Introduction to Patent Law

International cooperation in providing protection for patents began with the 1883 Paris Convention, which established that filing a patent application in any member country gave the inventor priority rights for six months - later extended to 12 months - from the date of filing. The U.S. ratified the treaty in 1887.^¹ The original signatories included France, Belgium, Brazil, Guatemala, Italy, Netherlands, Portugal, Salvador, (then) Serbia, Spain, and Switzerland. The filing does not act as a bar to subsequently receiving a patent, as would a sale or publication, although a formal patent application must still be filed.

The provisions of the Paris Convention were extended and amplified several times. The Stockholm revisions to the Treaty, negotiated in 1967, established priority rights for inventor's certificates.^² (The provision for an abbreviated statutory registration is discussed in Chapter 5.) The United States codified these provisions into U.S. patent law between 1970 and 1973.

In 1910 the Inter-American Convention on Inventions, Patents, Designs, and Industrial Models extended the provisions of the Paris convention to Latin American countries, including Argentina, Brazil, Chili, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Salvador, United States, Uruguay and Venezuela. The Convention established a 12-month period after filing an application in any of these countries, during which the inventor's priority was established.^³

The Patent Cooperation Treaty (PCT) of 1970 grew out of a conference of members of the Paris Convention. The Treaty was an attempt to reduce the duplication of effort involved in filing and processing patent applications for the same invention in several different countries. It allows an inventor to file an international application in a Receiving Office, normally the patent office of the inventor's home country. The Receiving Office forwards the application to an International Searching Authority, which may be the local patent office. The Searching Authority conducts a prior art search and issues a report on the result. The inventor then has 20 months in which to file an application in a member country, which is treated as a normal domestic application. Congress enacted amendments and additions to the Patent Act in 1975 to implement the treaty.^⁴

Under the PCT, an inventor may request an "international preliminary examination" of the patent, which may be recognized as the equivalent of a national examination. The international preliminary examination results in a non-binding opinion on questions of patentability. The United States, after some delay, agreed to accept these provisions, although a normal application with the Patent Office is still required.^⁵

To establish priority based on a foreign application the foreign filing must have been in an eligible country; the United States application must be filed within 12 months of the first foreign application; the United States application must be for the same invention that was disclosed in the foreign application; the foreign application must have been for a "patent;" and the foreign application must have been filed by the same applicant, or his or her legal representative, as in the United States.

The foreign application serves as constructive reduction to practice of "all subject matter which it discloses."^⁶ For example, in Yasuko Kawai v. Metlesics,^⁷ the Court rejected the use of a foreign application, used to avoid a publication disclosing the invention, since the application did not disclose a use for the chemical compound in question, as required by U.S. Law.^⁸

The European Patent Convention of 1977 established the European Patent Office in Munich, Germany. Patents issued by this Office become effective in member countries of the European Economic Community, precursor to the Common Market and the European Union. The Convention was subscribed to by Switzerland, Austria, and the Scandanavian countries, which were not then part of the EU. The United States is not a party to this Convention. A patent issued by the European Patent Office becomes effective as a national patent in member countries.

Article 52 of the European Patent Convention provides that patents shall be granted "for any inventions which are susceptible of industrial application."^⁹ Excluded from patentable subject matter are: discoveries, scientific theories and mathematical methods; aesthetic creations; schemes, rules and methods for performing mental acts, playing games or doing business; programs for computers; and presentations of information.^¹⁰ Also excluded are methods for treatment of the human or animal body by surgery or therapy, and diagnostic methods practised on the human or animal body.^¹¹ Plant or animal varieties are not patentable subject matter, but microbiological processes may be patented.^¹²

