For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 2 December 2011

A "done deal on EU patent", but what is going on with the Unified Patent Court?

The AmeriKat trying to get better, but the pesky
Unified Court keeps waking her up...
The AmeriKat is currently off duty, having been struck down by acute tonsillitis. Gargling paracetamol and saltwater while bracing herself for the horror of examining the status of her tonsils in the mirror has zapped the energy out of her. However, the AmeriKat’s sense of duty towards her adopted country has summoned her remaining strength to write, yet again, about the Unified Patent Court (previous posts on its location here and Professor Sir Robin Jacob’s specific criticism here). 


Yesterday, the European Parliament’s Legal Affairs Committee and Council presidency negotiators approved the latest draft agreement (whichever one that is), on which a voted will be taken on 19 and 20 December 2011. Allegedly, the MEPs adapted the regime to address small firms’ needs. The press release, worryingly entitled “Done deal on the EU patent?” stated that
Bernhard Rapkay, D-DE
“Parliament's rapporteurs struck a political agreement with the Polish Presidency of the Council on the three proposals (unitary patent, language regime and unified patent court) that form the "EU patent package". The agreement will have now to be confirmed by both the Parliament (after a vote in committee) and the Council. The regulation should enter into force in 2014” [a clear date which was apparently “against Council reservations” according to Rapporteur Bernhard Rapkay (D-DE), who is charge of the unitary patent protection element of the agreement:-see draft Committee Report here]. 
Raffaele Baldassarre - EPP - IT
The legislation establishing the unitary patent protection system largely reflects the Commission’s proposal. Small firms are touted to benefit from reduced costs [“How?”, says the AmeriKat] and a “sound system for distributing patent renewal fees [“You don’t know what you are getting into”, says the AmeriKat, as she reminds everyone about problems with distributing patent fees in the U.S. This whole agreement is being rushed in so quickly the AmeriKat is sure that no one has really thought through the bureaucracy and politics involved in distribution of patent renewal fees on a European-wide basis]. The EU patents would be made available in German, English and French ['German' is alphabetically first, in German] but, according to Rapporteur Raffaele Baldassarre (EPP, IT) who is in charge of the translation arrangements, during “a transitional period a second full translation into English will be obligatory” (draft Committee Report here).

According to the press release, “an international agreement” – -which it now is, given that the EU is no longer a signatory, is
“currently being negotiated by Member States participating in the procedure to create a unified patent court so as to reduce costs and uncertainty as to the law due to differing national interpretations.” 
Klaus-Heiner Lehne
According to the press release, the Legal Affairs Committee’s chair and rapporteur for the agreement on the unified patent court (draft Committee Reports here and here), Mr Klaus-Heiner Lehne, “made sure that the litigation system is efficient, by giving it a decentralized structure, clear procedural rules and judges selected for their competence.” Mr. Lehne, who studied law and physics in Düsseldorf and is a partner at Taylor Wessing in Dusseldorf (here), also stated:
"In 2011, when the proposal was first put forward, it was clear it was a key measure to be adopted. Today's agreement represents in this sense a great success, also due to Parliament's very constructive approach. We had to ensure not only the political consistency of the outcome, but also its legal coherence: the negotiations ended in a positive way in all these aspects.” 
Over the past several weeks the AmeriKat has heard that “The court is definitely going to be in X” applied to no less than 14 different locations. But who is even in the running? The only country to have reportedly put in a “bid” to host the court is Germany (see previous post on Germany and the unified patent). The AmeriKat has spoken to numerous people about this over the past month from all over Europe, but no one really knows what is going on with either the draft agreement or the location of the court. What exactly is the procedure for Member States submitting a bid? Besides the minimal statements about the host in the Draft Agreement and Guidance, what criteria does the host have to meet?  Who is judging this and who ultimately gets to decide?  Like everything, is it ultimately just a political compromise? What is the timeline -–not just for the location of the court but for the entire agreement? In short, what is going? 


