Table of Contents

Part I.


"Reopening the Software Patents Debate in Europe" is a report from the FFII working group on European Affairs. This is a working draft 1.0a. This report looks at the the latest proposal ("EU-EPLA") by the Portuguese EU Presidency for an EU Patent Court. The report examines the proposal, and concludes that its main goal is the legal validation of the European Patent Offices (EPO)'s controversial granting of software and business method patents through "interpretation" of the European Patent Convention (EPC). The report details the process by which national high courts, which do not agree with the EPO's practice, would be eliminated and replaced by trusted judges and patent experts. The report concludes that this proposal gives excessive law-making and enforcement powers to the EPO, nominally an administrative, not a legislative body, and achieves EU-wide software patents, despite the EU Parliament's formal rejection of this in 2005.


"The acrimonious debate over the proposed directive on computer-implemented inventions might never have arisen if the patent litigation system in Europe had been unified, thereby eliminating the possibility of disparate national rulings on the same patent matter." - David Sant, former EPO lobbyist in Brussels In the 1990s a general consensus predisposed patent professionals in Europe for a scope expansion of patent law to software and business methods that was met with little notice by software professionals who focussed on what persons in the business are supposed to do. The development of patent case law in the United States preceded administrative decision moves of the European Patent Office's Boards of Appeal which forced examiners to grant software patents. But ever since the legal enforceability of these granted software patents has been in question, and uninitiated politicians tend to blame "mistakes" of examiners for dubious patents. Patents are arbitrated in national high-courts, which have kept a view closer in line with the exclusions of patentable subject matter. In the field of software, national courts often reject patents which are granted by the EPO and upheld by its Technical Boards of Appeal (TBA). Legal Judges often found the interpretations of the Boards of Appeal flawed which has many reasons, among them institutional dependence and absence of legal qualification. The first attempt to overcome that situation in European substantive patent law was the revision of the European Patent Convention in 2000. Unexpectedly the diplomatic conference did not delete "programs for computers" from the list of invention exclusions in Article 52(2) and the software patent industry continued to rely on the workaround teachings. The next attempt was an EU directive on the patentability of computer-implemented inventions that was finally rejected by European Parliament in 2005. It would have codified the workarounds of the EPO that are applied in its granting practice. The intense public debate shocked the patent technocrats and players from non-EU countries who were unwilling to capitulate to the European Parliament that affirmed the legal exclusion of software patenting. Another remaining possibility for getting enforceable software patents is to unify the national patent courts in support of software patents. This can be done by informal means of judicial coordination or by the creation of an European Patent Court that handles jurisdiction for Europe as a whole, staffed with trusted judges. A already existing model for a specialized court is the US Court of Appeal of the Federal Circuit (CAFC) which institution in 1982 led to an erosion of substantive patent law in the United States without interference of the legislator. The European Union already discussed a proposal for an European Patent Judiciary in Luxembourg for the Community Patent which did not receive a warm welcome from the patent community. Against this EU solution and the stalled community patent, the EPO staged its European Patent Litigation Agreement, that would effectively get it a judicial arm and would make it further independent from political influence. It would also block any EU patent policy. The European Parliament in a resolution put forward its demands for improvements to EPLA (12 Oct 06): independence of judges, democratic control, litigation costs and a patent quality process. A consequent legal study ordered by European Parliament concluded that EPLA could be carried out outside the EU as patent policy is part of the acquis communutaire. The German presidency ignored the Parliamentary resolution and legal study, and continued to push for EPLA. This EPLA proposal is now "dead" (J. Gaster1). However, the German delegation in the European Council of Ministers is bent to include many elements from the EPLA and the German patent court system in a new EUEPLA proposal.

The Portuguese EU-EPLA proposal
• • • • • •

11622/07 Portuguese Presidency: Towards an Enhanced Patent Litigation System and a Community Patent - How to Take Discussions Further, Jul 12 20072 13675/07 Portuguese Presidency: Towards an EU Patent Jurisdiction - Points for discussion, Oct 10 20073 13878/07 German delegation: The Separation of Invalidity and Infringement Proceedings and the Use of Technical Judges in a European Patent Court System, Oct 12 20074 14492/07 Portuguese Presidency: Towards an EU Patent Jurisdiction - Points for discussion in the IP (Patents) working group, Oct 30 20075 14912/07 Portuguese Presidency: Enhancing the patent system in Europe (progress report for permanent representative), Nov 7 20076 15162/07 Portuguese Presidency: Enhancing the Patent System in Europe (progress report for the competitive council), Nov 16 20077

