Brave New World The Unitary Patent and Unified Patent Court · Many companies likely to use UP...

Brave New World

The Unitary Patent and Unified Patent Court

Brave New World

The Unitary Patent and Unified Patent Court The Unitary Patent and Unified Patent Court The Unitary Patent and Unified Patent Court

Managing Intellectual Property

International Patent Forum

London, 16 & 17 April 2013




Introduction

Brave New World

Introduction

Brave New World

Gordon Harris

Head of Intellectual Property

Wragge & Co LLP

Gordon Harris

Head of Intellectual Property

Wragge & Co LLP

Brave New World

� Setting the scene

� Planning a new style portfolio

� Litigation strategy – a view from business� Litigation strategy – a view from business

� Litigation strategy – a view from private practice

Gordon Harris, Wragge & Co LLP

Problems with the existing system

� Patents in Europe are expensive to acquire (translation costs),

maintain (renewal fees) and litigate (multi-jurisdictional)

� Different outcomes on the “same” patent

– Validity– Validity

– Infringement

– Remedies – interim and final

– To what extent is this caused by differences in procedural rules?

� Forum shopping


“Solutions”

� European Patent with Unitary Effect (“Unitary patent”) –

an EP with unitary effect across all participating Member

States

– Costs unknown – national patents/EPs with few national – Costs unknown – national patents/EPs with few national

designations may be cheaper for some

– Does new provision remove or embed variations in national laws

into the system?


“Solutions”

� Unitary Patent Court

– Decisions effective throughout between 13 and 27 Member States –significant commercial impact on D if patent infringed and P if patent revoked

– Exclusive jurisdiction to hear all infringement/revocation cases for existing and new EPs (including unitary patents)

– Subject to

– right to sue in national courts for EPs (not unitary) for 7 years

– right to opt out of Court jurisdiction (and opt back in) for existing EPs (not unitary) and those applied for the next 7 years


The Patent Court – some general points

� 3 types of division

– Central – revocation actions and applications for declaration for non-

infringement – a central division in 3 locations – judges from 3 countries

(probably)

– Local (and regional) – infringement – courts may bifurcate infringement

and validity (inherently pro-P?)

– 3 (or 4) judges per case

– “Experienced” local divisions will have 2 judges from 1 country +1 from another –

“local flavour”

– “Inexperienced” local divisions (and regional) will have 3 from different countries


The Patent Court – some general points

� Patentee may well have multiple choices as to the division

in which to bring infringement proceedings – place of D’s

business or place of infringement (likely to be multiple)

� Court has many powers but little guidance as to how to � Court has many powers but little guidance as to how to

exercise them

� No guidance on Court fees or costs but may well be more

expensive than litigating in any one Member State (other

than UK)


IntroductionIntroduction

Belinda Gascoyne

IP Law Counsel, UK IP Department Manager

IBM

Belinda Gascoyne

IP Law Counsel, UK IP Department Manager

IBM

The Hype

� According to the European Commission’s FAQs:

� “The single unitary patent option will offer those who wish to protect their invention in Europe huge cost advantages and reduce the administrative burden.and reduce the administrative burden.

� The single jurisdiction for patent matters will have the major advantage compared to today’s situation that, in the future, legal certainty will be enhanced. The risk of multiple parallel court proceedings leading possibly to divergent outcomes will disappear”.

Source: http://ec.europa.eu/internal_market/indprop/patent/faqs/index_en.htm

Belinda Gascoyne, IBM

How to obtain a ‘Unitary’ Patent

� Available via the EPO – apply in the usual way, same patentability requirements

� Elect ‘unitary protection’ at grant stage

– Must have same claims for all Member States

� Post-grant treated as having unitary effect – no national validation process or validation fees required

� Subject to the exclusive jurisdiction of the new Unified Court

� Renewal fees not yet decided

– Will cover costs & be ‘progressive’

– Single fee paid to EPO (50% shared with NPOs)


Translation requirements

� Claims required in 3 EPO languages, as now

� Specification in one other language during transitional period*

– German/French + English

– English + any other EU language– English + any other EU language

*12 yrs max, reviewed after 6 yrs – until decent machine translations available at EPO in all EU languages.

� Compensation (full, not capped) for EU SMEs translating from own language into EPO language (Art 5. Translation Regulation)

� Translation also in case of dispute, and in legal proceedings


What might it cost?

� Level of renewal fees to be set at a level that:

(a) is equivalent to the renewal fee to be paid for the average geographical coverage of current European patents

(b) reflects the renewal rate of current European patents; and

(c) reflects the number of requests for unitary effect.(Article 12(3) REGULATION (EU) No 1257/2012)

� Currently, a European Patent is validated on average in 5 EU Member States.(Source: EC Impact Assessment 30.6.2010)

� Only 8% of EP patents are currently renewed until statutory term (20 yrs).

