SlideShare a Scribd company logo
1
“If patent law is to stimulate innovation it is more important to have strong rules on
sufficiency (because the relevant information becomes available to all other
innovators), rather than to have strict rules on obviousness that come on top of the
novelty requirement”.
Discuss.
‘We cannot solve a problem by using the same kind of thinking we used when we created
them’.
A. Einstein (1875-1955)
The question juxtaposes sufficiency and obviousness, coming to the conclusion that
innovation is stimulated by strong rules of sufficiency because the disclosed information
becomes ‘available’ to innovators, rather than through strict rules on obviousness. While
I am inclined to agree with the statement, I only do so, in part.
I agree that effective sufficiency rules are more important than strict obviousness rules.
This is because (a) the test of obviousness is determined to a meaningful extent by how
effectively the prior art has been disclosed, or to put it another way, if the prior art has
been sufficiently disclosed the question of obviousness is (arguably) more luculent than it
would be under more relaxed sufficiency rules; and (b) the information, if effectively
disclosed and described, enables innovators to understand the scope of patent cover and
how or what makes the invention work – this is important to keep the patent award in
return for disclosure status quo.
Nevertheless, I am inclined to conclude that strict rules on sufficiency do not necessarily
stimulate innovation. Indeed, to take the flip-side of the question and suggest strict rules
on obviousness would stimulate innovation is even more questionable. The main problem
posed by the theory as a whole, however, is that proving or indeed disproving an
increase in innovation, whether statistically or otherwise, is extremely difficult to do so.
This is the substance of the discussion in part two of this paper.
2
Although the reasons for innovation may be numerous when it comes to patenting a
product, you need to know what the state of the existing art is - for this to be possible
the information disclosed by previous inventors must be enabling and an effective
disclosure. Thus, effective sufficiency rules are required. Although less technical problems
can be identified through basic observations, advanced technologies, such as those in
fields of biotechnology or computer implemented patents, may have problems that aren’t
always as clear. To be able to discern what the problem is, innovators need to question
the state of the art as it stands at that moment in time; their questioning wouldn’t be
possible for very technical inventions if there was no effective disclosure which was
enabling. This is explored more fully below.
Part one: Sufficiency - Adequate disclosure which is enabling
The trade off in patent law is the patentee is awarded a term of protection preventing
others using his patented process or invention, in return for disclosing and making
available the specification of the patent to the public. As one of the main justifications for
limiting competition in this respect1, patent law applies strict rules of disclosure to the
specification. This is contained in s.14(3)2 of the Patent Act 1977. There are important
exceptions however, for example, disclosure at an international exhibition3 or disclosure
arising out of breach of confidence4 will be disregarded. The effectiveness of these
safeguards are questionable considering once the information is made known to the
public it’s extremely difficult for something to become undisclosed again.
Lord Hoffmann in Kirin-Amgen Inc v. Hoechst Marion Roussel Ltd5 formulated a two-
stage test which determined what was required for ‘sufficiency’, or more commonly, a
‘sufficient disclosure’. It requires that: (1) firstly, the invention must be identified, along
with what it is claimed that the skilled person is enabled to do; (2) second, the
1
This is because you are preventing competitors from using a process or invention that may otherwise benefit
them.
2
“The specification of an application shall disclose the invention in a manner which is clear enough and
complete enough for the invention to be performed by a person skilled in the art”.
3
S. 2 subsection 4(c) Patent Act 1977.
4
S.2 subsection 4(a) Patent Act 1977.
5
[2005] RPC 169.
3
specification must be examined to see whether it does enable the skilled person to carry
it out6. Failure to sufficiently disclose the invention ultimately means that it hasn’t been
adequately described under s.14(3); insufficiency is a ground for invalidating the patent.
The requirement of sufficiency and its importance in assessing ‘novelty’ was made clear
in Synthon BV v. Smithkline Beecham plc7. Sufficiency must be an: (a) adequate
disclosure, which is also (b) enabling. In assessing disclosure, no aspect of trial or error
is permitted but in determining whether it is enabling, a reasonable degree of
experimentation is permissible. Bainbridge provides the useful example that8:
‘where a claim is broad enough to cover two methods, if the skilled person would quickly
realise that one would work and the other would not, the disclosure would still meet the
requirement of sufficiency’.
In the context of an enabling disclosure, Hoffmann went on to say that enablement
‘means that the ordinary skilled person would have been able to perform the invention
which satisfies the requirements of disclosure’9. A useful and illustrative example is the
Halliburton Energy Services Inc v. Dmith International (North Sea) Ltd10 case. Here, a
method of computer simulation for the design of drill bits failed to disclose the
specification in such a way that enabled the skilled person in the art to put the invention
into effect; the underlying computer program failed to work because the equation for it
was wrong. The disclosure has to enable the skilled person to be able to use the
invention within the bounds of what has been claimed.
Furthermore, Lord Hoffmann made it clear that disclosure and enablement are concepts
that should be treated distinctly separate11.
In the Synthon case Lord Hoffmann held that enablement for the purpose of determining
novelty was the same as enablement for the purpose of determining sufficiency but
6
Ibid at para 103; see also: Bainbridge ‘Intellectual Property’ (8th
edition) pg. 413.
7
[2005] UKHL 59; [2006] 1 All E.R. 685.
8
David I. Bainbridge: ‘Intellectual Property’ (8th
ed.) pg 413.
9
Synthon BV v. Smithkline Beecham plc 2005] UKHL 59; [2006] 1 All E.R. 685.
10
[2006] EWCA Civ 1715.
11
See also: IDA LTD v. University of Southampton [2004] EWHC 2107 (Pat), [2005] R.P.C. 11.
4
noted that the approach to be taken when applying these principles to the facts of a case
may differ12. When assessing sufficiency, the skilled person has the goal of the claimed
invention clearly in mind. When assessing enablement for the purpose of novelty, the
prior art cannot be assessed with the benefit of hindsight and knowledge of the claimed
invention. In either case it is detrimental that the information disclosed in the description
is accurate and of such a nature as to allow for the validity of a patent to be determined.
If the disclosure is unclear, it may fail on grounds of sufficiency; similarly, if the
ordinarily skilled person in the art has to work hard to implement the invention, then
considerable work being required to do so, may suggest insufficient disclosure and
enablement13.
What is particularly important about this provision is that the majority of challenges
brought against the validity of a patent are on grounds of ‘novelty’, or for lack of
‘inventive step’/obviousness14. For example, a patent will be novel/new if it does not
form part of the state of the art15; you cannot have a patent right for something that has
already been patented or is part of existing knowledge16. These challenges are different
in essence, but both have to consider the ‘state of art’. Therefore the prior art, among
other things, must consider the specifications disclosed in patents prior to the priority
date17. Thus, if rules regarding disclosure are insufficient, it is arguably more difficult to
determine whether the patent in question has been anticipated by prior art, or lacks
inventive step that a skilled person, having considered the state of the art, considers the
patent obvious. These questions cannot be answered if the prior art does not disclose or
enable a skilled person in the art to determine how and what makes the patent work i.e.
what has in fact been patented and what is the scope of the patented claim.
12
Andrew Sharples, ‘Experimental Novelty: Synthon vSmithKline Beecham’ [Case Comment] E.I.P.R. 2006,
28(5), 308-311., pg.3-4.
13
Halliburton Energy Services Inc v. Smith International (North Sea) Ltd [2006] EWCA Civ 1715.
14
Patent Act 1977, S.(3): “An invention shall be taken to involve an inventive step if it is not obvious to a
person skilled in the art, having regard to any matter which forms part of the state of the art by v irtue only of
section 2(2)above (and disregarding section 2(3) above)”.
15
Both the Patent Act 1977 s.2 and EPC art 54(1) require this.
16
Patent Act 1977, S.2(2): “The state of the art in the case on an invention shall be taken to comprise all
matter which has at any time before the priority date of that invention been made available to the public by
written or oral description, by use or in any other way”.
17
Ibid S.2(3).
5
A recent example which illustrates the above point is Samsung Electronics Co Ltd v.
Apple Retail UK Ltd18. In this case two patents concerning a mobile telecommunications
system were invalid because their subject-matter was not derivable directly and
unambiguously from the disclosure of their priority documents. The priority document
must be such to give the skilled man essentially the same information which formed the
subject of the claim and enable him to work the invention in accordance with that
claim19. Having failed to do so, the patents were insufficient. Furthermore, the patents
were deemed obvious because the radio link with turbo-decoding and variable latency
turbo codes for wireless multimedia communications prior art anticipated parts of the
patent20.
It is evident from the above cases that the rules surrounding sufficiency are detrimental
because of their relationship with determining novelty or inventive-step due to analysis of
‘prior art’ and the patent in dispute. Strict rules may provide greater clarity and ease of
