Author: Louise AMAR

Louise Amar is a junior lawyer at Amar Goussu Staub. She graduated from the University of Kent (LLB in English and French Law), the Université Paris I Panthéon Sorbonne (Licence) and the University of London, School of Oriental and African Studies (LLM in Law Development and Governance). She completed her Legal Practice Course at BPP London in 2015. Louise has been managing the UPC Blog since 2013.
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ESOMA’s challenge of the UPCA before Belgium’s constitutional court dropped

We highlighted in May that the European Software Market Association was challenging the Unitary Patent before the Belgian Constitutional Court. ESOMA in fact believed that the Unitary Patent “violated the Belgian Constitution (by denying) Belgians equality before the law, (by discriminating) on basis of language, (by violating) the separation of powers, and (was) an illegal political maneuver by the European Patent Office”.

However the Court declared on 21 st May 2015 that ESOMA’s request was inadmissible, as it appeared that the claim was filed after the 60 day period within which the Consituational Court could address the constitutionality of Belgian laws. The law allowing the ratification of the UPCA was in fact published in the Moniteur Belge on 09th September 2014 while ESOMA’s request was only filed on 09th March 2015. The Constitutional Court therefore did not have a chance to look into details in ESOMA’s claims  and declined to consider the substantial issues allegedly at stake.

After the ECJ decision opposing Spain and the European Commission, this is thus the second decision in favour of the UPC, clearing the way for its planned entry into force in 2016.

 

The Belgian Constitutional Court decision can be found here.

 

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One more…Luxembourg has now ratified the UPC Agreement!

Protocol to the Agreement on a Unified Patent Court on provisional application

As confirmed by the Council of the European Union, Luxembourg deposited its instrument of ratification in Brussels on 22/05/15. It is thus official: Luxembourg has ratified the UPCA. Luxembourg is the first country to ratify the UPCA in 2015 and hopefully not the last!

In fact, seven out of twenty-one countries have now ratified the UPCA. However for the UPC Agreement to enter into force a total of thirteen countries is necessary, divided as follows: France, Germany, UK  + ten other countries. The Council of the European Commission counts at the moment: France + six other countries. Therefore for the UPC to stay on track and be effective by 2016 Germany, UK + four other countries need to ratify reasonably soon.

 

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The Unified Patent Court and the Brussels 1 Regulation (recast): How has the Regulation been modified?

How was the Brussels I Regulation modified in order to accommodate the Unitary Patent and the Unified Patent Court? 

Article 89 of the UPC Agreement makes the entry into force of the Agreement dependent upon, among other conditions, the entry into force of the amendments to Regulation (EU) N° 1215/2012 or Brussels I Regulation (recast). The Brussels I Regulation (recast) was adopted on 12 December 2012 to replace Regulation (EC) N°44/2001, and its provisions apply since 10 January 2015 (Article 81 Regulation N°1215/2012). The need to amend the Brussels I Regulations arose because:

  • Under Article 71 of Regulation No 44/2001, Member States were prevented from concluding any new convention that, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments
  • The UPC Agreement does not lay down its own rules on international jurisdiction –since the rules on international jurisdiction, recognition and enforcement of judgments concerning the disputes falling within the competence of the UPC had previously been unified within the EU through the Brussels I Regulation;
  • Article 31 of the UPC Agreement states that the international jurisdiction of the UPC shall be established in accordance with Regulation N°1215/2012.

The Brussels I Regulation (recast) sets out a harmonised recognition and enforcement of foreign judgment rules in civil and commercial matters within the European Union. Regulation N° 1215/2012 is a recast version of the prior Brussels I Regulation, which had been in force since 1 March 2002. The recast Regulation applies to legal proceedings commenced in the courts of EU Member States on or after 10 January 2015; the Brussels I Regulation however continues to apply to legal proceedings commenced before that date. Both Regulations apply to all EU Member States and in order to ensure a consistent application of the Regulation throughout the European Union, any national court or tribunal is able to refer a question of interpretation of the Regulation to the Court of Justice of the European Union (CJEU).

The basic rule of jurisdiction established by the Regulation is that the defendant must be sued in the courts of the Member State in which she is domiciled. A defendant who is domiciled in one Member State may only be sued in the courts of another Member State to the extent authorised by the Regulation. The introduction of the unitary patent however led to some modifications of that rule, now contained in the Brussels I Regulation (Recast). The Unified Patent Court will in fact have jurisdiction over claims regarding the unitary patent where a defendant is domiciled in a Member State (art 71b(1) and art 71a). Where the defendant is not so domiciled then it will also have jurisdiction where a person consents to the UPC’s jurisdiction (art 71b(2))or where the patent is infringed causing damage within the EU and the defendant has property located in a country which is party to the Agreement on a Unified Patent Court and the dispute has a significant connection with any Member State to the UPC (art 71b(3)).

All necessary changes relating to the UPC  Agreement are combined in four new provisions all contained in Article 71, which states:

“1. This Regulation shall not affect any conventions to which the Member States are parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.

2. With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner:

(a)  this Regulation shall not prevent a court of a Member State which is party to a convention on a particular matter from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another Member State which is not party to that convention. The court hearing the action shall, in any event, apply Article 28 of this Regulation;

(b)  judgments given in a Member State by a court in the exercise of jurisdiction provided for in a convention on a particular matter shall be recognised and enforced in the other Member States in accordance with this Regulation.

Where a convention on a particular matter to which both the Member State of origin and the Member State addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of this Regulation on recognition and enforcement of judgments may be applied.”

In order to ensure the coherent application of the UPC Agreement and the Brussels I Regulation (recast) , it was in fact necessary to address the following issues in the Brussels I Regulation (recast):

Clarify in the text of the Regulation that the Unified Patent Court and the Benelux Court of Justice are ‘courts’ within the meaning of the Brussels I Regulation:

By clarifying that both the Unified Patent Court and the Benelux Court of Justice should be considered as “courts” within the meaning of the Brussels I Regulation (recast), it ensures that the international jurisdiction of these courts will be determined by the Brussels I Regulation. It in particular ensures that defendants which would expect to be sued in a specific Member State on the basis of the rules of the Brussels I Regulation may be sued before either a division of the Unified Patent Court or before the Benelux Court of Justice which is located in another Member State than the national courts designated on the basis of the Brussels I Regulation. Legal certainty and predictability for defendants requires that this change of territorial jurisdiction is set out clearly in the text of the Brussels I Regulation.

