About Alexander Esslinger

I am German and European patent attorney at Betten & Resch in Germany

CRISPR EP Update: Berkeley EP patent application close to grant

EPO by sporst

While the CRISPR-cas9 patent fight between the Broad Institute (“Team Zhang”) and the UC Berkeley (“Team Doudna”) in the US saw its first hearing at the USPTO´s Patent Trial and Appeal Board on December 5, the UC Berkeley has only a few days later received good news from the European Patent Office. An Office Action from December 8, 2016 indicated allowability of broad claims for its European patent application (publication number EP 2 800 811). Claim 1 reads as follows:

1. A method of modifying a target DNA, the method comprising contacting the target DNA with a complex comprising:

(a) a Cas9 polypeptide and
(b) a single-molecule DNA-targeting RNA comprising:
(i) a DNA-targeting segment comprising a nucleotide sequence that is complementary to a sequence in the target DNA, and
(ii) a protein-binding segment that interacts with said Cas9 polypeptide, wherein
the protein-binding segment comprises two complementary stretches of nucleotides that
hybridize to form a double stranded RNA (dsRNA) duplex,
wherein said two complementary stretches of nucleotides are covalently linked
by intervening nucleotides,
wherein said contacting is in vitro or in a cell ex vivo; and
wherein said modifying is cleavage of the target DNA.

A restriction to either eukaryotic or procaryotic cells seems not to be present. The contacting of the target DNA to be modyfied by the method, however, according to the claim has to take place in vitro or in a cell ex vivo. 

A notice of allowance from the EPO (communication under Rule 71(3) EPC) can be expected soon.


Disclaimer: Neither I myself nor the patent firm Betten & Resch, of which I am a partner, is involved in any patent cases relating to CRISPR-cas9 technology.

(picture by sporst)

New decision of the German Federal Patent Court: Payor bears the risk of missing deadline before the GPTO if GPTO does not use direct debiting mandate

Official headnote of the decision 7 W (pat) 29/15 of the 7th Senate (legal senate) of the GPTO dated May 12, 2016:

If a patent office fee is payed by a direct debiting mandate, the date of receipt of the mandate is according to § 2 No. 4 PatKostZV (Rules on payment of patent fees) regarded as the day of payment of the fee only if the mandated amount is withdrawn by the Federal Account on behalf of the Patent Office. According to this regulation the debtor alone bears the risk that, for whatever reasons, the amount is not withdrawn. This is true also if the amount has not been withdrawn because the Patent Office does not make use of the direct debiting mandate close to the due date. 

In the case to be decided by the court an opponent filed an opposition against a German patent on October 7, 2011, i.e. on the last day of the opposition period, and paid the statutory opposition fee of EUR 200 by means of a direct debit mandate. The GPTO, however, did not make use of the direct debit mandate, allegedly because it was not forwarded to the accounting office. Only after initiation of an insolvency procedure with respect to the opponent on November 25, 2011, which was communicated to the GPTO on December 6, 2011, did the GPTO accounting office take notice of the direct debiting mandate, but could no longer make use of it due to the insolvency. On December 20, 2011 (date of receipt) the opposition fee was paid to the GPTO by remittance with the authorization of the insolvency administrator.

The GPTO decided on June 25, 2015 that the opposition is deemed not having been filed due to failure to pay the opposition fee within the prescribed deadline.

The opponent appealed to the Federal Patent Court (FPC), which, however, rejected the appeal with the following reasoning:

According to the court, prereqisite of the “privileged” payment date of the receipt of the direct debit authorization is the actual withdrawal of the authorized amount by the GPTO. The withdrawal was no longer possible upon initiation of the insolvency proceedings on November 25, 2011. In the courtś view the fact that the GPTO had sufficient time to withdraw the money between October 7, 2011 and November 24, 2011 (i.e. about 7 weeks, whereas this procedure according to the statement of the GPTO typically takes about 2-3 weeks) does not change this general rule as long as by the delay general principles of the rule of law are not violated. The fact that the opponent is not responsible for these delays could only taken into account in abreinstatement procedure which, however, is not available in case of missing the opposition deadline. In addition, the court reasoned the opponent could use other possible payment methods avoiding this risk. The remittance received by the GPTO on December 20, 2011 was regarded as too late.

The Federal Patent Court allowed further appeal (Rechtsbeschwerde) to the Federal Court of Justice (FCJ).

Personal comment:

I hope that the opponent will lodge further appeal with the FCJ and that the decision will be revised upon appeal.

In my view, the decision unduely shifts the burden of the settlement risk of a payment of GPTO fees completely to parties of proceedings before the GPTO, be it opponents against a patent grant of a third party or patent applicants itself having to pay annuity fees or the like. This is true in particular for the formulation of the official headnote, which generalizes the individual case decided by the court to a general responsibility of parties before the GPTO using fee payment by direct debit authorization to bear the risk if any failure of the office to use the authorization to withdraw the fee.

Strict deadlines in patent proceedings serve the purpose of legal certainty for the involved parties as well as for the public, e.g. the public has a right to know whether a patent grant has been opposed to or not. Strict deadlines for fee payments can serve the same purpose as in the case of annuity fees, where the public needs to know whether or not a patent lapses or not. Payment of procedural fees as filing fees, opposition fees etc., however, are irrelevant for legal certainty but mainly serve the purpose of contributing to the procedural costs of the office.

