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The Politicization Of The US Patent System

The Washington Post story, How patent reform’s fraught politics have left USPTO still without a boss (July 30), is a vivid account of how patent reform has divided the US economy, preempting a possible replacement for David Kappos who stepped down 18 months ago. The division is even bigger than portrayed. Universities have lined up en masse to oppose reform, while main street businesses that merely use technology argue for reform. Reminiscent of the partisan divide that has paralyzed US politics, this struggle crosses party lines and extends well beyond the usual inter-industry debates. Framed in terms of combating patent trolls through technical legal fixes, there lurks a broader economic concern – to what extent ordinary retailers, bank, restaurants, local banks, motels, realtors, and travel agents should bear the burden of defending against patents as a cost of doing business.


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    European Unitary Patent And Court Becomes Reality

    Published on 11 December 2012 @ 7:22 pm

    By for Intellectual Property Watch

    A years’-long struggle ended Tuesday when the European Parliament overwhelmingly backed the creation of a unitary EU patent and patent litigation court system. The vote followed Monday’s approval by the Council of Ministers.

    But hard feelings over a last-minute government compromise, and continuing concerns about whether the new regime will make patenting in Europe cheaper and more accessible to smaller enterprises, continued to rankle. The European Court of Justice (ECJ), meanwhile, appears headed toward rejection of a legal challenge by Italy and Spain, who have refused to join the unitary patent system.

    The Council and Parliament agreed on a package that consists of a regulation creating a European single patent through “enhanced cooperation” of 25 of the 27 member states (Italy and Spain aren’t participating); a separate regulation setting up a language regime for the patent; and an international agreement among 26 EU countries establishing a single, specialised jurisdiction to hear patent cases.

    The compromise, made without input from Parliament members, “poisoned” the issue, said Bernhard Rapkay, of Germany and the Socialists and Democrats, who wrote one of the legislative reports on the single patent proposal. He accused the Council of gutting the ECJ’s power to enforce the patent regulation in order to lessen Parliament’s decision-making role, a claim denied by Internal Market and Services Commissioner Michel Barnier during the pre-vote debate. The EU high court will have the final say on interpreting patent protection and on language translation issues, Barnier said Tuesday.

    Many legislators said the unitary patent will cut application and translation costs, and give inventors more legal certainty. Small businesses will have more access to patent protection, said Raffaele Baldassare, of Italy and the European People’s Party (EPP), another of the three rapporteurs for this issue. He criticised the Council’s “inappropriate” behaviour but said lawmakers decided to compromise to avoid an inter-institutional squabble.

    Other members also slammed the Council. Its decision to remove three provisions that fell within parliament’s joint decision-making powers showed a “cavalier approach” to co-legislation said Evelyn Regner, of Austria and the Socialists and Democrats. Those provisions, removed “at the behest of Mr. [UK Prime Minister David] Cameron,” mean Parliament has given up its chance to have an impact on the new patent system, said Eva Lichtenberger, of Austria and the Greens/European Free Alliance. The system will be more complex, with higher litigation costs, she said.

    But others said it is about time the EU finalised a unitary patent regime. The project was a “perfect example of what is so wrong with Europe” because it took 40 years to complete despite the screaming need for a single EU patent, said Sajjid Karim, of the UK and the European Conservatives and Reformists Party. The regime will be a “milestone” in the completion of the EU single market, said Angelika Niebler, of Germany and the EPP.

    “Enhanced Cooperation” Upheld

    Spain and Italy opted out of participation because of the translation agreements, the Council said in conclusions following its December 10 vote on the patent package [pdf]. Patents will granted for the time being in only French, German or English, it said. Spain has also decided not to take part in the unified patent court agreement, it said.

    Both countries challenged the “enhanced cooperation” basis for the agreement on several grounds, ECJ Advocate General Yves Bot wrote in an 11 December opinion. They alleged that the Council lacked the authority to agree on enhanced cooperation because creation of a unitary patent falls within the EU’s exclusive jurisdiction to set competition rules necessary for the functioning of the internal market. Bot disagreed, writing that although rights arising from a patent affect trade and competitive relationships within that market, that alone doesn’t mean they relate to competition rules.

    Bot also rejected the claim that the Council misused its powers. Governments decided on enhanced cooperation because they couldn’t agree on patent language arrangements, so made use of a tool available to them under the EU treaties, he said. Spain and Italy also argued that enhanced cooperation does not respect the EU judicial system, but the court advisor said Council’s authorisation for setting up the agreement is just the premise for the adoption of other laws to give specific effect to that cooperation.

    Enhanced cooperation must be a “last resort,” when goals pursued can’t be achieved within a reasonable time by the entire EU, Bot write. The ECJ can only review whether the Council carefully and impartially examined all the issues relevant to making that determination, he said. In this case, there’s no manifest error of assessment, he said. Bot recommended that the high court reject all the arguments and dismiss the cases. The ECJ isn’t bound by the opinions of its advisors but generally follows them.

    Is Unitary Patent as Good as it Sounds?

