For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.
Showing posts with label Unified Patent Court. Show all posts
Showing posts with label Unified Patent Court. Show all posts

Sunday, 19 October 2014

Fill in the form, keep your hair: UPC IT Prototype needs your feedback

The AmeriKat's Sunday evening screen
For the AmeriKat, Sunday afternoons are all about scrubbing away the week's frustrations, been and to come, around her flat to the westward drum of Led Zeppelin.  Afterwards, if the siren call of her day job doesn't beckon her, she often curls up with her laptop and paws through the week's IP news.  On a slight variation on the theme today, she has curled up with a hot mug of jasmine moonlight tea to play with the updated version of the UPC's IT prototype.  "Oh, how dull!" you may think to cry.  But, you would be wrong.  After years of posts and commentary, there is finally something concrete you can play with - a UPC prop that makes the system come alive.

Last week, the Kat posted a little section encouraging readers to test out the system.  If you missed it the AmeriKat is here to remind you once more.  With no limit on the number of users testing the system, the UK Intellectual Property Office's UPC Taskforce and those responsible for bringing the IT workstream to life want as many people as possible to test it.  All feedback is welcome - the good, the bad and the ugly. 

We all know that there are differences between European legal traditions and substantive patent law, but there may be possibly even more differences in how we fill out our respective court forms.  How a French patent litigator interprets a direction on a court form to complete certain details will invariably differ from that of a Dutch or Hungarian patent litigator.  These differences came to light during the London workshop on the prototype held two weeks ago.  For example, there was considerable debate about how and when the confidentiality of documents (i.e., evidence) would be dealt with and by whom.  Do the boxes on the form provide enough options for how litigants want to classify the confidentiality levels of their documents?  How are you supposed to assess the value of the claim?  What is the easiest way to upload exhibits so that the court clerks and the judges don't get confused?

What will happen to the AmeriKat if the UPC IT
system doesn't work....
These issues may seem trivial to us now, but the AmeriKat promises that when the system is up and running if there is something not quite right with the IT system and forms, she knows you and your colleagues will be pulling your hair out and throwing your computers off buildings.  Such frustration is likely to surpass even key substantive issues, like no one quite knowing what Article 83 of the Unified Patent Court Agreement really means (and in this respect the AmeriKat is looking to you, European patent judges, to put your heads together at the upcoming Venice conference).  

The UK IPO's UPC Taskforce therefore encourages users to test the system:  
  • in different countries, across Europe and beyond;
  • using different internet browsers and devices (i.e., that means you, iPad and android users); and
  • who are part of teams/firms and will have a single account with multiple users.  This option has been included as a result of direct feedback but the tech wizards need multiple users to test it.
Testers can provide feedback using the feedback application at the bottom-right of the prototype screen.  The current court form is the Statement of Claim form, but there will be others and further iterations so testers are encouraged to check back again whenever they can.  Changes are set out on the front page of the prototype.  The prototype will be open until the end of November 2014.  The next workshop will be in Paris at the end of the month.  

Having played around with the updated version she can see that the IT team have already incorporated many of the comments from the London workshop.  Your feedback will not go into an empty IT abyss.  So be like the AmeriKat  - fill in the form and feedback now, save your hair later.   

Tuesday, 7 October 2014

A test-drive for the Unified Patent Court: Part II

Test-drives can be scary!
Readers will recall that this Kat has had his share of reservations about the Unified Patent Court (UPC) system, which is why he applauded the initiative taken by his friends at Bristows in conducting a real-time test drive of the new system.  The first report on their experience, masterminded by Alan Johnson and Alexandria Palamountain, can be read here.  Now the same adventurers take the story further:
To summarise the story so far, the proceedings kicked off with an application to revoke a patent in the London branch of the JUPC's central division, which itself was something of a surprise to the patentee which had been intending to commence its own infringement action in the London local division. The response to this from the patentee was to make a Rule 19.1(a) objection [under the 16th Draft of the Rules], which -- to save readers scurrying to their Rules -- is a preliminary objection to the jurisdiction and competence of the Court. The hearing of this application was delayed somewhat (about which more later), but took place last month before Judge-Rapporteur Rieu, who (in her day job) is a Member of the Paris Bar working at Bristows. The advocates on each side were two senior associates from the Bristows moot teams, Katie Hutchinson and Claire Phipps-Jones.

The essence of the objection was that the claimant pleaded an intention to rely on certain fact and expert evidence, but had not produced this evidence. It had stated in outline what the evidence would say, and had specifically listed three documents which were “to follow”. Hence it was argued that the claimant had failed to produce the documents referred to in the Statement for revocation in accordance with Rule 13.2 (applied mutatis mutandis under Rule 45), which requires the claimant to supply a copy of each of the documents referred to. Accordingly, it was argued, the Registry should not have accepted the claim, and the claim was therefore not validly filed. The defendant also pointed out that it was quite clear that the claimant had talked to the witnesses and that, three months on, it had still not filed this evidence. Further, it was critical to see the evidence when in part it related to an allegation of public oral disclosure in a conference presentation, it being stated that one of the witnesses would produce evidence relating to the disclosure made at the presentation, but without explaining what that evidence was. How could the defendant therefore plead in response? Also, the defendant relied on the fact that, even though its application was made under Rule 19.1(a), the Court had general case management powers under Rules 334 and 336. On this point, Judge Rieu noted that under Rule 172.2 too, the Court may at any time during the proceedings order a party making a statement of fact to produce evidence that lies in its control. 

The claimant responded to the effect that this was a misconceived application, having nothing to do with the real purpose of Rule 19.1(a) which was to permit an objection when there was no jurisdiction under Brussels 1 principles under Article 31 of the UPC Agreement, or competence under Articles 32 and 33 (the Registry also noted that under Rule 16.2, that it is only required to check compliance with Rules 13.1(a)-(k) and not the Rule requiring production of evidence (Rule 13.1(m)). Hence, prima facie, there had been compliance with Rule 16.2).  The claimant also stated that the evidence did not yet exist, and would normally be produced in the interim phase. It said it had complied with the requirements of Rule 45.1(g) that the Statement for revocation should contain the evidence relied upon “where available” and an “indication of any further evidence which will be offered in support”. The claimant concluded that this was a disguised attempt to obtain early evidence and that the facts should be pleaded out before the costs of producing the evidence are incurred.  
Judge Rieu gave her decision (French-style) the day following the hearing, in writing. She dismissed the Rule 19.1(a) objection, because the Court clearly had jurisdiction and competence under Articles 32(1)(d) and 33(4) of the UPC Agreement, but allowed the application in substance by requiring the claimant to produce the fact and expert evidence within six weeks and by extending the defendant’s time for service of its Defence until six weeks after service of the evidence. She reasoned that the Rules should be construed in the light of the “overarching principles of ‘fairness and equity’ expressly stated in both the Preamble of the Rules of Procedure and the Agreement and which ‘shall be ensured by having regard to the legitimate interests of all parties’”. She clearly had little sympathy for the claimant’s argument that it simply did not yet have this evidence, nor the argument that under the UPC procedure it was envisaged that evidence would be submitted during the interim phase, rather than the written phase. She noted that it was more than three months since the evidence was first referred to, and even longer since it had been referred to in a prior-filed protective letter. Hence she applied Rule 20.1 to give instructions to the parties as to the next steps in the proceedings, and the Court’s wider case management powers of Rules 172.2, 334 and 336. 

