Tag: Unitary Patent

Posted on

Have you decided which attitude to adopt towards the Unitary Patent and the UPC? A recent INPI survey might give you some indications:

The French National Institute of Industrial Property (INPI) conducted last autumn an online survey  indicating the intention of patent owners to register their patents as unitary patent, their perception of this new patent, and their current registration practice.

124 participants responded to the survey, consisting of 58 companies, 7 research organisations, 37 Patent Attorneys Firms, and 22 others. All together the participants represented for  20%  the chemistry industry, 17%  Electronics and Communications sector, and for 15% Services. Out of all participants 60.3% of them were large companies, 18.9% medium sized companies, and 20.8% small companies.

(Click on the graphs to see what the participants to the survey answered)

To the first question “Do you intend to use the Unitary Patent?”, the participants answered:

Graph1

 

To the second question “If you intend to use the Unitary Patent, what are your reasons for doing so?”, the participants answered:

 

Graph 2

To the third question “If you do not intend to use the Unitary Patent, what are your reasons for doing so?”, the participants answered:

Graph3

To the fourth question “Do you agree with the following?”, the participants responded:

Tableau1

To the fifth question “Which submission do you use?”, the participants responded:

Graph4

To the sixth question “If you use European Patents, how many EPC states do you validate in?”, the participants responded:

Graph5

It therefore appears that 73% of respondents consider that the Unitary Patent is necessary and that 50% of them will be partially using it for their patents. The main reason for its use appears to be the fact that it offers reduced costs compared to the European patent, while the main hindrance is the perceived legal risk attached to this new patent.

Above all, this survey shows that just a year before the entry into force of the UPC (scheduled for 01/02/2017), companies, law firms and patent attorneys have started working on the best strategy for them to adopt. We would like to know your thoughts on this survey and whether you have decided which attitude you will adopt towards the Unitary Patent and the UPC.

 

Posted on

Italy joins the Unitary Patent

Encouraging steps by participating member states towards the entry into force of the UPC Agreement

We reported a few weeks ago that Italy had formally requested the European Commission to join the unitary patent. It appears from the European Commission website that Italy’s request was accepted and that it has now become the 26th member of the enhanced cooperation on unitary patent protection.

Italy was  initially opposed to the Council of Europe’s decision to allow the enhanced cooperation and challenged it, along Spain, before the Court of Justice of the European Union in May 2011. However after the CJEU rejected Italy and Spain’s actions in April 2013, Italy decided to sign the Unified Patent Court but abstained from participating in the enhanced cooperation.

Here our post on Italy and Spain’s challenges of the Unitary Patent from 2011 to its resolution in 2015.

Italy (but also Bulgaria, Cyprus, Czech Republic, Estonia, Finland, Germany, Greece, Hungary, Ireland, Latvia, Lithuania, Romania, Slovakia, Slovenia, and the United Kingdom)  must now ratify the UPCA.

 

Posted on

The Select Committee has adopted the True Top 4 for the renewal fees of the Unitary Patent:

The Select Committee endorsed today the True Top 4 proposal for the renewal fees applicable to the Unitary Patent. The EPO reports that this proposal was adopted by the EU member states participating with the required 3/4 majority.

The True Top 4 proposal corresponds to the total sum of the renewal fees currently paid for the four most frequently validated countries (Germany, France, UK and the Netherlands), and contains a clause for possible revision after four years. Special consideration is also given to the situation of SMEs.

