Scrutiny Committee: red-line the unitary patent proposals (Part I)

The AmeriKat pestering her IT
department to make her computer
work this week...

After a couple desperate "meows" over the phone to her IT department last week, the AmeriKat finally was able to listen to the latest, but improbable, last round of the House of Common's European Scrutiny Committee's questioning of Baroness Wilcox on the unitary patent proposals.  This followed the earlier truncated session on 15 February 2012 (see AmeriKat posts here and here). Had the AmeriKat been even slower with her post and the IT weevils in her computer been more obstructive, perhaps she could have saved herself the countless hours spent painfully transcribing the session because, a mere two days later, the transcript of the proceedings were made available online (here). (Yes, the AmeriKat does transcribe the sessions before she posts)

Readers may recall that, by the end of the previous session in February, the questioning by the Members of the House of Commons Scrutiny Committee crescendoed with pointed examination being conducted regarding the communication following the European Council Summit Meeting of 30 January which stated that the EU was intending to reach

"A final agreement on the last outstanding issue in the patent package."

Baroness Wilcox

During the previous session, when questioned, Neil Feinson of the UK's Intellectual Property Office (IPO) stated that he did not "recognize what was in the European Council communiqué as being the situation in the negotiations" and that it was a "simplification" of the outstanding matters at issues. However, the witnesses would not be pressed into commenting on whether they therefore considered that the communiqué was untruthful. Thankfully for the Minister and her team, as the questioning was reaching fever-pitch with demands from Michael Connarty MP for clear answers, the session was cut short with Baroness Wilcox needing to catch a flight to Copenhagen. The first half of of the session two weeks ago took a less tense tone but the end of the session, again, ended with aggressive questioning by the MPs.

A done deal?

Chairman William Cash MP
of  the House of Commons
Scrutiny Committee

Mr. William Cash MP, the Chairman of the Scrutiny Committee, opened the session by asking for a status update on the progress of the unitary patent proposals. The Minister explained that the flight to Copenhagen that prematurely ended the last session was the first opportunity she had had to speak to the Danes and "our European partners about the patent and the court in an attempt to resolve the issues still outstanding" under the new Danish Presidency. She stated that she and her team were supporting the work on the Rules of Procedure by the newly formed Committee (see post here) but that there was nothing further to report.

Mr. Cash MP asked whether the Council's statement was correct, that the patent package was effectively a done deal except for the location of the Central Division. Mr. Feinson replied that this was not the case and highlighted that the UK Government, like the UK stakeholders, also did not care for the events of 5 December during the Competitiveness Council session (IPKat report here):

"I think there are those at a senior level in Europe who would wish that it were a done deal and who do not want to concern themselves with the technical issues, of which our stakeholders and you have highlighted the importance. They would much rather that we could come to a quick deal and claim a victory collectively in Europe. What we have been saying is, 'No, we didn’t like what happened on 5 December; we didn’t agree with the process'. There are issues around both the location of the court and how the court is designed that we think need to be settled first. "

However, the IPKat informed the AmeriKat yesterday that at the Pharmaceutical Trade Mark Group conference in Brussels two days ago, Margot Frohlinger (Director DG Market at the European Commission) stated that the only outstanding issue on the unitary patent package was the location of the Central Division. The AmeriKat wonders how that marries with Mr. Feinson's comments regarding the Council communiqué and why there continues to be this message from Brussels if the location of the Central Division is not the only remaining issue? 


Articles 6 to 8 of the Proposed Regulation

On the issue of Articles 6 to 8 of the Proposed Regulation which deals with patent infringement (and thus makes substantive patent law subject to the preliminary reference jurisdiction),  Nicholas Fernandes of the Department for Business Innovation and Skills stated that the preliminary reference jurisdiction of the Court of Justice for the European Union (CJEU) would only come into play where matters of interpretation arose in relation to those articles. He said that matters may well be "so clear that they do not need to be referred to the Court of Justice" and that if

"an issue of interpretation is very clear because all Member States do it in the same way, in which case there is no need to refer. Therefore, the referrals to the court may not be as many as some have suggested."