The ruling demonstrates vividly the dilemma facing claimants in the UPC. If they set out their evidence in full in the written phase, they will front-load their costs, reveal their case more fully than they may wish, and the costs may be incurred unnecessarily if they relate to matters which are admitted. However, if they do not plead their case fully, the Court may order “early” production of evidence, leaving them with a tight deadline to produce the evidence. Whether or not in practice real UPC judges take the same line as Judge Rieu is another matter, but for this case the claimant is now faced with the task of preparing some of its fact and expert evidence in only a few weeks, and the defendant will have that available to it before filing its Defence. The claimant who pre-empted the patentee by starting the revocation action may now be slightly regretting its decision. It has, however, chosen not to seek to appeal.

There are a few other features of the “litigation” so far which may interest readers.

First, to date the parties have not corresponded with each other in traditional British style, but have communicated with the Court. This appears to have put something of a burden on the Registry and this has caused delays as letters are received, reviewed and sent out to the parties. It also took a little time to arrange the hearing and partly for this reason and partly by reason of the order made, the theoretical timetable has already slipped by three months.

Secondly, neither party submitted any witness statement evidence or skeleton argument in advance of the hearing, but relied purely on the short written submissions exchanged via the Registry and oral submissions at the hearing. Neither did any party prepare an application bundle for the judge, but simply relied on the Court having its own papers.

Thirdly, when it came to the hearing, no-one really knew what to expect, and whether they would be questioned by the Judge or invited to make submissions, and if so, whether they would be allowed to reply and if so how many times. As it was, both parties were given the opportunity to set out their cases, and to speak twice on the substance of the application. Nonetheless, the whole hearing lasted just half an hour.

Fourth, both parties made an application for their costs of the application, citing Article 69(3) of the UPC Agreement, which states that “A party should bear any unnecessary costs it has caused the Court or another party”. On this, the Court ruled that costs determination was a separate part of the procedure in the UPC which followed the main action and that there would be no interim costs awarded despite a request from both parties.

The next stage in the action is service of the evidence as required by Judge Rieu. We will report again as the case progresses.
The IPKat and Merpel are already on the edges of their seats, all agog for the next instalment ...

Thursday, 19 June 2014

UK's UPC Consultation calls for evidence on draft legislation to avoid a law of "unintended consequences"

It's here.  Numbering at almost 100 pages, the UK Intellectual Property Office's consultation published last week on the draft UK legislation that will implement the Unified Patent Court Agreement and the Unitary Patent Regulations is a feast of information for UPC fanatics, like the AmeriKat.

The IPO is, in their words:

"seeking views on the drafting, structure and effect of the draft legislation which will allow for the implementation of the Unified Patent Court Agreement and the associated EU Regulations which introduce the Unitary Patent. We are also asking for relevant evidence on the way that the proposals will work in practice in order to inform our assumptions about economic impacts, and to assist with decisions on the detail of proposed legislation."
In short, tell us how the UPC Agreement is going to impact the current status of patent litigation and law in the UK.  In their section on the scope of the consultation, the IPO state that they hope to receive responses which will ensure that the proposed legislation implementing the UPC will not create any "unintended consequences".  Anyone familiar with the UPC Agreement and the Unitary Patent Regulations will know that the rushed/compromised drafting of both will ensure that the consultation's responses will be bristling with issues.

The proposed changes to the UK Patents Act 1977 fall into three broad categories which are accompanied by impact assessments for each (which include key assumptions like that the UK remains part of the EU ::cough::). These categories are as follows:

1.  Jurisdiction:  Subject to the much-disputed and misunderstood transitional period regime, sections of the UK Patents Act  1977 relating to the exclusive jurisdiction of national courts to hear infringement, declaration of non-infringement and revocation proceedings will no longer apply to UK designated European Patents or SPCs based on those patents.  Proceedings concerning unitary patents will automatically be subject to the exclusive jurisdiction of the UPC once the system comes into force.  Therefore, those sections in the Patents Act will also not apply to unitary patents.     
Irrespective of the ratio of box to Kat, the
AmeriKat  will try and make herself fit.
The UKIPO is trying to do the same with  fitting
the UPC Agreement into UK law.  
However, this is old ground.  The new interesting impacts on jurisdiction are those in relation to the Comptroller-General of Patents.  In the UK the Comptroller can decide on disputes relating to patents and, sometimes, SPCs.  For those patents that will be subject to the jurisdiction of the UPC, the Comptroller will no longer be able to deal with those issues.  However, the Comptroller's power to issue, upon request, non-binding authoritative opinions relating to the validity or infringement of a UK designated patent will remain and will also apply to unitary patents or classic European Patents that are subject to the UPC's jurisdiction.  The basis for this reasoning is that because the opinions are not binding, the implementation of the UPC will not impact on this service and it can continue without any changes.  
2.  The Unitary Patent:  There are two changes of interest in this category.  The first is the section on double patenting.  The UK does not permit more than one patent to be valid in the UK in relation to the same invention.  The Comptroller has the power to revoke a national patent where a UK designated European Patent protects the same invention.  The draft legislation extends this power so that the Comptroller has the ability to revoke a national patent if a unitary patent is registered for the same invention.  
Unlike those who issue groundless threats,
Kats don't pull punches.  A fuzzy IP-packed
paw will hit you every time.  
The second change of interest is on groundless threats.  If a patentee threatens to bring a patent infringement action in the UK, but there is no infringement or the patent is invalid, then the person threatened may be able to claim relief from the UK courts on the basis that they have been subjected to a "groundless threat".  Groundless threats were recently subject to a Law Commission report, published this Spring, which proposed changes to the current system.  Although the Government has yet to respond to this report, the importance of the groundless threats provisions are such that the UK IPO considers that they should apply to unitary patents.  
The interesting bit is that the UPC Agreement does not cater for groundless threats and, in turn, does not have jurisdiction for groundless threats.  Therefore, the UK IPO proposes that the current section 70 of the Patents Act be amended to make sure that  groundless threats will be applied to unitary patents and that it covers threats to bring proceedings in respect of a unitary patent before the UPC.  Oddly, at paragraph 83 of the consultation, the UK IPO states that "the threat itself will still have to be made in the UK...because section 132 of the Patents Act limits the Patents Act to acts in those territories".    Hmm.  But given the "unified" and "unitary" nature of the court and rights concerned, couldn't a threat made in one country to bring proceedings before the UPC be considered a threat in the UK?  
3.  Patent Infringement:  The stand-out change in this section is in relation to computer programs.  If there was ever a reminder that no one seemed to have read the UPC Agreement terribly thoroughly before signing it, Article 27(k) of the Agreement is evidence.  Article 27(k) provides that an exception to infringement for: 
 "the acts and the use of the obtained information as allowed under Articles 5 and 8 of Directive 2009/24/EC, in particular, by its provisions on decompilation and interoperability".  
The Software Directive relates to the protection of computer programs which are protected by...copyright.  The Directive provides that third parties who have lawfully acquired a computer program can copy the program or decompile it if it is necessary for interoperability.  There are other limited exceptions, but they have all been implemented into UK law as exceptions to copyright.  However, the UPC Agreement applies these exceptions to patents.   
Whoever put Article 27(k) into the UPC Agreement
is having a laugh....
The UK IPO states that where software is protected by a patent there are already exceptions from infringement for research and private acts.  Their view is that these exceptions will cover some of the acts provided for by the Directive.  However, the Directive goes further and provides exceptions for interoperability, reproduction and de-compilation.  They therefore propose that the draft legislation merely reference Article 27(k) instead of implementing the wording into the draft legislation.   
When this provision was pointed out to the AmeriKat, she and her fellow UPC-frantic friend just shrugged their shoulders not knowing where on earth this had come from.  She therefore asks the Kat's dear readers from across Europe whether the provisions of this Directive or similar provisions have been applied in their national law as an exception to patent infringement. 
The other notable change in this category is that made to the contributory infringement provisions under section 60(2).  Under this section, patentees can prevent a third party providing assistance to someone to infringe a patent by supplying "the means relating to the essential element of the invention" which they know will contribute to an infringing act.  Currently, the supply of the "means" has to be in the UK, to someone in the UK.  That it is to say, there are territorial restrictions on the operation of s.60(2) (i.e. the double territoriality requirement).  However, the draft legislation proposes to change this by extending the scope so that if someone in the UK were to provide the means to someone in France which enabled them to infringe a unitary patent, it would be considered contributory infringement.  
What happens to those who do not meet the
11:45 PM deadline on 2 September 2014. 
The consultation ends on 2 September 2014 at 11:45 PM, meaning that those enthusiastic UPC fans can spend their summer drafting meters of prose about all of the "unintended consequences" of implementing the UPC Agreement and Regulations into UK law.  She encourages everyone, especially those incredibly vocal Kat commentators, to contribute to this consultation as she knows the UK IPO is eager for responses.

