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2004-03-11 The Patent System Under Scrutiny

Prof. Marcel Crochet, chancelier de UCL Louvain

importance croissante des brevets comme source de financements pour UCL

Jérôme Grandboulan

director for innovation, research and development of Arcelor Group

Arcelor is a large industrial group based on steel production that finances research at UCL and whose business model is based on patents.

Hervé Hasquin

premier ministre de la communauté Wallonie-Bruxelles

Mr. Hasquin says he was one of the first to energetically pursue adoption of patenting in universities in Wallonia since the 1980s and is happy to see that patents have become an additional source of revenue. Today financing has to come from multiple sources, government being only one of them.

Reuter

replacing Serge Kubla, minister of economy and research of Region Wallonne

parle d'un "grand mouvement" de "valorisation de la recherche" avec l'aide du système brevet universitaire.

des centaines de sociétés spinoff ont été créés.

le brevet universitaire est un moteur de developpment en Wallonie

Il faut que les entreprises sortent du cocon wallon

Bernard Remiche

professor, director of Arcelor Chair, lawyer

systeme de brevet mis en question

inauguration de la chaire Usinor en 2001, renommée Arcelor

financé avec l'aide du groupe industriel Arcelor

technologie & droit

Frederick M. Scherer

professor of economics, Harvard

virtuous rent-seeking process

patent-based pharma profits only slightly higher than normal profits due to competition (14% vs 12%), R&D driven by expected profit, "virtuous rent-seeking process". Scherer was at the head of a government commmission which invested pharma profits.

presents a mathematical model which demonstrates that it is appropriate for poor countries to allow imitation of drugs, suggests a system in which companies could be allowed to patent either in 1st or 3rd world but not both.

Michel Vivant

Système de Brevets né véritablement au 18ème siècle.

lien entre brevet et industrialisation et formation de nations:

• Grèce adopte tard, industrialisation tarde
• pays africains adoptent comme symboles nationales
• Algérie reforme son système pour embracer l'universalisme TRIPs

Brevet triomphant

sur tout

Brevet impérial

par tout

Cela suscite résistance.

Plusieurs formes de critique se font écouter:

• l'objet du brevet n'est plus une invention
• le brevet ne rémunère plus un apport fait à la société; il est accordé sans véritable exigence.
• le système devient ingérable. Bruce Lehmann expliqua a Genève récemment que pour un véritable examen on aurait besoin d'un mois pour chaque brevet, mais ce n'est pas faisable.
• divulgation ne fonctionne pas, impossible de lire milliers de page pour un brevet génétique. Revendication "programme-produit" nécéssite divulgation de code source mais inlisible.
• manque de contrôle des institutions du système, notamment OEB

Carlos M. Correa

professor for patent law and innovation policy at Buenos Aires University

shows that innovation speed is decreasing and patents are being granted for more and more trivial incremental innovations. Number of new chemical entities per year is very small, number of chem patents very high. System is biased toward patent owners.

Utility of system as a whole is in doubt and there is little reason especially for developping countries to accept it.

cites warnings of US-President Bush about bad pharma patent practise.

Mexico eagerly adopted patent system in 1991 but reaped no benefit, as a new study shows.

Thierry Sueur

vice-président et chef de propriété industrielle de Air Liquide, ancien chef de propriété industrielle de Thomson Multimédia, parle pour UNICE, l'association des associations qui représantent l'industrie européenne, grandes entreprises autant comme PME.

L'industrie souhaite un système de brevets centralisé, bonmarché et éfficace.

Il y a beaucoup de critique du système en Europe, et cela est un des problèmes spécifiquement européens. On ne peut gagner dans la lottérie que si on joue, et quand on n'est pas sur le coté gagnant, on critique.

Le Japon, a l'initiative du premier ministre Koizumi, a adopté une stratégie de état basé sur propriété intellectuelle.

Académiciens americains comme Bessen & Maskin écrivent pour les Européens. Aux États Unis ont ne les écoute pas. Les décideurs américains n'ont même pas pris note du fait que ces débats existent et ne les prennent pas au sérieux.

