Grace Period First Real Chance after Seventy Years

Grace Period - First Real Chance after Seventy Years - Joseph Straus, Munich WIPO Open Forum on the Draft SPLT Geneva, March 3, 2006 1 © J. Straus 2006

Points to Consider 2 • The notion of grace period • Seventy years of international attempts • The state of law in 1963 (1973), 2001 and present • Past and present experience with “grace period” • “Absolute novelty” and legal certainty • Macro-economic impact of the lack of “grace period” • Grace period of Art. 9 SPLT and its prospects © J. Straus 2006

The Notion of "Grace Period" • "General grace period" is a specific period of time preceding the filing of a patent application, during which disclosures by any means (in writing, orally, by use, on exhibitions, etc. ) of the invention for which the patent application is filed by the inventor or his/her successor in title do not constitute prior art in respect of the patent application at hand. • Such "non-prejudicial" disclosures do not establish a priority date, i. e. do not provide for immunity for the inventor/applicant against parallel or later independent disclosures, including patent applications of third parties, but only immunity against own disclosures. 3 © J. Straus 2006

More than seventy years of international attempts 4 • 1934 London PC Revision – Art. 4 • 1958 Lisbon PC Revision – Art. 4 • 1963 Strasbourg Convention • 1973 European Patent Convention • 1984 WIPO Iiitiative • 1991 WIPO PLT – Art. 12 – Basic Proposal • 2001 WIPO SPLT Draft – Art. 9 © J. Straus 2006

Potential Reasons for Failure • "The inventor could be tempted to carelessness. As long as the idea of the grace period is not internationally recognized - the experience of the Lisbon Conference tells us that we are still far away from that - such a comprehensive grace period is regarded as a "greek gift" for the inventor. Although the inventor gets a national patent, his own publication would, as a rule, adversely affect patent applications abroad. “ Pfanner, 1962 GRUR Int. 545, 551 5 © J. Straus 2006

The State of the Law in 1963 (1973) as Compared with 2001 • • • 6 1963 "Grace period" available in: - Canada, Germany, Japan, United Kingdom and USA (all of general type) Ireland Italy (of limited type) [5 + 2] 2001 "Grace period" available in: Albania (12 PPR), Argentina (12 PPR), Armenia (12 PPR), Australia, Barbados (12), Belarus (12 PPR), Brazil (12 PPR - F), [Bulgaria (12 PPR)], Canada (12), China (6 - LT), Ecuador (12 PPR), El Salvador (12 PPR), Estonia (12 PPR), Japan (6 - F), Kazakhstan (12), Korea Republic of (6 LT - F), Korea Democratic People‘s Republic (6), Lesotho (6 PPR), Lithuania (6), Malaysia (12), Mexico (12 PPR - F), Moldova (12 PPR), Peru (12 PPR), Portugal (12 LT - F), Romania (12 PPR), Russia (6), Saudi-Arabia (12), Singapore (12 - LT), [Slovenia (12 PPR)], South Africa (no time limit), Spain (6 LT), Sri Lanka (12, 6 - in ease of abuse), Taiwan (6 - LT), Trinidad and © J. Straus 2006 Tobago (12), Turkey (12 PPR), Ukraine (12 PPR), USA (12)

WIPO 1984 – 1991 7 • Article 12 PLT Basic Proposal – not a failure • 32 WIPO Member States – introduced grace period between 1984 and 2001 • However, some – after acceding to EPC – abandoned again © J. Straus 2006

Past and Present Experience with "Grace Period" System • Germany (1936 -1981): No specific problems reported; used as safety net only; explicitly maintained as "isolated grace period" 1976 -1981; maintained in Utility Model Law • UK (1949 -1977): No specific problems reported; case law evidence for use as safety net only • "They, no doubt, wanted to know whether this fresh design was successful before they filed any application. If it was not it would have been foolish to file an application pending correction of any defects in operation which might have been disclosed by the trial on. . . " • 8 [Justice Whitford in Hubbard's appl. ] © J. Straus 2006

continued Past and Present Experience with "Grace Period" System • Japan: No specific problems reported • 1999 - invoked in 1735 appl. out of 413. 736 (0, 42%) (a) 47% by large enterprises (b) 10% SMEs (c) 13% Individual Inventors 43% of all their appl. (d) 26% R & D Institutes (e) 4% Universities } 9 • Canada: • USA: • Austria, Czech R. , Germany & Hungary UML: No problems reported No specific problems reported © J. Straus 2006