In the meantime, the AmeriKat will be wading through the layers upon layers of assumptions made in the impact assessment reports to try and figure out just what impact theses changes may or may not have on UK law and the UK generally.  The only thing she knows for sure is that the uncertainty over the level of fees is the biggest blank space that desperately needs to be filled in before anyone, court users and Governments alike, know what the impact of the new European patent litigation system will be.

Thursday, 12 June 2014

A test-drive for the Unified Patent Court

This Kat has had his share of reservations about the Unified Patent Court system which has been foist on the European Union's patent fraternity and which has been met by a wide spectrum of responses, from the ecstatic to the apoplectic. However, he must confess that, since the system is not yet up and running, all his anxieties have a somewhat hypothetical flavour to them.  He therefore awards full marks for enterprise to his friends at Bristows, who have had a jolly good to at conducting a real-time test drive of the new system.  This is the first report on their experience, masterminded by Alan Johnson and Alexandria Palamountain:

Testing out the real UPC system
Since the announcement that the Unified Patent Court would come into operation, a number of moots have been conducted so as to replicate a trial under UPC rules [Bristows note: the proceedings are being conducted under the 16th draft rules, although if any significant changes appear in the 17th draft and the final version of the rules, these changes will be taken into account.  The parties are instructed not only to plead their cases, adduce such evidence as they require (as allowed by the court), but also to keep a note of their thought processes as the litigation proceeds.  In this way, the considerations which are taken into account can be captured and points on interpretation of the rules perhaps not otherwise considered can be identified].  
Here's a scene from real-life patent litigation
that won't be replicated in a real-time exercise:
tracking down that elusive expert witness ...
Instructive as the UPC rules are, one is left with no real sense of how an action under UPC rules would unfold, or the tactics which would be used by seasoned practitioners in the new court to advance their clients’ interests.  For this reason, Bristows is running a real time set of mock UPC proceedings.  The aim is simple: to test out the system from start to finish (at first instance) over a one year period and see what two competing teams actually do in as near to real-life conditions as is possible [sounds like a great basis for a computer game, thinks Merpel, who is wondering what to call it ...].  A scenario was set up so that the proceedings could be commenced in the London local division, and only two unrealistic (but necessary) ground rules were put in place.  First: the parties would not be allowed to invoke Article 83(1) and commence national litigation to circumvent the UPC.  Secondly: they would not be allowed to settle.
A huge team of around 25 lawyers is involved
Including the judges, legal teams, and witnesses, all 11 patent litigation partners and 14 of the group’s associates are involved in the proceedings.
A rare sight: young IP lawyers queue up
to volunteer for UPC real-time training ...
The process was started at the beginning of March 2014, with volunteers recruited from Bristows’ patent litigation group.  Partner Alan Johnson created the scenario, acts as President of the Court of First Instance, and oversees the parties’ witnesses so that unduly biased evidence is not created for use in the proceedings.  Each legal team comprises two partners and three associates representing fictitious parties in the pharma sector litigating existing European patents and SPCs not opted out of the system.  Alan provided a set of common facts and documents to both teams but, as in real life, each side was also given its own particular facts, documents and instructions.  These included potential witnesses (expert and of fact played by other partners and associates in the group), as well as other information which might colour their potential tactics.
The proceedings were planned to be commenced no earlier than May 2014, thus allowing two months’ preparation time.  Partners Philip Westmacott and Edward Nodder were earmarked as the local judges, and senior French qualified associate, Vanessa Rieu as the third legal judge.  Partner Dominic Adair was stood ready to be called in as technical judge if required.
What happened in May when proceedings were commenced?
French patent judges like a little style and
formality when it comes to their attire
In the scenario, the parties had exchanged pre-action correspondence.  The patentee had let it be known that it had reached the conclusion that litigation was necessary and stated an intention to sue in the London local division.  Before the patentee could sue, however, the potential defendant decided to take the initiative and start its own revocation proceedings, in the central division.  Why it decided it would prefer a case in the central division than in a local division will doubtless be explained later, but the immediate consequence was that a different panel of judges was appointed, and perhaps importantly, the Judge Rapporteur appointed was Judge Rieu, a French judge, rather than an English judge as would inevitably have been the case had the action been started in the London local division.  Perhaps the potential defendant did not want an English Judge Rapporteur who might be more instinctively inclined to permit disclosure and fact and expert evidence? 
Forum shopping & Central Division revocation actions
In some ways this development is not dissimilar to what presently happens on the international stage, with a patentee starting infringement proceedings in one country and retaliatory revocation suits being commenced by the opposing party in another.  In the current system both (or all as the case may be) sets of proceedings may continue side by side.  In the UPC this should not happen, but forum shopping within UPC divisions is predictable, and what has happened already in this case is just one variant of it –- in other scenarios one can easily foresee patentees forum shopping as between various local and regional divisions.  But from this example we can already see from this one simple lesson:  if a patent owner so much as gives an indication that it may wish to sue, it may face a central division revocation action.  Will potential defendants, fearful of being sued in a local division they may feel potentially inconvenient or less favourable, take the option of starting in the central division?  Will this lead potential claimants to “shoot first, negotiate later” instead of tipping off opponents?  Such a tactic would also allow patent owners to catch their opponents potentially unprepared, and hence give themselves another advantage.  If so, this is hardly the most desirable of consequences of the UPC system.
Coming up next…
We now wait to see how the patentee will react.  It has an interesting choice:  will it counterclaim in the central division; or will it instead start its own infringement proceedings in the London local division as it had planned to do?  In making this decision, how will it assess the procedural rule governing this situation (rule 70)?  If the patentee does start an infringement claim in the London local division will the “infringer” counterclaim for revocation in the local division, or leave the two sets of proceedings to continue separately – de facto bifurcation without any court decision?  Were that to happen, would the President step in to join the two actions together so as to save court time and judicial manpower?
We will report on these and other developments as they occur over the coming months.
As a long-time educator, this Kat is fascinated not only by the exercise as it relates to the UPC, but by the potential for IP games as a means of training in other areas, such as OHIM Community trade mark mediations or FRAND licence negotiation.  He'd love to hear from any readers, regardless of their profession and jurisdiction, as to how they rate these exercises.

