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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A consultation on the UPC court fees in Spring?

While the EPO is working on a fee structure for the renewal of the Unitary Patent (see our post), the UPC Preparatory Committee discussed at its 8th meeting on 27 February 2015 the court fee structure and consultation document.

According to its website, the UPC now anticipates that this consultation will launch in Spring 2015. The Chairman of the Preparatory Committee is in fact “keen to begin engaging with stakeholder and users and asked the relevant working group co-ordinators to prepare the text to meet this deadline”. The IPCopy reports that “the Fees Consultation Sub-group is working towards a redraft of the court fees consultation document to be released in May. There are apparently a number of inconclusive “key policy points” but there is recognition that they need to seek views as soon as possible.” To this effect, the comments of the Expert Panel -who advises the Chair and working group co-ordinators and met in February 2015- are now being considered by the relevant teams. Thus, if the Select Committee meets its deadline we should thus soon know more about the UPC fees…

 

 

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Renewal fees for the Unitary Patent: What does the EPO suggest?

The IPKat has published a post this week (09/03/15) on the Unitary Patent’s renewal fees that raises important questions for the cost and the attractiveness of Unitary Patents. Renewal fees have in fact always been a hot topic as the cost of obtaining a Unitary Patent and renewing it might weigh heavily in the decision of the patentee as to which kind of patent to get. This is also particularly relevant in a context where Italy and Spain, two popular validation countries, will not take part in the UPC with the consequence that additional fees will have to be paid for both countries.

Moreover, renewal fees are central to the functioning of the European Patent Organisation (EPO), which is partly dependent on this income for its budget, as provided in Chapter Five of the European Patent Convention on Financial Provisions. Article 39 in particular states that “Each Contracting State shall pay to the Organisation in respect of each renewal fee received for a European patent in that State an amount equal to a proportion of that fee, to be fixed by the Administrative Council; the proportion shall not exceed 75% and shall be the same for all Contracting States.”  This amount shall following Article 40 be fixed at such a level as to ensure that the revenue is sufficient for the budget of the Organisation to be balanced.

To this effect, the Unified Patent Court’s Select Committee launched at its 11th meeting -that took place in December 2014- preparatory work on the “distribution key for the repartition of renewal fees between the EU participating member states”, on the basis of “additional simulations of fee level scenarios submitted by the EPO”.

Therefore, although not yet public and consequently unverifiable, the document referred to by the IPKat, entitled “Proposals for the level of renewal fees for European patents with unitary effect“, sheds light onto the fee structure that could apply to the renewal of the Unitary Patent’ fees.

But what are EU Regulations saying about renewal fees? Before looking into the data published by the IPKat and their analysis, let’s look at what Regulation (EU) No 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection dated 17 December 2012 says.

Article 12 of this Regulation states that:

“1. Renewal fees for European patents with unitary effect shall be:

(a) progressive throughout the term of the unitary patent protection;

(b) sufficient to cover all costs associated with the grant of the European patent and the administration of the unitary patent protection; and

(c) sufficient, together with the fees to be paid to the European Patent Organisation during the pre-grant stage, to ensure a balanced budget of the European Patent Organisation.

2. The level of the renewal fees shall be set, taking into account, among others, the situation of specific entities such as small and medium-sized enterprises, with the aim of:

(a) facilitating innovation and fostering the competitiveness of European businesses;

(b) reflecting the size of the market covered by the patent; and

(c) being similar to the level of the national renewal fees for an average European patent taking effect in the participating Member States at the time the level of the renewal fees is first set.

 3. In order to attain the objectives set out in this Chapter, the level of renewal fees shall be set at a level that:

(a) is equivalent to the level of the renewal fee to be paid for the average geographical coverage of current European patents;

(b) reflects the renewal rate of current European patents; and

(c) reflects the number of requests for unitary effect.”

Hence, according to the IPKat, in order to reconcile the imperatives of a balanced budget and an attractive cost for renewal, the EPO would have adopted the following structure for setting Unitary Patent’s renewal fees:

“Years 3 to 5: the level of the EPO’s internal renewal fees (IRF) [these are the fees payable to the EPO for pending patent applications currently] 

Years 6 to 9: a transitional level between the IRF level and the year 10 level 

 From year 10, a level equivalent to the total sum of the national renewal fees payable in the states in which European patents are most frequently validated (TOP level).”

 

So what does it mean? Between years 3 and 5, the renewals applicable to a Unitary Patent would correspond to the same fee level as those applicable to European Patent applications; thus ensuring consistency in the application of the fees in the pre and post grant phases. In fact, as highlighted by the IPKat, charging a renewal fee for the first few years of the patent could discourage patentees to opt for a Unitary Patent, especially as “in some states, national renewal fees (which apply equally to national patents and to European patents validated in those states) are initially very low or non-existent until the fourth or fifth year.”

