06.29.16

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Growing Consensus Even Among Patent Professionals That UPC is Dying Everywhere If Not Just in the UK

Posted in Europe, Patents at 2:26 pm by Dr. Roy Schestowitz

What purpose is left for Battistelli at the EPO then?

A shipwreck of UPC

Summary: The UPC continues to sink as more and more people come to grips with the complexity of the current situation, irrespective of what countries other than the UK do next

THE existential risk to the EPO (devaluation of patents) is no joking matter. It would severely harm Europe, more so than ‘Brexit’ has harmed Britain so far. One danger to the EPO is actually the UPC, which older rumours said Battistelli planned to jump ship to/for (moving to the UPC regime once it is created).

“Brexit Won’t Affect Current Patent Cases, But It Might Kill European Patent Court Plans” says one of the biggest publications for lawyers at Law.com. This headline is followed by the paragraph that reads: “The United Kingdom’s Brexit vote won’t disrupt current patent practice in Europe, practitioners said Friday, but it will surely cause further delays—and possibly even kill—plans for a unified European patent court.”

This basically agrees with what we have been saying for quite some time. In a sponsored “article” (they euphemistically call it “REPORT”) for the EPO/FTI Consulting-sponsored IAM there is UPC ‘damage control’ today. It comes from NLO, i.e. a bunch of lawyers from a self-serving firm. One must remember that the EPO itself foresaw the crisis in case 'Brexit' happens; what’s the point suddenly denying/downplaying the severity of the situation? Earlier today IP Kat wrote: “The Unitary Patent has been many years in the making, and its future is still not entirely clear. Dr. Ingve Björn Stjerna has published a series of papers on the subject, all of which are available to read along with links to other useful resources here. IPKat readers in particular may be interested in the “expert teams” of the Preparatory Committee, and the immediate implications for SMEs.”

“Basically, no simply resolution exists right now.”As Benjamin Henrion has just put it: “for the UPC, the ECJ stated it is not open to non-EU members.”

Jesper Lund added: “In the unlikely event CJEU will allow this, the post-Brexit UK would be subject to EU patent law and CJEU as highest court, right?”

Basically, no simply resolution exists right now. It’s more of a mess than it has ever been and it can take years for anything significant to happen (if it ever happens at all). People in IP Kat comments currently joke that the only way for the UPC to survive right now is for some large city in continental/central Europe to instantaneously rename itself “London”.

Earlier today one particular comment noted that “amending the UPCA to enable a Non-MS-UK to be part of the UPC would be anything but a simple task.”

To quote the whole comment:

Just had a flick through the UPCA and it strikes me as rather clear that amending the UPCA to enable a Non-MS-UK to be part of the UPC would be anything but a simple task. For example:

Art. 1: …”The Unified Patent Court shall be a court common to the Contracting Member States and thus subject to –> the same obligations under Union law as any national court of the Contracting Member State — ” (emphasis added).

Art. 5: Contractual liability of the court is largely governed by EU regulations

Art. 23: Reference to Art. 258, 259 and 260 TFEU

Art. 31: International jurisdiction to be established in accordance with Regulation 1215/2015 or the Lugano convention

Also, I note that whether or not the UPC will go live as planned in 2017 not only depends on whether the UK ratifies, but also on France’s and Germany’s ratification. Why should those two burden the already complicated Brexit-negotiations with additional issues and potentially give the UK extra leverage?

Here is another comment on the subject:

Before even bothering to try to wrap my mind around the legal complexities involved here, I’ll just say something: it is politically impossible. No British Parliament is going to ratify yet another European agreement, in the current mayhem, with MPs throwing things at each other and both parties effectively leaderless. And even when they regain some appearance of calm (if they ever do), they’ll have to deal with a lot many far more pressing concerns than the UPCA: not just trade, but also the millions of EU citizens in Britain and Britain citizens in the EU, their access to benefits and healthcare, and their pensions.

Not to mention the fact that this vote has whetted the appetite of quite a few other populists across the continent who dream to wreck the whole European project.

