Patents institutions lost confidence in politics, want their own trusted Court
Today patents bear many competitive disadvantages such as uncalculable market risks for groups that do not even participate in the patent system. The European Patent system faces a groundswell of interest in substantial reforms on subject-matter examination and governance. Parliaments are neither in Europe nor in the States powerful enough to trigger meaningful patent reforms. In the eyes of institutional orthodoxy of patent institutions democratic institutions become increasingly untrusted. The granting of software patents for instance failed two times political approval so far. Microsofts Steve Ballmer affirmed in the UK that they now want to use their software patent portfolio against Linux competitors. His company was a main sponsor for past failed software patent legislation attempts. It is important for investments in European litigation business to offer these customers better conditions for software patent enforcement and ensure validity. Still the National jurisdictions are a major threat to the software patent pratice of the EPO as national judges miss the legal basis for software patenting in the EPC.
Under the German presidency the European Patent Litigation Agreement (EPLA) proposal was widely promoted as to ensure full independence of patent institutions from political intervention. Based on wide consultations with selected business groups the Portuguiese Presidency transformed that into a new proposal for an EU-EPLA and desperately tries to push for a text together with the Germans.
The general public arguments put forward is that it would unify divergent interpretations of a patent in different member states and reduce the costs for multiple litigation. Right now multinational litigation is a phantom given the high litigation costs. The new court is also advocated as a path to the community patent and an anti-Torpedo-measure. In reality EU-EPLA drives the entry cost barriers for litigation up and is a solution for a non-existing scenario for a very limited circle of large companies that can afford patent litigation and professional patent litigation companies ("patent trolls"). The new central court is staged to approve expansive reforms on subject-matter by case law such as the illigitimate granting of software patents under full control or personal union with the EPO and as independent as its infamous BoA. As a side effect the new Court also minimizes the political risk of influence from national governments and strongly centralizes powers.
The Portuguise EU-EPLA is all about Software and Business Method Patents.
"The acrimonious debate over the proposed directive on computer-implemented inventions might never have arisen if the patent litigation system in Europe had been unified, thereby eliminating the possibility of disparate national rulings on the same patent matter." - — David Sant, former EPO lobbyist in Brussels
The discussion for EU patent policy is very old and did not achieve real results so far because the EPO stands institutionally in the way of EU harmonisation and does everything to keep all powers in their own hands. The simple fact that the EU-Parliament rapporteur for the EU-Biopatent directive (who found political support for the EPO patenting of that subject matter in a second trial) was awarded Presidency of the EPO speaks for itself. It was also no surprise that under Irish presidency the Community Patent that challenged the EPO role failed in the EU-Council while the very same day the software patent directive that affirmed the EPO granting practice was approved. The EU-Parliament that originally voted to stop the software patent granting of the EPO was completely ignored and that is why it finally stopped the Council Softwarepat-Directive.
We also had a ready European Patent Court proposal on the Council table in 2004 as a follow-up to the Community patent, then the EPO intervened with their own old EPLA treaty that was sold as an alternative to the Community patent but was a mere judicial independence declaration of the EPO, the European Parliament put forward a resolution with key demands, then the European Commission put forward its new compromise for an EU-EPLA following a consultation with business stakeholder, which received strong ignorance of the German presidency that rallied behind Munichs EPLA and ignored the Parliaments resolution. This was further developed by the Portuguiese Presidency into an EU-EPLA proposal. Apparently Germany gets more influcence on the Portuguise draft than it was willing to grant Portuguiese representatives under their own presidency.
It feels like a Banana republic. An immature proposal becomes center of political cult and then a putsch is staged for a new proposal with the "lets do it" crowd rallying behind it with random arguments. But despite a constant change of leadership the setting that causes the constant failures remains unreformed. Indeed, rhetorics around the proposals is often not directed towards the actual proposed text but merely an iteration of past emotional advocacy for EU patent harmonisation. This became apparent when arguments for the Community patent were discussed when EPLA was put in the ring again to as an "alternative" to the Community patent. For instance the Europatent court has no real language problem as compared to the Community patent. During German presidency talking EPLA was also a "taboo code" for the London Agreement and the sensitive language issue. The impression was invoked that the London Agreement is a precondition.
