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Francis Gurry will be the new director-general of WIPO
Francis Gurry has been elected the new director-general of WIPO. In a run-off poll with José Graça Aranha this evening, after the other candidates for the post had either been eliminated or had withdrawn, Gurry defeated the Brazilian by 42 votes to 41. The election of the Australian will be welcomed by many countries in the developed world and should also prove popular among WIPO staff. This is something that will be important as Gurry attempts to restore morale inside the office after the turbulent reign of Kamil Idris. The Sudanese national will depart with a tasty pension when his term officially ends in September. It is then that Gurry will be officially confirmed in his post by the General Assembly of all WIPO members.
Given the political way in which so many of the decisions around these types of appointment are made, I had thought that Graça Aranha was going to be a shoe-in, so it’s lucky I am not a betting man! However, I am pleased that Gurry has come out on top. He is someone I have met on several occasions and who I know thinks deeply about intellectual property. From the conversations I have had with him, it is clear that he understands IP’s political and, crucially, its economic importance. He also has a track record of delivery, having presided over the creation of the WIPO Arbitration and Mediation Centre, which has provided a highly-successful domain name dispute resolution service since its inception back in the 1990s.
But he has a hell of a job on his hands. During the latter years of the Idris regime, WIPO was embroiled in controversy as the DG was found not only to have failed to disclose his true age, but was also accused of various other things that called into question his integrity, although it is important to add that nothing was ever proved. But whether he was guilty of misdemeanours or not, Idris clearly lost the confidence not only of a number of WIPO’s member states, but also of many of the office’s staff. Gurry’s job is to ensure that everything inside the office – such as promotions and money allocation - is fully transparent, while at the same time putting WIPO in the centre of the debate about how IP can and should affect the world. I am sure we all wish him luck!
Here is the report that the IP Watch online news service, which has very strong connections inside WIPO, has put together on the vote. Note that the US is pleased, that some WIPO staff, at least, are delighted, that Gurry's most recent WIPO brief encompassed patents and that he has also served as the organisation's general counsel. This is a good appointment.
Joff Wild, IAM Magazine | 13 May 2008
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EU presidency hails patent advances, but money could scupper deal
The Slovenian presidency of the EU has produced a document outlining the progress that has been made in the on-going discussions among EU member states about a possible single EU-wide patent jurisdiction and the Community patent. If both proposals were to become a reality, we would see the introduction of a patent issued by the EPO that would be valid in the jurisdictions of all EU member states and the creation of a unitary court system to hear dispute relating to all patents awarded by the EPO.
Importantly, as I understand it this court system would not only deal with Community patent disputes, but also disputes relating to the types of patent the EPO awards now. In other words, patentees that have decided not to use the Community patent system but have instead opted for the traditional EPO route by which they decide in what countries their EPO-granted right should apply, would also use the new court structure in the event of a dispute. What I am not clear about is whether it would be compulsory to use the new court, or whether yu cold still pursue cases on a jurisdiction by jurisdiction basis.
However, we are a long way from having to worry too much about the details, there is still a lot to be done before any final decision is made. That said, as I reported from Ljubljana, the signs are looking positive. In this new document, the Slovenians confirm that there has been progress and that discussions are advancing, although some areas of difficulty remain. My hunch is that, as my EPO source told me last week, it is all going to come down to money. Some national patent offices are worried that they are going to lose considerable income from EPO renewal fees if the Community patent comes into force and this could mean they are going to look for reasons why it should not. That will have a knock-on effect on the litigation discussions. It will then come down to how much the big players – France, Germany and the UK – want everything to fall into place. If they do, then it is unlikely any other government will choose to expend valuable political capital in order to make a stand; which means that a deal will be reachd and we will get the patent rigt and the litigaiotn system. But, whatever happens, we are talking years here, so don't hold your breath!
Joff Wild, IAM Magazine | 12 May 2008
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Bush Administration urges Congress not to give up on patent reform
I have had a couple of comments from US-based readers concerning the blog I posted last Saturday on the demise (or so i thought) of the Patent Reform Act. According to both correspondents, I could be jumping the gun. This is what they had to say:
I wouldn't be too quick to jump to the conclusion that Congress is done with patent reform.
