Kluwer Patent Blog

29 comments

1. It is nice to consider that the ratification by Germany is a step forward towards the UPC.

   I however consider that the ratification has been acquired fraudulently because the members of Bundestag and Bundesrat have been misled by the Ministry of Justice in the explanatory not annexed to the new ratification bill.

   When you compare the accompanying note with an article published in GRUR Int. by Mr Tilmann with the actual content of said explanatory note, it can easily be seen who held the hand of the civil servants in the ministry.

   The problem of Art 7(2) UPCA has been dodged in this accompanying note as in the ratified agreement London is still expressis verbis mentioned as section of the central division. As the wording is crystal clear, Art 31 and 32 VCLT cannot allow a different interpretation, even a “dynamic” one.

   Trying to “provisionally” transfer the duties allotted to London to Paris and/or Munich, will encounter resistance from Italy, The Netherlands and lately Ireland which all want to see the London Section coming to them.

   It appears rather naïve to think that those countries will nod in approbation to the “provisional” transfer to Paris or Munich. But this is what has been suggested to the German MPs! The Brexit “gift only exists in the vivid imagination of some lawyers.

   If the notion of rightful judge has any meaning, simply ignoring Annex II of the UPCA defining the IPC classes to be dealt with in London (A, C), Paris (B, D, E, G, H) and Munich (F) is a no-go.

   A “provisional” allocation to Paris/Munich and a later transfer under Art 87(2) UPCA does not appear to have a legal basis as Art 87(2) has a totally different purpose.

   Art 87(2) only allows an administrative alignment of the UPCA with international treaties on patents and with Union law once all the member states of the UPCA have already adopted the corresponding rules in their national legal system.

   It remains a mystery how this alignment to existing legal requirements can authorise, first a “provisional” transfer of the duties allotted to London and afterwards the “final” transfer to another country. This is the opinion of the proponents of the UPCA, but the explanation given here shows that it is a legal opinion without any substance.

   The only way to deal with the problem of Art 7(2) UPCA would be to renegotiate said Art, but this would mean at least a partial, if not a full ratification of the amended UPCA. The proponents of the UPCA know too well that this would be the end of their dreams.

   I also wonder how a treaty establishing a jurisdiction in which supremacy of Union Law is expressed can be in conformity with the latter, when a UPC judge can be removed from office by the presidium of the UPC without offering him a possibility of redress. See Art 10 of the Statute of the court which is part of the UPCA.

   Due to the British influence, it was envisaged that part-time judges could be sit at the UPC. This seems to be a specificity of the English legal system. On the continent this notion is unknown, at least when it comes to decide finally on the fate of assets in civil jurisdictions. How can the notion of part-time judge be in conformity with constitutional rights in the remaining member states of the UPCA?

   As far as the two protocols are at stake, it should be remembered that the UK is still mentioned as necessary country to adopt them before they can enter into force.

   What is going on here is willingly ignoring the terms of a legally signed and ratified international agreement. Nobody had expected Brexit, but Brexit is a reality and trying to deal with the difficulties thus created in such an illegal manner is simply opening the door to a legal jungle. This is not the kind of European integration I want to see.

   I want however to make one thing clear: I am not at all against European integration, on the contrary. But I have not yet seen any convincing or compelling reasons why the UP/UPCA system will bring it.

   If it would be for all EU member states then why not? But it is not the case!
   Why have Poland and the Czech Republic signed but will not ratify the UPCA?

   When it is claimed that the translation problem is solved by the UP/UPCA system just have look at the language regimen in the rules of procedure. It is a nightmare, as only before the central section the language of the proceedings will be the language in which the EP/UP was granted.

   Furthermore, any costs for simultaneous interpretation will be costs of the case and the losing party will have to foot this bill as well. Even if they are ceilings foreseen for SMEs, it is difficult to see how they will be able to cope with such a burden. Only the simultaneous interpretation costs for the panel will be borne by the UPC.

   One can also ask questions whether the language regimen for obtaining a UP is in conformity with the London protocol.

   When it is claimed that a UP is cheaper than an EP, apples and pears are compared. The average number of validations for an EP in EU member states is between 3 and 5. It is only if all the fees for all EU member states are totted up, that it is cheaper. But in view of the average number of validations this cannot be the case!