(Source: Dominique Guellec, Bruno van Pottelsberghe: The Economics of the European Patent System, O.U.P. 2007)


Current geographical coverage of EP patents – at validation

GB, DE, FR - 50%

GB, DE, FR, IT, ES - 40%

13 or more MS - 8%

All 27 EU MS - 2%

(Source: European Commission Impact Assessment 13.4.2011)


If UP renewal fee = ‘5’ renewal fees…

� For the 50% of cases where validation only in DE, FR and GB,

traditional EP (or national) route would be cheaper than UP – 3

renewal fees instead of ‘5’ and no translation of spec required.

� For the 40% of cases validated in DE, FR, GB, IT and ES, normal EP � For the 40% of cases validated in DE, FR, GB, IT and ES, normal EP

route would again be cheaper – UP won’t cover IT or ES, so still need

to translate and will essentially be paying ‘5’+2 renewals.

� For (currently 10% of) cases validated in 13 or more MS – UP route will

probably be cheaper & for all MS MUCH cheaper.

(Based on an analysis by Reddie & Grose)


But…

� Some rumours that renewal fee might be equivalent to

eight or even more national renewal fees

� Once UP elected must pay the full UP renewal fee – cannot

cherry pick countries at later stage to reduce renewal cherry pick countries at later stage to reduce renewal

payments as we do now


The Patent Portfolio of the Future?

� Despite the litigation uncertainty and risk of central

revocation, the UP route will be used.

� Many companies likely to use UP route for at least some

new EP grants. I expect for more than just the 10% of new EP grants. I expect for more than just the 10% of

cases which are currently validated in 13 or more MS.

� Some may start to file more national patent applications

so as to avoid the risk of central revocation and

jurisdiction of the Unified Patent Court.



David Rosenberg

Vice-President Corporate IP Policy

GlaxoSmithKline

David Rosenberg

Vice-President Corporate IP Policy

GlaxoSmithKline

The impact of this structure

� National composition of panels plus wide discretion as to how to

exercise powers => local flavour of proceedings?

– Procedural issues – bifurcation, discovery, cross-examination

– Substantive issues e.g. Claim construction, defences– Substantive issues e.g. Claim construction, defences

– Remedies – interim and final

� Significant variability in approaches between different divisions for

many years?

� A trend towards pro-plaintiff bias as courts compete for business?

David Rosenberg, GlaxoSmithKline

So where does this leave the litigation system?

� National patents – sue in national courts

� European (non-unitary) patents – some options

– Don’t opt out

– In 7 year transitional period, sue in national court; or– In 7 year transitional period, sue in national court; or

– Sue in new court (risk pan-European revocation but get pan-European relief)

– Opt out with some/all existing patents and those applied for next 7 years – avoid risk of pan-European revocation – sue in national courts for national relief

– Opt back in if it suits you at the time of infringement and choose division where most likely to win

� Unitary patent – sue in new court


Advise the patentee

� Filing strategy – national, “ordinary” EP or unitary

– How many countries do you need protection in?

– Can you risk pan-European revocation? If not, unitary unlikely to be suitable

� Opt out strategy for those who select “ordinary” EPs� Opt out strategy for those who select “ordinary” EPs

– If remain in, risk action for pan-European revocation in central division

– If opt out, this risk avoided, and can opt back in to get pan-European relief if it suits at time of infringement

� Litigation strategy

– Multiple options – national courts, choice of divisions in unified court

– Is the risk/reward balance in favour of using national courts or unified court


Advise the defendant

� Pan-European risks

� Plaintiff has many forum shopping options – you have no such choices and limited options

� National courts and unified court divisions, or some of them, may � National courts and unified court divisions, or some of them, may become more pro-plaintiff to attract/maintain business

� Risks from “non-practising entities” may increase significantly

� Consider revocation/declaration of non-infringement first strike if threat anticipated – in UPC if not opted out, will prevent opt out; in “best” national court if opted out, will (probably) prevent opt in (but only have national effect)



David Barron

Partner

Wragge & Co LLP

David Barron

Partner

Wragge & Co LLP

Litigating under the new regime –existing patents

� Universal view that should opt out EPs

� Maximises flexibility/retains options

� Who will opt in for litigation?

� Uncertainty around costs/speed/quality/appeals

� Short term - reluctance to be guinea pig

� A favourable decision in one jurisdiction typically brings a Defendant to the table. Why risk all?

David Barron, Wragge & Co LLP

Litigating under the new system – the view from private practice

� No lack of information

� Some lack of planning

� Specifically – planning around portfolio strategy:

–– whether to move to nationals or stay with EPs

– or switch to Unitary Patents

– or obtain a combination. If so, what combination?

� Decisions made now will impact on litigation strategy in years to come


Forum Shopping is Dead – Long Live Forum Shopping!

� Claimant chooses

� Expect differences in speed, quality, pro/anti-patentee/bifurcation

� Interim � Interim remedies/discovery/experts/ tactical moves

� Forum-shopping is inevitable

� Appeal decisions may reduce differences over time, but won’t eliminate forum shopping


So who/when will the new system be used?

� What sort of claimant?

� Operating what sort of business

model?

� For which sorts of patents?� For which sorts of patents?

� In which local/regional

divisions?

� How long before the system

settles down?

Questions &

Answers

Questions &

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