February 13, 2015
By Anthony C. Tridico, Ph.D.; Leythem A. Wall
Authored by Anthony C. Tridico, Ph.D. and Leythem Wall
While it is unlikely the Unified Patent Court (UPC) will be up and running in 2015,1 what we can foresee is that everything falls into place this year for a functioning UPC in 2016. In this article we review the current status of the unitary patent package, what is clear, what remains to be clarified, and what remains to be accomplished over the next 12 months.
So far the following countries intend to host local divisions (proposed languages): Italy (Italian), England and Wales (English), The Netherlands (Dutch and English), France (French), Germany who will ask for four local divisions (German and English), Belgium (Dutch, French, German and English), Finland (Finnish, Swedish and English), Denmark (Danish and English) and Ireland (English).
It also appears the following will constitute regional divisions (proposed languages): Romania, Bulgaria, Cyprus and Greece (all official languages plus French and English); Sweden, Estonia, Latvia and Lithuania (English only); Czech Republic and Slovakia (official languages plus English).
Malta and Luxembourg are not expected to participate in local or regional divisions which will result in donation of jurisdiction to the Central Division and hence the language of grant.2
Ultimately, even if local or regional divisions are not established by the time the UPC comes into force, actions can be brought before the Central Division. Recently the UK Intellectual Property Office (IPO) revealed two potential London locations for the UK divisions, one in central London and the other in East London, with the intention to make a decision in spring 2015.3
2014 was a busy year for UPC judges. Over 1000 applicants expressed interest in a position as a legal or technical judge at the UPC.4 360 applicants were accepted as candidates for legal judges with 124 considered "outstanding." Out of 616 applicants considered suitable as technical judges, 300 were considered "outstanding."5
A training center was opened in Budapest March 13, 2014,6 and as of January 2015 onwards the EPO Academy will organize technical and legal training to commence for less experienced judges. It is currently proposed that 80 legal judges and 40 technical judges will be trained in 2015.
In January 2014 a draft proposal was released outlining court fees. While exact figures were not released, some guidelines were suggested including fixed fees for initiating actions or appeals (to be decided), additional value-based fees if the value of the action exceeds €500,000, fixed fees for other procedures e.g. application to opt-out "classical" European patents from the UPC jurisdiction, saisie procedures, protective letters, etc., and value-based fees on a sliding scale from €500,000 to €30 million. Also put forward were alternative proposals for a cap on recoverable costs for representation.7
A second draft is expected to be discussed in the beginning of 2015 with a new draft proposal on costs and cap due after the February 2015 meeting of the Preparatory Committee with an eye on meeting the spring deadline for the fees consultation which will be public. All of this is to include an evaluation of the operational costs that can be foreseen for the first seven years, taking into account that during this transitional period many costs will be borne by Signatory States hosting seats or divisions of the Court.8
The EPO Select Committee met on Dec. 9, 2014, to continue consideration of administrative rules for Unitary Patent Protection (UPP), renewal fee simulations, the distribution key, and its future work programme. Provisional agreement was reached on the UPP administrative rules, although Rule 25 (on financial matters) will require further discussion before this point is concluded.
There is currently no proposed figure on renewal fees.9 Discussion on annual renewal fee levels continued and further simulations, requested by delegations and users, were discussed at this meeting with the intention to conclude substantive discussions relating to the arrangements for Unitary Patent Protection by June 2015.10 Renewal fees are to be proposed by then but not open for public consultation.
In November 2014, the Advocate General recommended that Spain's challenges to the Unitary Patent package be dismissed.11 It is widely expected the CJEU will confirm this position.
The past year has seen the 16th and 17th draft Rules of Procedure issued, with a public hearing held in Trier on Nov. 26, 2014.12 The Preparatory Committee Roadmap indicates May 2015 as the target date for an agreement on the UPC Rules of Procedure.
One of the widely discussed and perhaps unresolved issues of the UPC is the opt-out procedure for 'classical' European patents. Unitary patents cannot be opted out of the UPC jurisdiction.
Article 83 UPC Agreement states:
(1) During a transitional period of seven years after the date of entry into force of this Agreement, an action for infringement or for revocation of a European patent or an action for infringement or for declaration of invalidity of a supplementary protection certificate issued for a product protected by a European patent may still be brought before national courts or other competent national authorities. (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, as well as a holder of a supplementary protection certificate issued for a product protected by a European patent, 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 register.
Based on this language, the question arises: Does an opt-out mean that no UPC action can be filed? The wording of the agreement says you can opt out of the exclusive competence. When opting out, does it now become a non-exclusive competence, i.e., UPC actions can still be brought? Also is it opted out only during the seven-year period and then back into UPC jurisdiction in year eight of the UPC, or is it opted out for the lifetime of the patent as long as the opt out is requested during the transitional period? Finally, is an application for a declaration for noninfringement an action that can still be brought before the national courts or which prevents a proprietor from opting its patent back in to the UPC?
A widely accepted view, and what appears to have been confirmed by the Preparatory Committee's interpretive note at the beginning of 2014, is that an opt out means UPC actions are no longer possible until you opt back in,13. However, due to loose language in the Agreement, this may need further clarification. The opt-out fee and when an opt-out is registered in relation to when an opt-out request is submitted are also contentious issues for which answers and resolutions are keenly awaited.
