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Inside IP
www.vennershipley.co.uk
Venner Shipley’s Intellectual Property Magazine Autumn/Winter 2019
G1/19: Just what do those
questions mean?
PAGE 12
What's in the Patent Box for Implications of the UK 100 Engineering Ideas That
SMEs? General Election on Brexit Have Changed The World
PAGE 10 PAGE 24 PAGE 30
European Intellectual
Property Attorneys
1
What’s inside?
Page 4 AI Inventorship Page 19 New Year, New Rules:
Richard Kennedy and Joel Moss explore if an invention Changes to the Rules of Procedure of
is created by an AI, should the AI be named as the the EPO Boards of Appeal January
inventor?
2020
Tim Russell looks to 1 January 2020 when new Rules
Page 5 MONOPOLY: Trade Mark of Procedure of the Boards of Appeal of the EPO come
into force.
Edition
Camilla Sexton highlights the recent case of Hasbro,
which had one of its EU trade mark registrations for Page 22 Integrated Circuits
MONOPOLY struck out in part. To celebrate the 60th anniversary of the invention
of the integrated circuit, Rob Cork looks back on the
pioneering work of two US inventors, Jack Kilby and
Page 6 Protecting a New Medical Use
Robert Noyce, whose research paved the way for
of a Known Substance virtually all modern electronic devices.
Catrin Petty looks at how patent protection can be
pursued for a new medical use of a known substance
in five key jurisdictions. Page 24 Implications of the UK
General Election on Brexit
We provide an insight into the implications of the UK
Page 8 Effective Use of Outsourcing
General Election on Brexit.
for Developing Patent Portfolios
Based on his experiences, Gary Whiting highlights
how in-house departments can make effective use of Page 25 Design Protection of
outsourcing when developing patent portfolios. Graphical User Interfaces
We continue our series of articles on GUIs. George
Hudson explores the extent to which GUIs can be
Page 10 What's in the Patent Box for
protected under the various design law systems
SMEs? covering the UK.
Ian Grey provides an update on the UK tax incentive
scheme, Patent Box.
Page 28 Sound Marks
Page 12 G1/19: Just What do Those David Birchall highlights the topic of sound trade
Questions Mean? marks.
Pawel Piotrowicz has been at the forefront of
developing EPO law regarding computer-implemented
Page 30 100 Engineering Ideas That
inventions following the EPO Board of Appeal
referring questions to the EBA on G1/19. In this issue Have Changed The World
Pawel discusses the referral and highlights the wider We continue our series of articles, where we look
implications for the patentability of simulations at some of the greatest engineering ideas that have
surrounding the decision. had an effect on our everyday lives. The list of 100
engineering ideas was compiled by The Institution of
Engineering and Technology (IET).
Page 16 Designing for Compliance –
Data Protection Considerations in the Page 34 Venner Shipley News
Development of Artificial Intelligence A round up of the latest Venner Shipley news.
Robert Peake and Ronique Hossain explore how
the application of AI, and ML, to support decision
making and accelerate innovation has experienced
exponential growth in recent years.
2
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A word from the editor
European patent practice is heavily influenced by the case law of the Boards of Appeal
at the European Patent Office (EPO). Every year there are hundreds of decisions made
by the EPO Boards of Appeal, but decisions of the Enlarged Board (which carry the
greatest weight) are much rarer, with only two or three cases being referred a year.
Regarding computer implemented inventions, there have been well over a thousand
Boards of Appeal decisions about what is patentable, but no Enlarged Board has fully
wrestled with the issue. This will change with Enlarged Board case G1/19, which is
the subject of our cover article. This case is being handled by Venner Shipley’s Pawel
Piotrowicz, and Pawel provides an overview of this very important European patent
matter on pages 12 to 15.
On the subject of the EPO Boards of Appeal, the Rules of Procedure of the Boards of Appeal undergo some
important changes on 1 January 2020, and appeals expert Tim Russell provides a detailed overview of the
changes on pages 19 to 21.
It will not be a surprise to many that there has been a huge growth in the filing of patents related to AI
technology, and Richard Kennedy and Joel Moss discuss on page 4 the issue of whether an AI can be
considered to be an inventor of a patent, with reference to a test case that is being processed by various
patent offices. In addition, Robert Peake and Ronique Hossain discuss data protection considerations in the
development of AI on pages 16 to 18.
Before joining Venner Shipley, Gary Whiting gained extensive experience as an in-house patent attorney.
On pages 8 and 9, Gary draws upon this experience to discuss effective use of outsourcing for developing
patent portfolios.
The UK has a tax incentive scheme called Patent Box, which enables companies to benefit from a reduced
rate of corporation tax for the profits derived from innovative products and processes protected by a
qualifying IP right. Ian Grey provides an update on this scheme on pages 10 and 11.
As part of our series of articles relating to graphical user interfaces, George Hudson provides an overview of
how design protection can be used to protect graphical user interfaces on pages 25 to 27.
Regarding trade marks, David Birchall discusses issues related to sound trade marks on pages 28 and 29,
and on page 5 Camilla Sexton provides an interesting summary of a recent decision relating to bad faith
concerning a trade mark for MONOPOLY. Also, Jan Walaski and David Birchall provide an insight into the
implications of the UK General Election on Brexit.
As a final point, I am very pleased to note that Venner Shipley has been recognised by Legal 500 UK as a Tier
1 firm for PATMA: Patent Attorneys. This recognition means a lot to us, and is the result of the hard work of
all of our attorneys and the wider Venner Shipley team.
Simon Taor
Partner, Patent Attorney
About Venner Shipley:
Venner Shipley is a leading firm firm with a long history and a
of European intellectual property vast amount of experience in
attorneys and lawyers. We are relation to all aspects of patents,
a modern forward-thinking trade marks and IP law.
3
AI Inventorship
For a patent application, there is a requirement to name the inventors. While
there have been many disputes as to who should be considered the inventor
of a given invention, the requirement to name inventors was, until recently,
considered to be uncontroversial. The continued rise of artificial intelligence has
changed this. If an invention is created by an AI, should the AI be named as the
inventor? Should inventions created solely by AI be patentable at all?
