Law Made Simple

Intellectual Property Law

Note 3 0f 7 Notes

Patent

Musbri Mohamed
DIL; ADIL ( ITM )
MBL ( UKM )

1
What is a Patent?

A patent is an exclusive right granted for an

invention, which is a product or a process
that provides, in general, a new way of
doing something, or offers a new technical
solution to a problem.  In order to be
patentable, the invention must fulfill certain
conditions.

2
Asian economies are setting a considerable pace in their
leading growth in terms of international patent filings.
Internationally there is still a healthy growth in the patent
system, with an exceptionally strong presence from some of the
Asian countries. A 4.5% growth in applications filed using the
Patent Cooperation Treaty (PCT) route in 2007 compared with
2006 was reported by the World Intellectual Property
Organization (WIPO).
 
A considerable amount of the said filings came from Japan,
Korea and China, which constitute 25.8 percent (40,248
applications) of the total filings. But many ASEAN countries
such as Singapore are also experiencing rapid growth as
demand becomes greater. because of a better linguistic
diversity, faster rates of filing in Asia of patent searches for
pre-existing work is taking place as more of that is increasingly
in the local languages.

3
According to WIPO, China has seen approximately 38.1 percent
growth in international patent applications in 2007 compared with
2006 and has overtaken Netherlands to become the seventh
leading country of origin for PCT filings. China represented 3.5
percent of all international applications. Korea, which represented
4.5 percent of all international applications, has seen 18.8 percent
growth in a year and has overtaken France to become the fourth
leading country of origin for PCT filings.

Still number one on the list is the United States with 33.5 percent
of all applications, which has seen 2.6 percent growth over 2006.
Next is Japan with 17.8 percent of all applications and with 2.6
percent growth. Third on the list is Germany with 11.6 percent of
all applications and with 8.4 percent growth. Malaysia and
Singapore also had double-digit growth from 2006.

4
Although companies from both USA and
Europe dominantly filled up the spots as the top
filers in 2007, Asian countries had also
participated actively and made remarkable
growth rates. Aside from Japan, Korea and
China, countries, which have also tallied
considerable number of applications, are India
(686), Malaysia (103) and Singapore (542).

What with this very significant historic shift,

after hundreds of years of European languages
domination in patent applications, interested
companies and inventors are now increasingly
having to be able to also view patented ideas in
those local languages.

5
What Rights does a Patent Owner have?

A patent owner has the right to decide who may - or may not -
use the patented invention for the period in which the invention
is protected. The patent owner may give permission to, or
license, other parties to use the invention on mutually agreed
terms. The owner may also sell the right to the invention to
someone else, who will then become the new owner of the
patent. Once a patent expires, the protection ends, and an
invention enters the public domain, that is, the owner no longer
holds exclusive rights to the invention, which becomes available
to commercial exploitation by others.

6
Why are Patents necessary?

Patents provide incentives to individuals by

offering them recognition for their creativity
and material reward for their marketable
inventions. These incentives encourage
innovation, which assures that the quality of
human life is continuously enhanced.

7
What Role do Patents Play in Everyday Life?

Patented inventions have, in fact, pervaded every aspect of human

life, from electric lighting (patents held by Edison and Swan) and
plastic (patents held by Baekeland), to ballpoint pens (patents held by
Biro) and microprocessors (patents held by Intel, for example).

All patent owners are obliged, in return for patent protection, to

publicly disclose information on their invention in order to enrich
the total body of technical knowledge in the world. Such an ever-
increasing body of public knowledge promotes further creativity and
innovation in others. In this way, patents provide not only protection
for the owner but valuable information and inspiration for future
generations of researchers and inventors.

8
New uses of IP and the need for valuation

The exploitation of intellectual assets such as patents has

become increasingly important for business in recent years.
Large and small corporations are making new uses of patents
and undertaking sophisticated licensing policies. Shareholders
are more interested in understanding the innovative potential of
their companies and look at patent portfolios as a key
competitive asset to generate value.