So, and I say this as somebody who has himself invested also quite a lot of time and effort in preparing for the UPC: Forget it. It’s over. This parrot is dead. It’s an ex-parrot. I hope that, some time in the future, maybe in less than yet another forty years, there’ll be a unified European (or EU) patent system. Maybe even, without the Cameron team’s fear of the CJEU, it will have a simpler, more rational legal structure than the UPC came to have. But for the moment, I’ll be happy if the EU still exists by 2020.

It seems as though Unitary Patent (and its predecessors) is a dead/dying project, based on what even some insiders who stand to gain from UPC publicly say. They should know this better than most people as it’s them who paved the way to the UPC, typically behind closed doors (or in very exclusive, seclusive and expensive meetings).

“EU software patents via the UPC,” as Henrion noted today, is a very big threat, but seems as though even patent lawyers are pretty much giving up on the UPC, rationally thinking that no ‘fix’ is possible amid ‘Brexit’. Joeri Beetz, whom we mentioned here before, published an article titled “Why a leaving UK will never join the UPC”. To quote:

For the greater part, all communication tells me more or less the same. The European Patent Office (EPO) is not an EU organization. British patent attorneys will continue to be able to represent their clients at the EPO and granted European patent applications can still be validated in the UK. When it comes to the future of the eagerly awaited, however not yet existing, pan-European Unitary Patent and Unified Patent Court (UPC), the communication becomes less clear. And for good reasons. No one really knows what is going to happen.

Still, when reading through all the articles that reached my various display screens, I was a little bit surprised by how many European IP professionals consider it a serious option for the Unitary Patent and the UPC to start before the UK actually leaves the EU and with the UK as a temporarily participating member state. Some of them (e.g. this article by the prominent Dutch IP Lawyer Wouter Pors) even went so far as to suggest that it might be possible that the UK would continue to participate in the UPC after having left the EU.

Earlier today we wrote about very long discussions regarding this sensitive matter. It was about trying to bring back the UPC, albeit every discussion was full of pro-UPC people, i.e. probably a bunch of discussions from those who would gain from it (if it ever became a reality at all). Now comes an antagonist to the echo chamber and says: “Stop, stop, stop, all of you, please stop. [...] It’s over. I repeat, it’s over.”

Here is the comment in full:

Stop, stop, stop, all of you, please stop.

It’s over. I repeat, it’s over. The conversations in the legal community over the course of the last few days, in which lawyers are desperately trying to put sticky tape on the house of cards to prevent it from falling down, are not going to work.

Any system has to be palatable to industry, whether telecoms, mechanical, automotive, pharma, or SME. Even before Brexit, the whole thing was looking a bit wobbly (and hence creative lawyers were licking their lips for working out ingenious ways in which the system could be gamed).

But now, forget it.

Having mentioned Tilmann this morning, it’s back again and he’s everywhere in the discussions. Tilmann’s UPC fantasies (he is one of the core people pushing for it, for personal gain obviously) are brought up again as follows:

This proposal from Prof. Tilmann may be reflective of what is going wrong in th EU, and why the situation is now as it is. There was a democratic decision by the UK to leave the EU. It was narrow, it was not to everybody’s taste (also not mine, to be clear) – but it was a democratic decision that the UK should distance itself from the EU. We have to respect this decision, or else we would jeopardise our democratic fundament.
Now advocating that the UK should nevertheless ratify an agreement which would connect it with the EU does not appear to be appropriate. It appears to be an attempt to undermine the result of the referendum.
As far as I remember, nobody ever made similar suggestions to enable the participation of other non-EU countries like, say, Norway or Switzerland. I thought there were good reasons for that (CJECU opinion 1/09). Suddenly, all this does not appear to be valid any longer? This does not sound convincing.
In my personal view, the UPC without the UK would be much less valuable. Therefore, the UPC should now be revised to reflect the new scenario. I fully understand the disappointment of all people who spent huge efforts to establish this agreement, but this is not a valid reason to disregard the outcome of a democratic referendum.

“A quite interesting and imaginative intellectual exercise by Prof. Tilmann,” wrote this person in response, “an exercise inspired by his restless efforts to promote the unitary patent system. But it seems to be far from reality. Leaving aside the objections derived from the ECJ’s conditions in its opinion G 1/09 for a Court competent to decide on EU law, Mr Juncker and Mrs Merkel have made it quite clear yesterday that there will be no cherry picking for the UK and that negotiations on the relations EU – UK have to take place after implementing the BREXIT.”