Pigs may like mud, but Kats don't -
they prefer things to be clear and transparent
Unable to get out of bed, the AmeriKat has devoted some time trying to see if the European Union’s numerous websites can answer these questions. Four hours of searching later, she is none the wiser.  The AmeriKat and IPKat have previously written about the lack of transparency in the EU, and again, she encounters the same regarding the bidding process of the unified patent court. Why is there such a lack of transparency over this point? Can anyone from the Commission point the Kat to the procedure, timeline and/or documents? If so many half-baked measures of critical importance to national and European intellectual property litigation are going to be carelessly rushed through EU hurdles, it is only right that the public and the practitioners whom it affects can easily know exactly what is going on.


The only thing anyone knows and can agree on is that the Member States are running out of time to put in a bid. Given that, according to the Polish Presidency's Guidance, Contracting Member States can be expected to contribute together “€ 4,8m in 2015, €7,3m in 2016, €8,7m in 2017, €12m in 2018 and €15m in 2019” for the operation of the Unified Patent Court, Her Majesty’s Government (and you, UK readers) need to be taking note. Indeed, this is something that the Scrutiny Committee should be reporting on (here).  According to the same Guidance (paragraph 11), the Presidency considers that Member States should be to arrive at a political agreement during the Competitiveness Council meeting on 5 December 2011 "despite the fact that some issues of political importance could be left to be agreed at a later stage, but before the signature of the Agreement" ["Like the location of the court", says the AmeriKat] .  The Presidency plans that the initialling ceremony taking place in Warsaw on 22 December 2011. 


 Time is limited, but the game's not up yet ... 


The AmeriKat will now collapse back in bed. While she is recuperating, she hopes that readers will take up the baton. You may not support London as being a location for the Central Division or Appeal Court -- that's a matter for you to decide, though the AmeriKat believes the case in favour is strong -- but every reader should support the need for greater transparency and debate on the legislation and procedures that may soon change patent litigation forever, but not necessarily for better.

14 comments:

Anonymous said...

Lehne is having his revenge over the anti-software patent hippies.

A central patent court will clarify that software patents are valid in the EU.

Anonymous said...

Don't be so optimistic, Anon@10.24! (or are you being pessimistic?). Under current arrangements, anything the central court tries to clarify will be appealed to the CJEU, whose decisions on IP have been so universally applauded.

Anonymous said...

The word on the street is that HMG has been convinced by the campaign for the central court to come to London, and will make a bid (at any moment). Check with Ladbroke's for the odds of success.

Anonymous said...

There are local, regional and central court locations up for grabs, and apparently they will be spread around, so plenty of chance for a silver or bronze medal too. No-one will go away empty handed...

Anonymous said...

No-one will go away empty handed...

Except Spain and Italy.

Anonymous said...

We should get our bid in now to host one of Germany's regional patent courts.

Steve Peers said...

There has never been a formal or rational bidding process for any EU agency or body. Unfortunately, I expect that Eurocrats will presume that the Amerikat's suggestion to have one in this case was meant to be ironic. So there is no lack of transparency here, because nothing is being hidden. To be fair, the degree of transparency regarding the patent legislation is above average, and the degree of transparency regarding the patent litigation convention is far, far above average for treaties between EU Member States (try digging up the drafting history of the treaty establishing the European Stabilisation Mechanism, for comparison).

I agree that the text of agreements between the EU and the Council - and not just in this case - really ought to be made available immediately, but the wait until the text of the agreed measures are released will likely not be longer than a few days. Then we can see what this supposed date of 2014 actually means.

Back to the location of the court. The UK government has been vaguely suggesting that it might not try that hard after all to repatriate some powers from the EU concerning labour law. Could the quid pro quo for this - and, in general, for approving a Treaty amendment to support the euro - be the location of the patent court in London?

Or conversely, the Germans might get the court as a quid pro quo for accepting Eurobonds or the greater role of the ECB saving the euro?

By the way, the decisions of the central court could not be 'appealed' to the ECJ. It could either refer questions itself to the ECJ, or the lower divisions of the patent court could, or a national court seized with an action which still falls within its jurisdiction or an action concerning the liability of the patent court for breaching EU law could ask the ECJ (see Article 14c of the agreement) whether the patent court had got an EU law issue wrong.

Anonymous said...

The joke highlighted in the last comment is that Germany may get the court for agreeing to the Eurozone doing something to sort itself out in a way that affects all Eurozone members not just itself. Self-appointed leaders of the gang. Now is not the time for Europe to be agreeing on anything like the single patent and unitary court because every single decision will made to placate Germany as quid pro quos for agreeing to solve a problem specifically of their own making - the Eurozone.

