The Unitary Patent & The Unified Patent Court IP Key & Centre for Commercial Law Studies, Queen Mary University of London 8 November 2016

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1 The Unitary Patent & The IP Key & Centre for Commercial Law Studies, Queen Mary University of London 8 November 2016 Pierre Véron Honorary President EPLAW (European Patent Lawyers Association) Member of the Expert Panel group of the Member of the Drafting Committee of the Rules of Procedure Paris Lyon

2 Summary Why a new patent system in Europe? Sources and architecture of the new patent system Judges, applicable law, language, rules of procedure 2

3 Why a new patent system in Europe? A new system was needed to cure the defects of the current patent system in Europe: Lack of real unitary patent protection Jurisdiction given to national courts in parallel proceedings 3

4 Lack of real unitary patent protection: the current European Patent is a bundle patent, not a unitary patent The European Patent Office provides a single patent grant procedure, but does not grant a single patent as far as enforcement is concerned The so-called European Patents are not European Union patents or even Europe-wide patents: instead they are a bundle of national patents. 4

5 The current European Patent bundle patent : once granted by EPO it becomes a series of national patents GRANT VALIDITY & INFRINGEMENT V FRANCE GERMANY UNITED KINGDOM Enlarged Board of Appeal Cour de cassation Bundesgerichtshof Supreme Court Board of Appeal Referral Cassation Cour d'appel Appeal Recourse Oberlandesgericht Recourse Court of Appeal Appeal Appeal Appeal Appeal Examination Division Opposition Division Tribunal de grande instance Bundespatentgericht Landgericht Patents Court Validity Infringement 5

6 Conflicting judgments Novartis / Johnson & Johnson (contact lenses) The Netherlands: patent valid and infringed 11 February 2009 Rechtbank The Hague France: patent valid and infringed 25 March 2009 Tribunal de grande instance Paris affirmed by court of appeal 27 October 2010 United Kingdom: patent invalid for insufficient description (but meeting novelty and inventive step requirements) High Court 10 July 2009 Germany: patent invalid for lack of novelty (but meeting description requirement) Bundespatentgericht 10 December2009 6

7 Conflicting judgments Novartis / Johnson & Johnson (contact lenses) Patent held invalid novel but insufficient description Patent held invalid sufficient description but not novel Patent held valid and infringed

8 1 A changing territory EPO and EU EPO NON EU (Two different Europes: EU & EPO) 8

9 1 A changing territory 25 UP (EPO + EU + UP) IT (EPO+ UPC + UP 2015) PL (EP+UP NON UPC) ES (EPO+EU NON UP NON UPC) HR (EU POST UP - POST UPC) EPO (NON EU) (Five different Europes: EU, EPO, UP, UPC) 9

10 Unitary patent Signature of the Regulations by the Presidents of the European Parliament and the Council on 17 December

11 Signature of the Agreement by the representatives of 25 EU States on 19 February

12 Legal sources 17 December 2012 Regulation 1257/2012 enhanced cooperation in the creation of unitary patent protection 17 December 2012 Regulation 1260/2012 (translation arrangements) 19 February 2013 Agreement on a Unified Patent Court and draft Statute 19 October 2015 Draft Rules of Procedure (V18) subject to legal scrubbing! _Agreement_UPC_DE-EN- FR_and_Rules_Procedure_UPC_DE-EN- FR_Draft_18.pdf 12

13 The main publicly available documents can be found on 13

14 Ratifications Entering into force when 13 contracting States including FR, UK and DE have ratified 11 ratifications so far: AU, FR, SE, BE, DK, MT, LU, PT, FI, BG and NL (SI and IT shortly) 14

15 Ratifications Ratifications UPC Agreement as of 15 June 2016 EP + EU + UPC RATIFIED Shortly EP + EU + UPC IS EP + NON-EU + NON-UPC EP + NON-EU + NON-UPC LUGANO CONVENTION 13 EP + EU + NON-UPC NO SE FI Suir ratifications Neva EE DK LV LT IE PT ES GB PL NL DE BE LU CZ SK AT HU CH FR SI HR BA IT RS MC ME MK AL GR MT RO BG TR CY Don (UK and DE missing for entry into force) 15

16 What is a European Patent with unitary effect? A European Patent granted by the European Patent Office under the European Patent Convention s rules and procedures (no change during the pre-grant procedure) to which, on request of the patent proprietor after grant, unitary effect is given for the territory of the 25 participating MS (all EU MS except Spain, Poland and Croatia) 16

