7. Patent Office-SSO Information Sharing1

7.1 Origins and Scope of Information Sharing

Until recently the standard-setting process has operated largely independently from patent examination and grants. However, as the interplay between standards and patents has increased, along with the number of patents in the technologies comprising ICT, so has recognition that the two systems’ functioning and integrity are interdependent. Particular technologies are often both vital to the standards in which they are incorporated and protected by patents. At the same time, implementers who are obliged to license standard-essential patents and often pay royalties for their use have a considerable stake in the quality of issued patents.

In determining whether the subject matter of a patent application is novel, patent office examiners rely on databases of previous patents, publications, and other documents, referred to as prior art.2 The submissions by participants to standards bodies represent a potentially valuable collection of prior art, consisting of patents, patent applications, and technical specifications. These include finalized standards documents, preliminary and temporary drafts, and other disclosures of technical information to working groups.

These standards-related materials are thought to affect 30 to 40 percent of patent applications in certain ICT fields.3 Patent offices and standards bodies are considering ways of cooperating to increase the availability to examiners of standards documentation that will improve the examination process. One institu-

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1This chapter relies on symposium presentations by Michel Goudelis, European Patent Office; Dirk Weiler, IPR chairman of the European Telecommunications Standards Institute (ETSI); and George Willingmyre, GTW & Associates. The latter’s presentation was commissioned by the Committee and incorporated material from interviews with stakeholders and officials in the United States, Europe, and Japan. See http://sites.nationalacademies.org/PGA/step/IPManagement/PGA_072825.

2Under U.S. law, to determine if the technology is novel, the USPTO assesses the difference between the technology claimed in a patent application and the technology available to the public through sale, use, publication, patenting, or other means of dissemination.

3Committee consulation with an ETSI representative.



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7. Patent Office-SSO Information Sharing1 7.1 Origins and Scope of Information Sharing Until recently the standard-setting process has operated largely inde- pendently from patent examination and grants. However, as the interplay be- tween standards and patents has increased, along with the number of patents in the technologies comprising ICT, so has recognition that the two systems’ func- tioning and integrity are interdependent. Particular technologies are often both vital to the standards in which they are incorporated and protected by patents. At the same time, implementers who are obliged to license standard-essential pa- tents and often pay royalties for their use have a considerable stake in the quality of issued patents. In determining whether the subject matter of a patent application is novel, patent office examiners rely on databases of previous patents, publications, and other documents, referred to as prior art.2 The submissions by participants to standards bodies represent a potentially valuable collection of prior art, consist- ing of patents, patent applications, and technical specifications. These include finalized standards documents, preliminary and temporary drafts, and other dis- closures of technical information to working groups. These standards-related materials are thought to affect 30 to 40 percent of patent applications in certain ICT fields.3 Patent offices and standards bodies are considering ways of cooperating to increase the availability to examiners of standards documentation that will improve the examination process. One institu- 1 This chapter relies on symposium presentations by Michel Goudelis, European Patent Office; Dirk Weiler, IPR chairman of the European Telecommunications Standards Insti- tute (ETSI); and George Willingmyre, GTW & Associates. The latter’s presentation was commissioned by the Committee and incorporated material from interviews with stake- holders and officials in the United States, Europe, and Japan. See http://sites.nationalaca demies.org/PGA/step/IPManagement/PGA_072825. 2 Under U.S. law, to determine if the technology is novel, the USPTO assesses the dif- ference between the technology claimed in a patent application and the technology avail- able to the public through sale, use, publication, patenting, or other means of dissemina- tion. 3 Committee consulation with an ETSI representative. 113