establishing obviousness for example, but would stricter rules evidence inventiveness?
Are strong rules on sufficiency more desirable than strong rules on other elements; does
this depend on the subject matter and field of the patent?
(i) Note on software patents: Maybe change in procedural rule rather than the
requirements themselves stimulate innovation – Could the answer be field
specific?
For other fields of technology such as software patents, strong rules on sufficiency or
obviousness, although necessary, may not stimulate innovation but in fact, achieve the
opposite. This is because software innovation occurs at such a rapid rate that within a
year your newly patented software is shipped to the realm of ‘out dated’ and you’re left
with an extensive patent term for old technology. This arguably stagnates innovation
because within that year the technology may be widely known or used and those in the
field will be prevented from using it until the end of the patent term, or, until the patent
holder agrees to license the innovation. In these fields, rules on sufficiency may not be as
18
[2013] EWHC 467 (Pat)
19
Ibid, paras 104-106; See also: MedImmune Ltd v. Novartis Pharmaceuticals UK Ltd [2012] EWCA Civ 1234.
20
Ibid, paras 155, 158.
6
important, as say, the length of patent awards and procedural issues are21. Such thought
was alluded to by former owner of Amazon, Jeff Bezos, where he openly critiqued his
‘one-click patent’ at the turn of the century22. He believed shorter patent terms were
needed in the field of software inventions, rather than stronger tests and rules23.
Part Two: Difficulties proving Innovation, an illustrative example – Lessons
learnt from Business Method Patents, an EU and U.S. consideration.
As touched upon above, one of the main problems the question poses is: how do you
ascertain whether stronger rules nurture innovative ideas, or indeed, how do you prove
an increase in innovation at all? The following analysis endeavours to illustrate the
dilemma and suggest avenues of enquiry that may evidence innovation. This will be done
through a consideration of business method patents; their blooming in the U.S. and
expansion into Europe and beyond.
The reasons for innovation are as numerous and broad as they are varied – some
innovate to solve questions posed by new problems or to solve any unresolved problems;
others apply new technology to pre-existing ideas; while the majority innovate for
commercial gain. Innovation may arise through the discovery of a new form of
technology that allows for more efficient results, for example, nanotechnology; or via a
culmination of two existing fields, such as biotechnology.
(i) Business Methods: The background
Although hotly debated24, it is clear that business methods came to the forefront of
patent filing in the U.S.25 following the decision of Judge Giles S. Rich in State Street
21
Jeff Bezos famously suggested that patents in the field of software and business methods might have greter
success if they are ‘faster patents’: i.e. ‘fewer (bad) patents, better (patents with higher quality), shorter
(patent term of 3-5 years)’, which he thought more suitable for the internet age. Bezos and O’Reilly Spearhead
Call for Patent Reform – An Open Letter from Jeff Bezos on the Subject of Patents”, 9th
March 2000 (See:
http://oreilly.com/news/amazon-patents.html).
22
Ibid.
23
Ibid.
24
“Since at least the days of Assyrian merchants, people have devised better and better ways to conduct
business. Yet it appears that neither the Patent Clause, nor early patent law, nor the current ss.101
contemplated or was publically understood to mean that such innovations are patentable” [Justice Steven’s
dissenting in Bilski v. Kappos 561 U.S., 10 S. CT. 3218 [2010] supra note 3, at 3257].
7
Bank & Trust Co. v. Signature Financial Group, Inc 26. This U.S. decision confirmed that
business methods were not patent-ineligible but in fact patent ‘eligible’27 subject
matter28, in certain circumstances. Following this decision there was a notable statistical
increase in the number of patent filings in the U.S.; the literature29 supports this notion
and provides for example, that the USPTO30 granted twice as many BMP in 1998 than
they did in 1997, and those were roughly 45% more than in 199831. Although less than
half of those filed to the USPTO were actually successful, it nevertheless raises a number
of interesting questions.
Does this increase suggest innovation and if so, were the reasons for this influx purely
down to the State Street decision? Were the reasons for filing, to protect their
innovations, or for more calculated commercial/business reasons?
Although a statistical increase in the number of patent filings in a particular field may per
se suggest innovation, this is not necessarily so. Price32 argued that the decision in State
Street created awareness in companies who wanted to maximise their profits33. This
could suggest that companies were encouraged to bring patents claims for their methods
of doing business so as to prevent competitors from using their models and to ultimately
maximise their profits. Although some businesses may have innovated new business
methods, it could just as easily be said that the majority of the filings were pre-conceived
methods, or to some extent, methods already in use. In other words, the businesses
25 Yinliang Liu, ‘Patenting business methods in the United States and Beyond – globalization of intellectual
property protection is not always an easy game to play’, International Review of Intellectual Property and
Competition Law (2011), IIC pg. 339; ‘Boom in Business Method Patent Filings has followed the State Street
ruing, PTO says’;’ 57 Pat., Trademark & Copyright J.115, December, 10, 1998.
26
149 F.3d 1368 (Fed. Cir. 1998), cert. Denied, 119 S.Ct. 851 [1999].
27
The term ‘patent-eligible’ connotes that business methods are not considered as inherently unpatentable
subject-matter under U.S. law per se. A business method will nevertheless have to satisfy all the other
requirements contained under SS.35 USC to be ‘patentable’. Being ‘eligible’ for patent protection and being
‘patentable’ are separate requirements.
28
This was confirmed in the very important U.S. Supreme Court decision: ‘a business method is simply one
kind of ‘method’ that is, at least in some circumstances, eligible for patenting under ss. 101’ [Per Justice
Kennedy, Bilski v Kappos 561 U.S., 10 S. CT. 3218 [2010]].
29
Yinliang Lui ‘Patenting business methods in the Unites States and Beyond – globalization of intellectual
property protection is not always an easy game to play’”, I.P.C.R. (2011); James Bollinger, ‘Road to Bilski: The
Troubled Passage to a Coherent Policy on Business Method Patents’ (2011) pg. 20-22.
30
United States Patent and Trademark Office (USPTO).
31
Yinliang Lui I.P.C.R. (2011); James Bollinger (2011) pg. 20-22.
32
Douglas L. Price: ‘Assessing the Patentability of Financial Services and Products’, 3 J. High Tech. L. 153
(2004).
33
Ibid, at 155.
8
were sitting on these ideas and following the decision in State Street they decided it
worthwhile to file an application; the decision may not have stimulated innovation, but
rather, facilitate more patent filings. Furthermore, only a fraction of the patents filed
under the head ‘business method’ were successful under the scrutiny of the USPTO34.
Although not applicable to all claims35, it could be argued that those that failed did so
because they were not innovations; by its very definition an innovation is something
new, whether a product, method or invention.
The clarity of the decision by Judge Rich is State Street maybe didn’t unequivocally
encourage innovation but did encourage the filing of methods of doing business that may
never have been made known to the public or competitors. It could be argued that the
‘clarity’, rather than the ‘strictness’ or ‘leniency’ of the rules instilled in businesses
enough certainty to encourage their applications and some innovation. If such a
correlation can be made then it was the judicial interpretation of the law, rather than the
strictness of the rules themselves that is responsible.
(ii) Development in Europe – Business Methods, albeit indirectly,
stimulating Innovation?
Subsequent case law made it more difficult for business method styled patents to
succeed. In much the same way as a species need to evolve to adapt and thus survive,
business method filings evolved and adapted to meet the legal challenges. As a result
new species of business patent emerged, which were implemented via computer software
apparatus. Two distinct types thus formed: (a) those implemented through
‘technological’ means and (b) ‘pure’ business methods; those that implemented
mathematical algorithms to ascertain data for example. Much like various species of
extinct elephant bird, the awarding of ‘pure’ business methods has all but died out36.
34
For example, only 900 out of a total of 169,000 filings were granted in the year 2001 (James Bollinger, Road
to Bilski…’ (2011), pg. 18).
35
Some of the claims may have failed because they were not sufficiently disclosed and failed to meet
procedural requirements.
36
A pure business method patent would come under section 52 subsection 2(c) of the EPC which states that:
‘schemes, rules and methods for performing mental acts, playing games or doing business and programs on
computers’ are not inventions, within the meaning of the act. Thus a pure method of doing business, thus
lacking any technical character or implementation, would fail to circumvent the section. This was reaffirmed in
Case: T 0931/95 OJ (2001), 44 ‘Controlling Pension benefits system/PBS PARTNERSHIP’.
9
They fail on grounds of ‘technical effect’ in the EPO37 and ‘obviousness’ in the U.S.
especially after the Supreme Court’s ruling in KSR Int’l Co v Teleflex Inc38.
What is interesting is that the business methods appeared to: Firstly, move from non-
technical to more technical based innovation; and secondly, reinstate that the careful
drafting of a claim should not be overlooked39, even though the advice given to clients
may not have necessarily changed40.
The more demanding EPO rules and tests implemented to satisfy ‘inventive step’ and
‘novelty’ seem to prevent ‘bad patents’ getting through and encourage applicants to be
savvy but once again we are faced with the question: Have these rules stimulated
innovation? What evidences innovation? Does the transition from non-technical business
methods to greater numbers of technical implementation suggest innovation, or rather,
