How the Law protects Investment in Technology - Trade secrets, Patents, Copyright, Database Right, Design Right, Semiconductor Topographies and Plant Varieties

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Information about How the Law protects Investment in Technology - Trade secrets, Patents,...

Published on November 29, 2013

Author: nipclaw



This is the handout for my presentation on how the law protects investment in technology that I gave on 27 Nov 2013. In it you will find links to the treaties, statutes and other materials as well as some background discussion.

Technology Jane Lambert 4-6 GRAY’S INN SQUARE 27 Nov 2013 16:00 – 18:00

Chapter I: Introduction and Overview 1. Introduction This is the last of the introductory seminars on intellectual property law. The others are    The Introduction to Intellectual Property1 Introduction to the Law relating to Branding: Passing off, Trade Marks, Geographical Indications and Domain Names2 and Introduction to the Law relating to Creative Output: Copyright, Related Rights and Designs.3 In the introduction to intellectual property I described intellectual property (“IP”) as the legal protection of intellectual assets (“IA”) and an intellectual asset as an attribute that gives one business a competitive advantage over all others. The IA in this seminar is technology which in the 19th and early 20th century meant new products and processes. In a post-industrial economy such as the United Kingdom’s technology also includes new services particularly those delivered electronically. 2. How the Law protects Technology In the 19th and early 20th century investment in the research, development, manufacture and distribution of a new product or process could be protected in two ways:   By keeping quiet about it and relying on the law of confidence to prevent unauthorized use or disclosure; or By disclosing it to the world in return for a monopoly of its manufacture, importation or use known as a patent for up to 20 years. The only way of protecting such investment in developing new services was by the law of confidence. The invention of the computer generated new technologies that could not easily be classed as products or processes. Generally computer programs are protected by copyright though patents have occasionally been granted for computer implemented inventions. In some countries products that are the result of modest technical advances are protected as “utility models”.4 Utility models are similar to patents but are granted for shorter terms and upon less rigorous examination. In the UK we protect original features of shape and configuration of articles or parts of articles as unregistered designs under Part III of the Copyright, Designs and Patents Act 1988.5 A variation of design right protects the design of 1 3 4 In Australia utility models are called “innovation patents” and in Ireland they are called “short term patents.” 5 2 1

semiconductor topographies under The Design Right (Semiconductor Topographies) Regulations 1989.6 The need to feed a rapidly increasing population has attracted investment into developing new crops and other vegetable products. In the USA patents are granted for new plant varieties. In the EU plant varieties are protected by a sui generis right known as a plant breeder’s right. 3. Summary This seminar will therefore consider the following intellectual property rights: (1) the law of confidence (2) patents (3) copyrights and database rights (4) unregistered design rights (5) semiconductor topographies, and (6) plant varieties. 6 SI 1989 No 1100 2

Chapter II: The Law of Confidence 1. Law of Confidence This is a common law or judge made doctrine that has evolved through a long series of decided cases. The basic principles are set out in Megarry J’s judgment in Coco v A N Clark (Engineers) Ltd. [1969] RPC 41. Three elements are normally required if, apart from contract, a case of breach of confidence is to succeed. First, the information itself must have the necessary quality of confidence about it. Secondly, that information must have been imparted in circumstances importing an obligation of confidence. Megarry J said: “if the circumstances are such that any reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence, then this should suffice to impose on him the equitable obligation of confidence.” Thirdly, there must be an unauthorised use of that information to the detriment of the party communicating it. 2. The information itself must have the necessary quality of confidence about it Information will be protected by the law of confidence if its unauthorized use or disclosure would harm the confider or benefit the confidante. It may be technical information as in Amber Size and Chemical Co Ltd v Menzel [1913] 2 Ch 239 or it may be commercial or even private. Information will not be protected if it is already in the public domain or if it is known to the confidante otherwise than through a breach of confidence. 3. The information must have been imparted in circumstances importing an obligation of confidence That is usually but not necessarily evidenced by a confidentiality or non-disclosure agreement. In Coco, Megarry J said: “where information of commercial or industrial value is given on a business-like basis and with some avowed common object in mind, such as a joint venture. I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence.” Nevertheless, a confidentiality agreement is recommended for transactions between joint inventors, an inventor and his contractor, product development consultant and component supplier, an inventor and a potential investor or licensee but perhaps not for a consultation with a regulated professional such as a patent attorney, solicitor or counsel. 4. Use of Confidentiality Until a patent is applied for the only way of protecting a new invention is by keeping it secret and relying on the law of confidence. For technologies that cannot easily be patented such as the source code of a computer program the law of confidence is the only option. If a product or process cannot easily be reverse engineered confidentiality may be the best option because there are no filing or renewal costs and knowledge of the product or process 3