Monday, 2 June 2014

Surprising growth of support for Europe's Unitary Patent Court, but ...

"But WHY?"
It's not quite a case of turkeys voting for Christmas, or even of sane and ostensibly unbribed humans voting to play the 2022 World Cup in Qatar, but here's a survey the results of which leave this Kat quite surprised. The figures come from a press release from the highly respectable magic circle law firm Allen & Overy but this press release does not indicate the methodology by which the results were compiled, the nature of the companies surveyed [it would be great to know what proportion consisted of, for example, SMEs, pharma companies, FRAND licensors or patent trolls other entities which make specific demands on the patent system] or the size of the sample surveyed. The text, in relevant part, reads as follows:
"Research reveals growing business support for UPC – crown jewel patents opted in; move to Europe for major patent disputes

LONDON – Research published by Allen & Overy today demonstrates surprising support for Europe’s hotly debated Unified Patent Court, with almost three-quarters (74%) of those responsible for overseeing preparations for the new system expecting it to be positive for their company – and only 15% expect it to have negative consequences for them.

While on the big question of whether to opt in or opt out of the new system during its seven-year transition period, the majority of respondents are undecided on the bulk of their portfolio (68% on average), close to half (49%) of those surveyed said they would definitely opt in at least some of their patents, while only 15% say they would definitely opt out some.

Crucially, where businesses have made a decision to opt in, about 24% of their portfolio on average, they are deciding to opt in their most valuable, or crown jewel, patents. This suggests that, where it matters most for business, they will opt in.

As one Dutch head of IP strategy commented: “The economics of a single enforcement action outweighs the risk of Europe-wide invalidation.” [Merpel assumes that this is an inference drawn from the figures above and not a proposition based on probabilities or game theory. It's a grand starting point for a discussion, though]

As this statement and the research suggest, despite the faltering reception the new system has received from companies across the globe, its impact is likely to be significant [this cannot be denied, but the word "significant" has a Delphic quality to it]. The UPC will offer patentees the ability to obtain broader remedies than those currently on offer in the U.S., with a larger customer base impacted and injunctions that are easier, cheaper and quicker to obtain. Costs are estimated to be at least five times lower than in the U.S [it would be good to know more about this statement too: does this estimate refer to defended or undefended actions, or both -- and does it take account of proceedings via the International Trade Commission?].

These advantages alone mean there is likely to be a shift towards Europe’s UPC as a forum of choice to rival the U.S. for major patent disputes. This is further supported by the majority of respondents indicating they will file unitary patents, as opposed to classic European or national patents, under the new system.

Despite its potential impact on business, the report also highlights an alarming lack of engagement among senior management on the UPC. Only 13% of those responsible for preparations for the new regime say their senior management are ‘fully engaged’ on the issue and appreciate the potential implications [could this be why so many of them are so positive towards it, wonders Merpel]. One consequence of which could see businesses lose exclusivity for their products, or worse still, have their business or products locked out of the entire continent. ... 
While the decision on what to do with a companies’ most valuable patents seems clear, what to do with a business’s less valuable patents is anything but. The 68%, on average, of their portfolio that business are still undecided on is largely made up of their secondary patents. Lack of clarity on costs is cited as the main barrier to being able to make decisions according to two-thirds (67%) of respondents. Only when this is clarified will businesses be able to undertake a proper cost-benefit analysis on their less valuable patents and whether it is more economically beneficial to opt them in or out. ... ”
This Kat, while uncertain as to its methodology, is fascinated by the outcome of this survey since it gives some small indication of how the various patent communities are reacting to the emerging reality of a new order. He hopes that other surveys will be commissioned that will add to it, in order to produce a more rounded impression, and that they will be repeated over time in order to monitor growth or shrinkage in confidence in the new system.  Above all, though, he hopes that more background information will accompany them: would a law practice based in, say, Greece or Portugal, or one of the Scandinavian or Baltic states, be able to replicate these percentages in a survey of its own?

UPDATE: in response to the questions raised in this blog post, Rebecca Hooper (Allen & Overy) has helpfully provided some further information, posted in today's Monday Miscellany round-up here.

Friday, 25 April 2014

Fordham Report 2014: The European Unitary Patent and the Unified Patent Court

Margot Fröhlinger:
the internal UPC optimist
It is no surprise that the AmeriKat would be covering the session on the Unified Patent Court.  As she made her way outside into the bright American sunshine to the lecture theater on Broadway that would be her home for the next several hours of patent law she was bemused by what would be the first speech after Sir Robin Jacob's (UCL) customarily brief introduction.

