An independent blog written by highly experienced Intellectual Property Lawyers providing a comprehensive overview of the Unitary Patent and the Unified Patent Court and discusses the latest news on the topic.
The Select and Preparatory Committees have published recently on the UPC website an explanatory note entitled “An Enhanced European Patent System” which aims at concisely presenting the UPC and UP to the public.
The UPC Blob will soon publish a post summarizing the main points of this note.
Last week, the European Parliament voted to complete the legal framework for the Unified Patent Court and the Unitary Patent (IP/13/750) (523 votes for, 98 against and 7 abstentions), updating EU rules on the jurisdiction of courts and recognition of judgments. In July 2013 the European Commission had in fact proposed an amendment to the Brussels I Regulation to clarify how its jurisdictional rules will work in the context of the Unified Patent Court, as well as how the rules of the Regulation should be applied in relations between the Member States, Parties to the Unified Patent Court Agreement and the Member States not party to the Agreement.
It is now for the Council of Ministers to formally adopt this text in order to become law. This is expected to happen at the Council meeting in June.
The training centre for judges who will work at the Unified Patent Court (UPC) has opened in Budapest. Launched March 13th, the centre will be based in government offices in the Hungarian capital.
The opening coincided with a two-day conference to discuss the centre, along with the unitary patent and UPC more generally. Zoltán Cséfalvay, minister of state of Hungary’s Ministry for National Economy, said EU member states participating in the unitary patent system had “unanimously” decided that judges should be trained in Budapest. Benoît Battistelli, President of the European Patent Office (EPO), in his address welcomed ” another step forward in putting in place a unified patent litigation system for the benefit of inventors and industry in Europe”. Paul van Beukering, Chairman of the UPC Preparatory Committee, on the other hand highlighted the crucial role of the UPC trained judges: “If we want the Unified Patent Court to be amongst the best patent courts in the world, we need the best judges we can get. They are the most important asset of the court. To achieve that, training is essential.”
A list of prospective judges has been drawn up, but none has been selected yet.
The Unified Patent Court website has published pictures of the training centre.
In an open letter published February 25th 2014 addressed to the Unified Patent Court, a coalition of companies and trade associations including Apple, Google, Microsoft and Samsung, repeated concerns raised last September regarding the rules of procedure of the UPC. See our post in the previous letter here.
This recent letter did not raise new concerns but insisted on the need for rules on judicial guidance, bifurcation and injunctions, in order to prevent patent trolls to abuse the new court. This consortium of companies argues that rules enabling courts to decide invalidity and infringement separately could mean that invalid patents will be held to be infringed. They also believe that judges may be persuaded to grant broad injunctions on valid patents, and fear that the probability of the UPC being flooded by Patent trolls will be increased by legal uncertainty deriving from an absence of appropriate rules on bifurcation and injunctions for judges. However as “Managing IP” suggests “judges may be less keen to bifurcate cases than many companies fear (…) partly because they would be reluctant to see part of the case off to another court in a different country, possibly conducted in another language.” (Managing IP 26/02/2014)
The sixteenth draft of the rules of procedure released on March 06th 2014 however does not bring any change related to bifurcation or injunction thus indicating that the UPC followed the Rules Committee’s position against being prescriptive and does not consider this issue to be a problem.
The Legal Group of the Preparatory Committee, chaired by Germany’s Johannes Karcher, will now consider the draft set of rules at the level of participating EU member states. It plans to hold a hearing later this year on the suggested amendments to the text. The hearing is expected to be in September or October. (Managing IP 07/03/2014)
Now that the final draft of the rules of procedure has been released do you think that they will allow an easy access to the UPC by Patent Trolls? Do you share the Apple, Blackberry or Google’s point of view? Or are you confident that the UPC has taken so far the necessary measures to protect itself against what cost the US economy $500 billion over the last 20 years according to Corporate Counsel?
You can find the latest draft of the Rules of Procedure (18th) here .
Marc Tarabella, a European MEP (Group of the Progressive Alliance of Socialists and Democrats in the European Parliament) from Belgium asked in November 2013 the European Commission the following written question about Patent Trolls and the UPC:
“Are ‘patent trolls’ soon to arrive in Europe en masse? These companies, which are very active in the United States, make money by buying up patents with the sole aim of taking anyone who infringes them to court. ‘Patent trolls’ thus make no commercial use of the patents they own; rather, they use them purely as a way of pressuring other companies into giving them money.
