The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Thursday, 7 September 2017

UPDATE: Complainant against UPC ratification in Germany confirmed as Ingve Stjerna

Ingve Björn Stjerna
As the German law blog JUVE reports, the complainant who filed the constitutional complaint against the ratification of the UPC Agreement in Germany is - as has been rumoured for a while - the attorney Ingve Stjerna. Stjerna has long been a vocal critic of the Unified Patent Court, and the complaint reflects some of his earlier criticisms (see IPKat post here and here for details of the complaint).


In late August, the German Federal Constitutional Court asked several stake holders to comment on the complaint, among them the German Ministry of Justice, the German Bar Association (Deutscher Anwaltverein DAV) and the European Patent Lawyers Association EPLAW, not, however, the UPC Preparatory Committee. The deadline to comment is rather short, which should indicate that the Court may decide on the admissibility of the complaint this year. Whether the complaint is even admissible is still not clear, but the requests for substantive comments indicate that the Court leans towards admissibility. Should the complaint be admitted, there is a  likelihood that the Court will refer questions on EU law to the ECJ, which would lead to considerable delays in the implementation of the UPC Agreement.


JUVE also reports that the Hungarian Minister of Justice, acting on behalf of the government, filed a motion with the Constitutional Court of Hungary requesting the Court’s opinion on the constitionality of the UPC Agreement. Since Hungary is not, however, one of the three required signatories (France, Germany, UK) for the entry into force of the UPC Agreement, the Hungarian assessment is not highly relevant. Needless to say, since German ratification is required for the Unified Patent Court and the Unitary Patent to come into existence, should the German Constitutional Court find the UPC Agreement unconstitutional, this could significantly delay or even derail the UPC and Unitary Patent.

41 comments:

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

IPkat = CopyKat? Not nice for the mice.

A German minister had to resign as big chunks of his PhD Thesis were copied......

IslandoftheDamned said...

Leaves me wondering whether some like-minded principled person is going to have the guts/money/determination to file a case in the hope of a referral by the Supreme Court in the UK as to the competence of the EUCJ over UK court decisions with regard to the UPC...any takers ?

Proof of the pudding said...

@IslandoftheDamned

What kind of legal challenge were you envisaging?

Perhaps a potential litigant might want to consider raising the protection of legitimate expectations as a ground of objection. That might have some mileage, especially given the rather troubling decision to write the UP Regulation in such a way that it applies new / different laws of infringement to pre-existing situations. I am pretty sure that there ought to be at least something in the UK's "constitution" that prevents a legal sanction being imposed in respect of acts that were perfectly legal at the time they were committed - which is a principle that the UP Regulation completely fails to respect.

Proof of the pudding said...

Regardless of what any of us might think about the constitutional complaint, one hopes that the BVerfG will be left entirely to their own devices to make up their minds upon the correctness (or otherwise) of the grounds of complaint.

In this regard, lobbyists and politicians alike would do well to take heed of the principle outlined last month by Frans Timmermans (when discussing the rule of law in connection with Poland) that:
"Everybody living in the EU has the right to rely on an independent national and European judicial system and deserves courts free from any form of interference, including by politicians".

Masters of Deception said...

A German minister had to resign as big chunks of his PhD Thesis were copied......

He should have applied for a job at the EPO as a Vice-President.

In the eating said...

In this regard, lobbyists and politicians alike would do well to take heed of the principle outlined last month by Frans Timmermans ...

They would do even better to take heed of the words of Prof. Siegfried Broß recently published in GRUR:

"To begin with it is necessary to point out that the Member States of the EPO and the EU act not only in a contradictory but in a blatantly dishonest manner when they raise serious accusations, for example, against Poland, Hungary and Turkey, because of their unlawful treatment of the judiciary, whereas on the other hand as a result of the serious defects in the drafting of legal agreements in their own house, they leave the door wide open for crude attacks on the individual rights of EPO staff members, and in the end retreat behind the "immunity" of the international organisation which they have created.

http://rsw.beck.de/cms/?site=GRUR-Int

Freedom of Expression said...

The comments on this thread do not seem to have been updated?

Sceptical look at things said...

EPLA was submitted to the CJEU, with the result we all know, Opinion 1/09.

Why has the UPC not been submitted as well beforehand?

Would it have been too dangerous for some? One can only wonder why.

We would now be clear, and we could have avoided all the innate discussions about the UK being able or not to participate in the UPC.

As far as the interest for European industry is concerned, I am rather sceptical as not much more than a third of applications at the EPO stem from EU member states. How many from European SMS?

