For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Tuesday, 27 September 2011

Daniels in the lions' den: can they avert a disaster of Biblical proportions?

Last Friday, while this Kat was at the LIDC Conference in Oxford, he was raging against the monstrous abuse of monopoly which resulted from the laws currently in place to protect the London Olympics and Paralympics in 2012 against anything that might be regarded as a whiff of competition.  Commenting on the (admittedly entertaining and well-presented) talk by the affable, unflappable Farisha Constable, LOCOG Brand Protection Manager, he said this:

"Usually when I, as a great enthusiast for IP rights, speak at a competition law conference, I feel like Daniel being thrown into the lions' den. However today, for once, I feel that I am on the side of the lions and that it is Farisha who is being thrown to them".   
By total coincidence, while the Kat was citing Daniel v Lions at the LIDC Conference, a whole group of Daniels was being cast to the lions the other end of Europe, in the lovely city of Warsaw.  The cause of this was the Academy of European Law's conference, The Future Unified Patent Litigation System in the European Union, "organised in the framework of the Polish EU Presidency of the EU Council" which was billed as providing
"... a platform for discussion on the new draft agreement on a Unified Patent Court presented by the Hungarian Presidency on 14 June 2011".
What, perchance was to be discussed on this platform? The programme explained:
"The objective of the conference is to analyse how issues raised by the Court of Justice of the European Union in its Opinion 1/09 on the previous version of the agreement regarding compatibility with EU law were addressed, as well as to promote an exchange of views between courts and practitioners on the functioning of the European Patent Court".
The event commanded an all-star line-up of speakers.  In case you were wondering, they were
  • Margot Fröhlinger, Director, DG Internal Market and Services, European Commission, Brussels
  • Dr Klaus Grabinski, Federal Supreme Court (Bundesgerichtshof) Karlsruhe
  • Professor Sir Robin Jacob, University College London 
  • Marcin Korolec, Undersecretary of State, Ministry of Economy, Warsaw
  • Eurico Marques dos Reis, Judge of the Court of Appeal, Lisbon
  • Kevin Mooney, Partner and Head of Intellectual Property, Simmons & Simmons, London
  • David Rosenberg, Industry Affairs Manager, Corporate IP Department, GlaxoSmithKline, Brentford
  • Thierry Sueur, Vice President, Intellectual Property and Vice President, European & International Affairs, Air Liquide (tbc)
  • Maciej Szpunar, Undersecretary of State, Ministry of Foreign Affairs, Warsaw
  • Professor Winfried Tilmann, Of Counsel, Hogan Lovells International, Dusseldorf
  • Vincent Tilman, Senior Advisor European Affairs, Eurochambres, Brussels
  • Robert van Peursem, Judge, The Hague District Court
  • Pierre Véron, Avocat, Véron&Associés, Paris
Unbeknownst to the cast, and to the 80 or so participants, there was also an envoy from the Republic of Katland, who sent back this report:
"The purpose of the conference, declared the Polish Minister opening proceedings, was to "look at the Court from the point of view of users - the Judges, lawyers and entrepreneurs". [Is 'entrepreneurs' a euphemism for 'litigants'? If so, the needs of plaintiffs -- who make the decision to go to court -- and defendants, who have little option to go when sued, may reflect different points of view. In any event, why are judges and lawyers listed ahead of the litigants? This reflects a poorly-focused mind-set, say Merpel] Unfortunately, this message had clearly not reached Winfried Tilmann who, speaking next, immediately informed the conference that "there was no political will in Council or in Parliament to re-open [the December 2009] package deal". He concluded with the dark warning that speakers should "resist the temptation to fight old battles". Plainly precisely nothing of consequence was up for discussion in his opinion, which begged the question: what actually was the point of the conference?

A succession of speakers then largely toed the Tilmann line. Unsurprisingly, perhaps, these were led by the German speakers such as Judge Klaus Grabinski. But French support too came from Thierry Sueur. While he sensibly urged that the Court be allowed to decide the language of proceedings, he implored Poland not to be afraid to push the Court agreement through, saying "let's not look for perfection" [Heaven forfend that one should even consider such a thing, adds Merpel. No-one really wants a perfect patent litigation system, do they?].

Then at last, (likening himself to Daniel entering the lions' den) Kevin Mooney pointed out a few of the fundamental flaws in the proposed arrangements, notably that no-one had explained how the Court was supposed to be funded, following withdrawal of the Commission's financial support (so central to the 2009 draft) consequent upon the ECJ's March 2011 opinion.

Following this lead, the touch-paper was well and truly lit by Judge Robert van Peursem, with a typically Dutch piece of plain speaking. Deeply critical of the proposals, he saw no reason to stick with the 2009 Council conclusions, saying it was not just a case of mending some details. He said that the "politicians should start to listen to the users" [If only! They scarcely listen even to one another ...]. Expressing strong support for the "excellent" British "Concerns of Principle" paper [on which click here] and the equivalent Swedish paper, he implored the Commission to "listen to those expert voices sincerely, not politely, or not at all". So strong was his condemnation of the proposals, that he declared that he "would seriously consider to decline to take part in this system as it stands", saying also that he spoke for the majority of his first instance colleagues.