Article 48 of the UPC Agreement governs who can act as a representative before the UPC. Section 2 specifically states that European patent attorneys with an appropriate qualification such as a "European Patent Litigation Certificate." A proposal for such appropriate qualifications was published in June 2014 listing a number of courses and qualifications, whose completion would entitle European patent attorneys to become representatives.14 Such courses include patent litigation certificate courses as currently offered by Nottingham Trent University and the University of Strasbourg in conjunction with CEIPI. Other appropriate qualifications include a bachelors or masters degree in law. The syllabus for a European Patent Litigation Course was also proposed with a minimum of 120 hours duration. Sole representation in three infringement actions is also considered as qualifying a European patent attorney to be a UPC representative.
There was a public consultation in July 2014 with 80 responses and so it is expected the Preparatory Committee will be providing a revised draft after their February meeting this year.
Article 65 of the UPC Agreement15 governs decisions on validity and states that a patent can only be revoked based on Articles 138(1) and 139(2) of the European Patent Convention (EPC). In other words, the validity of patents before the UPC will be governed by EPC law, which is the same law that the EPO currently applies in European patent prosecution and opposition proceedings.
In a similar vein it is clear from Rule 30(1)(b) of the UPC Rules of Procedure16 that amendments to patents in response to revocation actions will have to satisfy clarity (Article 84 EPC) and added matter (Article 123 EPC) requirements.
A prototype filing and case management system was made available to the public at the end of last year17 and since Nov. 1, 2014, over a thousand users have tested the prototype from 50 countries.
Prototype filing and case management system workshops were held in London, Paris and Munich on Nov. 27, 2014.
The UK IPO has indicated in correspondence with the Chartered Institute of Patent Attorneys (CIPA) that there is a timeline of December 2014 to June 2015 to procure software and services, and July to December 2015 for testing with completion by December 2015. On Dec. 15, 2014, the tender notice and pre-qualification questionnaire (PQQ) was issued.18 The notice and PQQ set out the three procurement lots: hosting, website and case management/eFiling.19
Article 89 of the UPC Agreement states:
1. This Agreement shall enter into force on 1 January 2014 or on the first day of the fourth month after the deposit of the thirteenth instrument of ratification or accession in accordance with Article 84, including the three Member States [France, Germany, UK], 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 or on the first day of the fourth month after the date of entry into force of the amendments to Regulation (EU) No 1215/2012 concerning its relationship with this Agreement, whichever is the latest.
Thus far Austria, France, Denmark, Sweden, Belgium and most recently Malta have ratified.20 Accordingly, only seven more ratifications (including UK and Germany) are required for the UPC to be up and running.
Although originally expecting to ratify before the general election in May 2015, the UK IPO has indicated in correspondence with CIPA that it does not expect the UK to lay the statutory instrument until afterwards. However, it does remain confident of being able to bring forward legislation after the General Election and expects to make the necessary changes to national law by the end of 2015.
The Preparatory Committee also reported after their meeting in November 2014 that they expect a number of countries to ratify in 2015.21
As we can see there has been a lot of progress and a lot that must happen in 2015. The Preparatory Committee's most recently issued "roadmap" confirms that it is not expected the Court will be up and running before the end of 2015, but 2016 is looking like a good bet.
Endnotes
1 http://www.unified-patent-court.org/images/documents/roadmap-201409.pdf.
2 "Unified Patent Court & Rules of Procedure—where do we stand", ERA, 4-5 December 2014, Kevin Mooney.
3 https://drive.google.com/file/d/0B_U9nV8-MjxraGdtQmVXWFNDR1JaS0pMSURHNHBvN3RyY19z/view?pli=1.
4 http://www.unified-patent-court.org/news/78-expression-of-interests-of-candidate-judges-letters.
5 "Unified Patent Court & Rules of Procedure—where do we stand", ERA, 4-5 December 2014, Kevin Mooney.
7 http://www.eplit.eu/files/downloads/UPC%20Draft%20Rules%20on%20Court%20fees%20and%20recoverable%20costs.pdf.
8 http://www.unified-patent-court.org/images/documents/roadmap-201409.pdf.
9 http://pub.bna.com/ptcj/no_proposed_figure_on_renewal_fees.pdf.
10 http://www.epo.org/about-us/organisation/communiques.html#a12.
14 http://www.unified-patent-court.org/images/documents/draft-eplc-consultation.pdf.
15 http://www.unified-patent-court.org/images/documents/upc-agreement.pdf.
16 http://www.unified-patent-court.org/images/documents/UPC_Rules_of_Procedure_17th_Draft.pdf.
17 http://www.unified-patent-court.org/news/81-upc-it-e-filing-available-to-test.
18 http://www.unified-patent-court.org/news/86-upc-it-tender-published.
19 https://www.ipoprocurement.co.uk/procontract/ipo/supplier.nsf/frm_home?ReadForm.
20 http://www.unified-patent-court.org/committee-members.
21 http://www.unified-patent-court.org/news/84-seventh-meeting-of-the-preparatory-committee.
Reproduced with permission from BNA's Patent, Trademark & Copyright Journal, Vol. 89, No. 994, 02/13/2015. Copyright © 2015 The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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