In a test case for these issues, a team inventions, DABUS was not merely manual to expressly indicate that “an
led by Professor Ryan Abbott at the used as a tool by a human inventor ‘AI Inventor’ is not acceptable as this
University of Surrey has filed several but instead independently conceived does not identify ‘a person’ which is
patent applications for inventions the inventions and identified their required by law” giving an indication
which they claim were invented by salience. The team’s view is that as to how the UK IPO is likely to react
an AI named DABUS (Device for the DABUS should be considered to be to the inventions allegedly invented
Autonomous Bootstrapping of Unified the inventor and that there is no by DABUS. Nevertheless, the pace
Sentience). The inventions in question appropriate human inventor to name of development of AI is rapid and
are a ‘Fractal Container’ and a ‘Neural in the patent applications. unpredictable, and Ryan Abbott’s
Flame’. team is of the view that DABUS is
However, the notion that an AI (or already capable of independent
indeed any computer software) creation without the involvement of
could be named as an inventor on a a human inventor. While views differ,
patent conflicts with several existing the issues go beyond mere academic
provisions in patent law, and with enquiry, or the formality of what
the common understanding that name to include on a form - in the
the inventor should be a person. United States in particular, failure to
For example, the UK Patents Act and name the correct inventors can lead
the European Patent Convention to a patent being held unenforceable.
provide certain rights to inventors, The questions around AI inventorship
including the right to be mentioned thus represent an emerging challenge
Architecture of the DABUS Artificial Intelligence in an application or patent. Rights for the patent system which has yet to
to appropriate compensation, at be resolved.
Patent applications to both of these least for some inventions, also exist
inventions have been filed with the UK in some jurisdictions. These and Venner Shipley has extensive AI
IPO, USPTO and EPO. PCT applications other provisions of patent law do expertise with the largest dedicated AI
to these inventions have also been not mesh well with the concept of AI team in the UK. Members of our team
filed. The 'Fractal Container' patent inventorship. have postgraduate qualifications in AI
application relates to a container Neural Flame
and have given presentations on the
having a wall with a fractal profile. The patentability of AI at various major
fractal profile enables the coupling of IP conferences. So, whether your AI
multiple containers, improves grip, has spontaneously started inventing
and facilitates heat transfer into and or you simply want to protect your
out of the container. The 'Neural inventions in this area, please get in
Flame' patent application relates to touch.
causing a light source to pulsate in a
particular manner to attract attention
over competing attention sources by
triggering human or artificial anomaly
detection filters. Fractal Container
Ryan Abbott’s team argues that The position of the European
these inventions were conceived by Patent Office is that it is “a global
DABUS. The team says that DABUS consensus that an inventor can only
only received training in general be a person” and that “the current
knowledge in the field, and was state of technological development
not created to solve any particular suggests that, for the foreseeable Richard Kennedy
problem nor trained on any special future, AI is a tool used by a human rkennedy@vennershipley.co.uk
data relevant to the inventions. The inventor”. Similarly, the UK IPO Joel Moss
team argues that in creating these recently updated its formalities jmoss@vennershipley.co.uk
4
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MONOPOLY:
the benefit of being able to rely upon
one registration without the need to
prove use of it. She also indicated that
this was a benefit considered by all
Trade Mark Edition
brand owners across many different
industries. It was the above admission
which appears to have been key to
the decision. The BoA noted that if
a filing is motivated not only by the
Hasbro, Inc. ('Hasbro') has had one of its EU trade advantage of not having to prove use
mark registrations for MONOPOLY struck out in of the mark but for other reasons
as well, this does not, in itself, make
part by the Board of Appeal on the basis that it was the strategy acceptable. Further, the
fact that other brand owners may
filed in bad faith. also make repeat filings does not,
in itself, make the strategy legal and
acceptable unless it has been tested
Background The Case and approved as such by the Courts.
The EU trade mark registration Hasbro already enjoyed the benefit
system is based on the 'first to file' of three EU trade registrations for the The BoA concluded in a harsh
principle. With some exceptions, word MONOPOLY. The registrations manner: “Such conduct, which
the superior right is awarded to the were filed respectively in 1996, improperly and fraudulently
trade mark owner who obtains a 1998 and 2010. It obtained a fourth extends the five-year grace period,
registration rather the owner who registration for MONOPOLY in is manifestly intended to circumvent
uses the mark in commerce but does 2011 for goods and services in part the obligation to prove use of earlier
not register it. However, the system identical to the previous registrations marks and must be considered as an
is open to abuse if owners clutter and in part for previously intention to distort and imbalance the
up the register with unused marks. unregistered goods and services. European Union trade mark system
Competitors are denied the full range A Croatian company applied to as established by the EU legislators”.
of available brand names. To mitigate invalidate the 2011 registration on the The MONOPOLY registration was
this, EU legislation allows a finite ground that it was filed in bad faith. struck from the register insofar as it
grace period of five years’ non-use It claimed Hasbro had a dishonest included goods and services already
of a registered trade mark after its intention when the application was covered by earlier registrations. It
entry on the register. If a mark is filed because it was a repeat filing was allowed to remain on the register
unused after that period there are made with the intention of re-setting insofar as it extended the goods and
consequences. One of these is that it the non-use clock for the word mark services because it could be inferred
becomes liable to a revocation action MONOPOLY. The Cancellation Division that these extensions were a natural
for non-use and could be struck from at first instance disagreed. It held that commercial progression of the mark.
the register insofar as it has not been there was no evidence of dishonest A further appeal is underway.
used on the registered goods and intention or unfair practice involving
services and there are no proper bad faith. An appeal was filed.
