Quality patents, better timeliness
This is an Insight article, written by a selected partner as part of IAM's co-published content. Read more on Insight
Forty years of quality patents
Almost exactly 40 years ago – on November 2 1977 – the European Patent Office (EPO) opened its doors for business. Far from a grand establishment, the EPO at the time had a small but dedicated team of just 98 essential staff based out of a temporarily rented building in Munich. These days it is a very different story. Our staff number nearly 7,000, across sites in Munich, The Hague, Berlin, Vienna and Brussels, giving us a truly international presence. In the past four decades, the EPO has undergone great transformation – and so has the European Patent Organisation. What was once a small but visionary group of seven member states at the start of the EPO in 1977 has become 38 member states today.
This change is not simply down to the will of policymakers. It is possible that when the various parties sat down on October 5 1973, they could not have predicted with any certainty that the EPO would go on to be one of the five largest patent offices in the world. After all, the European Patent Convention had taken more than 20 years of negotiations and enlargement was by no means guaranteed. Instead, the evolution and development of the EPO are as much a testament to innovation in Europe as they are to the support that has been given by governments. Increasing growth in supply and demand for innovative new products across Europe has continually driven demand for a single patent application that can be validated in multiple member states. Yet the mere existence of a European patent is not enough. To be truly valuable to industry and enterprises, the patent must be a quality product. For applicants looking to the EPO, this means that the granted patent has a high degree of legal validity and remains legally robust in the face of opposition.
There are a number of reasons why high-quality patents are in demand. Among the most important, inventors want reassurance that they will be able to reap the rewards of their endeavours. Similarly, investors, businesses and industries want to rely on robust patents so that they can devise research and investment strategies for their IP portfolios with more accurate forecasting, based on reliable patents. And perhaps most significantly, quality IP rights support economic growth.
Supporting the economy
In the 18 months since the last edition of Patents in Europe was published, the EPO teamed up with the EU Intellectual Property Office for a joint study to assess the real value of IP rights. The publication built on a previous report to ensure that those with an interest in intellectual property are equipped with an updated, improved assessment of the contribution made to the economies of the European Union by industries that make intensive use of IP rights. The results demonstrate just how important intellectual property has become, with 42% of the total economic activity (ie, gross domestic product) of the European Union being attributable to IP rights-intensive industries. In monetary terms, this is €5.7 trillion. On top of this, IP rights-intensive industries are responsible – both directly and indirectly – for 38% of all employment, which is equivalent to 82 million jobs. It was revealing to learn, as an IP office responsible for patents, that the value added specifically by patent-intensive industries has now reached over €2 trillion and generated 36 million jobs. In short, effective IP rights are a win for the European economy and have bolstered its competitiveness. Therein lies the key phrase – ‘effective’ IP rights – and we have always believed that patents can support European innovation and competitiveness only if they are of the highest quality. It is therefore little wonder that continually achieving greater levels of quality has been and remains our primary goal.
Increasing quality in a competitive world
The challenge over the past 40 years has been to increase quality while changes in the world around us have made searching prior art and examining patents more challenging. Inventions have grown more complex, the amount of prior art has risen exponentially, competition has increased and the demands of our users have changed. This is in addition to the overall growth in patent applications. At the EPO alone, applications have grown steadily from 2012 and have now reached around 160,000 per year, of which roughly half came from within Europe. On the basis of preliminary results, further growth is expected this year. The same trend of high volume and high growth is unfolding across the world and in 2016 there were 2.63 million patent applications at the IP5 offices.
Such changes have necessitated a constant adaptation of our operations to ensure that our patents and services continue to meet and surpass our users’ expectations. Just as the world around us has undergone rapid transformation, our quality strategy has also had to evolve if the EPO still wants to claim to be a trailblazer in patent quality. This year, for example, we are in the process of renewing our ISO 9001 certification according to the revised standard, which reflects recent developments in best practices in quality management (the EPO was the first IP5 office to achieve ISO 9001 certification for the quality management of our end-to-end patent process in 2015). Meanwhile, we have also created a specific sub-group on quality in the EPO’s advisory body, SACEPO, which can provide further input.
The EPO’s approach to quality clearly relies on a number of elements that are in themselves evolving; over the past few years, more resources have been concentrated on the core business. Whereas examiners numbered below 4,000 in 2011, they now constitute a core business workforce that is nearly 10% bigger, having reached 4,300. Yet this has been achieved with no increase in the overall headcount. Meanwhile, improved IT tools support them in their work and are helping us to transition to a purely digital environment.
We also continue to draw on immense reserves of patent documentation. Thanks to ongoing initiatives with partners – whether databases or national IP offices – the EPO continues to possess the world’s largest prior art collection. This comprises over 730 million records of patent and non-patent literature in 160 databases. In addition, EPO examiners have access to subscription-only external databases and collections, comprising over 10,000 journal titles spread across all areas of technology.
But how do we know that these resources are having a positive effect on quality? This year the percentage of files judged compliant by our operational quality control (CASE) remained extremely high at 98.5% for searches and 98.4% for grant – far surpassing an already rigorous target of 95%. But the checking does not stop there. As well as quarterly checks on the correctness of bibliographic data for the publication of patent applications and patents, there is also regular auditing. The EPO’s Directorate Quality Audit checks the compliance of products delivered with legal requirements, performing annual audits on the European and International Search Reports and on the applications passed to grant. This year the objective for classification was met while compliance in search was exceeded.