It all boils down to a single conflict: EPO.org or EU influence? Everything else such as national languages, seats of bodies, judges interests, business interests and the unrest over non-progress is just instrumental in the fight of the EPO for more power. It is important to ask the question about the future role of the EPO.org, if any, because everything constructive gets shelled in the no mans land.
Portugals EU-EPLA proposal
Because arguments iterate and are often unrelated to the actual text we just want to discuss the specifics of the proposal that shows why it hands over all powers to the patent insitutions. Moreover, we pick some of the current key points under discussions. Right now we have a non-paper by the Portuguese Presidency: Towards an EU Patent Jurisdiction - Points for discussion . It is quite unusual to present "non papers" and indicates the cautiousness. Even more unusual is the follow-up two days later by the German delegation, 12-10-07 The Separation of Invalidity and Infringement Proceedings and the Use of Technical Judges in a European Patent Court System that appears to serve EPO interests even more and perfectly fits to the Portuguise proposal. It also features some procedural modifications that explain quite well why software patenting is the driving force behind the construct. The German modification make the road for the Pt proposal even more firm.
It is a Court without substantive community law but decides on the Community validity of EPO patents. The advantage over the EPLA is that EU-EPLA is formally instituted by the EU, however the ECJ can only act upon the request of the court president.
Towards trusted judges
The new EU-EPLA court is not required for patent infringement cases at all. The EU patent insurance study gave enough empirical evidence that multinational patent litigation is almost non-existing which is no surprise given the court fees. EU-EPLA integrates and streamlines the existing patents courts into new regional chambers that are under tighter control of the patent institutions. The core is the new central court with its trusted judges and its validity decisions on European patents which will result in affirmation of the EPO granting pratice. The Portuguese proposal includes all safeguards that the central patent court will serve only the interests of software patent supporters. In fact the new EU-EPLA is a means to overcome potential resistance of national patent courts against the EPO granting pratice. This is why special emphasis is given in the proposal toward careful selection mechanism of trusted judges that serve the agenda of the patent institutions for subject matter expansion. The core of the core of trusted judges will be the at the Central Court and decide alone about the European future of substantive patent (case) law.
A surprising aspect of the Pt Proposal is the depiction of professional legal judges as incompent. According to the PT presidency "Internships" and "judges academies" are required to build up a pool of trusted judges that would pursue the agenda of the patent institutions. They would not find enough of them among present judges that would like to become dependent to pursue the agenda of patent institutions. The Portuguese proposal also reflects the arrogance of the litigation intense nations to which Portugal does not belong:
A training framework for patent judges should be set up at Community level in order to improve and increase available patent litigation expertise and to ensure a broad geographic distribution of such specific knowledge and experience. The Community would provide a budget line for funding such a patent judges' academy. The training framework would reflect best practices in MS and focus on gaining practical experience. Towards this end it would involve internships in the patent judiciary of other MS already having substantial levels of patent litigation activity. The Academy and the training framework should be operational well before the entry into force of the arrangements concerning the EU patent jurisdiction.
The proposal aims for a strong involvement of Technical judges and "technical" advisors. "Technical expertise" here means patent professionals. In other words: people who have shown to serve Munichs interests. Indeed the Technical Boards of Appeal of the patent offices serve as a model that delivered us expansive and abusive interpretation. That is why the Pt presidency recommends to also recruit judges among EPO BoA members, for joining of patent forces. As there is still an urgent need for trusted judges the Pt presidency also wants to hire patent attorneys as their judges.
Judge Jacob claimed the EC showed a limited understanding of technology, in its suggestion of "technically qualified judges".
