Center for Advanced Study & Research on Innovation Policy


CASRIP Newsletter - Summer 1999, Volume 6, Issue 1

1999 High Technology Protection Summit July 23-24

by Elizabeth Peterson

CASRIP's 1999 High Technology Protection Summit focused on technology transfer, from university and independent government funded projects to useful commercial applications. The summit had an international focus with presentations on the laws and structures in Japan, Taiwan, China, Germany and the US. A cross-section of professional perspectives was offered; from judges, professors, corporate executives, attorneys, patent officials to inventors. Many symposium participants and speakers returned from previous years in order to stay current on recent intellectual property developments. The presentations contained much substantive practical information useful to all IP professionals.

Friday July 2

Judge Randall Rader of the U.S. Court of Appeals for the Federal Court, Washington D.C. Circuit gave the keynote address. His thesis was that the expense of litigation in intellectual property cases in the United States is the price of the rule of law system. The high costs of litigation keep the courts in their proper role in the system by encouraging private settlement. The court expenses provide a benchmark for attorneys to calculate costs of settlement. The ultimate cost of enforcement of voluntary compliance of the current U.S. Intellectual Property system is far less than it would be for an alternate system.

Next, Judge T.S. Ellis of the U.S. District Court in the Eastern District of Virginia and Judge John C. Coughenour of the U.S. District Court, Western District of Washington spoke about intellectual property litigation. Judge Coughenour focused on the Federal Courts in general. He first noted that district courts do not specialize, but hear a wide variety of cases. Judges are generalists; they receive no special training to be judges, and very few have backgrounds in intellectual property issues. He commented that many patent and trademark attorneys make the mistake of assuming judges understand the language and the intricacies of this field of law. He suggested that if lawyers endeavor to make their case interesting, easy to understand, and use their time efficiently, judges and juries would be appreciative. This advice is particularly important because of the no holds barred approach of IP attorneys. Cases quickly can spin out of control, especially if the defendant files an anti-trust counterclaim. Judge Coughenour urges attorneys to think about the scope and costs of their cases.

Judge Ellis is from the famous "rocket docket" where cases typically start and finish within 6-8 months. His court has experienced an explosion of intellectual property cases for the last few years. Judge Ellis noted several common difficulties and surprises litigants commonly experience in his district. Among these points were: 1) litigants waste time with venue and jurisdictional issues; 2) the willingness of the court to consolidate complex cases involving Markman issues; 3) the rapid pace does not permit leisurely exploration of damages in the discovery phase; 4) around 95% of patent trials are by jury; 5) extension of the period for response to the initial motion for trial does not shift the schedule for trial; 6) assignment of a master judge for settlement proceedings (different from the trial judge); and 7) Markman hearings are held as soon as practicable.

The second session began with an overview of the Japanese court system. Mr. Yoshio Kumakura, reknown as the top litigator in Japan, spoke about the recent changes in litigation of IP cases. During the past 5 years IP cases filed in the Tokyo District Court have increased dramatically. In response to the high volume of cases Japanese courts have attempted to expedite procedures. In particular, new flexible hearing methods were adopted nationally in 1996 and the three-step trial process has been adjusted to allow the court to handle the different phases at the same time. Mr. Kumakura also made several recommendations to obtain quick and less expensive enforcement in Japan. Among his suggestions were: to use the expedited examination system, to use the expedited examination system, to study prior arts before filing, and to submit the infringement argument with evidence as well as to prepare and submit the argument and evidence of damages at an early stage of litigation.

Professor Toshiko Takenaka, Assistant Professor at the University of Washington and Director of CASRIP undertook a structural comparison of U.S. and Japanese court systems for patent litigation and referenced recent changes in Japanese intellectual property law. The Japanese system has special divisions within general courts as compared to the U.S. system, which has a special patent court. The disadvantages of the Japanese system are that it is inefficient and slow, but it has an important advantage in its use of expertise and ability to resolve complex issues. However, recent revisions in Intellectual Property Laws have remedied the inefficiency significantly. Increased interests of Japanese IP owners in enforcement has resulted in an increase in the number of disputes brought to the courts, and resulted in important alterations in case law. There have also been case law developments with regard to statutes that have remained unchanged.

During lunch Dr. Alvin Kwirum, Vice Provost for Research, Office of the Provost of the University of Washington presented an overview of the technology transfer process at the university. He noted that in the last decade, there has been a dramatic increase in research projects and technology transfer activities that have brought with them a host of new issues for consideration. Among these: how does a university decide which properties to protect, how aggressive should universities be in gaining value for their patents, how do the various external relationships-for example university donors-affect the transfer arrangements, what incentives should the school offer inventors and who owns copyright in a university. Dr. Kwirum encouraged participants to carefully reflect on these issues, as the answers will shape the architecture of future IP law.

