CIPA Annual Debate Report: European IP systems out of kilter for SMEs

Football, soccer ball,
pigs bladder...its all Greek
to the AmeriKat

By 7:30 this evening, a tumbleweed could have whistled past the AmeriKat's desk and she could not have been less surprised.  The flurry of e-mails and calls that had been dancing upon her desk came to a sudden stop when, she is lead to understand, "the football was on" - otherwise known as England's uninspiring 1-0 victory over Ukraine in Euro 2012.  But before then, the AmeriKat had predicted that the work flurry would hamper her planned evening of spectating another competitive sport - a legal debate in the form of this evening's Chartered Institute of Patent Attorneys (CIPA)'s Annual Debate.  So she turned to one of her favorite (and always reliable) IP barristers, Tom Mitcheson (3 New Square).  He kindly put on his Kat hat and reported on the event in her place.  Punctuated with some busybody comments from Merpel and the AmeriKat, Tom had this summary of this evening's event:  

Tom Mitcheson

"This evening, whilst elsewhere others were preparing to resolve their differences using a pig's bladder, in London the UCL Institute of Brand and Innovation Law was hosting the CIPA 2012 Intellectual Property Debate, chaired by the Rt Hon Professor Sir Robin Jacob, with the motion that

'This house believes that political pressure and a few loud business voices are making the IP systems in Europe less and less relevant to the needs of small enterprises.' 

The motion was proposed by Michael Wilcox, an inventor of a digital colour printing technology. He made national headlines in March when he burnt one of his patents in protest outside the Houses of Parliament, claiming that it had become worthless because it was too expensive to enforce.  Wilcox passionately explained that in his view the UK had become the free research laboratory of the world.  His view was that whilst SMEs provided 95% of the patents in the UK, the enforcement regime is biased in favour of big business -- the litigator with the deepest pocket wins. He compared the patent system unfavourably with copyright saying that copyright protection, unlike patent protection, is free and automatic, and there is the stronger disincentive in that it can be a crime to infringe. ["Ahh..", says the AmeriKat, "but patent infringement can be a crime and indeed is any many European countries like Austria, Denmark, Finland, France, Germany... just not the UK."] 

Vicki Salmon of CIPAseconded the motion by highlighting the potential damage to SMEs of the current proposals for the Unitary Patent.  Although obtaining a patent across a number of member states might be cheaper using a Unitary Patent, many SMEs are not interested in such wide geographical protection, and if SMEs cannot enforce their patents, they are worthless.  The Patents County Court works for SMEs; the Unified Court will not. She urged policiticans not to make the Unitary Patent irrelevant to SMEs. 

Sean Dennehey

Sean Dennehey, Deputy Chief Executive and Patents Directorat IPO, spoke amusingly against the motion.  Dennehey stated that political decisions are the product of democracy, and that the alternative is having decisions taken by unelected officials ["Like judges?", says Merpel].  He quoted figures suggesting that large businesses of more than 250 employees fund 96% of R&D in the UK while emphasising that maintaining the balance between big business and SMEs is important. ["How can you even go about trying to strike a balance with something that, on economics - and our IP system in the UK is an economic IP system -  is weighted so heavily in favor of big business?", asks the AmeriKat] 

James Nurton of Managing Intellectual Property seconded the oppostion. He explained that the IP system has become more accessible in Europe over recent years, with the single market allowing SMEs to obtain protection much more easily and cheaply than in the past. 

The debate was opened up to the floor and this provoked some lively contributions.  There was talk of the value of no-win, no-fee agreements, and the fact that in the US it is permissible for patent agents to take a stake in companies for whom they are acting.  The value of being able to apply a court decision obtained in one state in the US to the whole country was emphasised, as were the number of cases brought in the US by SMEs against big business. ["No mention of the costs of US patent litigation then?" asks Merpel] Criticisms were also made of the short termism of the UK legislative cycle, particularly with reference to copyright and registered designs legislation 

Vicki Salmon

Following a summing up by the protagonists, and in spite of a mischievous threat from Sean Dennehey that if the motion was carried, lawyers would be abolished and technical Judges appointed, the motion was carried by a reasonable majority.  ["A lesson for Dennehey, and us all, not to tease those whose vote you rely upon", suggests the AmeriKat].  Whether politicians will take notice of the messages summarised by tonight's event and the position of inventors like Mr. Wilcox and SMEs, is unclear.  ["What is clear", says the AmeriKat, "is that in the current financial climate, SMEs need their message and their needs to hit home with politicians, and not at a superficial level, before its too late."]"

The AmeriKat , like Ms. Salmon, has been following the unitary patent debate with some fervor.  In almost ever press statement and conference conducted in Brussels, you will see or hear a phrase explaining that the urgency to pass the current proposals is because of the need to assist SMEs and/or SME's require and are asking for the current patent package to be agreed.  Predictably, these types of statements are not supported by concrete or empirical evidence.  

The European IP system:
Elegantly balanced?

The AmeriKat is curious as to how aligned, or unaligned, the needs of SMEs are to the needs of bigger businesses and how singular and un-relatable their experience is as opposed to the rest of the business community in the IP field.  If the unitary patent saga is anything to go by, perhaps its not "big business" that is to blame for the "imbalance" in the system, but the politicians who fail to understand what any business, big or small, needs from the patent or IP system in general.  The cost and complexity of enforcement of patents under the proposed unitary patent system is not a problem that is only inflicted upon SMEs rather than big business - all will succumb to these inherent problems.  The only difference is that SMEs will feel the symptoms far worse.  If anything, from the AmeriKat's experience in relation to the unitary patent, the voices of big business are raising the concerns of SMEs with politicians but it is the politicians who are ignoring all voices - big and small.  

What do readers think?  Are politicians and big business to blame for imbalance, or is the IP legislative process the lone actor who should claim responsibility? Or, should we be more philosophical and say that, although one of the IP system's goals is to strike balance, there has never been a time that a true balance has ever been achieved amongst the various participants and it is unrealistic to think the system can do so now without impacting the IP ecosystem elsewhere?