He said: "The European Commission's proposal would have been a total disaster. They had an idea that there would be technical judges, and they said 'there are seven fields of technology'. Only somebody with an arts degree could say that."
The EU-EPLA proposal will features "specialised" judges for each field of technology.
The central division of the first instance and the second instance should be composed of mixed chambers of legally and technically qualified judges.
Trusted Judges pool
The right of proposal of the trusted judges lies by patent professionals:
The advisory committee, chosen from among the most experienced patent judges or patent lawyers of recognised competence and appointed by the Council, should prepare lists of suitable candidates for appointment as judges of the EU patent jurisdiction.
The right to vote for trusted judges lies upon Council:
All judges of the EU patent jurisdiction would be appointed by the Council, acting unanimously, following consultation of an advisory committee to be set up for this purpose.
The judges of the first instance divisions at MS level should come from the Member States concerned. However, these divisions would be entitled to include judges from another MS on the bench. Judges could be recruited amongst members of the EPO or national offices' Boards of Appeal, patent judges, patent attorneys etc. To this effect a pool of distinguished patent judges would be created at Community level.
Instead of dismanteling of the EPO the EU-EPLA proposal aims to dismantle the national patent courts and replace it by a new trusted court system.
…the EU patent jurisdiction should be an exclusive jurisdiction dealing with validity, infringement and inter-related proceedings concerning European patents and future Community patents.
All divisions would form an integral part of a unified Community jurisdiction with uniform procedures.
the first instance should comprise one central division and divisions located in MS.
Revokation only by the trusted judges of the central court
it would seem to be preferable that the central division should be hearing direct actions concerning the revocation of patents and actions for declaration of non-infringement.
In the case of counter-claims for invalidity the first instance division at MS or regional level concerned should, at the request of the patentee either stay proceedings and refer the case for a decision concerning the validity to the central division or involve judges from the central division when it considers that the patent should be revoked.
The solution of the language problem
The final solution for the so-called "language problems" is to offer all 26 languages. The German proposal aims to limit the central court to the three EPO languages.
Separation of invalidity action and infringement action.
The German plan shows what the central court is really for:
If invalidity actions are handled in distinct proceedings subject to the exclusive jurisdiction of a central judicial entity and infringement actions are handled separately in decentralized chambers, the procedural rules to be applied in each case can be better tailored to the respective distinctive features of the subject of the proceedings.
The separation ensures that patent trolls can sue for patent infringement without any immidiate risk of invalidation of their patents and legal representatives can charge their customers twice. But it is more than that as it reveals the real purpose behind EU-EPLA which has nothing to do with infringement court proceedings. The German plan intends to get the central judicial entity with its trusted judges in charge for all national invalidation proceedings, in fact equip the trusted judges with the power to legally approve the abusive subject matter interpretations of the EPO by setting case law precedence. On the contrary democratic institutions get no change whatsoever to stop the EPO granting of software patents. That institutional feature will ensure validation of the software patent granting pratice of the EPO. The central court should be fully in line with the EPO teaching:
In the case of patents granted by the European Patent Office, in contrast to the registration procedure in effect in some Member States, the patent application is subject to a preliminary substantive examination. Judicial review of this technical decision of the granting authority presupposes that the court is equipped with resources enabling it to reconsider the granting authority’s reasoning.
In fact EU-EPLA becomes an TBoA II that is just more expensive, equipped with "technical judges" that are ideologically controlled by the patent institutions, esp. the EPO.
What the European Parliament asked for:
European Parliament resolution Future of Patent Policy (12 Oct 2006)
wheras there has been growing concerns about undesirable patents in various fields and about a lack of democratic control over the process by which such patents are granted, validated and enforced.
…as regards the EPLA, considers that the proposed text needs significant improvements, which address concerns about democratic control, judicial independence and litigation costs.
It also demanded that
that all legislative proposals should be accompanied by an in-depth impact analysis related to patent quality, governance of the patent system, judicial independence and litigation costs.
