Wednesday, July 07, 2010

R&D Tax Credits - Time for a Rethink?

One of the roles of the French Senate is to work behind the scenes of government to check whether spending is all as it should be. To this end, numerous committees are created with the aim of investigating whether government led and implemented incentives are of benefit to the country as a whole, and in particular, whether they are costing the state too much - this is particularly so in these times of self-proclaimed austerity.

To whit, the finance committee of the French Senate released a report last month about the impact of incentives introduced in France's 2008 finance bill to stimulate innovation in the French economy by granting massive tax credits to companies that invested in innovation. A summary of the report in French can be found here, with a link on that page to the actual presentation made to the Senate by the committee's rapporteur, and the report itself.

The tax credits allowed by the finance bill of 2008 were pretty substantial, 30% on up to 100 million Euros expenditure per entity could be offset in tax credits for costs in associated R&D, including costs related to IP. Naturally, this has proven to be a fairly important incentive, not only for SMEs, but also for those larger corporations who just couldn't wait to claim credits left, right and center, including a tendency for holding groups to exploit a loophole that allowed its subsidiaries to claim up to the limit, allowing them a comfortable little tax nest-egg. Whilst the report acknowledges the positive effect that these measures have had on the economy as a whole, with an alleged reduction in job losses, improved competitiveness, and stimulation of research and development, it does also underline that the cost to the state has increased fairly significantly, escalating from an approximate 1.7 million Euros to 4.1 million Euros in the space of a year !

As the report outlines, despite the success, there has been a (quite logical) tendency for large corporate groups to optimise their taxation via the innovation tax credits system. The current system provides for a cap of 5% of all R&D costs on declared spending over 100 million Euros, and large corporations naturally often exceed the 100 million mark.  The upshot of this is that large corporations have created subsidiaries in order to split out amongst their respective subsidiaries the R&D expenditure burden, and thus stay under the 100 million limit per entity, thereby enabling the more interesting 30% rate of tax credit to apply. The report sees this as a way for large corporations to escape from paying their dues to the state, thereby adding to the state's massive budgetary deficit.

In order to counteract this undesired effect on the general health of the state's finances, the report has suggested that the government, in its next finance legislation, restrict the expenditure claimable to 100 million Euros per holding group. The system as a whole, would however be maintained, the objective of the government being to bring the country up to a level of investment in R&D of 3%  of GNP within the space of 3 years. At present, that rate has only evolved slowly, from 2.06% in 2007 to 2.07% in 2008, so it looks like the government still has its work cut out if it hopes to attain the 3% mark.

On the upside, the current measures have been seen to be sufficiently interesting to attract foreign investment and the creation of  41 new R&D facilities on French soil in 2009, a leap of 64% compared to the figures of 2008. 

The unfortunate position for the present government and its president is one of having made revitalising the economy via investment in R&D a political warhorse, yet finding itself in a tight spot financially, with the need to fill the state's depleted (and increasingly blackhole-like) coffers. It will be interesting to see how the government's future finance legislation will deal with this topic, which will have direct repercussions on jobs and viability of the R&D sector of the French economy.

Friday, May 21, 2010

French Trademark OLF - under the covers

This is a follow-on from my previous posting about trying to file a French trademark online via the INPI web site.

When you have a problem with the site, you can contact the INPI, via e-mail (free), or phone (pay per minute, but judging by the number it only works if you are ringing from France). Anyway, as I had complained via e-mail as to why the INPI's system seemed incapable of leading me to the promised land of electronic filing nirvana, despite my having all the required software installed, I was contacted by the INPI "helpdesk" (and I use that term very lightly), who were of absolutely no use whatsoever...below is a transcript of an excerpt of my conversation with them:

Helpdesk : you don't have the correct version of Java installed, and you don't have Adobe Acrobat Reader.

Me : errm, yes actually, I do have them because I listed them in my e-mail to you that provoked this phone call, I might add that Adobe Reader opens automatically from the browser to display the filled-out form.

Helpdesk : you need the latest version of those software products.

Me : OK, please tell me which versions then ?  It says nothing on your help page that any particular version of this or that software is required.

Helpdesk : you don't have the right version of Java, you need the latest versions of all of the required software

Me : Please tell me precisely which versions then.

