09.16.17

European Patent Office Continues to Paint a Rosy UPC Picture Even Though the UPC May Already be Dead

Posted in Europe, Patents at 1:24 pm by Dr. Roy Schestowitz

Summary: The European Patent Office (EPO) doesn’t let facts get in the way as another week passes with UPC promotion and further staff repressions

AS WE noted earlier this month, the EPO spits on local tradition/customs, probably for the sake of so-called ‘productivity’, as highlighted more officially in the EPO’s Web site yesterday (promoted via this tweet).

There is, moreover, a lot of greenwashing by Eponia (this example is from yesterday, but it’s repeated every couple of days).

If the EPO intends to repair its reputation, then it certainly does a really poor job. Yesterday, once again, it pushed the Unitary Patent, perhaps forgetting that it’s a patent office, not a lobbyist. “Looking for an all-encompassing guide for the Unitary Patent?”

They keep pushing the illusion of the UPC. But the UPC is dead/dying. Should so-called ‘customers’ not be told about that? The latest on this matter is, the whole thing is stuck at least until next year. The head of the Organisation is leaving in a fortnight and the head of the Office is leaving in summer. What happens then?

Thankfully, the tune of comments at IP Kat (those that get approved) is rapidly changing. Yesterday and today we found 4 comments on the subject, all of them rather pessimistic and quote-worthy. The first of these serves to remind us of patent trolls, which are obviously a threat/menace to British (or any European for that matter) businesses.

The comment focuses on the UK:

To quote from the original (UK) series of House of Cards: “You may well say that, but I could not possibly comment”.

The avoidance of duplication of litigation is easy to understand: if you only have to litigate at the UPC instead of at least in the UK, France, Germany and the Netherlands, then there could be a cost saving.

However, I would still take issue with the apparent presumption that there will be a “saving”. This is because those UK-based companies that litigate patents in multiple jurisdictions are hardly going to put many (or even any) of their key patents in an untested and uncertain system – especially where it is pretty certain that the UK will have to leave the UP system and may well not even be able to stay in the UPC system. There won’t be much of a “saving” if you still have to litigate separately in the UK!

Also, what about the additional costs to UK-based industry for defending / settling infringement actions launched (or threatened) at the UPC? Let’s not forget that there is a significant court fee (EUR20k) for mounting an invalidity defence… which could encourage “troll-like” behaviour from non-practising entities and could also have a chilling effect on UK (SME-based) industry.

All in all, I think that Mr Johnson’s figures nicely demonstrate what I have always perceived as problems with the UPP from the perspective of UK industry. Also, let’s be honest, those problems are just the tip of the iceberg when it comes to problems with the UPP.

As I see it, one of the biggest problems is that it attempts to meld together multiple sources of law (the UP Regulations, the Brussels Regulation, the EPC, the UPCA and national laws) and just expects that this will somehow magically work and will not contravene important principles under EU or national (constitutional) laws. And this is even before we consider the attempt to retain the UK in the system post-Brexit!

I therefore agree that the CJEU really should have looked at the system in detail well before anyone considered signing up to it (let alone bringing it into force). To be frank, the whole system is such a dog’s breakfast that it would be much better to write it off as a bad job and instead put effort and energy into creating a system that stands a decent prospect of actually working. Let’s hope that the BVerfG agree!

The next comment says that “many in the “pro-UPC” camp [are] adopting tactics of dismissing / minimising, or even turning a blind eye,” as usual. Facts don’t matter to them. To quote:

Of course, the reason why the CJEU was not asked up-front for its opinion on the UPCA is because that Agreement is not “between the Union and third countries or international organisations”, meaning that it was impossible to invoke the mechanism under Article 218 TFEU for obtaining an opinion.

This is a shame. Also, it is a shame that Spain’s challenge did not additionally allege contravention of EU laws due to the retroactive effect of Article 5(3) of Regulation 1257/2012. I would have been interested in the CJEU’s views on that point.

