navigating the patent maze

The Third Amendment to the Patent Law of China are expected to be approved and implemented early 2009. Some of the proposed changes, which were published in a draft released in March 2008, include:

• disclosure rules for inventions that rely on genetic resources or traditional knowledge and denial of a patent for inventions that “completely rely” on either if acquisition violated Chinese law or regulation;
• absolute novelty standard, which considers not only publication of the invention anywhere in the world and public use inside of China, but now also public use outside of China;
• a requirement that any invention made in China must be first filed in China and, before filing in a foreign country,must obtain a foreign filing license (like the license required by the United States);
• all co-owners of an invention must consent for assigning the patent and licensing the invention to others;
• liberalizing the rules for granting a compulsory license where the patent hasn’t been exploited within three years after patent grant, when there has been anticompetitive actions by the patent owner, when public interest requires it, or when a developing country lacks ability to manufacture a medicament;
• exempts from infringement those activities related to regulatory review.

For further information:

News release at SIPO

Main points of the Third Amendment (draft)

Third Amendment and Pharmaceutical Companies (Jones Day)

China’s State Intellectual Property Office (SIPO) granted 58,000 patents in 2006; more than half were granted to foreigners.  According to SIPO, there has been a rise of patent applications from overseas since China’s entry into the World Trade Organization.  Yet, a recent survey from the China Association of Enterprises with Foreign Investment revealed that IPR-related issues are a vital factor for decision-making by companies with foreign investment.  About 68% of the surveyed multi-national organizations answered that IPR is one of the top three problems for doing business in China.  Not surprisingly, trademark infringement is the number one concern. 

The backlog of patent and trademark applications in Brazil is both staggering and sobering.  In 2005, the Patent and Trademark Office received over 23,000 patent applications and granted less than 8,000; over 100,000 trademark applications were received and only 17,000 were granted.  The backlog of about 130,000 patent applications simply cannot be dealt with in a timely fashion as the PTO has only  120 employees.  To attempt to alleviate the crunch, Brazil has approved the creation of 338 positions for Analysts and Assistants.  Don’t expect miraculous results this year however, as it will take time to hire all these new people and provide at least six months of training. 

Because Australian patent law is silent with respect as to an experimental use exception, it’s been unclear whether such an exception exists.  Although the consensus of patent attorneys in Australia that I know advised "no experimental use exception".  In view of the widespread uncertainty and concerns that the lack of an exception is inhibiting research and development - especially in biotechnology - the Advisory Council on Intellectual Property (ACIP) in Australia examined the need and desirability of an exception and has issued a report of their conclusions. 

Briefly, ACIP recommended the following amendment to the Patents Act:

The rights of a patentee are not infringed by acts done for experimental purposes relating to the subject matter of the invention that do not unreasonably conflict with the normal exploitation of a patent. 

Acts done for experimental purposes relating to the subject matter of the invention include:

• determining how the invention works;
• determining the scope of the invention;
• determining the validity of the claims; and
• seeking an improvement to the invention.

In other words, the amendment would allow experimentation on the invention, but not use of the invention for its intended purpose. 

No word on if or when this amendment will be adopted. 

In 2001, at a WTO (World Trade Organization) meeting in Doha, Qatar, a declaration by member countries gave voice to world health problems and provided a mandate for implementing a solution within the framework of the TRIPS (Trade-related aspects of intellectual property) agreement to facilitate access to medications. 

…we affirm that the Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.

The solution finally forged was to waive the restriction in TRIPS with respect to
pharmaceutical patents that products made under compulsary licenses
must be "predominantly for the supply of the domestic market" of the
Member country granting such a license.  The waiver has now been made permanent.

(more…)

Several pharmaceutical companies (Abbott, Merck, and Gilead Science) have apparently received a letter from the Health Minister of Brazil, Humberto Costa, giving them 21 days to grant a voluntary license for the productions of some anti-retroviral drugs.  If the companies aren’t forthcoming, the Brazilian Government is set to grant licenses under a compulsary licensing mechanism. 

(From a newsletter sent by Daniel Advogados as reported in the newpaper O GLOBO). 

In a summary of IP law updates from the Far East Committee of AIPLA, comes this unusual news item:  a recent Taiwan decision holds that the grant of a patent in Taiwan carries with it the right to practice the claims.  As published though, the patent statute of Taiwan grants exclusionary rights - thus, the court decision would seem to be at odds with statutory law. 

In the U.S. and most, if not all, other countries, the patent right is exclusionary, that is, the rights holder can exclude others from making, using, selling, etc. but has no rights to practice.  While newcomers to patent law may find exclusionary rights difficult to grasp, it actually makes really good sense. 

Consider this scenario:  Joe has a patent for expression vectors that can be used to transform plants; Sally has a patent claiming the method of transformation of plants using Agrobacterium containing vectors, such as Joe’s expression vectors.  In an exclusionary patent system, Joe needs permission (e.g., license) from Sally to transform plants with his vectors; Sally needs Joe’s permission to transform plants using Joe’s vectors.  Both inventors gain economic benefit this way.  (Critics of patent systems would contend that Sally could block Joe from practicing his invention, which is not a good thing in their view.) 

In a non-exclusionary system, I assume that it means either Joe or Sally can transform plants and moreover Sally could use Joe’s vectors.  While this is boon for Sally, and some would argue is not bad for Joe because under the exclusionary system he might be blocked, Joe does not appear to get any benefit from his patent.  To me, it appears to remove any incentive Joe - or Sally - has for patenting and becomes a world of compulsary licenses (with .  In a non-exclusionary system, is there even such a thing as infringement?  Does anyone know more about this seemingly confusing and confused situation in Taiwan?