For now, ‘patent trolls’ are largely an American problem. However, the new EU legislation on patents could change that.
1. How is the Commission preparing for this legislation?
2. Does it have concerns that the law will be abused?
Intellectual property cases may be dealt with by two courts: one focuses on the validity of the patent, while the other establishes whether the patent has been infringed or not. As both courts work independently of each other, a product may be preventively taken off the market before the issue of the patent’s validity has been resolved. What is more, this could happen in at least 13 Member States, once the single patent becomes a reality.
3. In view of the major impact such a ban would have, would this not enable plaintiffs to extract considerable sums of money on the basis of poor-quality or even invalid patents?”
Michel Barnier, on behalf of the European Commission responded in January 2014 that:
“The Commission fails to see how the recent Union legislation on patents, namely Regulations 1257/2012 and 1260/2012, could increase the activity of so called ‘patent trolls’ in Europe. To the extent that the Honourable Member’s question pertains to the Unified Patent Court (UPC), it should be noted that the UPC agreement is an instrument under international law and is not part of Union law. The matter is thus outside the Commission’s remit. The Commission will, however, provide the following factual information.
The UPC as a common specialized patent court will increase legal certainty, and a centralized patent revocation procedure will leave less room for ‘patent trolls’ to exploit current fragmentation.
The UPC Agreement provides for safeguards against ‘patent trolls’. No automatic injunctions shall be granted: the UPC has the discretion to weigh the parties’ interests and to take into account the potential harm from the grant/refusal of the injunction. The Rules of Procedure (draft of 25 June 2013) foresee a possibility to require reasonable evidence that the patent is valid and being infringed and to order an adequate security for any injury likely to be caused to the alleged infringer if the injunction is later revoked.
The UPC is a single court competent for both patent infringement and revocation actions. A local/regional division has only a possibility, after having heard the parties, to refer a counterclaim for revocation to the central division. The Rules of Procedure provide that in case of a high probability that the patent will be held invalid in the revocation procedure the court must stay the infringement proceedings. The objective is to ensure that the patent validity is dealt with before the infringement action can proceed.”
This written question comes after the open letter signed by a number of very important groups such as Google, Apple, Cisco, Microsoft or Intel in September 2013 who raised concerns about the danger of Patent Trolls for the UPC, and especially in relation with injunctions. The UPC injunction power will in fact extend beyond a single country to most of Europe, which could lead to a rise of abusive litigation before the UPC. The open letter argued that “a rule that does not offer sufficient guidelines on when to grant injunctions will create strong incentives for abusive behaviors and harm the innovation that the patent system is designed to promote”, it also highlighted the fact that to mitigate the potential for abuses of Patent Assertion Entities, the UPC should be guided by strong rules of procedure assessing proportionality prior to granting injunctions.
The 15th draft of the rules of procedure so far deal with injunctions in rule 211 which sets out the criteria for the granting of preliminary injunctions. It states that “(1) The Court may in particular order the following provisional measures: (a) injunctions against a defendant (…) (2) In taking its decision the Court may require the applicants to provide reasonable evidence to satisfy the Court that (…) the patent is valid and his right are being infringed. (3) (…) the Court shall have discretion to weigh up the interests of the parties”. What causes concerns is of course the word “may” which indicates that it would be at the discretion of the UPC and its judges to apply the proportionality safety nets set out in rule 211. The definitive draft of the rules of procedure has not been yet released but it can only be hoped that safeguards against patent trolls will be secured.
The UPC Blog awaits your comments and thoughts on this issue:
Do you think that the UPC might be targeted by Patent Trolls?
Do you think that the draft rules of the UPC are too weak to prevent abusive litigation?
Or on the contrary, do you think as Michel Barnier, that the existing safeguards are enough?
Do you think that the answer to that problem might ultimately lie in the hands of the newly trained UPC judges?
One of the many challenges the UPC faces and which is currently the subject of questions and debates is the impact of the ratification of the European Patent Convention by member states on the UPC Agreement, or what is commonly called “the Malta problem”. The UPC Blog would like here to introduce the main elements of the debate and open the topic to discussion.