Based on wide consultations with selected business groups, the Portuguese Presidency transformed elements from the EPO-EPLA into a new proposal for an EU-EPLA and tries to push for a new specialized patent court together with Germans. According to the ECJ GAT vs LuK case, the competence of judging European patents lies in the jurisdiction of the National courts of the Member States. The EU-EPLA draft gets national courts completely out of charge for cases that involve national bundle patents granted by EPO and future Community Patents. EU-EPLA is a model for a regionalized European Central Court specialized in patents with two instances. Member states can chose to establish up to three regional chambers and can share regional chambers. Regional chambers are not mandatory. The costs for the Central court is borne by the EU. A right of appeal to the European Court of Justice is available subject to a prior approval by the First Advocate General. The new court is aimed to be dominated by technical judges and an advisory pool of technical experts. Contrary to popular belief, "technical" here refers to patent professionals that are not

eligible to a judicial office (i.e. "legal" judges) who received an academic title prior to becoming patent professionals, but they are not professionals skilled in the art with recent first hand work experience in a field of technology. The right of proposal for both technical and legal judges rests upon a committee of patent professionals. This raises certain concerns over the impartiality of the Court. Patent professionals usually lack a required judicial neutrality in matters of substantive patent law since commercial and institutional interests of their community clearly profit from expansive interpretations. Their incentives and belief systems as part of the "patent community" discourse are for instance evidenced by Dr. Birgitte Andersen (Birkbeck College, University of London). The same applies for the proposal to recruit judges from the patent institutions and boards of appeal which would carry the institutional smell. It is not ruled out that members of the patent judiciary and advisers could also serve as patent professionals, for instance as attorneys, members of patent offices, boards of appeal or other functions which imply a conflict of interests. The only independence safeguard is that "members of the Boards of Appeal of the EPO should not be eligible to serve in parallel to their functions as members of the Boards of Appeal as a judge of the EU patent jurisdiction". The EU-EPLA model as discussed by the Council states that: Judges could be recruited amongst members of the EPO or national offices' Boards of Appeal, patent judges, patent attorneys etc. To this effect a pool of distinguished patent judges would be created at Community level. The German delegation has put great pressure on the bifurcation of invalidity and infringement procedures. Their Council paper was perfectly orchestrated two days after a Portuguese proposal. According to the German plan, only chosen specialized judges of the Central Court may decide certain invalidity cases. A general disadvantage of a bifurcation is that it drives costs of proceedings for all parties up. Another practical problem from the split model surfaced in Germany, where such bifurcation is the national practice: in invalidity proceedings, patent holders tend to narrow the patent down while in infringement proceedings, the patentee aims to broaden the coverage. Unlike bifurcation a joint procedure keeps a better balance between both parties involved. The current proposal from Portugal discriminates a party that seeks invalidation and is therefore disproportionate.In cases of invalidity the regional court is limited either to reject the invalidation or to refer it to the central court, along with a preliminary opinion. The discrimination of the regional courts in terms of invalidity proceedings points that the drafters do not trust judges of the regional chambers. This is further shown by the designation of specialists from the Central Court to help the regional chambers. Member states (MS) need to be aware that foreigners will take part in regional patent litigation proceedings and sit on the same bench: The judges of the first instance divisions at MS level should come from the Member states concerned. However, these divisions would be entitled to include judges from another MS on the bench. A curiosity of the Portuguese Proposal is the depiction of judges as incompetent. According to the Portuguese presidency, "internships" and "judges academies" are required to build up a pool of judges: A training framework for patent judges should be set up at Community level in order to improve and increase available patent litigation expertise and to ensure a broad geographic distribution of such specific knowledge and experience [& ] The training framework would reflect best practices in Member States and focus on gaining practical experience. Towards this end it would involve internships in the patent judiciary of other Member States already having substantial levels of patent litigation activity. The background is a lack of legal judicial qualification of future "technical" judges. The judges

academy may be due to forge the "ability required for appointment to judicial office". Furthermore, the judges' drill facility synchronizes the future members of the judiciary, therefore keeping the pluralistic experience of transnational cooperation under control. Finally, we note that the current EU-EPLA deliberations in the Council have not addressed the concern of "forum shopping". With multiple regional chambers and bifurcation that aspect is certainly worth to get further examined to fully understand the legal economics of the EU-EPLA court.

Legal Base
The EU Treaties provide a legal base for a centralized jurisdiction for patents in Europe. It needs to be carefully examined if they are sufficient for the current EU-EPLA to come into force.

