Gowers Review of Intellectual Property

At the Enterprise Conference on 2 December 2005, the Chancellor of the Exchequer announced that, as part of the Pre-Budget Report 2005 package, he was asking Andrew Gowers to lead an Independent Review to examine the UK's intellectual property framework.

The Open Rights Group has been formally invited to participate. We are currently drafting our submission and wish to include your thoughts and opinions. We have reproduced the Call for Evidence below and invite you to contribute - just hit 'respond' next to the paragraph you wish to comment on.

Many of the questions asked by Andrew Gowers in this review are very focused, but you should feel free to comment on the issues and the wider implications rather than feel obliged to provide specific answers. If you want to talk about issues not raised by this call for evidence, please do - just leave your comments on the Introduction.

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  • Obtaining IP rights can impose significant costs on businesses and innovators. For example, evidence suggests that securing patent protection in a selection of European countries and in the USA typically costs around £75,000 over the first seven years, including legal fees and renewal fees. (The Financial Realities of Patent Protection, Frank B. Dehn and Co., Patent and Trade Mark Attorneys (2003)) Moreover, it appears to be considerably more expensive to obtain patent protection across Europe than it is in the US, largely due to translation fees and other costs at the national level. These figures do not include the costs of enforcing IP and challenging infringement through litigation, which also appear to be very high, often prohibitively so, especially for small and medium enterprises. This may be acting as a barrier to efficient enforcement of IP rights and equally as a deterrent to innocent parties being able to challenge dubious rights. Efforts to agree a European Community Patent, aimed in part at reducing these costs, have repeatedly foundered.

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5 responses

  1. David Mytton Says:

    Pricing is very restrictive when it comes to patents. Copyright is free, trademarks are relatively cheap but patents are incredibly expensive. However this expense does reflect the value to a certain degree. A patent allows you to enforce a monopoly on an invention so you can exploit it commercially. If the invention is worth patenting then it should regain the costs involved in development. However it could also be argued that trademarks and copyright are equally, if not more, valuable. In computer software, it is copyright which protects the source code, not patents (yet). But copyright needs no registration – enforcement is handled by the courts should it need to. Do inventions really need to be registered when copyright enforcement works well without?

  2. Richard Kirk Says:

    I have filed patents in the UK for several companies. We had to file for the UK patent. The next thing was usually to apply for a US patent: the US was usually about a third to a half of the world technology market by value, and filing for a patent was particularly easy because no extra languages were needed. Usually that was enough to make infringing in the rest of the world unattractive. If something was felt to be particularly significant, then we could go to patenting in Germany, Italy, France – usually in order of market share. These were complicated by the language problems. When I worked in Canon, Japanese patents were also filed. I have never been able to verify that the translations of my patents into other languages were faithfully done.

    Most of my patents were never used, except as part of a patent portfolio to negotiate cross-licencing agreements. In the case where patents have been used to threaten my company, the actual merit of the patent – provided we cannot wholly dismiss it – is less of an issue than the willingness and ability of the holding company to cause legal grief. Most of this legal grief happens in the US.

    The salient facts as I see them are…
    * People who need to file patents have to work in their own language
    * Material in any language may be considered prior art.
    * The actual text is not used in the majority of patents.

    The best language-neutral problem would seem to be to allow European patents to be filed in the language used for the initial national patent. This would avoid all the costs of producing translations that are not reliably proofed and may never be used. The promotion of a national patent to a European patent ought to be trivial.

  3. Richard Kirk Says:

    I have no experience of litigation, but some of being threatened with patent litigation.

    A large company in recession may make large cuts in its R&D department, and at the same time try and extract value from its patent portfolio after the people who wrote the patents have gone. In my case, this will mean a small UK company can be threatened to a court case with a US giant, where even if we win, we will get no damages and will have to pay our own costs. Small companies are often forced into licencing agreements by this tactic.

    The US courts recognize the difference between infringement and deliberate infringement. If the plaintiff can show the infringer knew about the patent and chose to continue, then the damages are tripled. Now, clearly, we cannot affect the US courts except by example, but I would like to see some system whereby costs could be awarded in cases where the case might be abandoned merely because of the threat of costs rather than the merits of the case – where a small company is being sued by a big one; where the case for infringement was weak; and (perhaps) where an option to settle for out-of-court arbitrartion was refused. The possibility of being able to recover costs might encourage no-win-no-fee patent defences.

    This will probably not significantly affect the number of patent cases heard in court, because most of these usually are settled outside. But it should alter the balance of power in favour of innovation.

  4. James Says:

    The irony is that the damage to the market economy incurred by patent wars (at least in IT) often far outweighs the benefits. It really is like living in the school playground when you get large companies suing each other (to no-one’s benefit – even theirs) over such stuff as who first invented “one-click shopping” etc.

  5. Gordon Says:

    1. I believe as the UKPO gives the Patent. The UKPO should be held liable in the first instance for its good standing,ie it should not be that the holder of the patent who has to face court proceedings when a patent is contested.
    2. The PO should have done its work by checking that it is a true and positive invention under article 52 of the EU patents.
    3. Also a validated audit trail of the methodology used to validate the patent is available on-line for inspection.
    4. The right to contest a Patents validity should be a available for at least 1Yr from its publication.
    5. If mistakes are made in the validation of a patent/etc it should be the validating body, ie PO that should be held accountable and bear the cost of putting it right.
    6. Where also there is a court case such as recently in the “SUN Microsystems & Java” where the Judge appears to have made an error then there should be some sort of “Higher Authority” to sort it out a very quick manner. At the present time nothing is being done which could impact many small business’es.
    7. The cost of taking out a properly prepared patent is also very high approx £8-30,000 according to a Patent Consultant.
    8. The cost of defending a patent is also out of reach of most small business’s approx £500,000 at going rates.
    9. The USA senate committee is also now looking at ways of stopping many patents as it is stopping inovation and putting many small companies out of business.