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Monday, 20 April 2015

The Unitary Patent Package: a client walks into a patent attorney's office

"Come in", called the patent attorney
Picture the scene: a bright, comfortable yet functional office in a modern block at the centre of Anytown, England. A patent attorney sits behind his desk, awaiting the arrival of a potential new client.  The door knocks. Swiftly checking that all is in order, he clears his throat, adjusts his tie and practises his best "how-can-I-help-you?" welcome. "Come in!" he calls.  The door opens. In walks an inventor, brandishing his iPad,* full of eager expectation and anticipation of the joys of a shiny, new and totally affordable patent [*other models of tablet computer are available] "How may I help you?" asks the patent attorney. The ensuing dialogue is recorded below:
Client: [Confidently] I would like one of those new unitary patents I have read about.  I hear they will be only a fraction of the cost of the old ones.

Patent attorney: you would think so, wouldn't you.  But sorry, no -- the cost up to grant will be exactly the same.

Client: well, it says here that the cost will be a single payment of 5,000 euros. So perhaps there are no renewal fees, then? 
Patent attorney: er, no. There will still be renewal fees paid every year. In fact the European Patent Office plans to apply them even earlier than some countries do at the moment. 
Client: [now a little less confidently] well, at least the renewal fees will be much cheaper than for a European patent, surely. 
Patent attorney: well, it depends. If you currently validate your European patent in only the largest countries -- United Kingdom, France, Germany, Spain and Italy -- the unitary patent will be more expensive. According to the current proposal from the EPO, the level of renewal fees will be pegged to the level of four or five countries which participate in the unitary patent system. However, Spain and Italy will not be in the system. This means that if you want patent protection there too, you will have to pay renewal fees there separately. And the unitary patent renewal fees will be higher than the sum of UK, France and Germany currently. 
Client: so is the unitary patent system ever cheaper? 
Patent attorney: yes, if you currently validate your European patent in all available states, then the renewals fees for the unitary patent will be significantly cheaper. 
Client: a fraction of the cost? 
Patent attorney: [thinking to himself how strange it is that people say "a fraction of the cost" when they mean something really cheap, forgetting that there are very large fractions too ...] well, I wouldn't quite go that far. 38 countries have signed up to the European Patent Convention.  The unitary patent will apply, as things currently stand, to at most 25 of them, but in the early years it could be as few as 13.  So you will effectively get from 13 to 25 countries for the price of 4 or 5.  But you will still have to pay for between 13 and 25 countries that are not (yet) in the unitary patent system, either because they are not EU Member States, or they did not yet ratify the agreement. 
Client: it says that the 5,000 Euros is a "single payable fee". This must surely mean that there will be no more messing around with a filing fee, search fee, designation fee, examination fee, grant fee? 
Patent attorney: still no, I am afraid.  The pre-grant procedure is identical to the current European patent system, so you pay the same fees up to grant, at the same time and under the same conditions as currently. 
Client: [more in hope than in belief] but surely they are abolishing the excess pages fees and the excess claims fees -- I really hate paying those. 
Patent attorney: no, those are staying too. 
Client: [increasingly bewildered] so what is the "lessened financial and administrative burden" that I read about?

Patent attorney: [who has absolutely no idea] I have absolutely no idea. 
Client: oh, that’s a shame.  In that case, why don't I just not bother with a European patent and go for one of those American patents instead, because I hear they’re traditionally a good alternative. 
Patent attorney:  well, that really wouldn't be a good a idea because then you would have no patent protection in Europe, which is where you told me 70% of your business is.  You really need both.
Client: it says that the Unitary Patent Package will be good for SMEs, like my company.  From what you have said, I am struggling to see it. 
Patent attorney: so am I.  In fact, the economic analysis undertaken of the Unitary Patent Package by Poland concluded that the Unitary Patent would be bad for Poland, primarily because it would disadvantage Polish businesses by hugely increasing the number of patent rights owned by foreign companies that would be extant in Poland. That logic would appear to apply generally, and especially for SMEs.