17 Unitary effect results from post-grant transformation of a European Patent 18/11/2022 Request of the patent proprietor 01/04/2014 European patent application 04/03/2020 Grant of European patent 29/10/2023 European patent with unitary effect (25 participating Member States) Examination 23/04/ /01/2020 (including possible opposition and appeal) 18/01/ /04/ month Unitary effect is obtained after grant by a request of the patent proprietor 17

18 Conditions for requesting unitary effect Unitary effect may be requested for any European patent granted on or after the date of application of the Regulations Unitary effect may be registered only if the EP was granted with the same set of claims in respect of all 25 participating MS 18

19 Renewal fees: how much? Single renewal fee (for the Unitary Patent to be paid to the European Patent Office: 50% EPO, 50% to participating Member States) Level of renewal fee: True Top 4 the annual renewal fee for a Unitary Patent will be equal to the combined annual renewal fees in the Top 4 most frequently validated countries participating in the Unitary Patent, i.e. UK, Germany, France and the Netherlands (from 35 in the 2 nd year to 4,855 in the 20 th year) 19

20 European Patent with Unitary Effect Pros and cons Pros one-single patent: one judgment for the whole EU (except ES, HR and PL) cost (?) Cons one-single patent: if revoked 20

21 6 The Court Court of Appeal optional preliminary request binding decision European Court of Justice Registry Appeal (facts & law)??? optional preliminary request binding decision Local division Local division Central division Regional division Regional division 21

22 The Court of first instance: central, local and regional divisions (based on the intentions to create divisions as supposed in 2016) Central Division also competent as "local" for: AT, IE, LU, MT, PT Baltic Regional Division (SE, EE, LT, LV) Finland Denmark United Kingdom The Netherlands Germany (4 divisions) Belgium France CZ-SK Regional Division? (CZ, SK) Central Regional Division? (HU, SI, HR) Poland (UP - non UPC) Spain (non UP - non UPC) Véron & Associés Croatia (EU post UP & UPC) 22

23 Article 7 and Annex II The Court of first instance: central division s seat and sections London Paris PRESIDENT S OFFICE Munich SECTION A HUMAN NECESSITIES SECTION C CHEMISTRY; METALLURGY SECTION B PERFORMING OPERATIONS; TRANSPORTING SECTION D TEXTILES; PAPER SECTION E FIXED CONSTRUCTIONS SECTION G PHYSICS SECTION H ELECTRICITY SECTION F MECHANICAL ENGINEERING; LIGHTING; HEATING; WEAPONS; BLASTING 23

24 3 Scope of application Unitary patent (exclusive jurisdiction) SPCs for a patent (although these are national IP rights) European patent European patent application 24

25 15 The judges (1) The Court shall comprise both legally qualified judges and technically qualified judges. Judges shall ensure the highest standards of competence and shall have proven experience in the field of patent litigation. (2) Legally qualified judges shall possess the qualifications required for appointment to judicial offices in a Contracting Member State. (3) Technically qualified judges shall have a university degree and proven expertise in a field of technology. They shall also have proven knowledge of civil law and procedure relevant in patent litigation. 25

26 8 (2) Panel: 1 st instance local division Member State with < 50 cases (anti Eastern District Texas provision) 26

27 8 (3) & (4) Panel: 1 st instance local division Member State with 50 cases or regional division 27

28 8 (5) Panel: Additional technical judge when a counterclaim for revocation is brought art. 33 (3) or upon request by one of the parties or on the panel s initiative 28

29 8 (6) Panel: 1 st instance central division Tech. judge except for 32 (1) (i) actions concerning EPO decisions on UP 29

30 9 Panel: Court of Appeal 30

31 Applicable law 24 (1) 24 (2) substantive law conflict of law rights conferred and limitations sanctions and damages 31

32 34 Territorial effects of the decision European Patent All the countries where the patent is in force Unitary Patent All UP countries 32

33 32 Jurisdiction Infringement Declaration of non-infringement Revocation Miscellaneous 33

34 33 (1) Infringement: (a) place of infringement 34

35 33 (2) 2 Infringement: multi-regional infringement If an action referred to in Article 32 (1) (a) is pending before a regional division and the infringement has occurred in the territories of three or more regional divisions, the regional division concerned shall, at the request of the defendant, refer the case to the central division. 35

