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Patents Newsletter

No. 29

June 2012

June 2012

Article 4: Prior Art: Websites and Emails - What Constitutes 'Publicly Available'?

Editorial

Nicholas Malden

As the Olympic torch makes its way around the country in the build-up to the 2012 Games and with the Queen’s Jubilee celebrations under way, there’s plenty to be excited about in the UK this summer. 

Even the world of British patents has its own dose of excitement for innovators with recent confirmation that the Patent Box initiative is going ahead, offering significant corporation tax reductions related to patented innovations. In this edition we update you on the latest changes and advise on techniques for getting the required patent granted as quickly as possible.

In this edition we also look at the issues for software innovators keen to reap open source’s benefits and yet avoid being caught by some of its legal traps. We also report on two recent EPO decisions offering guidance on when website publications and emails can be treated as part of the state of the art.

A fine summer to all our readers!

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Article 1: Software Innovation: To Open Source, or Not to Open Source?

Nicholas Malden & Alan Boyd

With at least half a million open source software (OSS) projects in the world1, OSS represents a significant aspect of contemporary software development. However, although there are advantages to be had from both using and releasing OSS, there are a number of issues to be kept in mind for the software innovator, in particular regarding how the use and distribution of OSS can interact with your intellectual property rights in a way that might be undesirable.

OSS guarantees particular freedoms, the most significant of which being that the user is free to:

  • use the software in any way;
  • access the human- readable source code;
  • modify the program in any way; and
  • redistribute the software (modified or unmodified) to anyone.

Also known as ‘free software’, it is a common misconception that OSS must be distributed without cost. In fact the term ‘free’ refers to the freedoms described above and OSS can certainly be sold provided that, as a result of selling the software, the above freedoms are ensured. However, since the buyer can freely redistribute it, the reality is that OSS is often distributed for free.

Contributing to OSS - Advantages

Firstly, OSS can quickly result in an industry standard. Since the source code is available and modifiable, there is no reliance on any particular company and the gravitation of participants, both code developers and end users, to a particular project can make its success a self-fulfilling prophecy. The opportunity to participate in, and therefore help define, such an industry standard can make OSS participation an extremely attractive, even unavoidable, commercial decision.

A second advantage of releasing OSS is the potential division of labour. As Bill Joy, cofounder of Sun Microsystems, put it, “No matter who you are, most of the smartest people work for someone else”. Encouraging others to contribute to and work on your project allows the involvement of people with wide ranging experience that many, particularly smaller, companies might otherwise never have access to.

Contributing to OSS - Considerations

Firstly, the above-mentioned gravitation of participants to a particular project is by no means guaranteed. Also, once released there is nothing to stop a competitor from taking your hard work and rebranding it as their own, or seeking to drive the project in a direction more suited to their business than yours.

Secondly, it is necessary to consider the ‘viral’ nature of many open source licences. The GNU Public Licence (GPL) is the most common open source licence, with over 50% of open source projects using it. Its viral nature comes from the fact that if you create software that links to or uses GPL licensed software, your software may only be released under the GPL – thereby granting all of the freedoms mentioned above.

Thirdly, the potential implications of releasing OSS with respect to related patents which you hold are particularly significant. Later versions of the GPL grant the OSS user an implicit (v2) or explicit2 (v3) licence to any patent claims held by the OSS contributor, which would be infringed in some manner by activity permitted by the GPL. The above-mentioned viral nature of the GPL thus extends that patent licence to all further users of the software.

This latter aspect of the GPL requires particular care to be taken by patent holders, in particular in organisations where the possibility exists for one department to be relying on continued patent protection, whilst another is participating in an OSS project. Ideally technologies being promoted via OSS participation and technologies which are being protected via patents would be kept clearly distinct, but in reality this is often not feasible and therefore clear internal communication with regard to what is being contributed to OSS projects is vital.

Using OSS - Advantages

The prime advantage to using OSS is, of course, to not recreate the wheel. Rather than expending time and money in programming, it may be possible to use or modify an existing project. It is also worth noting that the mere use of OSS generally makes no obligations on you. It is only by distributing software that contains OSS that particular restrictions may apply.

Using OSS removes reliance on a single distributor. If a company stops supporting its OSS, the source code remains available and other people are free to modify it. Consequently, the software may continue to be supported or, failing all else, you may modify it yourself. 