adaption to meet legal tests? The answer must invariably be a ‘maybe’.
Part Three: Innovation – ‘Crowdfunding’ and ‘Crowd sourcing’ paving the
way for innovation in the internet age.
The internet is facilitating the creation of new ideas and innovations from concept to final
product, independent of the traditional investing obstacles, such as companies and/or
banks. This is done through a system called ‘crowd-funding’ or ‘crowd-sourcing’.
Crowdfunding in its simplest manifestation is the pooling of ideas and money, typically
small amounts by a large community, towards a goal, via an online interface. Projects
including: water purification devices41; music projects, literary and artistic projects42 and
37
See: AMAZON.COM/Method and system for placing a purchase order via a communications network (T
1244/07) Unreported January 27th
2011 EPO (Technical Bd App)); Hitachi/Auction Method [2004] EPOR 548.
38
127 S. Ct. 17 27 [2007]. (See also the USPTO 2007 and 2010 guidelines which were released as a result of
the KSR v. Teleflex judgement: “Examination Guidelines for Determining Obviousness under 35 U.S.C. 103 in
view of the Supreme Court Decision in KSR International co. V. Teleflex Inc, 72 FR 57526 (Oct. 10, 2007)”,
1324 Off. Gaz. Pat. Office 23 (Nov. 6, 2007) (2007 KSR Guidelines)).
39
Ilan Barzilay, ‘Coping with confusion in the Aftermath of Bilski’ pg. 39.
40
Ibid pg. 37].
41
Michael Pritchard, a water-treatment expert in Ipswich, funded his ‘Lifesaver bottle’ in 2007 using crowd
funding as a way to innovate and bring his product to market.
42
Danae Ringelmann, ‘Why crowdfunding is the world’s incubation platform’, Wednesday 0th
April 2013 (See:
http://www.guardian.co.uk/media-network/media-network-blog/2013/apr/10/crowdfunding-businesses-social-
projects)
10
the creation of new molecular models43 (to name just a few), have been funded and
created via crowd-funding44. What’s unique is that the collective, who are pooling their
knowledge and money, need not contribute the entire funding goal themselves.
Individuals who may not be able to contribute to the technical innovation can show their
support by contributing a payment; they contribute as much or as little as they wish. As
one of the major restrictions to an innovation coming to fruition, funding, is a major
problem for innovators. Alternative revenue streams such as this, functioning
independent of investment institutions, provide an important revenue stream. Projects
that the ‘people’ want, rather than a bank, publisher or software company etc, can come
to fruition this way.
From 2010 to 2012, the cash spent on crowd funding tripled, from $900 million to $2.7
billion and the predominant pools of funding are from Europe and North America45.
Although patents are still applied for during or once the product is completed, the initial
innovation itself and funding come about via an alternative means: the individual. The
internet facilitates interaction between inventors, scientists, engineers and entrepreneurs
to not only interact but actively create. The usual arrangement is as follows: people all
share ideas in exchange that they use the information to enhance the invention and their
name acknowledged as contributor.
But does crowdfunding necessarily create innovation? Again, the statistics are as useful
as they were when considering the strictness of regulation and its impact on innovation
(above). It is important to factor in: what do we actually mean by ‘an innovation’? If we
think about patent law: Once an invention meets all the required criteria (inventive-step,
non-obvious, etc) it is a patentable invention and by statement alone is an innovation in
43
Molecular model company ‘Boehringer’ used crowd-sourcing to pool scientific knowledge from around the
world to develop a new model to accurately predict the biological response of molecules:
http://econsultancy.com/uk/blog/9376-boehringer-ingelheim-partners-with-kaggle-to-crowdsource-scientific-
problem.
44 The video game, ‘Shadow of the Eternals’, the sequel to 2002 survival horror hit‘eternal darkness’,managed
to raise$100k in the firstday of its crowdfundingcampaign.Although a cultclassic,itnever achieved
mainstreamsuccess,so the developers felt that the only way to providea sequel would be via crowdfunding
(See: http://www.cbc.ca/hamilton/news/story/2013/05/07/hamilton-shadow-of-the-eternals.html).
45
Collin Lecher, ‘Cash Raised Through Crowdfunding Tripled In Three Years’ (2013) Popsci website:
http://www.popsci.com/technology/article/2013-04/crowdfunding-tripled-three-years-infographic.
11
and of itself. An innovation is progressive and would arguably not encompass all those
filed patents that do not meet the required standards. A crowdfunded idea may well be
‘innovative’, in the technical sense, but this is a question for a patent office.
If we put the question of ‘does it have an inventive-step, is it unique?’ aside and focus on
the question: what brings an innovative product to market in a physical sense? The
answer is funding and to some extent technical know-how46.
Yes, a patentable invention may never make it as far as being industrially produced but
being able to physically create the machine; software etc. requires capital. My argument ,
is crowdfunding stimulates innovation because it brings a greater variety of inventions
and ideas to fruition. Yes, they may not work and yes they may never be produced on an
industrial scale but in terms of raw creativity and innovation, crowdfunding has been and
will continue to stimulate. Furthermore, there are the legal implications and issues
surrounding disclosure of the invention through crowd-sourcing; many inventors will not
divulge the technical elements straight away in fear, and rightly so, of their idea being
taken. These questions are not within the scope of this essay but do provide food for
thought.
Part Four: Conclusion
I agree that effective sufficiency rules are more important than strict obviousness rules.
This is because (a) the test of obviousness is determined to a meaningful extent by how
effectively the prior art has been disclosed, or to put it another way, if the prior art has
been sufficiently disclosed the question of obviousness is (arguably) more luculent than it
would be under more relaxed sufficiency rules; and (b) the information, if effectively
disclosed and described, enables innovators to understand the scope of patent cover and
46
Even so, the pooling of ideas allows for those with the creative design or thought to get input from those with
the technical no-how. Furthermore, you could pay an individual to produce the product for you, or fix those
elements which are problematic.
12
how or what makes the invention work – this is important to keep the patent award in
return for disclosure status quo.
Nevertheless, I am inclined to conclude that strict rules on sufficiency do not necessarily
stimulate innovation.
Although the theories and statistics are persuasive, until these findings can be quantified
in a qualitative manner they can never be conclusive; only speculative. It is safe to say
that we are still innovating, maybe not at the same rate as we were at the turn of the
century, but things certainly haven’t begun to stagnate. If we say successful innovation
is the bringing of a product to market, I’d argue that alternative forms of funding, over
stricter rules on sufficiency and obviousness, are the key. If we are arguing that an
innovation is the product of a patent award, we may, nonetheless, conclude otherwise.
Until these underlying ‘problems’ are resolved, the exact answer to what stimulates
innovation will remain as mysterious as the inventors that dreamt them up.
13
Bibliography
Books
David I. Bainbridge, “Intellectual Property” 8th edition, Pearson Education Limited,
Ashford Colour Press Ltd (2010).
Hugh Hansen’s, “US Intellectual Property Law and Policy”, Edward Elgar Publishing
Limited (2006).
James Bollinger et al, Inside the Minds: “The Impact of Bilski on Business Method
Patents”, 2011 edition, Thomas Reuters/ Aspatore publishing, 2011.
Paul Torremans, “Intellectual Property Law” 6th Edition, Oxford Universty Press, 2010.
Journal Artic les
Andrew Sharples & Duncan Curley, ‘Experimental novelty: Synthon v. SmithKline
Beecham’ (2006), E.I.P.R. 28(5), 308-311.
Bob Stembridge, “Business is still booming”, 2011 (www.MANAGINGIP.COM)
“‘Boom’ in Business Method Patent Filings has followed the ‘state Street’ ruling, PTO
says”; December, 10, 1998 57 Pat., Trademark & Copyright J.115.
Branstetter, Lee G. & Sakakibara, Mariko, “Do Stronger Patents Induce More Innovation?
Evidence from the 1988 Japanese Patent Law Reforms” (2001). Department of Social and
Decision Sciences. Page 45. http://repository.cmu.edu/sds/45
Gregor Grant & David Gibbins, ‘Inventive Concept – is it a good idea?’ (2005) E.I.P.R.,
27(5), 170-175.
Ian Hargreaves, “Digital Opportunity: A Review of Intellectual Property and Growt h”,
Intellectual Property and Growth, May (2011).
James Bollinger, “Road to Bilski: The Troubled Passage to a Coherent Policy on Business
Method Patents”, (2011).
Jeff Bezos, “Bezos and O’Reilly Spearhead Call for Patent Reform – An Open Letter from
Jeff Bezos on the Subject of Patents”, 9th March 2000 (See:
http://oreilly.com/news/amazon-patents.html
R. Freeland, “Disclosure and enablement: the House of Lords clarifies the law on novelty”
Journal of Intellectual Property Law & Practice, (2006) Vol. 1, No. 3,. pg. 163-165.
Yinliang Liu, “Patenting business methods in the United States and beyond – globalization
of intellectual property protection is not always an easy game to play”, (2011)
International Review of Intellectual Property and Competition Law.
‘To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy’
Executive Summary
14
Website and Newspaper
Danae Ringelmann, ‘Why crowdfunding is the world’s incubation platform’, Wednesday
0th April 2013 (See: http://www.guardian.co.uk/media-network/media-network-
blog/2013/apr/10/crowdfunding-businesses-social-projects)
Molecular model company ‘Boehringer’ used crowd-sourcing to pool scientific knowledge
from around the world to develop a new model to accurately predict the biological
response of molecules: http://econsultancy.com/uk/blog/9376-boehringer-ingelheim-
partners-with-kaggle-to-crowdsource-scientific-problem.
Collin Lecher, ‘Cash Raised Through Crowdfunding Tripled In Three Years’ (2013) Popsci
website: http://www.popsci.com/technology/article/2013-04/crowdfunding-tripled-three-
years-infographic.

