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04.02.16

UPC Lobbying and Propaganda at the Fordham IP Think Tank (‘Conference’) 2016 in New York, With a Clear EPO Role

Posted in America, Europe, Law, Patents at 8:25 am by Dr. Roy Schestowitz

Shaping EU law in the United States’ think tank [EN | ES], in front of an audience that is barely even European

Fordham IP Conference

Summary: Margot Fröhlinger of the EPO and few other ‘insiders’ (profiteers, not inventors) promote their horrific vision of Europe’s patent system, which would make it appealing to US-based patent trolls and proponents of software patents as well as patent aggression/extortion (such as Microsoft, the main sponsor of Fordham IP)

THE EPO has learned no lessons from the backlash that led to a crisis. Battistelli has been advised to keep a low profile (he’s widely loathed), but his troopers now inherit the role of UPC advocacy (Battistelli and his bodyguards will come to London later this month to do this too).

The UPC basically threatens to kill what’s left inside the EPO that actually combats software patents, namely the independent boards and other external factors (the EPO is just a money-making machine, recklessly ignoring the EPC whenever this suits the narrow-minded goals). As this one comment puts it:

Sir Robin imagines less use of opposition at the EPO, once the UPC is up and running.

Well, of course! A no-brainer, one might venture. Ever since the EPO started, in 1978, 70% of all oppositions have been filed by German speakers, all because of bifurcation in Germany of the issues of infringement and validity. Why bifurcation? The German basic law (Constitution) makes it unavoidable, right? But now? The UPC is going to sweep all that nonsense away, isn’t it.

In response to this, a patent lawyer wrote:

Yeah right. Opponents are going to abandon a low cost opposition for a high cost (with liability for costs) UPC. Both tracks will be used, and the added punch of a unitary patent will make opposition more compelling.

Then another patent lawyer said:

As ever, shrewd comment from Meldrew. Accepting that the unitary patent adds “punch”, what should be the business-like response of those going in fear of being punched, those who have seen the fist and fear its being used?

In Germany, up to now, it was to get their retaliation in first, and oppose whereas, in England, it was not. I venture to suggest that in England it made more sense, most of the time, to get one’s defence well organised but then wait for an attack which, mostly, would not happen. After all, litigation is supposed to be a last resort, isn’t it?

And if it were to happen, that an attack comes, and one really is sued in the unitary court for infringement, one would counter-claim for invalidity, would one not, as well as arguing non-infringement, all in the same court, the same action.

so, Meldrew, have times changed then, that you suppose pre-emptive opposition to be “compelling”?

And how about the “poor man’s opposition” namely filing at the EPO 3rd party observations on patentability? Hmmmmh, I doubt it. Why hasten the grant of the patent, with claims that enjoy a higher presumption of validity, claims paccking a greater “punch”?

And on it went:

Until the UPC has a track record it will not be clear whether it will encourage or discourage the fraternal enmity that occurs in Germany, but it is not that issue that concerns me.

It is the dramatically increased value of a European patent that will make it a more tempting target.

It is still possible at present to make a good living by selling products outside the holy trinity of DE-FR-GB and ignoring patents validated only in those countries. If the UP gets a big take up this option will decrease and there will be more people wanting to clear the path. To me this is very likely to result in an increase in oppositions.

As for 3POs, I use these a lot. My clients prefer early certainty to prolonged uncertainty, and would rather their competitors had strong patents my clients do not infringe, than uncertain patents my clients might infringe.

Far from being a “poor man’s opposition” 3POs are an essential part of an attorney’s toolkit, and they do not preclude later opposition. Perhaps this is why the number of 3POs is reported to have increased dramatically in recent years. Another factor here is the use of pre issuance submissions in the US. As our friends across the pond grow more familiar with such tools I would expect them to be used more. Particularly as you can say things in a 3PO you cannot say in a pre issuance submission..

The following should be expected from a site that attracts so many patent lawyers:

“From where I am sitting, EPO oppositions are going to continue, and are going to be the preferred option of weeding out bad patents. The speed of oppositions up to the OD is picking up, although the OD to TBA stretch is still too long. The, the EPO opposition route will remain cost effective compared to a UPC revocation action.”