OSS is generally deemed to be of high quality, reliability and security. A 2010 survey3 by Accenture indicates that over two-thirds of respondents cited these features as benefits of OSS. With a broad range of developers able to test, contribute to and use OSS, the range of platforms and scenarios in which it is used tends to be greater. Furthermore, with people able to contribute to the code at any time, inefficient code can be rewritten, buggy code can be fixed and code to improve compatibility can be added with relative ease. Features that are frequently requested are more likely to be developed and released back to the community. 

Using OSS - Considerations

Perhaps the biggest consideration is what future obligations you may be agreeing to, as a result of using or starting to rely on OSS now. 

As mentioned in the previous section, the mere use of OSS puts no obligations on you. However, the inclusion of a piece of software with a restrictive OSS licence may put you under certain obligations if you were to release a product containing that software. If there is an intention that the software be released to the public, a more thorough examination of the obligations is necessary than if it is merely used in-house. For example, it is not necessary to agree to the GPL in order to receive or use software covered by the GPL. However, if the same GPL software is then incorporated into software that is distributed to the public, you are obliged to release that software under the GPL – thus giving your customers the right to freely redistribute, sell and modify your software. Other OSS licenses are more permissive than the GPL and it is therefore crucial to understand the scope of the particular OSS licence that you are (implicitly) agreeing to before allowing the use of OSS in a project.

It is worth noting that in the UK OSS licences are largely untested. In the US, one known example of litigation has been the sequence of legal actions which the Software Freedom Law Centre (SFLC)4 has pursued on behalf of the developers of BusyBox, a popular software utility released under GPLv2. This software had been incorporated into a range of household components and the SFLC alleged that the terms of GPLv2 had not been met (typically that the source code had not been released). The majority of these cases have settled, typically involving an agreement to release the source code and an undisclosed sum being paid to the plaintiffs. It is interesting to consider that, in the fast-evolving world of consumer electronics and software, how much of a commercial burden such a retrospective release of the source code represents can strongly depend on the time that has elapsed between the marketing of the product and the settlement of the case.

As in the case of contributing to OSS projects, in order to prevent the creep of viral/restrictively licensed OSS into projects that are not intended to be released as OSS, internal communication in your organisation is key. It is recommended to implement a policy regarding what sort of OSS (if any) can be included within a given project, based on a clear understanding of the potential consequences of agreeing to the relevant licence(s).

Conclusions

There are clear advantages to be had from both the use and distribution of OSS. However, the decision to use OSS, and particularly the decision to release OSS, is not without some wide-reaching and perhaps unpredictable effects. In particular there is the potential for these effects to conflict with the intellectual property strategy of an organisation.

Consequently, it is important for companies in which the use or distribution of OSS is likely to implement an OSS policy. Such a policy should be made in conjunction with the company’s intellectual property strategy and should address, for any project, the licences that can be used and the licences that must not be used. Finally, the policy should consider the most appropriate licence under which software should be distributed, taking into account the strategy of the company together with what the release of the software is designed to achieve.

Useful links

  1. Black Duck KnowledgeBase database of open source software: http://dycip.com/blackduck
  2. GNU General Public License (see section 11 - Patents):http://dycip.com/gnulicense
  3. Accenture OSS investment survey:http://dycip.com/accenturesurvey
  4. Software Freedom Law Center:http://dycip.com/softwarefreedom

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Article 2: The Patent Box: More Good News for UK Business Investment

Doug Ealey

On 21 March 2012, the Chancellor confirmed his commitment to a UK ‘Patent Box’ in the budget, which, as of 1 April 2013, provides for a reduction in tax from 23% to 10% for IP based profits(see note 1 below). Following this confirmation, the pharmaceutical giant GlaxoSmithKline announced a £500m investment in the UK, with its CEO saying, “The introduction of the patent box has transformed the way in which we view the UK as a location for new investments”(see note 2 below). This view is now likely to be bolstered by the generally positive changes made to the final draft of the Patent Box legislation in the 2012 Finance Bill (see note 3 below), some of which are outlined below.

The most significant change is that the legislation now includes income from licences for a patented invention in a country that is not covered by the qualifying patent (see note 4 below). As a correspondent who pointed this discrepancy out to the Treasury, we are delighted to see that it has now been corrected. Hence for example it is now possible for a UK firm to include income from licencing an invention in the US, providing it also has a UK or European patent. This is in contrast to the original legislation that appeared to limit licencing to just the qualifying patents themselves.