Cat got your tongue said...

Comments do not seem to be getting through.
Is the moderator gone to sleep or is is a deliberate policy of censorship.

Look at things said...

Not a word about the UPC in the position paper of the EC relating to Brexit. A UP is manifestly not an "Intellectual property right having unitary character within the Union", as the "Enhanced cooperation" does not apply to all member states.

The Unitary Patent is also not a right delivered by, or has has been
submitted before an Union body in accordance with Union law, as the EPO is anything but a EU institution.

The more one thinks about this, the more one realises that the constitutional problems linked to the UPC are far from being minor. It is hight time to look at them.

Let's hope that the German Constitutional Court thinks about it, and forwards a question to the CJEU. Decisions of the CJEU can sometime be qualified of political, see the dismissal of the Spanish complaint, but here more fundamental aspects are at stake.

Anonymous said...

@ Sceptical look at things

The EU was a party to the planned EPLA but is not a party to the UPCA- hence the difference in whether an opinion was sought in advance.

As set out in the Gordon & Pascoe opinion in relation to question 5 (Point 127) https://www.bristowsupc.com/assets/files/counsel_s%20opinion%20on%20effect%20of%20brexit%20on%20upc,%2012%20sept%202016.pdf

and seemingly by the EU Commission, the CJEU does not have jurisdiction to decide on the legality of the UPCA at this point.

The CJEU also noted limits on their jurisdiction in relation the the UPCA in C-146/13 point 101

Well Spotted said...

Point 90 of C-146/13 seems to be quite clear:
"First, the Unified Patent Court does not form part of the institutional and judicial system of the European Union."

So it is settled that the UPC is not an EU Institution.
This would also seem to imply that it is - like the EPO - exempt from EU labour and data protection law. Or have I missed something?

Point of Order said...

IPKat moderators gone to sleep again?
Comments taking a long time to appear.
Is this an attempt to impede the debate.

Anonymous said...

@ Well Spotted

Not being an EU Institution in itself does not make something exempt for EU laws, as national institutions are not EU institutions but are subject to national law which must comply with EU law.

What prevents all standard EU or national law from applying directly is presumably the relevant protocols on immunities

These are here:

http://www.epo.org/law-practice/legal-texts/html/epc/2016/e/ma5.html

https://www.unified-patent-court.org/sites/default/files/ppi_final_ii_en_clean.pdf

Not sure how they compare- not my area of expertise and Ive not seen any commentary on either of them. Ive not seen suggestion that the UPC's protocol itsefl is legally or morally problematic.

Pacta sunt servanda said...

There's also an interesting explanatory memorandum available here:

https://www.gov.uk/government/publications/eu-no12017-protocol-on-privileges-and-immunities-of-the-unified-patent-court

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/584443/EM_EU_1.2017.pdf

Eternal Optimist said...

I've not seen suggestion that the UPC's protocol itself is legally or morally problematic.

Neither has there ever been any suggestion that the EPO's protocol itself is "legally or morally problematic".

It even includes a provision for co-operation with national authorities "to ensure the observance of police regulations and regulations concerning public health, labour inspection or other similar national legislation, and to prevent any abuse of the privileges, immunities and facilities provided for in this Protocol". (Article 20)

What could possibly go wrong there ?

Sceptical look at things said...

Point 90 in C 146/13 (the rebuttal of the Spanish complaint) is merely a summary of the 6th point brought forward by Spain, and cannot be considered part of the decision of the court!

When quoting the decision, please do it correctly and not in a biased way.

The position of the CJEU is to be found in Points 101 and 102 of the judgement:

101 However, it should be borne in mind that, in an action brought under Article 263 TFEU, the Court does not have jurisdiction to rule on the lawfulness of an international agreement concluded by Member States.

102 Nor do the Courts of the European Union have jurisdiction in such an action to rule on the lawfulness of a measure adopted by a national authority (see, to that effect, judgment in Liivimaa Lihaveis, C‑562/12, EU:C:2014:2229, paragraph 48 and the case-law cited).

103 It follows that the first two parts of the sixth plea in law must be rejected as being inadmissible.

The legal means used by Spain are thus not considered admissible, that means, that actually on this point , no decision as to the substance has been taken by the CJEU.

This is quite different from the allegations submitted.

Point 127 of the Gordon-Pascoe paper is an opinion, not a fact.

The question remains thus why the UPC was not submitted for opinion to the CJEU.

Sceptical look at things said...