Maybe Sir Robin was contributing his bit of Aprilfoolery before the due date? Unless the UPC starts systematically rejecting requests for stays of proceedings while oppositions are pending (and I don’t expect that), oppositions will remain interesting for alleged infringers if only as a delaying tactic. Tactically, the only drawback of an opposition vs. UPC invalidation is that the EPO is notoriously circumspect around evidence of public prior use. If your best attacks depend on such evidence, you may be well advised to go directly to the UPC to invalidate that patent. Otherwise, I’d start with an opposition.

Nice comments. Where do they leave us?

Horses for courses? There are WO and A publications best dealt with using a 3PO, others where that course would be contra-indicated. Then there are those cases which are more or less crying out to be opposed at the EPO. And then there are cases where one would hesitate to make the first move but would pile in to an opposition at the EPO if the patent owner makes the first move.

In short, every manufacturer ought to be actively keeping clear the path forward, by whatever means are best suited.

So, plenty of work for any European patent attorney with enough business acumen to help such clients arrive at the optimal strategy. And every reason to be confident, going forward, that the EU’s patent regime is fit, fair and economical, not only for patent owners but also for those bothered by patent owners.

As much as I admire Sir Robin, I cannot make much sense of the suggestion that litigation at the UPC might effectively do away with the need for EPO oppositions.

His suggestion may make sense for some litigants, but I doubt it will be all that many – at least not in the short term. This is because EPO oppositions will continue to make a great deal of sense for: (a) anyone seeking to knock out national validations in non-UPC countries (such as Spain); (b) those seeking to knock out opted-out EPs; (c) those of limited means who are seeking to “clear the path”; and (d) those with deeper pockets who want to play both systems.

To my mind, the majority of litigants will probably fall into at least one of those categories. However, it remains to be seen whether the balance changes once users become more familiar with how the UPC operates.

On that latter point, I suspect that the UPC will have a difficult time of it in the early years. This is because the legal system that the Court will need to apply simply has an astounding number of complexities and loopholes / gaps (and, arguably, is being improperly implemented by the Member States). In this respect, Ms Fröhlinger’s comments (if reported correctly) are potentially quite revealing. That is, if sorting out legal complexities is viewed in high circles as being “tedious”, it is no wonder that we are faced with a UPC system that currently looks to be half-baked at best.

“As a European Patent Office opposition needs to be filed within 9 months of grant,” noted one person, “it is only a useful process if third parties have a potential commercial interest in the patent at that time. Clearly, this will be the case in many instances, but not all, and it is technology dependent.”

The context of all the above was this article from a Bristows employee (massive boosters of the UPC). It helps show that Margot Fröhlinger of the EPO is an enemy of 99% (or more) of Europe’s population as she pushes for UPC with the same old attempts at self-fulfilling prophecies. To quote the relevant bit:

Margot Fröhlinger (Principal Director, Patent Law and Multilateral Affairs, EPO) was the first to take the podium to discuss outstanding issues about the unitary patent. Next year, Margot explained, we will hopefully have a unitary patent and a Unified Patent Court (UPC) in Europe. This means a one-stop shop for post-grant procedure for protection and enforcement. This will help remove the complexity of a fragmented market, but there are other issues that need to be addressed – some which are quite tedious and which need to be dealt with by agreement by Participating Member States or dealt with by the UPC. The first issue is in relation to Unitary Supplementary Protection Certificates (i.e. SPCs based on unitary patents). The European Commission has recently announced that they are going to create a unitary SPC. Margot wishes them good luck. The creation of a unitary SPC may be as complicated as the UPC (which took 40 years). There are number of legal and political issues – i.e. creating a European unitary title that only has effect in some EU Member States? Who is going to grant unitary SPCs and fix the fees? Who is going to get the fees for unitary SPCs? At the moment SPC fees are retained by national offices. It will be difficult to create, but pending the creation of a unitary SPC, national SPCs can be obtained on the basis of the unitary patent. The EU Commission will be clearly stating this. The second issue is what happens if request for unitary effect is rejected by the EPO or is overruled by the UPC at the time when the validation deadlines has already expired. Member States mainly agree that they should reopen the deadline for national validations. This has been implemented in Sweden, Finland, Netherlands and Germany. The UK considers that the patent holder should just pay the national renewal fees (and would be protected). A harmonized approach on this point may be difficult. The third difficulty is where prior national rights lead to a limitation or revocation of the patent for the territory of one of the participating Member States after the registration of unitary effect. There are different solutions – either revocation or limitation of the unitary effect only for the territory of the Member State concerned, or revocation or limitation of the entire unitary effect and reopening of the deadline for national validations or loss of the entire Patent. The UPC may have to deal with this issue as well. The final issue is the double protection for the same invention by Unitary Patents and national patents. There is no prohibition under the European Patent Convention. This is left to Member States. Member States have different approaches – some allow double protection, others prohibit it. German law which traditionally prohibits double protection has now provided for double protection in their new draft legislation. This adds another layer of complexity and may impact the opt-out strategies of patentees. In conclusion, Margot says we should not compare the UPC and unitary patent with what an ideal world may look like – it needs to be compared with what the fragmented system is like now. The UPC and unitary patent is an improvement.

