Rule 141 and UK IPO spin

tytoc collie wondered a few weeks ago what the point was of the new requirements as from 1 January 2011 to supply search results to the EPO on priority applications, under an amended version of Rule 141 EPC.  This was particularly puzzling since the requirement will immediately become superfluous in relation to priority application from the UK, US and Japan, according to a Decision of the President from 9 December 2010.

Baroness Wilcox meets Wallace & Gromit [Flickr]

Thanks to a press release (UPDATE: see the original here; the web version has now been mysteriously modified, possibly in light of tytoc collie's comments below) issued today by the UK Intellectual Property Office, the point now becomes clear.  According to the UK minister responsible for IP, Baroness Wilcox (right: the one in the middle), the point is cutting duplication of work. She says:

"Reducing the burden of bureaucracy saves businesses time and money. It is essential in creating the conditions for businesses to grow and prosper. 

These new arrangements will make it cheaper and easier for UK firms to obtain patent protection as they look to expand into other European countries. 

The UK has been campaigning for greater work sharing like this and I am pleased to see this latest development. 

Cutting duplication is key to dealing with the worldwide backlog of patent applications.
The quicker we deal with patent applications, the quicker firms can bring the latest innovations to the consumer."

These might seem like very good aims, but only really make sense if they relate to reducing a burden that already existed.  Rule 141 in its new form does not even come into force until tomorrow, so to claim that the requirement not to submit search results somehow reduces the burden on applicants is somewhat disingenuous, to say the least.  In its old form, Rule 141 could only result in an EPO examiner inviting the applicant to provide search results, with no provision for a penalty if the applicant did not comply. This was therefore hardly an onerous burden, and in practice was rarely used.

To add a further insult to its (presumably uninformed) readers, the IPO adds that the new requirements reduce costs because "individuals cannot make their own applications to the EPO so companies must engage a patent attorney to do it for them".  It is perhaps fair enough to presume that a non-patent attorney applicant would not know of the provision of Article 133 EPC, which states that, except for applicants from outside Europe, "no person shall be compelled to be represented by a professional representative in proceedings established by this Convention".  To have the IPO propagate such misinformation, however, is a little surprising.

tytoc collie thinks that perhaps the new year celebrations have started a little early at the IPO.

Hulu: The Once and Future (?) IPO

Given the paucity of IPO activities in recent years, the buzz surrounding a possible IPO by Hulu has attracted particular interest since the summer. After all, Hulu, a joint venture of NBC Universal (General Electric/Vivendi), Fox Entertainment Group (News Corp) and ABC Inc. (The Walt Disney Company), with funding by Providence Equity Partners, has been one of the most ballyhooed online content distribution initiatives of recent years.

The initial notion of Hulu was to stream recent episodes of television programs, with income to be derived from advertising. The service at first was limited to the U.S. and its roll-out to other countries is proceeding at a snail's pace, apparently due to issues regarding the securing of streaming rights. More recently, at the urging of some of its owners, most notably News Corporation, it began to consider a subscription service as well, culminating in the launch last month of Hulu Plus, which offers access to full seasons of streamed program content, rather than merely the most recent episodes, plus delivery capability to portable devices such as the iPad and to internet-connected televisions. When the possibility of an IPO arose, one report suggested that the IPO would be at a valuation of $2 billion dollars.

Alas, there will not be any IPO, not for a $2 billion valuation, not for a $1 billion valuation, and not even a $1.00 dollar one. As reported in the Wall Street Journal on 21 December by Jessica Vascellaro and Sam Schneider ("Hulu Mulls More Pay Plans, Not an IPO") here, Hulu has apparently abandoned, at least for the moment, any current plans for an IPO. Instead, it seems, the company will consider seeking alternative sources of financing as well as strengthening its subscription services.

That said, I was particularly struck by one comment made in the Wall Street Journal report:

"The people familiar with the matter said that Hulu's lack of long-term rights to its owners' online-video programming was one reason the board and Hulu's management have decided not to proceed with an IPO."

I had to do a double take on this sentence. It says that a major reason that Hulu

pulled its IPO plans is because it is apparently unable to secure long-term rights to use the contents of its (!) owners. It is one thing to say, as the article points out, that Hulu is still trying to decide with what types of content it wants to be identified (i.e. how it wishes to brand itself), but it is quite another thing to acknowledge that you do not have, for whatever reason, long-term rights to your owners' online video programming.

Unfortunately, the Wall Street Journal article does not further elaborate on this spectacularly curious point. Further insights can be gleaned, nevertheless, from a brief report by Sean Portnoy ("Hulu yanks IPO, mulls other subscription plans") that appeared in the 23 December issue of ZDNet here. Portnoy writes as follows:

"However, Hulu is running up against a couple of major obstacles, one external and one internal. The outside factor is Netflix’s success with its streaming service, and while it offers little in the way of new TV episodes and movies, it does have an extensive catalog of titles that Hulu Plus lacks. A major reason for Hulu’s need for more cash is to obtain additional content that would make its subscription plan more attractive.

