After BREXIT, ratification and then withdrawal by the UK, a referral to the German Constitutional Court (“Bundesverfassungsgericht“) and finally a ratification by its parliament, the UPC project is once again blocked in Germany, as previously before the Bundesverfassungsgericht. Like the phoenix, the project is constantly reborn. But should we resist, or should we surrender? What think of all this?
First of all, the ratification process seems endless, so much so that one wonders about a possible outcome in the long run. Some people no longer believe in it. It is true that this is not the first project and that, since the 1975 Luxembourg Convention, the members of the European Patent Organization have been trying, in vain, to establish a common jurisdiction. Meanwhile, the USA have set up the Court of Appeals for the Federal Circuit (“CAFC”) in 1982, which has proved its worth since. So what are we waiting for?
We must admit that UPC project does not seem to arouse an overwhelming enthusiasm in the media and among our governments. A system designed above all by its potential future users with the interlude of the EPO, the unified jurisdiction will not shine for its simplicity or its accessibility. We are notably thinking of the distinction between European and unitary patents and the opt-in/opt-out mechanism. In any case, this is a system designed by some patent users, and which tends, in contrast, to exclude others. Then the cost of the unitary patent will undoubtedly be a powerful disincentive for a number of actors who do not have the means (start-ups, SME-ETI in particular). Not to mention the fact that if companies are mainly involved in the development of the project, it also results in marginalization of the States. Thus, the choice not to make a jurisdiction integrated into the European Union, as with trademarks and designs, is not only regrettable, but also certainly explains the lack of enthusiasm States have shown for relaunching the process (see here). Altogether, the shortcomings of the UPC have been the source of its constant contestation by academics (see here for instance).
But let the reader make no mistake about it. I support UPC. At the same time, I admit finding it difficult to understand why recent events have not been considered as an opportunity to relaunch this project in a more ambitious direction. And, considering the situation in Germany, I believe that France should tackle the issue head on. However, it must be turned into a true European project. We also must plead for Paris to be the epicenter of this jurisdiction. The idea of several central divisions does not make sense, whereas centralization would be logical as much as it would facilitate the functioning of the system. The choice of Paris would be well-founded economically (France is the second largest market in the Europe), historically (France was at the heart of the construction of European Patent Law with the first patent legislation ever and with the Longchambon report long after, and the European office is already located in Germany), and geographically (Paris is a showcase at the center of Europe).
Therefore, in my opinion, defending the UPC will in any case mean recognizing that the project needs to be reformed. But at the very moment when the German authorities are jeopardizing the UPC, France must take its place as European leader in the field of innovation and take the lead: the future of innovation protection in Europe is at stake!
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“the German authorities are jeopardizing the UPC”
Woha, are they? By checking its constitutionality? Really?
Without, in any way, prentending to be an expert on the UPC, I cannot understand the statement “the German authorities are jeopardizing the UPC”. Are the democratic processes not running their due course in Germany at the moment? Reform, perhaps, yes. But isn’t evaluation of the project by the BVerfG also a test, that, if passed may lend credibility to the project? And if not, may occasion reform.
Also I cannot see how pleading for “Paris as epicenter” turns the UPC in a “true” European Project? From the French perspective perhaps, from the perspective of the rest of Europe perhaps less so?
“We also must plead for Paris to be the epicenter of this jurisdiction. ”
Sorry, but because of what exactly? So far Paris is not exactly known as an important venue for patent litigation. France does not even have a real patent office (in the sense of actually examining applications and having a large number of examiners). And why should the UPC be created in the “second largest market in the Europe”? Why not the largest?
Yes, the UPCA should be completely reworked. No, the UPC should not be based in Paris. Rather it should be in Munich or The Hague, where there is already a critical mass of professionals (forget about market size, the market would after all be the participating countries).
