The UK Government has appointed seven high-profile science and technology leaders to the new Department for Science, Innovation and Technology (DSIT) Startup Board. These non-executive directors include the likes of astronaut Tim Peake, McLaren founder Ron Dennis, Professor of natural sciences Jason Chin (Trinity College, Cambridge), and Shonnel Malani, Managing Partner at Advent International, who will serve as lead non-executive board member.

The DSIT was established in February with a mission to cement the UK’s position as a science and technology superpower by 2030. Since then, it has announced funding of hundreds of millions of pounds for innovation accelerators, continued research into the field of life sciences and the development of laboratories, and has published strategies for growth in the artificial intelligence, quantum, and wireless infrastructure sectors.

The newly appointed non-executive board members will provide strategic guidance and insight as the department focuses on driving economic growth, creating jobs, and improving the lives of citizens through science, technology, and innovation. They will serve for nine months on an initial startup board that will nurture DSIT through its first year of existence, before a permanent board is recruited in due course.

Science and technology Secretary Michelle Donelan expressed the government’s commitment to incorporating the best and brightest minds from the science and tech worlds at every level of decision making in the government. The success of the DSIT, according to Donelan, will play a crucial role in delivering long-term economic growth, which is a priority for the UK Government.

In response to his appointment to the board, astronaut Tim Peake said that “As a former test pilot and astronaut, who has taken part in more than 250 scientific experiments for the European Space Agency and international partners, I hope to bring a wealth of experience of how science, technology and innovation are critical to both learning and development.”

The appointment of these high-profile figures to the DSIT Startup Board demonstrates the UK Government’s determination to advance the country’s science and technology leadership and agenda. It is also an opportunity for the private and public sectors to collaborate on innovative areas that will transform lives and drive economic growth across the country.

The appointment of these non-executive directors brings a wealth of experience and expertise to the DSIT, furthering the department’s ability to achieve its goal of making the UK a science and technology superpower in the coming years.

The European Commission published their proposals for new regulations on standards essential patents (SEPs), compulsory licensing of patents in crisis situations, and revised legislation on supplementary protection certificates (SPCs). These proposals, implemented by the European Commission, will only directly affect the European Union (EU) and not the UK.

Proposed regulations on standards essential patents

Of all of these proposals, the proposed new regulation on SEPs is perhaps the most contentious, having been leaked on 24 March 2023. This was commented on widely in the press and among the global patent community, including in a letter by the European Telecommunications Standards Institute (ETSI), a post by IP Europe, and a post on LinkedIn by Fabian Gonell, Chief Licensing Lawyer at Qualcomm, who went so far as to say that the “draft regulation would upend patent rights in Europe and have a host of unintended consequences.” By contrast, Apple (an implementer) has been very active in lobbying for the current version of the draft regulation. Commentators have noted that is because the draft regulation would be pro-licensee and anti-patentee, and might well encourage ‘hold-out’ behaviour where an unwilling licensee could delay enforcement.

The proposals include assigning to the EU Intellectual Property Office (EUIPO), which currently administers community trade marks and community designs but does not yet have any patent expertise, the task of building an SEP register and a procedure for determining FRAND rates for SEPs. This also includes the option for regular checks (instigated by either implementer or SEP owner) to determine whether a sample of up to 100 patents are indeed essential – although the results of this are not legally binding. However, ETSI noted in their letter that they already maintain their own database of essentiality declarations and also technical specifications. The proposed regulations also impose an obligation on bodies such as ETSI to provide certain information to EUIPO which would place a significant burden on them, in particular relating to known implementations of the standard, which ETSI have said even they do not have the tools or resources to comply with.

With regards to determining FRAND rates for SEPs, this can be initiated upon request by an implementer or SEP owner and is to be completed within nine months and facilitated by ‘conciliators’ which shall be chosen by the parties from a group proposed by the EUIPO. However, commentators have questioned whether any imposed FRAND rate determination by two ‘conciliators’ (and without appeals available) at the EUIPO, an institution that until now has never dealt with patents before, resulting in a non-binding result in a very short timeframe, would work in practice, as it will unlikely be respected in the market.