36 33 (1) Infringement: (b) defendant s domicile 36

37 33 (1) 3 Infringement non EU defendants: Central Division 37

38 33 (7) Infringement: choice of the parties 38

39 Bifurcation or not bifurcation? BIFURCATION DON T NEED BIFURCATION 39

40 33 (3) Concurrence of actions: infringement then revocation Unitary patent and 01/06/2014 Infringement action 30/06/2015 Counterclaim for revocation 01/01/ /01/ /01/2016 The local division has the discretion to: proceed with the infringement proceedings and counterclaim for revocation (with a technically qualified judge); refer the counterclaim for decision to the central division and proceed with the infringement proceedings (bifurcation); or with agreement of parties, refer the case to the central division 40

41 33 (5) Concurrence of actions: revocation then infringement Unitary patent and 30/06/2014 Revocation action Central division 01/09/2015 Infringement action Local division 01/01/ /01/ /01/2016 The local division may either Proceed with the infringement proceedings, or stay the infringement proceedings, or if parties agree, refer the infringement action for decision to the central division 41

42 49 Language of proceedings: 1 st instance Regional division Local division Central division Regional division Local division Language of the court Language of the court (national or EPO language) (national or EPO language) Language of the patent 42

43 50 Language of proceedings: appeal Language of 1 st instance Court of Appeal Language of the patent (upon the parties agreement) Appeal (facts & law)??? Language chosen by the court and approved by the parties 43

44 83 Transitional period: 7 years 01/07/2017 Entry into operation Agreement 30/06/2024 End of Transitional Period 01/07/ /06/2024 Transitional period: 7 years National courts still competent for EP European Patent holders may opt out from (withdrawal possible) 44

45 83 Transitional period (3) Unless an action has already been brought before the Court, a proprietor of or an applicant for a European patent granted or applied for prior to the end of the transitional period under paragraph 1 and, where applicable, paragraph 5, shall have the possibility to opt out from the exclusive competence of the Court. To this end they shall notify their opt-out to the Registry by the latest one month before expiry of the transitional period. The opt-out shall take effect upon its entry into the Registry. (4) Unless an action has already been brought before a national court, proprietors of or applicants for European patents who made use of the opt-out in accordance with paragraph 3 shall be entitled to withdraw their opt-out at any moment. In this event they shall notify the Registry accordingly. The withdrawal of the opt-out shall take effect upon its entry into the Registry. 45

46 Rules of procedure (382 rules) Draft Rules of procedure of the Unified Patent Court 31 January 2013 (V14) proceedings shall be conducted in a way which will normally allow the final oral hearing on the issues of infringement and validity at first instance to take place within one year (preamble) 46

47 Rule 8 ROP Stages of the proceedings (a) the written procedure; (b) the interim procedure, which may include an interim conference with the parties; (c) the oral procedure, which shall include an oral hearing of the parties where necessary; (d) the procedure for the award of damages; (e) the procedure for a cost order. 47

48 Front loading system not drips and drabs system Unitary patent and 48

49 Interim conference with the judge rapporteur Unitary patent and 49

50 Hearing of a witness in person exceptional 50

51 Oral hearing Rule 114 Duration of the oral hearing 1. Without prejudice to the principle of proportionality, the presiding judge shall endeavour to complete the oral hearing within one day. The presiding judge may set time limits for parties' oral submissions in advance of the oral hearing, in accordance with the Practice Directions. 2. Oral testimony at the oral hearing shall be limited to issues identified by the judge-rapporteur or the presiding judge as having to be decided by oral evidence. 3. The presiding judge may, after consulting the panel, limit a party's oral submissions if the panel is sufficiently informed. 51

52 36 Court fees (1) The budget of the Court shall be financed by the Court's own financial revenues and at least in the transitional period referred to in article 83 as necessary, by contributions from the Contracting Member States. The budget shall be balanced. (2) The Court's own financial revenues shall comprise court fees and other revenues. 52

53 Draft 26 February 2016 Court fees On 26 February 2016, the Preparatory Committee also agreed the Guidelines for the determination of Court fees and the ceiling of recoverable costs of the successful party overable_costs.pdf 53