The explanatory notice signed by Mr Jo Johnson is quite revealing, and gives away some interesting figures:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/584443/EM_EU_1.2017.pdf

Fee income for UK ? £ 166 millions
Legal business for UK firms £ 200 millions

Savings through UPC for UK firms £ 2 millions no duplication of litigation

Savings through UPC for UK firms £ 17 millions on renewal fees

Who will be the big beneficiaries of the UPC, should UK be allowed to stay in it after Brexit: the legal "industry in UK"! Nobody else. No wonder that the legal industry pushes to stay in the UPC!

It is doubtful that £ 17 millions will be saved in renewal fees, as the number of patent owners from UK stem from the 3% of applications at the EPO coming from UK, and not all of them need protection in all member states.

Where the £ 2 millions in savings for avoiding litigation duplication for UK firms come from, remains a mystery.

It is surprising, but yet UK firms represent only 3% of the filings at the EPO (DE 15%, FR 7%, CH 5%, NL 4%, IT 3%, SE 2%). Those are official figures from the EPO.

Where has the British industry, I mean the real one, not the financial or the legal one, gone?

Proof of the pudding said...

@Sceptical

To quote from the original (UK) series of House of Cards: "You may well say that, but I could not possibly comment".

The avoidance of duplication of litigation is easy to understand: if you only have to litigate at the UPC instead of at least in the UK, France, Germany and the Netherlands, then there could be a cost saving.

However, I would still take issue with the apparent presumption that there will be a "saving". This is because those UK-based companies that litigate patents in multiple jurisdictions are hardly going to put many (or even any) of their key patents in an untested and uncertain system - especially where it is pretty certain that the UK will have to leave the UP system and may well not even be able to stay in the UPC system. There won't be much of a "saving" if you still have to litigate separately in the UK!

Also, what about the additional costs to UK-based industry for defending / settling infringement actions launched (or threatened) at the UPC? Let's not forget that there is a significant court fee (EUR20k) for mounting an invalidity defence... which could encourage "troll-like" behaviour from non-practising entities and could also have a chilling effect on UK (SME-based) industry.

All in all, I think that Mr Johnson's figures nicely demonstrate what I have always perceived as problems with the UPP from the perspective of UK industry. Also, let's be honest, those problems are just the tip of the iceberg when it comes to problems with the UPP.

As I see it, one of the biggest problems is that it attempts to meld together multiple sources of law (the UP Regulations, the Brussels Regulation, the EPC, the UPCA and national laws) and just expects that this will somehow magically work and will not contravene important principles under EU or national (constitutional) laws. And this is even before we consider the attempt to retain the UK in the system post-Brexit!

I therefore agree that the CJEU really should have looked at the system in detail well before anyone considered signing up to it (let alone bringing it into force). To be frank, the whole system is such a dog's breakfast that it would be much better to write it off as a bad job and instead put effort and energy into creating a system that stands a decent prospect of actually working. Let's hope that the BVerfG agree!

Proof of the pudding said...

Comments really are slow to appear on this thread, aren't they?

Proof of the pudding said...

Of course, the reason why the CJEU was not asked up-front for its opinion on the UPCA is because that Agreement is not "between the Union and third countries or international organisations", meaning that it was impossible to invoke the mechanism under Article 218 TFEU for obtaining an opinion.

This is a shame. Also, it is a shame that Spain's challenge did not additionally allege contravention of EU laws due to the retroactive effect of Article 5(3) of Regulation 1257/2012. I would have been interested in the CJEU's views on that point.

The constitutional challenge in Germany therefore provides the first (and much needed) opportunity for a court to express a view on whether the unitary patent package is consistent with important laws and legal principles. The delay caused by the BVerfG's review of the complaints will no doubt be frustrating for those who are eager for the system to get up-and-running. However, I would merely point out that it is plain common sense to check for fatal problems before an important system "goes live"... to do otherwise would frankly be irresponsible.

In this context, I have been disappointed to observe many in the "pro-UPC" camp adopting tactics of dismissing / minimising, or even turning a blind eye to, the grounds of the constitutional complaint. Such attitudes are at best extremely unhelpful and at worst are painting a seriously misleading picture to clients and contacts.

To anyone engaging in such behaviour, I would merely comment that the complaint is what it is. It might be something or it might be nothing, but presuming that it is the latter is nothing more than wishful thinking. Having to scrap the whole system and start again would be a huge pain, especially given the efforts expended so far and the arrangements already made. But that is the price that has to be paid when a system is set up in such a way as to effectively ensure that there can be no independent oversight (to confirm compliance with existing laws) until such a late stage.