reasons for non-use. It will also be Comment
disregarded as a basis of opposition The Appeal Decision There was always doubt that the
before the EUIPO, meaning it cannot practice of re-registering marks
block later applications for the This was a score draw. The Board of was acceptable under EU law. This
same or similar mark. In both these Appeal ('BoA') invalidated Hasbro’s decision very much underlines the
scenarios the registered owner is MONOPOLY registration in part and risk trade mark owners take in re-
required to prove use of the mark. allowed it to remain on the register filing in this way. Care is needed in
This requires an investment of time in part. Most unusually, rather than long-term filing strategies. It was
and cost. relying on written submissions alone, also interesting to note that the fact
the BoA ordered oral proceedings in of a finding of bad faith in relation
As a result of the above, some trade this case. The issue of bad faith must to some goods and services was not
mark owners have taken to re- be determined at the time of filing of fatal to the entire registration.
applying periodically for the same the mark and the BoA said it wanted
mark in order to re-start the non-use to better understand the particular
clock by each fresh application. The circumstances underlying the filing
resulting registration can be used in strategy of Hasbro. Bad faith is not
opposition proceedings for a period defined in EU legislation but may be
of five years without the owner having inferred from the behaviour of the
to prove use of it. Therefore, even if registered owner. This must take
the mark is in fact being used on the into account the accepted principles
registered goods and services, a new of honest commercial and business
registration would, in theory, spare practice. At the oral hearing the
the owner the task of proving actual registered owner mentioned that one
use in contentious proceedings. There of the reasons (among others) for the Camilla Sexton
is a time and cost saving here. re-filing was to reduce administrative csexton@vennershipley.co.uk
burden. She specifically referred to
5
Protecting a New
Medical Use of a
Known Substance
The ability to protect known compounds and compositions where a new
medical indication has been discovered can be extremely valuable. However, it
is not possible to obtain protection for a new medical use of a known substance
in some jurisdictions. Furthermore, even in jurisdictions where it is possible
to obtain protection, the form the claims should take to comply with local
practice can vary significantly. Knowing where protection can be pursued,
and the form the claims should take, better enables us to work with clients to
devise a targeted filing strategy. This article provides a summary of how patent
protection can be pursued for a new medical use of a known substance in five
key jurisdictions.
Europe an Enlarged Board of Appeal Decision Such claims can also define dosage
(G5/83) reached the conclusion that regimes and specific patient groups.
The European Patent Convention
the use of a known compound or
(EPC) states that a European patent
composition to treat a known disease China
shall not be granted in respect of
can be patentable if the medical use is
methods for treatment of the human In China it is possible to obtain
linked to a novel and inventive dosage
or animal body by therapy. This protection for the medical use of a
regime.
excludes from patentability methods known compound using so-called
of treatment and prophylaxis, but Swiss-style claims. These are written
Furthermore, established case law of
this exclusion does not apply to like so:
the Boards of Appeal (for instance,
products, in particular substances
see T 233/96) states that it is also
and compositions, for use in such
possible to obtain protection for • “Use of compound/composition
methods.
the use of a known compound or X for the manufacture of a
composition to treat a known disease medicament.”
If a known compound has not
where the compound or composition
previously been used in a method of
is administered to a novel patient Or:
treatment by therapy, it is possible to
group. The patient group must
protect the product using a so-called
be distinguishable from former • “Use of compound/composition
first medical use type claim, which
patients due to their physiological or X for the manufacture of a
may be written like so:
pathological status. medicament for treatment of
disease Y.”
• “Compound/composition X for
use as a medicament.” Unites States of America It will be noted that these claims
It is possible to obtain protection correspond closely to first and
Even if the product had previously for methods of treatment in the second medical use claims. If a PCT
been used as a medicament, further United States. Accordingly, it is application is drafted with first and
medical indications could still be possible to obtain protection for new second medical use type claims or
protected by a so-called second indications of known compounds and method of treatment claims, these
medical use claim, which would take compositions by using a method of can be converted to Swiss-style claims
the form: treatment claim. Such claims would upon entry to the Chinese national
generally take the form: phase.
• “Compound/composition X for
use in treating disease Y.” • “A method of treating disease X in However, a decision by the Supreme
a subject, the method comprising People’s Court found that use
It should be noted that second administering to a subject in features which do not have any
medical use claims are not limited to need thereof a therapeutically effect on the manufacture of
treatments of new diseases. In fact, effective amount of compound/ medicament cannot be considered
composition Y.”
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to form a contribution over the prior became patentable in India in 2005.
art. Accordingly, claims where the Accordingly, it is now possible
distinguishing feature is a specific to obtain protection for new
dosage regime or the treatment of a compounds and compositions.
specific patient group may be invalid Additionally, it is also possible to
in China. obtain protection for new forms of a
pharmaceutical product. For instance,
“protection
Knowing where
can be
if an unexpected improvement is
observed for a polymorph or salt of
a known compound then this may
be protected in India. Additionally, a
pursued, and the synergistic composition possessing
form the claims unexpected chemical properties may
also be protected.
should take, better
enables us to work Summary
with clients to Different jurisdictions have
significantly different approaches
devise a targeted when determining whether or not
”
a new medical use of a known
filing strategy. compound may be patentable.
However, careful drafting of the
patent specification and claims can
Japan ensure that there is basis to protect
The Japanese Patent Office allows your inventions in key markets. Please
a number of different formats for contact one of our attorneys for
claiming a new medical use of a further advice.
known substance. These are:
1. “A pharmaceutical composition
for the treatment of disease X,
comprising compound Y.”
2. “An anti-disease X agent
comprising compound Y.”
3. “Use of compound Y to treat
disease X.”
4. “Use of compound Y in the
manufacture of a medicament for Catrin Petty
the treatment of disease X.” cpetty@vennershipley.co.uk
Similar to the situation in China, the
claims of a PCT application can be
adapted to comply with Japanese
practice on national phase entry or
during subsequent prosecution of the
application.
In addition, new dosage regimes and
the treatment of new patient groups
may also be patentable if it can be
argued that there is an unexpected
technical effect associated with the
novel feature.
India
It is not possible to obtain protection
for a new use of a known substance
or a method of treatment in India.
Accordingly, second medical use
claims are not allowable.
However, chemical and
pharmaceutical substances
7
Effective Use of
Outsourcing for
Developing Patent
Portfolios
Gary Whiting has been a patent attorney for more than 20 years, with almost
half of that time spent in-house. Based on his experiences, Gary has the
following thoughts on how in-house departments can make effective use of
outsourcing when developing patent portfolios.
