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, 1 February 2017

INGRES Conference Part I - European Patent Law Developments

On Monday, INGRES, the most active Swiss association of IP practitioners, held its annual conference on European intellectual property law in Zurich (yes, European law - the conference on Swiss IP law is traditionally held in July. And yes, Swiss IP practitioners take a keen interest in developments in European IP law, despite Switzerland not being a member state of the EU).

The morning was entirely dedicated to patent law. Among the esteemed presenters were Klaus Grabinski (Bundesgerichtshof), Petra Schmitz (Member Board of Appeal @ EPO), Stefan Luginbühl (Director, International Legal Affairs @ EPO), Tilman Müller-Stoy (Bardehle Pagenberg) and Dieter Brändle and Tobias Bremi (Swiss Federal Patent Court).
Not the conference location, but the location
for the ski excursion the previous day

Out of the many decisions of the BGH rendered in 2016, Klaus Grabinski chose one of particular relevance for inventive step (X ZR 78/14 - optical element), one concerning a use up period for patent infrining goods (X ZR 114/13 - heat exchanger), and no less than three concerning different aspects of infringement by equivalent means (X ZR 29/15 - Pemetrexed, X ZR 76/14 - v-shaped guiding element, and again X ZR 114/13 - heat exchanger) for a closer look.

On inventive step, the "optical element" (LED) decision held that the choice of a prior art document as "the" closest prior art requires a justification. Such justification is generally found in the motivation to find a solution to the problem to be solved, and not merely in the most common structural features. When a prior art document is a potential "springboard", it is irrelevant that there are other prior art documents that may be equally suitable as starting points for the development that leads to the invention. This struck me as quite close to the EPO approach, with an even greater emphasis on whether the "closest" prior art addresses the same problem as the invention. During the discussion it was pointed out that under the EPO approach, the definition of the problem to be solved changes depending on the closest prior art. Hence it is futile to say that several prior art documents (with different disclosures) are more or less suitable starting points to develop a solution to the same problem, because the problem cannot remain the same. The answer to this was not entirely satisfactory IMHO - essentially, it was argued that the problem to be solved needed to be defined broadly enough to allow several closest prior art documents to be considered.

On the use up period, the BGH explicitly referred to the UK decision Navitaire Inc v EasyJet Airline Co Ltd (No. 2) [2005] EWHC 282 (Ch), [2006] RPC 4 for the proposition that injunctive relief should only be denied if it is "grossly disporportionate". In the specific case, the prohibition to sell convertibles with an "Airscarf" feature (warm air blown around the neck), was not disproportionate. It was made clear that denial of injunctive relief must remain an absolute exception to the rule that the patentee is entitled to injunctive relief. The usual inconveniences of a prohibition are insufficient to justify such an exception. While injunctive relief is not automatic, we are a far way from Ebay v. MercExchange.

Dr. Klaus Grabinski telling it like it is
Petra Schmitz presented on the assignment of the priority right (T 205/14), allowability of undisclosed disclaimers (pending referral before the EBO) and the withdrawal of an appeal after non-payment of a renewal fee (T 1402/13).

The assignment of the priority right led to the most discussion. In T 205/14 the BoA found that the EPC contained no provisions on the requirements for a valid assignment of the priority right, not even a requirement that such assignment must be in writing (against T 62/05). The assignment was exclusively governed by national law. In the case of the assignment of an invention from an employee to the employer, such assignment was governed by the law applicable to the employment law relation, in the specific case Israeli law. The place of filing of the priority application (in the case US) was irrelevant. A number of commentators disagreed with this. There was also disagreement whether the parties could validly choose the law applicable to the assignment of the priority right. In the T 205/14, there was no explicit choice of law, and the BoA did not need to address the issue. Petra Schmitz hinted that there would shortly be a decision that addressed this issue in the case of an assignment outside an employee-employer relationship. The question is of great practical import because the priority right must be validly assigned at the time of filing of the application claiming the priority. One cannot later amend a lacking assignment.

Stefan Luginbühl presented on the latest developments in European patent law, notably the Unitary Patent and Unified Patent Court (UPC). To make it short, nobody's blinking so far, the UPC system is expected to come into force January 2017. Germany's parliament is expected to approve ratification in spring, but the ratification document will not be submitted until the UK has ratified. The preparatory committee has received 840 applications for the positions as judges at the UPC (40% from Germany, 16% each from the UK and France), among them all the well-known patent judges of Europe. It was pointed out during the discussion that the Agreement on a Unified Patent Court contains no exit provision - should the UK actually ratify, it is unclear how it could leave should it want to (or have to) once it is leaving the EU.