The constitutional challenge in Germany therefore provides the first (and much needed) opportunity for a court to express a view on whether the unitary patent package is consistent with important laws and legal principles. The delay caused by the BVerfG’s review of the complaints will no doubt be frustrating for those who are eager for the system to get up-and-running. However, I would merely point out that it is plain common sense to check for fatal problems before an important system “goes live”… to do otherwise would frankly be irresponsible.

In this context, I have been disappointed to observe many in the “pro-UPC” camp adopting tactics of dismissing / minimising, or even turning a blind eye to, the grounds of the constitutional complaint. Such attitudes are at best extremely unhelpful and at worst are painting a seriously misleading picture to clients and contacts.

To anyone engaging in such behaviour, I would merely comment that the complaint is what it is. It might be something or it might be nothing, but presuming that it is the latter is nothing more than wishful thinking. Having to scrap the whole system and start again would be a huge pain, especially given the efforts expended so far and the arrangements already made. But that is the price that has to be paid when a system is set up in such a way as to effectively ensure that there can be no independent oversight (to confirm compliance with existing laws) until such a late stage.

In this respect, I think that it would be very dangerous indeed to assume that the huge political and financial costs that would result from the system being killed at this stage will lead to the BVerfG somehow finding a way of dismissing the complaint. This is because such an assumption is an affront to democracy and the rule of law. That is, it would be akin to “boots on the ground” diplomacy, where the rights and wrongs of the situation become irrelevant because key developments are perceived to be too difficult to reverse.

With this in mind, I can only hope that the BVerfG feels able to judge the merits (or otherwise) of the complaints from a purely legal perspective.

“Why were they then so complacent with the UPC?”

That’s what the next comment says:

I can only but agree with Proof of the pudding. It is not too late, and before the UPC starts the agreement, as well as its RoP, should be checked by the CJEU.

In another blog, Kluwer not to name it, one commenter asked why the UPC Preparatory Committee was not asked to comment by the Federal Constitutional Court?

The reason is very simple to me: it wanted to have a non-biased reply about the UP and the UPC.

What is to be looked at with caution is the way the UPC Preparatory Committee was set up and was functioning. It is the result of this procedure which is questioned by Mr Stjerna in his complaint to the FCC. Only a small number of people ever discussed the matter, and the presence of some national judges cannot disguise the fact that only a limited number of lawyers firms were represented in the process and could well be considering as leading the process.

I cannot say whether or not Mr Stjerna is right when he has criticised those points in numerous publications (all available in English), but the feeling of a small group of people, which might consider itself as a kind of elite, has taken far reaching decisions without any parliamentary or democratic control, as only the UPC Agreement has been open to ratification.

I think that those are the questions behind Mr Stjerna’s complaint, and it is indeed to be hoped that the FCC sends the lot to the CJEU, even if the fiercest proponents of the UPC hope that the complaint will be dismissed. The quorum problem is not the most important one, and this can be settled easily by a new vote in the German Parliament. The other parts of the complaint are much more of a problem and cannot be dismissed at once.

What is at stake is not only the UPC agreement on its own, but also, and may be more importantly, its RoP. Packing substantive aspects into Rules is certainly more practical, as the RoP can be changed more easily, but by doing so, those aspects escape parliamentary or democratic control.

At the revision conference of the EPC in 2000, attempts were made in that direction, but they were resisted by the member states. Why were they then so complacent with the UPC?

Our guess is, as always, that the UPC in its current form will fail. It will fall flat on its face and they’ll start all over again (as they did before).

In reply to the above, someone says that the UPC “would really be immune from any parliamentary oversight as in the case of the EPO.”

Great news, eh? Another reason to crush the UPC before it even gets off the ground. To quote:

A lot seems to hinge on whether the UPC is an EU institution.
If it is then it might be considered subject to oversight by the European Parliament.
If not, then it would really be immune from any parliamentary oversight as in the case of the EPO.

http://ipkitten.blogspot.ie/2015/01/developments-at-european-patent-office.html

The bottom line is, the UPC should not be considered “just a matter of time” or “potentially desirable”; it has the potential to make a horrible mess in Europe, like Texas did in the US. Later this weekend we’ll show that China too is creating a growing, sordid mess by adopting policies proposed by the patent ‘industry’ instead of the massive manufacturing industry. █

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