Client: does it help European businesses at all? 
Patent attorney: [sadly shaking his head] well, as far as I can see, any benefits of the system apply equally to non-European companies, but the disadvantages will disproportionately affect European ones, particularly the potential rise in third party patent rights that they have to consider, and especially in the countries where fewer European patents are currently validated. 
Client: [looks again at his iPad dubiously] this piece does not seem very accurate, but it is on the website of the European Commission.  Aren't they the people who put forward this legislation in the first place? 
Patent attorney: yes.
Client: well, shouldn't their information be more trustworthy? 
Patent attorney: you'd think, wouldn't you.  But on the Unitary Patent Package it seems not. 
Client: anyway, do I have to use the unitary patent system to get access to the Unified Patent Court?
Patent attorney: no, the Unified Patent Court will have jurisdiction over classical European patents as well, unless you opt your patent out of its jurisdiction.  Even if you don't opt out, jurisdiction will be shared with national courts for a transitional period that could be quite long. 
Client: it says here that the Unified Patent Court has clear jurisdiction over infringement disputes. So it is a single court then? 
Patent attorney: [wondering how much time he'd need in order to give a full answer to that question, and how he could ever bill for giving it ...] well, no actually it is quite complicated.  There is a central division with three sections, one each in Paris, Munich and London, and as many local or regional divisions as member countries, or groups of them, want to set up.

Client: well surely I would only ever get sued in my local division? 
Patent attorney: no actually.  If you sell products abroad, a patentee could sue you in the local division where the alleged infringement occurred. 
Client: but at least the language of proceedings would be English?
Patent attorney: no, it might be the language of the country of the local division or the language of the patent.

Client: oh dear, that sounds worrying.  But litigation at the Unitary Patent Court will be cheaper than European patent litigation currently? 
Patent attorney: it is a bit early to say yet.  We don't even know the level of the court fees.  It will certainly be cheaper than parallel litigation in lots of countries. But probably not cheaper than a single local litigation. 
Client: [beginning to clutch at straws] well can I still use the IPEC?  I do like the costs cap that applies there. 
Patent attorney: you will still be able to use the IPEC for classical European patents during the transitional period, and opted out patents, yes, but not otherwise.

Client: will the Unified Patent Court operate a costs cap? 
Patent attorney: well, the current rules of procedure envisage a "scale of recoverable costs which shall set ceilings for such costs by reference to the value of the dispute", so something similar, yes. 
Client: [fighting back the tears and almost wishing he wasn't an inventor after all] well I have to say that this is all much more complicated than I had hoped from what I read, and I am rather disappointed.  But thank you for explaining it to me. 
Patent attorney: [fighting back the tears and almost wishing he was a Patent Examiner after all] you are welcome.

18 comments:

Anonymous said...

Spot on. I have had this conversation several times, nearly verbatim.

Anonymous said...

Brilliant! Well done, that man!

Anonymous said...

I think the Kats have been bugging my office.

Barbara Cookson said...
This comment has been removed by the author.
Anonymous said...

[i]A fraction of the cost would by an average consumer or Politician mean A fraction with a numerator of 1. In this case, the largest fraction you can have is a half all the other fractions of the costs would be smaller than that. Therefore, it is entirely reasonable your client to expect that something at a fraction of the cost would be at least half priced. Clear you for a patent agent a construction of a possible fraction is 999/1000[/i]

???

Anonymous said...

Dear Darren, the sad thing is that your blog post should not be tagged "satire".

MaxDrei said...

Brilliant.

It is a small world. Any change in patent law in the USA is, we are always told, expressly to help the little guy, the plucky individual inventor and the vital Start-Up companies. Yet all can see that every change in the law is lobbyist-propelled, to give the large multi-nationals a leg-up, over the little people.

There is a lack of transparency in mainland Europe, which makes lobbying so quietly effective. We cannot ever know of course, but I bet there is by now a deal more lobbying in Brussels and Berlin than inside the Beltway.

Old Man said...

Absolutely brilliant!!

What the Commission does not seem to realise is that the Unitary Patent will open the door to non-European patent owners, as it will be much easier to enforce the patents.
If even there years ago the number of applications from Europe was about the same level as the non-European ones, the balance has shifted in favour of the non-European ones with an increasing trend.
Politicians should think twice about promoting things which could become a disadvantage to their constituencies, but they are too proud of their importance and think they know it better.
Let's see what the 5th of may will bring, but after the very political plea of the AG, I doubt that the CeuJ will do much.

Anonymous said...

Darren - you forgot to include the part of the conversation where the inventor asks about how he can ensure that he will be free to sell his product in the UK. It is in respect of clearance opinions where some of the biggest additional costs generated by the UP package will be seen.

MaxDrei said...

Good comments, from Old Man on non-domestic filers and from an anonymous on clearance checks.

Recall the Community Design Patent. The pols were enthralled how cheap and potent, quick and easy it should be, naively supposing that only domestic industry would apply to OHIM for registration rights, and would then use their registered rights to keep Johnny Foreigner out of Europe. Did they listen, when the specialists pointed out to them that the opposite would happen?