More Related Content

Viewers also liked

A Multichannel Analytics Roadmap
A Multichannel Analytics RoadmapA Multichannel Analytics Roadmap
A Multichannel Analytics Roadmap
St. Edward's University
 
Diccionarios y corpus electrónicos como herramientas del traductor
Diccionarios y corpus electrónicos como herramientas del traductorDiccionarios y corpus electrónicos como herramientas del traductor
Diccionarios y corpus electrónicos como herramientas del traductor
Gisela Abad UE Valencia
 
Rodney Sims Resume
Rodney Sims ResumeRodney Sims Resume
Rodney Sims Resume
Rodney (Tony) Sims
 
Tips
TipsTips
2014 annual R&D summary final
2014 annual R&D summary final2014 annual R&D summary final
2014 annual R&D summary final
Rachel King
 
Unclenching, the fist discovered a caress inside it
Unclenching, the fist discovered a caress inside itUnclenching, the fist discovered a caress inside it
Unclenching, the fist discovered a caress inside it
Angelos Michalopoulos
 
Ossobuco asado
Ossobuco asadoOssobuco asado
Ossobuco asado
Cocina con Nieves Angulo
 
Voeux 2017 b.muscolo
Voeux 2017 b.muscolo Voeux 2017 b.muscolo
Voeux 2017 b.muscolo
Bernard Muscolo
 
Córpora electrónicos
Córpora electrónicosCórpora electrónicos
Córpora electrónicos
Gisela Abad UE Valencia
 
Porrusalda
PorrusaldaPorrusalda
surge certificate
surge certificatesurge certificate
surge certificate
Neel Shah
 
First project, streatham
First project, streathamFirst project, streatham
First project, streatham
Fidel Karim
 
Human Hair Extensions In Australia
Human Hair Extensions In AustraliaHuman Hair Extensions In Australia
Human Hair Extensions In Australia
elishaclark28
 
Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...
Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...
Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...
Philip R. Lee Institute for Health Policy Studies
 
Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...
Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...
Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...
Philip R. Lee Institute for Health Policy Studies
 
Que es un marcador web
Que es un marcador webQue es un marcador web
Que es un marcador web
Lena Vargas
 
Empathetic Communication
Empathetic CommunicationEmpathetic Communication
Empathetic Communication
nooru1987
 
كتاب الخرائط الذهنية لسور القرآن
كتاب الخرائط الذهنية لسور القرآنكتاب الخرائط الذهنية لسور القرآن
كتاب الخرائط الذهنية لسور القرآن
Yassin Balja
 

Viewers also liked (18)

A Multichannel Analytics Roadmap
A Multichannel Analytics RoadmapA Multichannel Analytics Roadmap
A Multichannel Analytics Roadmap
 
Diccionarios y corpus electrónicos como herramientas del traductor
Diccionarios y corpus electrónicos como herramientas del traductorDiccionarios y corpus electrónicos como herramientas del traductor
Diccionarios y corpus electrónicos como herramientas del traductor
 
Rodney Sims Resume
Rodney Sims ResumeRodney Sims Resume
Rodney Sims Resume
 
Tips
TipsTips
Tips
 
2014 annual R&D summary final
2014 annual R&D summary final2014 annual R&D summary final
2014 annual R&D summary final
 
Unclenching, the fist discovered a caress inside it
Unclenching, the fist discovered a caress inside itUnclenching, the fist discovered a caress inside it
Unclenching, the fist discovered a caress inside it
 
Ossobuco asado
Ossobuco asadoOssobuco asado
Ossobuco asado
 
Voeux 2017 b.muscolo
Voeux 2017 b.muscolo Voeux 2017 b.muscolo
Voeux 2017 b.muscolo
 
Córpora electrónicos
Córpora electrónicosCórpora electrónicos
Córpora electrónicos
 
Porrusalda
PorrusaldaPorrusalda
Porrusalda
 
surge certificate
surge certificatesurge certificate
surge certificate
 
First project, streatham
First project, streathamFirst project, streatham
First project, streatham
 
Human Hair Extensions In Australia
Human Hair Extensions In AustraliaHuman Hair Extensions In Australia
Human Hair Extensions In Australia
 
Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...
Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...
Adolescent Medical Home Policy Brief July 2016. Tebb, K.P., Pica, G., Peake, ...
 
Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...
Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...
Mobile Integrated Health Care - Community Paramedicine: A Resource for Commun...
 
