From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Wednesday, 4 March 2015

Patent trolls still on the menu as industry-backed UPC website launches

Now with a snazzy logo, the UPC
Industry Coalition is here
to stay
In the Unified Patent Court's Arms Race (or Cold War), there seems to be new dedicated UPC websites popping up each week from various firms across Europe and the US.  Yesterday afternoon, another dedicated UPC website launched but this time it came from industry.  The AmeriKat has previously written about the UPC Industry Coalition's UPC activities which mainly came by way of co-signed open letters and media blasts on the hot topics of patent trolls and injunction gaps (herehere and here),  Yesterday, their involvement took on a multimedia dimension with the launch of  their new website dedicated to reinforcing their position on key UPC procedural topics.

With the launch of their website their narrative has not significantly changed - patent trolls and the "injunction gap" are still prominent concerns.  However, the voices have changed.  Although the new slick website is still co-signed by the West Coast behemoths such as Google, Microsoft and Intel, it is European small and medium companies (SMEs) that give voice (literally, by way of a series of videos on the site) to these concerns or the "unnecessary opportunities for abuses in the system", as they put it.    

German Elkamet's Director of Strategic Planning, Martin Deussen, raised the issue of bifurcation and the injunction gap as an aspect which they considered to be "very harmful for European companies in general and particularly so for smaller ones" as a company could face an injunction or damages for the infringement of a patent that has yet to be held to be de facto valid.   These fears are not abstract for Deussen whose current experience of bifurcation in Germany demonstrates the potential risks and abuse in the UPC.  He also voiced concerns where a large company brings an infringement case with a very high value attached, if the court fees are linked to that high value, it could prevent a much smaller company from being able to counterclaim for revocation as the cost of bringing a counterclaim could also be high.  

Don't understand the "injunction gap"?  The UPC Industry Coalition has
a helpful infographic just for you!
Andreas Richstatter of Germany company Adlon, an IT consultancy with a focus on cloud services echoed concerns that the UPC could create an environment for patent trolls and drew from recent experience when they were attacked by a patent troll.  For SMEs, this is no small issue as, in Richstatter's words, they do "not plan legal disputes" as the legal costs "directly lower our revenue".  This risk "will increase even further, especially with the new [bifurcation] procedure".  To avoid the cost of litigation a small company sued by a patent troll may seek to settle an infringement case to avoid high legal costs associated that action and to avoid the costs associated with invalidating the patent.  However, by virtue of the injunction gap "in hindsight it seems, that we actually paid licence fees for a patent that is not even valid."  Richstatter feels that this will restrict the competitiveness of a SME in Europe.  The solution?  To merge infringement and validity actions into one.  

Emil Pot, General Counsel of Belgian biotech firm ActoGeniX also echoed the concern of patent trolls and the UPC.  Pot is concerned that the patent troll situation in the US "will not flourish in the event there is bifurcation".  To avoid a US-style situation, Pot explains that the injunction gap should be "as short as possible".  In Pot's view, when granting remedies, the UPC should act proportionally.  If a company has infringed or is purported to infringe one patent (amongst several) in a product - and assumingly especially if that patent is relatively minor to the function and/or value of the entire product - then the court should be reluctant to issue an injunction instead of damages.  Pierre Demonsant from French company, Plainsware, is also featured in a video testimony.  

The website provides two recommendations to the powers that be (whoever they are nowadays in the murky world of UPC leadership):
1. Validity should be decided before or at the same time as infringement, or the remedy from the injunction decision should be stayed until after the pending validity issue has been decided.  
2.  Judges should have the discretion and direction to consider the proportional harm and fairness to the parties when deciding whether to grant injunctions.
And with that, cue the comments from our learned readers about (i) not being able to change the UPC Agreement from which bifurcation emerges and (ii) the judges already having wide discretion when it comes to granting injunctions.  After she sifts through those comments, the AmeriKat is hoping to see some inventive and creative views on what sort of changes to the rules of procedure and/or judges training there should be to realize industry's recommendations.

In the meantime, the AmeriKat welcomes industry's online voice and presence which has so far, sadly been lacking.  Let's just hope someone is listening.  

6 comments:

Anonymous said...

Validity first and foremost... Yes.

But is that not what the examination process is for?

I have to ask then, what does examination provide?

Gibus said...

Isn't it striking that most testimonies highlighted by AmeriKat are about SMEs delaing with sofwtare or business methods patents?

We were told (by Rapkay and most of European Parliament) that Unitary Patent/UPC would not boost such patents.

Anonymous said...

The alignment against software and business method patents is not an accident - and it has nothing at all to do with those categories of innovation per se.

The meme of "Troll" - which applies across the board and is NOT limited to software and business methods (no matter the rhetoric indicating otherwise) - is an easy meme to use. It is propaganda pure and simple, and as such will never be "off the menu."

Never.

One only has to look to the summer of 2014 in the US political scene. The White House publishes a heavy political piece re "Trolls" and not two months later, an independent agency of the same government, using data from a "Troll"-friendly source comes out and quashes the notion that "Trolls" are to blame.

But would such an objective piece put an end to the hysteria?

Of course not.

The battle continues. Whatever means necessary.

Anonymous said...

How do German SMEs cope with the "injunction gap?"

If it is a problem for German SMEs, why has it not been sorted?

Anonymous said...

Perhaps Germans are used to domestic patents that have been subjected to rigorous examination, and therefore have a high presumption of validity. The same used to be prima facie true of EP patents in the pre-Batistelli era, but things may become different under the new target-driven arrangements if previous threads on this blog are anything to go by.

Paul Kemp said...

There appear to be some misconceptions about the examination process at the EPO and elsewhere. The EPO examination is rigorous, probably more so than anywhere else including Germany. However it is limited by budget, the expertise available to the EPO examiners involved, and the evidence available to them. Opposition, or the somewhat similar process of revocation in court, will usually be driven by much larger budgets, resource experts in the technical field, and evidence which may not have been available to the EPO. The judge(s)in a court are likely to be less technically expert than the EPO examiners. This allows a court to explore flaws in a patent grant not evident to the EPO.
It is of considerably greater concern that the UPC has discretion to impose an injunction where infringement has been found. The injunction is generally a far greater deterrent to infringers than the threat of damages. If exercised leniently this will devalue patents for every stakeholder and may make the UPC an unattractive tribunal.

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