Category: Opt-Out : The Essential Guide

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Should I stay or should I go? Strategic considerations for the opt-out

Opt-out: How to opt-out a patent?

As the UPC will start its operations in the near future, European patent owners must determine their opt-out strategy. Indeed, deciding whether to opt out a European patent is a decision which requires analysing the scope of competence of the UPC and the scope of enforcement of its decisions, along with litigation costs and case law.

§. The UPC scope of competence

A non-opted out European patent will benefit from the scope of competence of the UPC. In fact, the UPC will be able to hear:

  • Revocation action of non-opted out European patents and Unitary patents.
  • Infringement action of non-opted out European patents and Unitary patents.
  • Action for declaration of non-infringement.
  • Action for compensation for licences.
  • Action against any decisions of the EPO.

§. Scope of enforcement of the UPC decisions:

Patent owners will submit their infringement actions before a unique court, and will be able to ask for the enforcement of the UPC’s decisions in all Member States that have ratified the agreement.

An action before the UPC therefore eliminates the need for duplicate procedures in each EPC country where the patent has been validated. Actions before the UPC would thus be more efficient and time effective, especially when dealing with patent infringement across multiple Member States.

As a result, a single decision of the UPC will have the capacity to revoke non opted-out European patents for the whole territory of the 26 contracting member states. Conversely, an opted out European patent needs to be assessed by 26 national courts to face the same fate.

§. Case law.

The diverse backgrounds of the future appointed judges has raised the question of the coherency of the UPC case law. In fact, the panels of judges will be made of legally and technically qualified judges from different nationalities and legal traditions .

The UPC Agreement provides for such discrepancies to be addressed through the training framework provided for at article 19 of the UPC Agreement. However, it is difficult to assess whether such training will be enough to create a coherent interpretation of patent issues throughout the UPC divisions.

§. Cost: 

In situations where the litigant initiates multiple actions before national courts, costs can add up quickly. Indeed, the litigant has to pay for the court fees of several national courts and the costs of legal representation.

Proceedings before the UPC could thus be cheaper than multiple national proceedings. In fact, although litigants would have to pay the UPC’s fixed and/or value based fees as well as the cost of representation, the action initiated would cover 26 countries.

§. A few examples:

You are the holder of a European patent during the transitional period and you want to end an alleged infringement of your patent:

  • If you have opted-out your patent, you will have to bring your infringement action before the national courts of the countries where your patent is protected and where the alleged infringement has been observed.
  • If you have not opted-out your patent, you will be able to choose between national infringement actions or a unique infringement action before the UPC.

You face a revocation action lodged by a third party against your patent:

  • If you have opted-out your patent, the third party must bring its action before the national courts of the states where the patent has been validated to obtain the revocation of the national part of the European patent.
  • If you have not opted-out your patent, the third party could choose to go before national courts or could chose to lodge its revocation action before the UPC to try to obtain the patent revocation in all the Contracting Member States.

Proceedings before the UPC in first instance shall consist of the following stages:

  • A written procedure.
  • An interim procedure, which may include an interim conference with the parties.
  • An oral procedure which, shall include an oral hearing of the parties unless the Court dispenses with the oral hearing with the agreement of the parties.
  • A procedure for the award of damages, which may include a procedure to lay open books.
  • A procedure for cost decisions.

The proceedings should last around one year before the First Instance Court. This is faster than in most European countries where the average length of an infringement action is around two years.

For example, in the First Instance Court of the UPC, an infringement action will cost €11,000; to which must be added a value-based fee ranging from €0 to €325,000 (depending on the value of the action). A revocation action on the other hand will cost €20,000.

These general guidelines are in no way meant as a substitute to legal advice from an IP lawyer and may not cover all the details of your specific situation.

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How to opt-out a patent / withdraw an opt-out / correct an opt-out?

Opt-out: How to opt-out a patent?

§. Who can lodge the applications to opt-out / withdraw an opt-out / correct an opt-out and how?

  • According to the Rule of Procedure 5 of the Unified Patent Court: the patent proprietor or a person mandated by her are the only persons allowed to opt-out, withdraw and correct an opt-out. In case of multiple patent proprietors, the opt-out must be lodged by or on behalf of all proprietors.

 

  • Opt-out on behalf of the sole patent proprietor:  If the authorised user is a representative before the UPC, as defined in article 48 of the UPC Agreement, a mandate authorising the opt-out is not required. If the user is not such a representative, a mandate from the proprietor – and, if applicable, holder of Supplementary Protection Certificates- must also be lodged. This mandate must specifically authorise the opt-out. The mandate can be delivered to any person or private company. It must include the patent number, the patent holder’s name and her signature. The UPC published a template mandate which can be found below.

