Germany says nein to Euro Unified Patent Court, pulls plug and leaves it nearby if anyone wants to put it back in
- Reference: 1584966734
- News link: https://www.theregister.co.uk/2020/03/23/germany_upc_europe/
- Source link:
Three years after receiving a complaint from a German patent lawyer over the plan, the court finally delivered its [1]verdict
[2]full verdict in German
on Friday and it was yet another setback for the dream of a single patent court that was supposed to be up and running years ago.Importantly, however, despite the decision going against the UPC, it may not be a death sentence. The court found that the way the UPC had been approved by the German Parliament was insufficient. A full two-thirds of parliament was needed to approve the UPC, it decided, and since that didn’t happen, it was invalid.
That is a hurdle that could be overcome by Germany’s Parliament simply holding another vote. And while [3]some commentators [4]worry that it may not be possible to hit that threshold, there is also no reason to believe that it won’t: when the the vote backing the UPC first passed, it had almost universal acceptance.
Perhaps more importantly, the German Constitutional Court effectively rejected the other arguments against the UPC’s validity. In essence, they were: that because the UK is exiting the EU that the UPC is no longer valid because the UK was one of three compulsory signatories to it (the other two being France and Germany); and that the European Patent Office (EPO) is insufficiently independent because of [5]“reforms” made by its former president Beniot Battistelli that concentrated power in his hands.
EU-only, mate
The court stated clearly that the UPC can only be for members of the EU. That, in one respect, solves the question of the impact of Brexit: earlier, the UK had argued it could still be in the UPC despite Brexit; a position that was then [6]discarded by the Conservative government. This decision makes it plain that the UPC is for EU members only.
Brexit Britain changes its mind, says non, nein, no to Europe's unified patent court – potentially sealing its fate [7]READ MORE
The constitutional court also stated the actual complaint itself was only valid in the context of the parliamentary vote. In other words, if the gripe was submitted after a valid vote, the court would probably not have considered it.
As for the EPO, while the court did not rule on whether its current functioning is sufficient, it clearly indicated that it would be unlikely to strike down the UPC on the basis of the EPO alone. That was perhaps the most surprising part of the decision given how extensively the EPO’s independence has been undermined by Battistelli’s reforms.
It should be noted that these musings by the court (or, to use the correct terminology, “dicta”) are not legally binding but can form the basis of any future legal judgment.
What that all that means is if the German Parliament considered a revised version of the UPC in which the UK was dropped as a compulsory signatory, which stated that the UPC was only open to EU member states, and which then passed with a two-thirds majority, it would almost certainly survive a similar constitutional challenge.
As such if there is sufficient support to push ahead with the UPC – and it would appear that there is within the patent industry – then the idea is not dead but simply delayed. Again.
Why we doing this again?
There is a bigger issue though, as Christian Liedtke, a German patent lawyer who lives and works in the US, outlined to The Register : the entire reason for having the UPC in the first place makes less and less sense.
“The whole drive behind the UPC was that it would make litigation less costly and that it would avoid duplicated litigation,” Liedtke explained. But, with the UK out the equation, neither of those are likely to hold true. For one, the cost-savings were in large part based on the fact that a UPC would pull many patent arguments out of the UK.
Thanks to the UK’s barrister structure, patent cases in the UK are much more expensive. Take the expense of the UK out of the system and those claimed cost savings disappear, warned Liedtke.
Even before the UK’s exit, several EU members had decided not to sign up to the UPC because they calculated it was going to cost them money. With the UK out, it seems likely that more will step away.
As for the second goal of avoiding duplicated litigation, that is also gone with the UK out of the UPC. The reality is that the UK is, and will remain, one of Europe’s largest and most advanced economies. There is no way for a company to avoid dealing with patent litigation in the UK, so even the UPC, a company is going to have to go to multiple jurisdictions to defend or fight infringement, raising the question: why bother?
The European Project
Ultimately, then, the future of the UPC is likely to come down to a simple question: do EU members want to pursue a single patent court because that is the logical path for the European dream? A single market, a single currency, a single patent court.
It’s hard to know what direction the EU is going in this larger ideological question. Brexit originally made people question whether the European project was still worth pursuing. Then sentiment swung the other way. Closing the Brexit process over the next year could cause another shift in thinking.
And then of course there is the current coronavirus crisis: how will that impact how Europe’s inhabitants and politicians view the EU and, by extension, the value of a project like the UPC?
It’s hard to escape the feeling that the UPC is a doomed project. But at the same time, the decision today by the German Constitutional Court provides a clear path for how it can be achieved. Whether people decided to walk down that path, we will have to wait and see. ®
[1] https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/EN/2020/bvg20-020.html
[2] https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2020/02/rs20200213_2bvr073917.html;jsessionid=8CC637BDE8F6F98563BEE975EBF69873.1_cid393
[3] http://patentblog.kluweriplaw.com/2020/03/20/reactions-to-ruling-fcc-in-case-unified-patent-court-positive-and-great-disappointment/
[4] http://patentblog.kluweriplaw.com/2020/03/20/federal-constitutional-court-voids-the-german-upca-ratification-law/
[5] https://www.theregister.co.uk/2017/12/21/euro_patent_office_accountability_case/
[6] https://www.theregister.co.uk/2020/03/04/uk_europe_unified_patent_court/
[7] https://www.theregister.co.uk/2020/03/04/uk_europe_unified_patent_court/
Re: Good idea, poor implementation?
