04.02.17

Team UPC ‘Took Over’ IP Kat, Readers Don’t Believe What It Says

Posted in Deception, Europe, Patents at 9:03 am by Dr. Roy Schestowitz

Unified around the idea that UPC is desirable and inevitable (it's neither)

Summary: Outline of responses to two promotional articles about the UPC, courtesy of staff from firms that are propelling the UPC for self gain

“MERPEL” (a pseudonym of various people at IP Kat) no longer covers EPO scandals, which leaves more room for Team UPC to push its agenda that worryingly enough overlaps Battistelli’s agenda. It’s sad to see, but that’s what IP Kat recently became.

“For those who have not been paying attention, following the Article 50 news IP Kat published not one but two puff pieces about the UPC.”Yesterday we wrote about Bristows' latest nonsense about the UPC and MIP's latest 'marathon' of UPC reports which are all hinged on 4 words from an alleged (unnamed) “spokesperson” for UK-IPO. IP Kat readers are not stupid and ‘awkward’ questions like this one are being asked: “Would you mind letting the readers know the exact source of these “news”? Is the above based on an official statement by the UK IPO and if so, where can this be found?”

For those who have not been paying attention, following the Article 50 news IP Kat published not one but two puff pieces about the UPC. The articles attracted over a dozen comments and all the comments are negative, disagreeing as usual with the original posts. And rightly so. We have, for quite some time, complained about this and we happen to know that even some former ‘Kats’ are not entirely happy with this bias.

“In this post we wish to focus on rational responses rather than pure marketing from Team UPC.”What has the IP Kat been reduced to?

In this post we wish to focus on rational responses rather than pure marketing from Team UPC. Typically, in most sites, articles are a lot saner than the comments, but in IP Kat — at least as far as UPC goes — it’s exactly the opposite.

“The UPC is nothing more than a Trojan Horse coming to put European industry under pressure,” said this comment. Here is the full comment:

Who is taking whom for a ride?
If UK wants to kill the UPC, this is the best way to behave.
One thing is clear: the lobbying of some circles, not to say U.K. law firms shows that what reasonable people consider stupid and foolish, might nevertheless become true.
Which reasonable legal adviser can suggest to his client to go for the UP, when it is not sure what will be the fate of the UPC.
I am still waiting for somebody to explain in a clear and concise matter how UK can stay in the UP after Brexit, and how enforcement will take place in the U.K. or in the other states for a decision taken by a local court or the section of the central court in UK.
The UPC is nothing more than a Trojan Horse coming to put European industry under pressure. Remember the proportion of applications coming from EU member states at the EPO? At best a third! And how many SMEs among those?
It is time to stop the ongoing hypocrisy.

Later on the same person expanded a little further. Added elsewhere was this comment which said, “who will be the beneficiary of the UPC: the US, Japanese and Chinese companies.”

And patent trolls in particular. To quote:

One of the comments above made it clear who will be the beneficiary of the UPC: the US, Japanese and Chinese companies. Where is the benefit for European industries and especially European SMEs? Being generous, may be a good third comes from Europe. And where does the rest come from?
The problem with the judges is not only of procedural nature. Interpreting the EPC is also at stake. When one sees that how decisions of the the boards of appeal are superbly ignored by national courts (and vice versa), why should this change under the UPC? Remember that in the big countries there will be two national judges in a panel, hence conclusions are easy to draw. Any idea how to resolve the necessarily upcoming of conflicting case law between the BA and the UPC? May be by not just sending the BA to Haar, but in orbit, as once Mr Pedrick suggested to do for the search documentation…..
As for Max Drei, what he says is exactly confirming what I have just said. Let’s do it the British way, which is the only right one! And that should represent a unified legal system? Please do not abuse the credulity of the reader. And on top of it there are so many unresolved legal issues following the Brexit, that any legal adviser suggesting his client not to opt out should be struck of the list of qualified representatives be it before the EPO or the UPC. The only thing such a representative does is to insure that his purse is well filled and that is it.
Hypocrisy has to stop. The UPC is so laden with errors of conception, that the Brexit is the opportunity to see how thing could be made better, and really to the benefit of European industry and SMEs. Already now the share value of companies depends on the litigation started. Do we really want this in Europe?

The following person (probably an attorney) responds to the above allegation about “US, Japanese and Chinese companies.”