can be kept secret indefinitely. If however a product can be reverse engineered protection is lost from the moment the article is placed in the stream of commerce. 5. Further Information Jane Lambert All you need to know about confidentiality 14 June 20067 Jane Lambert Confidentiality Agreement 21 Sep 20108 Jane Lambert “Enforcing a Confidentiality Agreement in the Small Claims Track” 9 March 2013 IP Yorkshire9 7 9 8 4

Chapter III: Patents 1. Patents A patent is a monopoly of a new invention. If the invention is a new product it confers the exclusive right of making, using, offering for sale, selling, or importing the product for those purposes.10 If it is a new process it confers the exclusive right of using the process, and using, offering for sale, selling, or importing any product obtained directly by that process.11 2. Conditions The patent is granted as a reward for making the invention available to the public. It is granted only for inventions that are: (1) new (2) inventive (3) useful, and (4) not excluded by statute. A patent may be revoked if the court or patent office finds that the patent should never have been granted. 3. Sources of Law Treaties TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights)12 Paris Convention for the Protection of Industrial Property13 European Patent Convention (“EPC”)14 Patent Co-operation Treaty15 Statutes Patents Act 1977.16 10 Art 28 (1) (a) TRIPs Art 29 (1) (b) ibid 13 14 15 16 11 12 5

Statutory Instruments The Patents Rules 200717 4. Institutions The Intellectual Property Office (“IPO”)18 is the operating name of the Patent Office which is an executive agency of the Department for Business Innovation and Skills (“BIS”). The IPO examines and grants application for patents for the United Kingdom alone. The European Patent Office (“EPO”) is one of the organs of the European Patent Organization which was established by art 419 of the EPC. Its task is to grant patents on behalf of governments of the member states of the EPC. A patent granted by the EPO is known as a European patent and art 2 (2) of the Convention provides that a “European patent shall, in each of the Contracting States for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that State, unless this Convention provides otherwise.” It is Important to note that the EPC is not an EU institution although all EU members states are party to the Convention and that European patents are granted for individual member states and not the EU as a whole. A European patent designating the UK is known as a European patent (UK)20. An applicant for a European patent can designate any one or more or indeed all of the contracting parties for the grant of a European patent. The World Intellectual Property Organization (“WIPO”)21 is the UN specialist agency for intellectual property. It acts as the clearing house for multiple patent applications through the Patent Co-operation Treaty. 6. Applications An application for a patent for the UK may be made in three ways:  To the IPO for a patent for the UK alone which is granted under the Patents Act 1977;  To the EPO for a European patent (UK); or  Through the PCT. Although professional representation is not compulsory it is strongly recommended. Professionals who represent applicants in the IPO are known as patent agents or attorneys. Their professional body is the Chartered Institute of Patent Attorneys (“CIPA”)22 and they are regulated by the IP Regulation Board (“IPReg”).23 17 20 S.130 (1) Patents Act 1977 21 22 23 18 19 6