Article 225a
Nice art 225a Lisbon art 225a (amendments emphasised) The Council, acting unanimously on a The European Parliament and the Council, acting in proposal from the Commission and after accordance with the ordinary legislative procedure, consulting the European Parliament and the may establish specialised courts attached to the Court of Justice or at the request of the General Court to hear and determine at first instance Court of Justice and after consulting the certain classes of action or proceeding brought in European Parliament and the Commission, specific areas. The European Parliament and the may create judicial panels to hear and Council shall act by means of regulations either on a determine at first instance certain classes of proposal from the Commission after consultation of the action or proceeding brought in specific Court of Justice or at the request of the Court of Justice areas. after consultation of the Commission. The decision establishing a judicial panel The regulation establishing a specialised court shall shall lay down the rules on the organisation lay down the rules on the organisation of the court and of the panel and the extent of the the extent of the jurisdiction conferred upon it. jurisdiction conferred upon it. Decisions given by judicial panels may be Decisions given by specialised courts may be subject subject to a right of appeal on points of law to a right of appeal on points of law only or, when only or, when provided for in the decision provided for in the decision establishing the establishing the panel, a right of appeal specialised court, a right of appeal also on matters of also on matters of fact, before the Court of fact, before the General Court. First Instance. The members of the judicial panels shall be The members of the specialised courts shall be chosen chosen from persons whose independence from persons whose independence is beyond doubt and is beyond doubt and who possess the who possess the ability required for appointment to ability required for appointment to judicial judicial office. They shall be appointed by the Council, office. They shall be appointed by the acting unanimously. Council, acting unanimously. The judicial panels shall establish their The specialised courts shall establish their Rules of Rules of Procedure in agreement with the Procedure in agreement with the Court of Justice of the Court of Justice. Those Rules shall require European Union. Those Rules shall require the the approval of the Council, acting by a approval of the Council. qualified majority. Unless the decision establishing the Unless the regulation establishing the specialised judicial panel provides otherwise, the court provides otherwise, the provisions of the Treaties

provisions of this Treaty relating to the Court of Justice and the provisions of the Statute of the Court of Justice shall apply to the judicial panels.
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• • • •

relating to the Court of Justice of the European Union and the provisions of the Statute of the Court of Justice of the European Union shall apply to the specialised courts. Title I of the Statute and Article 64 thereof shall in any case apply to the specialised courts. Is the phrasing "at first instance" compatible with the EU-EPLA proposal with two instances? Only Lisbon would provide "specialised courts". Nice "judicial panels" of the ECJ seem to be not wanted by EU-EPLA. The Lisbon treaty needs to come into force first. That would imply a procedure which gives Parliament more say. The current EU-EPLA proposal does not reflect the demands from the European Parliament (12 Oct 2006). The ECJ has to agree with the EU-EPLA proposal. The independence of patent professionals as "technical judges" is doubtful. The Treaties mandate legal judges: patent professionals usually do not "possess the ability required for appointment to judicial office". Article 225a has already been used for the creation of the European Union Civil Service Tribunal. See also EU law blog: Civil Service Tribunal goes live ! for more details about the function of this court.

Article 229a
Nice art 229a Lisbon art 229a (amendments emphasised) Without prejudice to the other provisions of Without prejudice to the other provisions of this this Treaty, the Council, acting unanimously on Treaty, the Council, acting unanimously in a proposal from the Commission and after accordance with a special legislative procedure consulting the European Parliament, may adopt and after consulting the European Parliament, may provisions to confer jurisdiction, to the extent adopt provisions to confer jurisdiction, to the that it shall determine, on the Court of Justice extent that it shall determine, on the Court of in disputes relating to the application of acts Justice of the European Union in disputes relating adopted on the basis of this Treaty which create to the application of acts adopted on the basis of Community industrial property rights. The this Treaty which create European intellectual Council shall recommend those provisions to property rights. These provisions shall enter into the Member States for adoption in accordance force after their approval by the Member States in with their respective constitutional accordance with their respective constitutional requirements. requirements. • Art 229a enables competence shifts to the ECJ only. Specialized courts created in Nice Art 225 might not be part of the ECJ (needs confirmation). • EPO patents are not European intellectual property rights as there is no community substantive patent legislation. The EU would need to codify the relevant EPC provisions ("add the house to the roof"). • Community patents become European intellectual property rights once adopted. • Lisbon would imply a procedure which gives Parliament more say. The current EU-EPLA proposal does not reflect the demands from the European Parliament (12 Oct 2006). • Nice Art229a might not be needed to create a Community jurisdiction for European patents, since Art 225a might be enough: "The decision establishing a judicial panel shall lay down the rules on the organisation of the court and the extent of the jurisdiction conferred upon it" • What constitutional difficulties would arise esp. with regard to languages?


Part II. Predicted consequences
EU-EPLA is not about patent litigation
The general public argument for the Court is that it would unify divergent court interpretations of a patent in different member states and reduce the costs for multiple litigation. But the figures show that multinational litigation is of minor importance. We find few cases of trinational litigation. The only showcase of divergent litigation interpretation on national grounds Epilady is ancient. The new court is also advocated as a path to the community patent and an anti-Torpedo-measure8. In reality EU-EPLA drives the entry cost barriers for litigation up and is a solution for rare cases of large companies that can afford patent litigation and professional patent litigation companies ("patent trolls"). The current patent litigation system strongly discriminates against small and medium enterprises which primary business is not patent enforcement. A more expensive system for crossborder litigation would not improve this situation.