Here is Managing IP (MIP) with its own take on this:

Margot Fröhlinger of the EPO (see our recent interview with her) runs through some outstanding questions on the Unitary Patent and UPC:

The European Commission is going to create a unitary SPC – “I wish them good luck” says Fröhlinger, saying there are a number of legal and political obstacles.

What happens if a request for unitary effect is rejected by the EPO or over-ruled by the UPC after the deadline for national validation has expired (deadline is normally three months). She reports “intensive” discussions on this point, with most member states considering that the deadline should be reopened.

What if a national earlier right is invoked against a Unitary Patent in the UPC? This complicated question may be one for the UPC to tackle.

Double protection by Unitary Patents and national patents – this issue is left open, member states have different approaches.

TPP and TTIP are named along with UPC in the same page. Just so people know who it's all for and about. It’s quite an extraordinary coup. It’s class war.

UPC critics, or sources that are actually familiar with the gory details, correctly stated the following:

The costs of the unitary patent

In a recent interview Mr Battistelli claimed that the unitary patent (UPP) “is going to be more accessible, less costly and simpler, especially for Europe’s small businesses, with cost reductions in the 70-80% range.” According to Mr Battistelli, the cost of applying for and maintaining a European patent across the EU is currently around €159,000 over 20 years. Under the new plans, this would drop to “around €35,500”. We do not know how Mr Battistelli comes to his “pre-UPP” sum of €159,000 which seems extremely high. What we do know is that applicants rarely, if ever, apply for all EU member states and that the average life-time of a patent is closer to 12 years than to 20 years. The figure mentioned – if correct – is therefore unrealistic. SC/D 2/156 gives us some information about the fees for the UPP. According to that document the renewal fees for the 2nd to the 20th year (page 5/18) add up to €35.555. That is suspiciously close to the “around €35,500″ that Mr Battistelli mentions. But those are only the renewal fees, i.e. the costs for maintaining a European patent across the EU over 20 years. If the costs of translation, legal representation and the EPO’s procedural fees are added, the minimum cost of “applying for and maintaining” a unitary patent will be closer to €55,000.

The more fundamental question that Mr Battistelli carefully avoids is, however: should patents (unitary or other) be cheap, in particular taking into account that two-thirds of the European patent applications are not of European origin? Do we really want to risk flooding Europe with a mass of cheap, mostly non-European patents?

So, in short, Battistelli is either misguided (self-deluding) or lying.

Using the patent system as an instrument by which to defend the wealth of the already-wealthy (with the antidemocratic UPC coup) isn’t acceptable. It defeats the purpose of the patent system. Here we have MIP’s latest “progress report” for the UPC (as it there’s no chance of it being derailed like previous such efforts with different names). To quote MIP: “The UK parliament has approved legislation to implement the Unitary Patent Regulations and UPC Agreement in the UK. Parliament also needs to pass legislation implementing the agreed Protocol on Privileges and Immunities of the UPC before the UK can be fully ready to ratify. It not yet clear whether this will come before or after the EU referendum on June 23. Earlier this month, the UK IPO told Managing IP that the “referendum will have no effect on UK ratification”. Some will remain sceptical. Time will tell.”