Margot Fröhlinger, the Principal Director of Patent Law and Multilateral Affairs at the European Patent Office was the first presentation of the session speaking on the million dollar question "Will the Unitary Patent become a success? " a talk aiming to dispel the concerns of the Unitary Patent and UPC.  The billing described the talk as emphasizing that "despite the current uncertainty about the level of renewal fees for the Unitary Patent (UP) and despite concerns about the future functioning of the Unified Patent Court (UPC) the UP is likely to become a success."   The factors that were mentioned as making the system a success were the "thoroughness of the preparatory work" and "the quality of the future judges." As Fröhlinger would surely have described her, the AmeriKat has historically been pessimistic about the UPC so the disbelief on the AmeriKat's face was evident when she read these words on the conference programme.   But with her usual focused flourish, Fröhlinger did not disappoint in delivery her brand of UPC optimism.

"An optimist may sell you that the UPC and the unitary patent will be the best of all possible worlds", began Fröhlinger, "the pessimist may fear that may be true."  The current doubts and concerns relate to the level of renewal fees and the functioning of the UPC - the efficiency, quality and fairness of its judgments.  Conferences, she noted, are often dominated by how to opt-out of the system, not how to use the system.

What, oh what will the renewal fees be?  Care to take a spin
on the WHEEL....OF.....FORTUNE!?
Fröhlinger explained that work on the renewal fees has just started.  The fees will be somewhat higher than the users hope but lower than the users have feared.  On the one hand the renewal fees will be attractive to business but they will also  have to generate sufficient income for the EPO to balance the budget.  To assess what figure will make the renewal fees attractive for users one has to take into account what the users pay.  Today, users generally validate in only four countries.  The renewal fees are likely to be somewhat higher than the amount that is paid for four designations, but not significantly higher.  The value for money that the unitary patent represents, she emphasized, was in the simplified administration of the patent portfolio by virtue of the broad geographical coverage of protection and more seamless enforcement.

The second concern related to the functioning and uncertainty of the UPC.  Eventually, the exclusive jurisdiction of the UPC may become an incentive rather than a deterrent for choosing the UPC, explained  Fröhlinger.  During the transitional period of 7-14 years, an EP may become the subject of litigation in several jurisdictions.  This can be avoided by choosing the unitary patent and UPC.  Concerns about the quality and efficiency of the UPC and the uncertainty resulting from the unfamiliarity of the new system are likely to be dispelled soon after the system comes into operation.   Fröhlinger considered that European IP practitioners have already experienced this with the creation of the EPO and OHIM.

Will the UPC be a lottery of whether or not
the judges hearing your case are experienced?
Fröhlinger pointed to the work of the Preparatory Committee who are tasked with the implementation of the UPC.  She noted that their work is very thorough.  They have just revised their roadmap which foresees the UPC coming into effect not before the end of 2015.  This, she observed, signals the Preparatory Committee giving priority to quality over speed.  She also explained that the 16th draft of the Rules of Procedure were recently finalized by a group of expert lawyers and judges and is now being revised by the Preparatory Committee.  Importantly, the preparatory work for the recruitment of judges has already been launched and has resulted in 1,300 applications for legally or technically qualified judges.  Among the legally qualified judges Fröhlinger stated that it was likely that you would find the most qualified patent judges in Europe.

She concluded by stating that the concerns from patent holders on the possibility of central revocation was unfounded.  "There is no need to be afraid of the UPC unless you have a bad patent", she declared.  Concerns on bifurcation and the grant of injunctions will be reviewed by the Preparatory Committee but bifurcation is unlikely to be the Big Bad Wolf that everyone has feared.  Indeed, she pointed to the mock trial at the last IP judges conference in Venice where all the judges decided not to bifurcate the proceedings.  She also noted that there will not be automatic injunctions in Europe as all judges consider the factors.  The AmeriKat is less convinced by that point as the difference between the exercise by the judges in granting a preliminary injunctions in the Member States can be quite different.  Fröhlinger's final comment was that "the only place where 'success' comes before 'work', is in the dictionary".  A pessimist would say that "failure" comes before both of those words, but after Fröhlinger's speech who would dare be pessimistic about the UPC?

Judge Rosas emphasizing
the importance of the now
infamous Opinion 1/09
Hon. Allan Rosas of the CJEU  discussed the impact of Opinion 1/09 in the creation of the UPC.  A self-confessed non-IP expert,  Rosas explained that the CJEU does not have jurisdiction over patent issues although it does hear related issues, for example on SPCs and stem cell patentability.  This, he noted, may change to a certain extent in the future.  One of the question marks for someone who has not followed the negotiations and preparations, like himself, was to what extent mattersin the UPC will be specifically Union law and what will be national law.

In the past, Judge Rosas noted that that the CJEU has accepted that the EU can commit itself to internationally binding disputes such as the WTO.  In Opinion 1/09 the Court held that the EU could not commit itself to the then draft Unified Patent Court Agreement which was in relation to a scheme which would have involved an international organization with participation of other EU Member States.  Judge Rosas stated that this was of course very different from what one was used to in relation to trade marks and other examples in which you have a Union agency with a possibility of appeal to the Union courts in Luxembourg.  Indeed, Rosas continued, that feature of the draft Agreement as it existed at the time was a problem.  The problem specifically arose from the fact that according to the draft Agreement the national courts of the EU Member States would have been deprived (a word noted to have been abused in the Opinion) of their right to submit preliminary ruling requests to the CJEU in the fields where this international court system would have had exclusive jurisdiction.

Sir Robin Jacob, unusually not reading a patent law book
in the UCL library
Judge Rosas observed that Opinion 1/09 is one of the most important decisions of the CJEU in the last ten years.  It is of certain constitutional significance as it underlines somewhat more than in the past the role of the national judge in the EU Member States as an integral part of the EU judicial system.  The national courts would have been deprived as to what would have normally been the position.  It was obviously argued before the court in the oral hearing that there was no problem with the Agreement as the court had ordered in the past that the Benelux court could submit preliminary reference questions to the CJEU.  In the Opinion, the court stated that the Benelux court is different as it is a common court to three Member States - the Netherlands, Belgium and Luxembourg.  In reply to this argument the CJEU hinted that this alternative approach that may have been possible. Judge Rosas stated that if one looks at the Unified Patent Court Agreement as it was ultimately signed more than a year ago to a certain extent the Agreement is based on a Benelux approach as it is a court common to the Member States.  There are several provisions in this agreement which clearly are inspired by the Opinion of the CJEU.  It is underlined in several places that it is envisaged that the UPC will be subject to the normal rules and principles of Union law to the extent that it will be dealing with Union law and that will be an interesting issue in the future, i.e., where the line between Union and non-Union law is drawn.  This division is a problem that Judge Rosas stated is observed in many fields of law.

