House of Commons
Session 2003 - 04|
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|Patents Bill [HL]|
These notes refer to the Patents Bill [HL]
PATENTS BILL [HL]
1. These explanatory notes relate to the Patents Bill [HL] as brought from the House of Lords on 6th April 2004. They have been prepared by the Department of Trade and Industry in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.
2. The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.
3. This Bill amends the Patents Act 1977 ("the 1977 Act"), which is the statute governing the patents system in the UK. The purpose of the Bill is three-fold. Firstly, it is intended to bring the UK patents system into line with the revised European Patent Convention which was agreed by Diplomatic Conference in November 2000. Secondly, it introduces into the 1977 Act some measures designed to assist in the enforcement of patent rights and in the resolution of patent disputes between patent proprietors and third parties. Thirdly, it updates the 1977 Act.
The European Patent Convention
4. The 1977 Act reformed the law of patents in the UK. One of its main purposes was to bring into effect in the UK the European Patent Convention ("EPC"), which was a new European-wide patents treaty agreed in 1973. The EPC is not a Community treaty, but is a treaty agreed between its contracting states - of which there are currently 28.
5. The EPC allows for a single patent application to be made to the European Patent Office ("EPO"). If the European patent is granted, this results in what is, in effect, a bundle of national patents which apply in those countries of the EPC in which the applicant wishes to have patent protection. The EPC also ensures harmonisation of patent law within itscontracting states as regards European patents and applications. In implementing the EPC in UK law, the intention has always been for the substantive law in respect of national patents and applications (that is, patents granted by, and applications to, the UK Patent Office) to follow as closely as possible that in the EPC. There are two main reasons for this. Firstly, it is important to avoid unnecessarily differing standards applying to patents which have come into force in the UK via different routes. Secondly, it is of considerable assistance to the public if they can adopt much the same approach when seeking a UK or a European patent. A function of the 1977 Act was, therefore, to bring domestic patent law into line with the provisions of the EPC, and to recognise the existence of European patents and applications and provide for their effect in the UK.
6. The EPC underwent a revision in 2000. It follows that it is necessary - if the UK is to remain part of the European patents system - for the 1977 Act to be amended to reflect the changes that have been made as part of the revised EPC. This is one of the things that the Bill seeks to do. The revised EPC is referred to throughout these notes as "EPC 2000".
Domestic issues - the enforcement of patent rights and updating of the 1977 Act
7. Patents provide a legally enforceable means by which a person (including a company) who has an innovative solution to a technical problem can prevent others from using this innovation without his permission. Such innovations, when patented, become intellectual property assets which can be exploited in much the same way as physical property assets, such as a house or a factory. The owner of a patent can decide to sell, license or mortgage it and so realise its economic value. Alternatively, he may exploit the invention himself and use the patent to prevent others from doing so. The unauthorised use of a patent is referred to as infringement.
8. The Bill amends the 1977 Act to improve and update procedures that patent proprietors use to maintain and enforce their patents. In particular, it contains a number of provisions designed to give patent proprietors more opportunity to benefit from their patents and includes measures to facilitate the early settlement of patent disputes. Improvements related to the process of applying for patents are to be made by a Regulatory Reform Order - see paragraph 10 below.
The Patent Co-operation Treaty
9. Alongside the EPC, the 1977 Act also recognises the Patent Co-operation Treaty ("PCT"), an international treaty agreed in 1970. The most recent Regulations under the PCT came into force on 1st January 2004. The PCT, which currently has 123 contracting states, provides a streamlined procedure by which patents in many countries may be acquired by filing a single patent application at one of a number of selected patent offices. The Bill makes some minor changes to the 1977 Act in order to clarify the relationship between domestic patent law and the PCT, and to implement a change resulting from the most recent Regulations under the PCT.