In this respect, I think that it would be very dangerous indeed to assume that the huge political and financial costs that would result from the system being killed at this stage will lead to the BVerfG somehow finding a way of dismissing the complaint. This is because such an assumption is an affront to democracy and the rule of law. That is, it would be akin to "boots on the ground" diplomacy, where the rights and wrongs of the situation become irrelevant because key developments are perceived to be too difficult to reverse.

With this in mind, I can only hope that the BVerfG feels able to judge the merits (or otherwise) of the complaints from a purely legal perspective.

Sceptical look at things said...

I can only but agree with Proof of the pudding. It is not too late, and before the UPC starts the agreement, as well as its RoP, should be checked by the CJEU.

In another blog, Kluwer not to name it, one commenter asked why the UPC Preparatory Committee was not asked to comment by the Federal Constitutional Court?

The reason is very simple to me: it wanted to have a non-biased reply about the UP and the UPC.

What is to be looked at with caution is the way the UPC Preparatory Committee was set up and was functioning. It is the result of this procedure which is questioned by Mr Stjerna in his complaint to the FCC. Only a small number of people ever discussed the matter, and the presence of some national judges cannot disguise the fact that only a limited number of lawyers firms were represented in the process and could well be considering as leading the process.

I cannot say whether or not Mr Stjerna is right when he has criticised those points in numerous publications (all available in English), but the feeling of a small group of people, which might consider itself as a kind of elite, has taken far reaching decisions without any parliamentary or democratic control, as only the UPC Agreement has been open to ratification.

I think that those are the questions behind Mr Stjerna's complaint, and it is indeed to be hoped that the FCC sends the lot to the CJEU, even if the fiercest proponents of the UPC hope that the complaint will be dismissed. The quorum problem is not the most important one, and this can be settled easily by a new vote in the German Parliament. The other parts of the complaint are much more of a problem and cannot be dismissed at once.

What is at stake is not only the UPC agreement on its own, but also, and may be more importantly, its RoP. Packing substantive aspects into Rules is certainly more practical, as the RoP can be changed more easily, but by doing so, those aspects escape parliamentary or democratic control.

At the revision conference of the EPC in 2000, attempts were made in that direction, but they were resisted by the member states. Why were they then so complacent with the UPC?

Oversight said...

What is at stake is not only the UPC agreement on its own, but also, and may be more importantly, its RoP. Packing substantive aspects into Rules is certainly more practical, as the RoP can be changed more easily, but by doing so, those aspects escape parliamentary or democratic control.

A lot seems to hinge on whether the UPC is an EU institution.
If it is then it might be considered subject to oversight by the European Parliament.
If not, then it would really be immune from any parliamentary oversight as in the case of the EPO.
http://ipkitten.blogspot.ie/2015/01/developments-at-european-patent-office.html



Questions, more questions said...

If it is not an EU institution, then I do not understand why in the the preamble of the UPCA the following is said:

RECALLING the primacy of Union law, which includes the TEU, the TFEU, the Charter of Fundamental Rights of the European Union, the general principles of Union law as
developed by the Court of Justice of the European Union, and in particular the right to an effective remedy before a tribunal and a fair and public hearing within a
reasonable time by an independent and impartial tribunal, the case law of the Court of Justice of the European Union and secondary Union law;

Furthermore Art 1 of the UPCA states: The Unified Patent Court shall be a court common to the Contracting Member States and thus subject to the same obligations under Union law as any national court of the Contracting Member States.

If I understand well, the TEU and TFEU should thus be clearly applicable. Or did I miss something?

Divisions of the UPC can bring forward prejudicial questions to the CJEU, but the the text governing the UPCA cannot be submitted to the CJEU. I fail to understand the logic behind such a position.

Could somebody explain.

Proof of the pudding said...

It’s not that hard to understand, given the limits of the jurisdiction of the CJEU.

In essence, the CJEU can only review the legality of EU Treaties and the (legislative) acts of EU bodies. The UPCA is not an EU Treaty or legislative act, as it is instead an international agreement (that just so happens to be exclusively between EU Member States).

However, this is not to say that the CJEU will have no teeth when it comes to the effects of the UPCA. That is, pursuant to Article 258 or 259 TFEU, the CJEU will be able to assess whether the Member States that are party to the UPCA are fulfilling their obligations under the EU Treaties. Unfortunately for the public, however, such actions can only be commenced either by the Commission or another Member State.

This effectively means that a challenge by Spain (under Article 259 TFEU) might be the only hope of sorting out whether the actions of the UPC (or the Participating Member States) are compliant with EU law.

