TWN Info Service on Intellectual Property Issues (May09/04)
13 May 2009
Third World Network

Below is a news report on the WIPO Secretariat's document for Patent Cooperation Treaty (PCT) reforms and the PCT Working Group that ended last Friday.

Regards
Sangeeta Shashikant
Third World Network

WIPO: Concerns raised over Secretariat's push for patent road-map

SUNS #6698 Tuesday 12 May 2009

Geneva, 11 May (Sangeeta Shashikant) -- Developing countries voiced concerns over harmonization of patent application, search and examination procedures at a meeting of the Patent Cooperation Treaty (PCT) Working Group, which resulted in deferment of the consideration of a road-map outlining actions needed to reform the PCT.

This came despite intense pressure by the WIPO Secretariat, the developed countries and the users of the patent system that are largely based in these countries to endorse the road-map at the week-long meeting of the Working Group, which ended on 8 May.

The road-map, titled "The Future of the PCT" (PCT/WG/2/3), is a Secretariat document. It sets out general principles and actions that need to be taken to reform the PCT system, as well as containing a resolution for adoption by the General Assembly that would give life to the road-map.

The PCT is a system that allows an applicant to seek patent protection for an invention simultaneously in many countries by filing an "international" patent application. The application is then subjected to an "international search" carried out by offices designated as International Searching Authority (ISA) and optionally followed by a preliminary examination, performed by an International Preliminary Examining Authority (IPEA).

There are two phases to the system: the first phase is the international phase, while the second phase is the national and regional phase, wherein different procedures for filing, search and examination of patent applications usually exist. This adds to the checks and balances of the patent system, ensuring that only patents of "quality" suitable to the level of development are granted.

However, the Secretariat's road-map appears to move in the direction of removing many of these checks and balances.

It proposes inter alia the removal of reservations to PCT Articles and Rules made by members in exercise of their rights under the PCT; and promotes greater coordination in such a manner that the work of a few patent offices designated as ISAs determines the outcomes of the national examination substantially by raising a presumption of validity of patent applications examined by the ISAs.

Several developing countries raised concerns over the direction in which the road-map was heading and sought more time to study the need for, and content of, such reform.

They also highlighted the need for the 45 Development Agenda (DA) Recommendations to be considered in any move towards PCT reform.

The concerns of the developing countries heightened as they heard a proposal by the United States for a new version of the PCT (PCT II), which would automatically grant a patent in PCT countries so long as it is approved by three or less international authorities.

According to intellectual property experts, this would effectively erode the flexibility of PCT Member States to grant patents on the basis of their own patentability standards.

The US proposal was not accepted by Member States.

The WIPO Secretariat has also been pressuring developing-country delegates to accept the road-map, raising suspicions as to the Secretariat's motives and interest behind the road-map.

According to diplomatic sources, the WIPO Secretariat contacted missions, ministries and patent offices of delegates from developing countries that queried the intent and purpose of the road-map and thus sought more time for considering the road-map.

Sources also say that WIPO Director-General Dr Francis Gurry has also attempted to persuade the participants of the PCT Working Group of the irrelevance of the DA recommendations, as the matter being discussed was more procedural rather than substantive.

Opposition to a quick endorsement of the road-map resulted in an agreement on 8 May that the PCT bodies should continue to improve the PCT within the existing legal framework of the treaty "without limiting the freedom of contracting states to prescribe, interpret and apply substantive conditions of patentability and without seeking substantive patent law harmonization or harmonization of national search and examination procedures".

The meeting also agreed that the relevant PCT bodies should discuss ways in which this objective could be achieved, taking an "incremental approach", "in a member-driven process involving broad-based consultations with all stakeholder groups, including regional information workshops"; "taking into account the recommendations contained in the Development Agenda"; and "taking into consideration the topics addressed in the draft road map proposed by the International Bureau" and "any other topics which contracting states may wish to address in order to achieve the objective" set out.

An in-depth study was further agreed to, including on the following elements: outlining the background of the need to improve the functioning of the PCT system; identifying the existing problems and challenges facing the PCT system; analyzing the causes underlying the problems; identifying possible options to address the problems; evaluating the impact of the proposed options; defining and clarifying concepts such as "duplication of work", "unnecessary actions" etc. The study is to be submitted at least two months before the next Working Group meeting.

The decision also states that proposals should be prepared, including fee reductions and capacity-building measures to increase access of independent inventors, Small and Medium Enterprises, universities and research institutions, particularly from developing and least developed countries to the PCT. The need for technical assistance for national and regional offices of developing countries in order to benefit from the PCT system was also mentioned.

The road-map was first released in February 2009 as a memorandum by Director-General Gurry for informal consultations with certain PCT offices and users of the PCT system, and later presented at the sixteenth Meeting of International Authorities (MIA) in Seoul in March 2009. The version presented to the Working Group is an updated memorandum following the sixteenth MIA.

The Secretariat document outlines several reasons for the road-map, including large backlogs of patent applications in patent offices; duplication of examination in patent offices; prohibitive cost of obtaining patent protection in multiple states; lack of examination capacity in patent offices; and increase in the grant of invalid patents.

As such, the document proposes national offices eliminating procedures which encourage duplicative processing, and unnecessary actions, creating a system that meets the needs of applicants and designated offices of all types, and granting of patents on the basis of international applications having a high presumption of validity.