 

  • Opt-out on behalf of multiple proprietors:
    • The opt-out may be lodged on behalf of a proprietor by a registered user of the CMS. The user must be authorised to lodge the opt-out by all proprietors. She must declare in the opt-out that each proprietor is entitled to be registered as proprietor pursuant to Rule of Procedure 8.5.
    • If the authorised user is a representative before the UPC, in accordance with article 48 of the UPC Agreement, a mandate authorising the opt-out is not required. If the user is not such a representative a mandate from all proprietors and holders of SPCs must also be lodged specifically authorising the opt-out in question.

The mandate template for lodging an application is available on the UPC Case Management System and can be found below:

§. What if Supplementary Protection Certificates (SPCs) have been granted in respect of the patent being opted-out?

If at the date of the opt-out one or more SPCs have been granted in respect of the patent that is being opted-out, the following details of the SPCs must be included in the opt-out:
the name, postal and, where applicable, electronic addresses of each proprietor and of the holder of any supplementary protection certificate based on the European patent in question ;
details of any supplementary protection certificate granted based on the patent concerned, including the number.
Each holder of an SPC, if different from the proprietor of the patent, must lodge or authorise the opt-out in addition to the proprietor of the patent. Such a patent must be opted out even if expired.
The opt-out will be effective in respect of any further SPC granted after the registration of this opt-out.

§. What are the different procedures?

1. Opt-out procedure:

The opt-out procedure must be completed online by logging into the UPC Case Management System. This is a 9 steps process:

Opt-out process

All opt-out requests will appear on the EPO Register. All European patents opted out will be published on the UPC website.

It is not possible to opt out a European patent with unitary effect. Therefore if the application for opting-out a European patent with unitary effect is granted, the opt-out is deemed to be withdrawn from the date of grant. It is also not possible to opt out any patent/SPC which is the subject of an existing or prior action before the UPC.

 

2. Correction of the opt-out procedure:

Following the lodging of the correction of the opt-out, the correction date will be recorded in the opt-out register. An email will be sent with details of the corrected registration. The correction will be available to the public.

3. Withdrawal of the opt-out:

A patent which has been the subject of a withdrawal may not thereafter be opted out again.

Following the lodging of the withdrawal of the opt-out, the relevant European Patent published application number will be removed from the opt-out register. An email will be sent to the patent proprietor with details of the withdrawal. These details will be available to the public.
4. Correction of the withdrawal of the opt-out:
As it is not possible to correct the patent number in the original withdrawal, a new application to withdraw an opt-out must be lodged with the correct number. A correction of a withdrawal of an opt-out must be lodged in respect of each patent where the withdrawal data was incorrect. Following the lodging of the correction of the opt-out withdrawal the date of correction will be recorded in the opt-out register. An email will be sent to the patent proprietor with details of the corrected registration of the withdrawal. These details will be available to the public.

§. When will the opt-out take effect?

An opt-out lodged before the date of entry into force of the UPC Agreement will be treated as lodged on the date of entry into force.
Following the lodging of the opt-out the relevant European Patent published application number will be recorded in the opt-out register. An email will be sent to the patent proprietor with details of the registration. These details will be available to the public.
All corrections and withdrawals will take effect respectively from the date of correction and date of withdrawal.

§. How much will it cost to opt-out?

The Preparatory Committee confirmed that there will be no fee for the opt-in nor opt-out procedure.

§. The Templates

Template opt-out mandate

Opt-out template

OPt-out template 2

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What are the consequences of an opt-out?

Opt-out: How to opt-out a patent?

§. Once an opt-out has been notified to the UPC registry and registered:

  •  If it was granted for a European patent application, the opt-out will automatically apply to the European patent in question.
  • The opt-out will be valid in all Contracting Member States where this patent produces legal effects. There is no need to notify the opt-out separately for the relevant Contracting Member States.
  • The opt-out will last for the whole life of the patent. It will not be limited to the length of the transitional period.
  • The proprietor can withdraw the opt-out at any time and decide to opt back in. This opt-in will then be definitive: the patent proprietor will not be able to opt out its European patent again.

 

It must be noted that opting out will not be possible if an action is already pending before the UPC.

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What does it mean to Opt-out a European patent from the jurisdiction of the UPC?

Opt-out: How to opt-out a patent?

