29 June 2012

Today, History is Written in Brussels: European Patent System agreed on after 40 years of Discussion

Today (29 June 2012) is a truly historic day for the European Union and the European patent community!

After some 40 years of discussion (the Community Patent Convention was signed on 15 December 1975) the EU Summit (European Council) finally aggreed on a EU Patent System involving a Unitary Patent valid in 25 out ot 27 EU member states (Italy and Spain still refuse to accede) and a Unified Patent Court for handling centralised EU-wide litigation and revocation actions.

Document EUCO 76/12 of the European Council, 28/29 June 2012, concludes: 
Heads of State or Government of the participating Member States agreed on the solution for the last outstanding issue of the patents package, namely the seat of the Central Division of the Court of First Instance of the Unified Patent Court (UPC). That seat, along with the office of the President of the Court of First Instance, will be located in Paris. The first President of the Court of First Instance should come from the Member State hosting the central division.

Given the highly specialised nature of patent litigation and the need to maintain high quality standards, thematic clusters will be created in two sections of the Central Division, one in London (chemistry, including pharmaceuticals, classification C, human necessities, classification A), the other in Munich (mechanical engineering, classification F).

Concerning actions to be brought to the central division, it was agreed that parties will have the choice to bring an infringement action before the central division if the defendant is domiciled outside the European Union. Furthermore if a revocation action is already pending before the central division the patent holder should have the possibility to bring an infringement action to the central division. There will be no possibility for the defendant to request a transfer of an infringement case from a local division to the central division if the defendant is domiciled within the European Union.

We suggest that Articles 6 to 8 of the Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection to be adopted by the Council and the European Parliament be deleted.
 For further information, please refer to our today's article titled "BREAKING: Agreement On EU Unitary Patent Reached" on the ksnh::law blog.

27 June 2012

Unified Patent Court: Rumours running wild before tomorrow's start of EU Summit

As recently reported on ksnh::law under the headline "Munich Dropped Out?", a press report of French journalist Sophie Mosca on Europolitics.info assumes that Munich has lost the race for the seat of the Central Division of the Unified Patent Court, as the EU Committee of Permanent Representatives (COREPER), which is responsible to prepare the decisive   EU Summit (European Council) beginning tomorrow in Brussels, may suggest to award Paris with the seat of the Central Division and give some supportive functions such as the court registry to London:
[...] Munich seems to be out of the running, Paris appears to be the favourite and London could win a few laurels.
As reasons for this ranking the article refers to the fear that a Munich-based court could prefer bification over invalidity counter claims and the fact that Munich already hosts the European Patent Office as the future examination authority of the Unitary Patent. Paris was first suggested by the Polish EU Presidency in December 2011 as a middle road between the liberal German and the strict English approach towards patent infringement and injuctions. Also, two main players in this game, EPO president Benoît Battistelli and EU Competitiveness Commissioner Michel Barnier are French. As Paris appears to be supported by the President of the EU Council Herman Van Romuy, the FT.com assumes that "the smart money appears to be on Paris at the moment".

In our today's posting "On the Eve of the EU Summit" we report on a compromise plan of Herman Van Rompuy - allegedly in agreement with the 'most concerend' EU member states (i.e. the UK, France, Germany) -, as provided via EuropeanVoice:
Earlier this month, Denmark, which holds the rotating presidency of the Council of Ministers, asked Herman Van Rompuy, the president of the European Council, to broker a compromise.

Van Rompuy and Helle Thorning-Schmidt, the prime minister of Denmark, have now written to EU leaders proposing a solution.

They wrote: “After consultation with the most concerned member states, we have prepared an outline for an agreement on the outstanding issues – the location of the seat of the unitary patent court (UPC).”

They propose locating the seat of the court's central division, along with its president's office and registry, in Paris, with other departments based in London and in Munich.

“Given the highly specialised nature and quality standards, we also propose to create specialised clusters in two sections of the UPC, one in London, the other in Munich, which will continue to deal with administrative matters.”
However, it appears to be safe to assume that it will neither be "smart money" nor Van Rompuy's plan that will really decide on the seat issue, but rather the individual agendas of the EU Heads of Government regarding the EU depth crisiswhen they will gather tomorrow in Brussels for holding the EU Summit.

