The European Patent Situation by uee19558

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									                     The European Patent
                                                                                                            Furthermore, the significant differences
                                                                                                        between the various national patent regula-
                                                                                                        tions lead to diverging and sometimes con-

                         “Situation”                                                                    flicting judicial decisions between
                                                                                                        contracting states. The same patent may be
                                                                                                        maintained in France, amended in
                                                                         Office (EPO) should            Germany, and revoked in the United
BY KEVIN CASEY OF STRADLEY RONON STEVENS & YOUNG, LLP AND                deliver     both     the       Kingdom. This is what we call “legal
ANNE-MARIE PECORARO AND NASSIM TERKI OF BIGNON LEBRA & ASSOCIÉS          European and the               uncertainty.”
                                                                          Community patent. To              Another drawback is forum shopping,
                                                                          a certain extent, the
                                                                          European patent sys-          whereby the most favorable national court
                                                                          tem has proven to             to institute litigation is selected for pro-
                                                                          work, even if it is           ceedings.
                                                                          regularly criticized.             These drawbacks reduce the incentives
                                                                          Nevertheless, it is           to apply for a European patent and under-
                                                                          obvious that the sys-         mine the competitiveness of the European
                                                                          tem must be improved,         economy, hence the need for new solutions,
                                                                          with specific emphasis
                                                                                                        which have been in development for the
       Kevin Casey            Anne-Marie Pecoraro          Nassim Terki   on the judicial aspect.
                                                                          The proposition of 26         past decade.
Kevin R. Casey is Chair of the Intellectual           European judges on November 4, 2006, on
Property Group and Co-Chair of the                    rules and procedures of a European Patent         THE PROPOSED EUROPEAN PATENT
Alternative Dispute Resolution Group at               Court appears to be a decisive step in this       COURT
Philadelphia-based Meritas firm Stradley              direction.                                            Twenty years after the EPC came into
Ronon Stevens & Young, LLP  .                                                                           force in 1977, the European patent system
                                                      THE EUROPEAN PATENT SYSTEM AS                     has proven to be, in some ways, unproduc-
Anne-Marie Pecoraro is a partner with                 SEEN FROM EUROPE: SOMEWHERE                       tive, uncertain, costly and, as a result, crit-
Paris, France-based Meritas firm, Bignon              BETWEEN CRITICISMS AND GREAT
Lebray & Associés, and serves as Chair of                                                               icized.
                                                      EXPECTATIONS                                          The EPC members tried to resolve those
the Meritas Intellectual Property Group.
                                                          The European patent is neither a              issues by the draft European Patent
Nassim Terki specializes in Intellectual              national patent nor a unitary patent for the      Litigation Agreement (EPLA), which is a
Property with Bignon Lebray & Associés.               entire territory of the contracting states to     proposed patent law agreement designed to
Meritas is an international alliance of inde-         the European Patent Convention (EPC). It          create an optional protocol to the EPC
pendent law firms located in more than 60             is a mere granting system consisting of a         which would commit its signatory states to
countries.                                            single application process through either         an integrated judicial system, including
                                                      national offices (in France it is sometimes       uniform rules of procedure and a common
                                                      compulsory2) or the European Patent
INTRODUCTION                                          Office, which, eventually, centrally
                                                                                                        appeal court.3
                                                                                                            On February 16, 2004, a so-called