Never a man to be outshone, Sir Robin Jacob described all amendments to the litigation proposals since the EPLA proposal as retrograde, and warned of the dangers of creating the "patent equivalent of the Euro". He said that if he were a user he would certainly opt out.
Noble support for the Daniel cause came next from David Rosenberg, who declared himself a wholehearted supporter of a unitary court, but only if it was better than the present system -- which this was not. He observed that it was important to get it right for innovation, not for politicians. It was not just a political project and if it had to take more time, so be it. This was not a case of following the advice of Macbeth (right) that " If it were done when 'tis done, then 'twere well It were done quickly": That, he pointed out, was said in relation to the killing of a king, whereas for this project, a more apt exhortation would be "when it is done, it should be done right".

So what did Margot Fröhlinger make of all this in her speech? Dishearteningly she said that some aspects of the agreement such as bifurcation and composition of panels "could not be improved". She was "surprised" at the criticism. This envoy from Katland was not alone in his surprise at her surprise. Robert van Peursem pointed out that he had made precisely the same observations at five different conferences [This just goes to show how foolish it is for members of the IP community to believe that their expertise and experience have any value in a world of convenience and expediency]. It was impossible to put any questions to Margot Fröhlinger, however, to ask her if having now heard these criticisms, she would listen, or whether she would follow the Tilmann line. Instead, the subsequent "debate" consisted mainly of a series of attacks on the Daniels by various of the faithful lions. Thierry Sueur described the dissenting speakers as "isolated" (a suggestion strongly rebutted by Robert van Peursem) and astonishingly responded to Sir Robin Jacob's plea not to "do a Euro" by describing the Euro as a "great success". This perhaps summed up the attitude of some: that criticism (no matter how constructive) is quite simply heretical to the political project that the unified court has become, and those heretics deserve to be thrown to the lions.

But it was not all doom and gloom for those who would like to see a good agreement, not just an agreement at any cost. Reassuringly, the German view was far from universally supportive. Speaking from the floor, having curiously been deprived of a speaker's platform, Jochen Pagenberg voiced support for more debate on the issues, including revisiting exclusivity in purely domestic disputes and suggested a transitional period of 15 years or more. Even Margot Fröhlinger appeared to concede that the transitional and opt-out arrangements could in fact be considered further.

Daniel waited patiently to be eaten while the lions debated the benefits of bifurcation and pondered as to whether they should dine alone, in pairs or in panels of three ... 
So what will the next steps be? Almost certainly some decisions will never be overturned. The bifurcated system is here to stay. So too is the panel system of permanent local panels of two local judges and one guest judge. This combination will almost certainly lead to forum-shopping among the divisions of the Court. But other issues may yet be revisited: the transitional arrangements in particular. If improvement here could be negotiated, together with a concession that the Central Division could be used by patentees commencing infringement cases, that would make a considerable difference. Let us hope that the political imperative to do a deal - any deal - does not in Sir Robin Jacob's words leave us in 15 years' time with a system which is more expensive than the present one. Whatever the outcome, however, the Daniels deserve a great deal of thanks for their efforts in Warsaw. The lions certainly know now, if they did not know it before, that they are in for a fight to reach a better agreement".

3 comments:

bosson said...

I am curious as to where can I find this Swedish paper what Judge Robert van Peursem was supportive of.

best,
Jonas Bosson

Anonymous said...

As someone who enjoys working in patent litigation, this blog post have got me really worried. The current proposals for the Unified Court, if implemented in full, would be a disaster for industry in the EU.

This snippet in particular filled me with dread: "So what did Margot Fröhlinger make of all this in her speech? Dishearteningly she said that some aspects of the agreement such as bifurcation and composition of panels "could not be improved"."

The following post has just been left on the PatLit Blog, which sums up why this is such a worry, but it also offers a simple solution to the problem (or an 'improvement' to paraphrase Dr Frohlinger):

"My single biggest concern with the proposed court structure echoes that of Tony Blair; bifurcation, bifurcation, bifurcation.

The German bifurcated system is structurally unfair to defendants, as it does not enable alleged infringers to adequately defend themselves against the assertion of invalid patents. The telecoms and electronics sectors, which are plagued by high numbers of dubious patents, would be in constant danger of having their businesses severely disrupted if German-style bifurcation were permitted under the new Unified Court structure.

It is completely understandable that German lawyers would want to retain the division, as this would inevitably lead to even more cases being started in Germany, but I cannot believe that anyone without a vested interest can honestly defend the bifurcated system. In theory, if the EPO had sufficient resources to ensure that only valid patents were granted, then bifurcation might be justifiable. In reality, however, there are many thousands of highly questionable patents in force in Europe which patentees would be reluctant to assert in jurisdictions which permit revocation counterclaims. With the bifurcated system, there is no such reluctance, and it allows a patentee to take a 'free hit' at a defendant's business. The prospect of having an injunction granted against you, preventing you doing business across the whole of Europe for even a very brief period, must be rather terrifying.

A politically acceptable answer would be to permit bifurcation of infringement and validity only where the parties agree to it. A defendant is, in most cases, unlikely to consent to bifurcation, but the option would still remain if it were genuinely appropriate to the case and fair to all concerned."

Anonymous said...

A video related to the topic

http://www.youtube.com/watch?v=l7GHh5unGfg

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