9
Aventis Farma Sa (M) Sdn Bhd & Anor v Rohibul Sabri
bin Abas @ Megat (t/a as Dabur Enterprise) & Anor
[2008] 3 MLJ 451

The relevant provision that governs patents in Malaysia is s

36(4) of our Patents Act 1983 ('Act') which is a restatement of
art 34 of the Trade Related Aspects of Intellectual Property
Rights Agreement ('TRIPS'). Section 36(4) reads:

For the purposes of this section, if the patent has been granted
in respect of a process for obtaining a product, the same
product produced by a person other than the owner of the
patent or his licensee shall, unless the contrary is proved, be
taken in any proceedings to have been obtained by that
process.

10
Industries invest millions in developing computer-related systems every year.
However, these systems do not seem to be given ample intellectual property
protection. Computer programs enjoy copyright protection, but these will only
protect them against copying. Patent protection, on the other hand, prevents
competitors from copying, reverse engineering or independently inventing a
system that embodies the same inventive concept. Initially, most jurisdictions
around the world expressly prohibited software from being patented.
Nevertheless, advances in computer-related systems have resulted in some
countries realising that software needs patent protection and a more liberal
interpretation has ensued.

The recent English Court of Appeal case of Symbian Ltd Application [2008]
EWCA City 1066 highlights the willingness of the English courts to accept
certain computer software as patents, in line with the current developments in
technology, although the law prima facie denies computer software in general
from being patentable.

11
In the European Union, while "programs for computers" and "methods for
doing business" are among the items excluded from patentability under Article
52(2) of the European Patent Convention, if the claimed subject matter has a
technical character it may be patentable if it meets the other requirements for
patentability. However, a program will be patentable if it produces a further
technical effect going beyond the normal physical interactions between the
program and the computer. The European Patents Office has time and time
again showed that they are willing to accept computer software as valid
patents, as seen in cases like Re Sohei O.J.E.P.O. 525 (1995), Re Pension
Benefit System Partnership O.J.E.P.O. 441 (2001) and Hitachi Auction
Method (T 258/03).

12
In the United States, software had been granted patent protection since the US
Supreme Court case of Diamond v Diehr 450 U.S. 175 (1981). In 1998, the
US appeal court for patent matters ruled in State Street Bank v Signature
Financial 149 F.3d 1368 (1998) (“State Street”) that a computerised method of
managing mutual funds was patentable subject matter, based on the very broad
definition of patentable subject matter in the US patent statute (149 F.3d 1368).
The statute provides that a person who invents or discovers any new and useful
process, machine, manufacture or composition of matter, or any new and useful
improvement of it, may obtain a patent. The Court in State Street held that
software is patentable if it provides a ‘useful, concrete and tangible result’.
However, this case seems to be overturned in the recent case of Re Bilski 88
U.S.P.Q.2d 1385 (2008), where the Court of Appeal held that computer
software is patentable if it is tied to a particular machine or apparatus, or it
transforms a particular article into a different state or thing. This case was
petitioned to the U.S Supreme Court for a writ of certiorari in January 2009 and
the outcome of this case was still not known at the time of writing. However, it
is still certain that although Bilski would mean that there is stricter control to
software patents, software is still patentable under US laws.

13
In Japan, the Japan Patent Office expressly states that they would
allow patenting of computer software, or ‘Business Method
Patents’ subject to several restrictions. However, patent rights are
denied for software dealing with application of a technology to
another specific field, automation of manual tasks and any change
of design based on artificial arrangements. The Patent Office also
published a guideline regarding the patentability of software. The
stand of the Japan courts can be best summarised in Justsystem
Corporation v Matsushita Electric Industrial Co. Heisei 17
(NE) 10040 (2005), where the newly formed Intellectual Property
Court then held that the manufacture and sale of a word
processing software constitutes indirect infringement of Article
101, Subparagraph 2 of the Patent Law, thus recognising software
as patentable products.