Judge Rosas concluded
"One should not interpret [Opinion] 1/09 as some view or hostility of the court vis-a-vis a unitary patent.  Many people of the court, including myself, felt rather bad that the Opinion led to a negative result.  But sometimes as a judge you have to look at the constitutional and legal realities which lead to the conclusion that we came to.  But now of course the situation looks a bit different."
Sir Robin stated that IP lawyers' view of the CJEU is zero, citing the decision in Brustle as an example where the view of the Court is likely to be absolute zero.  He therefore asked Judge Rosas whether the CJEU is fit for hearing IP cases.  Judge Rosas said that he was in favor of a generalist approach:
"At the CJEU you hear all types of areas - transport, environment, immigration and criminal law.  All of these fields have the same concerns.  It is a classical debate in all Member States.  I would personally think that it is even healthy that people who are not great technical experts hear the cases and provide an external judge's view.  You cannot have a court system that consists solely on technical experts.  Obviously, the consequences of this are harsh words."
Wim van der Eijk, the Vice-President Directorate-General Appeal at the EPO responded to Sir Robin's question about the effect that central revocation in the UPC will have on EPO oppositions by stating that it could have an effect on the number of oppositions filed.  He considered that central revocation actions in the UPC could be viewed as an alternative but if there is not much trust in the system you may not wish to only seek revocation of the patent in the UPC.  His overall view was that he would not be surprised if the UPC lead to fewer opposition actions.

Like Jimi Hendrix, Judge Grabinski
wants to know from
the UPC candidates
"Are you experienced?"
Hon. Dr. Klaus Grabinski of the German Federal Supreme Court observed that bifurcation will happen only in exceptional cases, for example where there is parallel litigation before several local or regional divisions where a counterclaim for revocation is filed.  It would make sense in those cases that the Central Division would decide on revocation.  Judge Grabinski's guess was that bifurcation
would be the exception, not the rule.  This would also be the case for the local divisions in Germany.  Judge Grabinski viewed the current system as actually "not too bad" in that decisions are handed down in number of jurisdictions to first instance within a year.  Some courts are a bit more expensive, but they are not too expensive.  Europe also has a loser pays costs regime which is one reason why unlike in the US the troll problem is not too bad.  Judge Grabinski observed that when a new system starts there is always a lot of uncertainty as users do not know how the courts will interpret provisions in an agreement.  Echoing Margot's comments, this uncertainty is comparable to the situation with the EPO - no one really knew how it was going to work.  There is a chance that the new system will be a success but like his comments at AIPPI in Helsinki last year, the selection of judges will be a very important issue.  Referencing the Statute in the Unified Patent Court Agreement, he pointed to the provision on the appointment of judges who are appointed by the Administrative Committee.  When appointing judges they will ensure the best legal and technically experienced judges are appointed, as well as ensuring that the judges are selected from a broad geographical spectrum.  Judge Grabinski agreed with both of these factors in the selection of judges but the latter criteria could be misused.  His formulae for users getting comfortable enough to rely on the system would be that on a panel of three legally qualified judges, at least two should be experienced.  This would leave the lesser experienced judge to learn on the job.  If the panel is the other way around - one experienced judge and not two - then the system will be a "a mess".  Judge Grabinksi advised that users should check who is appointed as a judge to decide whether the system can be reliable.

Sir Robin, who is the chairman of the Advisory Committee looking at the selection of the judges noted that amongst the 1,300 applications for the UPC judges there were really good candidates - more than enough "good people to staff the court in order to be one of the most respected courts anywhere in the world".  A big claim, from a big IP legend and a once highly vocal critic of the UPC.  

Dr Janssen - getting ready for some
shopping in the UPC
Dr. Bernd Janssen of the German firm Uexküll & Stolberg was also positive about the potential of the UPC to be a success.  However, he noted that there will be an important role of forum shopping and the competition between the local courts who are tasked with hearing infringement cases.  With that competition Dr. Janssen considered that the infringement courts would be patent friendly.

David Laliberté, the Director of IP Policy at Microsoft also thought that the system has the potential to be better, but it also has the potential to be worse.  A lot of what happens in the coming months will help answer that question, David noted.  He said that Microsoft tends to be optimistic that the solutions will be forthcoming.  To support this view, he noted that the 16th draft of the Rules of Procedure addressed some of their concerns, namely with provisional injunctions the rules on which now provide for a balancing of interests exercise.  There are, however, other areas that need to be addressed and he looks forward to the public hearing to address these issues - for example on bifurcation where they would like to see some more restrictions on the judge's wide discretion as to when bifurcation can occur.  Although David noted that Judge Grabinski considered that bifurcation may not happen save for exceptional cases, David would have preferred a system where there was more predictability on that issue than the wide discretion that is afforded to judges currently.  David concluded by stating that the success of the system and the participation of users depends on the question of fees and costs.  That is currently a huge unknown.

John Temple Lang doubting
the number of experienced
patent judges in Europe
John Temple Lang at the Brussels office of Cleary Gottlieb Steen & Hamilton LLP considered that there were two sets of problems.  The first concern was the quality of the judges and how they would behave in certain circumstances.  He said that we do not know enough to have to have the confidence to be optimistic or pessimistic about the future of the UPC.   "I would not have thought that there were 1,300 experienced patent judges.  I am not reassured that the potential judges will need training as I do not think that you can get sufficient training to substitute for patent litigation experience", he stated.  The second concern was that the effect of the UPC will be that it will add considerably to the number of courts before which patentees can be faced in litigation.  There will be a lot of forum shopping and tactical manoeuvring.  This will be "confusing and unsatisfactory".  The only way that that problem can be avoided is by extremely tough case management - if the judges are strict enough then they can minimize the procedural manoeuvring and forum shopping.  John said that to carry this out, the court would need to have at least of majority of experienced judges in each of the UPC courts.  Judge Grabinksi agreed on this - noting that having recently participated in a mock trial with an interim conference and several case management issues, only experienced patent judges would have the skill to effectively manage the cases.

All signs point to appeals in the UPC - but which court gets to decide?
Sir Robin raised a final issue for the panel discussion - that of appeals.  Sir Robin summarized the issue that lead to disagreement and division in the Rules of Procedure Committee.  One school of thought says that appeals will cause delays but the other school says that you need appeals to achieve uniform case law to reduce forum shopping and clarify other issues.   Fröhlinger chimed in saying that throughout the negotiations it was always the Court of Appeal who could grant leave to appeal on procedural orders.  The text at the time said that you could appeal a procedural order if granted by the court of first instance or the Court of Appeal.  Before a text is adopted,  it undergoes linguistic revision by the Council of Ministers.  The linguists said that it did not make sense that the court of first instance and the court of appeal should be both specified as giving permission to appeal, because in the definitions "The Court" is defined as both.  So they replaced the wording.  Fröhlinger stated that it was always understood by the Member States during the negotiations and now that the Court of Appeal would be capable of permitting procedural appeals.  She also noted that on the website of the Preparatory Committee clearly states that the Court of Appeal can permit leave to appeal on procedural orders as it is a principle of international law that you should give an authentic interpretation of what has been agreed.

