I’m delighted to welcome Helen Smith today, a freelance translator based in Oxford, UK. She obtained a BA (Hons) in Modern Languages (French and Spanish) from the University of Oxford, and then worked for 5 years at a top 50 City of London law firm, where she trained and qualified as a solicitor. You can find out more about Helen from her website.

Helen kindly offered to report on the recent Oxford conference on the Unitary Patent for those of us who weren’t able to attend. Over to you Helen!

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FLUFFY CATS AND TROLLS OUT SHOPPING

The conference, held in Oxford on 4 and 5 October, focused on the newly agreed Unitary (EU) Patent System (“Unitary Patent”), which should be available (in Member States where it is ratified) from 2014 and should enable patentees to attain a single patent that they can enforce in a common EU Unified Patent Court (“UPC”).

EPO headquarters, the Isar building in Munich

This is different to the existing European patent system, governed under the European Patent Convention (“EPC”) with patents granted by the European Patent Office, which merely enables patentees to attain various national patents that are enforceable under the different EPC member states’ national systems.

As a contract specialist, I arrived at the Oxford conference with a view to expanding my specialisms and gaining an insight into an area of law where translation is a key and integral feature. The event’s international diversity was evident from the very beginning in the origins of the delegates and speakers. In addition to London, Nottingham and Cambridge, people had travelled from the Netherlands, Germany, Italy, Finland and the United States. In fact, languages are so relevant in this area that the EPO and the World Intellectual Property Organisation even have their own patent and intellectual property (“IP”) dedicated translation tools (find them here and here).

The conference was opened by Sir David Kitchin, currently a judge in the Court of Appeal and an IP law expert, who outlined the reason for and benefits of the new Unitary Patent, along with the key issues faced by academics, practitioners and institutions alike. These threads were then expanded upon by the other speakers who focused on the Unitary Patent from different perspectives, a few of which I endeavour to summarise below.

Supporters of the Unitary Patent believe that one of its benefits will be a reduction in the cost of patents (the argument here being that there should be greater innovation in countries whose patent system is not prohibitively expensive, although this link is yet to be empirically demonstrated). In any event, the Unitary Patent is intended to be cheaper than the existing system as it is only necessary to file one, as opposed to several, copies of the same patent thereby avoiding multiple filing costs and the duplication of efforts in several countries. Yet current estimates suggest that the cost is likely to be equivalent to filing patents in seven countries under the existing system, when in fact patentees usually only file in three or four. It is therefore debatable whether the Unitary Patent will actually be a less expensive option.

The Unitary Patent and UPC also provide parties with a choice of venues, and by default a choice of languages in which to bring their claim. In fact, any Member State could potentially have its own local division of the UPC, or Member States can group together and form a regional division, rather than each bearing the cost of their own local divisions. However, this also raises the spectre of forum shopping.

In very general terms, patent actions can be separated into infringement actions i.e. actions brought by a patentee alleging infringement of its patent, and validity actions brought by parties to dispute the validity of a patent. As patentees will have the choice of various local and regional divisions of the UPC, they could feasibly therefore choose to bring infringement actions in divisions which appear to be strict on infringement. By contrast, “infringers” can only bring actions to revoke patents in the Central Division of the UPC in Paris, and those actions will be stayed if an infringement action is brought.

This has been interpreted as showing that the Unitary Patent is biased towards patentees, which could potentially lead to an increase in claims from so-called “patent trolls”. These odd-sounding creatures are actually “non-practising entities” who, as the name suggests, hold patents but do not manufacture goods or supply services on the basis of their patents. Rather, they enforce patent rights against alleged infringers with a view to collecting licensing fees. In the worst-case scenario, if a business cannot afford the cost and/or disruption of contesting the validity of a patent troll’s patent, that business can be severely damaged as a result of fighting infringement proceedings brought by a patent troll or being forced to pay a settlement to the troll in order to be allowed to continue its business, when in fact the troll might not even have a valid patent.

This issue could be exacerbated by the potential for UPC proceedings to be bifurcated, i.e. the court may decide issues relating to infringement and validity separately. The pitfalls of bifurcation are well recognised in patent law, and referred to as the Angora cat problem.

In summary, bifurcated proceedings allow the patentee to argue for a wide interpretation of its patent in infringement proceedings (the angry, bristling cat). This means that there is more chance that the defendant will be deemed to have infringed the patent, purely because its remit is wider.

In validity proceedings, however, the patentee can argue for a narrow interpretation of its patent (the calm, sleepy cat with smooth fur) so that the chances of it being deemed invalid are diminished. This strategy is clearly much more likely to be employed in proceedings where infringement and validity issues are heard separately. It is therefore also arguable that a bifurcated system adds to the pro-patentee bias of the UPC and its associated problems as set out in the preceding paragraph.

Regarding languages specifically, Unitary Patents can be granted in the three current EPO languages (English, French and German) and so parties’ requirements regarding translation of the patents themselves might not change much. However, my understanding is that a party accused of infringement might require other translations depending upon where that action is brought. Patentees can file a claim in the local or regional division where the infringing act has occurred, which might not be the defendant’s country of residence. The relevant local court might decide to conduct its proceedings in an EU language other than an EPO language. If that is the case, the parties might then need to arrange translation of the court documents.

Another concern relating to the UPC is that of certainty. As with any new system, there are no precedent decisions. This makes it particularly difficult for patentees and their advisors to predict the outcome of disputes. There is also a perception, rightly or wrongly, that certain jurisdictions might not have an adequate supply of judiciary with detailed knowledge of patent law and that this might lead to certain divisions of the UPC delivering unexpected decisions. This is particularly risky as any validity decisions relating to patents which are subject to UPC jurisdiction will take effect across all participating Member States.

After the Unitary Patent goes live, there will be a seven-year transition period during which patentees can (and, if they follow the advice of some well-respected City law firms, will) opt out of the new scheme. They will then be able to see how the different local and regional divisions of the UPC, and the Central Division for that matter, deal with the cases that are brought before them. This should enable them not only to better predict the outcome of any future disputes they might have but also to see which of the divisions might be more sympathetic to their cause (as described above in relation to forum shopping). Defendants, however, have no such option and must continue in the UPC system if proceedings are brought against them.

It was made clear at the conference that the Unitary Patent raises a variety of issues which will need to be ironed out over time, not least in light of the fact that Italy and Spain have opted out of the system and Spain is in the process of challenging its very validity. However, given that a single European system for patents has been on the cards now for around half a century, it seems likely that the Unitary Patent will go ahead and that there will be many interesting twists and turns as Europe comes to terms with it.

For more reading on the Unitary Patent and the UPC, I recommend this website, from Bristows LLP, the firm where another of the conference speakers, Alan Johnson, is a partner. The full conference programme listing all speakers can be accessed here.