U
      .S. companies that base their busi-             searches and examines applications for
      nesses on innovative technologies                                                                 Working Party on Litigation, mandated by
                                                      European patents. Title(s) granted may
      often protect their investment through                                                            the European Patent Organization Members
                                                      then be valid in the contracting states’ ter-
patent protection in the United States.                                                                 in 1999 to propose draft texts on a patent
                                                      ritories specified in the application.
When those companies export their tech-                                                                 integrated judicial system, came up with a
nology, or seek to license their patents                  In a nutshell, the current European sys-
                                                      tem has three main advantages thanks to           draft statute for the European Patent Court.4
abroad, they need to secure additional                                                                      Finally, on November 4, 2006, 26 patent
patent protection in their targeted markets           the centralized application process: (1) cost
                                                      reduction if the applicant seeks protection       judges proposed rules and procedures for a
because U.S. patents cannot be enforced
                                                      in more than three European countries; (2)        to-be-established European Patent Court.
beyond U.S. borders.1 Once patent protec-
tion is secured in the foreign countries of           a central grant procedure in one of three         These principles were adopted unani-
interest, U.S. patent owners often must con-          official EPO languages (German, French,           mously by judges from all over Europe pur-
sider strategies to enforce those rights.             and English); and (3) a high-quality prior        suant to article 17 of the draft statute of the
   European and international companies               art search and examination.                       European Patent Court, which allows a
alike continue to seek intellectual property              In reality, this system has led to a situa-   committee of judges to draw up proposals
protection with a single title covering the           tion where a dual litigation system (the pro-     regarding the rules of procedure for the
whole European continent. The establish-              cedure is split between the EPO as to the         European Patent Court.
ment of a so-called Community patent has              validity of the title and national courts as to       This European Patent Court, under the
been delayed several times since the con-
                                                      infringement issues) involves numerous            aegis of the Court of Justice at Luxembourg,
cept was first proposed more than 30 years
ago. The existing European patent system              drawbacks in terms of translation and liti-       is a keystone for the creation of an inte-
and the to-be-established Community                   gation expenses (hiring of local attorneys        grated European judicial system as
patent system seem to be complementary,               and experts, payment of court fees in the         required by the contracting states of the
and in the future the European Patent                 states where the litigation is initiated).        European Patent Organization.

14                                                  INTELLECTUAL PROPERTY TODAY        FEBRUARY, 2007
RULES AND PROCEDURES OF THE                        COEXISTENCE BETWEEN THE EXISTING                the lack of democratic control of the OEB
EUROPEAN PATENT COURT5                             EUROPEAN PATENT SYSTEM AND                      system. In this context, even the European
                                                   COMMUNITY PATENT SYSTEM                         Parliament resolution of October 12, 2006,
   The European Patent Court would deal                                                            affirms that “there have been growing con-
                                                       The European Patent Office is not a
both with infringement and revocation                                                              cerns about undesirable patents…in vari-
                                                   body of the European Union (EU). In fact,
actions (legal action on the patent title) on      there are two international organizations       ous fields and about a lack of democratic
European patents, that is, with the whole          and two projects that are developing sepa-      control over the processes by which such
patent litigation from the start of the proce-     rately. Therefore, the potential conflict       patents are granted, validated and
dure to the measures that can be ordered by        between the EU’s project with the expected      enforced…8
                                                   “Community patent” and the planned                  The reluctance of the EU on the whole
courts. This European Patent Court would
                                                   European patent litigation system has been      European patent system is, without any
also deliver non-binding opinions on                                                               doubt, the main issue hindering the estab-
                                                   exacerbated because European patents will
diverse points of European patent law to                                                           lishment and the authority of the European
                                                   continue to be granted.
national courts, with a view toward harmo-             In theory, collaboration between the two    Patent Court.
nization, and would impose securities,             organizations, whereby an applicant for a           However, some practitioners think that
sanctions and fines, and order provisional         European patent might choose the European       creating the European Patent Court will be
and protective measures.                           Community area, should be beneficial and is     helpful because it will reduce litigation
                                                   expected. In this direction, the EU Internal    costs by eliminating the division of the pro-
   At a lower level, the Court of First
                                                   Markets and Services Commissioner, Charlie      cedure for a European patent.
Instance with a Central Division at                                                                    Others think, because the EPO has
                                                   McCreevy, states, “the Community patent
Luxembourg and a number of Regional                and the EPLA are not mutually exclusive         issued some patents based more or less on
Divisions located in the participating states      initiatives; indeed, our aim should be to       computer-implemented inventions and has
would also have some jurisdiction. For             ensure that they converge.”6                    ignored the European Parliament’s rejec-
instance, national courts would retain juris-          Nevertheless, in reality the EU looks       tion of the Patentability of Computer
                                                   unfavorably at the EPLA and, conse-             Implemented Inventions directive, the
diction to order provisional or protective
                                                   quently, the European Patent Court. Some        underlying risk is that the European Patent
measures pursuant to their national law,                                                           Court will validate such patents.
                                                   practitioners7 even consider that there is a
and order seizure of goods.                        sort of quarrel between the OEB, which              Others point out that the judges to be
   Finally, a Court of Appeal would hear           issues the European patent, and the EU          appointed will be chosen from the mem-
the challenges to first instance decisions         bodies. For instance, the EU Commission         bership of EPO boards that issue the
and would also act as Facultative Advisory         has specified that pursuant to the              European patents, creating a lack of
Council.                                           Regulation (EC) 44/2001 of December 22,         democracy and weakening the separation
                                                   2000, EU member states do not have the          of power principle.9
   The procedure will be divided into three
                                                   power to sign the EPLA.
“three-month phases” (written, interim and                                                         THE U.S. WATCHES & WAITS
                                                       One of the main issues is the
oral) to ensure that a first instance decision     Patentability of Computer Implemented              Meanwhile, the U.S. monitors the efforts
is rendered within a year from the begin-          Inventions (see part VI for an American         “across the pond.” There have been numer-
ning of the procedure.                             perspective on this subject). The other is      ous attempts to break the political deadlock