Next, Professor Rebecca Eisenberg of the University of Michigan School of Law, surveyed public research and development in patents and technology transfer in government sponsored research in the United States. She believes the current IP policy does not always further the transfer of new technologies to the private sector for commercial development. It does not take into consideration the tension between the revenue motive of research performers as patent owners and licensors, and the profit incentives of innovating firms. Eisenberg argues the Bayh-Dole Act may actually serve to retard product development, and cautions that revenue incentives might not be the best measure for selecting research projects at universities and other institutions.

Following Professor Eisenberg was a panel discussion offering a review of the current system of technology transfer at U.S. universities. First to speak was Mr. John Sandolin of Standford University, who presented an overview of the operation of a technology transfer office. He provided a basic understanding of patent and licensing, describing the different types of agreements used and their key terms. Next, Dr. Catherine Hennings, Director of the Technology Transfer office at the Fred Hutchinson Cancer Research Center, focused on the benefits of establishing a good relationship between the technology transfer office and the scientist-inventor. She advocated a customer service approach to dealing with inventors, and gave practical tips for managing expectations. Then Dr. Jeffery Labovitz, Director of the Office for Technology and Trademark Licensing at Harvard University spoke about the tensions in technology agreements between universities and for profit corporations. He advised universities to explain fully and to educate potential partners the constraints under which they work. He also urged universities to be creative in their thinking. Lastly, the moderator, Dr. Robert Miller, Director of the Technology Transfer office at University of Washington, analyzed the financial importance of industrial research agreements to universities. He also summarized the University of Washington's approach to and management of technology agreements.

Dr. Leroy Hood of the University of Washington presented the inventor's perspective. He spoke about the revolutionary changes in our understanding of biology that have occurred in the last ten years, and their potential legal impact. He suggested a new perspective: that intellectual property law, where it intersects with biology, should patent the specific information rather than the general mechanical compositions for translating information. He proved to be the most thought-provoking speaker of the conference.

Next, Mr. Richard Donaldson, Senior Vice-President of Texas Instruments, presented the industry perspective on university technology transfer. Many industry leaders such as Texas Instruments and Sony among others currently have research agreements with American universities. He advised that these agreements are most successful with the parties keep the agreement simple and long range. He also counseled against mixing students, professors and industry employees between institutions, as it is it a complicated mix for most corporations, and against joint ownership of IP projects. Despite the difficulties, he stated that he foresees a bright future for the joint projects.

Last on Friday, Mr. Stephen Maebius of Foley and Landner, and Mr. Steve Faczewski of CTI, offered views on university technology transfers from their position as attorneys. Mr. Maebius spoke about specific forms of licenses and agreements, in particular research tool patents and reach through licenses. He used the experience of the Gene Logic company and a patent developed by Yale researchers as a case study for successful commercialization of a university research project. Mr. Faczewski spoke about the legal concerns in commercial applications and gave practical advice for interested companies. In particular, he suggested business and university to establish the boundaries of their relationship, to set the commercial priorities, and to define the roles of the contributors at the outset.

Saturday, July 24

The morning began with a presentation from Dr. Hans Ullrich, Professor of Law at Bundeswehruninversitat. He began with an overview of the German and European Union Approach to technology transfer, and identified two fundamental flaws of the European approach: an over-simplistic view of product development, and the inability of the current intellectual proper rights system to accommodate technological developments. In response, Dr. Ullrich made several recommendations for changes in short term policies, and international initiatives. He believes IP policy should concentrate in promoting the effectiveness of intellectual property rights as an innovation system.

Next Professor Katsuya Tamai, Professor RCAST of the University of Tokyo spoke of the problems surrounding the traditional technology transfer system at Japanese universities, and the hope that the newly formed organizations (such as University of Tokyo's Center for Advanced Science and Technology Incubation) will soon improve the situation. These new pro-technology organizations will better understand the potential of the university departments, and will help with the processing of applications and in the marketing phase. Professor Tamai predicts Japanese universities will soon experience a boom in technology transfer operations.

Dr. Kuan Hsiu Hsiao, Director of the Department of Central Processing of the National Science Council of Taiwan then gave a summary of the recent developments regarding university technology transfer in his country. Influenced by Bayh-Dole in the United States, and organizations like CASTI in Japan, Taiwan is formulating its own technology transfer offices. Although some changes have already taken place, Dr. Hsiao expects that it will take between five and ten years for the new technology transfer system to came established and profitable.

Later, Professor Martin Aldeman of the George Washington University School of Law, spoke on the complications involved in the drafting of patent applications. He gave an introduction to the problems associated with multiple inventors, and used the development of AZT as an AIDS medication as a case example. He urged pratictioners to draft broadly, and be aware that inventions may have third party inventors that are presently unknown.