IP Europe noted that the proposed new regulation is damaging for:

1. departing radically from existing precedent, without sufficient data; 
2. turning over management of SEPs to an agency with no previous experience with patents or standards; 
3. creating an unpredictable and unbalanced system which will further delay licence negotiations and royalty payments, potentially for many years;
4. ignoring the EU’s commitments under the World Trade Organisation’s TRIPS Agreement and TBT Agreement, and the EU’s Charter of Fundamental Rights to defend patent rights; and
5. imposing an artificial and premature cap on aggregate royalties for implementations of a standard with a process that is open to misuse.

Compulsory licensing

The Commission notes that the new rules foresee a new EU-wide compulsory licensing instrument that would complement EU crisis instruments, such as the Single Market Emergency Instrument, HERA regulations and the Chips Act. The Commission states that in light of the COVID-19 crisis, these new rules would further enhance the EU’s resilience to crises, by ensuring access to key patented products and technologies, should voluntary agreements not be available or adequate.

Supplementary protection certificates

The proposal also introduces a unitary SPC to complement the Unitary Patent, along with a centralised examination procedure to be implemented by the EUIPO.

2023 EU SME fund

Concurrently with the proposal, the 2023 SME fund was also announced making vouchers available for SMEs to save up to €1,500 on their patent registration costs.

The European Commission’s proposals for new regulations on SEPs, compulsory licensing of patents in crisis situations, and revised legislation on SPCs have stirred up a lot of debate and commentary within the global patent community. While some, such as Apple, have actively lobbied for the proposed changes, others have expressed concerns about the potential unintended consequences of the regulations, particularly the new regulation on SEPs.

Nevertheless, the Commission argues that these new rules would boost innovation and investment within the EU, enhance the region’s resilience to crises, and support SMEs through the 2023 SME fund. It remains to be seen how these proposed regulations will be received and implemented within the EU and beyond.

The dispute began in 2022 when Lidl launched proceedings against Tesco, alleging that Tesco’s use of its ‘Clubcard Prices’ sign (Fig. 1 – yellow circle in a blue square with the words “Clubcard Prices” in the middle) amounted to trade mark and copyright infringement of its own Lidl mark (Fig. 1 – yellow circle, surrounded by a red ring in a blue square containing the word “Lidl” ) as well as its registration for the same design but without any text (the wordless mark).

Both marks comprise a yellow circle on a blue square, used by Tesco since September 2020 to advertise its Clubcard Prices loyalty discount scheme and indicate which products are eligible, and by Lidl in its main logo.

Lidl alleged that Tesco’s use of the yellow circle against a blue square was intended to deliberately take advantage of Lidl’s reputation as a discount supermarket and that consumers are likely to believe that Tesco’s mark is Lidl’s. Essentially, Tesco is “seeking deliberately to ride on the coat tails of Lidl’s reputation as a ‘discounter’ supermarket known for the provision of value.”

Tesco filed a counterclaim, arguing that:

1. Lidl has never made genuine use if its wordless mark and that the registration should be revoked or declared invalid based on non-use.
2. Lidl’s application to register the mark was filed in bad faith.

Drawing on arguments from Sky v SkyKick, Tesco alleged that the wordless mark was registered by Lidl as a legal weapon, a product of its trade mark filing strategy. There was, Tesco claimed, no intention by Lidl to use the mark in commerce, only to widen its legal monopoly right.

Tesco also accused Lidl of ‘evergreening’ by filing successive trade mark applications periodically for the wordless mark in 2002, 2005, 2007 and 2021 in order to refresh the grace period and avoid having to prove genuine use, drawing arguments from Hasbro Inc v EUIPO.

Lidl made an interim application to the Court to strike out Tesco’s counterclaim that some of Lidl’s registrations should be invalidated for bad faith and for permission to rely at trial on survey evidence in relation to the distinctiveness of its trade marks. The High Court agreed with Lidl on both counts and claimed that Tesco had not produced sufficient evidence to rebut the presumption that Lidl’s application had been made in good faith. The court held that mere lack of intention to use the trade mark did not constitute bad faith and struck out Tesco’s bad faith counterclaims. Tesco appealed.

