AIPPI FORUM Berlin September 25, 2005 Session V: Does the EPO grant trivial patents? Should the level of inventive step be increased? ERWIN J. BASINSKI BASINSKI & ASSOCIATES 113 SAN NICOLAS AVENUE SANTA BARBARA, CA 93109 EJB@BASINSKILAW.COM 1
Does the EPO grant trivial patents? Should the level of inventive step be increased? YES and NO 2
Does the EPO grant trivial patents? What is trivial? What is a trivial patent? Does trivial = obvious? Does trivial = low quality? Does obvious = low quality? How is obviousness determined? By the EPO By the US PO Is the EPO granting trivial patents? 3
What is trivial? A WORD - A SYMBOL Representing a concept of reality Different for each person with the concept I will know it when I see it 4
What is trivial? Webster s Dictionary - trivial From the Latin trivialis - found everywhere, commonplace, from trivium crossroads, from tri- + via way -- 1: COMMONPLACE, ORDINARY, (in French - Vulgar) 2 a : of little worth or importance b:relating to or being the mathematically simplest case; 5
What is trivial legally? EPO - not defined in EPC Articles, Rules No EU Cases/Opinions found US - not defined in 35 USC or 37 CFR or MPEP US - one 19th Century case 6
What is trivial legally? the Court contrasted invention, which adds to our knowledge and makes a step in advance in the useful arts, with an unpatentable trifling device, every shadow of a shade of an idea, which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures." Atlantic Works v. Brady, 107 U.S. 192, 200 (1883). 7
What is a trivial patent? In Patent Law - sounds like Obvious! or Low quality! EU Council - the problem of trivial patents is of patent examination, not of patent law in general NGOs/Academics/FOSS - any software patent is obvious/trivial - especially in hindsight so-called trivial patents (i.e. patents of a bad quality, failing to involve sufficient inventivity). From Propriété industrielle (marques et brevets) URL: www.droit-technologie.org/1_2.asp?actu_id= 1078 8
New EPO CII Brochure says The expression trivial patent is ambiguous and subjective. If by trivial such patents are meant that have been granted but should have not been granted, because in the opinion of third parties they lack novelty or inventive step, then, in such cases, mechanisms exist by which such patents may be challenged. CII brochure available at http://cii.european-patent-office.org/ 9
New EPO CII Brochure says Furthermore, with hindsight many patented inventions may appear to be trivial or obvious, though at the priority date of the application they were not. Finally, in cases where the scope of protection is small or has become small, perhaps because the examiner has in the light of the prior art imposed additional restrictions to the claims, such that it might appear to be trivial in the opinion of third parties, then such a patent may be of doubtful value to its owner and unlikely to block any further technical innovation. 10
Patent Quality Obviousness/technical step How determined? What are the variables? Type of technology -chemistry, CII, Bio, etc. Examiner skill, knowledge, environment, workload, prior art availability Examination procedures Management oversight 11
Patent Examination Process Application Application Application Exam procedure Examiner Patent Exam rules Opposition filter 12
Obviousness INVENTIVE STEP PRIOR ART NON-OBVIOUS 13
Role of the Nonobviousness Doctrine It can be considered a nontriviality requirement, where triviality is measured by technical difficulty. 14
IN THE US 35 U. S. C. 103 A patent may not be obtained..., IF the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which the subject matter pertains. 15
USPTO Process Analysis from Graham v. John Deere (383 U.S. 1) (1966) Three Primary Factors: Scope and Content of the Prior Art Differences between the Prior Art and the Invention Level of Ordinary Skill in the Pertinent Art Secondary Factors: Commercial Success Long Felt Need Failure of Others etc. (copying by others, unexpected results) Obviousness is a Question of Law 16
Difficulties with the Graham Analysis The primary factors merely identify the relevant question. They identify the gap between the prior art and the invention but provide no guidance for evaluating the significance of the gap. The importance of the secondary factors is unclear. more susceptible of judicial treatment subtests to tip the scales of patentability 17
Federal Circuit s Obviousness Test Prima Facie Case evidence of a suggestion, teaching, or motivation to combine or otherwise modify the prior art reference to produce the invention PTO bears the burden of establishing PTO receives deference in interpreting references Secondary Considerations can be used to rebut a prima facie case required part of the analysis 18
Possible Changes Seek Supreme Court Review of Certain Key Points of Federal Circuit Case law Suggestion Test --Eliminate or restrict. Commercial Success --Limit to situations where patentee can prove that no exogenous changes account for success Presumption of Validity --Presumption could be eliminated where challenger demonstrates that the PTO did not have relevant prior art. Congress considering Post-grant Opposition Procedure Now 19
