Concerns regarding plans for a new EU United Patent Court

By EDRi · May 9, 2012

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Deutsch: [Skepsis in Sachen EU-Patentgericht |]

The EU ministers have recently put up plans to create a United Patent
Court (UPC), a framework that will allow inventors to gain
cost-effective unilateral patent protection across the EU. Within this
framework, the inventors would only have to apply once in order to
obtain patent protection across the 25 countries and countries will be
able to preserve their current court system, but with the power to
remove products from the whole EU market.

British Telecom patent lawyer Simon Roberts warned about the
preservation of the existing systems stating that bifurcated court
systems (separating infringement and validity proceedings) such as the
German one, are unbalanced, favouring patent owners. A product can be
banned from the German market even if the patent is found invalid a year
later. “It is time for the software community to wake up. Ministers are
clueless about the dangers of the EU court agreement, and I am surprised
that top questions like bifurcation has not been fixed. German courts
are now a magnet for patent trolls, and the EU patent court will allow
them to stop products for a market of more than 600 million consumers.
German failed patent system will expand to the whole EU,” Stated
Benjamin Henrion, president of the FFII.

In a hearing of the European Commission on the review of the 2004/48/EC
Enforcement of Intellectual Property Directive, John Mitchell from the
SME Innovation Alliance (UK) gave a very interesting presentation on how
the patent system is basically unusable for SMEs and who questioned if
the entire patent system had reached the end of its useful life.

Furthermore, the report of the House of Commons’ European Scrutiny
Committee analysing UPC, reveals that small UK firms would face higher
costs for challenging or defending the validity of patents or alleging
or defending patent infringement claims in court. “This complex
structure of the UPC is likely to be far more costly and burdensome for
SMEs than the existing system in the UK,” says the report adding that a
“UK SME engaged in cross-border trade may also be required to defend
itself against a pan-European injunction for patent infringement in the
language of the local division chosen by the patentee.”

The system is meant to have local, regional and central divisional UPCs.
The UK Committee raised concerns related to the ability of the local and
regional UPCs to separate validity and infringement rulings on the same
patent, where parties choose where to initiate the legal action, based
on where they think they would more likely win. The committee warns over
the possible domination of the market by Germany in patent litigation.

If the German local division finds in favour of a patentee, the
judgement will be valid throughout the EU which will be inconvenient for
small companies having to deal with extra expense related to overseas
proceedings in a foreign language. A transfer from the local German
division of the UPC to the Central Division to avoid bifurcation would
cause additional trouble and expense as well.

The Committee considers it premature to conclude an agreement on the
newly proposed system as several issues should be first cleared up.
“Important open issues include … the fees payable by the users of the
new system (this again is vital for SMEs), the allocation of costs and
revenues to the participating states (which will play a role in some
statesĀ“ decision on whether or not to create a local division of the
court which in turn again is of importance for SMEs), the draft
procedural rules, which presently contain more than 400 provisions, will
require an enormous effort to find compromises between the participating
states on fundamental aspects of civil procedure law to ensure a
harmonized, expeditious and appropriate procedure for all type of cases,
and, not least, the amount of recoverable costs that a successful
litigant may claim.”

Italy and Spain have objected to the plans and referred the issue to
ECJ. Spain believes that restricting the language regime to English,
French and German is discriminatory and Italy considers the plans are
unlawful and would distort competition.

EU patent plans are a fuel for patent trolls, says British Telecom

Unified patent court proposals would harm small businesses, committee of
MPs report (4.05.2012)

European Scrutiny Committee – Sixty-Fifth Report – The Unified Patent
Court: help or hindrance? (3.05.2012)