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Friday, 29 June 2007

EPLA or bust? Robin Jacob speaks out

EPLAW, the European Patent Lawyers Association, was formed in 2001 "with a view to promote the equitable and efficacious handling of patent disputes in Europe and to strengthen the links between lawyers having relevant litigious experience in patent law in Europe". The Association held a conference this week in Munich. Among the speakers was Lord Justice Jacob, who gave a paper entitled "The Judge’s Perspective", the subject of the perspective being the resolution of Europe's horrendous patent litigation problems.

It is rare for the IPKat to post an entire document of this length; it is even rarer for the Kat to withhold his comments. However, he thinks that this paper is an excellent summary of the live issues faced by patent litigants and of the way an experienced appellate and trial judge, and former advocate, envisages how they can be dealt with; on this basis he doesn't want to distract readers by interposing his own observations - though IPKat comments will doubtless follow in the near future. In the meantime, readers are highly welcome to post their own comments below.

Since Sir Robin has kindly permitted the IPKat to post his paper in full., here it is:

Is there a single “Judge’s perspective"?

The uninformed outsider might think, from general belief, that there is basically just one big legal divide in Europe: that between the common law and the so-called “continental” traditions. Not so. European Patent Judges come from a wide variety of very different legal traditions. Civil procedures are very different, one from another, not just as between the common law countries but right across Europe. The very legal cultures of different European countries are different one from another. Our legal professions are organised differently. And all this is even before you take into account language differences.

So you might expect the answer – no, there is no single Judge’s perspective. And that is what I would have expected too – until I came to know and respect my fellow patent judges in Europe. The EPO set up the biannual meeting of patent judges. I have been to most since I became a Judge in 1993. More recently the EPO has also jointly, with the European Patent Lawyers’ Association, sponsored conferences of judges and practitioners in Venice.

Much has come of this. I believe that those judges who frequently decide patent cases, whether they are full career judges or those, like myself, who became judges after a long career as a patent lawyer, have come to realise that we can not only work together but would like to do so – to produce a more harmonised and efficient and decisive system for Europe.

Our co-operation in Venice to produce draft principles for the rules of a new EPLA Court demonstrates that this can be achieved.

We are, uniformly or almost uniformly of the view that the way forward is EPLA and not via some sort of EU Court. I will explain why below.

The users’ perspective

The users’ perspective is not a politician's. An English poet, Alexander Pope, once wrote:

“For forms of government let fool’s contest,
What’s best administered is best.”

That is the view of the users. What they want is a simple, cheap and predictable system. That is why the EPO opposition system as it stands at present is failing the users. That is the reason why you do not hear industry saying: “please attach a patent court to the EU judicial system.”

Right: Sir Robin, at a recent IP event in Central London

I will be frank: I do not think the EU court is a suitable place for patents to go. There is no need, and no point, save one for politicians, not users. Unless there is an EU proposal which achieves all of the key requirement, the thing will not work. The key requirements are:

(a) Keep the ECJ out of substantive patent law – it not suited for this (and probably does not want it);
(b) Speed (another reason for (a) – the ECJ has so much work it could not produce results quickly – yet industry needs to know where it stands and cannot wait years for an answer;
(c) Cheap as possible language regime – one in practice designed for the case in hand
(d) Experienced patent judge on the panel
(e) Local presence
(f) No possibility of forum shopping
(g) An effective way of dealing with technical understanding and dispute.

How we got here

The European Patent System is unfinished business. That business started in the Council of Europe in the 1950s. By 1963 the outline of what was to become the EPO was well in place – but there was nothing about a judicial system.

Time after time proposals were put forward – the 1975 CPC, the 1988 revision, various proposals from the Commission, the more recent “common political approach.” None were based on the proposition we should look for what industry wants. None were based on the use of existing judges. All were essentially theoretical. Above all none of these ideas were practical. So they all failed – as will all other similar ideas.


The problem

The problem is the patchwork nature of the existing system – with various results from various countries at disparate speeds. And the corresponding need to draft a patent for use everywhere and to take advice in lots of countries. Not good for a common market. Only last Friday I handed down a judgment agreeing with the judge below, who had disagreed with a German infringement court. I agreed with a French court in Rennes (Pozzoli v BDMO SA ([2007] EWCA Civ 588). The German validity court has yet to decide the case. Appeals lie in all the jurisdictions, save probably the UK where, unless the House of Lords decides to take the case which is very unlikely, it is over.

