Working Guidelines

by Luis-Alfonso DURAN, Reporter General,
Jochen E. BüHLING, Deputy Reporter General and
Ian KARET, Deputy Reporter General
Dariusz SZLEPER and Thierry CALAME,
Assistants to the Reporter General

Question Q180

Content and relevance of industrial applicability and/or utility as requirements for patentability

Introduction

1. Art. 27 TRIPS provides that, subject to certain exceptions, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Art. 27(1) TRIPS includes a footnote indicating that, for the purposes of this article, the term "capable of industrial application" may be deemed by a Member to be synonymous with the term "useful". This proviso in the footnote leaves space for the Members of TRIPS to adapt to the requirements of TRIPS without replacing existing standards. In particular, Members are not forced to introduce industrial applicability or utility as a specific requirement for patentability if their law knows one of the two but not the other. The contents of these terms is also left to the Members and their legislation or case law.

2. In the context of its work on the Substantive Patent Law Treaty (SPLT), the Standing Committee on Patent Law at WIPO (SCP) has made various proposals to include said requirements.The discussion came up in the Fifth Session of the SCP which was held in May 2001 where it was agreed to include a provision in the SPLT concerning patentable subject matter (see Document SCP/5/6).1 Whether this would include industrial applicability/ utility was undecided. The accompanying Regulations which were drafted at this Session contained a definition of "industry" for the purposes of industrial applicability (utility), namely to follow Art. 1 (3) of the Paris Convention and to understand it in the broadest sense. One alternative of draft Art. 16 of the SPLT read that an invention shall be considered industrially applicable (useful) if, according to its nature, it can [be made or used in any kind of industry] [have a specific, substantial and credible utility]. The other alternative simply suggested to delete this requirement completely.

At the next Session in November 2001 this draft Art. 16 was deleted entirely. The Notes on draft Art. 12 which contained the conditions of patentability stated that no distinct condition of patentability with respect to either industrial applicability or utility was provided.

The reason was that there are differences between industrial applicability as used by
some systems and utility as used by others which appeared to be difficult to overcome. It was therefore suggested not to include industrial applicability/utility as a distinct condition of patentability into the SPLT at this point but to deal with the issue in conjunction with patentable subject matter or any other requirement (see Document SCP/6/4, Notes 12.02 and 12.03).

The latest Draft SPLT (Ninth Session of the SCP in May 2003) contains a provision in
draft Art. 12 (4) which was introduced at the Seventh Session in May 2002. According to this draft Article 12 (4) a claimed invention shall be industrially applicable (useful). What shall be considered industrially applicable/useful is still undecided. Three alternatives are being proposed (see document SCP/9/2):

(1) The invention can be made or used for exploitation in any field of commercial [alternatively: economic] activity,

(2) The invention can be made or used in any kind of industry, whereby "industry"
shall be understood in its broadest sense as in the Paris Convention or

(3) The invention has a specific, substantial and credible utility.

According to a Comment in the draft text the first alternative intends to provide a single definition accommodating both "industrial applicability" and "utility", although a Contracting Party may use either term under the applicable law. Alternative (2) is modelled after Article 33 (4) PCT (see also document SCP/9/5). At the Eighth Session in November 2002 a majority of the delegations preferred Alternative (2), possibly with some modifications.It was also suggested that the International Bureau prepare a study regarding commonalties and differences between the "industrial applicability" and the "utility" standards.

3. In the granting practice of the major patent offices (EPO, JPO, USPTO) the additional requirement of industrial applicability and utility differs considerably. This also comprises the aspect of "technicality" or "technical effect" of an invention. This aspect has been addressed in different ways. In Europe, for instance, the term "invention" is interpreted in the sense that it implies technicality. Otherwise, the subject matter of a patent application is not considered as an invention. Rule 29 of the Implementing Regulations specifically states that the claims in the application shall define the matter for which protection is sought in terms of the technical features of the invention. This has led to a number of issues and problems in patenting software inventions or biotech inventions. Although one has to be aware of the fact that, in the context of this Question Q180, there may be overlaps with the problem of technicality and the technical character or technical effect of an
invention, this problem, should explicitly be excluded from the studies of Q180 In the context of this question we wish to limit the work of the Committee to issues of industrial applicability and utility. This should, however, not prevent a Group to address the issue of technicality if this is part of industrial applicability or utility according to their national law.

4. Art 52 (1) EPC reads that patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step. According to Art 57 EPC ("Industrial application") an invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture. In general, this provision is interpreted broadly so that a refusal of the grant of a European patent for reasons of a lack of industrial applicability is rather exceptional.