Tilman Müller-Stoy gave an outline of the procedural rules of the UPC with a focus on the rules of evidence. Points of discussion were the affidavits and the obligation to produce evidence favouring the other side. Affidavits must be submitted with  a statement of the witness that he is aware of his obligation to tell the truth and of his liability under applicable national law in the event of any breach of this obligation - the consensus being that the applicable law is the law of the place of the local division where the affidavit is submitted, not the law where the witness resides. It is an open question what happens if the law at the place of the local division does not provide for sanctions for false written witness statements because such statements are unknown in the national law. A hearing of the witness in person must be explicitely requested. On the production of evidence, a party may be obliged to disclose evidence in its possession, provided that the requested items of evidence are reasonably specified (R 170.3, 190). The only sanction that can be imposed for non-compliance with a production order seems to be adverse inference. Whether this is a sharp or blunt instrument depends on how this will be handled in practice.


Proof of the pudding said...

"the UPC system is expected to come into force January 2017"

Did you mean December 2017?

Regardless, I am fascinated by the comments on the lack of an exit provision in the UPC. Is it really the case that "pro-UPC" attorneys cannot see the elephant in the room, namely that Article 2b and 2c of the UPCA together make it impossible for the provisions of that Agreement (at least in its current form) to continue to apply to the UK?

Carrying on regardless is only an option if you are prepared to crash and burn at a later date... when those disadvantaged by a UPC judgement inevitably question its enforceability (and/or compliance with EU law). Pretending (or assuming) that everything will be OK therefore amounts to nothing more than a reckless form of wilful blindness.

Mark Schweizer said...

I meant January 2018. January 2017 is definitely wrong.

Observer said...

I fully support Proof of the pudding

Whilst it understandable that UK law firms would like UK to stay in the UPC in spite of Brexit, it is amazing that an official of the EPO comes up with such a stupid statement, implying that UK could stay in the UPC after Brexit.

It should be clear for every sound person that the UPC is intimately linked with the EU and the CJEU. Deleting this essential feature ends up in an intermediate generalisation, and the person skilled in the art receives a different information after the amendment. In other words we are in presence of unallowable added subject-matter.

Wait and see what the CJEU will do then. One does not have to look into a crystal ball to guess: rip it to pieces. And then. All for nothing!

In order to come to the conclusion that UK cannot stay in the UPC after Brexit, you do not even have to have studied law. Just read the text of the UPCA with a will to understand it, not to misunderstand it.

There might not be an exit clause, but the exit is not to be avoided for any EU contracting state leaving the EU. The same applies to all statements to the effect that non-EU member states may join the UPC, once the UK has left the EU. Why not before then? Has anybody ever heard of decision 1/09? All this gobbledygook is wishful thinking at its best!

One could also bet that Germany might not submit the ratification document even if the UK has ratified. I cannot see German politicians gambling with their industry. Bringing into force a legal construction with such a weak foundation is anything but good for non-UK industry in general, and German industry in particular. By the way, what is UK industry? There are less European patent applications from UK (2%) than from Switzerland or the Netherlands (4% each). Lets put things in perspective.

We all know that the President of the EPO wants UK to ratify as quickly as possible and stay in the UPC, but even without wanting to offend a very touchy boss, a more careful way of expression should be expected from an official representative of the EPO.

MaxDrei said...

I think the BGH'S Problem and Solution Approach is flawed, unfair and deflates under pressure. Can we have a comment from a person who litigates at the BGH, about the discrepancy between the EPO's robust, tried and tested Problem and Solution Approach and the dodgy one that the BGH stubbornly clings to?

Can we have a comment what it is in the EPO's Approach that it cannot bring itself to swallow?

Perhaps it is just the impossibility of a real judge of the Supreme Court conceding that a mere Patent Office could out-think his colleague judges at that Supreme Court.

Anonymous said...
This comment has been removed by a blog administrator.
Proof of the pudding said...

The Brexit White Paper makes an interesting read:
"We will bring an end to the jurisdiction of the CJEU in the UK".

So bye bye UK participation in the UPC, then? Or might this not quite mean what it says? The subsequent sentence perhaps gives a clue.

"We will of course continue to honour our international commitments and follow international law".

I guess that one could characterise the UPCA as "international law", and so this perhaps leaves the government with some "wriggle room". However, it will be interesting to see how (if at all) the government manages to "square the circle" where obeying international law (such as the UPCA) requires the CJEU to have jurisdiction in the UK.

Based upon my observations to date of UK politicians, I predict that the mutual incompatibility (with respect to e.g. the UPCA) between the two above-quoted statements will be handled in the usual manner. That is, the government won't bother trying to explain itself. It will just be evasive and change the topic.

The same approach will be used to handle the question of how free trade with the EU can be achieved without submitting to common rules (and the jurisdiction of a court that interprets those rules)... especially as the proposed alternative (a dispute resolution mechanism that does not have direct effect in UK law) is very unlikely to be palatable to the other EU Member States.

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