Moreover, the document that the IPKat had access to appears to argue that paying the total sum for national countries (three to five) might initially look more attractive in terms of costs than paying the internal renewal fees. The EPO however seems to point out in this document that the cost of hiring a local patent attorney or a specialist renewal firm would add to the final cost of renewal, with the consequence that the difference between the renewal costs of a Unitary Patent and those of a European Patent would be very small.

The three-tier fee structure proposed would then be divided between years 3-5, years 6-9 and years 10-20. For years 10-20 the calculations for the level would be based on the total of national renewal fees payable in the most frequently validated countries. But as the IPKat explains, “in the classical European patent system, patentees who have validated their patent in an average number of states after grant can always abandon the protection state-by-state over the patent term, and in the later years often narrow it down to the three major European markets. As they will lose this flexibility under the Unitary Patent protection in 25 states, they might be discouraged from opting for unitary protection if the fees for the last five years are prohibitive compared with those for just three to five of the bigger countries.” The EPO however seems to have taken this issue into consideration and for years 10 onwards, it proposes to charge the total sum of national renewal fees payable in the most frequently validated states, thus significantly reducing costs for users as their additional fee-administration charges will be considerably lower.

Following these observations and with the necessity to render the Unitary Patent cost-efficient for patentees in mind, two proposals have apparently been made. In the first one the years 10 onwards level would be based on current renewal fee levels for four European countries (TOP 4 level). In the second one the years 10 onwards level would be based on current renewal fee levels for five European countries (TOP 5 level) but with a reduction for certain categories of patentees, namely SMEs, natural persons, non-profit organisations, universities and public research organisations.

The IPKat gives the following numbers for TOP 4 and TOP 5 levels and provides us with a table presented as “the Annex 2 which compares the “Top 4” and “Top 5” proposal with the current EPO internal fees for pending applications, and the national renewal fees for 25 member states”:

“The TOP 4 level renewal fees would be as follows:

2nd year: EUR 350

3rd year: EUR 465

4th year: EUR 580

5th year: EUR 810

6th year: EUR 855

7th year: EUR 900

8th year: EUR 970

9th year: EUR 1 020

10th year: EUR 1 175

11th year: EUR 1 460

12th year: EUR 1 775

13th year: EUR 2 105

14th year: EUR 2 455

15th year: EUR 2 830

16th year: EUR 3 240

17th year: EUR 3 640

18th year: EUR 4 055

19th year: EUR 4 455

20th year: EUR 4 855

Over 20 years, that adds up to EUR 37 995.

 

The TOP 5 proposal involves a 25% reduction for the entities mentioned above in respect of years 2 to 10 only.  The proposed fees are as follows with the fee reduction in brackets:

 2nd year: EUR 350 (EUR 262.50)

3rd year: EUR 465 (EUR 348.75)

4th year: EUR 580 (EUR 435.00)

5th year: EUR 810 (EUR 607.50)

6th year: EUR 880 (EUR 660.00)

7th year: EUR 950 (EUR 712.50)

8th year: EUR 1 110 (EUR 832.50)

9th year: EUR 1 260 (EUR 945.00)

10th year: EUR 1 475 (EUR 1 106.25)

11th year: EUR 1 790

12th year: EUR 2 140

13th year: EUR 2 510

14th year: EUR 2 895

15th year: EUR 3 300

16th year: EUR 3 740

17th year: EUR 4 175

18th year: EUR 4 630

19th year: EUR 5 065

20th year: EUR 5 500

Over 20 years, that adds up to EUR 43 625 and EUR 41 655 for the normal and reduced level respectively.

  

Renewal Fees Table:

in € per OY             TOP4               TOP5          SME            EPO Internal renewal fees    25 MS

2                                     350                      350            252.50                              0                                            0

3                                     465                      465            348.75                          465                                         1,298

4                                     580                      580                 435                         580                                          1,874

 5                                    810                       810           607.50                         810                                         2,545

6                                     855                      880                660                        1,040                                         3,271

7                                     900                      950           712.50                         1,155                                         3,886

8                                     970                      1110         832.50                         1265                                          4,625

 9                                  1020                     1260               945                        1380                                           5,513

10                                  1175                     1475        1106.25                         1560                                           6,416

11                                 1460                      1790             1790                        1560                                           7,424

12                                 1775                      2140             2140                        1560                                          8,473

13                                 2105                      2510            2510                        1560                                           9,594

14                                2455                      2895            2895                        1560                                          10,741

15                                2830                      3300           3300                        1560                                          11,917

16                                3240                      3740            3740                        1560                                         13,369

17                                3640                    44175             4175                        1560                                          14,753

18                               4055                      4630            4630                        1560                                          16,065

19                               4455                       5065           5065                         1560                                         17,660

20                              4855                       5500           5500                         1560                                         19,197