This Congress is done with patent reform. There will be a whole new Congress and Executive branch within a year. We just don't know how they will view things. These dynamics are both the best and worst thing about being an American.
Michael Martin, Venetian Capital Management
I agree with Michael that you shouldn't jump to conclusions on this. Future Congresses will likely take this up again. I would go even farther to say that things could still happen this year. Congress is just as likely to pass things in a rush at the end of the session (which, given the budget situation may just run until Jan in a lame-duck). So May is way to early to be saying "game over."
Kenan Jarboe, Athena Alliance
Just to clarify what I said previously: my view is that given recent developments there is not going to be any patent reform legislation between now and the elections in November, but that we could see something reintroduced next year. So, Michael and I are probably on the same wavelength. However, if Kenan is right, it could be that a deal might be done later this year, even – perhaps – after the election, when, as I understand it, the old Congress sits for a few weeks before the newly elected one takes over in January. It was in this lame duck period that the Bayh-Dole Act was passed in 1981 and then signed into law by Jimmy Carter, on one of the last days (if not the last) he was Commander-in-Chief.
So, you never know. Maybe we will see an attempt to revive things. Indeed, if this article by Commerce Secretary Carlos Gutierrez is anyting to go by, it looks like the Bush Administration is keen to see a deal done. However, I guess it will have to be on its terms and, as Gutierrez makes clear, for that to happen something is going to have to give on damages apportionment. Any legislation voted through by Congress still has to be approved by President Bush for it to become law. I don’t know exactly how that works, but I am sure he has the option either to veto or just not to sign. Given his government's oft-stated and trenchant opposition to the current damages apportionment provisions in the legislation, there would surely have to be significant changes before the President was happy to put pen to paper. On that basis, supporters of the legislation - for whom, it seems, changes to the damages regime are really the only game in town - may feel they are better off waiting until 2009, when there is a new Congress (one predicted to contain many more Democrats), a new President and a new head of the USPTO.
Joff Wild, IAM Magazine | 12 May 2008
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Two IAM IP publications now available free of charge online
IAM has just published two guides, both of which are available online and completely free of charge:
• Brands in the Boardroom, released to coincide with next week’s INTA meeting in Berlin, examines how Playboy and E&J Gallo manage their respective brands portfolios, and also takes an in-depth look at Google’s controversial AdWords programme. In addition, there are a series of other articles detailing key trademark issues in some of the world’s major jurisdictions.
• Patents in Europe, first made publicly available last week at the European Patent Forum in Ljubljana, has been produced in association with the European Patent Office. The publication is divided into two parts: in the first, chapters – including an introduction from EPO President Alison Brimelow – look at recent developments inside the EPO and in Europe generally; in the second, there are detailed guides on how patent litigation is conducted in 21 European jurisdictions, including all the big players.
Brands in the Boardroom and Patents in Europe are among a number of free IAM guides that can be accessed via our website, by clicking here. You will also find a link to the website dedicated to IAM’s yearbook IP Value: Building and Enforcing Intellectual Property Value.
Happy reading!
Joff Wild, IAM Magazine | 12 May 2008
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McCurdy leaves Thinkfire to become chairman of anti patent troll online venture
I understand that this week Thinkfire will confirm that its CEO, Dan McCurdy, has resigned to become chairman of a spin-out from the company called PatentFreedom. McCurdy is succeeded by Steven Hoffman who was previously Thinkfire’s president; he will stay on at the company until July to help in the transition process.
As one of the founders of Thinkfire back in 2001, McCurdy has played a prominent role in building the company into a successful and profitable business. Although it rarely gives any details of its client base, Thinkfire has been involved a number of high profile litigations, including, I believe, working for Alcatel Lucent in its on-going dispute with Microsoft. Of course, before setting up Thinkfire, McCurdy was president of Lucent Technologies’ IP business responsible for managing 300 employees and a portfolio of 26,000 patents that generated annual revenues of $500 million.