EU-EPLA is about validating EPO practice
The new central court is staged to approve expansive reforms on subject-matter by case law such as the illegitimate granting of software patents by the European Patent Office (EPO). The new court is tailored to be as independent as the EPOs infamous Technical Boards of Appeal. The new Court also minimizes the political risk of influence from national governments and strongly centralizes powers. The Portuguese EU-EPLA is all about validation of Software and Business Method Patents. It attempts to overcome discomfort of national judges about the abusive legal interpretations of the European Patent Convention, Art 52, by the European Patent Organization including teaching such as the infamous "further technical effects".

Technocratic win
The Council discusses a patent court that reflects the interests of patent technocrats and patent attorneys, but not European businesses and inventors. Member States are recommended to assess the compatibility of the current model with the EU Treaties (including the new revision agreed in Lisbon recently) to include centralized jurisdiction for European and community patents. The EUEPLA requires prior EU harmonization of national substantive patent law or will run into delicate legal difficulties. The German model of separation of litigation and validation drives costs up and favors patent holders. An important matter is the role of technical judges as part of the court. Legal judges would guarantee for judicial independence and legal quality of rulings. On a longterm perspective the parallel governance of the European patent system means that one institution needs to give way. Sooner or later it will be necessary to dismantle the European Patent Organization and let an European Union Innovation agency and parliamentarian institutions overtake its role. EU-EPLA blocks the transformation process and strengthens the institutional influence of the European Patent Organization that is not part of the Union and governed by technocrats cushioned against business reality.

Parliament disengaged
EU-EPLA is staged to validate software patents without parliamentarian deliberations that take

account of a diversity of political views, stakeholders and economic impact assessments which simply cannot be addressed in courts proceedings. Democratic decisions add legitimacy. It would be appropriate to stress that unclarity in substantive law calls for a legislative clarification first. Divergent national court practices are not bad per se as they hint to European legislative harmonization needs. Cynically spoken it seems patent institutions lost confidence in politics and now want their own trusted court. It is worth to examine the political economics of the October EUEPLA in terms of trusted judges, technical experts and validity decision-making. In the field of software the European Commission refuses to propose a new directive that would keep the software service sector safe so that software authors can trade their copyrighted works without any risks of EPO software patents. Parliament has no right of proposal but made very clear in the past debates that it seeks changes to the status quo. This example illustrates the 'constitutional' inability of the legislator to stop institutional malpractice and its reliance on the Commission. Thus also in other matters of substantive patent law the European legislator would yield influence over substantive patent law while it further remains to be prejudiced by patent technocracy. Given the lack of compromise, procedural trickery and deceptive drafting during the software patent debate the EU-EPLA court is a potential threat to parliamentarian democracy, on the national and the European level.

Part III. Annex
The US Court of Appeals of the Federal Circuit
The USA has experimented with a central patent court. In 1982, the US Congress put all patent litigation into a single court called the Court of Appeals of the Federal Circuit (CAFC). This is how the US CCIA (Computer & Communications Industry Association) described the effects of CAFC9: The Federal Circuit has: * Lowered the threshold standard of patentability * Encouraged extortionate demands and settlements * Eliminated virtually all limits on patentable subject matter * Endowed issued patents with an unjustifiably high presumption of validity [CAFC] has made patents more potent, easy to get, easy to assert, and available for a virtually unlimited range of subject matter. As shown in the 2002 joint Department of Justice/Federal Trade Commission (FTC) hearings, this has led to over-patenting, portfolio racing, opportunism, extortionate settlements, and failure of the public disclosure function. As the final FTC report, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy, makes clear, the ill effects have been borne disproportionately by the ICT sector.

ECJ outside of patent law
Hartmut Pilch (FFII e.V.) was saying last 2 May 2007: "I don't think EU joining EPC would automatically mean that ECJ can intervene on substantive patent law questions. If there is a ECJ above the EPJ, then probably only for very special questions relating to areas outside patent law, such as EU treaties, and it would not be accessible to the litigating parties but only to the EPJ itself or maybe to the Commission, member states and the European Parliament." The Portuguese Presidency did not explain the mechanisms by which the ECJ will be able to interpret substantive patent law. In fact, its move to push for an EU litigation system is like putting the horse before the car: current EU law is silent about substantive patent law, expect for the biotech directive. The question of substantive patent law has to be clarified before any discussion on litigation can happen. ECJ is not accessible for private parties to defend themselves, as it is not competent for disputes between private parties. The Portuguese proposal mentions that only the Advocate general can request the ECJ on points of law. Compared to the american CAFC-SCOTUS mechanism, it denies the right of a party to appeal to the ECJ. It also carries the risk that if the Advocate General is dependent of the patent system, it can deny a request to appeal for important questions such as limits of patentability. Parties in the

