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Tuesday, 19 March 2013

Unitary patents in Europe: which law of infringement applies?

Some horses are just not worth flogging ...
The expression "flogging a dead horse" refers to the irritating habit of going back to the same subject again and again, even though every aspect of it has been thoroughly explored and there is nothing left to discuss.  Some readers might feel that any further discussion of the European Union's new patent regime smacks of flogging a dead horse: the  relevant laws have now been passed and consensus among those who really matter in Europe -- that is to say, every significant soul who has nothing to do with the functioning of the patent system or the exploitation of patents -- has been achieved.  In Papal terms, one might say that a plume of white smoke has billowed forth from the Commission and the European Parliament though, as Merpel observes, it takes a lot less time to choose a Pope than to pick a new patent system and, in the normal course of things, opportunities for picking a new one come more frequently to the Vatican conclave than they do to Europe's legislators.

Readers might by now be aware that the mere fact that agreement has been reached on the new European patent package does not mean that debate and discussion has ceased. This is not a case of flogging a dead horse. Far from it, the horse resolutely refuses to die, and indeed appears to be quite resistant to even the most vigorous of floggings.  And that is what leads on to this post.

With agreement now achieved, the keen minds of patent litigators from all over Europe are now looking increasingly closely at the new system and are doing what lawyers do best: rubbing the various new legal provisions up against one another, to see what they are really made of.  Among them is Nick Cunningham (an IP partner in the UK law firm Wragge & Co LLP), who writes as follows:
"There is concern about the potential effect of Article 5(3) of the Unitary Patent Regulation (1257/2012), which determines the law of infringement that is to apply in respect of any particular unitary patent. You may remember that it emerged late from the political wrangling over Articles 6 to 8 and possible references to the Court of Justice of the European Union.

Article 5(3) says that the scope of the rights
"and the applicable limitations shall be those defined by the law applied to European patents with unitary effect" 
in the Member State whose law of property applies per Article 7 -- which will be the participating Member State where the application for the patent originated, alternatively Germany. In other words the rights exercisable under a unitary patent would vary according to the state of origin of that patent.

This may seem crazy -- aside from the complexity, the concern is that this will import the variation to be found between member states, particularly with regard to exceptions for experimental use and clinical trials. The German default matters because Germany has wider exceptions than many other Member States, and lots of applications originate outside the EU.

However I think the concern may be misplaced. The relevant law is that which is applied in the state in question "to European patents with unitary effect". This is circular in a helpful way. At present there is no such law in the UK, but when the unitary scheme comes into effect the law to be applied in the UK in a local division of the Unified Patent Court (or in the central division) to a European patent with unitary effect (over which the UPC has exclusive competence) will be determined by the Agreement on the UnifiedPatent Court.

The rights and limitations to be applied by the Unified Patent Court are set out in detail at Articles 25 to 28 inclusive of the Agreement, and so should be the same in all the participating Member States.

However the unitary patent rights and limitations may differ from those of national patents, and of European patents which have been opted out of the UPC's competence. Although the Article 27 limitations reflect the current UK position, it appears likely that the UK limitations will be broadened following the recent UKIPO consultation, so we may yet see significant differences here (as elsewhere) between unitary patents and the rest".
Do you agree with Nick's analysis? It seems pretty plausible to this Kat, but Merpel bets there will be plenty of different perspectives from our readers.


Gibus said...

However the unitary patent rights and limitations may differ from those of national patents, and of European patents which have been opted out of the UPC's competence.

With due respect, I disagree here. European patents which have been opted out of Unified Patent Court's competence are still subject to the provisions of the UPC agreement which are not related to the jurisdiction competence. This includes provision on direct/indirect infringements and limitations thereof (Arts 25-28).

Moreover, an international agreement does not unify national laws of the signatory states. There is only a mere harmonisation. But provisions of the agreement are still to be interpreted with regard to national laws. And this leaves some room for variations in the implementation.

Just think about patentability rules. They are harmonised by EPC. Nevertheless, national courts' interpretations have proven to be sometimes divergent.

This is where the EU has failed to create a genuine uniform EU patent.

Anonymous said...

In Art 20 UPC, whereby the primacy of EU law is ensured. All UPC provisions must comply with the UPR as it is EU law. The UPR provides that "the scope of that right and its limitations shall be uniform in all participating Member State". This bars any interpretation where Unitary Patents can have differing scope depending on the country of application.

This extends to rules on infringement, limitations, exceptions and scope and any other relevant rules. As such, there will have to be a unified doctrine which applies equally to all Unitary Patents and across all party states.

Frankly any other interpretation is naive, since the purpose of the package is clear, and the people who will ultimately interpret the legal aspects (whether the ECJ or the UPC) will clearly see that uniform protection is the cornerstone of the regulation.

