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“Patents are the future.” You might expect that quote to come from a Harvard Business School professor or some MIT inventor but in fact it is the words of German Chancellor, Angela Merkel. Addressing the European Patent Forum in Munich in April, Merkel called for reform of EU patents law, saying: “We are so proud of the diversity in Europe but the Community Patent is one point where this diversity could be reduced a little.”

Merkel added that the key challenge is making the system “standardised, more affordable and legally secure”. These sentiments do not reflect the reality of patent law in Europe or the position of national governments when it comes to protecting intellectual property (IP).

In short, the patent system in Europe is a mess and has been since the 1950s. The desire exists for a Community Patent – a single patent that can be obtained and protected across all EU member states under a unified legal framework – exists but the reality is that while patents are granted, they must be enforced on a country-by-country basis.

While discussions continue about setting up a European Patent court, no one seriously thinks this is likely to happen anytime soon.

Age old problem

Efforts to resolve patent issues go back several decades. Proposals such as the European Patent Litigation Agreement and the London Agreement are negotiated, agreed and then either remain unratified or are often ignored. The London Agreement is good example. Drafted in 2000, it proposed a deal under which member states agree to criteria for patent filing that would cut costs for patent translation or to do away with them altogether.

A patent man

Mark Pacey took over as CIO of the UK Intellectual Property Office (IPO) after moving from Companies House where he was first marketing director and then CIO. Pacey is a business oriented CIO who says of himself: “You have to have an appreciation of technology – to do my job you need good technologists around you.” Because of the nature of the patent examinations – which must be checked for novelty, technological progress and contributing to prior art – IT cannot accelerate the decision-making process on whether a patent can be granted, which can take between one and three years.

The changes brought by technology are to streamline the administration by making more forms available online, to grant access to the decision-making process and to open up technical information to those seeking patents. Pacey has worked on an 18-month programme that, for the first time, will see all patent applications scanned and passed to patent examiners. The goal is not to automate the examination of patent applications but to create an electronic repository that can be made available to customers. The ultimate goal is to create a complete end-to-end electronic process for applications, payments, renewals, database access and information transfer.

“We have a lot of platforms,” says Pacey. “The underlying register is based on a VME mainframe system. The core system for patents is largely open source and Linux-based in terms of operating systems. The trademark system runs on Documentum. For administration the office runs Oracle Financials and HR function is handled through an outsourcing deal with the Department for Trade and Industry. The server infrastructure is Unix, Sun Solaris and Linux. The desktop is Windows XP running MS Office and the email system is Groupwise. Web technologies are being built using the .Net framework.”

Overall the UK IPO has 1,000 users supported by a 100-strong IT department. Key milestones include the landmark introduction of web filing for patent applications. The UK IPO also conducted a major website upgrade in September 2006. In Autumn 2007, an electronic view of case files will be made available. The UK IPO is also releasing more electronic versions of forms.
Beyond that Pacey is deploying of an e-business infrastructure that will provide common services across patents, trademarks and designs.

Translation costs account for 40 per cent of patent costs, which in Europe average out at around €3,000. Seven years on, no such agreement is in place and opinion is that the big three – the UK, France and Germany – are dragging their heels. The European Patent Convention, signed in 1973, did set up the European Patent Office (EPO) but there is still no single, centrally enforceable, European wide patent.
Mark Owen, partner at law firm Harbottle and Lewis, says that people like the idea of pan-European patents but in reality not enough support exists for it and that we are as far as ever from a Community Patent. “There are huge political arguments about what to do next. The London Agreement was just one part but it got bogged down and there just not enough support. There is not the political will,” says Owen.

Failing business

Günter Verheugen, vice-president of the European Commission, says that an incomplete patent system puts European businesses at a competitive disadvantage.

“Europe has a patent system that, over the patent term of 20 years, is nine-times more expensive than its US and Japanese counterparts. That is not acceptable. Lack of awareness of IP, cumbersome and expensive procedures for obtaining protection, concerns about disclosure requirements in patent applications and problems in enforcement, are among the many reasons why many businesses are hesitant in protecting their IP,” says Verheugen.

For all the talk of creating a basis for IP driven economic growth within a global market and the recognition that the current situation benefits no one in Europe, it is national needs that take precedence. Securing European patents remains a costly, time-consuming exercise and protecting patents in Europe even more so. Owen says: “In the UK we’ve had the Gowers review but in reality there wasn’t very much new in it. It is what people in industry have known for a long time but the politicians need to get a handle on it.”

Guiding role of the UK IPO

While the controversy and heel dragging continue at a political level, at a technology level the UK and European Patent Offices are making great strides. The job of handling patent applications, examining them for consideration, granting and handling disputes falls to the UK Intellectual Property Office (UK IPO).
In a typical year it will handle around 30,000 applications, including UK and international applications. To handle this volume of work and to make life easier for both the examiners and the customers a new web accessible IT infrastructure is being put in place.

Mark Pacey, CIO at the UK IPO, sees his role as guiding patent applicants through the process and helping his customers by providing as much information as possible. A recent major website overhaul is the among the latest steps which he sees as one day delivering a complete end-to-end electronic engagement with his customers.

Getting a software patent

The granting of patents is about striking a balance between encouraging innovation and ensuring fair competition between companies.

It is commonly believed that you can’t patent software in Europe. This is wrong. The EPO has granted over 15,000 software patents. Software can be patented as long as it meets the existing criteria for patenting. In the field of computer programs it seems that it was the intention of the European Patent Convention to ensure that inventions that would be patentable in accordance with normal criteria, for instance, that they make a technical contribution to the arts. They should not be excluded from patentability merely because they utilise or involve computer programs. As a Computer Implemented Invention (CII), it must also change the operation of a computer. For example, if software changes the process of forming and designing a drawing using a computer then this will not be granted a patent. If software changes how the computer operates to deliver a different process of forming and designing a drawing, then this is likely to be granted a patent. Correct claim formulation is necessary in all fields. Regardless of the substance of the invention, a patent will not be secured if the form of the claim is wrong.

Source: Patenting Software under the European Patent Convention

“IP is the basis for innovation, competitiveness and ultimately economic success. We want to support innovation and raise awareness of IP. The UK IPO is here to help you in your journey and help you protect your rights. From my professional stand point, my job is about making the correct information available to help companies, large and small, obtain and protect the rights to their intellectual property,” he says.
Owen says sorting out patents in Europe would have a huge impact.

"IP is the basis for innovation, competitiveness and ultimately economic success"

Mark Pacey, CIO, UK IPO

“It is all part of creating a strong environment for IP. The growth of venture capital activity in Silicon Valley probably has a lot to do with an easier patent environment in the US.”

The situation is also becoming more complex. “Technology is increasingly interdependent. You can’t make a computer without chemists, physicists, mathematicians,” says Keith Beresford, a partner at European patent attorneys Beresford & Co and the author of Patenting Software under the European Patent Convention.

Change catalyst

He says one possible scenario that might make European governments act to agree a better patent system is “a flood of cheap imports of technological products – which are based on European technology which can’t be protected”.

Patents may be the future, as Merkel says, but that future may be far away. Asked how long it would take for the EU to agree a Community Patent, Commissioner Verheugen estimated that it could be sorted out in five years. For something that has taken half a century to get this far, he is perhaps, being optimistic. l