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Sunday, 9 November 2014

Are we there yet? 17th draft of UPC Rules of Procedure welcomed, but more work to do

"If you don't know where you are going,
any road will take you there." said the Cheshire
Cat in Alice in Wonderland but who could
easily have been talking about the UPC.  The car
analogies are a tribute to late Tom Magliozzi of
NPR's Car Talk .
The AmeriKat will miss you, Tom..

An early Christmas has come to devotees of the Unified Patent Court. In advance of the public consultation in Trier, Germany on 26 November 2014, the Rules of Procedure Committee released its 17th Draft of the Rules of Procedure early last week. The draft contained a number of welcomed changes on key issues that have been subject to intense debate and lobbying by industry and professional organizations.

One of the most prominent concerns with the rules was in relation to the so-called “injunction gap”. Where the court decides to bifurcate proceedings, the validity and infringement of the patent is decided separately and, often, at different times with the infringement case normally being decided first. When this happens and an injunction granted, a patentee can prohibit a would-be defendant access to the market. Following the validity decision, it may transpire that the defendant was actually wrongly prevented from entering the market where the patent is held be invalid. However, dependent on the length of this “injunction gap” a defendant could suffer irrecoverable market losses.

The new Rule 40 goes some way to addressing this. A revocation counterclaim that has been bifurcated in circumstances where the infringement action has not been stayed, will be accelerated. The judge rapporteur of the panel hearing the revocation counterclaim in the Central Division “ shall endeavour to set a date for the oral hearing on the revocation action prior to the date of the oral hearing of the infringement action.” The new rule goes a bit further than a mere direction to “accelerate proceedings” (which has been popping up on and off in various drafts and which was considered by some to be unpractical in that the likely busy Central Division could never realistically accelerate proceedings enough to make a difference). However, “shall endeavour” still is not an absolute command. If the Central Division’s diary is busy and the revocation counterclaim cannot be heard, then it is arguable that the judge rapporteur’s “shall endeavour” standard is discharged. So, again, like much of the fate of the UPC, a great deal depends on the identity and quality of the judge’s “endeavours”. Nevertheless, this will likely be considered a win by those groups who have lobbied hard to narrow the “injunction gap” via the Rules of Procedure.

There have been changes to other rules, including making clear that pending proceedings before the UPC or national courts are absolute bars to opting-out and opting back in (i.e. withdrawing opt-outs) to the UPC (still no clarity on the tricky Article 83 issues) (see rules 5.7-5.9), the deletion of Rule 118(2) which gave the court discretion as to whether to order an injunction following judgment and a new Rule 220(2) on procedural appeals.

Readers will recall earlier this year that an industry coalition backed by Goliaths of Silicon Valley, Europe and beyond called into question these issues in an open letter (see AmeriKat post here). So what are their views on the new draft? Well, the news is good. The AmeriKat spoke with Stephen Pattison of ARM, a member of the coalition, shortly after the rules were published and he said that the coalition’s view was that the Preparatory Committee was making good progress in developing a workable procedural framework for the UPC, including in relation to the rules on the language of proceedings (Rule 14) and procedural appeals (Rule 220). On the new wording in Rule 40, Stephen stated that the changes would help:
“limit opportunities for abuse of the European patent system, by requiring that regional or local divisions of the UPC coordinate their proceedings with the Central Division. Under the proposed rules, it will be difficult for unscrupulous patent litigants to take advantage of the “injunction gap” problem by obtaining a quick injunction in the regional/local divisions without having established that the patent in question is valid.”
So for those of us not preparing their Thanksgiving birds on the 26 November 2014, Trier will be the place to be with likely droves of UPC addictees flocking to be heard at the upcoming Rules of Procedure consultation. The AmeriKat understands that members of the industry coalition are hoping to be some of those attendees and will relish the opportunity of outlining other improvements that are needed in the Rules (“What are those?” the AmeriKat wonders). “Well, their invites better not get lost in the post, then”, chides Merpel.

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