It remains to be seen which grounds could be raised by Spain under Article 259 TFEU. However, Article 118 (attributing the European Union with exclusivity regarding the creation of uniform IP rights) is an interesting possibility.

In C-146/13, the CJEU held that:
Notwithstanding the fact that the contested regulation contains no list of the acts against which an EPUE provides protection, that protection remains uniform in so far as, regardless of the precise extent of the substantive protection conferred by an EPUE by virtue of the national law which is applicable, under Article 7 of the contested regulation, that protection will apply, for that EPUE, in the territory of all the participating Member States in which that patent has unitary effect”.

In other words, the CJEU held that Art. 118 TFEU was not contravened because EU law (the UP Regulation) has been used to achieve (partial) harmonisation, through the designation of a single, national law.

However, this would appear to mean that failure of the UPC to apply a single, national law (as determined under Art. 7 of the UP Regulation) would therefore not only contravene the Member States’ obligations under the UP Regulation but also their obligations under Art. 118 TFEU.

This puts an interesting “spin” on the law of infringement to be used under the UPP, doesn’t it?

For a start, it would appear that the UPC would only be able to refer to the infringement provisions in the UPCA to the extent that those provisions are fully incorporated into the national law selected under Arts. 5(3) and 7 of the UP Regulation. This means that the UPC, as well as all patent attorneys, will need to become experts on the extent to which this is true in each of the relevant Member States... and also what the significance might be of seemingly contradictory / non-identical provisions in national laws.

On the other hand, it would also seem to force the UPC to issue judgements for “traditional” (not opted out) EPs on a country-by-country basis. This is because the UP Regulation does not contain any provisions on the law to be applied to “traditional” EPs... meaning that there is no basis under EU law for the law of infringement for those EPs to be “harmonised”. Also, attempts by the Member States to “go it alone” with harmonisation of the law with respect to such EPs may well contravene the provisions of Art. 118 TFEU.

To put it another way, as the UPCA is not part of EU law, how can the provisions of that Agreement be used to “harmonise” patent law (for UPs or not opted out EPs) within the EU without infringing Art. 118 TFEU?

Proof of the pudding said...

Alternatively, Spain could think about a further challenge the legality of Regulation 1257/2012.

As previously mentioned, the impermissible, retroactive effect of Article 5(3) might be one ground for such a challenge. This is because that Article applies new / different laws (of infringement) to pre-existing patents and patent applications, as well as to acts committed prior to entry into force of the UPP. That hardly seems compliant with the principle of legitimate expectations!

Another, very interesting possibility might be alleged contravention of Article 18 TFEU (“any discrimination on grounds of nationality shall be prohibited”) by Article 5(3) of the UP Regulation.

Understanding this ground requires a little thought.

Firstly, Art. 5(3) states that the applicable law of infringement is determined by Art. 7. Secondly, the primary factor to be considered under Art. 7(1)(a) is residence / place of business. For many individual and corporate applicants, their residence / place of business will be the same as (ie equivalent to, or a surrogate for) their nationality.

Thus, the UP Regulation requires the selection of a single, national law based upon a criterion that, for many applicants, will be a surrogate for their nationality.

The final step is to realise that the national laws of infringement are not harmonised. Thus, inventors / applicants that have identical claims, but that have different nationalities, would have different laws of infringement applied to those claims (and hence potentially different results from litigation).

It really is hard to understand how this could possibly be compliant with Article 18 TFEU!

Further Question said...

If it is an EU institution why would it need its own dedicated Protocol on Privileges and Immunities ?
Surely it would be covered by the EU PPI ?

Questions, more questions said...

Thanks to Proof of Pudding for the explanations.

We are ahead of interesting times, and it might be possible that the CJEU considers the UPCA not in accordance with EU law. In view of the sometimes political nature of the CJEU's decisions, I doubt that it would blow up the whole system, but it could severely harm it.

In the same vein, there is a further question which could be tricky as well. If an opposition is launched against a UP, can the opposition division be composed of nationals of non EU member states?

This becomes particularly critical if the EP has only been validated as a UP.

One could consider that since the EPO regains competence by virtue of an opposition, then the composition of the OD is irrelevant.

On the other hand, one could also consider that having become, at least in some member states of the EPC which are also members of the UPC, an asset according to EU law, its fate can only be decided by nationals of member states of the EU.

If the patent is revoked, then there is no revision possible. And here we are back to the other complaints before the German Constitutional Court.

This question was raised at the latest conference on the UPC in July in Munich, and has up to now not received a reply.

