The EPLA plan for software patents

FFII has argued at the KnowRights2010 conference in Vienna that the UPLS central patent court was designed to rubberstamp software patents in Europe.

Here are the slides of the presentation:

What's wrong with the UPLS?

Roadblocks for a central patent court in Europe
Benjamin Henrion
http://ffii.org — http://zoobab.com
KnowRights 2010

What is the UPLS?

• Stands for United Patent Litigation System
• International Treaty (ex: ACTA)
• Drafted by the patent industry, patent judges and Council members
• Goal: creation of an specialized court system to judge EU+Com patents
  • Successor of the European Patent Litigation Agreement (EPLA)
  • Decentralised regional courts for infringement (Ex: one court for Benelux)
  • Central validity court
  • Open to non-EU states EEA, not EPC (ex: Switzerland, Iceland, not Turkey)
  • Competent for European and future Community patents
  • Outsourcing of national courts to those courts

Problem 1: Democracy

• A state: seperation of powers
  • Legislator (ex: Congress, Senate)
  • Judiciary (ex: CAFC+SCOTUS)
  • Executive (ex: USPTO)

Problem 1: Democracy

• The EU: mixed legislator
  • Legislator: Council of Ministers + European Parliament
  • Judiciary: National courts + ECJ
  • Executive: none in patent law
• The UPLS: an international legislator
  • Legislator: international governements (diplomatic conference)
  • Judiciary: an international court(s)
  • Executive: an international organisation (EPO)

Problem 1: Democracy

• Problems with "international" structures
  • Lack of transparency of the negotiations
  • No elected legislator
  • International executive (ex: EPO)
  • No feedback mechanism between national parliaments and executive (ex: EPO)

Problem 1: Democracy

• Who is the legislator?
• Does the legislator is elected?
• -> How does reforming the law works?
• Brimelow: reforming the EPC is nearly impossible
• EU joinng the EPC
• ICJ (UN states) for disputes on EPC

Problem 2: Software Patents

• The Software Patent directive was rejected at the request of large companies
• Better push for a central patent court
• "All the European institutions and industry have worked hard and constructively on the issue of CII patents for some time. Europe's high tech industry will support the efforts of the European institutions to find broader improvements to the European patent system that will particularly benefit the interests of smaller companies."— EICTA, Europe's High Tech Industry Welcomes European
• SAP, IBM, Microsoft, Philips are pushing for such court
• What is their interest if it is not about software patents validation?

Problem 2: Software Patents

• Recent diverging cases
  • Exalead EP1182581 search engine method (France)
  • FAT patent validated (Germany)
  • Gemstar EPG patent invalidated (UK)
• Centralised case-law, interpretation problem solved

Problem 2: Software Patents

• Centralised case-law, interpretation problem solved
• "The purpose of the unified Patent Court is inter alia to reduce the variety of interpretations of patent scope and claim interpretation in Europe, especially at non-specialized courts."— Commission: Economic Cost-Benefit Analysis of a Unified and Integrated European Patent System
• "However, the idea to establish a single European patent court is a trap because the patent movement will make sure that only judges will get appointed who intend to rubberstamp EPO case law and thus software patents."— FFII submission to the 2006 consultation

Problem 2: Software Patents

• "The IPR system also needs to be improved by the creation of a Community patent for innovative ICT companies to protect their inventions in the single market."— European Commision, A Strategy for ICT R&D and Innovation in Europe: Raising the Game
• "Now, currently, in a few cases in some very specific fields (biotech and IT) differences arise in how the national courts interprete the EPC. This can be solved either via a common court which would set EU (or EPOrg) wide case law, or by legislating those gray zones. However, the latest attempt to harmonise EU patent law regarding one of those grey zones (the CII directive) was the fiasco we all remember." — IPJur: Yet Another Revised Proposal For A Council Regulation On The Community Patent

Problem 3: Fundamental rights

• What happens if a fundamental right issue is raised?
  • EUpat: national constitution links?
  • Compat: ECJ + charter of fundamental rights in Lisbon?
  • Does the Lisbon Treaty provides a Constitutional basis?
  • Ex: program claims Vs freedom of expression
  • Patent law do not operate in a vaccuum (Pr Vivant, recent CEIPI conference)
  • Extraction of parts of civil law, whole civil law corpus