Total                   37,995                  43,625       41,655                    23,855                                   158,621

So what should we conclude from these different fees? It appears from this table that the Unitary Patent will not be financially attractive for patentees who wish to have a protection for less than 4 states, such as the UK, Germany and France. For users who on the contrary wish to get protection for at least four countries, and a fortiori for a large number of countries, then the Unitary Patent would be cost efficient and thus attractive. We thus fully agree with the IPKat who points out that many users would have liked the EPO to draft a TOP 3 –or lower- level. However, according to the EPO’s communiqué dated 15 December 2014, we will only have to wait until June to find out the exact content of  “the appropriate decisions on the financial and budgetary aspects of the implementation of the Unitary Patent Protection”…

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Can European Patent Attorneys represent parties before the UPC?

The role of representation of European patent attorneys before the UPC

 

According to article 48 of the Agreement on the Unified Patent Court (UPCA), there is an obligation for parties to be represented. Article 48(1) provides for the representation by a “lawyer” authorized to practice before a court of an EU Member State as a general principle, whereas under article 48(2), European patent attorneys authorized before the EPO under A.134 EPC may represent parties before the Unified Patent Court (UPC), provided “they have appropriate qualifications such as European patent litigation certificate”.

 

This language suggests that such Certificate is only one appropriate way among others to acquire the right of representation before the UPC for European patent attorneys.

 

The Administrative Committee issued Draft Rules (http://www.unified-patent-court.org/images/documents/draft-eplc-consultation.pdf) on the Certificate and other appropriate qualifications (hereafter the Draft) in March 2014, as well as a Memorandum on this Draft (http://www.unified-patent-court.org/images/documents/draft-eplc-consultation-memorandum.pdf).

 

The Draft was open to a public consultation over last summer. The content of the current Draft, the Memorandum and the public consultation is discussed below.

 

 

A) The European Patent Litigation Certificate

 

Part one of the Draft relates to the courses leading to the Certificate and the suitable institutions running such courses.

 

The minimum duration of the courses shall be 120 hours (rule 4) and be concluded by both written and oral examinations.

 

The draft EPLC decision stipulates that the Certificate will be issued by universities or other non-profit educational bodies of higher education in Contracting Members States, subject to an accreditation requirement. The Memorandum makes it clear that the institutions providing the courses leading to the Certificate shall not be commercial providers of courses and conferences. Instead, the institutions should be public bodies at an academic level of a university, “due to the public law nature of granting Certificates and in order to ensure a satisfactory and harmonized quality level”.

 

It is to be noted that the Training Center for Judges (in Budapest) may organize a course for European Patent Attorneys and it shall not need an accreditation to provide such course.

 

 

B) The other qualifications

 

As an alternative to the Certificate, European Patent Attorneys seeking to represent parties before the UPC may apply for recognition of their qualifications.

 

Part two of the draft EPLC decision identifies two particular circumstances on the basis of which such alternative qualifications may be recognized:

 

1) Law diplomas (Rule 11)

 

European patent attorneys holding a bachelor or master degree in law or who have passed an equivalent state exam in law of a Member State of the European Union shall be deemed to have appropriate qualifications.

It is to be noted that the suitable law diplomas are not listed as such in the Memorandum. They are merely defined as “providing the necessary knowledge of private and procedural law required to conduct patent litigation”. The “equivalence” will probably have to be considered by an appropriate body on as case by case basis when deciding upon the registration on the list of entitled representatives.

 

Further, it seems that the diplomas may originate from any Member State of the European Union, and are not limited to those of the UPC Contracting Member States, let alone those States having ratified the UPC.

 

Further, and more importantly, these alternative qualifications are to apply indefinitely and are not meant to be transitional, contrary to the interim measures set out under item 2b) below.

 

 

2) The transitional period (Rule 12)

 

Rule 12 of the Draft provides a period of three years from the entry into force of the UPCA, during which European Patent Attorneys may apply for the right of representation before the UPC, based on the two further sets of appropriate qualifications:

 

(a)  Successful completion of one of existing identified IP courses

or

(b)  Previous experience in patent litigation.

 

 

The list of appropriate existing courses under (a) is currently as follows:

 

(i)             CEIPI: courses leading to the Diploma on Patent Litigation in Europe or to the Diploma of international studies in industrial property (specialized in patent);

(ii)            FernUniversität in Hagen: course “Law for Patent Attorneys”;

(iii)           Nottingham Law School: course “Intellectual Property Litigation and Advocacy”;

(iv)          Queen Mary College London: courses “Certificate in Intellectual Property Law” or “MSc Management of Intellectual Property”;

(v)           Brunel University London: course “Intellectual Property Law Postgraduate Certificate”;

(vi)          Bournemouth University, course “Intellectual Property Postgraduate Certificate”;

[…]

This list of courses is thus not exhaustive and may be further completed. One will note the variety of the courses, some providing basic knowledge in IP, some others being quite advanced and dedicated to litigation.