14
In Australia the leading authority is the case of National Research
Development Corporation v. Commissioner of Patents (1959) 102 CLR
252, where the High Court said "a process, to fall within the limits of
patentability … must be one that offers some advantage which is material, in
the sense that the process belongs to a useful art as distinct from a fine art ...
that its value to the country is in the field of economic endeavour." If the
methods of doing business are pure or abstract then they are not considered
to be patentable, but if the method is implemented using a computer, it
avoids the exclusion business methods.
In view of the developments above, it would be natural for software
developers in South East Asia to expect at least partial patent protection for
their software, particularly with the implementation of the Multimedia Super
Corridor in Malaysia, as well as the emphasis on information technology in
Singapore.

15
In Malaysia Section 13(1)(a) of the Malaysian Patents Act 1983
specifically excludes from patentable subject material "discoveries,
scientific theories and mathematical methods" and paragraph (c)
excludes "schemes, rules or methods for doing business, performing
purely mental acts or playing games".

With the advancement of technology, copyright protection no longer

provides sufficient protection to inventors of computer software. The
developed world has recognized this, and thus, allowed to a certain
extent, software patents. In Malaysia and Singapore there is at present no
case law that has interpreted these sections to allow software patents in
certain circumstances.

16
A patent protects:

A new and useful process, machine, manufacture or composition of matter; and

A new and useful improvement of a process, machine, article of manufacture or
composition of matter.

Depending on how it is claimed:

Aspects or specific sections of a web site or of computer software may be eligible

for patenting as a process (a sequence of steps) patent

They may also be contained in a machine as it executes on a computer

And may be an article of manufacture, when the software is contained on floppy

disks, CD-ROM, DVD, system memory, etc.

17
Inventive Step

“Given that programming techniques are widespread and

well known, and that programs may often be built up from
pre-existing modules or building blocks, demonstrating
inventiveness for a computer software invention may also
pose considerable problems. That a considerable quantity of
skill and labour is required to produce the program is not
enough if that skill and labour is uninventive.”

Carr & Arnold, Computer Software: Legal Protection in

the United Kingdom

18
The invention must be:

Useful
Useful means that the invention must actually have some utility. Thus just
an idea without a practical application will not qualify. Indeed, it is the
implementation which is patentable, not the idea itself

Novel
Novelty means the ‘invention’ must be new. Novel means that it cannot
have been previously known. An application will be rejected if each and
every element in the claim can be found in a single prior art reference.

Unobvious
Unobvious means that it must be sufficiently different from similar
inventions. An application will be rejected if the invention claimed in the
patent is considered obvious "to a person having ordinary skill in the art."

19
In IEV International Pty Ltd v Sadacharamani a/l Govindasamy [2008] 2
MLJ 754 the High Court of Malaysia considered the issue of novelty in
relation to improvements made to an existing patent right and whether to
allow a patent invalidation action brought by the original patentee. Held that
the Plaintiff had clearly satisfied the above requirement and therefore
qualified as an aggrieved person.

The Court considered Section 15 of the Patents Act 1983 wherein an

invention shall be considered as involving an inventive step if, having regard
to any matter which forms part of the prior art under Para (a) of subsection (2)
of Section 14, such inventive step would not have been obvious to a person
having ordinary skill in the art.

In arriving at this conclusion, the Court relied on the various expert evidence
tendered by the Plaintiff through several expert witnesses, which showed that
there was no novelty or inventive step in the Defendant’s patent. The Court
also noted the fact that the expert evidence adduced by the Plaintiff was not in
any way controverted or disproved by any expert evidence whatsoever
adduced by the Defendant.

20
Exclusion From Patent Protection

(1) ideas
(2) laws of nature
(3) scientific principals
(4) mental steps
(5) mathematical algorithms
(6) printed matter

21
Difficulties in Determining Patentability

Deciding under which conditions an invention is proper subject

matter and is therefore patentable or is not proper subject matter
and is not patentable can be very difficult.
For example, one of the complexities dealt with is as follows: If
the software embodies an idea, a law of nature or a mathematical
formula, the patent application is rejected when there is an
attempt to foreclose the general use of the idea, the law of nature
or the formula. If the software containing the idea, law or
formula is instead applied to a particular machine, it may be
acceptable for patenting. In this area and others it is sometimes
difficult to draw the line between concepts.