Therefore it should be sufficient if the involved party of proceedings before the GPTO has timely and in accordance with the procedural rules initiated payment of the correct amount. Any delay caused by the office should not be to the disadvantage of the involved party. This should be particularly true in the decided case in which not a withdrawal attempt of the GPTO failed, because the GPTO never undertook such attempt, and the opponent has actualy made payment of the opposition fee after initiation of the insovolvency proceedings, albeit inevitably after expiry of the opposition deadline.

The reference of the FPC to other payment methods avoiding this risk is not helpful either. According to the rules on payment of patent fees there are in total four ways to pay fees to the GPTO (and the FPC):

1. Direct debit authorization (according to SEPA procedural rules). This payment method is the most popular one.

2. Remittance. The deadline is met only if the GPTO receives the money in time. The delay risk thus is also borne by the debtor.

3. Cash payment to the cashier of the GPTO.

4. Cash payment at a bank to the benefit of the corresponding Federal Account of the GPTO.

As the payment methods of direct debit authorization and remittance are unpredictable and thus not “save” to meet a GPTO or FPC deadline, the discussed decision and in particular the very gneral official headnote thus has the consequence that careful applicants and their patent attorneys have to pay patent fees (wish can be substantial for large applicants) using less “privileged” routes, namely to use cash only. This cannot be the intention of an important government agency in 2016 !

An innovative solution in addition to a reversal of the decision at the FCJ would instead be to allow payment in the cryptocurrency bitcoin, where a payment confirmation is received within about 60 minutes.


Amicus curiae brief in the case G1/15 of the Enlarged Board of Appeal of the EPO

I herewith publish my amicus curiae brief, which I filed on February 27, 2016 in the case G1/15 of the Enlarged Board of Appeal of the EPO relating to the issue of so-called “poisonous divisionals” under the EPC (photograph by sporst):  


This amicus curiae brief is submitted in accordance with Art. 10 of the Rules of Procedure of the Enlarged Board of Appeal providing observations on question 5 of the questions referred to the Enlarged Board of Appeal by the Technical Board of Appeal 3.3.06 in the case T 0557/13, pending as G1/15. The opinions expressed in the brief are my own and do not necessarily reflect the views of Betten & Resch or any of its clients.


The case G1/15 relates to the issue of self-collision between parent and divisional applications as mutual prior art documents under Art. 54(3) EPC, a situation which became notorious as “toxic divisional” or “poisonous divisional” problem. Surprisingly, this issue has come up for the first time only in September 2012 with the still singular Appeal Board decision T 1496/11, despite the large number of divisional applications pending or having been granted under the EPC since it coming into force in 1978.

The “toxic” situation occurs when of two related European patent applications EP1, EP2 (either parent or divisional) both claiming the same priority date P of an earlier application (either national or European) one application (e.g. EP1) comprises a patent claim containing a generalization with respect to the priority application such that the claim of EP1 as a whole cannot validly claim the priority date P of the earlier application and at the same time EP2 comprises a specific embodiment which can validly claim the priority date P. The specific embodiment of EP2 validly claiming priority P thus is novelty-destroying prior art under Art. 54(3) for the generalized claim of EP1 not enjoying priority P.

In the case T 1496/11 (referring decision T 0557/13, Reasons 15.1.7) claim 1 of the parent patent was directed to a security document including a security device which comprised a functionally defined “feature (10) which can be inspected, enhanced or optically varied by the optical lens when …“. The priority document disclosed only a “printed or embossed” feature for this purpose. The board concluded (Reasons, 2.1) that the claimed subject-matter had been generalized by omitting the more specific indication and thus encompassed security devices including features produced by other means. Hence, it did not constitute the same invention as that set out in the priority document (Article 87(1) EPC). Consequently, the subject-matter of claim 1 was found to be only entitled to the filing date of the parent application upon which the patent had been granted. The board went on to conclude that the subject-matter of claim 1 lacked novelty under Article 54(3) EPC over an embodiment disclosed in its published European divisional application. This embodiment was identically disclosed in the priority document and was hence entitled to the claimed priority date. Therefore it anticipated the subject-matter of claim 1 of the parent patent, which was not entitled to the priority.

As the situation that a priority application contains one or multiple specific embodiments and relatively narrow claims and a later European or PCT patent application has broader claims is rather common for users of the patent system due to continuous improvements of the claimed invention, the conclusion is obvious that poisonous parent or divisional applications “killing” their relatives are rather common and threaten a substantial number of European patents, in particular if national invalidity courts would follow T 1496/11 in applying Art. 54(3) EPC to parent/divisional applications.

One possibility to avoid this highly undesirable situation for patent owners is to entitle the generalized claim partial priorities such that those parts of the claimed scope which are disclosed in the priority document can enjoy its priority and the remainder of the claimed scope enjoys the priority of the filing date. The specific example enjoying the earlier priority date thus anticipates only those parts of the generalized claim which validly claims the same priority, thus not forming novelty-destroying prior art under Art. 54(3) EPC. Or, in the words used in the referring decision T 0557/13, a “generic OR-claim” encompassing alternative subject-matter by virtue of one or more generic expressions or otherwise may be entitled to partial priority. This solution to the toxic divisional problem is dealt with in questions 1 – 4 of G1/15. The present amicus curiae brief, however, focuses exclusively on the general question of whether or not parent and divisional applications can be mutual prior art under Art. 54(3) EPC at all, that is, question 5 of G1/15, which reads as follows:

5. If an affirmative answer is given to question 1, may subject-matter disclosed in a parent or divisional application of a European patent application be cited as state of the art under Article 54(3) EPC against subject-matter disclosed in the priority document and encompassed as an alternative in a generic “OR”-claim of the said European patent application or of the patent granted thereon?

