Unified patent court procedures could stall technology innovations, says expert

Out-Law News | 13 Feb 2013 | 12:06 pm | 2 min. read

Technology companies could be "unduly prevented" from launching new products to the market because of the way a new court system that is to be designed to deal with disputes relating to new unitary patents has been configured, an expert has said.

Patent law specialist Deborah Bould of Pinsent Masons, the law firm behind Out-Law.com, said that TMT firms will share concerns expressed by a committee of MPs about the new unified patent court framework that is to be formed.

In a new report, the European Scrutiny Committee has reiterated concerns about how rules that could see matters relating to the validity and infringement of unitary patents being considered in separate court proceedings. The Committee said that the potential for this "bifurcation" could lead to 'forum shopping', which is a term used to describe where parties select where to initiate legal action on the basis of where they think they would be most likely to win.

The Committee has previously expressed concern about the prospect of many unitary patent disputes relating to unitary patents being heard in Germany because there is already a system in place there whereby courts do not consider whether patents are valid when reviewing whether an infringement has occurred, as is the case in the UK. The Committee has warned about the cost of litigation to small businesses as a result of the framework that has been agreed.

Businesses will in future be able to obtain unitary patent protection for inventions across 25 EU member states by filing just a single application after agreement was reached on the legal framework behind the unitary patent regime late last year. Under the agreement a new unified patent court system would be created, in which new local, regional and central divisional courts would be able to hear cases. The rules of procedure for the court have still to be agreed.

Bould said that the Committee’s concerns about ‘forum shopping’ under the new unified patent court framework would be shared by TMT companies in particular.

"Forum shopping is a serious concern to all parties who will be using the unified patent court, especially when combined with the potential bifurcation of infringement and validity proceedings," Bould said. "Most consumer electronics devices use multiple technologies which, in turn, are protected by a sea of patents. There is a real risk of patent hold up for technologies not based on standards, like touch screen technology. Proceedings for any single patent can prevent exploitation of the technology as a whole."

"It is inevitable that certain local and regional courts will be subject to more patent proceedings than others and so will have delays in hearing cases. This is exacerbated because the location of a local or regional divisional court will usually dictate the language used in the proceedings,” she said.

"The danger of bifurcation is that a party could be prevented from selling their product across all the 25 contracting Member States by a local or regional division of the unified patent court, whilst they seek to prove that the patent preventing them from engaging in those business activities is invalid before a central division of the court," Bould added.

"The volume of cases before the central division of the unified patent court is likely to make validity proceedings slower than the infringement proceedings. So, in instances where a patent is ultimately found invalid, a party has been unduly prevented from continuing their business activities. Ultimately it is local or regional divisions that will decide whether to bifurcate the proceedings, another area in which forum shopping might occur. Any guidance in the unified patent court’s Rules of Procedure that severely restricts bifurcation would be welcome," she said.