European Patent Convention And Patent Vs. Trademark

Contents

TOC o “1-3” h z u 3. European Patent Convention PAGEREF _Toc376511918 h 33.1. Patentability under the EPC (1973 and 2000) PAGEREF _Toc376511919 h 53.2. Filling Formalities PAGEREF _Toc376511920 h 73.2. Dualism in EPC PAGEREF _Toc376511921 h 103.4. The Future of the EPC PAGEREF _Toc376511922 h 144.0. The Community Trademark System PAGEREF _Toc376511923 h 164.0. EPC Patent vs. Community Trade Mark PAGEREF _Toc376511924 h 21

1. Introduction

The EU controls one of the greatest economies in the world. Made up of 27 member states and with other nations waiting in the line to accede to the bloc, the EU enjoys a smooth flow of a wide range of goods, services, capital, and knowledge emanating within its boundaries. Ideally, the bloc has in place a number of universal rules that govern the production and movement of goods and services within the region. Again, to avoid undue competition while still maintaining market diversity and fluidity, the regulations also determine the conditions which goods, services, capital, and knowledge from non-members are accepted into the region. Outstandingly, the European Patent Convention regime and the EU trademark system are among the most important of these regulations which operate in a complementary manner in protection of the property intelligent rights applied by entities from the EU member states as well as the extent which similar property intellectual rights from non-member states are accepted in the region. Precisely, the flow of technological knowledge in the EU is managed by the provisions of the European Patent Convention (EPC) which is enforced by the European Patent Office (EPO) at Munich, Germany or The Hague, Netherlands and Berlin, German. Under the EPC, property intelligence rights are awarded through a harmonized unitary system that binds all member states (to the extent applicable in each member state). This paper attempts to discuss the EPC, the modalities of the EU patent system as well as how the patent system fares when juxtaposed against the region’s trademark system.

2. Theoretical Framework

This discussion will be tailored around a barrage of theoretical frameworks touching on issues of innovation and the applicability of such innovation in commercial and/or industrial realms. Apart from providing a basis for the discussion, the theoretical framework will help to limit the discussion with the selected topic. Moreover, it will provide an unbiased analytical account of the “state-of-affairs” of the EU patent and trademark systems.

It is conventionally accepted that the process of creating goods and services is dependent on the quality of technological knowledge available and that new technological advancements help to induce prosperity in the production of such goods and services. As such, the realm of research and development (R&D) particularly in matters touching on industrial production plays a core role in the advancement of existing products as well as the creation of new ones. However, when such knowledge advancements are restricted to a small area it does not achieve much economic gains. In this regard new knowledge and technological advancements should be allowed to flow freely across borders for maximum economic achievements to be experienced.

Ideally, the smooth flow of goods and services as well as human and monetary capital among nation states at the global market arena is not enough to achieve high and sustainable global economic progress: nation states need to open up their borders to facilitate the free flow of knowledge. Even so, the flow of such knowledge across borders if left unattended may be injurious to the global economy as unscrupulous entities may be tempted to exploit vulnerable inventors, a thing that would stifle the spirit of invention. As such, it is very imperative that strong structures be put in place to ensure there are ample protection measures as well as acknowledgement and appreciation to the authors of technological innovations.

Bottazi and Peri (2001) note that new inventions are basically the products of existing patents as well as materials gained through concerted R&D. In this regard, the ease of accessibility to the patented ideas as well as the quality of R&D resources greatly affects the level of innovation in any given nation and/or region. In fact, “innovation is a fundamental activity for economic growth [and that] new profitable ideas enlarge the stock of technological knowledge which in turn increases productivity”. In mitigation of potential inflexibilities in the process of innovation, nations and regions alike strive to put in place strategies that enhance the easy accessibility of new knowledge irrespective of whether such knowledge is sourced from within or beyond the borders. Apparently, basing on the conventional wisdom that, the fluidity of trade is largely determined by the border effect – the rate of flow of goods and services, labor and capital across national borders, this may not be an easy endeavor particularly in the face of uncooperative national legal systems.