Interestingly, it seems that the very nature of Thinkfire’s business has precipitated McCurdy’s departure. PatentFreedom’s is an online community that is designed to help companies defend themselves against attacks from patent trolls: they will subscribe to join the community – which is how PatentFreedom will make its money – and will be able to access a database of trolls to find out more about who they are or could be up against, as well as share information anonymously with each other. In this way, so the thinking goes, companies that find themselves under attack from trolls will be better placed to devise effective strategies to fight back, so helping to reduce payouts, minimise time and money lost to litigation and maintain product lifecycles and margins.
All of which could well interest the trolls’ frequent targets. To my knowledge, beyond law firms there is nothing out there at the moment which is focused on the needs of defendants in these cases and which offers access to detailed information about trolls – up to now companies have pretty much been on their own.
However, what may have caused PatentFreedom problems if it had remained inside Thinkfire were potential conflicts with the company’s existing services, many of which have at least some element of assertion to them. Just last year, for example, Thinkfire announced the launch of its Leveraged Transactions Group, a service designed specifically for small entities looking to exploit their rights. Senior figures inside large corporations may well have felt reluctant to do business with an organisation that, with another cap on, could have been helping an organisation to get damages from them. Spinning PatentFreedom out gets round that problem rather neatly. And putting McCurdy in charge gives the project a very well-known public face. When his departure is formalised in July, Thinkfire will have no equity in or control over PatentFreedom.
Depending on whom you speak to, the term troll can mean a lot of things. The definition PatentFreedom intends to work from is pretty wide-ranging. It is, essentially, any entity that earns, or plans to earn, the majority of its revenues from the licensing or enforcement of patents. To become a subscriber to PatentFreedom, you must be an operating company with revenues of $100 million or more from the sale of products other than revenues from the licensing, enforcement, enforcement for fee or sale of patents.
Joff Wild, IAM Magazine | 11 May 2008
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A complete waste of time that has weakened the US patent-owning communities
It has looked dead for a month or so. And now it is. The Patent Reform Act has been officially withdrawn from the schedule of the US Senate and with that decision goes just about any chance it had of being enacted. Once it became clear that no deal was going to be reached over damages apportionment, the writing was on the wall for the proposed legislation When John Whelan, on secondment from the USPTO, packed up his things and left Senator Patrick Leahy’s office and Leahy’s chief counsel started to work on other things, the game was up.
But, when you think about all the words expended – not to mention the money spent on lobbyists – what is surprising is that absolutely nothing has come out of the last year and bit's worth of debates. Having been led to believe that the US patent system was fundamentally flawed and needed fixing if it was going to be fit for purpose in the 21st century, we have now found out that the only game in town was actually an argument about how damages should be calculated in patent infringement cases and that nothing else on the table was worth taking forward.
Apart from no changes to the damages regime, here are a couple of the other things we are not going to be seeing in the US as a result of the Act’s failure to get through the legislative process:
• No first to file. The US will remain the only country in the world (I think) where first to invent holds sway.
• No system of post grant oppositions at the USPTO – your options will remain re-examination or litigation if you want to get a patent invalidated.
It is surely extraordinary that, given the chance to make changes to the system, the greater US patent community could not find any kind of consensus over what it might want. Basically the last 14 months – and all the divisions they have caused and all the questioning of the patent system they have encouraged – might as well not have happened. In effect, all they have done is expose fault lines in the US patent-owning community that, although always present, had never been so visible in public before. It is difficult to see how relationships can be repaired given some of the bitter exchanges that have taken place and the accusations that have been made. In fact, can we really talk about a single patent owning community in the US these days? Probably not.
Given that new proposals for legislation are unlikely to surface before the middle of 2009 at the earliest - and stand almost no chance of being enacted before 2010, if at all - should reform happen now it is much more likely to be piecemeal through the courts, through regulatory authorities such as the FTC and through the USPTO, none of which the US patent communities have much control over (in the case of the latter, much to the chagrin of so many, of course). Basically, US patent owners had their chance to help shape legislation that so many of them claimed was necessary. And they blew it. As a result, they could end up discovering that a lot of what happens over the next few months and years is not much to their liking, whatever sector they are involved in. I can’t help thinking that you reap what you sow and that in the not too distant future we may be hearing an awful lot about the law of unintended consequences.
