Proprietary change

PRACTICE AREA: PATENTS

GRANIA LANGDON-DOWN OUTLINES THE MYRIAD OF CHANGES CURRENTLY FACING PATENT SPECIALISTS AND FINDS THAT LAWYERS MAY HAVE TO RECONSIDER THE WAY THEY PROVIDE SERVICES TO THEIR CLIENTS

The stakes are high when it comes to patenting a new product - and with several new developments in the offing, professionals involved in patent work are undergoing a sea change in the way they provide services to clients.

New guidelines for a streamlined litigation procedure came into force last week, the long-talked-about European community patent has finally won political agreement, and later this year the House of Lords will make a crucial ruling on one of the essential elements of a patent.

At the same time, a move by City law firm Field Fisher Waterhouse to enter into a branded relationship with a firm of patent attorneys to offer the expertise of both under one virtual roof has highlighted the different ways the profession operates in this field.

While patent work remains reasonably resilient in the face of a recession - protecting monopolies and market share becomes, if anything, more vital - there have been fears that the high cost of litigating in the UK has led to business being lost to Germany and the Netherlands, where the court process is seen as simpler and cheaper.

Paul Stevens, an intellectual property (IP) partner at Olswang in London, stresses that business for his firm has never been better, but admits: 'The UK is losing business to the German and Dutch patent courts.

The English courts offer Rolls-Royce justice in examining all the issues with a fine-tooth comb, which is appropriate if a company has spent tens of millions of pounds developing a pharmaceutical product with a massive potential market.

But when it comes to a product likely to have a turnover in the low millions, then the European broad-brush, quick-and-dirty approach is proving more attractive.'

But the UK is responding to the challenge.

Alan Johnson, secretary of the Patent County Court Users Committee and a partner at niche London IP firm Bristows, has high hopes for the new streamlined procedure introduced under the Patents Court Guide.

He explains: 'The idea is to bring smaller actions to trial within eight months by dispensing with disclosure and experiments, and limiting the scope of cross-examination so it only lasts a day.

This will be very important for litigants when choosing which jurisdiction to bring their action in because they will get the benefit of the UK's highly respected courts at a more reasonable price.

'We see this as a very powerful tool to attract business to the UK, and as a good antidote to the perception that the German and Dutch patent courts are cheaper.'

For Chris Forsyth, a partner specialising in patents at Freshfields Bruckhaus Deringer, cost is only one factor driving business abroad.

'The English courts have a reputation in the US and Europe of being anti-patentees.

UK judges are as technically proficient as they are legally expert, so they tend to set a higher bar for patents to clear.'

While patent litigators are excited about the new court procedure, they remain underwhelmed by last month's political agreement for a community patent, which envisages the establishment of a patent court in Luxembourg by 2010.

At present, individuals and companies can either obtain a patent in their own country or spread the net wider by obtaining a European patent, which offers a streamlined way of obtaining individual patents in some or all of the countries that have signed up to the European Patents Convention.

The community patent will be enforceable in all EU member states.

Mr Forsyth says: 'People have been talking about a community patent for 30 years.

The political sticking points all along have been about language and jurisdiction.

The Greek presidency of the European Community has done an excellent job in finding a compromise which has led to this new agreement.

But commentators remain divided over whether it will now move quickly to fruition or whether the Greeks have just pushed the substantive issues into the details, which are still to be grasped.'

Jonathan Radcliffe, IP partner at City firm Field Fisher Waterhouse, says: 'We haven't seen the fine print of the court process yet, so it is impossible to say whether lawyers or industry will want to use the community patent.

While it will, in theory, be simpler because you will have one EC-wide patent, if you lose it, you lose everything - that will prove a major disincentive.'

Mr Radcliffe's firm has stirred up the patents world by teaming up with patent attorneys Mathys & Squire under the brand name Isosceles.

While Mathys will act as Field Fisher Waterhouse's sole patent agent, as it has for more than five years, it will continue to work with other law firms.

The two will also bill separately and remain in their own offices, while providing scientific and legal advice from a single point of contact.

The move highlights the different ways law firms operate in the patent field.

Olswang employs patent attorneys to work alongside their lawyers.

Mr Stevens argues: 'Isosceles is just sticking a label on the sort of relationships that have been going on for years.

Our view is that clients want to deal with one firm with one bill from one set of people.

'It is issues over advocacy which are causing the profession to undergo a sea change as the distinctions between solicitors and barristers at one end, and solicitors and patent attorneys at the other, are being eroded.'

Other firms, such as Freshfields, work with lots of different firms of patent attorneys.

'It is good to have competition on both sides,' says Mr Forsyth.

'It keeps you on your toes.'

Mr Radcliffe, who is a director of Isosceles, says the initiative is modelled on the US, where IP lawyers and patent attorneys work in tandem.

'It has the potential to fracture the way in which IP services are delivered in the UK.

Don't forget, US law firms have been doing this for years and they are now moving into London and getting into the IP market.

Niche boutique firms which have traditionally existed on referrals are potentially quite exposed - they will either have to roll this out too or grow into a different specialist area.'

Field Fisher partner John Olsen is chairman of Isosceles.

'We have tried having patent attorneys within the firm but it doesn't work because Law Society rules prevent them becoming partners, and no self-respecting professional wants to be an employee for ever,' he explains.

However, Mr Johnson sees the move as merely the 'blurring of the edges' in relationships between lawyers and patent attorneys - interesting but not something Bristows would look to mirror.

'Most of our work comes directly from long-standing clients and from beauty parades - it is very rare for a patent agency to have the major say in the allocation of work from any significant client,' he says.

Another potential development in the patent field could come later this year when the House of Lords considers an appeal centred on 'obviousness' - whether a product, idea or design involves an inventive step worthy of being given a patent.

It will also be looking at the issue of importation for the first time and asking whether the point at which legal title is transferred has any impact on the question 'who is the importer?'

Field Fisher Waterhouse is acting in the case, representing Sabaf, an Italian manufacturer of cooker units.

It sued another Italian manufacturer, Meneghetti, for infringement of its patent when Meneghetti started supplying hob units to MFI for sale in the UK.

At first instance, the High Court found the patent to be invalid because the design was too obvious.

The Court of Appeal ruled the patent valid but also allowed a cross-appeal that Meneghetti did not import the hobs because they passed to MFI in Italy.

Mr Radcliffe says: 'The appeal in the Lords will be very significant in patent terms because it is the first time in living memory it has considered obviousness.'

Grania Langdon-Down is a freelance journalist