In my view, question 5 should be answered independent from the answers to questions 1 – 4, and it should be answered in the negative. Both issues – partial priorities and the application of Art. 54(3) to parent/divisional applications – are very important as such, but not necessarily dependent on each other. Allowing partial priorities under the “conceptual approach“ suggested in T 1127/00 to distinguishing “a limited number of clearly defined subject-matters” as required by decision G2/98 is essential not only to establish novelty of an EP application having a generic “OR”-claim over a specific embodiment contained in its divisional or parent application, but also over such specific embodiment contained in its national or European priority application. The eligibility to partial priorities under the “conceptual approach“ is therefore to be affirmed. Conversely, the eligibility of divisional/parent applications or patents as prior art under Art. 54(3) EPC is a fundamental question of patent law under the EPC, which should be clarified by the Enlarged Board of the Appeal, also in order to serve as precedence for national invalidity courts in Europe.

2. Applying Art. 54(3) EPC to parent/divisional applications is inconsistent with the right to file divisional applications

According to Art. 76(1) EPC

(1)    A European divisional application shall be filed directly with the European Patent Office in accordance with the Implementing Regulations. It may be filed only in respect of subject-matter which does not extend beyond the content of the earlier application as filed; in so far as this requirement is complied with, the divisional application shall be deemed to have been filed on the date of filing of the earlier application and shall enjoy any right of priority.

This provision prescribes the right of the applicant of a European patent application to file a divisional application, which shall enjoy any right of priority of the parent application. Likewise, under Art. 4G of the Paris Convention

(1) If the examination reveals that an application for a patent contains more than one invention, the applicant may divide the application into a certain number of divisional applications and preserve as the date of each the date of the initial application and the benefit of the right of priority, if any.

(2) The applicant may also, on his own initiative, divide a patent application and preserve as the date of each divisional application the date of the initial application and the benefit of the right of priority, if any. Each country of the Union shall have the right to determine the conditions under which such division shall be authorized.

an applicant has the explicit right to a divisional application, either according to paragraph (1) in response to a non-unity objection of the patent examiner or according to paragraph (2) in his/her own right. The EPC constitutes, according to its preamble, a “special agreement within the meaning of Article 19 of the Paris Convention“. Hence, it shall not contravene the basic principles concerning priority laid down in the Paris Convention (Referring decision T 0557/13, Reasons 12.1; G 2/98, Reasons, 3).

It is very clear that a specific example or embodiment in the description of a European patent application cannot be cited as prior art under Art. 54(3) for a generalized claim (generic-OR-claim) in the very same application, even if the specific example can validly claim an earlier priority date as the generalized claim. Art. 76 (1) EPC as well as Art. 4G of the Paris Convention give the applicant the right to file a divisional application under the same conditions (same filing date, dame priority date) as the parent application. If the act of making use of this right through filing a divisional application retroactively creates prior art not present before and posing a high risk of invalidating not only the divisional but also the patent application, the applicant cannot properly enjoy this right to a divisional application but is at least partly deprived of the right to a patent for his/her invention disclosed to the public. The applicant should with respect to novelty over the prior art of the invention disclosed in the patent application not be in a worse position after filing the divisional application than before filing it. Applying Art. 54(3) EPC to parent/divisional applications is thus inconsistent with the right of the applicant to file divisional applications according to Art. 76 EPC as well as Art. 4G of the Paris Convention and therefore could in my view not have been the intention of the drafters of the EPC.

3. Applying Art. 54(3) EPC to parent/divisional applications is inconsistent with the purpose of Art. 54(3) EPC

Art. 54 EPC defines the prior art when assessing novelty and inventive step of European patent applications:

Article 54 EPC (Novelty)

(2) The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application.

(3) Additionally, the content of European patent applications as filed, the dates of filing of which are prior to the date referred to in paragraph 2 and which were published on or after that date, shall be considered as comprised in the state of the art.

It recites two types of prior art, namely prepublished prior art according to Art. 54(2) EPC and fictional prior art (“shall be considered as comprised in the state of the art”) according to Art. 54(3) EPC. The latter is only relevant for the establishment of novelty but irrelevant for judging inventive step (Art. 56 EPC).

From the wording of the provision (“the content of European patent applications”) it is not clear, whether or not parent or divisional applications of a European patent application under consideration should be regarded as part of that fictional prior art.

The purpose of Art. 54(3) EPC is to avoid double patenting, that is to ensure that only the first applicant filing an application directed to the same subject-matter will be granted a patent. This can be directly seen from the travaux préparatoires to both the EPC 1973 and the EPC 2000 (detailed discussion and references enclosed in the amicus curiae brief of Vossius & Partner dated November 17, 2015, pages 4 – 7):

The Chairman then summarized the discussion stressing that the basic idea was that only one patent could be granted for one invention.” (Travaux préparatoires to the EPC 1973, document 9081/IV/63-E-Final, page 69, fifth paragraph)

Article 54(3) EPC contains a legal fiction (…). The purpose of this provision is to include European prior rights into the state of the art in order to preclude double patenting.” (Travaux préparatoires to the EPC 2000, document CA/PL 17/99 e, page 1, items 1 to 2).

This was also confirmed by Enlarged Board of Appeal in its decisions G 1/03 (Reasons, 2.2.2) of April 8, 2004 and in G 2/98 (Reasons, 8.1) of May 31, 2001.