Why Insource? Why Core In-House Tasks One aspect of patentability analysis
is searching for earlier disclosures of
Outsource? A number of elements of the patent
similar concepts (prior art). In-house
Let us assume that you are portfolio development process can be
experts know the business, often
responsible for a dedicated in-house considered to be core in-house tasks
making them good at searching in the
IP department that is developing a that should generally be partially or
relevant field, suggesting that prior art
significant patent portfolio around the completely insourced, if the resources
searching should be a core in-house
world. Your department has limited are available to do so.
function. However, prior art searching
resources and makes extensive use of is a specialist and time-consuming
outsourcing. You are under pressure Invention Harvesting
task. You should consider whether the
to develop a high quality patent Your in-house team is likely to be
use of specialist external searchers
portfolio that meets the needs of your closer to the business (and to the
is more efficient or whether your in-
business. You are also under pressure people within the business) than
house team can do a more effective
to keep costs under control. external patent attorneys. This,
job. Also, with algorithms improving,
coupled with the knowledge of the
is there a case for automatic or
How can you ensure that your use of business (including business strategy),
semantic searching as part of the
outsourcing is effective? typically makes invention harvesting a
process?
If your in-house team has both core function of the in-house team.
the skills and the time to do so, There will be circumstances when
If a detailed prior art search is
then insourcing many of the tasks external attorneys can be of
obtained, many departments consider
typically carried out by external assistance. For example, a visit from
that analysis of the search results is
patent attorneys is likely to be the an external attorney (e.g. an invention
a core function of the in-house team.
cheapest option. Also, in-house harvesting workshop) can sometimes
However, some companies prefer to
teams are closer to the business and generate enthusiasm and encourage
outsource at least some of this work.
have detailed technical and business the submission of ideas for potential
knowledge that can lead to the patent filings.
Filing Decisions
generation of a high quality patent Whether to file a patent application
portfolio that meets the needs of the Initial Patentability Analysis
is typically a decision with many
business. In some companies, patent
variables, only one of which is
applications are filed if there
patentability. Accordingly, this is
So why not insource everything? is a business case, with limited
usually considered to be a core in-
In-house departments typically have consideration of patentability. The
house function. You should consider
insufficient resources (particularly consideration of the business case
the extent to which the wider
time) to insource everything and it is is a core in-house role. In other
business should be involved at this
easy to increase or reduce the level companies, patent applications
stage. Do you want to get input from
of outsourcing as workload demands may be filed only when a detailed
your technical team regarding the
fluctuate. In addition, outsourcing is patentability analysis concludes that
inventiveness of a new invention?
typically the easiest (and most cost- the chance of obtaining a granted
Do you want to get input from your
effective) way of obtaining specific patent is high. Where to sit on this
commercial team regarding the
technical or legal expertise. spectrum is a question for you and
commercial value of a new invention?
your business.
8
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Portfolio Management The preparation of the first patent external patent attorneys, but for the
A patent portfolio needs to be filing for a new invention is one of the in-house team to retain responsibility
reviewed regularly to ensure that most important steps in the patent for the scope of the patent claims.
resources are being used effectively. generation process. Well drafted
For example, abandoning individual patent applications not only lead Oppositions and Contentious Matters
patents or patent families can help to to patents that are more likely to Patent oppositions can be extremely
keep costs under control. provide valuable patent protection, time-consuming. Accordingly,
but such patent applications typically although expensive, unless your
This is generally an in-house role, and pass through the patent system department has a significant amount
the wider business should perhaps more easily. It can be difficult (and of regular opposition work, such
be involved. One approach is to hold expensive) to get poorly drafted tasks are typically best outsourced.
regular (e.g. annual) review meetings patent applications granted and may Similarly, contentious work is often
to get the business involved. This be impossible to obtain a broad scope better outsourced unless significant
approach works well with relatively of protection. Accordingly, investing internal expertise is available.
small patent portfolios, but can extra resources at the patent drafting Outsourcing contentious work may
quickly become unmanageable as the stage may be cost-effective in the long also make the application of attorney-
size of the portfolio grows. Another term. client privilege easier to secure.
option is to reconsider the value of
cases within the portfolio at defined Patent Filing Final Thoughts
milestones (e.g. on grant) or at The filing of patent applications
defined time periods after filing. IP departments have different sizes,
is usually outsourced to patent
Even though the decision making is skill sets, workloads and priorities.
attorney firms. Filing patents in-house
often a core function of an in-house Almost all departments make at least
involves significant responsibilities
IP department, the implementation some use of outsourcing and the
and is typically only cost-effective
of such decisions is often outsourced. comments above should assist with
for companies with large patent
Although it is possible for an in-house tailoring the use of outsourcing to
portfolios. Before committing to
team to liaise with patent attorneys meet your particular circumstances.
this, you must ensure that you
around the world, this is a significant It makes sense to discuss your
have sufficient internal resources.
undertaking. This is typically only a approach to outsourcing widely.
Consideration should be given to the
core function of the largest in-house For example, these issues can be
implications of systematic mistakes
IP teams. discussed within your IP team,
that risk the loss of a significant
within your wider business and with
portion of your patent portfolio.
Consideration must also be given to your peers (e.g. those managing IP
departments at other companies).
“anAexternal
how to handle renewal fee payments
that are required to keep patents visit from Moreover, external patent attorneys
in force (such costs can be a large have experience of many different
proportion of the lifetime cost of a outsourcing arrangements, all of
patent family). Nearly all companies attorney can which have pros and cons.
Although you should consult widely,
outsource this process, either to
an external patent attorney or to sometimes generate ultimately decisions need to be taken
and those should be communicated
a specialist renewal fee payment
company, not least because of
enthusiasm and (internally and externally). External
the severe implications of missing encourage the patent attorneys who understand the
rationale behind your outsourcing
payments.
submission of ideas arrangements (and your wider
Non-Core Functions for potential patent patenting strategies) will be better
placed to meet your expectations.
A number of elements of the patent
portfolio development process are
not generally considered to be core
filings.