Clarify the operation of the rules on jurisdiction with respect to the Unified Patent Court and the Benelux Court of Justice insofar as defendants domiciled in Member States are concerned. Create uniform rules for the international jurisdiction vis-à-vis third State defendants in proceedings against such defendants brought in the Unified Patent Court and Benelux Court of Justice in situations where the Brussels I Regulation does not itself provide for such rules but refers to national law;

The new rule in Article 71b, paragraph 1 prescribes that the Unified Patent Court and the Benelux Court of Justice will have jurisdiction any time when a national court of one of the respective Contracting Member States would have jurisdiction based on the rules of the Brussels I Regulation. On the contrary, the Unified Patent Court and the Benelux Court of Justice will not have jurisdiction when no national court of a Contracting Member State has jurisdiction pursuant to the Brussels I Regulation.

Define the application of the rules on lis pendens and related actions in relation to the Unified Patent Court and the Benelux Court of Justice on the one hand and the national courts of Member States which are not Contracting Party to the respective international agreements on the other hand. Define also the operation of these rules during the transitional period referred to in Article 83(1) UPC Agreement:

The new proposal in Art. 71b, paragraph 2 extends the Regulation’s jurisdiction rules to disputes involving third State defendants domiciled in third States. In addition, the Unified Patent Court’s and Benelux Court of Justice’s jurisdiction to issue provisional, including protective measures is ensured even when the courts of third States have jurisdiction as to the substance of the matter.

As a result of this extension, access to the Unified Patent Court and the Benelux Court of Justice will be ensured in situations where the defendant is not domiciled in an EU Member State. In addition, such access is ensured independently of which instance or division within the Unified Patent Court is seized of a claim.

In addition, the new proposal in Art. 71b, paragraph 3 establishes one additional forum for disputes involving defendants domiciled outside the EU. The proposal provides that a non-EU defendant can be sued at the place where moveable assets belonging to them are located, provided their value is not insignificant compared to the value of the claim and that the dispute has a sufficient connection with the Member State of the court seized. The forum of the location of assets balances the absence of the defendant in the Union.

Clarify the operation of the rules on recognition and enforcement in the relations between Member States which are and Member States which are not Contracting Parties to the respective international agreements:  

The new rule in Art 71c prescribes that the rules on lis pendens and related actions of the Brussels I Regulation (recast) apply between the Unified Patent Court or the Benelux Court of Justice on the one hand and the courts of non-Contracting Member States on the other hand. Finally, this Article also prescribes that the rules of the Brussels I Regulation (recast) apply when, during the transitional period referred to in Article 83(1) UPC Agreement, proceedings are brought before the Unified Patent Court on the one hand and before the national courts of Contracting Member States to that Agreement on the other hand.

Clarify the operation of the rules on recognition and enforcement in the relations between Member States which are and Member States which are not Contracting Parties to the respective international agreements:

Art. 71d regulates the recognition and enforcement of judgments of the Unified Patent Court and the Benelux Court of Justice in Member States which are not Contracting Parties to the respective international agreements, as well as the recognition and enforcement of judgments given in Member States which are not Contracting Parties to these agreements in matters governed by such agreements which need to be recognised and enforced in Member States Contracting Parties to the international agreements.

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UPC Public Consultation on court fees and recoverable costs – open until 31st July

The Unified Patent Court has opened its public consultation on the rules on court fees and recoverable costs. The consultation will close on 31st July 2015, and all contributions should be sent to secretariat@unified-patent-court.org.

The consultation document presents two options for a revised Rule 370, a table of fees, a scale of ceilings for recoverable costs and an Explanatory Note. As well as proposing fee levels, the consultation also addresses :

  • support for small and medium-sized enterprises (SMEs), not for profit organisations and certain other bodies as set out in the Agreement by providing two possible options
  • the threshold at which a value-based fee will be payable
  • a scale of ceilings for recoverable costs

One point to take into consideration however in evaluating the proposed fee structure is that “the fee structure for the Unified Patent Court will comprise fixed fees and, for certain actions, an additional value based fee.  The fee levels proposed are the lowest that will enable eventual sustainability of the Court”…

 

 

 

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Spain v Council of the European Union: A quick overview of the CJEU judgment

On 5th May 2015 the CJEU dismissed both of Spain’s actions against the regulations implementing enhanced cooperation in the area of the creation of unitary patent protection. Spain sought the annulment of the two regulations forming part of the unitary patent package package, namely the regulation on the creation of unitary patent protection (Case C-146/13) and the regulation governing the applicable translation arrangements (Case C-147/13). This post will look at the findings of the Court in dismissing Spain’s actions.

The UPC Blog by LAVOIX has also published a comprehensive post looking the whole course of these cases opposing Spain, Italy and the Council of European Union. It looks at Spain and Italy’s pleas, the opinion of the Advocate General Yves Bot and the Findings of the Court.

The UPC Blog by LAVOIXalso covered the Advocate General’s opinion in a separate post that can be found here.

 

The Court looked at Spain’s please in relation to Regulation EU 1257/2012 and EU 1260/2012. Its findings are explained below:

 

First, regarding Regulation EU 1257/2012:

Concerning the issue raised about judicial review: The Court rejected Spain’s argument by pointing out that the regulation is in no way intended to delimit, even partially, the conditions for granting European patents – which are exclusively governed by the EPC – and that it does not incorporate the procedure for granting European patents laid down by the EPC into EU law. The Court stated that the regulation merely “(i) establishes the conditions under which a European patent previously granted by the European Patent Office pursuant to the provisions of the EPC may, at the request of the patent proprietor, benefit from unitary effect and (ii) provides a definition of that unitary effect”.

Concerning Article 118 TFEU and uniform protection: The Court pointed out that unitary patent protection is apt to prevent divergences in terms of patent protection in the participating Member States and, accordingly, provides uniform protection of intellectual property rights in the territory of those States.