Let Germany sort out this problem using the huge wealth they have created for themselves on the back of the single currency and then we can all get back to business as normal with quid pro quos on their usual, lesser, footing.

The bargaining power of the UK, France, etc is currently zilch.

Anonymous said...

Peter, of course you're right about there being no 'appeal'. But points of 'European law' can (and will) be referred to CJEU. As long as Arts 6-8 remain in the Regulation, infringement is a matter of European law (why infringement only, and not validity? - bifurcation again?). The CJEU will a) slow matters down b) spread muddle and uncertainty. Please not!

Anonymous said...

For 'Peter' read 'Steve'. Sorry. This is an obvious mistake, in the sense that it is immediately evident that nothing else could have been intended than what is offered as correction.

Steve Peers said...

1) Anonymous at 3.58 -

But the crucial difference between an appeal and a reference is that the referring court decides whether to make a reference on EU law to the Court of Justice. Of course, final courts (including, in future, the patent court of appeal) are obliged to make references, but that is subject to the 'acte claire' exception. The patent court of appeal might decide to invoke this principle. Anyway, Arts. 6-8 of the Regulation will only be applicable as regards unitary patents, so there would be limited reasons to send references to the Court of Justice as regards European patents.

1) Anonymous at 2.48 -

Depending how the negotiation goes, and whether the location of the patent court is put into play at all, it could either be compensation for a German concession or compensation for a UK concession. I agree that the first scenario is objectionable in principle because saving the euro is in the Germans' own interest - although at the moment it seems that Mrs. Merkel is either stark raving mad or the world's best poker player.

But if the scenario of a concession to the UK plays out, we should hardly reject this concession on grounds of principle. If the UK does not take the opportunity to obtain the patent court (or some part of it) as a quid pro quo for agreeing to the treaty changes, then an opportunity this good may not present itself in future. Since they want a Treaty change, and we have the power to deny it to them, then our bargaining opportunity is not 'zilch' - although it is reduced by the prospect of the eurozone members simply signing a treaty among themselves, and further reduced because the government has adopted the strategy of blaming the British economy's problems on the eurozone, thereby putting itself in the position of appearing to damage the British economy if it does not agree to a Treaty change. The fact that the Germans (and the other eurozone members) have put themselves in this position is irrelevant - it is still a chance, however limited, to press for something in return (whether we should instead try to negotiate something else, like a repatriation of some powers, is a different question). We should neither look a gift horse in the mouth, nor cut off our nose to spite our face.

Steve Peers said...

And another thing - there is a later version of the patent court treaty here -

http://register.consilium.europa.eu/pdf/en/11/st16/st16741.en11.pdf

with some later amendments here -

http://register.consilium.europa.eu/pdf/en/11/st17/st17539.en11.pdf

..but of course this is not as good as having the supposedly agreed text available to the public.

Anonymous said...

I'd like to think Merkel is just mad because this isn't playing poker. Germany are sitting on the high ground and all other members of the Eurozone are the ones going to be hit by the flood when it comes. Any concessions over treaty changes from the UK and non-Euro countries needs to be directed at protecting their interests from the Eurozone bloc that will become more poweful (inevitably due to the need for great fiscal union to save their currency). Things like the future of the European IP system and its economic associations will be considered small beer in comparison.

As a concession to Germany, getting the court could easily be one of many dozens of prezzies they will take home in their Christmas stockings.

I would rather the court was chosen based on practicalities together with the need to avoid further centralisation in Munich.

The Euro will eventually fail because the fiscal control of members' budgets that is required will prove unacceptable to the citizens of many states. The required changes to the treaty will probably go through and Britain won't try and block them. Whatever checks and balances are incorporated to protect non-Euro states will also prove ultimately futile. The Euro-bloc will be too dominant, because they will need to vote on all EU matters as one, and this will lead to a loss of members from the EU.

So, by trying to keep everything together (EU and Euro) everything could fall apart. My money is on the EU surviving and the Eurozone breaking up, with many years of severe pain (Germany excluded) in between.

Anonymous said...

I would have thought it more likely that the court would end up in one of the newer EU member states, starting at Poland and working eastwards. Riga would be quite pleasant.

EdT

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