Proof of the pudding said...

"the sometimes political nature of the CJEU decisions"? Are you suggesting that the CJEU might not demonstrate complete independence from the executives of the Member States and/or the executive arms of the EU?

If there is a (perception of) lack of independence, then perhaps it is high time that someone took a close look at the conditions of appointment of the judges of the CJEU, in order to see how well the CJEU fares regarding internationally recognised "best practice" for achieving judicial independence. ;-)

Proof of the pudding said...

It would be nice to see comments appearing a little sooner on this thread. There is still a lot to discuss (including the points made in comments that I posted over 9 hours ago!).

Questions, more questions said...

I do not want to claim that all decisions of the CJEU are more of political than strictly judicial nature. It is a minority of decisions, but the manner in which the CJEU has dismissed the second complaint of Spain against the UPC is an example to me of more political decisions.

Any reason not to consider Spain's complaint were good to dismiss the claims. Some of the questions were however quite specific.

In decisions on the correct application of directives it is certainly not politic. Plenty of those have been published and commented on this blog.

Proof of the pudding said...

OK, so my later comment from yesterday eventually appears, but not the earlier, more substantive one. I shall try again (in two parts).

Part 1:
Wow, not even a deliberate, glaring error in my first comment from yesterday can provoke a response! Either no one cares or no one is watching who has a thorough understanding of EU law.

As decided by the CJEU in C-274/11, “it must be concluded that the competences conferred by Article 118 TFEU fall within an area of shared competences for the purpose of Article 4(2) TFEU and are, in consequence, non-exclusive for the purpose of the first paragraph of Article 20(1) TEU”.

Thus, the hypothetical arguments based upon Article 118 TFEU and “traditional” EPs don’t work... meaning that more subtle arguments need to be deployed if incompatibilities between the UPCA and EU law are going to stand up.

Proof of the pudding said...

OK, so my shorter comment makes it through quickly but my longer, more substantive comment still does not appear. I shall assume that the problem is length and not content and will therefore have another go, breaking down my comments even further.

Part 2a
For me, the major issue with the Unitary Patent Package has still got to be the (impermissible) retroactive application of new / different law to pre-existing cases. The fact that the UPC would (in theory) be free to apply the infringement law of the UPCA to “traditional” EPs in fact makes the effects of retroactivity a lot worse.

Proof of the pudding said...

Part 2b
To illustrate, consider a pending EP that has the same claims for enough EU Member States to qualify (in theory) for unitary effect. Which law of infringement would you say will be applied (e.g. in the UK) to the claims of that EP, once granted? To me, it seems that there are, in fact, multiple choices.

(1) In this scenario, a request for unitary effect is filed after the patent is granted.

The law of infringement applied by the UPC (the only litigation forum for the “unitary” patent) will then be dictated by Articles 5 and 7 of the UP Regulation. For the sake of simplicity, we shall assume that the patent proprietor has no residence or place of business in the Participating Member States, meaning that the UPC will apply German national law for the purposes of determining infringement.

(2) In this scenario: unitary effect is not requested; no opt-out is filed; and the “traditional” EP patent (the UK validation, plus a handful of other validations) is litigated at the UPC.

Which law of infringement will the UPC apply to the “traditional” EP? Whilst this is a tricky question to answer, we can apply some common sense to work out the most likely result.

Firstly, the UPC will not be bound to apply the same national law as under scenario 1. This is because the UP regulation does not apply to “traditional” EPs.

Secondly, in all likelihood, the UPC will apply a single law... as otherwise there would be no benefit to using a supposedly “unified” court!

Thirdly, Article 24 UPCA provides a hierarchy of laws. With no overarching EU law to consider (as the UP Regulation is irrelevant to “traditional” EPs), the next stop for the UPC will be the UPCA itself (Article 24(1)(b) UPCA).

Thus, in all likelihood, the UPC will apply the infringement law of the UPCA (Articles 24 to 30 UPCA) to all validations of “traditional” EPs that are litigated in that forum.

(3) In this scenario: unitary effect is not requested; no opt-out is filed; and the UK validation of the “traditional” EP patent is litigated at the UK High Court.

Here the answer is simple. The UK High Court will apply UK national law for the purposes of determining infringement. There is simply no basis under UK law for the court to do anything else... not least because the provisions of the UPCA have not been incorporated into UK law (instead, a few “tweaks” have been made that only partially align UK law with the UPCA provisions on infringement).

(4) In this scenario: unitary effect is not requested; an opt-out is filed; and the UK validation of the “traditional” EP patent is litigated at the UK High Court.