22
In addition one must consider other issues. Processing a
patent application is time consuming and can be costly.
The protection obtained may protect the method claimed,
but not other methods for accomplishing the same
purpose.

However, the possession of a patent could deter others

from developing inventions which have the possibility of
infringing. Some companies obtain significant revenue
from licensing patent rights. A patent can prevent others
from exploiting their own, independently created,
invention, if it infringes on your patent. Each invention
must be considered on its own unique facts.

23
Patent Act 1983

Patent Act 1983 was enacted to :-

provide protection on patentable invention

give exclusive rights to the owner in the form of

exploitation of the patented invention;

transfer of patent ownership;

and licensing contracts.

This Act came into force on 1 October, 1986.

Subsidiary legislation :- Patents Regulations 1986.

24
Patent Act (Amendment) 1995

This amending Act came into force on1 August 1995. The
objectives of the amendment are to:-

Speed up patent processing and grant

Update the Act in line with the Paris Convention
Widen the scope of patent protection

25
Patent Act (Amendment) 2000

This amending Act came into force on 1 August 2001. The objectives or
the amendment are to:

Change the period of patent protection from 15 years from the grant date to
20 years from the filing date.

Update the mandatory licensing provisions in line with Article 31 of the

TRIPS Agreement.

Allow import activities for patented products after after the products are
available in the market in any countries outside Malaysia (parallel import)

Limit the power to exploit patents by the government only during

emergency period and for public interest

26
Whether or not such computer programs are also patentable in
Malaysia depends on the interpretation to be given to s 13(i) of the
Patents Act 1983 which provides for the following not to be
patentable:

(a) discoveries, scientific theories and mathematical methods;

(b) plant or animal varieties or essentially biological processes for
the production of plants or animals, other than man-made living
micro-organisms, microbiological processes and the products of
such micro-organism processes;
(c) schemes, rules or methods for doing business, performing purely
mental acts or playing games;

27
(d) methods for the treatment of human or animal body by surgery or therapy
and diagnostic methods practised on the human or animal body:
Provided that this paragraph shall not apply to products used in any such
methods.

Such a specific listing of the items excluded and the absence of any mention
of computer programs in this list may suggest that the latter may be patentable
but caution should be exercised in utilizing the maxim expressio unius
exclusio alteriusto to interpret this section. An integral part of a computer
program is an algorithm which is essentially a mathematical expression of an
idea intended to solve a specific problem.

As a result there is always the underlying concern that the computer program
may fall within the purview of s 13(1)(a) and (c) and be excluded from
patentability.

Consideration of the approach taken in other jurisdictions with similar

provisions may assist in the interpretation of the Malaysian section.

28
The approach taken in Australia, the United Kingdom,
the United States and by the European Patent Office will
have a spill-over effect in Malaysia since the Registry of
Patents, Malaysia is currently adopting a modified
system in its substantive examination of patent
applications.

Under this system, a Malaysian application with claims

in conformity with those filed in the said countries or
the said office will be accepted for registration in
Malaysia once a patent is granted by any one of them.

29
A search at the Registry of Patents, Malaysia reveals that
under the modified system of examination, there are
several patents granted for inventions which incorporate
computer programs. E.g. Grant no MY-100183-A is for a
patent applied for by NEC Corporation for a traffic data
system by which a central processor collects traffic data
from a plurality of exchanges for storage and updating. The
system relies heavily on the use of a specially tailored
computer program. The patent was registered in the United
States of America and the Malaysian application proceeded
to grant under the modified system of examination adopted
by the local registry.

A further point to note is that under the proviso to s 13(1)

of the Malaysian Act, the physical forms of the computer
program may be registrable as patents in Malaysia.