§. What is an “Opt-out”?

The opt-out is the procedure by which proprietors or applicants for a European patent can withdraw their patents from the exclusive competence of the Unified Patent Court.

Only European patents granted or applied for before the end of the transitional period can be opted out. It will thus not be possible to opt-out European patents with unitary effect or Unitary patents.

§. What happens once the patent is opted out?

Once granted the opt-out will take effect in all participating Member States, and the opted out patent will be removed entirely from the jurisdiction of the UPC.

A European patent opted out will thus be under the exclusive competence of national courts. This means that national courts will be the sole jurisdiction before which -for example- actions for infringement or for revocation of the national part of a European patent can be brought.

However, during a 7 year transitional period after the entry into force of the UPC Agreement, the UPC will share jurisdiction with national courts over actions for infringement or revocation of a European patent. Hence, any holder of or applicant for a European patent will be able to initiate actions before national courts. This will be possible regardless of whether the European patent or application concerned has been the subject of an opt-out.

During this period, the UPC will indeed also have exclusive jurisdiction over Unitary patents.

§. When will the opt-out be allowed?

European patent owners will be allowed to opt-out from the start of the sunrise period up to the last month before the end of the transitional period. In other words it will be available from 3 months before the UPC Agreement entry into force to at least 6 years and 11 months after the entry into force of the UPC Agreement.

§. What are the provisional application phase and the sunrise period?

The Provisional Application Phase is scheduled to last for 6 months. The last 3 months, also known as the sunrise period, will specifically allow European patent proprietors to start opting out. The beginning of the Provisional Application Phase is not yet known but could start during the Autumn 2017.

§. What is the transitional period?

The transitional period is a renewable 7 year-period. During this time the UPC will share jurisdiction with national courts over actions for infringement or for revocation of a European patent.

If the UPC Administrative Committee does not extend the transitional period for a further seven years, the UPC will then have perpetual exclusive jurisdiction over Unitary patents and European patents. Opted out European patents will not come back in the UPC exclusive competence once the transitional period is over.

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Update on the Opt-out Process and the Case Management System: a Letter from the UPC Chairman

UK ratifies the UPC Agreement

The UPC Chairman answers the questions of the British IP Federation about the opt-out proceedings.

On June 13th, the British IP Federation, which represents the view of UK industry in IP policy and practice, wrote an open letter to the Chairman of the Preparatory Committee of the Unified Patent Court (UPC) Mr Alexander Ramsay asking him to clarify the opt-out process during the sunrise period (3 months before the entry into force of the UPC Agreement).

Six days ago, the IP Federation published on its website the reply from the chairman. In his response, Mr Ramsay addressed the following points:

  1. The Chairman clarified the meaning of rule 12 of the Draft Rules on the European Patent Litigation Certificate. This rule does not prevent a European Patent Attorney (EPA) with an existing alternative qualification to register during the sunrise period as a UPC Representative.
  1. The IP Federation had concerns that the massive influx of registrations as UPC representatives at the start of the sunrise period could create delay. But, the chairman stated that arrangements had been made to manage the expected large number of applications.
  1. All users, including staff members, will have to register on the Case Management System (CMS) if they want to make applications to opt out. There will be a two-stage authentication procedure to register, first as a user, then as a UPC representative on the CMS. The details of this procedure will be published in the near future on the UPC Website.
  1. The formalities staff will be able to prepare the opt-out applications for EPAs or representatives to file. However, the formalities staff will have to use their own user ID if they want to register the opt-out on behalf of the EPA or representative. Any user that lodges the application will be responsible for its content and must provide her user identity. Besides, a mandate will be required for any user that is not a qualifying EPA or a UPC representative.
  1. The proprietor of a patent will not need a mandate to opt it out. If the proprietor is a company, any member of the staff who is not a UPC representative will need to file a mandate. This is why the Preparatory Committee is considering the creation of a general mandate to authorize multiple opt-out applications by a particular user over a period.
  1. Application Programming Interfaces (APIs) are provided by the UPC IT team in the developer section of the UPC website to enable companies to integrate the CMS to their IT systems. Also, a user-friendly guidance through the APIs and a list of third-party companies specialized in services for integration with the CMS will be published on the UPC website as soon as possible.

The Chairman did not specify any date for the start of the sunrise period.

Changes coming to the Case Management System.

On a side note, on July 5th the UPC IT team released an update to the CMS. The goal is to fine-tune different processes on the site like the opt-out application process or the procedure of patent selection. A new API was also made public on the UPC website.