”
Patent Prosecution
in-house tasks. These are often Prosecuting patents to grant typically
outsourced (to a greater or lesser involves a large number of self-
degree), although this may depend on contained tasks that are well suited
the size and expertise of the in-house to outsourcing to external patent
team. attorneys.
Patent Drafting Care is required here since patent
Patent drafting is time consuming and applications can be granted with
most departments do not have the Gary Whiting
amendments that can significantly
resources to draft all cases in-house. gwhiting@vennershipley.co.uk
reduce the value of the patent within
Many IP departments outsource all your patent portfolio. Thus, if this task
patent drafting work, but if you have is to be outsourced, then the in-house
internal patent drafting expertise, team should ideally maintain at least
then a combination of drafting some some control of the process. One
cases in-house and outsourcing common approach is to outsource
others may be optimal. the patent prosecution process to
9
What's in the Patent
Box for SMEs?
R&D tax credits is a UK tax incentive scheme which seeks to encourage
UK companies to invest in R&D by allowing them to reduce their tax bill or
claim payments as a proportion of their R&D expenditure. The scheme has
been available to UK companies for some time and the value of it for many
companies is undisputed.
In 2013, the UK Government patents, it must have a qualifying IP to the perceived complexity of the tax
expanded on the favourable tax right, such as a patent granted by calculations and the associated cost
incentive offered by the R&D the UKIPO or the EPO, or a patent and effort of ensuring compliance.
tax credit scheme by enacting a granted by another country within Although the additional administrative
Corporation Tax incentive, known as the European Economic Area that burden may be a factor, a lack of
the Patent Box, to further capitalise recognises the system. A qualifying awareness of the scheme and the
on creative talent in the UK and IP right is not limited to patents, benefits that it may provide, coupled
boost innovation by incentivising and and may also include certain other with a lack of specialist knowledge
rewarding the active exploitation of types of intellectual property, such as relating to intellectual property may
patented technology in the UK. supplementary protection certificates also be partially to blame.
and plant variety rights.
The UK Patent Box regime offers Although some SMEs might be
companies a competitive tax The company must actively hold the dissuaded from claiming, we would
environment by reducing the rate qualifying IP right as an owner or still encourage all companies to
of Corporation Tax payable to 10%, an exclusive licensee. This means investigate the potentially valuable
compared with the main rate of that the company must be creating, incentive provided by the Patent Box
Corporation Tax of 19%. The reduced or significantly contributing to, the regime. Electing into the scheme may
rate is applicable to the profits protected invention, or performing be worthwhile for many businesses
derived from innovative products and a significant amount of activity to and the procedure may not be as
processes that are protected by a develop the protected invention or onerous as it first appears.
qualifying IP right. any product or process incorporating
it. If the company holding the patent It is also important not to
The lower rate of Corporation Tax is part of a group and the activities underestimate the potential tax
provided by the Patent Box regime are carried out by another member relief that may be available, bearing
has the aim of incentivising UK of that group, then it must actively in mind that a UK patent is all that is
companies to: manage its portfolio of qualifying needed to enable all the worldwide
IP rights. It is also necessary for the profits generated as a result of selling
• Increase the number of patents company to have an income related a product covered by that patent to
and other intellectual property to the IP right, such as from the sale fall within the Patent Box regime. As
protection being sought, and of patented products. Finally, the long as UK Corporation Tax is paid
to ensure that the technology majority of the relevant R&D must be on the profits obtained as a result of,
covered by that intellectual carried out in the UK. for example, the sale of a patented
property is further developed and product, it is irrelevant whether
commercialised; Since the introduction of the system those sales were made in the UK or
in 2013, the total value of the relief overseas. Furthermore, if a patented
• Manufacture and sell innovative
claimed through the Patent Box component is incorporated into a
products protected by that
regime has grown year-on-year. From larger product, profits attributable
intellectual property; and
the latest statistics on the uptake to the entire product may qualify for
• Locate the high-value jobs of the Patent Box published by relief under the Patent Box regime.
associated with the development HM Revenue & Customs (HMRC) in Whilst there are some upfront costs
and manufacture of patented September 2018, it is apparent that associated with obtaining a patent,
technology in the UK and this upward trend continues. once granted it can be maintained
encourage the exploitation of for 20 years, which means that the
patents covering that technology. Whilst the statistics show year-on-year saving in Corporation Tax over that
growth, the use of the Patent Box 20-year period can be substantial and
For a company to benefit from the regime continues to be dominated by easily justify the costs associated with
reduced 10% Corporation Tax rate on large companies. One reason for the obtaining the patent in the first place.
profits derived from UK or European lack of uptake by SMEs could be due It is also important to appreciate that
10www.vennershipley.co.uk
a patent can be sought for relatively
small modifications or improvements
to existing products or processes,
especially if that new product or
process provides an advantage or
solves a problem compared with an
existing product or process that is
already known.
Once granted, a patent will enable
a company to take advantage of the
Patent Box and the tax savings that
it provides straight away. Although a
claim for tax relief under the Patent
Box regime can only be made once a
patent has been granted, the regime
does allow for profits arising up to six
years before grant (i.e. in the period
between applying for a patent and
grant), to benefit from the reduced
rate.
Assuming that the UK Government
intends to continue its high priority
of supporting innovative companies
undertaking R&D in the UK, we
anticipate that the Patent Box regime
will continue beyond Brexit. As the
rules around the relief available have
been influenced by the European
Commission, Brexit means that the
UK will no longer have to seek EU
approval for favourable tax incentive
regimes such as the Patent Box, and
so the UK government may have free
rein to implement a more generous
Patent Box regime. This could make it
more attractive to SMEs and further
incentivise the creation of IP assets in
the UK.
Please contact us if you have any
further questions on the Patent Box.
I
Ian Grey
igrey@vennershipley.co.uk
11G1/19: Just What Do
Those Questions Mean?