Tesco’s grounds of appeal

Tesco argued that the High Court had:

1. Failed to apply the correct test to the striking out application under rule 3.4(2)(a) of the Civil Procedure Rules, and that it had also failed to consider that bad faith is a developing area of the law.
2. Failed to consider all of the alleged facts and inferences in its bad faith counterclaims in the context of Lidl’s infringement case, considering that no disclosure had yet been given by Lidl as to its intentions when registering the wordless mark.

 On this premise, the Court of Appeal granted the appeal.

Court of Appeal decision

While disagreeing with Tesco’s argument that the judge had applied the incorrect test, the Court of Appeal did agree that Smith J had neglected to consider bad faith as growing field of law and failed to properly consider the pleaded facts.

Tesco’s first claim alleged that the wordless mark (first registered in 1995) was applied for without any intention of using the mark, but instead as a way of securing a wider legal monopoly than afforded by the mark used by Lidl since 1987 and registered in 2011 as a mark with text. The Court relied on Ferrero SpA’s Trade Marks [2004] RPC 29 and Target Ventures Group Ltd v EUIPO case T-273/19. In both cases, the proprietors’ registrations of new marks, which were not intended to be used in the course of trade but instead designed solely to extend the scope of existing registrations amounted to bad faith. The Court of Appeal held that it was wrong for the High Court judge to say that Tesco’s allegations were “no more than assertion”, as all allegations must be assumed to be true unless shown to be manifestly unsustainable. Lidl could have presented evidence to show that this allegation was unsustainable but had not done so.

On Tesco’s second claim that the re-filing of the wordless mark amounted to ‘evergreening’ and should be declared invalid, it relied upon Hasbro Inc v EUIPO Case T-663/19, in which the General Court found that Hasbro had acted in bad faith by re-filing its ‘MONOPOLY’ mark to avoid having to provide proof of use. Tesco alleged that Lidl’s re-filing activity supported the bad faith claim.

The Court of Appeal reversed the High Court’s decision to strike out Tesco’s bad faith counterclaims and held that Tesco had raised “sufficient objective indicia to give rise to a real prospect of the presumption of good faith being overcome so as to shift the evidential burden to the applicant for registration to explain its intentions.” Tesco had substantiated its pleadings sufficiently.

Where are we now: back in the High Court and going round in circles

In addition to providing a reminder of the legislative and judicial context for the concept of bad faith, the Court of Appeal’s decision provides useful insight into two specific types of activity that may result in a finding of bad faith: filing for ‘defensive’ marks and ‘evergreening’ marks, as well as highlighting that the concept of bad faith is a developing area of UK law.

We return full circle and on 7 February, the trial began at the High Court which will now reconsider Lidl’s initial claims of trade mark infringement and Tesco’s counterclaims of non-use and bad faith. The case will provide further guidance on various issues, such as the threshold needed to be met in satisfying the bad faith criteria, the process of ‘evergreening’, and what is meant by lack of intention to use a mark. We may also expect guidance on the use of wordless marks as well as the relevance of survey evidence in establishing the distinctiveness of trade marks.

Given the highly anticipated Sky v SkyKick appeal to the Supreme Court in June this year, which will further investigate the notion of bad faith, we can expect to see additional clarity in this area of law and an opportunity to define the rules.

Just like its own mark, Lidl seems to be going round in circles; a discount retailer, well known for invoking recognised supermarket brands with its lookalikes, is now ironically claiming that consumers will think of Lidl when using their Tesco Clubcard. In the meantime, we will keep an eye on both cases as we anticipate the judgements.

The European Patent Office (EPO) has released its 2022 Patent Index, which evaluates trends in the number of European patent applications filed across different technical fields and geographical regions. In 2022, the EPO received a record 193,460 patent applications, representing a 2.5% growth from the previous year.

Increase in European patent applications from non-EPO states

While applications from EPO states remained the same, their overall share of filings fell to 43.4%, the lowest they have ever fallen. This is due to a surge in applications from China, South Korea and the United States. China saw the most dramatic increase in filings, with 15% more applications than last year, whilst South Korea has experienced a 10% growth rate.

Huawei was the leading patent applicant for its fourth year

Huawei continued its reign as the top patent applicant for the second year in a row and fourth year overall. Following Huawei were LG, Qualcomm, Samsung and Ericsson. With the increasing number of patent applications from China, the United States and South Korea, it is no surprise that these countries are where the top four applicants are based.