While the Secretariat document states that the process of improving the use of the PCT does not seek to address matters of substantive patent law harmonization or of a unified "international patent", the outcome of the road-map is broadly intended to discourage examination of patents at the national level according to national patentability criteria, with the aim of expediting the processing of patent applications.

The main winners of such a system would be the developed countries and their entities that are the main applicants and users of the PCT system, while developing countries are likely to suffer from the effects of such a system, in particular, more foreign patents being granted at the national level that would further hamper access to the tools needed for development.

The concrete actions that the Secretariat document proposes to overcome the perceived problems of the PCT system include:
(a) Search done by the ISA during the international phase of a patent application is not repeated at the national level when the same application enters the national phase before the same office. This is to be achieved by January 1, 2010.

(b) PCT Contracting States should eliminate the approximately 150 reservations, notifications and declarations of incompatibility in force for various States under Article 64 of the PCT in respect of various PCT Articles, Rules and Administrative Instructions.

It is proposed that by January 2011, all PCT Offices in cooperation with the International Bureau will have completed a review of reservations, notifications and incompatibilities with the PCT that apply to their Office, identify the reasons for such reservations and the possibility, mode and time-line for their elimination.

(c) Identifying by March 2010, the different types of parallel applications which occur in different offices and if reasons for different applications are merely procedural, the MIA should consider changes in office procedures and fee structures to encourage that an international application be pursued in preference to a duplicative national one.

(d) Conduct collaborative international search and preliminary examination, that is, if an international application is found to meet the requirements of the PCT to the satisfaction of, for example, three offices, to consider it safe for any office to consider that it would also meet its own examination requirements.

In this regard, the road-map calls by July 2010, a pilot project testing models for allowing examiners from at least three different Patent Offices to work jointly on the same application to establish a single common report (international search report, written opinion, or both).

The intent here is to create a high degree of presumption of validity with the effect that if a PCT application is approved by three offices (for example, the US Patent and Trademark Office, Japan Patent Office and European Patent Office), it can become binding for other offices.

The idea is based on an initiative of developed countries called Patent Prosecution Highway (PPH). Integrating this arrangement as it exists between the US Patent and Trademark Office (USPTO), Japan Patent Office (JPO), Korean Intellectual Property Office, and the Canadian, UK and German patent offices will imply making all national offices that are ISEA connected to the PPH.

The likely overall effect is that the USPTO, JPO and European Patent Office will collectively be responsible for most of the world's search and examination work and results from these offices will become the basis for granting monopolies over the world's most important technologies and binding on other offices in the long run, hence, constraining the autonomy of national Patent Offices, including patent offices of developing countries which have become ISEA.

The proposal for the adoption of the road-map implies according to IP experts a substantial revision to the PCT system and appears to move in the direction of harmonization of patent application, search and examination procedures, including discouraging national offices from conducting their own search and examination of patent applications.

As a consequence, opposition to a quick endorsement of the road-map that began with a few countries on 4 May, ended by the end of the week with the African Group, the group of Latin American countries (GRULAC), India, Indonesia and the Philippines calling for more time.

India said that there were gaps in the road-map and that the language needs to be redrafted. It stressed that member states need to do a thorough job, in particular, by outlining the problems that the PCT system currently has, defining terms and concepts and a study that is objective and factual on why we are where we are today and options to address the problems.

Brazil stressed that it did not favour any reform that leads to patent harmonization or undermining the leeway that exists in relation to patentability criteria. It reiterated the need for more time to consider the proposal and spoke of the need to move things forward on a gradual step-by-step basis.

South Africa said that while it was in favour of ensuring a more effective PCT system, it would like to reflect on it and bring a broader approach on the link between norm-setting and the PCT system. It added that they should not be considered in isolation.

Costa Rica (on behalf of GRULAC), the African Group, Sri Lanka, Indonesia and the Philippines also spoke of the need for more time to consider the road-map.

On the other hand, developed countries and agencies representing the users of the patent system that are largely based in the developed countries persisted in seeking the endorsement of the road-map.

Japan said that the PCT system was intended to provide users with a simplified process and the road-map was a methodology to do so. It added that adoption would send a good signal to the users.

The US, UK, France, Germany, and Sweden echoed that it was not appropriate to postpone consideration of the matter. Switzerland even went as far as to note a reservation in relation to the section of the decision that speaks of the Development Agenda.

User groups such as the American IP Law Association (AIPLA), the Japan IP Association (JIPA), and the German Association of Industrial Property and Copyright (GRUR) reprimanded countries that called for more time to further consider the road-map.
This provoked a strong response from the developing countries.

AIPLA said that not adopting the roadmap would make WIPO ‘impotent’ in resolving the needs of users and threatened to create a similar system outside WIPO.

Brazil requested observers to ‘not disrespect’ member states adding that every country is equally relevant to participate in an equal footing and if Brazil has anything to say, it was Brazil¹s right to say it adding that the WG was a ‘multilateral exercise’.

Sri Lanka reminded participants that observers could not submit amendments, proposals and motions according to the rules of procedure.

India said that the contention that the user groups represent all group is contestable. It stressed the need to take into account policy space and sovereignty of member states.  PCT¹s members have a right to say what they think about the roadmap, it also added. It further added that it wont hinder solving the problems plurilaterally or bilaterally.