When you think of a researcher – a scientist or an engineer – designing a new
computer chip, optimising a chemical process, or developing a new medicine,
the chances are that you picture him or her sitting in front of a computer
manipulating a computer-generated model. Simulation allows the researcher
to test different designs, try out alternatives, make substitutions and change
variables, before settling on a final design. In this way, the researcher can
rapidly try out large numbers of designs before finally turning to expensive real-
world testing or costly production.
Given that patents protect implemented inventions are handled perhaps unsurprising that different
technological innovations, you might at the EPO. Boards of Appeal can reach different
naturally assume that patents can conclusions in similar cases giving
be used to protect the very type of Appeals at the EPO diverging reasoning.
software used in this activity. That
assumption, however, is misplaced. The EPO has a self-contained appeals This is where the Enlarged Board
Indeed, in Europe, patent protection system. If a department of first of Appeal plays an important role:
for computer-implemented inventions instance (typically an examining its main task is to ensure uniform
is currently under review with division or an opposition division) application of the law (the European
questions referred to the European refuses an application, revokes a Patent Convention). It decides
Patent Office (EPO) Enlarged Board of patent or issues some other form of on points of law which are of
Appeal in G1/19 (CONNOR/Pedestrian negative decision, then the affected fundamental importance that are
Simulation). The outcome of the party can appeal against the decision. referred to it either by a Board of
referral could have a significant effect Appeal or by the President of the EPO.
on whether these invaluable – indeed The appeal is heard by one of 28 Referrals of questions are rare: there
essential – tools and processes can Technical Boards of Appeal (or simply are only two or three cases referred
in fact be protected and could have 'Boards of Appeal'). Each Board to the Enlarged Board each year.
far-reaching consequences affecting consists of about seven members
a wide range of technical areas of which three are drawn to hear This is what is happening in G1/19.
involving computers. a particular appeal. The appeal Questions have been referred by a
process includes a written procedure Board of Appeal seeking clarification
But G1/19 is not just simply and often involves a hearing ('oral about patentability of simulations.
about whether or not computer- proceedings'). At the end of the
implemented simulations are process, a Board hands down a
decision which includes its reasoning Computer-Implemented
patentable. It also looks at the sorts
of simulations that can be protected. (the 'ratio decidendi', to give it its Inventions at the EPO
For example, a tool for verifying the proper name). Once a decision has The case law relating to patentability
design of a computer chip might seem been handed down, the case is often of computer-implemented inventions
more worthy of patent protection remitted back to the department of is well developed and you might be
than one which models the price of first instance for further examination forgiven for thinking that no referral
stocks and shares. Furthermore, the with the department bound by the is needed. Indeed, a referral made
case also looks at what the claims reasoning in the decision. Important over ten years ago by the President
should cover, in particular, whether decisions are added to the EPO’s of the EPO in G3/08 (Programs
a claim to a method of simulation Case Law of the Boards of Appeal and for computers) was found to be
alone is enough or whether the significant cases are incorporated into inadmissible because the Enlarged
claim should be directed to the wider the Guidelines for Examination at the Board of Appeal did not identify
design process (including simulation), EPO. any divergence in Board of Appeal
or indeed be limited to a final, real- decisions. The present case, however,
world product or system. About 3,000 appeals are filed each highlights a potential gap as to
year, most of which result in a what should be considered to be
Before delving into some of the decision. Thus, there is a large and patentable in the realm of computer-
details of the case, it is perhaps ever-expanding body of case law. implemented inventions.
helpful to have a brief look at the Given the sheer volume of cases and
appeals process and how computer- variations in Board members, it is
12www.vennershipley.co.uk
The current EPO approach to The perceived problem with a questioned the decision’s reasoning in
examining computer-implemented simulation is that it does not control INFINEON.
inventions is based to a large extent any external equipment or process
on T 641/00 (Two identities/COMVIK). physical data. If a simulation just runs First, the Board considered that
on a computer, then what technical “although a computer-implemented
In this decision, it was held that, effect does it produce or indeed could simulation of a circuit or environment
when assessing inventive step of an it produce? is a tool that can perform a function
invention consisting of a mixture of "typical of modern engineering work",
technical and non-technical features The Appeal it assists the engineer only in the
and having technical character as cognitive process of verifying the
a whole, only those features which The application in CONNOR relates design of the circuit or environment,
contribute to the technical character to a method of simulating pedestrian i.e. of studying the behaviour of
of the claim should be taken into crowd movement which can be used the virtual circuit or environment
account; those features making no to help design or modify a venue, designed. The circuit or environment,
such contribution cannot support the such as a railway station or stadium. It when realised, may be a technical
presence of inventive step. seeks to provide a realistic simulation, object, but the cognitive process
in real-world situations, which of theoretically verifying its design
It is important to note that the cannot be adequately modelled by appears to be fundamentally non-
COMVIK decision did not state that conventional simulators. technical”.
non-technical features should be
ignored. Instead, the decision made The application was refused during Secondly, the Board took the view
it clear that such a feature could examination on the grounds that that the earlier decision “appears
contribute to technical character (and it lacked an inventive step: the to rely on the greater speed of the
so be considered when assessing examining division argued that a computer-implemented method as
inventive step) provided it met a simulation model was non-technical an argument for finding technicality.
certain requirement, namely that it and that its implementation on a But any algorithmically specified
interacts with the technical features computer was obvious following the procedure that can be carried
to change how those aspects of the approach set out in COMVIK. out mentally can be carried out
claim technically function. more quickly if implemented on a
So what are the issues? The first computer, and it is not the case that
This approach is important since relates to the link between the the implementation of a non-technical
in most computer-implemented simulation and physical reality. method on a computer necessarily
inventions the distinguishing feature Simulations are run on models which results in a process providing a
tends to lie in areas that the EPO approximate real-world systems. Is technical contribution going beyond
considers to be non-technical, such there a direct link between the two? its computer implementation”.
as an algorithm or mathematical Should there be? Remember that
process. the system being modelled may not The Board acknowledged
actually yet exist and indeed may the significance of numerical
What does this approach mean in never exist. development tools and considered
practice? that “legal certainty in respect of the
The second issue is the role that the patentability of such tools is highly
Stated simply, a non-technical feature simulation plays. Does the simulation desirable”. Accordingly, it is looking
can contribute to the technical merely assist in a cognitive process for a decision to be taken on the
character in one of two ways, namely of verifying the design? A cognitive patentability of simulation methods.