   Last but not least, when you know that barely 30% of patents granted by the EPO belong to EU proprietors, I have difficulty in understanding why the UP/UPCA system is good for European industry in general and European SMEs in particular.

   It is thus legitimate to ask which industry will benefit from the UP/UPCA system, and especially which profession will be allowed to fill its already deep pockets. Knowing what national litigation costs, I dare imagine the costs in case of a supra-national litigation.

   When on top you see that the basic fee for infringement (11 000 €) is nearly half that for an action on nullity (20 000€) it becomes abundantly clear which party is directly favoured in case of litigation.

   As the above considerations can be seen as a resumé of various posts on LinkedIn, I have decided to publish them under my name.

   1. Even people with a long EP history may have a short memory. Art. 160 (2) EPC 1973 allowed part-time Board members for exactly the same reason as the UPCA allows part-time judges for the UPC: flexible adaptation of the number of staff necessary for a still unknown number of cases.

      1. I want to make clear that part-time judges might be a feature in some member states of the EPC, but not in the remaining UPCA/EU member states.
         Even the GFCC decided that part-time judges are only acceptable under two conditions:
         1) they are civil servants for life time;
         2) they cannot be reappointed.
         That such part time judges were acceptable under EPC 1973 is not relevant in this day and age.
         Under EPC 1973 British examiners could also act as first members in EPO examining divisions.
         All the argumentation on part-time judges in Switzerland or under EPC 1973 are thus irrelevant.
         One of the reasons Ireland has entered the race for getting the London section is that Ireland is the only important country adhering to the common law system.

         1. Attentive, I had not appreciated that Ireland had thrown its hat into the ring. Thanks for that.

            Under Prime Minister Johnson, the government in London (England) is emphasizing that the UK is constituted by FOUR great nations (England, Wales, Scotland and Ireland). Bear in mind that, even today, at least in the sport of Rugby Union, the island of Ireland is one united whole. What a visionary and future-oriented move it would be, to shift the UPC pharma-biotech operation from common law London England to common law Dublin Ireland. One might almost classify it as a trivial “fix” of a minor drafting point.

            Given the importance of fact-finding in chem/bio cases by lawyer-supervised rival, opposed, laboratory investigations, it is good to have chem/bio cases in a common law jurisdiction, where the fact-finding procedures are so strict and forensic. This keeps the opposed parties honest. This is important should the parties ever contemplate litigating the same patent in a civil law jurisdiction.

            That, I had supposed, was the whole point of allocating chem/bio to London (England). If so, preserve the logic by switching to Ireland. It’s an English language jurisdiction too. Just what those pushing the UPCA want most, eh? And usually they get what they want, eh?

            1. Maybe that is the solution. Since the Commission consider NI to be in the EU, perhaps the third court could be based in (London)Derry.

            2. Dear MaxDrei,
               Could you please be so kind and not confuse what I write with the statements of a person acting under the pseudo Attentive!
               Your point is not exempt from a certain logic, but I fear that wh at matters here is not logic but political force and support.
               The reason for London was in my humble opinion not because it was the home of common law, but because of the fact that it was the third country witch had the most patents at a given date.
               This was the same as the countries needed to ratify the UPCA in order for it to enter in force.
               On this basis, only IT or NL have a chance.
               The procedure before the UPCA was never conceived as implying cross examination in the Anglo-Saxon style.
               Why should the files in IPC classes A and C be submitted to a British way of fact-finding and not those to be dealt with in Munich or Paris? To sum it up, a nice thought but little chance for Ireland. This is the more so in view of the very lenient position of Ireland in matters of company taxes. That NL is not much better in this matter will not withhold NL to claim that London should be replaced by Amsterdam or The Hague.
               NI is only part of the EU as far as goods are concerned in order to avoid a hard border between Ireland and NI. Thinking of locating the London section in Derry is beside a nice word play a no-go.

   2. Switzerland, at least, also has part-time judges. Of course, Switzerland is not in the EU and will not be part of the UPC (if the UPC ever comes into existence). But the notion of part-time judges is not simply an English eccentricity with no counterparts anywhere in contintental Europe, as you seem to suggest, and cannot be dismissed that lightly.

