The modus operandi of a P.A.E.,��such as��IPNav, is not complex: it is a company that acquires (usually temporary) rights on a batch of patents from different rights holders.�� After identifying companies that are��allegedly using these patents without authorization��from the patent holder, the P.A.E. will attempt to monetize its patents by charging licensing fees or threatening (and sometimes engaging in) costly lawsuits.

These practices��have been����by the media and society because P.A.E.s themselves do not commit any investment in the innovative process and��the legal arguments��used to support the rights claimed by the P.A.E.s are, in many cases, weak. In some instances, even if a patent has not actually been infringed upon, a company that receives notice by a P.A.E. may��consider it worthwhile to pay licensing fees in order to avoid the threat of further costs and time spent in a possible lawsuit. It is not a coincidence that the main targets of P.A.E.s are such as Amazon, Oracle, and Citigroup - businesses of higher net worth that may be willing to pay more in response to such claims. For these reasons, P.A.E.s are often referred to as “patent trolls.” A by researchers at Boston University School of Law reveals that the activities of patent trolls in 2011 cost approximately US$ 29 billion for “trolled” companies.

Due to these business practices, P.A.E.s are often cited as the enemy of innovation.�� The President of the United States, Barack Obama, in February 2013 that patent trolls exist to extort money and do not contribute to innovation, and that legal reform is needed to prevent the misuse of the patent system. In June 2013, the White House major steps to improve incentives for future innovation in high tech patents by . These steps include executive measures, such as tightening functional claiming and strengthening the enforcement process of exclusion orders, and legislative recommendations, such as requiring patentees and applicants to disclose the real party-in-interest, permitting more discretion in awarding fees to prevailing parties in patent cases, and protecting off-the-shelf use by consumers and businesses.

P.A.E.s, however, claim to represent positive forces for innovation. P.A.E. owners often argue that their activities��are very important to , who��may��not have the organizational and financial structures necessary to enforce their exclusive patent rights. Through the support of P.A.E.s, small inventors can obtain appropriate compensation when their patents are��infringed by third parties, encouraging them to invest more time and money in new innovations. Furthermore, Erich Spangenberg emphasizes that entities like IPNav can also help large innovative companies monetize their patents, encouraging future investments by these companies in new technologies.

It is important to note that not all lawsuits filed by P.A.E.s are abusive or lack reasoned legal grounds. The P.A.E., IPCom, was successful in against the German company Deutsche Telekom and indirectly contributed to compensating inventors of the infringed technologies. From this perspective, P.A.E.s acting in accordance with ethical and legal standards actually by small inventors and large companies alike.

In this blog, and opinions about the activities of P.A.E.s have been reported, reflecting the contrasting positions held by the media and legal critics. This is also indicative of the fact that this topic will be open for continued discussion and debate. Currently, there are no specific legal provisions concerning these entities at��the international level, causing considerable legal��uncertainty.

In my opinion, considering all P.A.E.s as enemies of innovation and banning them indiscriminately is not compatible with current commercial practices, nor is it a way to promote innovation.�� It is a common occurrence that the direct economic beneficiary of an intellectual property right is not necessarily the inventor or creator per se, but a third party who has acquired these rights (e.g. copyright enforced by music publishers, patent rights enforced by large technology companies). The practice of assignment and transfer of patent rights is expressly allowed under . In principle, therefore, the activities of P.A.E.s��are not necessarily illegal or disadvantageous to society.

In fact, P.A.E.s only become a problem for development and innovation when they misuse patent rights, abuse procedural requirements, or threaten companies into settlements based on non-existent infringement. In such cases, bad faith actions of patent trolls have to be identified and punished by the courts on a case-by-case��basis. General and indiscriminate prohibition of P.A.E.s would achieve these goals but at the same time eliminate the benefits that these entities provide. Indeed, it may be that other areas of law and current policies need to be changed in order to��eliminate the misuse of patent rights. The importance of high-quality patents for avoiding patent trolls has been expressly by the European Commission - granting patents for imprecise and ambiguous claims lead to misleading interpretations on the scope of a patent and facilitate abusive practices.

