Tag: UPC

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The UPC London Central Division will be in Aldgate…

The UK government announced on 11th August that the location of the London Central Division and the UK Local Division of the UPC had been chosen and that a lease had been signed for 8th floor of the Aldgate Tower.  The Intellectual Property Office Minister, Baroness Neville-Rolfe published the following statement about these new premises:

“The signing of this lease represents a milestone in the UK’s preparations for the introduction of the Unified Patent Court. Aldgate Tower, with its superb central location, will provide an ideal home for a modern court to support the UK’s and Europe’s leading edge innovative companies. This will further strengthen UK’s legal and professional services sector, and reinforce London’s status as a world leading centre for dispute resolution.”

After rumours that the UPC might be located in Holborn or near Heathrow it seems that the IPO preferred a building in East London, conveniently located in zone 2, and easily accessible. In fact, 5 underground lines, the DLR, London Overground and 3 major rail stations are all within walking distance of the Aldgate Tower. Two Crossrail stations are also underway at nearby Liverpool Street and Whitechapel.

The full planning application (necessary to change the use of Aldgate Tower’s  8th floor from office use only to a mix of offices and courtrooms) can be found here. It contains notably the proposed floor plan of the UPC, which should be organized around four courtrooms and 14 meeting rooms/office spaces. The IPO’s covering letter to Tower Hamlet also indicates that the installation of the UPC will be followed by the creation of 10 permanent jobs by the IPO.

 

 

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An update on the UPC consultation on Court fees and recoverable costs and the issues that this consultation raises:

On 23rd June was organised in London by the IPO and CIPA an event on the consultation launched in May by the Preparatory Committee on Court fees and recoverable costs. The consultation focuses primarily on Court fee structure, SMEs support, Opt-out and Recoverable costs. This event aimed at raising issues relevant to the consultation and encouraging responses from the general public.

You can see our post on the consultation here. The consultation documents can be found here. You can participate to the consultation by clicking here.  The link to the video of the IPO and CIFA event can be found here.

The UPC Blog participated to the webinar and has summarised for you the Background of the consultation, The Issues at stake in the consultation document and the Discussion that followed between the participants.

I. The background of the consultation:

The background was presented by Janis Makarewich-Hall (Head of UPC Taskforce at the IPO) who insisted that the court fees consultation document does not represent “a done deal”. The contents of this document could in fact evolve following the results of the consultation.

Janis  Makarewich-Hall explained that the propositions listed in the consultation document had first been circulated to all participating member states but that the responsibility for the fee structure was split between two committees: the legal and finance committees.

Part of the finance committee’s work is to calculate the court fees so that the court is self-sustaining by the end of the transitional period, this consequently entails a regular review of the fee structure. The structure however follows completely new rules specific to the Unified Patent Court and unrelated to national norms that were considered inappropriate.

II. What are the main points of the consultation?

Counter claim for revocation: The main issue at stake is whether a value-based fee (or high fee) is established or whether a low fixed fee is a better choice. The UK wanted a low fixed fee as it fears that a value-based fee could be seen as an impairment to the defence. The compromise that was suggested by the expert panel was to have both fees combined.

SMEs :  The second issue that is addressed by the consultation is the impact of the court fee structure on SMEs. In order to avoid adopting a fee structure that would be detrimental to SME a few options were considered. Some states wanted to focus and promote behaviours favoured by SMEs, such as early settlement. Others wanted more direct support with either reductions of fees or no value based fees. The consultation documents includes these two options and the public is invited to comment on what they think more suited to SMEs.

Recoverable costs: The maximum ceiling of 3 millions for recoverable costs has been controversial and some states have expressed their concerns considering that it is too high and therefore should be reduced.

Opt-out fee: Most member states felt that 100 euros would have been fair (after taking into consideration the administrative costs of the Opt-out procedure) based on an EPO estimate. A compromise of 80 euros was however agreed.

The consultation is opened until 31st July. All the responses will then be sent to the Preparatory Committee, which will take the final decision in its December and February meetings.

III. Discussion of the key points:

In the second part of the event the participants were invited to critically assess the propositions submitted in the consultation document.

 Court structure fees (Kevin Mooney, Simmons & Simmons):

Under Article 36,  during the transitional period, the UPC is financed by litigants  and its budget is balanced by member states’ contributions.  However it is important to note that the budget of the court has not yet been published;  it is thus impossible for users to know the financial assumptions underlying the level of court fees which justify the current fee structure.