Clearly, this change is excellent news for UK firms whose business relies heavily on licencing overseas.

Other notable points in the final legislation are the confirmation that in addition to patents, the Patent Box extends to Supplementary Protection Certificates, granted secret applications, UK and European plant breeders’ rights, and for products also extends to certain marketing protection rights for medicines, and data protection rights (see note 5 below).

The Government has also extended the patents qualifying for the Patent Box to those from a number of European states, the most notable being Germany. However in practice it is unlikely for a UK firm to have a German national patent and not a UK or European issued patent, and so the effect of this provision may be limited.

Finally, further changes to the legislation include that the simplified profit calculations for small businesses has raised the threshold on total profits from £1m to £3m (see note 6 below), thus making this process accessible to far more SMEs.

The provisions for SMEs are intended to make the system additionally attractive to small businesses, and the maths seems to back this up.

Assuming a 10 year product life, and even rather conservative estimates for the cost of filing, granting and maintaining a patent, if you make more than just £1,000 per month in profit from a patented product or licence, you are likely to be comfortably better off under the Patent Box scheme.

At this point it is worth remembering that most products have a distinguishing aspect if one focusses on the specifics, and that narrow claims often grant more quickly in the UK and Europe; consequently, in addition to broad patents directed at fundamental enabling concepts, patent applications that protect characteristic features of particular products may now also become valuable for their ability to bring these products into the Patent Box scheme.

Moreover, the scheme is generous with what products are eligible: for example a patent for a printer cartridge will make eligible profits from the sale of a printer incorporating that cartridge, and (perhaps more importantly) a patent for the printer makes eligible profits from the sale of a cartridge for that printer. As a result, the scope for identifying patentable products and subsequent profits is very broad.

We can help with the identification of existing patents and applications, and of new inventions, which could make your products and processes qualify for the Patent Box. In addition we can liaise with your accountancy team in preparation for 1 April 2013, or draw on the expertise of a local leading accountancy firm who are happy to provide advice to our clients on this specific issue. For more information and to discuss the options available to you, please contact your usual D Young & Co representative.

Notes  and useful links

  1. The scheme phases in over five years, starting at 60% of full effect
  2. http://dycip.com/L0y44S
  3. Available at http://dycip.com/hmtfinancebill
  4. See §357CC(6)(b) of the Finance Bill
  5. See §357BB of the Finance Bill
  6. See §357CL of the Finance Bill

 

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Article 3: Planning for the Patent Box Strategies for Accelerating Granted Patents in the UK

The Patent Box places a potentially extremely high financial value on a granted UK patent (see notes 1 & 2 below), whereas a pending patent application has no value under the scheme. The race for getting granted UK patents is therefore now on. For UK manufacturing companies, profits arising from sales of products will be eligible for reduced corporation tax if and only if a granted UK patent is in force for some element of the product.

Because of the relative slowness of the European Patent Office (EPO) as a patent granting authority, the Patent Box directs attention on to the UK Intellectual Property Office (UK IPO) which has a range of existing procedures for obtaining quick grant. An optimised process for obtaining rapid grant of a UK national patent involves:

  1. Requesting combined search and examination
  2. Requesting accelerated search and examination
  3. Requesting early publication
  4. Responding immediately to the combined search and examination report.

Each of these points is now discussed.

1. Requesting combined search and examination

The combined search and examination (CSE) procedure is a long-standing option offered by the UK IPO which works extremely well. The UK IPO’s internal target is to issue a CSE within four months of request, which typically means within four months of filing, since CSE requests are usually made on filing. Our experience is that this target is normally met.

2. Requesting accelerated search and examination

Requesting accelerated search and/or examination is a formless, no-cost procedure in which the applicant merely has to provide a sensible reason, such as knowledge of an infringing product, a planned investment round or support for licence negotiations. Recently, the UK IPO declared that when an invention relates to environmental technology that itself is also a valid reason for acceleration, this being called the ‘Green Channel’. By way of example, on 14 March of this year we filed an application using the Green Channel and the CSE report was issued 11 working days later!

3. Requesting early publication

Requesting early publication is a further necessary step for securing early grant of a UK patent, since without such a request the earliest grant can take place is about two years from filing. The early publication should be early enough that grant is not delayed, but very early publication may be damaging to the applicant’s wider interests, since the published application forms part of the state of the art in the usual way. Typically, we would advise not to request early publication on filing, but to make the request when responding to the CSE report to leave open the possibility of re-filing the patent application to take account of the CSE report.

