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Monday, 2 July 2012

Black Friday or Black Monday?: Two days of decisions on the unitary patent

The AmeriKat enjoying the 40th
strawberry of the day. . .
On Friday, when the AmeriKat was uniquely not in front of a computer and also prohibited from using her phone, it seemed that everything was happening on the unitary patent front. After enjoying a day of Pimms, champagne, copious amounts of food, lounging (and some racing) at Henley, the AmeriKat snuck a peek at her phone in the afternoon and found literally hundreds of e-mails on the unitary patent. But being in the middle of a field next to the Thames prevented her from breaking the news. Instead a few calls to IPKat team member Jeremy ensured that the latest events were alerted to readers (thank you Jeremy).


Earlier that day, the AmeriKat was awoken early by e-mails from IPKat friends, Vicki Salmon and Tom Mitcheson, informing her of the news that UK's Prime Minister David Cameron had blocked the then yet unconfirmed deal (see post here) on the proposed unitary patent and unified patent court after failing to obtain last-minute demands. Mr. Cameron had proposed withdrawing his bid for the Central Division of the Unified Patent Court to be in London in exchange for the removal of the problematic and controversial Articles 6 to 8 of the Proposed Regulation which give the last say on the interpretation of patent infringement and defences to the Court of Justice of the European Union (CJEU) - a problem understood by anyone who has experience with the CJEU's reference mechanism in trade mark law.

Prime Minister Cameron
According to the Financial Times, this gesture failed to appease President Hollande and Chancellor Merkel, who were reported to have reached a bilateral deal to locate the Central Division and most of the work in Paris. By 9/10 AM, the AmeriKat's e-mails were filled with "Congratulations to Cameron" and "Well done Cameron, I may vote for him now…". The AmeriKat, who having followed these events closely for several months, remained unconvinced. To some friends of the IPKat heralding the good news she replied

"Let's see what today brings and if the 4 July vote falls away".
Sure enough, after lunch on Friday we received more news from the European Council during the final day of their two day summit. In their conclusions, the Council confirmed the week's earlier rumors that Paris would host the Central Division of the Unified Patent Court, with a London branch of the Court dealing with pharmaceuticals and a Munich branch dealing with mechanical engineering (not automotive which was the earlier rumor). In the document, the Council also suggested that

"...Articles 6 to 8 of the Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection to be adopted by the Council and the European Parliament be deleted."
Arbitrarily, the Council also stated that there is no possibility for a defendant to request a transfer of an infringement case from a local division to the Central Division if the defendant is domiciled within the EU ("Get ready for jurisdictional races to court", surmizes the AmeriKat). The rationale for this decision has completely eluded the AmeriKat.

So again, more shouts of glee from the patent profession filtering into the AmeriKat's inbox, who nevertheless depressed that the numerous other identified deficiencies had not been addressed, were consoled that at least there was a recognition that Articles 6 to 8 should be deleted - the most problematic of the many offenders in the Proposed Regulation and the Draft Agreement. 

Indeed, the European Patent Office published this press release quoting EPO President Battistelli as saying:

"Thanks to this long-awaited step towards the completion of the European patent system, Europe has demonstrated its conviction that boosting innovation and strengthening the competitiveness of its industry is the best way of countering the current economic uncertainties. The simplification of the existing patent system will bring particular benefits to small and medium-sized enterprises and to innovators in universities and research centres. I would like to take this opportunity to warmly thank all the European deciders who permitted to reach such an historic decision."
Bernard Rapkay
The AmeriKat herself was somewhat livened that it appeared at least someone was listening to the profession and industry on the issue of Articles 6 to 8 but, again, she suspected the fat lady had not yet sung on Articles 6 to 8.

Sure enough this afternoon came news that confirmed what the AmeriKat had predicted to her friends on Friday morning - the European Parliament voted to postpone the 4 July vote on the unitary patent proposals and objected to the deletion of Articles 6 to 8 (see further articles in the German press here and here). The vote for postponement, requested by the German rapporteurs for the proposals - Bernard Rapkay and Kalus-Heiner Lehne - signals the latest of pronouncements from Mr. Rapkay. Mr Rapkay, who previously referred to European judges as an "interest group" in reference to their objection to the inclusion of Articles 6 to 8, stated that the Council had pledged to approve the proposals as they stood as at December 2011 (which the AmeriKat assumes includes the secretive location of the Central Division being Paris) and to change the proposals would be
"a scandalous breach of procedure"
He also likened the Council's negotiation on the seat of the Central Division to that of an "oriental bazaar" and Mr. Lehne stated that deleting Articles 6 to 8 would "emasculate" the proposals. Mr. Rapkay also threatened that if the Council deleted Articles 6 to 8, the case
"would go straight to the European Court of Justice". ["Well, you are in for quite a wait Mr. Rapkay", says Merpel, "What has happened to the Italian and Spanish referrals on the enhanced cooperation procedure?"]
The European Parliament's stance is unsurprising. Essentially, the European Parliament's inclusion of Articles 6 to 8 was overturned on appeal by the Council, and then remitted back to the European Parliament to re-decide the same issue. It wouldn't have taken an oracle to predict that the European Parliament would be unhappy with this and object to the deletion. Especially, says the AmeriKat, when you use such weak language as "we suggest that Articles 6 to 8" be deleted.

