Editorial - The 125th anniversary of the German utility model – A reason to celebrate?

For our current issue, Editorial Board member Karsten Königer (Harmsen Utescher, Hamburg) has penned a very interesting editorial on utility models in Germany, first introduced in 1891. Karsten calls for a reflection on the role of utility models, highlighting several reasons (e.g. requirements for protection, costs, etc.) that explain why "the German utility model does not meet the apparent expectations of the German legislator."


The 125th anniversary of the German utility model – A reason to celebrate? 

Karsten Königer

On 1 October 1891, the first German Act on Utility Models (“Gebrauchsmuster”) came into force – creating a new industrial property right for technical inventions, in addition to the patent. 
125 years later, there are about 85,000 registered German utility models in force (the maximum term of protection is ten years). Can we be congratulated? Have the legislator’s expectations been met? 
In 1985, in a proposal for a new version of the Act, which was later enacted, the German government gave the following reasons for the utility model: ‘The utility model is mainly [designed] to quickly and inexpensively make available a manageable industrial property right for sole inventors and small and medium-sized enterprises for their everyday life inventions.’ The term ‘everyday life inventions’ was apparently used to describe inventions that involve only a small inventive step. 
The German utility model can indeed be obtained quickly. It is registered without examination within a few months after application and gives rise to injunctive relief. It can also be created by ‘branching off’ from a patent application or from a patent under opposition. In this respect, the utility model meets the expectations of the German legislator. But what about the other goals? 
In the year 2006, the German Federal Court of Justice held that regarding the requirement of inventive step in utility model law the same principles apply as in patent law. The court stated that it could not find a capable criterion for protectability that lies between non-obviousness in terms of patent law and novelty. Thus, apart from a different definition of the state of the art - German utility model law provides a grace period! - only inventions that would also meet the requirements of patentability can be protected by a German utility model. Why then should an inventor file a utility model application instead of a patent application - and waive ten years of protection? 
As mentioned above, the German legislator had the idea that the utility model was, compared to the patent, manageable, i.e. easy to handle, and cheaper. In reality, however, a utility model application is as difficult as a patent application. Moreover, unlike in the patent granting procedure it is not possible to correct certain mistakes. The German utility model application has the same structure as a patent application: claims, description and possibly drawings. The scope of protection is determined by the claims as it is for patents. This structure requires that a utility model application is written by a person who is as competent as an educated patent agent. The idea that a utility model application needs less care and competence than a patent application can have fatal consequences especially for sole inventors. 
As regards costs, the differences between the official fees for the application and maintenance of a utility model and a patent, respectively, are rather symbolic. The significant costs for the utility model application and the patent application are the attorney’s fees anyway. Thus, also from the financial point of view, there should be no reason for an applicant to prefer a German utility model to a German patent application. 
In sum, the German utility model does not meet the apparent expectations of the German legislator. It can be a useful additional tool for the inventor. However, these advantages for the inventor, if wanted, could be reached by small changes to patent law: re-introduction of a grace period and, if desired, injunctive relief based on a published patent application (cf. Article 67 EPC). More problematic than the limited usefulness of the German utility model is, in my view, that it also causes costs that have to be paid by competitors who are confronted with the registration of the unexamined right. Since the utility model is not examined by the Patent Office, the competitors are forced to examine the validity of the claims. These costs can be especially high for small and medium-sized companies (SMEs) which are not used to such examinations and need more advice. Thus, in many cases, SMEs are not the beneficiaries of the fact that the utility model is not examined, but the victims. 
Considering, I hesitate to say “Stay as you are” and to wish for another 125 years. 
© The Author(s) 2016. Published by Oxford University Press. All rights reserved.

Editorial - The passing of the Golden Age of IP: Quo Vadis?

In his latest Editorial, editorial board member Neil Wilkof suggests that IP is experiencing a period of stagnation, after the Golden Age period of the 1980s. Neil argues that "there is a sense that IP has lost its commanding position as a prime source of value creation in a post-industrial world", looking at various explanations for such perception. Is the Golden Age of IP behind us?

