The Less – The Better
Foreword
In expanding on the reflections on the topic: "Is the utility model beneficial?", the author of the publication is offering several theses calling for comprehension and further refinement. The variety of issues suggested for consideration is big. One of them is refining the system of utility model protection by conducting information retrieval for the filed utility model and publishing the results of this retrieval to inform third parties.
At first sight, such a proposal is beneficial for both the inventor and applicant, though it places a burden on the Patent Office. However, public interest has an edge over group interests and, the more so, over the private interests of individuals. And, if the public is responding positively to such proposals on protection of intellectual property rights, this means that its high time for such innovations.
Stogniy Ye.S., Patent attorney of Ukraine, Ukraine
Best things come in small packages
Big – but bad
- Country lore
Fast creation of a patent portfolio for enterprises is a topical and essential issue, especially for new and developing companies, as well as for those who are launching new products to the market and those who, owing to different circumstances, have lost their patent assets, e.g., because of an economic crisis, political situations, judicial proceedings, and so forth. Hence, to build a patent portfolio fast and without involving big material cost, enterprise managers often resort to filing utility model applications instead of utility invention ones. The advantages of filing utility model application are obvious. First, this implies a prompt procedure of application examination by the Patent Office. For instance, the term of processing a utility model application starting from its filing and through to its registration with the Patent Office of Ukraine is merely 10 months. The main reasons of the low cost of patenting a utility are that there is no need in a patent search and a substantive examination by the Patent Office examiners. Hence, the utility model institution enables applicants to build their patent portfolio in short time.
An advantage of a utility model, as compared to an invention, is that a utility model has a lesser chance that its patent will be found invalid than that of the case of an invention patent. This is because utility models during judicial proceedings are examined for two patentability criteria: novelty and industrial applicability, whereas inventions are examined for three criteria: novelty, inventive step and industrial applicability. At the same time, notwithstanding that the applicant has an invention patent, for which a patent search and a substantive examination were conducted (with payment of all requisite patent fees), judicial proceedings can challenge the compliance of the registered invention patent to patentability criteria. Most likely, the judicial proceedings will order, at least, one legal enquiry whose findings can differ completely from those of the Patent Office examiner, implying that the invention patent can be found invalid. This begs the legitimate and expected question – why pay more? Would it not be more practical to save on patenting one's technical solutions by filing a utility model application because, in any case, during judicial proceedings it is necessary to hold legal enquiries and bear associated financial expenditures? Therefore, no wonder a utility model patent has become more attractive for enterprises in the short term as compared to an invention patent.
On the practice and strategy of parallel applications
Usually, countries providing for filing utility model applications allow for parallel filing of invention and utility model applications for the same technical solution. Hence, enterprises can implement their patenting strategy using the "Invention – utility model" tandem when an enterprise files simultaneously, at least, two applications for the same technical solution, for instance, one application for an invention and another one for a utility model. Before long, the enterprise is granted a utility model patent, and in some time, an invention patent. Thereat, in some countries, for instance, in the Russian Federation the patent legislation envisages that, prior to receiving a decision on being granted an invention patent, the applicant-patent holder has to abandon a utility model patent granted for an identical technical solution. Supposedly, everything is so simple and one needs not search for a black cat in a dark room, especially if it is not there! However, the practice of tandem filing has its drawbacks. Thus, by filing one application with several independent claims (covering a group of inventions), the applicant must file one invention application and, at the same time, several utility model applications because the patent legislation of Ukraine does not provide for registering a utility model patent with several independent claims.
At the same time, filing an application for a group of utility models would offer more options for protecting technical solutions prevailing when new technological items are being developed. As it is known, when filing a primary application, its priority is established on the date of its registration with the Patent Office. In case of filing independent applications, the filing dates of utility model applications making up a group can be different. This will create problems with observing the novelty criterion among applications of the same group of utility models of the same applicant. If a group of utility models is filed as one application, the priority date is established by this primary application, and the applicant shall have the right to subsequently divide (if needed) out of it a separate utility model.
The objective of filing an application for a group of utility models can be to block a market segment for a new product manufactured by the applicant enterprise. In this case, the primary application for a group of utility models can be used for establishing a priority and for subsequent filing of applications in other countries.
