Centre for Information and Innovation Law Oxford March 5 th 2015

The Unified Patent Court: Pros and cons of specialisation – Is there a light at the end of the tunnel (vision)?

Professor, dr.jur., PhD Jens Schovsbo Sted og dato (Indsæt --> Diasnummer) Dias 1

Center for Informations- og Innovationsret

Starting points

• Patent law is important but also legally complicated • deals with technical issues and is based on abstract concepts • lots of room for lawyers to argue, PTOs to administer and courts to decide • EU’s patent law system is the most complicated of them all • EU law // national law // international law • strong executive (EPO) // weak legislator // weak (national) court(s) Sted og dato (Indsæt --> Diasnummer) Dias 2

Centre for Information and Innovation Law

The “unitary patent package”

• The “unitary patent package” comprises of four legal instruments: • Council Decision of 10 March 2011 authorising enhanced cooperation in the area of the creation of unitary patent protection (2011/167/EU); • • • Regulation (EU) 1257/2012 of the European Parliament and of the Council of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection; Council Regulation (EU) 1260/2012 of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements; Agreement on a Unified Patent Court and Statute of 11 January 2013 Doc. 16351/12 • It aims at creating a EUropean patent system which is more transparent, consistent, efficient, and fair than the present one(s) • To do so it creates: • The ”European patents with unitary effect” and •

The ”Unitary Patent Court”

Sted og dato (Indsæt --> Diasnummer) Dias 3

Sted og dato (Indsæt --> Diasnummer) Dias 4 Centre for Information and Innovation Law

Tekst starter uden Clement Salung Petersen

UPC – infringement actions

Court of First Instance

(Local/regional division) • Multinational panel of judges • 3 legally qualified (+ optional (or in cases involving revocation): 1 technically qualified allocated from the Pool of Judges) • Counterclaims for revocation may be referred to the Central Division (bifurcation)

Court of First Instance

(Central division) • Multinational panel of judges • 3 legally qualified (+ optional: 1 technically qualified) • Exclusive competence to hear claims for revocation + declaration of non-infringement dato og ”Enhedens

Court of Appeal

• Multinational panel of judges • 3 legally qualified judges + 2 technically qualified judges

Court of Appeal

• Multinational panel of judges • 3 legally qualified judges + 2 technically qualified judges

Court of Justice (CJEU)

• Preliminary references on EU law • Substantive

patent law

harmonised on an EU level (!) will

not

be Dias 5

Clement Salung Petersen Tekst starter uden

Judges of the court

• Panels must always have multinational composition • Cases involving counterclaims for revocation shall comprise a technically qualified judge • Legally qualified judges • Shall posess the qualifications required for appointment to judicial offices in a Contracting Member State • Shall ensure the highest standards of competence and shall have proven experience in the field of patent litigation • Technically qualified judges • Shall have a university degree and proven expertise in a field of technology • Shall have proven knowledge of civil law and procedure relevant in patent litigation • Appointment procedure • Advisory committee (patent experts) establish a list of most suitable candidates • Administrative committee appoint the judges ”acting by common accord” • Appointed for a term of 6 years (this term is renewable) dato og ”Enhedens Dias 6

Centre for Information and Innovation Law

How will the UPC affect the European patent system?

• The UPC will become a central policy-maker in European patent law • Will endevaour to actively develop European patent law into a coherent legal system • Today, the EPO plays a vital role in developing European patent law – often accused of being ”closed” and ”undemocratic” • No strong legislator in European patent law • Will the UPC take on the role as a ”watchdog” vis-à-vis the EPO?

• Is it good that European patent law is developed exclusively in highly specialised institutions? • Democratic legitimacy?

• Compare the US model: CAFC (semi-specialised) - Supreme Court (general) Sted og dato (Indsæt --> Diasnummer) Dias 7

Center for Informations- og Innovationsret

The UPC in action: Its biases

• The UPC is by design • highly specialized (patent judges) • multi(de)national (panels with judges from different jurisdictions // create uniform body of case law) • Because of this the UPC will be biased towards

technology based values

• There is nothing inherently good or bad in this • and it remains to be seen how it will play out • BUT it makes the UPC stand out when compared to a national court • and may have unforeseen (or even unwanted) effects on the way the UPC will decide its cases when compared to traditional courts • 3 examples: 1. Ordre public and morality 2. Competition law 3. Scope of protection Sted og dato (Indsæt --> Diasnummer) Dias 8

Center for Informations- og Innovationsret

Example 1: The UPC and Ordre public and morality

• • Formal issues: • • Biotech-Directive Article 6(1) and 6(2), EPC Article 53(a), and EPC Rule 28a-d (+ national PTAs) Is “ordre public and morality” EPC law or EU law?

• a “unitary European standard” (i.e. the 38 EPC-countries (EPO BoA)), an “EU concept” (the 28 EU-countries including perhaps also national conditions (CJEU), or a “UPC standard” (the 25 UPC-countries)?