Joff Wild, IAM Magazine | 10 May 2008
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Mutual recognition raises its head as EPO boss says backlog won't be mastered
So what happens when a major patent office concedes publicly that its growing backlog will never be beaten and that for the foreseeable future there are going to be hundreds of thousands of unexamined applications piling up, creating levels of uncertainty never before known in the jurisdictions for which it is responsible? Well, over the next couple of years we may well find out, because this is the situation in which the European Patent Office now says it finds itself.
In an exclusive interview with IAM, which took place in the Slovenian capital Ljubljana, venue for this year’s European Patent Forum and European Inventor of the Year ceremony, EPO president Alison Brimelow said: “I am coming to the conclusion that the backlog will not be mastered." It is now time, she continued, to think about what must be done to ensure that the patent system can function adequately in this new environment. “There are no silver bullets but there are a range of things that we could do – some of which will be more effective than others.”
While stressing that she had come to no conclusions and had not even begun to form firm opinions yet, it is clear that recognising backlogs are essentially an unsolvable problem has freed up Brimelow and her team to ask a series of questions that indicate major changes to the European patent system are a real possibility. How about mutual recognition for starters, or maybe a two-tier application process? Higher fees are another option, as is blocks of applications being handled by teams of examiners instead of each being handled by an individual operating in a silo. All of this in addition to the measures – including raising the patentability bar – already outlined in the document Future Workload, which was approved by the Council of the European Patent Organisation last December.
Also present at the interview was Ciarán McGinley, the Controller of the EPO. According to McGinley there have been fundamental changes in the global patent system over the last few years. “When we used to talk about dealing with backlogs our main focus was on timeliness. Now, given the cross-patenting between regions even if we deliver good pendencies, we will still have a backlog blackhole,” he said. One way of looking at it, he continued was that all the world’s major offices now have a permafrost of pending applications. This, McGinley said, created real uncertainty. The US is already at a point where there are one million pending applications and Europe is forecast to be there within five years. It is important to work out if there are ways of shining a light into the blackhole to find out what lurks within. “If we can’t then the current distortions that you see in the US market - which have led to the emergence of patent trolls, for instance – will begin to occur in Europe.”
Again, it is important to make clear that Brimelow, McGinley and other members of the office’s senior management are still in the very early stages of exploring what might be done. But have no doubt that there is some very deep thinking going on.
“There are a number of developments that are leading to issues being explored in a way that would not have been possible two years ago,” Brimelow told me. One of these, she said, is mutual recognition. Although the idea of automatically registering a patent that has been granted by another patent office has been around for many years, it has always proved a political hot potato. Differences not only in patentability criteria between offices, but also in perceived levels of quality, have made it nigh on impossible for people to countenance mutual recognition as anything but a pipedream. But that, said Brimelow, may be changing. “In conversations I have had at the margins of this event [the Forum], I detect that more users of the system are prepared to contemplate what we have to do if we are serious about mutual recognition.” Some very serious players, she continued, are interested in understanding what going down this path may mean.
Although Brimelow said that different US and European perceptions of patentability still created significant barriers, there could be ways to get round them if the will is there. For example, it may be a case of not recognising grants in all areas but instead only in some of the less controversial ones, such as mechanics. Another option is to look at extending the Utilisation Pilot Project, which makes use of work done by national patent offices in Europe to speed along the European patent application process, to patent offices outside of Europe. “Presumably this subject is not going to go away, so it is important that we think it through. User input here is very important,” Brimelow said.
One user of the EPO that has been thinking deeply about the future of the patent system is IBM. Last year, the company’s head of IP law, David Kappos, told IAM about what he termed the European Interoperability Patent – essentially a right granted by the EPO on the proviso that its owner would be willing to license its use to anyone that asked. It is an idea that has got Brimelow thinking. “Perhaps this might mean taking a two-tier approach, with soft IP on one level and the gold plate, traditional route on another,” she suggested. In essence, those foregoing the exclusive use of their rights would be examined to one standard, while those who wanted to retain all options would be examined at another.
