Summary: The reality of software patents in Europe and what a Unified Patent Court (UPC) would mean for these if it ever became a reality

"Having to inspect the patent database before writing a single line of code, that's not what I call Happy Programmer's Day," Benjamin Henrion wrote the other day, adding that "it does not change much to the fact that the EPO and al [sic] still forces you to read their invention garbage."

The EU rejects software patents, but the EPO flagrantly disobeys the rules, instructions, common sense etc.

Henrion took note of this new article from an EPO-friendly site, relaying the words of "Francisco Mingorance [who is] executive secretary of IP Europe, a lobby group representing European technology companies and research institutes."

"Open standards and Francisco Mingorance do not go well in the same sentence," Henrion wrote. "We now await a communication from the European Commission on FRAND licensing this autumn," he added. FRAND is a euphemism for patent traps inside standards.

To say the least, Mingorance is an enemy of programming. He used to work for the Business Software Alliance (BSA), a pro-FRAND, anti-FOSS, pro-software patents lobby (and the whole bundle of Microsoft lobbying).

At the moment, the main concern we have is that Unitary Patent lobbying threatens to bring software patents to more countries, even countries which explicitly disallow software patents. We wrote many articles about that before. There's one particular comment in IP Kat which reinforces our views about the UPC. The comment is very long so its author was prevented from posting it (or rather having it published) -- to the point of stating: "It would be nice to see comments appearing a little sooner on this thread. There is still a lot to discuss (including the points made in comments that I posted over 9 hours ago!)."

Here is the comment in full, posted in fragments as follows (with emphasis added):

OK, so my later comment from yesterday eventually appears, but not the earlier, more substantive one. I shall try again (in two parts).

Part 1: Wow, not even a deliberate, glaring error in my first comment from yesterday can provoke a response! Either no one cares or no one is watching who has a thorough understanding of EU law.

As decided by the CJEU in C-274/11, “it must be concluded that the competences conferred by Article 118 TFEU fall within an area of shared competences for the purpose of Article 4(2) TFEU and are, in consequence, non-exclusive for the purpose of the first paragraph of Article 20(1) TEU”.

Thus, the hypothetical arguments based upon Article 118 TFEU and “traditional” EPs don’t work... meaning that more subtle arguments need to be deployed if incompatibilities between the UPCA and EU law are going to stand up.

OK, so my shorter comment makes it through quickly but my longer, more substantive comment still does not appear. I shall assume that the problem is length and not content and will therefore have another go, breaking down my comments even further.

[...] For me, the major issue with the Unitary Patent Package has still got to be the (impermissible) retroactive application of new / different law to pre-existing cases. The fact that the UPC would (in theory) be free to apply the infringement law of the UPCA to “traditional” EPs in fact makes the effects of retroactivity a lot worse.

To illustrate, consider a pending EP that has the same claims for enough EU Member States to qualify (in theory) for unitary effect. Which law of infringement would you say will be applied (e.g. in the UK) to the claims of that EP, once granted? To me, it seems that there are, in fact, multiple choices.

(1) In this scenario, a request for unitary effect is filed after the patent is granted.

The law of infringement applied by the UPC (the only litigation forum for the “unitary” patent) will then be dictated by Articles 5 and 7 of the UP Regulation. For the sake of simplicity, we shall assume that the patent proprietor has no residence or place of business in the Participating Member States, meaning that the UPC will apply German national law for the purposes of determining infringement.

(2) In this scenario: unitary effect is not requested; no opt-out is filed; and the “traditional” EP patent (the UK validation, plus a handful of other validations) is litigated at the UPC.

Which law of infringement will the UPC apply to the “traditional” EP? Whilst this is a tricky question to answer, we can apply some common sense to work out the most likely result.

Firstly, the UPC will not be bound to apply the same national law as under scenario 1. This is because the UP regulation does not apply to “traditional” EPs.

Secondly, in all likelihood, the UPC will apply a single law... as otherwise there would be no benefit to using a supposedly “unified” court!

Thirdly, Article 24 UPCA provides a hierarchy of laws. With no overarching EU law to consider (as the UP Regulation is irrelevant to “traditional” EPs), the next stop for the UPC will be the UPCA itself (Article 24(1)(b) UPCA).

Thus, in all likelihood, the UPC will apply the infringement law of the UPCA (Articles 24 to 30 UPCA) to all validations of “traditional” EPs that are litigated in that forum.

(3) In this scenario: unitary effect is not requested; no opt-out is filed; and the UK validation of the “traditional” EP patent is litigated at the UK High Court.

Here the answer is simple. The UK High Court will apply UK national law for the purposes of determining infringement. There is simply no basis under UK law for the court to do anything else... not least because the provisions of the UPCA have not been incorporated into UK law (instead, a few “tweaks” have been made that only partially align UK law with the UPCA provisions on infringement).

(4) In this scenario: unitary effect is not requested; an opt-out is filed; and the UK validation of the “traditional” EP patent is litigated at the UK High Court.

Here, the same answer applies as under option 3, namely UK national law will be applied for the purposes of determining infringement.

So, for a single, pending EP, there are actually three possible choices of law of infringement (namely German national law, UPCA law or UK national law) that will be applied in respect of a single territory (the UK). More worryingly, the choice of law will be dictated by post-filing actions of the proprietor, ie whether or not unitary effect is requested, whether or not an opt-out is filed (and, if so, whether or not it is later withdrawn) and/or which litigation venue is selected (from the UPC or national courts).

Remember, national laws of infringement have not been fully harmonised with one another across the Participating Member States, nor have they been fully harmonised with the infringement provisions of the UPCA. Thus, it will make a difference to the outcome which law of infringement is selected.

So, the UPCA coming into force will bring the advent of what I like to call “Schrödinger's patents”, which are pending EPs whose precise effect upon third parties cannot be fully pinned down until they are actually granted and litigated (at a specific forum). As will be evident from the above, until the proprietor has made final, irreversible choices with regard to all three of unitary effect, opt-out and litigation forum, uncertainties will remain as to the law of infringement that will be applied.

Bringing such “Schrödinger's patents” to life seems to me to be irreconcilable with the principle of legal certainty, and no doubt countless other provisions and principles of EU law (especially fundamental principles relating to the rule of law). But why has this issue attracted so little attention?

It is about time that this changed, I would say. It would be horrible to "sleepwalk" into a nightmare scenario that might become impossible to wake up from.

We certainly hope that patent examiners understand why British software companies, for instance, dread the UPC and oppose it.

Some more EPO articles are on the way. The big series about Battistelli will start quite soon, culminating some time ahead of the quarterly meeting of the Administrative Council. ⬆