Why do Chinese academics file so many patents?

A few weeks ago this Kat published her first report from the Global Forum on Intellectual Property. This report included a summary of Professor Williamson's (University of Oxford) presentation which showed a variety of pie charts, one of which that indicated that as much as 23% of patents applied for were from academic institutions in China, compared with only 7% in the US. This Kat, now fervently watching the academic patent debate with the Stanford v Roche patent battle now before the Supreme Court (reports here and here), asked whether readers could explain why there was such a higher per cent of academics filing patents in China. tytoc collie called and her lovely readers answered in the form of Michael Lin of Marks & Clerk (Hong Kong). Writing from his personal opinion and not in his professional capacity, Michael says this:

"The reasons why you are seeing such a large increase in Chinese Patents filed by Academics is that for them 1) it's free and 2) they get academic credit for it. Filing patents is encouraged by the Chinese Government and Academia. The Chinese Government has given Universities (as well as local companies) funds for filing patents in order to spur innovation - one measure of which is the number of patents filed by China, as a country. Also, the Chinese Universities are ranked against each other according to how many patents they've filed. As a result, Chinese Universities have adjusted their tenure requirements and expectations such that professors who want to advance are virtually required to file patents as well as to publish papers. In one specific University I know of, filing a patent is "worth" 3 published papers. This practice has been around for at least 2.5 years. Thus you are seeing (proportionally) a very large number of Chinese Academics filing patent applications in China.

Notice all of this relates to filing patent applications - there is no discussion above about actually getting them granted, or any other such matters.

This is also a major factor as to why there is such an amazing increase in Chinese Patent filings (in the Chinese Patent Office) in 2008-10, while filings everywhere else in the world were dropping."

The reason for these incentives could be tri-fold. Economically the programs of incentives are part of China's 50-year technology plan which is confirmed by the National Patent Development Strategy released a few weeks ago (click here to see the English translation). Politically, being able to show an increasing number of patent filings to the rest of the world can be seen to legitimize China's dedication to IP and IP protection - an area which they are oft-criticized. The third reason is that socially, the Chinese Government realizes that it is essential to shift from a manufacturing economy to a research & development economy, which may help pacify rising dissent in the countryside. By increasing, or at least showing, an increasing level of innovation this may also instil in the Chinese public a sense of pride and nationalism (see, the Beijing Olympics).


What is missing from the data, and as tytoc collie identified during Professor Williamson's speech is how many of these filings result in grants? Further, how many of those grants enter countries via the Patent Cooperation Treaty (PCT)? Do such numbers exist?

And what do UK and US academics think about a system where their academic standing can be judged by how many patents one files?

tytoc collie would like to thank Michael for his e-mails and invaluable insight into an area that many of us on this side of the world seldom have an opportunity to explore.

Lord of the Flies buttons down ill-drafted statute provision

This handy device is useful for
dealing with unwanted flies in court ...

When one sees the words "fly" and "Shanks" in a shared context, many a reader may involuntarily summon up an unsavoury image of annoying insects hovering around a leading brand of bathroom fixtures,  However, this is far from the case with today's post.

Back in December 2009, in the Patents Court for England and Wales, Mr Justice Mann gave a ruling in Shanks v Unilever plc and others [2009] EWHC 3164 (Ch), noted here by tytoc collie.  The case was a dispute over Professor Shanks' claim for compensation as an employee inventor. The Patents Act 1977, sections 39-42 provides a set of rules for dealing with employees' inventions, as well as for rewarding those inventors whose patents are particularly beneficial to their employers.. Anyway, Mann J's decision hinged on the interpretation of the Patents Act 1977, s.41 which provides, in relevant part:

"An award of compensation to an employee ... in relation to a patent or an invention shall be such as will secure for the employee a fair share (having regard to all the circumstances) of the benefit which the employer has derived, or may reasonably be expected to derive, from the patent or from the assignment, assignation or grant to a person connected with the employer of the property or any right in the invention or the property in, or any right in or under, an application for that patent ...

