© 2008 International Intellectual Property June 22, 2009 Class 6 Patents: Multilateral Agreements (Paris Convention); Economics of International Patent System

Early Multilateral Agreements In the late 19 th century, two multilateral treaties were adopted –Paris Convention for the Protection of Industrial Property (“Paris Convention”) Patents Adopted in 1883 –Berne Convention for the Protection of Literary and Artistic Works (“Berne Convention”) Copyrights Adopted in 1886 These treaties serve as the foundation for the current international intellectual property system © 2008

Paris Convention -- Background Patents are “national” in nature –Generally, patents have no legal force or effect beyond the nation’s own territorial borders There may be exceptions to this general rule provided by convention or treat y –E.g.: In the U.S., the statute governing patent infringement provides: “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” © 2008

Paris Convention -- Background Although patents are national in scope, patent holders frequently want to use their inventions in more than one country. So, what do they have to do? –Apply for a patent anywhere they want protection –But, there are numerous problems with this nation-by- nation patent process Because of these procedural and substantive differences, foreigners applying for patents often were subject to discrimination. © 2008

Patent Requirements What does a patent holder have to show to get a patent? –New (or “novel”) –Involves an Inventive Step (or “non-obvious”) –Capable of Industrial Application (or “useful”) –Enabled What’s patentable subject matter? –Processes, machines, manufactures, compositions of matter But not laws of nature, physical phenomena, abstract ideas © 2008

Paris Convention -- Background Vienna Congress of 1873 –First conference to consider international protection for inventors –Representatives from 13 countries attended –Resolutions were general, but endorsed strong patent protection Paris Conference of 1878 –Representatives from 11 countries attended –Substantive and procedural resolutions were adopted Compulsory working –patent revoked if not worked in country Resolutions were adopted regarding national treatment (i.e., non- discrimination), right of priority, and independence –But, no agreement as to “previous examination,” so couldn’t reach final agreement © 2008

Paris Convention -- Background Conference at Paris (1880) –Parties continued working toward agreement after the 1878 Conference, and in 1880 the French government organized another conference 1880 Conference was attended by representatives from 19 countries Parties ultimately agreed on provisions that became the Paris Convention Paris Convention was approved and signed in 1883 –International Union for the Protection of Industrial Property (“Union”) Established in 1884; first composed of 11 countries; 29 were added later Amendments to Paris Convention must be approved unanimously by members of the Union WIPO administer Paris Convention on behalf of Union © 2008

Paris Convention Primary Provisions Right to National Treatment Right of Priority Independence of Patents Compulsory Working/ Compulsory Licensing © 2008

Right to National Treatment No discrimination against foreign patent applicants –Must grant equal protection to nationals of other member countries (§ 5.10) nationals of non-member countries who are domiciled in member countries (§ 5.11) –May be exceptions for certain procedural rules (§ 5.16) No reciprocity of Protection (§ 5.14) –E.g., if national of country X applies for a patent in country Y, and the patent term in country X is 30 years, but only 20 years in country Y, then X will get a patent for 20 years because the law of country Y, not country X, governs © 2008

Right of Priority Patentee has 12 months to seek protection in all member states from time original application was filed (§ 5.20) –Date of first application will be priority date for all applications filed within 12- month period Practical Advantages to Right of Priority (§ 5.21) –Not required to present all applications at home and in foreign countries at same time Saves patent applicants time, money, resources Withdrawal, abandonment, or rejection of first application does not destroy right of priority (§ 5.27) © 2008

Independence of Patents Patents granted in member countries must be treated as independent of patents issued in other countries for the same invention (§ 5.33) –“…the fate of a particular patent for invention in any given country has no influence whatsoever on the fate of a patent for the same invention in any of the other countries.” (§ 5.34) What’s the rationale for this rule? (§ 5.35) –Substantive and procedural laws differ from country to country i.e., the decision not to grant or to invalidate a patent in one country often will have no bearing on whether a patent should be granted on the same invention in a different country with different laws © 2008

Compulsory Working/Licensing Member nations may choose to take coercive legislative measures to deal with the failure to work or insufficient working of the patent (§ 5.44) Compulsory Licenses -- most common coercive measure –License granted by government without the consent of the patent holder to practice the patented invention May be requested the later of: (1) four years from date the application was filed, or (3) three years from the date the patent was issued. (§ 5.47) Must be non-exclusive license (§ 5.49) –These requirements do not apply to other types of compulsory licenses (i.e., “public interest” licenses) (§§ ) © 2008

Justifications for Patent System Today, the primary justifications for the patent system are economic 1.Stimulate inventive activity –Patents are necessary to encourage people to invent 2.Encourage commercialization of inventions –Patents are necessary to encourage investment in inventions 3.Disseminate technical information –Patents are necessary to persuade inventors to disclose their secrets © 2008

Justifications for Int’l Patent System Advance of technology and development of industry What does Penrose say about this? –Most foreign patenting is done by already- industrialized nations Little evidence that commercialized inventions would not be sold internationally without patent protection –Costs are significant High prices Inability to use patented technology is inefficient © 2008

Justifications for Int’l Patent System Penrose argues that an int’l patent system prevents a distortion of the allocation of resources –If inventors could only patent inventions in one country, most production facilities would be in densely populated industrialized countries Concentrate R&D activities in developed countries Competitors in developed countries (where patents would be concentrated) would be at a disadvantage as compared to competitors in non-industrialized countries who could offer competing products unhindered by any patents © 2008