A few days later, the UPC IT Working Group Coordinator Dario Pizzolante announced in a statement that a new version of the CMS specifically designed for the opt-out procedure during the sunrise period will be released in August. He also added that in the future the changes made to the CMS will not be released continuously but instead in larger updates. The IT team is currently working on the adaptation of the CMS to the rules of procedure and on the authentication mechanism. Besides, the team has been receiving feedbacks from multiple workshops since the creation of the temporary website.

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How to conjugate “to opt out” and more news on the topic:

Supplementary Protection Certificate

Yesterday (06/06/16) the Union pour la Juridiction Unifiée organised in Paris an event on the Opt-out. The day was divided between a morning session with panels sharing their position on the Opt-out  and clarifying procedural and technical questions while a mock trial examining the validity of an opt-out was organised in the afternoon.

The panel discussions were an opportunity for some useful vocabulary reminders by Pierre Véron, who pointed out the necessity to get used to the UPC vocabulary such as:

  •  staying-in (for European patents without unitary effect but not opted-out) rather than opting-in (as this would refer to a specific action from the patent proprietor to opt-in),
  • to withdraw an opt-out
  • To opt out
  • An opt-out (for those of us who are not English native speaker, the nuance is in the hyphen…)

Beyond issues of lexicology a few important points were clarified by the participants on the different aspects of the opt-out:

  • On the issue of representatives, all participants were reminded that there is no need to be a “professional” representative, such as a patent attorney or lawyer, to process the opt-out. A person instructed by the company itself, such as an employee of the company can opt-out a patent.

 

  • The issue of the impact of late ratifications on the geographical scope of the opt-out was also raised. In fact if a patent is opted out at a time where only 16 member states have ratified the UPCA, what happens when a new country ratifies the Agreement? Does the opt-out automatically applies for this country too? No answer could be given today, but the next (and last) batch of rules of procedure should clarify this matter.

 

  • It was also reiterated that if the true owner of the patent is not registered in the registers of all participating member states, he/she must lodge a declaration that they are the true owner.

 

  • The IT team confirmed that the option to opt out in bulk (for more than one patent) will be allowed by the Case Management System. It will be possible to manually identify an unlimited number of patents to opt out in the CMS, or to use an “Application Programming Interface” that will allow a selection of patents from a database outside the CMS that will then be exported to the CMS  to be opted out. This last option will allow very large numbers of patents to be opted out easily and within a short amount of time.

 

  • Finally, the IT team is working on an additional security level that would prevent (or reduce) unauthorized opt-outs (arising from mistakes or  maliciously opted out). They are considering different options such as a login linked to some form of ID, the download of a letter of intention/proof of representation/copy of practice certificate/power of attorney, a letter of confirmation sent to the physical address of the patent holder or a fixed line call-back system that would automatically call the patent holder to confirm the opt-out. Some of these options are however costly, while others involve lengthy steps before receiving the confirmation of the opt out. The IT team  recommended anyway a close monitoring of patent portfolios in registers.

 

Lastly, panelists from Bosch, Sanofi, and Ericsson presented their approach to the opt-out: All three highlighted the fact that they would not proceed to a  general opt-out. Sanofi explained that they are in the process of selecting which patent they will opt-out by taking into consideration factors such as the patents’ potential for litigation (is it a patent that attracts litigation or not?), the uncertainty as to the application of the Bolar exemption, the problems that might arise from the possible inexperience of judges, but also the necessity to contribute to the elaboration of the case law and to be attuned to what their competitors are doing in this area. Ericsson reported that their strategy was in progress and would take into account their need for flexibility in the choice of courts, the injunction possibilities (for example: will injunctions be available before the UPC for SEPs?), the centralized effect of the UPC versus the national court lock-in effect with the opt-out, and finally the legal uncertainty that comes with the new system. Bosch on the other hand explained that they will be reviewing their patent portfolio throughout the UPC transitional period  (7 years from the entry into force of the UPCA and renewable once) and will decide on a case by case basis whether to opt out their patents. Bosch made clear that their decision would be based on criteria that would be directly relevant to the patent, such as  the technology protected by the patent or the scale of the investment, rather than on a legal reasoning.

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No Opt-Out Fee!!

As part of the recent amendment by the Preparatory Committee of Rule 370 of Procedure which deals with Court Fees and Recoverable Costs voted on 25th February 2016, it appears from the draft* published on the UPC website that there will be no fee for the opt-out! 