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114 Patent Challenges for Standard-Setting in the Global Economy tion in particular, the European Patent Office (EPO), has concluded ground- breaking agreements with three SSOs to share such information. The EPO is the regional patent office established by the 1973 European Patent Convention among 38 member states. It examines patent applications submitted by inventors worldwide. Applications approved by the EPO may be granted EPO patents and also granted by the patent offices of individual member states.4 The EPO processes the third largest volume of patent applications in the world after the Chinese State Intellectual Property Office (SIPO) and the USPTO. In recent years the EPO concluded memoranda of understanding with three standards organizations. The first agreement was the Institute of Electrical and Electronics Engineers Standards Association (IEEE-SA), which develops global standards for a wide range of IT products and services. The second memorandum was with the European Telecommunications Standards Institute (ETSI), which also produces globally-applicable ICT standards. Finally, the third agreement was with the International Telecommunications Union (ITU), the United Nations spe- cialized agency for creating global standards in information technology and com- munications. The three agreements have several common elements: 1) exchange of in- formation and documentation of mutual interest in the field of standards for the benefit of prior art search; 2) collaboration on documentation format definition and dissemination policies to align them with the EPO prior art search needs; 3) contributions to education activities in the field of standards; and 4) self-funding of expenses associated with the agreements. Of the three arrangements, the 2009 ETSI-EPO memorandum of under- standing has created the most robust relationship although the two institutions had previously developed a mutual understanding since EPO became a member of ETSI in 2003.5 ETSI is a leading body for globally applicable standards for telecommunications and home of world-class standards such as GSM, TETRA, and DVB. Its membership consists of 766 companies and organizations from 63 countries. Its IPR database contains information on those patents and applica- tions notified to ETSI as being essential or potentially essential to ETSI stand- ards. The value of this database arises from both its comprehensiveness and the structure of relationships in its information architecture, in particular its integra- tion of patent documentation, bibliographic information, patent families, and patent number normalization. Under the agreement with ETSI the EPO has ac- quired documentation on standard-essential patents from ETSI along with nec- essary bibliographic data, incorporated the data into its internal databases, and 4 In December 2012, 25 European states agreed to pave the way for a unitary European patent issued by the EPO and for the creation of a unitary European court to handle patent disputes. 5 EPO has joined other SSOs also to access prior art, often under the same conditions and costs as industry members who profit from their membership, but membership is not a sine qua non of EPO information sharing with SSOs. See discussion below.

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Patent Office-SSO Information Sharing 115 educated its examiner corps on how to use data in assessing prior art (Goudelis, 2012). The EPO is seeking similar working relationships with other standards or- ganizations. In 2012, the Office extended invitations to enter into similar memo- randa of understanding (MOUs) to ISO and IEC. The EPO has also shared what it considers its positive experiences with other patent offices (Goudelis, 2012). 7.2 Benefits and Costs of Information Sharing One measure of the utility of these standards-related information sharing arrangements is the number of times ETSI standards documents have been cited in EPO patent examinations. These citations show a marked decline over the period of cooperation, from 2000 in 2004 to 884 in 2008. No analysis is availa- ble of the number of patent applications rejected on the grounds of prior art from these sources, but one can conclude that the data represent a significant addition to the knowledge base available to examiners in the fields covered and have been used to limit the scope of approved patent claims. The costs of participating in the information sharing arrangements are non-trivial. For the EPO, the costs include membership fees and for the EPO and SSOs, acquisition and conversion costs. Nevertheless, for the EPO, the arrange- ments contribute to a reputation for relatively efficient search and high quality examination and the benefits are seen to extend beyond generating patents of higher quality. Improved transparency in the linkages between IPR and stand- ards is seen as a benefit by both SSO members and EPO examiners. Disclosure of SEPs, together with a commitment of FRAND licensing, is a requirement of many SSOs. Nevertheless, the amount and quality of information about declared patents may be less than desired by some users of their databases. Generally speaking, SSOs do not perform checks on the essentiality, validity, and com- pleteness of the disclosures. Where disclosure is not compulsory, SSOs are not in a position to provide assurances about the completeness and timeliness of submissions to their databases. The interlinking of EPO and SSO databases benefits SSO members by providing updated information on patent applications and claims and generating automatic identification of classifications and types of patent families, all sub- ject to the agency’s quality controls. ETSI independently modified its IPR policy to extend disclosure and FRAND licensing commitments from a specified mem- ber of a patent family to all existing and future essential patents of that family unless there is an explicit exclusion of specified patents at the time of the under- taking.6 ETSI also took advantage of its cooperation with EPO to launch a new in- formation architecture in 2011, increasing transparency, functionality, and user- 6 ETSI has a unique definition of patent families with respect to licensing commit- ments. This term should not be confused with the more common concept of patent fami- lies at the EPO and other patent offices.

