|The AmeriKat sporting her A/W 2012 outerwear|
In July, shortly after the EU Council's agreement on the location of the Central Division and the European Parliament's "emasculation" following the Council's suggested deletion of Articles 6 to 8 which delayed the planed vote on the proposals, the AmeriKat organized a debate. The debate, chaired by Lord Neuberger, Lord Justice Aikens and Lord Justice Kitchin, aimed to flesh out the key points that concerned industry users and practitioners on the proposed system (official transcript here). The debate drummed up strong views from across a diverse section of the profession and industry, as well as novel points on procedure and areas where work still needed to be done - for example, the need for a harmonized approach on accessory liability.
A few months on, last week, Bird & Bird hosted an event in their London office recapping the proposals and what is next. The AmeriKat was unable to attend, but sent her trusty guest Kat and colleague, Lorraine Neale (Allen & Overy) to report on the event on behalf of the Kat. Lorraine has this to say:
Understandably people are concerned that this will lead to substantial delay, uncertainty and questions of substantive patent law being presided over by a nonspecialist judiciary. The EU Council has suggested the deletion of Articles 6-8, which did not go down well with the European Parliament, who considered this to be unlawful. As a result the vote on the Unitary Patent package, which was due to take place in July 2012 was postponed, and is now due to be discussed again on 10th October. Furthermore the Cypriot presidency is keen and pushing for an agreement to be reached by the 10th December 2012 . Chelsea then outlined two particularly contentious aspects of procedure: the ability of a local division of the Unified Patent Court to grant an EU wide injunction, and the discretion given to local and regional divisions to ‘bifurcate’ infringement and validity. She then handed over to her German and French colleagues for further discussion of these issues.
Dr Claus Becker took to the podium declaring that it was his intention to be the valiant defender of bifurcation (which musketeer?). He acknowledged that one of the main concerns regarding bifurcation was that it was pro-Plaintiff, as an infringement trial is generally faster that a validity trial, potentially leading to bigger companies, or even non practising entities (patent trolls) enforcing weak patents against SMEs. This coupled with an ability to obtain speedy injunctions could put the SME out of business. Claus pointed that ‘speed’ was favourable to the local company too, when faced with a foreign infringement of their IP rights, and that in any event it was possible to stay infringement proceedings pending the outcome of parallel revocation proceedings if the patent was ‘weak’. A second concern was that of claim construction, with bifurcation allowing different interpretations of the scope of protection (broadly in the infringement trial and narrowly in the validity trial). Claus believed that it was possible to avoid this with a cross consideration of case statements, and that in any event the proposed Appeals Court would ultimately iron these differences out by apply a uniform interpretation. With regards to the deletion of Articles 6-8, Claus opined that there was “much ado” in the UK, with a general consensus that these articles should not be included. In Germany the opinion was more polarised with several leading patent lawyers eg Dr Pagenberg and Prof Krasser favouring their deletion, whilst others such as Prof Tilmann ["Whose views are not those of Hogan Lovells", reminds the AmeriKat], believing them to be indispensable. The German Patent Attorney Association had declared that they could live with both solutions and do not really care!
Germany loves France - or do they?
Finally with regards to the Court’s location, Claus stated that the real concern in Germany was that, as the present draft encompasses several possibilities of transferring first instance cases from the local/ regional divisions to the central divisions, this could lead to a reduction of cases heard in Germany, with the consequence that the know-how and experience of the German IP judges in Dusseldorf, Berlin and Mannheim would be underutilised.
Marie Wormser, apologising to Claus, declared that he had unfortunately not won her over on bifurcation! Indeed she appeared steadfastly against it. Amongst several arguments put forward by Marie against bifurcation, was that being optional, it would result in some local and regional courts, in Germany (familiar with the system) and other small countries (not willing to rule on validity which is more technical), bifurcating, whereas in other countries like France or the UK, the local divisions would be more eager to keep the whole case together. There was a fear that this would increase forum shopping, this being facilitated by the fact that in the current Draft Agreement it is enough to have a ‘threatened’ infringement to give a jurisdiction to a local court. Marie advised that if one had to live with bifurcation, it would be imperative to ensure the introduction of sufficient safeguards into the current drafting of the Proposed Regulation: a stay of the infringement action should be systematic rather than remain at the discretion of the local/regional court, or alternatively if infringement proceedings are not stayed, the injunction should be subject to the compulsory depositing of a bond by the patent owner (currently at the discretion of the local /regional court).