This theory is also shared by Maurseth and Verspagen (2002) in their study to investigate knowledge spillovers and patent citation trends in EU. Precisely, they opine that geographical distance is a huge impediment to the smooth flow of knowledge from one region to another. They also opine that the flow of knowledge is more fluid within countries as opposed to regions particularly in cases where such regions do not share the same language.Bottazi and Peri (2001) support this argument in their finding that information normally flows with more ease within the borders of single nation states than across the borders. For instance, they categorically clarify that codified information is easier to access almost everywhere when compared to embodied information. In this regard, it is acknowledged that accessibility is higher particularly on new non-codified ideas that are locally generated while accessibility is at its lowest particularly on non-codified ideas whose source spills across the borders.

3. European Patent ConventionThe EPC came into force in June 1, 1978, some five years after it was established in 1973 (EPO, 2010). Basically, the treaty sought to unify the inherently fragmented European patent system by creating a central patent examination system that would bring together the national patent systems of wiling European nations. Under the EPC, patent applicants are mandated to file their applications at the EPO in Munich, Germany or The Hague, Netherlands. This is contrary to what was the norm before the EPC came into force, where applicants filed their applications at the various national patent offices in the countries they wished their patents to be recognized.

EPC is a totally different entity from the EU. First and foremost their membership is totally different: the EU has 27 member states, while the EPC has 37 member states, a testimony that some of the EPC are not members of the EU. Again, the larger EPC membership testifies that not all EU members are signatories of the EPC. Precisely, the following countries are EPC members but not EU members: Turkey, Norway, Switzerland, Croatia, Liechtenstein, Monaco, San Marino, and the Republic of Macedonia.

A balanced account of how the EPC has fared over the years since 1973 reveals that it has undergone significant harmonization with emerging issues in the realms of invention. The changing socio-political, cultural and economic trends in Europe have occasioned a barrage of litigations whose outcomes have a wake-up call for urgent amendments of the EPC provisions. Most importantly, the desire to make technological innovations more useful for commercial purposes and the need to scrap out borders with view of shortening the distance which knowledge travels within the EPC jurisdiction advised these constant amendments. For instance, there was an urgent need to make the process of applying, granting, and renewal of patents to be quicker and cheaper so as to increase the value of patents.

As it will be seen later in the paper, the treaty has encountered a number of tests over the years. Even so, it is only fair to point out that the treaty has achieved significant gains. For instance, one of the most bothersome parts of patent enforcement has been addressed by the treaty: the hassles of having to file for opposition and appeal at different national patent offices have been significantly addressed. Under the EPC patent holders seeking legal recourse in relation to a breach of patents are required lodge their complaints at the EPO in Munich or The Hague, a huge reprieve for patent holders and challengers of such patents.

3.1. Patentability under the EPC (1973 and 2000)Perhaps one of the most important provisions of the EPC is Article 52 as revised in 2000.Basically, the article delineates the nature of inventions that are patentable under the EPC and those which are not. Precisely, any invention that is technologically based, that provide new ideas, that has an inventive element, and that has its ideas applicable in industrial production, is eligible for patenting under the EPC. Article 52(2) succinctly stipulates that: “discoveries, scientific theories and mathematical methods; aesthetic creations; schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers, and; presentations of information” cannot be considered as inventions in the EPC.

Even so, section 3 of the same article offers a deeper explanation that can be used to identify inventions beyond the scope of the EPC. It stipulates that:

The provisions of paragraph 2 [of the same article] shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.

Moreover, section 4 of the article clarifies that:

Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body shall not be regarded as inventions which are susceptible of industrial application within the meaning of paragraph 1[of the same article]. This provision shall not apply to products, in particular substances or compositions, for use in any of these methods.