Helpdesk : Sir, you are being difficult, why don't you just file your application from another machine that does have the correct versions, or file by post.

What this conversation tells me is that (1) the INPI has a log of each connection you make to their system because they knew exactly at what time I had connected, (2) the helpdesk don't read the detail of what you send them, and (3) the person you get at the end of the line hasn't got a clue what the requirements of the system really are. When I asked to talk to someone responsible for IT matters, I was told I was already speaking to such a person !!! Oh dear :-/

Not content to let matters remain in that situation, I wrote back to the INPI, via e-mail with the following information, taken from the INPI web page :

4.2 Required configuration for signing. How to check ?
Click on the icon to the right of the title bar. A window opens and will check, in the following order :
* the presence of Acrobat Reader
* the presence of a Sun JVM
* the type and version number of your browser
* the version of your operating system (windows, mac, …)
If your computer does not support the use of the signing tool, (generation and installation of the certificate, signing the form), a message will invite your to download and install the required updates (See point §4.3).

This is what I have on my computer :

1) Acrobat Reader : version 9.3.2 dated 04/01/2010

2) a JVM : version 1.6.0_20, supplied by Sun

3) a browser : Firefox 3.5.9

4) operating system : Linux Ubuntu 9.10, generic kernel 2.6

For the sake of completeness, I thought I'd run some tests to see whether any of the other browsers currently available on Linux would fare any better. The results are posted below :

Each browser was tested, prior to accessing the INPI web site, for its capacity to load a functional JVM via the official Sun test page, all of them passed, including Google Chrome : 

1) Firefox 3.5

JavaSun Microsystems Inc. Version : 1.6.0_20
Système d'exploitationLinux

2) Opera 10.10
Acrobat NaN
Java Sun Microsystems Inc. Version : 1.6.0_20
Système d'exploitation Linux
Navigateur Accepté

3) Google Chrome 5.0.375

JavaNoJVM Version : NoJVM
Système d'exploitationNoJVM

4) Seamonkey (Mozilla) 2.0.4

Acrobat NaN
Java Sun Microsystems Inc. Version : 1.6.0_20
Système d'exploitation Linux
Navigateur Accepté

From memory (and I stand prepared to be corrected), the 2.x versions of Seamonkey correspond to the 2.x branch of  Firefox.

From the testing, it is apparent that the problem does not appear to be with browser compatibility, since in all cases the INPI's detection script considered that the browser version being used was acceptable.

Apart from Google Chrome, all of the browsers tested using the INPI script returned an acceptable version of the Java VM.

This led me to believe that the problem lies in the Javascript used to test the user configuration, and that this script trips up on the detection of Adobe Acrobat on Unix-like platforms. The irony of the situation is that the form which has already been filled out by the server opens automatically in Adobe Acrobat Reader when the user is invited to check its application documents for correctness. What happens here is that the link provides a data stream bearing the PDF mime type, and thus is recognised by the plugin mechanism that is prevalent on Unix/Linux systems.

As an aside, it appears that the INPI has used the content creation and secure signing platform known as Dictao, details of which can be found here

In order to resolve the script issue, I needed to find out which script ran when I clicked the "check configuration" icon. The good (or bad depending on your point of view) thing about having web pages with scripts in them is that at some stage, they have to be loaded into the memory of the machine they are running on via the application (in this case via the browser). This leaves them open to analysis, which is exactly what I did by installing an extension module for Firefox known as a script de-obfuscator. What this does is trace the script calls loaded into the memory of the browser and make them available in human readable form - and very handy it was too !!

The result displayed is a long line of codes, routines, subroutines, etc, most of which wasn't particularly relevant to my quest, but in the end, I found a section of code which looked promising :