30
The fact that computer programs have
a place in the patent regime, besides
the copyright area, is becoming
recognized in various parts of the
world. Malaysia should not be an
exception.

31
The European Parliament (EPO) has made its stand clear
by revising the European Patent Convention (EPC) and
inserting Rule 23(d) and (e) into the Convention. Thus,
under the revised EPC, certain biological inventions are
not patentable particularly those involving human cloning,
processes for modifying the germ line genetic identity of
human beings and uses of human embryos for industrial
or commercial purposes. Whilst, other biological
inventions such as human genes, pluri-potent cells taken
from foetus and elements isolated from the human body
would be patentable. The provision however, does not
explicitly refer to human embryonic stem cells.

32
In two recent decisions, Edinburgh and WARF, the EPO refused
to grant patents on inventions that involve human embryonic stem
cell. These decisions have been heavily criticised by other
members of the European Union as there is no common stand on
the procurement of stem cells from embryos.

Countries like Austria, Germany, Ireland, Luxembourg, Italy and

Portugal prohibit the procurement of stem cells from
supernumerary embryos.

Denmark, Spain, Finland, France, Greece, the Netherlands, and

Sweden allow such activities. Even more liberal are countries like
UK and Belgium that allow the creation of human embryos for the
procurement of hES cells.

33
 In Malaysia, there is no explicit exclusion for inventions
that involve human biological material under the Patents
Act 1983. In the context of patent law, the incorporation of
'public order and morality' in s 31 as a yardstick for the
grant of patents, brings into question to what extent such
inventions would be acceptable in Malaysia and to what
extent s 31 could be invoked to bar such inventions.

In the 2006 guidelines by the Ministry of Health, the

extraction of stem cells from embryos was not allowed. In
a later policy guideline on cell transplantation, embryonic
stem cell therapy is also not allowed. However, research
on stem cells is allowed, although not encouraged, if the
existing guidelines on ethical standards are followed. Stem
cell lines could also be imported. The creation of embryos
specifically for research is however prohibited.

34
The decision to open up patents to embryonic stem cells has caused
an uproar among the scientific community and patent offices all
over the world. It is the view of many that 'human embryos' should
not be simply treated as starting materials just like any other
'composition of matter'. What more if the research requires the
destruction of human embryos, an act which is described by many
as akin to 'abortion'. To that extent, the Patent Office would have to
be prudent in examining applications relating to stem cells. It
would be useful to delineate this boundary through express
provisions in the patent law.

However, from the experience of the UK, EU and Australia,

whatever phrase or words that one adopts to delineate what is not
patentable would be highly contentious; otherwise it runs into the
danger of becoming obsolete due to the rapid changes in
technology. Ultimately, what is more important would be a policy
decision by each country depending on the prevailing social mores,
religious sentiments and moral views of the country.

35
How can a patent be obtained worldwide?

At present, no “world patents” or “international patents” exist.

In general, an application for a patent must be filed, and a patent shall
be granted and enforced, in each country in which you seek patent
protection for your invention, in accordance with the law of that
country.

In some regions, a regional patent office, for example, the European

Patent Office (EPO) and the African Regional Intellectual Property
Organization (ARIPO), accepts regional patent applications, or grants
patents, which have the same effect as applications filed, or patents
granted, in the member States of that region.

36
Can I discuss the details of my invention with a potential investor before filing a
patent application?

It is important to file a patent application before publicly disclosing the details of the
invention. In general, any invention which is made public before an application is
filed would be considered prior art (although the definition of the term "prior art" is
not unified at the international level, in many countries, it consists of any
information which has been made available to the public anywhere in the world by
written or oral disclosure). In countries which apply the above definition of the term
"prior art", the applicant's public disclosure of the invention prior to filing a patent
application would prevent him/her from obtaining a valid patent for that invention,
since such invention would not comply with the novelty requirement. Some
countries, however, allow for a grace period, which provides a safeguard for
applicants who disclosed their inventions before filing a patent application, and the
novelty criteria may be interpreted differently depending on the applicable law.