Observer, you suggest that pan-European benefits litigants from outside Europe more than domestic industry. The EU Registered Design Right was also supposed to help domestic industry against competitors from outside Europe. You know: nobody ever files for design registration outside their home country, that logic.

Yet my feeling is that EU Design Registrations are mainly used by non-European claimants against European defendants.

Here we go again?

Compare jurisdictions outside Europe: US, JP, CN. Who can deny that litigants in those jurisdictions go on enjoying huge “home advantage” by playing at home, in their own courts?

But this is why I cherish my European heritage. More fairness, and less nationalism and protectionism than in other jurisdictions. At least, in the recent past that is.
Saturday, 1 April 2017 at 17:

Then they spoke about Battistelli, hypothesising that we may “have here the secret agenda of the president of the EPO. Let everything go down the drain, so that the only place to litigate will be the UPC.” Rumours used to say that Battistelli would attempt to spearhead the UPC, too. A king for a decade? Two decades? More? Here is the comment:

When one sees the sudden increase of grants, but without loss of quality…., and the way the boards of appeal are ill treated, with the fees having to go up, and the posts being only sparingly filled, one wonders if we do not have here the secret agenda of the president of the EPO. Let everything go down the drain, so that the only place to litigate will be the UPC. And this is a good forum for companies having deep pockets. But no it is just for the SMEs. Convenient, n’est-ce pas?

The following comment explains that the UPC “was a bad idea from the start, irrespective of Brexit. Pushed for by the litigation community…”

It was a bad idea from the start, irrespective of Brexit. Pushed for by the litigation community in complete ignorance of the realities of the industries they purport to represent. Further evidence, if it were ever needed, of the self-serving bubble of ignorance and incompetence in which such lawyers reside.

Seeing the original delusions from Bristows, one person rightly or justifiably joked: “This is an April Fool’s, surely…..?”

Well, Bristows is lying, not joking. There is a profound difference between those two actions.

Another person said:

The UK is busy gathering cards to play in its negotiations with the 27. Hinting at weakened co-operation on security against terrorism is just one dirty example. Ratifying the UPC is just another card in the hand.

The UK should oppose swallowing the UPC as British businesses certainly do not want the UPC. It would only harm them. As one EPO insider put it the other day, “IPKat becoming a mouthpiece of the UPC lobbying clique? Jeremy we miss you!”

“Smyth wants us to wrongly assume that the UPC is about to start irrespective of the UK.”Well, even some former ‘Kats’ miss him. He used to actually antagonise Battistelli. Look what his blog became after he had left, habitually deleting my comments. The UPC boosters, especially after he had left, used the blog for shameless self-promotion. It’s not just Bristows but Darren Smyth also. He wrote: “There will be likely at least a year of uncertainty between the UPC opening, and the question of the continuing participation of the UK being resolved. If there are no enough users of the system, it may not be financially viable and then again its future would be open to doubt. Here again, readers will doubtless have their views.”

That’s a very loaded statement which doesn’t really belong at IP Kat. Smyth wants us to wrongly assume that the UPC is about to start irrespective of the UK. Nothing is true about certainty at all (even outside the UK) and pretending that it’s inevitable is part of the brainwash we’ve repeatedly complained about.

“They’re like a political party, the “UPC Party”.”Remember MIP’s UPC lobbying events — the ones without any critics of the UPC in them? Darren Smyth personally participates in such events, in his capacity at a law firm; no actual producers are invited, attending etc. (it’s super expensive and designed to exclude some views, just like RNC and DNC). They’re like a political party, the “UPC Party”.

Smyth wrote: “This is the crux of the matter. At an event on Brexit and IP convened by IPAN, there was some doubt about the attractiveness of a new patent and litigation system whose membership was, from the very beginning, in doubt. Those interested in the effect of Brexit on IP should look out for IPAN’s forthcoming report: “IP, Brexit and beyond – a blue-print for action in IP”, which will be based on the event. Similar concerns were voiced at the MIP International Patent Forum.”

Here again is that same old UPC promotion. Echo chamber, courtesy of IP Kat. So from being a Battistelli antagonist the site has turned into a weapon of Battistelli’s agenda. How sad…

Thankfully, the responses are all pretty much dissenting, in the sense that they don’t share the same optimism as the original writers’ (as is common in IP Kat these days). Bristows' views in particular received a lot of flak.