Russell said...

iI agree with Nick except on the point about opted out EPs where I agree withGibus..

I agree with Nick that the infringment law for unitary patetns will be universal and as set out in UPCA.

Note the contrast in language between Art 5 which as Nick says refers to the national law on Unitary patents and Art 7 which refers to the national law on national patents.

My reading of it is that pre existing national legislation, case law and the CPC (which most national laws will generally be similar too)are irrelavant to Art 5 in a direct sense since they do not apply to Unitary patents. Once the UPCA is ratified then Art 25 to 28 will become the national law in that country regarding Unitary patents.

Now things could get interesting if countrys implement the UPCA wrongly or create new national law that refers to Unitary patents but I just dont see the UPC taking notice. The English courts currently refer directly to the EPC on the grounds that if the equilvant sections of the UK Act differ from it the differences are ultra vires..If national law on infrignment of Unitary patents differs from art 25 to28 thenI think the difference will similary be dismissed as contrary to the UPCA.

As to whether Unitary law might differ from the law on EPs and national I agree with Gibus that the opt out is only an opt out from the court not an opt out from the UPCA and Arts 25 to 28 apply to all EPs regardless of the court used..

On national patents it will depend on the country. With regard to the UK Sean Dennehey indicated that the UK Patents Act will need to be amended to ratify the UPCA. I would assume that would include amending Section 60 etc to bring EPs in line with Arts 25 to 28 of the UPCA. Theortically they could keep the law regarding UK patents unchanged but I cant see them adding the complexity. Further if they were to have broader Bolar exemptions for UKs than for EPs and Unitarys it would just devalue UKs.

Gibus said...

@Anonymous Tuesday, 19 March 2013 15:38:00 GMT

“the scope of that right and its limitations shall be uniform in all participating Member State”

One unitary patent shall have uniform scope/limitations across participating Member States. This doesn't prevent unitary patents to have differing scopes depending on the patentee's residence, and the national law applied accordingly.

Anonymous said...

@ Gibus

I see your point in relation to Unitary Patent/Unitary Patents. Nonetheless, the UPCA is intended to unify, not harmonise the substantive patent law of the MS. Look to Art 24 UPCA, the list of sources of law is heirarchical - national law sitting squarely at the bottom of the ladder and Union law proudly at the top.

Art 5(1) UPR gives protection throughout the territories of the participating Member States in which it has unitary effect, subject to applicable limitation. These limitations are in the UPCA - which is substantive law, and which will apply the same limitations regardless of where the applicant sent his application from. That is to say the scope of the Unitary Patent will be the same, because it's limitations are from the same source (the UPCA) whether you apply from Germany or France or wherever.

At least that's what I think it's meant to provide for...

JA said...

The killer point will be accessory/secondary liability. There is no document which purports to provide unitary rules on accessory/secondary liability, so this (important) aspect of infringement will vary depending the origin of the patent.

Anonymous said...

I'm (very) late to the party on this one, but am nevertheless particularly puzzled about what happens to non-unitary EPs that are not opted out of the exclusive competence of the UPC.

The reason for my confusion is that Articles 5 and 7 of Reg. 1257/2012 only relates to "a European patent with unitary effect". A non-unitary EP clearly does not have unitary effect and so Articles 5 and 7 do not apply, even if that EP is not opted out.

However, if the non-unitary EP is not opted out of the UPC, then Article 24 of the UPC Agreement clearly applies - which puts that Agreement (and the infringement provisions that it contains) well above those of national law.

Conclusion: a non-unitary but not opted-out EP will be subject to the infringement law defined in Articles 25 to 27 of the UPC Agreement.

It appears that the Preparatory Committee and the UK IPO are of the view that national laws will apply to opted-out EPs. I still have my doubts about that view. Nevertheless, if it is correct, then this means that the applicable laws on infringement may change, depending upon the opt-out status of the patent.

Quite frankly, I do not see how this situation is sustainable for third parties, whose activities may be non-infringing one day (e.g. due to generous exemptions from infringement in the national law that applies to an opted out EP) but infringing the next - if the EP in question is suddenly opted in and is then subject to the much less generous exemptions in Article 27 of the UPC Agreement.

I know that CIPA has expressed to the UK IPO their concerns about this kind of flip-flopping of applicable laws, but what on earth can be done about it (other than de facto harmonisation of all relevant national laws on infringement - with each other and with the provisions of the UPC)?

Also, if the law of the UPC Agreement applies to EPs that have not been opted out, then do the national laws on indirect infringement also need to be brought into line with the UPC for that category of EPs (as well as for EPs having unitary effect)?

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