Patents in the Knowledge-Based Economy (2003) / Chapter Skim
Currently Skimming:
Patent Quality Control: A Comparison of U.S. Patent Re-examinations and European Patent Oppositions
Patent Quality Control: A Comparison of U.S. Patent Re-examinations and European Patent Oppositions
Pages 74-119
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 74... ...
Our analysis focuses on two broad technology categoriesbiotechnology and pharmaceuticals and semiconductors and computer software. Within these fields, we collected data on all EPO patents for iWe appreciate helpful comments by Robert Blackburn, Wesley Cohen, Markus Herzog, Mark Lemley, Stephen Merrill, Richard Nelson, Cecil Quillen, F
|
From page 75... ...
A more elaborate and adversarial procedure in the European Patent Office (EPO) is the opposition process.
|
From page 76... ...
Although the EPO application costs roughly three times more than the typical national application, because an EPO patent grants the applicant a right to patent in any designated state, the EPO process affords significant cost advantages for inventions requiring protection in a number of European markets. However, the centralization of application and examination also allows a centralized legal challenge: Under the European Patent Convention (EPC)
|
From page 77... ...
has suggested that the requirement that any opposition be filed within 9 months of the issue of an EPO patent may mean that the validity of EPO patents is determined at a much earlier point in their term than is true of the re-examination or litigation processes.7 Merges estimates that almost 7 percent of EPO patents trigger opposition proceedings, whereas only 0.3 percent of U.S. patents result in re-examination re6An alternative re-examination procedure, the inter parses re-examination, was enacted by the U.S.
|
From page 78... ...
We then constructed a random sample of EPO patents in these technology classes that triggered no opposition proceedings. We matched these EPO patents with the "equivalent" USPTO patents covering the same invention in the United States.
|
From page 79... ...
Much of the group's opposition to such changes stems from the belief of many independent inventors that stronger reexamination or opposition proceedings would significantly raise the costs of patenting, because of the added costs of defending patents within these proceedings. Accordingly, information on the incidence of re-examination and opposition proceedings among different classes of patentholders will shed light on the likelihood that a disproportionate share of any such increased costs would be borne by the independent inventor.
|
From page 80... ...
As part of the patent system harmonization legislated in the American Inventors Protection Act of 1999, the United States instituted a policy of publication 18 months after application in November 2000 for many patents with applications pending in jurisdictions outside the United States.~3 In contrast, EPO applications have always been published with an 18-month lag, regardless of whether they have issued. Both systems have a post-grant procedure through which the validity of the patent can be challenged by other parties, but the two patent systems' post-grant challenge procedures differ significantly.
|
From page 81... ...
~ I i Patent Issues 1 year (US ~ Rejected \ Re-examination · Re-issue Litigation FIGURE 1 Time line of patent application process in the EPO system and USPTO system.
|
From page 82... ...
Litton Industrial, 756 F.2d 1556 (CAFC 1985) (finding that an invention was "novel" when no prior art was precisely equivalent)
|
From page 83... ...
Procedurally, the re-examination proceeding permits the patent owner or any other party to notify the USPTO and request that the grounds on which the patent was originally issued be reconsidered by an examiner.27 Initiation of a re-examination requires that some previously undisclosed "new" and relevant piece of prior art be presented to the agency. Under the statute, a relevant disclosure must be printed in either a prior patent or prior publication no other source can serve as grounds for the re-examination.
|
From page 84... ...
Any third party, such as a competitor or other opponent of the patent, thus has a limited role in the re-examination process. The requester is entitled to notify the USPTO of the triggering "prior art," to receive a copy of the patentee's reply to the re-examination (if any)
|
From page 85... ...
Because patent suits generally arise from a charge of infringement by the patent owner, the patentee exerts considerable control over the timing of enforcement and litigation in a patent dispute.34 Legal standards create a relatively hostile environment in the federal courts for challengers seeking to invalidate an issued patent. Under the statute, patents are "born valid," enjoying a strong presumption of validity during the court proceedings.35 Furthermore, the evidentiary standard for proving a claim invalid is "clear and convincing" evidence, a standard considerably higher than the mere "preponderance" of proof required in the typical civil suit.
|
From page 86... ...
In contrast, adversarial processes form the basis for the "opposition" procedure adopted by the EPO. EPO Examination and Opposition Procedures36 Patent protection for European member states can be obtained by filing several national applications at the respective national patent offices or by filing one EPO patent application at the European Patent Office.
|
From page 87... ...
The EPO opposition procedure is thus the only centralized challenge process for European patents. An opposition to a European patent is filed with the EPO.
|
From page 88... ...
