Disclaimer, Union IP Position Paper

Union IPNote from the Editorial Committee: It is our intention to seek to inform our members of developments and/or opinions of members and others in the field of IP. We therefore scrutinise rigorously requests for publication in epi Information with we trust transparency and fairness, there being an understood caveat that the views and opinions expressed in documents that are published are solely those of the author(s), and not those of the epi or of the Editorial Committee. Neither the epi nor our Committee accordingly endorses the views and opinions expressed in documents selected for publication.
With the above statement in mind, we publish below for the information of members a position paper recently submitted to us by UNION IP.

Position Paper

Grace Period for Patents

On Behalf of the UNION-ip ExCo The Patents Commission of UNION-ip

The President The Vice President Member
Jochen Kilchert Reinier Wijnstra Cyra Nargolwalla

I. Introduction

UNION-ip is an association of practitioners in the field of Intellectual Property, that is of individuals whose principal professional occupation is concerned with patents, trademarks or designs and related questions and who carry on their profession independently or as employees. UNION-ip is a private, free, international association which is not dependent on any national or international authority: it approves its own members, in accordance with its statutes, in total independence, and likewise decides on its own activities and its own budget. It aims on the one hand to work continuously on current developments in Intellectual Property in Europe, especially by making early submissions during the preparation of proposed laws and treaties with the intention of influencing them; and on the other hand to devote itself to the improvement of professional and personal understanding between European Practitioners in the Intellectual Property field in different countries and different branches of the profession.

UNION-ip maintains close contacts with International authorities such as WIPO (The World Industrial Property Organisation), the European Patents Office, and the Commission of the European Union, and it is invited to their consultations and discussions. It participates regularly as a non-governmental organisation with observer status at International Conferences.

II. Comments

Patent law is harmonised on an international level to a great extent. One subject that is dealt with differently in different countries is the so called grace period. In short, grace period is the period that an inventor may disclose his invention before he files a patent application. Some countries apply a grace period of half a year, others of a full year, while several other countries don't apply a grace period at all. A grace period exists in countries such as the United States of America, Korea, and Japan. On the other hand, none of the European countries have a grace period for patents, although Germany does have a grace period for utility models.

Important International IP associations such as FICPI and AIPPI are in favour of a harmonized global grace period. This is because the existence of grace period possibilities in some countries but not others has a negative effect on both patent holders and third parties, due to the uncertainties and discrepancies which arise. Thus, FICPI and AIPPI have both taken the position that a strictly applied grace period, with a narrow scope (also known as a "safety-net" grace period) would be beneficial for both patent-holders and third parties.

III. Position of UNION-ip

Union-ip is in general in favour of harmonisation of IP-law. This applies a fortiori to the subject of grace period. It is confusing at least for many applicants, that it is possible to get a patent in a country like the United States of America after presenting ones invention to the public, while it became impossible in for instance the countries of Europe due to that same presentation. Due to this confusion, inventors in countries with a grace period involuntarily loose the possibility of worldwide protection, while inventors in countries without a grace period don't realise that they still can obtain a patent in several important countries even though they might have lost that possibility in their own country. Accordingly, the main and unanimous position of Union-ip is that it were best if a grace period would exist either worldwide, or in no country at all.

The position whether a harmonised patent world should have a grace period, or not, is not unanimous. A majority of the patent commission of Union-ip is against such a grace period, while an important minority is in favour. The arguments pro and con will be presented below.

The majority of the members of the patents commission is of the opinion that although a grace period could help out inventors in some cases, overall it adversely affects legal certainty, not only for third parties, but also for the inventors.

A first disadvantage for third parties is that there is a longer period of uncertainty before it is known whether someone has filed a patent application for a certain inventive product or method, or not. In a system without a grace period, one is sure that a patent application - if one has been filed - will publish within 18 months after filing. As the filing needs to be done on the day of disclosing the invention the latest, one knows that the publication will be 18 months after disclosure the latest. In a system with a grace period, the duration of the grace period will be added to this, so the uncertainty will last 24 or 30 months.