      More generally, there seems to be a notion among some commentators on the UPC that anything which is even slightly reminiscent of practices from the UK should be purged now that the UK is not a participant. That the UK is not a participant is regrettable; but do we really need to get rid of anything “contaminated” by the UK approach just because of that? Surely the goal should be to take elements of the best practices from judicial systems around the world, whether in the UK, EU or elsewhere.

      Let us not forget, too, that there are still EU members (at least Ireland and Malta) which retain strong influences from the English Common Law in their own national laws.

      1. These responses concerning the appointment of part-time judges seem to distract from the more obvious problems indicate by Mr. Thomas. Part-time judges were agreed on, put in law, and signed for.

         This cannot be said of the hard-coded prominence of the UK and London in the UPC and PPA. All states signed for a specific portion of all cases being dealt with in London and for the provisional application not starting without the UK participating. If all states want to change that, they can. But the law will not change itself.

         1. @Five Cents:

            On that, I completely agree – London is there in black and white in the text of the Agreement, and it is difficult to see by what mechanism the Agreement can be amended in that respect prior to its entry into force.

            A creative solution (with tongue firmly in cheek…) would be to note that, though the Agreement specifies “London”, it does not specify “London, England”. Could this be an opportunity for a small French village to come to the rescue…? https://en.wikipedia.org/wiki/London,_France

            Back in the real world, however, I agree that the problem of the London division does not appear to be quite as easy to hand-wave away as some may wish. Or, at least, not as easy to hand-wave away in a totally unambiguous fashion.

            I suspect that we’ve not seen the last act of this long-running farce just yet.

            1. A very well known lawyer and fierce supporter of the UPCA went as far as saying that Brexit was a gift for France as the duties allotted to the London Section would be transferred to Paris, but this gift should not be discussed too heavily.
               Bad luck, Germany wants also part of the London cake!
               We can expect a hard haggling to come up when the duties of the London section will be allotted to another city!

         2. I completely agree.

            Especially, since the BverfG decision probably does not apply here.

            Aside from that, AFAIK there are part-time judges in Germany (e.g. some special BGH-senates have “Ehrenamtliche Beisitzer”, also in some state constitutional courts). And if I remember correctly, the Austrian supreme court has part-time judges for patent matters (drawn from the ranks of the Austrian Patent Office).

            So, while the institute of part-time judges might be critical (depending on their main job), it is not a novel solution…

      2. To make things clear I just said that part time judges where not a feature of the remaining UPCA/EU member states.
         I know very well that they are possible in Switzerland.
         EPC 1973 is not any longer valid.
         Under the EPC 1973 examiners from the British IPO could be members of EPO examining divisions. This time is also over!
         All those reasons are thus not relevant in this day and age.
         Even the GFCC decided that part-time judges are only acceptable under two conditions:
         1) the judges are civil servants for life time;
         2) they cannot be reappointed.

         The reason why Ireland wants the duties of the London section to be allotted to it, is exactly the fact that it is one of the common law states left in the EU. With due respect to Malta I do not think that it’s influence/contribution to common law is extremely important.

   3. According to the UPCA, the AC can amend the agreement “to bring it into line with an international treaty relating to patents or Union law”. Would Brexit not fall under the scope of a treaty relating to Union law? In my view it would. So the AC can put a line through “London”. If a contracting member state were to object, then the agreement could be re-negotiated.

      1. What is this ‘Brexit treaty’ you speak of? Could you maybe provide a link to the relevant articles of that Brexit treaty with which the text of the UPCA should be brought in line? Does that Brexit treaty prescribe how the UPCA should now be adapted?

         1. While the Brexit agreement does not have provisions which directly deal with the UPC as such, it does have the effect that the UK ceases to be an EU member state.

            Given that the UPCA defines eligibility as limited to EU member states, would you agree that the UPCA is therefore affected by the Brexit agreement, even though the latter does not explicitly refer to the UPCA?

            1. Of course the UPCA is affected by Brexit. That’s the problem we’re discussing here. But Brexit is neither a patent treaty nor Union law. And even if it were, you can’t just align the UPCA with Brexit. Brexit doesn’t tell you if the tasks of London/UK should be eliminated or transferred to FR/DE/IT/NL/…

      2. To five cents – re. your message of 11:04 pm. Yes, of course the UPCA is affected by Brexit. But that’s not what you argued. You questioned the existence of a “Brexit treaty” at all. We now seem to be agreed that Brexit exists *by virtue of a treaty*. So that is progress of a kind.

