01 March 2014

USPTO Rightly Grants Patent to Disgraced Korean Researcher

Research readingIn the last couple of weeks the US Patent and Trademark Office (USPTO) has been subject to some harsh criticism after granting a patent naming Korean researcher Hwang Woo-suk and 13 co-workers as inventors.  Managing Intellectual Property provides a brief summary of the ‘controversy’, noting that the grant of the patent (no. 8,647,872) has been described as representing ‘staggering incompetence’ on the part of the USPTO, which has supposedly been ‘embarrassed’ by its actions.

I doubt the USPTO is embarrassed.  At least it has had the courage to follow the law as it stands, and let the cards fall as they may, which is (as I will explain) more than can be said for IP Australia.  The reasons for which the Hwang patent was granted (or, perhaps more to the point, could not be rejected) are worthy of discussion. 

In 2011, the Canadian Patent Office granted a patent to Dr Hwang and his team.  Yet earlier, in 2008, the Australian Patent Office initially accepted a corresponding application before subsequently nullifying that decision in circumstances that, to my mind, were themselves highly controversial.

Background – The Stem-Cell Cloning Fraud Scandal

Dr Hwang was at the centre of a scandal that erupted in late 2005 over fraudulent research results published in the journal Science by his team from Seoul National University, claiming to have successfully obtained stem cells from cloned human embryos.  A subsequent Korean investigation affirmed that fraud had occurred, resulting in Dr Hwang being convicted of embezzling government research funds.

Dr Hwang, however, continues to maintain that the stem cell line known as ‘NT-1’ was in fact the result of cloning, and has appealed his conviction, which is still under review by the Korean Supreme Court.  Furthermore, there is no question that his team was indeed the first to create a cloned dog in 2005.  Dr Hwang is continuing his non-human-based research at the Sooam Biotech Research Foundation outside Seoul.  He wants the Korean Government to restore his licence to conduct human-based cloning research, and is arguing that the grant of a US patent supports the validity of his work.

Australia’s Response to the Scandal

When the Australian Patent Office faced the same potential ‘embarrassment’ as the USPTO back in 2008, having accepted a related Hwang patent application, it initially issued a statement defending its actions [PDF, 37kB].  IP Australia had perhaps been hoping that the application would be opposed, but it was not.  The apparent intention to grant a patent resulted in some criticism of IP Australia, including from the respected journal Nature.

No further steps were taken towards actually granting a patent, and on 16 March 2009 the Office issued a further statement [PDF, 35kB] advising: ‘[t]he Commissioner of Patents considers that acceptance of the application was invalid.  Accordingly the Commissioner has reopened examination of the application and an  adverse examination report has been issued.’  By that stage, the application had lapsed.

In a subsequent appeal to the Federal Court (H Bion Inc v Commissioner of Patents [2010] FCA 539), the Commissioner did not even attempt to argue that her action in declaring acceptance of the patent invalid was authorised by any provision of the Patents Act 1990.  On the contrary, it was argued on behalf of the Commissioner that ‘her action “in recognising that the acceptance decision was invalid and a nullity did not constitute a decision, let alone a decision under the Act”’, and therefore was not subject to appeal on the specific grounds permitted by section 51 of the Act.

Of course, this kind of caprice on the part of an administrative authority is generally subject to review under the Administrative Decisions (Judicial Review) Act 1997, although it does not appear that H Bion Inc (by then, the official owner of the rights) followed through with this option.

Grant of the US Patent

The USPTO has stood by its decision to grant the patent, with a spokesman reported stating that this is ‘definitely not an assertion by the US government that everything [Dr Hwang] is claiming is accurate’, and confirming that Office was aware of the history and took steps to make sure the claimed invention complied with the patent laws.

There are essentially two possible grounds on which the Hwang patent may be invalid, neither of which the USPTO – or IP Australia, for that matter – is really in a position to assess.  These grounds are that the claimed invention is not ‘useful’, and/or that the patent was obtained fraudulently.

Usefulness

The US statute, in 35 USC § 101, requires an invention to be ‘new and useful’ in order to be patentable.  Similarly, paragraphs 18(1)(c) and 18(1A)(c) of the Australian Patents act require patentable inventions to be ‘useful’.  Clearly, an invention will not be ‘useful’ if it simply does not work, and in theory this is a basis to reject a patent application.  In fairness to IP Australia, this ground has only been available to Australian examiners since commencement of the Rarsing the Bar reforms on 15 April 2013, but was a ground of possible opposition in 2008, and has always been a ground for revocation of a patent.

The thing about ‘usefulness’ (or utility) is firstly that an examiner may not have much to go on in order to assess the practicality of the invention, and secondly that there is a sense in which it really does not matter if ‘useless’ patents are granted.

Consider, for example, another patent that many people would argue should never have been granted – US 6,025,810, entitled ‘Hyper-light-speed antenna’.  The specification asserts that the invention ‘changes the medium of transmission and reception of electromagnetic waves such that information is transmitted at greater than the speed of light.’