The Patent Law Treaty and the Regulatory Reform (Patents) Order 2004
10. The Patent Law Treaty ("PLT"), agreed in 2000, is a treaty which harmonises the procedural requirements which are associated with filing and prosecuting a patent application. The changes to the 1977 Act which are required by this treaty involve the removal or reduction of a number of burdens or constraints on patent applicants. Therefore, the 1977 Act is to be amended by the Regulatory Reform (Patents) Order 2004 ("RRO") in order to give effect to the PLT. The RRO will also make a number of other deregulatory changes to the 1977 Act. This Bill will therefore run alongside the RRO, and the changes that it makes to the 1977 Act are designed to be consistent with the changes to be made by the RRO. A few provisions in the Bill relate to or amend provisions inserted into the Act by the RRO and these are discussed in detail below. The proposed draft RRO was laid before Parliament for scrutiny by the Regulatory Reform Committees of both Houses on 10th November 2003. The House of Lords Delegated Powers and Regulatory Reform Committee's report was published on 30th January 2004 (Sixth Report of Session) and the House of Commons Regulatory Reform Committee's report was published on 17th February 2004 (Second Report of Session). The proposed draft RRO is to be amended, taking into consideration the questions asked and the report made by the House of Commons Committee, and representations made during the scrutiny period. As a result, some changes have been made to the Bill, by Government amendment, in the House of Lords.
Consultation on matters in the Bill
11. A consultation paper was issued on 29th November 2002, setting out the proposed changes to the 1977 Act to give effect to EPC 2000, and asking for views on a number of other possible changes to the 1977 Act. A summary of the responses received and the Government's conclusions was published on 14th November 2003. Copies have been placed in the Library of both Houses of Parliament. Both the consultation paper and the response document are available on the Patent Office website at:
OVERVIEW OF THE BILL
12. The clauses set out the major amendments to the 1977 Act, divided into those relating to international obligations and those relating to other matters, and supplemental provisions. Schedule 1 makes further amendments relating to international obligations. Schedule 2 makes minor and consequential changes to the 1977 Act. Schedule 3 lists the repealed provisions of the 1977 Act.
13. The Bill extends to the whole of the United Kingdom. Subject to any modifications made by an Order in Council, the Bill extends to the Isle of Man. Intellectual property has not been devolved. As regards Scotland, intellectual property is a reserved matter under section 30 of the Scotland Act 1998 and Head C4 of Part II of Schedule 5 to that Act. Intellectual property is a reserved matter under section 4(1) and Schedule 3 of the Northern Ireland Act 1998, paragraph 27. This means that the Northern Ireland Assembly cannot enact legislation in relation to intellectual property without the consent of the Secretary of State under section 8(b) of the Northern Ireland Act 1998. As regards Wales, no functions in relation to intellectual property have been transferred to the National Assembly for Wales under section 22 of the Government of Wales Act 1998. The 1977 Act does not feature in Schedule 1 to the National Assembly for Wales (Transfer of Functions) Order 1999.
COMMENTARY ON CLAUSES
14. References (other than in italics) to a numbered section or subsection are to a section or subsection of the 1977 Act, references to "EPC 2000" are to the EPC as revised in 2000, and references to the EPC are to that Convention as originally agreed in 1973.
Clause 1 - Methods of treatment and diagnosis
15. This clause inserts a new section 4A. This new section corresponds to Articles 53(c) and 54(4) and (5) EPC 2000, which deal with the exceptions to patentability and novelty respectively. New section 4A reflects the manner in which inventions of methods of treatment or diagnosis are treated under the provisions of EPC 2000, thus ensuring conformity of practice.
16. New section 4A(1) corresponds to Article 53(c) EPC 2000 and makes clear that an invention which consists of a method of treatment (by surgery or therapy) or a method of diagnosis cannot be patented. The provision replaces existing section 4(2), which corresponds to Article 52(4) EPC. Currently, such inventions are treated as incapable of industrial application, a fiction which EPC 2000 regards as undesirable to uphold since methods of treatment and diagnosis are excluded from patentability in the interests of public health.
17. New section 4A(2) corresponds to Article 53(c) EPC 2000 and replaces existing section 4(3) which corresponds to Article 52(4) EPC. It ensures that the exclusion of methods of treatment or diagnosis from patentability in section 4A(1) does not extend to inventions consisting of substances or compositions for use in such methods.
