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04.19.16

The ‘Great Conspiracy’ of Patent Lawyers, Lobbyists and Large Corporations for UPC and for Software Patents

Posted in Europe, Patents at 3:00 pm by Dr. Roy Schestowitz

Money in circulation, self-serving agenda everywhere one looks…

The undemocratic patent conspiracy (UPC): We'll just call it something misleading

Summary: The “Community patent” or “EU patent” or whatever euphemism those who created it (the architects) use these days (now it’s UPC) is threatening to engulf Europe without the European public ever being consulted about it (the ‘threat’ of democracy overcome by the rich and the powerful)

“It’s hard to see UK making any UPC-related decisions before result of the Brexit referendum is known on 24th June.”

These, surprisingly enough, were the words of IAM’s official Twitter account (based in the UK). We would go even further than this; as the UK is the only large English-speaking country in the EU (Ireland aside), what would a UPC look like without the UK? Would it be accessible to firms from the US? What about British? The language barrier is just one issue among many. The UPC fantasy is anything but a certainty; its proponents hope that by talking about it they’ll make it happen. There’s even a push to practically prepare the UK for it (ahead of any approval, vote, consultation with the public etc.) and UPC propagandists are being quoted by other UPC propagandists as saying that Brexit means nothing at all to UPC, not even to UPC inside the UK. What a farce!

Money talks.

Money can also change a person’s view.

Sadly, as we have pointed out here for a number of years, the debate about UPC is dominated by the few who stand to benefit from it at everybody else’s expense.

The other day Merpel started talking about the UPC in relation to the UK and already leaped to a debate about “UK Patents Court judges”, almost as though the UPC is inevitable and already here to stay. It never even arrived at all. Well, if it ever becomes a reality at all, there’s no guarantee it will reach the UK. Merpel wrote: “It would be misfortunate to squander this available experience, especially in the critical early days of the UPC. The success of the UPC will be determined by the quality of its decisions and, thus, the experience of its judges. Without experienced judges from one of Europe’s widely recognised and frequently used patent jurisdictions, the strength and attraction of the UPC as a competitive venue for European patent litigation will be depleted. A subsidiary issue is that, without the participation of the UK’s Patents Court judges, the attraction for litigants to use the UK’s local division to commence patent infringement actions would also be weakened (thus curtailing the positive benefit to UK’s economy). Such a state of affairs seems completely nonsensical given how hard the UK Government fought to secure a seat of the Central Division in London for exactly the same reasons (i.e., beneficial to the UK economy, key role in the stake and success of the UPC, etc etc etc).”

The UK ‘produces’ not that much other than services, and this includes software services. What kind of economic benefit/edge would the UK have if the UPC became a reality? Patent trolls are already starting to gather in London. Do we need even more of that? I, as a software professional, am growingly worried about these prospects.

The comments on Merpel’s post have mostly come from patent lawyers and attorneys, as one ought to expect given the blog’s audience. Some of the comments rightly point out issues. To quote some comments (copyright assigned to their posters):

Highly unlikely. Even if the UK is still around for the UPC and the UPC does in fact take off and this were to happen -unfortunately,the UK, France, Germany and Italy will be outnumbered by the non patent nations on the UPC. So you can start complaining now about the quality of the judgments to come like you do about the CJEU. In fact, the CJEU never pretended to be nor indeed was required to be a specialist court for patents but the criticism meted out to them about not getting it right whenever they dealt with the SPC Regulation was enormous -although on the other hand they always had a good stab at the Biotech Directive whenever they dealt with it.

As one comment put it:

If there’s a Brexit, game over.

Whilst I am not a Brexit proponent myself, many people are. We shall wait and see what happens. Another commenter says: “Given that the UK has (seemingly unlike almost all other countries ratifying the UPC Agreement) gone to the trouble to specifically create a national law applicable to EPUEs, it would be a terrible waste if there were no UPC judges who were qualified to interpret that law” (the remainder of this comment is added below).

If there are no UK judges in the UPC’s first intake, what will the UPC do about Articles 5(3) and 7(3) of Regulation 1257/2012, as applied to EPUEs filed by UK-based applicants?

That is, who will explain to the other judges how to interpret the national law of the UK that is “applied to European patents with unitary effect”?

Given that the UK has (seemingly unlike almost all other countries ratifying the UPC Agreement) gone to the trouble to specifically create a national law applicable to EPUEs, it would be a terrible waste if there were no UPC judges who were qualified to interpret that law.

Presumably, interpretation of the relevant national law is an issue upon which (due to Art. 5(3) of the UP Reg) questions could be referred to the CJEU. Could be interesting seeing how the CJEU handles that one!