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116 Patent Challenges for Standard-Setting in the Global Economy friendliness by such improvements as reliable reporting of query results, infor- mation on ownership and essentiality status, and links to information on licens- ing conditions. The estimated cost of these upgrades was 1 million Euros, or approximately U.S. $1.3 million. A possible future benefit of EPO-SSO cooperation is in tracking changes in patent ownership. Both participants in standardization development and standards implementers have a strong interest in the availability of accurate, updated information about who owns which SEPs, in which patent jurisdictions, and for how long. Also important is information about whether titles have been reassigned and to whom. The EPO’s ability to track ownership and assignments extends only through the time at which the patent is granted and the nine-month period following, during which an opposition may be filed. Beyond those times information on transfers resides, if at all, in national patent offices. One sugges- tion to address this challenge of tracking patent transfers is the creation of Inter- net-based patent registers maintained by standardization bodies in cooperation with patent offices. This idea continues to be discussed in various forums. Establishing mechanisms to record patent transfers, preferably in the pa- tent office where the national patent was granted, would help in achieving the goal of identifying the ownership of SEP patents.7 Despite practical concerns, such measures would enable an implementer or standards developer to search official records to determine who owns a SEP, whether it is declared or not, and whether it has been assigned. 7.3 Legal Status of Standards Information Final standards are part of the available prior art, except in the case of pri- vate standard consortia that do not publish them but make them available only to specific parties under non-disclosure agreements. Further, preparatory docu- ments are treated like other written or oral disclosures, meaning that to qualify as prior art they must have been made available to the public prior to the patent filing or priority date without the disclosure being subject to a requirement of confidentiality. Thus, the prior art standing of a standards draft may be subject to the rules or norms of the SSO concerned and is not always clear, nor is the date of a document always verifiable. The incentives for members of SSOs to make early specifications availa- ble as prior art are often mixed. In some SSOs, circulation of early drafts of specifications is limited to those working on it, perhaps due to a concern that allowing other parties to comment adversely on preliminary drafts could chill 7 Japan records transfers of all patents, including SEPs. An article by Nahoko Ono, Avoiding Japanization: Lessons from Japanese Gridlock on the Patent Recordation Sys- tem (2012) discusses problems with the Japanese system of recording patent documents. The focus of that article is on licensor and licensee concerns with disclosing confidential terms (such as exclusive license scope) and on limiting information to specific infor- mation such as grantor, grantee, addresses, and patent numbers.

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Patent Office-SSO Information Sharing 117 innovative proposals. There may also be a concern that competing non- members, able to read the new specification before it is formally published as a standard, could somehow undermine it. Such considerations are balanced, how- ever, against an interest in early publication in order to foreclose others from patenting technology created during the standards development process. Under the three MOUs with SSOs, documents provided to the EPO, whether preliminary or final, are considered not to be confidential unless other- wise specified. To date there have been no cases where the participating SSO has excluded use of shared information as prior art. If a patent applicant were to contest use of such documents as prior art, the circumstances would be assessed case-by-case in the course of patent examination. 7.4 Relevance of the European Experience to the USPTO The committee considered the implications of the EPO-SSO agreements for the U.S. Patent and Trademark Office, which does not participate in them. In this regard, the Scientific and Technical Information Center (STIC), a central library facility operated by the USPTO, frequently receives requests from exam- iners to provide the text of standards thought relevant to the patentability of in- ventions under consideration. The application may reference a particular stand- ard or include part of a standard. Further, the examiner may find mention of a standard in the course of the examination. The STIC provides access to standards documents through a variety of channels, including most frequently its non-patent literature (NPL) website and its subscriptions to the publicly available standards of some SSOs, such as IEEE-SA. In general, these sources are limited to final standards, and obtaining additional documents relating to them may entail a significant cost to the patent office. For their part, SSOs have access through public search facilities to the same databases of granted patents and pre-grant applications that are available to exam- iners. However, like other members of the public, they do not have access to the STIC NPL Website. As for patent transfers, assignments, and re-assignments, the USPTO maintains an assignments database. Submissions of information to it are voluntary, although registration does convey some legal protection that would not otherwise exist. The committee finds that arrangements along the lines of the EPO-SO memoranda could significantly benefit both the USPTO examination process and SSO functioning at relatively modest cost to both parties. We note, however, two issues that would need to be addressed. First, as does Europe, the United States has its own jurisprudence on when documentation is “publicly available” and therefore eligible as prior art, and cooperative arrangements must take those laws into account. In a recent perti- nent case, for example, SRI International v. Internet Security Systems Inc., a