         By virtue of the Brexit treaty terminating the UK’s membership of the EU, that allows the UPCA to be “brought into line” in that it provides a mechanism for adapting the UPCA to remove references to the UK. That is a starting point, at least. And it gives the lie to those who suggest that the UPCA cannot legally be adapted *at all*, or at least not without a wholesale redrafting/reratification.

         Of course I agree with you that the Brexit treaty does not specify what the *precise solution* is, in other words what the *precise amendments* should be, beyond removing references to the UK in the UPCA. How the London division’s work is reallocated remains an open question.

         But there is, is there not, a *legal* opening here, in other words a treaty affeting the UPCA which therefore requires consequential amendments? This provides a *legal* route to making the necessary, “surgical” amendments to the UPCA, once those amendments have been agreed at a political level. In other words, the legal mechanism exists and it exists because of the Brexit treaty. How that mechanism is used, now that is a matter of politics. But the mechanism exists, nonetheless, contrary to those who seem to argue that the UPCA is set in stone and cannot be amended unless it is redrafted from the ground upwards.

         1. @ Anon,

            It is the first time that I hear this interesting story.

            One thing has to be acknowledged: the imagination of the UPCA proponents is without limit. First they told us that in spite of Brexit the UK could still continue to be a member state of the UPC. BoJo had a different opinion and this rant stopped.

            As far the Brexit treaty is concerned it has been ratified by the European Parliament and I do not remember that the UP/UPCA system has been at all mentioned in the Brexit treaty, for the simple reason that it did not exist at the time. The argument of a surgical amendment to the UPCA is thus not acceptable.

            Moreover how can it be “surgical” to “provisionally” allocate the duties of the London section to France and Germany and wait for an amendment to the UP´CA under Art 87(2) to find a definitive place for the duties originally meant for London. A bit more coherence please.

            As the EU is not a contracting state to the UP/UPCA system, this argument is clearly devoid of any merit.

            1. You make the mistake, that so many in all things relating to the UPC do, of being so personally invested in a particular outcome that any mere comment and speculation around options other than that outcome are taken as being a “proponent” in the face of all reality, or characterised as “rants”. Not so. I am simply exploring a possible argument. Is that not the purpose of this forum? Why, of all the topics discussed on this blog, does the UPC raise such personal and emotional stakes for so many people that they resort to name-calling and insults?

               Anyway. The outline of the argument that I want to explore (and that is all it is at this stage – an argument which would need to be fleshed out; NOT a proposal and NOT an endorsement of any particular outcome), as I see it, is this:

               Art. 87(2) UPCA allows amendments to the UPCA “to bring it into line with an international treaty relating to patents or Union law”.

               Is the Brexit agreement an international treaty? Yes.

               Does it relate to Union law? Yes, at least insofar as it terminates the UK’s membership of the EU.

               So does this activate Art. 87(2) UPCA?

               I think the points of possible disagreement here all revolve around this point.

               In your viewpoint (if I understand it correctly), the fact that the Brexit agreement relates to EU law is a necessary but not sufficient condition for amendments under Art. 87(2) UPCA. For it to be *sufficient*, the Brexit agreement would *also* have to specify precisely what amendments are to be made to the UPCA, including the fate of the London division. It does not, and therefore either (A) Art. 87(2) UPCA is not activated; or (B) Art 87(2) UPCA is activated, but is toothless, because the amendments are left unspecified in the Brexit agreement.

               What I am trying to explore is an alternative, and I am interested in genuine thoughts on this if emotion can be put aside.

               In the alternative position, the argument might go like this:

               The Brexit agreement is necessary and sufficient to activate Art. 87(2) UPCA to the extent that it permits the UPCA to be amended to remove any provisions relying (implicitly or explicitly) on the UK’s membership of the EU. At a minimum, this could include deletion of the reference to London in Art. 7(2) UPCA.