For the first time ever, a comprehensive quality report for all to read will be made available during the course of 2017. It marks an important step in ensuring that the EPO is a transparent organisation and complements our other reports, such as those covering social conditions for staff and environmental governance. For the EPO, the report is an expression of our desire to keep our users informed about how quality is managed, maintained and improved. The EPO’s member states and users will have access to a comprehensive report that gives detailed information on how the EPO manages its quality and, crucially, how it is progressing. Our users rightly want to know how the EPO has been able to do this successfully while also increasing efficiency, productivity and timeliness.
The quality of timeliness
Once granted, quality patents support competitiveness, but the EPO’s patent applicants want to see their applications processed in a timely manner. There can be nothing more frustrating for a user of any service – let alone one that can influence IP strategies – than feeling that an application has disappeared into an administrative black hole. Similarly, competitors and third parties are harmed by the uncertainty when the outcome of applications remains unknown.
As a result, the EPO views timeliness as an inseparable result of quality in our patents and services and has made changes to facilitate the timely processing of patents. Last year I reported that we would be expanding our Early Certainty initiative to include examination and opposition. It follows the success of Early Certainty from Search, which has brought the average time for a search report with written opinion down to around just five months, well inside our six-month target.
Since then, the initiative has been fully launched, and for examination, we are aiming for grants to be concluded on average within 12 months after the start of the examination procedure. For opposition, we have now committed to ensuring that the overall duration of the procedure is reduced, from the current 26 months for cases with no specific legal complications, to just 15 months. To steer us further towards attaining this 15-month target, the workflow of the opposition procedure has already been revised within the current legal framework as of July 1 2016. The streamlined opposition procedure simplifies opposition proceedings and is now delivering decisions faster, while giving parties more time to react to summons and prepare for oral proceedings.
Continually evaluating workflows and processes in patent granting is therefore a critical tool for delivering results. Following a report last year by Boston Consulting Group, we have also seen how our own patent granting workflows can be revised further. With increasing digitalisation and automation, we have an opportunity to streamline the patent process. The EPO will therefore undergo a reorganisation this year, which will see formalities officers and patent examiners working more closely together to increase clarity and coherence. This is just one area where we have seen digitalisation present new opportunities, but it is sure to be merely one adaptation that we will make in the coming years. With the shortening of cycles between industrial revolutions, the pace of change is increasing and presents both challenges and opportunities as the EPO and its users look to exploit technological changes. But it also means that feedback from our users is increasingly important, so we can ensure that our services continue to match or surpass user expectations in these dynamic times.
The value of user feedback
While the EPO can put effective quality measures in place and its own monitoring and control measures, one of the most effective litmus tests for our patents and services is how they are viewed by the users themselves. User feedback is therefore an integral aspect of the EPO’s Quality Management System. Whether the input comes as metrics-based feedback that can be assessed statistically or oral feedback received during meetings, it is all analysed. On the basis of these assessments, quality issues can be identified and a number of options are then available, from correcting specific and minor deficiencies through to reviewing current practice and redesigning processes.
Independent user satisfaction surveys are an important component of understanding our users’ needs in the field of quality, because they also help the EPO to track exactly how we are responding to more modern trends that can affect the services we offer. For example, between 2013 and 2016, the number of respondents very satisfied with the EPO’s Asian prior art coverage increased by 21% – indicating that the EPO’s records are keeping pace with the exponential growth in Asian prior art.
One of the most influential surveys that we take note of each year is the annual IAM user survey, thanks to its independent status and its increasingly comprehensive input from patent professionals around the world, which this year numbered 800. Once again, the EPO was voted as first among the IP5 offices for the quality of its patents and services. Between 92% and 94% of those surveyed rated the quality of patents issued as “excellent”, “very good” or “good”.
Given that patent offices the world over are under pressure to boost efficiency, these are encouraging results, particularly given the strong advances that the EPO has made over the past year in its productivity. Last year the results of our internal management measures led to an 8.5% increase in production. Combined with our Early Certainty initiative and the 2015 rise in production, the effects have been significant – 40% more patents were granted in 2016, reaching a record level of 96,000, and our stock has been reduced by 25%, making the EPO a more adaptable and responsive organisation.
The results of the IAM survey and our own user feedback show that such gains have been achieved in addition to increasing levels of quality, and not to its detriment. To help our users to understand how we have remained committed to quality, I sincerely hope that our applicants will read and appreciate our annual quality report. But no matter how comprehensive that report, it is our patents and services that do the real talking; when it comes to quality at the EPO, there is simply no compromise.
European Patent Office
Benoît Battistelli was elected president of the European Patent Office (EPO) in July 2010. His initial mandate was extended by three years (to June 2018), following the unanimous approval of his results and programmes by the Administrative Council of the European Patent Organisation in June 2014.
Before joining the EPO, Mr Battistelli was director general of the French National Institute of Industrial Property from May 2004. He was also elected chair of the Administrative Council of the European Patent Organisation in March 2009. During his career, Mr Battistelli has held several high-profile positions concerned with innovation, competitiveness and external economic relations – for example, as French trade commissioner to Poland, Italy, India and Turkey.