 

The appropriate qualifications under item (b) are defined as the previous representation of a party, without the assistance of a lawyer, in at least three patent infringement actions initiated before a national court of a Contracting Member State within the five years preceding the application for registration on the list of the entitled representatives.

The experience in representing parties is to be evidenced when applying for the request for recognition of other appropriate qualifications (see Rule 14).

Evidence will include details necessary to identify the infringement actions and/or copies of the power of attorney.

This option under (b) will however not be available to some European patent attorneys, depending on the national law (for example in France, where representation of parties before a national court is only opened to lawyers).

 

C) The public consultation

The consultation on the Draft closed on 25 July 2014. Comments on the Draft were filed by various representation bodies of European patent attorneys, including The Council of Bars and Law Societies of Europe (CCBE), The European Patent Litigators Association (EPLIT),The IP Federation, National bodies of Patent Attorneys such as The Compagnie Nationale des Conseils en Propriété Industrielle (CNCPI) and the Chartered Institute of Patent Attorneys (CIPA).

Broadly speaking, and as expected, the views are that the scope of the Draft is either too broad or overly limited, depending on the bodies and as far as representation by European patent attorneys is concerned.

The submissions of the Public Consultation are currently reviewed by the Committee. According to the latest Preparatory Committee roadmap (http://www.unified-patent-court.org/images/documents/roadmap-201409.pdf), a revised version of the Draft is to be expected for early 2015.

 

D) Right of audience

 

In addition to any rights of representation, “patent attorneys” will also be entitled to a right of audience under A.48(4) UPCA, by assisting the representatives.

 

The term “patent attorneys” is here to be construed in light of the Rules of Procedure.

 

According to the 17th Draft (http://www.unified-patent-court.org/images/documents/UPC_Rules_of_Procedure_17th_Draft.pdf), we understand that rule 292 now provides that the “patent attorneys” entitled to the right of audience should be practicing in a Contracting Member State, as a prerequisite.

 

This may include European Patent Attorneys registered before the EPO (draft rule 292.1 combined with draft rule 287.7), as well as any “person who is recognised as eligible to give advice under the law of the state where he practises in relation to the protection of any invention or to the prosecution or litigation of any patent or patent application and is professionally consulted to give such advice” (draft rule 292(1) combined with draft rule 287.6(b)).

 

These latest draft proposals differ from those of the 15th draft in that they now recite the additional requirement that the professionals should practice in a Contracting Member State in order to be entitled to the right of audience. This provision thus seems to exclude from the right of audience the lawyers and patent attorneys of a party which do not practice in the 25 Member States parties to the UPCA.

 

Incidentally, the “lawyers” authorized to represent parties before the UPC in article 48(1) are those authorized to practice before a court of an EU Member State and seem to be further limited to national of EU Member States under Rule 286 and Directive 98/5/EC (http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:31998L0005).

 

It thus seems that non-EU nationals having a title of lawyer in the sense Directive 98/5, such as French avocat or German Rechstanwalt and practicing in an EU Member State may not be able to represent parties before the UPC, although they may have a right of audience.

 

Patent attorneys entitled to the right of audience will be allowed to speak at hearings of the Court at the discretion of the Court and subject to the representative’s responsibility to coordinate the presentation of a party’s case. They will benefit from the attorney-client privilege provided by draft rule 287.

 

These provisions will have to be confirmed once the 17th draft meets agreement, which according to the roadmap of September 2014 (http://www.unified-patent-court.org/images/documents/roadmap-201409.pdf) should be expected for May 2015

We shall post the developments as they occur.

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New Mock Trial UPC April 2nd 2015 Paris!

The UPC Blog would like to share this invitation to the second UPC Mock Trial organised by the UJUB (Union pour la Juridiction Unifiée des Brevets). We had attended the UJUB first mock trial – see our post here– which was a real success and highlighted the incredible challenge that the UPC represents. The UPC Blog will thus be delighted to be present to this new Mock Trial which should particularly address the means of evidence and the provisional measures. 
Mock Trial UPC April 2nd 2015 Paris – SAVE THE DATE
 
 
The date of entry into force of the European Unified Patent Court is 
not yet known. However after the Trier Oral Hearing on the 17th draft
of Rules of Practice we can test the proceedings so to be well prepared
at this date.
 
The Mock Trial that has been held last May by UJUB (the association of
most patent professionals in France) has been a great success.
 
UJUB is managing of a second one that will take place in Paris on
April the 2nd. 
This mock trial should particularly address the means of evidence and
the provisional measures.
 
We will provide you soon with further details.
 
Please save this date : Paris, April 2nd 1pm-6pm
 
 
Alain MICHELET
Union pour la Juridiction Unifiée des Brevets –  UJUB
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So what are the key dates for the UPC for 2014-2015

So what are the key dates for the UPC for 2014-2015?