Concerning the Infringement of Article 291(2) TFEU: The Court observed that the EU legislature did not delegate any implementing powers which are exclusively its own under EU law to the participating Member States or the European Patent Office. Hence, in that regard that, according to the TFEU, it is for the Member States to adopt all measures of national law necessary to implement legally binding Union acts.

 

 

Second, regarding Regulation EU 1260/2012:

Concerning the breach of the principle of non-discrimination: The Court emphasised that “the regulation has a legitimate objective, namely the creation of a uniform and simple translation regime for the EPUE (European Platform of Universities engaged in Energy Research, Education and Training) so as to facilitate access to patent protection, particularly for small and medium-sized enterprises”. The language arrangements established by the regulation is as a whole “easier, less costly and legally more secure”.

Concerning the disregard of the Meroni case law: The Court held that if that the EPO is given additional tasks, it is “a consequence of the fact that the participating Member States, as contracting parties to the EPC, entered into a special agreement within the meaning of Article 142 of the EPC”. The Court thus added that “since the Council did not, contrary to what is asserted by the Kingdom of Spain, delegate to the participating Member States or to the EPO implementing powers which are uniquely its own under EU law, the principles set out by the Court in the judgment in Meroni v High Authority (9/56, EU:C:1958:7)” cannot apply.

 

Concerning the lack of a legal basis for Article 4 of the contested regulation: “the second paragraph of Article 118 TFEU does not preclude, when the language arrangements for European intellectual property rights are being determined, reference being made to the language arrangements of the organisation of which the body responsible for issuing the intellectual property right to which unitary effect will be attributed forms part. It is moreover of no relevance that the contested regulation does not establish an exhaustive body of rules for the language arrangements applicable to the EPUE. The second paragraph of Article 118 TFEU imposes no requirement on the Council to approximate all aspects of the language arrangements for intellectual property rights established on the basis of the first paragraph of Article 118 TFEU. As regard Article 4 of the contested regulation, it is clear that this provision is directly part of the language arrangements for the EPUE, since it sets out the special rules governing the translation of the EPUE in the specific context of a dispute. Since the language arrangements for the EPUE are defined by all the provisions of the contested regulation and more specifically Articles 3, 4 and 6, which are intended to apply to different situations, Article 4 of the regulation cannot be detached, with respect to the legal basis, from the remainder of the provisions of the regulation.” In the light of these arguments, the Court dismissed the argument that article 4 must be rejected.

 

Concerning the infringement of the principle of legal certainty the Court looked at:

  • The alleged absence of costs ceiling or method of establishing the compensation scheme, the court followed the opinion of Advocate General Yves Bot, and found that, under Article 9(2) and Article 9(1) of Regulation No 1257/2012 a decision on the costs ceiling or the method of establishing the compensation scheme are matters which fall through a select committee of the Administration Council of the European Patent Organisation to the participating Member States, as Contracting States to the EPC.
  • The fact that it is only the patent in the language in which it has been issued which produces legal effects and not the translation and concluded that “does not create any legal uncertainty, since it enables the operators involved to know with certainty which language is authentic in order to assess the extent of the protection conferred by the EPUE”.
  • Whether the omission to indicate the specific consequences of the possibility that an alleged patent infringer acted in good faith infringe the principle of legal certainty. It decided that it did not as the court has jurisdiction (as stated in recital 9) to undertake a case-by-case basis analysis by examining, inter alia, whether the alleged patent infringer is a small or medium-sized enterprise operating only at local level and taking into account the language of the proceedings before the EPO and, during the transitional period, the translation submitted together with the request for unitary effect.
  • At the alleged lack of a guarantee that the machine translation system, and the uncertainty as to whether it will function properly. The Court, it must be observed that the EU legislature provided for a transitional period of 12 years for the introduction of the component of the language arrangements which involves machine translation of patent applications and specifications into all the official languages of the European Union. The Court added that there is no sufficient ground for the annulment of the contested regulation since no guarantee that that system, which is to be operational at the end of a transitional period, will function properly was given.

Concerning the infringement of the principle of the autonomy of EU law: the direct application of a regulation, laid down in the second paragraph of Article 288 TFEU, means that its entry into force and its application in favour of or against those subject to it are independent of any measure of reception into national law, unless the regulation in question leaves it to the Member States themselves to adopt the necessary legislative, regulatory, administrative and financial measures to ensure the effective application of the provisions of that regulation

 

 

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Spain and Italy’s challenges to the Unitary Patent: From Spain’s initial action to the CJEU final judgment.

This post looks at the legal challenges that Spain and Italy brought against the Unitary patent and the EU legislation notably Regulation EU 1257/2012 and 1260/2012 which permitted its creation. On 5th May the Court of Justice of the European Union dismissed all actions against both regulations. So what were Italy and Spain’s pleas and the findings of the Court?

 

 

May 2011: Spain and Italy v Council of the European Union

 

I. In March 2011 the Council of the European Union issued a decision authorizing enhanced cooperation for the creation of a unitary patent protection. The enhanced co-operation mechanism is set out in the Lisbon Treaty and permits nine or more member states to use the EU’s processes and structures to make agreements that bind only those countries.

 

Spain and Italy applied before the Court of Justice of the European Union for the annulment of this decision on 30th and 31st May 2011 respectively.

They submitted four pleas:

  • Lack of competence of the Council to establish the enhanced cooperation
  • Misuse of powers
  • Breach of the condition that a decision authorising enhanced cooperation must be adopted as a last resort

 

II. The CJEU dismissed their actions on 16th April 2013 and found:

First, that the Council’s decision was within the boundaries of Article 118 TFEU as it is ‘[i]n the context of the establishment and functioning of the internal market’ that the first paragraph of Article 118 TFEU confers the competence to create European intellectual property rights and to set up, as regards those rights “centralised, Union-wide authorisation, coordination and supervision arrangements. (…) The competence, conferred by the second paragraph of Article 118 TFEU, to establish language arrangements for those rights is closely bound up with the introduction of the latter and of the centralised arrangements referred to in the first paragraph of that article. As a result, that competence too falls within the ambit of the functioning of the internal market.”

