Will it end in tiers? A wind-up to boost secondary protection

Is it time to wind up the anti-STP
establishment with some well-aimed
evidence-based arguments?
This member of the IPKat team has long been an enthusiastic supporter of second tier protection (STP) -- a generic term for the utility model, the petty patent, the gebrauchsmuster or whatever you want to call it. Indeed, his position was firmly stated in a guest editorial, "Three cheers for two tiers? It’s time to welcome the nimbus", which he wrote for CIPA in September 2010 (you can read it here together with a goodly batch of readers' comments).

What has brought about this sudden recollection of an idea which for many is unpopular and unworkable, despite the success with which it has been deployed in Germany, Japan, China, Korea and elsewhere? Today marks the appearance online of an opinion piece, "Could 'Utility Model Patents' help SMEs and the lone inventor. What is ‘STP’?", which the UK's Intellectual Property Office is hosting in its most recent IP Insight, here.  The author is patent attorney John Grant MBE, of wind-up specialists Baylis Brands -- a highly respected member of the British IP community. This is what he has to say [with Kat comments in red]:
"In layman’s parlance, Second Tier Protection (STP) is a lesser form of intellectual property (IP) that is intended for the protection of devices, apparatus and the like where the technical advance is not as high as it might be for obtaining the grant of a full patent [too narrow, says the Kat: the technical advance may be considerable but the speed of the market in developing new products, available funding and strategic considerations may all make STP a better choice than a patent]; nevertheless, STP in its many guises is established in some 77 countries worldwide and finds extensive usage in some European countries but especially in China, Japan and South Korea. ...

In some countries the STP is registered without examination although such a procedure has to be undertaken if an infringement action is contemplated. The various forms of STP have different terms depending upon IP Law of the territory; thus, in Belgium a Short Patent has a term of 6 years while a Utility Model in Japan can be for 10 to 15 years.

Over the last two decades there have been several proposals for the implementation in the United Kingdom (and Europe) of STP in the form of a ‘Utility Model’ [the proposals go back even further: they were swiftly rejected by the Banks Committee,  The British Patent System [1970-71 Cmd 4407], on what seems to this Kat to be the ground that they weren't a British idea]. ...

In recent times it has been suggested that a European Utility Model would serve the interests of lone inventors and SMEs to of benefit to UK PLC insofar that it is recognised that the SMEs are the driving force that will lead the Country on the path to economic recovery, financial stability and prosperity [there was a dreadful Commission draft directive on Utility models COM
(1999) 309, which would have required harmonisation through the adoption of one of three different legal models, or is it muddles?].

The proposal that STP could be a step in the right direction was included in some of the responses made in the call for evidence that was considered in the Review by Professor Hargreaves; however, the topic never made it to the final report stage [not surprising, given the time constraints and the absence of the word "digital" from anythng to do with STP].

How would STP benefit SMEs et al

Amongst the main disadvantages that have to be overcome by lone inventors and SMEs is the uncertainty that Intellectual Property Rights (IPRs) can be protected at a cost they can afford. The cost of a full patent in the United Kingdom can be as little as £280.00 if the Applicant has the ability to draft a Specification and Claims that will pass muster not only before the Patent office Examiner, but also before a Court if the Inventor’s monopoly is attacked in an infringement action. On the other hand, if the services of a Patent Attorney are used, the initial costs of filing a Patent Application may be not less than £3000.00 with attendant additional monies becoming due if and when an Examiners Report raises objections that have to be responded to by reasoned argument [comments, anyone?].

The financial burden on the lone inventor and/or an SME could be alleviated if STP was available at a lower cost for a short term whether or not the STP was subjected to an examination procedure.

In China, according to Tony Mak, there were 315,000 Utility Models were granted in 2010, see the article printed at page 231 et seq of the CIPA Journal for April 2011. He also noted that 99.96 of the patentees were Chinese entities [the preponderant use of STPs by domestic businesses is a feature of every country that offers them, the Kat thinks. This is in huge contrast with regular patents, which in almost all countries are mainly owned by non-nationals].

It is not suggested that there would be a similar proportion of applicants for STP in the United Kingdom if a Utility Model law was to be promulgated; however, without such a Law we can only postulate at the effect it might have on the economic development of the Country.

Unfortunately, the likelihood of a United Kingdom and or a European Utility Model is something of a pipe dream and, even if there was to be an accord between the various countries of Europe, it would be many years before a law for STP would be promulgated.

In the meantime, there is no reason why lone inventors’ SMEs and even larger entities could not take advantage of the STP that is available in any of the 77 countries where such provision is established and especially in places like China, South Korea and Japan so that dealing with manufacturers in those countries, for products to be sold in Europe and elsewhere, would give added safeguard against copying by the manufacturer for his own disposal [This Kat has never understood why this option is so rarely pursued -- he believes that it is not always offered].