The European Patent Convention was signed on 5 October 1973 and entered into force in 1977 for seven countries (Belgium, Germany, France, Luxembourg, Switzerland, Netherland and the United Kingdom). Malta on the contrary is a late-comer to the European Patent Convention and only joined on 1 March 2007, which means that European patent applications filed before 1 March 2007 are not valid in Malta by virtue of Article 79 (1) EPC. However, assuming that Malta ratifies the Unified Patent Court Agreement, its late ratification of the EPC will have direct consequences for the Unitary Patent at the scale of Europe.
Article 3(1) of regulation 1257/2012 requires in fact for the unitary effect “a European Patent granted with the same set of claims in respect of all the participating Member States”. The same article further states that “a European Patent granted with different sets of claims for different participating Member States shall not benefit from unitary effect.” Malta having been a member of the EPC since only 1 March 2007, any European Patent application filed before that date will not get a grant valid for Malta. Hence the granted European Patent will not have the same set of claims in all participating member states, since it would have a valid claim set for some states and no set at all for Malta.
This situation of course seems absurd: assuming that Malta ratifies the Agreement in a timely fashion it would appear that no European patent application filed before 1 March 2007 could be eligible to become a Unitary Patent.
One could argue that this is not really a problem since it will resolve itself. In fact, most applications will at some point have a filing date situated after 1 March 2007, and will thus be eligible. However, this problem will not in the future be limited to Malta. In fact what about new and future EU members? As for example Croatia, which joined the EU on 1 July 2013 and joined the EPC as recently as 1 January 2008, after being an extension state from 1 April 2004. As an EU member, Croatia is now able to opt in to the Unitary Patent package. So, if Croatia ratifies the Agreement, the same problem will apply, except that the cut-off date will now be 1 January 2008.
Other recent EPC-joiners that aren’t yet EU members are Norway (EPC since 1 January 2008), Albania (EPC since 1 May 2010), Macedonia (EPC since 1 January 2009), Serbia (EPC since 1 October 2010), and San Marino (EPC since 1 July 2009). Any of these joining the EU in the near future, and becoming Member States of the unitary patent, would shift the cut-off date even later.
It thus seems to the UPC Blog that the Unified Patent Court will have to decide between three possible interpretations of article 3 (1) of regulation 1257/2012.
The first interpretation would be a literal interpretation of article 3 (1) which would have for consequence that no European Patent with Unitary effect could be delivered for European Patents granted before 2007. This interpretation seems of course to be very unlikely.
The second interpretation would consider that if a European patent is not available in a country, the Unified Patent Court should then ignore that country rather than disqualify the Unitary Patent. The requirement of a European Patent “granted with the same set of claims in respect of all the participating Member States” could hence be read as follows: in all participating Member States for which the patent is granted, it should have the same claims. But if the patent is not granted in a particular member state at all, the only effect is that it will not be included in the unitary effect. To a certain extent this will happen anyway. In fact, not all member states will ratify the UPC Agreement at the same time. So a European Patent with Unitary Effect obtained a few years after the Unified Patent Court Agreement enters into force will very probably concern more countries than a European Patent with Unitary Effect granted early 2015 (assuming that the UPC Agreement comes into force in early 2015 as planned by the UPC preparatory committee).
Finally, the third interpretation of article 3 (1) would require the Court to ignore the date of entry into force of the European Patent Convention. This interpretation would mean that a European Patent which could not have been filed for Malta before 2007 could get unitary effect on the basis of a European Patent with Unitary Effect much older than 2007. This situation would however affect third parties who may have relied on the fact that Malta was not covered by a European Patent before 2007.
The UPC Blog awaits your thoughts, comments and questions on the “Malta problem”.
On 20 November 2012 the European Parliament voted in favour of the Legal Affairs’ Committee amendments to the European Commission’s proposal to reform the Brussels Regulation. The draft legislation was sent to the Council of the EU for final adoption, which took place on December 06th 2013 at the Council of Justice Ministers.
The Council agreed on a general approach on a proposal for a regulation amending Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, also known as Brussels I.
This general approach will constitute the basis for negotiations with the European Parliament in order to agree the final text of the regulation.
What needs to be amended?
Article 31 of the UPC Agreement states that the international jurisdiction of the Unified Patent Court is to be established in accordance with Regulation 1215/2012, or, where applicable, the 2007 Lugano Convention. Article 89 of the UPC Agreement links the entry into force of that Agreement to the entry into force of the amendments to Regulation 1215/2012 concerning the relationship between those two instruments.
