Mitchell on Law

In an era when someone may indeed build a better mousetrap, perhaps one that monitors its prey’s DNA, patent law has never been more important. In the United States, updating laws created in the smokestack era to foster and protect 21st-century innovation is a top priority. Around the globe, the challenge is even more formidable.

“There is no such thing as a global patent,” says Jay Erstling, who joins William Mitchell’s intellectual property program this fall as its fourth full-time faculty member. Since 2002 he has served as director of the Patent Cooperation Treaty (PCT) and advisor to the director general of the World Intellectual Property Organization (WIPO) in Geneva. While the focus of Erstling’s work has been on the international patent filing system, he has also kept his finger on the pulse of patent harmonization progress, which, despite significant procedural advances, remains agonizingly slow.

The PCT does not issue patents. However, it does provide applicants with a centralized and streamlined international application process, and it is Erstling’s job to make sure it runs smoothly. Since the treaty was concluded in 1970 and the first application filed in 1978, it has been gaining purchase. That first year, 459 applications were filed, and 18 countries were party to the agreement. It took 22 years to receive the first half million applications, but the next half million arrived in only four years. Last year, 145,000 applications poured in, and 136 countries now participate.

On the surface, the process seems simple enough. Instead of filing individual patent applications in every country in which protection is wanted, an applicant submits a single PCT application that covers all member countries. “One application, filed in one country, in one language, with one set of fees,” Erstling summarizes. A major patent office then examines the application to determine the invention’s potential patentability, and WIPO publishes the application to disclose it to the world. It is only at the end of this process that applicants must convert their applications to accommodate the national laws of the countries in which they want protection.

The PCT simplifies filing and gives applicants valuable information and additional time to make important patenting decisions. It has also served to bring national patent provisions into close proximity with each other, but distinctions in national law and practice remain a fact of life. Hence the goal of harmonization: to simplify search and conversion, ease international trade, curb corporate legal costs, and ultimately benefit the consumer by lowering prices.

But Utopia won’t happen anytime soon. The road to harmonization, which arguably began with the Paris Convention for the Protection of Industrial Property in 1883, is long, bumpy, and littered with conflict.

» View All Pages -1- Next Page »

“Ever since patent law was created, there has been a built-in tension inherent in the system,” says Erstling. “In fact, that’s the greatest genius of the system — the tension between the private rights of the patent holder and the rights of the public.” Exclusivity vs. public interest is at patent law’s core, he explains; the inventor gets exclusive rights for his invention for 20 years in exchange for disclosing to the public what makes that invention an invention.

But not every country defines invention in the same way, and not every country has a well-defined patent policy. The resulting gaps, especially between industrialized and developing countries, can be large. Because published applications are a valuable depository of technical knowledge, industrialized countries want strong, transparent, effective systems in place worldwide. Developing countries may want those systems, too, but they want them framed in such a way that less advanced economies and their populations can also benefit.

Divergent views in the pharmaceutical field illustrate the inherent conflict. According to the Paris Convention, Erstling says, countries were required to protect the process for manufacturing a pharmaceutical product but not the product itself. But the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement requires that protection also be granted for products. This has alarmed some developing countries, who say that if patents are available for products, then prices will go up, and people won’t have access to the drugs they need.

“A compromise has been struck that is still controversial. Nobody on either side likes it terribly well,” Erstling says. Certain provisions allow developing countries to grant compulsory licenses that would not break the patent, but would require the patent owner to make available patented drugs on reasonable terms in cases affecting public health. “It’s an attempt to strike a balance between public and private rights. The pendulum keeps swinging,” he adds.

Preserving traditional knowledge, much of which is unwritten and passed down through oral traditions, is also tricky. In China, for instance, controversy surrounds the patent protection issues related to traditional medicines. According to Jia Hepeng, writing recently in Intellectual Property Watch, China’s patent law, revised in 1993, now protects “pharmaceutically effective chemical ingredients.” But because these medicines often combine 20 or more herbs whose individual contributions to the drug’s effectiveness have not been determined, that protection is difficult to apply. Patenting the combination is not seen as a solution either, because, with minor tinkering, a formula’s healing effects could easily be duplicated.

