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01.06.18

The European Patent Office Suffers an Unprecedented Patent Quality Crisis Reminiscent of the World’s Worst Offices

Posted in America, Europe, Patents at 4:42 am by Dr. Roy Schestowitz

Messy office

Summary: The very fact that the European Patent Office (EPO) has, in some domains, become more lax/lenient in its granting practices than the US patent office should be a cause for alarm; this typically means an increase in litigation, from which law firms benefit at the expense of productive companies

THE EPO had spent decades building a superb reputation for quality of patents (until Battistelli and his ‘reforms’ came). It was about quality, not quantity. There weren’t many European Patents (EPs), but those which existed were rather good and difficult to challenge, which made them worth a lot and potentially scary to any defendants.

The USPTO, on the other hand, became rather notorious for quality (there’s a whole series called “Stupid Patent of the Month” about it). Now it’s China taking this ‘crown’ (more on that later this weekend).

“There weren’t many European Patents (EPs), but those which existed were rather good and difficult to challenge, which made them worth a lot and potentially scary to any defendants.”A patent office without quality control (or with insufficient quality control) might as well become a registration office like INPI. It’s not worth much, but at least people can safely assume that filed/granted patents are questionable at best. They’re as good as notes that an engineer files in his/her cabinet.

“The U.S. Patent and Trademark Office eventually reexamined the patents involved in the suit, 5,629,867 and 5,809,246,” says this new article. As it turns out, MAD’s patent crusade has ended. The press barely mentions any of this, but since broadcasters are affected the most, here’s one new article about it. It’s in Radio World and this makes it clear that the clear winners were lawyers on both sides (neither the plaintiff nor the defendants):

The official court document dismissing the suit is very brief and offered no out-of-court settlement specifics, if, indeed, any took place, stating only that all parties “hereby stipulate and agree to this dismissal of the above-captioned action with prejudice,” which means the suit cannot be brought forward again. Each party also agreed to “bear its own fees and costs.”

Several patents held by MAD were at the center of the infringement suit targeting CBS Radio, Greater Media, Beasley Broadcasting, Cumulus Media, Entercom Communications and Cox Radio. Beasley has since acquired Greater Media and Entercom merged with CBS Radio. The plaintiffs claimed their patents, involving hard-disk radio automation systems, were being infringed by the broadcasters. Townsquare Media, originally included in the infringement suit, was released from it in late 2011, a move that sparked industry debate about a possible settlement agreement.

The U.S. Patent and Trademark Office eventually reexamined the patents involved in the suit, 5,629,867 and 5,809,246, at the request of equipment maker and automation software developer Broadcast Electronics. As the result of two reexaminations “DigiMedia was forced to narrow their amendments and arguments,’ according to courtroom documents associated with the case.

Imagine what would happen if the patent examiner got it right the first time around

“A patent office without quality control (or with insufficient quality control) might as well become a registration office like INPI.”But you see, there’s a problem…

As TechDirt put it yesterday, “Shocked, Shocked To Learn The Patent Office Is Structurally Designed To Approve Shit Patents” (we mentioned this paper last weekend).

Here is how TechDirt frames it (with some background and unnecessarily obscene words):

The book Innovation and Its Discontents, by Adam Jaffe and Josh Lerner, was first published in 2004. We’ve cited the book frequently around here, as it did a bang up job describing structural problems with our patent system (and the judicial review of patents). There were a few big points that it made about why our patent system was so fucked up, and a big one was the incentive structure that heavily incentivized approving patents rather than rejecting them.