The True Top 4 proposal is divided as follow:

2nd year: 35 EUR12th year: 1, 775 EUR
3rd year: 105 EUR13th year: 2, 105 EUR
4th year: 145 EUR14th year: 2, 455 EUR
5th year: 315 EUR15th year: 2, 830 EUR
6th year: 475 EUR16th year: 3, 240 EUR
7th year: 630 EUR17th year: 3, 640 EUR
8th year: 815 EUR18th year: 4, 055 EUR
9th year: 990 EUR19th year: 4, 455 EUR
10th year:  1, 175 EUR20th year: 4, 855 EUR
11th year: 1, 560 EUR

This proposal was preferred to the True Top 5 for which the renewal fees matched the five most frequently validated countries (Germany, France, UK, Netherlands and Sweden) and foresaw a 25% fee reduction for the first ten years of the lifetime of the patent for specific entities such as SMEs, universities and public research institutions. Under Top 4 proposal the patentee will have to pay a total of EUR 35, 555, whereas under Top 5 the patentee would have faced an overall cost of EUR 41, 955 and EUR 40, 403 for respectively the normal and reduced levels.

Putting aside the fear that these fees are still too high for SMEs, it is good news to have a definite idea of renewal fees for the Unitary Patent as it should enable us all to anticipate better when Unitary Patents are the most relevant to patentees.

You can see our previous posts about the different proposals made by the EPO on renewal fees here (May 2015) and here (March 2015).

 

Posted on

Has Spain changed its mind about the Unitary patent package since its actions were dismissed by the CJEU?

Has Spain changed its mind about the Unitary patent package since its actions were dismissed by the CJEU? According to the Confederation of Employers and Industries of Spain, it has not and the Spanish industry is much better off outside the system…

A few weeks after Spain’s actions were dismissed by the ECJ, the Kluwer Patent Blog publishes an interview of the Confederation of Employers and Industries of Spain (CEOE), in which the Confederation explains why they strongly support Spain’s government’s opposition to the Unified Patent Court and the Unitary Patent and why they wish to remain out of the UPC Agreement.

It appears unambiguously that the CEOE believes that “the UPC Agreement will not be beneficial to most EU entreprises  and will be very detrimental to SMEs” justifying therefore CEOE’s strong opposition to the Unitary Patent package.

The CEOE’s main concern in that respect is the language regime adopted by the UPCA , namely the fact that the unitary patent will have to be filled in English, French or German. For the CEOE “this gives a competitive advantage to enterprises which use one of these languages, to the detriment of enterprises of other Member States.” An example for the CEOE of the unsuitability of the trilingual language regime is the EPO which it considers to be “inefficient and expensive“.

The CEOE further justifies Spain’s position towards the UPC Agreement by arguing that Spanish companies will be able to enjoy all the benefits of the UPCA without the inconvenient as they “will not be obliged to respect in Spain Unitary Patents which have been granted without a Spanish translation with legal effects. Nor will Spanish companies be exposed to lawsuits over products and activities developed in Spain, before a Unified Patent Court in a foreign country and in a foreign language.” The CEOE finally insists that the UPCA, and in particular the court fees, have not been designed with SMEs in mind. The CEOE argues notably that “only big companies will be able to litigate. If SMEs are sued for infringement, they will have to give up, even if the patent of the plaintiff is invalid“.

It appears therefore that there is still a very strong opposition to the Unitary Patent package in Spain and that as a consequence Spain will not in the near future be part of the UPC Agreement.

Posted on

In-house counsels, have your say about the Unified Patent Court and the Unitary Patent:

Managing Intellectual Property launched on 18th June a new survey for in-house counsel to assess the evolution of concerns and views about the UPC. This survey is part of a bigger initiative by Managing IP which already organised a first survey at the beginning of 2015 and which will organise a third one before the end of the year.

The first survey on the Unitary Patent and Unified Patent Court showed “broad support fo the new system, with the majority of respondents saying that they will use (the Unitary Patent and the Unified Patent Court) and 46% saying that it will be good innovation for Europe”.

This second survey now comprises 6 short questions which are designed around two themes. First, it assesses “how the attitudes to the new system  have change” and what specific concerns about the UPC in-house counsels have. It then features questions about the Unitary Patent fees and the Unified Patent Court fees.

If you wish to participate you can find the link here.