 Here is a presentation with all the key dates for the UPC for 2014-2015:

[embeddoc url=”http://upcblog.amar.lawwp-content/uploads/2015/01/Key-dates-for-UPC.pdf”]

 

If you would like to share an update  or add a new key dates please contact us by email upcblog@lavoix.eu or by Twitter @UPCBlogLAVOIX !!

 

 

 

 

 

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Damages and the Unified Patent Court Agreement: how is it going to work?

Supplementary Protection Certificate

Here is a new presentation (in French) on Damages and the Unified Patent Court. It was given by Cyrille Amar for an AIPPI webinar on 19th January 2015.

[embeddoc url=”http://upcblog.amar.lawwp-content/uploads/2015/01/Presentation-Damages-pptx.pdf”]

 

And its English counterpart:

[embeddoc url=”http://upcblog.amar.lawwp-content/uploads/2015/01/Presentation-Damages-en.pdf”]

 

The UPC Blog would be happy to discuss any of the issues raised in the presentation! You can contact us either by email upcblog@lavoix.eu,  via the Comments section below or by Twitter @UPCBlogLAVOIX.

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Actavis v Eli Lilly: When the High Court of Justice rules across multiple jurisdictions… Isn’t the need for a Unified Patent Court becoming even more flagrant?

Actavis v Eli Lilly: when the High Court of Justice rules across multiple jurisdictions… Isn’t the need for a Unified Patent Court becoming even more flagrant?

 

Background of the case and Nature of the claim:

On 15 May 2014, the High Court of Justice in the Patents Court division handed down a significant judgment in Actavis v Eli Lilly, granting a declaration of non-infringement across multiple European jurisdictions in respect of the UK, French, Italian and Spanish designations of a European Patent. Actavis in fact sought a declaration that their proposed launch of a generic pemetrexed product to compete with Lilly’s cancer treatment product Alimta, would not infringe Lilly’s EP1313508 covering pemetrexed disodium. Actavis had indicated to Lilly that they would seek marketing approval for their competing product by reference to Alimta and were seeking to clear the path of any obstacles that would prevent this. Lilly counterclaimed for threatened infringement in relation to the UK designation of the patent.

Before going more in-depth into this decision it is important to look at the decisions for the same claim rendered on 27 November 2012 and 21 May 2013 by respectively the Patent Court and the Court of Appeal which laid the legal basis of the 2014 decision.

 

In 2012 Arnold J passed a judgment on three procedural issues relating to the service of the claim (§ 35) and the question of the exercise of the Court’s jurisdiction on the ground of forum conveniens. The question before the court was thus whether the UK Court could determine all five claims together, or whether they should be tried separately in their respective national courts.

It is important to highlight three essential points of that judgment.

  • First Lilly is not domiciled in an EU Member state. It followed that in accordance with article 4(1) of the Brussels I Regulation which states “If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, subject to Articles 22 and 23, be determined by the law of that Member State” the jurisdiction of the court was a matter for English law.

 

  • Second, Actavis did not challenge the validity of the Patent (§ 29). This point is essential as in these circumstances “this Court was not required to decline jurisdiction by virtue of article 22(4) of the Brussels I Regulation, which confers exclusive jurisdiction over challenges to the validity of registered intellectual property rights on the Courts of the States where they are registered.” Arnold J considered that as the validity or registration of the patents at stake was not part of the litigation, national courts did not have exclusive jurisdiction over any litigation deriving from them in their respective registration State. A court in the United Kingdom applying English Law can therefore determine any issue of infringement of a foreign patent as long as its validity is not at stake.

 

  • Third, Arnold J points out that, in the light of Lucasfilm Ltd v Ainsworth, Lilly did not dispute the justiciability before the English Court of the claims raised with regard to the non-UK designations. The Supreme Court in Lucasfilm Ltd v Ainsworth in fact established that the infringement of foreign copyrights were justiciable before the English Courts. For Lord Walker and Lord Collins, the modern trend is in favour of the enforcement of foreign intellectual property rights: “First, article 22(4) of the Brussels I Regulation only assigns exclusive jurisdiction to the country where the right originates in cases which are concerned with registration or validity of rights which are “required to be deposited or registered” and does not apply to infringement actions in which there is no issue as to validity. This can rarely, if ever, apply to copyright. Second, the Rome II Regulation also plainly envisages the litigation of foreign intellectual property rights and, third, the professional and academic bodies which have considered the issue, the American Law Institute and the Max Planck Institute, clearly favour them, at any rate where issues of validity are not engaged”(see §109).