The fees are fixed by the Administrative committee, and will evolve in line with the needs of the court. The fees are at the moment divided between fixed fees and value based fees. It is however not yet known when the value based fee will apply. Under article 370 there are 7 fixed fees with an additional value based fee, and 18 fixed fee only actions. The fixed fees start at 80 euros for the opt-out and go up to 20,000 euros for the revocation. Value-based fees will cost up to 220,000 euros for the most valuable cases (more than 30 millions). The guidelines that will determine the method of assessment of the value-based fee have not been published yet but it appears that the case will be valued on a notional royalty for the period of the alleged infringement. Moreover, the valuation should relate to the whole action.

One issue highlighted by Kevin Mooney is the fact that under Article 70, value-based fees should be paid in advance which reveals a problem of timing as the value might not be known from the start. Targeted support measures for small and medium-sized enterprises and micro entities may be considered. However the word “may” highlights the fact that it is not compulsory.

Kevin Mooney suggested moreover  to consider  the following questions when responding:

  • A value based fee for infringement action and for an application to determine damages will apply, when the fee should have initially covered the whole action. The same applies to appeals as the consultation document shows that there could be a further fee payable on appeal. So does this amount to a double payment of a value-based fee by the applicant ?
  • Should the value based fee element have been removed from the revocation actions? Should someone counterclaiming for infringement in a revocation action have to pay a value based fee? Is a value based fee appropriate for appeal actions? Is the Court not getting double fees in some circumstances?

Fee structure and SMEs (Justice Birss):

The consultation proposes three alternatives for the fee structure concerning the SMEs:

  •  Alternative 1 : would apply to SMEs only , which would have discounts based on the behaviours of SMEs such as the use of a single judge or early settlements.
  • Alternative 2 : would apply to SMEs and Universities, Public Organisation, micro-entities and Public research organisations. All of them could be exempt from value based fees.
  • Alternative 3 : would apply to any entity whose economic stability would be threatened.

 Justice Birss further highlighted two more systems that could benefit SMEs :

  • The first one is a cap on recoverable costs which would support SMEs. This has already proved effective in other jurisdictions but the necessary and appropriate levels would need to be discussed and agreed.
  • The second one would be a definition of what attracts value based fees that take directly take into consideration the needs of SMEs. A value-based fee for infringement for example would very detrimental to SMEs.

Opt out  (Richard Vary, Nokia):

As Richard Vary explained, a fee for opting-out and opting back in will apply to deter companies opting all or most of their patents in fear of the new court. The fee will be 80 euros for opt-out fees.

The opt-out fee however raises questions. Applicants will in fact be charged for a system they do not want to use and will therefore subsidise a system that they decided to leave. The direct financial consequence of that will be that the more people opt-out, the more money the court receives but the less work it has to do.

Richard Vary  also suggested that there should be a reduced opt-out fee for patentees who want to opt-out more than one patent, as he believes the administrative costs is unlikely to increase when dealing with patents that all belong to the same patentee.

Recoverable costs (Alan Johnson, Bristows):

It is important to note first that recoverable costs under article 69(1) include legal representation, court fees, and costs incurred in court. However it appears that the table of recoverable costs caps that is submitted in the consultation document only relates to the legal representation; court fees would thus be recoverable on top of this.

Another issue arises with recoverable cost caps, which should apply per action. However if a patentee brings a case  for infringement and validity, should it be considered as one or two actions ?

The assessment of the value is also a problem as it is unclear whether the “value of action” is to be necessary the same as that assessed for the value based-fee. The following problem may occur: if patentees assess a large value for theirs patents they can therefore recover a large amount of costs, if defendants on the contrary, only see this action as being of a small value they would therefore only recover small costs. So Alan Johnson argues that there is a risk that “recovery is determined by who starts the action”.

 In case of multiple defendants there is also a question of whether it is possible for the applicant to recover multiple costs from multiple defendants. Is the payment shared between all the defendants? On the contrary if the defendants win do they all get their costs?

 The problem of VAT is also a further point to consider when responding to the consultation as whether the value of action includes VAT, or  what would happen if one party is registered for VAT while another is not, are not addressed in the consultation document.