L'industrie souhaite un examen rigoureux et des brevets de qualité.

L'industrie souhaite un brevet communautaire unilingue (Anglais). Le brevet Européen est au jour d'hui trop chère, ce qui fait que les Européens ne s'investissent pas assez dans le système. C'est a cause de cette manque d'investissement qu'on a le climat particulier anti-brevet en Europe qui contribue au cercle vicieux.

L'industrie souhaite un système de jurisdiction centralisé au niveau de l'UE.

Jean-Louis Vanherweghem

professor, president of Free Univ of Brussels

expresses doubts about wisdom of universitarian patenting

Patrice Vidon

patent lawyer (conséil en PI), head of patent lawyer association

fears negative impact of European Union patent (community patent). EU patent would disproportionately favor invasion of non-european patents (e.g. US+JP). Language barriers are useful in the medium term. Apart from Germany, most of Europe has a too low patenting intensity, would therefore be disadvantaged by union patent system.

Discussion

Jerome Reichman

protests against Sueur's statement that US is happy with patent system as is and not discussing its drawbacks, says that patent system is seen as disastrous in US. Sueur responds that he knows Reichman and some other academics think like this, but these academics are irrelevant to political decisionmaking in the US, Reichman is better known in Europe than in the US. Only in Europe is there a climate where politicians lend an ear to such debates. This is because Europe is on the losing side in the patent competition.

Bernard Lang

• Sueur's support for software patenting assumes that only "good" patents would be awarded, but the the system has never exhibited such behaviour. Hence the quality should be improved first, before discussing extension.
• Vidon criticizes the EU community patent arguing that it will favor invasion of non-european patents. He should then logically be against software patents which will have the same effect. But isn't he really more worried about increased competition of anglo-saxon professionnals in his own business as IP consultant?

  Note: Lang has been involved in public debates pro/contra software patents with Vidon in France. Vidon responded to Lang by complaining that "open-source advocates" unfortunately often personalise the debates.

Hartmut Pilch

asks for distinction between what kind of exclusivity may be desirable and what is practicable. E.g. requirements such as "high level of inventivity", "proper breadth" may not be translatable into practise. Moreover, in some fields, such as software, objects which fulfill all the specifications of a desirable patent-like right may not exist at all or be very rare. So let's talk about real claim scopes and verifiable rules for achieving them, rather than about some projections of desire for an ideal world.

2004-03-12 09.00-12.30 Logiciels et Creations Commerciales

Vincent Cassiers

copyright inadequate for software

technicity concept meaningless

need for good software patents

EU directive project doesn't satisfy the need, should be scrapped

Paul Belleflamme

professor, economist, centre for operations research and econometrics of UCL

sans protection

sous-production,

avec protection

sous-utilisation

brevets doivent être étroits, profonds et utiles

Theodora Karamanli

lawyer, representing European Patent Office (EPO)

Art 52(3) ("as such" clause) calls for restrictive interpretation of what is not patentable. EPO has found good solutions.

Are computer programs patentable? Answer is "It depends".

Are business methods patentable? Answer is "Clear No", errh, not as such.

Programs with technical effect beyond the normal physical interaction between program and computer are not programs as such.

Computer programs that implement business methods can be patented if they make a technical contribution in their inventive step.

Definitive caselaw is IBM 1, 2 and Pension Benefits System

There is no problem of lack of democratic control over EPO, because

• technical boards of appeal are independent
• anybody can file an opposition

Bernard Lang

economics of information different, require new approach

Gérard DeFranc

employee of Thales

presenting Unice position

software is a heavy industry with great investments

40% specification, 20% implementation, 40% testing

seems to imply that copyright covers only 20% of the work

gives example of program claim which he says is needed to protect aerospace investments

Bernard Lang

economie differente du logiciel

Hartmut Pilch

conflit EuroParl Consilium sur la directive

1. K. Verma

   professor of law in Indian Law Institute

   non-brevetabilité du logiciel confirmée en Inde

   5% des applications logiciel sont indiennes

   taux de croissance de l'industrie du logiciel indienne 50% par an

   brevetabilité doit être reconsidéré quand l'industrie indienne est devenu plus forte

Ruth Okediji

summary and comments: copyright inadequate, patents may be more appropriate provided examination is carried out more strictly.

