outcomes are that the patent is revoked in its entirety, limited in some way, or upheld in unchanged form.

In the light of the conflicts surrounding Myriad’s licensing policy and the general debate on gene patents, it is hardly surprising that the EPO received an uncommonly large number of oppositions against the BRCA1 patents granted in 2001. Also unusual was the fact that most of the opponents were not direct competitors of the patent owner, but organizations and institutes that were eager to question the existing system.

Oppositions were filed by, among others, Greenpeace, the Minister for Public Health in the Netherlands, and the Social Democratic party in Switzerland. Oppositions were also filed by the French research institutes (including Institut Curie) that had once been involved in the breast cancer consortium together with Skolnick and the University of Utah.

EPO decisions limit the patents

The opposition procedure concerning the first patent – that covering the BRCA1 gene as such – was concluded in 2007, following an appeal procedure (Board of Appeal decision T1213/05). After the dust had settled, it became clear that Myriad had lost patent protection for the gene as such in Europe. It is important to note, however, that the outcome was not the result of a decision that genes cannot be patented, but a consequence of Myriad’s failure to satisfy the traditional criteria for obtaining a patent. The patent applications originally filed described a DNA sequence that contained errors. After the filing of these applications, the correct DNA sequence was published before Myriad had filed a patent application disclosing this sequence. Thus, the correct DNA sequence was already known before a patent application containing this sequence was filed: it was, therefore, not novel. No novelty, no patent.

The final decision with regard to the oppositions against the two other patents on BRCA1-related inventions was reached in November 2008, also after appeals against the first instance decisions (Board of Appeal decisions T80/05 and T666/05). The written decisions were issued by the EPO on 7 March 2009. From the file histories it is clear that the broad protection sought by Myriad from the outset – and initially granted by the EPO to some extent – has been severely limited. What remains is patent coverage of one single specific cancer mutation, and of the detection of frame shift mutations in the gene.

The decisions state the exact reasons why the patent claims had to be limited, and in these two cases, too, this is due to failures to meet the “classic” existing rules, rather than any sign of a change in jurisprudence concerning gene inventions in general.

It remains to be seen what future commercial effect these patents will have on the testing of BRCA1-related cancer risk. Whoever supplies tests for BRCA1 mutations for the purpose of diagnosis should study the patents as now finally decided, to ensure that there is freedom to operate.

A working system of checks and balances

The general debate on the patent system and gene inventions continues in Europe, despite the fact that the Myriad case is, to all intents and purposes, closed. At present, there is a discussion concerning whether the best way forward would be to introduce a limitation of the scope of protection, such that a patent owner should not be able to block all uses of a gene, even though it had never before been identified and isolated, but only obtain an exclusive right to the actual use described in the patent application. Some European countries have introduced such legislation, but it is too early to tell what the consequences will be.

To summarize, the European chapter in the Myriad Genetics patent saga is practically concluded. Despite widespread concern that European patent offices are over-generous in granting patents on gene inventions, it appears that the existing system and the conventional patentability criteria – including the possibility of opposition – have worked well in this case. The application of the criteria during EPO’s processing of the applications led to limitations on the patent protection that Myriad applied for, and what is left could be said to correspond to a reasonable compensation for the contribution to the art that Myriad and their collaborators provided.

Niklas Mattsson

European Patent Attorney

Niklas is a member of the specialist team "Life Sciences". The Life Sciences team consists of some 30 patent attorneys – mostly European Patent Attorneys and/or Swedish authorized IP attorneys – with extensive experience and expertise in life sciences.

Please feel free to comment on Niklas's blog entry by sending him an e-mail!