The unitary patent proposals are
starting to feel like a never-ending
game of chutes and ladders
So what is next? Given the legislative murkiness of European procedure the AmeriKat is unsure (although she is gathering intel as she types), but from reports the issue will be referred back to the Legal Affairs Committee. According to Professor Steve Peers who commented this evening on the PatLit post:

"I would suggest to those opposing Arts 6-8 that it is not enough to win the political argument with the UK government and therefore the EU summit. They also have to engage in the legal argument that the regulation would still be a valid use of the power conferred by Article 118 TFEU even without Arts. 6-8. Someone should write (very soon) a formal legal analysis advocating this view, publish it online and circulate it to the relevant people in the Council, Commission and EP."
The AmeriKat's green chile rellenos
should be covered in green, not red chile
The AmeriKat agrees and believes this is important, especially in light of the Commons Business Skills and Innovation Committee announcement on this issue stating that the Government must clearly state its position "on avoiding European Court of Justice jurisdiction" (see Kat post here). So to help the Government along, who is going to volunteer to write this letter and analysis?

The AmeriKat knows from speaking and working with the main IP organizations that their views on this issue are united, so she suggests that they combine to write one letter and analysis to avoid the inevitable 8 letters and press releases on the same theme. Much of it has already been written, by this Kat, Kat readers, and the submissions to the House of Commons European Scrutiny Committee. Perhaps, if you give the AmeriKat some lemonade and green chile rellenos she may just do it for you…

In the meantime, the AmeriKat will be back to update readers if any further announcements are forthcoming from Brussels and governments across Europe.

8 comments:

Gibus said...

"The AmeriKat knows from speaking and working with the main IP organizations"...

Humm talk with real law professors and you'll see that ther eis no valid legal argument that can be made to delete arts 6-8.

Moreover, this is not the only legal flaws in the text.

But you cannot see this as long as you'll see only the views of the patent microcosm.

See for a start.

Anonymous said...

The story of the EU patent shenanigans would make a great feature for a Sunday paper, as it provides a perfect, small-scale example of everything that is wrong with EU politics.

At its core is a story of competing national interests which are dressed up as technical, apolitical concerns. The whole structure of the system is designed to favour German patent laywers. Without the bifurcated system, they would have to learn how to litigate cases involving validity (by the way, they would be perfectly capable of doing this, and it would even make their jobs more interesting, but that's irrelevant for this post). However, the bifurcated system just so happens to be structurally unfair, and is likely to turn the EU into a patent trolls' paradise, to the detriment of industry.

Given these two factors, how should a responsible, objective legislature go about designing a new patent litigation system from scratch? That's easy; appoint two German rapporteurs, one of whom is a German patent lawyer who has a clear conflict of interest, to design the system in secret, and when people object try and characterise the objectors as luddite and europhobes who are only acting in their own national interests.

A scandalous breach of procedure indeed.

MaxDrei said...

I suppose Herr Rapkay has read the book "When China Rules the World" by Martin Jacques, in which the author compares the nation States of the EU with the various provinces of the Middle Kingdom, and points out that in Europe, above the national level, there is not yet any more democracy than there is in China.

But then Herr Rapkay commits an outrage, by asserting that judges in Europe are no more than an "interest group". What the patents judges here in Europe have to say about the supra-national patents court is independent of the Party, the Council, the Commission and the wilfully misinformed members of the EP, but without disrespect to duly elected Members of Parliament. The considered advice from the specialist judges is heavyweight. For an EP Member to denigrate it in this way is to piss on the most precious thing that distinguishes us from less civilised parts of the world, namely, The Rule of Law.

By the way, everybody in Europe who has some responsibility to shape our progress should read the book, and then (for the sake of their children) reflect deeply on what they have read.

Anonymous said...

I would like to clarify one point: the reaon for postponing was that - by deleting the Arts. 6-8 - the council would have unilaterally breached a formal (first reading)agreement with the parliament on the content of the patent regulation.
It has nothing to do with the content of the court agreement such as the "secretive location of the Central Division being Paris".

I agree that it would be good to tackle the 6-8-problematic in more detail.
Up to now the discussion has focused on why we don't want the ECJ to decide but not on the EU law-problems a deletion might cause.
I believe specialists in EU law should tackle the issue, because patent law is not the problem.
It is only the reason for taking 6-8 out. In this way we could also avoid flawed discussions with assertions such as the ECJ becoming a "third instance" and the like...

Anonymous said...

I think the whole thing is pretty simple. Do we really want a EU Patent Court? If the answer is yes, the ECJ MUST have the last word. Will this cause delay in cases? Yes, and long ones. Will this make our discipline even more complicated? Absolutely yes. But having the ECJ on top is unavoidable if we are talking about EU-wide rights.
And do not forget that regardless what the Council and the European Parliament, ECJ will have the last say. And I'm pretty convinced that they will want articles 6-8 in the text ...

Anonymous said...

"real law professors", Gibus? Are they the sort that you need to avoid using sharp objects around in case of puncture? Too much hot air and they'll burst anyway.

Anonymous said...

It seems simple to me. The Patent Court should have the last say on issues of fact and the interpretation of the Unitary Patent Regulation, and the CJ on the application of the EU Treaty or the fundamental rights of the parties (i.e. to a fair trial). The CJ should therefore have ultimate jurisdiction, but only to the extent that the Patent Court has acted in a manner incompatable with the Treaty or these fundamental rights.

Anonymous said...

If you look at or listen to the Parliament debate (http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+CRE+20120702+ITEM-016+DOC+XML+V0//EN&language=EN), they clearly decided that the matter should be sent back to the Legal Affairs Committee (Lehne's committee), which is likely to delay the proposed implementation timetable in the Danish/Cypriot Presidency Statement annexed to Council Doc 10059/12 of 24 May 2012 (http://register.consilium.europa.eu/pdf/en/12/st10/st10059.en12.pdf).

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