Patent Law

From Max-EuP 2012

by Joseph Straus

1. Subject matter, scope and historic roots

The notion of patent law stands for the entirety of provisions that regulate all aspects of the patent right such as entitlement, its genesis, content, scope, duration, grant and revocation, enforcement, etc. The patent right itself is a time-limited right to exclusively exploit an invention, ie an instruction for methodically utilizing controllable natural forces to achieve a causal, perceivable result (BGH 27 March 1969, 1 IIC 136, 138 (1970)). The term patent law, which according to the modern understanding forms part of the law of intellectual property, goes back to the time-limited privileges that rulers in England in the late Middle Ages granted for the introduction and exercise of primarily new industries in the form of open—in contrast to sealed—letters, litterae patentes, open letters, open grants (patents).

Since that time, but in particular after the adoption of the first modern patent laws in 1790 (United States) and 1791 (France), the purpose of patent protection has primarily been the promotion of innovation. By granting a time-limited right for exclusive exploitation of inventions, the chance is secured that the enrichment of technology will be rewarded through the market. At the same time this chance provides inventors and industry with incentives to innovate and it also serves as a safeguard of investment in research and development. Moreover, the patent system also has an important information function: inventions for which patent protection is sought have to be disclosed in patent applications in a manner sufficiently clear and complete for their being carried out by a person skilled in the art, and patent applications are made accessible to the public 18 months from the filing or priority date at the latest. Between the inventor and the public, a social contract (contrat social) materializes, according to which the inventor discloses to the public his/her technical knowledge in exchange for being granted an exclusive right of exploitation. From that point in time, third parties can build on the disclosed knowledge and can further develop and improve upon it. In order to achieve this goal, in all patent laws of the world, with the exception of that of the United States, the right to the patent is attached to the person who first files the patent application for his/her invention—first to fileand not to the person who first makes the invention—first to invent. Patents thus inhibit secrecy and make technological developments transparent.

In order to achieve the goal of promoting innovation, the effects of the patent do not extend to acts done privately and for non-commercial purposes and, moreover, also not to acts done for experimental purposes relating to the subject matter of the patented invention (eg § 11 German Patent Act (GPA)). Under the established case law of, for instance, the German Federal Constitutional Court (10 May 2000, GRUR 2001, 34) and the German Federal Supreme Court (Bundesgerichtshof) (BGH 11 July 1995, BGHZ 130, 299, English translation 28 IIC 103 (1997); BGH 17 April 1997, BGHZ 135, 217, English translation [1998] RPC 423), improvements and further developments of the subject matter of the patented invention and, in general, all acts which in this context are aimed at generating new knowledge are exempted from the effects of the patent. Where a patentee refuses to allow a third party to use his/her invention under commercially available terms (contractual license) and where such permission would be necessary in the interest of the public, eg because no medication for the treatment of a particular disease would otherwise be available, upon a corresponding request, eg in Germany the Federal Patent Court can grant the applicant such permission—a compulsory licencewhich may not be exclusive and under which the patent holder is to be adequately remunerated (§ 24 GPA, BGH 5 December 1995, BGHZ 131, 247, English translation 28 IIC 242 (1997)). The patent right does not confer on the patentee a licence to use the invention. Whether the use is allowed or lawful depends instead on both compliance with statutory rules, such as the rules on drug safety, animal welfare, protection of the environment, etc, and whether such exploitation respects third parties’ rights, for instance patents.

Since the inception of patents, economists have, though with varying degrees of intensity, expressed doubts that patent protection in fact successfully serves its goal of promoting innovation. Exact empirical data that could either convincingly prove or disprove such a position is not available. However, the importance and necessity of patent protection are not contested even by critical economists, particularly regarding branches of industry in which high investments in research and development, including costs for activities such as the pre-clinical and clinical trials necessary for marketing approval, must be undertaken even before the innovation can reach the market—an outcome that, in and of itself, can hardly be guaranteed.

2. Tendencies of the legal development

Patent law is meant to protect inventions which are "new" in a legal sense, are based on inventive activity and are industrially applicable. Therefore, patent law is closely linked to the development of science and technology. Of crucial importance in this context is how to interpret the notion of invention, which is not defined in the statute although it has to be viewed as the centrepiece of the entire legal field. Is the notion of invention to be interpreted in a static way, ie as it has been understood by the historical legislature in light of the state of science and technology when the law was adopted? Or must it be interpreted in a dynamic way, ie against the background of science and technology at the relevant date? The German Federal Supreme Court convincingly held that the intent of the Patent Act not only permits but even compels drawing upon the latest state of scientific knowledge to interpret the concept of invention (BGH 27 March 1969, BGHZ 52, 74, English translation 1 IIC 136, 137 (1970)).