Inventive Activity in a Foreign Country

Until 1992-93, inventive activity in a foreign country could not be used to establish priority of invention. The exception to this limitation was where the invention was made by someone serving in a foreign country on behalf of the United States. The theory was that it would be too difficult for U.S. courts to gather evidence of conception and reduction to practice in a foreign country, and there was no guarantee that by allowing evidence of foreign inventive activity the useful arts in the United States would be enhanced. This limitation was modified with the North American Free Trade Agreement (NAFTA), negotiated in 1992 between the United States, Mexico, and Canada, and implemented in 1993. Under NAFTA, inventive activity in any of the three member countries may be used to establish priority of invention.^¹³

The General Agreement on Tariffs and Trade (GATT) was first signed in 1947 by 24 countries,^¹⁴ including most of the countries of Western Europe, Australia, New Zealand, India, the U.S., and the Union of South Africa. The so-called Havana Charter was designed to provide an international negotiating forum which would encourage free trade between member states by regulating and reducing tariffs and providing a mechanism for resolving trade disputes. The Agreement was originally part of a draft charter for an International Trade Organization, which would be the third leg of the Bretton-Woods post-war agreements establishing the World Bank and the International Monetary Fund. While GATT entered into force in 1948, the rest of the Havana Charter was never ratified.

The GATT agreement included provisions for on-going "rounds" of trade negotiations. The negotiations, and the resulting modifications and extensions to the GATT agreement, are generally named after the place in which ministerial meetings took place. Most of the rounds dealt with tariff reduction, but as tariffs went down, non-tariff barriers went up. The Kennedy Round (1964-67) reached an anti-dumping agreement. The Tokyo Round (1973-79) dealt with subsidies and retaliatory measures, technical barriers to trade, import licensing, and other areas of concern.

The most recent, the Uruguay Round (1986-94), was the most comprehensive. The negotiations lasted over seven years and resulted in establishing the World Trade Organization (WTO) to enforce the terms of the GATT and other agreements. The WTO has a single mechanism for settling disputes among trading partners, and allows one nation, or a corporation, to sue another nation charged with anti-competitive or protectionist practices. As of April, 2004, there were 147 members of the WTO.^¹⁵ All members of the WTO commit to all of the agreements.

One of the protocols of the Uruguay Round establishes an agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS sets minimum standards concerning the scope and availability of intellectual property rights, including patents. Patent protection is available regardless of the place of invention within the sphere of WTO member countries, and without discrimination as to the field of technology and whether the products embodying the invention are imported or locally produced. In other words, patent rights granted by one member country are - or should be - enforceable worldwide.

TRIPS permits member countries to exclude from patentability: diagnostic, therapeutic and surgical methods for the treatment of humans or animals;^¹⁶ plants and animals, other than micro-organisms;^¹⁷ and they may prevent commercial exploitation of any inventions which are necessary to protect public order or morality, to protect human, animal or plant life or health, or to avoid serious environmental damage.^¹⁸ The list of permissible exclusions includes many but not all of the exclusions under the European Patent Convention.

As part of the TRIPS agreement, Congress amended the patent term to 17 years from the date of issue, or 20 years from the date of application, whichever is greater.^¹⁹ At the same time, the U.S. and Japan entered into a quid pro quo agreement. The U.S. would adopt the 20-years from filing date system, Japan would permit patent applications to be filed in English. Congress also amended U.S. patent law to permit evidence of inventive activity in any WTO member country to be used in establishing priority of invention.^²⁰ The U.S. Patent Office determines the weight to be given to deposition testimony from another country in view of all the circumstances, including whether procedures for compulsory discovery are available.^²¹ Activity in a foreign country may be used to rebut an inference or claim of abandonment.^²²

The TRIPS agreement provides that the patent holder may prevent third parties from making, using, offering for sale, selling, or importing the patented device without the owner's consent. Prior to this, U.S. law did not include "offering for sale" among the patent owner's rights.^²³