I too think it's a good idea. Similar to what European Trade Marks have done since the 1990's, a one stop shop to protect your trade mark in over two-dozen countries. A single place to file your patent that covers a lot of markets (for many companies even the only jurisdictions they'll ever need) sounds like a logical next step.
Besides, it could sort out all the issues at the European Patent Office by making them a proper EU institution with proper checks and oversight etc.
I don't see, however, why it could only be open for EU member states? Why could Norway or Switzerland (or the UK once it's come back to its senses) not be signatory to it if they asked nicely? Surely if a participating non-member state accepts that, upon joining, patent jurisdiction is pooled in the new court that should settle it? Is there a legal obstruction at EU level to allowing non-member states in?
Re: Good idea, poor implementation?
"Why could Norway or Switzerland (or the UK once it's come back to its senses) not be signatory to it if they asked nicely?"
That is envisaged by the UP package, although the UK is unlikely to ask to join because it would mean being subject to the jurisdiction of the CJEU.
Re: Good idea, poor implementation?
I expect that CJEU anxiety to be one of the next red lines that the UK will give up so I very much doubt that would be an obstacle in, let's say, five years from now. I expect the UK government to have bigger issues to deal with than patent law for the next couple of years anyway so joining a European Unitary Patent would be more of a matter of 'in due course'.
Re: Good idea, poor implementation?
A couple of points:
- the EPC is not an EU instrument. It has nothing to do with the EU.
- the jurisdiction of the CJEU is the cited reason why the UK pulled out of the UPC in the first place, so the red-line holds.
- devising an UPC system that is essentially an international court, outside the EU, but available only to "contracting members states" (of the EU), and appeals directly to the CJEU is not required or even sensible. Unlike the EPC (which has no such constraints), it precludes the involvement of a multitude of states that might otherwise be able to harmonise patent law and case law, not least the rich set of states contracting to the EPC.
A truly inclusive international agreement for harmonisation of patent law and interpretative and litigation case law is what is needed here. Not an exclusive court answerable to the CJEU that knows, frankly, nothing about patents, their validity or infringement anyway.
Re: Good idea, poor implementation?
- the EPC is not an EU instrument. It has nothing to do with the EU.
Sure, but why should EU membership of signatory countries be a requirement then? That's the bit I don't understand.
- the jurisdiction of the CJEU is the cited reason why the UK pulled out of the UPC in the first place, so the red-line holds.
I wouldn't read to much into what the current low-skilled clueless government says or does. They don't know what they're doing and their opinions will have very little bearing on what (and who) will ultimately decide the outcome.
Settling the UK's outstanding financial commitments was a red line, until it wasn't. A border down the Irish Sea was a red line, until it wasn't. Enrolling in programmes that are regulated under EU law (and therefore mean CJEU jurisdiction), from science, health and education to security, law enforcement and energy will become a pressing decision for the UK in the next few years. Either under the current festival of incompetence or the next. By the time the UK has a chance to think about patents again (not in the next few years if you ask me (it will have already enrolled in EU programmes with CJEU jurisdiction so that won't be an obstacle for a European Unitary Patent.
- devising an UPC system that is essentially an international court, outside the EU, but available only to "contracting members states" (of the EU), and appeals directly to the CJEU is not required or even sensible. Unlike the EPC (which has no such constraints), it precludes the involvement of a multitude of states that might otherwise be able to harmonise patent law and case law, not least the rich set of states contracting to the EPC.
A truly inclusive international agreement for harmonisation of patent law and interpretative and litigation case law is what is needed here. Not an exclusive court answerable to the CJEU that knows, frankly, nothing about patents, their validity or infringement anyway.
I don't think you and I are that far apart. I don't see why this system should be limited to EU countries. But, I do understand why it made sense to use an existing legal order like the European Union instead of having to reinvent the wheel and recreate an entire parallel structure.
I'm not sure it matters whether the CJEU know much about patents, they needn't get involved in that anyway. If the system would work in any way like it works now, the CJEU does not get involved in the technicalities of a case that is put before them. Their role is solely to interpret EU law, elaborate on it in relation to the question the referring court has asked them, and then hand it back to the court that referred the case so that can hand down a final verdict.
In this case I would image that a case about a patent for 'a better mousetrap' that would be referred to the CJEU by a European Patent Court wouldn't be about the workings of the mouse trap but about whether the process that was followed by the quarrelling parties has interpreted EU law or principles correctly.
Re: Good idea, poor implementation?
" - the EPC is not an EU instrument. It has nothing to do with the EU.
Sure, but why should EU membership of signatory countries be a requirement then? That's the bit I don't understand."
Len, Apologies if I have misunderstood you, but I think you are confusing the EPC with the UPC, or at least the UP (that is, the Unified Patent package).