Any current abuse of rights by patent trolls also reveals the major flaws in patent litigation procedures. Due to the high cost of litigation, extensive length of proceedings, legal uncertainty in the area of patents, and the risks of granting preliminary injunctions, companies are more apt to settle when faced with a claim from a patent troll�� - even if the claims lack a strong foundation.�� Reforming procedural law as it relates to patent litigation��should also be reconsidered by legislators in order to avoid potential abuse in the future.

In conclusion, the activities of P.A.E.s, when performed under ethical standards, are valid from a legal perspective and can actually support the innovative activities of both small and large companies. Instead of outright prohibiting P.A.E.s, the most reasonable solution would be to identify and evaluate abusive lawsuits filed by P.A.E.s on a case-by-case basis. Furthermore, requiring Patent Offices to engage in a more thorough analysis of patent claims before granting intellectual property rights and effectively reforming procedural laws may help to prevent the proliferation of abusive patent trolls.

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In 1996, Jim Logan received a for a personal audio device that would allow users to select and download audio tracks for offline enjoyment. Personal Audio eventually launched a service where users could receive cassette tape audio recordings of magazine articles on demand.�� The company has not released a product in 15 years, yet, Personal Audio received a continuing patent in 2012 and was successful in a patent infringement suit against Apple for . Apple appealed the ruling and later settled for an undisclosed amount.

Personal Audio is now going after individual podcasters with against NBC, CBS, ACE Broadcasting and HowStuffWorks.com. Logan says that his company will not go after smaller podcasters, but several individuals, including comedian have reported receiving letters from Personal Audio informing them that their activities infringe Personal Audio’s patent. The activities of Personal Audio have led several critics to label the company as a "patent troll."

Logan sees nothing wrong with allowing a patent holder to come forward and claim infringement on a product that they did not manage to bring to market. His claim is that he put $1.6 million into development and his only remaining asset from the venture is the patent itself. This is part of the allure of the patent - that even when a product is unsuccessful, an individual may still be able to get a return on their investment when another entity wants to licence the patent and "try again." The argument remains that patents provide incentive for innovation through the economic rights related to the intellectual property covered by a patent.

In 2012 Logan obtained a continuation patent��and was able to succeed against Apple.�� This is one angle from which others might attempt to challenge the patent’s validity. Canada takes a restrictive approach to patentability and does not have continuing patents. In my opinion, it is doubtful whether Logan’s original patent would hold up under opposition under the Canadian patent system, as he would not have had the same ability to update it to reflect the ways in which the technology developed. Although purposive��construction of claims��can blur Canadian patent parameters, the lengthy review process makes it less likely for a patent to pass basic threshold tests when challenged in the Federal Court.

Canada also has procedural safeguards in place that would affect how defendants may choose to proceed against a patent troll. Canadian courts are reluctant to award interlocutory injunctions in patent infringement cases, which limits the ability for patent trolls to threaten an injunction to force a settlement at an early stage in the proceedings.

When threatened with patent infringement, alleged infringers have to make a choice - defend against the claim at a substantial financial cost (with no guarantee of "winning") or attempt settling to avoid court costs and an extended time in litigation proceedings. In Canada, a lack of interlocutory injunctions and the possibility of costs awarded to successful defendants provides an incentive to defend against a weak claim.

One suggestion to combat patent trolls has been discussed by Professor Cameron Hutchison of the University of Alberta, who proposed using the concept of�� in property law to deal with companies like Personal Audio. This idea would require patent holders to commercially develop their invention. If a patent holder does not bring their invention to market within a specified time, others could use the defence of "adverse possession" when a patent holder comes forward to claim infringement.�� This may also curb the registration of over-broad patents that are able to encompass future technologies, as is the case with Personal Audio.