7. The Inventor’s Bargain S.14 (2) (b) of the Patents Act 1977 requires an application for a British patent to contain a specification. A specification must contain “a description of the invention, a claim or claims and any drawing referred to in the description or any claim.” S.14 (3) further provides: “The specification of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.” Drafting the specification requires considerable care and skill. It must be sufficiently broad to protect the investment in research and development but it must not be too broad otherwise it may be revoked. 8. The Claim S. 14 (5) provides: “The claim or claims shall (a) define the matter for which the applicant seeks protection; (b) be clear and concise; (c) be supported by the description; and (d) relate to one invention or to a group of inventions which are so linked as to form a single inventive concept.” S.125 (1) of the Act adds: “For the purposes of this Act an invention for a patent for which an application has been made or for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application or patent, as the case may be, as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent or application for a patent shall be determined accordingly.” S.125 (3) further provides: “The Protocol on the Interpretation of Article 69 of the European Patent Convention (which Article contains a provision corresponding to subsection (1) above) shall, as for the time being in force, apply for the purposes of subsection (1) above as it applies for the purposes of that Article.” This Protocol consists of the following articles: “Article 1 General principles Article 69 should not be interpreted as meaning that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Nor should it be taken to mean that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the 7

patent proprietor has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties. Article 2 Equivalents For the purpose of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is equivalent to an element specified in the claims.” In Kirin-Amgen Inc. and Others v Hoechst Marion Roussel Ltd and Others24Lord Hoffmann said that the Protocol was a protocol on the interpretation of art 69 of the EPC, and not on the interpretation of claims. 9. Examination The application is then examined for compliance with the conditions mentioned in paragraph 2. If the examiner finds that the application appears not to comply with one of those conditions he or she will raise the objection with the applicant who will be given an opportunity to deal with it. If the examiner is persuaded the application proceeds to publication on the IPO’s website and in its journal to allow the public to see the application and make representations. If there are no further objections the application proceeds to grant. If the examiner is unpersuaded the applicant can ask for a hearing before an independent tribunal known as “a hearing officer”. If the hearing officer allows the application it will proceed to grant. If he or she does not, the applicant can appeal to the court. If the examiner’s objection is not challenged or upheld the application is refused. 10. Novelty S.2 (1) provides that an invention shall be taken to be new if it does not form part of the state of the art. S.2 (2) defines the “state of the art” as “all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way.” S.2 (3) also includes matter that was disclosed in an application made after the priority date if the subsequent application contains matter that was filed and published in an earlier application. The words “made available to the public” can cover a publication in a language other than in English in a remote public library or use in some remote corner of the world. When the Patents Act 1977 was enacted most of the world’s new technical literature was in English or some other European language. Nowadays it is at least as likely to be published in Japanese, Korean or Mandarin which makes searching much more difficult. 24 : [2005] RPC 9, [2004] UKHL 46, [2005] 1 All ER 667, (2005) 28(7) IPD 28049, [2005] RPC 169 8

Note also second medical uses of known substances or compositions in s.3 (3) and (4). 11. Inventive Step S.1 (1) (b) requires an invention to involve an inventive step. S.3 provides: “An invention shall be taken to involve an inventive step if it is not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art by virtue only of section 2(2) above (and disregarding section 2(3) above).” A “person skilled in the art” can refer to a team. Such a person is also known as “the skilled addressee”. 12. Utility S.1 (1) (c) requires an invention to be “capable of industrial application”. S.4 (1) provides that an invention shall be taken to be capable of industrial application if it can be made or used in any kind of industry, including agriculture. 13. Excluded Categories S.1 (2) of the Act provides: “It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of (a) a discovery, scientific theory or mathematical method; (b) a literary, dramatic, musical or artistic work or any other aesthetic creation whatsoever; (c) a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer; (d) the presentation of information; but the foregoing provision shall prevent anything from being treated as an invention or the purposes of this Act only to the extent that a patent or application for a patent relates to that thing as such.” The words “as such” mean that it is possible for some software implemented inventions to be patented but not if the invention is nothing more than a computer program. Also excluded are inventions the commercial exploitation of which would be contrary to public policy or morality under s.1 (3) and methods of treatment or diagnosis under s.4A (1). 14. Infringement A patent is infringed by: 9