United States has the right to petition the Supreme Court independently of the mind of captive patent judges. This appeal mechanism has recently been used by the Supreme Court to correct some low-patentability-requirements thresholds created by the captive court of CAFC. This attitude of those patent captive courts is mentioned here: Dear Mr. Josefsson, You are absolutely correct: The EBA is the highest law-making body within the EPO system, and all basic questions should be referred to it. This is in Art. 112 EPC. Contrary decisions of a Swedish court and a TBA of the EPO must be referred to the EBA. However, in practice this does not happen. This is so because the EBA rarely confirms the decision below, and the judges of the TBAs think this reflects badly on their work. We have exactly the same problem in Germany where the Senates of the Federal Patent Court should refer basic questions to the BGH but do not do this. You might read a commentary on Art. 112 EPC. With kind regards, Hans Raible

Parliament resolution on Future European Patent Policy
The European Parliament resolution on European Future Patent Policy (12 Oct 2006) set a clear agenda for future talks about a patent judiciary: whereas there has been growing concerns about undesirable patents in various fields and about a lack of democratic control over the process by which such patents are granted, validated and enforced. & as regards the EPLA, considers that the proposed text needs significant improvements, which address concerns about democratic control, judicial independence and litigation costs. It also demanded that all legislative proposals should be accompanied by an in-depth impact analysis related to patent quality, governance of the patent system, judicial independence and litigation costs.

Dr. Langfinger (Business Europe): consent as legal base
Report: Wie geht es weiter mit der europäischen Patentgerichtsbarkeit, BPatG Symposium, Panel 2 Als Rechtsgrundlage kämen je nach Konstruktion unterschiedliche Vorschriften des EGVertrages in Betracht. Zu verweisen sei auf die Artikel 225 a, 229 a, 308 EG-Vertrag. Letztlich sei dies jedoch nicht die entscheidende Frage. Wenn zwischen den Mitgliedsstaaten Einigkeit über die Schaffung einer europäischen Patentgerichtsbarkeit erzielt werde, sei nicht zweifelhaft, dass auch eine Realisierung unter dem EG-Vertrag möglich sei. in English: Depending on the design requirements different provisions of the EC Treaty come into consideration. We refer to the articles 225, 229 a, 308 EC Treaty. Ultimately, however,

this is not the crucial issue. If the member States get mutual consent on the establishment of a European patent judiciary, it is without doubt that a implementation under the Treaty provision would be made possible.

Danger of Democratic interference
Responses from David Rosenberg and Tim Frain focussed on shared concerns, their primary worry being that politics would obstruct the quality of decisions made under the new system. Source: L. Mathias report from AIPPI conference, Dec 510 "The main topic was the EPLA. Almost everyone there declared in favour of the EPLA and we were told that the judges were uniformly in favour. The villains were seen as the politicians." Source: PATENTEPI report, "The Future of the Patent Jurisdiction in Europe" Munich, 25th and 26th June 200711)

Froehlinger (COM) explains the regional central court
Dr Froehlinger addressed whether the proposed Community patent jurisdiction required seats in all member states. She said that the Commission intends through financial incentives to encourage regional chambers. The need for physical proximity could be reduced by video conferencing and chambers could be peripatetic. She added that judges in the UK have confirmed that the UK, Ireland and the Benelux countries are discussing plans for a regional chamber. She countered criticism that local chambers inevitably lack experience, relying on training and the use of a multinational pool of judges. & Lastly Dr Froehlinger addressed the controversial issue of bifurcation. The Commission s aim is to introduce choice and flexibility into the system and she insisted that there would be no imposed bifurcation of validity and infringement proceedings. Source: L. Mathias report from AIPPI conference, Dec 512

Patent litigation: empirical data
Today patents are litigated in very few EU member states. Multinational litigation hardly occurs.

Footnotes 1. Gaster at Friedrich Ebert Stiftung, Der effektive Schutz geistigen Eigentums, Nov 1 2007 2. 3. 4. 5. 6. 7. 8. 9. 10. L. Mathias:Patent Litigation in Europe: the Commission Communication and the EPLA is this the last chance? 11. 12. L. Mathias:Patent Litigation in Europe: the Commission Communication and the EPLA is this the last chance?

Questions On EU­EPLA (part1) 

Q1: Legal base in the EU treaties for an EU  patent court

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. Which article of the Treaty constitutes the legal base for  installing such specialized patent court?