Watch the enormous costs associated with it; one way or another these costs will be passed in the form of tax to a lot of Europeans, more so than to foreign corporations:

Its my understanding that the biggest problem is that a salary of EURO 11,000 per month is a deterrent. Very few in the UK seem to be interested in such a paltry remuneration, whereas in Germany they apparently already have over 1000 applicants!!

Some things are hard to believe:

1000 applicants from Germany? Twaddle as the application process hasn’t started yet (read the article).

Now the EPO is brought into it:

Will there be any full-time UK Patents Court judges in the UPC? Forget it, Judges. It’s the EPO. By the way pay no attention to that man behind the curtain!

Anon, anon was probably referring to this campaign:

https://www.unified-patent-court.org/news/preparatory-committee-launches-expression-interests-candidate-judges

Then comes up the problem associated with languages, which are already a problem at the EPO (we covered this before). To quote:

the key issue here is languages, what French or German language UK judges speak??? will them be able to take a case in German? or French? will a month or two in the Budapest training centre suffice for acquiring French and German language skills ?? the perfect candidates for these judge posts are members of the EPO Boards, however these people have a salary much higher than the 11.000 Euros net per month, so who will apply? I agree with some comments, above, the non Patent important UPC member states…
11.000 euros is half of the salary of an ECJ judge and 3 to 5 thousand euros less than an average member of the Boards of Appeal, who will leave aside its house, the children and the spouse job for this salary and for a non-permanent job of 6 years?.

It looks like representation would not be as diverse as people were led to believe:

Hire a couple of high profile patent judges from each of the main countries, and be sure they will fight for years trying to impose their own national practices and legal traditions in respect of hundreds of issues from the formal requirements to be met by a party´s request, to the admissibility of new arguments or the way orders should be formulated and decisions drafted. Less prominent candidates might be more prone to finding reasonable compromises.

And again a discussion about the waste of money:

Ah yes, but some have been preparing for this for some time (years in some cases)-sorting out their references,sending CVs to key persons, hobnobbing with civil servants from their MS,making sure they write articles on patents etc.

And don’t sniff at the 11,000 EUR tax free which does not include the massive list of benefits paid on top. For example, EU civil servants get an education allowance for their kids until age 26 (negotiated by the Germans over 50 years ago as German kids stay in higher education until then easily and so do British kids increasingly except there are increasingly no Brits left in the system and the Brits wanted to get rid of this).

How many people might even be qualified? Here is an educated guess:

At a conference in Strasbourg on the proposed UPC – memorable for having started the day that Icelandic volcano blew – the subject of judge’s qualifications for this role came up. It was estimated that the number of active judges who met the requirements was about – 20. Perhaps 50 at a push. Not official of course, but not very optimistic. And apparently not much improved upon since.

There is not much room at all for British judges anyway:

The numbers of judges initially required is probably relatively low. Given the number of proposed local divisions and allowing a bit of flexibility probably around 50 legally qualified judges are required almost all of whom would only be acting on a part time basis. However, if the response to the expressions of interest are representative, that is just as well since only 171 of those who expressed an interest had the qualifications and experience in patent litigation to be a legally qualified UPC judge without additional training.

At minimum, each local division will need at least one local judge, with the local divisions in UK, Germany, France, Italy and the Netherlands having two local judges. So there will necessarily be a spread of nationalities and at least 2 UK judges.

You would have to ask the existing UK patent judges whether or not they intend to apply but given the political capital that has been invested in the project, it is unlikely that the MOJ would prevent UK judges from serving on the court on a part-time basis.

Merpel’s post aside, we were rather disturbed to see a colleague from Bristows pushing the UPC in the same old fashion, first relaying UPC lobbying in a Microsoft-sponsored conference for patent maximalists who wish to influence policy (even Microsoft-funded lobbyists were there to promote software patents), then posts like this one and several others. “On a bleak Friday afternoon in London,” she wrote, “with the rain soaking into her paws and the wind messing with her perfectly coiffured fur coat, the AmeriKat was warmed by receiving an e-mail from Joan Scott of the European Crop Protection Association (ECPA) on one of her favorite topics – Supplementary Protection Certificates (SPCs). Prompted by her report of Margot Fröhlinger’s presentation on outstanding issues in the UPC at this year’s Fordham IP conference (see here), which included the need to iron out details on SPCs based on unitary patents…”

This Bristows (LLP/UPC) employee later wrote about Claire Phipps-Jones of Bristows LLP (notorious here for UPC promotion) and proceeded to some more of that. There is so much UPC promotion at IP Kat these days, usually courtesy of Bristows LLP staff. What is this, another corporate blog (for some contributors)? One way or another, EPO management must be happy. We are slowly led to believe that the UPC is almost here in the UK or is already here. This is far from the truth. Secrecy around UPC makes it hard to know exactly what’s happening (see this recent complaint about it). Like all sorts of so-called ‘trade’ agreements, it is a conspiracy of the rich and powerful against the rest. It’s usually large corporations and their lawyers and/or lobbyists.