There are two possibilities for this ‘invention’: either the inventor has stumbled across a new, and hitherto unsuspected, physical principle that proves Einstein’s theories wrong; or (more likely, in my view) it is just crackpottery and simply does not work.  The question is whether any examiner is competent to make a call on this.  On the face of the specification, there is a detailed technical description and an assertion that the apparatus does ‘what it says on the tin’.  The inventor is no doubt completely sincere in his belief in the effectiveness of the apparatus, and would therefore gladly (and in completely good faith) swear an affidavit that the claimed invention works.

There is no question that the claims define something new – whether crackpottery or unprecedented physical insight, there is little chance that anyone has done the same thing before.  And defying the known laws of the universe is, pretty much by definition, non-obvious!  So what choice did the USPTO have in this case other than to grant the patent?

Arguably, however, none of this matters because a patent on something that cannot be made to work equally cannot be infringed!

Fraud

Fraud, false suggestion, misrepresentation or (in US terminology) inequitable conduct present similar problems to usefulness.  An examiner will generally have no way to confirm, with the limited time and resources available for examination, whether or not an applicant is trying to ‘trick’ the Office into granting a patent. 

If (as in Hwang’s case) an inventor agrees to swear an affidavit to the effect that any data on which the patent claims rely is genuine, the examiner is not really in a position to refute that claim.  Instead, the onus is on the applicant to be truthful in his or her dealings with the Patent Office, otherwise the patent will be invalid or unenforceable in a court of law.

It is also important to bear in mind that there is no fraud merely in being wrong about something, so long as one’s belief in the incorrect information was genuinely held at the time.

Conclusion – Issues Raised by the Hwang Case

The USPTO was right to grant the Hwang patent.  Indeed, in the circumstance that there is no statutory ground for rejection it was obliged to do so.  This does not mean that the patent is valid and enforceable.

Similarly, IP Australia should have granted the corresponding Australian patent.  All applicants should be at least a little concerned that the Australian authority believes that there are at least some cases in which it can, it is own discretion, block the grant of a patent on extra-statutory grounds.  Admittedly, the Hwang case is a rare example of a public relations disaster waiting to happen, but I am not sure that this is a good enough reason for the Commissioner to exceed her authority.  Sometimes it is better to face the music, and use the opportunity to engage and have the difficult conversations.

So this should not be the end of the discussion.  The Hwang case raises various questions that may be worthy of consideration, such as:
  1. whether examiners can or should look to external scientific consensus in assessing usefulness;
  2. how an examiner, who is not a world-leading researcher in the field, should go about assessing matters such as the relationship between Hwang’s patent claims, and the specific results that were separately found to be fraudulent is unclear;
  3. whether, in exceptional circumstances, a patent office should be able to require an applicant to provide independent, objective proof of utility; and
  4. whether it is sufficient to argue that people have ‘nothing to fear’ from patents that are useless, or unenforceable, when the only way to establish this for sure is through an expensive process of litigation.
I do not think that there are simple answers to these questions.  It might be that a system that would ensure that patents could not be granted based on unworkable principles or fraudulent results, would also necessarily deny protection to products and processes based on genuine counterintuitive scientific breakthroughs.  And that would be a Bad Thing!

As always, please feel free to share your thoughts on these questions in the comments.

Image Copyright (c) 123RF Stock Photos

6 comments:

Mark Summerfield said...

I'll preface my remarks with the following disclaimer: I am not commenting on the correctness of the actions of IP Australia; I am merely 'fleshing out' some of the issues raised in the post.

There are essentially two possible grounds on which the Hwang patent may be invalid, neither of which the USPTO – or IP Australia, for that matter – is really in a position to assess. These grounds are that the claimed invention is not ‘useful’, and/or that the patent was obtained fraudulently.

IP Australia was in an odd position: There was compelling evidence that the patent application was founded on fraud, false suggestion or misrepresentation; this was known before the application had been granted. However, there is no explicit provision for rejecting the patent application before grant on the basis of fraud, false suggestion or misrepresentation. There is, however, a provision for revoking the patent after grant in s 138(3)(d).

So should IP Australia grant a patent which the Commissioner already believes to have been obtained through fraud, false suggestion or misrepresentation, and then immediately try to get it revoked?

Alternatively, should the Commissioner assert that the application was not properly made (or at least the decision to accept the application was not properly made) since there is compelling evidence that the application was based on fraud, false suggestion or misrepresentation? This shifts the decision about whether the application (or the decision to accept) was properly made straight to the Courts (via appeal) which are arguably better equipped to deal with such a question.

At the very least, this case provides impetus to make explicit legislation requirements that patent applications must not be based on fraud, false suggestion or misrepresentation, and provide some practical mechanism through which the Commissioner (or indeed any person) can before grant challenge/refuse the application on the basis of a belief that the application is based on fraud, false suggestion or misrepresentation.

Mark Summerfield said...

I agree with you up to a point. If fraud, false suggestion or misrepresentation was a ground of rejection, then IP Australia could refuse an application on this basis, and such refusal would (presumably) be subject to an appeal to the Federal Court under s 51.