Quality of Products FY 04 Patent In-Process xaminatio n ompliance Rate 1 Patent Allowance rror Rate 2 1600 76.4% 4.40% 1700 83.1% 8.03% 2100 88.3% 3.05% 2.53% Fiscal Year 2004 2600 2800 3600 74.2% 86.8% 3.39% 79.6% 7.54% 3700 Design 81.7% 9.01% 90.4% 3.28% FY 04 Total 82.0% 5.32% 1 Compliance is the percent of office actions reviewed and found to be free of any in-process examination deficiency (an error that has significant adverse impact on patent prosecution). 2 Patent allowance error rate is the percent of allowed applications reviewed having at least one claim which is considered unpatentable on a basis for which a court would hold a patent invalid. Allowance occurs before a patent is issued, so these errors are caught before any patent is actually granted. FY 05 Target 84.0% 4.0% 20
USPTO v. EPO Procedure Different US procedure - 35 USC 103 PO employees, work rules, work environment Court imposed rules govern statute interpretation teaching, suggestion, motivation test FESTO increased # of claims dramatically Huge backlog EPO Technical Requirement - EPC Art 54 & 56 Different definition of Prior Art Non-obvious/ Technical step required Solve a technical problem With a technical solution 21
Exam Variables USPTO EPO Examiner skill Mostly BS, some MS Mostly MS & PHD TC 1600 - MS & PHD Better Trained Examiner turnover Very high -hiring 860 Negligible 30% of new hires/3 yrs > 0.1%/year Environment Challenging thruput rules - 6/mo Less time constrained No non-technical (?) Workload Compensation 600,000+ case backlog 100,000+ backlog Better pay & benefits Prior Art availability And Definition Reasonable tools & access- no technicality Same type tools - Prior Technical Art Examination procedures Courts constrain rules EPO controls - no court constraints 22
Does the EPO grant trivial patents? Of Course! When I was a Patent Office examiner (though that was many years ago) we knew that we sometimes granted patents that we shouldn t, but did it anyway because we thought the Patent Appeals tribunal would not support us. Mr. Peter Prescott QC (sitting as a Deputy Judge) in the July 21, 2005 decision In the matter of Patent Applications GB 0226884.3 and 0419317.3 by CFPH L.L.C. 23
Does the EPO grant trivial patents? If trivial = of little worth/importance - YES If trivial = obvious = unenforceable - YES Should the level of inventive step be increased? NO!! In the Computer implemented Arts, it is too high now! 24
Fiction of Non-Technical Prior Art State of the Art = State of Technology Business schemes are non-technical Business schemes are not state of technology Business schemes, whether public or not, whether known before or not, may be considered in inventive step analysis May be considered known by the person skilled in the art in assessing obviousness. 25
This Prior Art Fiction Has raised the obviousness bar to a level which defies common sense and violates the EPO s own Guidelines and prior opinions on hindsight and Ex Post Analysis 26
Summary Recent EPO case law suggests non-technical contribution (excluded matter) should be assumed to be known when assessing inventive step inconsistent with historical approach to inventive step inconsistent with approach used in other fields contrary to well-established principles of patent law inconsistent with TRIPS and the now dead EU Draft Directive It represents either If applied generally, a radical departure from the principles of patent law established over centuries; or If restricted to software inventions, a sui generis law which has never been agreed by the contracting states 27
Conclusion Does the EPO issue Trivial patents? Of course it does if quality is in the eyes of the beholder If trivial = obvious, It does issue some, wherein it does not find available Prior Art, especially nonpatent prior art. Witness the number of Oppositions. EPO believes Opposition process provides a reasonable filter. Should the EPO Raise the Obviousness Bar? No. And it should review the prior art fiction currently used in CII applications. 28
Current BOA Opinions in the CII Area Pension Benefits 9/8/00 T 0931/95 Pension/Insurance System Comvik 9/26/02 T 0641/00 Digital Telephone System Ricoh 11/27/03 T 0172/03 Order Management System Hitachi 4/21/04 T 0258/03 Dutch Auction Scheme 29
Rules from these Opinions Have Raised the Obviousness Bar The Fiction of Non-Technical Prior Art The Exam Process for BM Applications Other Considerations re CII Applications 30
Art. 56 EPC Inventive Step Invention has no Inventive Step IF, having regard to the State of the Art, it is obvious to a person skilled in the Art 31
ART. 54 EPC What is NEW - State of the Art? If it Does Not form part of the State of the Art, it is NEW State of the Art is EVERYTHING available to the public (oral, written, use, or in any other way) before the filing date of the application 32