Here, the same answer applies as under option 3, namely UK national law will be applied for the purposes of determining infringement.

Proof of the pudding said...

Part 2c
So, for a single, pending EP, there are actually three possible choices of law of infringement (namely German national law, UPCA law or UK national law) that will be applied in respect of a single territory (the UK). More worryingly, the choice of law will be dictated by post-filing actions of the proprietor, ie whether or not unitary effect is requested, whether or not an opt-out is filed (and, if so, whether or not it is later withdrawn) and/or which litigation venue is selected (from the UPC or national courts).

Remember, national laws of infringement have not been fully harmonised with one another across the Participating Member States, nor have they been fully harmonised with the infringement provisions of the UPCA. Thus, it will make a difference to the outcome which law of infringement is selected.

So, the UPCA coming into force will bring the advent of what I like to call “Schrödinger's patents”, which are pending EPs whose precise effect upon third parties cannot be fully pinned down until they are actually granted and litigated (at a specific forum). As will be evident from the above, until the proprietor has made final, irreversible choices with regard to all three of unitary effect, opt-out and litigation forum, uncertainties will remain as to the law of infringement that will be applied.

Bringing such “Schrödinger's patents” to life seems to me to be irreconcilable with the principle of legal certainty, and no doubt countless other provisions and principles of EU law (especially fundamental principles relating to the rule of law). But why has this issue attracted so little attention?

It is about time that this changed, I would say. It would be horrible to "sleepwalk" into a nightmare scenario that might become impossible to wake up from.

Questions, more questions said...

Thanks to Proof of the pudding for his interesting contribution on the law applicable for infringement.

I have a further question with respect to validity, which is also to be decided by the UPC.

What will happen if the UPC and the TBA come to totally different views with respect of the validity of a UP? In other words, in case of conflict between decisions of the UPC and the TBA.

At the latest conference on the UPC in Munich, Sir Jacob made it clear that for him the UPC will be the leading court in Europe. In other words, the UPC decisions should prevail. By doing so he forgets that there are also other non-EU member states at the EPO. And they also deserve some respect.

One example: it is abundantly clear that the boards of appeal of the EPO have taken a strict stance in respect of added subject-matter. What if the UPC waters down the requirements? This thought is not abstruse when one looks at certain national decisions in this respect.

The UP being a patent to be granted by the EPO, the examining and opposition divisions are bound to follow the case law of the boards of appeal, and especially that of the enlarged board. The strict stance will be maintained be it only for this reason.

If the UPC is more lenient in the matter, which is to be expected, the only way to have a patent scrutinised strictly on this point is to file an opposition at the EPO. Otherwise it might become difficult to have a strict view on the matter. That proprietors prefer a more lenient way is obvious, but the opponents will want exactly the opposite.

At the recent INGRES Conference reported in another blog on IPKat, Mr Hoying made an interesting comment. According to his view, “Art. 54(3) EPC [is] a big problem which leads to multiple patents for the same invention (and – via divisionals – unacceptable uncertainty of third parties). Why can EPO and Dutch courts not read “the content of European patent application” broader? The skilled person should always read (when reading for Art. 54(3) EPC purposes) with the common general knowledge and consider each combination with the common general knowledge as disclosed”.

This is to me a clear attempt to water down the requirement for novelty which is goes like an Ariadne thread through all decisions of the enlarged board, novelty, added subject-matter, priority, divisional applications and disclaimers.

If the UPC follows this line, then we can say good bye to certainty in this matter. Is this really want is good for the users of the system? For US companies yes, as they have never understood the problem, for European companies, and especially EU and SMEs among them, certainly not.

In any case, the uncertainty will remain. And to me, this is not good for business, unless it has deep pockets.

By the way, at the latest conference on the UPC in Munich, Sir Jacob made it also very clear what he thought of opposition divisions and the boards of appeal: an opposition is playing waiting for Godot! This is not very kind, to say the least.

To me, the problems with the UPC are not only when it comes to infringement as exemplified by Proof of the pudding, but also when it comes to validity.

Answers said...

One example: it is abundantly clear that the boards of appeal of the EPO have taken a strict stance in respect of added subject-matter. What if the UPC waters down the requirements? This thought is not abstruse when one looks at certain national decisions in this respect.

I would say that the EPO Boards of Appeal are history at least as a judicial or quasi-judicial instance. They may potter on for a while in Haar but their glory days are over.