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118 Patent Challenges for Standard-Setting in the Global Economy number of patents related to the Internet were alleged to be invalid in view of a prior technical paper. However, the Federal Circuit Court of Appeals ruled that there was “insufficient evidence to show that the paper was publicly accessible as a printed publication as required under U.S. patent law in 35 U.S. Code § 102(b). The paper had been placed on a server, but solely to facilitate peer re- view and it could not be accessed by the researching public.8 Holding that the paper was therefore not prior art, the court vacated a summary judgment of inva- lidity against the patents. A factor that may simplify and facilitate activity with SSOs is that U.S. patent law has recently changed. In switching the United States from a first-to- invent to a first-inventor-to-file priority system for patent applications filed on or after March 16, 2013, the America Invents Act of 2011 has ostensibly moved U.S. patent law in the direction of European law and other international patent systems. This should make published standards documents in one jurisdiction more translatable to use in other jurisdictions than in the past. Further actions toward harmonizing the requirements for prior art standards publications might be useful, although the process of harmonizing substantive patent laws is inher- ently difficult and often protracted. A second issue raised in discussions of prospects for USPTO-SSO cooper- ation is whether it is appropriate for USPTO to take membership in private or- ganizations, an element of the EPO’s relationship with the ITU and ETSI, but not IEEE-SA. Although a number of federal government agencies participate as members in organizations such as the American National Standards Institute (ANSI), the USPTO no longer participates, considering an arm’s-length rela- tionship to be the appropriate way for a regulatory agency to support the private sector standards development system while avoiding potential conflicts of inter- est. Membership may contribute to a certain level of trust in the EPO’s relation- ships with ITU and ETSI, but it is the process of arriving at the MOUs, benefit- ing from them, and maintaining them that fosters a belief that they are strategic assets. Along this line, it should also be recognized that U.S. federal and state governments, like governments in other countries,9 play a significant role as a purchaser of standardized products (DeNardis, 2012). Accordingly, government agencies have an interest in robust, accessible standards that promote interoper- ability, cost-efficiency, innovation, transparency in the inclusion of technologies in standards, and a diverse system in which no single company controls the standard or is its sole implementer.10 Cooperation between the USPTO and SSOs could contribute to these objectives. 8 SRI International Inc v. Internet Security Systems Inc., 511 F.3d 1186 (Fed. Cir. 2008). 9 See also Chapter 8 regarding India and e-government. 10 Office of Management and Budget OMB Circular A119 directs the government to adopt commercial standards rather than derive unique government specifications unless there is justification.

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Patent Office-SSO Information Sharing 119 7.5 Recommendations to the USPTO and SSOs The committee finds that the EPO’s information sharing arrangements with leading international SSOs have demonstrated their value to both parties of having broad, timely, and low-cost access to standards prior art with important potential gains in transparency and efficiency. Similar arrangements could achieve such gains also for the United States even if U.S. law more narrowly circumscribes the range of standards documentation that qualifies as prior art. It should be possible for leading SSOs to agree on terms of cooperation with the USPTO that enable mutually beneficial information sharing without raising con- cerns about conflicts of interest. Recommendation 7:1 First, in the wake of the passage and implementation of the America In- vents Act, the USPTO should  Clarify how the legal definition of prior art varies across jurisdictions, particularly as between the EPO and USPTO. Specifically, when is art “publicly available” in a standards context?  Explore with leading SSOs, including possibly ETSI, IEEE-SA and ITU, information sharing arrangements similar to those concluded by the EPO;  Work with other patent offices to establish uniform fields and templates for standards-based prior art documents, such as early drafts of specifi- cations, published minutes, and the like, and deliberate with other of- fices on the definition of sharable information in this context;  Improve standards technology education for U.S. patent examiners. For example, when standards developers convene in Washington, they could be asked to instruct and update USPTO examiners about stand- ards processes and recent developments; and  Develop joint education programs with SSOs on the pros and cons of standards-based prior art, especially early drafts, and benefits from in- cluding it in patent office search databases.

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