The Unitary Patent identified as the single most important IP issue this year

Last week, Taylor Wessing published its fifth Global Intellectual Property Index which assesses how intellectual property regimes around the world compare with each other. The Index also identifies the  IP hot topics among its 8,500 individual assessments from senior industry figures, and this year the Unitary patent was identified as the single most important IP issue!

Just two days before the Brexit referendum we can only hope that this enthusiasm carries weight in the UK’s decision to stay or leave the EU…

Fresh News on the UPC from Alexander Ramsay’s visit in Paris

Today the Union pour la Juridiction Unifiée (UJUB) hosted an event on the Opt-out in Paris in which the following news were announced:

  • The sunrise period’s start is scheduled for October 2016, once the Protocol on the UPC Agreement  has been ratified by 13 states having ratified the UPCA.

 

  • The coming live of the UPC is on the other hand expected for Spring 2017.

 

  • The IT team as well as Alexander Ramsay however warned that due to the uncertainty of the ratification process and the coming referendum in the UK on its EU membership the sunrise period and the coming live of the UPC might be delayed.

 

  • Alexander Ramsay also confirmed that the UPC should run its course even if the UK decides to leave the EU although the Brexit would impact the present schedule.

 

  • It is highly likely that the Preparatory Committee will have finished its work at the end of June 2016, and will be replaced by the Administration Committee and the Budget Committee.

 

  • Last but not least, Bulgaria has deposited its instrument of ratification on Tuesday 31/05/16. Ten countries have thus now ratified the UPCA.

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.

 

Finland is the ninth country to ratify the UPCA:

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

Finland deposited its instrument of ratification of the UPC Agreement in Brussels with the General Secretariat of the Council of the European Union on 19th January.  Finland is the ninth member state to complete this step, the others being Austria, Belgium, Denmark, France, Luxembourg, Malta, Portugal and Sweden.  Two more countries must now ratify the UPCA, on top of the ratifications of Germany and the UK.

The UK has indicated that it would ratify the Agreement before its referendum on its EU membership, whose date has not been confirmed yet. On the other hand, it is expected that Germany will only ratify the UPCA in Septembre 2016. The entry into force of the UPC is planned for February 2017.

The European Commission’s take on the UPC’s impact on SMEs:

Brexit and the German constitutional challenge

The European Commission published in the last quarter of 2015 a “Staff working document”  analysing Europe’s single market strategy and ways to encourage modernisation and innovation within the EU.  The consolidation of Europe’s intellectual property framework, is -as expected- a pillar of the Commission’s strategy.  The Staff working document,  in Section 3.3.1, looks specifically at the effects of the UPC on the consolidation of Europe’s IP structure, and in particular on SMEs.

The impact of the UPC on the latter has been a hot topic since the start of the Unitary Patent Package and especially since the draft cost guidelines were published (see our post here). In fact, it has been feared that high litigation costs would be detrimental to SMEs, leaving them struggling to enforce their IP rights or defend themselves. The European Commission establishes in this document that if only 17% of all patent technology can be attributed to SMEs, “the cost exposure for IP rights and particularly patent litigation is significant, hits SMEs disproportionately hard and acts as a serious deterrent for SMEs to engage in patenting in the first place“. Under the Unified Patent Court, SMEs may indeed have to pay, the winner’s court fees of up to EUR 220, 000 euros, the winner’s legal costs of up to EUR 3 millions, plus damages.

In order to counter the negative effects of the UPC on SMEs the Commission therefore highlights a few measures:

  • The Commission considers that the development and launch of a European Commercial IP legal costs insurance could negate the risk of legal fee exposure and “lead to more investment by banks and other financial institutions into innovative start-ups and SMEs” thanks to the security of insurance and the possibility to increase the value of IP assets. The commission believes that this litigation insurance market could develop at European level as the scale would be considerably bigger than national level where it failed to grow . This would be launched when the unitary patent comes into effect.
  • COSME funds (European programme for small and medium entreprises), designed to encourage innovative European SMEs will be used to assist the latter in applying for European IP titles including the Unitary Patent.
  • The Horizon 2020  SME instrument will be used to “encourage European ‘disruptive’ innovators to protect their investments with unitary patents so that they exploit them commercially at EU level, rather than at national level where they may not be commercially viable“.

A more accurate analysis of the impact of the UPC on SMEs and response to the challenges that this will raise, will however only be possible once the definite cost guidelines are published scheduled for the coming months.

Furthermore, under Section 3.3.2 of the “Staff working document” the European Commission also voices its concerns regarding the following issues, although not specific to SMEs are essential in securing legal certainty for all UPC users:

  • The coherence between the upcoming unitary patent and current EU rules on SPC – in the absent of a unitary SPC title – will be important. SPCs are instrumental for industry sectors whose products are subject to regulated market authorizations;
  • The consequences of the rejection of a request for unitary effect, and the revocation of a unitary patent due to defeating national prior art 203 and the possible acceptable conditions to convert such a putative unitary patent into a bundle of national patents;
  • The principle of non-double protection deriving from unitary patent and national patents, except in very limited circumstances; and
  • The possible issues stemming from the obligation to designate all participating Member States for the purpose of obtaining a unitary patent.

These concerns raised by the Commission seem to be especially important in the light of the new target of 0.25% in EU GDP evaluated by the Commission, which captures the possible net productivity impact resulting from the reduction of validation and maintenance fees in the Member States for patents granted by the European Patent Office and, subsequently, the increase in the number of non-national patent rights enforced.

“Unitary patent protection: what’s next?” Conference in Vilnius:

The State Patent Bureau of the Republic of Lithuania organises a conference on the topic “Unitary patent protection: what’s next?” which will take place on 19 November, 2015 in Vilnius, Lithuania.