Second, that the decision to use the enhanced cooperation procedure had been taken as a last resort after multiple unsuccessful attempts and “having found that the unitary patent and its language arrangements could not be established by the Union as a whole within a reasonable period”. The Court also made clear that this cooperation contributes to the process of integration.

Finally, the Court rejected Spain and Italy’s argument about the Unitary Patent’s undermining the internal market through its uniform but non exhaustive protection, which applies in part only of the European Union. The Court in fact found that the creation of a framework only binding Members States who have cooperated is inherent to the procedure of enhanced cooperation.

 

 

 

May 2013: Spain v Council of the European Union

 

Following this judgment, Italy decided to sign the Unified Patent Court Agreement, whereas Spain filed in April 2013 actions against Regulation EU 1527/2012 on the creation of a Unitary Patent protection and Regulation EU 1260/2012 on translation arrangements which directly resulted from the use of the enhanced cooperation.

 

I. Spain’s claims (22nd March 2013):

 On 22nd March 2013, Spain lodged an application before the CJEU against the European Parliament and the Council of the European Union for two actions.  It asked:

 

First, to declare legally non-existent Regulation EU 1257/2012 of the European Parliament and of the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection; in the alternative to annul Regulation EU 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection for lack of legal basis, and breach of the principle of autonomy and uniformity in the application of European Union law. Finally, if neither of these two options were chosen, to annul Article 9(1), Article 9(2), and Article 18(2), and all references in Regulation EU 1257/2012 to the Unified Patent Court as the judicial regime for the European patent with unitary effect and as the source of law for the EPUE.

The arguments put forward were the following (case 146/13):

  • Breach of the rule of law. Spain argued that the Regulation EU 1257/2012 was established on the basis of a right granted by the European Patent Office, whose acts are not subject to judicial review.
  • Regulation EU 1257/2012 does not introduce measures guaranteeing the uniform protection envisaged in Article 118 TFEU.
  • Use of enhanced cooperation for purposes other than those provided for in the Treaties.
  • Infringement of Article 291(2) TFEU and, in the alternative, misapplication of the Meroni case-law in the regulation of the system for setting renewal fees and for determining the ‘share of distribution’ of those fees.
  • Misapplication of the Meroni case-law in the delegation to the European Patent Office of certain administrative tasks relating to the European patent with unitary effect.
  • Breach of the principles of autonomy and uniformity in the application of European Union law, regarding the rules governing the entry into force of Regulation EU 1257/2012.

 

Second, to annul Regulation EU 1260/2012 implementing enhanced cooperation regarding translation arrangements for the Unitary Patent. Spain argues that the Regulation lacks legal basis and infringes the principles of non-discrimination, legal certainty, and autonomy.  Alternatively, Spain asked the CJEU to annul Articles 4, 5, 6(2), and 7(2) of Regulation EU 1260/2012 of 17 December 2012 implementing enhanced cooperation for the creation of unitary patent protection with regard to the applicable translation arrangements.

The arguments put forward regarding this second regulation were (case 147/13):

  • Infringement of the principle of non-discrimination due to a language arrangement prejudicial to individuals whose language is not one of the official languages (English, French and German) of the European Patent Office.
  • Lack of legal basis for Article 4.
  • Infringement of the principle of legal certainty.
  • Disregard of the Meroni case in the delegation of the administration of the compensation scheme (Article 5) and the publication of the translations (Article 6(2)) to the European Patent Office.
  • Infringement of the principle of the autonomy of European Union law due to the fact that the application of the Regulation relies on the entry into force of the Agreement on a Unified Patent Court. 

 

 

II. Advocate General Yves Bot’s Opinion (18th November 2014):

Opinion for case 146/13 can be found here.

Opinion for case 147/13 can be found here.

Press release can be found here.

 The Advocate General delivered his opinion on 18th November 2014 (see our post here). Yves Bot proposed that the Court of Justice of the European Union dismissed Spain’s challenge to Unitary Patent Regulations and argued that:

Regarding the creation of the Unitary Patent protection:

  • The Regulation EU 1257/2012  “only attributes to European patents an additional characteristic, namely the unitary protection, without affecting the procedure regulated by the Convention (on the grant of European Patent) The protection conferred is regulated by the uniform implementation provisions of the regulation. That protection brings real benefit in terms of uniformity and hence of integration compared with the situation resulting from the implementation of the rules laid down by the Convention”.
  • The EU Member States drafted the EU Regulation with the intention that the EU’s legislature would be shared with the Member States, enabling it to make references to national laws. The Unitary Patent will guarantee a uniform protection through national legislation applied to European Patent which will then be implemented “throughout the territory of the Member States participating in the enhanced cooperation.”

Regarding the renewal fees:

  • Yves Bot considers that the power to set the renewal level can only be exercised within a predetermined legislative framework “established and clarified by the EU legislature”.

Regarding Spain’s claim that the regulation provides for a specific judicial regime for the European Patent with Unitary Effect contained in the Agreement on a Unified Patent Court:

  • The Advocate General takes the view that the Court does not have jurisdiction to review the content of the Agreement on a Unified Patent Court in an action for annulment of the regulation.
  • The Agreement on a Unified Patent Court does not fall within any of the categories of acts the lawfulness of which is subject to judicial review by the European Court of Justice. In fact it is an intergovernmental agreement negotiated and signed only by certain Member States on the basis of international law and the Regulation EU 1257/2012 does not approve an international agreement but is intended to implement enhanced cooperation in the area of creation of unitary patent protection.

Regarding Spain’s claim that “the application of the regulation is absolutely dependent on the entry into force of the Agreement on a Unified Patent Court, and that the effectiveness of the power exercised by the European Union through the contested regulation thus depends on the will of the Member States which are party to the Agreement on a Unified Patent Court”:

  • The Advocate General highlights that it will be the role of the Unified Patent Court to ensure “the proper functioning of the European patent with unitary effect, consistency of case-law and hence legal certainty”. Regulation EU 1257/2012 is thus not at the mercy of willing Member States. 