Filing an application for a group of utility models will reduce the cost of processing the application. Being granted one patent for a group of utility models will cut applicant's expenditures by several fold, and will save the patent holder's finances for paying annual fees to maintain a patent. At the same time, being granted one patent for a group of utility models is equivalent legally to issuing separate patents for each utility model.
However, some applicants cannot use the above-mentioned advantages of utility models to successfully create their patent portfolio because not all technical solutions are patentable as utility models. For instance, the patent legislation of the RF does not provide for registering utility models for methods and products-substances. Hence, applicants, both residents and non-residents, cannot readily build their patent portfolios in industries with prevailing applications for methods (e.g., methods of steel casting or baking bread, and so forth) and substances (in chemistry, pharmaceuticals, etc.), and are a priori in a disadvantageous position.
At the same time, the practice of parallel filing of applications, on the one hand, results in a steady growth of the number of registered patents for intellectual property, and on the other hand, in an unjustified growth of the body of patent documents in patent databases of patent offices with duplicate technical solutions, which were filed as utility models. This, in turn, complicates the use of patent databases and patent searches by both patent office examiners and the general public. The strategy of parallel (tandem) applications, as mentioned earlier, means that only one technical solution with several variants of realisation in one patent office can be expressed through a host of patent documents based on one inventive conception. Many can argue that roses come with thorns and that applicants knowingly go for extra expenses at one's own discretion, and that an additional filing of utility models is beneficial for both the applicant and the public. One can agree with this, but more closer scrutiny of the strategy of parallel filing of applications reveals its deficiencies like spots on the sun.
For instance, when concluding license agreements, misunderstanding and tension can arise between parties because the licensee will believe that the licensor is artificially overvaluating the license agreement by increasing the number of patents, which are the subject of the license. There are cases when, owing to the big number of licensor's valid patents, the license agreement does not include all the patents, which, in the licensee's opinion, should be included in the agreed license price.
Note additionally that, when implementing the strategy of tandem (parallel) filing, issues and confusions arise in connection with the financial rewards of the authors interested in a maximum reward, and with blowing things out of proportion.
The applicant's implementation of the concept of parallel filing of applications, for instance, can encounter a situation when the examiner of the Patent Office of the RF, in preparing a decision on granting an invention patient, will inform the applicant that first he has to abandon a utility model registered in his name, which is equivalent to the invention being filed. Hence, the applicant is unobtrusively made to abandon a prior utility model patent. In this case, we are not talking a compensation, in spite of the fact that, abandoning a utility model patent, even in favour of registering an invention, can bring about a line of challenging legal consequences, for instance, if the applicant has included the registered solution in the Articles of Association of a company or has pledged it to receive a loan, or has concluded a license agreement, and so forth. Additional re-execution of a license agreement means lost time for the applicant, holding consultations with one's investors and creditors who, with such abandonment of a utility model, can spot what nobody knows and what is not in favour of the applicant-patent holder. Likewise, there are cases when the applicant, in resorting to the strategy of parallel filing of applications, at the time of receiving a decision on issuance of an invention patent, has already assigned or sold one's utility model patent to third parties. Such practice often embroils the patenting process and presents significant vagueness.
A special case has to be emphasised, namely: the receiving and the existence of parallel patents for the same technical solution, which fails to meet patentability criteria, and is the result of receiving utility model patents under the responsibility of the applicant. Such actions of certain unscrupulous applicants results in patenting the so-called "paper dragon", i.e. creating an illusion of patent protection whose essence is reduced to abuse of law. Opposing a patent for such a "paper dragon" can be challenging because both the public and the defendant reckon that if examining at least one patented invention is costly, then the examination of a host of utility model patents is a yet more costly and involved process. The applicants of "paper dragons" usually go by the premise of prevalence of capital and strongly believe that, owing to the hand-made "paper dragon" and availability of funds, one can always maintain an energy-sapping siege of a competitor and wear down his resistance in the marathon race of judicial proceedings, and gain a victory over the competitor and the public who will cede ground and declare their surrender.