4. Responding imediately to the combined search and examination report

Responding quickly to the combined search and examination report will obviously move things forward, but is also significant in that it exhausts the applicant’s duty to disclose the results of searches made by other patent offices on corresponding patent applications (see note 3 below). More generally, additional iterations of the examination process caused by the need to take account of fresh prior art should be avoided. In respect of timings, this means the UK publication request should be made at the latest about seven months from filing (with publication taking place six weeks later) so that UK grant can pre-date the earliest likely issuance of the PCT search report which is 15 months from priority.

What about converting existing pending applications into UK patents in time for April 2013? For European patent applications the EPO offers a ‘Programme for Accelerated prosecution of European patent applications’ (PACE) (see note 4 below), similar to the UK IPO scheme. For pending international (PCT) patent applications, the best way forward is to make an early entry into the UK national phase. The UK application can then be prosecuted using the general measures described above or through a specific acceleration option called ‘PCT(UK) Fast Track’ which can be used if the PCT application has received a positive International Preliminary Report on Patentability (IPRP).

In summary, there will be large numbers of UK-based companies for whom the corporation tax savings obtainable through the Patent Box will vastly outweigh patenting costs. For these companies there will be a reversal of the current burden on the engineering and scientific side of the business to justify the patent costs. Instead, chief executives and chief financial officers will be demanding UK patents from their engineers and scientists unless there are convincing reasons why the company’s product innovations are clearly unpatentable. However, optimal use of the Patent Box will require careful long term advance planning and coordination between a company’s tax advisers and patent advisers and relevant management. For example, there is a potentially complex interaction with the R&D Tax Credit scheme which will need to be modelled.

Useful links

  1. Patent Box from a patent attorney’s view: www.dycip.com/pnl0212pbox
  2. Patent Box from an accountant’s view: www.dycip.com/pwc-pbox
  3. Disclosure of search results: www.dycip.com/ukipo-pn
  4. EPO PACE scheme: www.dycip.com/trackfaq

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Article 4: Prior Art: Websites and Emails - What Constitutes 'Publicly Available'?

Under Article 54(2) EPC the state of the art comprises everything made available to the public by means of a written or oral description, by use, or in any other way, before the filing of a European patent application.

There has been uncertainty as to whether email and, under what circumstances, web pages become part of the state of the art under Article 54(2) EPC. Two recent appeal decisions (T-0002/09 and T-1553/06) relate to patent applications intentionally filed as test cases to attempt to provide clarity on these issues.

Web pages

How accessible does a web page need to be to be publicly available under Article 54(2) EPC? Should factors such as whether the web page can be found by entering keywords into a search engine and the length of time which the web page was on the internet be taken into consideration?

The answers to such questions were sought in the opposition test case behind decision T-1553/06. As explained below, the answer lies in whether there is direct and unambiguous access to the content of the web page.

Background to the appeal

Prior to filing the patent application in issue, the patentee and opponent colluded to place four different disclosures on the internet under different circumstances. The opponent then accessed the webpages ‘I1’, ‘I2’ and ‘I4’ prior to filing in front of a notary and the print outs were notarised.

The decision

In deciding whether or not a web page was available to the public, the Board dismissed arguments presented by the patentee as to whether finding the web page amounted to undue burden stating:

“as the Enlarged Board ruled that applying the concept of novelty must not depend on an element of subjectivity, such element must not only be excluded in determining the availability of information which is accessible and derivable from a means of disclosure … but also in the preceding stage of determining the accessibility of such means. In both situations the degree of burden involved is in principle irrelevant to the determination of what constitutes prior art.”

The Board considered that the decisive factor is the practical possibility of having access to the means of the disclosure. Seeking to avoid “hidden disclosures” being considered prior art, the Board stated that the public should be aware of the means of disclosure and have access to the means of disclosure.

Drawing on previous case law (such as G 1/92 and T-0952/92), the relevant criterion is whether there is direct and unambiguous access by at least one member of the public to the means of disclosure:

“If… a document stored on the World Wide Web and accessible via a specific URL

(1) could be found with the help of a public web search engine by using one or more keywords all related to the essence of the content of that document and

(2) remained accessible at the URL for a period of time long enough for a member of the public, i.e. someone under no obligation to keep the content of the document secret, to have direct and unambiguous access to the document,

then the document was made available to the public in the sense of Article 54(2) EPC 1973.”