Judge Grabinski did not agree with this, although he admitted he did not know about the story on the linguistic point.  He said that we have to interpret what is in the Agreement.  He feared that there could be an onslaught of appeals on each and every decision of the court.  Sir Robin disagreed.  He did not think that every case will have an appeal.  He considered that the sensible Court of Appeal which needs to be robust and commanding, would control the number of appeals it hears choosing only to hear those issues of procedural importance to the efficient functioning of the UPC.

Friday, 21 March 2014

When will the Unified Patent Court and Unitary Patent System begin? Some sense at last from Preparatory Committee

A little belatedly the IPKat saw this news item on the official Unified Patent Court website reporting the fifth meeting of the Preparatory Committee on 18 March 2014 , which pleasingly announced:

It is clear to the Committee that the ambitious target date of early 2015, decided at its first meeting, cannot be accomplished. The Committee stays completely focused on its task but at the same time cannot let self-imposed deadlines stand in the way of quality. At its fifth meeting it was agreed that the UPC will not be operational until the end of 2015 at the earliest. A new revised roadmap will be published at the website shortly.
When will the sands run until?
Why "pleasingly"?  Well, this Kat in particular is frustrated and annoyed at the ongoing disconnect between official pronouncements, and unofficial but more realistic estimates on the subject.  When updating clients about the progress of the UPC project, it is a waste of energy, and sometimes strains client relationships, to have to continually explain to clients that what they have heard is untrue.  Official pronouncements tainted by over-optimism and in some cases ignorance (see previous grump here) do nobody any favours.

It has always been the case with the UPC and UP that the official pronouncements have suggested timescales far more rapid than any informed observer thought practical.  At the time that the Unitary Patent Regulation was voted in Parliament in December 2012 (see here and note the "soon") and the Unified Patent Court Agreement was signed in February 2013, officials talked as though the real start date might be somewhere close to the earliest possible start date according to the Regulation and the Agreement of 1 January 2014 (Se eg Article 89(1) of the Agreement).

The original Road Map of the Preparatory Committee announced (in a document from June 2013), albeit as "ambitious", that "At its first meeting the Preparatory Committee decided that early 2015 would be a realistic target date for the entry into operation of the UPC."

Until now the official pronouncements have remained unchanged, while observers have suggested, to take a selection, "2015 at the earliest" (Dehns, August 2013), "in 2016 or even 2017 is seen as being realistic" (Kilburn & Strode, February 2014), "2014 ... was always unrealistic, and a new target date has been set for early 2015.  That too is unrealistic, but later 2015 or 2016 is certainly possible" (Bristows, December 2013), and "maybe start not before 2018" (Tweet from KSNH Patentanwalte, November 2013, via IPCopy).

If the official estimates of timescales begin to converge with the estimates of informed observers, that will aid the credibility of all concerned.  We can probably all now begin to agree that talking about 2016 as the start date is probably the most sensible.  For the time being.

Merpel points out that, as to costs, we are still none the wiser.

Thursday, 6 March 2014

BREAKING (ish): 16th Draft UPC Rules of Procedure out now!

The AmeriKat purring away at the thought
of the 16th Draft
(photo courtesy of Joe Delaney of 3 New Square)
After a very long day, it feels like Christmas morning for the AmeriKat. Having languished over the 15th Draft of the Rules of Procedure of the Unified Patent Court for so long, she is purring loudly over the just-today-published 16th version published on the Preparatory Committee's website. But that's not all, folks! The Preparatory Committee has also published a handy table which sets out the suggested changes proposed by the public during last year's consultation and the expert group's responses to the suggested changes. She has not yet had time to review the changes and the 200 pages of comments to the public's observations, but she did notice one key change.

The AmeriKat has been a vocal opponent to the drafting of Rule 211(3) - the provision which only gave judges the discretion as to whether or not to weigh up the interests of the parties (see here). However, she notices a welcome change to the Rule which now reads as follows:
In taking its decision, the Court shall in the exercise of its discretion weigh up the interests of the parties and, in particular, take into account the potential harm for either of the parties resulting from the granting or the refusal of the injunction.
For readers not in the vicinity of the AmeriKat (although her colleagues can vouch for it), the AmeriKat, having read this revision, is purring ever so loudly....

In the meantime, the Preparatory Committee writes:
The Expert Group chaired by Mr. Kevin Mooney has carefully studied the comments received by the Secretariat of the Preparatory Committee in the written consultation on the Draft Rules of Procedure of the future Unified Patent Court which was open from 25 June to 1 October 2013. As a conclusion from its thorough discussions it has presented a revised 16th version of the draft Rules of Procedure in which the amendments to the previous version appear in mark-up mode. Alongside a comprehensive digest is published which was prepared by the Expert Group for their discussions containing explanations on the approach taken. Henceforth the work is taken up under the chairmanship of Johannes Karcher in the Legal Group of the Preparatory Committee which will now examine the draft set of rules at the level of participating EU-Member States.

The publication of the 16th draft of the Rules of Procedure is not intended as a call for a fur-ther round of written comments but for information only. Any comments should be submitted at the oral hearing planned to be held by the Legal Group in the course of this year which will seek input of users on all suggested amendments to the text since the written consultation. For further information on the timing of the oral hearing please consult at regular intervals the roadmap of the Preparatory Committee which will appear on this website.
The AmeriKat cannot wait to attend (if she can) that oral hearing (cue more purring). Purrrrr.......

Tuesday, 25 February 2014

Innovation, not litigation! Google, Samsung and Apple backed industry coalition call for UPC Preparatory Committee to act (again)

Last September, a coalition of patent power players, including Google, Apple and Samsung  published an open letter to the Preparatory Committee on the Unified Patent Court highlighting two main concerns of the the latest (15th) draft of the Rules of Procedure - bifurcation and the granting of injunctions - which they considered would undermine the purported benefits of the unified system (see previous AmeriKat report and analysis of this letter and rules here).  One week after the letter was published, members of the coalition submitted their comments on the Unified Patent Court's Rules of Procedure which detailed these concerns.

Now, as the Preparatory Committee reviews these comments in preparation for a public hearing and a final revised draft of the Rules of Procedure, the Goliaths of Silicon Valley, Europe and beyond have again called upon the Preparatory Committee to act.   The coalition is not demanding a change to the Rules, necessarily (in light of the fact that the Rules are parasitic on the Agreement on the Unified Patent Court which cannot be altered), but recommends the inclusion of guidance to judges on how to interpret the rules.