               I think the real point of disagreement here is what happens next. In your viewpoint (again, if I understand it correctly) it is not enough that London is deleted, there must be something specified to *replace* London. Because the Brexit agreement does not specify this, nothing can be done. In the counter-argument I want to explore, either:

               (a) deletion of London from Art. 7(2) UPCA, leaving *only* Paris and Munich, is compliant with Art. 87(2) UPCA in consequence of the Brexit agreement terminating the UK’s EU membership; or

               (b) Brexit having terminated the UK’s EU membership, Art. 87(2) UPCA is activated at least to the extent that it opens Art. 7(2) UPCA to amendment, permitting deletion of London, *and* whatever other amendment to that article the Committee may wish to make at the same time.

               I have seen lots of emotional arguments but so far have seen no real legal arguments as to why this counter-position does not work. I’m not saying that it is indeed the right answer or even that it is a desirable one. But what, in your view, are the reasons that it is wrong?

      3. The interpretation you propose is the interpretation given by the UPC proponents. But the question is which international treaty is there to adapt the UPCA for? Which part of Union law will necessitate to be adapted.

         Art 87(2) UPCA has been devised for a quick adaptation of the UPCA with legal requirements stemming for international treaties or provisions of Union law already adopted by its member states.
         Even with the most audacious interpretation according to Art 31 and 32 VCLT it cannot be used to auto-correct itself. But this is what is actually proposed.

         1. As the comment nesting seems not to allow a continuation of the discussion above, see my above comment at 19 August 4:07 PM.

            That aside, to play devil’s advocate against myself, I have the feeling that the arguments around Art 87(2) are potentially a red herring.

            To me, the strongest argument (and one that I have not seen articulated on this forum) could be summarised as follows. Art 87(2) is not subject to the Protocol on Provisional Applicaiton. It does not enter into force unless the UPCA enters into force. Thus there is no route to amend the UPCA *before* it enters into force. But if it enters into force, it does so with a London branch of the Central Division. For political reasons this is intolerable. So, we have a Catch-22 situation, as the conditions permitting the amendment cannot exist until the agreement comes into force – which it cannot do without in the first place giving rise to the very conditions that necessitate the amendment.

            This, to me, seems to be the strongest available argument against the legality of amendment of the UPCA at the present stage. The questions regarding the relationship between the Brexit treaty and Art. 87(2) are less clear-cut, for the reasons already set out in my comments above.

            1. @Anon
               As far as I am concerned, I have no interest whatsoever at stake. I am not a lawyer and I am not a qualified representative with a litigation certificate so that I am not touched in the slightest by the whole outcome.

               What interests me is that the rule of law is respected and that a treaty enters into force with the proper content.

               There is no catch 22 situation at all. If all the signatory/ratifying states would come together in order to amend the UPCA, its Annexes and the various protocols, then the situation would be clear and would not suffer any discussion. Deleting London and replacing it by an other location would instantaneously solve most of the problems.

               That this procedure would cost some time is abundantly clear and the fear of all the proponents, or if you prefer the staunch supporters, of the UPCA is that all the momentum in favour of this system would vanish.

               After all, the EU has lived for more than 4 decades without a common patent litigation system. With the average number of validations, the necessity of such a complicated and expensive system is not apparent at all for most of the industries.

               What disturbs me, when you look deep down, is that the UP/UPC system has been adorned with a series of virtues that only serve to pass off private interests as public interests. The UP/UPC system is an absolute necessity for some circles. And any means to push it forward, even the most abstruse legal constructions are good for this.

               The UP/UPC system is meant to help European industry in general and European SMEs in particular, whilst it is opening a single door to attack European industry as barely 1/3 of the patents issued by the EPO belong to European patentees. I have difficulties in seeing any interest

               The problem is that the only beneficiaries are the big industry strong enough to bear the costs and the international litigation industry helping it. it is not a little one.

               Yes to European integration, but not the one proposed with the UP/UPC system!

            2. It is well known that unless and until the UPCA comes into force, then there is no possibility to rely upon Art 87(2) UPCA to amend that agreement. I therefore agree with you that the discussion of the existence (or otherwise) of a Brexit “treaty” is entirely academic.

               Thus, for making the necessary amendments, the only option that would comply with the rule of law would be an entirely new UPC Agreement (that excludes any mention of London or the UK), as well as new Protocols to that Agreement. One has to question why that option has yet to receive serious consideration by the Participating Member States. It is almost as if they are determined to press ahead with the route that involves the highest possible number of breaches of the rule of law.