The above is only a portion of what was discussed during the hour that I spent with Brimelow and McGinley. I will report on other issues – such as the possibility of higher fees, the team approach to examination and the quality of the applications the EPO receives - over the next few days.
Of course, there is a long way from saying things to actually doing them, especially in Europe. Even if Brimelow wanted to make major changes, she could not without getting sign-off from the EPO Council; and with over 30 countries wanting their say there, that is never gong to be easy. However, it seems to me that the president is moving towards a point where she could be making some pretty radical suggestions during the final two years she is in office. Thoughts are crystallising, ideas are beginning to form. Watch this space.
Joff Wild, IAM Magazine | 08 May 2008
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Euro patent progress confirmed as Commissioner fails to shine
I have been in Ljubljana, the capital of Slovenia, for the last couple of days, attending the European Patent Forum, organised by the EPO, the Slovenian government and the European Commission. It’s been a very interesting event, looking at how the patent system may, can and should affect the development of clean technology. We have covered this on the blog before and it is going to become a very big topic for all IP owners – as the speeches some very clever people have been making here have proved.
But enough of that! I have spent quite a bit of my time trying to find out from those in the know exactly where we are with the Community patent and the single EU patent jurisdiction negotiations. The official line was delivered by EC Commissioner Gunther Verheugen during his keynote talk to delegates yesterday afternoon. There has been progress in both areas over recent months, but it is still too slow and he would like to see all member states take things a lot more seriously. The Slovenian line (the Slovenians hold the EU presidency until the end of June and are currently leading the negotiations on both subjects) was given by Biserka Strel, the president of the country’s IP Office. She told me at a press conference that “great progress is being made in both the jurisdiction and the Community patent – it is looking positive and we are optimistic”. Informally, the Slovenians told me that they expected formal proposals to emerge by the end of this year, especially because the French have also made clear that they see sorting out the European patent system as a priority.
I also spoke to a senior official inside the EPO. This is what he told me, and I quote:
• The Slovenians have done some great work.
• With the London Agreement ratified the language issue should no longer be a major barrier.
• The single patent jurisdiciton is the next major block. There seems a real possibility that the political will is there to remove it.
• The financial issue concerning the level of renewal fees and distribution keys risks are emerging as the key issue. It has always lurked in the background but was over-clouded by the language and litigation issues. We may be getting down to a heads of government negotiation table on this aspect.
• Overall, one has to be more positive and more hopeful.
Now when this person starts talking like that, I think you can be pretty certain that we are on the verge of something happening. It does seem, though, that it will all come down to money. Put simply, were a Community patent to be introduced, a lot of the renewal money that national patent offices currently get from EPO granted patents will no longer be there. Currently, national patent offices get a percentage of the renewal money on every single European patent which is valid in their jurisdiction. With the Community patent, this would no longer be the case, as the most recent Slovenian discussion document makes clear.
For patent offices in countries such as Germany, France and the UK this would mean a dramatic decline in income. However, the problem does not seem to be with any of them; in the words of my source: “They will take the hit because they want to make progress.” Instead, the problem may come from smaller offices where income from European patents is still pretty significant – in particular Austria and some of the Nordic countries. If officials were left on their own to negotiate, things may well stall, hence the talk of a heads of government negotiation. Once you get to that level, with the big three all pushing for change, the likelihood is that no other country is going to want to make a stand against them.
Of course, all this comes with the usual health warnings. It is gossip and it is rumour. But I was speaking to pretty senior people, so I am reasonably confident that I got at least the flavour of what is going on behind closed doors.
On another note, I was not that impressed with Mr Verheugen. At one point in the press conference he seemed to fall asleep, while he also failed my “how you say patent test”. It is my rule of thumb that anyone from a governmental organisation that says “pay-tent” instead of “pa-tent” has very little grasp of what they are talking about. This point was underlined during Verheugen’s plenary speech when he stated that it is currently 26 times more expensive to obtain European patent protection than protection in the US. Anyone with any clue would have known this is a hugely exaggerated figure. The Commissioner also upset EPO officials by stating that he favoured both fast-tracking for patent applications relating to clean technology and much cheaper patents for European SMEs. If we already have a huge backlog and one million pending applications forecast within five years, the EPO people were asking, how is encouraging more applications going to help things?