Although one may wish that to be the case, Mr. Jacob Rees-Mogg MP suggested that that view was "quite optimistic". Mr. Feinson interjected explaining that the position was that they recognized that there is a potential problem embedding substantive EU law into the Regulations due to the preliminary reference mechanism and that the UK Government is

"trying to make sure that the substantive provisions around the definition of an infringement of a patent are not in the Regulation so that those points are not points of EU law that have to be taken to the ECJ. We cannot escape the ECJ's jurisdiction completely, but we are trying to ensure that it is very much only the setting up of the framework that feeds into the ECJ, and that the substance of the litigation is decided by the Unified Patents Court and its Appeal Court."

The Trade Mark Litigation Experience

Mr. Stephen Phillips MP

A brief discussion on the relevance of the acte clair doctrine followed, after which it was Stephen Phillips MP – the initiator the cross-examination style questioning regarding the EU Council communiqué during the last session – who asked Mr. Fernandes to summarize the impact of the existing decisions of the EU courts on trade mark litigation. Mr. Fernandes replied that:

"The area of trade mark litigation is different from the area we are looking at in patent law, because with the trade mark litigation a lot of law has been harmonized through the Trade Marks Directive and the Community Trade Mark Directive. Patent law, on the other hand, has been largely untouched by European legislation, so the opportunities for reference are less. Does that answer your question?"

Mr. Phillips MP replied that it answered his question, but the AmeriKat disagrees ["Unless it was an answer to an unspoken question", says Merpel].  Mr. Phillips's question was regarding the impact of the CJEU's decisions on trade mark litigation and whether if the inclusion of Articles 6 to 8 would mean that patent litigation would encounter a similar fate as its trade mark cousin, not whether there existed a comparable degree of harmonized European law which was subject to the preliminary referencing procedure.

Structure of the Unified Patent Court and Language

Probably the only dictionary
that will not be required
in the Court of First Instance for
the moment...

The panel was then questioned by Ms. Nia Griffith MP regarding the structure of and language of the Unified Patent Court. She also asked if the panel could confirm whether it was true that Germany was proposing that it would have eight or so courts. As predicted, Baroness Wilcox could not confirm the gossip, but Mr. Feinson explained that the Court of First Instance would be a combination of local and/or regional divisions and the Central Division. A local division would be the division in a particular Member State if that Member State so decided to establish a court. Otherwise, Member States may combine forces and set up a regional division. The regional and local divisions will operate in the local language of the division, or potentially more than one language in instances of a regional division. The Court of Appeals would then be the referral court for the Court of First Instance. The Central Division and the Court of Appeal would operate in the language of the patent (English, French and German).

Generally, infringement cases are commenced in the local or regional divisions, whereas validity or revocation cases start in the Central Division. Baroness Wilcox explained that it was very important that the rules and procedure of the system would identically apply to every court within the 25 Member States signed up to the agreement and that there would not be different rules applying throughout the various local or regional divisions.

The AmeriKat wonders whether the net effect of this is that in the Courts of First Instance you may potentially have to deal with 5 or more languages for one case depending on whether you are bringing infringement and validity proceedings? Surely not….

The Judges and Location of the Central Division

Judges, O' Judges, where art
thou?

Responding to questions by Mr. Chris Kelly MP and Mr. Phillips MP on whether there would be enough suitably qualified and experienced judges to man the local and regional divisions, especially in smaller states. Liz Coleman of the IPO explained that some smaller states have already begun speaking about joining regional divisions with larger states, such as the UK. This would avoid the problem whereby a small state may not have enough suitably qualified patent judges to fulfil the requirements of a local division.

On the issue of the location of the Central Division, Baroness Wilcox expounded on the general merits of having the Central Division in London – the amount of income being brought into London, the location, the expertise of practitioners and litigation support, etc. There was little of note in this section, save for the suggestion during the Polish Presidency that the head of the Central Division may not be a national from the host state, but a national from another Member State. Baroness Wilcox stated that the Government would like to examine whether this suggestion that was something was still possible if London did not obtain the seat of the Central Division. If so, the AmeriKat wonders if the UK practitioners would so easily give up one of our cherished patent judges for the Central Division?