Why did the patentee have to sue in three jurisdictions? It is not good for Europe. In some cases market conditions are such that winning in one is enough to win for the whole of Europe because it is not possible to isolate sales in a particular country.

It is important here to recognise that cases are not certain. Yes we all try to reach the “right” result. But in reality there is no so such absolute thing. Most cases we do not see are predictable – if the alleged infringement is bang with the claim or the invention is clearly disclosed in a prior document there is no problem – and there is unlikely to be any litigation. But what judges normally get are the cases which could go either way. Different answers are possible – and all the more so if you use different methods of evidence gathering. What is needed is one result – reached by as good a practicable method as can be devised. And reached soon – it is generally better for commerce to have an early “wrong” answer than a much later “right” one.

Possible solutions

1. Stay as we are
2. Stay as we are but allow cross-border actions
3. An EU solution
4. EPLA


Why staying as we are will not do

I have already described the current situation. Most of industry is agreed that it is far from good for European industry. Note that I put that way. It would not matter if it worked well enough for industry’s needs, no matter how untidy it might look to civil servants and politicians.

But there is no point in changing unless we can produce something better.

Why cross border injunctions will not do

As is well-known the Dutch courts started this practice of enforcing patents granted in other countries. The Court of Justice put an end to it (or virtually so) with Gat v Luk. I am glad, for I do not think cross-border assertion of IP rights is appropriate:

(1) It leads and led to forum shopping of the worst kind – people 10 years ago were in practice saying “let this go to Holland”, they have the kort geding and are pro-plaintiff. Jan Brinkof, when still a judge, described some Dutch lawyers, then drumming up business around the world, as “Rambo lawyers.”
(2) It actually represents an interference by the courts of one state in what is the affair of another state. This has profound implications. Many would say it is no business of foreign courts to make orders closing down factories in my country.

Recently a number of academic lawyers in Europe, partly based around some, but not all, at the Max Plank Institute, have proposed an amendment to the Recognition and Enforcement of Judgments Regulation so as to allow cross-border jurisdiction in patents. Similarly, in Voda v Cordis, academics in the US urged the Court of Appeals for the Federal Circuit to decide that US courts had “long-arm” jurisdiction over foreign, including European patents. I am afraid they are wrong. It is all part of the keep things tidy approach which ignores, because it has no or little experience of, the practical implications.

Why an EU solution is neither necessary or desirable

As I have said attempts to go this way are very old – never driven by industry. What are the problems?

(1) Language – Any system which requires use of many languages will not do
(2) Unsuitability of procedure. The EU courts are essentially structured to deal with questions of law. Fact finding and deeply technical questions are not readily bolted on to it.
(3) This has proved to be so in the case of trade marks. With the greatest of respect the ECJ and the courts of first instance have not done well in trade marks. Things are much too slow; there is much uncertainty. Being blunt: if this is what the system produces for trade marks who would give patents to it? I wish to make it clear that this is not a general criticism of the ECJ. When it comes to most other fields, it is my experience that it produces clear and helpful judgements – for example its VAT judgments in my opinion are better and clearer than those in my own country!
(4) Delay. You only have to look at how long things take to realise that adding more work for the court will not help.
(5) Inexperienced patent Judges. This is important. It is a basic EU rule that you cannot be a national judge and an EU judge at the same time. Unless that rule is changed it will not be practicable to use the developed expertise of the national patent judges of those European countries which experienced patent judges. Who would trust their litigation to inexperienced judges? – none save those who have rotten cases.
(6) Inflexibility – a seat in Luxembourg is not appropriate for a Europe wide jurisdiction of this sort – and the court would necessarily have all the bureaucracy which goes with being attached to a much larger system.

I pause to note that it is primarily those countries with little or no experience of patent litigation which favour the ECJ route. And even there, in my experience, their judges do not agree. You will know that at the Venice meetings the judges have been virtually overwhelming in their support for EPLA – a support reinforced at the last Patent Judges’ Symposium in Thessaloniki.

EPLA – Is there a legal objection?

