A new bill going through the Australian Parliament will allow Australian companies to obtain compulsory licences to manufacture and export medicines to developing countries experiencing a health crisis. The (Australian-based) generic manufacturer will need to apply to the Federal Court of Australia and demonstrate that there is a genuine health crisis, such as tuberculosis, malaria or HIV/AIDS, and that the country concerned has no adequate facilities for producing the (patented) product. Experience in other countries shows that the provisions will be rarely, if ever used. In the past twenty or so years, for example, in Germany only one compulsory licence was initially granted.
Normally the patent proprietor and the generics manufacturer come to an agreement – with the Damocles sword of a compulsory licence hanging over their heads. Indeed that is what happened in Germany – the parties agreed on a licence in the end.
This rule is valid for all divisional application filed after 1 April 2014. And fortunately, It is also valid for any pending patent applications for which the previous 24-month deadline had applied. In other words, the window for filing divisional applications has been removed. They can now be filed as long as the parent application is pending.
There’s of course one catch – increased fees. In future, divisional applications, which are themselves divided out of previous divisional applications, will attract a supplementary fee. This fee ranges from Euros 210 for such a “second generation” application to Euros 840 for a fifth and higher generation application.
The European Patent Office had hoped that the restriction on the time frame for filing divisional patents would mean that fewer would be filed. The law of unintended consequences kicked in as applicants filed “precautionary” divisional application – and apparently lead to a rise in the number of divisional applications being filed.
The return to the old rule of filing as long as the application is in force is to be welcomed. It will mean that difficult and costly decisions will not need to be made when the patent application is still being prosecuted.
Much of the future of software patents in the US (and possibly the world) turns upon a case heard yesterday in the Supreme Court in Washington DC.
Alice Corporation has a patent on a computerized escrow system and method that is allegedly used by CLS Bank for settling transactions. Alice sued CLS for patent infringement, and CLS responded arguing that the claims of the patent are invalid as they “encompass an abstract idea”. The decision could focus very narrowly on the facts of the case, but many hope that the Supreme Court will actually address the whole issue of software patents and give some guidance on which types of patents are valid. The transcript of the proceedings can be read here.
The question resolves around section 101 in the US Patent Code which clearly states that offers patent rights to anyone who “invents or discovers any new and useful process, machine, manufacture, or composition of matter.” In practice, very few of the patent cases involving section 101 cases actually refer to the statutory text. The focus is more on the cases previously decided by the Supreme Court that the statute also prohibits patents on abstract ideas, products of nature, and natural phenomena. It’s the concept of an abstract idea that is core to this case.
The US government through the Office of the Solicitor General is arguing that any software patent that improves the functioning of computer technology is eligible. And any software patents that is used to improve another technology is eligible.
CLS argues that the computer implementation must offer a technological solution and that is missing in this patent.
Whatever the decision, its effects will be seen on the software industry. Should the court restrict its decision to the facts of the case, then the question of software patents will rise again soon. Should the court be expansive and argue that section 101 should be interpreted broadly, then many patents granted by the US Patent Office in the last few years could be rendered invalid – and potentially render worthless billions of dollars of investment. On the other hand, if the court upholds the principle of software patents, then many will continue to push for changes in the law – and that is the best forum. It’s really not up to the Supreme Court to make law, but for activists to push for changes in the law through Congress.