The company is also facing pressure from its content partners to come up with other pricing plans that provide more revenue to those partners. No details were reported about such plans. But those partners would need to open up their archives fully in order to justify new pricing, especially as Netflix aggressively pursues content for its service — even inking deals with Hulu’s partners" (emphasis by this Kat).

Portnoy's comments suggest that Hulu's own owners are hedging their bets, at least with respect to what platform(s) will be best positioned to monetize their video contents. This apparent bet-hedging by Hulu's owners comes on the heels of increasing penetration by both Netflix and YouTube into online access of television programming which, after all, has heretofore distinguished Hulu from other online content delivery platforms.

Behind all of this remains the continuing nagging question: how and who will be able to make money with respect to the provision of online contents? If the CEO of Hulu, Jason Kilar, stated in a recent interview that the company is on track to generate $260 million dollars for the year 2010. Revenues of $260 million dollars are not a small amount, but it certainly takes a number of multiples to reach even a $1 billion dollar valuation.

Independent Review of the IP System Launched Today

The Prime Minister today unveiled plans for an independent six-month review of the Intellectual Property system in the UK. Revealing the publication of "Technology Blueprint" at a major event in Shoreditch, David Cameron outlined how the Government will support high-tech innovation. According to the IPO press-release: "He spoke about how the Government can help make Britain the most attractive place in the world to start and invest in innovative technology companies."

The Press-Release Continues:

Mr Cameron said:

"I can announce today that we are reviewing our IP laws, to see if we can make them fit forthe internet age."

The Blueprint also reveals the Intellectual Property Office will trial a peer to patent project,which will allow people to comment on patent applications and rate contributions to help improve the quality of granted patents.

The six-month review aims to identify barriers to growth within the IP framework, which consists of the rules and regulations covering how IP is created, used and protected in this country.

It will particularly focus on how the IP system can be improved to help the new business models arising from the digital age."

The Press-release continues, noting that Baroness Wilcox also commented on the manner in which the internet has changed the business landscape:

"An IP system created in the era of paper and pen may not fit the age of broadband and satellites. We must ensure it meets the needs of the digital age."

There was also a great deal of talk about IP 'helping' and 'not hindering' companies that operate in highly skilled, technology sectors - with reference being specifically made to rights clearance systems akin to those available under fair use of copyright works in the US.

The scope of the review is stated to include examination of:

• Barriers to new internet-based business models, including the costs of obtaining permissions from existing rights-holders;
• The cost and complexity of enforcing intellectual property rights within the UK and internationally;
• The interaction between IP and Competition frameworks;
• The cost and complexity to SMEs of accessing services to help them protect and exploit their IP.
• The review will also look at what the UK can learn from the US rules covering the use of copyright material without the rights-holder's permission.

The press release notes that "[t]he review will make recommendations on the changes the UK can make as well as the long-term goals to be pursued through the international IP framework." Its report is expected in April 2011.

The IPO has also used the press-release to announce the trial of a "peer to patent project, which aims to improve the quality of the patents by ensuring they are sufficiently new and inventive." It explains:

"Patent examiners cannot be expected to have access to all the information already in the public domain and this project aims to address that.

In the trial selected patent applications would be available for people to comment on and crucially rate each other comments. The highest rated comments would then be submitted to the patent examiner."

The trial follows similar projects elsewhere (most notably in the U.S. and Australia).

IP well and truly in the spotlight.

Peer to Patent here

Beer to patent here (.pdf alert)

Manual Labours: Manual of Patent Practice Updated

Those that are fans of the IPO’s Manual of Patent Practice (and let’s face it, who isn’t?), will be delighted to learn (admittedly slightly later than this Kat was originally intending) that this most informative of publications has recently been subject to the latest round in its thrice-yearly update schedule. For those that have not checked the Manual since the end of September, a helpful summary of the bits that may now be different to the last time you looked can be found here.

Highlights include:

• Updated guidance on the person skilled in the art following the Court of Appeal’s decision in Schlumberger Holdings Ltd v Electromagnetic Geoservices AS [2010] EWCA Civ 819 (noted by tytoc collie here) – the manual has also been revised in light of Jacob LJ’s explanation of the issue of long-felt want in the same case.

• Discussion of clarity of claims using the terms “predetermined” or “preset”: updated in light of the decision in Folding Attic Stairs Ltd v Loft Stairs Co. Ltd. [2009] FSR 24 (a case which, readers may recall, prompted a storm of comments when first blogged by tytoc collie here).

• Also brought within the IPO’s corral is the decision in Dr Reddy’s Laboratories (UK) Ltd v Eli Lilly & Co Ltd [2010] RPC 8 (noted by tytoc collie here), in which the Court of Appeal delved into the murky depths of selection invention – asking, in the process, where a wise man would hide a leaf…

• The sections on supplementary protection certificates has also been updated in light of the decisions of the High Court in Yeda Research and Development Company Ltd v Comptroller General of Patents [2010] EWHC 1733 (Pat), and that of the Court of Justice of the European Union (the artist formerly known as the ECJ) in Case C-428/08 Monsanto Technology LLC v Cefetra BV et al (the latter was noted by tytoc collie here).

A weekend of happy reading awaits...