Discussion

Benjamin Henrion

dialogue of the deaf between Parliament and Council, also no substantial progress in this conference. Problem of how to remedy the evident failures has not been tackled, solutions proposed by Parliament have been ignored by many speakers who however are not seriously proposing anything better. No serious effort is being made to bring about rational and constructive dialog.

Michel Vivant

Agrees with Henrion.

Commission de facto declares programs for computers to be technical inventions in the sense of patent law. Interests of a large group of players are not taken into account, questions not asked.

Karamanli statement on EPO accountability is shocking.

Opposition procedure only corrects individual patents but doesn't allow review of judicial doctrines. If TBA go astray, it is very difficult to correct them. Creating a new EU patent court, as Sueur and others proposed, also does not address the problem that unelected bodies are setting new rules.

EU often demands democratic reform from non-EU countries, so introducing democratic reform in the EU patent system might be a good idea.

EPO examiner

Twenty years ago exactly same filter structure for which today a software patent is granted was done in hardware. If a patent was the right way to reward inventors 20 years ago it is the right way to do the same today.

DeFranc

Opensource movement is coexisting peacefully with patents, not being harmed.

Cissé

Les problème expériencés indiquent que le système n'est plus adapté pour les modes de production d'au jour d'hui.

Pilch

Examples de dégats subi par des PMEs et éffets néfastes sur projèts libres (geogrid).

Réduction a la logique (= aux logiciel) est une façon de faciliter l'invention. Cela change l'économie, les monopôles lourds de jadis ne sont désormais plus adéquats.

2004-03-13 15.00-18.30 Interet Publique

Christine Nozaradan

young researcher of Arcelor chair

philosophical deliberations about "public interest", why this subject is both vague and unavoidable if research is to be of relevance

Abdoullah Cissé

professeur Ghanien, vue très critique du système et de son impacte notamment sur les pays en voie de developpement

Michel Trommetter

economist, has profound doubts about utility of the patent system

Theodora Karamanli

lawyer, representing European Patent Office

EPO takes public interest into account by publishing patent descriptions and by allowing people to file opposition

Jean-Charles Van Eeckhaude

CEC DG Commerce

TRIPs Art 7-8 et al allow broad interpretation in favor of public interest. Rightholder lobbies are pressing for extreme interpretations of TRIPs and finding support in WTO arbitration system.

Substantive Patent Law Treaty (SPLT) threatening to go even beyond TRIPs. US government has 40 permanent representatives in Geneva pressing for extreme positions, EU has only 10, NGOs even less.

Yet influence of patent lobby is slowly diminishing as non-patent NGOs grow stronger.

"IP Community" is digging its grave, NGOs are helping to save them from their own misguided policies.

Francis Leyder

Atofina Research s.a. Belgium

Jerome Reichman

professor of law at Duke University

1. S. defence industry based on extensive use of compulsory licensing.
2. S. patent lobby pressures other countries not to use compulsory licensing.

Discussion

Hartmut Pilch

• "balance between rightholder interest and public interest" is wrong model. It would be more correct to speak of a balance between various private interests, including those of rightholders. If these are well-balanced, the public interest is served. Policy should never, like CEC in the swpat case, disregard one party's interests wihtout giving a good reason.
• If opposition procedings reflect public interest then the opponent needs to be rewarded, e.g. the patentee should pay him in case his patent is rejected or narrowed.
• CEC DG Markt is insisting on extreme interpretations of TRIPs, just like US. From the news it seems that even Pascal Lamy of DG Trade sometimes goes with such interpretations, see Microsoft antitrust case. Is Mr. Van Eeckhaude too optimistic ?