Regarding Spain’s refusal to ratify the Unified Patent Court Agreement:

  • The Advocate General is keen to emphasize that it is an infringement of the principle of sincere cooperation.  By not ratifying the UPCA, Member States are “jeopardising the attainment of the Union’s harmonisation and uniform protection objectives”
  • Yves Bot also notes that “the principle of sincere cooperation requires the participating Member States to take all appropriate measures to implement enhanced cooperation, including ratification of the Agreement on a Unified Patent Court, as such ratification is necessary for its implementation.”

 Regarding the language arrangements and the alleged breach of equality:

  • There is no principle of equality of language, therefore the choice of the English, French and German language “pursues a legitimate objective and is appropriate and proportionate”. Hence, if “the language arrangements chosen do certainly entail a curtailment of the use of languages, they pursue a legitimate objective of reducing translation costs.”
  • The purpose of having only three official languages derives from the fact that “the system introduced is aimed at ensuring unitary patent protection throughout the territory of the participating Member States whilst avoiding excessively high costs by establishing the language arrangements” thus allowing a reduction in translation costs.
  • Having only three languages acknowledges the realities of the patent sector, both in terms of research (“most scientific papers are published in German, English or French”) and economic reality (“those languages are spoken in the Member States from which most of the patent applications in the EU originate”). Moreover, it also “ensures a certain stability for economic operators and professionals in the patent sector”.

Regarding the principles of legal certainty and proportionality:

  • Finally the Advocate General looks at these two principles and concludes that neither of them is breached as the language requirements will in fact act as safeguards for legal certainty and a compensation scheme for translation cost will be created.

 

III. CJEU judgment (5th May 2015):

 The CJEU dismissed both cases on 05th May 2015. The Court findings are explained below:

First, regarding Regulation EU 1257/2012:

  • Concerning the issue raised about judicial review: The Court rejected Spain’s argument by pointing out that the regulation is in no way intended to delimit, even partially, the conditions for granting European patents – which are exclusively governed by the EPC – and that it does not incorporate the procedure for granting European patents laid down by the EPC into EU law. The Court stated that the regulation merely “(i) establishes the conditions under which a European patent previously granted by the European Patent Office pursuant to the provisions of the EPC may, at the request of the patent proprietor, benefit from unitary effect and (ii) provides a definition of that unitary effect”.
  • Concerning Article 118 TFEU and uniform protection: The Court pointed out that unitary patent protection is apt to prevent divergences in terms of patent protection in the participating Member States and, accordingly, provides uniform protection of intellectual property rights in the territory of those States.
  • Concerning the Infringement of Article 291(2) TFEU: The Court observed that the EU legislature did not delegate any implementing powers which are exclusively its own under EU law to the participating Member States or the European Patent Office. Hence, in that regard that, according to the TFEU, it is for the Member States to adopt all measures of national law necessary to implement legally binding Union acts.

 

Second, regarding Regulation EU 1260/2012:

  • Concerning the breach of the principle of non-discrimination: The Court emphasised that “the regulation has a legitimate objective, namely the creation of a uniform and simple translation regime for the EPUE so as to facilitate access to patent protection, particularly for small and medium-sized enterprises”. The language arrangements established by the regulation is as a whole “easier, less costly and legally more secure”.
  • Concerning the disregard of the Meroni case law: The Court held that if that the EPO is given additional tasks, it is “a consequence of the fact that the participating Member States, as contracting parties to the EPC, entered into a special agreement within the meaning of Article 142 of the EPC”. The Court thus added that “since the Council did not, contrary to what is asserted by the Kingdom of Spain, delegate to the participating Member States or to the EPO implementing powers which are uniquely its own under EU law, the principles set out by the Court in the judgment in Meroni v High Authority (9/56, EU:C:1958:7)” cannot apply.
  • Concerning the lack of a legal basis for Article 4 of the contested regulation: “the second paragraph of Article 118 TFEU does not preclude, when the language arrangements for European intellectual property rights are being determined, reference being made to the language arrangements of the organisation of which the body responsible for issuing the intellectual property right to which unitary effect will be attributed forms part. It is moreover of no relevance that the contested regulation does not establish an exhaustive body of rules for the language arrangements applicable to the EPUE (European Platform of Universities engaged in Energy Research, Education and training).  The second paragraph of Article 118 TFEU imposes no requirement on the Council to approximate all aspects of the language arrangements for intellectual property rights established on the basis of the first paragraph of Article 118 TFEU. As regard Article 4 of the contested regulation, it is clear that this provision is directly part of the language arrangements for the EPUE, since it sets out the special rules governing the translation of the EPUE in the specific context of a dispute. Since the language arrangements for the EPUE are defined by all the provisions of the contested regulation and more specifically Articles 3, 4 and 6, which are intended to apply to different situations, Article 4 of the regulation cannot be detached, with respect to the legal basis, from the remainder of the provisions of the regulation.” In the light of these arguments, the Court rejected the argument that article 4 must be rejected.
  • Concerning the infringement of the principle of legal certainty the Court looked at:
  • The alleged absence of costs ceiling or method of establishing the compensation scheme, the court followed the opinion of the Advocate General, and found that, under Article 9(2) and Article 9(1) of Regulation No 1257/2012 a decision on the costs ceiling or the method of establishing the compensation scheme are matters which fall through a select committee of the Administration Council of the European Patent Organisation to the participating Member States, as Contracting States to the EPC.
  • The fact that it is only the patent in the language in which it has been issued which produces legal effects and not the translation and concluded that “does not create any legal uncertainty, since it enables the operators involved to know with certainty which language is authentic in order to assess the extent of the protection conferred by the EPUE”.
  • Whether the omission to indicate the specific consequences of the possibility that an alleged patent infringer acted in good faith infringe the principle of legal certainty. It decided that it did not as the court has jurisdiction (as stated in recital 9) to undertake a case-by-case basis analysis by examining, inter alia, whether the alleged patent infringer is a small or medium-sized enterprise operating only at local level and taking into account the language of the proceedings before the EPO and, during the transitional period, the translation submitted together with the request for unitary effect.
  • At the alleged lack of a guarantee that the machine translation system, and the uncertainty as to whether it will function properly. The Court, it must be observed that the EU legislature provided for a transitional period of 12 years for the introduction of the component of the language arrangements which involves machine translation of patent applications and specifications into all the official languages of the European Union. The Court added that there is no sufficient ground for the annulment of the contested regulation since no guarantee that that system, which is to be operational at the end of a transitional period, will function properly was given.
  • Concerning the infringement of the principle of the autonomy of EU law: the direct application of a regulation, laid down in the second paragraph of Article 288 TFEU, means that its entry into force and its application in favour of or against those subject to it are independent of any measure of reception into national law, unless the regulation in question leaves it to the Member States themselves to adopt the necessary legislative, regulatory, administrative and financial measures to ensure the effective application of the provisions of that regulation