(2) ... the amount of any benefit derived or expected to be derived by an employer from the assignment, assignation or grant of–(a) the property in, or any right in or under, a patent for the invention or an application for such a patent; or

(b) the property or any right in the invention; to a person connected with him

shall be taken to be the amount which could reasonably be expected to be so derived by the employer if that person had not been connected with him" (emphasis added)

So what were the facts? Shanks' invention led to a patent for measuring activities which was later used in blood testing kits for diabetics. In June 1984 his employer, Unilever Central Resources, transferred the patent to a related company Unilever plc for a nominal consideration. After an initially slow start, Unilever plc licensed its use to various persons and derived licence royalties of around £23m [Enough to buy a reasonably good soccer star, notes Merpel, but not to pay his wages].

Having commenced proceedings for compensation under the Patents Act 1977, s.40, Shanks applied to admit a supplementary statement of case that required consideration of the true interpretation of the words 'that person'. According to the hearing officer, 'that person' referred back to a connected person, and thus referred to that specific person, modified only by considering what that specific person would have done if such a person had not been connected with the employer. He explained his reason thus:

"If a hypothetical person had been intended, the legislator could have said "a person" instead of "that person". As a matter of English, the use of the word "that" would seem to clearly indicate that the specific person previously identified is the one referred to".

He then refused the application.  Shanks' appealed successfully to Mann J.  The judge was asked to consider whether the 'deemed counterparty' to the hypothetical transaction was the actual counterparty with the connection element removed, but with all the other attributes of that person in place, or whether it should simply be treated as being a normal unconnected arms-length purchaser with no special attributes.  In his view Parliament, in using the formulation in question, had intended to refer to a notional non-connected counterparty operating in the appropriate market at the appropriate time. That understanding was not inconsistent with the assumption, in the case of other actual transactions leading to benefits, that an employer was likely to want to exploit the patent properly and not give away its benefits, even though the words used did not impose a positive obligation on the employer to do so. The words 'that person' could not sensibly be taken as being the actual purchaser: to do so would risk introducing absurdity into the hypothesis, leading to absurdity in the result. He said:

"42. I therefore conclude that the hearing officer's final formulation of the meaning of "that person" in section 41(2) is wrong. One does not treat that person as being the precise real person with all the same characteristics (commercial warts and all) as that person has but simply without the connection. I consider that in using the formulation that it did, Parliament was, perhaps a little clumsily, intending to refer to a notional non-connected counterparty operating in the appropriate market at the appropriate time. This is not inconsistent with its assumption (in the case of other actual transactions leading to benefits) that an employer is likely to want to exploit the patent properly and not give away its benefits, albeit (as I have observed) that it did not impose a positive obligation on the employer to do that.".

Today the Court of Appeal, in [2010] EWCA Civ 1283, disagreed.  Lord Justice Jacob, with whom Mr Justice Kitchin and Lord Justice Longmore noddingly concurred, said

"31. The Judge only departed from the "natural meaning" of "that person" as meaning the actual assignee because he thought it could produce uncommercial results. But that was predicated on the basis that one is to exclude the known facts about exploitation. Once one brings them in the uncommercial results fall away. And in any event the Judge's conclusion can lead to equally uncommercial results the other way [as Jacob LJ demonstrates earlier in his judgment].

32. In truth this is one of those provisions which is so ill-drafted ... that one has to be guided by its evident purpose (ascertainable from the paradigm case) to ascertain its meaning. My old head of Chambers, Thomas Blanco White QC, used to call this approach to construction of an ill-drafted provision "sewing the fly buttons on the statute"".

tytoc collie wonders how many young readers are even familiar with the fly button, the cause of many a problem for whose with poor dexterity or whose fingers were numbed by lack of central heating.

Merpel notes that the term "fly buttons" has somewhat changed of late.

Old Levi's Fly Button commercial here
Lord of the Flies here

T 784/06 - "technical effect" reaches bioinformatics

tytoc collie has been prompted by the EPLAW Patent Blog to read a recent EPO decision, who in turn have been prompted by none other than Stefan Steinbrener.  This name will be familiar to all those who have been keeping a close watch on developments at the EPO leading up to the recent Enlarged Board decision of G 3/08 (commented on by Tufty here, among many others).