It appears more likely that the seat will be awarded to exacly that EU member state that is prepared to compromise to enable an EU-wide agreement on appropriate (financial) measures for tackeling the EU  crises. In this respect, Munich may still have chances as Angela Merkel is reported to be prepared to rule out eurobonds "as long as I live" since even the Federal States of Germany do not have a communitarization of depts. Exactly this, however, is one cornerstone of the new Grand Plan drawn up by a European presidential Quadrumvirate consisting of EU Council President Herman Van Rompuy, EU  Commission President Jose Manuel Barroso, Eurogroup President Jean-Claude Juncker and European Central Bank President Mario Draghi.

In any case, things remain exciting and EU Summits always are big bazaars where you never know what you will come out with.

(Photo 2010 by Kamshots via Flickr under a CC license)

26 June 2012

Class Headings Decision C 307/10 Issued by CJEU (UPDATE: Interpretations of OHIM and MARQUES)

On our coporate ksnh::law blog, we recently reported on the much anticipated 'IP TRANSLATOR' decision (C 107/10) of the Court of Justice of the European Community as released on 19 June 2012.

As I give a brief summary on the base below, please refer to the posting titled "CJEU ‘Class Headings’ Case C-307/10 ‘IP TRANSLATOR’ – Final Judgement Is Out" for a more complete coverage of the decision.

The trademark application was launched as a test case by the Institute of British Patent Attorneys (CIPA) to have OHIM's  practise as to the meaning of class headings reviewed by the CJEU. The national UK trademark 'IP TRANSLATOR' was claimed for Education; providing of training; entertainment; sporting and cultural activities’, i.e. the class heading of Class 41 of the Nice ClassificationThe UK IPO refused the application on the basis of Article 3(1)(b) and (c) of Directive 2008/95 and OHIM Communication No 4/03, according to which the trademark covers all services falling within Class 41, so that the trademark was considered lacking distinctive character and being descriptive in nature for "translation services", which also undefalls Class 41. The susequent appeal to the referring court raised that the application did not specify, and therefore did not cover, translation services. 

The issued decision is quite clear on this problem. Therein, it has been clarified

  • that the goods and services must be identified with sufficient clarity and precision to enable third parties, on that basis alone, to determine the extent of protection;
  • that the genereal indications of the class headings may be used provided they are sufficiently clear and precise; and 
  • that, if (all general indications of) a class heading is used, this will not be considered to cover the entire class if this is not considered sufficiently clear (no. 62). In this case, the applicant would have to specifiy the goods and services further.
Thus, the court clearly voted for the means-what-it says approach.

From this decision the following three issues arise:
  1. Pending applications reciting class headings which are not clear and preciseHere the court stated that the applicant must be given the chance to specify the goods and services further, which means to extend the scope beyond the plain meaning of the general indications of the class heading.
  2. Registrations reciting class headings which are not clear and preciseHere the court did not give any indication how this problem can be resolved. Personally, I would assume that means-what-it-says would prevail in the case of a conflict or cancellation actions. But this remains the most relevant issue. How to deal with the past. This is a point currently dealt with in the Class Headings Project of the Convergence Programme.
  3. General indications which are not clear and preciseThis refers to what the Advocate General raised in his Opinion of 29 November 2011. Some of the general indications (e.g in classes 37 and 45) would be much too general and cover goods and services which are much too varied to be compatible with the function of a trade mark, which is to serve as an indication of origin (see no. 84 of the Opinion). Thus, in the Taxonomy currently being set up in the Convergence Programme, it must be taken care that all groups of terms defining a class scope are sufficiently clear and precise to fullfill this function. Note, however, that all these terms currently proposed have been confiremd to be accepted by all national offices as well as OHIM and WIPO for classification pruposes.
UPDATE (05.07.2012): Today we report on OHIM's conclusions drawn from that decision (see this announcement and the new Communication Nº 2/12) according to which a trademark applicant using the general indications of a particular class heading of the Nice Classification in order to obtain protection for all goods/services covered by that class only needs to make an appropriate statement like this:
I hereby confirm that I am applying for all of the goods or services included in the alphabetical list of each class field.
This practice, however, is critisised by the brand user's association MARQUES in an open letter sent to all IP offices in the European Union, including OHIM, as it would require the applicant to additionally study the Nice classification's alphabetical list (pdf) of goods/services of that particular class before he is able to exactly determine the goods and services covered by the trademark, whereas the CJEU clearly demanded the opposite:
Directive 2008/95 [...] requires [that] the goods and services for which the protection of the trade mark is sought to be identified by the applicant with sufficient clarity and precision to enable the competent authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by the trade mark. 