(1) (2) (3) 15. making, disposing of, offering to dispose of, using or importing or keeping whether for disposal or otherwise a product that falls within at least one of the claims (s.60 (1) (a)); using or offering to use a process that falls within one or more of the claims in the knowledge that such use without the proprietor’s consent would infringe the patent (s.60 (1) (b)); or disposing of, offering to dispose of, using or importing any product obtained directly by means of such a process or keeping any such product whether for disposal or otherwise (s.60 (1) (c)). Proceedings Claims relating to patents must be brought either in the Patents Court or the Intellectual Property Enterprise Court (CPR 63.2).25 The Patents and Intellectual Property Enterprise Courts are specialists lists within the Chancery Division consisting of judges who have either practised in the Patents Court such as Arnold or Birss J or Judge Hacon QC or other judges such as Roth J. Vos J, Morgan J or Norris J who are regarded as particularly able (see the Patents Court Guide).26 The judges who sit in the Patents Court are known as “the assigned judges”. Those who sit in the IPEC are known as “enterprise judges.” 25 26 10

Chapter IV: Software Implemented Inventions 1. The Problem Because of the exclusion of computer programs, methods information and communications technology industry has to rely on copyright, database right and the law of confidence to protect their investment in software development. 2. Copyright S.3 (1) of the Copyright, Designs and Patents Act 1988 includes computer programs, preparatory design materials for computer programs and databases within the definition of “literary work”. Copyright in a literary work is infringed by copying the whole or a substantial part of a work and the term lasts for the life of the author plus 70 years. 3. Database Right The right to prevent the extraction and re-utilization of the contents of a database which is protected by the Copyright and Rights in Databases Regulations 1997, SI 1997/3032. 4. Confidence The source code of a computer program can be protected by the law of confidence as a trade secret so long as it is kept out of the public domain. 11

Chapter V: Designs and Semiconductor Topographies 1. Design Right In the absence of a utilities model law Part III of the Copyright, Designs and Patents Act 1988 protects the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article. A design does not have to be novel to qualify for design right protection – merely original. Design right subsists for 10 years though in the last 5 years anyone in the world can apply for a licence to use the design as of right. This is a cheap and convenient way of protecting for a short while investment in some functional designs and circuits though its value is limited by the fact that very few countries provide reciprocal protection. Consequently there is no design right protection for designs created outside the EU. 2. Semiconductor Topographies The Design Right (Semiconductor Topographies) Regulations 198927 extend design right protection to the design of silicon chips. There is a 25 year term and protection is conferred on nationals of states that provide reciprocal protection to British designers. 3. Infringement Proceedings Claims for infringement of design right in the design of a semiconductor topography have to be brought in the Patents Court or IPEC (CPR 63.2). All other design right claims can be brought in the Chancery Division or the Birmingham, Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Newcastle or Preston County Courts. 27 12

Chapter VI: Plant Varieties 1. Plant Breeders’ Rights New varieties of seeds and plants may be registered with the Plant Variety Rights Office which is part of the Department for Environment Food and Rural Affairs under the Plant Varieties Act 1997.28 Registration confers a 25 year monopoly of the seed variety under s.11 (1) (b) of that Act or 30 years in the case of potatoes pursuant to s.11 (1) (a). 2. Community Plant Variety Office Alternatively plant breeders can register their varieties at the Community Plant Variety Office under the Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights.29 3. UPOV Convention The International Convention for the Protection of New Varieties of Plants (better known as “the UPOV Convention”) provides reciprocal protection for parties to the Convention which includes the UK. 4. Enforcement Proceedings relating to plant breeders’ rights are brought in the Patents Court or IPEC (CPR 63.2). 28 29 13

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