               Of course, if a new UPCA were crafted and ratified, that would call into question the validity of references to “the Agreement” in the UP Regulations … on the basis that those Regulations could not possibly be construed as referring to a FUTURE international treaty that, at the time the UP Regulations were concluded (ie well before the Brexit referendum), no one could have imagined as being necessary. I suspect that this is the reason that a proper (ie lawful) route for entry into force of the UPCA is not being contemplated. But seeking to evade the potential pitfalls of a new EU legislative procedure is in itself a subversion of the rule of law … and so is not even remotely close to a reasonable excuse for pressing ahead with the current Agreement.

2. Stepping back from the detail, I for one have the feeling, Attentive, that what trumps everything else, in this sorry saga, is Germany’s present difficulty being a “good European”, by which I mean, good enough to be able to scold other EU Member States about any backsliding on upholding The Rule of Law.

   Upholding the Rule of Law in the EU Member States east of Germany is enormously important. Far more important than any adverse consequences to SME’s which the UPCA might bring in its wake. I mean, if the first UPCA case goes all the way to the CJEU which then declares it unlawful, German government shoulders will shrug and German Govt spokespeople simply declare: So what? Not our fault. Not our problem.

   To repeat, the main thing at the moment is, we can’t let authoritarian heads of state, within our shared European Union, wilfully demolish precious and hard-won personal freedoms and basic human rights. Everything possible has to be done to arrest that trend, including Germany ratifying the UPCA.

   If Germany were to back out of ratifying the UPCA it would be seized upon by all those States busy demolishing the Rule of Law in their countries, with the argument that I’m only following the example set by Germany, not only with the UPCA but also in the very unfortunate German Supreme Constitutional Court to declare unlawful the CJEU Decision on the ECB.

   The world is becoming more and more lawless. Europe must do all it can to nurture and preserve the precious notions of representative democracy, the separation of powers, and the Rule of Law. I don’t want to give any more excuses to dictators within the EU to destroy what has been painstakingly built up over centuries.

   Apocalyptic, you may say. But we are indeed on the verge of an apocalypse, are we not?

   1. Dear Max Drei,
      I cannot but agree with you.
      The EU cannot tolerate that the judicial power comes under control of the executive in Poland or Hungary and at the same time accept that the notion of the rightful judge is trodden on just because it is in the interest of big industry and internationally acting lawyers firms.
      This is not the type of European integration I want for my children and grandchildren.
      If the rule of law is serving private interests, we will end up in the jungle and only the right of the strongest will prevail!
      No, thank you!

   2. The ECB decision of the GFCC was not really unfortunate, but in the end unavoidable. Here is a very good summary of the problem and its current status:
      https://www.spiegel.de/international/europe/stewing-conflict-between-german-high-court-and-the-eu-could-boil-over-a-f0b9c9bb-de7a-4dd0-9585-7698a2ffd8c2

3. I find it telling that the German ratification occurred on Friday the 13th.
   If the German had a sense of humour, one could have said that they did it on purpose.

4. IMHO there is only a solution: amending and re-signing the Protocol, which has been created already before Brexit because the Agreement could not have entered into force without some “adjustments”.
   The new Protocol should not make any reference to the UK and should add that if a seat is not available on the date of entry into force (e.g. London and Budapest), it should be moved “temporarily” to an already available seat (e.g. Milan).

5. Dear Patent Robot,

   You have an interesting suggestion, but the problem is not the PPA, the problem is in the UPCA itself.

   Even if the PPA is amended and the UK is deleted, the PPA cannot serve to indirectly amend the UPCA itself.
   London is in black and white in the UPCA and cannot disappear with a magical wand.

   The only way to deal correctly with the problem of Art 7(2) UPCA is to rewrite the article and to re-ratify, either the new Art 7(2) UPCA or the UPCA as a whole, as also annexes have to be amended.
   The proponents of the UPC know too well that it would be the death knell of the UPC, and this is why any other solution is preferred. Whether this solution is legal does not seem to be a problem for those proponents.

   I would also like to be a fly on the wall when the discussions about the, in my opinion illegal, “provisional” transfer of the duties allotted to London to another place takes place. We have three contenders! And France and Germany want to get the part of the cake which was given to London.
   When one remembers how arduous the haggling which ended up with the comprise in Art 7(2) UPCA was, I doubt that even there an agreement will be reached.

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