Europe’s & Industry’s Weak Arguments 10 • No “absolute novelty” under EPC – Art. 54 (5), 55 • Does not offer legal certainty – Art. 54 (1) – covers all kinds of disclosure worldwide • Does not provide for fast clarifications • Publication at or after application no safe solution – affects later applications for improvements [G 3/93] © J. Straus 2006

Examples from EPO Case Law 11 • T 381/87 - 7 years to find out - based on the balance of probabilities - when a Journal was placed on a library shelve • T 455/91 - 12 years to determine the content of an oral disclosure • T 326/93 - 10 years to deny an alleged public prior use • T 406/92 - 9 years to establish lack of clarity of an oral presentation • T 436/92 - 9 years to deny violation of a tacitly agreed confidentiality • T 750/94 - 9 years to establish when a Journal became available to the public © J. Straus 2006

Macro - economic Impact of the Lack of "Grace Period" • "Open" firms more successful in R&D efforts • Enormous increase of University - Industry collaboration • Increased involvement of Universities in patenting USA 1974 – 177 patents 1984 – 408 patents 1994 – 1. 486 patents 1997 – 6. 000 patent applications 2001 – 11. 265 patent applications 3. 721 patents issued 1. 07 billion US $ Royalties 30 billion US $ turnover 300. 000 new jobs [some 2. 000 pre-published] 12 © J. Straus 2006

continued Macro - economic Impact of the Lack of "Grace Period" • Delayed publication and availability of scientific and technical knowledge • Applications filed for speculative, incomplete inventions • Enormous growth of industry‘s publications 1980 - 1989: – – – • 13 France 240 %, Sweden 150 %, Japan 90 %, Netherlands 37 %, Germany 30 % Control and Containment increasingly difficult © J. Straus 2006

Article 9 Draft SPLT Grace Period (1) General Principle An item of prior art with respect to a claimed invention shall not affect the patentability of that claimed invention, in so far as that item was included in the prior art on a date during the [12] [six] months preceding the priority date of the claimed invention, (i) by the inventor (ii) by an Office and the item of priority art was contained (a) in another application filed by the inventor [and should not have been made available to the public by the Office], or (b) in an application filed without the knowledge or consent of the Inventor by a third party which obtained the information contained in the item of prior art directly or indirectly from the inventor, or (iii) by a third party which obtained the information contained in the item of prior art directly or indirectly from the inventor 14 © J. Straus 2006

Article 9 Draft SPLT Grace Period continued (2) [Invoking grace period] [Alternative A] The effects of paragraph (1) may be invoked at any time [Alternative B] A contracting Party may require that the applicant submit a declaration invoking the effect of paragraph (1) [as prescribed in the Regulations]. (3) [“Inventor”] … also means any person who, at or before the filing date of the application, had the right to the patent. (4) [Third party rights] 15 © J. Straus 2006

Basic Position Taken by WIPO Members SPC May 2004 • Argentina (12), Australia (12), Brazil (12), Canada (12), China (6), Colombia (12), India (6), Indonesia (12), Ireland – on behalf of 25 EU Members (6), Japan (6), Kenya (12), Malaysia (12), Mexico (12), Moldova (6), Morocco (12), New Zealand (12), Norway(6), Romania (6), Russian Federaton (6), Switzerland (? 6), Turkey (6), Ukraine (12), USA (12) • Total 46 – 13 in favor of 12 months – 33 in favor of 6 months 16 © J. Straus 2006

In Addition: Countries not mentioned but providing for Grace Period • Albania (12), Armenia (12), Belarus (12), Bulgaria (12), Ecuador (12), El Salvador (12), Kazakhstan (12), Korea Democratic Republic (6), Lesotho (6), Saudi Arabia (12), Singapore (12 -LT), Taiwan (6 -LT), Trinidad and Tobago (12). • Total 13 – 9 in favor of 12 months – 4 in favor of 6 months • Basic consensus in FAVOR: Grand Total 59 states, 22 in favor of 12 months; 37 in favor of 6 months 17 © J. Straus 2006

Pleading in Favor • Clear and recognized need exists for this safety net • Historically no negative experience • Existing differences should be overcome by acceptable compromises – if necessary • Not open to compromises – preceding priority date! • Formal requirement to invoke? If unspecified – acceptable – but of little use • 12 or 6 months? – Consider – grace period No general immunity! 18 © J. Straus 2006

The Window of Opportunity should be used - the issue not again discussed to death !!!! States should act now !!! 19 © J. Straus 2006