Que es un marcador web
Que es un marcador webQue es un marcador web
Que es un marcador web
 
Empathetic Communication
Empathetic CommunicationEmpathetic Communication
Empathetic Communication
 
كتاب الخرائط الذهنية لسور القرآن
كتاب الخرائط الذهنية لسور القرآنكتاب الخرائط الذهنية لسور القرآن
كتاب الخرائط الذهنية لسور القرآن
 

Similar to IP summative essay

European & us patent law module3 2013 updated
European & us patent law  module3 2013 updatedEuropean & us patent law  module3 2013 updated
European & us patent law module3 2013 updated
IP Dome
 
How To Write An Invention Disclosure
How To Write An Invention DisclosureHow To Write An Invention Disclosure
How To Write An Invention Disclosure
Intepat IP
 
Doctrine of equivalants
Doctrine of equivalantsDoctrine of equivalants
Doctrine of equivalants
Altacit Global
 
Patent Invalidation in Vietnam - How to proceed.pdf
Patent Invalidation in Vietnam - How to proceed.pdfPatent Invalidation in Vietnam - How to proceed.pdf
Patent Invalidation in Vietnam - How to proceed.pdf
KENFOX IP & Law Office
 
Imagine : Harvesting Innovation
Imagine : Harvesting InnovationImagine : Harvesting Innovation
Imagine : Harvesting Innovation
Innomantra
 
SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...
SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...
SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...
SterneKessler
 
Patentable and Non Patentable Inventions
Patentable and Non Patentable InventionsPatentable and Non Patentable Inventions
Patentable and Non Patentable Inventions
egoistic_ek
 
Software Patent Issues
Software Patent IssuesSoftware Patent Issues
Software Patent Issues
Troy Adkins
 
Patents 101 Part 3 - Patentability
Patents 101 Part 3 - PatentabilityPatents 101 Part 3 - Patentability
Patents 101 Part 3 - Patentability
Jane Lambert
 
Introduction to Patents
Introduction to PatentsIntroduction to Patents
Introduction to Patents
Jane Lambert
 
Post grant compliances
Post grant compliancesPost grant compliances
Post grant compliances
Altacit Global
 
Post grant compliances
Post grant compliancesPost grant compliances
Post grant compliances
Altacit Global
 
Poster presentations public_disclosures
Poster presentations public_disclosuresPoster presentations public_disclosures
Poster presentations public_disclosures
fengrui129
 
Patent Reform - Conference Material
Patent Reform - Conference MaterialPatent Reform - Conference Material
Patent Reform - Conference Material
Rachel Hamilton
 
BOLAR EXCEPTION.pptx
BOLAR EXCEPTION.pptxBOLAR EXCEPTION.pptx
BOLAR EXCEPTION.pptx
SaurabhYadav39869
 
Disclosure requirement issues
Disclosure requirement issuesDisclosure requirement issues
Disclosure requirement issues
Shadab Ali
 
Post-KSR Obviousness
Post-KSR ObviousnessPost-KSR Obviousness
Post-KSR Obviousness
Gary M. Myles, Ph.D.
 
Common mistakes while drafting a patent application.pdf
Common mistakes while drafting a patent application.pdfCommon mistakes while drafting a patent application.pdf
Common mistakes while drafting a patent application.pdf
Boolean IP Consulting
 
Patent Eligibility's Common Stock Theory
Patent Eligibility's Common Stock TheoryPatent Eligibility's Common Stock Theory
Patent Eligibility's Common Stock Theory
Robert DeWitty
 
Novelty search USA & Canada | Patentability Search | InventionIP
Novelty search USA & Canada | Patentability Search | InventionIPNovelty search USA & Canada | Patentability Search | InventionIP
Novelty search USA & Canada | Patentability Search | InventionIP
Invention ip
 

Similar to IP summative essay (20)

European & us patent law module3 2013 updated
European & us patent law  module3 2013 updatedEuropean & us patent law  module3 2013 updated
European & us patent law module3 2013 updated
 
How To Write An Invention Disclosure
How To Write An Invention DisclosureHow To Write An Invention Disclosure
How To Write An Invention Disclosure
 
Doctrine of equivalants
Doctrine of equivalantsDoctrine of equivalants
Doctrine of equivalants
 
Patent Invalidation in Vietnam - How to proceed.pdf
Patent Invalidation in Vietnam - How to proceed.pdfPatent Invalidation in Vietnam - How to proceed.pdf
Patent Invalidation in Vietnam - How to proceed.pdf
 
Imagine : Harvesting Innovation
Imagine : Harvesting InnovationImagine : Harvesting Innovation
Imagine : Harvesting Innovation
 
SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...
SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...
SKGF_Advisory_Preparing and Prosecuting a Patent that Holds up in Litigation_...
 
Patentable and Non Patentable Inventions
Patentable and Non Patentable InventionsPatentable and Non Patentable Inventions
Patentable and Non Patentable Inventions
 
Software Patent Issues
Software Patent IssuesSoftware Patent Issues
Software Patent Issues
 
Patents 101 Part 3 - Patentability
Patents 101 Part 3 - PatentabilityPatents 101 Part 3 - Patentability
Patents 101 Part 3 - Patentability
 
Introduction to Patents
Introduction to PatentsIntroduction to Patents
Introduction to Patents
 
Post grant compliances
Post grant compliancesPost grant compliances
Post grant compliances
 
Post grant compliances
Post grant compliancesPost grant compliances
Post grant compliances
 
Poster presentations public_disclosures
Poster presentations public_disclosuresPoster presentations public_disclosures
Poster presentations public_disclosures
 
Patent Reform - Conference Material
Patent Reform - Conference MaterialPatent Reform - Conference Material
Patent Reform - Conference Material
 
BOLAR EXCEPTION.pptx
BOLAR EXCEPTION.pptxBOLAR EXCEPTION.pptx
BOLAR EXCEPTION.pptx
 
Disclosure requirement issues
Disclosure requirement issuesDisclosure requirement issues
Disclosure requirement issues
 
Post-KSR Obviousness
Post-KSR ObviousnessPost-KSR Obviousness
Post-KSR Obviousness
 
Common mistakes while drafting a patent application.pdf
Common mistakes while drafting a patent application.pdfCommon mistakes while drafting a patent application.pdf
Common mistakes while drafting a patent application.pdf
 
Patent Eligibility's Common Stock Theory
Patent Eligibility's Common Stock TheoryPatent Eligibility's Common Stock Theory
Patent Eligibility's Common Stock Theory
 
Novelty search USA & Canada | Patentability Search | InventionIP
Novelty search USA & Canada | Patentability Search | InventionIPNovelty search USA & Canada | Patentability Search | InventionIP
Novelty search USA & Canada | Patentability Search | InventionIP
 