The consultation closes on 31st July and as the panel explained there is no particular structure to the consultation as far as the responses are concerned. However, it was also noted that comments along the four topics discussed (counterclaims for revocation, SMEs, the opt-out and recoverable costs) might be a good place to start…

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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.

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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.

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What is the impact of the UK’s referendum on its EU membership on the UPCA?

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

WIPR published on its blog last week an update about the UK’s ratification of the UPCA, as it appears that it might only take place after the referendum on the country’s EU membership.

The European Union Referendum Bill was passed by the House of Commons on 9th June and if passed by the House of Lords, the referendum will be held before the end of 2017. The WIPR however notes that the UPCA ratification by the UK is unlikely to happen before the EU referendum, which means that the UK’s ratification might be postponed to the very end of 2017 or beginning of 2018. This late ratification will of course have a direct impact on the entry into force of the UPC as it requires the ratification of ten countries plus the ratification of France, Germany and the UK for the court to come into existence. The 2016 ambitious entry into force of the UPCA is thus very likely to be once again postponed.

If the UK were to leave the EU this would however not mean the end of the UPC. In fact, article 89 of the UPCA states that:

“This Agreement shall enter into force … on the first day of the fourth month after the deposit of the thirteenth instrument of ratification or accession in accordance with Article 84, including the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place …”

A“Member State” is in turn defined in Article 2(b) as “a Member State of the European Union”. Therefore if the UK decides that it does not want to take part anymore in the European Union,  the Netherlands would become the third mandatory ratification country, as it is the country with the highest number of European patents after the UK.

If the end of the UK’s membership in the European Union does not mean the end of the Unified Patent Court Agreement, it would however have other practical consequences. In fact the UK is in in charge of various responsibilities within the UPC preparatory committee and notably the IT system. This major part of the UPC would thus need to be allocated to a country which has the capacity to put together an IT system within a short period of time. Another issue is the fact that one of the central division will be located in London. It would not make sense for the UK to host one entity of the central division if it does not ratify the UPCA and takes part in the Unified Patent Court. Article 7(2) of the UPCA however states that “The central division shall have its seat in Paris, with sections in London and Munich …” and Annex II to the Agreement specifies the functions of the London branch. An amendment of the UPCA would therefore be necessary in order to relocate the London central division. This amendment could of course be quite complicated to set up and might necessitate the countries who have already ratified the UPCA to ratify this amendment too.

Finally it must be noted that the most obvious consequence of the UK exiting the EU is the fact that the scope of protection offered by the unitary patent will not include the UK, and will therefore be narrower than it is now. The question is therefore whether this will make the unitary patent less attractive for patentees.

The issue of the UK’s referendum on its participation to the European Union will thus have direct consequences for the UPC, whether the UK stays within the EU or leaves the Union, and the UPC Blog by LAVOIX is keen to know what you think about this new development.

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The Unified Patent Court and the Brussels 1 Regulation (recast): How has the Regulation been modified?

How was the Brussels I Regulation modified in order to accommodate the Unitary Patent and the Unified Patent Court? 

Article 89 of the UPC Agreement makes the entry into force of the Agreement dependent upon, among other conditions, the entry into force of the amendments to Regulation (EU) N° 1215/2012 or Brussels I Regulation (recast). The Brussels I Regulation (recast) was adopted on 12 December 2012 to replace Regulation (EC) N°44/2001, and its provisions apply since 10 January 2015 (Article 81 Regulation N°1215/2012). The need to amend the Brussels I Regulations arose because:

  • Under Article 71 of Regulation No 44/2001, Member States were prevented from concluding any new convention that, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments
  • The UPC Agreement does not lay down its own rules on international jurisdiction –since the rules on international jurisdiction, recognition and enforcement of judgments concerning the disputes falling within the competence of the UPC had previously been unified within the EU through the Brussels I Regulation;
  • Article 31 of the UPC Agreement states that the international jurisdiction of the UPC shall be established in accordance with Regulation N°1215/2012.

The Brussels I Regulation (recast) sets out a harmonised recognition and enforcement of foreign judgment rules in civil and commercial matters within the European Union. Regulation N° 1215/2012 is a recast version of the prior Brussels I Regulation, which had been in force since 1 March 2002. The recast Regulation applies to legal proceedings commenced in the courts of EU Member States on or after 10 January 2015; the Brussels I Regulation however continues to apply to legal proceedings commenced before that date. Both Regulations apply to all EU Member States and in order to ensure a consistent application of the Regulation throughout the European Union, any national court or tribunal is able to refer a question of interpretation of the Regulation to the Court of Justice of the European Union (CJEU).