One should keep in mind, however, that with the formulation of Art. 54(3) EPC the “prior claim approach” to double patenting (which was e.g. applied in German patent law before the introduction of the EPC and the accompanying harmonization of substantive European patent law) was replaced by the “whole content approach”, which excludes from patent protection everything which was disclosed in an earlier filed, later published EP application. Therefore only the first inventor to file a patent application has the right to the patent to the disclosure in this application and later applicants are precluded from obtaining a patent therefor.

Applying Art. 54(3) to parent or divisional applications is contrary to the purpose of avoiding double patenting also according to the “whole content approach” for the following reasons:

(i) Double patenting in parent/divisional applications is handled in the examination proceedings at the EPO by refusing a divisional application if it claims the same subject-matter as a pending parent application or a granted parent patent, as confirmed by the Enlarged Board of Appeal in its decision G 1/05 (Reasons, 13.4):

“The Board accepts that the principle of prohibition of double patenting exists on the basis that an applicant has no legitimate interest in proceedings leading to the grant of a second patent for the same subject-matter if he already possesses one granted patent therefor. Therefore, the Enlarged Board finds nothing objectionable in the established practice of the EPO that amendments to a divisional application are objected to and refused when the amended divisional application claims the same subject-matter as a pending parent application or a granted parent patent.”

That is, to avoid double patenting between parent/divisional applications, the later examined application is refused based on the principle of avoiding double patenting applying the “prior claim approach”, but not through the application of Art. 54(3) EPC.

(ii) The effect of applying Art. 54(3) to parent/divisional applications does not serve the purpose of preventing double patenting. Four different cases can be distinguished:

(1)    The parent/divisional applications EP1, EP2 do not claim earlier priority dates such that the effective filing date of both applications is the actual filing date, which is by definition identical for both applications. They therefore cannot form prior art to each other under Art. 54(3) EPC, requiring an earlier date of one application, even if the claimed subject-matter is identical. In this case double patenting would be possible even when applying Art. 54(3) EPC to parent/divisional applications.

(2)    Both parent/divisional applications EP1, EP2 claim earlier priority date P. The claims of both applications are identical and both can validly claim priority P. Again, the applications cannot form prior art to each other under Art. 54(3) EPC, even though the claimed subject-matter is identical. Therefore double patenting likewise cannot be prevented by application of Art. 54(3) EPC to parent/divisional applications.

(3)    Both parent/divisional applications EP1, EP2 claim earlier priority date P. The claims of both applications are identical, but generalized with respect to priority application P such that both EP1 and EP2 cannot validly claim priority P but only the respective filing dates EP1 = EP2. Assuming that both applications EP1 and EP2 contain the same embodiment validly claiming priority P (the typical situation), then both applications form prior art to each other under Art. 54(3) EPC and none of it survives, even if the applicant would withdraw one of the applications after its publication. Again, not double patenting would be prevented by application of Art. 54(3) EPC, but both applications would be invalidated even if the applicant would itself avoid double protection by withdrawing one of the applications.

(4)    Both parent/divisional applications EP1, EP2 claim earlier priority date P. The claims of both applications are not identical, EP1 being generalized with respect to priority application P such that EP1 cannot validly claim priority P, but EP2 can. Then EP2 would form prior art under Art. 54(3) EPC with respect to EP1, but not vice versa. Therefore EP2 would survive, but not EP1. Thus, one application would be eliminated, but because the claims are different. The effect again is contrary to avoiding double patenting.

In conclusion, the application of Art. 54(3) to parent/divisional applications of the European patent application under consideration is in clear contradiction to the purpose of this provision to avoid double patenting.

4. Self-collision between parent and divisional applications in other jurisdictions

1) USA:

According to 35 U.S.C. § 102 (a) (2) an earlier filed and later published patent application (prior application) directed to the same invention is only to be regarded as prior art, if it names another inventor. Therefore, self-collision between parent and divisional applications is explicitly excluded (Report of the Tegernsee experts group: Treatment of conflicting applications; September 24, 2012, paragraphs 64 – 65, enclosed to this brief)

2) Japan:

According to Article 29-2 of the Japanese Patent Act an earlier filed and later published patent application (prior application) directed to the same invention (using the “whole content approach”) as the invention under consideration is regarded as novelty-destroying prior art with the explicit exceptions that the inventor or applicant (at the time of filing) are identical. Therefore, parent and divisional applications are excluded from the prior art effect of earlier filed and later published applications (Report of the Tegernsee experts group, paragraphs 39 – 48)

3) Germany:

The provision of § 3 (2) German Patent Act (PatG) is worded as Art. 54(3) EPC, thus leaving it open whether or not parent/divisional applications can form novelty-destroying prior art. There are to date no FCJ decisions in which divisional applications have been cited as prior art for parent applications/patents or vice versa. According to § 39 German Patent Act (PatG) the division of a pending patent application into a parent application and a divisional application (the latter pending at the same stage of the procedure as the parent application) is regarded primarily as a procedural act dividing one application procedure into two separate procedures (“Schulte”, PatG, 9th edition, § 39, No. 10 – 13). § 39 (3) German Patent Act also speaks of a “declaration of division”, indicating the focus on the procedural aspect of a divisional application.