One person wrote:

I remember 1978 when the PCT and EPC got started. Applicants were very cautious, but the economics of filing PCT/EPC were so much more attractive than continuing to file national. The EPO did nothing to dent confidence in its procedures or in the way it examined substantive patentability. So then, after a few years of caution, and of keenly monitoring EPO performance on thousands of cases, everybody simply piled in.

That was the level of cautiousness then. I cannot imagine it is much different today.

But think about when the deciders ask: Unitary patent? Why should I?

Is there any persuasive answer why they should? we are always being told that industry hates uncertainty. Is saving on annuities enough of a reason to switch to unitary? In Big Pharma, who is going to volunteer to go first?

Here is more:

“If the UK is peripheral to the operations of a company….”

Here’s the rub.

For most major patent filers, and thus most major litigants, and thus most of the (potential) major users of the court, the UK is indeed peripheral to the operations of the company (emphasis on company).

However, for the patent litigation system, both: (i) as it stands at the moment; and (ii) as projected under the UPC, the UK is a very important component. The UK has been a significant contributor to the design of the UPC system, and is also significant in terms of the contributions from judges, the patent jurisprudence, and (to be honest) the lawyers.

How is the circle going to be squared?

Then:

Comment #2 [above] asks how the circle will be squared.

It seems to me that England is an extremely important jurisdiction for high value patent litigation where fact-finding is key to the outcome. Mainland Europe doesn’t understand equity, disclosure, cross-examination. Time and again, business people in civil law jurisdictions get burned by English law fact-finding. The arrogant assertion “That’s for me to know, and you to find out” doesn’t end the matter if you litigate in England (or the USA).

So unitary patent or not, I see England having on ongoing important role to play, when patents get litigated in Europe.

“I can’t imagine anyone in their right mind who would put their Crown Jewels into the Unitary Patent system,” said the following comment:

I can’t imagine anyone in their right mind who would put their Crown Jewels into the Unitary Patent system.

The UPC is a different question entirely. However, it will be several years before those who can afford to opt their cases out take a look at whether they should revisit their decision.

With all “important” cases opted out by all those with deep pockets, what will there be left for the UPC to work with in the early years? There will of course be some cases where the proprietors can afford to lose their patent. But there will not be too many of those. There is only one group of operators for whom the UPC will be very attractive from the off: non-practising entities.

So, the UPC will be a troll’s paradise. With not many cases to go around, what is the betting that the various local divisions will end up “competing” against one another for the biggest source of “work”? And so what is to stop the UPC creating a European outpost of the Eastern District of Texas?

It’s not looking good. The only crumb of comfort that I can cling on to is that the Unitary Patent Package appears to contravene general principles of EU law, and so there is a faint chance that it could end up being struck down by the CJEU.

With “UPC,” one person asked, “what happens to the supremacy of the ECJ over UK law in this so bright and rosy independent future?”

Well, the British government intends to maintain legal supremacy, which means that the UPC remains untenable. David Davis is mentioned again in the following comment:

I still fail to understand how the UK government, while trumpeting loudly about being freed from the shackles of the ECJ, can boldy come along and ratify a treaty of which it knows full well it will be stepping out in 2 years time…could someone please explain the rationale behind this, other than some cynical attempt to gain negociating points with regard to the EU – after all, if the UK does ratify, and the whole thing kicks off, how long is the UK going to hold the system in a suspended state of animation pending negotiation of some kind of acceptable exit deal ? Listening to Theresa May in parliament at PMQs on March 29th, and David Davis yesterday, one gets the impression the UK government is going to do what it jolly well pleases legislatively as and when the time comes. Irrespective of the legal arguments presented in support of a Brexited-UK still being able to be a member of the UPC, what happens to the supremacy of the ECJ over UK law in this so bright and rosy independent future ?

Now that decline in EP quality (low quality in processes and grants) is no longer a secret, people rightly express concerns about what a UPC-like regime would mean. We suppose there will be an EPO rule of thumb some time in the future, something alone the lines of “EPs from number x upwards (or year y onward) are dubious and should be taken with a grain of salt.” The Battistelli era has been thoroughly damaging to the reputation of EPs, not just the reputation of the EPO, and the “number of NPE cases in Germany is rising steeply and the NPEs more and more tend to litigate outside of the USA,” said the following comment:

Proof of th epudding is very sceptical about the success of the UPC. Where I can understand that from a European point of view, things are regarded differently at the other side of the ocean(s). For non-Europeans the scattering in Europe (the capital of Denmark is Amsterdam, right? And something terrible is happening in Sweden. Sweden, by all means!) is gruesome and should be ended as soon as possible.
I thus expect that many American, Japanese and Chinese companies would welcome this one court fits all principle.