The decision, T 784/06 (currently available via the EPO register for application 95906094.8), relates to an application that was originally filed in 1994 for a method of automatic genotype detection.  The method used probability distributions to determine a particular genotype at a locus within genetic material obtained from a biological sample. The actual invention, however, was really all about a mathematical method carried out on a computer, which allowed the probability distributions to be assessed and a result obtained.  If this is all starting to resemble the invention in Vicom, you are already on the right lines.

(Right: the code in question. Can you make any sense of it?)

As a result of the mixture of 'technical' and 'non-technical' features in the claimed invention, the Board took into account the type of analysis normally carried out for computer-implemented inventions.  The applicant argued that the mathematical parts of the claim contributed to the technical effect of the invention, and should therefore be taken into account when assessing inventive step.  The opponent, however, argued that the mathematical parts "did not require any further technical considerations" and were to be disregarded in the assessment of inventive step.

The Board considered that the correct assessment to be made was that from decisions such as T 641/00 (Comvik) and T 154/04 (Duns Licensing), both of which related to computer-implemented inventions.  The question to be answered was whether the claimed invention in the field of biotechnology having a mix of technical and non-technical features could be inventive.  Non-technical features such as mental activities could be taken into account when assessing inventive step, provided they "interact with the technical subject matter of the claim for solving a technical problem and thereby contribute to the technical character of the claimed subject matter" (reasons, point 4).  For assessing inventive step therefore, the question was whether the mental activity steps of the claimed invention interacted with the technical activity part to yield a tangible technical result.  The applicant argued that they did, and the opponent that they did not.

All this was, as far as tytoc collie was concerned, quite conventional and straightforward.  The Board, however, then threw something of a googlie in deciding that the non-technical steps were only generally formulated and not well described in the specification.  The specification did not provide a reasonably complete and sufficient description of the software, and this was not remedied by the mathematical formulae or the extract of code provided.  As a result, no interaction could be established between the mental activity steps of the claims and the technical part, and these steps could be ignored when assessing inventive step.  The claimed invention therefore lacked an inventive step, since the technical part was disclosed in documents cited during proceedings. The patent was revoked.

(Left: Or perhaps the real invention was just too simple?)

tytoc collie thinks that this is decision is an important one, but perhaps not as important as it could have been.  The Board's reasoning relating to the non-technical parts of the claims being insufficiently described seems to be a bit unusual, and tends to put the whole decision in a strange light.  tytoc collie suspects that the Board had decided that the claimed invention should not be allowed but were struggling to find sound reasons to reject it in light of the arguments presented. However, the decision highlights at least two important points.  Firstly, that the case law relating to computer-implemented inventions can certainly be applied to the field of bioinformatics.  Just because an invention is classified in the biotech field does not mean that the invention has to be assessed according to the case law relating only to that field.  Secondly, if an invention is to rely on computer-based processing steps including mathematical methods then the disclosure needs to be as full as possible, and preferably described in a way that makes it understandable to someone outside the field of software coding.  A few lines of impenetrable computer code and a couple of equations does not necessarily amount to a sufficient disclosure of the invention.  tytoc collie, who also could not make much sense of the invention as disclosed in the specification, wonders whether a different outcome could have been obtained if it had been more fully described or simply better explained.

EU Patent Stumbling Again?

The EU Patent. Three words (if you’ll accept the acronym) that have promised much, but delivered little, over the many years that have passed since the idea of a unitary European patent was first floated.

For those unversed in the twists and turns of patent law’s development within Europe, it is probably worth mentioning that the EU Patent differs significantly from the “European Patent” that is administered and granted under the European Patent Convention (EPC) by the European Patent Office (EPO) in Munich. The latter provides a system of centralised application, examination and grant of “European Patents”, but upon grant these fragment into national rights (imagine the mincing machine (right) with application in at the top and patents out at the side and you’ll get the idea). The EU Patent, on the other hand, has as its goal a single patent for all member states of the EU (i.e. the same model of protection adopted by the Community Trade Mark).