Posted on

Unitary Patent Renewal fees: New adjustments by the EPO

The EPO published at the beginning of May two new proposals for an adjusted level of renewal fees for the European Patent with Unitary Effect, which were examined at the 14th meeting of the Select Committee of EU Participating Member States in the enhanced cooperation on Unitary Patent Protection. (See our post on the EPO’s first draft of the renewal fees here)

The EPO describes these two proposals in the following terms:

“These proposals foresee fee levels of respectively the equivalent of the renewal fees which have to be paid for the four or five countries out of the twenty-five EU participating member states in which most European patents are currently validated (a “true” TOP 4 and a “true” TOP 5- in contrast to the previous approach, the EPO’s internal renewal fees are no longer taken into account). The “true” TOP 5 proposal in addition foresees a 25% fee reduction for the first ten years of the lifetime of the patent for specific entities such as SMEs, universities and public research institutions. Member States held an exchange of views with some Member States not yet able to take a concrete position on these proposals.”

The question is therefore how do these new proposals differ from the first draft of renewal fees presented in March 2015 by the EPO. The first proposal had been criticized and judged inadequate for the ambitions of the Unitary Patent. The level of renewal fees for the first ten years of the unitary patent had in fact been established by reference to the EPO’s internal renewal fees payable to the EPO before grant while the application is pending, rather than by reference to the renewal fees payable to national patent offices for a similar patent. Renewal fees only matched the fees payable for 4 (TOP 4: Germany, France, Great Britain, and the Netherlands) or 5 (TOP 5: Germany, France, Great Britain, the Netherlands and Sweden) top validation countries for European Patents after year 10.

The new proposals took into consideration these criticisms, and national renewal fees for Top 4 and Top 5 thus now form the basis of the proposed Unitary Patent renewal fees from years 2 to 20. This created reduce fee levels for patent years 2 to 9.  In addition, in the true TOP 5, the 25% SME reduction in years 2 to 10 and the 15% licenses of right reduction remain.

So what are the new adjusted fees? (See SC/18/15)

For Top 4 level, over 20 years the sum total of the fees would be EUR 35, 555 divided as follow:

2nd year: 35 EUR

3rd year: 105 EUR

4th year: 145EUR

5th year: 315 EUR

6th year: 475 EUR

7th year: 630 EUR

8th year: 815 EUR

9th year: 990EUR

10th year:  1, 175 EUR

11th year: 1, 560 EUR

12th year: 1, 775 EUR

13th year: 2, 105 EUR

14th year: 2, 455 EUR

15th year: 2, 830 EUR

16th year: 3, 240 EUR

17th year: 3, 640 EUR

18th year: 4, 055 EUR

19th year: 4, 455 EUR

20th year: 4, 855 EUR

This is to be contrasted with the total of 37,995 EUR, which means that under the adjusted fees the patent owner would save 2,440 EUR. (See our post on the first version of Court fees here)

For Top 5 level, over 20 years the sum total of the fees would be 41, 955 EUR and 40, 403 EUR for the normal and reduced levels. The Reduced fees correspond to a 25% reduction from years 2 to 10 for SMEs, natural persons, NGOs, Universities and public research organisations. The fees would be divided as follows (the amounts after the 25% reduction for SMEs and other entities are shown in brackets, in italics):

2nd year: 85 EUR (63.75 EUR)

3rd year: 165 EUR (123.75 EUR)

 4th year: 255 EUR (191.25 EUR)

 5th year: 455 EUR (341.25 EUR)

 6th year: 645 EUR (483.75 EUR)

 7th year: 825 EUR (618.75 EUR)

 8th year: 1 050 EUR (787.50 EUR)

 9th year: 1 255 EUR (941.25 EUR)

 10th year: 1 475 EUR (1 106.25 EUR)

11th year: 1 790 EUR

12th year: 2 140 EUR

13th year: 2 510 EUR

14th year: 2 895 EUR

15th year: 3 300 EUR

16th year: 3 740 EUR

17th year: 4 175 EUR

18th year: 4 630 EUR

19th year: 5 065 EUR

20th year: 5 500 EUR

Therefore a patent owner would save 1,670 EUR (or 1, 252 EUR for the reduced fees) compared to the first version of the court fees established by the EPO.