“Unitary Patent Select Committee keeps meeting,” noted this one frequent critic (Francisco Moreno), “but transparency is not invited. Distribution key, anyone?”

Transparency for the UPC? They try to ensure that virtually nobody except UPC proponents even knows what this thing is about. Here is what Moreno wrote, having asked the EPO last year about the UPC [1, 2]: “An agreement has been reached but no details are provided: what is the % corresponding to each pMS? Or what is the formula that takes account of the GDP and the number of applications filed to fix the distribution key?”

Well, obviously, look who lobbies for the UPC and recall who benefits from it. Korenberg is quoted (paraphrased) as saying that “one rationale behind unitary patent court in Europe, decrease prohibitively costly enforcement for smaller companies,” but this is a lie. The UPC does exactly the opposite by exposing SMEs to more patent lawsuits and fees. It is in no way beneficial to the small firms, or even to European firms. It is also terrible for Spain [1, 2, 3] (Moreno should know this), so no wonder it opposes the UPC, in spite of lots of pressure, even economic blackmail. Conveniently enough, as some care to notice, UPC propaganda ‘forgets’ to mention that any SME which gets a patent faces lots of lawsuit threats from many more other companies. There are two sides to this coin and those who pocket all the coins are usually patent lawyers. According to this very recent update, citing a dubious report: “The 2016 annual report of the European Patent Office (EPO) pointed out that China maintains the most fast-growing European patent filer. With a patent filing number of 5,721 (22.2% increase compared to the data in 2014), China ranked the eighth among all the countries. The EPO stated that strong growth of the Chinese economy has become an important driving force in European patent development.”

So imagine how many patent lawsuits can come from China alone, never mind all those patent trolls from Texas.

The Bristows posts attracted comments too, just like the post from Merpel. Yet another response, in another thread, said that one should be “very uncomfortable with the EPO gaining control of the examination” while Battistelli is killing the Boards of Appeal and reduces quality of patents for the sake of superficial gains. Here is the comment in full:

use the EPO? Are you serious? That is one sure way of losing all of the collective knowledge of the national offices that has been gained over the last 20+ years regarding how to examine SPCs. How about we instead try to improve upon what already exists (e.g. by creating a virtual body), rather than throwing out the baby with the bathwater?

Another thing – unless and until a way is found to improve the governance of the EPO (including ensuring full compliance with fundamental principles of employment legislation in the EU), I would be very uncomfortable with the EPO gaining control of the examination of yet another highly valuable IP right.

Here comes a criticism of the prospect of the UPC, citing immaturity factor:

Come on: back in 1978 the EPO had 0 experience with patent examination. Yet it could start and flourish because it hired experienced examiners from national offices, and because it built on the Institut International des Brevets in Rijswijk.
The same holds for the UPC: when it starts, it will have 0 experience itself. Yet, nobody needs to be afraid of silly judgments because the UPC judges will be drawn from experienced national courts.
So, no doubt that the EPO will do just fine if it were (t)asked to examine SPC applications.

Governance will be the big issue with any virtual office: it will need real governance structures. Especially when you consider appeals: any decision from the appeal body will have to be implemented by the first instance, so again real governance is needed to ensure that this indeed happens.
So, it is better to involve a real body rather than a virtual one.

The EUIPO is an EU organization, that is true, but it has no knowledge of patents and technical things. Would that really be a more preferable solution for handling SPCs?

The employment issues at the EPO do not prevent it from examining patent applications as usual. Also, the EPO Board of Appeal issues are irrelevant for unitary SPCs if SPC appeals are handled by the UPC rather than by the EPO Boards of Appeal,just like the UPC handled administrative unitary patent appeals.

The EPO, in the mean time, keeps pushing for the UPC, effectively lobbying for a corporate takeover of Europe over at Twitter. Battistelli is the lobbyist in chief and the UPC sets up a “webinar on the Unitary Patent”, later stating: “IPO EU trademark regulation entered into force last month. Hopefully #unitarypatent package will be next”

They are referring there to EUIPO and the picture becoming clearer. They’re putting things under a common umbrella (like a corporate takeover) and readers may already recall the relation between the EUIPO and EPO, as we covered it several times in recent weeks [1, 2, 3]. Going back to the comments we have:

I should add that there are already not enough experienced SPC examiners to go around, and so it would be a disaster if the EPO were to hire a significant number of them.