“They’re making a complete mockery of democracy, much like the EPO which arrogantly views itself as being above the law.”The UK parliament never asked British people about this. They’re making a complete mockery of democracy, much like the EPO which arrogantly views itself as being above the law. Michael Loney, writing for MIP from New York, had this to say about Robin Jacob’s take on the UPC (which Brits never got told about or consulted about): “Sir Robin Jacob talks about his career in IP. When he started, “IP was asleep” around the world, then litigation took off. He adds that he believes the European Patent Convention is the best patent law in the world, and adds that there is a common law in Europe – but not common procedures. When parallel cases reach different conclusions in Europe, that is due to different evidence not different law, he says. [...] Asked to reflect on his career, Klaus Grabinski says the most interesting role is being a first instance judge. He agrees with Jacob that “material law” on patents is the same across Europe, and says the UPC will further that harmonisation…” (behind paywall)

The Bristows employee later added the following regarding Jacob:

“Sir Robin Jacob (UCL) was faced with the first question as to whether he would change anything about his career. Robin said no, that he was incredibly lucky, but noted that when he came to the bar, IP was a happy but quiet world. IP, he said was asleep, but he did not know why it was asleep especially as it was very much awake in the 19th Century. It woke up in England when an English judge started enforcing patents with the result that Americans, who were losing their patents in the US, started litigating in the UK. Hugh asked Sir Robin which patent law he considered to be the best patent law. Sir Robin said that the “European Patent Convention is the best written patent law in the world. It is clearly effective”. Hugh asked whether there was a difference between English patent law and European patent law. Sir Robin said there was not. English patent law is European patent law. Although the law is the same, it does not mean that judges of different national courts will apply the law the same. Often, he noted, a German and Dutch judge will likely apply the law similarly. The differences come when you look at procedural differences with the common law courts (UK) conducting a more intensive dive into the facts and evidence than the civil law courts (Dutch and German). Sir Robin commented that one area of IP law that no one has ever understood is trade mark law and particularly noted that smells should only ever be protected as a trade mark when consumers use their noses to walk around super markets to figure out what they are going to buy.”

Then comes the part about UPC:

“Justin Watts (Freshfields) was gifted with choosing who was the next judge to speak. He chose Judge Klaus Grabinski (Federal Supreme Court) who explained that being a first instance judge is far more fun than being a judge on the appellate court. This is because as a first instance judge you get to see how the case is being run on the front line and discover, like an inventor, the legal issues that need to be tackled. Echoing the comments from Sir Robin, Judge Grabinski stated the differences between European national courts are mostly procedural issues, not substantive. This could be seen, explained Judge Grabinski, at the judges symposium that is held every other year. The judges are split into groups by language to decide legal issues and often, the English and German groups would adopt more or less the same reasoning. The French groups would often come to a different result. Judge Grabinski considers that the German and UK courts are more harmonized as a direct result. The UPC will examine these differences in practice by virtue of the UPC procedural rules being a blend of common and civil law procedures. We will see what works and what does not work and whether there are issues that need to be harmonized further. Hugh asked whether or not the reputation of the first instance judge impacts how an appellate court deals views the first instance decision. He said no, that he did not have a blacklist of judges in mind. In the US, responded Hugh, it is sometimes better to have lost below and go up to the Court of Appeals on the basis of a decision from certain judges (ie. they are not well-respected so will be easier to overturn). ”

All the above wrongly assumes that UPC will become a reality, using overly optimistic projections of when it will happen (as if it’s a certainty that this will unavoidably happen and it’s just a matter of time).

Quite frankly, the UPC propaganda needs to stop and we urge all of our readers to put an end to it before it ever manages to leap beyond the gates like a Trojan bird catapulted by Battistelli and fellow barbarians. These are evidently a bunch of people drunk on power, wrongly assuming they’re above the law and also set the law (e.g. patent law a la UPC). In their own words…

Willy Minnoye caricature

“The government is not trying to destroy Microsoft, it’s simply seeking to compel Microsoft to obey the law. It’s quite revealing that Mr. [Bill] Gates equates the two.”

Government official

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