This latest string of suits could be the straw that breaks the camel’s back for patent trolls in the United States. ��against Personal Audio for what it calls “a classic example of an over-broad software patent”.�� EFF, along with Harvard’s Cyberlaw Clinic, and few vocal podcasters have put out the call to challenge the validity of the patent and demand legislative reform.

Allison McLean is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.��

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Background

Re-examination provides a summary means of challenging a patent, limited to certain grounds supported by affidavit evidence. If the requester is able to demonstrate that there is a 'substantial new question of patentability', a re-examination proceeds akin to the initial examination of the patent during application. (This standard has recently changed in respect of one of the methods of re-examination in the United States but the change is not material for the purposes of this article) A examiner re-examines the patent and the examiner's decision may be appealed by the patent owner to the Board of Patent Appeals and Interferences (the Board). The decision of the Board can then be appealed to the Federal Circuit.

Invalidity proceedings, on the other hand, are initiated as a part of court actions and generally involve a full trial process. Litigants have the benefit of oral evidence, discovery and a hearing before the Court but the process is also more expensive and longer in duration.

Given their differences, challengers are left with a tactical decision that is based upon the particular circumstances of the case and their strategy. In certain situations, one is clearly superior to the other, but what happens when both re-examination and invalidity proceedings are used together?

In a recent case, (Baxter), the United States Court of Appeals for the Federal Circuit considered this issue, grappling with a conflict between administrative and judicial decision-makers, the potential for abuses of process and the importance of consistency and finality in Court decisions.

Baxter concerned a dispute regarding Baxter International’s patent for a “Method and Apparatus for Kidney Dialysis”, U.S. Patent 5,247,434 (the ‘434 patent). The particular claims in question related to the means and interface used for the control of certain functions of the dialysis machine.

One of Baxter’s competitors, Fresenius, challenged Baxter’s claims through both an invalidity proceeding and a subsequent re-examination. Fresenius’ initial action failed as a matter of law to show clear and convincing evidence and this outcome was . The Federal Circuit noted that “Fresenius failed to present any evidence-let alone substantial evidence-that the structure corresponding to the means for delivering dialysate limitation.... existed in the prior art”.

In parallel with the litigation, Fresenius initiated a re-examination of the ‘434 patent. Fresenius relied upon references that were not raised in the action and the examiner found that these references rendered obvious the claims in question.

The examiner’s conclusion was appealed to the Board and the Director of the PTO ordered the Board to consider the Federal Circuit’s decision in the Fresenius litigation. The Board affirmed the examiner’s rejections and noted that “a lower standard of proof and the broadest reasonable interpretation standard of claim construction apply at the PTO and therefore the agency is not bound by the court’s determination”.

The Decision of the Federal Circuit

Baxter appealed the decision of the Board to affirm the examiner’s rejection of the claims to the Federal Circuit. On first glance, this appears to be a dilemma: the Federal Circuit, in the Fresenius litigation, has ruled in favour of the validity of the claims but the Board and the PTO has decided against the validity of the claims in question.

In this peculiar situation, the majority decision of the Federal Circuit reviewed the evidence and the possible conflict between the invalidity proceeding and re-examination. The majority was sensitive to the potential for conflicting outcomes and noted that “when a party who has lost in a court proceeding challenging a patent...provokes a re-examination in the PTO, using the same presentations and arguments, even with a more lenient standard of proof, the PTO ideally should not arrive at a different conclusion”. The majority found that in this case, the examiner’s rejections were based on references that were “not squarely at issue during the trial on the invalidity issues”, and therefore relied upon new prior art. The majority upheld the rejections but commented the tactical nature of Fresenius’ in obiter: “Why Fresenius did not present that prior art before the district court we do not know”.

Newman J., in her minority decision, dissented. Newman J. was primarily concerned with the erosion of judicial supremacy by an administrative decision maker. She noting that upholding the administrative decision effectively violated the constitutional authority of the Courts and the rules of estoppel and preclusion. She argued that the principles of judicial finality should have applied “in all forums” and thus should have precluded Fresenius from raising the matter again on the issues of fact and law based on the logic that they had “one good bite at the apple and should not be given a second”.