IP summative essay

  • 1. 1 “If patent law is to stimulate innovation it is more important to have strong rules on sufficiency (because the relevant information becomes available to all other innovators), rather than to have strict rules on obviousness that come on top of the novelty requirement”. Discuss. ‘We cannot solve a problem by using the same kind of thinking we used when we created them’. A. Einstein (1875-1955) The question juxtaposes sufficiency and obviousness, coming to the conclusion that innovation is stimulated by strong rules of sufficiency because the disclosed information becomes ‘available’ to innovators, rather than through strict rules on obviousness. While I am inclined to agree with the statement, I only do so, in part. I agree that effective sufficiency rules are more important than strict obviousness rules. This is because (a) the test of obviousness is determined to a meaningful extent by how effectively the prior art has been disclosed, or to put it another way, if the prior art has been sufficiently disclosed the question of obviousness is (arguably) more luculent than it would be under more relaxed sufficiency rules; and (b) the information, if effectively disclosed and described, enables innovators to understand the scope of patent cover and how or what makes the invention work – this is important to keep the patent award in return for disclosure status quo. Nevertheless, I am inclined to conclude that strict rules on sufficiency do not necessarily stimulate innovation. Indeed, to take the flip-side of the question and suggest strict rules on obviousness would stimulate innovation is even more questionable. The main problem posed by the theory as a whole, however, is that proving or indeed disproving an increase in innovation, whether statistically or otherwise, is extremely difficult to do so. This is the substance of the discussion in part two of this paper.
  • 2. 2 Although the reasons for innovation may be numerous when it comes to patenting a product, you need to know what the state of the existing art is - for this to be possible the information disclosed by previous inventors must be enabling and an effective disclosure. Thus, effective sufficiency rules are required. Although less technical problems can be identified through basic observations, advanced technologies, such as those in fields of biotechnology or computer implemented patents, may have problems that aren’t always as clear. To be able to discern what the problem is, innovators need to question the state of the art as it stands at that moment in time; their questioning wouldn’t be possible for very technical inventions if there was no effective disclosure which was enabling. This is explored more fully below. Part one: Sufficiency - Adequate disclosure which is enabling The trade off in patent law is the patentee is awarded a term of protection preventing others using his patented process or invention, in return for disclosing and making available the specification of the patent to the public. As one of the main justifications for limiting competition in this respect1, patent law applies strict rules of disclosure to the specification. This is contained in s.14(3)2 of the Patent Act 1977. There are important exceptions however, for example, disclosure at an international exhibition3 or disclosure arising out of breach of confidence4 will be disregarded. The effectiveness of these safeguards are questionable considering once the information is made known to the public it’s extremely difficult for something to become undisclosed again. Lord Hoffmann in Kirin-Amgen Inc v. Hoechst Marion Roussel Ltd5 formulated a two- stage test which determined what was required for ‘sufficiency’, or more commonly, a ‘sufficient disclosure’. It requires that: (1) firstly, the invention must be identified, along with what it is claimed that the skilled person is enabled to do; (2) second, the 1 This is because you are preventing competitors from using a process or invention that may otherwise benefit them. 2 “The specification of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art”. 3 S. 2 subsection 4(c) Patent Act 1977. 4 S.2 subsection 4(a) Patent Act 1977. 5 [2005] RPC 169.
  • 3. 3 specification must be examined to see whether it does enable the skilled person to carry it out6. Failure to sufficiently disclose the invention ultimately means that it hasn’t been adequately described under s.14(3); insufficiency is a ground for invalidating the patent. The requirement of sufficiency and its importance in assessing ‘novelty’ was made clear in Synthon BV v. Smithkline Beecham plc7. Sufficiency must be an: (a) adequate disclosure, which is also (b) enabling. In assessing disclosure, no aspect of trial or error is permitted but in determining whether it is enabling, a reasonable degree of experimentation is permissible. Bainbridge provides the useful example that8: ‘where a claim is broad enough to cover two methods, if the skilled person would quickly realise that one would work and the other would not, the disclosure would still meet the requirement of sufficiency’. In the context of an enabling disclosure, Hoffmann went on to say that enablement ‘means that the ordinary skilled person would have been able to perform the invention which satisfies the requirements of disclosure’9. A useful and illustrative example is the Halliburton Energy Services Inc v. Dmith International (North Sea) Ltd10 case. Here, a method of computer simulation for the design of drill bits failed to disclose the specification in such a way that enabled the skilled person in the art to put the invention into effect; the underlying computer program failed to work because the equation for it was wrong. The disclosure has to enable the skilled person to be able to use the invention within the bounds of what has been claimed. Furthermore, Lord Hoffmann made it clear that disclosure and enablement are concepts that should be treated distinctly separate11. In the Synthon case Lord Hoffmann held that enablement for the purpose of determining novelty was the same as enablement for the purpose of determining sufficiency but 6 Ibid at para 103; see also: Bainbridge ‘Intellectual Property’ (8th edition) pg. 413. 7 [2005] UKHL 59; [2006] 1 All E.R. 685. 8 David I. Bainbridge: ‘Intellectual Property’ (8th ed.) pg 413. 9 Synthon BV v. Smithkline Beecham plc 2005] UKHL 59; [2006] 1 All E.R. 685. 10 [2006] EWCA Civ 1715. 11 See also: IDA LTD v. University of Southampton [2004] EWHC 2107 (Pat), [2005] R.P.C. 11.
  • 4. 4 noted that the approach to be taken when applying these principles to the facts of a case may differ12. When assessing sufficiency, the skilled person has the goal of the claimed invention clearly in mind. When assessing enablement for the purpose of novelty, the prior art cannot be assessed with the benefit of hindsight and knowledge of the claimed invention. In either case it is detrimental that the information disclosed in the description is accurate and of such a nature as to allow for the validity of a patent to be determined. If the disclosure is unclear, it may fail on grounds of sufficiency; similarly, if the ordinarily skilled person in the art has to work hard to implement the invention, then considerable work being required to do so, may suggest insufficient disclosure and enablement13. What is particularly important about this provision is that the majority of challenges brought against the validity of a patent are on grounds of ‘novelty’, or for lack of ‘inventive step’/obviousness14. For example, a patent will be novel/new if it does not form part of the state of the art15; you cannot have a patent right for something that has already been patented or is part of existing knowledge16. These challenges are different in essence, but both have to consider the ‘state of art’. Therefore the prior art, among other things, must consider the specifications disclosed in patents prior to the priority date17. Thus, if rules regarding disclosure are insufficient, it is arguably more difficult to determine whether the patent in question has been anticipated by prior art, or lacks inventive step that a skilled person, having considered the state of the art, considers the patent obvious. These questions cannot be answered if the prior art does not disclose or enable a skilled person in the art to determine how and what makes the patent work i.e. what has in fact been patented and what is the scope of the patented claim. 12 Andrew Sharples, ‘Experimental Novelty: Synthon vSmithKline Beecham’ [Case Comment] E.I.P.R. 2006, 28(5), 308-311., pg.3-4. 13 Halliburton Energy Services Inc v. Smith International (North Sea) Ltd [2006] EWCA Civ 1715. 14 Patent Act 1977, S.(3): “An invention shall be taken to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art by v irtue only of section 2(2)above (and disregarding section 2(3) above)”. 15 Both the Patent Act 1977 s.2 and EPC art 54(1) require this. 16 Patent Act 1977, S.2(2): “The state of the art in the case on an invention shall be taken to comprise all matter which has at any time before the priority date of that invention been made available to the public by written or oral description, by use or in any other way”. 17 Ibid S.2(3).
  • 5. 5 A recent example which illustrates the above point is Samsung Electronics Co Ltd v. Apple Retail UK Ltd18. In this case two patents concerning a mobile telecommunications system were invalid because their subject-matter was not derivable directly and unambiguously from the disclosure of their priority documents. The priority document must be such to give the skilled man essentially the same information which formed the subject of the claim and enable him to work the invention in accordance with that claim19. Having failed to do so, the patents were insufficient. Furthermore, the patents were deemed obvious because the radio link with turbo-decoding and variable latency turbo codes for wireless multimedia communications prior art anticipated parts of the patent20. It is evident from the above cases that the rules surrounding sufficiency are detrimental because of their relationship with determining novelty or inventive-step due to analysis of ‘prior art’ and the patent in dispute. Strict rules may provide greater clarity and ease of establishing obviousness for example, but would stricter rules evidence inventiveness? Are strong rules on sufficiency more desirable than strong rules on other elements; does this depend on the subject matter and field of the patent? (i) Note on software patents: Maybe change in procedural rule rather than the requirements themselves stimulate innovation – Could the answer be field specific? For other fields of technology such as software patents, strong rules on sufficiency or obviousness, although necessary, may not stimulate innovation but in fact, achieve the opposite. This is because software innovation occurs at such a rapid rate that within a year your newly patented software is shipped to the realm of ‘out dated’ and you’re left with an extensive patent term for old technology. This arguably stagnates innovation because within that year the technology may be widely known or used and those in the field will be prevented from using it until the end of the patent term, or, until the patent holder agrees to license the innovation. In these fields, rules on sufficiency may not be as 18 [2013] EWHC 467 (Pat) 19 Ibid, paras 104-106; See also: MedImmune Ltd v. Novartis Pharmaceuticals UK Ltd [2012] EWCA Civ 1234. 20 Ibid, paras 155, 158.
