30 January 2007

Gowers Review

To Lovells, for a seminar on the Gowers Review starring the man himself. But most of the talking is done by a panel including Pumphrey J, John Burt from IBM and Robert Anderson of Lovells. Even before that, over tea and cakes (what’s called “registration”, though we are already registered and only need to be give badges, souvenir pens and folders), I encounter two people I know well who work for a client, which is just a little disconcerting.

Mr Gowers tells us that there is a Gowers Implementation Team now working at the Patent Office, so we can be sure that his recommendations will be acted on and the fact that the acronym for the people bringing this about is GIT should presumably be ignored. (How can the Patent Office have named the team with so little regard for conventional branding wisdom? Or is this post-modern irony, which I am too old to understand, like the Review’s beloved hip-hop music?)

He explained that the Review covered the whole field of IP because it was apparent that people did not understand fundamental matters like the difference between copyright and patents, and he admitted that he was a little hazy about it. So too is the national press, his old paper included, but the very suggestion that they covered the whole area indicates a lack of understanding: the Review says virtually nothing about designs, and little about passing-off, and of course even in the areas where it had a lot to say it only looked at a few problem areas. Not surprisingly, with only a little over a twelve-month from start to finish to ask questions, receive answers and present them in a report. No wonder there wasn’t time to proof-read it.

The Review sought to find the common strands in intellectual property law without being “blinded by the differences”, he said, hence the focus on broad themes like enforcement, flexibility and governance – but why should the differences cause a problem? More to the point, surely, is the fact that these are diverse rights, which have emerged over time to do very different jobs. It started by developing an analytical framework, which drove the questions that formed the call for evidence.

On matters of substance, given that he only had a few minutes to give his presentation, Mr Gowers was brief. He did mention that the new Strategic Advisory Board would be set up later in the year, and the chairman would report direct to the Minister: and he also mentioned that a cross-Whitehall implementation group is in place with the Patent Office as the implemening agent.

The first of the panel of speakers was Kim Connolly-Stone from the Patent Office, who started by observing that the government has taken up the recommendations of the Review with the exception of one that is for the European Commission to deal with. 43 recommendations affect the Patent Office, and there are several other departments of state that have to take action (DTI, DCA, OFT and the Home Office). In addition the Foreign and Commonwealth Office and the Department of Culture, Media and Sport (among others) have roles to play.

Announcements about the new innovation support strategy would be made in the next few days, and the DCA will publish a consultation paper covering (inter alia) damages in the same time scale. Meetings are scheduled on the copyright aspects, which she acknowledged were among the most complicated recommendations in the Review. There would be more consultations by the Patent Office about fees and the fast-track procedures recommended in the Review, and the Office would change its name in April (perhaps the first day of that month would be an appropriate date). Completing the name change would be a tricky matter, though, with some 132 pieces of legislation mentioning the Patent Office by name.

Spring should see implementation of the copyright recommendations, she promised, though presumably the arrival of spring will not be measured this year by the appearance of daffodils. The timetable for the whole process will be published next week on the Patent Office web site, which is also when advertisements for the secretariat to the Strategic Advisory Board will be published (after which expressions of interest from prospective members will be sought).
Roger Burt from IBM (and TMPDF) considered the Review from the patent side, saying that it was a timely and well-conducted piece of work and welcoming particularly the “retroactivity” recommendations. He described the the EPLA, broadly endorsed by the Review, as “disruptive”, but applauded the recommendations on software and business methods patents and petty patents – “we really cheered!” – opining that the disastrous effects of a low-quality patent system are on display on the other side of the Atlantic.

On work sharing between patent offices, he had reservations: it would be disastrous (again) if the work of the USPTO were automatically to have world-wide currency, but if it meant that patent offices could concentrate on their own specialities, what would make sense. The Chinese patent office could search Chinese language patents, the JPO Japanese ones: the UK could play to its acknowledged strengths in biotech.

The Community Patent and the London Agreement were “fading”, he thought, and the former he was not bothered about – the fact that the pharmaceutical industry, loath to put all its eggs in one basket, would not it was its death-knell. For IBM, he observed that just a German patent usually sufficed, putting a big enough hole in the market to achieve their goals. As for the London Agreement, he feared that we might wait forever for France to sign up to using English, and might almost as well proceed without them.

He remarked on recommendation 22, which speaks of maintaining the high quality of granted patents in the UK, and on third party observations, which the profession virtually never used (preferring to use the “silver bullet” carefully, and not trusting the Patent Office to act effectively on observations). Beth Novek’s misleadingly-named (but if the Community Patent isn’t happening, why worry?) community patent review is supported by IBM, but TMPDF prefer to let the Americans try it out and find the problems before we give it a go. It would at least need some ground rules, a Code of Practice perhaps, lest applicants were to be drowned in citations of little or no relevance.

Of the Review’s recommendation for model agreements he approved, especially in the case of licences of right. IBM’s open licensing policy would benefit from such an initiative, and he explained that some 90 per cent of IBM’s patents cold be endorsed licence of right but for the fact that they rely on them for defensive purposes, to promote cross-licensing arrangements. Within the context of the Open Invention Network, royalty free licences are made available, but on condition that rights are not used to attack Linux or any other open source programme. Within this context, standard form licences should be encouraged as a means of giving licences of right, but retaining some control on the part of the patent owners.