From time to time it is suggested that EPLA is not legally possible because it is incompatible with the laws of the EU. I have not been able to see why. What business is of the EU how member states decide their patent cases? True it is that sometimes some questions of EU law will arise (e.g. where a question about the Enforcement Directive, or a defence based on breach of EU competition is raised) but provided the court concerned (a) must apply EU law and (b) can refer questions of EU law to the ECJ, what is the problem?

My answer is there is none. This has been established already by the decision of the ECJ in Dior v Evora Case C-337/95. This concerned the supra-national Benelux Court. This is a court for the three Benelux countries. It takes references on trade marks from the national courts of any of the three countries. The Court of Justice in Dior said:

[21] There is no good reason why such a court, common to a number of Member States, should not be able to submit questions to this Court, in the same way as courts or tribunals of any of those Member States.

That would just what the EPLA court could do. Note that the Court’s decision is not based on any special recognition of the Benelux Court in the Treaty.

Recently there was an interim legal opinion for the Parliament suggesting EPLA was not lawful. I decided to ask the recently retired AG Sir Francis Jacobs about it. He put me in touch with Professor Arnull, a well-known expert. We wrote a joint paper, now published as [200] EIPR 209. He wrote most of it, but I helped with some of the ideas. Professor Sir Francis Jacobs has informally told me he agrees.

This is very important. It means that the EPLA system is available to those countries which wish to use it. It will have to apply EU law and will be able to refer questions to the ECJ. The debate about whether we should go ahead is political, not legal.

I would add two points. First it is being said that also that there is a problem because there is “mixed competence”. I have yet to see any justification for this. Second, there may be a problem in including non-EU countries within EPLA. There may be force in this – a court with a Swiss judge in it could have difficulty in applying EU law or making a reference to the ECJ. But there must be a way round this, probably by a separate Treaty.

Why EPLA is the way forward

1. It would use experienced judges – and they would be able to share experience with less experienced judges
2. It would be possible to be entirely flexible about language. Translation costs would only be incurred where necessary.
3. It would have a local presence
4. By changing the constitutions of the courts so that the judges kept meeting and working with different judges uniformity would be achieved. And the parties could not forum shop.
5. It would be speedy – see the Venice principles with the objective of a determination at first instance in a year

Of course there would be problems and important matters of detail to be settled. But that is where attention should focus.

If we do not do something soon in Europe, our competitors will pass us readily by. China has created a working patent system over the last 20 years. There is more patent litigation there than in any other country, nearly all Chinese v Chinese. It works fast and with reasoned judgments. Japan has recently re-organised its patent litigation system. I suspect India will do so soon – there is talk of it now. It is no good Europe remaining inward looking, putting perceived national interest, or the interests of lawyers or translators first. We have the opportunity to create a patent litigation system for Europe which will take the best bits of different national traditions – to create a first class system. We should get down to it.

Apply to join EPLAW here

10 comments:

Anonymous said...

Almost invariably I agree with Jacob, LJ but my viewpoint on the current EU patent litigation landscape is less gloomy than his. Take the TAXOL stent. His court and the NL First Instance disagree but it really is a 50:50 case, and a blockbuster to boot. Let's see what the Dutch Court of Appeal and Lord Hoffmann have to say about it. Whatever it is, it will bring greater legal certainty to obviousness. You wouldn't want to swap Euro law on obviousness with that of USA (KSR) or Australia (where subject matter found to be old can then be found not obvious). Once the English and German courts finally see the potency of Problem and Solution we will get even more clarity and legal certainty, here in Europe. It's the competition between the legal mindset in England, Germany, EPO and NL that brings dividends, but I concede only over survival-of-the-fittest evolutionary timescales . Robin Jacob mentioned Pozzoli. You couldn't conceive of simpler subject matter (they are indeed the trickiest cases, like Improver or Spannschraube, both the subject of those biennial Judges' conferences). In Pozzoli, the spotlight of scepticism is on the twin track German litigation system. Duesseldorf has already found infringement. Hardly surprising because validity is outside its competence, and the accused embodiment looks just like the prior art. The defendant must be furious, but will have to wait till 2008 for a first utterance on validity from the Federal Patents Court in Munich. We can have the best of every country's legal system, eventually, just by running litigation in parallel. It might be irritating for him, and frustrating for today's litigants, but what's going on at the moment sure is gradually purging the European litigation scene of various national absurdities.

