Patents take centre stage at conference

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On 24 May, the London Wall offices of DLA Piper welcomed visitors from various UK law firms for its Third Annual Patent Law Seminar. Speaking at the event were Richard Taylor, George Godar, John McKinlay, Bonella Ramsay and Neville Cordell, who covered a range of patent subjects from the state of UK law to questions of licensing and standards. The sessions provided welcome clarity on some complex issues, trimming away several ambiguities and warning against others.

Richard Taylor’s piece, Developments in UK Patent Law, featured a look at sufficiency and obviousness in the cases of Halliburton v Smith (2006) and Angiotech v Conor (2007), which – by highlighting some pitfalls in those cases – focused visitors’ minds on sound patent preparation and case strategy.

Halliburton’s thin explanation in the text of its drill-bit patent for how an efficiency-based computer model would be created earned a useful critique. So did the presence of a scientific advisor in the case who sent emails directly to judges rather than presenting his thoughts to the parties. The lesson offered by Angiotech was to ensure that a patent description clearly defines an inventive step. As the firm’s choice of drug coating for its medical stent failed to demonstrate this, Lord Justice Jacob concluded that it was simply ‘suitable’, and therefore obvious.

Rather less obvious was George Godar’s intriguing fact that the US Supreme Court has never formally agreed that software, in a general sense, is patentable. With a wide scope for patentability set at statutory level in the US, this may not seem the case – but George’s talk, US Software and Business Method Patents, showed that a transformative process was key to winning over America’s top lawmakers.

One thing that characterises this area is the paucity of caselaw on it – it’s almost a conspiracy of silence.
John McKinlay on Experimental Use Exemption

Referring to two older patent disputes, he showed that software had produced transformations by turning a computer into a new machine capable of handling a specific image format (Alappat, 1994), and by converting dollar values into share prices (State Street Bank v Signature 1998). By contrast, in the ongoing Blisky case, a risk-management process was last year considered too abstract and non-transformative by the USPTO Appeals Board. The case is now pending at Federal level, but may yet go higher before it is settled.

John McKinlay examined the subject of Experimental Use Exemption, in which a firm or individual can claim that experimenting with prior art was vital to produce an inventive step, thereby avoiding infringement allegations. ‘One thing that characterises this area,’ said John, ‘is the paucity of caselaw on it – it’s almost a conspiracy of silence.’ It is also a maze of contentious laws that change from one jurisdiction to the next. While the UK approach to this field is fairly generous, German law is even broader, exempting ‘all experimental acts as long as they serve to gain information and thus to carry out scientific research into the subject matter of the invention, including its use.’ Thanks to this wording, Germany has become a comfortable base for the R&D activities of at least one UK drug firm.

Bonella Ramsay and Neville Cordell’s session on Patents and Standards looked at how patents can, over time, become recognised as standards through a variety of avenues. Bonella explained that a de facto standard attains its status through gradual adoption by its industry, whereas a formal standard is one enforced through law and often connected with ownership. As an example of the latter, Bonella revealed: ‘Forgent Networks, which owns the JPEG patent, has earned $100 million in three years from prosecuting infringers.’ She also mentioned patent pooling as a major factor in standardisation, and asked the audience to consider which technology would win the next big format race – HD DVD or Blu Ray?

Neville closed the section with a view of how competition law works in this context, then offered his own tips for the future – Nokia v Interdigital, Qualcomm v Nokia and Samsung v Ericsson were all flagged up as major cases to watch out for in the coming months, to see how they strike a balance between complying with standards and observing patent laws.