54 (contents) The consequences of the UK referendum on Brexit of 23 June 2016 The UK is still a EU Member State for several months or years UK referendum and UPC Agreement Influence of a possible Brexit on the UPC Agreement Legal questions and political uncertainties: Where there is a will there is a way 54

55 EU law background The UK is still a EU Member State for several months or years Unitary patent and The 23 June 2016 referendum has no legal effect in itself Only a formal notification in accordance with Art. 50 Lisbon Treaty might trigger the process by which the UK would withdraw from the EU; the UK must press the button Article 50 PM Theresa May said she would press this button no later than March 2017 Once Art. 50 has been triggered, the withdrawing EU Member State remains in the Union until the date of entry into force of the withdrawal agreement or, failing that, two years after the notification 55

56 Referendum and UPC Agreement From a purely legal standpoint, the UK may ratify the UPC Agreement notwithstanding the referendum: but this needs strong political impetus in the UK, which seems unlikely today As a result, the UPC Agreement could theoretically enter into force notwithstanding the current turmoil in the UK: but this needs political impetus in the rest of Europe 56

57 Influence of the Brexit on the UPC Agreement UPC Agreement refers only to EU Member States (Art. 2, Art. 84): a non-eu Member State could not accede the Agreement UPC Agreement does not envisage the withdrawal from the EU of a EU Member State thereby becoming a non-eu Member State UPC Agreement does not envisage either the withdrawal of a Member State (nothing like Art. 50 Lisbon Treaty in the UPC Agreement) 57

58 Legal questions Assuming the UPC Agreement enters into force and assuming UK withdrawal from the EU becomes effective (Brexit), would such withdrawal make the UPC incompatible with EU law? In other words: is it possible that a State which was a EU Member State when the UPC Agreement entered into force remain in the UPC system after its withdrawal from the EU? 58

59 The CJEU s opinion 1-09 of 3 March 2011 The CJEU did not say that only EU Member States could participate in the UPC system It only answered the specific question: Is the envisaged agreement creating a Unified Patent Litigation System (currently named European and Community Patents Court ) compatible with the provisions of the Treaty establishing the European Community? 59

60 The CJEU s opinion 1-09 of 3 March 2011 The question submitted to the CJEU related to a system in which non EU Member States (like Switzerland) could participate; and which would have created a European and Community Patents Court ( the PC ) which was an independent court, not a court common to a number of Member States, situated, consequently, within the judicial system of the European Union The CJEU s opinion is only based on the second point: it does not directly address the first one 60

61 The CJEU s opinion 1-09 of 3 March 2011 The CJEU s opinion is also based on the following remark: if a decision of the Patents Court were to be in breach of European Union law, that decision could not be the subject of infringement proceedings * nor could it give rise to any financial liability on the part of one or more Member States * In this context infringement proceedings refer to EU law proceedings whereby a party would argue that a Member State or another legal body has infringed EU law (nothing to do with patent infringement proceedings ) 61

62 The CJEU s opinion 1-09 of 3 March 2011 This failure noted by the CJEU s opinion has been overcome in the UPC Agreement: Art. 1 The shall be a court common to the Contracting Member States and thus subject to the same obligations under Union law as any national court of the Contracting Member States Art. 22 1) The Contracting Member States are jointly and severally liable for damage resulting from an infringement of Union law by the Court of Appeal, in accordance with Union law concerning non-contractual liability of Member States for damage caused by their national courts breaching Union law 62

63 Optimistic interpretation of the CJEU s opinion 1-09 of 3 March 2011 Unitary patent and The CJEU s legal opinion does not exclude the participation of non-eu Member States A court common to a number of Member States, situated, consequently, within the judicial system of the European Union may also be a court common to EU and non-eu Member States without violating EU law as long as the UPC Agreement provides that the Contracting Member States are jointly and severally liable for damage resulting from an infringement of Union law by the Court of Appeal 63

64 Technical adjustment needed UPC Agreement needs to be changed as it refers only to EU Member States (Art. 2, Art. 84) This could be done, after entry into force of the Agreement, by an amendment according to Article 87(2) UPCA The Administrative Committee may amend this Agreement to bring it into line with an international treaty relating to patents or Union law 64

65 Uncertainties The uncertainties are more of political nature than of legal nature: if the UK ratifies the UPC Agreement before its effective withdrawal from the EU it seems legally possible that the UPC Agreement enters into force and remains valid even after the UK s effective withdrawal from the EU but this needs political momentum in both the UK and the EU 65