18. New section 4A(3) and (4) is concerned with the patentability of inventions consisting of a known substance or composition for use in a method of treatment or diagnosis, and corresponds to Article 54(4) and (5) EPC 2000. While these subsections do not extend the availability of patent protection in respect of an invention consisting of a substance or composition for use in a method of treatment or diagnosis, they simplify and clarify the manner in which patent protection may be obtained for such inventions.
19. To be patentable, an invention must be new. Currently, section 2(6), which corresponds to Article 54(5) EPC, provides for the patentability of an invention consisting of a known substance or composition for use in a method of treatment or diagnosis when the substance or composition is first used in any such method. The invention is considered to be new if the use of the substance in any such method is unknown. New section 4A(3) has the same effect, so that such an invention is considered novel where the substance or composition is first used in a method of treatment or diagnosis.
20. Where the substance or composition is subsequently used in a method of treatment or diagnosis which is different from the method in which it was first used, the courts have held, on the basis of current section 2(6), that the subsequent use may be regarded as new but only if the invention is claimed in the form "Use of X for the manufacture of a medicament to treat Y", where X is the known substance and Y is the medical condition in question. This is known as the Swiss form of claim, since it was first used in the Swiss Patent Office before becoming embodied in EPO practice.
21. New section 4A(4) enables patent protection to be obtained for the second or subsequent use of a substance or composition in a method of treatment or diagnosis by a direct claim in the form "Substance X for use in treatment of disease Y". The second or subsequent use, that is, the "specific use" of a known substance or composition in a method of treatment or diagnosis, is treated as new if that specific use was previously unknown. Where patent protection is sought for a substance or composition for specific use in a method of treatment or diagnosis, the Swiss form of claim will still be possible, but inventions may now be claimed in the simpler form.
Clause 2 - Amendment of patents after grant
22. Sections 27(1) and 75(1) confer on the comptroller and the court a discretion to allow or refuse an amendment to a patent. Article 138(3) EPC 2000 requires contracting states to enable a patent proprietor to amend his patent by limiting the claims in national proceedings for revocation of the patent. Article 105a(1) EPC 2000 confers on the EPO a discretion to allow or refuse an amendment of a European patent by limitation of the claims. The comptroller and the court will continue to have a discretion to allow or refuse an amendment, but in exercising that discretion, subsection (5) requires the comptroller or court to have regard to any relevant principles which are applicable in amendment or limitation proceedings under the EPC. These may include relevant regulations made under the EPC, any relevant guidelines produced by the EPO, and decisions of the Opposition Division and Boards of Appeal. This should ensure that, as far as possible, there is consistency in approach as regards post-grant amendment in national proceedings and before the EPO.
23. Subsection (5) therefore applies to all types of amendment made during any proceedings in which validity may be put in issue (note also the change to section 75 made by Schedule 2 paragraph 18). Furthermore, subsection (1) makes clear that the new regime applies equally to voluntary amendments under section 27 - that is, amendments proposed by the patent proprietor when no proceedings are under way. This is also intended to ensure closer conformity of approach between amendment under section 27 and the new procedure under EPC 2000 for limitation at the EPO.
24. Subsections (3) and (4) amend sections 62 and 63 in order to protect third parties from patent proprietors who act covetously. Under section 62(3) as amended, where a patent proprietor has amended his patent and sues for a pre-amendment infringement, the courts or comptroller may not award damages for that infringement unless they are satisfied that the proprietor is acting in good faith in bringing the infringement proceedings. Therefore, damages may not be awarded if it were shown that the proprietor knew that the infringed claim, before amendment, was invalid. However, damages would be available for infringing acts committed after the amendment was allowed. Similarly, under section 63(2) as amended, damages will only be available for a partially valid patent if the court or comptroller is satisfied that the proprietor has acted in good faith in bringing the infringement proceedings. Therefore damages will not be available if it can be shown that the proprietor knew that the infringed claim was only partially valid.
