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10.09.16

From World’s Best to World’s Worst: China’s SIPO (Worst of Asia) and France (Worst of Europe) the Vision for EPO

Posted in Asia, Europe, Patents at 5:24 pm by Dr. Roy Schestowitz

Poor quality patents (SIPO) and lack of examination (INPI)

SIPO and Battistelli

Summary: The trajectory of the EPO under Battistelli’s leadership gives cause for very serious concerns, which include patent trolling and a humongous disservice to existing grantees of EPs (European Patents)

THE EPO may be going down the road of both China's SIPO and France's INPI (where Battistelli and many of his cronies at today's EPO top-level management came from). The Chinese have remarkably low patent quality (quantity over quality is the mantra) and the French, who fail to attract applications (French is spoken by far fewer people than Mandarin speakers), hardly care about quality at all. A French INPI clerk just rubberstamps (or simply files/shelves) everything that comes in. If the EPO follows the French model, then no examiners will be needed, just clerks who can follow a simple manual. How would one feel about one’s old/er EP/s if every crappy application on the EPO’s pile was suddenly granted or at least given hasty consideration for the sake of so-called ‘production’? Battistelli’s policy poisons the well or muddies the water right now. It is unfair to people who spent a fortune (and many years) pursuing EPs.

“If the EPO follows the French model, then no examiners will be needed, just clerks who can follow a simple manual.”As we noted here several weeks ago, east Asia is becoming attractive to patent trolls [1, 2], due in part to low patent quality (same as was the case in the US). There are more trolls and litigation, not just poor patent quality; there’s a correlation between those two things. SIPO is by far the worst in that regard. Korea and Japan, in the mean time, recognise the self-destructive nature of M.A.D. with patents, based on another article from IAM that says: “This blog has noted that one of the big themes in Asia’s automaking industry this year has been a significant move by Japanese and Korean brands to join defensive patent alliances. It’s a strategic shift for the industry that in many ways is being led by companies in this part of the world, rather than their North American and European counterparts. But Chinese companies have not yet followed the same path in significant numbers, and industry observers say with litigation on the rise there, buy-in from players in China will be crucial for these alliances going forward.”

One or two of IAM’s paid (partly by patent trolls) writers have focused a lot on Asia recently. See the latest issue’s “Patents in Asia 2016″ series, including focus on China, Japan, South Korea, and Malaysia. The feature item was actually about China, titled “Putting China’s patent rise into context” (all behind a paywall) and Jacob later wrote (partly in relation to this) that China welcomes crappy patent applications from the US, just like the EPO under Battistelli does. He recently started following me in Twitter (maybe out of curiosity, I find him a lot more balanced than Mr. Lloyd and Mr. Wild) and he didn’t put it in these words but instead he wrote:

It was eye-opening, but not necessarily shocking, to read on this blog last Tuesday the suggestion that Huawei’s mobile patents might generate up to 20% of all the patent income earned by Chinese companies. The conjecture appeared in a new research paper which seeks to revise (downward) earlier estimates of the total royalty stack on the typical mobile phone. The study looked at 49 major mobile licensors, of which Huawei was one of only two Asian operating companies (the other being Samsung Electronics).

Credit the Shenzhen-based company for building an IP team that has put it head and shoulders above its domestic competitors in terms of patent portfolio strength. I was reminded, though, of a quote by Huawei head of IP Jason Ding that appears in the issue of IAM out this week…

There is also an article about Foxconn.

Asian companies haven’t much to gain from a crappy patent system. Take Samsung for example. The most stupid patent that has made headlines in recent years (slide-to-unlock, hardly a novel concept at all) might soon cost Samsung more than $0.1 billion, based on reports like this new one and some remarks from Florian Müller (he wrote a lot more about it in Twitter). To quote Bloomberg (cited by Slashdot):

Apple Inc. won an appeals court ruling that reinstates a patent-infringement verdict it won against Samsung Electronics Co., including for its slide-to-unlock feature for smartphones and tablets.

In an 8-3 ruling, the U.S. Court of Appeals for the Federal Circuit said a three-judge panel was wrong to throw out the $119.6 million verdict in February. Instead, it ordered the trial judge to consider whether the judgment should be increased based on any intentional infringement by Samsung.

Does this not demonstrate how foolish software patents harm companies like Samsung, whose home country (Korea) does not permit software patenting (we wrote about this earlier in the month)? This new IAM article remarks on patent tax when it comes to phones, which makes them very expensive (“licensing return from mobile market at $14.3 billion”).

As for the patent system in France, where does one even begin? The patent system in France is worse than a bloody joke; one might even call it a facility for corruption in light of details about the Patent Boxes (we wrote about this too, several times in the recent past alone). Here is a new article about it, demonstrating that journalists have begun catching up with the dirty scheme:

France’s patent box legislation, which permits a 15 percent corporate tax rate for profits from licensing of intellectual property rights rather than the usual 35 percent corporate tax rate, is being challenged as unfair to the European Union single market.

The matter has come before the EU Code of Conduct Group for Business Taxation, where several EU countries—including Ireland, Bulgaria and the Baltic nations— are insisting the French patent box regime should be considered harmful.

Among those contesting France’s IP rate are EU member countries that were themselves previously criticized by France over their overall low corporate tax rates.

“The issue has surfaced because France insists its regime doesn’t need to be reformed as all EU member states agreed to do in 2014,” a European Union diplomat, who participates in the Code of Conduct Group of Business Taxation, told Bloomberg BNA Sept. 30.

“However, all other EU countries are reforming their tax regime and insist France must do the same. Some of these countries, many of them resentful over French criticism of tax dumping, are rejecting the French arguments against reform.”

In this new IAM article a connection between the French and the Chinese is highlighted, in the form of “France Brevets”:

Unlike IP Bridge and Intellectual Discovery, France Brevets did not provide comment for the feature, but anecdotal accounts suggest that there has been something of a shift in strategic focus at the firm in recent months – and the call for change has come from the highest levels.

It appears that securing a return on its 100% public sector investment is now the fund’s primary objective, with its aims of boosting the domestic SME sector and kickstarting a local market in IP assets taking a back seat, at least for the time being. Simultaneously, some key personnel have come and gone; in June, founding CEO Jean-Charles Hourcade was replaced by Didier Patry, who was previously head of IP at Eaton Aerospace and before that led Hewlett-Packard’s IP transactions department from 2002 to 2014. Pascal Asselot, who had served as the fund’s director of development and licensing since its establishment, departed in the same month.

The USPTO, which finally tightens patent scope and goes after trolls (more on that in articles tonight and tomorrow), isn’t the world’s worst; some of the worst are probably SIPO and INPI and this is what the EPO is connecting to (several days ago Battistelli bragged about meeting SIPO officials in the town where he used to be a mayor, over in France that's not even an EPO host nation).

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