function eh(g, f) {
        $doc.dwe.detect = Object();
        $doc.dwe.detect.acrobatObj = new Object;
        $doc.dwe.detect.acrobatObj.installed = false;
        $doc.dwe.detect.acrobatObj.version = "0.0";
        if (navigator.plugins && navigator.plugins.length) {
            for (var h = 0, d = navigator.plugins.length; h < d; ++h) {
                if (navigator.plugins[h].description.indexOf("Adobe Acrobat") != -1 ||
                    navigator.plugins[h].description.indexOf("Adobe PDF") != -1 ||
                    navigator.plugins[h].description.indexOf("Adobe Reader") != -1) {
                    $doc.dwe.detect.acrobatObj.version = parseFloat(navigator.plugins[h].description.split("Version ")[1]);
                    if (isNaN($doc.dwe.detect.acrobatObj.version) &&
                        navigator.plugins[h].description == "Adobe PDF Plug-In For Firefox and Netscape") {
                        $doc.dwe.detect.acrobatObj.version = "8.0";
                    if ($doc.dwe.detect.acrobatObj.version.toString().length == 1) {
                        $doc.dwe.detect.acrobatObj.version += ".0";
                    $doc.dwe.detect.acrobatObj.installed = true;

Oddly enough, this code is very similar to that released by Ryan Parmann under a version of the GPL2, an example of which can be found  here - I don't recall seeing on the INPI web site anywhere that they used GPL2 code in their services, tsk, tsk, tsk. The date on the code states 1997-2003, here's hoping that Dictao did their homework beforehand...

Now I'm not an expert at scripts, but the code above looks like it is designed to search only for version 8 of Adobe Acrobat, and then only if the description found in the plugins index is identical to "Adobe PDF Plug-in for Firefox and Netscape". If not, the test fails and returns NaN. Below is some extra code, again found here which allegedly can calculate the various versions of Acrobat Reader currently in circulation (until Adobe releases version 10), but I think that it gives the gist of what should work :

acrobat.ver4=(acrobat.installed && parseInt(acrobat.version) >= 4) ? true:false;
acrobat.ver5=(acrobat.installed && parseInt(acrobat.version) >= 5) ? true:false;
acrobat.ver6=(acrobat.installed && parseInt(acrobat.version) >= 6) ? true:false;
acrobat.ver7=(acrobat.installed && parseInt(acrobat.version) >= 7) ? true:false;
acrobat.ver8=(acrobat.installed && parseInt(acrobat.version) >= 8) ? true:false;
acrobat.ver9=(acrobat.installed && parseInt(acrobat.version) >= 9) ? true:false;

This is all well and good, but until the INPI decide to correct the problem (or can get Dictao to do so, if it is their responsibility), then for the moment, it looks like online filing of trademark applications in France is going to be out of the question for many of us who prefer to use alternative operating systems.
It is noteworthy that since I first reported the incident and followed up with e-mails containing the results of my testing, I've heard nary a peep from the INPI IT helpdesk. Embarassment, confusion or just plain ignorance (close our eyes and the problem will go away) ?

Wednesday, May 05, 2010

Online Filing Woes - get thee away Satan

It seems that life is full of little setbacks at the moment, what with my previous rant on French PTO fax machines and now my latest encounter with the French trademark filing authorities. Being of moderately good cheer despite the wintry weather, I thought I'd cock a snoop at the snow falling outstide my office today and attempt to file a trademark online via the INPI's spankingly refurbished website (which is an ultimately very frustrating experience, but more of that later).

Aside from the fact that you have to trawl through several pages of information which are more or less useful depending on the extent of your trademark knowledge, I can safely say that online trademark filing via the INPI is not at all obviously pointed out on its web site, and the overall impression that this gives is that the INPI is only really looking to attract the absolutely motivated individual who has time to spare, or the professional who has finally exclaimed "at last" when the link to the online filing section of the site is found. Just to make it easier for anyone reading this blog, the current address is :

For the non-French speakers there are several alternative languages for the interface available, one of which being English, but it has to be said that some of the translations of the fields into which data is to be entered appear somewhat... unusual, to the native English speaker. In any event, the non-French user is forewarned in advance that the application will have to be filed in French come what may, or else it will be rejected. This doesn't appear obvious to the English speaking user until you have filled in the applicant and contact details and actually get around to typing in the definition of classes and goods and services for which protection is sought. The page where you fill in these details is entirely in French, which I suppose stands to reason seeing as the aim is to file a French trademark application after all. However, considering that the trademark classification system also exists in English, it would have been a nice touch to provide that translation as a guide to the would-be non-francophonic applicant.