To me, choosing court sites because of political reasons and according to practical reasons is emblematic for some of the failures in setting up the UPC. A “clean” and streamlined procedure and organization seem to have been goals with low priority. 🙁
But I fear nobody will work on a “clean” solution. After all, it would mean creating an EU patent office (without the non-EU members of the EPC). And then setting up a court responsible for appeals against decisions of this EU patent office plus dealing with validity and infringement (possibly even with an administrative law section covering labour law for this office?). – I don’t expect to see this happening during my professional life.
In summary, it is not “the German authorities […] jeopardizing the UPC”. It was jeopardized by the “authorities” devising a bad agreement without caring for basic legal rules…
Every lawyer considers his home jurisdiction to be the best. How could he not? The EPC has 38 Member States and presumably every patent lawyer in every one of them “yields to no man” in their contentions that their home jurisdiction is the best.
Hence it is no surprise to read now from a French correspondent that:
“France must take its place as European leader in the field of innovation” by having the seat of the UPC in Paris.
The piece could have been drafted by the EPO’s immediate past President, Monsieur Battistelli, also a Frenchman, who, disgracefully, went as far as to cripple the EPO Appeals Directorate in order to give Paris a free run to establish itself as the maker of pan-European patent law.
This all illustrates both the beauty and the ugliness of life within the EU. We have the beauty and elegance of the patentability provisions of the EPC and the economy and rigour of the EPC case law written at the EPO. And then we have the demeaning scrabbling for opportunities under the UPC to make pocketfuls of lovely money.
Until BREXIT, the UK used to be the Tie-breaker, between Germany and France. it is a tragedy, at least in patent law in Europe, that the UK has left the room. Frankly, for me, the Munich/London/Paris split of the UPC Seat was a plus point. Germany does engineering litigation well. English law fact-finding is good for chem/bio where each side might need to inspect the other side’s experimental evidence, and Paris would handle the more intellectual (and hand-waving) “do it on the internet” sort of patent case.
Full support for the previous comments: constitutional review of laws is part of a democratic state. One can wonder why the BVerfG did not explicitly raise all its concerns in reaction to the first complaint.
Incidentally, the Hungarian Constitutional Court has also raised concerns: it seems convenient to forget it.
The Benelux countries have a common court that applies national law (identical law passed in the three countries). Maybe this should have served as example.
Dear Maître Dhenne,
Sorry but your claim for the UPC to be located in Paris is an old one, and previous commenter have clearly shown that this is vain and will certainly not help to insure the future of the UPC.
It was the haggling between France, the UK and Germany which ended with a typical EU compromise, a bit for everyone. Nobody is pleased, but nobody can be completely displeased. And so we ended with Art 7(2) UPCA, and one of the actual stumbling blocks.
Do you really think that Paris alone will solve the problem? We are exactly at the same point we were when the decision to split it not in two but in three parts was taken.
It is not the German authorities who are jeopardizing the UPC. The UPC was jeopardised from day 1 as it started with the wrong premises. In view of the low average number of validations in EU member states and of the low number of true multinational litigations, the UPC is as useless as a plaster on a wooden leg. A proper study of the pro’s and con’s and of the economic viability was never undertaken. That is also why we ended up with an extraordinary level of procedural fees.
The UPC has also been jeopardised by the bunch of internationally acting lawyer firms having pushed for the UPC which were sitting in the Drafting committee for the rules of procedure of the UPC. They, and the big industry, used SMEs as a fig leaf behind which they could act in all impunity and lured politicians, be it at national or at European level, into false hopes. At the moment they also have the support of an EU Commissioner who is no more than a lobbyist.
The large internationally active lawyer firms have soon realised that the UPC could even better fill their already deep pockets. The big industry helped them as they also realised pretty soon that with this system they could crush smaller entities. Why do you think that Poland or the Czech Republic do not want to join the UPC?
The decision of the founding fathers of the EPC to separate the grant from the use of the title has made impossible to bring the whole EP patent granting and litigation system under the EU.