It is therefore necessary to amend Regulation 1215/2012, in particular to insert provisions which determine how the Unified Patent Court can exercise its international jurisdiction.
The Commission submitted its proposal in July 2013. Although the main objective of the proposal is to regulate the relationship between Regulation 1215/2012 and the UPC Agreement, it also takes into account the existence of the Benelux Court of Justice and the international jurisdiction to be exercised by that Court in specific matters which are covered by Regulation 1215/2012.
Source: Press release of the Justice and Home Affairs Council meeting
(A) The current situation:
Currently, national courts and authorities of the contracting states of the European Patent Convention are competent to decide on the infringement and validity of European patents.
In practice, this gives rise to a number of difficulties when a patent proprietor wishes to enforce a European patent – or when a third-party seeks the revocation of a European patent – in several countries: high costs, risk of diverging decisions and lack of legal certainty. Forum shopping is also inevitable as parties seek to take advantage of differences in national courts’ interpretation of harmonized European patent law and in procedural laws, as well as differences in speed (between “slow” and “quick” courts) and in the level of damages awarded.
The Unified Patent Court Agreement addresses the above problems by creating a specialized patent court, the “Unified Patent Court”, or UPC, with exclusive jurisdiction for litigation relating to European patents and European patents with unitary effect (unitary patents).
(B) The UPC Structure:
The UPC will comprise a Court of First Instance, a Court of Appeal and a Registry. The Court of First Instance will be composed of a central division (with seat in Paris and two sections in London and Munich) and by several local and regional divisions in the Contracting Member States to the Agreement. The Court of Appeal will be located in Luxembourg.
(C) Panel Composition:
The UPC panels will have both legally and technically qualified judges from all over Europe.
Panels in the local/regional divisions will be made up of three legally qualified judges. In addition it will be possible to appoint a technically qualified judge from a pool of judges, either on request of one of the parties or on the panel’s own initiative. For local divisions, two of the three legally qualified judges must be nationals of the contracting state in which the division is set up if this state has 50 or more patent cases per year. Otherwise, only one judge from this state will be required. For regional divisions the same rule applies with the condition that two judges come from the region.
Panels in the central division will be made up of two legally qualified judges who are nationals of different contracting member states and one technically qualified judge with qualifications and experience in the relevant technological field. When hearing actions concerning certain EPO decisions, the panel will be composed of three legally qualified judges.
Panels in the court of appeal will be made up of three legally qualified judges who are nationals of different contracting member states and two technically qualified judges with qualifications and experience in the relevant technological field.
(D) Entry into force
The UPC will come into existence and start its operations immediately after the UPC Agreement enters into force.
As explained by the UPC Preparatory commitment, “the Agreement will enter into force on the first day of the fourth month after the fulfillment of the following two requirements (whichever is the latest):
1. The deposit of the thirteenth instrument of ratification, including Germany, the United Kingdom and France (the three Contracting Member States in which the highest number of European patents had effect in 2012).
2. The date of entry into force of the amendments to Regulation (EU) No 1215/2012 (Brussels I Regulation) concerning its relationship with the Agreement.[4]” The European Commission is expected to present a proposal during 2013. The necessary amendments can then be adopted and enter into force before the target date of the entering into force of the UPC in early 2015.
The Preparatory Committee is officially working towards early 2015 as a target date for the UPC to be set up.
(E) Implementation
The signatory states of the UPC Agreement are working together to ensure that the UPC is fully operational by the time the Agreement comes into force. To this end the Preparatory Committee oversees work in five main areas:
Each area has been assigned to a working group with the responsibility to develop proposals. The details and the target dates are established in the roadmap of the Preparatory Committee which is published on the official website of the Committee and can be found here.
(F) Enforcement of UPC decisions
Any ruling by the court on a patent will be simultaneously valid in all countries in which that patent has been validated and will be enforced under procedures governed by the law of the country(ies) where enforcement takes place.
(G) Fees
The fee system for the court is yet to be finalized, but will be agreed upon by the participating Member States according to Article 36 (3) of the Agreement. In setting the fees Member States will need to balance the need to ensure the Court is accessible for users, especially SME’s, with the requirement in the Agreement that the system will eventually self financing.