“Prof. Tilmann cannot be taken seriously,” explains another person, as “his “expert” statements usually do nothing more than serving his very own interests, as some commentators have quite rightly indicated.”

Here is the full comment:

I am very sorry, but Prof. Tilmann cannot be taken seriously, his “expert” statements usually do nothing more than serving his very own interests, as some commentators have quite rightly indicated.

Readers may wish to have a look at Prof. Tilmann’s past writings on opinion 1/09, some are freely avalable on the internet (e. g. EUCJ – Opinion 01/09 – Analysis and Consequences, www.eplawpatentblog.com/eplaw/2011/04/eucj-opinion-0109-analysis-and-consequences.html). Studying paragraphs 14, 15, 19, 22, 23 of said paper is very enlightening, also Prof. Tilmann’s conclusions (paras. 24 and 25):

“24. This leads me to the following result of my Analysis: If the Agreement would be
concluded by EU Member States only and if the two “sanctions” would be expressly regulated in the Agreement, the Court would not have objections against the centralised Patent Court (PC).
25. Therefore, I advocate that the Opinion of the EUCJ be adopted to the fullest
extent and accordingly that the draft Agreement be amended in the following respects:
a) restricting the membership of the Agreement to the EU Member States willing to participate in the Enhanced Cooperation on the Unitary Patent and (…)”

So is it only my understanding that Prof. Tilmann was in fact saying in his analysis of opinion 1/09 that participation in the UPCA should be limited to EU member states only?

To the informed observer, Prof. Tilmann’s remarkable flexibilty in his positions on the UP/UPC issues is nothing new, he has repeatedly morphed in line with what was required to realize the project:

In the context of former Art. 6 to 8 of the Patent Regulation, some may remember that Prof. Tilmann first argued that the articles could not be removed without putting at risk Art. 118(1) TFEU as the Regulation’s legal basis. Later, after the European Council had demanded the removal of these articles, he suddenly advocated for the exact opposite of his initial position, namely that a removal was perfectly legal and would not endanger the legal basis at all.

Some may also recollect that he held the position that the opt-out of an eligible patent from the jurisdiction of the UPC would leave the application of the UPCA unaffected, i. e. a national court dealing with an opted-out patent would have to apply the UPCA in the national proceedings. This even led the Preparatory Committee to issue a statement that it did not share this position (www.unified-patent-court.org/news/interpretative-note-%E2%80%93-consequences-application-article-83-upca).

Therefore, Prof. Tilmann’s statements should certainly be taken with nothing but a grain of salt.

Still focusing on Tilmann’s role in the whole UPC project:

Professor Tilmann’s paper is certainly interesting and he may (or may not) be correct in his proposition that the UK can be part of the UP and UPC.

However, as already stated, even if this could happen it should not happen.

I suspect that even staunch supporters of Remain (including myself) would agree that a problem with the EU is that it has (by stealth?) over the years moved from an economic union towards a political union. Consequently I assume that many Remainers object to laws originating from the EU Commission having effect in the UK and even they would agree that we are perfectly capable of making our own laws in the UK and don’t need the EU to do it for us.

Since it is the courts who enforce the law and since the UP and UPC dictate which courts have jurisdiction it would be diametrically opposed to the spirit of the Referendum result to give courts in mainland EU countries jurisdiction over patent matters in the UK.

However much we as a profession (both in the UK and the rest of the EU) would like the UP/C to be effective in the UK, we should face up to the fact that it shouldn’t happen.

A relatively rude comment then said that “big Anglo-American law practices want to keep England in the UPC.” Well, obviously, but not just Anglo-American ones. The whole UPC scheme isn’t a national conspiracy but an occupational conspiracy, i.e. a collection of patent lawyers trying to make their wishlist a reality. They have spent many years trying to accomplish this and many of their hopes and dreams come crashing down right now.

“The mind boggles as to how anyone could thing the UPC is one of the things the UK could seek to cherry pick,” this one person wrote. “Seriously?”