  • 6. 6 important, as say, the length of patent awards and procedural issues are21. Such thought was alluded to by former owner of Amazon, Jeff Bezos, where he openly critiqued his ‘one-click patent’ at the turn of the century22. He believed shorter patent terms were needed in the field of software inventions, rather than stronger tests and rules23. Part Two: Difficulties proving Innovation, an illustrative example – Lessons learnt from Business Method Patents, an EU and U.S. consideration. As touched upon above, one of the main problems the question poses is: how do you ascertain whether stronger rules nurture innovative ideas, or indeed, how do you prove an increase in innovation at all? The following analysis endeavours to illustrate the dilemma and suggest avenues of enquiry that may evidence innovation. This will be done through a consideration of business method patents; their blooming in the U.S. and expansion into Europe and beyond. The reasons for innovation are as numerous and broad as they are varied – some innovate to solve questions posed by new problems or to solve any unresolved problems; others apply new technology to pre-existing ideas; while the majority innovate for commercial gain. Innovation may arise through the discovery of a new form of technology that allows for more efficient results, for example, nanotechnology; or via a culmination of two existing fields, such as biotechnology. (i) Business Methods: The background Although hotly debated24, it is clear that business methods came to the forefront of patent filing in the U.S.25 following the decision of Judge Giles S. Rich in State Street 21 Jeff Bezos famously suggested that patents in the field of software and business methods might have greter success if they are ‘faster patents’: i.e. ‘fewer (bad) patents, better (patents with higher quality), shorter (patent term of 3-5 years)’, which he thought more suitable for the internet age. Bezos and O’Reilly Spearhead Call for Patent Reform – An Open Letter from Jeff Bezos on the Subject of Patents”, 9th March 2000 (See: http://oreilly.com/news/amazon-patents.html). 22 Ibid. 23 Ibid. 24 “Since at least the days of Assyrian merchants, people have devised better and better ways to conduct business. Yet it appears that neither the Patent Clause, nor early patent law, nor the current ss.101 contemplated or was publically understood to mean that such innovations are patentable” [Justice Steven’s dissenting in Bilski v. Kappos 561 U.S., 10 S. CT. 3218 [2010] supra note 3, at 3257].
  • 7. 7 Bank & Trust Co. v. Signature Financial Group, Inc 26. This U.S. decision confirmed that business methods were not patent-ineligible but in fact patent ‘eligible’27 subject matter28, in certain circumstances. Following this decision there was a notable statistical increase in the number of patent filings in the U.S.; the literature29 supports this notion and provides for example, that the USPTO30 granted twice as many BMP in 1998 than they did in 1997, and those were roughly 45% more than in 199831. Although less than half of those filed to the USPTO were actually successful, it nevertheless raises a number of interesting questions. Does this increase suggest innovation and if so, were the reasons for this influx purely down to the State Street decision? Were the reasons for filing, to protect their innovations, or for more calculated commercial/business reasons? Although a statistical increase in the number of patent filings in a particular field may per se suggest innovation, this is not necessarily so. Price32 argued that the decision in State Street created awareness in companies who wanted to maximise their profits33. This could suggest that companies were encouraged to bring patents claims for their methods of doing business so as to prevent competitors from using their models and to ultimately maximise their profits. Although some businesses may have innovated new business methods, it could just as easily be said that the majority of the filings were pre-conceived methods, or to some extent, methods already in use. In other words, the businesses 25 Yinliang Liu, ‘Patenting business methods in the United States and Beyond – globalization of intellectual property protection is not always an easy game to play’, International Review of Intellectual Property and Competition Law (2011), IIC pg. 339; ‘Boom in Business Method Patent Filings has followed the State Street ruing, PTO says’;’ 57 Pat., Trademark & Copyright J.115, December, 10, 1998. 26 149 F.3d 1368 (Fed. Cir. 1998), cert. Denied, 119 S.Ct. 851 [1999]. 27 The term ‘patent-eligible’ connotes that business methods are not considered as inherently unpatentable subject-matter under U.S. law per se. A business method will nevertheless have to satisfy all the other requirements contained under SS.35 USC to be ‘patentable’. Being ‘eligible’ for patent protection and being ‘patentable’ are separate requirements. 28 This was confirmed in the very important U.S. Supreme Court decision: ‘a business method is simply one kind of ‘method’ that is, at least in some circumstances, eligible for patenting under ss. 101’ [Per Justice Kennedy, Bilski v Kappos 561 U.S., 10 S. CT. 3218 [2010]]. 29 Yinliang Lui ‘Patenting business methods in the Unites States and Beyond – globalization of intellectual property protection is not always an easy game to play’”, I.P.C.R. (2011); James Bollinger, ‘Road to Bilski: The Troubled Passage to a Coherent Policy on Business Method Patents’ (2011) pg. 20-22. 30 United States Patent and Trademark Office (USPTO). 31 Yinliang Lui I.P.C.R. (2011); James Bollinger (2011) pg. 20-22. 32 Douglas L. Price: ‘Assessing the Patentability of Financial Services and Products’, 3 J. High Tech. L. 153 (2004). 33 Ibid, at 155.
  • 8. 8 were sitting on these ideas and following the decision in State Street they decided it worthwhile to file an application; the decision may not have stimulated innovation, but rather, facilitate more patent filings. Furthermore, only a fraction of the patents filed under the head ‘business method’ were successful under the scrutiny of the USPTO34. Although not applicable to all claims35, it could be argued that those that failed did so because they were not innovations; by its very definition an innovation is something new, whether a product, method or invention. The clarity of the decision by Judge Rich is State Street maybe didn’t unequivocally encourage innovation but did encourage the filing of methods of doing business that may never have been made known to the public or competitors. It could be argued that the ‘clarity’, rather than the ‘strictness’ or ‘leniency’ of the rules instilled in businesses enough certainty to encourage their applications and some innovation. If such a correlation can be made then it was the judicial interpretation of the law, rather than the strictness of the rules themselves that is responsible. (ii) Development in Europe – Business Methods, albeit indirectly, stimulating Innovation? Subsequent case law made it more difficult for business method styled patents to succeed. In much the same way as a species need to evolve to adapt and thus survive, business method filings evolved and adapted to meet the legal challenges. As a result new species of business patent emerged, which were implemented via computer software apparatus. Two distinct types thus formed: (a) those implemented through ‘technological’ means and (b) ‘pure’ business methods; those that implemented mathematical algorithms to ascertain data for example. Much like various species of extinct elephant bird, the awarding of ‘pure’ business methods has all but died out36. 34 For example, only 900 out of a total of 169,000 filings were granted in the year 2001 (James Bollinger, Road to Bilski…’ (2011), pg. 18). 35 Some of the claims may have failed because they were not sufficiently disclosed and failed to meet procedural requirements. 36 A pure business method patent would come under section 52 subsection 2(c) of the EPC which states that: ‘schemes, rules and methods for performing mental acts, playing games or doing business and programs on computers’ are not inventions, within the meaning of the act. Thus a pure method of doing business, thus lacking any technical character or implementation, would fail to circumvent the section. This was reaffirmed in Case: T 0931/95 OJ (2001), 44 ‘Controlling Pension benefits system/PBS PARTNERSHIP’.
