Where in the world ...? Second Global IP Index reviews 24 places to litigate patents

Last month saw the publication of the second Taylor Wessing Global Intellectual Property Index. According to the firm's website,

"Based on an innovative analysis of surveys of senior industry figures globally and an array of published empirical data, the index provides an assessment of the best and worst jurisdictions to obtain, exploit, enforce and attack particular types of IP. Where once anecdotes, conjecture and even some prejudice may have informed our view of a particular jurisdiction, we are now able to rely on statistical analysis.

GIPI 1 [= Global Intellectual Property Index 1] covered the three main IP rights of trade marks, patents and copyright in 22 jurisdictions. GIPI 2 provides an update on that, using data from even more respondents (20% more than in GIPI 1), to whom we are most grateful. In addition, GIPI 2 includes:

* coverage of Ireland and Turkey, bringing the total to 24 jurisdictions;

* assessments relating to designs and domain names;

* consideration of regional systems of the Community Trade Mark/OHIM and European patents/European Patent Office (not fully ranked); and

* assessments of the cost-effectiveness of enforcement in each jurisdiction".

On patents, the report had this to say:

"Initial observations

Remarkably, the ratings for all jurisdictions have risen ..., with a narrowing of the margin between the lowest and highest ranked countries. The UK remains 1st and Germany has climbed into 2nd place ahead of the USA.  Australia is now 4th ahead of the Netherlands and Canada. Ireland is a new entry in 8th place sharing the same rating as Singapore. Japan consolidates its mid-field position in 10th place and South Korea moves further up to 12th place.

Turkey is another new entry, in 17th place. Mexico, South Africa and UAE show strong gains in their ratings. The BRIC jurisdictions again occupy the bottom four places of the Patent Index although they have all gained points in their ratings. Russia is now leading this group with the strongest score gain of any country.

The biggest fallers in rank (ignoring the effect of new joiners) were Israel, Spain and Poland.

Analysis

Respondents continue to identify the same factors as key to high scoring as in GIPI 1. These are:
* Relatively speedy and effective procedures.
* Specialist patent courts.
* Well-respected and experienced judges.
It is these, above even cost considerations, that continue to place the UK, Germany and USA in the top 3 positions, both overall and also for each of enforcing, exploiting and attacking patents. ...

It was concluded in GIPI 1 and now confirmed by GIPI 2 that cost considerations play a role, but not a determinative one, in the ratings and ranks. This was somewhat unexpected, given the present adverse economic climate. When asked to score jurisdictions for cost-effectiveness of enforcement, the spread of scores was narrower overall. As with all the other major IP rights, Germany was rated highest for cost-effective enforcement by a clear margin and, as with trade marks, Mexico came 2nd. With virtually identical scores, New Zealand, Canada, France and the UK come next. The USA came last.

To have the UK ranked highly for cost-effectiveness may surprise some. This is not least given the very public criticism made by a High Court judge in his judgment last year against a patentee for racking up £6 million in legal fees on enforcing its patent and defending it against a revocation counterclaim. With losers generally having to pay a substantial part of the winner’s costs, the possibility that those costs can approach this figure is a disincentive to litigation. It has to be said that this case was exceptional, with costs about five times more than an average one. However, it has resulted in the English patent court judges taking a more proactive role in seeking to cap patent action costs. 

Significantly, the USA was ranked bottom, alongside India as the least cost-effective country for patent enforcement (just below China). Aside from cost considerations, England is still perceived as somewhat anti-patent, at least for pharmaceuticals. It topped the score table, by some 40 points, for challenging patents. In fact, this reputation and that score may be less justified now since, in just over 30% of the English cases in 2008, the patent was held to be valid – considerably up on previous years.

In Germany, the EU Enforcement Directive was implemented during 2008 broadening patentees’ rights to information concerning the scope of infringing acts and gathering evidence. In particular, the court practice on granting pre-trial inspection orders was confirmed by statutory provisions added to the German Patents Act Although Germany and the US have tended to be regarded as patentee-friendly systems, they were likewise high scorers for attacking patents.

Other common law countries also saw gains in ratings but not necessarily rank:  Australia is rated highly for obtaining and exploiting patents but drops back a little in the contentious arena. Judges and court users have long recognised a need to streamline the Australian patent litigation system. This has led to the Australian Federal Court to rolling out an intensive case management procedure that aims to limit discovery and expert evidence.

New Zealand increases its rating but falls effectively one place. ... “New Zealand’s patent law is over 50 years old and antiquated for emerging technologies.”

Canada, dropping one rank but with a slight rating increase, is criticised for being the only G7 economy not having patent term restoration. ...

The Asian jurisdictions all see rating gains: Japan and South Korea showed respectable gains in ratings points and retained their mid-table positions. ... [Japan's] specialist IP courts are perceived to have been further improving both their speed and quality of first instance decisions. Singapore’s slight gain may reflect the benefits of recent amendments to its laws aimed at facilitating patent licensing (its highest rate and ranking, 7th, was for exploiting patents). China’s increased score still leaves it bottom of the table. ...

Israel’s drop in rank, but gain in rating, suggests its progress is not as good as others. It has notably remained in this year’s Special 301 Priority Watch List largely because its laws do not, according to the USTR, satisfactorily prevent unfair commercial use of undisclosed test data used in applications for marketing  authorisation and makes no allowance in patent duration for delays in obtaining such authorisation (i.e. there is no equivalent to the UK Supplementary Protection Certificate). Mexico is likewise hauled up for this.

There was again major disparity across Europe for dealing with patent disputes. Score variances of 231 points (attacking patents) and 211 points (enforcing patents) arose between the top and bottom scoring EU Member States. The latter were Spain, Italy, and Poland. The rank variance was from 1st to 20th/21st, so almost the entire GIPI table. To the extent there is a centralized European system at all (for obtaining and attacking patents), the European Patent Office would have been placed 7th overall and slightly higher for obtaining patents. The latter may reflect the implementation of the London Agreement which has assisted in cutting back on the material cost of translation in obtaining European-wide patent protection.
However, responses expressed mixed feelings about the EPO:"

This year's survey is not only wider in scope and deeper in content -- it is also more rigorous in terms of methodology than its predecessor. Taylor Wessing has provided a valuable service to the patent litigation community in commissioning this work and making it available to the critical scrutiny of all. It would be good to think that work of this nature, which reflects the opinions of those who work within the patent dispute resolution system, would be given as much weight as some of the more academic materials on which Europe's leaders are likely to base their next moves towards European patent litigation reform.