Use of Patent System Flexibilities and the Main Constrains Thereon in the Region Slobodan Marković, PhD in Law Full Professor of IP Law Faculty of Law University of Belgrade Serbia Универзитет у Београду

Mandatory reading WIPO Standing Committee on Patents, XV session, October 2010 – Experts’ Study on Exclusions from Patentable Subject Matter and Exceptions and Limitations to the Rights (SCP/15/3) – 6 Annexes (studies) treating different topics from different angles 2

Flexibility? Exclusions from patenting – Non-inventions (e.g. abstract knowledge, aesthetic creations, presentations of information, solutions outside the scope of the concept of technology) – Inventions that are not susceptible of patenting Exceptions and limitations – Making a patent non-enforceable in legally defined situations Patentability criteria – Novelty – Inventive step 3

Overview of the use of flexibilities in the region Dozens of states (Central European and Baltic States, Central Asian, Eastern European and Caucasian countries, some Mediterranean states) Extreme difference in size, level of technological and economic development, culture Party to different regional political organizations influencing member countries’ political decisions Subject to different obligations under international patent law 4

Overview of the use of flexibilities in the region Lack of relevant common denominator for the CEA Region Lack of relevant CEA Region specific conclusions Dubious utility of collecting data on legislation and judicial and administrative practice on country by country basis 5

Therefore… Understanding the flexibilities in a social policy context – Patent system (institutes, legal mechanisms) – Policy goals Understanding the constrains in use of flexibilities Making choices of flexibilities for certain policy goals 6

Historical view of flexibilities Pre-TRIPS: – Almost unlimited flexibilities – Freedom of countries to tailor the national patent system according to the interest of national economic and technological development – Resulting in the emergence of industrialized (developed) countries Post TRIPS: – Dramatic reduction of flexibilities – Reduction of freedom of countries to tailor the national patent system according to the national developmental needs – IP becoming a dubious mechanism for closing the gap between the rich and the poor, developed and underdeveloped nations 7

Actual purpose of exploring patent flexibilities today Developed countries How to reinforce the main functions of the patent system in particular fields of technology (incentive for innovation, enhancement of technology transfer etc.) How to balance private and public funding of research How to preserve economic growth based on information and knowledge Developing and least developed countries How to secure free or easy access to foreign technology for the purpose of commercial use and research 8

Outer boundaries of patent flexibilities in the Region TRIPS Agreement (Art. 6, 8, 27, 30,31) European Patent Convention (Art. 52, 53…) – Implementing regulations (Rule 26, 27, 28, 29…) European Union legislation Euroasian Patent Convention (Art. 12) – Implementing regulations (Rule 3..) 9

Inner boundaries of patent flexibilities in the Region Actual conditions in the country (net importer of technology, capacities for domestic R&D, any technology as national priority…) Policy goals (incentive for domestic R&D or easy access to foreign technology as priority in particular fields of technology…) Functional relationship between certain instruments of patent law and desired policy goals 10

Inner boundaries of patent flexibilities in the Region IP offices becoming the hub of state power in the field of IP law: – Administrative procedures – International co-operation – Co-ordination with other state organs – Co-ordination and co-operation with industry and academia, education, public awareness raising – Preparation of legislation ! For the utilization of patent flexibilities, absolute necessity of consulting all the stakeholders and academia 11

Example 1 Policy goals: – Fine tuning of social cost/ benefit ratio of patent protection in certain fields of technology – We want to avoid artificial incentives in the fields of technology where inventions emerge due to some mechanism other than patent (other IP right, lead time driving innovation in the competitive market, other incentive mechanism) – We want to avoid perception of the patent system as supportive of socially unacceptable values 12

Example 1 Invention of a surgical, therapy or diagnostic method – exclude or not? – Ethical reasons? – Incentive for innovation coming from alternative sources are sufficient (usually no big R&D costs) – “Good face” of patent law in the public perception 13

Example 1 Computer programs per se – exclude or not? – Incentive coming from the lead time in the conditions of free competition market is usually sufficient – Economic life of the product is relatively short – Avoidance of patent thickets and high transaction costs of fragmentation of ownership over single technology 14

Example 1 “Bolar exemption” – limitation to patent or not? – Avoidance of informal extension of a patent for a pharmaceutical – Need to introduce generic pharmaceutical equivalents and restore free competition as soon as the patent lapses – Drop of price, easier accessibility to the public – Public health concerns 15

Example 2 Policy goals: – Support domestic research freedom – Attract foreign research programs to your country 16

Example 2 Use of a patented invention for research purpose – limitation to a patent or not? – If no opposing interest among domestic patent holders… – Freedom of use for both non-commercial and commercial research purpose – Freedom of use for both “on” and “with” the invention (research tools in biotechnology) 17

Example 2 “Bolar exemption” – limit to patent or not – Possibility of attracting to your country foreign producers of generic pharmaceuticals to perform research and testing on patented pharmaceuticals 18

Conclusions 1.Patent system is like a “hydraulic system”* (if you push the button on the one side, something is moving on the other side) 2.The same or similar policy effects can be achieved in several ways 3.Some exclusions can be substituted by some limitations and vice versa ___________________________________ *Daniel Gervais, The Compatability of the Skill and Labour Originality Standard with the Berne Convention and TRIPs Agreement, (2004) 26(2) EIPR

Conclusions 4. Exclusions appear to be more precise, but are insufficiently selective and tend to become obsolete (e.g. exclusion of use of human embryos for commercial purpose) 5. Limitations seem to be better suited for precise tailoring 20

Conclusions 6. Do not overlook that exclusions and limitations are not the only flexibilities of the patent system, that can be used for certain policy goals. Think of: - novelty - inventive step - rules on sufficiency of disclosure 21

Appendix on petty patent Petty patent = utility model = cerificat d’ utilite Existing in cca. 75 countries in the world Outside of the scope of international patent law relevant for the Region Allowing flexibility in respect of all substantive elements of protection – Field of technology – Novelty – Inventive step – Term of protection 22

Appendix on petty patent Policy goals – Incentive for predominantly domestic innovation capacities (SME, academia) that produce “sub- patentable” or “small” inventions – Giving priority to certain technologies – Extension of the information function of the patent system so as to encompass the “small” inventions – Conferring protection by preserving relatively low social costs (short term of protection, no substantial examination) 23

Appendix on petty patent Good model of petty patent: – Exclusion of inventions for products that need regulatory approval for marketing – Absolute novelty – Lower level of inventiveness than for a patent, or a combination of technical improvement and industrial utility – No substantive examination, quick registration – Low administrative cost – Duration limited to max. 10 years – Subsequent substantial examination at request, or mandatory in case of infringement suit 24

Appendix on petty patent Bad model of petty patent: – Protection requirements same as for patent (loss of attractiveness for applicants)* ___________________________ * Existing e.g. in France, Belgium, Ireland… due to historical reasons (introduced before the IP offices transitioned from the system of prior examination of patent applications to the system of deferred examination) 25

Thank you for attention! 26