For various reasons, national SPCs will be with us for a long time yet (perhaps indefinitely). Thus, the national offices will continue to represent important venues (perhaps the most important venues) for SPC applicants. To eviscerate their examining capability would therefore be doing applicants a serious disservice.

The alternative (a virtual body) would make the best of what already exists, whilst allowing national offices to retain their skilled staff. What’s not to like about that?

Anon, you argue that “The employment issues at the EPO do not prevent it from examining patent applications as usual”. However, handing responsibility for uSPCs over to the EPO at present would be akin to rewarding a problem child for appalling behaviour.

The discussion about SPC continues here:

This virtual body looks silly. Why not a real body like the EPO, with any appeals being handled by the UPC, but just like appeals against EPO decisions in unitary patent matters.

A basis in the EPC for doing so can easily be found, see Articles 63(4), 143 and 149a(1) EPC. Note that in Article 149a(1) EPC, whatever follows “such as” is non-limiting and can be skipped.

As regards fees and costs, the EPO should get its costs reimbursed, following the principles of Art. 146 EPC. For the remainder, the fee income can be distributed by the EPO among the participating states in the same way as their share in the unitary patent income.

As regards the law to be applied, changing the present SPC regulations will just result in long delays. So, it is better to accept the preset SPC regulations, and to look for any improvements later on.

The above could easily be handled in a relative small amendment of the unitary patent regulation 1257/2012, as it is a logical consequence of the decision to allow a subgroup of EU states to cooperate in unitary patent matters. Doing so would automatically result in jurisdiction for the UPC to handle appeals under Article 32(1)(i) UPC Agreement.

Just like with unitary patents, the new SPC provisions in the unitary patent regulation would be supplemented by decisions of the Select Committee.

And below that:

As an EU organisation, the EUIPO would appear to be better suited to the task than the EPO. One wonders why they were not chosen to handle the unitary patent registration procedure.

A cynic might suggest, based on the above, that Battistelli’s goal is to demolish the EPO in favour of the UPC (in whatever form it takes), then become the UPC’s head, get close to EUIPO, and maybe form or shift name to make up an umbrella organisation that’s EU-sanctioned (unlike the EPO that dates back to the EPC). Is this vision of the UPC starting by taking boards (of appeal, not Board 28) out of their job, then automating the job of examination with algorithms that do a shoddy job at examination, as we noted earlier today? Whatever it is, this is not looking good and secrecy creates more suspicion. To quote further comments:

An alternative would be to allow an applicant to request an SPC before any patent office of an EU state with this then extending to the EU as a whole in the same way that a national court can act as an EU court in design matters.

you have clearly failed to grasp the perils of throwing the baby out with the bathwater when it comes to experience in examining SPCs. Starting at ground zero with the EPO really would be a disaster for applicants – especially given the complexity of the (case) law.

Your perspective is so pro-EPO, can you please confirm whether you are on BB’s payroll before commenting again? As you may guess, I can confirm that I am not.

Notice the corrupting impact of the EPO paying vast amounts of money to a PR firm. Many people are often presumed to be on Battistelli’s payroll.

Speaking for myself (personally), I have been rather disappointed with IP Kat‘s coverage about the EPO as of late. There’s omission of so many important stories and developments. When was the last time IP Kat and notably Merpel even touched the EPO scandals? Maybe Battistelli got his way after he threatened some bloggers. They’re silent on it all. Several months ago I confronted IP Kat over its deletion of (refusal to approve) comments about the EPO, after people had reported this to me.

There is more UPC promotion in IP Kat these days than there is a mention of Battistelli and his latest scandals. And look who’s behind all the UPC promotion. It’s usually the Bristows staff. Where does UPC promotion come from? Those who would gain from UPC. Now that the UK is under a de facto coup (from EPO management, patent lawyers, and other opportunistic profiteers) we need the voice of opposition to at least be aired somewhere and that somewhere is not IP Kat.

It has become increasingly clear over time that not only is the UPC orthogonal to the interests of European citizens but one should also regard it as an active danger to anyone including those who work for the EPO as patent examiners. As for patent lawyers, the benefits of the UPC may depend on the kind of clients they have. But whether the clients are large or small, and whether they use patents offensively or defensively, the legal fees are still unavoidable, thus for a lawyer it is important to have as much patent confrontation as possible. This, except patent applications (sought in an aggressive/defensive atmosphere), is what ‘brings home the bacon’, so to speak. If the UPC causes more legal uncertainty and makes it more affordable to go to court even on a tight budget, then it means more legal action overall, hence more business to patent lawyers.

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