Marie reported that the deletion of Articles 6 to 8 were much debated in France too, where there was a general reluctance to give jurisdiction over infringement to the CJEU. However Marie pointed out that the issues were very complex - one problem was that the basis for the draft Proposed Regulation is Article 118 para 1 TFEU and this article concerns the “establishment of measures for the creation of European Intellectual Property rights to provide Uniform Protection”. So the question is whether the deletion of Articles 6 to 8 from the Regulation is compatible with this legal basis. If removed would the Regulation still be valid? Would it not increase the risk for the Regulation to be invalidated by the CJEU?
Not what the AmeriKat will be wearing this Fall
Judge Colin Birss QC revealing that he was “involved a bit in the Rules” but not in any negotiations for the unitary patent, said that he wanted to pick up on some positive notes because most of the discussion that one hears, especially in London, is negative. He thought that the unitary patent will happen - despite our moaning. It was however essential to be using the appropriate and proper means, and our best endeavours to make it as good as we think it can be – because then it could turn out to be a really good system. ["Time to refocus our efforts, seems to be the message", says the AmeriKat] The system we end up with will necessarily be a compromise, and we need to get used to this. However Judge Birss thought that we should be positive that that we have gained a system which fundamentally looks quite a lot like what the British regard as a ‘proper’ court system – a system where you can have disclosure, discovery, and cross-examination of witnesses. It is important for those to whom these are important things, that we do not let this slip away.
Judge Birss thought that bifurcation was a compromise to the German/Austrian systems, and that in his opinion one can solve all of the problems that bifurcation is supposed to solve by having a good system of interlocutory relief. With respect to Articles 6-8, and the jurisdiction of the CJEU, Judge Birss acknowledged that there was a need for in European system to be governed by a European body. He thought that the Appeals Court could fulfil this function and he did not see why one necessarily have to go to a higher level. However he also acknowledged that most legal systems have to higher legal arrangement (UK, France, Germany), and that there was some value in having two instances of appeal. With regards to the deletion of Articles 6-8, although disclaiming that he was not an expert in these matters, he personally he did not think it mattered because his view was that once the instrument is passed the general application in European Law will put the Regulation into the jurisdiction of the CJEU in any event. As to the location of the Central Division, Judge Birss admitted that he completely agreed with the French. He believed that it was important that the real part of the Central Division was not in Munich. One really did not want to have a concentration of all things concerning patents in Europe in one place.
Judge Birss reminded everybody that the agreement is not just about unitary patents, it will also catch normal EP patents, and furthermore that contrary to what the EPO believe, it will impact them. He concluded (sharing Marie’s concerns) that this arrangement is a recipe for forum shopping. However, unlike Marie, he felt that there was a risk that more, rather than fewer countries, would begin to bifurcate, and that there would be a race to the bottom. At the moment the only two countries in Europe that bifurcate are Austria and Germany – and they are good at it.! In the future there may well be situations where there will be pressure on the courts and the court systems all over Europe to try and be better than the Austrians/Germans. Judge Birss concluded with the concern that there was a real risk that the legal systems will feel a pressure that the only way that they will have any patent litigation is by doing whatever it is faster, better, cheaper, maybe dirtier than other people - and that would be a really bad thing."All-in-all, no surprises or outrageous opinions emanating from the seminar, but the session nevertheless acts as a useful summary of the issues that will be floating up to the top of everyone's minds this Fall (no, not Autumn) while memories of the Olympics and soggy, rainy summer days quickly fade away.
The Amerikat will be back later on to report on any news following today's CJEU hearing and if the expected new consolidated drafts of the Regulation and Agreement are forthcoming.