The principle of independence of patents, a bedrock provision embedded in the Paris Convention, may also work against harmonization. Even industrialized countries have significantly different patent laws. The same patent application could be accepted in one country and rejected in the next, Erstling says.

« Previous Page -2- Next Page »

“In the U.S., you can patent pretty much anything—a method of doing business, a surgical procedure, computer software. Most countries have much greater restrictions. Claims are also drafted differently, which can affect the scope of the patent right. In addition, in the U.S., the first person who invented something wins the patent. In the rest of the world, whoever files the application first wins. And a U.S. inventor who discloses his invention has a year to file, but a European who discloses before he files may be out of luck.”

Emerging countries have tended to be resistant to and suspicious of harmonization, he adds. “Developing countries fear giving up the flexibility they feel they might need as they move along,” he says. “Some of their most valuable intellectual property exists in traditional knowledge and genetic resources, and Western IP systems in general don’t recognize these to the extent that they might. The ultimate goal of developing countries is not to block medicines or advances, but to be able to say, ‘Wait a second—we have contributed significantly to this, and we want our share of the benefits.’”

Most agree that harmonization provisions should ensure that technology transfer takes place on a fair, just basis. But should they focus on narrow areas of patent law, or encompass broader areas that significantly affect how developing countries profit and benefit from their intellectual property? The PCT has managed to bring countries closer together by implementing a common set of procedural rules, Erstling says. Because every international search takes place on the basis of agreed-upon standards and definitions, individual countries are increasingly willing to rely upon a positive international search report in granting a patent because they assume it meets suitable patentability standards.

Two major shifts have occurred during his PCT tenure, he adds. A cultural shift has made the PCT process more user-friendly and better attuned to applicant needs and a patent-filer mentality. The PCT also has created a rich database and is moving toward a paperless system. Efficiency has increased while costs decrease, although the large backlogs that still exist in some national patent offices make timeliness a continuing goal.

A shift in focus is also occurring, with the biggest growth coming from the East. China, which didn’t have a patent system 23 years ago, now has one of the world’s largest, and Korea has become the fourth largest filer of PCT applications. Other emerging countries such as India are “quickly waking up to the notion that as their own industrialization advances, intellectual property is now in their self-interest. They’re participating more and more, but they’re also demanding that there be a fair balance in the way patent policy moves forward,” Erstling says. “With respect to the PCT, we want not only to bring more countries into the system, but also to make sure those countries benefit from being in the system. We want to meet increased PCT demand in a quality way.”

« Previous Page -3- Next Page »

Yet gaps still exist in PCT membership, primarily in Africa and Latin America, and countries such as Thailand and Argentina, which have long considered joining the PCT, are still outside the system. In the United States, increased recognition of the importance of international protection has led both to increased use of the PCT and to a push for substantive harmonization as well as national patent reform. Companies welcome the streamlined simplification that a reliable, transparent, international process represents. Erstling foresees the possibility of significant reform, with the United States moving closer to the rest of the world by adopting a first-to-file policy, for example, and other countries adopting some U.S. law features, such as a grace period for disclosure.

“As the international patent process becomes so much more the norm, the realization that there has to be some solution to national discrepancies will grow,” he says. “International protection is really at the core. Everyone wants filing ease, clear rules about how applications are examined and granted, and a greater sense of certainty about patents that are issued. The closer laws come to each other, the less burdensome and costly that protection will be.”

Whether harmonization is in itself a worthy goal provokes endless debate. “There’s something about diversity that we inherently value, something good about local flavor that needs to be honest, cherished, and retained. Yet we need to reduce costs to the consumer. It’s a tricky balance,” says Kenneth L. Port, head of William Mitchell’s intellectual property law program. “It seems to me that we’re rapidly harmonizing the IP procedure, but we’re held up on harmonizing the IP substance. And we’ve been held up on that for 130 years.”

Erstling doesn’t disagree, but neither is he discouraged. Given the recent strides and future hopes of the PCT, combined with the growing willingness of countries to participate in the international patent process, harmonization may be further along than it seems. “It’s almost as if it’s beginning to exist in practice,” he concludes. “The problem is that we can’t write it down.”

« Previous Page -4-