In fact, the Committee explains that processing the opt-out fee would generate an administrative cost for the Court. The Preparatory Committee being cautious of not burdening the applicant with a heavy fee for the opt-out, it therefore decided to remove the fee so as to remove the cost for the Court. The Committee also explains that having a no fee policy for the opt-out “also eliminates the problem of how to process payments particularly during provisional application.”

The decision not to charge for opt-outs seems also to have been motivated by the clear consensus on this issue which appeared in the different public consultations on the necessity to remove or lower the opt-out fee ” to reflect the commitment made by the Preparatory Committee that the fees for both the opt-out and its withdrawal are set to reclaim administrative costs only and that the Court would not profit from either of these.”

 

*The Rules on Court Fees and Recoverable costs were agreed by the Preparatory Committee but are subject to legal scrubbing. The definitive version should not however vary substantially from the version below. See page 17 for the paragraph on Opt-Out Fees.

[embeddoc url=”http://upcblog.amar.lawwp-content/uploads/2016/02/agreed_and_final_r370_subject_to_legal_scrubbing_to_secretariat.pdf”]

 

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A new update on Article 83 and its opt-out by the Preparatory Committee

Supplementary Protection Certificate

The Preparatory Committee published an update on Article 83 of the UPCA and the possibility of opting out. As a reminder, Article 83 states that:

“(1) During a transitional period of seven years after the date of entry into force of this Agreement, an action for infringement or for revocation of a European patent or an action for infringement or for declaration of invalidity of a supplementary protection certificate issued for a product protected by a European patent may still be brought before national courts or other competent national authorities.

(2) An action pending before a national court at the end of the transitional period shall not be affected by the expiry of this period.

(3) Unless an action has already been brought before the Court, a proprietor of or an applicant for a European patent granted or applied for prior to the end of the transitional period under paragraph 1 and, where applicable, paragraph 5, as well as a holder of a supplementary protection certificate issued for a product protected by a European patent, shall have the possibility to opt out from the exclusive competence of the Court. To this end they shall notify their opt-out to the Registry by the latest one month before expiry of the transitional period. The opt-out shall take effect upon its entry into the register.

(4) Unless an action has already been brought before a national court, proprietors of or applicants for European patents or holders of supplementary protection certificates issued for a product protected by a European patent who made use of the opt-out in accordance with paragraph 3 shall be entitled to withdraw their opt-out at any moment. In this event they shall notify the Registry accordingly. The withdrawal of the opt-out shall take effect upon its entry into the register.

(5) Five years after the entry into force of this Agreement, the Administrative Committee shall carry out a broad consultation with the users of the patent system and a survey on the number of European patents and supplementary protection certificates issued for products protected by European patents with respect to which actions for infringement or for revocation or declaration of invalidity are still brought before the national courts pursuant to paragraph 1, the reasons for this and the implications thereof. On the basis of this consultation and an opinion of the Court, the Administrative Committee may decide to prolong the transitional period by up to seven years.”

The Q&A  of the Unified Patent Court’s website clarifies the provisions contained in article 83(1) and 83(3), and looks at whether Article 83 affects the exclusivity of the UPC’s jurisdiction and the duration of an opt-out.

What does the Preparatory Committee say about Article 83 and the exclusivity of jurisdiction?

The issue was whether Article 83 only concerned the exclusive jurisdiction of the UPC with the consequence that after the opt out the UPC would share its competence with national courts, or whether Article 83 should be read as totally removing the UPC’s competence once the patent was opted-out.

The Preparatory Committee makes clear that the intention of the legislator is that Article 83 gives the opportunity to patentees to  remove their patents entirely from the jurisdiction of the UPC. Therefore once the patent has been opted out, the parties only choice of forum will be national courts.

And what about the duration of the opt-out?

This was the second main issue about opt-outs. In fact with the present drafting of Article 83 (1) it is difficult to know whether the opt-out from the jurisdiction of the UPC for a classic European patent is only effective during the transitional period or whether, once it has been notified during the transitional period, it is effective for the whole life of the patent.

The Preparatory Committee states in unequivocal terms in the Q&A that the opt-out is valid for the whole life of the patent rather than just for the transitional period. Therefore the transitional period only corresponds to a period of time during which patentees have the possibility to either bring their actions for infringement or revocation before national courts, or decide to opt-out of the UPC so that their patents are only under the jurisdiction of national courts. The transitional period consequently does not impact the length of the opt-out but determines when the opt-out can take place, i.e. within the seven years (more if prolonged) set out by the UPCA.

See our post on the Transitional period and the Opt-out here.

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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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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.