The "Guidelines for Examination in the European Patent Office" specifically state that Art. 57 EPC excludes from patentability very few inventions which are not already
excluded by Art. 52 (2) EPC. This list comprises subject matter which either lacks
an industrial object or an industrial result, but consists of rather abstract ideas, among others presentations of information. This does not mean that the requirement of industrial applicability "overrides" the restrictions of Art. 52 (2) EPC. Even if an invention is susceptible of industrial application it may not be patented if it falls within the scope of Art. 52 (2) EPC. On the other hand, the claims need not necessarily be restricted to industrial applicability if the description indicates the way in which the invention is so susceptible.

Practice of the EPO has shown that most refusals under Art. 52 EPC are based on Art.
52 (4) EPC which deals with methods for the treatment of the human body and diagnostic
methods practised on the human body (now Art. 53 (c) EPC as amended by the Revision
Act of the EPC of November 2000). In the meantime the European Parliament and the Council have issued the EU Biotechnology Directive which has not yet been transformed
into national law in all of the EU Member States. The EPO has, however, already
amended the Implementing Regulations and has introduced rules which allow biotech inventions to be subject-matter of patent applications in Chapter VI (Rules 23b to 23e).This implies that such inventions may be industrially applicable as required by Art. 52 (1) EPC. Reference should also be made to the EU Biotech Directive (Directive 98/44/EC) concerning the legal protection of biotechnological inventions. Recitals (22) and (24) of this Directive specifically address the issue of industrial applicability and state that patentability for biotech inventions should be subject to the same criteria as in all other areas of technology. In its decision of June 20, 2001 (OJ 6/2002, p. 293) the opposition division of the EPO expressly stated that the recitals of the European Directive 98/44/EC serve as supplementary means of interpretation.

The Japanese Patent Act contains a similar provision. Art. 29 (1) begins with the statement that any person who has made an industrially applicable invention may obtain a patent therefore. According to the examination guidelines of the JPO the word "industry" is interpreted in a broad sense, including mining, agriculture, fishery, transportation, telecommunications etc. Certain groups of inventions have been established which are considered industrially inapplicable. These comprise methods for the treatment of the human body by surgery or therapy and diagnostic methods practiced on the human body, commercially inapplicable inventions (for personal use or academic or experimental purposes only) and practically inapplicable inventions. Whatever is not covered by these groups will be considered industrially applicable. One may note that the first group of exceptions corresponds to Art. 53 (c) EPC (Revised Version).

In the US the situation is quite different. 35 U.S.C. 101 gives a definition of "Inventions Patentable". According to this general definition any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof may be patentable subject to further conditions and requirements. Whereas industrial applicability is not necessarily required, the term "useful" plays a decisive role. By this standard, inventions are not limited to industrial applicability. As long as they have utility they are patentable. Utility can be described as "practical utility" or "specific utility". These terms mean that the claimed subject matter has "real-world" value and that a specific use for the invention or a specific application of the invention has been disclosed (see also USPTO Utility Examination Guidelines). This requires in many cases a great deal of evidence and test results to convince the examiner of the specific utility in that particular case.

The differences described above have led to considerably diverging results in granting
patents on inventions particularly in new technical fields, such as biotechnology, information and communication technologies. This situation shows that there is clearly a need for harmonization with regard to patentability requirements.

Previous studies of AIPPI

AIPPI has studied the requirements of novelty and inventiveness on various occasions. As an example reference is made to Q89G which discussed Patentability under the European Patent Convention and to Q167 which dealt with Current Standards for Prior Art Disclosure in Assessing Novelty and Inventive Step Requirements. However, the question whether there should be additional requirements such as industrial applicability or utility and what their contents should be, has never been studied in depth. Solely, Q150 when studying Patentability Requirements and Scope of Protection of Expressed Sequence Tags (ESTs), Single Nucleotide Polymorphisms (SNPs) and Entire Genomes dealt with these issues. In its Resolution adopted in Sorrento 2000 AIPPI has expressed the view that one of the key issues is the problem of utility or
industrial application and that the mere affirmation that an EST or SNP would be useful as a probe may be insufficient. In the same Resolution it was also recognized that a relationship may exist between utility or industrial application and inventive step (non-obviousness).

Not only Art. 27 (1) TRIPS and the ongoing discussion at WIPO in the SPLT negotiations but also the differences in granting patents which can be seen throughout the world let it seem appropriate and important for AIPPI to conduct studies on the issue of industrial applicability and utility as requirements for patentability. It is the purpose of Q180 to make a comparative study as to the current situation in the various countries and to develop proposals for further harmonization in this respect.