State of Technology? Article 56 EPC in its English text states that an invention shall be considered to have an inventive step if, having regard to the state of the art, it is not obvious to a person skilled in the art. The equally authentic French and German texts are somewhat more informative in that they can best be rendered in English as stating that an invention shall be considered as based on inventive activity if a skilled person cannot derive it in an obvious manner from the state of technology. COMVIK T 0641/00 33
Fiction of Non-Technical Prior Art The fiction = Consider the inventive business concept as part of the State of the Art, without any evidence the concept was publicly known before the priority date of the application. 34
So Does Art. 56 Now Mean? An invention shall be considered as involving inventive step if, having regard to the state-of-the-art, it is not obvious to a person skilled in the art having knowledge of any novel aim to be achieved in a non-technical field; or non-technical aspects and features of the invention 35
Fiction of Non-Technical Prior Art Pension Benefits T 0931/95 The assessment of inventive step has to be carried out from the point of view of the programmer... having the knowledge of the concept & structure of the improved pension system as set out in the method claims. 36
Fiction of Non-Technical Prior Art COMVIK T 0641/00 Re an apparatus implementing a BM - skilled person had knowledge of the nontechnical method - only technical aspects used in assessing inventive step. (citing pension benefits). Hindsight principle only applies to technical elements. (No authority for this). 37
Fiction of non-technical prior art RICOH T 0172/03 Applicant complained of the fiction but BOA said: ex post facto knowledge cannot be avoided in judging inventive step (violates earlier BOA opinions); Programmer has knowledge of business related features and aspect of the order management method, as part of technical problem to be solved. 38
Fiction of Non-Technical Prior Art Where does the Fiction lead? Lots of challenges Many EPO cases on hindsight & ex-post analysis In the interim, any new, non-public, business related schemes/elements will be deemed known by the programmer implementing the system. 39
Case Law of the BOA EPO 4th Ed. P & A approach to avoid ex post facto analysis of Prior Art. - page 101, 102 citing T 564/89, T 645/92, T 795/93 and T 730/96 Ex Post Facto analysis - no pointer to solution Pages106, 107 citing T 229/85, T 99/85 and many others. 40
The Traditional Approach (Decision T 89/0268) In identifying the problem it is not permissible to draw on knowledge acquired only after the date of filing or priority. The guiding consideration in assessing inventive step is the knowledge of the skilled person before the date of priority or filing. 41
PTO Guidelines Not Followed Part C, Chapter IV 9.4 Obviousness Thus the question to consider, in relation to any claim defining the invention, is whether before the filing or priority date valid for that claim, having regard to the art known at the time, it would have been obvious to the person skilled in the art to arrive at something falling within the terms of the claim. If so, the claim is not allowable for lack of inventive step.... In considering inventive step, as distinct from novelty (see IV, 7.3), it is fair to construe any published document in the light of subsequent knowledge and to have regard to all the knowledge generally available to the person skilled in the art the day before the filing or priority date valid for the claimed invention. 42
PTO Guidelines Not Followed Part C, Chapter IV 9.8.3 Could-would approach In the third stage the question to be answered is whether there is any teaching in the prior art as a whole that would (not simply could, but would) have prompted the skilled person, faced with the objective technical problem, to modify or adapt the closest prior art while taking account of that teaching, thereby arriving at something falling within the terms of the claims, and thus achieving what the invention achieves (see IV, 9.4). In other words, the point is not whether the skilled person could have arrived at the invention by adapting or modifying the closest prior art, but whether he would have done so because the prior art incited him to do so in the hope of solving the objective technical problem or in expectation of some improvement or advantage (see T2/83, OJ 6/1984, 265). This must have been the case for the skilled person before the filing or priority date valid for the claim under examination. 43
Exam Process from these Opinions 1. Parse claims - technical elements 2. Tech elements define technical field. 3. Find closest prior art in THIS field 4. Find tech features not in closest PA 5. Objective tech problem = "Starting from the closest prior art, how to modify the closest prior art in order to..." 6. Is actual implementation technical, new & non-obvious? 44