Substantive issues: • Alain Pompidou: “the generality [of Article 53a] ensures that it can be applied to inventions in the [i] fast evolving field of biotechnology that cannot at present be foreseen. It also ensures that possible [ii] changes in fundamental legal and ethical principles can be taken into consideration and immediately incorporated into patent law” • i) the UPC will probably be good at assessing this • ii) the UPC will probably find this (even) harder to decide on than national courts with a broader composition and mandate Sted og dato (Indsæt --> Diasnummer) Dias 9

Center for Informations- og Innovationsret

Example 2: The UPC and competition law

1. When could the UPC use competition law rules (competition law interests)?

1. Infringements actions UPCA Article 32:The Court shall have exclusive competence in respect of: (a) actions for actual or threatened infringements of patents and supplementary protection certificates and

related defences, including counterclaims concerning

licences; 2. Actions for preliminary injunctions Article 62 [weighing of the interests of the parties] • Conclusion (Petersen/Riis/Schovsbo): “… even though the UPC will not have competence to hear separate actions or decide on counterclaims concerning the grant of a compulsory license, the UPC will be able to apply competition law and national rules on compulsory licensing as balancing instruments in actions for patent infringement and in actions for preliminary injunctions (provided that the defendant presents a relevant defense in this regard).” Sted og dato (Indsæt --> Diasnummer) Dias 10

Centre for Information and Innovation Law

Competition law as a “defence” against injunctions in SEP/FRAND cases

• • • The starting point: • Patent exclusivity = property rule = injunction BUT: • Case C-170/13, Huawei Technologies Co. Ltd v ZTE Corp., ZTE Deutschland Gmb (AG Opinion on 20.11.2014) • Does the proprietor of a standard-essential patent who informs a standardisation body that he is willing to grant any third party a licence on fair, reasonable and non discriminatory terms abuse his dominant market position if he brings an action for an injunction against a patent infringer although the infringer has declared that he is willing to negotiate concerning such a licence? or … This could mean that for a whole category of patent conflicts granting an injunction would amount to an illegal “abuse” • • Many European courts have already accepted this What will the UPC do?

• will its biases and “doctrinal isolation” mean that it would be reluctant to follow suit?

Sted og dato (Indsæt --> Diasnummer) Dias 11

Center for Informations- og Innovationsret

Example 3: Scope of protection (EPC Article 69 and the Protocol)

• National disagreement • Germany • Doctrine of Equivalents: BGH in Formstein etc. (DoE is prescribed by Article 69 and the Protocol) • UK • “Purposive construction”: HoL in Kirin-Amgen etc. (“… Article 69 firmly shuts the door on any doctrine which extends protection outside the claims”) • Which one should the UPC pick?

• Is there a middle way?

• History of “constructive disagreement” • UK CoA : “[b]roadly we think the principle in our courts – and indeed that in the courts of other member states – should be to try to follow the reasoning of an important decision in another country” (Grimme Landmachinefabrik) • Similarly BGH in Walzenformgebungsmaschine Sted og dato (Indsæt --> Diasnummer) Dias 12

Centre for Information and Innovation Law

“The middle way”

• Stenvik suggests that the doctrine of equivalents should be interpreted in a way that (1) discourages third parties from directing their efforts solely towards circumventing claim language, rather than towards making technical progress of their own, (2) forms a doctrine that is sufficiently clear and simple to be grasped by industry representatives and applied by non-expert lawyers and provides a reasonable degree of certainty for third parties, and (3) does not hamper technological progress. • Will the UPC be good at this? Better than national courts have been?

A Stenvik: 'Protection for Equivalents Under Patent Law: Theories and Practice', IIC 2001 1.

Sted og dato (Indsæt --> Diasnummer) Dias 13

Center for Informations- og Innovationsret

Conclusion – the problem

• Specialization and the mandate to create a uniform body of case law will most likely enable the UPC to enhance the European patent system • transparency, consistency, efficiency, and fairness • But specialization comes with costs and the design of the UPC also has indirect effects: • biased towards certain policy aims which may • lead to “doctrinal isolation” • imply underuse/-development of mechanisms (values) which have traditionally been considered as important • make it difficult to overcome the “democratic deficit” of the court (Ullrich IIC 2015.1) • discredit past experiences • ex nihilo nihil fit Sted og dato (Indsæt --> Diasnummer) Dias 14

Centre for Information and Innovation Law

Conclusion – the solution

• To maintain traditional balances the UPC should acknowledge its biases and systematically seek to cover its blind spots by seeking to include non-technical values and varying opinions. • Concretely by e.g.

• training judges in non-technical areas, • appointing court experts and inviting persons concerned by the outcome of the dispute to intervene (amicus curiae), • dissenting opinions (cf. Art. 78 (only in “exceptional circumstances”)), and • seeing itself as part of a European tradition based on diversity Sted og dato (Indsæt --> Diasnummer) Dias 15

Centre for Information and Innovation Law

Thank you for your attention!

• comments and questions are welcome ([email protected]) Sted og dato (Indsæt --> Diasnummer) Dias 16

Center for Informations- og Innovationsret

Read more

• Clement Salung Petersen, Thomas Riis, and Jens Schovsbo: • “The Unified Patent Court (UPC) in Action - How Will the Design of the UPC Affect Patent Law? (June 16, 2014) in "Transitions in European Patent Law – Influences of the Unitary Patent Package" (Kluwer forthcoming (2015)) (available at //ssrn.com/abstract=2450945) • “The Unified Patent Court (UPC), Compulsory Licensing and Competition Law”, Nordiskt Immateriellt Rättskydd (NIR), 2014 324 (available at http://ssrn.com/abstract=2489006) Sted og dato (Indsæt --> Diasnummer) Dias 17

Sted og dato (Indsæt --> Diasnummer) Dias 18 Centre for Information and Innovation Law