Based on the above-stated, one can draw a conclusion that the practice of parallel filing of applications for inventions and utility models is a crushing burden for the applicant, patent office and public (competitors, creditors, investors and stock holders) and, essentially, discourages technical advancement, and yet more, unduly clutters patent databases and complicates patent searches. All this increases the workload of patent office examiners, and in some cases, can be an element of speculative manifestations and a misunderstanding of the essence of the problem. For instance, one technical solution yields a host of patents with one common basis, which will be dressed up so that the company's shareholders, investors and creditors will believe that this is indicative of a good positive trend in the company's intellectual growth and development; however, in fact, the company has especially, like a peacock, unfurled its feathers to gain extra advantage from this.
Other, more effective methods of creating the patent portfolios of applicants-patent holders must be developed, which would meet the public interest. First, one must bear in mind that the state should promote innovation and encourage inventors to maintain technological advancement, which cannot be attained by parallel patenting of the same technical solutions (which, in principle, contradicts the primary principle of patenting), though statistical data on using parallel applications, of which the patent office informs regularly, is showing better figures, and patenting activity is allegedly on the rise.
Note also that the increasing number of filed utility model applications with issuance of utility model patents under applicant's responsibility precludes the public (competitors, investors and the patent holder himself) to assess in full the significance of the utility model and the practicality of its further use in civil transactions. The applicant, in filing a utility model application, is aware that, in spite of the patent search he has conducted, he was governed by a merely subjective assessment of its novelty. In so doing, it is not improbable that this subjective evaluation can be far from the actual state of things.
Utility model with a patent search?
This paper considers issues related to developing and refining the strategy of tandem (parallel) filing of applications for inventions and utility models from the viewpoint of optimising the protection of patent rights of both the applicant-patent holder and the public as a whole. At the same time, the paper also considers suggestions enabling the public and interested persons to be up to speed and receive information on activities in seizing market segments by using the parallel filing strategy. Besides, the paper offers proposals on improving the effectiveness of using utility models in civil transactions.
The proposal is to introduce a legislative norm allowing to include in one application a group of technical solutions united by one inventor's conception (i.e., a utility model can have several independent claims) when filing a utility model application. If a utility model application is filed and it has one independent claim, the applicant shall have the right to request a patent search with a report, provided a search fee has been paid. The presence of a patent search enables the applicant to receive additional information, which can help make a final decision on registration or refusal of registration of a utility model patent. This will determine the future fate of the claimed technical solution.
In filing an application for a utility model containing several independent claims, the applicant is obliged to request a patent search with a report, and pay an appropriate fee for this. Note that the obligation to request a patent search is a forced measure to counteract abuse by applicants as regards the public. Since there are apprehensions that, when filing utility model applications (for a group of technical solutions) without a patent search, applicants that resort to tandem filing or, more precisely, to misusing it will yet more entangle the public and interested persons with their patent webs. This can lead to an outright filing of utility model applications with several independent claims. Due to this, it will be challenging to make sense of the legal issues in monopoly rights, with which the applicant has hedged both himself and the public.
Let us consider in more detail the preparation of the abnove-mentioned patent search report. In six months from the date of filing a utility model application, the patent office examiner checks the compliance of submitted materials to legislative requirements and prepares an examiner's opinion. The patent fees shall not depend on the number of independent claims of the utility model, as is the case with the report on the search conducted by an International Search Authority to the РСТ procedure.
Having familiarised oneself with the search report, the applicant determines the practicality of further payment of patent fees for registering a utility model. If the applicant, having received a prepared patent search report, decides to make revisions, amendments and refinements to the utility model application materials, including the utility model claims, he shall pay an additional patent fee for such revisions, amendments and refinements. The examiner, having received these materials, analyses the presented revisions, amendments and refinements, and defines whether they extend beyond the scope of the initially submitted utility model application materials. Next, he analyses the application claims and specification, and compiles an additional patent search report to be sent to the applicant. In so doing, the examiner can rely on the initial results of the patent search and the closest technical solutions found. If the examiner disagrees with the submitted revisions, amendments and refinements in the utility model claims, he shall inform the applicant thereof. If the applicant agrees with the opinion and proposals of the examiner, no additional patent fees are paid. In this case, the understanding is that deleting claims requires no payment of additional patent fees by the applicant in connection with making revisions, amendments and refinements. Having paid the patent fees for registering a utility model patent, its specification is appended with the patent search report published in the patent bulletin. Hence, the bulletin contains references to utility model patents published without a patent search report and those published with such a report.