Anonymous said...

For anyone interested, summary notes here give a fascinating idea of the whole spectrum of views that were aired this week in Munich on and about EPLA.

By happy coincidence (or rather, by no coincidence whatsoever), Informa held a interesting 1-day meeting today organised by EPLAW's Kevin Mooney at the Cafe Royal (undaunted by the efforts of Al Quaeda to stop it).

Some gleanings:

Is there a legal objection?

Sir Francis Jacobs wouldn't take a definitive view, but he said to him the arguments seemed strong. Given that marginal notes in the EPLA Venice-2 papers compare its enforcement provisions point by point to the Enforcement Directive, sometimes agreeing, sometimes disagreeing, sometimes expressing no view, clearly this touches areas where there is existing EU law. Moreover the whole basis of the recognition of judgements is the Brussels Convention - so again this is an area already under the aegis of EU law; and as the ECJ judged in 2006 with regard to the Lugano Convention, Member States can have no competence to independently conclude agreements in such circumstances. (A decision for which he was AG, though his advice was not made public). He also suggested that as he saw it, community-wide accession to EPLA would likely require unanimity from the Council of Ministers, not Qualified Majority Voting (QMV), as the judgments would have an impact in every state of the community.

The paper by Sir Robin Jacob and Prof Arnull he descibed as "interesting". Sir Francis said he would discuss it, but not express an opinion. In particular, the idea of taking out all the provisions that fall under exclusive competence he called an "ingenious alternative", but was this not a "rather drastic solution"? Would it not in effect strip the agreement of substance, if one removed both enforcement, and the recognition of judgments?

What, Sir Robin asks, is the problem? The issue, at least as it seems to me (JH), is that exclusive competence is one of the most important rules that holds the EU together, and stops it fragmenting when the going gets tough into lots of different configurations of states following different projects. It's not so different to preventing Member States individually negotiating transatlantic flight rules, making it impossible for the EU to do it as a whole. It also stops groups of states smaller than an EU qualified majority in effect establishing a status quo that others will either later have to take or leave, or be railroaded into following from the start against their will. So it's a rule that protects the rights of minorities of states in the EU process - a position that the UK has often enough found itself in - and keeps the EU as a whole on the road.

Where are we at?

According to Harrie Temmink, from the Industrial Property policy unit of the European Commission, the result of putting EPLA on the agenda for political discussion was "a complete bloodbath" at the Competitive Council of Ministers in December 2006, and "very ugly" exchanges between the countries backing EPLA, and those wanting an EU-based approach, notably France and most of the mediterranean states. As a result, "it would be very unwise for the Commission to go for EPLA - it would simply never go through".

So what the Commission has been doing, as he puts it, is "to get the Member States back together on speaking terms. The Commission is trying to build a bridge".

And so far it may be working. Voices he says have been raised, but so far meetings have been fairly positive (he's "seen much worse"). The Commission itself has been taking a low profile, letting the Member States speak, including the 12 new states, for which this has been their first chance to put their views. Harrie, in the most diplomatic charming Dutch fashion, wouldn't give much away; but the next six months (the Portuguese presidency) is likely to see more of the same, with 5 more 1-day meetings of the expert working group scheduled "and then we'll see where we are".

The Commission proposal is intentionally vague, but represents a fifth possibility to add to Sir Robin's four - a system "inspired by EPLA", but embedded firmly within the EU structure, negotiated within the EU system, and established under EU treaties. The goal is to keep everybody on board, and to establish a specialist EU civil court for the first time, with EU-wide reach. As in the EPLA version, the courts would be largely self-standing, with only limited appeals or references to the ECJ on purely constitutional issues. In time, they might be a model also for taking some of the existing IP caseload away from the ECJ into a more specialist setting.

The elephant in the room is the language issue. According to Harrie, the sensitivity on this, and the nearness of the issue to the surface simply cannot be over-estimated. It was deliberately not raised in the proposal. "Otherwise would have been instant suicide". But the hope seems to be, if the Commission can first sufficiently ease the discussion, and then get sufficiently many of the details taped out in principle, then maybe even this can be tackled eventually.