This focus on the procedural aspect gives rise to the following considerations: As in all jurisdictions, in German (as in European) patent law a specific example or embodiment in the description of a patent application cannot be cited as prior art for a generalized claim (generic-OR-claim) in the very same application, even if the specific example can validly claim an earlier priority date and the generalized claim cannot. If the filing of a divisional application is mainly a procedural act dividing one application procedure into two separate procedures, the declaration of division should not change the prior art status of the content of the original (combined) patent application. It would be a surprising result at least that new prior art should be created retroactively by the act of dividing one application procedure into two procedures. Based on these considerations, parent and divisional applications should not be regarded as prior art with respect to each other under German Patent Act.

5. Conclusion

In summary, parent and divisional applications should not be regarded as prior art under Art. 54(3) EPC to each other, independent from the practice of entitlement to partial priorities.

Applying Art. 54(3) EPC to parent and divisional applications of the patent application under consideration is not consistent with the purpose of Art. 4 G of the Paris Convention and Art. 76(1) EPC giving the applicant the right to divisional applications. If this right carries the risk that the parent application is invalidated by the divisional application or vice versa, the provisions are not appropriate and sufficient to provide the applicant this right.

Applying Art. 54(3) EPC to parent and divisional applications is also not consistent with the purpose of Art. 54(3), i.e. to avoid double patenting in the sense that only the first inventor to disclose an invention has the right to the patent.

As the intensive discussion about “poisonous” or “toxic” divisionals has shown, the application of Art. 54(3) EPC to parent and divisional applications exposes applicants and patentees under the EPC to a considerable invalidity risk. Conversely, no purpose or positive effect thereof can be recognized. Question 5 of the referral should therefore be answered in the negative.

Alexander Esslinger

Enclosure:    Report of the Tegernsee experts group: Treatment of conflicting applications; September 24, 2012

The Bass-Spangenberg patent validity attacks: A new patent monetization model. Soon to be expected in Europe under the UPC ?

The activities of non-practicing entities (NPE´s; by some referred to as “patent trolls”) trying to make money by acquiring and enforcing patents against third parties are still very controversially discussed in the US as well as in Europe. Taking up criticism that NPE´s would threaten innocent operating companies with enforcement of allegedly invalid patents, in early 2015, well-known hedge-fund manager Kylie Bass together with IP expert Erich Spangenberg devised a new patent-monetization strategy based not on patent enforcement but on challenging the validity of essential patents of target companies in the pharmaceutical area. Putting into place an aptly named “Coalition for affordable drugs” (CFAD), they targeted high-priced patented drugs. The strategy is to look for publicly traded pharmaceutical companies the value of which is substantially dependent on a low number of patents which, based on a first analysis, have questionable validity. Then they challenge the validity of these patents by way of the newly introduced, allegedly fast and low-cost (compared to a full patent trial in the US) inter partes review (IPR) process at the Patent Trial and Appeal Board (PTAB) of the USPTO, which had quickly gained a reputation of high invalidation rates. To make sure that – besides the effect of reduced prices for the patented drugs in case of success – the fund investors receive a return on investment, Bass and Spangenberg short-sell stock of the targeted pharmaceutical companies. In case the attacks on the validity of the patent(s) of such company create considerable uncertainty in the financial markets, this results in falling stock prices and thus profits for the investors. How successful the strategy turns out to be in the courtroom cannot yet be judged, since the 30 initiated IPR proceedings (by 18 December 2015) all started only in 2015 and are still pending, but it certainly was big news in the US IP monetization community. The pharmaceutical industry understandably is less enthusiastic.

There is already speculation to extend this patent monetization strategy to companies outside the pharmaceutical industry. A company qualifies as a potential target for a Bass-Spangenberg attack if the following requirements are fulfilled:

  • The company is publicly traded and is large enough that a liquid market of its stock exists
  • The validity of one or a small number of patents has large impact on the overall (future) profits of the company and therefore its share price
  • The validity of these patents is questionable

The second requirement apparently rules out most companies in the telecoms area, as the validity of a single patent has not much effect because products and services in these technologies typically use hundreds or thousands of patents. Sadly, innovative enterprises heavily relying on a single or a small number of patented products are particularly vulnerable.

One precondition for this strategy was the novel availability of a relatively fast and low-cost stand-alone (i.e. independent of an infringement lawsuit) inter-partes procedure to challenge the validity of a granted patent. Such proceedings, however, are long established in Germany as well Europe-wide in the form of opposition or nullity proceedings. Thus, the strategy should in principle work on this side of the Atlantic, too. While the German market alone may be too small to sufficiently affect the share price of generally globally acting pharmaceutical company, a patent loss with effect for Europe as a whole should be sufficient to have a visible effect on share prices. Opposition procedures have the disadvantage of the strict nine-month deadline after publication of patent grant such that patents in later stages (which often are the more profitable ones) can only be attacked in various national courts.

Here the UPC may provide a new opportunity to patent validity challenge investors. The validity of European patents, which have not been opted out of the UPC, can be attacked in with single action before the central division of the Unified Patent Court. The court practice and the invalidation statistics are of course not yet known. But at least there could a great potential for creating uncertainty, which alone can drive down share prices. Such uncertainty is only reinforced by the considerable publicity to be expected for earlier important cases under the new UPC.

Companies considering itself possible targets of such central invalidity attacks could avoid these by making sure to opt-out from the UPC its essential patent rights from the first day the UPC enters into force, since after an invalidation action has been launched against a patent, opting out this patent is no longer possible. In order to make sure that the opting out takes effect right with the UPC coming into force a so-called “sunrise period” has been introduced, allowing patentees to file requests for opt-out before the start of the UPC, having effect on its first day of operation.