The basic rule of jurisdiction established by the Regulation is that the defendant must be sued in the courts of the Member State in which she is domiciled. A defendant who is domiciled in one Member State may only be sued in the courts of another Member State to the extent authorised by the Regulation. The introduction of the unitary patent however led to some modifications of that rule, now contained in the Brussels I Regulation (Recast). The Unified Patent Court will in fact have jurisdiction over claims regarding the unitary patent where a defendant is domiciled in a Member State (art 71b(1) and art 71a). Where the defendant is not so domiciled then it will also have jurisdiction where a person consents to the UPC’s jurisdiction (art 71b(2))or where the patent is infringed causing damage within the EU and the defendant has property located in a country which is party to the Agreement on a Unified Patent Court and the dispute has a significant connection with any Member State to the UPC (art 71b(3)).

All necessary changes relating to the UPC  Agreement are combined in four new provisions all contained in Article 71, which states:

“1. This Regulation shall not affect any conventions to which the Member States are parties and which, in relation to particular matters, govern jurisdiction or the recognition or enforcement of judgments.

2. With a view to its uniform interpretation, paragraph 1 shall be applied in the following manner:

(a)  this Regulation shall not prevent a court of a Member State which is party to a convention on a particular matter from assuming jurisdiction in accordance with that convention, even where the defendant is domiciled in another Member State which is not party to that convention. The court hearing the action shall, in any event, apply Article 28 of this Regulation;

(b)  judgments given in a Member State by a court in the exercise of jurisdiction provided for in a convention on a particular matter shall be recognised and enforced in the other Member States in accordance with this Regulation.

Where a convention on a particular matter to which both the Member State of origin and the Member State addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of this Regulation on recognition and enforcement of judgments may be applied.”

In order to ensure the coherent application of the UPC Agreement and the Brussels I Regulation (recast) , it was in fact necessary to address the following issues in the Brussels I Regulation (recast):

Clarify in the text of the Regulation that the Unified Patent Court and the Benelux Court of Justice are ‘courts’ within the meaning of the Brussels I Regulation:

By clarifying that both the Unified Patent Court and the Benelux Court of Justice should be considered as “courts” within the meaning of the Brussels I Regulation (recast), it ensures that the international jurisdiction of these courts will be determined by the Brussels I Regulation. It in particular ensures that defendants which would expect to be sued in a specific Member State on the basis of the rules of the Brussels I Regulation may be sued before either a division of the Unified Patent Court or before the Benelux Court of Justice which is located in another Member State than the national courts designated on the basis of the Brussels I Regulation. Legal certainty and predictability for defendants requires that this change of territorial jurisdiction is set out clearly in the text of the Brussels I Regulation.

Clarify the operation of the rules on jurisdiction with respect to the Unified Patent Court and the Benelux Court of Justice insofar as defendants domiciled in Member States are concerned. Create uniform rules for the international jurisdiction vis-à-vis third State defendants in proceedings against such defendants brought in the Unified Patent Court and Benelux Court of Justice in situations where the Brussels I Regulation does not itself provide for such rules but refers to national law;

The new rule in Article 71b, paragraph 1 prescribes that the Unified Patent Court and the Benelux Court of Justice will have jurisdiction any time when a national court of one of the respective Contracting Member States would have jurisdiction based on the rules of the Brussels I Regulation. On the contrary, the Unified Patent Court and the Benelux Court of Justice will not have jurisdiction when no national court of a Contracting Member State has jurisdiction pursuant to the Brussels I Regulation.

Define the application of the rules on lis pendens and related actions in relation to the Unified Patent Court and the Benelux Court of Justice on the one hand and the national courts of Member States which are not Contracting Party to the respective international agreements on the other hand. Define also the operation of these rules during the transitional period referred to in Article 83(1) UPC Agreement:

The new proposal in Art. 71b, paragraph 2 extends the Regulation’s jurisdiction rules to disputes involving third State defendants domiciled in third States. In addition, the Unified Patent Court’s and Benelux Court of Justice’s jurisdiction to issue provisional, including protective measures is ensured even when the courts of third States have jurisdiction as to the substance of the matter.

