© J. Straus 20061

Grace Period

- First Real Chance after Seventy Years -

Joseph Straus,

Munich

WIPO Open Forum on the Draft SPLT

Geneva, March 3, 2006

© J. Straus 20062

Points to Consider

• The notion of grace period

• Seventy years of international attempts

• The state of law in 1963 (1973), 2001 and present

• Past and present experience with “grace period”

• “Absolute novelty” and legal certainty

• Macro-economic impact of the lack of “grace period”

• Grace period of Art. 9 SPLT and its prospects

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The Notion of "Grace Period"

• "General grace period" is a specific period of time preceding the

filing of a patent application, during which disclosures by any

means (in writing, orally, by use, on exhibitions, etc.) of the

invention for which the patent application is filed by the inventor

or his/her successor in title do not constitute prior art in respect

of the patent application at hand.

• Such "non-prejudicial" disclosures do not establish a priority

date, i.e. do not provide for immunity for the inventor/applicant

against parallel or later independent disclosures, including patent

applications of third parties, but only immunity against own

disclosures.

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More than seventy years of international attempts

• 1934 London PC Revision – Art. 4

• 1958 Lisbon PC Revision – Art. 4

• 1963 Strasbourg Convention

• 1973 European Patent Convention

• 1984 WIPO Iiitiative

• 1991 WIPO PLT – Art. 12 – Basic Proposal

• 2001 WIPO SPLT Draft – Art. 9

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Potential Reasons for Failure

• "The inventor could be tempted to carelessness. As long as the

idea of the grace period is not internationally recognized - the

experience of the Lisbon Conference tells us that we are still far

away from that - such a comprehensive grace period is regarded

as a "greek gift" for the inventor. Although the inventor gets a

national patent, his own publication would, as a rule, adversely

affect patent applications abroad.“

Pfanner, 1962 GRUR Int. 545, 551

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The State of the Law in 1963 (1973)as Compared with 2001

• 1963 - "Grace period" available in:- Canada, Germany, Japan, United Kingdom and USA (all of general

type)• Ireland and Italy (of limited type)

[5 + 2]

• 2001 - "Grace period" available in:Albania (12 PPR), Argentina (12 PPR), - Armenia (12 PPR), Australia, Barbados (12), Belarus (12 PPR),

Brazil (12 PPR - F), [Bulgaria (12 PPR)], Canada (12), China (6 - LT), Ecuador (12 PPR), El Salvador (12 PPR), Estonia (12 PPR), Japan (6 - F), Kazakhstan (12), Korea Republic of (6 LT - F), Korea Democratic People‘s Republic (6), Lesotho (6 PPR), Lithuania (6), Malaysia (12), Mexico (12 PPR - F), Moldova (12 PPR), Peru (12 PPR), Portugal (12 - LT - F), Romania (12 PPR), Russia (6), Saudi-Arabia (12), Singapore (12 - LT), [Slovenia (12 PPR)], South Africa (no time limit), Spain (6 - LT), Sri Lanka (12, 6 - in ease of abuse), Taiwan (6 - LT), Trinidad and Tobago (12), Turkey (12 PPR), Ukraine (12 PPR), USA (12)

[33 + 6]

• Austria, Germany, Hungary, Czech Republic, Japan (Utility Model Laws)

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WIPO 1984 – 1991

• Article 12 PLT Basic Proposal – not a failure

• 32 WIPO Member States – introduced grace period between 1984 and 2001

• However, some – after acceding to EPC – abandoned again

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Past and Present Experience with "Grace Period" System

• Germany (1936-1981): No specific problems reported; used as

safety net only; explicitly maintained as "isolated grace period"

1976-1981; maintained in Utility Model Law

• UK (1949-1977): No specific problems reported; case law evidence

for use as safety net only

• "They, no doubt, wanted to know whether this fresh design was

successful before they filed any application. If it was not it would

have been foolish to file an application pending correction of any

defects in operation which might have been disclosed by the trial

on ..."• [Justice Whitford in Hubbard's appl.]

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Past and Present Experience with "Grace Period" System

• Japan: No specific problems reported

• 1999 - invoked in 1735 appl. out of 413.736 (0,42%)

(a) 47% by large enterprises(b) 10% SMEs(c) 13% Individual Inventors(d) 26% R & D Institutes(e) 4% Universities

• Canada: No specific problems reported

• USA: No specific problems reported

• Austria, Czech R., Germany & Hungary UML: No problems reported

continued

} 43% of all their appl.