She was concerned about the fairness of the process, leading to the potential harassment of patent owners through multiple lawsuits that end up wasting judicial resources and incurring unwarranted costs to the parties. She supported re-examination as an ‘efficient and economical alternative to litigation’ as a part of the ‘tactical armory’ of litigators but stressed that its purpose should not distorted to enable administrative agencies to override the final decisions of the Courts.

Analysis

This case is reminiscent of an earlier case in the Federal Circuit, , where a similar fact situation arose. In CEC, the re-examination was conducted years after the litigation confirmed the validity of the claims and applied the same references in a different manner. The decision in CEC was also similar: the majority upheld the rejection of the claims with Newman J. providing a strongly worded dissent raising the same issues as in Baxter, namely arguing for preclusion, finality and concerns about the overstepping of administrative authority.

Both the majority and Newman J. have valid arguments: while re-examination is designed to further the purpose of patent law by removing deadwood claims from the Patent Register, it is important to ensure that the overall process is still fair to both the patent owners and the patent challengers.

Extrapolating from the majority decisions in both Baxter and CEC, a challenger would be able to use re-examination to effectively obtain a ‘second chance’ to challenge the validity of the claims using the same references, so long as the arguments utilize the references in a different manner from that in the original invalidity proceeding.

To resolve some of the concerns that were raised in this decision, this editor recommends that further guidance be provided through the following legislative amendments:

1. Where concurrent invalidity proceedings and re-examinations have been initiated and not yet resolved, either party should be entitled to request a stay of the later of the proceedings or re-examination absent a reason to the contrary;

2. Where a claim has been challenged by a prior re-examination or invalidity proceeding, the subsequent judge or examiner must consider the prior decision in coming to their own decision regarding the validity of the claim; and

3. Where a claim has been challenged by a prior re-examination or invalidity proceeding, the challenging party should be precluded from doing so unless they indicate the reasons that (a) the new arguments are substantially different than the earlier arguments and (b) why the new arguments were not raised earlier.

The goal of these amendments would be to provide judges and examiners a better framework to deal with the co-existence of the different provisions. A level of discretion is required to ensure that there is the necessary latitude to prevent abuses of process while at the same time allowing for the consideration of new arguments that have merit.

Further, the stipulations that the challenger provide reasons if the validity had been upheld in a prior re-examination / invalidity proceeding are designed to provide decision makers with more information that they can use to decide whether the new argument is bona fide or if it should be precluded on grounds of abuse of process.

Brian Chau is a recent graduate of Osgoode Hall Law School.

Editor's note (19/12/12):��A more detailed version of this piece has been published in the Intellectual Property Journal (IPJ), "Re-Visiting Patent Re-Examination under Sections 48.1-48.5", 24 I.P.J. 279.

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Here are some of the main features of the AIA:

• The AIA awards a patent to the first inventor to file. That claimant can be dislodged by a showing that someone else was the true inventor. Previous law awarded the patent to the first inventor, not the first to file.
• It becomes far easier for corporations to own inventions. They are now granted much leeway to file for the patent directly, so long as the inventor is contractually obligated to assign the patent. The committee stated that this is to push aside “the antiquated notion that it is the inventor who files the application.”
• A potpourri of other changes includes: new patent marking rules, , failure to obtain legal advice on patent validity cannot be used to prove willful infringement, procedures to correct erroneous patent prosecution information, federal jurisdiction of contracts to assign patents, a prior use defense, and post grant proceedings in the USPTO.

These are significant changes, but they do not comprise a comprehensive reform. The remainder of this blog will discuss elements of a comprehensive reform, rather than focus on shortcomings of the AIA.