As a result of this extension, access to the Unified Patent Court and the Benelux Court of Justice will be ensured in situations where the defendant is not domiciled in an EU Member State. In addition, such access is ensured independently of which instance or division within the Unified Patent Court is seized of a claim.

In addition, the new proposal in Art. 71b, paragraph 3 establishes one additional forum for disputes involving defendants domiciled outside the EU. The proposal provides that a non-EU defendant can be sued at the place where moveable assets belonging to them are located, provided their value is not insignificant compared to the value of the claim and that the dispute has a sufficient connection with the Member State of the court seized. The forum of the location of assets balances the absence of the defendant in the Union.

Clarify the operation of the rules on recognition and enforcement in the relations between Member States which are and Member States which are not Contracting Parties to the respective international agreements:  

The new rule in Art 71c prescribes that the rules on lis pendens and related actions of the Brussels I Regulation (recast) apply between the Unified Patent Court or the Benelux Court of Justice on the one hand and the courts of non-Contracting Member States on the other hand. Finally, this Article also prescribes that the rules of the Brussels I Regulation (recast) apply when, during the transitional period referred to in Article 83(1) UPC Agreement, proceedings are brought before the Unified Patent Court on the one hand and before the national courts of Contracting Member States to that Agreement on the other hand.

Clarify the operation of the rules on recognition and enforcement in the relations between Member States which are and Member States which are not Contracting Parties to the respective international agreements:

Art. 71d regulates the recognition and enforcement of judgments of the Unified Patent Court and the Benelux Court of Justice in Member States which are not Contracting Parties to the respective international agreements, as well as the recognition and enforcement of judgments given in Member States which are not Contracting Parties to these agreements in matters governed by such agreements which need to be recognised and enforced in Member States Contracting Parties to the international agreements.

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UPC Mock Trial 2: 3 Abrasive v La Toilemeri

UPC Judges recruitment 2019

 On Friday 2nd April 2015 as announced on the UPC Blog, the « Union pour la Juridiction Unifiée des Brevets » organised a second mock trial replicating the Unified Patent Court. (Find here our post on the first UPC mock trial organised by the UJUB). It was with great pleasure that the UPC Blog editorial team attended this mock, which once more offered a remarkable insight into the functioning of the UPC and gave substance to its rules of procedure and to the UPCA.

The afternoon was divided into three sessions:

  • Hearing on request to preserve evidence and inspection of the premises
  • Hearing on the application for provisional measures
  • Court delivered its judgment

I. The Facts:

This second mock trial opposed a US company “3 Abrasive” (the Claimant) and a French company “La Toilemeri” (the Defendant) over an infringement action of a European patent for “flexible abrasive”.

The patented invention was described in details as “a method for manufacturing an abrasive member comprising a flexible sheet with a multitude of discrete metal protuberance wherein a multitude of copper protuberance are formed on the flexible sheet, nickel protuberances are electrodeposited over the copper protuberances in the presence of particulate abrasive material so that the particulate abrasive material becomes embedded in the nickel deposits and wherein the voids between the protuberances are at least partially filled with resin material, the resin material being selected so as to reduce lateral movement of the nickel deposits.”

This patent is “valid and in force in the Contracting States designated by the Patent, including France, Germany, The Netherlands, United Kingdom and Sweden. All the Designated Contracting States of the Patent have ratified and implemented the UPC Agreement.”

The patent was also the subject of an opposition proceeding in the European Patent Office. In a decision dated 3 September 2014, the opposition division however had rejected the opposition and decided that the patent be maintained as granted. At the time of the mock trial, an appeal was pending before a Board of Appeal.

3 Abrasive alleged that La Toilemeri, the Defendant advertised a product on its website whose characteristics could only be obtained with the method developed in 3 Abrasive’s patent. La Toilemeri, in fact marketed a product described as “an excellent lateral bearing of the abrasive patches, a reinforced securing of the abrasive patches onto the support.”

Following this discovery, 3 Abrasive decided to engage an infringement action before the UPC local division in Paris since no application for opt-out had been made and La Toilemeri is domiciled in France. The Statement of claim was filed on 13 October 2014 in English, which under Art 49(2) UPCA, is one of the official languages of the EPO that the Paris local division accepts.