Specifically, there were two big ideas mentioned in the book about the US Patent & Trademark Office: (1) that because Congress forced the USPTO to fund itself from fees, it had the direct financial incentive to encourage more patent applications, and a good way to do that is to approve a lot more patents and (2) individual examiners were rated and reviewed based on productivity scores on how many patent applications they completed — and it is much faster and less time consuming to approve a patent, rather than reject one. That’s because once you approve a patent it’s completed and gone from your desk (and into the productivity metrics as “completed”). But, if you “reject” a patent, it’s not done. Even though the USPTO issues what it calls “Final Rejections” there’s nothing final about it. The patent applicant can keep going back to the well over and over again, making minor tweaks on the application, requiring the examiner to go through it again. And each time they do, that hurts their productivity ratings. As an additional “bonus” — the USPTO actually makes significantly more money when it grants a patent, because in addition to application fees, there are also issuance fees and renewal fees.

This was pointed out here before. We even wrote about it a decade ago. If examiners have an incentive to grant (more so than to reject), then it’s a recipe for disaster. It’s a guarantee/symptom of declining patent quality.

Last year we warned that in some areas, patent quality at the EPO had gotten even worse than in the USPTO. Scope of patenting under Battistelli gradually broadens in order to fake ‘production’.

Yesterday, “Patentability of Diagnostic Methods in Europe” got published by Finnegan, Henderson, Farabow, Garrett & Dunner LLP’s Hazel Ford. Read it carefully:

Like the USPTO, the European Patent Office (EPO) considers that the discovery of a natural phenomenon is not patent eligible. However, unlike the USPTO, the EPO takes the view that a patentable invention can derive from a practical use of that discovery (EPO Guidelines for Examination G-II, 3.1), such as its use in a method of diagnosis. For example, the discovery of a naturally-occurring correlation between a biomarker and a disease can be put to a practical use in the form of a method for diagnosing the disease. A claim directed to a method of diagnosing the disease involving detecting the presence or amount of that biomarker may therefore be patentable at the EPO, even if the underlying naturally-occurring correlation is not patentable.

The main issue with diagnostic methods at the EPO is not their reliance on naturally-occurring products or effects, but instead is a general exclusion from patentability of diagnostic methods that are practiced on the human or animal body (Article 53(c) EPC).

[...]

The approach to patenting diagnostics is therefore very different in Europe to that in the United States, and many methods that may receive objections under 35 USC §101 in the United States may have no such patent eligibility problems at the EPO. Diagnostic methods that are carried out on in vitro samples can be patented in Europe, as can methods that do not reach a diagnostic conclusion. Where an invention does relate to a method of diagnosis that is performed on the human or animal body, some claim types may still be patentable in Europe, as long as they were described in the patent application as originally filed. We recommend considering global claiming strategies when the patent application is drafted, so that suitable language can be included in the application to allow for filing such alternative claim types at the EPO in due course.

It is worrying that the EPO now grants patents on things that the USPTO would not; it is even more worrying that Battistelli has gotten so close to China (more on that later this weekend). It’s like he’s trying to set up ‘SIPO Europe’, not IIB. Will anything change in July? We doubt it. Campinos is not a scientist (his background is banking, Battistelli’s background is politics) and he signaled no changes to core policies, only empty allusions to dialogue. The EPO’s (and Battistelli’s) friends say: “With Antonio Campinos off to @EPOorg, @EU_IPO needs a new executive director. Nice work if you can get it: “The current basic monthly salary … is EUR 15.944,36. There are additional salary elements reflecting marital status and dependent children” https://euipo.europa.eu/tunnel-web/secure/webdav/guest/document_library/contentPdfs/about_euipo/vacancies/VEXT-17-256-AD/VEXT-17-256-AD_en.pdf …”

“Campinos has been working with Archambeau for quite some time and considering his ‘musical chairs’ move at CEIPI it’s not hard to envision something similar at EU-IPO.”“Battistelli already ‘fixed’ it,” I told them, “[according to what] some say, and the Belgian guy from EPO will get it [the job] as part of the ‘exchange’…”

We were alluding to Christian Archambeau and alleged back room deal with Belgium [1, 2]. Campinos has been working with Archambeau for quite some time and considering his 'musical chairs' move at CEIPI it’s not hard to envision something similar at EU-IPO.

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