European Union: Big Blue Proposes New Type Of Patent Right - The EIP
Big Blue, new, patent right, EIP, community patent,

There's an interesting article in this months edition of iam-magazine in which Joff Wild interviews David Kappos (VP IP law at IBM) about a proposed new type of patent right which he says Europe should adopt.

The right, called the European Interoperability Patent (EIP) would be an EU-wide patent granted by the EPO. It would not be possible to obtain injunctions for infringement of EIPs, but instead, any person can obtain a license of right (in return for a reasonable royalty). Infringement and royalty disputes would be determined by the courts. The EIP would not replace current patents, but sit alongside them as another option.

David claims that the EIP would significantly reduce costs and be a boon to many types of company. In Europe, there would not be such a pressing need to get translations for each country, and prosecution and enforcement could be done centrally.

The Community Patent, in a slightly watered down form...

Some problems highlighted by Joff:

• Companies in the life sciences sector would not be happy with this right.
• How can SMEs grow when bigger rivals always have the opportunity to take a license of right to their inventions (under the EIP)?

David's responses to both are basically that it wouldn't replace any existing right.

David also points out that companies which did not use the EIP, but still played in open standards and interoperability would have some explaining to do (ie they would be seen as free-riding off everyone else's innovation).

• Joff made the point that the EIP would very neatly fit IBM's strategy of having an enormous outlicensing program. (It seems to me to also benefit large companies that can generate a lot of inventions for EIP protection.)
• David and IBM are to be congratulated for thinking about this issue and coming up with a first suggestion for discussion.
• I think that it is inevitable that open source and interoperability will only increase in importance over time. Companies with strategies which integrate these approaches will do much better over the long term.
• The suggestion also hits at what has been termed 'the myth of exclusivity' - that in most industries patents rarely confer an absolute monopoly - there's always another technical solution. So, it is better to get your solution widely adopted and early.
• I wonder whether an EIP-type right would eventually effect the value of 'reasonable royalties' being paid. If you're going to have to license it anyway, then there's little argument about the price you can command (you've lost exclusivity as an economic driver). Perhaps this can be remedied by reference to royalties commanded elsewhere (until the whole world as EIP equivalents...)
• Faced with the choice, though, you can see that many companies would not relinquish there (normal) patent rights in favour of an EIP or similar right.
• Maybe it would operate as a credibility chip to allow companies to 'play' in the open source space, but still, I'm sceptical, I must admit.

Still, an important discussion which needs to continue. What do you think?

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Duncan Bucknell

Duncan Bucknell Company