For the technical fields considered in this paper, we compute these figures below. 45Rule 60 EPC: "In the event of the death or legal incapacity of an opponent, the opposition proceedings may be continued by the European Patent Office of its own motion, even without the participation of the heirs or legal representatives.
|
From page 89... ...
The attractiveness of the EPO opposition process stems in part from the fragmentation of patent litigation processes in Europe. Unfortunately, there have been very few systematic studies of patent litigation within the various European nations.
|
From page 90... ...
Moreover, because many of the other parties initiating re-examinations are law firms that may be acting on behalf of patentholders, the share of re-examinations initiated by patentholders almost certainly approaches 50 percent.48 In many cases, patentholders initiate re-examinations to address failures to properly cite prior art, to correct claims, or to repair other flaws in the issued patent. However, this difference between re-examinations and oppositions in the identity of the initiating parties highlights the very different roles of the re-examination and opposition procedures and underscores the need for caution in drawing analogies between these types of post-issue challenges.
|
From page 91... ...
USPTO re-examinations (right hand scale) - 0.0045 - 0.004 ~00035 cn - 0.003 - 0.0025 - 0.002 - 0.0015 - 0.001 ~ oh - 0.0005 FIGURE 2 USPTO re-examinations and EPO oppositions by year of patent grant.
|
From page 92... ...
0.0 . 16.0 14.0 10.0 8.0 6.0 PATENTS IN THE KNOWLEDGE-BASED ECONOMY USPTO Re-examinations by Grant Year 1980-1996 Selected Technology Classes ~ ~ ~ ~ I_ _ ~ / \, / \ ~ ~ ~ 1980 1982 1984 1986 1988 1990 1992 1994 1996 Year of Patent Grant EPO Oppositions by Grant Year 1980-1996 Selected Technology Classes ~ 1k~ m ~ 4.0 2.0 0.0 ., ~ // // a/ 1980 1982 1984 1986 1988 1990 1992 1994 1996 Year of Patent Grant ~ Semiconductors/Software ~ Pharma/biotech ~< All other sectors FIGURE 3 USPTO re-examinations and EPO oppositions by grant year, 1980-1996, by selected technology class.
|
From page 93... ...
The relatively modest interclass differences in re-exam~nation rates reflect the limited utility of this process for use by patent opponents or competitors. Figure 4 displays the distribution of the average lag between applying for a patent and the filing of a re-exam~nation or opposition request.
|
From page 94... ...
For re-examinations requested by a nonowner, the median lag between patent application date and final opposition outcome at the EPO is 0.35 years greater than for re-examination at the USPTO for the overall time period. For pre-l991 applications, this lag is 0.3 years smaller in the EPO system.
|
From page 95... ...
Fit l.:.:.m c.:.:.:.:' l::: :q l:: m c::: :q I:: m l::::: l a:::: :' 1::: :1 a:: m l::: :' ':: m ~ _ I 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Years since application FIGURE 5 Lag between USPTO application and final re-examination outcome, 19812000 (patents granted 1975-1999) and EPO application and final opposition outcome, 1978-1999 (patents granted 1980-1997~.
|
From page 96... ...
lawsuit involving this patent, however, was not settled for 2 years after the conclusion of the opposition process for the EPO "twin." The other case study of the Liposome Corporation's U.S. and EPO patents reveals a similarly complex interaction between the processes of post-grant review or litigation in the U.S.
|
From page 97... ...
The average lag between application date and the initiation of a challenge is substantially greater within the U.S. re-examinations than in the EPO oppositions, but this difference reflects the different time limits on the initiation of such proceedings (the EPO requirement that opposition be filed within 9 months of patent grant)
|
From page 98... ...
As we noted above, our data include re-examinations in all technology classes, in contrast to the analysis of oppositions by Harhoff and Reitzig. Our analysis of re-examinations of patents in the classes examined by Harhoff and Reitzig indicates that biotechnology/pharmaceutical patents are no more likely to be re-examined and patents in the semiconductor, computer hardware, and software classes are less likely to be re-examined, compared with patents overall.52 For patents granted before 1991, both biotechnology/pharmaceuticals and semiconductor/computer hardware have re-examination rates that are approximately the same as those for other industries.
|
From page 99... ...
99 ~ =~g x ~ ~ =~: ~ m C ~ at 3 O c En At ~ O AX -d =~!
|
From page 100... ...
The next section compares the results of re-examination to those achieved by the EPO opposition system for these two technology classes. Sampling Strategy for U.S.-EPO Equivalents Thus far, we have examined data on the determinants of re-examinations at the USPTO.
|
From page 101... ...
PATENT QUALITY X ._4 X Do 1 an be as _' Do Do Cal as o C)
|
From page 102... ...
