MPs express concern over unitary patent proposals

Out-Law News | 11 Jan 2012 | 4:19 pm | 5 min. read

A plan for an EU-wide patent could lead to inconsistent decisions and high legal costs, a committee of MPs has warned.

The European Scrutiny Committee said some of the draft plans for a single EU-wide patent system could disadvantage UK small businesses.

Plans to allow inventors to gain cost-effective unilateral patent protection across the EU have been under negotiation for years. In recent months 25 EU countries have moved closer to establishing a new framework around how that system would operate, however

Negotiations over the workings of a new unitary patent court system are of "particular" concern, the committee said in a report on the enforcement of patent rights. Current plans under discussion suggest that national courts will hear cases involving disputes over the validity of unitary patents, but that the European Court of Justice (ECJ) would deal with cases involving the infringement of rights to do with the same patent, the committee said. Such a framework could lead to expensive legal battles and "inconsistent" decision making, the report said.

The committee also questioned the competence of the ECJ to rule on infringement cases. A letter sent from Baroness Wilcox, the UK minister for Intellectual Property, had failed to allay those concerns, it said. 

"Extending the jurisdiction of the Court of Justice to consider substantive patent law should be avoided: patent litigants need an efficient and predictable procedure before highly experienced judges which they would not get in proceedings which would include referrals on substantive law to the Court of Justice," the committee said in its report.

"From the submissions we have received, there appears to be a substantial body of expert opinion which thinks the Court of Justice would be wholly unsuited to this task, with profoundly negative consequences for the enforcement of intellectual property rights across the EU," the report said. "If, however, the Minister can point us to a body of countervailing expert opinion which welcomes the advent of the Court of Justice's involvement, we would be grateful to review it."

A so-called "package" of measures related to the unitary patent system has previously been drafted and includes separate regulations specifying the technical details of the patent system itself, the language regime to be used in unitary patent applications and approvals and the establishment of procedures for the operation of a unified patent court.

The committee also expressed concern about the costs associated with setting up the court system for dealing with unitary patent disputes and whether judges would be appropriately qualified to rule on complex patent cases. The report also detailed concerns over the use of language in court hearings and publications.

The committee said "some Member States had concerns that their nationals may not be able to use their own language in the UPC (unitary patent court), and judgments may not be available in their language". It said that "UK industry" had concerns that the language regime would be too complex and "create cost and uncertainty".

Baroness Wilcox said that whilst the "separation of jurisdiction on validity and infringement" was still being pushed for by some Member States, those proposals were "mitigated by a number of options which allow the regional or local division to hear such actions together, or remit both to the central division," according to the report.

How the new court system will be paid for has still to be resolved, Baroness Wilcox said. A "scale" on how the individual Member States will contribute to these costs will be determined "at least until" the court becomes "self-financing". She said efforts are being made to ensure users of the court do not have to pay huge fees to do so.

Baroness Wilcox said it would only be possible to simplify the language regime of the new court system to a certain degree.

"While some simplification is possible, it is also necessary to ensure that defendants, in particular, are able to use an EU language with which they are familiar," the minister said, according to the report.

"Where parties agree, the language of proceedings may be changed; alternatively there is a possibility for either party to petition the President to change the language of proceedings to the language of grant. Some aspects of the linguistic regime, for example publication of judgments, could be dealt with in the Rules of Procedure," she said.

Baroness Wilcox said that "negotiating parties" understood the need for judges to be properly trained in patent law "to ensure there are enough experienced judges once the unified patent court starts up". One country has already said that it wants to host a "training centre for judges".

The committee said it was "struck ... by the strength of opposition ... from organisations representing the patent profession" to the plans as to how the unitary patent system would be enforced as well as the "linked Patent Regulation". The UK's Chartered Institute of Patent Attorneys last month expressed its concerns about aspects of the plans.

Plans to remove parts of the legislation that give the ECJ the jurisdiction to rule on unitary patent infringement cases are largely supported by other countries "but the Government has continued to raise the issue," Baroness Wilcox said.

Plans to establish a cheaper and more efficient way for inventors to gain patent protection across Europe have been mooted for years. Europe-wide protection is only possible at the moment by validating a patent registered with the European Patent Office (EPO) in each individual country. To be valid in a country a patent must be translated into its language. The European Commission has sought a cheaper system because of what it has said is the prohibitive cost of that process.

In 2010 12 EU member states got together to push for an EU-wide patent system. Under the Lisbon Treaty nine or more EU countries can use the EU's processes and structures to make agreements that bind only those countries. The proposals are now backed by every EU country except Italy and Spain.

Under the unitary patent proposals a European patent holder would make only one application to the EPO for patent protection across the 25 EU countries that have signed up to the scheme, with successful patents being initially published in English, French or German and eventually translated into all three languages. Applications for unitary patent protection not made in any of those languages would have to be translated in order to be considered, although applicants would be compensated for the cost of this.

Italy and Spain have objected to the plans, with both lodging legal cases with the ECJ. Spain has said that restricting the language regime to English, French and German was discriminatory whilst Italy has said the plans are unlawful and would distort competition.

The European Commission has previously said that it can cost more than €32,000 in translation and other costs to obtain a Europe-wide patent, compared with an average cost of $1,850 in the US. The Commission estimated the overall yearly cost of validating patents in the EU to be €193m.

Late last year it looked like a consensus amongst the 25 countries negotiating the legal framework around the operation of a unitary patent system was forming and that an agreement would be signed. However, final details over some aspects of the framework are still to be resolved.