One last sting

There is one last sting. Although the Member States now don't have competence to do EPLA without the EU, Sir Francis points out that right now the EU doesn't have treaty competence to establish courts for private litigation either. Both Arts 229a and 225a of the Nice treaty fall short.

Of course, there is now going to be an Inter-Governmental Conference (IGC) to confirm how to legally flesh out into a treaty the political decisions taken at the leaders' summit last weekend. Perhaps, people seemed to think, that IGC could also put in the plumbing to allow the first step towards an EU-wide system of civil courts. That couldn't be at all controversial now, could it?

-- J. Heald

zoobab said...

Making international treaties for doing something european was a tradition 30 years ago. Now we have the European Union with a Parliament, the patent industry just wants its own court to be able to control it, putting the right judges and so on.

We have EU now, and even if some patent freaks wants can make the treaty compliant with EU law, it will block the EU to make some new laws that conflicts with EPLA, such as the Community Patent project, which requires an EU court.

EPLA is a dangerous project, it is just creating another international court of of parliamentary control.

Europe needs more direct democracy, not new islands in the middle in the North Sea, like the EPO is an island in the middle of Germany.

Stop me those dictatorship havens, and put me all of this patent system under exclusive European Parliament control. And exclude me those Council delegations and National Patent Offices to mess up with patent policy at the Council level.

We need accountability, in order to fire politicians if they make bad laws and bad systems.

How can the people fire decisions makers at the EPO, they are not elected?

How can the people fire decisions makers at the EPLA court, they are not elected?

Gerontius said...

What you forget, Zoobab, is that the EPO and the EPLA are not accountable to just the EU. Switzerland, Iceland, Turkey (to name just three) and, shortly, Norway are all party to the EPC and would all be affected by the EPLA but are not EU countries. Is it right that those counties should be forced to follow EU laws and regulations?

Give up on the "patent lawyers are evil" line/lie cause you're winning no arguments and making no friends.

The only way to get a wholly EU institution is to give up on the EPC and get the commuity patent going. But that's been stalled for even longer than the EPLA.

Andre said...

"What you forget, Zoobab, is that the EPO and the EPLA are not accountable to just the EU. Switzerland, Iceland, Turkey (to name just three) and, shortly, Norway are all party to the EPC and would all be affected by the EPLA but are not EU countries. Is it right that those counties should be forced to follow EU laws and regulations?"

--> This is exactly the problem, a double governance. When we compare the EU and the EPO which organization is more capable to reflect the whole range of relevant political opinions and which one is a technocratic institutions without any parliamentarian control held captured by patent attorney interests?

"Give up on the "patent lawyers are evil" line/lie cause you're winning no arguments and making no friends."

Say: EPLA put the foxes in charge of the henhouse. EU-EPLA does the same. It is not a matter of "good" or "evil" but of business interests and institutional belief systems.

"The only way to get a wholly EU institution is to give up on the EPC and get the commuity patent going. But that's been stalled for even longer than the EPLA."

Who killed the Community Patent? Was it industry or was it the EPO lobbying against?

And the EPLA-relaunch was nothing but an attempt to stop the ComPat discussions. Munich failed.

ComPat without substantive patent law. Forget it. The real question is how to rewind the EPO and turn it into an EU institutions that obeys the law and is open to democratic control.

Anonymous said...

That last comment leaves me feeling angry and almost physically sick. The EPC was worked out before patent law became politically sexy. Back then, patent law reform could be worked out by experts, by which I mean people who work on Monday for a patent owner and the following Monday for a competitor about to be enjoined by a patent owner. The result is a system that balances fair protection for a patent owner with a fair amount of legal certainty for the public (impeded by the patent). And the EPC worked very well, till the politicians started getting in on the act. Since that time, the beautiful elegance of our European system has suffered. The only point where the ignorant bystanders are right is about the phenomenon of "creep" whereby ever more business method claims get through. But Robin Jacob has shown how to deal with that: just follow the words of the Convention, which from the 1978 outset forbade patents on business methods and computer programs. If the EPO TBA wants to, it can creep back even now, to Robin Jacob's line, and what the 1978 EPC commands. Any more of this "political control" rubbish and Europe will end up with a patent system as screwed up as the American one. These days, every ignorant bystander thinks that his useless viewpoint is as much worth as somebody like Robin Jacob who has devoted his entire working life to doing justice between rights owners and those who own businesses shut down by patent owners. Those who do understand the issues have a duty to speak up, to help the public come to a properly informed view.