by its technical application to a field of process is not technical. Therefore,
technology, i.e., by solving a technical does the simulation provide a The Board, therefore, referred the
problem in a technical field (i.e., it technical contribution going beyond following questions to the Enlarged
serves a 'technical purpose'), or by its computer implementation? At their Board of Appeal for decision:
being adapted to a specific technical heart, the issues concern technical
implementation. Thus, if neither of effect and the question “What is the 1. In the assessment of inventive
these two situations arise, then the technical effect of a simulation which step, can the computer-implemented
non-technical feature will be ignored is run on a computer?” simulation of a technical system or
during the assessment of inventive process solve a technical problem
step and so the claimed invention is The appeal cited an earlier Board by producing a technical effect
likely to be found unpatentable. of Appeal decision T 1227/05 which goes beyond the simulation’s
(Circuit simulation I/INFINEON implementation on a computer, if the
A non-technical feature can be TECHNOLOGIES) in which it was found computer-implemented simulation is
considered to serve a technical that simulation of a circuit subject to claimed as such?
purpose when, for example, it 1/f noise constitutes an adequately
contributes to controlling external defined technical purpose. In that 2. If the answer to the first question
equipment, such as an X-ray machine, case, the simulation was found to be is yes, what are the relevant criteria
or it is used in the processing of patentable. for assessing whether a computer-
physical data, such as digital images implemented simulation claimed as
or measurements, to achieve a The Board of Appeal agreed that such solves a technical problem? In
technical effect. INFINEON supported the case in particular, is it a sufficient condition
CONNOR. However, the Board that the simulation is based, at
13least in part, on technical principles Amicus Curiae Briefs and Conclusion
underlying the simulated system or
process?
Comments from EPO It is hoped that the Enlarged Board
of Appeal will hand down a decision
President before the end of 2020.
3. What are the answers to the At the beginning of September, the
first and second questions if the Enlarged Board of Appeal invited All being well, the Enlarged Board of
computer-implemented simulation is observations from the appellant, Appeal will take a sensible, pragmatic
claimed as part of a design process, in interested parties and the EPO approach and agree that computer-
particular for verifying a design? President. implemented simulations as such are
patentable at the EPO. If it takes the
The questions are ostensibly based The common view was that the first opposite view, then the repercussions
on those that were presented by two questions should be answered not just in computer-aided design
the appellant during the appeal. in the affirmative. Pleasingly, the EPO but also across all fields involving
Interestingly, another question was President submitted comments which computer-implemented inventions
formulated by the appellant relating supported the view of the appellant. – including AI – would be immense.
to the extent to which claim features The President was of the view that “a It would also bring into question
based on psychological considerations computer-implemented simulation of whether the patent system in Europe
could make a technical contribution. a technical system or process claimed is fit for purpose for inventions
The Board, however, decided not to as such solves a technical problem coming from new and growing
refer a question on this point. by producing a technical effect going technology sectors or whether it is
beyond the computer-implementation stuck in the 20th century, content
So what do these questions actually when it reflects, at least in part, with granting patents only for the
mean? The questions can be stated technical principles underlying the technologies of yesteryear.
more simply (although not quite on a simulated system or process”.
one-to-one basis) as:
- Are computer-implemented
simulations in principle patentable?
- Does the nature of the system or
“theThe outcome of
referral could
process being simulated matter? have a significant
In particular, does it help if the
simulation concerns the technical effect on whether
aspects of the system or process?
- What form should a claim to a
these invaluable –
simulation take? indeed essential – Pawel Piotrowicz
Another way of looking at the tools and processes ppiotrowicz@vennershipley.co.uk
questions is whether the test set out
in T 1227/05 is correct and, if so, how
can in fact be
should it be applied? protected and could
The form of claim will have an have far-reaching
important bearing on different consequences
actors in the chain between software
designer, via the user of the software, affecting a wide
and manufacturer. For example,
if a direct link to physical reality
range of technical
is required, then it still might be areas involving
”
possible to obtain a European patent
for a product designed using the computers.
simulation. However, such a patent
is of little use to the designer of the As to the issue of direct link to
software. physical reality, the President stated
that “a direct link to physical reality
The answers to the referred […] is not necessarily required for
questions could have far-reaching the finding of a technical effect going
consequences. Simulations are beyond the computer-implementation
used in a wide range of technical in the context of inventive step”.
areas, including drug discovery,
chemical processing, transport and Thus, if this view is followed by the
communication networks to name but Enlarged Board of Appeal, then it will
a few. Also, it should be remembered affirm that computer-implemented
that building a model is a key part of simulations, in principle, can be
artificial intelligence. patented at the EPO.
14www.vennershipley.co.uk
15Designing for
Compliance – Data
Protection Considerations in
the Development of Artificial
Intelligence
The application of artificial intelligence (AI), and more specifically, machine
learning (ML), to support decision making and accelerate innovation has
experienced exponential growth in recent years. Large, aggregated datasets
are extremely valuable; they can help us to identify trends in a population,
relationships between different variables, test hypotheses and evaluate
outcomes.
One of the central challenges for requirement of data minimisation; research into potential causes and
AI developers is the vast amount which, as we will see, also assists cures. The importance of considering
of data required in order to train in achieving data security and in the privacy impact of AI systems
AI algorithms successfully. Many meeting the legal requirement that will only increase, as more powerful
of today’s AI applications seek to personal data are retained no longer models are fuelled by increasing
solve human-centred problems, and than necessary for the purposes amounts of data. With the wider
therefore rely heavily on data about for which they are processed. We availability of hardware specialised
individuals - personal data - in order should not, however, lose sight of the for the processing required in ML
to function. In this article, we will requirement for personal data to be models (such as neural processors/
look at the phases in the lifecycle of processed lawfully. Non-exhaustively, accelerators, found even in mobile
ML applications, the importance of that means the data are processed: devices), it is more feasible than ever
personal data in those phases, and to perform a contractual obligation; to implement larger, more powerful
the approaches which can be adopted in the legitimate interests of the models. Typically, more data are
to minimise regulatory risk whilst processor; in order to carry out a task required to train these larger models
allowing algorithms to achieve their in the public interest; or based on the and achieve these higher levels of
aims. consent of the individual whose data performance.
is being processed. Another important
Personal data – being data relating aspect of data protection law in the Typical ML Pipeline
to an identified or identifiable context of automated decision making
individual – must only be collected – including decisions reached using Before turning to the strategies for
and processed in accordance with AI systems – is that individuals have minimising the privacy impact of ML
data protection laws. In the UK, we the right not to be subject to purely models, it is useful to have in mind
are concerned principally with the automated decisions. This should the common phases for such models.