CRISPR Update: 9 Oppositions filed against first granted European CRISPR-Cas9 patent

The revolutionary CRISPR-Cas9 gene editing method is presently the hottest issue in molecular biology. The scientists Jennifer Doudna of UC Berkely, Emmanuelle Charpentier of the Max-Planck Institute for Infection Biology in Berlin and Feng Zhang of the Broad Institute (jointly operated by the MIT and Harvard University) are regarded as pioneers in this field and areeach involved in start-up companies commercializing the new technology.

In parallel a dispute about who owns the IP related to this scientific breakthrough has evolved. Interference proceedings are pending before the USPTO to decide ownership of the technology.

Meanwhile Mr. Zhang and the Broad Institute obtained four granted patents in Europe by means of an ultra-fast prosecution procedure between February 11 and September 2, 2015. The 9-months opposition period against the first grated patent EP 2 771 468 expired on November 11 and nine oppositions have been filed (according to the EPO patent register on November 13, 2015). The opponents are:

  1. CRISPR Therapeutics AG
  2. Novozymes A/S
  3. Boxall Intellectual Property Management Ltd.
  4. Sarittarius Intellectual Property
  5. Regimbeau
  6. Mr. George Schlich
  7. Dr. Martin Grund
  8. Mr. Harvey Adams
  9. Dr. Ulrich Storz

The first opponent in the list is the company co-founded by Emanuelle Charpentier for commercializing the gene editing technology, opponent 2 is a Danish biotech company, opponents 3 to 5 are IP law firms and opponents 6 to 9 are patent attorneys from the UK or Germany. It is not unlikely that opponents 3 to 9 are so-called “strawman opponents”, i.e. acting for a different party wishing not to be named in the proceedings. Such strawman oppositions are explicitly allowed under EPO case law and are quite common if the “real opponent” e.g. wishes not to endanger ongoing cooperation with the patentee.

Despite much interest of the biotech community in the case, a first instance decision of the opposition division cannot be expected earlier than in about two years, in particular in view of the huge amount of evidence filed by the opponents.

Apple´s “Slide to unlock”-patent finally invalidated as being obvious by the German Federal Court of Justice (FCJ)


Official Headnotes:

a) For the examination of inventive step instructions relating to the presentation of a particular content and thus aiming to influence human imagination or comprehension are not taken into account as such. Instructions relating to information to be reproduced according to the teaching of the invention can support patentability in relation to inventive step only in so far as they determine or at least influence the solution of a technical problem with technical means.  

b) Claim elements relating to information have to be examined as to whether the information to be presented at the same time forms an embodiment of technical means – not already recited elsewhere the claim – for solving a problem. In such case the technical means for solving a problem have to be taken into account for the examination of patentability. 

Apple´s well-known and  internationally litigated “Slide-to-unlock” patent – being part of the original iphone patents – has been invalidated in first instance nullity proceedings by the Federal Patentn Court. The patentee appealed to the Federal Court of Justice, which on 25 August 2015 rejected the appeal and finally confirmed the invalidation decision of the Federal Patent Court. The grounds for the decision have been published on the FCJ website only now.

Representative method claim 1 reads as follows:

1.A computer-implemented method of controlling a portable electronic device comprising a touch-sensitive display comprising:
detecting contact with the touch-sensitive display while the device is in a user-interface lock state;
transitioning the device to a user-interfae unlock state if the detected contact corresponds to a predefined gesture; and
maintaining the device in the user-interface lock state if the detected contact does not correspond to the predefined gesture;
characterized by
moving an unlock image along a predefined displayed path on the touch sensitive display in accordance with the contact, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device.

In the proceedings a written description “N1 Quick Start Guide, Version 0.5” relating to a prior art mobile phone “Neonode N1” formed the closest prior art reference E14. It describes a mobile phone having a touch-sensitive display displaying upon actuating a power button the information “Right sweep tp unlock”. Thereupon the user can unlock the device using a corresponding finger movement (gesture). An unlock image, however, is not displayed. Upon failure to unlock the phone an invitation to retry is instead displayed. The distinguishing features over closest prior art reference E14 therefore were found to be:

(5.1) Moving an unlock image

(5.2) along a predefined displayed path on the touch sensitive display

(5.3) in accordance with the contact,

(5.4) wherein the unlock image is a graphical, interactive user-interface object

(5.5) with which a user interacts in order to unlock the device.

In its first instance decision the Federal Patent Court found that all claim elements (5.1) to (5.5) would relate only to the presentation of information directed to the user and would not influence the technical functioning of the device and consequently had to be ignored for the assessment of inventive step.

The FCJ expressly disagreed with this finding. According the the FCJ the technical problem solved by the invention over the prior art is to provide a more user-friendly unlocking procedure. This technicla problem is solved by the combination of above features (5.1) to (5.5) solving the technical problem of improving user operation reliability by the technical means of optically signalling the unlock path to the user.

The court, however, held that features (5.4) and (5.5) do not add any technical matter to features (5.1) to (5.3) which would contribute further to the solution of the technical problem of improving operation relaibility of the unlock procedure and were therefore ignored by the court for the examination of inventive step. Features (5.1) to (5.3) were meanwhile regarded by the court as obvious in view of further reference E7, a video presented at a conference in 1992 showing several virtual operation keys on a touch sensitive display, among them a virtual slider toggle providing the function of the unlocking mechanism according to the patent in suit (“The user can then grab the pointer and slide it to the other side”), albeit not in connection with a mobile phone. The court, however, took the view that the skilled person would nevertheless apply the refined virtual key functionality disclosed in E7 to the gesture-controlled unlock procedure of the mobile phone with touch sensitive display according to E14, thus rendering the claim obvious of a combination of references E 14 and E7. This judgement equally applied to the amended claims of the several auxiliary requests on file.