However, failure to meet either 1. or 2. does not mean that the document was not made available to the public, as it must then be examined if other circumstances provide direct and unambiguous access. Other circumstances may include whether there was written or oral disclosure of the URL, the presence of the URL on a web page available to the public and publication of the document in a web-based discussion forum.

Access via a search engine and all keywords relating to the essence of the content

It was considered whether a URL alone could be sufficient to provide direct and unambiguous access to a web page:

“The Board cannot exclude that there might be URLs which are so straightforward, or so predictable, that they could readily be guessed exactly and thus be regarded as providing direct and unambiguous access to web pages at those URLs. However, this is conceivable only in exceptional cases. ”

Therefore, in most cases, proof of direct and unambiguous access such as through a publicly available search engine is required. The Board further stated:

“For the sake of completeness, the Board observes that the situation in which a URL must be guessed in order to access a web page is analogous to the situation in which access to the document is protected by a password which members of the public have no means of obtaining except by guessing.”

This is an interesting comment, particularly in view of the earlier comment that it is possible for exceptional URLs to be able to provide direct and unambiguous access. However, it appears that this analogy may not be entirely accurate. For instance, the placing of an obvious password onto a document could still convey to the guesser that the content of the document is not intended to be freely available. This is not the case with a URL.

Considering the keywords used to provide access to the document through a search engine, the Board concluded that these must all relate to the essence of the content of the disclosure to ensure that effectively hidden publications cannot be cited as prior art under Article 54(2) EPC.

Application of the test to I1 and 12

Evidence was filed to show that webpage I1 could be found via the AltaVista search engine using content related keywords on 15 November 1999 (i.e. comfortably before the priority date of 1 February 2000).

The webpage I2, which had with the same URL as I1, contained the content of I1 with an added section and evidence was filed to show that this content was accessed on two occasions via the AltaVista search engine using content related keywords. The webpage was first accessed on 12 January 2000 and subsequently accessed on 31 January 2000.

The Board concluded that the periods over which I1 and I2 were available (the shortest of which was just under three weeks) were long enough for a member of the public to have direct and unambiguous access.

Application of the test to I3

Evidence was filed to show that webpage I3 could be found at the URL http://www.gironet.nl/home/morozov/CIE/THRESHOLD_115mV for a period of 20 minutes only on 31 January 2000. No evidence was filed that this webpage could be obtained by carrying out a search in a search engine using keywords and the patentee admitted that I3 was not indexed by any search engine.

I3 was considered not to be available to the public because the opponent had failed to prove that it was either indexed or straightforward to guess the unpublished URL.

Consequences of this decision

The decision has provided some guidance as to when and under what circumstances webpages are considered publicly available with the key test being whether there is direct and unambiguous access to the means of disclosure. In this case a period of accessibility of just under three weeks for a document which could be accessed through a search engine using keywords related to the essence of the disclosure was deemed to make that document publicly available. How much shorter this accessibility period could be remains a moot point.

However, this decision has also confirmed that, in practice, the use of webpages as prior art is likely to be limited. For example, searching for prior art to be used in an opposition necessarily occurs at least 18 months after the filing or priority date of the patent to be opposed. By then, it may be difficult to establish that a particular webpage existed with a specific content prior to the priority date and to prove that the webpage would have been found on a search engine using content related keywords.

Emails

In the second test case (T0002/09) at issue was whether sending an email over the internet could make the content of the email available to the public. In this case, the documents considered related to interception of encrypted and non-encrypted emails.

The Board considered whether and under what circumstances it would be legal to intercept email, before deciding that regardless of the lawfulness of the interception absolute confidentiality should be granted for intercepted emails:

“The Board would not accept any ensuing public availability… This is because, in the Board’s view, the practical and effective protection of the fundamental rights enshrined in Article 8 of the European Convention on Human Rights (ECHR) would be jeopardised if information obtained in violation of this provision could be relied on to the detriment of those for whom the rights were designed.”

The Board concluded that making emails publically available would breach the right to respect under Article 8 ECHR that everyone has for his private and family life, his home and his correspondence.

Useful links

Decision T-0002/09: http://dycip.com/t000209dec

Decision T-1553/06: http://dycip.com/t155306dec

Decision G 1/92: http://dycip.com/g192dec

Decision T-0952/92: http://dycip.com/t095292dec

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