Another interesting trend that the Index revealed is that a significant share of applications from Europe were filed by SMEs or individual inventors, making up 20% of total filings.

Digital communication, medical technology and computer technology were the top technical fields

Digital communication was the top technical field for European patent applications, whilst also experiencing 11.2% growth from 2021. In fact, there has been a continuous increase in filings in this field since 2019. Medical technology and computer technology were the second and third technical fields respectively with the most patent filings. It is expected that these areas are likely to come together and play an important role in the future in respect of smart health innovation.

The technical field that saw the most growth was electrical machinery, apparatus and energy, with an 18.2% increase in patent applications. Another growing field was biotechnology, with an 11% rise in filings.

Sustainable innovation is the future

With many pledges towards carbon neutrality and investments in clean energy, sustainable innovation is becoming a focus for European patent applications. Patent filings regarding battery technologies have consistently been rising, whilst applications for fossil fuel technology patents have seen a decline. Sustainable innovation is accelerating and is anticipated to continue.    

Looking ahead

It is apparent that the rate of innovation and subsequent patent filings are on the rise, with China, South Korea and the United States being partly responsible for the surge. The trends identified by EPO suggest that sustainable technologies are continuously on the rise, expecting an even more staggering increase in the years to come. What is pleasantly surprising to see is the high portion of applications are filed by SMEs, indicating that individual inventors are prioritising protecting their intellectual property. Through Mathys & Squire’s Scaleup Quarter, we cater to the burgeoning startup community and are proud to have worked on some of these applications with our inventive clients.

Data and commentary provided by Mathys & Squire has featured in articles by The Patent Lawyer, City AM, Carbon Pulse and Carbon News providing an update on the rapid growth in carbon capture patents applications.

An extended version of the press release is available below.

There have been a record 411 global patent applications for carbon capture and storage technology published in the past year*, up 65% from 249 in 2020/21, shows new research by Mathys & Squire, the leading intellectual property law firm.

Carbon capture and storage technology is generally regarded as a crucial tool in meeting CO₂ emission targets, and companies are investing heavily in research and development in this area. Crucially, companies are seeking to patent technological breakthroughs to protect their IP and monetise their technology effectively.

While companies across a number of sectors have filed carbon capture patent applications, a key player is of course the energy sector, from which there have been 41 such patent applications published in the past year. Energy companies have identified carbon capture technology as a major tool in their strategies to reduce emissions. Notable filers of carbon capture patents include Exxonmobil, Saudi Aramco and Unilever.

Specialist carbon capture businesses, which have been established in recent years, were nevertheless responsible for 19 of the patent applications published in the last 12 months.

The United Nation’s Intergovernmental Panel on Climate Change has stressed the importance of carbon capture in reaching global net zero**. This has been reflected in many governments increasing investment in the technology.

The US Government announced $2.6 billion in funding for carbon capture projects in July 2022***, while in the same month the EU announced €1.8 billion in funding for clean technology projects for reducing greenhouse gas emissions, including carbon capture****.

A further example of governments encouraging investment in carbon capture technology is the recent discussions between the US and Indonesian Governments, leading to a $2.5bn carbon capture agreement between ExxonMobil and Indonesian state-owned energy company, Pertamina.

73% of published global carbon capture patent applications originated from China

In 2021-22, 73% of the carbon capture patent applications published (298) were from Chinese applicants – largely from energy companies and universities. The USA came second place with 10% (42), whilst the UK accounted for only five patent applications published, corresponding to just 1.2% of the global total.

China recently opened its largest carbon capture facility in Shandong province, with plans to build two more similarly sized plants announced*****. China aims to be carbon neutral by 2060 and the accelerated investment in carbon capture plants suggests the technology is a core part of its plans.

Innovative examples of recent patent applications related to carbon capture include:

• Carbon capture technology designed to be used in coal-fired power stations
• A method of producing diamonds from carbon captured from the air
• A carbon capture system designed for use in domestic households

Debate remains over whether resources and investment should be focussed only on renewable technologies, or on the development of other solutions in parallel. Some see carbon capture technologies as extending reliance on fossil fuels and hampering a shift to renewable technologies in the long term.