Well, that’s actually a good point and there are more urgent goals for the UK if/when it exits the EU, not some ineligible scrolls with patent screed that was dubious along. Here is another opinion on the matter:

Honestly, stop thinking about it.
Just because there might be some “legal theoretical” ways to “fix” it, it’s never going to happen.

The “Eastern District of Texas” argument is good to kill the treaty for good. Why should IT, ES (or DE and FR) go for something like that? Iurisdiction outside it’s own iurisdiction?!
EMA and other institutions are moving out of London and the UPC people dream of opening a new EU institution in London or having English judges deciding on cases under EU law?!

Even minor points are big for some countries: Why should English be the sole language of the procedings? Only Ireland would be an English speaking member. Spain and Italy won’t like it nor will France or Germany…

Some people were paid very well for the last few years and now cling to their jobs and “mission”.

So everybody go on and do something “useful”.

“There are many tragedies connected with Brexit,” the following comment says, and “the likely demise of the UPC being one of the lesser ones.” This is yet another reason why the UPC might be a dead-end project. Remember that London is still considered the capital of litigation or at least of lawyers.

To quote the entire comment:

There are many tragedies connected with Brexit (and the debate that preceded the vote), the likely demise of the UPC being one of the lesser ones. Nevertheless, one still has to feel for those who have put their heart and soul into bringing the UPC into being. It is not hard to understand that they do not want to see all of that time, effort, energy, cost and resources amounting to nothing more than a hill of beans. I think that I would feel the same in their shoes.

If Brexit does become a reality, then we will have gone backwards with regard to the goal of simplifying and reducing the costs of securing and/or enforcing patents across multiple European countries. However, that does not mean that we should get too disheartened. I’m sure that the UPC did not look all that appealing to SMEs. Further, the glaring (loop)holes in the legislation leave a lot to be desired, and would / will create a huge amount of uncertainty. Thus, we should perhaps not spend too much time mourning (or making what are likely to end up being futile attempts to prevent) the UPC’s imminent demise, and instead focus our creative energies on constructing something new that could end up being better.

I shall provide the first idea: how about a “mutual recognition” system for court judgements? This could perhaps involve conducting full litigation in one jurisdiction and then having only “litigation light” in the jurisdictions where the judgement is to be recognised (e.g. where the fact-finding and expert evidence is taken from the first judgement, but where differences of fact and national law in the jurisdiction of the other court(s) are taken into account).

Such a system might not be optimal. However, combined with further efforts to reduce the cost of validation (e.g. based upon efforts made with machine translations and/or rules taken from the UPC regarding provision of a translation upon enforcement) it might represent a compromise with which we could all live for many years to come. If you cast your eyes back to what happened with the CPC, you will see that the EPC represents a very similar kind of compromise.

“The UK will not ratify anything that will give jurisdiction on an important part of IP law to an EU body while it is negotiating to remove itself from jurisdiction of EU bodies,” notes the following comment. Here is the full comment, which just like many others is rather pessimistic about the entire thing.

A creative solution, which requires everyone to co-operate and trust one another from the word go.

In the current climate, that is wishful thinking.

The UK will not ratify anything that will give jurisdiction on an important part of IP law to an EU body while it is negotiating to remove itself from jurisdiction of EU bodies. If it did so, it would have to be in the knowledge that that jurisdiction may return to the UK after two years. In the meantime, there would be the risk of British headlines about injunctions by brand new EU courts against UK small businesses or importers, which would play into isolationist hands, all the while the UK is trying to create a workable, amicable exit package. The UK will also not hand over its bargaining chips so easily. If it is a benefit to the EU that the UK participate in the new Package, then expect this to be a negotiating point between UK and rEU, not a done deal.

The UK’s involvement in the Package is therefore likely to be deferred until the Brexit agreement is made, or until the political winds change. Therefore, the package also would likely be deferred.

As was made well above, the problems created by Brexit are not solely legal, but are also political, and the creative solution posed misses the political dimension.

We expect some rename or some alternation of strategies from the UPC camp (Bristows might actually have to rebrand and register a new domain). But that doesn’t mean that anything like the UPC will ever become a reality. It’s the single thing that I can think of which ‘Brexit’ would be good for.

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