Professor Jerome Reichman of Vanderbilt University Law School presented an overview of the problems of overlapping property rights in university generated research projects. He spoke of the difficulties involved in joint ownership of patents, and current contractual practices of American universities. He also discussed ownership of copyrights focusing on its application to university-generated software and the problems of multiple creative contributions. His analysis finished with a call for a new intellectual property paradigm to address the current patchwork application of patent laws.

Mr. John Whealan, Acting Deputy Solicitor of USPTO next spoke on inventorship and ownership in regards to the PTO. He cautioned that under current law the USPTO does not make determinations regarding the true inventor or assignee of the patent. To be named as a joint inventor, an individual need only have contributed to one claim. An unknown third party inventor may face a substantial burden in proving his contribution, but can complicate and extend infringement lawsuits between companies and inventors. Mr. Whealan recommended that to avoid conflict in the future, an agreement should be signed prior to the start of any work, and that companies should only accept assignments from all of the inventors.

During lunch Commissioner Ming-Bang Chen of the Intellectual Property Office of Taiwan gave a presentation on the reorganization of Taiwan's Intellectual Property Office formally established by law in January 1999. He provided an overview of the departments and management systems of the office, and outlined plans to promote expedited patent, trademark, copyright and anti-counterfeiting examinations. He also surveyed current law and proposed rules governing patents, trademarks and copyrights.

The afternoon session began with a comparative law section devoted to systems giving inventors incentive to research and develop new products. Dr. Heinz Goddar of Boehmert and Boehmert gave a summary of intellectual property right laws in Germany with respect to company employees, public servants, university professors and assistants. He focused on the acquisition of ownership by the inventor in each setting. He then discussed the obligations of the employer after acquiring ownership of the patent with respect to the protection of the inventor, and remuneration for the invention. The German system for patent protection is unique and is facing pressure to change as other European nations strive for harmonization of their laws.

Next, Dr. Robert Kneller of the University of Tokyo and RCAST surveyed the different approaches to IP transfers in the United States, Japan and China. He noted technology transfers at American universities are handled by contract and managed by the Technology Licensing Office (TLO). In contrast, in Japan the majority of inventions are passed from inventors of companies informally because of ambiguous reporting requirements that are loosely enforced. China appears to be moving to a U.S. style system. An inter-ministerial regulation of March 1999 has given universities greater autonomy in the management of technology. However, most schools have not established TLOs yet and actual implementation will take time.

Professor Harold Wegner of the George Washington School of Law proposed a one-world system of patent application model for harmonization of the different national systems. He suggested applicants should be able to file at the office of their choosing. The different patent officers would be required to learn the patent law of the different nations. Professor Wegner believes such a system would improve efficiency, and allow nations to maintain the size of patent office that would reflect true need. He also made two suggestions for aligning the present systems: to add a domestic opposition system in the United States, and to amend the Patent Cooperation Treaty to extend the preliminary examination system to 48 months.

The Honorable Todd Dickinson, Comissioner of the Patents and Trademarks Office, surveyed U.S. legislative developments over the last two years. He introduced recent budget related changes that have caused internal revisions at the PTO, and affected fees. The bulk of his presentation was spent detailing the provisions of the current omnibus patent law reform bill, HR 1907 The American Inventors Protection Act and the PTO office concerns related to the proposed law. He then summarized other bills currently under consideration. Legislation topics include: databases protection, trademark dilution, anti-cyber squatting (in regards to domain names), the Madrid Protocol Implementation Act, and patent term extension. He concluded with a brief description of the advanced rulemaking package currently under consideration at the PTO.

Mr. Shozo Uemura, Deputy Director General of the World Intellectual Property Organization outlined WIPO's programs and activities for reduction of patent costs. Currently, the WIPO also helps with enforcement providing an arbitration and mediation center for resolution of commercial disputes between private parties. In particular, the draft Patent Law Treaty, scheduled for adoption in 2000, strives to harmonize national patent rules around the world. The Patent Cooperation Treaty, aimed at streamlining the application process is to be incorporated into the Patent Law Treaty. Mr. Uemura renewed WIPO's pledge to contribute to the improvement to harmonization of international patent law, but said ultimately progress depends on the willingness of individual nations.

The last presentation of the conference was given by Mr. Shigeo Takakura of Kyoto University and Chief Appeal Examiner of the Japanese Patent Office. He commented on the role of APEC and the Japanese Patent Office, recommending Japan to align its national legislation with the TRIPS Agreement, and to participate in the WIPO global systems for technology protection. He also urged expanded bilateral technical cooperation in the areas of patent search and examination, and to simplify and standardize enforcement of intellectual property rights.

The symposium was a great success because of the combined efforts of the speakers and interest of the participants. A more detailed account of each presentation will be available in Vol. 5 of the CASRIP Publication Series. For more information on the conference, please contact Professor Toshiko Takenaka at (206) 685-2996; Fax (206) 685-7810.

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