A second disadvantage is related to the first one, as third parties will be uncertain for what elements of a novel product or method protection is sought, and what the claimed scope of protection for these elements is, for a period of 24 or 30 months, instead of 18 months. It is quite legitimate in the patent system to design and market alternatives for an inventive product or method, as longs as these fall outside the scope of the earlier patent. As long as the patent application is not published, it is unknown what scope is claimed, and it is not possible to investigate whether the claimed scope is likely to be granted or not.

A third disadvantage for third parties is that it becomes more difficult to assess the validity of a patent (application), as pieces of prior art that would be detrimental for the patent (application) might be graced. As a result, the third party needs to investigate for each piece of prior art whether it comes from the inventor, is based on a disclosure by the inventor, which are graced, or comes from an independent source and is not graced.

A grace period introduces uncertainty for inventors too. Third parties might become inspired by a disclosed new product or method, and develop a related alternative. Then he could perform one or more of the following actions before the original inventor files a patent application. Firstly, he could simply start using his alternative and obtain a prior use right as a result, so the later filed patent application cannot stop him. Secondly, he could simply disclose the alternative. Both the first and the second action results in the alternative becoming prior art against the later filed patent application of the original inventor. This application then needs to be novel and inventive over the alternative. In many cases, this means that the invention needs to be claimed more narrowly, as a more broad claim would not be novel over the alternative. Even this narrow claim risks being rejected, as it may lack inventive step in view of this alternative. A third action would be to file a patent application for the alternative (or improvement), which may limit the original inventor in exploiting his idea.

Another uncertainty for the inventor, is whether he is able to prove that all publications that are done before filing for a patent are actually derived from his own disclosure(s). An author of an article may deviate from the original disclosure and not mention the original source. This might result in reasonable doubt whether this is an independent disclosure, which is not graced, or a disclosure based on the inventor's disclosure which should be grace.

Given the risks for the inventor, the best option is always to file first before disclosing, even if there is the option of a grace period. However, once it is known that a grace period is available, a lot of inventors will know just that, and will be unaware of the risks. As a result, they will rely on the grace period while that is not in their interest. In the opinion of the majority of the patents commission, this disadvantage is bigger than saving the rights of the few inventors that are not aware of the 'file first' principle of patent law. Accordingly, it is best to further reduce this unawareness by educating the public consistently that one should file before disclosing, instead of creating an inappropriate notion that early filing is not that important.

A minority of the members of the patents commission is in favour of a harmonized grace period. In their view, a harmonized, safety-net grace period would overcome the disadvantages outlined above, and would greatly benefit all users of the patent system. This is because the safety net grace period would be limited to providing protection only against applicant's own disclosures, or those of a third party which directly reproduce or result from applicant's own work. Such a safety net grace period would not protect the applicant from third-party disclosures resulting from independent research. Thus, this type of safety net grace period would still always encourage applicants to file at the earliest possible stage.

Furthermore, a global grace period having the same time period (commonly agreed as either 6 months or 12 months) would also reduce the uncertainties which arise from the present unharmonized situation. Thus both patent holders and third parties would be aware that limited types of disclosures (as indicated in the paragraph above) would be "graced" for a limited time period, and this would apply in all territories.

Although the upholders of grace period favour a system without an obligatory declaration which lists the publications that should be graced under the grace period, it is noted that the opponents of a grace period consider this a measure that mitigates the negative effects of a grace period for third parties. When a third party is interested in developing a product that might infringe a pending patent application, it is often desired to evaluate the strength of such application Such third party might be aware of publications that could harm the pending application. Accordingly, it is important to know whether or not these publications are 'graced' or not. Such information should be obtainable from the prosecution file.

Another measure that would mitigate the adverse effects of a grace period is adjusting the publication period. Currently, the publication period of a patent application is 18 months from the earliest priority date. Only when a patent application is published, a third party is able to evaluate how strong the resulting patent might be. However, a grace period extends the period between the first publication or even market introduction of a new product and the moment of publication of the related patent application. Accordingly, a third party has to wait longer before he knows what the strength of the patent application as, and base a strategy on this (e.g. designing around the patent). It is therefore proposed to count the 18 months publication period from the earliest priority date, or the earliest disclosure date as indicated in the declaration of graced publications, whichever is the earliest.