After having selected your classes and associated products from the list, or having typed in your own definitions, one can then proceed to the "Special Cases" page, where it is possible to choose whether the application is linked to a renewal of an existing French trademark, to a divisional filing, to a collective certification mark, or to a claim to Paris Union priority.

Once sorted, you can proceed to the signatory page, where the name and contact details of the person signing the application (aka the representative) are given. This then takes you to the form validation page, and from there onto the payment page (because online payment by credit/debit card, is also possible). However, this is where I came unstuck, and was doled out a rather terse error message :

Votre configuration actuelle ne vous permet pas de certifier le formulaire
Acrobat NaN
Java Sun Microsystems Inc. Version : 1.6.0_20
Système d'exploitation Linux
Navigateur Accepté

Which basically means that my computer setup did not allow for certification of the form. Hmm, I don't recall seeing any certification requests or the like indicating that a secure certificate was to be installed on my computer.

Whilst the INPI has helpfully indicated what the minimum computer software requirements are (via an icon click in a little corner of the screen), it still left me dumbfounded because my system actually meets all of those requirements, including the allegedly "absent from my system" Adobe Acrobat Reader. Thus stymied, I am given the option of saving all I have done so far, in which case you receive an access code in order to try again with the application data being stored temporarily (2 weeks) on the INPI's server - this function does actually work - or else saving the generated form to disk via the, wait for it, "unfindable" Adobe Acrobat Reader which opens up on clicking on the link to display the form and its relevant data...

So that basically was it. Stuck for now, other than filing 5 paper copies of the application via post and paying an extra 25€ filing fee, until someone, somewhere within the arcanes of INPI IT support can actually help me out (or not, as the case may be).

Deflated, but not defeated, I shall wait to hear from them to get to the bottom of the problem and report back. Sometimes you just can't beat those good old fax machines...(don't get me started on them again...)

Sunday, May 02, 2010

Anyone for CML ?

Today's post is not about medical nasties such as chronic myelogenous leukemia, but rather Chemical Markup Language (here), or even more generally, the representation of chemical structures and other chemical data such as spectra in patent applications.

Way back in 2006, I raised this issue in the online filing forum of the EPO (here). As I later discovered, CML was in fact already being considered by the EPO, as evidenced by a report published by Dr. Wendy Warr in 2004 (here, p.49-50). Since then, unless I'm very much mistaken, no progress seems to have been made whatsoever. Am I to understand that the filing powers that be and industry still have come to no agreement, or is it that, as I was led to believe, the USPTO is so entrenched in its use of TIFF that it can not adapt to a recognised standard for the representation of chemical formulae ? If so, then it really is a pretty poor show all round. After all, it is not as if there is no software around capable of converting a graphically driven interface rendering of a structure into compliant CML - there are now several, both proprietary and open source, and additionally capable of running on multiple operating systems (see herehere, and  here).

So what is holding back the adoption of CML directly in patent applications, instead of the current practice of having to draw the structures and save them as bitmap images, which are then copied into the word processing document, saved, recompressed and rendered un-reusable thereafter  ? How significant is the reticence or lack of knowledge on the part of patent attorneys or the subcontractors who prepare chemical drawings ?

If anyone has any gems of information on the subject, I would be interested to know.

Tuesday, April 13, 2010

Employee Inventions - Private Sector Makeover

A proposed piece of legislation was recently filed with the French parliament relating to revamping the current wishy-washy legislation about employee inventor remunerations into something half-decent (in theory at least), hopefully with some teeth, and with the purported aim of stimulating the French economy and turning the nation's patent applicants into a "file first, file fast, ask questions later" IP cowboy. The proposed text can be found here:

The aim of this long sought after legislation (at least from the various inventors' lobbies) is to bring the private sector into line with handling of public sector employee inventions, which have been codified (and operational) for some time now.

After having read the proposal, I find it unlikely that it will sail through parliament unchecked - the employers' (Medef, CGPME, etc) lobbies will no doubt bring their weight to bear on MPs and Senators alike to remove the proposed possibility for employees to come back to their employers at some undefined date in the future and ask in true Oliver Twist style "for more" if they sense that the employer is making too great a profit from the invention to which they contributed. I'm also pretty certain that if, as is proposed, new taxes are set up to deal with these perceived windfalls that are escaping the clutches of the "good ol' French IRS", then the government will cook up something that nobody will be happy with - after all, the French state is up to its eyeballs in debt, and what better way to earn more money for itself than to tax those both giving and receiving, I can see the state treasury laughing all the way to the national bank!!