The passing of the Golden Age of IP: Quo Vadis?  

Neil Wilkof*  

One of the more interesting features that accompanies the rise and decline of a phenomenon is the notion of a “Golden Age”. A “Golden Age” is invariably lodged in the past and usually it is only later generations that come to view it as such. Intellectual property is not immune to this trajectory. As we approach the home lap of the second decade of this century, it is becoming more and more likely that IP as we know it also has had its “Golden Age”. Looking at IP present, it is difficult to shake the impression that IP is in a state of stagnation. 
IP’s “Golden Age” was roughly the period of the 1980s, when patents, copyright and trade marks all came together to give IP a collective preeminence. The ascendance of patents emerged from a less hostile view to patents resting on a recognition of their pro-competitive effects, the potential of encouraging patenting in the West as a means to counter the perceived challenge from Japanese industry, and the promise of judicial streamlining of patent protection following the establishment of the US Federal Circuit Court of Appeals. 
As for copyright, notable was the US joining the Berne Convention and the changing perception of copyright protection from a quaint form of legal protection for books and the art world to the legal guardian of mass distribution of creative content as disparate as computer software and video cassettes. Trade marks underwent a transition from being viewed as a manipulative tool in the hands of advertisers for creating artificial consumer wants to a positive purveyor of consumer information and as a means for creating company value in the form of brand equity. At the international level, the foundations were being set down for the inclusion of IP protection within the framework of a new international trade law, culminating in the TRIPS Agreement. 
By the first decade of the 21st century, however, fortress IP was showing vulnerabilities in multiple directions. Patents were being attacked as providing the basis for patent trolling and other claimed patent misuse, leading some to question the entire patent system. Copyright protection was being viewed as toothless in the face of rampant copying on the internet, on the one hand, and too often inimical to the encouragement of content creation, on the other. Trade marks fared only marginally better, prized for the potential long-term and robust value in strong brands, but also coming under increasing attack as overprotecting trade marks as a form of property, even when there was no threat to origin or confusion. 
IP qua IP has not disappeared as a body of legal rights and protection. For example, patents will still be crucial in biotech, pharma and the like and strong trade marks will continue to be valuable. Taken as a whole, however, there is a sense that IP has lost its commanding position as a prime source of value creation in a post-industrial world. 
The main trigger for this decline is the ever-expanding penetration of digitization, where traditional IP protection—patents, copyright and trade marks, is viewed as less relevant. In their place, other types of intangible concern have increasingly taken centre stage. Most notable are issues of secrecy, privacy data protection and the quest for network effects leading to impregnable barriers to entry. The threat of a wide-scale security breach, leading to the unauthorized disclosure of valuable information, at both the commercial and private levels, may loom larger than any potential act of copyright or trade mark infringement. 
These developments have not passed by the IP academic community. One need only look at faculty websites. No longer are faculty staff satisfied with being identified as “Professor of Intellectual Property.” More and more, academic positions are characterized by the ampersand, such as a “Professor of Intellectual Property & Innovation” or “Professor of Intellectual Property & Internet Law.” Both “Innovation” and “Internet Law” are self-standing fields of inquiry. Intellectual property may well play some role in each of these fields, but one can legitimately ask whether expertise in IP justifies the ampersand. Or maybe it is merely a rational way to deal with the challenge posed by the fact that the Golden Age of IP, as we know it, may well be behind us. *

*Email: wilkof@bressler.co.il.  
(c) The Author(s) 2016. Published by Oxford University Press. All rights reserved.

New year, new colour, new issue!

Our first issue for 2017 is now available both online and in print. As you may have noticed, our new colour is an elegant blue! If you wish to subscribe to JIPLP, or to renew your subscription, you can find more information here - a discounted subscription rate is available for personal subscriptions, as well as for members of the German Association for the Protection of Intellectual Property. A free sample issue is available on our website.



Table of Contents

Volume 12 Issue 1 January 2017
For checked items
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Editorial

Current Intelligence

Articles

From GRUR Int.

IP in Review

Corrigendum