To discuss the EPC patentability provision the WARF patent application litigation will be used. Wisconsin Alumni Research Foundation (WARF), a technology transfer arm of the University of Wisconsin based in Madison, United States sought to file a European patent for a scientific finding about “composition (cultures) of human embryonic stem cells” which it considered an invention by James Thompson. However, in pursuance to the provisions of rule 28(c) of the EPC, the EPO refused to grant WARF the patent. The EPO examiners argued that the application touched on “biotechnological inventions which concern uses of human embryos for industrial or commercial purposes”, an area that is not covered by the EPC jurisdiction.

In the ensuing appeal, to the Technical Board of Appeal (TBA) as well as the Enlarged Board of Appeal (EBA), four critical questions which can be used to test the strengths of the EPC patentability provisions. The questions succinctly centered on:

Does rule [28(c)] EPC apply to an application filed before the entry into force of the rule?

If the answer to question 1 is yes, does rule [28(c)] EPC forbid the patenting of claims directed to products (here: human embryonic stem cell cultures) which—as described in the application—at the filing date could be prepared exclusively by a method which necessarily involved the destruction of the human embryos from which the said products are derived, if the said method is not part of the claims?

If the answer to question 1 or 2 is no, does Article 53(a) EPC forbid patenting such claims?

In the context of questions 2 and 3, is it of relevance that after the filing date the same products could be obtained without having to recur to a method necessarily involving the destruction of human embryos (here: e.g. derivation from available human embryonic cell lines)?

In response to question 1, there is no doubt about the applicability of Rule 28(c) for litigations entered after September 1, 1999. In the oral proceedings of the case the EBA argued that rules 28 to 29 of the EPC were specifically meant to offer clarification to Article 53 of the EPC. In conjunction the rule 28(c) and Article 53 are applicable to litigations filed after September 1, 1999. In explanation to the likely answers to the four questions the EBA partly argued that:

It is true that there are exclusion clauses from patentability provided for in the EPC. It is also true that the frequently cited principle, according to which exclusion clauses from patentability laid down in the EPC are to be construed in a restrictive manner, does not apply without exception.

Though the rulings of this case by the EBA is not of great importance to the patentability discussion for this paper, the above argument brings to light a new subject that the interpretation of the EPC is sometimes difficult given the drafting of the treaty was influenced by political overtones. Conclusively, save for this case the EPC has fared relatively well in determining what can be patented and what cannot.

3.2. Filling Formalities

The EPC 1973 rules underwent a major amendment at the Munich Conference in 2000. The main reasons for the changes were to align it with the Patent Law Treaty (PLT) particularly in the areas of filling date, filling missing application documents, and post-filling formalities, such as claiming priority”. Other areas that got significant restructuring included the modalities of the timeframe for applying for legal recourse in the event of a failure to “meet time limits by further processing and re-establishment of rights”. Precisely, an extension of the time limit was granted to accommodate new timeframes. Another phenomenal change was the moving of the legal provisions from the articles forming the EPC to the respective implementing rules in accordance with the clamor for making the EPC more flexible and efficient particularly by making it more legally operational for future amendments to the law.

Initially, this required a Diplomatic Conference like the one held in Munich which entrenched these changes. With these new changes it only meant the EPO Administrative Council would be enough to effect any changes. Again, the Munich Conference recognized the inherent needs of communities within which the patents are used. Precisely, pursuant to the provisions of Article 112(a) of the EPC, a new flexible procedure for petitioning in case of “self-limitation or self-revocation” of a European Patent at the Enlarged Board of Appeal body was created hence making it easier for holders of European Patents to seek a centralized legal recourse system.

In regard to the filling date requirements, a number of radical changes were made. For instance, the EPC 1973 required European applicants as well as their international counterparts to facilitate claims during the filling date. Apparently, the revised EPC does not make this as a critical prerequisite during the filling date. Precisely, only three major items are required: an explicit “indication that a European Patent is sought, (b) information identifying the applicant or allowing the applicant to be contacted and, most importantly, (c) a description or reference to a previously filed application”. Essentially, though the revised EPC does not require European applicants to provide claims as a filling date prerequisite, the requirement is yet to be practically abolished as applicants are still required to file claims two months after the filling date failure to which the application is nullified. However, so as to create a difference with the EPC 1973, claims filed after the filling date but within the two months period, are not considered as part and parcel of the original application but as amendments which must be restricted within the context and meaning of the application as originally entered.

