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Grace Period – A Matter of Patent Law Harmonization and International Trade Distortion

Prof. Joseph Straus, Munich/Pretoria

JPO – AIPPI – FICPI "Tegernsee Symposium" focused on Grace Period organized by Japan Patent Office, Hotel Okura,

Tokyo, July 10, 2014

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Points to consider

• The notion of grace period – a clarifying reminder

• Seventy years of international harmonization attempts

• The state of law in 1963 (1973) as compared with 2001 and 2013

• Past and present European experience with "grace period"

• Porous EPC "absolute" novelty & legal certainty

• Macro-economic impact of lack of "grace period"

• Lack of "grace period" - an international trade distortion factor?

• Anomalies in international patent law harmonization debates

• Call for an international mandatory minimum standard

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The Notion of "Grace Period“ – A Clarifying Reminder

• "General grace period" is a specific period of time preceding the filing or the priority 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 againstparallel or later independent disclosures, including patentapplications of third parties.

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More than seventy years of international attempts

• 1934 London PC Revision – Art. 4

• 1958 Lisbon PC Revision – Art. 4

• 1963 Strasbourg Convention

• 1973 European Patent Convention

• 1984 WIPO Initiative

• 1991 WIPO PLT – Art. 12 – Basic Proposal

• 2001 WIPO SPLT Draft – Art. 9

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WIPO 1984 – 1991

• 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 it again

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Basic Position Taken by WIPO MembersSCP 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

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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

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The State of the Law in 1963 (1973) as Compared with 2001 and 2013

• 1963 - "Grace period" available in:- Canada, Germany, Japan, United Kingdom and USA (all of general

type)• Ireland and 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 Tobago (12), Turkey (12 PPR), Ukraine (12 PPR), USA (12) [33 + 6]

• Austria, Germany, Hungary, Czech Republic, Japan (Utility Model Laws)

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Past and Present European 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

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Porous EPC "Absolute" Novelty – Relativized

• EPC Article 54 (4) and (5)

• Article 55 EPC and corresponding national provisions

• Legal certainty of "absolute" novelty concept in Article 54 (1) EPC - greatly

diminished by the very inclusion in the state of the art of all kinds of

disclosures worldwide

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Experience with Legal Certainty Under the EPC System

• Does not offer legal certainty

• Does not provide for fast clarifications

• Publication at or after application no safe solution – affects later applications for improvements [G3/93]

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Examples from EPO Case Law

• 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

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The European Mantra against "Grace Period"

"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

• 1962 – not 2013!

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Macro-Economic Impact of the Lack of "Grace Period"

• Unnecessarily delayed dissemination of new knowledge

• Automatic loss of any proprietary rights in disclosed information

• Shift of R&D investment into countries where grace period available

• Negative impact on university-industry cooperation

• Opted out US publication system

• Overall destructed balance of interests the patent system should serve

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Lack of "Grace Period" – International Trade Destruction Factor?

• 63% of European respondents used the grace period

• 59% of responding European large companies used grace period

• 70% Japanese, 73% US and 32% European large companies in favor of grace period

Results of Tegernsee Questionnaire

• The impact on international trade and competitiveness?

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Lack of "Grace Period" – Not Only an Issue of Patent Law Harmonization but also of Distortion of Trade and Free Riding

• Clear and commonly recognized need exists for "grace period" as safety net

• Historically no negative experience – inventors and industry – also European – have successfully coped with it world-wide

• A white spot lacking grace period defended with obsolete arguments but allowing – on purpose or not – in effect free riding on inventions patented in the majority of WTO members – offends against the very genuine spirit of TRIPS and the entire WTO legal order

• Although AIPPI harmonization proposal – ideal solution – for foreseeable time – unrealistic

• Required – a minimum standard for a "grace period" - which will remove the existing trade distortion - has to be established

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Anomalies in International Patent Law Harmonization Debates

• Developing countries and emerging economies – by and large –against further patent law harmonization

• However – laws of the most important emerging economies & many developing countries have a "grace period" provision

• Introduction of a "grace period", e.g. in Europe, would be to their benefit

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ALLEA's Call for Mandatory Minimum Standard

• Grace Period of six or twelve months – preceding priority date

• Should be invoked by the applicant formally at the (priority) filing date

• Should be complemented with a declaration indicating pre-filing disclosure(s)

• Declaration to be submitted to the patent office within reasonable period of time following the (priority) filing – no later than before publication of application

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Thank you!

皆様のご静聴に心から感謝いたします

Arigato!