Whence, Arnold J states at paragraph 89 that “If (…) one considers the reasons given in Lucasfilm v Ainsworth at [104]-[110] by Lord Walker of Gestingthorpe JSC and Lord Collins of Mapesbury (…)  for holding that there is no subject matter limitation on jurisdiction, in my opinion they are equally relevant to the operation of the forum non conveniens doctrine.” Arnold J in fact considers that if patents are no different to copyrights for the purpose of justiciability, they should then be treated no differently for the purposes of forum non conveniens –when validity is not an issue.

The forum non conveniens doctrine allows a court to dismiss a civil action where an appropriate and more convenient alternative forum exists in which to try the action. The appropriate forum is the one in which the case may most suitably be tried in the interests of all the parties and the ends of justice. Permission to serve the proceedings outside the jurisdiction will then only be granted if the court is satisfied that the other jurisdiction is the proper place (or forum conveniens) in which to bring the claim.

Actavis argued of course that England was the appropriate place for a trial as “first, it would mean that the case would be conducted by one team of lawyers on each side using one set of factual and expert witnesses (although in the present case it appears unlikely that there will be any need for factual witnesses), thereby saving costs for both sides. Secondly, it would enable the case to be determined by reference to one law, namely English law, if Lilly chose not to raise any issue as to foreign law, thereby saving even more costs. Thirdly, even if different laws were applied, it would mean that one court (and one court on appeal) would determine all five claims, thereby eliminating the prospect of inconsistent decisions unless they really were mandated by the different national laws’ approaches to Article 69 EPC and the Protocol.” Arnold J found these arguments compelling, rejected Lilly’s position as to the cost of the defense (see §98) and declared that England was the proper forum to hear the five claims.

Following this decision Lilly lodged an appeal (which can be read here), dismissed by the Court of Appeal on 21 May 2013. It is nonetheless important to note that the Court only considered the issues of procedure and service of the claim. The substantial issue -whether “the judge ought to have granted a stay on the grounds of forum non conveniens”- was not looked into by the Court. Kitchin LJ in fact after upholding the first issue (whether the judge was right to hold that Lilly’s solicitors, Hogan Lovells, agreed to accept service of proceedings in the first action), formed the view that this conclusion was dispositive of the whole appeal.

The Judgment passed in May 2014 is  the last chapter -to date- of the Actavis v Lilly saga, and seems to bring a definite if unsatisfactory answer to the question of the justiciability of the infringement of the foreign counterparts of a European Patent.

The substantive issue and the claim for declaration of non-infringement:

Concerning the substantive issue, Arnold J found that “neither pemetrexed diacid nor pemetrexed dipotassium nor pemetrexed ditromethamine falls within the scope of the claims 1 to 12 of the UK, French, Italian, or Spanish designations of the patent”. These claims can be read here. Hence, the dealings in permetrexed diacid, dipotassium and ditromethamine by Actavis do not constitute direct or indirect infringement of the UK, French, Italian or Spanish designations of the Patent.

Arnold J then proceeded to the analysis of the law applicable to the declaration of non-infringement (“DNI”) claims. The Judge made an important difference between the law applicable to the question of whether Actavis’ proposed acts infringed each non-UK designation of the Patent and the law applicable to the DNI claim made by Actavis. Concerning the first question, or whether Actavis’ proposed acts infringed each non-UK designation of the Patent, Arnold J considered that lex loci protectionis, the substantive patent law of the relevant country, applied. As for the second question, i.e. which law should be applied to the DNI claim, the Judge had to decide between Actavis’ contention that lex fori -i.e. the law of the jurisdiction in which relief is pursued- should apply, and Lilly’s contention that on the contrary lex loci protectionis was relevant. Two interpretations of the nature of the rules governing the declaration of non-infringement were opposing each other. Actavis in fact contended that these rules should be considered as part of evidence and procedure and should thus be governed by article 1(3), which excludes these areas from the scope of the Rome II Regulations at the benefit of national jurisdictions. Article 1(3) hence states: “

“This Regulation shall not apply to evidence and procedure (…)”

Lilly on the contrary argued that a declaration of non-infringement is a remedy in the sense of article 15 (c) and as such should be within the scope of the Regulation. Article 15 (c) in fact states:

“The Law applicable to non-contractual obligations under this Regulation shall govern in particular:

(…)

(c) the existence, the nature and the assessment of damage or the remedy claimed”

 

After considering the interpretation of the Rome II Regulation Arnold J found that the law that applied to the DNI claim should follow lex fori. In fact he did not accept that a DNI is a remedy in the sense of article 15(c) and “even if a DNI is a remedy, and even if it is a remedy within Article 15(c), it seems to me that Article 15(c) should be interpreted as only having the effect that the question of principle as to whether a DNI is available at all is a matter for the law applicable to the non-contractual obligation.” The judge then concluded “the rules presently in issue (the rules for obtaining negative declaratory relief) are matters of procedure within article 1(3) and are not governed by the law applicable to non-contractual obligation in accordance with Article 15”. As a result the rules determining the obtaining of a DNI fall outside of the scope of the Rome II Regulation. Thus, as explained by Arnold J in paragraph 210 “it is common ground that if Actavis are right (…) the question of the applicable law is to be determined by English private international law and that under English private international law, the applicable law is the lex fori, because English law regards the rules for obtaining declaratory relief as being procedural”.  The rules governing the claim for a declaration of non-infringement thus follow English Law.