Joff Wild, IAM Magazine | 07 May 2008
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Will WIPO soon be dancing to a samba beat?
Here’s a little bit of gossip for you. Take it with a pinch of salt as it will probably turn out to be a load of old rubbish. But you never know. So here goes.
Within the next 10 days we should know the identity of the new Director-General of WIPO – the person who will succeed the current, and highly controversial (to say the least), incumbent Kamil Idris. There are 15 candidates for the job, but as is so often the case with these things, some have more of a chance of being elected than others.
So, as Africa supplied the last DG it is very unlikely that an African will take the job this time around. Likewise, Europe had its turn before Africa when Arpad Bogsch was in charge from WIPO’s foundation in 1963 right through until 1997. That leaves us with candidates from Latin America, Australasia and Asia as the likeliest winners (there is no candidate from North America).
Now, given that most of the countries voting for the DG will be from the developing world, it is unlikely – I was told – that the candidates from Japan and Australia will attract that many votes, despite their undoubted skills. All of which means that the realistic contenders for the job are: Toufiq Ali (Bangladesh), Jorge Amigo (Mexico), José Graça Aranha (Brazil), Masood Khan (Pakistan), Enrique Manalo (Philippines) and José Delmer Urbizo (Honduras). And out of those six, the three attracting the most interest are the Mexican, the Brazilian and the Pakistani.
I stress that all of this is rumour and gossip, and may well turn out to be completely incorrect. But if I were a betting man, I might just put a few quid on José Graça Aranha getting the nod at the end of the selection process. He is already a WIPO insider and, I was told, has done good work on the trademark side of things. Something that may count against him, however, is Brazil’s record on patents. Would it be credible for a representative from a country that is happy to override pharmaceutical patents to be in charge of the world’s intellectual property agency? WIPO member states will be deciding soon enough.
Joff Wild, IAM Magazine | 06 May 2008
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Maybe it's time for intermediaries to start talking regulation
This blog has been banging on about it for a few weeks now and day by day it seems to get truer: it is an excellent time to be an intermediary in the IP market. Of course, intermediaries come in all shapes and forms; they help companies buy and sell patents, they arrange financings; and, as this article from the Dow Jones newswires explains, they also help fund IP litigation for plaintiffs that could otherwise not afford it in return for a share of any resulting pay-out.
There is just no getting away from it, IP is an attractive investment right now. As the article makes clear, IP rights are not exposed to the vagaries of the market in the same way as traditional investment targets and so offer the possibility of returns even when more general conditions are not so strong.
However, any IP-related project is only as good as the people who are running it. Because we are talking about something that is idiosyncratic, by definition we are talking about something that most people will struggle to understand, at least in the short term. That is going to make deciding who to do business with quite a tricky choice. What kind of questions would you ask, for example, to determine an intermediary’s level of expertise? What deal-making evidence do you look for when comparatively few deals have been done?
You can expect that as IP becomes more a more mainstream investment option, more people and more firms are going to want to tap into it. Right now in the market, the community is relatively small and most people know each other. How long that can continue is open to question. And the one thing that might kill the intermediary industry stone dead is a few deals that go sour because the people doing them were not really qualified.
It seems to me, therefore, that for those looking to invest money with intermediaries, for IP owners looking to do deals with them and for intermediaries themselves, what is needed is some kind of quality seal – something that legitimises market participants. I don’t know what it could be, but maybe for the sake of their industry’s development, intermediaries need to get together and form some kind of association, or develop a quality standard, that can be displayed by firms on their websites and on their stationary. This will not stop the cowboys getting involved, but it will clearly separate them from those who know what they are doing and it will certainly help investors and IP owners. Are there any takers for an IP Intermediaries Association out there?
Joff Wild, IAM Magazine | 05 May 2008