Tuesday, 11 December 2012

The patent system almost nobody wants comes a step nearer

The three instruments which together make up the scheme for a unified patent for the European Union are slowly making their way through the legislative process, which seems to get more convoluted as time goes by, and today the Council looks set to take another step towards putting in place what many regard as little more than a further burden on small and medium-sized businesses (see for example this paper by Dr Jochen Pagenberg, probably the most vociferous critic of the scheme).

My own opinion, for what little it is worth, is that the unified patent idea, which looks good on paper, stinks. It is good for Big IP and its lawyers, bad for everyone else, which is a theme you can see running through most developments in the IP worlds at this stage of their development. I recall back in the mid-1980s, when my job at the CBI had the grand title "Head of Commercial Law", no-one really seemed to want the Community Patent Convention: the EPC delivered all the benefits they could ask for, even the big multinationals, but the project clearly has momentum that, eventually, is irresistible.

But I will leave the criticism, for now, to Dr Pagenberg, and make this posting factual. Mostly, anyway. On 19 November COREPER agreed a package, comprising a draft regulation creating the unitary patent which is proceeding on the basis of Enhanced Co-operation a (Euro speak for co-operation between not all the Member States, in this case 25 because Italy and Spain are not taking part), the language regulation, and a 26 member international agreement which will set up a single specialised patent jurisdiction.

The main regulation will create a one stop shop at the European Patent Office in Munich, which will grant patents effective in the 25 member states which are taking part. After a twelve-year transition period, the sort of thing that only the European Union could dream up, there will be a 23 language regime both before and after the patent is granted. Applications may then be filed in any language but processed in English, French or German, and after grant the claims will be translated into 23 languages. Contrary to first appearances, this, it is claimed, will cut translation costs by 80 per cent.

As for the unitary patent court, all the governments at the November council meeting agreed that the seat should be Paris, with satellite courts in London and Munich. The London Court will deal with chemical and pharmaceutical patents and the Munich court with mechanical engineering. That much appears to be fairly non-contentious, the product of a typical Euro horse-trading exercise, but there is a great deal of excitement over changes made to the text in July 2012 on the initiative of the United Kingdom. Articles 6, 7 and 8 of the proposed agreement were deleted, and equivalent provisions added to the parallel international agreement (articles 14 septies to 14 nonies: I think you know you are in trouble when an instrument's numbering gets to bis, let alone septies and nonies, rather like the Z sections in some UK legislation like the Registered Designs Act). Article 6 dealt with the right to prevent third parties from making direct use of an invention, Article 7 with knowingly supplying means relating to an essential element of the invention, and Article 8 to limits on the effect of the single patent. In other words, these three articles described the effect of the granted patent, and deleting them removes from the regulation the essence of what patents are all about. Removing them meant that the Court of Justice could not review infringement matters. The powers of the Court of Justice have been removed and then given to the EU Patent Court, whose authority is therefore boosted. A new article 5bis will throw the matter back to national authorities.

Members of the European Parliament were dismayed at these deletions, saying that it went against the previous agreement that had been reached between the Council and the Parliament and moreover were illegal. Bernard Rapkay MEP, German Social and Democrat member, and the rapporteur for the Legal Affairs Committee (which inevitably in this age of text-speak seems to have become known as JURI), says the removal of these provisions has gutted the enforcement provisions of the regulation and left nothing for the Court of Justice to do (which presumably was exactly what the UK government wanted to achieve). And Mr Rapkay says that the November text appears compatible with EU law and respects the Court of Justice's power to ensure consistent application of the legislation. It also upholds the parliament's right to be involved if the patent rules change. He described the compromise as "sub-optimal", but thought that the Legal Affairs Committee would be able to accept it (see the EP press release here). Nevertheless, the compromise has been criticised by the Greens and European Free Alliance for its lack of legal certainty, with Eva Lichtenberg  MEP (Austria) saying that it ''poses a risk of endless legal proceedings. It is not what we need."

Council is now expected to accept a compromise on the 10th December and Parliament may go on to vote on it in the same week. Then the regulations could be adopted on 21 December and the international agreement signed on 18th February, with the whole package becoming effective when the international agreement is ratified.

While the compromise seeks to deal with the Article 6 to 8 problem, some doubt its effectiveness. The removal of those provisions clearly did not comply with Article 118 TFEU because the deleted articles defined the very substance of the rights conferred by the EU patent. The proposal therefore did not conform to the legal basis set out in the Treaty. The EP declared the removal of those provisions unacceptable and postponed a plenary vote: but placing the same provisions in the international agreement will not work either, according to some critics including the Max Planck Institute. The method of the compromise has also come in for a good deal of criticism. But the bandwagon seems to roll on.

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