The EU’s (or, strictly speaking, European Economic Community’s (EEC), as it was known then) involvement in patent law began in the late 1950s with but one clear goal: providing for the unity of the Common Market. Its rationale was simple: the territorial nature of the patent grant, amongst other things, was seen as a potential stumbling block to free-trade within the EEC and therefore attention was directed to remedy this. Thus a move towards what Van Empel describes in his classic analysis of the European Patent Convention – The Granting of European Patents, (Sijthoff, Leyden, 1975) – as the creation of a “unitary and autonomous European Patent for the Common Market as such, governed by Community law proper and dealt with by Community Institutions” was begun.

However, this initial work on an EEC patent ground to terminal halt in 1965 due, primarily, to a lack of agreement on the advisability, or otherwise, of permitting external states (including the UK as a (then) non-EEC member) to participate in the process. In many respects this first EEC attempt at a Draft European Patent Law tried to do too much by attempting to provide both a Common Market strategy which included the possibility of association on the part of non-members, and an international patent for an unspecified number of countries, under one roof. Tensions rose: the French, for example, following President De Gaulle’s infamous grand ‘non’ to the UK’s proposed entry into the Common Market in 1963, were less than content with any proposal to open the doors of an EEC patent to third states that would inevitably include the UK. Thus, the tension created by “incompatible objectives” eventually resulted in a decision to divide European patent law into two parts, the Common Market themes being catered for under the Community Patent Convention, leaving the non-EEC elements to be dealt with under what became the EPC.

To cut a long story short(ish), the Council of Europe’s proposals for a harmonised system of application, examination and grant eventually came to fruition in 1970s when the EPC entered into force. The drive towards a unitary European Patent has, however, been a far bumpier ride.

And it's not getting any smoother.

Whilst the agreement reached in December 2009 [press release here: Agreement here: [.pdf alert], during the Swedish presidency of the EU, mapped out many of the main issues, a big one was left out. Therefore, in much the same way as the coffee creams get left until the end of a box of chocolates, it left the thorny question of language to be determined at a later date. [Update: for some reason this paragraph disappeared when this was first posted. Sorry]

Enter the Belgian presidency, cue a commitment to finish the process [which, notes Merpel, given the history, is a bold move indeed!], and round 2 has kicked off.

The Commission proposal (link to proposal: here [.pdf alert]. Link to press release accompanying proposal: here), as it currently stands, would require EU Patents to be “examined and granted in one of the official languages of the EPO – English, French or German. The granted patent will be published in this language which will be the authentic (i.e. legally binding) text. The publication will include translations of the claims into the other two EPO official languages.

"No further translations into other languages will be required from the patent proprietor except in the case of a legal dispute concerning the EU patent. In this case, the patent proprietor may be required to provide further translations at his or her own expense. For example, the proprietor may have to supply a copy of the patent into the language of an alleged infringer, or into the language of the court proceedings when this is different from the language of the patent.”

The proposal also sets out accompanying measures to be agreed “in order to make the patent system more accessible to innovators.” Prominent amongst these is the suggestion that “high quality machine translations of EU patents into all official languages of the EU should be made available.” In addition, where applicants come from EU Member States that have official languages outside of the official three, they “shall continue to have the possibility to file applications in their own language. The costs of the translation into the language of proceedings of the EPO will be eligible for additional compensation, beyond what is currently already in place for European patents, including financial and technical assistance for preparing these translations.”

However, Italy and Spain are widely reported as being the most doggedly opposed to the trilingual proposal, preferring either multi-lingual or monolingual regimes (the latter using English as the language of choice).

If reports such as that on as Euractive.com, which proclaims that “A final deal on the EU patent was still being held hostage by divergent national interests”, are to be believed, then it would appear that the dreaded language issue may, once again, derail the process. Belgium certainly has its hands full with this presidency.

Thanks to Lisa Peets (Covington & Burling LLP) for the pointing out the EurActive article.

Lost in translation: here, here and here

It's EP divisional crunch time

tytoc collie should not need to be reminding his patent attorney readers about this, but tomorrow 1 October 2010 is the final day in many cases for filing divisional applications at the EPO (see tytoc collie's previous post here for a good starting point), as a result of the EPO Administrative Council decision CA/D 2/09.