                                                 INTELLECTUAL PROPERTY TODAY      FEBRUARY, 2007                                             15
in the debate on Europe’s patent regime over        as Germany, the United Kingdom, France,           ENDNOTES
the past 30 years. As Europe continues to           and Italy provides cost-effective protection.     1. Like other intellectual property (IP) rights, the
struggle over the requisite language transla-       Such a strategy precludes competitors in              rights conveyed by patents are specific to the
tions for a single Community patent, and            the pan-European market from exploiting               country that grants them. As the value of patent
                                                                                                          portfolios increase in our modern global economy,
whether a Community or a European Patent            the patented technology across that market.           one challenge is how to protect patent assets in a
Court would be better or worse than the 25             Another practice focuses on the problem            company’s established foreign markets and from
or 31 national patent courts in the member          of enforcing patents in different national            potential infringers. See generally International
states or EPC members, other regions                                                                      Patent Litigation: A Country by Country Analysis
                                                    legal systems. Some large, multi-national
                                                                                                          (BNA) (M. Meller ed., 2006 supp.). There are a
around the world make strides that may              companies are thinking about avoiding that            few exceptions to the country-by-country rule of IP
leave Europe economically disadvantaged.            problem by forming a group whose mem-                 protection. It is possible, for example, to obtain
    U.S. businesses, among others, have             bers agree to arbitrate their IP disputes             one, European-wide trademark registration,
long complained about the fragmentation                                                                   through a European Community Trademark, that
                                                    (regional or even global) in one arbitra-             can be enforced in each of the 25 countries of the
and inefficiency of the EU patent system.           tion.12 Thus, alternate dispute resolution            European Union.
Equally troubling is the lack of a harmo-           techniques such as arbitration and media-         2. Pursuant to article L. 1614-2 § 2 of the French
nized, EU-wide regime for solving patent            tion might help resolve patent disputes.              Intellectual Property Code, the “application must
disputes. In order to settle a legal disagree-                                                            be filed with the National Institute of Industrial
                                                       Even if a single patent and enforcement            Property if the applicant has his place of resi-
ment over patents, parties are currently            system were adopted in Europe through the             dence or business in France and is not claiming
forced to obtain separate rulings in the dif-       EU or the EPC, all issues of concern to U.S.          the priority of an earlier filing in France.” On this
ferent member states, an inefficient, costly        businesses would not be resolved. An                  subject, see Albert Chavanne, Jean-Jacques Burst
                                                                                                          par Jacques Azéma and Jean-Christophe Galloux,
and time-consuming exercise. The                    important topic for U.S.-based industry is            “Droit de la propriété industrielle, ” p. 483 (2006,
European Commission estimates that liti-            the patentability (or lack of patentability) of       Dalloz).
gating a small-to-medium sized patent case          business methods, surgical methods, thera-        3. See the Wikipedia encyclopedia entry for
in the United Kingdom alone can cost up to                                                                “European Patent Litigation Agreement” at
                                                    peutic methods and computer programs in
                                                                                                          <http://en.wikipedia.org>.
$2 million at the trial level and up to $1.3        Europe. Although inventions directed to           4. See the EPO Web site at <http://patlaw-
million more before the appellate court. By         such technologies are patentable in the               reform.european-patent-office.org/index.en.php>
comparison, a case before the European              United States, they are not in Europe.            5. See the full text of the Principles Relating to the
Patent Court, as proposed by the EPLA,                                                                    Rules of Procedure of the European Court at
                                                                                                          <http://www.ipeg.com/_UPLOAD%20BLOG/
might only cost up to about $500,000 at the         CONCLUSIONS                                           Venice%20Rules%20of%20Procedure,%20
trial court and under $300,000 at the                   Practitioners outside of Europe believe           2006.pdf>.
appellate level.10                                  that, although it is unlikely that either the     6. Tove Iren S. Gerhardsen, in Intellectual Property
    In addition to the economic concerns,                                                                 Watch, “European Parliament To Vote On Future
                                                    European patent or the European Patent                Patent Policy Resolution” At <http://www.ip-