Some history. From the twelfth century forward, commercial and industrial classes were steadily gaining influence English law and policy. As that movement gained steam, it persuaded the English Parliament to enact the Statute on Monopolies during the reign of James I. (21, James I Ch. 3, 1623.) The act was intended to abolish all royal grants of monopoly. The act provided an exception: A patent (“lettre patente”) might be allowed for limited years for those who perfect “any manner of new manufacture, within this realm.” The United States Constitution embraced similar criteria. (U.S. Const. art. I §#8, cl.8 ) A recent unanimous Supreme Court decision: reaffirmed that “the primary purpose of our patent laws is not the creation of private fortunes for the owners of patents but is ‘to promote the progress of science and useful arts,’ ” ()

Patents flourished during the industrial revolution. During that period interested parties recognized that the patent monopoly could be used as a source of rent and a means to control economic activity. In short, patents were not simply a limited reward, but were a source of capital. Nurturing patents as capital became the primary emphasis in latter decades of the twentieth century. That emphasis was present throughout the AIA legislative process.

The role of technology and patents today. During the seventeenth through nineteenth centuries the United States and European powers pursued national interest and little else. Events in the twentieth century undermined the economic and political foundations of that approach. World War II exhausted Europe, and after that war, a consensus emerged that aggressive war, racism, widespread hunger and disease must be curtailed and, if possible, eliminated. Much of that consensus exists today, but has not been successfully acted upon. Now, the world population stands at seven billion, the climate is radically altering, while wars, poverty, and lack of education continue to create overwhelming suffering.

Technology can do much to aid the world. Technology advance depends primarily on social resources such as education, research, shared knowledge, and public institutions. Individual insight and company efforts contribute, often strongly, to that progress. One of the great innovators of all time, Isaac Newton, captured the gist of this combination when he urged that if he had seen further, it was because he stood on the shoulders of giants. In a modern environment, scientific and technical advance require investment in research facilities and the efforts of trained professionals. Patents offer a boost to useful innovation, but they are neither a necessary nor sufficient means.

Patents can encourage innovation, but they also can and do discourage it. This negative effect occurs when they are used as power, as a form of capital. A portfolio of minor patents can block introduction of new technologies and prevent delivery of new products to the public. A raft of scholarly writing investigates this problem. John Flock, a veteran patent litigator, observes that patents are used mainly as weapons in “global patent warfare as a way to gain leverage over a competitor in negotiations.” (2011 WL 5618030 ASPATORE). Patents of dubious validity compound this problem. According to Professor F. Scott Kieff businesses “are forced to defend against large numbers of lawsuits over junk patents.” (157 U. Pa. L. Rev. 1937, 1938 (2009)) Professor Mark Lemley echoes that observation, adding, “Even the ones that turn out to be valid are often impossible to understand.” (15 Marq. Intell. Prop. L. Rev. 295, 296 (2011)) It also should be borne in mind that patent procedures and litigation consume legal resources which might be focused on social needs such as reduction of domestic violence, environmental protection, criminal due process, and reducing the resort to warfare and war crimes.

Thus, any patent system ought to be designed to meet human needs. Its rewards ought never to extend beyond rewarding innovative effort or providing for research. United States patent law, for example, fails to assure that any gains from the patent monopoly will be invested in research or development. They can be spent on advertising, executive bonuses, lobbying, acquisitions, “golden parachutes,” etc. Nor does US law require that the patentee actually practice or license the invention during its term. These defects can be remedied by legislation.

Patents ought not function to control the economies or development of nations. The peoples of the world face very different needs and challenges. Huge portions of humanity are ravaged by war and disease. A very small percentage of the world’s population takes part in the levels of income, protection and luxury that are enjoyed by stock holding individuals or leaders of large corporations. The patent monopoly as it exists today fuels those disparities. Thus, rather than focus on increasing corporate values or control, patent laws should focus exclusively on making technological advance available to all at reasonable social and personal expense. This means that national laws need to be altered and that the entire intellectual property treaty structure needs to be reexamined. In major respects, patent law and the related treaties, serve primarily the interests of dominant corporations and national elites.