One way of ensuring that the appointed manufacturer is not tempted to manufacture products and to market them in territories where the inventor has no patent and/or design protection is to offer the manufacturer a licence deal at an equitable royalty rate that allows him to legitimately make the products for the inventor while being able to exploit markets where the inventor has no interest.

[An] Applicant for patent protection in any territory where STP is available should seek their Patent Attorney’s advice in relation to the usefulness of adding Applications for STP to their portfolio, especially where the protection being sought is for high value goods, apparatus and machinery [Merpel cheekily wonders how well local patent attorneys are confident to advise on this, given their lack of hands-on experience of dealing with them, an apparent lack of enthusiasm shared by many of them for the concept and the wide array of STPs currently on offer ...]. Having an STP, albeit for a short term may ensure that possible infringement of ones IPRs is prevented or at least reduced. ...

Obviously, STP in the United Kingdom would not protect any overseas markets for an invention, which would have to be the subject of an STP or full Patent wherever the invention was going to be marketed".
Bravo, says this Kat, it's time to get the show on the road!
Will it end in tiers? A wind-up to boost secondary protection Will it end in tiers? A wind-up to boost secondary protection Reviewed by Jeremy on Tuesday, February 28, 2012 Rating: 5


  1. I'm all for time-limited, monopolies for innovations that deserve one, but not a petty/utility model, absolutely not. No! Nein! Non! Nej!

    Nothing can help the SME/lone inventor more than a kick up the proverbial. If they want to be pandered like babies then send them some Pampers!

  2. Having first-hand knowledge of STP rights, I can't share the IPKat's sanguine view.

    Even if they don't have to pass muster before a patent examiner, in principle their whole purpose would be to be able to pass muster in court. Which normally should mean professional drafting, bringing their costs quite close to that of full patents.

    In practice, the large majority of STPs are self-drafted and hardly worth the paper they're written on. Worse, they often create an unwarranted sense of safety among SMEs and individual inventors, sometimes even spurring hopeless litigation.

    Furthermore, even when they are used professionally, it's often for the wrong reasons: either the owner knows there is plenty of relevant prior art and nevertheless wants to dissuade competitors, or he wants a handy chip to claim subsidies, tax credits or perform shady transfer-pricing operations.

    In the worst case, they may be used to take advantage from local patent law quirks, such as, for instance, when public prior use abroad is not considered as prior art for STPs. I've had more than one client who has found to his surprise that Chinese competitors had registered Chinese utility model patents on features of his existing products, and that it was not possible to invalidate those utility model patents absent some written disclosure of that feature prior to the filing date.

    I used to be favourable to STPs as a means of providing protection to less-than-wealthy inventors. However, the actual experience is far less lofty.

  3. When I started in practice, before PCT and EPO, I worked for a company that made electrical and telecom connectors and such. We sought full patents for our products in major countries, for scope and length of protection, but always in Germany asked for a "hilfsGebrauchsmuster" - the auxiliary form of STP - just in case. This, and the Japanese system of allowing conversion of a patent application to a UM application, to my mind allow useful short-term protection against slavish copying.

  4. If a technical contribution is non-obvious, it deserves and may obtain patent protection.

    Utility models are designed and intended for something that has a lower level of creativity. Hence, for something WHICH IS OBVIOUS.
    This is an unavoidable consequence, and everybody has to accept (apart from the Germans: the BGH – in a most criticized decision – says that a Gebrauchmuester has the same inventive level of a patentable invention).

    So what? Is it legitimate or convenient to grant a monopolistic right to something which is obvious?

  5. I fully agree with those who find STPs nearly as pernicious as STDs.

    For those countries where the standard of invention is lower than for a patent, I agree with Mario Franzosi that they permit protection for the obvious. Is this healthy?

    For those countries that have the same standard of inventive step the problem is that examination is slow, hence some alternative method is required [plainly getting the patent office to pull their finger out is not practical].

    And isn't it strange that countries that have a high standard of examination permit unexamined rights for effectively the same content as examined rights?

    And isn't it even more strange that different standards of inventive step and novelty in a given country (e.g. China) means that it can be more difficult to revoke a right granted in respect of an obvious product (STP) than a right in respect of an inventive product (Patant)?

    The fact that STPs are used primarily by the residents of the country concerned simply indicates that STPs represent in practice a non-tariff barrier to trade that hides under the respectable cover of "IP".

    STPs are pernicious and should be stopped.

    A modest proposal - if countries do not have a mechanism to accelerate prosecution of patent applications effectively, they should do so - but if this is impossible permit applicants to sue on a searched patent application. At least then the defendant would have a starting point for formulating a defence.


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