While the judgement resulted in the loss of the patent of Apple, it is in general good news for inventors striving to improve user interfaces. Patent applications in this field are frequently rejected as being related to the presentation of information which allegedly had to be ignored when assessing inventive step. The FCJ clearly disapproves such practice stating (at the end of paragraph 18 of the judgement): “It would not be justified not to include the technical effects of the presentation of information for the examination of inventive step, because they are claimed in the patent claim merely in the form of presentation of a particular information.”

Multiple patentees have to pay separate appeal fees for joint appeal: Decision “Set of building bricks” by the German Federal Court of Justice (FCJ)

Official Headnotes:

a) If multiple patentees file an appeal against the decision of the German Patent and Trademark Office (GPTO) in opposition proceedings, each one has to pay an appeal fee (Law on Patent Fees No. 401 100). 

b) If for an appeal lodged by multiple participants only one appeal fee has been paid, it has to be examined whether the paid fee can be assigned to one appellant. 

In the decided case “Set of building bricks” an opposition was filed against the patentin suit which was jointly owned by two patentees. The opposition was successful and the patent was revoked by the patent department of the GPTO. The two patentees jointly filed an appeal against the revokation decision but paid only one fee. The Federal Patent Court dismissed the appeal as inadmissible on the ground that the one appeal fee paid cannot be assigned to one of the two joint appellants and therefore none has paid the necessary fees.

The joint patentees lodged a further appeal for legal review (“Rechtsbeschwerde”) with the FCJ and were successful. The FCJ confirmed the first instance decision that the two patentees had to pay two appeal fees for their joint appeal, but that in order to avoid hardship a single appeal fee is to be assigned to one of multiple appellants whenever possible. The was done by the FCJ based on the name of the first appellant on the money transfer form filed with the Federal Patent Court. Consequently the case was remitted back to the Federal Patent Court for decision on the merits.

This deision is important for all applicants before the GPTO because the FCJ made it clear that joint right holders (not only of patents, but also of utility models, trade marks and designs) have to pay separate fees for appeals and similar legal remedies explicitly enumerated in the Law on Patent Fees. The FCJ confirmed that the regulations in the Law on Patent Fees do not distinguish between right holders and opponents or other third parties. Under this reasoning seperate appeal fees for joint appeals therefore have to be paid not only in contradictory proceedings like oppositions but also in the most common appeal procedure, namely an appeal against the rejection of a patent application by the GPTO.

The ruling is in contradiction to hitherto common practice at the GPTO and the Federal Pastent Court requiring the payment of only one appeal fee for a joint appeal of multiple patentees. It is also contrary to the law and practice at the EPO and that in patent nullity proceedings.

Will the CRISPR patent dispute continue before the EPO ?

WO2013176772-Fig. 2

The revolutionary CRISPR-Cas9 gene editing method is presently the hottest issue in molecular biology. The scientists Jennifer Doudna of UC Berkely and Emmanuelle Charpentier of the Max-Planck Institute for Infection Biology in Berlin even are among the top contenders for the Nobel prize for Chemistry to be announced on Wednesdy, October 7. But there is also a dispute about who owns the IP related to this scientific breakthrough. A third scientist, namely Feng Zhang of the Broad Institute (jointly operated by the MIT and Harvard University) has built up a strong patent position and achieved the first patent grant for CRISPR technology in the US already in April 2014. The original patent application by Doudna and Charpentier (and from which the above illustration of the DNA editing is taken) is still pending (on October 5, 2015) before the USPTO and the EPO. In April 2015 the University of California has meawhile initiated interference proceedings before the USPTO to decide ownership of the technology.

A review of the EPO register now reveals that the agggressive patent stategy of the Broad Institute and Mr. Zhang was even more successful in Europe. By means of an ultra-fast prosecution procedure the grant of 4 patents was achieved between February 11 and September 2, 2015. Further applications are still pending. The patents were issued by the EPO even with knowledge of the original publications of Doudna and Charpentier, which predate the priority dates of the Zhang patents and have been submitted to the EPO files by anonymous third-party observations.

It is therefore not unlikely that a further main battleground of the IP dispute on who owns the CRISPR-Cas9 technology will soon be the EPO, where opposition proceedings against the 4 granted patents are likely and the legal rules for determining ownership on an invention differ from that in the US.

Let´s see how the Nobel committe will decide on Wednesday this week. It will then be interesting to observe if a Nobel prize for CRISPR-Cas9 in 2015 or one of the following years will influence the outcome of the legal dispute.

Patenting mathematical methods: Decision “Airplane attitude” by the German Federal Court of Justice (FCJ)

Official Headnotes:

a) Mathematical methods are patentable according to § 13 (3) No. 1 Patent Act only if they serve the solution of a concrete technical problem with technical means.

b) A mathematical method can be regarded as being non-technical only if it has in connection with the claimed teaching no relation to the purposeful utilization of forces of nature.

c) A sufficient relation to the purposeful utilization of forces of nature is present if a mathematical method is used for the purpose to obtain – based on the available measurement data – a more reliable knowledge about the attitude of an airplane and thereby to influence the functioning of the system for detection of this attitude.

d) Subject matter which is new and based on an inventive step cannot be regarded as not patentable solely on the ground that it does not provide a recognizable advantage compared to the prior art.