If it is inevitable to disclose your invention to, for example, a potential investor or a

business partner, before filing a patent application, such a disclosure should be
accompanied by a confidentiality agreement.

37
In Malaysia, any interested party has the right to apply to
the IP Court for a ‘Declaration of Non-Infringement’
whereby the court may make a declaration, as against a
patent owner, that the performance of a specific act does not
constitute an infringement of the Malaysian patent
concerned.

However, should the act in question already be a subject of

an infringement proceeding, the defendant therein is not
permitted to apply for a Declaration of Non-Infringement.
An application for a Declaration of Non-Infringement may
be made in combination with an invalidation proceeding,
provided the applicant concerned is not the defendant in a
related infringement proceeding.

38
A Declaration of Non-Infringement, if granted, clears
the way for the applicant to continue or begin to
perform the specified act. However, there is no
certainty that the applicant will limit its act to
specifically that for which the Declaration of Non-
Infringement has been applied, or was granted by the
court. As such, at any point in time during the
proceedings for a Declaration of Non-Infringement or
after grant of thereof, the patent owner may initiate
infringement proceedings against the applicant, should
the latter exceed the stated limit of its specified act.
However, infringement proceedings may not be
instituted after five years from the act of infringement.

39
In the current uncertain economic times,
intellectual property (IP) financing (the use of
IP assets to gain access to finance) is of
growing economic importance.

Global commerce in the emerging IP asset

class is worth an estimated US$300 billion
worldwide annually, and some 80% of
corporate value today is represented by
intangible assets.

The financial potential of IP assets is currently

limited, however, by systems and policies that
are still largely geared to tangible assets.

40
Intellectual Property Rights (IPR) enforcement will
always be about striking a balance between the rights of
the Intellectual Property (IP) proprietor and the general
public’s right to freely use and share available resources
and innovations and improve on existing technologies
and ideas.

IP laws in Malaysia have been in conformance with

International IP laws as a member of the World
Intellectual Property Organization (WIPO) and a
signatory to the Paris Convention and Berne Convention
which govern intellectual property rights such as patents,
trademarks, industrial designs, copyright, geographical
indications and layout designs of integrated circuits.

41
An overhaul in Malaysian IP laws are to be affected by the end of
the year according to MyIPO .

The relevant areas of IPR that will be considered is copyright laws,

trademarks, patents and reviewing key IP legislation with a view to
clarify current laws and to ensure the balance of public and private
rights. In April 2009, The Office of the United States Trade
Representatives declared in its 301 Special Report 2009 that
Malaysia was to remain on the Watch List due to concerns in
enforcement of IPR. It urged Malaysia to continue its efforts to
update its IPR laws and to accede and fully implement WIPO
Internet Treaties.

As MyIPO has always maintained the importance of IP protection

in an increasingly aware and knowledge-driven society, the
following amendments to IP laws will be included shortly.

42
Malaysia takes pride in deep rooted traditional
knowledge and being party to an
Intergovernmental Committee  (IGC) on
Traditional Knowledge and Genetic Resources in
World Intellectual Property Organisation
(WIPO) has assisted in monitoring the
availability of such resources for patent
purposes.

Like our foreign counterparts, Malaysia is also

equipped with a digital library for traditional
knowledge which acts as a defence against the
granting of patents linked to traditional
knowledge and genetic resources.

43
IP financing occurs in many countries in a range of
industries using a variety of financial mechanisms, but
its level of success is based on legal and regulatory
support, the awareness of the banking industry and
development of capital markets.

IP financing has great potential in developing countries,

particularly small and medium-sized enterprises which
rely upon their knowledge and IP assets as the main
source of funding. In this context, IP financing can
provide an accessible source of relatively inexpensive
funding, and encourage further innovation and
creativity.

In many developing as well as developed countries,

however, levels of awareness of IP assets-based
financing remain low, and progress is needed to tap this
potential. The issue is the subject of international policy
development at the United Nations Commission on
International Trade Law (UNCITRAL).

Thank you.

44