It is in my humble opinion impossible to combine an open convention, the EPC, with mechanisms of a closed convention, the UPCA. Reconciling those two entities is doomed to fail. That some academics want to have a purely EU grant and litigation system is certainly nice, but it would mean turning the wheel back to the mid-sixties of the last century. Forget it!
The few member states of the EU at the time have failed to reach an agreement. Do you think they would be more capable of doing so nowadays? It was the pressure of the PCT which forced Europeans to act. That the only input of the Commission and of the EU parliament in matters of European patents was to come up with the notion of “enhanced cooperation” says a lot.
Relaunching the UPC or something similar that “must be turned into a true European project” is illusory! And that Paris wants to lead the whole thing is at best preposterous, not to say ludicrous!
When you come up with an alleged historical role of France in patent matters you remind me of all the Brexiters who are hoping that the UK goes back to its past glory and power. At this rate Italy could go back to the Venetian patent act, and also claim the lead.
The future of IP litigation in Europe lies with an enhanced cooperation of all judges dealing with patent validity and litigation in Europe, and not just limited to EU member states. Regularly bringing judges together can achieve more and at a much lower cost than any UPC of whatever kind.
Rather than fighting for something like the UPC it would be much better to fight in order to give the Boards of Appeal of the EPO their true independence and to be merely satisfied with an increased perception of their independence.
If you fight for this I will be with you, but not for what you want at the moment, which is no more than a playground for lawyers wanting to increase their revenues. That some German judges (I have not hear about others, but cannot exclude it) complain about the money they lose due to a belated opening of the UPC is adding insult to injury.
@anonymous : Think about the after work situation in The Hague and the food in Munich and give it a second thought 🙂
As was commented previously, the hold up of the German ratification as a result of the complaint to the FCC is effectively impeding the will of the people. As such, there is every reason for the complaints to be made public as opposed to the current “behind closed doors” procedure.
Establishing a central court in a EU country which is not high on the list of favored states for litigating IP would make sense (maybe one of the eastern states?). Otherwise there will always be the impression that the court has only been establsihed to favor one’s friends in the system.
Adopting a EU patent enforcement directive to harmonize patent infringement cases in all EU member states and creating an IP section at the CJEU would solve all issues and make the UPC completely useless.
Noteworthy seems the author’s repeated reference to “we” in this piece. Would the author mind telling the readers who “we” is? The group of people with vested interests conspiring – in the truest sense of the word – to ram down the public’s throat an unlawful project for the profit of a selected few and to the detriment of many?
If the UPC is to be reformed, which I believe is absolutely necessary, then amendment of the UPC Agreement would be the first (essential) step. However, that Agreement cannot be amended unless and until it enters into force. Therefore, “reforming” the UPC project necessarily means building an entirely new project, including new EU Regulations to replace those that are inextricably tied to the current UPC Agreement.
This means that, with regard to reform of the UPC project, the decision is between wholesale reform or nothing at all. There is no guarantee that a new UPC project would clear all of the same hurdles that have been cleared by the current project. Therefore, unsurprisingly, the pro-UPC lobbyists have put their entire weight behind the option of no reform at all. However, by rights (ie under any sensible interpretation of the provisions of the Vienna Convention), that option ought to be pushing up the daisies alongside the fabled Norwegian Blue.
Conclusion: do not expect the UPC’s strongest supporters to give up flogging the current horse unless and until the FCC delivers a second opinion upon its evident demise.
It is always interesting to see that centralization appears to be the best solution when the claimed central point is at the home of the one advocating for it, while it is the worse practice when the central point is located abroad, in the UPC case even only decentralized… I am a French citizen and prefer decentralized courts where every member can contribute its own views and perspectives. Diversity of views is always better than silo thinking
“A proper study of the pro’s and con’s and of the economic viability was never undertaken. That is also why we ended up with an extraordinary level of procedural fees.”
The only “economic” justification on the UPC dates from … 2009, for a treaty signed in 2012, and when the court fees of 2016 were not even known!