This in consequence explains why Arnold J considers that Actavis are entitled to a DNI in respect of the UK, and foreign designations of the European Patent.  The declaration of non-infringement irrelevantly of the Patent designation being in fact governed by the lex fori, or English Law.

 

Declaration of non-infringement in respect of the UK designation applying English Law:

Once the appropriate law applying to the DNI identified, Arnold J pursued by deciding if the grant of a DNI to Actavis would meet the necessary criteria identified by English Law.

Following Messier – Dowty, a DNI can only be granted if it serves a useful purpose. This criterion will be met if the “claimant has a real commercial interest in the negative declaratory relief sought or a real commercial reason for it to be granted”. Arnold J found that Actavis should be granted a DNI in respect of the UK Patent designation as “Lilly does not seriously dispute that, if Actavis establish that dealings in their products would not amount to an infringement of the UK designation of the Patent, then Actavis should be granted a DNI in respect of that designation pursuant to the inherent jurisdiction of the Court”.

 

DNI in respect of the French, Italian, and Spanish designations applying English Law:

After establishing that the law applicable to the question of whether Actavis were entitled to a DNI in respect of the French, Italian, and Spanish designations of the patent was English law, Arnold J found that Actavis should be granted declarations of non-infringement in respect of those designations pursuant to the jurisdiction of the High Court of Justice of England and Wales, Actavis having demonstrated that they have a real commercial interest in obtaining DNIs and that these declarations would serve a useful purpose .

 

DNI in respect of the French, Italian and Spanish designations applying respectively French, Italian, and Spanish laws:

Arnold J pursued his judgment by looking at the declarations of non-infringement in respect of the French, Italian, and Spanish designations applying French, Italian and Spanish law “in case (I am) is wrong about the applicable law” on “the assumption that the relevant law is the law applicable to the non-contractual obligation”.

Finally, Arnold J helped in his appreciation of foreign laws by experts’ opinions on the granting of DNI under these jurisdictions, decided that “even if French, Italian, and Spanish law is the applicable law respectively, Actavis are entitled to a DNI in respect of the French, Italian, and Spanish designations of the Patent”.

 

In Conclusion:

This decision is remarkable in many respects. First, it is a superb example of legal craftsmanship. Second , Arnold J  innovative reasoning could inspire litigants in the UK and in other EU countries, pending the entry into force of the Unitary Patent system.  We believe that although the reasoning applied to a situation where a party was seeking a declaration of non-infringement prior to marketing potentially infringing products, thus not risking a patent infringement counterclaim, it could nevertheless be extended to infringement claims in cases where nullity counterclaims are not available, such as in cases litigated before the German patent district courts (Landgericht).  Third, this decision is a good illustration of the inefficiency of the existing system. Of course the solution is elegant and sophisticated but in the end, this is merely a “patch” aimed at fixing, albeit imperfectly, an inherent error in the European Patent system.  It is time to move from error correction and bug fixes to a brand new release of the European patent system.  No doubt that the patent lawyers will find many new opportunities to demonstrate their creativity in this new system, for a better result.

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Want to lodge a statement of claim with the UPC? Try its case management system prototype…

The UPC has revealed the prototype of its case management system. It is based on the UPC draft rules of Procedure 13-28, allowing testers to file an infringement claim. Feedback from testers will be used over October and November 2014 to help the UPC to continue configuration of its case management system and evaluate its procurement process.

The purpose of the prototype is to test the viability of a cloud-based, configured system for the UPC, where data is stored by a supplier and can be accessed securely from any location.

This trial comes after workshops organized by the UPC with patent lawyers throughout Europe which highlighted three recurrent issues:

“Roles-Based Access – There are strict legal requirements for protecting access to certain patent information and Lawyers want to be able to control access.
Usability – Several Lawyers demonstrated current eFiling systems across Europe and highlighted usability issues; we want to use what is good from other systems and we don’t want to make the same mistakes.
Ease Document Management – Identifying documents and searching content were key to users’ working patterns; being able to quickly identify the type of document and current status.” (http://prototype.unified-patent-court.org/selfservice/web/index.html)

The prototype e-Filing/case management can be accessed here.