As Phil O'Sophical says, the EPC has nothing to do with the EU. It set up the European Patent Office (again not an EU body) to issue patents to which would be valid within any of 38 contracting States. The EPO has no enforcement jurisdiction. Once a valid patent has been awarded by the EPO, it is enforced via the national courts of the member states, applying their applicable national patent statutes and caselaw. The CJEU has no role in enfrorcing EPO patents.
The Unified Patent system is an EU initiative which aims to set up supra-national courts to hear disputes about European patents, including patents issued by the EPO to EU member states. As mentioned, the EU aspires to widen the membership of the UP to include all EPC signatories in due course, but because the ultimate court of appeal within the UPC setup is the CJEU, I'm not sure how palatable that would be to the non-EU members of the EPC, such as Switzerland, and soon the UK.
Re: Good idea, poor implementation?
Thanks Andy J, I think I am indeed not fully understanding the whole situation and conflating two separate structures.
It's been a while since I had to deal with a patent attorney to try and get some of our work patented and that whole episode of Byzantine structures and Kafkaesque procedures made me vow never to get involved in anything like that ever again. It's probably why the thought of a Unitary Patent is appealing to me.
Re: Good idea, poor implementation?
I was mostly with you there, then you lost me. What would be a "truly inclusive agreement"? One where all countries in the world would come together? If you notice it's difficult already to get the EU countries to get in agreement, why should it be easier to do it under the UN? That's plain unrealistic.
I'm not worried about the CJEU knowing nothing about patents. I'm sure they're smart, they can read, and learn.
And once it's established and working, then I'm sure there'll be ways to expand it if so desired.
Remember that even though its lofty political goals w\ere present from its inception, the EU started as a decidedly non-inclusive agreement on coal and steel.
Re: Good idea, poor implementation?
Surely if a participating non-member state accepts that, upon joining, patent jurisdiction is pooled in the new court that should settle it? Is there a legal obstruction at EU level to allowing non-member states in?
I guess that'd be UK & Germany. And perhaps some other countries, ie all global patent disputes should be settled in Texas. I'm guessing there's a combination of political and financial wrangling, ie who pays for the EPC, outside of fees charged for cases heard there. But from reading the article, whether EU members are happy with the idea of handing judicial sovereignty to the EPC, even though it's the logical venue to settle any EPO patent disputes.
As a lay reader, seems like Germany's objection would be the validity of any judgement by the EPC against German entities. Same I guess with the UK, ie I have an EU patent, the EPC rules a UK company has infringed, but that ruling wouldn't be enforceable in the UK because we're not playing nicely with others at the moment. Or we're trying to keep them at a safe distance, for health reasons.
Re: Good idea, poor implementation?
An EPO seems logical, even if poorly managed. One Union, one place to file a patent in one large market rather than 28.. I mean 27 seperate states.
The EPO already has 38 members, it isn't an EU body.
Continuing with the UPC would be burdensome
Most patent applicants (except, for example, the Pharma industry) seek protection in only 3 or 4 of the European states via the European Patent Convention. Normally these include UK, France, Germany. That covers enough of Europe's industry and economy to provide valuable protection for patentees.
With the UK out of the UPC, the whole project becomes a burden on industry. Any litigation before the UPC must also be paralleled before the UK courts. The UPC is drafted to include common-law concepts that reflect UK law, yet will now be applied by judges from Civil law countries. The quality of decision-making at the UPC will suffer from the lack of input and influence from the UK's world-class legal system including UK judges. Patentees and third-parties will suffer from potential divergence and inconsistency in decision-making between the UK and UPC courts. Questions of patent validity can diverge between UK and UPC court decisions, with uncertain consequences for the interpretation of the European Patent Convention.
In sum, the UPC is better shelved and replaced with a truly inclusive international project open to all European Patent Convention contracting states, including those not in the EU (such as Switzerland, Norway and now the UK).
I didn't understand why this is true:
"Thanks to the UK’s barrister structure, where it is impossible for smaller legal firms to interact directly with the ultimate advocates for their case, patent cases in the UK are much more expensive."
Why is it impossible for smaller legal firms to interact directly with the ultimate advocates?
I've tweaked that - don't forget to email corrections@theregister.co.uk if you spot anything wrong.
C.
EU-only, mate
How dare they say the UK should no longer have a say in the EU simply because we left !
Re: EU-only, mate
How dare they say the UK should no longer have a say in the EU
No-one is saying that. The subject here is an EPC, not the EU.
Good idea, poor implementation?
Ultimately, then, the future of the UPC is likely to come down to a simple question: do EU members want to pursue a single patent court because that is the logical path for the European dream? A single market, a single currency, a single patent court.
It's been a long time since I filed any patents, but.. An EPO seems logical, even if poorly managed. One Union, one place to file a patent in one large market rather than 28.. I mean 27 seperate states. But now I have my fancy EU patent, and someone is infringing, it would seem convenient to have one place to sort that out rather than having to pick the right jurisdiction and argue it there. Then also convenient if there was one court procedure to understand instead of 27 possibilities.
But then patent lawyers aren't cheap, and an EPC I guess would leave national ones facing fewer billable hours if everything was handled by an EPC.. Especially as that would probably favour the big law firms.