Data Protection Act 2018 (DPA) and be borne in mind by organisations Trained ML models process data
the EU General Data Protection implementing AI systems. in order to make some prediction
Regulation (GDPR). Certain types about that data. For example, in
of personal data, such as health Some of the most widely reported order to verify a user’s identity, face
or biometric data, are classified (and debated) AI applications at recognition models receive a picture
as special category data which are present rely on biometric and other of a face and predict whether the
subject to heightened restrictions special category data, for example, AI received picture depicts a specified
on processing, and must be handled systems that process vast amounts of user or not. This phase, where a
with additional safeguards. In this patient data in order to find specific trained ML model is used to make
article, we will look principally at symptoms that could help identify the predictions, is usually referred to
how ML models can meet the legal presence of a disease, thus enabling as the inference phase. The phase
before this is known as the training
16www.vennershipley.co.uk
phase. An untrained model has access privacy discussed below will need to This is a very simple method, and easy
to training examples during this be implemented in both the training, to implement in the inference phase,
phase; the data comprising those testing and inference phases. as well as in training, as all that is
examples will often be collected from needed is remembering which noise
one device and transferred to a server Data Protection distributions were chosen during
where the ML model training will training, and the features to which
take place. These training examples Techniques noise was added.
include some input data and a target Many applications of ML, such as
for each data point. The target face recognition, use an individual There are, however, some drawbacks
represents the result that we would as a data point. Each example in the to implementing perturbation in order
ideally like our model to produce for set of training examples is linked to reduce privacy impact. First, with
each given data point. Then, to train to a particular individual and each any method that perturbs individual
the model, we generate predictions example might contain a set of features of training data, there is
for some training examples, and descriptors about the individual. For a risk of reducing the predictive
adjust the model so that the next example, a job recommendation power of ML models, as patterns in
time it sees the training examples, service may use an ML model to the training data become corrupted
the generated predictions are more match candidates with jobs; each by the addition of noise. More
similar to the corresponding targets. training example will represent a importantly however, is that if outliers
In the face recognition example, particular candidate. The descriptors are present in the training data (e.g. if
the target would be 1 (i.e. 'True') for for each candidate may include the highest earning candidate earns
images with the user’s face, and 0 (i.e. information such as industry sector double the second highest earner),
'False') otherwise. experience, years of experience, adding noise will do little to mitigate
relevant education, etc. For training the risk that the outlier could be
These are the two most important examples linked to an individual, singled out from the data.
phases, but there are other phases the data protection principle of
where data is processed. Before minimisation means that the amount Using Random Matrices
deploying ML models in practice, of personal data collected, processed Another perturbation method could
it is important to go through a and retained should be no more than involve generating a random matrix
validation phase. This involves what is necessary for the purpose to multiply with the training examples
making predictions on unseen data of the data processing. Similarly, in (also represented as a matrix) to
(i.e. data that the model has not the testing and inference phases, transform human-readable, sensitive
been trained on) to ensure that the minimising the personal data used in data into a matrix of ‘random’
model performs well when deployed. ML applications is a key component numbers. In this case, as all of the
When picking a suitable model for of regulatory compliance. Below, data has been modified by the same
deployment, several models may be we examine some of the principal transformation, the predictive power
validated. The best performing model methods for minimising personal of ML models should not be affected.
will then be tested on a separate data data in ML applications, from training At inference, instead of sending the
set in the testing phase in order best through to inference. personal data to a server where
to assess the model. In practice, this training data is stored, the personal
is implemented by distinguishing a Perturbation Methods - Adding data can be first multiplied by the
large collection of data into different Noise generated matrix in order to preserve
sets for these distinct phases, with a A simple technique which seeks to an individual’s privacy. However,
large majority of data being used to reduce the privacy impact of data there is risk that the process could
train the various models (e.g. 70% of processing on individuals, is to be reverse engineered to find the
the data), and smaller portions for ‘perturb’ the training examples by inverse transformation and recover
validation and testing (e.g. 20% for adding 'noise' to the data (e.g. by the original data.
validation and 10% for testing). replacing existing data points with
modified values). This approach Synthesising Data
While it is common to separate seeks to mitigate the risk of retaining A related approach is to train ML
training and inference phases, a fully accurate data profile for models using synthetic training data.
this may not always be the case individuals in the trained ML model, In this privacy-preserving technique,
in practice. One example of this is which would pose a heightened risk generative models are used to
on-device training in which a model to those individuals, for example, in generate synthetic data which closely
is continually refined through use, the event of a data breach. In the job matches the characteristics of the
e.g. a face recognition model which recommendation service example, original training data set comprising
is refined over time as a user’s a candidate’s previous income personal data. Such generative
appearance changes. may be desirable to include in the models will of course need to be
training data. Instead of using (and trained in the first place, which will
Most of ML depends on the storing) a candidate’s real income, we require the use of personal data,
assumption that the data used to could generate values from a noise although that training could make
train a model is from the same distribution and perturb the values use of federated learning (as we
distribution as the data that will be by adding this noise to produce a examine in greater detail below),
received during inference. Therefore ‘noisy estimate’ of the candidate’s real where personal data is only stored
any pre-processing (i.e. processing income. on a local device. Alternatively, a
done to raw data before input into the centralised trusted organisation
ML model) approaches to preserving could train these models in a secured
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