La Toilemeri filed a defence on 18 December 2014 “challenging any evidence of infringement” and a counter claim for revocation of the Patent. Simultaneously, the Defendant filed an Intervention in the Appeal procedure, which had been initiated at the EPO on 21 November 2014 by a third party. The Defendant, also requested the Court that, under the provisions of Rule 298, the appeal procedure at the EPO be accelerated and to stay its proceedings pending the outcome of the EPO appeal.

The local division in Paris:

The Panel of the local division in Paris comprised three judges: Mr Paul Maier (FR), President, Mrs Sophie Canas (FR) and Mr Colin Birss (UK), who was also appointed in October 2014 as the Judge Rapporteur (following Rule 18).

According to Article 33 (3)(a) UPCA the Court then decided to keep the applications for infringement and revocation together and Mr Kim Finnilä (FI) was subsequently allocated to the panel as technically qualified judge.

 

II. Application for preserving evidence and inspection (The application can be seen here p 89 of the binder):

 

Following La Toilemeri’s statement of defence, in which it insisted that 3 Abrasive did not have any evidence of the alleged reproduction of 3 Abrasive’s method of manufacturing, 3 Abrasive decided to file on 29 December 2014 an application for preserving evidence (Rule 192) with a request of an order for inspection at the premises of La Toilemeri, near Paris.

3 Abrasive also requested the Court to issue this order without hearing the Defendant so as to avoid any risk of the evidence disappearing.

The inspection was granted (the decision of the court can be seen here at page 99 of the binder) and revealed that:

  • The fabrication process of nickel mixed with diamond powder was effectively electro deposited through a layer of non-woven fabric, which thus matched 3 Abrasive’s patent. This was confirmed by a test report.
  • A distribution agreement for the product in Europe with commercial indications.

III. Application for provisional measures (The application can be seen here at page 119 of the binder):

After 3 Abrasive spotted that La Toilemeri had announced on its website that it would launch its product at an international exhibition in Paris in May 2015, it applied under rule 206 for provisional measures. La Toilemeri filed observations against this application (which can be seen here at page 142 of the binder).

IV. Judgment of the Court:

While the Court was deliberating the participants were asked to vote, and by a large majority decided that 3 Abrasive should not be granted the provisional measures it was requesting against La Toilemeri. The Court however decided to grant 3 Abrasive the injunction it was requesting.

The slides explaining the technical elements of the case and the relevant UPC articles and rules can be found here.

The UJUB has dedicated a website to this second mock trial on which notably the video of the whole trial can viewed. This will give a great insight into the functioning of the UPC for those who could not attend or stream the trial. You will also find the whole synopsis and the presentation of the different “actors”.

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A new coalition of companies against the threat of patent trolls before the Unified Patent Court

What are the amendments proposed by the UPC Industry Coalition? 

The issue of Patent Trolls and the strong opposition of certain companies to the separation between infringement and validity actions, modelled on the German Court structure, have arisen already a few times since the UPC was announced. Groups of companies published open letters addressed to the UPC expressing their concerns while some participated to the open review of the UPC Rules of Procedure. The UPC Blog covered some of these initiatives here and here.

The UPC Industry Coalition however distinguishes itself by uniting major IP actors such as Microsoft and Google with small and medium European companies such as Elkamet or Planisware.  Both categories of stakeholders have joined in and publically appealed the UPC and its Select and Preparatory Committee to modify certain rules of procedure to allow a stronger protection against abuses from “unprincipled plaintiffs”.

These companies identify on their website two supposed threats within the UPC Rules of Procedure:

  • The first one is the injunction gap or “the gap of time during which the products of a company can be barred from the EU market despite a pending question about the patent’s validity” caused by the bifurcation of infringement and validity actions decided by two different courts in two different countries. The fear expressed by these companies is that patent trolls will use the injunction gap to force SMEs to “pay excessively high settlements (even on potentially invalid patents) diverting those precious resources from R&D and other critical uses.” In fact, for the UPC Industry Coalition, the risk for SMEs to have their products removed from the market while waiting for the validity of the patent to be assessed by the court could be life threatening. Against this potential risk the signatories recommend that “validity should be decided before or at the same time as infringement, or the remedy from the injunction decision should be stayed until after the pending validity issue has been decided”.