Michael Stott, Partner at Mathys & Squire, says: “Companies have recognised the commercial opportunity in mastering carbon capture technology, which is likely to form a key part of meeting the global net zero objective, and supplementing the progress that continues to be made in the advancement of renewable technologies.”

“Companies are racing to develop their carbon capture technologies and secure their IP. Those that can patent the most effective technologies are likely to have a commercial edge as the global economy transitions to net zero.”

“However, the UK lags behind other parts of the world in developing carbon capture technology. The UK Government may wish to consider whether current funding structures provide enough support to research and development in this vital field.”

“Support for carbon capture technologies doesn’t have to take away from renewables research. When it comes to achieving the global net zero objective, encouraging innovation across a broad range of technology areas can only be to the benefit of posterity.”

*Year end June 30 2022

**IPCC Special Report

***US Department of Energy

****European Commission

*****Sinopec

The start date for the Unified Patent Court (UPC) will be 1 June 2023. This will also be the date on which the Unitary Patent (UP) system comes into effect.  Thus, many patent holders are currently considering the merits keeping their EP patents ‘opted in’ to this system. 

Our UPC brochure outlines reasons why a you may wish to ‘opt out,’ but also includes some advantages of remaining ‘opted in.’  The purpose of this article is to expand on the latter, to assist weighing up the pros and cons of adapting your patent strategy such that future litigation would be through the UPC, instead of solely through the individual national courts across Europe. Thus, five advantages of remaining ‘opted in’ are outlined below.

1. Pan-European enforcement

Naturally, the first advantage of the UPC to note is that its jurisdiction covers numerous European territories (initially 17, likely extending to 25 in the coming years). Thus, relief for infringing activities across all of these territories can be sought via a single action.

Advantages include:

• Mitigating the complexity and cost of infringement proceedings, compared to pursuing proceedings at each individual national court. This may also avoid a scenario in which the national courts reach conflicting opinions on the issue of infringement.
• Relief for infringing activities occurring across the contracting member states, even in those states where an applicant may not have considered validating a ‘traditional’ EP patent or may have avoided for the purpose of infringement proceedings (e.g. a territory lacking a litigation track record in the field of the patent).
• The possibility of a Europe-wide injunction enforceable against a third party in each contracting member state, avoiding commercial confusion in scenarios where injunctions are ordered by only a selection of national courts, with the third party being (at least theoretically) free to continue their activities in other European states.
• Damages that may reflect the size of the market defined by the at least 17 (and counting) contracting member states, which is anticipated to be considerably more lucrative than damage obtainable from a single (or limited selection of) national court(s). This is particularly attractive for seeking damages in territories where the law on damages is less patentee-friendly.
• Enforcement of a single patent ‘pan-Europe’ is anticipated to be cheaper than separate litigation actions in the various European territories. This may be particularly attractive for patents covering technology sold widely at high volume, but at low value.

2. A system ‘born for’ patents

Although a number of European territories have excellent patent courts, such courts tend to be a smaller ‘part’ of a wider (e.g. civil) court system, with judges potentially selected for their broad IP knowledge across different types of IP. In contrast, the UPC is a court system dedicated to patent matters and is the outcome of years of meticulous planning by patent experts toward optimisation for patents. Furthermore, given the importance of this new system to the patent profession, numerous knowledge bases have been/ are being generated on a regular basis as the UPC is being rolled out. Thus, an interested applicant/ patentee can enjoy access to a wealth of information on the UPC system at their fingertips.

Advantages include:

• a patent court system designed to operate efficiently, with a first instance trial intended to be scheduled for within 12 months from the commencement of proceedings (versus a more typical period of about two years in some national courts). This should deliver more rapid resolution, and thus more rapid commercial certainty.
• Trial days are to be minimised (e.g. one trial day only, where possible), thus saving costs.
• Access to a talented pool of judges (85 of which have already been appointed), selected for their excellence in patent matters from over a thousand applications, and expected to deliver consistent decisions.
• Uniform court management systems (optimised for patent matters) across the divisions available to hear a case, leading to clarity and consistency in terms of timelines and costs.  Indeed, each division, independent of its territory, will follow the same Rules of Procedure that govern how litigation is conducted before the UPC.