 

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A new challenge to the Unitary Patent Agreement before Belgium’s Constitutional Court

The IPCopy blog highlights a new challenge to the Unitary Patent Agreement brought by the European Software Market Association, a non-for-profit organisation which presents itself as “the voice of independent IT firms, professionals, and consumers”. The ESMA filed a suit before Belgium’s Constitutional Court at the beginning of April.

The ESMA argues that the Unitary Patent violates the Belgian Constitution by “deny(ing) Belgians equality before the law, discriminat(ing) on basis of language, violat(ing) the separation of powers, and (being) an illegal politician manoeuvre by the European Patent Office.”

As Belgium ratified the UPCA in June 2014, it is highly unlikely that this challenge will have any impact on the UPCA or its entry into force. However at a time where all governments should be considering a quick ratification, let’s hope that this does not incite new judicial challenges.

We would love to hear from our readers if they know any other organisation/individuals challenging the UPCA before the Courts.

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UPC Mock Trial 2: 3 Abrasive v La Toilemeri

UPC Judges recruitment 2019

 On Friday 2nd April 2015 as announced on the UPC Blog, the « Union pour la Juridiction Unifiée des Brevets » organised a second mock trial replicating the Unified Patent Court. (Find here our post on the first UPC mock trial organised by the UJUB). It was with great pleasure that the UPC Blog editorial team attended this mock, which once more offered a remarkable insight into the functioning of the UPC and gave substance to its rules of procedure and to the UPCA.

The afternoon was divided into three sessions:

  • Hearing on request to preserve evidence and inspection of the premises
  • Hearing on the application for provisional measures
  • Court delivered its judgment

I. The Facts:

This second mock trial opposed a US company “3 Abrasive” (the Claimant) and a French company “La Toilemeri” (the Defendant) over an infringement action of a European patent for “flexible abrasive”.

The patented invention was described in details as “a method for manufacturing an abrasive member comprising a flexible sheet with a multitude of discrete metal protuberance wherein a multitude of copper protuberance are formed on the flexible sheet, nickel protuberances are electrodeposited over the copper protuberances in the presence of particulate abrasive material so that the particulate abrasive material becomes embedded in the nickel deposits and wherein the voids between the protuberances are at least partially filled with resin material, the resin material being selected so as to reduce lateral movement of the nickel deposits.”

This patent is “valid and in force in the Contracting States designated by the Patent, including France, Germany, The Netherlands, United Kingdom and Sweden. All the Designated Contracting States of the Patent have ratified and implemented the UPC Agreement.”

The patent was also the subject of an opposition proceeding in the European Patent Office. In a decision dated 3 September 2014, the opposition division however had rejected the opposition and decided that the patent be maintained as granted. At the time of the mock trial, an appeal was pending before a Board of Appeal.

3 Abrasive alleged that La Toilemeri, the Defendant advertised a product on its website whose characteristics could only be obtained with the method developed in 3 Abrasive’s patent. La Toilemeri, in fact marketed a product described as “an excellent lateral bearing of the abrasive patches, a reinforced securing of the abrasive patches onto the support.”

Following this discovery, 3 Abrasive decided to engage an infringement action before the UPC local division in Paris since no application for opt-out had been made and La Toilemeri is domiciled in France. The Statement of claim was filed on 13 October 2014 in English, which under Art 49(2) UPCA, is one of the official languages of the EPO that the Paris local division accepts.

La Toilemeri filed a defence on 18 December 2014 “challenging any evidence of infringement” and a counter claim for revocation of the Patent. Simultaneously, the Defendant filed an Intervention in the Appeal procedure, which had been initiated at the EPO on 21 November 2014 by a third party. The Defendant, also requested the Court that, under the provisions of Rule 298, the appeal procedure at the EPO be accelerated and to stay its proceedings pending the outcome of the EPO appeal.

The local division in Paris:

The Panel of the local division in Paris comprised three judges: Mr Paul Maier (FR), President, Mrs Sophie Canas (FR) and Mr Colin Birss (UK), who was also appointed in October 2014 as the Judge Rapporteur (following Rule 18).

According to Article 33 (3)(a) UPCA the Court then decided to keep the applications for infringement and revocation together and Mr Kim Finnilä (FI) was subsequently allocated to the panel as technically qualified judge.

 

II. Application for preserving evidence and inspection (The application can be seen here p 89 of the binder):

 

Following La Toilemeri’s statement of defence, in which it insisted that 3 Abrasive did not have any evidence of the alleged reproduction of 3 Abrasive’s method of manufacturing, 3 Abrasive decided to file on 29 December 2014 an application for preserving evidence (Rule 192) with a request of an order for inspection at the premises of La Toilemeri, near Paris.

3 Abrasive also requested the Court to issue this order without hearing the Defendant so as to avoid any risk of the evidence disappearing.

The inspection was granted (the decision of the court can be seen here at page 99 of the binder) and revealed that:

  • The fabrication process of nickel mixed with diamond powder was effectively electro deposited through a layer of non-woven fabric, which thus matched 3 Abrasive’s patent. This was confirmed by a test report.
  • A distribution agreement for the product in Europe with commercial indications.

III. Application for provisional measures (The application can be seen here at page 119 of the binder):

After 3 Abrasive spotted that La Toilemeri had announced on its website that it would launch its product at an international exhibition in Paris in May 2015, it applied under rule 206 for provisional measures. La Toilemeri filed observations against this application (which can be seen here at page 142 of the binder).