The world can benefit from cooperation on patent law. In today’s jargon this is called “harmonization.“ The term or its equivalent appears twenty times in the Report. However, the AIA’s emphasis on assuring the United States a “competitive edge in the global economy” runs contrary to international cooperation. This aspect of the AIA amounts to a modern form of mercantilism. Classically, “mercantilism was control of the economy in order to further national interests.” (Thomas B. Nachbar, 91 Va. L. Rev. 1313, 1318 (2005)) The AIA form of mercantilism allows patents to be a form of control that advances corporate interests, rather than national interests. The Report implies that the AIA will “spur innovation as a means to create American jobs and raise standards of living.” However, corporations and others from around the world can own US patents. They are free to locate their workforces anywhere and decide what wages they will offer.

In sum, I urge that patent laws be based on assessment of what will actually serve all. This requires lawmakers to consider these laws in their full context. It cannot be done by isolating patent policies from other legal policies and needs.

Howard C. Anawalt is a United States attorney, law professor, and writer. ��His article on “Best mode” was featured in IPilogue post.

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Among the that died with the end of the 40th Canadian Parliament last Friday was Bill C-393, Canada’s Act to amend the Patent Act. The bill proposes to modify , itself an amendment to the Patent Act passed in 2004.

CAMR’s aim has been to facilitate the process for Canadian companies to produce and market generic versions of medications used to treat HIV/AIDS, malaria, and other diseases. Medicines for these ailments remain prohibitive expensive in developing countries and, despite CAMR’s good intentions, remain largely unavailable even still.

CAMR has been fraught with criticism since its enactment. regularly argue that it is wrapped in red tape; its unnecessarily complex procedures and restrictions make it nearly impossible for companies to do what the system purportedly assists them to do. Indeed, only one order of medicine from one company to a single country has ever been filled under CAMR – and even that company has said that it will not attempt to do so again. These sentiments have been echoed by Médecins Sans Frontières and the very developing countries it aims to serve.

Bill C-393 aimed to rectify these shortcomings, chiefly by way of a single-licence solution. Under such a system, generic manufacturers would require only a single licence to export a drug to a country in need and to continue that supply as needs evolve, necessitating only one pass through the licensing process. This bold amendment to CAMR grants the wish of many, including Richard Elliott, executive director of the Canadian HIV/AIDS Legal Network, discussed in an .

Passed in the House of Commons by a vote of 172 to 111, with support from MPs of each federal party, Bill C-393 stalled in the Senate. This delay has attracted , even from some Senators.��One called it “an abuse of Parliament” and another said there was simply no procedural grounds for it. Surely the initiative will be brought up again when Parliament reconvenes but, until then, months will pass – and with them, lives.

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In an interesting turn of events since last month, the European Patent Office has recently with Google to have the Internet titan do some of its much-debated translation work. Each side will benefit from the arrangement. It takes some pressure off the European Union to reduce the number of sanctioned languages of its planned European patent to English, French, and German. Such a move will surely please Italy and Spain, the two most vocal opponents to the proposed trilingual system. Google, for its end, does not expect to profit immediately but will improve its translation technology in gaining a vast body of documents already translated by professionals.

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At a meeting held in Brussels last week, EU delegates came no closer to reaching consensus on a unified European patent system. After years of proposals, the monumental task last year after EU members agreed to create a single European patent and a centralized court that would deal with all patent disputes, two features conspicuously absent from the region’s current legal landscape.

To be granted an effectively Europe-wide patent under the , inventors make their filings to the European Patent Office, headquartered in Munich. They must then pay to have their patents translated to the official language(s) of each country where the patent will be recognized. However, each may have other “validation” procedure requirements as well. A found that the cost of a European patent validated in 13 countries is made up of 70% translation costs and is tenfold more expensive than a similar patent in the US. Also, for want of a central court, patent owners and other parties involved are burdened by the additional costs of responding to legal challenges in each country. Thus there is considerable momentum behind the reform.

