02.05.22

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[Meme] EPC Calling

Posted in Europe, Law, Patents at 6:25 am by Dr. Roy Schestowitz

EPC was not just some 'advice'

Summary: There’s growing realisation that the EPC has long been abandoned, rendering the legitimacy of the EPO’s present operations (or management style) dubious to say the least

Comment by Daniel X. Thomas (former EPO Director) last week:

No surprise for a French lawyer wanting to concentrate the Central Division in one and the same location that is Paris. In view of the fierce battle which has ended up with the Central (?) Division being in cut in three parts, I would rather think that this no more than wishful thinking. Germany would like it too.

I doubt that the two contenders for the allocation of the duties devoted to London, IT and NL, will accept a “provisional” allocation to either Paris and/or Munich of files in IPC classes A and C. I have not yet seen one convincing or compelling legal basis for such a “provisional” allocation. It is also far from sure that the distribution in Annex II of the UPCA will remain as it is. I could well see that FR and DE will haggle again and should a third location come, both countries would like to keep files in IPC classes A and C and transfer to the third location other IPC classes.

One can even have doubts that the UPC is in conformity with union law and Art 6(1) ECHR. Beside the legality of the provisional transfer of duties, a further reason is that a UPC judge can be removed from its post by his peers, but no means of redress are offered to him! See Art 10 of the Statute of the court, Annex I.

It is the first time that I see concerns expressed about the position of the SMEs in the UP/UPC system. Up to now SMEs have been used as a fig leaf by the big internationally active industry and big international active litigation lawyers firms, to hide the fact that they were primarily interested in the UP/UPC system. Only those two groups are sure to profit from the UP/UPC system. An impact of EPLA on the SMEs seems to have been carried out, but not for the UP/UPC. In all meetings in which SMEs were informed about the UP/UPC system, they clearly expressed their fears. The level of fees being the strongest deterrent to start with.

One very important aspect is that 70% of patents are held by proprietors not residing in a UPC contracting state. The UPC opens those extra-European proprietors a single point of attack for European industry in general and European SMEs in particular. Is this really helping European patent holders? I have some serious doubts. When one further sees that the average number of validations of granted European patents is between 3 and 5, the necessity of a complicated system like the UPC is not manifest. To my knowledge no study about the economic necessity of the UPC has ever been carried out.

Claiming that the UPC will bring about a movement of harmonization of European Patent Law is anything but sure. Both the UPC and the BA can decide upon the validity of a granted patent. The EPO for a shorter length of time, the UPC for a longer one. As a UP is a patent granted by the EPO, divisions of first instance of the EPO and BA are bound by decisions of the EBA. There is not even a cooperation mechanism foreseen between the two courts. This is however the case for the EFTA Court and the CJEU. The problem is compounded in that the UP/UPC is first not covering the whole of the EU, and I am not sure that the remaining member states of the EPC will accept case law from an institution they have no influence on it.

I do not expect that the number of oppositions at the EPO will diminish. First there is a big difference in fees and the EPO has streamlined the opposition procedure and the BA are making great efforts to lower their backlog. One should also not forget that the backlog has risen due to the blocking of any recruitment at the BA for many years. One wonders if this was not a deliberate attempt to discreetly favour the UPC.

Last but not least, the costs for simultaneous interpretation are borne by the EPO, whereas at the UPC, they will be costs of the proceedings to be borne by the losing party. That the costs or damages can have ceilings does not fundamentally change the issue.

Independently from the high basis fees at the UPC and in view of the costs for simultaneous interpretation been borne by the losing party, it is clear that the UP/UPC is for contenders having deep pockets.

Having practised European integration during my whole active life I am certainly for it, but I am neither convinced nor compelled to think that the UP/UPC system is the right way in matters of IP. There are other, much cheaper, ways to bring about a harmonisation in IP matters.

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