Problem 4: Judicial review

• UPLS is framed to be controlled by the patent profession
• "We do not feel it would be helpful for the ECJ to become involved in questions of substantive patent law - and we believe industry to be of like mind." — Responses of 5 UK patent judges to the EC Consultation of 2006
• Risks of being captured by the patent establishment
• Critics in the US bash the CAFC as being "captive"
• US Supreme Court reviewing more and more CAFC decisions (lowered standards, injunctions, subject matter,…)

Problem 5: Legal base

• The French excuse to refuse EPLA
• French constitution requires french judges
• France EPLA
• European Commission internally split on EPLA
• EPLA and IPRED1: delay the talks, claims competence

Problem 5: Legal base

• Find a legal base: none in the EU treaties
• Patent industry refusal to have specialized ECJ tribunals
• UPLS is the legal base
• Patch to the Lisbon treaty to support European Patent
• Needs to be ratified by National Parliaments, like Lisbon
• Huge lobbying if the ECJ gives some "green light"

Problem 6: Costs

• Reduction of the cost of the litigation is the main argument
• Reduction for the "problem" of parallel cases
• Total Cost of Litigation (TCL):
  • procedural costs
  • damages
  • seizures of assets
  • injunctions
  • products stopped
• SMEs: court system too costly, out of court settlements, parallel cases not really a concern

Problem 6: Costs

• EPLA estimates by the EPO: 100K EUR/case (procedural costs, outside of damages)
• EU-wide patent injunctions will be possible (products stopped)
• Pan-european damages (Ex: 5.000.000EUR asked for damages in France, multiplied by 27?)
• Pan-european damages jackpots will be incentives for patent trolls/owners to enforce their patents
• Blackberry scenarios in Europe
• Costs of specialized patent lawyers
• US vs EU: looser pays all

Problem 6: Costs

• Harhoff study: not really deep in econometry
• More studies of cost predictions?
• "The European Commission said "parallel litigation" - having to fight a cross-border patent dispute in different countries at the same time - typically costs at least EUR498,000 per case. A "unified" patent court, it estimates, would drastically cut that to about EUR221,000 in an average case." — Irish Examiner: Brussels brokers EU-wide patenting breakthrough
• Cross-border cases: less then 10% of cases
• Risk to higher the cost for the other 90% of cases (national only)

Problem 7: Languages

• Lisbon Treaty: languages "restriction" at unanimity
• Lisbon Treaty: no languages discrimination (charter of fundamental rights)
• Is there a conflict of law there?
• ECHR: no languages discrimination
• Case for trademarks
• EPO opposition in 3 languages?
• Automatic translation (laugh!)
• Language of the trial? Language of the defendent?

Problem 8: Law

• Extraction of the patent part of the civil law corpus of the Member States
• Does the extraction is enough to cover all the aspects of civil litigation?
• Lack of harmonisation for "parallel imports" (patented in one country, not in another)
• Caselaw well developed on "Epuisement du droit" in France
• Freedom of circulation through the internal market when sold in one country
• European Patent law operating in a vacuum
• UPLS called "bricolage" by some law professor at the recent CEIPI conference

Problem 9: Feedback

• Multiple courts: divergent interpretations
• Show where the judges do not agree
• Won't be available anymore to legislators
• This was the basis of the EU patent directive (UK Vs DE)

Other Problems

• Does it comply with all 27 constitutions?
• Does it comply with the acquis communautaire?
• Where to locate the courts?
• Will they sign a treaty without knowing the court location?
• Risks of forum shopping
• Enough grip in the EU treaties to bypass national constitutions for judging European patents?

Agenda

• 18 May: ECJ hearing of the Council delegations
• European Parliament "sign here" process
• European Parliament information (similar to ACTA)
• ECJ opinion by the end of the year, delay with Lisbon
• Maybe the ECJ will throw a legal spanner?
• Discussion unanimity Vs QMV in the Council?