Andre said...

"Why an EU solution is neither necessary or desirable"

--> Sir Robin discusses the old model which involves a strong role of the ECJ.

Substantive patent law was originally made by parliament but today parliament is disengaged. We saw it in the struggle over software patents. A technocratic elite armed itself against any political input that challenged the institutional practice and used its sophistic dogmatic interpretations to deceive the legislator. Just think of phrases as "person skilled in the art" and what a politician or a "person working in the profession" is made to believe it means. It is a legal fiction with a certain purpose. Similarly the "inventive step"/obviousness test has a very limited general clause capability in the examination process and it would be a complete failure to build the whole examination process on that base (cmp. the US reform debate), almost as stupid as using "evilness" as a base of criminal law.


It is clear that a judicial independence declaration of the EPO, that is EPLA would leave no room for parliament input anymore. But here a problem ermerged: The debate over biopatents demonstrated the wide variety of political, religious and economical views. It is very simple: How can these views be taken into account by a judge? Is he competent to judge economic matters? I doubt so. Substantive patent law and its reform is a matter for the legislator. From an economist perspective the patent system is just an incentive system. But it got a life of its own. When the scope was expanded by TBA interpretation no reasonable economical evidence was provided. And this is crucial: when you apply the patent system to other fields (than real inventions) you need to provide empirical estimates that an interference into the Free market is justified, e.g. because a market without a patent system would lead to suboptimal performance or market failure. However, the patent religion as I want to call it is immune against falsification, the burden of proof is reversed. What makes accountancy, methods of story telling etc. so special to justify an exclusion of patent law.

"Any more of this "political control" rubbish and Europe will end up with a patent system as screwed up as the American one."

The CAFC lead to a situation where annually Congress convenes to reform patent law but has no means anymore as all the dogmatic instruments to finetune the patent system were rendered useless by case law. EPLA is a European CAFC. It is not political control that introduced the massive changes to the US situation.

As of EPLAW I want to point out that their Venice Judges lobbying program is sponsored by Munich. It is alarming that an institution abuses judges to influence the political process and participates in lobbying legislators. Lobbying parliament is no legitimate role for the EPO and needs to stop. It is an indication of the lack of democratic oversight.

Anonymous said...

See. By that last contribution Andre makes himself ridiculous. It is as Robin Jacob writes: political commentators have their heads in the clouds, miles away from the coal face, where rights are duly balanced, between those who innovate and those who are blocked by the patents of the innovators. Andre now has two demons in his sights, the concept of obviousness and the concept of the person skilled in the art. But they aren't demons, just well-behaved servants of a fully functional and fair (although language-wise very expensive) European patent system.

twr57 said...

Actually, what Alexander Pope wrote was:
"For forms of government let fools contest;
Whate'er is best administered is best."

In poetry, as in law, the specific words used are important - if for different reasons.

Anonymous said...

I think you misinterpret what I said: I see the patent process like a machine with certain tests that have a special functionality within the system and a label. The point I wanted to make is that policy makers get deceived because they believe what they read. In the Shoa context "Special treatment" means "mass murder" and with the political control it's like an Eichmann defense of the kind: No, we did care well for the jews, that is why we ensured that they got special treatment.

Or Brigitte Zypries, German minister of Justice, saying that Germany wants "technical judges" as an answer to questions regarding swpat in the EPLA context, that is according to her "judges with technical competence". In reality it means "patent experts" with no real judicial qualification and eligilibility to judicial office as opposed to "legal judges"

In the patent systems we see politicians still saying there are no software patents, there are only patentable "computer-implemented inventions". The debate about "obviousness" is a typical red herring to avoid a meaningful discussion about subject matter/scope.

I agree with you that "obviousness and the concept of the person skilled in the art" have a very special and limited role in the system and it would be a complete failure to make policy makers believe that you can tune the system with these two, because they are not informed about the application of these rules in patent practice. They draw their own conclusions from the "labeling" of the rules. And it would be a complete failure to abuse these tests according to the "popular opinion".

But my core point was that judges are not competent for the real political questions and courts can only decide bipartisan cases. what courts can take into account is very limited. Substantive law must be clear.

--André

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