One thing is certain : the current situation is a complete mess, with the legislation so full of holes you could strain your spaghetti in it and case law apt to swings of mood. It is at least praiseworthy that someone has stood up to the mark to attempt to do something about it, but ultimately the law may have no real teeth as such and it will be a case of yet another piece of rushed positive lawmaking gone horribly wrong.

As examples of a few potholes in the current legislation that IMHO need filling:
  • - applicability (or as the case law now says, "inapplicability") of collective bargaining agreements;
  • - absence of explicit sanctions for not respecting the invention declaration and categorisation procedures; at the moment, the employer can get away with virtual murder of the invention by not sticking to the procedure laid out under law, leaving the inventor to either go to court to obtain a decision, or to file a patent application surreptitiously and then tell his/her employer afterwards - in any event, it generally leads to an uncertain legal position and a fair amount of strife between employer and employee;
  • - HMA (hors mission attribuable) inventors being considered by the Social Security and IRS administrations as having independent inventor status even though they are fully employed with the company that awards itself and files their inventions;
  • - absence of binding (appealable) decisions issued by the National Employee-Inventors Commission;
  • - supplementary remuneration being considered as salary : aside from the taxation issues, French employment regulations currently make it impossible for an employer to pay an inventor "supplementary remuneration" using the only means available to it, i.e. a wage slip, once that person has left the company. An attempt has been made to address this issue in the proposed legislative changes by considering the sums paid as outside the normal scheme of salary payments.

More updates on this topic as things evolve (no doubt slowly given the current political climate).

Monday, April 12, 2010

Living Dangerously aka French Fax Machine Woes

Experience has proven that when you attempt to file by fax at the French PTO (INPI), after 5pm, with an application of more than 15 pages, then you really are loading a revolver with more than one bullet before pointing it at your head. Russian roulette, ha !! childsplay. Want a real adrenaline rush ? Try and file a 50+ page PCT application in English after 6pm, now there's playing hide n seek in a minefield, while under the influence, and base jumping without a parachute all at the same time !!!

In the world of modern communications, and despite a wealth of e-mail communications abounding, the fax machine still appears to have many a long day ahead of it, and to be fair, it is on the whole a fairly reliable and secure way of transmitting data (absent wire taps and capturing electromagnetic waves from phone lines via sophisticated interception techniques). One would think that most European nations' IP offices would have reliable fax machines. Oh ye of utmost naievety, for ye have not encountered the INPI's ultimate fax reception service solution hell.

Indeed, in stark contrast to the EPO, WIPO and even most other IP offices I've had to deal with in the past, the French PTO continues to have, in my humble and completely unbiased opinion, one of the most woeful fax reception systems in the world. Last I knew, they only have one full time fax machine dedicated to receiving faxes from the public. There is a back-up, in case the first one breaks down, but apparently it is not set up to take over any excess demand for communication that the first can not handle. The fax machine is only cared for by a member of staff until 4:30pm (OK being generous, I actually heard it is 4:45pm), after which, in true French civil servant "jobsworth" style, that person bunks off for the night and leaves the machine to a lonely evening alone at home (can't you see those teardrops running down my face ? No ? not surprising coz I'm sharpening my knives !!).

So, the fax machine sits alone in Paris, at the INPI's St Petersbourg street HQ in the hope of one or more external communicants dialing its number. But lo and behold, what happens when those outsiders use up all the paper, or it jams ??? Errrmmm, well, the fax goes offline - I hear gasps of horror from the audience - yes, it does just that. Aha, but those who have been following chirp in, "Wait a minute, you said there was a second fax machine waiting in the wings". So I did. But here's the catch. The second doesn't know the first isn't working because they are not synchronised, i.e. it is not a true failsafe, fallover, backup, whatever. Truly astounding, implementation of modern technology at its best. And of course, yes you've guessed it - the person who looks after the fax machines having gone home, no one else is there to care a hoot, or even less, do anything about it.

