WIPO SCP/13 – some conclusions

A very productive week of plenary discussions which culminated in Friday’s difficult informal consultations behind closed doors at the SCP/13 demonstrated that WIPO has already come a long way, but a lot remains to be done. In many ways, this 13th session of WIPO’s Standing Committee on the Law of Patents (SCP) marked another step in the process to re-invigorate WIPO as a global centre for innovation policy regulation.

The chair, Mr Maximiliano Santa Cruz from Chile, was open, inclusive and very cooperative, also giving observer organisations room to participate in the deliberations. The secretariat was helpful, competent and very approachable, doing their best to facilitate the discussions. And for most of the plenary, WIPO’s new Director General, Mr Francis Gurry, followed the discussions, including the interventions by observers. Never has WIPO been more open, inclusive and forthcoming in the years that FSFE has been participating in the activities.

The focus of the deliberations throughout this past week was a set of reports prepared by WIPO’s secretariat, starting with a Report on the International Patent System that had initially been prepared for SCP/12 and for which SCP/13 had been presented with some updates. This report is remarkable in that it provides an economic rationale for the patent system, allowing evidence based assessment of the effectiveness of the patent system. This rationale in particular establishes three primary reasons for the patent system:

  • Addressing market failure when the market fails to provide innovation in an area.

  • Growing the public domain by putting knowledge about new ideas into the public domain.

  • Disseminating knowledge to others in the field and promoting follow-up innovation.

As also highlighted in FSFE’s interventions, these criteria allow for an assessment of the usefulness of the patent system for each individual area. It follows that areas in which these benefits do not materialise lack an economic rationale for patenting. An example for such an area is software, which had no innovative market failure prior to the introduction of patents, in which patents are useless for disclosure of new ideas, and in which legal counsels suggest that developers do not study patents in order to avoid claims of intentional infringement. So this study provides an analytical rationale behind statements such as the one by Bill Gates in 1991, which voices concern about the anti-innovative effect of patents in the field of software:

If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.”

Application of this rationale in the policy setting process would allow to assess which areas can benefit from patents, and where more innovation can be had by excluding an area from the patent system. In parallel to the “Berne three-step test” we have dubbed this the “three step test for inclusion in the patent system” in our oral intervention.

The other reports under discussion were

  • SCP/13/2: Standards and Patents

  • SCP/13/3: Exclusions from Patentable Subject Matter and Exceptions and Limitations to the Rights

  • SCP/13/4: The Client-Attorney Privilege

  • SCP/13/5: Dissemination of Patent Information

of which the first two were of the most interest for FSFE. We therefore addressed them specifically in our interventions on exceptions and limitations, and patents and standardisation. While in relation to the dissemination of patent information the biggest surprise was how often Member States were asking for the application of the open innovation model behind the on-line encyclopaedia Wikipedia, true excitement was caused by the statement of the U.S. delegation regarding standards and patents.

This statement seemed reflective primarily of the position of Microsoft, which not only submitted comments to the SCP/13 prior to its convening, it was also represented at the meeting by means of a Director of International IP Policy, who was registered with the delegation of the International Chamber of Commerce (ICC). FSFE managed to respond in its oral intervention shortly afterwards, providing some balance, but several people were questioning the initial imbalance of the governmental statement. Accusations against any party would however be misplaced.

It is legitimate for Microsoft to represent its own particular interests in the same way that it is legitimate for any company or person to seek to influence the political process. The people attending these meetings always come from a wide mix of backgrounds, such as pharmaceuticals, biotechnology, and in case of the SCP, many of the delegates will be from the patent offices of their governments, including the U.S. delegate, who was from the United States Patent and Trademark Office (USPTO).

Often lacking guidance from other branches of their respective governments and without background in Information Technologies (IT), these delegates will follow whatever advice the IT industry appears to be giving. Groups like the ICC are not fundamentally different from governments in that respect, but are usually considered more authoritative by governmental representatives than individual companies, as they bundle the interests of a larger group of companies.

Microsoft was the only IT company represented at the meeting as part of the ICC delegation and apparently prepared for this meeting also in dialogue with the U.S. government, because statements this long and elaborate are usually prepared beforehand and only read out by the local delegate. So it should be expected that the statement by the U.S. delegation did not seem inclusive of or even damaging to the interests of other U.S. corporations, including IBM, Sun Microsystems, Google, Oracle, HP, or Red Hat.

Because companies not participating in the process usually do not know when such statements are made, many representatives will never learn that the position they promoted in the name of their government was detrimental to the interests of the country or parts of its industry although they were honestly working hard to do their best for their country.

For balance, it should also be highlighted that while the U.S. has been chosen to demonstrate the process at work, the same mechanisms are at work for other Member States. The positions taken by the European Union or by the group of developed countries (referred to as “Group B”) are for instance traditionally very critical of open innovation models, Open Standards or Free Software.

So one could just as easily have chosen Germany as an example, which just decided to invest 500m EUR into Green IT, IT Security and Free Software, the IT infrastructure its Federal Foreign Office makes extensive use of Open Standards and Free Software, so does its Federal Office for IT Security, which also has strong recommendations in favour of Free Software. Germany began in the late 90s to fund Free Software development – as one of the first countries in the world.

More examples are provided by the U.K. which just published its Open Source, Open Standards and Re–Use: Government Action Plan, or Spain, which is one of the leading countries in Free Software adoption. The list of countries is extensive and includes countries from all over the world, which is hardly surprising considering Gartner’s prediction that 100% of all companies will be using Free Software by November 2009.

It might come as a surprise that the United States with Google as the possibly largest Free Software enabled company in the world, or the European Union with its “Open Source Observatory” for governmental use of Free Software across all EU member states are preaching that these methodologies are detrimental to innovation at WIPO, while they are reaping their benefits at home. In reality, this discrepancy typically results from lack of coordination within the governments, and sometimes from rivalry between ministries.

It is time that all stakeholders within the governments and companies seek out their colleagues and representatives and provide them with some more background on how Free Software, Open Standards, and open innovation models are to the benefit of the country, and how it would be beneficial to all Member States, developed or developing, that WIPO embrace these methodologies and add them to its repertoire of innovation instruments.

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