By registering to the website you will be able to lodge a fictitious statement of claim divided into the following twenty-four sections:

  1. Claimant Representative
  2. Claimant details
  3. Claimant Contact Details
  4. Individual Claimant Address Details
  5. Company Claimant Registered Office Details
  6. Company Claimant Contact Address Details
  7. Please enter your Patent Number
  8. Is the Claimant the proprietor of the Patent
  9. Are there any additional proprietors?
  10. Patent Proprietor
  11. Does your claim involve more than one patent?
  12. Does the claimant have the proprietors permission to submit this claim
  13. Please upload a document detailing permission(s) to proceed with this claim
  14. Add further Patents
  15. Pending proceedings
  16. Details of Claim
  17. Defendant
  18. Defendant Contact Details
  19. Individual Defendant Address Details
  20. Company Defendant Registered Address Details
  21. Do you know who is representing the Defendant?
  22. Case hearing
  23. Submit
  24. Payment

The prototype offers of course the opportunity to give feedback by clicking on the “Send Feedback” tab at the bottom of your statement of claim screen.

The UPC is planning a full, open procurement process, with publication of the procurement notice in the Official Journal of the European Union in November 2014 and contract award in summer 2015.

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The UPC Preparatory Committee publishes a new roadmap

Brexit and the German constitutional challenge

The Preparatory Committee published last Tuesday (16/09/2014)  an updated roadmap which highlights the amendments to key millstones towards the delivery of the European Package.

If this new version of the roadmap starts with the work completed in 2014, most of it is dedicated to the ongoing work divided into five areas of work: the Legal Framework, the Financial Aspects, IT, the Facilities, and the Human Resources and Training.

Here are the main points of the new roadmap:

 

Legal framework:

  • The Preparatory Committee plans for the Rules of Procedure to be agreed upon in May 2015  after being amended and reviewed by a first team.
  • The rules on Legal Aid were discussed in July 2014 and a final draft will be agreed by January 2015.
  • A consensus was reached in July 2014 on the proposals on the Rules for the Administrative Committee of the UPC and on the Budget Committee of the UPC.
  • A second report is expected in November 2014 on Mediation and Arbitration.
  • A revised draft for the Rules of the litigation certificate for Patent Attorneys is expected for early 2015, after a public consultation in June and July 2014 on the first draft published in March.

 

Financial aspects:

  • A final agreement on financial regulations which includes the provisions concerning the establishment, structure and implementation of the budget, internal control and audit procedure is scheduled for October 2014. `

 

  • An evaluation of the budget must also be done in order to quantify the operational costs for the next seven years while taking into account that during the transitional period many costs will be borne by the Signatory States hosting seats or divisions of the Court.

 

Legal Framework and Financial Aspects on Court fees and Recoverable costs:

The Legal Framework team and the Financial Aspects team are both responsible for the Court fees and the recoverable costs. While the legal group will primarily assume the responsibility for the establishment of a schedule of the different fees, the financial group will determine the amount for those different fees of the court.

“A schedule for the Court fees, containing of a fixed fee as well as a value based fee above the defined ceiling of the fixed fee shall be established. Also a method for the calculation of the value of the case shall be defined. The question of court fees is also dealt with by the financial group. (…)  A scale of recoverable costs shall be adopted, which shall set ceilings for such costs by reference to the value of the dispute. ”

The discussion on Court fees will start at the end of 2014 and will be followed in spring 2015 by the consultation on fees which will then allow the budget for the first year to be finalized.

 

Human Resources and Training:

  • The training of candidate judges, the nomination of the first group of judges, and the organisation of the first pool of judges seem to be a priority for the Preparatory Committee. The Preparatory Committee is focusing at the moment on a provisional intensive training for candidate judges which should run during  the preparatory phase and the first year of the UPC. Preparations for this training have hence started with the first training programs expected to start before the end of December 2014. This first training initiative will then be followed by a “permanent training framework, that shall be further developed and endorsed by the Administrative Committee once established “.

 

  • For legally qualified judges, training should consist of advanced courses in patent law and patent litigation, possibly combined with mock-trials and internships at patent courts in countries with highly specialized and highly experienced patent courts as well as courses on the UPC Agreement and the Rules of Procedure. For technically qualified judges training should consist of basic concepts of patent law relating in particular to the validity and basic concepts of civil procedure, as well as training on the UPC Agreement and the Rules of Procedure. For both legally and technically qualified judges language training should allow judges to work on files and participate in deliberations on a patent case in at least one language which is not their mother tongue.

 

  • Preparations are also being made for the nomination of judges. A pre-selection process was concluded in July 2014, and a provisional list of suitable candidates was approved by the Committee.  The final number of judges however will be determined  with regard to the number of cases and divisions. It is thus assumed that in the early years, the UPC will work as much as possible with part-time judges and (in particular in the local divisions with high workload, the central division and the Court of Appeal) a limited number of full-time judges. Hence, “recruitment of the first judges of the UPC will aim at appointing a sufficient number of part-time and full-time judges before the entry into operation of the UPC and to create a reserve list of judges who could be appointed should the case-law increase more than expected.”