This approach does not alter the fact that discoveries as such (§ 1(3)(1)GPA), ie the finding or cognizance of yet unknown but already existing laws of nature, phenomena, interdependencies or characteristics, continue to be excluded from patent protection. A patentable invention as opposed to a discovery is only achieved when the discoverer, in addition to having found a natural substance in a complex natural environment, also describes a repeatable technical teaching of how to isolate the respective substance from the natural environment or synthetically produce it, eg determining a gene sequence coding for a specific protein, which in turn allows the industrial use of the substance, eg for the production of medicine (Asahi Kasei Kogyo KK’s Application [1991] RPC 485 (HL)).

However, the dynamic understanding of the concept of invention opened the way for the adoption of the EU Biotech Directive (98/44), in which for the first time patent protection was set forth for biological material, defined as any material containing genetic information and capable of reproducing itself or being reproduced in a biological system (Art 2(1)(a) Biotech Directive; § 2a(3)(1) GPA). By these rules, patent protection, in principle, also became available for inventions that relate, for example, to animals and plants, the latter, however, only if they are not eligible for special plant variety protection. Consequently, DNA sequences of any origin, including elements isolated from the human body (even where the structure of that element is identical to that of a natural element), constitute subject matter eligible for patent protection (Arts 4(2), 5(2) of the Biotech Directive; §§ 1 ( 2), 1a, 2a(2) GPA). In order to also secure effective patent protection for self-replicating biological material, respective provisions were introduced into the Biotech Directive and subsequently into national patent laws of the EU Member States. On the one hand, the EU Biotech Directive has established special rules for the deposit of biological material as a complement to the written description, including rules on access to and release of the deposited material (Arts 13–14 Biotech Directive; German regulation on the deposit of biological material in patent and utility model proceedings). On the other hand, the Biotech Directive has extended patent protection of products and processes in case of biotechnological inventions to subsequent generations of the natural propagation or multiplication and set forth that in case of product inventions that contain or consist of genetic information, the patent protection extends to all material in which the product is incorporated and in which the genetic information is contained and performs its functions (Arts 8–9 Biotech Directive (ECJ 6 July 2010, Case C-428/08 Monsanto Technology LLC v Cefetra BV, et al; §§ 9a–9b GPA). At the same time, the European law makers, by introducing the so-called farmer’s privilege into the patent law, mitigated the impact of patents on plants and animals for agriculture. Thanks to this privilege, under certain conditions, farmers who have lawfully acquired patented plant propagating material may use harvested material for new sowing on their own farms against equitable remuneration of the patent holder. The same applies to lawful acquisition of farm animals: here also the animal reproductive material can be used for the purposes of pursuing farmers’ own agricultural activities. In case of plants, the Plant Variety Rights Regulation (Reg 2001/94) (plant variety protection) sets forth which agricultural plants genera are covered by the privilege and how the licence royalties due are to be calculated (Art 11 Biotech Directive; § 9c GPA).

In view of ethical concerns existing against the patenting of inventions in the area of living matter, the European legislature declared inventions unpatentable where their commercial exploitation would be contrary to ordre public or morality and has explicitly indicated as such, in particular: processes for cloning human beings, processes for modifying the germ line genetic identity of human beings, uses of human embryos for industrial or commercial purposes; and processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal as well as animals resulting from such processes (Art 6 Biotech Directive; § 2 GPA).

Computer programs are not generally excluded from patent protection (BGH 17 October 2001, BGHZ 149, 68, English translation 33 IIC 793 (2002)); ultimately, here the issue of patentability depends on whether a specific technical problem is solved by the computer program at hand. If the answer is in the affirmative, patentability is not denied by the mere fact that the subject matter for which protection is sought (also) relates to an object, which as such is excluded from patent protection. Computer implemented inventions including technical computer programs are therefore held as patentable, although it is always difficult in a specific case to assess whether a solution has to be viewed as technical.

3. Patent law in international Conventions

The intangible and ubiquitous nature of inventions left territorially limited patent rights particularly susceptible to infringement as free trade evolved and made the necessity of an internationally anchored protection clear as early as the 19th century. But it took more than 100 years before, in 1994, mandatory standards for effective international protection of inventions were introduced for the first time by the adoption of the TRIPS Agreement in the framework of the WTO legal network. The first foundations for international protection had however already been laid down in 1883 with the signing of the Paris Convention for the Protection of Industrial Property (PC). By reserving the right to make special agreements for the protection of industrial property separately between themselves, insofar as such agreements do not contravene the provisions of the PC (Art 19 PC), Paris Convention member states provided the basis for all subsequent international conventions dealing with patents.