Worldwide patent protection has raised concerns in the Third World, particularly with respect to pharmaceuticals and agriculture. Although there are exemptions for treatments for AIDS, malaria, tuberculosis, and a few tropical diseases, Third World countries have demanded that they be allowed wider latitude to import or manufacture less expensive generic copies of patented medicines to deal with acute health problems. For the most part these demands have been resisted.^²⁴

The TRIPS system permits the patenting of life-forms, particularly seeds, which are created by human intervention. This has led to charges of "biopiracy," whereby some firms and universities have obtained patents on plants that Third World countries have known about and used for centuries. An example is the case of basmati rice, which has been harvested and used in India for more than two centuries. In 1997, a Texas firm obtained a patent on a hybrid version. So far the patent is only enforceable in the U.S. It has been widely denounced in the Third World as an example of First World economic hegemony.^²⁵

Compulsory Licensing

In the United States refusal to use or license a patent is protected. The classic case is Continental Paper Bag Co. v. Eastern Paper Bag Co.^²⁶ Compulsory licensing almost never arises in U.S. patent cases unless misuse of a patent rises to the level of an anti-trust violation, where a compulsory license may be given as a remedy.^²⁷ Rarely, a court may refuse to enjoin infringement, where the patent holder refuses a license and the public interest requires it.^²⁸

As noted in Chapter 5, the Commissioner of the PTO may withhold publication of a patent when the national interest requires it, classifying it under secrecy statutes. The government may claim an exclusive license. The Clean Air Act provides for compulsory licensing for patents relating to air pollution. The National Institutes of Health is considering compulsory licenses to facilitate broader dissemination of biotechnology Aresearch tools.@

The TRIPS agreement permits compulsory licensing provisions in the patent laws of member countries, especially for failure to use the invention, but provides a number of restrictions. German and French laws provide for compulsory licensing for: 1) non-working of the invention within four years from the date of filing; 2) cross-licensing to and from a third party who patents an improvement on the original invention; 3) public health; 4) insufficient production to meet market requirements; or 5) national defense.^²⁹ Indian patent law permits the Controller of Patents to issue a compulsory license: 1) to prevent abuse of the patent as a monopoly and to make way for commercial exploitation; 2) in case of national emergency or extreme urgency; 3) for exports of pharmaceutical products to foreign countries with public health problems.^³⁰ The NAFTA agreement has its own provisions, which are somewhat more restrictive than those contained in TRIPS.

Especially fierce debate has arisen around the issue of licensing of drugs to combat malaria, TB, HIV, and AIDS in third world countries. Compulsory licensing is permitted, but only to manufacturers within the country. Many third-world countries do not have manufacturing facilities which could make the needed drugs. Importing them from another country which ignores the patent restrictions is forbidden, leaving many third world countries without the funds to import drugs which are needed to combat serious health problems. Agreement has not been reached within the WTO, but the Doha round of trade talks instructs delegates to consider how to make these drugs available at reasonable cost. The members remain divided.^³¹

28 Hybritech, Inc. v. Abbott Lab., 4 USPQ2d 1001 (C.D. Cal. 1987) (public interest required that injunction not stop supply of medical test kits that the patentee itself was not marketing), aff=d, 849 F.2d 1446 (Fed. Cir. 1988); Vitamin Technologists, Inc. v. Wisconsin Alumni Research Found., 64 USPQ 285 (9th Cir. 1945) (public interest warranted refusal of injunction on irradiation of oleomargerine); City of Milwaukee v. Activated Sludge, Inc., 21 USPQ 69 (7th Cir. 1934) (injunction refused against city operation of sewage disposal plant because of public health danger). Eppich, Patenting Dilemma: Drugs for Profit Versus Drugs for Health, 43 Santa Clara L. Rev. 289 (2002); Kieff, Property Rights and Property Rules for Commercializing Inventions, 85 Minn. L. Rev. 697 (2001); Lee, Permitted Use of Patented Inventions in the United States: Why Prescription Drugs Do Not Merit Compulsory Licensing, 36 Indiana L. Rev. 175 (2003).