Of course OHIM rights are so narrow that you are clear if you don't copy. But that is not the case with the broader claims of the utility patents issued by the EPO.

Nails in coffins, anybody?

Ugly American said...

Barbara Cookson,

Your world of fractions with only a numerator of one is an excessively narrow view.

The rest of the fraction world rejects that view.

Quite in fact, fractions abound alongside and with full ordinal numbers.

While exmples are typically given of fractional numbers less than one, the definition is not so constrained: a numerical quantity that is not a whole number.

3 3/4 is a fraction.

Ugly American said...

MaxDrei mentions "lack of transparency" and seemingly implies that this is not an issue in the US

And while there is a recent episode in the US that shows that the system here is capable of responding to a "lack of transparency" - the SAWS incident - it would be a grievous error to think that political machinations are fully visible here.

They are not.

It was just over a year ago that then interim director Lee hosted - without any records of exactly who, or the content of the meetings - closed door sessions with "constituents," which followed closely an unprompted "anti-Troll" announcement featuring Google-backed software.

While a few voices noted this publicly, most went about their daily concerns without batting an eye.

Obama - no matter what you feel about his policies - has set back to back records for having the LEAST transparent administration on record.

Again, a few voices have brought this up in the patent "ecosystem," but by and large this too is greeted with a mute expression of seemingly disinterest.

I am reminded of the quote from several different people, but this version is the one chosen today:

"History will have to record that the greatest tragedy of this period of social transition was not the strident clamor of the bad people, but the appalling silence of the good people."

Martin Luther King, Jr.

(for those historically inclined, I offer this link: http://quoteinvestigator.com/2010/12/04/good-men-do/ )

Anonymous said...

Darren is of course spot on here and voices in an amusing and illustrative way what a lot of people have been saying. My own fear was and remains that the UP will be too expensive to be attractive, and without a strong take up of the UP, the UPC could be a venue primarily for NPE litigation in the short term. Other litigation may well remain in national courts, both where there are opt outs and through other forum choice, especially if the costs of using the UPC are not attractive (and there much will depend on the court fees, which we don't know yet but could be significant if it is to be self financing..). People will look at the cost/benefit of the UPC vs national court route for sure. And if that happens, the UPC could remain rather idle for a long time. Alas whenever someone pipes up to point out these concerns, we get the usual political - shall we say nonsense? - about it all being cheaper, better for SMEs, better for Europe, "everyone said the EPO would fail", supported by soundbite cost savings that are based on extreme situations only. I hope I'm wrong in all of this but with the Commission and others seemingly unwilling to talk about the real world, I do wonder. Meanwhile, we must continue to prepare...

Meldrew said...

No mention of the cost of validating in 13-25 countries.

The reason patentees are selective in their validations is that they have to be selective.

Sorting participating states by GDP, DE+FR+GB amount to about 2/3 of the GDP of the participating states and are London Agreement countries with no translation costs. Next is NL accounting for about 6% of participating state GDP. To add NL gets a slightly bigger coverage but with a significant cost. Each country added adds to the cost (sometimes by a lot) but with progressively less added benefit.

In contrast, the unitary patent will require just the filing of a translation (which you will need anyway if you want Italy or Spain).

Renewal fees are important, but unless the fees chosen are too high (which the current proposals are) the unitary patent will present a compelling case to many patentees.

I agree that users of the unitary patent may largely be non-European in the early years, since they will be more remote from established European practitioners who are likely to be conservative in their analysis. Few patent attorneys are encouraged to be adventurous.



Anonymous said...

Pseudonym is TANGO.

The unitary patent will be handled by the EPO. At the same time a production increase of 15% out of thin air and other measured of the Battistelli regime will lead to a lowering in quality, as any examiner will confirm if he or she dares to.
EPO annual report states:
* two thirds of applicants are from abroad
* two thirds of applicants are big industry
So the question is: Who in an SME dominated industy as we have it in Europe will profit.

Note also Battistelli is working closely and eclusively together with Google on translation. yet, Google is just being investigated by the EU.

TANGO

Anonymous said...

An Inventor says..

To understand the Unitary Patent, you have to be a genius - or French.

Anonymous said...

Could anonymous of Wednesday, 22 April 2015 at 21:37:00 BST be a little bit more specific about his comment on the French?

G said...

The Labour Party or the Conservative Party have already taken any public position on the ratification of the agreement?

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