Q2: Results of the consultation on the Future of  Patent Policy in Europe

Last 16 January 2006, the Commission launched a consultation on the Future of Patent Policy in  Europe. 1. Why does the Commission is not publishing the contributions of stakeholders of this consultation on  its website? 2. When does the Commission intends to do so?

Q3: Results of the consultation on the Future of  Patent Policy in Europe

Last 16 January 2006, the Commission launched a consultation on the Future of Patent Policy in  Europe. The Commission has received the Worst Lobbying Award 2006 for pouring patent­holding  SMEs in the results of the consultation on the "Future of Patent Policy in Europe", and such after the  official closing deadline of 2nd of April 2006. The results of the consultation and the interpretation  made by the Commission of those results should be scrutinized, which right now is impossible for  external parties since the Commission has not yet published the contributions of stakeholders. 1. Has the Council investigated this issue? 2. Is the Council using such consultation as a basis to discuss the creation of a specialized patent court  in Europe?

Q4: Epilady case and basis for creating an EU  patent court

The Council is currently discussing a proposal to create an specialized patent court inside the  framework of the Treaties of the European Union. One of the often mentioned case for creating such 

system is the Epilady case. Nevertheless, this case is pretty old (1990). Q1: Can the Council list the cases (name+date) where the same European Patent was litigated in  different Member States and led to different decisions: a. for two different member states b. for three different member states c. for more then three different member states Q2: Which percentage of the total number of cases involves cross­border litigation? Q3: Does the Council considers the number of cases leading to different interpretations sufficient  enough to create a central court for validity cases?

Q5: Creation of a specialized patent central  court and software patents

The Council is currently discussing a proposal to create an specialized patent court inside the  framework of the Treaties of the European Union. Although the Commission said that the main purpose  was not to legalise software patents by the back door, such European patents are still granted by the  European Patent Office. Can the Council explain in detail how a specialized patent court would be forbidden to adopt the same  extreme interpretations made by the EPO TBA of the article 52.2­3 EPC?

Q6: American experience with specialized  patent courts

Twenty five years ago, in 1982, the American Congress created the CAFC (Court of Appeals for the  Federal Circuit) in order to have specialized patent courts. Learning from the american experience, can the Presidency list the disadvantages of such courts?

Q7: Discussions in the Council on a central court  for validating patents delivered by the European  Patent Office

Last 12 October 2007, the European Parliament adopted a resolution on patent policy, mentioning the  following: "Reminds the Commission that all legislative proposals should be accompanied by an in­depth impact analysis related to patent quality, governance of the patent system, judicial independence and litigation  costs;"

Since then, the German and Portuguese presidencies have organised a series of meetings in order to  discuss the possibility to create a specialized patent court for patents granted by the European Patent  Office. When the Council and the Commission intends to conduct such in-depth impact analysis related to  patent quality, governance of the patent system, judicial independence and litigation costs?

Q8: Council: Technical Judges in EU patent  courts

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. A document (13878/07) put forward by the German delegation  introduced the idea to have 'technical judges' which was overtaken by the latest document (14492/07) of  the Portuguese Presidency. 1. What is the definition of a 'technical judge'? Is the Council aware of a definition or established  practice regarding technical judges? 2. Are those technical judges "persons whose independence is beyond doubt and who possess the  ability required for appointment to judicial office" (Article 225a TEC)? 3. Does the Council consider a European Patent Attorney as a person whose independence is beyond  doubt?

Q9: Council: Discussions in the Council on a  central court for validating patents delivered by  the European Patent Office

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. Can the Council elaborate whether decisions of such specialized patent court would be legally binding  for the European Patent Office, which is not part of the EU institutional framework?

Q10: Link between the EU­EPLA court and the ECJ

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. In the United States, defendants and plaintiffs has the right to appeal decisions of the specialized patent  court CAFC at the Supreme Court, via a Certiorari petition right [1]. In the case of a european specialized patent court, does parties in dispute would have the right to appeal 

on points of patent law to the ECJ via such petition mechanism? [1]  

++ Questions On EU EPLA (part2) 

Q11: Discussions in the Council on a central  court for validating patents delivered by the  European Patent Office

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. 1. When the Council and the Commission intends to conduct such in­depth impact analysis discussing  such proposal? 2. Before or after agreeing on a proposal?

Q12: Specialized patent courts in the United  States and Germany

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. Two countries, Germany and United States, has such specialized patent courts. About the specialized patent courts in Germany, here is what a german patent attorney said [1]: "We have exactly the same problem in Germany where the Senates of the Federal Patent  Court should refer basic questions to the BGH but do not do this." The experience in the United States with recent decisions of the Supreme Court which has overturned  rulings of the CAFC shows that it is important to have an independent court reviewing the decisions of  specialized patent courts. How does the Presidency intends to avoid the problem mentioned in [1]? [1]

Q13: Cost analysis for SMEs in case of patent  litigation

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. Right now, patent litigation in court is unaffordable for most small companies, and a raise in patent  litigation costs would force small players to make an out­of­court settlement.