    If a small or mid-sized enterprise wanted to validate a patent in all 25 participating states, or a large majority of them, the new system “is likely to entail a cost advantage and perhaps the availability of a wider geographic scope for that cost will encourage more SMEs to seek protection on that wider basis” in order to derive income from new markets in Europe, said Hogan Lovells (London) patent attorney Daniel Brook. But if an SME seeks protection only in a few countries – for example, an English company that does business in the UK and Germany – the new set-up offers nothing more on the prosecution/procurement side, and parties are likely to continue seeking patent protection only in those key countries, not through unitary patents, he told us.

    Whether the patent court system offers any advantages is harder to predict, Brook said. The costs are unknown but are likely to be higher than most individual national patent actions currently cost on the continent, he said. The possibility of forum-shopping inherent in the new system – there will be courts in Paris, London and Munich – may mean SMEs are embroiled in litigation outside their home courts with attendant language and travel issues, he said.

    The upside of the new court system is the potential for a single decision that resolves a patent matter EU-wide, Brook said. “That said, not many SMEs are involved in multi-jurisdictional litigation at present, so for them that benefit is unlikely to be great.”

    But the Association for Competitive Technology (ACT) industry group said a single patent system will give innovative entrepreneurs a way to become major contributors to Europe’s sustainable economic recovery. Small players will have more exposure to national markets, and standardised and harmonised patent law will give them more legal certainty, said President Jonathan Zuck.

    The European Patent Office welcomed the adoption of the unitary patent, saying it puts Europe on a par with its competitors in Asia and the US. Under the scheme, the EPO will be in charge of centrally administering the patent, levying the annual renewal fees and distributing them to the participating EU member states.

    Many open questions

    The agreement must be ratified by nine member states including the UK, France and Germany, Brook said. Given the views voiced by stakeholders, “that may not be a foregone conclusion.”

    At the 10 December Council meeting, Poland expressed concerns, and in Parliament, Janusz Wojciechowski, of the European Conservatives and Reformists, said he would vote against the proposal because Polish academics and scientists believe it’s more costly to SMEs.

    Another concern is whether the court system and agreement and regulations will be challenged in the ECJ, either by Spain or Italy once the documents are final or by unwilling court litigants wanting to slow down the process – and whether they’ll be found to comply with EU law, Brook said. Some academics called for an ECJ review earlier this year “but that appears to have fallen on stony ground,” he said.

    There is also a large number of practicalities to work out, including the judges, infrastructure of the patent registry and courts and costs, Brook said. Rules of procedure must be finalised, as must the ability of the new Court of Appeal, to be seated in Luxembourg, to ensure that the court system is harmonised regardless of which division is being used, he said.

    Governments will have a draft international accord for the patent court system ready in February, said Loucas Louca, justice and public order minister for Cyprus, which holds the current EU Presidency.

    Dugie Standeford may be reached at info@ip-watch.ch.

     

    Comments

    1. European Parliament approves single EU patent system – ComputerWeekly.com | Law Attorney Magazine | Law Attorney News says:

      [...] PatentScience AAASEuropean patent scheme approved by legislatorsDeutsche Welle (press release)European Unitary Patent And Court Becomes RealityIntellectual Property WatchBBC News -4-traders -Europolitics.infoall 224 news [...]

    2. Ted Appleby says:

      bullshit software patents for everyone. hoo-ray.

    3. The Aftermath of ‘Unitary’ Patent | Techrights says:

      [...] European Unitary Patent And Court Becomes Reality [...]


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    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

    2. You understand and agree that Intellectual Property Watch is not responsible for any content posted by you or third parties. You further understand that IP Watch does not monitor the content posted. Nevertheless, IP Watch may monitor the any user-generated content as it chooses and reserves the right to remove, edit or otherwise alter content that it deems inappropriate for any reason whatever without consent nor notice. We further reserve the right, in our sole discretion, to remove a user's privilege to post content on our site. IP Watch is not in any manner endorsing the content of the discussion forums and cannot and will not vouch for its reliability or otherwise accept liability for it.

    3. By submitting any contribution to IP Watch, you warrant that your contribution is your own original work and that you have the right to make it available to IP Watch for all purposes and you agree to indemnify IP Watch, its directors, employees and agents against all damages, legal fees and others expenses that may be incurred by IP Watch as a result of your breach of warranty or of these terms.

    4. You further agree not to publish any personal information about yourself or anyone else (for example telephone number or home address). If you add a comment to a blog, be aware that your email address will be apparent.

    5. IP Watch will not be liable for any loss including but not limited to the following (whether such losses are foreseen, known or otherwise): loss of data, loss of revenue or anticipated profit, loss of business, loss of opportunity, loss of goodwill or injury to reputation, losses suffered by third parties, any indirect, consequential or exemplary damages.

    6. You understand and agree that the discussion forums are to be used only for non-commercial purposes. You may not solicit funds, promote commercial entities or otherwise engage in commercial activity in our discussion forums.

    7. You acknowledge and agree that you use and/or rely on any information obtained through the discussion forums at your own risk.

    8. For any content that you post, you hereby grant to IP Watch the royalty-free, irrevocable, perpetual, exclusive and fully sub-licensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part, world-wide and to incorporate it in other works, in any form, media or technology now known or later developed.

    9. These terms and your posts and contributions shall be governed and interpreted in accordance with the laws of Switzerland (without giving effect to conflict of laws principles thereof) and any dispute exclusively settled by the Courts of the Canton of Geneva.

     

     
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