Taking a broader perspective, one may even wonder why any court ought to be financed only by the fees paid by the parties. Equitable, reasoned, and timely judicial adjudication of disputes, after all, benefits even non-parties to any given case, and the public in general.
Accordingly, it is not outrageous that the states contribute to the operating costs of the courts exercising the judicial power in their name. In fact, considering that high court fees may deter some parties from asserting all their rights, it is a very reasonable position.
In this context, the fees resulting from the requirement that the UPC be “self-financed” are not simply high. They are outrageously high. Requiring that a party pay more than ten thousand euros just to file a counterclaim for nullity will deter many alleged infringers from even trying to defend their case!
And as an exercise, I would suggest that one try to tell, for instance, a US federal judge that the fee for filing a civil action in their jurisdiction ought to be set above ten thousand dollars…
Before I forget, can I please emphasize the following:
The suspension of the ratification proceedings impedes the clear will of the people as clearly expressed in several votes by the German Parliament, in which the legislation was approved by a large majority. This suspension clearly violates the very core of democracy. This cannot be, for, as a wise man has recently stated: “Ultimately, at a constitutional level, the will of the people still comes first.”
Also, the fact that this suspension has been concocted in a private phone call between the Federal President and the FCC is an outrageous violation of transparency and the public’s god-given right to know whatever it wishes (with the exception, of course, when my interests are affected which self-evidently excludes any transparency from the outset).
Moreover, the FCC is not even allowed to grant an interim order against the Federal President as this is only possible against existing laws (and don’t look into sec. 32 BVerfGG, there’s nothing to see there).
Further, please note that the first constitutional complaint was only upheld partially and on formal grounds and with the closest possible vote of 5:3 judges and expect the new complaints to be thrown out imminently as obviously inadmissible and/or obviously unfounded, since the arguments asserted are exactly the same that were rejected in the first complaint already.
So those of you also deeply invested in making the unlawful UPC scam a reality and contribute to our financial common good, please don’t worry. The phoenix will once again rise from the ashes and we will get there eventually, whatever it takes and regardless of the consequences for society at large. Our common good will prevail. It always has.
Please do not waste your irony on the pro-UPC lobbyists. It will have no effect upon them. All they need is to find an argument that they can PRETEND is plausible, and to then use that as an excuse for asserting that everything in UPC world is perfectly in order.
If you need an example of how implausible legal arguments can be wheeled out as part of a strategy of avoiding engaging with substantive issues, then look no further than the assertions of unconstitutionality now being made across the pond. It comes from the same playbook: just simply find some legal “expert” who is prepared to stand behind whatever ludicrous and nonsensical interpretation of the law suits your purposes and then argue long and hard that you are merely upholding important legal principles by taking a stand against common sense.
Very well said, Wouter. The phoenix will once again rise from the ashes and all our efforts will pay off in the end! Ultimately, this is for our common good, what could be wrong with that?! Transparency and democracy will win.
Thank you for this, brother. Hail phoenix! Btw, don’t you have further shills bots at hand who could populate the patent blogs and leave nonsense comments under UPC posts to divert the attention of the readers away from the questions that really matter? Most of the more versed UPC critics appear to slowly wake up to our brilliantly thought-out plan, even daring to increasingly doubt our non-existent honesty. Just send more shills over to post more nonsense and bury the mindful and well-formulated comments by UPC critics in BS, making it more difficult for the uninformed to find out about the true issues. After all, what are we paying all these associates for?! I’m totally with you, our common good will prevail!
If the members of the Bundestag and the Bundesrat would have been properly informed and the real problems facing the UPC taken into account -supremacy of Union Law-status of the London Section- then I would accept that the will of the people has been effectively impeded by the attitude of the GFCC.
The first topic was ignored and the second belittled as the interpretation given in the explanatory note to the new ratification bill is in manifest contradiction with the Vienna Convention on the Law of Treaties. I do not expect that all members of the legislative are aware of all details, but the information given to them has to be neutral and factual. This was not the case.
