European patent judiciary in the light of the emergence of the unified patent court: challenges and debates
For more than 40 years now, the harmonisation and unification of the European patent law have been discussed. So far, the only European legal instrument regulating substantive patent matters is a European Patent Convention (EPC) signed in 1973. The EPC, however, is outside the EU’s legislative and judicial framework - once granted the European patents by the European Patent Office (a non-EU institution itself), their enforcement is entirely within the competence of the national courts of signatory countries of the EPC.
But why are we even talking about the European harmonisation and unification of patent judiciary, and why is it so important and necessary? First of all, the answers to these questions can be found in the very aims of the European Union and the history of its creation primarily as an economic union with its single market. The protection of IP rights has always been tangled up with the principle of free movement of goods and services as the latter inevitably entail the IP rights in themselves. Indeed, the EU legislator, as well as the Court of Justice of the European Union (CJEU), have gradually introduced a balanced approach towards guaranteeing the free movement of goods and services, on the one hand, and the protection of IP rights, on the other (e.g. Article 36 of the TFEU and the early case law of the CJEU such as Consten and Grundig, Hoffmann-La Roche v. Centrafarm, Deutsche Grammophon v. Metro, to name just a few).
Today, a coherent IP enforcement regime is considered the principal promoting factor for innovation and, therefore, is central to the EU’s priorities. As we can see from the Communication Paper of the European Commission ‘A Balanced IP Enforcement Responding to Today’s Challenges’, the Commission particularly sheds light on the issue of fragmentation across the Member States. In its most recent Communication Paper form November 2020, on ‘Making the Most on EU’s Innovative Potential: An Intellectual Property Action Plan to Support the EU’s Recovery and Resilience’, it once again highlights the importance of enhancing the judiciary to increase the predictability and legal certainty. Since patents are especially concerned with innovation, the heterogeneity of patent enforcement within the European Union has become especially topical and something that bothers not only the EU officials but also the actual ‘patent circles’ – those involved in patent litigation in the cross-border context in the European region.
Selective analysis of major European jurisdictions in the field of patent law – Germany, France and the UK – indeed proves the diversity between the institutional elements of competent patent courts in these countries, such as centralised (France and the UK) vs decentralised court systems (France and the UK), general legal (France) vs specialised patent (Germany and the UK) expertise of the judges, separation of infringement and validity issues, i. e. ‘bifurcation’ (Germany) vs single treatment of these issues (France and the UK).
Moreover, the analysis of the cases that have been litigated in Europe in the cross-border context also proves that in addition to institutional differences, substantive patent law matters such as infringement by equivalent (Improver Corp. v. Remington Consumer Products Ltd [1989]; Samsung Electronics Co. Limited v. Apple Retail UK Ltd. and Apple Sales International [2013]), obviousness and common general knowledge (Angiotech Pharmaceuticals Inc. and others v. Conor Medsystems Incorporated [2007]; Pozzoli v. BDMO SA [2007]), added matter (Document Security Systems v. European Central Bank [2008]), insufficiency (Novartis AG and Cibavision AG v. Johnson & Johnson Medical Ltd and others [2010]), etc., are often understood and treated differently by the national courts and judges. In simple terms, the same patent can be held valid in one European state and be invalidated in another.
The drawn picture does not really correspond to such highly valued predictability by the European Commission or the idea of a single market with a homogenous IP/patent regime. A portion of concerned patent practitioners also sees the current system as inconsistent, triggering time and money loss as well as an undesired ‘forum shopping’.
Now the question is - is the Unified Patent Court (UPC) a remedy to the existing fragmentation of patent enforcement? And if yes, what are the challenges that this court needs to overcome in order to, first, become operational and, once in force, function as a truly European unified court? Certainly, the set aim of the UPC was to address the fragmented market of patents, as also formally stated in the recital of the UPC Agreement. However, for the UPC agreement to enter into force, it needs to be ratified by 13 countries (Article 90, the UPC Agreement), including the three Member States in which the highest number of European patents had effect in the year preceding that in which the Agreement was signed. These countries, at that time, were Germany, the UK and France. Shortly, the current situation is the following: France has ratified the Agreement, Germany’s final ratification (execution of ratification act) is still pending, and the UK’s participation is no longer relevant as it withdrew its ratification in summer 2020 due to the Brexit. Now the seat of a central division reserved in London needs to be reallocated elsewhere, supposedly to Italy due to its high number of patents in force.
But most importantly, for the UPC to see the light of the day, Germany needs to finalise its ratification process. The first act of ratification was found to be void by the German Constitutional Court in 2020 as a result of the constitutional complaint lodged in 2017. The second ratification at the German parliament – Bundestag has been attacked again by the second round of constitutional complaints that are still pending as of now. The openness of the German government towards the UPC and the fact that the Constitutional Court at the first time did not rule on the substantive issues raised by the complainant, Ingve Stjerna (democratic deficit and the deficit of the rule of law with regards to regulatory powers of the UPC organs, lack of independence of the UPC judges and the violation of the EU law) but instead has only nullified the ratification act on the formal ground (lack of qualified majority in the Bundestag), keep the entire project still alive and promising. One thing is sure: the time is running against the UPC and triggers demotivation amongst the system's supporters. Should the Constitutional Court take the same amount of time with making its decision like the first time, the UPC will not become operational until 2023. Meanwhile, there are discussions concerning relaunching the system and giving France a leading role due to the situation in Germany. There is also a group of academics that calls for changes to the UPC Agreement and suggest alternative solutions for the EU patent system.
Apart from these issues that still need to be overcome to keep its promise and solve the fragmentation issue in order to function as a genuinely European unified court, the structure of the UPC needs to be tackled as well. Namely, its several central and local divisions are a danger for creating a new layer of fragmentation since these divisions will integrate the national judges bringing in their own experience and practices. In order to ensure that the judges are on the same page and harmonisation is achieved on a horizontal level, cooperation between the national judges shall be guaranteed even before the UPC comes into force. The discussions on the engagement of the CJEU into patent litigation in the EU is also present. It is notably argued that the supranational control can serve as an additional tool to harmonise the patent enforcement on an EU level and avoid the allegedly narrow view of the UPC having specialised jurisdiction.
One way or another, the harmonisation and unification of patent enforcement is a way forward to fulfil the EU’s above-stated goals. These are not only abstract or intrusive terms but may well reflect on the success rate of the EU as a patent litigation venue for European as well as international commercial disputes.
Originally published on lteclab.com - Written by Tamar Khuchua - EIPIN Innovation Society scholar Tamar Khuchua contributed to the speaker series between the LTEC Institute of University of Windsor and EIPIN Innovation Society - More blogs on Law Blogs Maastricht |