Membership in the PC, originally signed in 1883 by 11 states and later often revised (the last revisions took place in 1958 in Lisbon and in 1967 in Stockholm) currently totals 173 Member States (2010). With the PC, a union for the protection of industrial property has been established. From the very beginning, the notion of industrial property covered all sorts of patents (Art 1(1)(2) PC); however, the PC itself lacks any norms, eg on what has to be protected by patents, under what conditions, by what effects and for what period of time. Thus, the minimum protection standards provided by the PC for patents are deficient. Nonetheless, the principle of national treatment or non-discrimination (Art 2(1) PC), adopted from the very beginning, has had far-reaching consequences, controlling all the respective international conventions concluded subsequent to the PC. As far as the minimum rights existing under the PC for the area of patents are at issue, the most complicated and extensive rules relate to the right of priority in Art 4. Thereunder, nationals of the member states who have duly filed regular patent applications in one of the countries of the Paris Union can, within a period of 12 months, file a subsequent application for the same invention in any of the other countries of the Union with the priority date of the first filing. Further, minimum rights provided for in the PC are the independence of patents obtained for the same invention in different countries, the obligation of the member states not to refuse or invalidate patents on the ground that the sale of the patented product or of a product obtained by means of a patented process is subject to restrictions or limitations resulting from the domestic law and limitations of the member states for granting compulsory licenses or providing for forfeiture of the patent.

A further step in improving the international protection of patents was accomplished in 1970 by the adoption of the Patent Cooperation Treaty (PCT), whose membership amounts to 143 contracting states (2011). As a special agreement under Art 19 PC, the PCT has for the first time opened the possibility that an international application filed in a contracting state by a national of a contracting state has the effect of a regular national filing in all designated contracting countries (Arts 3, 9(1), 11(3) PCT). In other words, the PCT makes it possible that by filing just one international application, the patent is applied for in 142 contracting states with the same international date of entry. Thereby, the international application can also claim the priority date of one or more earlier applications filed in a country party to the PC (Art 8(1) PCT). The PCT regulates the international phase of the applications, which provides for mandatory publication of the international application 18 months from the priority date of that application (Art 21(2)(a) PCT) and for the issue of the international search report on the relevant prior art by an International Search Authority (ISA) (Art 18 PCT). Optionally, the applicant can also demand an international preliminary examination of his application according to chapter II (Arts 31–38 PCT) by the International Preliminary Examining Authority (Art 32(1) PCT). After 30 months from the priority date, at the latest, the applicant has to decide whether to pursue the proceedings in the national phase. If answered in the affirmative, he has to provide a prescribed translation of the international application and pay the national fees to each elected office (Art 39(1)(a) PCT). The international phase of the PCT is administered by the International Bureau of WIPO. The national offices that undertake the actual proceedings for granting a patent are neither bound by the result of the international search report nor by the results of the international preliminary examination. This is true even when the respective office has acted as the ISA or the International Preliminary Examining Authority in that case.

Parallel to the development at the universal international level, in Europe efforts have been undertaken to harmonize substantive patent law and to establish a centralized patent granting system for the EU Member States. To date, those efforts have been successful only in part. By signing the Convention on the Unification of Certain Points of Substantive Law on Patents for Invention (Strasbourg Convention) in 1963, Member States of the Council of Europe have by and large successfully unified substantive patent law. Subsequently, not only national patent laws of the Member States of the European Economic Community and European Community, respectively, but also the Convention on the Grant of European Patents (European Patent Convention), signed in 1973, followed the provisions of the Strasbourg Convention. Although the then Member States of the European Economic Community signed the Convention for the European Patent for the Common Market (Community Patent Convention) in Luxembourg in 1975, this Convention, along with the 1989 Agreement on Community Patent never entered into force (European patent).