This is meant to give the original applications more strength to cushion them from unforeseen revocations. Precisely, Article 123(2) of the EPC stipulates that: A European patent application or a European patent may not be amended in such a way that it contains subject-matter which extends beyond the content of the application as filed. Again, this accords “Euro-direct” applicants’ a chance to make “non-allowable amendments” to applications before a European search, a leeway that was conspicuously missing in EPC 1973. For instance, under the EPC 1973 it was problematic for international applications that, pursuant to the PCT where subjected to supplementary searches in the international phase or even the European phase upon entry into the European Union. To mitigate any potential limitations occasioned by the European search, the revised EPC allows Euro-direct applicants a leeway to file non-allowable claims before the European search just as their European counterparts provided that such claims do not constitute a change of meaning and context from the originally filed application documents. To the benefit of the Euro-direct applicants, the additional search which can be carried out during the actual scrutiny of the application is absolutely done free of charge pursuant to the EPC Guidelines C-VI, 5.4., B-II, 4.2., and C-VI, 8.2.All these were non-existent provisions in the EPC 1973.

A phenomenal shift in validation of patents occurred in 2003when the EPC member states agreed that patents would be considered valid as soon as they are granted by the EPO if they are filed in any of the three EPO official languages: English, Germany, and French. Initially, the translation of claims requirement demanded that applicants should incur the costs and hassles of having to translate the claims into all the EU official languages to validate the patent.

3.2. Dualism in EPCOne of the most outstanding features of the EPC is the principle of dualism. Applicants from the EPC member states are given the opportunity to file their patent applications either at their respective national patent offices or at the EPO in Munich or at The Hague. Pursuant to Article 75 of the EPC, applications may be filled:

With the European Patent Office, or;

If the law of the Contracting State so permits, and subject top Article 76, paragraph 1, with the central industrial property office r other competent authority of that Sate. Any application filed in this way shall have the same effect as if it had been filed on the same date with the European Patent Office.

In clarification, Rule 35 of the EPC demands that if a patent application is at the national patent offices of the EPC contracting states then such applications should be submitted to the EPO within the shortest time possible for formal examination process to begin. Section 3 of the same rule (35) succinctly stipulates that:

If the European patent application is filed with an authority referred to in Article 75, paragraph 1(b), such authority shall without delay inform the European Patent Office of receipt of the application, and, in particular, of the nature and date of receipt of the documents, the application number and any priority date claimed.

It is true that an EPC patent is considered legally enforceable in all EPC member states jurisdictions. Even so, the extent to which this provision is practically enforceable is a thing that has resulted into complicated, costly, and time consuming legal tussles. For example, a valid patent granted by the EPC is still subject to validity challenges filed from the different national patent systems.

Consequently, it is only fair to argue that EU patent system is highly fragmented and bureaucratic. The dualism feature allows for circumvention of the very fruits that the EPC purports to offer to its member states. Applicants are required to first submit their applications to their respective national patent offices and wait for clearance before presenting such applications to the EPO offices at Munich of The Hague. Given the rigorous process of the vetting procedures, the sheer overwhelming numbers of such applications, as well as the inherent inefficiencies and bureaucracies among member states it may take some time to finalize this process.

Again, the litigation part of the patent system is highly fragmented as holders of patents can file infringement charges at the independent national patent offices or at the EPO offices. In fact, applicants can file litigations at the national patent offices of the member states where an infringement has occurred instead of filling at the EPO in Munich or at The Hague. In such instances, it is obvious to assert that the likelihood of getting a totally different outcome from each of the patent ligations filed in different EPC member states is very high going by the different legal systems practiced by the 37 EPC member states. Worse still, the results of such litigations are only effective within the borders of the state where such litigations were filed. Consequently, patents holders intending to seek recourse in the event their patents have been infringed by multiple states spend huge amount of money and time.

