(2002; 131 pages)
D. Utility Models
It has been suggested144 that utility models or “petty patents” may provide an alternative way of protecting TRM.
144 For instance, by the Society for Research and Initiatives for Sustainable Technologies and Institutions (SRISTI) of India.
The requirements for acquiring a utility model are less stringent than for patents. While the requirement of “novelty” is always to be met, that of “inventive step” or “non-obviousness” may be much lower or absent altogether. In practice, protection for utility models is often sought for innovations of a rather incremental nature that otherwise may not meet the patentability criteria.
The term of protection for utility models is shorter than for patents and varies from country to country (usually between 7 and 10 years without the possibility of extension or renewal). In most countries where utility model protection is available,145 patent offices do not examine applications as to substance prior to registration. This means that the registration process is significantly simpler and faster. Utility models are much cheaper to obtain and to maintain than patents.146
145 Currently, utility model protection is granted in Australia, Argentina, Armenia, Austria, Belarus, Belgium, Bulgaria, China, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Guatemala, Hungary, Ireland, Italy, Japan, Kazakhstan, Kenya, Kyrgyzstan, Malaysia, Mexico, Netherlands, members of the African Organization of Intellectual Property (OAPI), Peru, Philippines, Poland, Portugal, Republic of Korea, Republic of Maldova, Russian Federation, Slovakia, Spain, Tajikistan, Trinidad & Tobago, Turkey, Ukraine, Uruguay and Uzbekistan.
146 See, e.g., WIPO at www.wipo.org/sme/en/ip_business/utility_models/
Utility models are generally intended to protect minor or incremental innovations in the mechanical field. One noticeable exception is Germany, where utility models protection is conferred since 1891. In 1987 the scope of protection was broadened to include inventions concerning chemicals and polymers, in addition to mechanical devices.147 The European Commission has prepared a proposal for the adoption of a Directive harmonizing the utility model protection in Europe,148 to enable small to medium enterprises (SMEs) to attain IPRs protection in a less complicated and cheaper way than through the patent system. Though, upon a proposal by the European Parliament, the scope of the Directive was revised in order to cover software, chemical substances or processes would not be covered.149 Developing countries willing to apply utility models to TRM should ensure that the laws are designed so as to include medicinal products.
147 Whereas the German Patent Act requires an “inventive activity”, a utility model requires an “inventive step”. However, it often turns out that this difference is of more academic than practical relevance (Schuster and Hess, 1997, p. 27). This allows applicants to simultaneously file and obtain patents and utility models in parallel, since both can co-exist. The registration of the utility model grants the applicant immediate protection, since examination is not necessary and the average time to register an utility model is about two months (Schuster and Hess, 1997, p. 26), while under patent law an injunction against infringers can only be obtained after the issuance of the patent.
148 See COM (1999) 309, 12.7.99.
149 The chemical industry was unhappy with the idea of utility models, because the value of patents could be undermined by the proliferation of unexamined utility models. See, e.g., Leith, 2000.
Some studies suggest that utility models have played an important role in promoting incremental innovation and productivity growth. Thus, the World Bank reports that in Brazil utility models helped domestic producers gain a significant share of the farm-machinery market by encouraging adaptation of foreign technologies to local conditions. Utility models in the Philippines encouraged successful adaptive invention of rice threshers. In Japan,150 utility models had a strongly positive impact on real total factor productivity (TFP) growth over the period because they were an important source of technical change and information diffusion (World Bank, 2001, p. 123).
150 The substantive examination of utility models was abolished in Japan in 1994, thereby dramatically shortening the time required from application registration.
However, there is some evidence indicating that in those countries where utility model protection has been available, SMEs have not been the primary users of that system. One of the shortcomings of the system lies in one of its main advantages: the lack of examination to grant the rights means that title-holders must be careful in asserting their rights against potential infringers, since infringement claims may trigger off counterclaims of damages against the title-holder (Leith, 2000). This experience suggests that resource-constrained communities and other TRM holders are likely to face similar if not more significant difficulties to exercise their rights.
The role that utility models might play in the field of TRM is uncertain. First, in order to be applicable, legislation should specifically allow for the protection of non-mechanical inventions, particularly chemical substances of biological origin, something that most laws do not allow today.
Second, even if easier to obtain, acquiring utility models requires the compliance of administrative procedures and, above all, the capacity to enforce the rights against potential infringers which, as noted, is costly and poses a major barrier for communities, as it does for SMEs even in developed countries.
Third, granting utility models in relation to TRM domestically will not ensure their protection in foreign countries, where a similar protection may not be accorded.
Fourth, the advantages of this approach for the protection of TRM will depend on the specific design of the national legislation, particularly with regard to the level of inventive step required. If similar to the one applied to patents, the only significant advantage would be of procedural nature, not irrelevant but perhaps insufficient to make a real difference for potential applicants.
Fifth, the granting of utility models would face the same problems relating to determination of title-hood and representation noted above for other modes of IPRs, and would require the establishment of disclosure obligations of the type described in the preceding sub-section.
The TRIPS Agreement neither obliges nor limit Members’ right to legislate on utility models, subject only to the national treatment obligation established by the Paris Convention (article 1 (2)). However, the question remains whether an easier means to get protection in the form of utility models would actually benefit TRM holders, since most of the obstacles regarding registration and enforcement common to other forms of IPRs remain. Utility models may become, as suggested by the German experience, a practical complement to patent protection for those that have access to the patent system anyway.