According to the European IPR Helpdesk, the main focus of the conference will be  “to review and evaluate current approaches and developments in relation to unitary patent and the UPC, such as: renewal fees and their distribution, court fees and other litigation expenses, overview of EPO Select and Preparatory committees’ activities and other latest developments“.

 

Participation is free of charge, but the number of participants is limited. Conference registration required by e-mail: registracija@vpb.gov.lt.

UPC Case Management System Workshops:

The UPC Taskforce is introducing the Case Management System for the Unified Patent Court in different European cities to patent lawyers, judges and clerks. The UPC Taskforce describes these workshop as  “interactive giving you the chance to give feedback and help define the process”. For those of you who are particularly eager to know more about how this case management system will work, the remaining workshops will be held in :

The Hague – 11 November,
Luxembourg – 17 November,
Dusseldorf – 1 December,
Munich – 2 December and
Rome – 10 December

Most events however are fully booked, there are only some seats left in Munich. You can register by clicking on the link above.

 

UPC Case Management System has opened for user testing:

The UPC case management system (CMS) is now open for user testing. If you feel like testing what it will be like to start an infringement action or apply for a patent opt-out, you can register at  secure.unified-patent-court.org and create an account.

You can also take a peek at our screen shots below to have an idea of what the case management system might look like. You can click on them to have a closer look at the CMS.

If you wish to leave any feedback about this new case management system you can do so via the ‘send feedback’ button at the bottom of the web page.

Case management Screenshot1

Case management Screenshot2

Case management Screenshot3

The 18th Draft Rule of Procedure in detail…How does it differ from the 17th Draft?

We published this morning the 18th Draft Rules of Procedure. We now look at the modifications that the Preparatory Committee introduced to the final version of the UPC Rules of Procedure. 

Rule 5 -Paragraph 13: Opt out applications: 
The opt-out period  is now confirmed by paragraph 13 of Rule 5. Applications accepted by the Registry before the entry into force of the Agreement, shall be treated as entered on the register on the date of entry into force of the Agreement.

Rule 10 (c): Written procedure:
If all parties agree not to have an oral hearing (to reduce costs for example), the Court can decide not to hold an oral hearing.

Rule 14: Use of languages in proceedings:
Panels of regional or local divisions will have the possibility to use the official national language(s) of the country where it is situated for oral proceedings and for rendering orders or decisions, even if the parties themselves have chosen to use an additional language of the EPO as the language of proceedings. It will be up to the Judge Rapporteur to order this exception to the language regime, and he may only do so “in the interest of the panel”. However, in case the official language is used over the chosen language, each order and decision shall be accompanied with a certified translation for enforcement.

It means for example that the Judge Rapporteur in Lithuania may decide that in the interest of the panel it is better for the panel to use  Lithuanian rather than English/French/German, in oral proceedings and for drafting orders and decisions.

Rule 17.3: Distribution of actions between the seat of the central division and its sections: 
The UPC agreement provides that the competence is determined by the classification of the patent. Rule 17.3.c) provides a solution for the situation in which the action involves a single patent having more than one classification or where the action involves more than one patent which do not have a single classification corresponding to the seat or section of the central division. In such case the Registry shall assign the action to the panel to the seat or section appropriate to the first classification of either the single patent or, where the action involves more than one patent, the patent first listed in the Statement of claim.  This distribution is either accepted or rejected by the presiding judge of the aforementioned  panels. If the presiding judge rejects it, they shall instruct the Registry to refer the action to the presiding judge of a panel of the section of the central division they considers appropriate, who shall likewise consider if the allocation is appropriate. If the latter considers otherwise, the President of the Court of First Instance (which will be located in France), shall finally allocate the action.
Rule 158, paragraphs 4 and 5: Decision by default in case of no security for costs: 

At any time during proceedings and following a reasoned request by one party, the Court may order a party to provide a security for the legal costs and expenses incurred or to be incurred by the requesting party. If a party fails to provide adequate security the Court may give a decision by default.

Rule 202: Letters rogatory:

The Court can now issue letters rogatory for the production of documents by other competent courts or authorities outside the EU. In previous drafts of the Rules of Procedure the letters rogatory were only possible for the hearing of witnesses or experts by such courts.

Rule 229: Appeals not respecting the time requirements: 
Rule 229 provides that the President of the Court of Appeal shall reject the appeal as inadmissible, if it is lodged outside the time limits set for appeal . The rule however provides that the President “may” give the appellant an opportunity to be heard beforehand.

Rule 311: Insolvency of a party:
Rule 311 now provides that the Court shall stay proceedings up to three months if a party is declared insolvent under the law applicable to the insolvency proceedings. Proceedings may also be stayed at the request of a temporary administrator who has been appointed before a party is declared insolvent.

Rule 345: Allocation of judges to panels by the President of the Court:
The task of the President of the Court of First Instance is to allocate the judges to the panels of the local or regional divisions, the seat of the central division and its sections. In previous drafts this task was given to the “presiding judge of each local or regional division or the seat of the central division or one of its sections”. The Preparatory Committee has since decided to allocate the task of allocating judges to the President of the Court, who will therefore become a key player within the UPC.

The 18th Draft Rules of Procedure is now available

As announced a few weeks ago, the Unified Patent Court has now published the last Draft Rules of Procedure. This new draft is presented as a “major milestone in the progress of the Committees work” which is “the result of a successful and fruitful collaboration between the Preparatory Committee’s Legal working group and the Drafting Committee”.

You can find below the new Rules below:

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