Of course, now that the INPI has finally entered the age of electronic filing, it probably doesn't care very much whether its fax machines are left to break down on their own well before most of us have even thought about going home. Yet consider this, if you will : the stats tell us that approximately 16,000 French filings are carried out each year (with a slight variation, give or take a couple of thousand). Of those, I would guess that approximately 10%, maybe 15% are filed using the online filing system - the rest, well, snail mail and fax of course, and usually both since fax filings have to be confirmed via normal mail. OK, where does that leave us, hmm, at an optimistic 13,500 filings over the year, a daily average (including bank holidays and weekends) of 37 patent application filings a day. Obviously, this figure does not consider any of the other filings that take place using the same fax number, filing responses to office actions, various other requests, other rights filings, etc, so the number of communications going through that fax number must be much higher than first thought.

One would have thought that even the INPI would have sussed that so many faxed communications would warrant a more reliable system, capable of running 24/7, but the powers that be at the INPI have obviously decided that this is not the case. It may be, once again, that budget constraints mean that it can't actually afford to invest in a battery of failsafe fax machines, in which case there is no hope. Of course, some smart people in procurement could just suggest that the faxes be handled by a PC (or two or three) running fax reception software, but apparently even this appears beyond grasp of comprehension.

If you've managed to bear with me to the end of this rant, then you'll have done well. "What did I do then ?", you might ask. Answer : WIPO - response time of 15 minutes max - now there's service !!

P.S : The above is entirely based on my own personal perception. If anyone out there really does know what the actual set up is at the INPI, then I'm all ears, I was just letting my paranoiac psychotic brain get the better of me ;-) toodlepip !!

Tuesday, January 05, 2010

Cloak and Dagger Filing - just leave your smartcard at home

My contribution, call it that if you will, of today, relates to a recent friendly, but nonetheless firmly worded, circular sent by the French Ministry of Defense to all French IP attorney firms at the end of November (plus I assume, also to counsel working in industry). In it, the DGA (Direction Générale de l'Armement), responsible for checking the content of all French, European and PCT patent applications filed through the French patent office (INPI), has reminded all practitioners of the need to think carefully before unholstering their Smartcard and filing their patent applications using the EASY/PCT SAFE software that so many national offices now attempt to ram down our throats, despite it being platform and operating system dependent on one very large operating system supplier.

To be brief, the instructions handed down in the circular state that electronic filing software as provided by the INPI / EPO / OMPI is not certified as "defense security compliant", and thus advises as follows:

(a) if the subject matter of the patent application relates to contract research or development financed by the MoD, inter alia, those containing a required security notice ;

(b) or if the subject matter of the patent application can be of military usefulness which confers operational superiority (to France of course)

then the electronic filing software should not be used, and the usual channels of paper filing are mandatory.

It transpires that the reason for this circular is apparently linked to one or more "near misses" with regard to potential breaches of national security, although for obvious reasons no further details of the "near miss" are given. The fact that the DGA has taken the trouble to write such a circular is significant in itself, as usually this is a very discrete department not prone to such displays.

Now I can see people at the back raising an eyebrow or two about how vague the expressions "of military usefulness" and "operational superiority" are, and how extensive, nay expansive, they may seem. Indeed, and to this end, the DGA has kindly provided a short guide of two A4 pages styled as a FAQ as to how to go about determining whether the applicant is likely or not to fall foul of the military secrecy statutes as they affect patent applications. I might even get around to translating it from French into English if I get the time, but one thing of noticeable importance is the bit on inventors. There is, so states the circular, "no obligation to first file the patent application via France just because one of the inventors is French, or has his place of residence in France" (this was indeed the interpretation of the law given by many a practitioner until now). However, before you all go off telling yourselves that there is no longer any need to worry, one should read on : "the fact that an inventor carries out research or studies on behalf of a foreign entity, where those activities may conflict with the fundamental interests of the nation, may expose the inventor to the sanctions foreseen by the New Penal Code". Additionally, and as mentioned elsewhere in the circular, all of those involved in the transmission of information deemed to affect the fundamental interests of the nation, and particularly those of the MoD, are tarred with the same brush as the initial divulger.

Well, now that's much clearer for everyone isn't it ? So get your cloak on, mate, fasten your dagger, we've got dirty work to do...but pssst, leave that chip at home.