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Second Tier Patent Protection Maurer School of Law: Indiana University Digital Repository @ Maurer Law Articles by Maurer Faculty Faculty Scholarship 1999 Second Tier Patent Protection Mark D. Janis Indiana University Maurer School of Law, [email protected] Follow this and additional works at: https://www.repository.law.indiana.edu/facpub Part of the Intellectual Property Law Commons Recommended Citation Janis, Mark D., "Second Tier Patent Protection" (1999). Articles by Maurer Faculty. 543. https://www.repository.law.indiana.edu/facpub/543 This Article is brought to you for free and open access by the Faculty Scholarship at Digital Repository @ Maurer Law. It has been accepted for inclusion in Articles by Maurer Faculty by an authorized administrator of Digital Repository @ Maurer Law. For more information, please contact [email protected]. VOLUME 40, NUMBER 1, WINTER 1999 Second Tier Patent Protection Mark D. Janis* The problem of access to the patent system, particularly for small en- terprises, 1 currently dominates the patent policy debate internation- ally. Although the access problem can be conceptualized in a variety of ways, 2 it is often defined narrowly in terms of the prohibitive costs of 3 acquiring and enforcing patent rights. A number of the responsive strategies currently being implemented entail direct reform of the regular patent system through fee reduc- tions4 or substantive reforms. However, an important trend emerging in many regions of the world focuses on an additional strategy in which access to the patent system is to be enhanced by the expansion (or, in some cases, the creation) of an entirely separate regime of rights, known variously as the "utility model," the "petty patent," or, generi- * Associate Professor of Law, University of Iowa College of.Law. B.S., Purdue University, 1986; J.D., Indiana University, Bloomington, 1989. The author gratefully acknowledges insightful comments from Graeme Dinwoodie and Mark Lemley, and excellent research assistance from Chris Gaspar, Dorian Cartwright, Sasha Boros, and Heather Lloyd. Research support was also provided by Dean N. William Hines and the University of Iowa College of Law. 1. I will adopt the European convention of referring to "SMEs" (small and medium-sized en- terprises), by which to refer to small-sized technology enterprises and independent inventors. 2. See infra Part IL.A for some examples. 3. See, ag., Michael N. Meller, Planningfor a Global PatentSystem, 80 J. PAT. & TRADEMARK. OFF. Soc'y 379, 380 (1998) (identifying the cost of worldwide patent coverage as an "over- whelming" problem for patent applicants); Erwin E Berrier, Global Patent Costs Must be Reduced, 36 IDEA 473 (1996); see also Promoting Innovation Through Patents: Green Paper on the Com- munity Patent and the Patent System in Europe, Doc. COM(97)314 final § 5.2, at 22-24 (June 1997) (referring to the high cost ofacquiring patent protection in Europe). 4. Concerning fee reductions in the United States, see, e.g., Patent and Trademark Office: Final Rule Reduces Fees with Expiration of Surcharge, 56 PAT., TM. & COPYRT. J. (BNA) 350 (July 30, 1998); Legislation: House Passes Authorization Bill Decreasing Patent Offie Fees, 56 PAT., TM. & COPYRT. J. (BNA) 350 (May 14, 1998). Concerning Europe, see Patents Paris Conference Debates Proposalsto Reduce High Costs of EU Patents, PAT., TM. & COPYRT. DAILY (BNA) (Oct. 23, 1997) (considering proposals to reduce translation costs for patent applications filed with the European Parent Office); European Patent Office: EPO Announces Fee Reductions in 1997 to Total DEM 140, PAT., TM. & COPYRT. DAILY (BNA) (Jan. 6, 1997) (announcing 20% fee reductions effective July 1997, for the stated purposes of responding "to calls worldwide for lower patent costs," and "making European patents more attractive, especially for independent inventors and small and medium-sized firms"); see also United Kingdom: Patent Office Reduces Patent Examination Fees, PAT., Tm. & COPYRT. DAILY (BNA) (Feb. 10, 1997) (announcing a 21% reduction in fees for examina- tion of patent applications filed at the U.K. Patent Office, effective January, 1998, "which will benefit small and medium-sized enterprises in particular"). Concerning recent fee reductions at the Japan Patent Office and materials relating to the Third International Symposium on the Reduction of Patent Costs, June 29-30, 1998, see <http://www.jpo-miti.go>. HarvardInternational Law Journal / Vol 40 cally, the "second tier patent."5 While these regimes vary considerably, they commonly feature relatively short-term protection,6 protectability standards that may be less rigorous than those applicable to regular patents, 7 and the granting of rights without any prior examination for compliance with substantive protectability standards. 