3. Flexibility in forum selection

Given that the EU is a single market, it is not uncommon for an infringing activity in one territory to also be taking place in multiple (or even all) other territories. A claimant may therefore have a choice of litigation venue, chosen from one of the local/regional divisions present in any of the territories where infringement occurred. This opens the possibility for patentees to make strategic venue choices.

Advantages include:

• The option to select a venue considered desirable for your technical field.  For example, the background of the judges at the different divisions could be analysed to identify a panel with strong knowledge in the technical field of the invention, reducing the need for and cost of expert witnesses.
• For a territory lacking a litigation track record (e.g. in the technical field of the patent), litigation could instead be opened in a territory with a more established track record, such as in Germany. In this scenario, proceedings could be sought in German, or indeed even in English (both languages of the German local divisions). 
• A single litigation team can be brought on board, to manage a single litigation action conducted through the UPC. This contrasts with the traditional system where it has been necessary to recruit litigators in each territory.

4. The best of both worlds

It is also possible to adopt a strategy that makes use of both the UPC and the traditional national validation system. For example, a patent portfolio could be analysed to select members of the portfolio suited to the UPC e.g., for patents anticipated to be widely infringed across the EU (incl. in territories lacking a litigation track record). Other members of the portfolio could instead be ‘opted out’ of the UPC and proceed via traditional national validation e.g., where widespread infringement is not anticipated, and it is desirable to avoid the risk of central revocation.

Furthermore, creative ‘divisional’ application filing strategies may allow both systems to be pursued in parallel. For example, a broad ‘parent’ patent may be ‘opted out’ to be maintained via the traditional national validation system. Separately, a narrower ‘divisional’ patent (e.g. more particularly focused around a key commercial embodiment) could be set up for the UPC. This could provide a scenario where the parent patent provides a broad deterrent to infringers, and although broader it would not be at risk of central revocation, a feature of the UPC.  The narrower ‘divisional’ patent, on the other hand, may have reduced risk of central revocation due to its narrow nature that could resist validity attacks.

5. Stay ahead of the curve

Eventually, the UPC will have exclusive jurisdiction over all patents granted by the EPO, irrespective of whether the patent is pursued as a Unitary Patent, or is ‘classically’ validated. This situation will begin at the end of the transitional period, lasting seven years (extensible to 14 years) after the Unitary Patent system comes into effect on 1 June 2023.

Thus, by engaging in the system as it rolls out, it would be possible to begin developing experience and expertise in a system that will eventually become the status quo. By getting involved now, early users could be in a position to provide vital feedback as the system beings, playing a hand in helping to shape it. Perhaps even more appealing would be the possibility to help shape the development of case law under the UPC, for example toward establishing patentee friendly case law.

Conclusion

The UPC is set to be a significant commercial tool for organisations in the years to come. Our dedicated UPC and UP Hub has been created to provide updates on current developments in the UPC landscape, and to identify the potential implications for your patent portfolio.

Please contact your usual Mathys & Squire attorney or email us at [email protected] to discuss your UPC strategy in more detail.

It has been confirmed that the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has been approved. This means that the UK will soon join a free trade area including Australia, New Zealand, Canada, Singapore, Japan, Mexico, Vietnam, Malaysia, Brunei, Peru and Chile.

The Intellectual Property (IP) Chapter of the CPTPP includes an obligation for parties to that treaty to provide a 12-month grace period for patent applications. This means that public disclosures of information should be disregarded as prior art if those disclosures were made by the patent applicant or by “a person that obtained the information directly or indirectly from the patent applicant” during a period within 12 months prior to the filing date of the patent application.

That obligation had proven controversial since it is at odds with current practice in the UK which – in line with the European Patent Convention (EPC) – applies a strict ‘absolute novelty’ test. Under the current UK and European approach, parties’ own disclosures can count as prior art against their patent applications, with no grace period provisions except in very limited circumstances such as disclosures in breach of confidence.

In fact, questions had even been raised in some quarters as to whether a UK grace period would be compatible with the UK’s continued participation in the EPC. Article 2(2) EPC, which requires EPC contracting states to commit to the requirement for European Patents to “have the effect of and be subject to the same conditions as a national patent granted by that State.”