International mandatory protection standards for patent law were only adopted in 1995, when the TRIPS Agreement binding all WTO Member States (153 in 2010) became effective. After a transitory period which, to a large extent, has already lapsed, the TRIPS Agreement obliges all WTO member states to make patent protection available for any inventions, whether products or processes, in all fields of technology provided that they are new, involve an inventive step and are capable of industrial application (Art 27(1) TRIPS) and also provided that they are disclosed in the application in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art (Art 29(1) TRIPS). TRIPS, however, also allows for some exceptions to this general rule. Member states may exclude from patentability inventions ‘the prevention within their territory of the commercial exploitation of which is necessary to protect human, animal or plant life or health or to avoid serious prejudice to the environment’ (Art 27(2) TRIPS). If the law of a member state provides for such exemptions from patentability, it may not allow the commercial exploitation of the respective inventions. Moreover, member states may exclude from patentability diagnostic, therapeutic and surgical methods for the treatment of plants or animals (Art 27(3)(a) TRIPS) as well as plants and animals and essentially biological processes for their production. On the other hand, member states are obliged to provide patent protection for micro-organisms and non-biological as well as micro-biological processes for the production of plants or animals (Art 27(3)(b) TRIPS), whereby the protection of the latter has to extend to plants and animals obtained directly by those processes (Art 28(1)(b) TRIPS). Finally, member states have to provide protection for plant varieties either by patents or by an effective sui generis system or by any combination thereof (Art 27(3)(b)2 TRIPS).

No less important is the fact that TRIPS has also set forth mandatory standards regarding the content of the patent rights. In the case of product patents, the owner has the exclusive right to prevent third parties not having his consent from the acts of making, using, offering for sale, selling or importing for these purposes the patented product (Art 28(1)(a) TRIPS). In the case of process patents, the holder has the right to prevent third parties not having his consent from the acts of using the process and also from the acts of using, offering for sale, selling or importing for these purposes at least the product obtained directly by that process (Art 28(1)(b) TRIPS). TRIPS has also fixed the minimum term of patent protection as a period which shall not end before the expiration of a period of 20 years counted from the filing date (Art 33 TRIPS). At the same time the TRIPS Agreement allows member states to provide in their national laws for limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties (Art 30 TRIPS). Such criteria are met, for example, in the case of experimental acts done on the subject matter of the patented invention that aim at enriching knowledge, as for instance in the case of clinical trials designed to find further medical indications, but also to prove the bio-equivalency of generic drugs for marketing approval (WTO Panel Report (17 March 2000) WT/DS 114/3). The provisions of TRIPS on compulsory licences in Art 31 were complemented by a WTO decision (WC/L/540) allowing the granting of specific compulsory licences for foreign markets in favour of the least developed countries and member states with insufficient pharmaceutical production capacity.

Of similar importance to its substantive patent law protection standards are TRIPS rules by which internationally binding standards for the enforcement of intellectual property rights were laid down for the first time (part III, Arts 41–61 TRIPS).

With the aim of harmonizing formalities in patent granting proceedings, eg the date of application, representation or restitutio in integrum, in 2000 the Patent Law Treaty was signed. Its membership stands at 19 contracting states (2010).


Fritz Machlup, ‘Patentwesen, geschichtlicher Überblick’ in Erwin von Beckerath and Carl Brinkmann (eds), Handwörterbuch der Sozialwissenschaften, vol VIII (1964) 231; GHC Bodenhausen, Guide to the Application of the Paris Convention for the Protection of Industrial Property (1968); Friedrich-Karl Beier and Joseph Straus, ‘The Patent System and its Informational Function—Yesterday and Today’ (1977) 8 IIC 387; Friedrich-Karl Beier, ‘Significance of the Patent System for Technical, Economic and Social Progress’ (1980) 11 IIC 563; Kurt Haertel in Kurt Haertel, Friedrich-Karl Beier and Gerhard Schricker (eds), Europäisches Patentübereinkommen—Münchner Gemeinschaftskommentar (looseleaf, vol 1 1984); Edwin Mansfield, ‘Patents and Innovation: An Empirical Study’ (1986) 32 Management Science 173; Joseph Straus, ‘Implications of the TRIPS Agreement in the Field of Patent Law’ in Friedrich-Karl Beier and Gerhard Schricker, From GATT to TRIPs—The Agreement on Trade-Related Aspects of Intellectual Property Rights (1996) 160; Roberto Mazzoleni and Richard Nelson, ‘The Benefits and Costs of Strong Patent Protection’ (1998) 27 Research Policy 273; William Cornish and David Llewelyn, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5th edn, 2003); Nuño Pires de Cavalho, The TRIPS Regime of Patent Rights (2005); Joseph Straus and Nina Sophie Klunker, ‘Harmonization of International Patent Law’ (2007) 38 IIC 907; Hiroko Yamane, Interpreting TRIPS—Globalization of Intellectual Property Rights and Access to Medicines (2011).

Retrieved from Patent Law – Max-EuP 2012 on 18 May 2024.

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