2004-03-14 Conclusions and Closing Speeches

Josef Drexl

professor for competition law at Max-Planck Institute

summary of public interest session

Ruth Okediji

professor of law, Minnessota University

summary of software session. everybody agreed that copyright is inadequate for software. EPC forbids patenting on computer programs, but not when they have a technical effect. EU Parliament's vote on software patent directive has stirred controversy, making groups like UNICE unhappy and groups like FFII happy. Since we have software patents we must make the best of them, try to improve examination procedures.

David Vaver

professor of law, Oxford University

summary of biotech session

Michel Vivant

criticism of communication failures, proposed remedies:

function principle

look at function (performance) rather than structure

reality principle

look at reality of what is being invented/claimed rather than at abstractions on whose meaning there is no consensus (e.g. "technical")

Discussion

Reichman

Problem of today's competition is "zero lead time". In chemistry, pharmacy, software et al, products carry their structure information on their face, can be immediately imitated. This requires some kind of regulation, but not based on defined exclusion scopes but on liability.

Alberto Bercowitz

EPO and CEC have recently been advocating what is in fact a "sui generis software patent law", a special regime for software patents which differs from the general rules of patentability.

1. years earlier the software directive created a "sui generis copyright".
2. years earlier, the WIPO proposal for a sui generis software law was rejected. This is rather ironic.

Bernard Lang

World Peace is imminent, military spending will be transferred to universities, so lets double the number of professors immediately.

If you find the above logic naive, then why do many people in this room continue to propose redoubling of patent examination efforts as a means of solving problems that for more than a decade haven't been solved this way?

Rules of the patent system are a formal game and there is no reason to believe that they will produce satisfactory results. It would instead be better to take account of the evidence that has been found in the last decade. If the architecture is broken, then don't build new structures on it.

Hartmut Pilch

Copyrighted software is difficult to imitate, information is usually (contrary to what Reichman said) not on its face but hidden. Even if source code is open, working around software copyright often takes as much time as writing the original. For a software project, patents offer an expensive and weak protection. Working around 20 patents that are obtained for 1m lines of code may take 2 manyears while working around the copyright on these 1m lines may take 20 manyears. When assessing whether an exclusion right is strong or weak, one should argue in terms of cost of imitation and other cost factors, rather than in terms of "expression", "literary work", "invention" and other abstractions.

Ms Okediji's summary report should have mentioned that the EPO's interpretation of Art 52 EPC is not uncontested. The king is nude, and even if that is inconvenient to his representative who is with us, it must be said.

See Moses, the Ten Commandments and Stealing with a Further Ethical Effect

Philippe Busquin

EU commissioner for research

importance of R&D, innovation and Community Patent for EU

Bernard Remiche

procedings will be published later this year

Impressions of Benjamin Henrion

I have the same impression after the two days here at the conference in Louvain:

"It's clear that it's a deaf dialogue from the start". For me the start was in 1999, when I signed the first online petition which collected some 10.000 signatures.

I was believing that european democracy was working, but it's not. Now I have the proof with all I know from this story is that:

LOW-LEVEL DEBATE

the quality of the swpat debate is very LOW: some speaker here in Louvain said that, without anybody contradicting. They fail to pose the right questions, and fail to write the demonstration of their patent system, and if you critise the system, they say it's a human system, and it's not perfect. The overflooding of information on the swpat topic shows that many people cannot make distinction on what are reallities (the constraints) and what are only ghost arguments (that kind of arguments that are not strictly needed to write law). Some people like IP fools wants to speed up the adoption of the law, so as to keep the debate at a low level, and do not give time to people to join and to debug their ownfully buggish directives (in the strict sense of the law, which is based on strong realities).