At least then the cost of court proceedings to establish whether or not there was in fact a fraudulent attempt to obtain a patent would be borne by the applicant and/or IP Australia, and not by a subsequent opponent or applicant for revocation. And there would be a well-defined mechanism for IP Australia to deal with such cases, and for applicants to appeal adverse decisions.


However, it is not clear to me that this would necessarily address the underlying problem, which comes down to resolving what might well be highly contested technical issues. For example, from researching this article I am satisfied that there is substantial evidence that Dr Hwang committed academic fraud, that he secured publication in Science on the basis of at least partly fabricated results, and that those same results and publications were used to secure further funding for his research.


What I have not been able to establish is whether or not the NT-1 stem cell line created by Dr Hwang is the result of cloning human embryos (as Dr Hwang continues to maintain) or of well-established techniques of asexual reproduction (as some of his detractors contend). I freely admit that I am not qualified to draw a conclusion on this, and certainly not to do so on the basis of media reports and articles in popular science journals.


Ultimately, if the processes and products described and claimed in the Hwang application are actually workable, the patent would most likely be valid. The fact that, in other circumstances, Dr Hwang perpetrated an academic fraud against Science is somewhat beside the point. Certainly his actions seriously damaged his reputation, and resulted in criminal sanctions. But that, in itself, is not proof of inutility or of obtaining a patent by fraud, false suggestion or misrepresentation. That would require knowledge of the relationship between what is claimed in the patent application, and the specific fraudulent research results included in the submissions to Science.


The cynic in me says that IP Australia acted as it did to avoid becoming further embroiled in controversy, and not because of any fundamental desire to preserve the integrity of the Register. Maybe it would have been preferable to face the controversy, and use it as an opportunity to argue for greater powers to address these types of circumstances in future?

Mark Summerfield said...

Some countries such as Europe and New Zealand have an option to refuse acceptance/grant of applications in this situation by excluding from patentability technology which is contrary to morality. However, this isn't an option in Australia at the AU Patents Act does not include such provisions. Perhaps Australians have no morals?!

Interestingly, where a contrary to morality objection is available to the examiner, it could perhaps have been used in relation to two aspects of this case - the falisification of research results (which could potentially apply to any technology area) or the fact that the application attempted to claim methods of human cloning.

Personally I would have concerns with both objections - who is a patent examiner to judge whether research has been falsified, there could be mis-information published by competitors and a full inquiry would be need to establish this. Also, each examiner will have their own ideas of what is moral or amoral and whether a particular technology (or commercialisation of the technology) is contrary to morality. For an examiner to potentially deny the applicant a patent based on such subjective issues seems unreasonable.



I believe that the decision as to morality of a particular technology should be determined by regulation and ethics committees as it is with GM crops, pharmaceuticals, genetic research etc.

Mark Summerfield said...

Hi Bob

I am not sure that 'contrary to morality' type provisions actually address this situation. Taking the European wording as a typical example, Article 53(a) of the European Patent Convention states that a European patent should not be granted in respect of:

inventions the commercial exploitation of which would be contrary to "ordre public" or morality; such exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States

The point is therefore not whether an applicant or inventor may have engaged in some form of nefarious activity prior to applying for a patent. Rather, the provision goes directly to the question of whether the general public might consider the commercial use of the invention itself to be immoral.

Of course, there are some people who would feel exactly that way about any use of human cloning technology, but that has nothing to do with whether or not the researchers may once have falsified some results!

The Advisory Council of Intellectual Property (ACIP) has proposed a similar exclusion for Australia and, as you have suggested, that proposal includes empowering the Commissioner to seek advice from appropriate experts. IP Australia commenced a consultation on the proposal last year. A number of public submissions were received but, like many other activities that spanned the change of government, no further action has yet been taken.

Mark Summerfield said...

Well, there is an European family member of the Hwang patent (EP EP1711599). The EPO raised objections not only under Art.53(a) EPC (which is, as you rightly say, a provision concerned with the subject - matter of the claim as such), but also under Art. 83 EPC (lack of disclosure), on the basis of the investigations following the scandal in Korea. In other words, the EPO accepted the investigation results as evidence that the invention was not enabled, although the examiner did not -and could not- carry out experiments himself.

In this case, the applicant did not try to file affidavits (whose probatory value is anyway quite low in EPO proceedings), but simply retracted all the claims but two, which concerned a medium for cultivating human blastocysts, for which the above objections did not apply. The application was finally granted (with amended title and containing only two claims) in 2010.

Mark Summerfield said...

Thanks for the information - very interesting.


I guess what bothers me about this situation is not so much that the examiner was unable to independently verify enablement, but rather that the relationship between the outcome of the investigation and the claimed invention may not be clear.


An investigation into whether specific data included in certain publications and/or grant applications was, in fact, falsified, is not the same thing as an inquiry into whether the disclosure in a patent specification is commensurate with the scope of the claims.


I suppose in this case the onus was on the applicant to satisfy the examiner that the claims were patentable despite the allegation that they were not, in light of the investigation results. If they did not attempt to do so, that was their choice. Whether or not we might draw any adverse inferences from that is another matter!


Mark

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