Questions:

1. What is the situation in your country?

The first part of the Questionnaire will deal with an assessment of the current situation in the various countries. The Groups should give an overview of the legal situation in their respective country and inform about whether there are additional requirements for patentability besides novelty and inventive step.

1.1 Does your country know industrial applicability or utility as an additional requirement for patentability besides novelty and inventive step?

The Groups are invited to state whether industrial applicability and/or utility are required to make an invention patentable. They should also inform about the legal background and state whether such a requirement, if it exists, comes from statutory law or has been established outside the statutory law by their case law. Some countries may distinguish between the two whereas other countries may follow Art. 27 TRIPS and use both terms as synonyms.

1.2 How does this comply with TRIPS?

This question is of particular interest with regard to those countries whose law does not specifically state industrial applicability or utility as a requirement for patentability. The Groups should state how the system in their country is brought in compliance with TRIPS and how additional requirements for patentability are treated.
2. Industrial applicability The Groups which have listed industrial applicability as a requirement for patentability are invited to describe in more detail what the elements of this requirement are and how this is examined in practice. For those countries which do not know this requirement it might be of interest to answer this part of the question if the Group feels a need to implement this requirement in the future and to express their views on the various aspects.

2.1 How is industrial applicability defined?

The Groups could state whether there is a definition of industrial applicability by law or whether it has been developed by their case law. The elements which constitute industrial applicability should be described. This includes a definition of the term "industry" which may differ from country to country. A wide range of definitions is possible from the broadest sense on the one side to a very narrow interpretation on the other side which might limit the term to "old" or "conventional" fields of industry. It will also be of interest how patentable inventions are distinguished from inventions which are industrially inap-plicable and to which nature of invention these typically belong, e.g. mechanical, chemical, biotech or software related inventions. Are there differences between process and product claims?

2.2 What is the relevance of industrial applicability and how does it affect granting proceedings?

Although industrial applicability may be a prerequisite for patentability its relevance may be limited. The Examination Guidelines of the EPO clearly show that the requirement of industrial applicability only plays a minor role in its examination proceedings and that very few inventions are not patented due to a lack of this requirement. In many cases the examiner may find a different reason for denying the patent, such as insufficient disclosure or lack of inventive step. How is this done in your country and what is the effect on the granting proceedings? What is the ratio compared to other grounds of refusal and what are examples of specific cases? It would also be interesting to hear about whether there are special tools for the examiner to assess a lack of industrial applicability and which standards are applied to this requirement.

2.3 How is industrial applicability treated in proceedings concerning the validity of patents?

Similar problems can be found in invalidation proceedings, i.e. opposition proceedings or nullity actions. Is the lack of industrial applicability a separate ground for opposition or nullity? What are the requirements for the opposing party to establish such a ground?

Again the practical relevance should also be considered as well as the way opposition
authorities or nullity courts deal with this.

3. Utility

The same aspects have to be assessed with regard to the requirement of utility. Those
Groups in whose countries utility is required are invited to comment in detail on the elements of this requirement and the application in practice. Again, those Groups which do not have the requirement of utility are requested to state what their suggestions are if they would like to see utility as a requirement for patentability in the future. The following questions have the same contents as the questions listed above for industrial applicability so that further explanations are not necessary at this point.

3.1 How is utility defined?

What are the elements which constitute utility? When is an invention considered useful?

How are useful inventions distinguished from non-useful inventions? In which fields of
technology does this requirement play the most important role?

3.2 What is the relevance of utility?

How is utility examined by the patent authorities? How does the lack of utility affect granting proceedings? Does this requirement play a significant role in the number of rejected patent applications? What are examples and how is this requirement combined with other requirements, in particular with the inventive step/non-obviousness of the invention?

3.3 How is utility treated in proceedings concerning the validity of patents?

Is the lack of utility a separate ground for invalidity? What are the requirements for the opposing party to establish such a ground? What is the practical relevance of this ground for invalidation?

4. Conclusions

In this part of the Questionnaire the Groups are invited to express their views as to
whether industrial applicability and/or utility should be used as additional requirements for patentability and, if so, what are the reasons and what should be their definition and elements. If the Groups are of the opinion that industrial applicability or utility should not be considered as additional requirements they are requested to give their reasons as well. The Groups should also consider suggestions for the harmonization of both requirements towards each other.

The Groups are also invited to make additional comments on any other aspect which
they might find relevant in the context of this Question.

Note:

It will be helpful and appreciated if the Groups follow the order of the questions in their Reports and cite the questions and numbers for each answer.