It was questioned whether the introduction of a grace period in the UK – without a parallel grace period in the EPC – would have been consistent with that requirement (despite the fact that a handful of other EPC states already provide 6- or 12-month grace periods for national patent applications and/or national utility models).

In the event, any difficulties in reconciling the UK’s membership of both the EPC and the CPTPP have been avoided, as the UK negotiating team has successfully secured a derogation from this part of the IP Chapter. The grace period provisions of the CPTPP have been set aside in the UK “until the necessary amendments to the relevant international conventions have been made”, with an agreement that the UK will “promote international harmonisation on the grace period and will report annually to other CPTPP members regarding progress on this matter.”

This means that UK patent practice remains unchanged in this respect, and in contrast to other CPTPP states, patent applicants will not be able to rely on a 12-month grace period when filing UK patent applications.

The European Patent Office (EPO) has so far demonstrated no intention to introduce a grace period of its own, and a recent EPO study suggested relatively little support for doing so. The prospect of a change of position in light of the UK’s obligation to ‘promote international harmonisation’ thus seems rather remote at present. According to the Chartered Institute of Patent Attorneys, any adoption of a grace period in the UK may also require amendment of the Strasbourg Patent Convention of 1963, a forerunner to the EPC which is still in force, and to which thirteen EPC member states, including the UK, are signatories.

Any developments with respect to amendment of the EPC or the Strasbourg Convention will be monitored with interest, but the adoption of a grace period in Europe seems unlikely for the time being.

The Enlarged Board of Appeal has issued a preliminary opinion suggesting that it is minded to approve something close to the so-called ‘PCT joint applicants approach.’

As explained in our earlier article, the Enlarged Board has essentially been asked to decide whether, firstly, the EPO has the power to determine whether a priority right has been validly transferred to a successor in title, and secondly, whether naming the applicant for a first filing as applicant for the US only in a PCT application claiming priority thereto is enough for the purposes of introducing priority rights into the European designation. Oral proceedings have been scheduled for 26 May 2023 and the Enlarged Board has now issued its preliminary opinion on the issues.

First question

The Enlarged Board considers the first question admissible as it touches upon fundamental questions of law. This in itself is interesting because the tribunal could have taken the position that the first question did not require an answer in view of established case law and practice, according to which the EPO does have the power to decide entitlement to priority.

The Enlarged Board further addresses the scope of the first question and considers that it encompasses all situations where the applicant claiming priority is not clearly identical to the applicant of the priority application. This is because entitlement to priority issues are also said to arise outside the context of succession in title.

As regards how the first question should be answered, the Enlarged Board merely identifies a number of further questions that might usefully be discussed at the hearing. These are summarised as follows:

• Has the case law always implicitly or explicitly supported the EPO’s competence to assess entitlement to priority?

• Does the provision governing the EPO’s lack of competence to determine entitlement to a European application have any impact on the interpretation of the provision governing entitlement to priority?

• Should the EPO assess entitlement to priority ex officio during examination proceedings?

• Could entitlement to priority be assessed on the basis of the autonomous law of the EPC, i.e. without invoking national law?

• If the EPO has the competence to assess an applicants’ entitlement to priority, is it also competent to assess their entitlement to the priority application?

These further questions suggest that Enlarged Board is far from making up its mind. Indeed, the tribunal notes that opinion is also evenly divided between ‘yes’ and ‘no’ in the amicus curiae briefs and among the parties to the proceedings.

Second question

The Enlarged Board considers the second question admissible because it is relevant in many proceedings before the EPO and is a matter of ongoing discussion in the case law. 

As regards how it should be answered, the Enlarged Board says that it tends to support an affirmative answer (assuming there is an affirmative answer to the first question) on the basis that the joint filing of a PCT application (“i.e. with the consent of all applicants”) could serve as evidence implying an agreement on the sharing or transfer of the priority right. This approach seems to align closely with the PCT joint applicants approach, although problems could presumably arise if there is evidence proving the absence of any agreement, or worse, a disagreement between the PCT applicants vis-à-vis the sharing or transfer of priority rights. 

The Enlarged Board further notes that the written submissions have almost unanimously supported an affirmative answer to the second question. An affirmative answer would certainly be good news for many patentees!

We will provide further updates as the Enlarged Board referral progresses.

