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European IP Bulletin, Issue 18, January - Patents
Patents
4. EU Software Patents Directive Hangs in Balance AFter Poland Withdraws Support
On 16 November 2004, Poland withdrew its support for the EU draft Directive on the Patentability of Computer–Implemented Inventions. The Directive seeks to codify and harmonise different EU national laws for computer programs including the treatment of software patents. The Polish cabinet decided that it would not support the directive as it is too vague and, in its present form, does not rule out the possibility of patenting software or business methods.
The original text proposed by the Commission was approved by Parliament on 24 September 2003 after a series of amendments which placed significant limits on the patentability of software. Parliament’s amendments were a major defeat for the directive’s original proponents. Rather than being a confirmation of the global practice of granting software patents, the Parliament’s version placed substantial limits on patentability. Under the co-decision procedure, the Council on 18 May 2004 submitted a compromise version of the proposal which overturned most of Parliament’s amendments.
The compromise version of Directive was scheduled to be formally adopted without debate before being sent back to the EU Parliament for a second reading. However, the recent revision on the number of votes each state can wield gave Poland enough influence to tip the balance of the Council in favour of the anti-software patent camp. Without Poland’s support, the directive’s approval falls short of a majority. Nevertheless, the Council’s Committee of Permanent Representatives in its December meeting determined that the Council’s version of the directive would be scheduled for formal adoption without debate. However due to statements of reservation by Belgium, France, Netherlands, Hungary, Latvia and Poland being attached to the Common Position; as well as the opposition from Poland, the Council’s vote has been postponed indefinitely. It is uncertain when the issue will return to the agenda.
The postponement of the adoption process means that the highly controversial software patents directive has an uncertain future. The wording of the European Patent Convention, suggests that computer-implemented inventions are excluded from patentability within Europe and national laws in EU member countries are far from clear. The task of clarifying what can and cannot be patented is left to the courts. It is generally agreed that clarification and harmonisation of this area would be beneficial. However, now that the political process has stalled, the current uncertain position will remain until the draft directive is renegotiated to produce a version more acceptable to all sides.
5. A Proposal On Leave to Perform Certain Experiments in Patent Litigation
A decision was given by Aldous LJ in the appeal by Smithkline Beecham against the decision of the Patents Court rejecting a claim of infringement of UK patent 2297550 against Apotex.
The case concerned the production of paroxetine hydrochloride anhydrate for the treatment of depression. The manufacture of the anhydrate results in impurities binding to the anhydrate crystals that include organic solvents used in the manufacture. The patent claimed a process for the removal of this bound solvent using a displacing agent, which causes the impurity to leave the substance but does not itself become irretrievably bound to the substance. Water can be used as such an agent and be removed by conventional drying techniques.
The prior art included an example that purported to show the production of the anhydrate including the use of “more” organic solvent to dissolve the substance and a subsequent final washing step using water. Later experiments showed that interpreting “more” as a small amount would produce the hydrated form (SmithKline Beecham’s argument).
On the other hand, Apotex argued that the skilled man would use several litres of organic solvent. The submission that this prior art destroyed novelty was rejected since the directions were not “clear and unambiguous”. However, Apotex also argued alterations, by the skilled man, of a known experiment leading to the substance being produced made the claim obvious.
Apotex performed experiments with large quantities of organic solvent but introduced other conditions including carrying out the experiment under nitrogen to prevent the introduction of water. At first instance the judge accepted these alternatives to the experiment as detailed in the prior art. However, the Court said that this was an error of principle as there was no evidence a skilled man would use such dry conditions.
Aldous LJ was of the view that such experiments should be performed by a skilled man without the direction of lawyers to avoid inevitable hints being given to the scientist. What the Court required was performance of the unembellished disclosure. He suggested that in the future a court-appointed expert should be used and consulted when leave to adduce experimental evidence was requested.
Court-appointed experts are not widely used in the UK but were provided for in particular to reduce costs to individual parties. However, this proposal would result in difficult case management as the Court would need to hear submissions on the precise nature of the science in dispute and make a decision itself that inevitably would be open to appeal.
6. Human Rights and Patents: ITP V Coflexip Stena Offshore
On 19 November 2004, the First Division of Inner House delivered its judgment in ITP SA v Coflexip Stena Offshore Limited [2004] CS A3606/00.
ITP had sued Coflexip in Scottish Courts for infringement of its patent for a heat insulated pipe-in-pipe assembly for use in pipelines to be laid on the seabed for the purpose of transporting oil products. ITP’s patent was held valid both before the Opposition Division of the European Patent Office and before the Lord Ordinary in Scottish proceedings. In the latter proceedings, Coflexip was also held liable for infringement of the patent. Coflexip appealed against both decisions and during the pendency of appeal before the Scottish Court, the Board of Appeal of the European Patent Office annulled the decision of the Opposition Division and found the patent to be invalid. This led to a situation where the patent was invalid against the whole world, but was valid against Coflexip due to the judgment of the Scottish Court which had not been overturned by the Court of Session on appeal.
The matter was further complicated when ITP made an application to the European Court of Human Rights (ECtHR) claiming that the proceedings before the Board of Appeal had infringed its human right to a fair trial enshrined under the European Convention of Human Rights (ECHR). This was based on the fact that the Board took into consideration certain documents which were never put before the Examining Division of the EPO, and that the Board failed to remit the matter back to the Examining Division leading to the deprivation of a property right due to procedural irregularity. On the basis of this application, ITP asked the Scottish Court to delay the decision of the appeal at least until the ECtHR had considered whether the application was admissible, as contrary action would again amount to infringement by the Scottish Court of ITP’s human rights. Coflexip on the other hand contended that the appeal be allowed on the ground that the patent had been held invalid by the Board of Appeal.
After hearing both submissions, the Court held that the European Patent Convention supersedes the ECHR. There is nothing in the ECHR that can prevent the UK courts from implementing a decision of the Board of Appeal under section 77 (4A) of the Patents Act. Since the patent was a property right created by the European Patent Convention, after being revoked under the Convention there is no property right in favour of ITP. The national courts are bound to give effect to a decision of the Board of Appeal and cannot inquire into whether the proceedings before the Board of Appeal were Convention-compliant. In reaching this conclusion it also held that there existed a fundamental distinction between a decision of an international tribunal such as the Board of Appeal and that of a foreign court, as only in the latter case may a domestic court decline to give effect to the decision due to non-observance of principles of natural justice.
On broader perspective, this decision is another example where the parties have sought to re-read the legislation in light of human rights. The Court, though amenable to such an approach, emphasized that the European Patent Convention and the UK Patent Act can not be interpreted in light of ECHR in such a way so as to make the resulting interpretation inconsistent with the fundamental features of the legislation. Another issue settled in this case is that a decision of the Board of Appeal will not be open for further review even if there is a substantial miscarriage of justice due to non-observance of principles of justice. In the opinion of the Court, if ITP is successful in its application to the EctHR, it will not affect the revocation of the patent because the ECtHR does not have any power to order European Patent Office to reinstate the patent. At best it could make an order for monetary compensation in ITP’s favour. However, it is hoped that in future such a situation will be rectified by addressing this anomaly.
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