We based our sampling strategy on the IPC classifications done at the EPO, because these assignments are more reliable than the IPC assignments done after the fact at the USPTo.55 We began by drawing a sample of approximately 2,000 EPO patents that met the following criteria (Figure 6 provides a graphic depiction of this sampling strategy) : · They were granted between 1980 and 1997 (applied for between 1978 and 1995)
|
From page 103... ...
and EPO standards for the patenting of embodiments differ, the USPTO permitting a larger number of applications than the EPO's Unity of Invention standard would allow. Article 82 of the European Patent Convention states: "The European patent application shall relate to one invention only or to a group of inventions so linked as to form a single general inventive concept." This international distinction would tend to be exacerbated in the case of pharmaceutical and biotechnology patents, however, the applicants for which have long been recognized to pursue of strategy of "serial patenting" (Merges, 1997)
|
From page 104... ...
A set of dummies for the number of EPO citations received by the patent between its issue date and 1999. One additional forward cite raises the opposition probability about 3-5 percent, with some diminishing returns, a result that is consistent with the Harhoff-Reitzig results cited above.
|
From page 105... ...
of EPO claims 11-15 1,068 0.051 0.026 0.033 0.026 No. of EPO claims >15 1,244 0.118 0.026 0.105 0.026 Independent inventor (EPO ass.)
|
From page 106... ...
of EPO claims >15 0.084 0.018 0.074 0.019 Accelerated search requested -0.132 0.055 -0.132 0.055 Accelerated exam requested 0.242 0.045 0.239 0.046 PCT application 0.119 0.023 0.100 0.023 Nationality of patentholder Germany 0.091 0.023 0.091 0.024 Other West European 0.068 0.018 0.069 0.020 U.S. Twin characteristics U.S.
|
From page 107... ...
· Whether the patentholder is an independent inventor,6i a dummy variable for which the coefficient is insignificant. · Whether an accelerated search was requested by the patent applicant at the EPO, which lowers the probability of opposition by about 14 percent.62 Accelerated search is often requested when the applicant is unsure of the state of the art or of whether the invention is patentable.
|
From page 108... ...
If we do not control for patent characteristics, however, patents held by independent inventors are 11 percent more likely to be opposed; the main reason seems to be that they are more likely to be biotechnology/pharmaceutical patents. This result may reflect the greater presence of European university inventions within the biotechnology/pharmaceutical patent class, ownership of many of which remains with the individual faculty member.
|
From page 109... ...
The slightly lower coefficient for U.S. citations relative to EPO citations may reflect the fact that USPTO patents have many more citations per patent than EPO patents.
|
From page 110... ...
Opposition Outcomes The outcomes of the oppositions for our sample are shown in Table 5. The category "opposition closed" refers to cases in which either the opponent withdraws the opposition and the patent office does not pursue the case on its own behalf, or the patent holder does not renew patent protection, which causes the patent to lapse into the public domain.
|
From page 111... ...
Amendment is less likely when there are multiple oppositions or the inventor is an individual. More important patents or patents in relatively new, dynamic areas of inventive activity appear on this evidence to be more likely to be amended rather than revoked in an opposition.
|
From page 112... ...
o as cq o By so By - ~ by as : o o by o.
|
From page 113... ...
First, the U.S. reexamination procedure differs dramatically from the EPO opposition procedure in virtually all of its features.
|
From page 114... ...
, for any given patent the EPO opposition process does not resolve uncertainties over the quality and breadth of patents more rapidly than the re-examination process. Indeed, opposition proceedings in some cases (and almost certainly in important, complex cases with numerous opponents, appeals, etc.)
|
From page 115... ...
EPO (European Patent Office)
|
From page 116... ...
. "Implication of Recent Patent Law Changes on Biotechnology Research and the Biotechnology Industry." Virginia Journal of Law and Technology 1(2)
|
From page 117... ...
District Court found that LC's patent was invalid and that Nexstar's product was not infringing. As of this date, no decision has been delivered in the Nextar/Daiichi opposition proceedings, thus suggesting that the cases are essentially closed.
|
From page 118... ...
Nexstar officer said that LC's announcement of the outcome of its patent re-examination had harmed the firm (Jesse Eisinger, "Patent ruling may hamper Nexstar offering," Denver Rocky Mountain News, 5B, June 11, 1996~. The USPTO certificate on the re-examination of the '635 patent finally issued on July 2,1996, and the facts did not entirely support LC's press releases of a month earlier.
|
From page 119... ...
Each party stipulated to a voluntary dismissal of the case and the Court announced that the parties had "resolved their differences." But the EPO opposition proceedings continued, and after the two pending oppositions were consolidated, the EPO patent was revoked on October 17, 1986. Ortho immediately appealed the adverse decision to the EPO, but the appeal was finally rejected on January 8, 1991, 5 years after settlement of the firm's infringement suit against one of the EPO patent opponents.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.