Unfortunately, the delegates have been deadlocked for months over what languages the proposed system should operate under. The stalemate is not altogether surprising, considering that the EU boasts 23 official languages. The European Commission, the executive body of the EU, last July that patents be granted in one of its three working languages: English, French or German. The proposal was by several members, most vocally Spain and Italy, on the basis of alleged linguistic discrimination. Belgium, the current occupant of the European Council’s rotating presidency, has since the compromise that patent applicants be reimbursed for translation costs during a limited transition period. Alas, this proposal was also at last week’s meeting. At this point, anything short of a pentalingual system does not seem to bode much chance of success. Absent such a concession, it remains to be seen if a system can be created that adequately respects the international diversity that it simultaneously attempts to constrain.

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On May 12, 2010 the Enlarged Board of Appeal of the European Patent Office (EPO) responded to several questions posed by the President of the EPO, Ms , regarding the patentability of computer programs in Europe.�� The resounding answer to these questions, provided by the Enlarged Board of Appeal, was that they are inadmissible and that the status quo should prevail.��

In constructing , the Enlarged Board of Appeal cited that the purpose of the European Patent Convention (EPC) is to establish uniformity of law within the EU patent system.�� The only way the Enlarged Board of Appeal can partake in the development of law is in instances of conflict between existing precedents, whereby the board may break with existing practise and point the development of law in a new direction.�� The President’s questions posed to the Enlarged Board of Appeal did not address conflicting decisions in the patent system, and were thus inadmissible.

While the Enlarged Board of Appeal did not deviate from current case precedents in Europe, it did clarify and provide guidance regarding the interpretation of leading cases in the European patent system.�� ��Under the EPC, computer programs are listed among the categories that are not patentable subject matter.�� However, while patents explicitly claimed as computer programs are not patentable, programs that are part of a computer, network or other programmable apparatus’s scheme are not excluded and may be patentable as a .��

The Enlarged Board of Appeal clarified that according to the (Microsoft) decision a program on a computer-readable medium is not excluded from patentability.�� So long as either the computer-readable medium or the program it contains has a technical effect, it will not be excluded from patentability.�� The final question, before granting a patent then, is to consider whether the computer program or computer-readable storage medium which contains it, has an inventive step.���� ��

While a computer program on a computer-readable medium is not excluded from patentability, the Enlarged Board of Appeal did state that simple patent claims for a program on a computer-readable storage medium or method of operating a computer will still fail to be patentable for lack of an inventive step. ����To be patented, the programmer must construct a program/procedure which a machine cannot only carry out, but must make a non-obvious technical contribution, or solve a technical problem.

This decision by the Enlarged Board of Appeal likely disappointed many who hoped for a change to exclude the patentability of all computer programs in Europe.�� Many consider software patents to be broad and trivial by nature, and that these patents harm the economy by stifling innovation and growth.�� Because the work of a programmer is already protected by copyright, detractors of the software patent system argue that patents in this area are often used to restrict the interests of software producers in favour of patent producers.�� Alternatively, proponents of software patentability cite that these patents will promote economic growth by encouraging investment in research and development, and increase the valuation of small companies who can protect their market-share using patents to challenge larger companies and thus increase competition.��

Europe’s software patent policy currently has settled on a restrained approach to granting software patents, where computer programs must have a technical characteristic as part of a larger computer or network scheme.���� While proponents and detractors of software patents had hoped the Enlarged Board of Appeal would reform Europe’s patent system, clinging to the status quo has done little to satisfy European software developers’ appetite for change.���� All eyes are now on the US Supreme Court and their upcoming decision in to provide guidance for the development of software patent law in North America, Europe and around the world.

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According to the�� the proposal is both "constructive and sensible", and the Working Group has not shied away from problems.

Patents County Court (PCC):

Established in 1990 by Parliament, the PCC intends to provide cheaper alternatives for simpler IP cases to the Patents Court of the . The aim of the PCC is to meet the needs of small and medium sized enterprises. Although the name of the court is Patents County Court, this court also addresses cases regarding copyrights and trademarks. There are no restrictions on the complexity of cases that can be heard at this court or the amount of damages and costs awarded. Furthermore, cases can be transferred from the High Court to PCC and vice versa.