1. How would the proposal of the Portuguese Presidency would change this in the case of multiple  instances (one national and one central)? 2. Does the Council has in hands a cost analysis prediction, preferably made by an independent third­ party?

Q14: Cost analysis for SMEs in case of patent  litigation and seperation of invalidity and  infringement proceedings

The Council is currently discussing a proposal to create a specialized patent court inside the framework  of the Treaties of the European Union. A paper from the German delegation proposes to seperate  invalidity and infringement proceedings in two different circuits. 1. Is this proposal an opportunity for patent lawyers to charge their customers twice? 2. How would this proposal impacts on the total cost of litigation for SMEs?


The Council and the Commission are discussing a proposal for a common European Patent Court but  did not consider the input from the European Parliament yet. Given the current governance problems in  the patent systems worldwide and an technocratic rule bound to patent business that tends to ignore  democratic institutions it is questionable if it is deemed positive to grant extensive competences to  patent professionals, also called "technical experts". a) When will the Council consult Parliament? b) Will the proposals be made under codecision? c) How will the Council ensure that the new court does not circumvent the European legislators  competences in terms of possible expansive interpretation of substantive patent law?

Q16: Judge academy

The EU­EPLA proposal as discussed by the Council features the proposal of a Judge academy. Judges  would require training and internships. How will the Council ensure independence of the judges from patent institutions and the business  interests underlying patenting given that patent professionals are no neutral stakeholders and cannot  take into account the wide variety of political, ethical and economical issues underlying patenting?

Q17: EU­EPLA and software patents

The former lobbyist of the European Patent Office in Brussels, Mr. Davi Sant is quoted as follows: "The acrimonious debate over the proposed directive on computer­implemented inventions might never  have arisen if the patent litigation system in Europe had been unified, thereby eliminating the possibility of disparate national rulings on the same patent matter." 1. Can the Council safeguard that the new Court will not follow the current interpretation of the EPO  regarding software­implemented inventions in respect of the EPC 52 which has received no majority in  the European Parliament? 2. Which checks and balances are provided to avoid a technocratic takeover of the controversial  legislative procedures underlying substantive patent law? 3. Does the Council share the vision that disparity of national interpretation calls for legislative  clarifications rather that a centralization of the Judiciary?

Q18: Denationalisation of national patent courts

The European Union plans to denationalize the national patent courts. The working paper of the PT  presidency features the painting of judges from many european member states as incompetent in patent  law, so that they require academy and internships. 1. Which nation is competent in patent law? 2. Which nation needs such education?

Q19: Parliament competence in Substantive patent law: or put the fox in charge of the henhouse

The Council and the Commission are aware that the Technical Boards of Appeal of the EPO established  rulings that extended a patentability to Computer Programs despite a clear exclusion from patentability  in the EPC. Right now, there is no way for the European Parliament to stop that abuse of competences.  No European Parliament ever authorized the subject matter extension. The Commission refuses to  propose a directive to ban software patents in Europe. 1. Why should the European Institutions empower a new European Patent Court to get full  interpretation authority over the validity of European Patents within its member states when Parliament  has no powers to correct abuse? 2. Why shall persons that are closely tied to the patent institutions get any say over European  substantive patent law and the court be advised and trained by people from the patent business?

Q20: Commission: Patent Quality debate

The "Putting knowledge into practice" report (INI/2006/2274) adopted by Parliament in May 2007 "calls on the Commission and the Member States to propose, in the context of the new Community  patent, a procedure for eliminating trivial patents and sleeping patents;" 1. Is the Commission aware of any means to measure patent quality? 2. What steps attempts the Commission to take in order to satisfy the request for patent quality  promotion?

+++ Q21: Harmonisation of Substantive Patent Law

While the European Patent Convention provides a minimal framework for substantive patent law which  is not fully implemented under the acquis communautaire yet significant differences between the patent  laws of the member states exist which are an obstacle to the single market. Is the Commission aware of a comparative study of national substantive patent law of EU member  states in order to identify harmonization needs?