MACRO-ECONOMIC STUDIES

they are not made by our governements, even the economic scientific experts are playing with really highly biaised knowledge of economy. They just put forward simple statements that are easily breakable but they do not go very far in their studies. Even the minister of Economy here in Belgium can not show us a macro-economic study of the proposed patent system. They do it in the US, why not in EU? Instead of that, they encourage the creation of legal uncertainty, and creating artificial businesses for lawyers.

DEMOCRACY

the Parliament has a position which was pushed by the majority of the "market players", which are mainly people who moved to the Parliament to express their views and fears, not professionnal lobbyists, and I think many MEPs were impressed by that (in a good sense). The Parliament has never seen such pressure coming from everywhere for a project of directive. It will be a SHAME for Europe if this directive goes to an end, and if we will have a bullshit law at the end. One way of raising the debate at a higher level is to slow down the adoption of the law, involve a lot of people in it.

Conference Languages

The conference was conducted in a spirit of francophony (cultivation of the French language). Most of the speakers from non-english countries presented in French. Very few people needed the simultaneous interpretation, and those who did said that it was very well done, thanks to intensive preparation of the interpreters on the basis of preparatory texts which existed in both languages.

Sidetalks about "Industrial Application"

Bercovitz explained that CEC is advocating "sui generis software patent". and found this ironic as an addition to "sui generis copyright" after refusal of "sui generis software law" in late 70s.

It was understood that CEC-style sui generis patent law is incompatible with TRIPs. Art 27 TRIPs states a limited set of allowable conditions of patentability which can be interpreted (e.g. by definition of "technical", "industrial"), but not changed by addition of new concepts such as "technical contribution in the inventive step".

Bercovitz mentioned an article written by him in which he explained what "industrial applicability" means. Spanish law is nowadays not quite as explicit as Belgian law on this:

L'article 2 LBI indique que l'invention brevetable est "susceptible d'application industrielle" c'est-à-dire Cette condition de brevetabilité exige que l'invention ait un caractère directement opérationnel, L'industrie désigne "l'ensemble des activités économiques ayant pour objet l'exploitation de matières premières, de sources d'énergie et leur transformation, ainsi que celle de produits semi-finis en biens que "son objet peut être fabriqué ou utilisé dans tout genre d'industrie, y compris l'agriculture" .

But Spanish law also states a requirement that the patent must be directed toward an activity of bringing products to the market (rather than restricting freedom outside the market) and this implies that the products are material. The same requirement appears in german patent law commentaries. The "industry" definition of the EP is in line with this traditional concept which would become meaningless without such an interpretation.

EPO in justifying software patents often quotes German word "gewerblich" as meaning "commercial", but this is at odds with the way in which the word was used and defined in the german tradition.

Berkowitz spoke at AIPPI recently and appears to be a member. He acted as chairman of a session.

There seems to have been a generation change at mpi.

Ralph Nack may be seen as an exception to this rule, but even Nack (who wasn't present in Louvain la Neuve) is clear on some things. Nack has also discovered that the swpat sophistry created a sui generis right (e.g. special rules that apply only to software, such as failure to distinguish between the scope of exclusion and the achievement whose patentability is to be examined, mingling of technicity with non-obviousness, new claim forms with special rules). Apparently these are unheard of elsewhere and designed mainly to circumvent general rules of patent law. Nack nevertheless tries to legitimate software patents by going to great lengths to discredit Art 52 EPC as well as the efforts of german courts to "pseudo-scientifically" ground the definition of "technical invention" in concepts of physics such as the "four forces of nature". Instead Nack advocates a system in which "technical" is defined by evolution of caselaw.

FFII Participants

Hartmut Pilch

arrivée

SN 2580 11MAR Berlin Tempelhof-Bruxelles 0905 1030

LH 5923 13MAR Bruxelles-Munich 1710 1830

Benjamin Henrion (jour 2-3)

Jonas Maebe (jour 3)

Webshop Poster Distribution

large posters of the webshop were displayed and distributed to participants. At least one such poster will probably be seen in the EPO soon. Many will show up in universitarian research institutes.

Thanks to Jonas, Wiebe et al for making this possible.

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