The invention: The patent application in question (DE 10 2007 002 672) relates to a method for the detection of the attitude of an airplane, namely its position, speed and orientation. For this purpose it was known to use a so-called Kalman filter which calculates based on a plurality of measurement data obtained by e.g. an inertial navigation system an estimation value of the physical quantities, e.g. the location and orientation of the plane. The processing speed of the Kalman filter depends on the amount of data to be processed such that real-time position determination was not possible with Kalman filtering based on the raw measurement data. From the closest prior art reference it was known to therefore feed the Kalman filter with averaged data instead of the raw data such as to reduce the processing burden and processing time of the filtering procedure.

It was therefore the technical problem of the invention to provide an alternative attitude determination method which allows a reliable and fast attitude detection of the plane.

According to the invention this problem is solved by a particular averaging preprocessing: The raw data, which are represented as points in a k-dimensional space of the measurement parameters, are replaced by the center point vector and the radius of a k-dimensional sphere having a minimal radius and including all measurement points. The difference between the method according to the invention and that of the closest pior art is therfore only the mathematical method of avaraging the raw data before feeding them to the Kalman filter, or expressed differently, the averaging algorithm.

Upon refusal of the application by the patent office, the applicant appealed to the Federal Patent Court. The 17th Senate – known for its rather critical stance toward software-implemented inventions – rejected the application on the ground that the distinguishing features would be based on non-technical considerations in the filed of data representation and statistics.

The decision: In its decision X ZB 1/15 of 30 June 2015 the FCJ reversed the lower instance decision and allowed the patent application. According to the ruling, an invention which distinguishes over the prior art only by its mathematical method is patentable if the mathematical method is new and non-obvious over the prior art and serves the solution of a concrete technical problem (determination of the state of an airplane based on measurement data) with technical means (sensors, data processing means). In this respect it is not necessary that the found mathematical solution of the technical problem has a technical advantage over the prior art. It is sufficient to provide an alternative mathematical solution as long as this is not rendered obvious by the prior art.

In short, an invention distinguished over the prior art by a new and non-obvious algorithm is patentable if the the algorithm is used for a concrete technical purpose, thereby relating to the use of forces of nature. 

It is thus quite clear that the FCJ would not have accepted the patent application in its original wording, related to a mathematical method for the determination of the state of a (not further defined) object. Only the restriction of the method to the attitude determination of an airplane provides the required concrete technical application. Would the application also be allowed if the claims were directed not to the attitude determination of a real airplane but one simulated on a computer ? My guess is yes, it would, as in accordance with the rationale expressed by headnote c) of the decision a more reliable knowledge about the attitude of an airplane and thereby influence on the functioning of the attitude detection system (thus the relation to the purposeful use of forces of nature) is obtained also by performing the method of the invention on a flight simulator.

Why patents are still needed: A response to the title story “Set innovation free!” published by the Economist on 8 August 2015

The Economist published in this week´s issue (8 August 2015; http://t.co/vooavJq1np)  a cover story consisting of an editorial and a more detailed article challenging the effectiveness of the patent system to achieve its purpose, namely to foster innovation. As reasons for this failure the newspaper cites the abuse of the system by so-called “patent trolls” threatening businesses with lawsuits based on dubious patents and the alleged skills of patent lawyers to obscure rather than to disclose to the public the inventions protected by the respective patents.

As empiric evidence in favour or against the effictiveness of patents is notoriously hard to come by, the Economist concludes: “But a top-to-bottom re-examination of whether patents and other forms of intellectual-property protection actually do their job, and even whether they deserve to exist, is long overdue.” In the meantime the Economist suggests to reduce patent lifetimes, in particular in fast-moving technical areas as computer technology, and to run experiments with other forms of financing innovation alongside the patent system. While the former would deprive of protection inventors being ahead of their time such that their inventions become commercially relevant only towards the end of a patent´s 20-year lifetime, the latter suggestion surely sounds like a good idea. Governments could increase funding for reasearch (e.g. into drugs against rare diseases, which are not profitable for pharmaceutical companies) and publish the results without filing a patent application, thus handing over the publicly financed innovation to the public domain. This, however, can be done without any change of the current patent system.

In the discussion of the pros and cons of patents, however, I always and in this article in particular miss one point, namely the capability of patents to transform innovation into a defined, tradable asset.

Patent attorneys do the work of dissecting innovation into defined, manageable pieces and the examiners at the patent offices do the work of verifying whether or not a claimed invention is really new and non-obvious. Without patents, innovation can come only in two forms, either being published and thus part of the public domain and no longer a tradable asset, or kept secret by the innovator. A transaction to sell such kept-secret innovation would be enormously complex as the work to define the parts of the innovation/new technology being subject to the transaction and the work to value it would have to be done from scratch by the transaction parties thermselves, and without the help of patent databases. The information asymmetry between the innovator and potential technology seller keeping the secret about the (allegedly) newly developed technology and the potential technology buyer having no such knowledge would complicate things further.

Without patents, innovation would thus be a largely illiquid asset. For the economy as a whole the costs of the illiquidity of new technology as an asset would in my view by far outweigh the costs associated with patent lawsuits, in which only a tiny proportion of all granted patents are involved. I had expected that in particular the Economist, an outspoken supporter of free trade, would have taken into account this vital role of the patent system.