When you look at said explanatory note, which was actually written by heavy pro-UPC lobbyists, the manifest conclusion is that will of the people has been willingly misled, so that the intervention of the GFCC has to be welcomed.
From the beginning the pro-UPC lobbyists wanted the UPC to come into force as quickly as possible in order to obtain a kind of fait accompli. By pushing it through at any cost and at any rate they hoped that no jurisdiction would dare putting the carefully set up money machine into jeopardy.
Brexit was a first blow to this hope, and the first complaint before the GFCC a second one. How often have we heard that the complaint will be dismissed at once as the complaint had no merit? The same record is playing again with the second one. Dear lobbyists, it is getting tiring to hear again the same tune.
By keeping flogging the dead UPC horse pro-UPC lobbyists still show that they have not given up their hope of the big buck. Hope dies last, but in the present situation, pro-UPC lobbyists are becoming a pain.
Trying to locate the UPC in one of the eastern states is a nice idea, but rather naive. The problem is that the present text of the UPCA says something quite different. And on top of it the Czech Republic and Poland have declined to ratify the UPC. In Hungary there are constitutional problems, and the UPC cannot be ratified without an amendment to the constitution. Where else should it then be located in Easter Europe?
When on top one sees how those countries want to get the money from the EU, but try as much as possible not to abide with fundamental values like free speech and independence of justice, it can only lead to hair raising.
Good comments from Extraneous, but could somebody tell me what is the fee set by the USPTO to entertain a Request for review of the validity of a patent duly issued by that Office. It also is of the order of EUR 10,000, is it not? If so, is that not even more scandalous?
Per the USPTO fee schedule, the Inter partes review request fee is 19,000 USD for up to 20 claims, and an additional 375 USD for each claim in excess to 20. And there are no reductions for small and micro entities!
It is worth noting that the USPTO describes itself as… “a fully fee-funded agency”. See, e.g.: https://www.uspto.gov/about-us/performance-and-planning/budget-and-financial-information
Not only art. 7(2) UPCA is an issue but also art. 19(1) and art. 35(1), for the same reasons.
It was not smart (euphemism) to locate divisions of the UPC in specific states and not to require the ratification of these states for the entry into force of the UPCA.
The discussion about the height of the fees is distracting from the real issues.
I do not care what the fees are in the US, what matters is the fee level here in Europe. And at the UPC it is extortionate to say the least. SMEs have repeatedly said that the fees are much too high for them. They hardly have the funds to file European applications, and even less when it comes to defend themselves. The ceiling on the recoverable costs are not a safety net they can rely on.
It is not uncommon, and I have seen it many times, that big industry either buys applications from SMEs just to put them in a cupboard, or inundate them with a series of legal challenges so that in the end they cannot afford them and go bankrupt. For any patents left, they cannot any longer afford annual fees so that they even have the patents for free.
In spite of the fiercest proponent of the UPC say, the UPC is not for SMEs, and even the present blogger agrees with it. The UPC is a machinery set up in order to crush SMEs by big industry helped by wilful lawyers which can at the same time make the big buck.
When it comes to Art 19(1), i.e. to Hungary, the ratification of the UPC is far from being at the door as there are constitutional problems. When it comes to Art 35(1), Portugal has ratified, against the clear message from the local representatives considering that it was damageable to local industries. Guess who was the head of the PPTO for quite a while? I have not heard for a long time that that Slovenia was making any attempt to ratify.
May be Mr Tilmann and his friends will explain to us that, should those countries not have ratified the UPCA before the UPC could come into action, the duties foreseen to be located in Budapest and Ljubljana could be temporarily transferred to other locations, for instance Paris and Munich. This would then allow to decide on a proper location later, for instance at the first amendment of the UPC. Seeing how far their intellectual flexibility can go when it comes to defend their private interests, I would not put it past them!
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