IV. Judgment of the Court:

While the Court was deliberating the participants were asked to vote, and by a large majority decided that 3 Abrasive should not be granted the provisional measures it was requesting against La Toilemeri. The Court however decided to grant 3 Abrasive the injunction it was requesting.

The slides explaining the technical elements of the case and the relevant UPC articles and rules can be found here.

The UJUB has dedicated a website to this second mock trial on which notably the video of the whole trial can viewed. This will give a great insight into the functioning of the UPC for those who could not attend or stream the trial. You will also find the whole synopsis and the presentation of the different “actors”.

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A new coalition of companies against the threat of patent trolls before the Unified Patent Court

What are the amendments proposed by the UPC Industry Coalition? 

The issue of Patent Trolls and the strong opposition of certain companies to the separation between infringement and validity actions, modelled on the German Court structure, have arisen already a few times since the UPC was announced. Groups of companies published open letters addressed to the UPC expressing their concerns while some participated to the open review of the UPC Rules of Procedure. The UPC Blog covered some of these initiatives here and here.

The UPC Industry Coalition however distinguishes itself by uniting major IP actors such as Microsoft and Google with small and medium European companies such as Elkamet or Planisware.  Both categories of stakeholders have joined in and publically appealed the UPC and its Select and Preparatory Committee to modify certain rules of procedure to allow a stronger protection against abuses from “unprincipled plaintiffs”.

These companies identify on their website two supposed threats within the UPC Rules of Procedure:

  • The first one is the injunction gap or “the gap of time during which the products of a company can be barred from the EU market despite a pending question about the patent’s validity” caused by the bifurcation of infringement and validity actions decided by two different courts in two different countries. The fear expressed by these companies is that patent trolls will use the injunction gap to force SMEs to “pay excessively high settlements (even on potentially invalid patents) diverting those precious resources from R&D and other critical uses.” In fact, for the UPC Industry Coalition, the risk for SMEs to have their products removed from the market while waiting for the validity of the patent to be assessed by the court could be life threatening. Against this potential risk the signatories recommend that “validity should be decided before or at the same time as infringement, or the remedy from the injunction decision should be stayed until after the pending validity issue has been decided”.

In their position paper on the Unified Patent Court draft rules of procedure dated 26 November 2014, the Industry Coalition makes three specific proposals to address this issue:

(1)  Expedited Revocation ruling: this option would encourage the revocation Court to issue the substance of its decision before the infringement decision. In fact, “by informing the parties of its decision as soon after the oral hearing as possible, the revocation Court can minimize the possibility that an injunctive remedy will be imposed on an invalid patent.” Rule 40 on “Accelerated proceedings before the central division” however would need to be amended, so that it expressly states that the Judge Rapporteur should only issue a revocation decision after the oral hearing. The proposed amendment can be seen here.

(2)  Enforcement Only After Revocation is completed: This option would prevent enforcement of any injunctive relief until the central division completes the revocation proceedings or in other words would prevent the execution of injunctions or seizures based on the infringement of a patent that may later be declared invalid. According to the UPC Industry Coalition “ensuring that injunctions and seizures are not enforced until any pending validity issues between the parties have been resolved prevents numerous public and private harms, including abusive litigation and the waste of public and private resources”. This option would imply amending rule 37 on the “Application of Article 33(3) of the Agreement” so that remedies are not enforceable on invalid patents. The amendment can be seen here.

(3)  Bond Requirement: This option would require the patentee to post a bond before the Court enforces any injunctive relief when the central division has not yet ruled on the pending revocation issue. The bond amount, which would be left to the discretion of the Court, would have to be sufficient to compensate the accused infringer for any harm suffered by the unwarranted imposition of injunctive relief if the patent concerned is later determined to be invalid. Rule 352 “Binding effect of decisions or order subject to security” would then need to be amended so that permanent injunctions or corrective measures taken in infringement proceedings are not ordered without a security in place. The amendment can be seen here.

  • The second alleged threat that this coalition wishes to prevent is “the lack of discretion and guidance on proportionality for injunctions”. In fact, according to the members of the UPC Industry Coalition “the latest draft of the UPC Rules of Procedure severely limits the judicial discretion to consider the individual facts of the case and to tailor injunctions accordingly.” This would be due to the increasing number of patents used in products. An injunction could thus permit “the most trivial of patents to bar far more significant products from the near EU-wide market”, which would of course have a disproportionate impact on the business of SMEs. Hence, the coalition argues that “although the patent itself may contribute only insignificantly to the entire product, by providing an injunction on the entire product, the patent holder essentially is credited with 100% of the product value. Thus, even trivial patents that contribute insubstantially to a product can exert tremendous business leverage on a company”. The UPC Industry Coalition thus concludes that the absence of discretion and direction for Judges to consider the proportional harm and fairness to the parties when granting injunctions will permit “unprincipled plaintiffs to force high royalties through settlements, royalties that far outstrip the actual value contributed by the patent.” In its open letter to the Preparatory and Select Committee commenting dated 26 November 2014, the UPC Industry Coalition therefore suggests an amendment of rule 118 “Decision on the merits” so that the Court would be compelled to have regard to the principles of fairness, flexibility, proportionality and equity when making a decision on whether to grant or not an injunction.

 

So what do we think at the UPC blog about these suggested amendments and the threats that patent trolls may derail the UPC?

It seems to us that it is regrettable that the treaty allows bifurcation as the UPC procedure is quick enough to eliminate by itself the slowness caused by a defense based on the invalidity of the patent.

Practically, the bifurcation seems attractive to us only in the absence of a technical judge within a local or regional division for such a case.

If there was any abuse of the bifurcation, by Trolls or other patentees (Trolls are in fact not the only one to abuse the bifurcation system, other patentees may misappropriate it too), it will always be possible to the UPC to create its own jurisprudence and to equip itself with appropriate counter measures.

In this respect, the propositions published by the UPC Industry Coalition, and in particular the bond requirement, appear to us judicious.