25. Subsection (2) makes the corresponding changes to section 58(6) and (8) of the 1977 Act. These provisions are equivalent to sections 62(3) and 63(2), but apply to Crown use instead of infringement.
Clause 3 - Relief for partially valid patent
26. Under section 63(3), the court or comptroller may make it a condition that a partially invalid patent is amended under the 1977 Act before granting relief for infringement. Subsection (1) inserts a new subsection so that relief may be granted on condition that the proprietor of a European patent (UK) limits the patent at the EPO. The limitation would have to be done to the satisfaction of the court or comptroller for relief to be granted. Subsection (2) makes a corresponding change to section 58. Section 58(9) is equivalent to section 63(3), but applies to Crown use instead of infringement.
Clause 4 - Revocation
27. Where the court or comptroller finds that a European patent (UK) is partially invalid, this clause provides that they may order revocation of the patent unless the proprietor limits his patent at the EPO under Article 105a EPC 2000. This is an alternative to the existing possibility of the proprietor amending the patent under the 1977 Act. The former option would affect the European patent in all its designated states, whereas the latter would only affect the European patent (UK). Even during revocation proceedings in the UK, the proprietor of a European patent (UK) could independently request limitation before the EPO. In practice, the court or comptroller could, if appropriate, stay the UK revocation proceedings while limitation went ahead.
28. It should be noted that both the new and existing provisions require the amendment or limitation to be done within a specified time and to the satisfaction of the court or comptroller, if revocation is not to take place. This allows the court or comptroller to retake control of proceedings in case of delay as a result of seeking limitation at the EPO. It also allows the court or comptroller to proceed with revocation of the patent if they are not satisfied with the amendment or limitation that has taken place.
Clause 5 - Further amendments relating to international obligations
Schedule 1 paragraphs 2, 3 and 4
29. EPC 2000 introduces a new procedure whereby the EPO's Enlarged Board of Appeal may review a decision of the Board of Appeal. However, the Board of Appeal's decision is not suspended for the duration of the review, so a patent or application may be revoked or refused by the Board of Appeal but then subsequently reinstated by the Enlarged Board. In these circumstances it is necessary to protect those who have started in good faith to work the invention (or made serious and effective preparations to do so) in between revocation or refusal of the patent or application and its subsequent reinstatement.
30. Paragraph 2 therefore amends section 77 to ensure that such protection is available to third parties where a European patent has been revoked and then restored by the review procedure. Existing section 78(6) provides protection for third parties when a European patent application is terminated or refused, but paragraph 3(3) amends this provision in order more clearly to provide protection where a European patent application has been refused and then reinstated. This includes reinstatement by the Enlarged Board of Appeal. The provision as amended is consistent with new sections 20B and 117A, inserted by the RRO, on reinstatement and resuscitation of national patent applications. Section 80(4) provides equivalent protection for third parties when a European patent or application has initially been incorrectly translated into English. Paragraph 4 therefore amends section 80(4) to be consistent with the new section 78(6). These paragraphs therefore clarify the position where a third party begins, in the relevant period, in good faith to do an act which would constitute an infringement of the rights conferred by publication of an application for a patent (i.e. the rights referred to in section 69).
31. The addition to section 78(5A) which is provided by paragraph 3(2) ensures that an application for a European patent (UK) will have prior art effect under section 2(3) on publication - regardless of whether the UK remains designated at the time of publication. As a result of EPC 2000, every European patent application will designate the UK on filing, and will be treated as an application for a European patent (UK) - see paragraph 40 below. This fact, in combination with the amended section 78(5A), means that every European patent application will have prior art effect under section 2(3) on publication. This result is consistent with the operation of Article 54 EPC 2000. The amendment to section 78(5A) complements the existing provision, which makes clear that withdrawal of designation from an application for a European patent (UK) after publication does not affect the prior art effect of that application under section 2(3).