The independence has been so far eroded despite or perhaps as a result of the fig-lesf reform in 2016 so that they can no longer be seriously considered as an independent judicial instance. The "President" of the Boards of Appeal cannot even appoint his deputy without the approval of the President of the EPO (nota bene: the EPO President and not the Admin Council has the final say here). The President of the EPO also has the final say over the promotion of Board members.

The plan of the EU manadarins seems to be to replace the EPO Boards of Appeal by the UPC. That much is clear from Jacob's comments.

Anonymous said...

The Boards of Appeal are likely not to survive the upcoming decisions of the German constitutional court, be it only because the Enlarged Board itself in a recent and disastrous disciplinary case stated it was under the influence of the President of the office.
This entirely changes the situation which prevailed for decades, when earlier decisions rightly concluded that the members of the Boards were judges in all but name.

Proof of the pudding said...

"The plan of the EU manadarins seems to be to replace the EPO Boards of Appeal by the UPC. That much is clear from Jacob's comments".

Hmmmn. If that is true, then we could be looking at a very dark future indeed.

Oppositions at the EPO could hardly be described as a "low-cost" exercise. However, on any realistic assessment, revocation actions at the UPC are likely to be an order of magnitude more expensive.

It is therefore all too easy to envisage disastrous consequences for SMEs (and the public) across Europe if the UPC becomes the only forum for revoking European patents. That is, if the cost of knocking out a "bad" patent that has been asserted against you becomes prohibitively expensive, and the market for litigation insurance has (predictably) failed to materialise, how do you stop the "trolls"?

There is another factor could make this a "perfect storm" that could devastate important areas of industry across Europe, especially those that are largely populated by SMEs. That is, we need to consider that the management of the EPO has, in recent years, engaged upon a drive to grant as many patents as possible. It is clear to anyone who has been paying attention that this drive has involved a "light touch" approach to examination... thus greatly increasing the likelihood that patents will have been granted with overly-broad claims, or perhaps even no valid claims at all.

So, we could end upon with more "bad" patents and the prospect of hugely increased costs for knocking out such patents. Who would that benefit, I wonder?

Whilst I am very reluctant to believe in conspiracies, even I have to admit that the actions of the current EPO management (grant rate forced ever upwards, Boards of Appeal hobbled, chances of the opposition procedure surviving the constitutional complaints in Germany correspondingly decreased...) all seem to be tailor-made to benefit only a certain section of the patent ecosystem. We shall just have to wait and see whether this is the result of accident or design.

Look at things said...

Proof of the Pudding’s picture is scary, but it cannot be dismissed.

It is a frightening thought, but the more one looks at the situation, one can discover what the hidden agenda of the actual president of the EPO could have been, now was: transform the EPO in an examination-light office, reduce the boards of appeal to nothing, and push the UPC at any rate.

One does not have been scholar of the ENA (the posh stable where the president comes from) to guess who will benefit from this.

As far as the UPC is concerned, the SMEs have always been used as fig leaf to push the project through for the benefit of any other players than the SMEs. That even the Commission once thought to introduce a litigation insurance says a lot. The stance about SMEs is repeated with the regularity of a Tibetan prayer mill turning in the wind.

As SMEs benefit from a fee reduction when filing European applications, it would be interesting to see if the EPO is prepared to publish statistics about the number of filings by SMEs in member states of the EPC in general, and from SMEs in the EU in particular, and then from the countries having ratified the UPC. I take bets that the number is barely worth mentioning, otherwise those figures would have been already published.

The official filing figures at the EPO are clear in themselves, even abundantly clear: filings coming from EU states are barely above a third of all filings. The first beneficiaries are easy to find: all non EPC member states.

Another figure which would be interesting: how many EP are validated in all EU member states? How many are validated in all EPC member states?

That at the last conference on the UPC in Munich, the organisers managed to find a SME which reaves about the UPC is a good marketing coup. It is certainly not representative of the real situation of SMEs.

The UPC is a perfect example of lobbying at its best, when one sees who will be the beneficiaries of the whole system: litigation lawyers (some of them having written themselves the Rules of Procedure of the UPC) and large companies acting internationally and with deep pockets.

It might be more expensive to litigate in each and every EU or EPC country, but at least it was a barrier for stopping some bullies. And if it was worth it, the litigants had enough money to fight were the market share was worth it. How many cases of this kind?

With the UPC, no reason to refrain, in one go all are caught. In the long run the number of diverging decisions between EPC member states have gone down and will continue to go down, so why do we absolutely need an instance like the UPC?

But is looks so social to apparently care for the smaller and poorer among us….

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