These arguments are emboldened by Maurseth and Verspagen (2002) postulations in their study to investigate the extent which patent citation requirements are pursued in the EU patent regime. Precisely, they argue that a European patent is more or less “a collection of [assorted] patents in individual European countries (each subject to its own law) [with] the [European Patent Office acting] as a single intermediary to all participating countries”. In fact van Pottelsberghe and Danguy (2009) affirm this postulation in their report to the EC DG Internal Market when they boldly opine that:

The European patent system, from a “European Union” perspective, is actually a sum of [37] national patent systems. The only centralized aspect corresponds to the granting procedure, composed of performing search reports, ensuring publications, performing substantive examinations and processing oppositions, which are all performed by the European Patent Office (EPO).

As a matter of fact, most of the “ground work” is carried out from the national patent offices of the EPC member states, with the EPO at Munich or The Hague doing mere “rubber-stamping” of a patent. The priority fillings, filling of claims, translations, renewals, as well as filling of litigations in the event of a patent breach are carried out in the respective national patent offices. In fact, the national patent offices are responsible for the initial procedures of patent application as well as the final procedures. The EPO takes the middle procedures (application) which may be considered as the most critical ones in the process of patent validation. However, when it comes to actual enforcement of such patents it is the national patent offices which play the most critical roles.

Apart from the above discussed snags facing the smooth enforcement of the EPC, there are a number of incongruities that threaten the achievement of the very benefits it purports to achieve. Mejer and Pottelsberghe (2009) offer a detailed analysis of such incongruities. Firstly, they offer that there is glaring incongruence between the EU competition policy and the national patents systems practiced by the EPC member states. The EU competition policy that is applicable in all EU member states has seemingly very incompatible features with the EPC patent system as enforced by the respective EPC member states. It is obvious that the EU competition policy leverages at the EU as a whole while on the other hand each independent EPC member states run their own patent systems. Such scenario has been noted to be a recipe for patent litigations and invalidation cases. For instance, acting on the leeway provided by EPC, national patent bodies may invalidate EPC patents and at the same time, they can also issue patents without consultancy with the EPO.

There also exists a parallel trade system among the EU countries. Due to the policy of free trade embraced by many European countries it is very easy for patents to be infringed. Unscrupulous entities such as imitators and patent violators find it very easy force their way into the EU particularly through nation states that are not signatories of the EPC. In such instances, it can be very difficult for the patent holders to prevent such unscrupulous traders from infringing their patents even within jurisdictions where such patents are enforceable. This happens despite the passing of the Enforcement Directive 2004/48/EC courtesy of the fact that its applicability is largely determined by the political goodwill on the part of the nation states where such infringement has occurred. Given that European countries uses different legal systems the entire process of blocking, seizing, and suing patent infringers once they have been identified, legal recourse may proof to be time consuming.

Despite its main goal of helping to reduce the bureaucracies involved in patent application and enforcement among the European applicants, the EPC has not fully succeeded in achieving this feat. Currently, the process of filing patent applications as well as their enforcement is prone to a barrage of technical and legal snags. Patents applications are subject to EPO examiners for a period of nine months meaning that third parties can file opposition claims disputing such patents at the EPO. The ensuing legal recourse demands that the EPO make a ruling based on investigations carried out in all the countries where the patent is enforced. Third parties can also file opposition claims from national patent offices in the respective EPC member states. In fact, opposition claims can be filed as early as the date of patent validation at the respective national patent offices irrespective of whether there are other validity challenges awaiting ruling at the EPO. Experience shows that opposition cases can lag at the EPO for as long as three years. Certainly, patents embroiled in validity litigations cannot be commercially utilized and that holders of such patents also incur huge costs particularly when it emerges that indeed an infringement of existing patents occurred.

