Publications
European IP Bulletin, Issue 25, September - Patents
Patents
7. Euro Notes in the Midst of Patent Infringement
Document Security Systems Inc. (DSSI) is the owner of a European Patent which covers a method of incorporating an anti-counterfeiting feature into bank notes or similar security documents to protect against forgeries by digital scanning and copying devices. The technology creates an interference pattern that produces distortions on a copied bill, hence making it easier to distinguish counterfeits.
DSSI acquired the patent in question in 2004 and now seeks to enforce its rights against the European Central Bank (ECB). This suit was announced as the first in the series of potential litigations the company has planned against other banks and corporations who in its opinion are using its patented technologies without valid licences.
In the claim before the Court of First Instance (CFI), DSSI has asked for “reasonable sum of royalty”. This amount is potentially a very significant figure considering that 30 billion euro notes have been printed and are or will be in circulation, allegedly in violation of the company’s patent. Any sum of royalty will be calculated on the basis of the cost of printing and what royalty rates are normal in the industry.
The suit was filed with the CFI because under Article 235 of the Treaty, only the CFI has the jurisdiction to hear matters between the European institutions, such as the ECB and the parties. The case is listed as T-195/05, Document Security Systems Inc. v European Central Bank.
This case presents an example of smaller firms getting bullish in seeking to enforce their patent rights against bigger well known organisations. It will also be a test case for CFI, which is traditionally more accustomed to hear disputes of the nature of judicial review and to acting as an appellate jurisdiction in trade mark matters for OHIM under the Community Trade Mark Regime, rather than patent enforcements and infringement.
8. OSDL Announces Patents Common Project
The Open Source Development Labs (OSDL), a global consortium dedicated to accelerating the adoption of Linux, announced on 9 August 2005 at LinuxWorld that it would be creating a patent commons project designed to provide a central location where software patents and patent pledges will be housed for the benefit of the open source development community and industry. The aim is to increase the utility and value of the growing number of patent pledges and promises to provide a central repository where intellectual property can be held for the benefit of everyone. Vendors such as IBM, Nokia, Novell, Red Hat and Sun Microsystems have become known to pledge their intellectual property to the benefit of open source community.
Linus Torvalds, the creator of Linux, who now works for OSDL, believes that software patents are a potential threat to the ability of people to work together on open source. OSDL is planning to use this patent commons project to fight that threat by initially providing:
- a database and library for patent pledges made by companies and for other legal solutions, such as indemnification programmes offered by vendors of open source software
- a collection of software patent licenses and software patents held for the benefit of the open source community
Although the OSDL patent commons project looks to be very encouraging for the open source community, not all supporters of open source are happy. There has been criticism of the project and arguments that inventors, who want their inventions to be used freely by everyone, should publish them and thereby allow them to pass into public domain. It is also proposed that patent attorneys help open source by contributing more by organising and searching prior existing art data bases to invalidate other companies’ patents rather than filing more patent applications and then giving them away for free.
It remains to be seen how the OSDL patent commons project develops. Ideally, it will create a one-stop aggregation point for developers to navigate and understand what patent and indemnification resources are available. Some have voiced their pessimism towards the idea of software vendors to hand over their pledged patents to OSDL. On the other hand, other remain optimistic that the OSDL patent commons project will be embraced as a “protective haven where developers can innovate without fear”.
9. One More Avenue for a Reduced Disclosure Closed
On 21 July 2005, the High Court handed down its decision in Halliburton Energy Services v Smith International (North Sea) [2005] EWHC 1623 (Pat). The case concerned a claim for infringement of two European patents (UK) covering methods of designing drill bits. The drills bits are used in the vertical drilling of oil and gas wells adapted for different types of rock and other substrates. One patent concerned identifying the orientation of different parts of the drill bits (“Orientation patent”) and the other related to the constraints on drill bit design placed on it by reason of the forces imposed during drilling (“Force patent”).
In the words of the judge the disclosure of the Force patent was "remarkable for the small amount of information it gives on how actually to perform the [invention]". It failed to provide information on how various calculations were to be performed but rather referred to the disclosure of the Orientation patent and another document said to be part of the existing technology (“the Ma document”). Halliburton argued that the information did not need to be set out in the Force patent since it could be found in the other documents.
The judge said that neither of these other documents could be part of the disclosure of the Force patent. The judge’s primary reason for this was that neither reference gave any specific direction about what information would be found in the documents. In fact, the Ma document was only referred to as part of the background technology and was used to show why the Force patent was superior to existing technology.
The cross-reference to the Orientation patent was also held to be inadequate as the Orientation patent was not available to the pubic on the date the patent was filed.
The result was that the Force patent was invalid for insufficient disclosure. The judge noted that lessons could be learnt from this by the drafters of patent applications. The judge commented generally on the practice of cross-references and endorsed the European Patent Office’s approach. The EPO does no allow cross-referencing at all, and instead insists that if the information is essential, it should be in the text of the patent itself, and if inessential, that the cross-reference be removed. Although due to the ordinary principles of document construction, the judge did not feel he could exclude the possibility of cross-referencing, he nevertheless said that the EPO approach was “sound”. As such, this case might be seen as the latest in a number of recent patent cases in which the English judiciary are looking towards EPO practices.
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