So far this was not sufficiently addressed by neither proposal.
No role for community law and parliament
Democratic institutions will get no influence over patent law. Corrections of substative law will be made by judges of the EU-EPLA central court with effect in the EU at large. These trusted judges will be closely tied to the institutional interests of the patent institutions and ensure strong influence of patent professionals ("technical experts"). Controversial debates in Parliament over subject-matter expansion as we saw in the Life patent and the software patent debates will be obsoleted. While no community law for patents get established community caselaw gets created which would prejudice any potential Community level patent law. In fact such law would be avoided by the new central court decisions.
In order to ensure efficiency and coherence of patent litigation the EU patent jurisdiction should be an exclusive jurisdiction dealing with validity, infringement and inter-related proceedings concerning European patents [i.e. EPO bundle patents] and future Community patents.
It is no wonder that the main advocates for software patents in Europe that were consulted by the Portuguiese presidency find their interests perfectly reflected: Enforcable subject matter expansion without any need to get a critical Parliaments involved. In fact community substantive patent law gets unnecessary or even "undesirable".
No EPO migration path
The parallel governance of the European patent system means that one institution needs to go. It will be the EPO, not the EU. Sooner or later it will be necessary to dismantle the European Patent Organiation and let an European Union Innovation agency overtake their role. EU-EPLA strengthens the institutional role of the European Patent Organisation.
- How can a Court decide on non-community law? Will the EPC need to be recodified?
- Would national patent law be judged by foreign judges on the same bench?
- How could European Institutions still exercise any influence?
Legal base in the new Lisbon Treaty
|Nice art 225a||Lisbon art III-359|
|The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may establish specialised courts attached to the General Court to hear and determine at first instance certain classes of action or proceeding brought in specific areas. The European Parliament and the Council shall act either on a proposal from the Commission after consultation of the Court of Justice or at therequest of the Court of Justice after consultation of the Commission.||1. European laws may establish specialised courts attached to the General Court to hear and determine at first instance certain classes of action or proceeding brought in specific areas. They shall be adopted either on a proposal from the Commission after consultation of the Court of Justice or at the request of the Court of Justice after consultation of the Commission.|
|The decision establishing a judicial panel shall lay down the rules on the organisation of the court and the extent of the jurisdiction conferred upon it.||2. The European law establishing a specialised court shall lay down the rules on the organisation of the court and the extent of the jurisdiction conferred upon it.|
|Decisions given by judicial panels may be subject to a right of appeal on points of law only or, when provided for in the decision establishing the panel, a right of appeal also on matters of fact, before the General Court.||3. Decisions given by specialised courts may be subject to a right of appeal on points of law only or, when provided for in the European law establishing the specialised court, a right of appeal also on matters of fact, before the General Court.|
|The members of the judicial panels shall be chosen from persons whose independence is beyond doubt and who possess the ability required for appointment to judicial office. They shall be appointed by the Council, acting unanimously.||4. The members of the specialised courts shall be chosen from persons whose independence is beyond doubt and who possess the ability required for appointment to judicial office. They shall be appointed by the Council, acting unanimously.|
|The judicial panels shall establish their Rules of Procedure in agreement with the Court of Justice. Those Rules shall require the approval of the Council, acting by a qualified majority.||5. The specialised courts shall establish their Rules of Procedure in agreement with the Court of Justice. Those Rules shall require the consent of the Council.|
|Unless the decision establishing the judicial panel provides otherwise, the provisions of the Treaties relating to the Court of Justice and the provisions of the Statute of the Court of Justice of the European Union shall apply to the specialised court. Title I of the Statute and Article 64 thereof shall in any case apply to the specialised courts.||6. Unless the European law establishing the specialised court provides otherwise, the provisions of the Constitution relating to the Court of Justice of the European Union and the provisions of the Statute of the Court of Justice of the European Union shall apply to the specialised courts. Title I of the Statute and Article 64 thereof shall in any case apply to the specialised courts.|