Although PCC was created with good intentions, it failed to meet its goals. IP litigations at PCC are both expensive and time consuming. According to the proposals for reform, there are numerous reasons for this. Firstly, the procedure of PCC is identical to the High Court and thus is costly. Secondly, since there are no limits on the awarded costs many enterprises, especially small ones, settle actions out of court due to fear of having to meet "substantial, and unpredictable, adverse cost awards if unsuccessful". Thus, it seems that the current structure and procedure of PCC denies small enterprises access to justice. Thirdly, long battles over transfer of forum makes litigation both costly and time consuming.������������

The Proposal:

To address the shortcomings of the system, the proposal aims at differentiating the PCC from the High Court and tries to provide incentives to stop forum shopping. The latter is done by limiting the costs and damages awarded. The proposal includes the following changes in procedure and cost recovery mechanisms:

• to require parties to present their cases by sequential written arguments;
• to impose robust case management;
• to permit or require disclosure, experiments, factual evidence, expert evidence, and cross-examination only where a cost-benefit test is satisfied, namely when the benefit of further material in terms of its value in resolving the issue justify its costs;
• to limit trials to one or at most two days;
• to limit recovery of costs to £50,000 in patent infringement actions and £25,000 in other IP cases;
• to limit available financial remedies to £250,000, this limit can be increased if needed;
• to change the name of PCC to Intellectual Property County Court, since PCC's operation is not limited to patents.

Reform in Canada:

Since Canada like the UK is a signatory to Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement, , it is obligated to provide effective protection for intellectual property rights. However, the time consuming and expensive nature of the current IP litigations in Canada could, arguably, be barriers to meeting this obligation. Furthermore, similar to England and Wales, the costly IP litigations may also prevent some enterprises from having access to justice. Thus, Canada may also need to reform its IP litigation system. However, adopting the exact same proposed reforms may not be appropriate in Canada as there are differences between the legal procedures and damages awarded. For instance, in Canada the provincial courts and the Federal Court have jurisdiction over patent disputes. However, the of patent litigation is heard at the Federal Court. Thus, it seems that forum shopping may not be a major problem in Canada.

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In February 2008, the United States Patent and Trademark Office (“USPTO”) of an embryonic stem cell patent held by the Wisconsin Alumni Research Foundation (“WARF”).�� One month later, the USPTO for human embryonic stem cells.�� Together, the patents broadly cover a method of isolating human embryonic stem cells and five unmodified stem cell lines.��

In praise of the decision, some have argued that such intellectual property protections are critical to stimulating private-sector investment in stem cell technology and commercializing new treatments.�� However, the challengers to the patents and their supporters disagreed with the decision, arguing that WARF’s stem cell patents are overbroad.�� In addition, they are concerned that granting such broad patents will lead to a situation where stem cell research will be monopolized by the few institutions that hold the key patents, which will have a chilling effect on useful research.�� At the same time, others view the decision as a victory for the challengers, since the USPTO narrowed the claims of the three patents and WARF has eased its previously burdensome licensing requirements.

In response to the challengers’ concerns that overbroad patents will slow research, a number of considerations have been raised.�� First, the scope of patent protection could be limited by using more restrictive tests when interpreting existing patent criteria such as novelty, utility, and non-obviousness.�� Second, the National Institutes of Health could support exemptions that give third parties access to stem cell research.�� Third, compulsory licensing could enable third parties to obtain access to stem cell research without authorization from the patent owners.�� Fourth, competition law could intervene in cases where market power is misused.�� While some considerations are more intrusive than others, it is clear that despite WARF’s currently held stem cell patents and the USPTO’s decision, other avenues for access to stem cell research exist.

In order to achieve President Obama’s goal of increased stem cell research, it seems that a balance must be struck between providing incentives for private sector investment in stem cell technology and allowing third party researchers access to it.��

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