Robert Anderson of Lovells spoke about the enforcement aspects of the Review. Referring to the comparison of costs contained in the report, he pointed that the validity is a matter in Germany for the Federal Courts, which has a big impact on the comparative costs. In the Netherlands, validity and infringement are dealt with at the same time, but the judges are not very receptive to invalidity arguments, especially where there has been an opposition in the European patent office. As for what happens in France, he nearly observed that no one litigates there. However, up to a point, there is a free market in judicial services within Europe and competition between different national court systems. If the UK was bad, as the Review suggest (if only on cost grounds) that is, people would not choose to use it.

It is still the case that a decision of the courts in the UK is likely kill proceedings elsewhere. This will even apply to opposition proceedings taking place in the EPO.

The Review called for a fast track system in the patent’s county court, which is probably not addressing the problem that needs to be dealt with. Already, the Patents Judges are in power to dispense with almost everything, including cross-examination, oral evidence and experiments. Power exists to limit the jurisdiction of the Patents County Court by a statutory instrument, but it has never yet being done and it will probably be a good idea to differentiate the Patents County Court’s jurisdiction from that of the Patents Court in this way.

The next speaker was Dominic McGonigal from PPL/VPL. He began by saying that the Review does not help resolve the confusion that exists in many people’s minds between patents and copyright, and some of the leading questions in the call for evidence perpetuated this. The report focuses on the importance of knowledge, which of course is not a concept known to intellectual property law, and as far as copyright is concerned it seems to assume that its natural place is in the public domain. Copyright is referred to as a monopoly right, leading to monopoly pricing, a proposition for which there is little or no authority. It also refers to a contract between the creator and the general public, suggesting that copyright rewards the creator whereas it merely gives the creator rights which put them in a position to earn a living. The copyright system encourages access, especially in the digital environment, and he pointed to the fact that there are 3½ million tracks available on I-tunes – baying the question over that something that is I-tunes is truly available.

The review identifies a policy deficit in the copyright area, and he said that this arises from the fact that the patent offices primarily an operations agency, concerned with registering things. The change of that institution’s name is purely cosmetic.

The review seems to adopt exceptions from copyright protection as a basic panacea for problems it identifies. Moreover, the fact that these are grouped together under the heading “flexibility” is misleading; legislative exceptions are rarely if ever flexible.

Regarding the extension of copyright term for sound recordings, various assertions were thrown against the idea of an extension and he quoted the Cambridge report commissioned by the review which attached considerable weight to the proposition that most people assume that the money will not get back to the musicians.

Recommendation 33, which suggest that there should be a market investigation into the activities of collecting societies, came completely out of the blue. As far as collecting societies are concerned, the only issue that appears to be on the agenda prior to the publication of the Review was cross-border licensing which is being taken care of by the European Commission.

Mr Justice Pumphrey told the seminar that 25% of the work in the chancery division, on one view, is intellectual property work. Litigation in this field is keeping several judges employed and he said that 5 are needed for the patents list. He expressed himself at a loss to understand how this is happening, but described the growth of IP Litigation as a “howling success”. There is an enormous amount of trademark work amongst it, and what he referred to as a worryingly large amount of patent work. However, the centre of gravity of intellectual property work is moving towards the licensing disputes, especially trans-national ones, and he referred particularly to the “phone wars” in this context.

The Review contained several of what he called “slightly rift-causing passages”. For example, it states that there are few differences in Europe as far as the remedies available in intellectual property cases are concerned, or the quality of decisions.

As for the EPLA, he described it as being “a persistent vegetative state”, saying that it gave him no pleasure to report this. The problem stems from a dispute between the French Foreign Ministry and the judiciary.

The London Agreement has been approved by the Conseil Constitutionel, but is still unlikely to make much progress. Industry does not want the community patent, and 67 member states do not want the EPLA. He referred to this as a minor, but important disaster.

The review observes that the EPO grants a lower proportion of patents than the US Patent and Trademark Office, and the Japanese Patent Office granted an even lower proportion of 29%. It takes its responsibility very seriously. He observed that this all depends on the requirement of inventiveness applied by the different patent offices, and in this context a forthcoming US Supreme Court decision would be important.

In regard to remedies, and in particular the availability of injunctions, he asserted that: “I have never refused an injunction in any case where the plaintiff has succeeded”. If the US was about to change the basis on which an injunction was granted that would need to be considered carefully. There is a compulsory licensing argument against it. We are now restricted by the enforcement directive and may be unable to fill any gaps in our domestic law because of it. As he observed, this seems to have turned into a community competence while no one was looking.

In the discussion that followed, Roger Burt observed that it is possible to get a patent granted in the UK in 7 months, so a questioner who seemed to be arguing for faster grant of patents seemed to be worrying unnecessarily. He also added that in the European Patent Office they think that half the patents they have are invalid.

Regarding the difficulty of enforcing patent rights, “after the event” insurance was not a satisfactory solution as the insurance industry had not yet got to grips with it in sufficient detail. Mandatory patent insurance as suggested by the European Community was “dead in the water”, according to Tibor Gold who also referred to a recent German case where the court had effectively done away with any distinction in the standard of inventiveness between a patent and a utility model, partly on the grounds that the patent standard has become so devalued that the two have converged. Another question related to the UK’s failure tp introduce any unfair competition law. Robert Anderson expressed himself deeply suspicious of nebulous concepts like unfair competition, and Catriona Smith of Allen & Overy said that a survey carried out by the European offices had come to the conclusion that unfair competition and passing of laws were not really very different.

1 comment:

Filemot said...

Wow Peter what an impressive report! Very sneaky of the Patent Office to talk about GIT and not mention that they were about to give away free IP audits in only two days time http://www.patent.gov.uk/press/press-release/press-release-2007/press-release-20070201.htm