+ Broken Governance of the European Patent Organisation

A business as such

The European Patent Office finances itself by fees from the patents which it grants. It is free to use a certain percentage of these fees. The Administrative Council has shown a tendency to treat the office as a commercial entity rather than as the public service organisation. Because of its financial independence of the EPO. This results in the continuing demands for ever more granted patents for its clients, while refusing to increase the resources of the European Patent Office accordingly. SUEPO, the Staff Union of the EPO soundly condemns this development due to the risks it poses to the quality of patent rights granted in Europe1. Thierry Sueur, of BusinessEurope (ex UNICE, and a good friend of the patent industry) said: Mr. Sueur expresses an opinion which is widely shared by the EPO staff:

I am convinced that the way the EPO is managed today (by the Administrative Council) is such that it will mean either the death of the EPO or its transformation into a cash machine

Conflict of interests leads to bad quality

The Administrative Council of the European Patent Organisation is mainly populated by representatives of national patent offices2, which are struggling over fee distribution, since their offices receive approx. 50% of renewal fees. That very governance structure creates incentives to grant as many patents as possible. Since the 1980s the EPO has lowered the standards of technicity, novelty, non-obviousness and industrial applicability and abolished examination quality safeguards so as to increase the number of granted patents by more than 10%. Many stakeholders and academics3 are criticizing this conflict of interests which tends to promote 'more patents, the better': Question: The Administrative Council runs the EPO together with the President. Most of its members work at national patent offices. What effects does this combination of national and European offices have? Professor Harhoff: It is undoubtedly good that the European Patent Organisation benefits from the experience of national institutions and experts. However, there are problems, on principle, with the fact that the EPC contracting states, or rather their national offices, profit financially from EPO-granted patents by virtue of their 50% share of the renewal fees, yet simultaneously would have to approve any measures leading to a greater focus on quality and thus to fewer patents. That is indeed an unsatisfactory situation requiring correction in the long term. The whole fee system is characterised by cross-subsidisation: expensive examination is partly financed by renewal fees. That of course creates incentives to grant as many patents as possible. The Academic Advisory Council report did in fact criticise this.
1 2 3 SUEPO: A Public Service Organisation out of control?

Notably examiners ask for quality not quantity. Their trust in the governance of the EPO has declined to 4% in 20064: the Administrative Council (AC) and President have almost totally lost the confidence of the EPO staff. In 2004, just 8% of staff expressed trust in the Administrative Council, and 28% in the President. In 2006 this figure had fallen to 4% and 7%. The EPO staff representative raised the institutional problem at the Administrative Council: When Staff Representatives mentioned such potential conflicts of interest in a recent Council meeting, some delegations reacted with irritation and even went so far as to threaten expulsion of the Staff Representatives from the Council if such allegations were made again. The Administrative Council of the EPO is mostly apolitical, most of its members are from the national patent offices, which are part of the executive power, not the legislator. The range of political views represented in this Council is pretty narrow, and they do not faithfully represent the political diversity that you can find in institutions like the European Parliament. The apolitical aspect of the EPOrg is mentioned5 by the President, Mr Grossenbacher, who is also President of the Federal Institute for Intellectual Property in Switzerland: But he cautioned that the EPO, which has seven member states that are not members of the European Union, should not be subsumed into the EU: "Would the EU dominate the EPO? Would non-EU members be disadvantaged? Another consequence would be if the EPO became politicized. In such a situation, Switzerland might have to reconsider its position viz-a-viz the EPO.

EPO examiners demonstrating their lack of trust in front of the house of the Mr Grossenbacher, President of the Administrative Council
4 5 ManagingIP: EPO chair hints at fee rises

++ EPC2000: Power to the technocrats, but no Power to the EU-Parliament

EPC2000 Article 33 says the Administrative Council can modify the EPC parts II to VIII and Part X with only 75% (Art. 35)6 of the votes of the member states (one country one voice). It means that the Administrative Council could decide to remove computer programs from the list of exclusions if they decide so. For example, the proposal to remove the computer programs exclusion of the EPC in 2000 had not generated much debate in the public at the time, while the proposed directive rejected in 2005 had generated one of the most heavily lobbied piece of legislation ever. The Staff Union SUEPO clearly outlines this problem in its press release of 2001 "A Public Service Organisation out of control?"7: Suepo: Further loosening of democratic control is contemplated This Administrative Council is currently contemplating far-reaching changes to the European Patent Convention. These changes will effectively mean that in future the Administrative Council can decide autonomously on the future direction of the law governing the award of patent rights in Europe, and the very law by which it is governed itself. No agreement by the European Parliament or any other publicly accountable European organisation will be needed and, as in all deliberations of the Administrative Council, many of which are held in secret session, there will be no participation of society at large. This opens the door to uncontrolled wide-ranging changes to the European Patent System. Recent events suggest that these changes may be against the interest of European citizens.

In its resolution on patent policy of October 20068, the European Parliament reminded the lack of democratic control in the patent system: "all legislative proposals should be accompanied by an in-depth impact analysis related to patent quality, governance of the patent system, judicial independence and litigation costs;" and mentioned the "growing concerns about undesirable patents in various fields and about a lack of democratic control over the processes by which such patents are granted, validated and enforced"

6 7 SUEPO: A Public Service Organisation out of control? 8 +V0//EN

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