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Europe’s & Industry’s Weak Arguments

• No “absolute novelty” under EPC – Art. 54 (5), 55

• Does not offer legal certainty – Art. 54 (1) – covers all kinds of

disclosure worldwide

• Does not provide for fast clarifications

• Publication at or after application no safe solution – affects later

applications for improvements [G3/93]

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Examples from EPO Case Law

• T 381/87 - 7 years to find out - based on the balance of probabilities - when a Journal was placed on a library shelve

• T 455/91 - 12 years to determine the content of an oral disclosure

• T 326/93 - 10 years to deny an alleged public prior use

• T 406/92 - 9 years to establish lack of clarity of an oral presentation

• T 436/92 - 9 years to deny violation of a tacitly agreed confidentiality

• T 750/94 - 9 years to establish when a Journal became available to the public

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Macro - economic Impact of the Lack of "Grace Period"

• "Open" firms more successful in R&D efforts

• Enormous increase of University - Industry collaboration

• Increased involvement of Universities in patenting

USA 1974 – 177 patents

1984 – 408 patents

1994 – 1.486 patents

1997 – 6.000 patent applications

2001 –11.265 patent applications 3.721 patents

issued 1.07 billion US $ Royalties 30

billion US $ turnover 300.000 new jobs

[some 2.000 pre-published]

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Macro - economic Impact of the Lack of "Grace Period"

• Delayed publication and availability of scientific and technical knowledge

• Applications filed for speculative, incomplete inventions

• Enormous growth of industry‘s publications 1980 - 1989:

– France 240 %,

– Sweden 150 %,

– Japan 90 %,

– Netherlands 37 %,

– Germany 30 %

• Control and Containment increasingly difficult

continued

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Article 9 Draft SPLTGrace Period

(1) General Principle An item of prior art with respect to a claimed invention shall notaffect the patentability of that claimed invention, in so far as that itemwas included in the prior art on a date during the [12] [six] monthspreceding the priority date of the claimed invention,

(i) by the inventor(ii) by an Office and the item of priority art was contained

(a) in another application filed by the inventor[and should not have been made available to the public by the Office],or

(b) in an application filed without the knowledge or consent ofthe Inventor by a third party which obtained the informationcontained in the item of prior art directly or indirectly from theinventor, or(iii) by a third party which obtained the information contained in theitem of prior art directly or indirectly from the inventor

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Article 9 Draft SPLTGrace Period

(2) [Invoking grace period]

[Alternative A]The effects of paragraph (1) may be invoked at any time

[Alternative B]A contracting Party may require that the applicant submit a declarationinvoking the effect of paragraph (1) [as prescribed in the Regulations].

(3) [“Inventor”]… also means any person who, at or before the filing date of the application, had the right to the patent.

(4) [Third party rights]

continued

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Basic Position Taken by WIPO MembersSPC May 2004

• Argentina (12), Australia (12), Brazil (12), Canada (12), China (6),

Colombia (12), India (6), Indonesia (12), Ireland – on behalf of 25 EU

Members (6), Japan (6), Kenya (12), Malaysia (12), Mexico (12),

Moldova (6), Morocco (12), New Zealand (12), Norway(6), Romania

(6), Russian Federaton (6), Switzerland (? 6), Turkey (6), Ukraine

(12), USA (12)

• Total 46

– 13 in favor of 12 months

– 33 in favor of 6 months

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In Addition:Countries not mentioned but providing for Grace Period

• Albania (12), Armenia (12), Belarus (12), Bulgaria (12), Ecuador (12),

El Salvador (12), Kazakhstan (12), Korea Democratic Republic (6),

Lesotho (6), Saudi Arabia (12), Singapore (12-LT), Taiwan (6-LT),

Trinidad and Tobago (12).

• Total 13

– 9 in favor of 12 months

– 4 in favor of 6 months

• Basic consensus in FAVOR:

Grand Total 59 states, 22 in favor of 12 months; 37 in favor of 6

months

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Pleading in Favor

• Clear and recognized need exists for this safety net

• Historically no negative experience

• Existing differences should be overcome by acceptable

compromises – if necessary

• Not open to compromises – preceding priority date!

• Formal requirement to invoke? If unspecified – acceptable – but

of little use

• 12 or 6 months?

– Consider – grace period No general immunity!

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The Window of Opportunity should be used- the issue not again discussed to death !!!!

States should act now !!!