In their position paper on the Unified Patent Court draft rules of procedure dated 26 November 2014, the Industry Coalition makes three specific proposals to address this issue:

(1)  Expedited Revocation ruling: this option would encourage the revocation Court to issue the substance of its decision before the infringement decision. In fact, “by informing the parties of its decision as soon after the oral hearing as possible, the revocation Court can minimize the possibility that an injunctive remedy will be imposed on an invalid patent.” Rule 40 on “Accelerated proceedings before the central division” however would need to be amended, so that it expressly states that the Judge Rapporteur should only issue a revocation decision after the oral hearing. The proposed amendment can be seen here.

(2)  Enforcement Only After Revocation is completed: This option would prevent enforcement of any injunctive relief until the central division completes the revocation proceedings or in other words would prevent the execution of injunctions or seizures based on the infringement of a patent that may later be declared invalid. According to the UPC Industry Coalition “ensuring that injunctions and seizures are not enforced until any pending validity issues between the parties have been resolved prevents numerous public and private harms, including abusive litigation and the waste of public and private resources”. This option would imply amending rule 37 on the “Application of Article 33(3) of the Agreement” so that remedies are not enforceable on invalid patents. The amendment can be seen here.

(3)  Bond Requirement: This option would require the patentee to post a bond before the Court enforces any injunctive relief when the central division has not yet ruled on the pending revocation issue. The bond amount, which would be left to the discretion of the Court, would have to be sufficient to compensate the accused infringer for any harm suffered by the unwarranted imposition of injunctive relief if the patent concerned is later determined to be invalid. Rule 352 “Binding effect of decisions or order subject to security” would then need to be amended so that permanent injunctions or corrective measures taken in infringement proceedings are not ordered without a security in place. The amendment can be seen here.

  • The second alleged threat that this coalition wishes to prevent is “the lack of discretion and guidance on proportionality for injunctions”. In fact, according to the members of the UPC Industry Coalition “the latest draft of the UPC Rules of Procedure severely limits the judicial discretion to consider the individual facts of the case and to tailor injunctions accordingly.” This would be due to the increasing number of patents used in products. An injunction could thus permit “the most trivial of patents to bar far more significant products from the near EU-wide market”, which would of course have a disproportionate impact on the business of SMEs. Hence, the coalition argues that “although the patent itself may contribute only insignificantly to the entire product, by providing an injunction on the entire product, the patent holder essentially is credited with 100% of the product value. Thus, even trivial patents that contribute insubstantially to a product can exert tremendous business leverage on a company”. The UPC Industry Coalition thus concludes that the absence of discretion and direction for Judges to consider the proportional harm and fairness to the parties when granting injunctions will permit “unprincipled plaintiffs to force high royalties through settlements, royalties that far outstrip the actual value contributed by the patent.” In its open letter to the Preparatory and Select Committee commenting dated 26 November 2014, the UPC Industry Coalition therefore suggests an amendment of rule 118 “Decision on the merits” so that the Court would be compelled to have regard to the principles of fairness, flexibility, proportionality and equity when making a decision on whether to grant or not an injunction.

 

So what do we think at the UPC blog about these suggested amendments and the threats that patent trolls may derail the UPC?

It seems to us that it is regrettable that the treaty allows bifurcation as the UPC procedure is quick enough to eliminate by itself the slowness caused by a defense based on the invalidity of the patent.

Practically, the bifurcation seems attractive to us only in the absence of a technical judge within a local or regional division for such a case.

If there was any abuse of the bifurcation, by Trolls or other patentees (Trolls are in fact not the only one to abuse the bifurcation system, other patentees may misappropriate it too), it will always be possible to the UPC to create its own jurisprudence and to equip itself with appropriate counter measures.

In this respect, the propositions published by the UPC Industry Coalition, and in particular the bond requirement, appear to us judicious.

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Can European Patent Attorneys represent parties before the UPC?

The role of representation of European patent attorneys before the UPC

 

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

 

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

 

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

 

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

 

 

A) The European Patent Litigation Certificate

 

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

 

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

 

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

 

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

 

 

B) The other qualifications

 

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

 

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

 

1) Law diplomas (Rule 11)

 

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

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

 

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

 

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

 

 

2) The transitional period (Rule 12)

 

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

 

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

or

(b)  Previous experience in patent litigation.

 

 

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

 

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

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

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

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

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

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

[…]

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

 

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

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

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

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

 

C) The public consultation

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

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

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

 

D) Right of audience

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

We shall post the developments as they occur.

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New Mock Trial UPC April 2nd 2015 Paris!

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