66 Ratifications Entering into force when 13 Contracting States including the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place (=2012), DE, FR and UK have ratified 66

67 If UK does not ratify, a change in the Agreement may be needed Unitary patent and Art. 89 This Agreement shall enter into force after the deposit of the 13 th instrument of ratification or accession in accordance with Article 84, including the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place It is unlikely that a decision of the Administrative Committee might amend this Article because the Administrative Committee will exist only after the entry into force of the Agreement. However a protocol might allow a provisional entry into force of the Agreement pending the UK ratification. 67

68 If UK does not ratify No UK local division London section of the Central Division to be relocated (a decision of the Administrative Committee might be enough, no new Agreement needed) (Art. 87 (2) The Administrative Committee may amend this Agreement to bring it into line with an international treaty relating to patents or Union law. ) 68

69 If UK does not ratify No UK judges in the UPC UK solicitors and barristers not permitted to represent clients before the UPC (Art. 46 (1) Parties shall be represented by lawyers authorized to practice before a court of a Contracting Member State ) (except UK lawyers admitted in Ireland and except if UK continues EEA membership as an EFTA Member State) UK European patent attorneys still permitted to represent clients before the UPC (Art. 46 (2) Parties may alternatively be represented by European Patent Attorneys who are entitled to act as professional representatives before the European Patent Office pursuant to Article 134 of the EPC and who have appropriate qualifications such as a European Patent Litigation Certificate ) 69

70 If UK does not ratify, long-arm jurisdiction of Regulation 542/2014 would apply to UK Long-arm jurisdiction for certain acts of infringement of a EP-non EU patent, e.g. Turkey, Switzerland and UK in case of Brexit Arm_Jurisdiction_Conferred_upon_the_UPC_P_Veron_2015_37_EIPR_p588.pdf 70

71 New Article 71b (3) Regulation 542/2014 Jurisdiction for infringement of a European patent committed outside the territory of the Union (EP non-ue) 3. Where a common court has jurisdiction over a defendant under point 2 in a dispute relating to an infringement of a European patent giving rise to damage within the Union, that court may also exercise jurisdiction in relation to damage arising outside the Union from such an infringement. Such jurisdiction may only be established if property belonging to the defendant is located in any Member State party to the instrument establishing the common court and the dispute has a sufficient connection with any such Member State. 71

72 New Article 71b (3) Regulation 542/2014 Jurisdiction for infringement of a European patent committed outside the territory of the Union (EP non-ue) EPO and EU EPO NON-EU (currently Albania, Bosnia, the Former Yugoslav Republic of Macedonia, Iceland, Monaco, Montenegro, Norway, Serbia, Switzerland, and Turkey) 72

73 New article 71b (3) Regulation 542/2014 Conditions of the long arm jurisdiction The defendant is being sued before the UPC He is accused of having committed acts of infringement of a European Patent in a UPC territory He is domiciled outside the European Union He owns property in any Member State party to the instrument establishing the common court and The action has a sufficient connection with this State 73

74 New Article 71b (3) Regulation 542/2014 Scope of the long arm jurisdiction The «may also exercise jurisdiction in relation to damage arising outside the Union from such an infringement» This means exercise its jurisdiction to damages arising in States where the European patent in suit has effect, but which are not Member States of the EU, hence not Contracting Parties to the UPC Agreement (currently Albania, Bosnia, the Former Yugoslav Republic of Macedonia, Iceland, Monaco, Montenegro, Norway, Serbia, Switzerland and Turkey and UK in case of Brexit) 74

75 New Article 71b (3) Regulation 542/2014 The 2007 Lugano Convention limits the long-arm jurisdiction The 2007 Lugano Convention* applies between the EU Member States and their neighbours, Iceland, Norway, and Switzerland, members of the European Free Trade Association (EFTA) Article 64(2) of the 2007 Lugano Convention may provide a shield against the long-arm jurisdiction of the for the defendants domiciled in Iceland, Norway, and Switzerland If UK joins the Lugano Convention, UK-domiciled defendants might be beyond the reach of the UPC long-arm jurisdiction * the Convention on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, done at Lugano on 30 October

76 Pierre Véron Thank you 1, rue Volney Paris Tel. +33 (0) Fax +33 (0) , avenue Maréchal Foch Lyon Tel. +33 (0) Fax +33 (0)

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