8 Second tier protection has been considered a backwater of intellec- tual property. For example, the TRIPs agreement dutifully establishes minimum substantive standards for each of the major intellectual prop- erty regimes9 but fails explicitly to mention second tier protection,10 leaving WTO member countries free to formulate or reject second tier protection regimes as they see fit." The Paris Convention 12 includes 5. Classical "utility model" regimes, as I refer to them, are regimes that feature relatively short-term protection but reflect origins in design law, particularly by employing a diminished standard of inventiveness, as compared to regular patent law, and by extending protection only to subject matter that meets a "three-dimensional form" requirement. See, e.g., infra Part LA (de- scribing classical utility model regimes). The term "petty patent" refers to regimes that feature relatively short term protection but oth- erwise closely resemble regular patent systems, especially in regard to inventiveness standards, See, ag., infra Part I.B.2.b (discussing the Australian petty patent system). "Second tier patent" is used herein as a generic label encompassing utility models, petty pat- ents, and modern regimes that are comparable to petty patent regimes in that they discard the three-dimensional form requirement but otherwise borrow heavily from classical utility model regimes. See infra Part I.C. Unfortunately, the "utility model" label is used rather indiscriminately in the literature, masking significant conceptual differences between regimes that require "three-dimensional form" and those that do not. For example, the European proposal discussed in this paper is de- nominated a "utility model" proposal even though it is more properly a second tier patent pro- posal. See infra Part I.C. 6. Typically, second tier regimes offer terms that extend no longer than about ten years from the application filing date. John Richards, Petty Patent Protection, 2 INTERNATIONAL INTELLEC- TUAL PROPERTY LAW AND POLICY CH. 47, 47-13 (Hugh C. Hansen, ed. 1996) (providing a list- ing of terms in Table I). By contrast, the international standard for the term of regular patents, established in Article 33 of the TRIPs component of the GAIT agreement, is twenty years from the application filing date. General Agreement on Tariffs and Trade: Multilateral Trade Negotia- tions Final Act Embodying the Result of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, D.O.S. 95-33, 33 I.L.M. 1125, 1197 (Annex IC: Trade Related Aspects of Intel- lectual Property Rights) [hereinafter TRIPs Agreement]. 7. For example, second tier regimes may feature a relaxed version of the obviousness/inventive step criterion. See, e.g., infra note 64 and accompanying text (discussing the diminished inventive step standard in German law). 8. See, eg., infra note 98 (discussing Japanese law). For a comparative analysis of existing re- gimes, see infra generally Parr I.B.2. 9. See, e.g., J.H. Reichman, UniversalMinimum Standards of Intellectual Property Protection Under the TRIPs Component of the WTO Agreement, 29 INT'L LAW. 345 (1995). 10. See, e.g., Uma Suthersanen, A Brief Tour of "Utility Mode" Lau, 20 EUR. INTBLL. PROP. REv. 44, 45 (1998) (confirming this observation). See also TRIPs Agreement, supra note 6, at Art, 1(2) (stating that "the term 'intellectual property' refers to all categories of intellectual property that are the subject of Sections I to 7 of Part II," none of which deal expressly with second tier patent rights). 11. This may prove to be a significant omission from TRIPs given the increasing popularity of second tier regimes, especially among developing countries. See infra notes 219-221 and accom- panying text. 12. Paris Convention for the Protection of Industrial Property, Mar. 20, 1883 as last revised at Stockholm, July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention]. 1999 / Second Tier Patent Protection second tier protection in its definition of the categories of industrial property,13 but, apart from extending national treatment 14 and prior- ity15 to second tier patents, it establishes no important benchmarks for this form of protection. Worldwide interest in second tier patent regimes appears to be sub- stantial. More than sixty countries currently offer second tier patent protection, including key patenting jurisdictions such as Germany and Japan. 16 A dozen or more countries have created second tier regimes in their national patent laws since the mid-1980s.' 7 In North America, Mexico introduced a second tier regime in the early 1990s,' 8 and at least one scholar has recently urged that Canada consider second tier protection.19 Most importantly, the European Commission is moving to expand the role of second tier regimes at the pan-European level. A proposal to harmonize existing second tier regimes in EU member states has now reached an advanced stage of consideration. 20 A harmonized system of second tier patent protection is now spoken of in Europe as one of the 13. Id. at Art. 1(2) ("The protection of industrial property has as its object ... utility models ."). See also id. at Art. 1(4) ("Patents shall include the various kinds of industrial patents recog- nized by the laws of the countries of the Union, such as patents of importation, patents of im- provement, patents and certificates of addition, etc.").
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