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Spain v Council of the European Union: The Advocate General’s opinion

Spain v Council of the European Union against the European Regulations implementing enhanced cooperation in the area of the creation of Unitary Patent protection:

The Advocate General’s opinion 

In 2011 Spain and Italy, in a first attempt to challenge the Unitary Patent, had sought annulment of the Council’s decision of March 2011 which authorised enhanced cooperation and therefore allowed the creation of the Unitary Patent package. Both countries submitted that Article 118 Treaty on the Functioning of the European Union did not provide the appropriate legal basis for the Council’s decision. The CJEU dismissed their actions in April 2013. Following this judgment, Italy decided to sign the Unified Patent Court Agreement, whereas Spain filed in May 2013 actions against Regulation (EU) N° 1527/2012 on the creation of a Unitary Patent protection and Regulation N° 1260/2012 on translation arrangements which directly resulted from the use of the enhanced cooperation.

Spain sought an order declaring “legally non-existent Regulation (EU) N°1257/2012 of the European Parliament and if the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection and in the alternative, annul that regulation in its entirety.” In case this request was rejected, Spain also asked the court to annul “Article 9(1) in its entirety, and article 9(2) (…) article 18(2) in its entirety and all references in Regulation N°1257/2012 to the Unified Patent Court as the judicial regime for the European Patent with Unitary Effect and as the source of law for the European Patent with Unitary Effect”.

Spain’s pleas were as follow:

“Breach of the values of the rule of law in so far as a regulation has been established on the basis of a right granted by the European Patent Office, whose acts are not subject to judicial review.

 

Non-existence of an act of the European Union and, in the alternative, lack of a legal basis for Regulation N°1527/2012 in that it does not introduce measures guaranteeing the uniform protection envisaged in article 118TFEU.

 

Misuse of power through the use of enhanced cooperation for purposes other than those provided for in the Treaties.

 

Infringement of Article 291(2) TFEU and, in the alternative, misapplication of the Meroni case law in the regulation of the system for setting renewal fees and for determining the “share of distribution” of those fees.

 

Misapplication of the Meroni case law in the delegation to the European Patent Office of certain administrative tasks relating to the European patent with unitary effect.

 

Breach of the principles of autonomy an uniformity in the application of the European Union law, as regards the rules governing the entry into force of Regulation N°1257/2012.”

The Advocate General responded to Spain on 18 November 2014 and proposed that the Court of Justice of the European Union dismisses Spain’s challenge to Unitary Patent Regulations. Yves Bot argues that:

Regarding the creation of the Unitary Patent protection:

  • The EU Regulation 1257/2012  “only attributes to European patents an additional characteristic, namely the unitary protection, without affecting the procedure regulated by the Convention (on the grant of European Patent) The protection conferred is regulated by the uniform implementation provisions of the regulation. That protection brings real benefit in terms of uniformity and hence of integration compared with the situation resulting from the implementation of the rules laid down by the Convention”.
  • The EU Member States drafted the EU Regulation with the intention that the EU’s legislature would be shared with the Member States, enabling it to make references to national laws. The Unitary Patent will guarantee a uniform protection through national legislation applied to European Patent which will then be implemented “throughout the territory of the Member States participating in the enhanced cooperation.”

Concerning the renewal fees:

  • Yves Bot considers that the power to set the renewal level can only be exercised within a predetermined legislative framework “established and clarified by the EU legislature”.

 

As regard Spain’s claim that the regulation provides for a specific judicial regime for the European Patent with Unitary Effect contained in the Agreement on a Unified Patent Court:

  • The Advocate General takes the view that the Court does not have jurisdiction to review the content of the Agreement on a Unified Patent Court in an action for annulment of the regulation.
  • The Agreement on a Unified Patent Court does not fall within any of the categories of acts the lawfulness of which is subject to judicial review by the European Court of Justice. In fact it is an intergovernmental agreement negotiated and signed only by certain Member States on the basis of international law and the EU Regulation 1257/2012 does not approve an international agreement but is intended to implement enhanced cooperation in the area of creation of unitary patent protection.

Regarding Spain’s claim that “the application of the regulation is absolutely dependent on the entry into force of the Agreement on a Unified Patent Court, and that the effectiveness of the power exercised by the European Union through the contested regulation thus depends on the will of the Member States which are party to the Agreement on a Unified Patent Court”:

  • The Advocate General highlights that it will be the role of the Unified Patent Court to ensure “the proper functioning of the European patent with unitary effect, consistency of case-law and hence legal certainty”. EU Regulation 1257/2012 is thus not at the mercy of willing Member States.

 Concerning Spain’s refusal to ratify the Unified Patent Court Agreement:

  • The Advocate General is keen to emphasize that it is an infringement of the principle of sincere cooperation.  By not ratifying the UPCA, Member States are “jeopardising the attainment of the Union’s harmonisation and uniform protection objectives”
  • Yves Bot also notes that “the principle of sincere cooperation requires the participating Member States to take all appropriate measures to implement enhanced cooperation, including ratification of the Agreement on a Unified Patent Court, as such ratification is necessary for its implementation.”

Language arrangements and Breach of equality:

  • There is no principle of equality of language, therefore the choice of the English, French and German language “pursues a legitimate objective and is appropriate and proportionate”. Hence, if “the language arrangements chosen do certainly entail a curtailment of the use of languages, they pursue a legitimate objective of reducing translation costs.”
  • The purpose of having only three official languages derives from the fact that “the system introduced is aimed at ensuring unitary patent protection throughout the territory of the participating Member States whilst avoiding excessively high costs by establishing the language arrangements” thus allowing a reduction in translation costs.
  • Having only three languages acknowledges the realities of the patent sector, both in terms of research (“most scientific papers are published in German, English or French”) and economic reality (“those languages are spoken in the Member States from which most of the patent applications in the EU originate”). Moreover, it also “ensures a certain stability for economic operators and professionals in the patent sector”.

Principles of legal certainty and proportionality:

  • Finally the Advocate General looks at these two principles and concludes that neither of them is breached as the language requirements will in fact act as safeguards for legal certainty and a compensation scheme for translation cost will be created.

You can find the CJEU press release No 152/14 here

The full text of the opinion in C-146/13 is published here

The full text of the opinion in C-147/13 shall be published here