Even though applicants and attorneys have had over a year to prepare, there will inevitably be something of a last minute rush to make sure all those divisionals that might be needed are on file by midnight tomorrow.  Will the EPO's fax machines and online system manage to cope with the load?

tytoc collie knows that many hard-working people both at the EPO and within patent attorney firms will be struggling at the moment to cope with the excessive load of applications, and would like to express his sympathy for all those adversely affected.  He would be interested to hear any stories of how things are going (or not, as the case may be).  If you have the time, please chip in using the weblog's comment facility (anonymously, if necessary).

As a final tip, according to the Notice of the President dated 12 July 2007 (Special Edition No. 3, OJ EPO 2007), applications can be filed at the EPO's offices in Munich, The Hague or Berlin, in particular at the following fax numbers:

Munich
+49 (0)89 2399-4465
The Hague
+31 (0)70 340-3016
Berlin
+49 (0)30 25901-840

Other things to do in Munich on 1 October here.

1 October 2010 Update: Thanks to a comment, tytoc collie has been pointed to this notice from the EPO, which states:

"The European Patent Office (EPO) has been informed of an email containing a hoax announcement purporting to be from the EPO in which the public is given the impression that the Office's fax and online filing services will not be available from 30 September 2010 to 6 am on 4 October 2010, due to maintenance and updating of the Office's telecommunication facilities.

The European Patent Office informs all concerned that this notice is completely false and that all electronic filing facilities at the European Patent Office (online and fax) are fully available.

The Office reserves the right to take legal steps against the person(s) who disseminated this false information."

tytoc collie, who has not had sight of this email, is intrigued. Can anyone shed any further light?

G 1/09: When is a patent application pending?

Once a patent application has been filed, and before it has been granted, refused or withdrawn, the application is considered to be "pending", i.e. awaiting some further action before a final decision is taken.  One thing that can only be done while a European application is pending is filing of a divisional application.  If the application has already been granted, or has been refused or withdrawn, or if the two year period under Rule 36 has passed, it is too late.  Or is it?

A strange situation arises in the case of an application that is refused at the end of oral proceedings at the EPO.  At that point, one would think, the application becomes no longer pending and, consequently, it is no longer possible to file a divisional.  However, if an appeal is then filed against the decision the application miraculously becomes pending again, because otherwise a final decision by an appeal board could not be taken.  

The question then is: is a European patent application that has been refused at oral proceedings still pending during the time allowed in which to file an appeal?  Does it even matter if an appeal is filed to make the application pending again? 

This was the situation for EP application 01102231.6, which was refused by the examining division in oral proceedings held on 23 November 2005.  On 14 December 2005, the applicant filed a divisional application, i.e. within the time allowed for filing an appeal against the decision. They did not, however, file an appeal in time.  

The EPO then took the view that, because the pending earlier application has been finally refused, the application could not be processed as a divisional.  The EPO issued a decision to this effect, which the applicant then did appeal against.  

In decision J 2/08, the board of appeal decided that they could not decide on the meaning of the word "pending", and instead decided to refer the following question to the Enlarged Board of Appeal:

"Is an application which has been refused by a decision of the Examining Division thereafter still pending within the meaning of Rule 25 EPC 1973 (Rule 36(2) EPC) until the expiry of the time limit for filing a notice of appeal, when no appeal has been filed?"

At this point, tytoc collie thought that there were good arguments either way, and could not decide himself which way the question should be answered.  It did seem, however, a bit odd that an application could be considered to have been pending only in retrospect, which would be the inevitable result of the EPO's apparent view in 2006.

After a mere 16 months of deliberation, the Enlarged Board have now issued their decision, which is available via the EP register for the divisional application 05027368.9, and presumably shortly to appear on the EPO decisions page.  To cut what is a long story short (there is much pontification in the decision, which tytoc collie's readers can peruse and comment on at their leisure), the Enlarged Board concluded:

"[U]nder the EPC a patent application which has been refused by the Examining Division is thereafter still pending within the meaning of Rule 25 EPC 1973 until the expiry of the period for filing an appeal and, on the day after, is no longer pending if no appeal is filed.  The same conclusion applies to Rule 36(1) EPC 2000 both in its former and its current version."

Or, in other words, in answer to the actual question raised: yes.


We can all now breath a sigh of relief, and get back to all those divisional applications that have to be filed by Friday.  


tytoc collie thanks Simon Roberts (BT) for the tip.