3.4. The Future of the EPCIn response to the above highlighted enforcement, validity, and cost snags there have been efforts to unify the patent enforcement procedures. The My 31, 2002 EPLA 4th Proposal (WPL/SUB 2/02) though yet to be approved outlined the modalities of forming a new European Patent Litigation Agreement (EPLA) and a European Patent Court which will be considered as the “National” Court for the EU.

European Patent Court

Within the proposed EP Patent Court system there will be a Court of First Instance (CFI) which most probably will be headquartered at Luxembourg with regional divisions spread n the EPC contracting states. There will also be a central Court of Appeal which will also be located at Luxembourg. The establishment of the divisional courts will be purely based on either a regional or national basis; however, depending on the number of cases that will arise within the first three years into the system, the prospect of more regional/national divisional courts will be established. It has been decided that each regional/national court can handle only handle a maximum of 100 cases meaning that new courts that will be added to regions/nations that will have handled more than that number. Increment will however not exceed three courts for each of the regions/nations. The jurisdiction of the EP Courts will cover all manner of litigations in all EPC contracting states as stipulated in the Brussels and Lugarno Conventions as well as the (EC Regulation 44/2001).

The implementation of the proposed changes will take a period of seven years during which national courts will still be allowed to listen to both patent litigations, however the decisions delivered thereof will only be applied within the national courts. Upon the lapse of the seven-year transition period the EP Patent Court system will incorporate the National Courts.

Some of the expected operational snags include the provision that within the first three years German will only have a single Regional Court and that the Regional Courts will not listen to appeal on factual disputes during this period. Again, it has also been proposed that for purposes of making the new litigation regime more “legalistic” attorneys will not represent litigations or invalidation cases without the assistance of lawyers. By fair terms, this is a phenomenal change from the existing regime and it is likely to cause heated debate.

In mitigation to the translation snags mentioned above, some EPC contracting states, notably France, Germany, and the UK have been considering the possibility of dropping the full translation requirement of EPC patents in the event that such patents were filed in a different official language. This is in tandem with the provisions of the yet to be ratified “Language Protocol” (London Protocol/Agreement).

Community Patent

A Community Patent housed by the EPC has been proposed under the auspices of the (COM (2000) 412 final) of August 1, 2000 (Draft Regulation). Moreover, the revised EPC provides a room for regional agreements. For instance, under the provision of the new Article 149(a) of the EPC, the EU and/or the EPC contracting states are empowered to among other things to establish a Community wide patent system under the umbrella of the EPC.

Ideally, the Community Patent would address the three key issues: (a) transferring the maintenance of EPC patents from contracting states to the region; (b) waiving the requirement that EPC patents be translated into the various official languages of the EPC contracting states they are enforced, and; (c) replacing the existing requirement that litigations and invalidation for EPC patents be filed at the individual EPC contracting states.

Most importantly, the Community Patent Law will operate autonomously yet hand in hand with the national patent laws and EPC. This is in tandem with Article 1 of the Draft Regulation that recognizes any community-wide patent issued by the EPO as a Community Patent.

Overall, this will be a big reprieve in terms of costs as well as the time spend on fulfilling the application, translation, obligations and renewal would be drastically reduced as the Community Patent will operate in three official languages, namely: English, French, and German .

4.0. The Community Trademark SystemComing out of a relatively rigid trademark system, the European Community adopted a more leaner and efficient community-wide trade mark system. The new system accords applicants a unitary protection system that spans at least 15 states. The 15 member states are; Austria, Belgium, the Netherlands, Luxemburg, Denmark, Finland, Germany, Greece, Ireland, Italy, Portugal, Spain, Sweden, and the United Kingdom.

Like the EPC patent system, the European Community trade mark system has got reservations for what can be recognized as a trade mark and what cannot. Basically, any signs that can unambiguously provide a clear distinction between a business entity from others, or even a product(s) from others may be considered a trade mark as long as such trade mark can be represented using words, letters, designs, numerals, shapes of goods, and shapes of packaging.

Essentially, the Community trade mark sy