The newly expanded coalition (the signatories now include Vodafone, Huawei and AFDEL) writes:

Last year, we, the undersigned organizations, wrote in support of Europe’s effort to create a unitary patent and a Unified Patent Court (UPC) system. The decision to move in this direction was a direct result of the recognition “that the fragmented market for patents and the significant variations between national court systems are detrimental for innovation." 
As we previously noted, an effective and balanced unified patent system has the potential to decrease the costs of obtaining patent protection, increase European competitiveness, and support the long-term growth of innovative industries in Europe and abroad. Importantly, if done right, it also has the ability to reduce the negative impact of Patent Assertion Entities (PAEs), or “patent trolls”, thereby preempting the problems that continue to plague innovators. 
In early October, we submitted responses to the Preparatory Committee’s consultation on the rules of procedure for the UPC. Our responses recommended that the Preparatory Committee incorporate guidance to the judiciary from the outset on the issues of bifurcation and injunctions when validity is raised, including when to issue a stay of an infringement action and when to issue injunctions. We noted that, without this guidance, the potential exists for a court to order an injunction prohibiting the importation and sale of goods even though the patent may ultimately be found invalid. This result unduly reduces competition, can increase the cost of products in the market and reduce product choices, all negatively impacting consumers. Many other  stakeholders, ranging from telecommunications operators to pharmaceutical companies and patent practitioners, raised similar concerns and made similar recommendations. 
As the Preparatory Committee prepares its revised draft of the UPC rules of procedure, it is imperative that these changes are incorporated in a meaningful way. Adoption of these recommendations will allow operating companies to focus on innovation instead of litigation, thereby fostering economic prosperity in Europe for the benefit of innovators and consumers. This, in turn, will help Europe achieve the stated purpose of the UPC to defend “against unfounded claims and patents,” “enhance legal certainty,” strike “a fair balance between the interests of right holders and other parties,” and allow for “proportionality and flexibility.” 
So far so good, but it was the penultimate paragraph that contained the ultimate warning for those tasked with creating and implementing the new system.  Citing an article by John Allison, Mark Lemley and Joshua Walker entitled "Patent Quality and Settlement Among Repeat Patent Litigants" which found that, excluding default judgments,  PAE plaintiffs win only 8% of cases that reach a judgment on the merits, the coalition concluded:
Europe has a unique opportunity to avoid the abuses of PAEs that reportedly cost U.S. businesses $29 billion for cases filed in 2011 alone and caused economic damage of approximately half a trillion dollars from 1990 to 2010. The stakes of leaving these issues unaddressed are high and unfortunately well-known by the undersigned organizations. Recent press reports suggesting that some PAEs welcome bifurcation within the UPC further show that a system with perceived loopholes has the potential to open the floodgates to a detrimental form of patent litigation. 
We continue to look forward to working with the Preparatory Committee to help ensure a system that is fair and balanced and allows for European innovation and competitiveness to thrive.
The warning continues over on Google's Europe blog (here) where Google's Director of Patent Litigation, Catherine Lacavera reiterates that the proposed changes will "curb abuses by the kinds of patent trolls that have plagued the US economy".  She continues:
"Patent trolls - entities that don't make anything, instead using dubious patents to extort money from companies that due - are placing a huge drag on innovation.  In the United States, trolls use the threat of expensive and lengthy litigation to extract settlements, even if their patents wouldn't hold up in court.

A Unitary Patent System could promote efficiency and long-term competitiveness. But the current draft rules contain certain provisions that trolls could exploit, taking a potentially serious toll on economic growth and innovation in Europe. 
For instance, the rules as currently written could allow a troll to block a product from the European market using a patent that later turns out to be invalid. We think that the validity of a patent should be tested before it impacts 500 million European consumers."
Bleary-eyed commuters may not have cottoned on to a slight change of emphasis in the coalition's latest letter and commentary, so the AmeriKat will give you a hint:  "European consumers".  In the scrabble for the location of the Central Division, the alarm in interpreting the poorly drafted Agreement and the furore on the impact of bifurcation on a litigant's business, the poor (literally) European consumer has often been ignored.   The coalition has been smart to place the European consumer front-and-center in the debate on the impact on the Rules of Procedure as ultimately it is the European consumer who will subjected to, for example, not being able to purchase a newly injuncted smartphone and having to pay more for a more expensive alternative (admittedly an oversimplification of competition and market dynamics). More importantly, it is the European consumer who can ultimately vote those in power out of office.  But will the Preparatory Committee be focused on the impact of the consumer or will their focus be just on getting their job done?  The two are not mutually exclusive, but the AmeriKat fears that the latter will be the ultimate driving force for the Committee and those Member States charged with the six specific work streams (legal framework, financial aspects, IT, facilities and HR & training).

In any event, the AmeriKat was curious (as Kats tend to be) why the coalition issued a second call for action.  In an e-mailed statement from a member of the coalition to the AmeriKat, the view was that
" there is still more work to be done, however, in crafting rules that support innovation and don't provide an incentive for increased activity by patent trolls."
The AmeriKat, who has been active in this saga for years comes with the experience that even with the greatest of effort and the loudest of voices, little can be done to convince European governmental organizations that necessary changes must be made to the system to ensure that the pitfalls identified by the coalition are not made a daily reality for UPC litigants.  She recalls, for example, the excellent suggestions that European IP judges made to the then draft Unified Patent Court Agreement which were, in effect, wholly ignored (see AmeriKat post here).

So with her cynical hat on, she asked a member of the coalition how confident they are that the Preparatory Committee will listen to and implement their recommendations.  The coalition's response boiled down to the fact that unlike the brick wall mentality of some European institutions during the initial stages of this project (the AmeriKat's words, not theirs), the Preparatory Committee is different.  It is, as a member of the coalition, puts it
"tasked with creating rules for the UPC that will strengthen the patent system and support innovation, and we share that goal.  We are engaging policy leaders in each of the 25 member countries to make sure they understand the views of innovative companies in their countries, and encourage further revisions to ensure the letter of the law matches the spirit."
And the coalition has been busy "encouraging" across Europe.  A number of coalition members submitted recommendations to the Preparatory Committee during the public consultation and, in the run-up to the final draft of the Rules of Procedure, have met and are likely to continue to meet with policy leaders to discuss their concerns in the hope that they "get this important language right."

Commissioner Barnier and other European officials have repeatedly issued declarations about how the unified patent system was needed in order for Europe to be competitive with the US and Chinese systems.  But when you are given the unique opportunity to design a system from scratch, why would you desire only to be equivalent to your competitor   Don't you want to be better?  It seems, however, that those responsible for introducing and now implementing the UPC have not carefully examined what is and is not working in their competitors' systems, nor have they made the necessary and recommended changes to remedy these defects.  With the legislative and judicial troll battles raging in the US (and here), the AmeriKat urges, as she recently wrote here,  that the Preparatory Committee and the Member States learn from the US experience and, at the very minimum (which is frankly all they can do given that the Rules are hard-wired by virtue of the Agreement), provide the much-needed guidance to the judges (and litigants!) on interpreting the Rules.

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