Clearly, such a proposal will reduce the number of filed parallel patents for utility models, and will increase the share of creative activities of patent office examiners related to conducting a patent search and preparing the report. Arguably, this will lead to a better quality of utility model patents filed by applicants.
Obviously, preparing and publishing a patent search report will enable the public, applicants, creditors, investors, applicant competitors and other interested persons to receive hassle free additional important information about a registered utility model patent.
The increasing number of patent search reports will help the patent office examiners to upgrade their skills and study the requirements placed on the reports of the International Search Authority. This is very beneficial for the patent office because the employment of skilled personnel not only commands respect, but is also a valid argument in favour of acquiring the status of an International Search Authority.
Getting familiarised with the patent search report enables the applicant to get an iinsight into the claimed utility model and its compliance with the state-of-the-art in the respective industry. This will help the applicant to use the utility model with greater effect in civil transactions. For example, if the author has created a technical solution during office hours, with a company decision to file a utility model application, then, with payment of an award, the applicant-patent holder often asks the question: what will the author receive – and award or an incentive for a technical solution, for which a utility model was registered? Besides, the applicant fears that the author is simply making a fool of him because the adverse life circumstances of the author are making him to play for keeps, including the filing of utility model applications, for which he is expecting to receive an incentive or even an award. Therefore, the patent holder needs an independent valuation of the claimed technical solution by a competent authority, in particular, a patent office. In this case, if the patent holder will find that the registered utility model has no value, at least, for himself, he will relinquish the procedure of maintaining a utility model patent or will make public his intent to grant an open license to any interested person. This will no more but favour the reduction of additional financial expenditures. As the case may be, the saved financial resources will be allocated to the company's development fund.
The patent holder is aware that exhaustive information about the issued utility model patent will allow determining the chances of attacking the potential patent infringer, and of maintaining an effective defence against potential patent aggressors.
Bear in mind that the public is also interested in full information about registered utility models because the competitors want to get exhaustive information on issued utility model patents of competitors. At the same time, the patent holders specially "flex their muscles in public", hoping that this will make both competitors and third parties, including investors, creditors, shareholders, and so forth do some thinking.
The patent search report will help applicants get familiarised with expert's opinions and suggestions. This will improve the quality of submitted utility model application materials, eliminate obvious errors in the claims and specification, which, with current practice, the examiner should not focus on, though essentially this is wrong. If the examiner will find omissions and inaccuracies, for instance, inconsistent terminology or wrong use of terms by the author, or if the claims were presented in a narrower version than the specification contains, then they will be aware of the errors but will sit tight against their will, i.e. they will be committing a reprehensible act, which can contradict the moral principles of the examiner and the principles of non-interference whilst dealing with errors. The applicant will receive the proposals of the patent office gladly because the applicant understands that the examiner's viewpoint will improve the quality of utility model materials. In the future, this will improve the quality of newly submitted applications of authors, mainly individual ones. In this case, obtaining additional information from the findings and proposals in the patent search report are crucial for authors and patent experts because this results in definite conclusions and a revision of one's practice in preparing and submitting specifications. This will also help eliminate systematic errors, for instance, for the patent staff at an enterprise who submit applications for inventions and utility models in one area of addressing application problems at the enterprise.
The proposals considered in the paper are focused to improving the strategy of parallel filing of applications for inventions and utility models.
Conclusions
1. It is necessary to adopt a legislative norm that will permit registration of utility models with several independent claims.
2. When filing a utility model application with one independent claim, the applicant can request additionally a patent search and a search report with opinions and proposals of the patent office examiner.
3. When filing a utility model application with several independent claims, the applicant shall be obliged to request a patent search and a search report with opinions and proposals of the patent office examiner.