The EPO also published a second document (SC/19/15) comparing the fees and external costs of a European Patent validated in 1 to 25 countries and a Unitary Patent (based on the adjusted fees). This document shows that the Unitary Patent is only financially interesting for patentees who wish to register their patent in more than 3 countries for TOP 4 and 4 countries for TOP 5.

Paradoxically however 64% of European Patents are only validated for a maximum of 3 countries, while only 0.4% of European Patents are validated for 25 countries. It is nonetheless impossible to know from these figures whether the overall cost of the Unitary Patent will encourage patentees to choose the Unitary Patent above the European Patent or whether there is a genuine majority of patents, which only require a validation in 3 or less countries.

These adjusted fees have already been criticised by the American Intellectual Property Law Association and the EUROCHAMBRES. The AIPLA in fact wrote to the EPO to express concerns about the adjusted fees that it considers to be still to high in comparison with costs in the Americas and in Asia. AIPLA argues for example that “the current TOP 4 proposal would cost at least 3 times more over the life of a Unitary Patent than renewals of a U.S patent, an the UP will not cover all EPO countries or even all EU states.”

The Euro Chambres of Commerce and Industry notes that the fee for the “True TOP 5 with reduced fees” only equals a 4% reduction from the first draft of the Unitary Patent Court fees. These adjustments therefore do not represent a real economy for the SME that the EUROCHAMBRES represent, especially compared to the U.S where a 50% reduced fee is applied at renewal. The EUROCHAMBRES president Arnaldo Abruzzini defends the idea –shared by others, see notably this post– that the renewal fees are set up in accordance with the needs of the national patent offices in mind rather than in accordance with the principles of competitiveness and attractiveness., and therefore at the detriment of businesses.

Finally, as highlighted by the IPKat, when looking at the distribution of the reductions of the renewal fees, it can be noted that these reductions apply disproportionately to the early years of the patent. This means that these reductions benefit in particular industries with short product lifecycles where patents are less likely to be maintained after the first ten years.

It is now to the Select Committee to decide the exact level of renewal fees which will apply and the UPC Blog by LAVOIX will keep a close eye on this topic.

Posted on

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

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

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

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

 

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

 

First, regarding Regulation EU 1257/2012:

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

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

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

 

 

Second, regarding Regulation EU 1260/2012:

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

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

 

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

 

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

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

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

 

 

Posted on

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

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

 

 

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

 

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

 

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

They submitted four pleas:

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

 

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

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

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

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

 

 

 

May 2013: Spain v Council of the European Union

 

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

 

I. Spain’s claims (22nd March 2013):

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

 

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

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

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

 

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

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

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

 

 

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

Opinion for case 146/13 can be found here.

Opinion for case 147/13 can be found here.

Press release can be found here.

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

Regarding the creation of the Unitary Patent protection:

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

Regarding the renewal fees:

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

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

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

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

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

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

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

 Regarding the language arrangements and the alleged breach of equality:

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

Regarding the principles of legal certainty and proportionality:

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

 

III. CJEU judgment (5th May 2015):

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

First, regarding Regulation EU 1257/2012:

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

 

Second, regarding Regulation EU 1260/2012:

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

 

Posted on

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

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

The Advocate General’s opinion 

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

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

Spain’s pleas were as follow:

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

 

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

 

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

 

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

 

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

 

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

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

Regarding the creation of the Unitary Patent protection:

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

Concerning the renewal fees:

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

 

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

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

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

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

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

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

Language arrangements and Breach of equality:

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

Principles of legal certainty and proportionality:

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

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

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

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

Posted on

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”…