  • 9. 9 They fail on grounds of ‘technical effect’ in the EPO37 and ‘obviousness’ in the U.S. especially after the Supreme Court’s ruling in KSR Int’l Co v Teleflex Inc38. What is interesting is that the business methods appeared to: Firstly, move from non- technical to more technical based innovation; and secondly, reinstate that the careful drafting of a claim should not be overlooked39, even though the advice given to clients may not have necessarily changed40. The more demanding EPO rules and tests implemented to satisfy ‘inventive step’ and ‘novelty’ seem to prevent ‘bad patents’ getting through and encourage applicants to be savvy but once again we are faced with the question: Have these rules stimulated innovation? What evidences innovation? Does the transition from non-technical business methods to greater numbers of technical implementation suggest innovation, or rather, adaption to meet legal tests? The answer must invariably be a ‘maybe’. Part Three: Innovation – ‘Crowdfunding’ and ‘Crowd sourcing’ paving the way for innovation in the internet age. The internet is facilitating the creation of new ideas and innovations from concept to final product, independent of the traditional investing obstacles, such as companies and/or banks. This is done through a system called ‘crowd-funding’ or ‘crowd-sourcing’. Crowdfunding in its simplest manifestation is the pooling of ideas and money, typically small amounts by a large community, towards a goal, via an online interface. Projects including: water purification devices41; music projects, literary and artistic projects42 and 37 See: AMAZON.COM/Method and system for placing a purchase order via a communications network (T 1244/07) Unreported January 27th 2011 EPO (Technical Bd App)); Hitachi/Auction Method [2004] EPOR 548. 38 127 S. Ct. 17 27 [2007]. (See also the USPTO 2007 and 2010 guidelines which were released as a result of the KSR v. Teleflex judgement: “Examination Guidelines for Determining Obviousness under 35 U.S.C. 103 in view of the Supreme Court Decision in KSR International co. V. Teleflex Inc, 72 FR 57526 (Oct. 10, 2007)”, 1324 Off. Gaz. Pat. Office 23 (Nov. 6, 2007) (2007 KSR Guidelines)). 39 Ilan Barzilay, ‘Coping with confusion in the Aftermath of Bilski’ pg. 39. 40 Ibid pg. 37]. 41 Michael Pritchard, a water-treatment expert in Ipswich, funded his ‘Lifesaver bottle’ in 2007 using crowd funding as a way to innovate and bring his product to market. 42 Danae Ringelmann, ‘Why crowdfunding is the world’s incubation platform’, Wednesday 0th April 2013 (See: http://www.guardian.co.uk/media-network/media-network-blog/2013/apr/10/crowdfunding-businesses-social- projects)
  • 10. 10 the creation of new molecular models43 (to name just a few), have been funded and created via crowd-funding44. What’s unique is that the collective, who are pooling their knowledge and money, need not contribute the entire funding goal themselves. Individuals who may not be able to contribute to the technical innovation can show their support by contributing a payment; they contribute as much or as little as they wish. As one of the major restrictions to an innovation coming to fruition, funding, is a major problem for innovators. Alternative revenue streams such as this, functioning independent of investment institutions, provide an important revenue stream. Projects that the ‘people’ want, rather than a bank, publisher or software company etc, can come to fruition this way. From 2010 to 2012, the cash spent on crowd funding tripled, from $900 million to $2.7 billion and the predominant pools of funding are from Europe and North America45. Although patents are still applied for during or once the product is completed, the initial innovation itself and funding come about via an alternative means: the individual. The internet facilitates interaction between inventors, scientists, engineers and entrepreneurs to not only interact but actively create. The usual arrangement is as follows: people all share ideas in exchange that they use the information to enhance the invention and their name acknowledged as contributor. But does crowdfunding necessarily create innovation? Again, the statistics are as useful as they were when considering the strictness of regulation and its impact on innovation (above). It is important to factor in: what do we actually mean by ‘an innovation’? If we think about patent law: Once an invention meets all the required criteria (inventive-step, non-obvious, etc) it is a patentable invention and by statement alone is an innovation in 43 Molecular model company ‘Boehringer’ used crowd-sourcing to pool scientific knowledge from around the world to develop a new model to accurately predict the biological response of molecules: http://econsultancy.com/uk/blog/9376-boehringer-ingelheim-partners-with-kaggle-to-crowdsource-scientific- problem. 44 The video game, ‘Shadow of the Eternals’, the sequel to 2002 survival horror hit‘eternal darkness’,managed to raise$100k in the firstday of its crowdfundingcampaign.Although a cultclassic,itnever achieved mainstreamsuccess,so the developers felt that the only way to providea sequel would be via crowdfunding (See: http://www.cbc.ca/hamilton/news/story/2013/05/07/hamilton-shadow-of-the-eternals.html). 45 Collin Lecher, ‘Cash Raised Through Crowdfunding Tripled In Three Years’ (2013) Popsci website: http://www.popsci.com/technology/article/2013-04/crowdfunding-tripled-three-years-infographic.
  • 11. 11 and of itself. An innovation is progressive and would arguably not encompass all those filed patents that do not meet the required standards. A crowdfunded idea may well be ‘innovative’, in the technical sense, but this is a question for a patent office. If we put the question of ‘does it have an inventive-step, is it unique?’ aside and focus on the question: what brings an innovative product to market in a physical sense? The answer is funding and to some extent technical know-how46. Yes, a patentable invention may never make it as far as being industrially produced but being able to physically create the machine; software etc. requires capital. My argument , is crowdfunding stimulates innovation because it brings a greater variety of inventions and ideas to fruition. Yes, they may not work and yes they may never be produced on an industrial scale but in terms of raw creativity and innovation, crowdfunding has been and will continue to stimulate. Furthermore, there are the legal implications and issues surrounding disclosure of the invention through crowd-sourcing; many inventors will not divulge the technical elements straight away in fear, and rightly so, of their idea being taken. These questions are not within the scope of this essay but do provide food for thought. Part Four: Conclusion I agree that effective sufficiency rules are more important than strict obviousness rules. This is because (a) the test of obviousness is determined to a meaningful extent by how effectively the prior art has been disclosed, or to put it another way, if the prior art has been sufficiently disclosed the question of obviousness is (arguably) more luculent than it would be under more relaxed sufficiency rules; and (b) the information, if effectively disclosed and described, enables innovators to understand the scope of patent cover and 46 Even so, the pooling of ideas allows for those with the creative design or thought to get input from those with the technical no-how. Furthermore, you could pay an individual to produce the product for you, or fix those elements which are problematic.
  • 12. 12 how or what makes the invention work – this is important to keep the patent award in return for disclosure status quo. Nevertheless, I am inclined to conclude that strict rules on sufficiency do not necessarily stimulate innovation. Although the theories and statistics are persuasive, until these findings can be quantified in a qualitative manner they can never be conclusive; only speculative. It is safe to say that we are still innovating, maybe not at the same rate as we were at the turn of the century, but things certainly haven’t begun to stagnate. If we say successful innovation is the bringing of a product to market, I’d argue that alternative forms of funding, over stricter rules on sufficiency and obviousness, are the key. If we are arguing that an innovation is the product of a patent award, we may, nonetheless, conclude otherwise. Until these underlying ‘problems’ are resolved, the exact answer to what stimulates innovation will remain as mysterious as the inventors that dreamt them up.
  • 13. 13 Bibliography Books David I. Bainbridge, “Intellectual Property” 8th edition, Pearson Education Limited, Ashford Colour Press Ltd (2010). Hugh Hansen’s, “US Intellectual Property Law and Policy”, Edward Elgar Publishing Limited (2006). James Bollinger et al, Inside the Minds: “The Impact of Bilski on Business Method Patents”, 2011 edition, Thomas Reuters/ Aspatore publishing, 2011. Paul Torremans, “Intellectual Property Law” 6th Edition, Oxford Universty Press, 2010. Journal Artic les Andrew Sharples & Duncan Curley, ‘Experimental novelty: Synthon v. SmithKline Beecham’ (2006), E.I.P.R. 28(5), 308-311. Bob Stembridge, “Business is still booming”, 2011 (www.MANAGINGIP.COM) “‘Boom’ in Business Method Patent Filings has followed the ‘state Street’ ruling, PTO says”; December, 10, 1998 57 Pat., Trademark & Copyright J.115. Branstetter, Lee G. & Sakakibara, Mariko, “Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms” (2001). Department of Social and Decision Sciences. Page 45. http://repository.cmu.edu/sds/45 Gregor Grant & David Gibbins, ‘Inventive Concept – is it a good idea?’ (2005) E.I.P.R., 27(5), 170-175. Ian Hargreaves, “Digital Opportunity: A Review of Intellectual Property and Growt h”, Intellectual Property and Growth, May (2011). James Bollinger, “Road to Bilski: The Troubled Passage to a Coherent Policy on Business Method Patents”, (2011). Jeff Bezos, “Bezos and O’Reilly Spearhead Call for Patent Reform – An Open Letter from Jeff Bezos on the Subject of Patents”, 9th March 2000 (See: http://oreilly.com/news/amazon-patents.html R. Freeland, “Disclosure and enablement: the House of Lords clarifies the law on novelty” Journal of Intellectual Property Law & Practice, (2006) Vol. 1, No. 3,. pg. 163-165. Yinliang Liu, “Patenting business methods in the United States and beyond – globalization of intellectual property protection is not always an easy game to play”, (2011) International Review of Intellectual Property and Competition Law. ‘To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy’ Executive Summary
  • 14. 14 Website and Newspaper Danae Ringelmann, ‘Why crowdfunding is the world’s incubation platform’, Wednesday 0th April 2013 (See: http://www.guardian.co.uk/media-network/media-network- blog/2013/apr/10/crowdfunding-businesses-social-projects) Molecular model company ‘Boehringer’ used crowd-sourcing to pool scientific knowledge from around the world to develop a new model to accurately predict the biological response of molecules: http://econsultancy.com/uk/blog/9376-boehringer-ingelheim- partners-with-kaggle-to-crowdsource-scientific-problem. Collin Lecher, ‘Cash Raised Through Crowdfunding Tripled In Three Years’ (2013) Popsci website: http://www.popsci.com/technology/article/2013-04/crowdfunding-tripled-three- years-infographic.