Schedule 1 paragraph 5
32. Paragraph 5 removes from section 81 certain provisions which concern transitional arrangements connected with the setting up of the EPO in the 1970s. The provisions made it possible for European patent applications in certain areas of technology to be converted to national UK patent applications. This reflected the fact that the EPO did not, initially, process patents in all areas of technology. Under EPC 2000, the corresponding provisions in the EPC have been deleted.
33. Furthermore, the paragraph restates the remaining provision in section 81(1), so that the wording is consistent with the corresponding provision of EPC 2000. Therefore, when a European application is deemed to be withdrawn under the EPC, because the application has not been forwarded to the EPO within the required time, it may be converted into a national UK patent application if the conditions set out in section 81(2) are met.
Schedule 1 paragraph 6; Schedule 2 paragraphs 11, 12, 19-21, 24(c), 24(d), 26
34. These provisions remove redundant provisions in the 1977 Act which relate to the Community Patent Convention ("CPC") which has never come into force. The effect on the Act of the CPC (as amended by the 1989 Agreement on the Community Patent) is therefore confined to the interpretation of those provisions of the 1977 Act which correspond to the CPC by virtue of section 130(7).
Schedule 1 paragraph 7 and paragraph 9, sub-paragraphs (2)(a) and (3)
35. Paragraphs 9(2)(a) and (3) provide a new section 130(4A) making clear that an international application which is treated under the 1977 Act as an application for a European patent (UK) is not - simply by virtue of the designation "EP(UK)" - also to be treated as an international application for a patent (UK).
36. This provision replaces section 89(4), which is omitted by paragraph 7. The approach taken by section 89(4) is no longer meaningful, since that provision assumes that an international application may be filed which designates only "EP(UK)" and not "UK". As noted in paragraph 41 below, all international applications will now automatically be treated as designating both "UK" and "EP(UK)" on filing.
37. Nevertheless, the effect under new section 130(4A) is essentially unchanged from that under section 89(4). Thus if the UK designation on an international application is withdrawn, that application cannot be considered to be an international application for a patent (UK) on the basis that the EP(UK) designation remains.
Schedule 1 paragraph 8
38. Section 89B(2) states that an international application is treated as published under section 16 when it enters the national phase - provided it has already been published as an international application under the PCT. Paragraph 8 amends section 89B(2) to make it clear that this applies whether the international application enters the national phase early, or enters the national phase at the end of the time period for doing so.
39. If the application has not yet been published under the PCT when it enters the national phase, the new provision makes clear that the application is not treated as published under section 16 until publication under the PCT has taken place.
Schedule 1 paragraph 9, sub-paragraph (2)(b)
40. Under the EPC, the applicant chooses ("designates") which of the contracting states he wishes the European patent to cover. Under EPC 2000, all the contracting states will automatically be deemed to be designated on filing of the European patent application. Paragraph 9(2)(b) amends the definition of "designate" in the 1977 Act in order to make clear that, where a country is deemed to be designated under EPC 2000, that country will be treated as designated under the 1977 Act. It follows that every European patent application will be treated under the 1977 Act as an application for a European patent (UK), because every European patent application will be treated as having designated the UK on filing.
41. The amended definition of "designate" will also apply to the designation of states or regions under the PCT. From 1st January 2004, a revision to the Regulations under the PCT will mean that all the contracting states and regions of the PCT will automatically be deemed to be designated on filing of an international application. It follows that every international application for a patent will be treated as an international application for a patent (UK), because every international application will be treated as having designated the UK on filing.
42. It will continue to be possible under both the EPC and PCT to withdraw the designation of a contracting state or region from an application at any time. Therefore, as at present, withdrawal of a designation will not change the fact that the country or region concerned was designated on filing. Withdrawing the UK designation at any time will therefore not stop a European or international patent application from being defined under the 1977 Act as an application for a European patent (UK) or an international application for a patent (UK) respectively. However, withdrawal of the UK designation will, as now, continue to have the effects set out in section 78 (for European applications) and section 89 (for international applications). Thus withdrawing the UK designation will mean that patent protection is not obtained in the UK.
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