the current European patent system raises           Court proposal will succeed in the near               watch.org/weblog/index.php?p=423&res=1024
peripheral issues for U.S. industry. The            future, it seems clear to all that the current        &print=0>.
majority of patent applications filed world-        European system cannot continue for the           7. Paul Van den Bulk, “Le projet d’Accord sur le
wide are processed by one of three patent                                                                 règlement des litiges en matière de brevets : un
                                                    long term.13 The system is chaotic and frus-          sujet qui fache l’OEB et l’UE” at
offices: the U.S. Patent and Trademark              trating to industry. Charlie McCreevy told            < h t t p : / / w w w. d r o i t - t e c h n o l o g i e . o r g /
Office, Japan Patent Office and European            the EU foreign ministers, “there is an over-          1_2_1.asp?actu_id=1217>.
Patent Office. These three offices formed a         whelming desire for a patent system which
                                                                                                      8. See <http://wiki.ffii.org/EplaReso061012En>
Trilateral Office in 1983 with the goal of                                                            9. According to article 2(b) of the draft statute of the
                                                    is simpler [and] more cost-effective. . .             European Patent Court: “Any person who has a
cooperating in an attempt to coordinate             What industry wants is a one-stop shop.               good command of at least one of the official lan-
their efforts in the patent field.11 This task,     People don’t care how this is achieved. But           guages of the European Patent Office may be
and the related U.S.-focused task of foster-                                                              appointed as a judge of the European Patent
                                                    they want action.”14                                  Court, provided that he has sufficient experience
ing interests held by U.S. companies in
                                                        The European perspective is more opti-            of patent law and…has been or is a member of a
Europe, is made more difficult by the lack                                                                board of appeal of the European Patent Office or a
                                                    mistic. The to-be-established European
of uniformity in patent law among European                                                                national patent office of one of the Contracting
                                                    Patent Court is expected by European prac-
countries.                                                                                                States to the European Patent Convention, …
                                                    titioners to become a new means to practice       10. T. Buck, “Hopes fade for EU patents reform ini-
    Until and unless the problems created
                                                    specializations outside of national borders           tiative,” Financial Times (Dec. 6, 2006)
by the fragmented European patent system                                                                  <www.ft.com>.
                                                    and courts.
are addressed, U.S. industry must adopt                                                               11. See <www.trilateral.net>.
                                                        Patent administrators from the United         12. See Sir Robin Jacobs, “Intellectual Property in the
interim practices. For example, one prac-
tice addresses the problematic and sub-             States, Japan and Europe have affirmed                New Millennium,” speech available at
                                                    that they need to coordinate their legisla-           <http://www.law.ed.ac.uk/script/newscript/nofra
stantial costs associated with obtaining                                                                  mes/nfonline.htm>, downloaded on December
patent protection and bringing enforcement          tive and regulatory policies in our global            23, 2006.
actions in each country where patent                economy, focusing on harmonization and            13. The European Commission said on December 7,
infringement may occur. Some companies              the development of patent administra-                 2006, that it would make a new proposal in 2007
                                                    tion, to contribute to an increasingly                designed to break a seven-year stalemate on an
elect to reduce those costs, while maintain-                                                              EU-wide patent scheme. “EC Will Offer New
ing relatively effective protection, by             effective and world-wide patent system in             Proposal for E.U.-Wide Patent Scheme in 2007,”
obtaining and enforcing patents in a few,           the 21st century.15 Resolution of the cur-            Patent, Trademark & Copyright Journal (BNA),
                                                    rent, fragmented patent “situation” in                vol. 73, No. 1798 (Dec. 15, 2006).
key, strategic European countries. They
                                                                                                      14. “European Patent Court Delayed Again” (Dec. 6,
may reason that patent protection and               Europe would constitute a step in the                 2006) available at <http://iplaw.blogs.com>.
enforcement only in large EU markets such           right direction. IPT                              15. See <www.trilateral.net>.

16                                                INTELLECTUAL PROPERTY TODAY        FEBRUARY, 2007

								
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