It has been announced that the court will have experienced judges: most of the leading patent jaudges in the UK, Germany, France and The Netherlands will appear as UPC-judges. Thus, quality of teh court will not be a problem.
A problem in the first years of the existence of the court will be the harmonisation of the procedures, where local habits may tend to be persistent.

The fear for NPEs as mentioned by Proof seems to be justified. At this moment already the number of NPE cases in Germany is rising steeply and the NPEs more and more tend to litigate outside of the USA (and thus in Europe). On the other hand: is the attitude of NPEs objectionable? I do not see that you should be a producer yourself in order to be allowed to stop others producing.

So, I do not share the bleak view of Proof of the Pudding and I share Max Drei’s comparison with the start of the PCT and EPC: in the long run (which hopefully may not be that long) the UP and UPC will be a success.

Finally we see better and broader realisation of the trolls problem in Germany. People are catching up with the latest. These trolls are already coming to the UK, too. Cautionary tale about the UPC? Only lawyers in London would profit from this.

“I say that the UPC will be a troll’s paradise because of two main factors,” said the following comment. To quote:

I do not object to NPEs. I object to “trolls”. There is a subtle difference between the two. A troll engages in abusive (threats of) litigation in order to extract income from a patent of highly dubious validity (or from patent claims that cannot validly be “stretched” to cover the activities complained of).

I say that the UPC will be a troll’s paradise because of two main factors. Firstly, the ridiculously high fee for filing a counterclaim for revocation. For the victim of abusive litigation, that’s effectively a tax on defending yourself. Secondly, there is still no functioning market for (patent) litigation insurance. This will leave SMEs in Europe as “easy pickings” for trolls… no doubt heavily backed by investment groups that will view all of this as a wonderful wheeze.

Going back to the above-mentioned possibility of patent trolls coming from abroad (including China and the US), the following comment says this:

Upon reflection, I take issue with your assertion that you would “expect that many American, Japanese and Chinese companies would welcome this one court fits all principle”.

The problem that I have with your assertion is not that such companies won’t perceive the potential advantages to the UPC. Of course they will. Instead, my issue is that all such companies will surely have European advisors… who will no doubt be pointing out to them that it is a complete no-brainer to opt out all of their important patents and applications (at least for the time being). And if their European advisors are not doing that, then I would question why not.

On a totally separate theme, Max is of course correct to point out that users were initially hesitant to utilise the EPO. No doubt the same theme will play out with the UPC. However, there is a crucial difference between the EPC and the UPCA. For the former, it has taken over 40 years for fundamental flaws in the governance structure set out in the EPC to be exposed (by a ruthless and self-serving borderline psychopath). For the latter, anyone who cares to consider in detail how unitary patents and the UPC can be made to work will realise that the system is already horribly broken before it has even started… not to mention that is also has similar flaws as the EPC in terms of governance.

I should point out that I am all for a well-designed, fully functional “unitary” patent system for Europe. I just haven’t seen one yet.

A response to the above said: “How convenient it was for the EPO President (on secondment from Paris) to skewer the EPO’s patent law-making” (as is usual from Battistelli). To quote:

Just one observation on that last posting by Pudding and his use of the term “self-serving”:

How convenient it was for the EPO President (on secondment from Paris) to skewer the EPO’s patent law-making Appeals Directorate DG3. Not only did it wreak revenge on his troublesome judges in Munich, but it has also helped the Paris Seat of the UPC to get up and running with an enhanced flow of pan-European patent disputes.

The CJEU always did have French as its working language so the “seat” of pan-European patent law in Munich always was an affront to La Grande Nation. Till now, that is.

We are sad to say that inside the comments there is a lot more factual information than in the so-called ‘articles’, which are actually like advertisements rather than reporting. If this is what IP Kat has been reduced to, then we have no choice but to carry on rebutting that UPC lobbying. Not because it’s IP Kat but because it is not correct. █

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