The Department of Health and Social Care recently published a Medical Technology Strategy report which outlines how the UK health and social care system can access innovative medical technologies, so called ‘medtech’, to deliver high-quality care.

The strategy provides a framework in which the NHS is to develop and select medtech products. The aim is to provide continuity in the medtech supply chain to ensure innovative products reach patients quickly and to develop an infrastructure to enable this.

The report also highlights the importance of medtech, to the UK healthcare system, with the NHS alone spending an estimated £10 billion per year on medtech as well as the industry itself accounting for 31% of all turnover in the UK life sciences sector. The medtech sector is broad, varied and competitive with just under two million products registered for use on the UK market and over 4,000 UK medtech businesses in the UK. 

The report also emphasises the important role that patent protection plays with medtech patents making up 1 in 12 patent applications from the UK to the European Patent Office. As a practical commercial matter, due to product development and regulatory approval requiring significant time and investment, patent and design protection in this sector offers a major strategic benefit. Companies in this industry value their IP rights very highly and as a result are prepared to invest to defend them. The latest strategy highlights government’s understanding of the importance of the future of medtech, as well as the trust in innovation and IP protection required.

The recent spring budget also provided positive news for UK medtech companies with an announcement of a new R&D tax credit scheme for SMEs and a commitment from the UK Government to support the Medicines and Healthcare products Regulatory Agency to provide simple, rapid approvals for medicines and technologies.

For more information on how best to protect your medical technology, please contact our medical devices team.

Chancellor Jeremy Hunt delivered his Spring Budget in the House of Commons on Wednesday, 15 March 2023, with a target of rebuilding a strong economy by tackling inflation and the cost of living crisis. Of particular interest to us is the government’s focus on carbon capture, tax boosts to smaller businesses, and the future of the nuclear energy and artificial intelligence (AI) sectors.

Investment allowance increase and further tax boost for small businesses

Reinforcing the attempts to grow the economy, Hunt announced that the Annual Investment Allowance has been increased to £1m for small businesses. Considering 99% of the UK economy is made up of small and medium-sized enterprises (SMEs), all of them will be able to deduct the full value of their investment from that year’s taxable profits. In addition to supporting the burgeoning startup community by increasing the tax-deductible amount spent on investment, the Chancellor has also introduced a tax boost to further promote spending. SMEs will be able to claim £27 for every £100 spent, as long as they spend 40% or more of their total expenditure on research and development (R&D). Introduced measures should see SMEs investing and researching, with a goal of growing the business and thus the UK economy.

Financial support for the development of carbon capture technologies

As anticipated, the chancellor has confirmed a budget of up to £20bn to support the development of carbon capture methods, as well as its storage and usage technologies. Not only is it expected to help capture 20-30 million tonnes of CO₂ per year by 2030, but it will also support up to 50,000 jobs and attract further private sector investment. This area of cleantech is already a hot bed of innovation, however, the extra funding available is likely to enhance the speed and quality of new solutions brought to market.

Confirmation of the classification of nuclear power as environmentally sustainable

The clear-cut validation of nuclear power as “environmentally sustainable” gives it access to same investment incentives as any other renewable energy. Along with the confirmation and in line with Britain’s goal of energy independence, Jeremy Hunt has also launched “Great British Nuclear”, looking to support the industry by providing better opportunities and lower costs to produce nuclear power. The chancellor went a step further and announced a competition for small modular reactors. If the technology is found to be viable, the government promises to co-fund the technology. With such clear government backing, we expect the rate of innovation in the nuclear power sector to go up significantly.

Encouragement and prizes for groundbreaking artificial intelligence research

The already rapidly expanding sector of AI has been promised a prize of £1m every year for the next 10 years “to the person or team that does the most groundbreaking AI research.” The current rate of R&D in the sector is astonishing as it is, and £10m worth of prizes available will only spark the competitiveness and drive amongst innovators.

Looking ahead

The budget highlights the government’s trust in the rate and direction of innovation driven by the SME community, as well as cleantech and AI inventors. As a follow-on effect, increased innovation will likely result in a spike in filings of intellectual property rights in a bid to help commercialise the technology in question. We look forward to seeing how the introduced policies and measures will affect the technology and science space.