Intellectual Property Office, the IP Federation, and the Chartered Institute of Patent Attorneys.
The event was somewhat sparsely attended in person at the venue; doubtless many were availing themselves of the webinar option to watch from their office/sitting room/local hostelry. But if you have missed it, never fear, because the video of it can be seen here. If you are interested in responding to the consultation in particular, it is definitely worth a watch.
Timing of UK Implementation of the UPC
But first, a digression, which may be of more general interest than the specifics of the particular consultation. The IPKat, ever eager to seek news for his dear readers, took the opportunity to ask whether there was any truth in the speculation that has appeared repeatedly in comments on this blog and elsewhere that the current UK Government might delay ratification of the UPC Agreement until after the UK Referendum on membership of the EU, which is not scheduled until 2017. The Intellectual Property Office, as it turns out, has an answer prepared for this question, and the IPKat is delighted to share it with you.
EU Referendum question
The Government is committed to this project and wants the UK to be part of a European patent system that supports growth and fosters innovation. The Prime Minister was personally involved in the negotiations on the Unitary Patent regulations and the UPC Agreement and the UK is taking an active role in the current work to implement the new system.
These is still work to be done before the UK can ratify the Agreement, and I am committed to pressing ahead with this. It is the Government’s intention for our domestic preparations to be completed by Spring 2016.
So, while the answer is veiled in non-specifics, and it is not clear what "domestic preparations to be completed" covers, this moggy believes that the IPO is stating that the UK Government intends to ratify the agreement (which will include enacting the requisite secondary legislation to achieve the necessary amendments to national law) by Spring 2016. In any case, there is no intention to delay until after the Referendum.
Back to the main topic. The purpose of the event was to aid thinking on the consultation to enable interested parties to respond. The august panel was as follows:
- Carol Arnold (Chair), President of the IP Federation
- Catriona Hammer, Immediate Past President, CIPA
- Janis Makarewich-Hall, Head of UPC Taskforce, UKIPO
- Tracey Webb, UKIPO Lead, UPC Fee negotiations
- Mr Justice Birss
- Kevin Mooney, Simmons & Simmons
- Alan Johnson, Bristows
- Richard Vary, Nokia
Topic 1 - the structure (Kevin Mooney)
The structure was set out (see previous post for an overview). Issues on which interested parties might like to comment are:
- Timing issues for the value based fees - the court fees are to be paid in advance, but the value will not be known at the very beginning
- Guidelines are being developed on the assessment of the value for the value based fee; these are not yet published but may be in due course; the main intention is that the case is valued on a reasonable royalty basis, and that the valuation should relate to the whole action.
- There is a value based fee for infringement action AND for an application to determine damages - does this amount to a double payment of a value-based fee?
- There is no value based fee for revocation or counterclaim for revocation; this was because many felt that to pay a large fee to simply defend oneself from an invalid patent was unjust. But is it right that there should be a value based fee for infringement but not for revocation?
To finally end a point raised in comments on this blog, this Kat sought and received clarity that under the currently proposed Rules of Procedure of the UPC, if a defendant to a patent litigation does not file a counterclaim for revocation and pay the Court fee (between €11,000 and €20,000), then they may not plead that they do not infringe because the patent is invalid.
It was pointed out in the questions that the fees are set to enable the Court to be self-financing; however the draft budget for the Court is not published (nor apparently is is likely to be), so users (and responders to the consultation) cannot see what are the financial assumptions underlying the level of court fees.
Topic 2 - SME support (Mr Justice Birss)
The consultation proposes two fee structures, one in which there is a reduction of fees to reward certain behaviours such as use of a single judge or early settlement, and one in which there are specific discounts for SMEs, micro-entities, non-profit organisations, universities and public research organisations. It seemed generally agreed that the first proposal did not specifically help SMEs, and some questioned whether Universities, some of which are wealthy and litigious, should benefit from any reduction.
It was pointed out that any fee reduction for some entities was effectively subsidised by the other users of the system, since the Court is expected to be self financing with the court fees as its only source of income.
Topic 3 - opt-out fee (Richard Vary)
Topic 4 - Recoverable costs (Alan Johnson)
The recoverable costs include legal representation, court fees, and costs incurred in court proceedings (eg simultaneous interpretation, witnesses). The table of the cap on recoverable costs as currently proposed however only relates to the representation element of this, and it appears that court fees etc are proposed to be recoverable on top of this. (This Kat would like to apologise if his question, which supposed that the cap applied to the total recoverable costs, caused confusion; however it appears that many present shared his misunderstanding, so it is perhaps as well that the matter was aired).
There are issues if there are multiple defendants - if they win do they all get their costs? If the patentee wins, do they get the capped amount, the payment to be shared between all defendants?
It is also unclear whether the "value of action" is to be necessarily the same as that assessed for the value based fee. Should it be? It is also unclear whether it includes VAT, and what would happen if one party is registered for VAT and another not, which would be even more problematic when the parties are in different countries.
It was pointed out in questions that there is a question as to whether the cap on recoverable costs is compatible with the Enforcement Directive, and there is currently a reference to the CJEU on this point (C57/15).
So, dear readers, there are four main issues. Of course, you may respond to the consultation on any issue, not just these ones. If you would like to know more, probably best to watch the recording of the event. And as ever, if you wish to comment here, then you are most welcome.