18 June 2012

London bid to host Unified Patent Court trimmed down as D-Day (or rather "Jour J") is Approaching

British IP lawyers lobbying to bring the Japanese IP High Court home to London. 
Joff Wild, chief editor of  renowned London-based IP strategist's periodical IAM magazine considering himself a prod Brit has already previously expressed that, when it comes to the UPC seat, his "sympathies are with the Germans". Now he again explains why London should not be the home of an EU patent court and clearly pleaded for Munich ("makes the most sense") and for Paris and even The Hague, the latter having entered only recently the race for the seat of the Central Division - the first instance of the future Unified EU Patent Court. Mr Wild basically concluded that  
London offers nothing that the other candidate cities do not offer, while its drawbacks are far greater than those presented by Munich, Paris or the Hague. The UK government should not have entered the race in the first place; it should withdraw now. But if it does not, other member states should not consider the UK capital. There are far better alternatives elsewhere.
Besides a number of rather structural factors (comparably few potential UK court users, too expensive, peripheral location, etc.), the probably most persuasive argument is that
UK government and representative IP organisations have shown little inclination to do any of the heavy lifting. [...]. The British government and representative organisations only seem to have got involved now that money is at stake.
This is exactly the feeling that at least German IP professional have about the London bit, as the British capital became a candidate city rather late and only after UK legal professionals explained the economical implications involved to their Prime Minister. It did not come as a surprise that the British law gazette reminded David Cameron that "the UK legal sector could lose almost £3bn a year if the proposed new European central patents court is not based in London" only shortly before the Competitiveness Council meeting on 30/31 May 2012 (see here)

such remarks will not anymore be heard by the European Council (EU Heads of Government) who will attend to this matter on 28/29 June 2012 (see here) - provided the Greek elections, the Spanish banking crisis and the concerns about Italy leave some room for discussing other matters - as diplomats expect that "[a] decision on the location of the court will be part of a high-level political deal that will have little to do with patents" (see here).

In this connection we pointed on our ksnh::law blog ("Final Showdown Is Nigh") to Document 10059/12 dated May 24, 2012, addressing COREPER 1 and suggesting a way forward for a political agreement of the creation of a Unified Patent Court, as well as to an AFP is report indicating that at tomorrow's COREPER meeting (19 June 2012), EU president Herman Van Rompuy might table a final proposal in preparation for the European Summit to be held at the end of this month. This proposal might indicate the President's favourite UPC seat and the political and/or financial compensations he expects of the respective member state in return.

Attached to Document 10059/12 is a Joint Statement from the Danish Presidency and the (incoming) Cypriot Presidency, sketching the political process up to the 1st of April 2014, when the system should be ready for the first registration of a European patent with unitary effect.

It is so impressive that the EU administration did not yet loose its idealism and fine sense of humour despite of all those disasters that recently broke in over Europe. This attitude will surely help to restart Unified Europe just like the mythological greek bird of Phoenix (not to be confused with Ikarus).

(Photo 2011 by Richard of England via Flickr under a CC license)

08 June 2012

Controvercy on Unified Patent Court is developing into a Beacon for Europe's policy-making capability

In a series of four postings on our ksnh::law blog we comment on both the latest developments of the negotiations for a Unified Patent Court Agreement at the recent Competitiveness Council Meeting and its future perspective before the background of Europe's looming financial crisis:
Below please find a short overview of the main facts and observations raised therein: 

Document 10362/12 summarises the poor result that once more no political solution was reached. Its crucial passage reads
The Council held a preparatory debate in order to gather consensus on the location of the seat for establishing a unified patent court, with a view to a successful decision on the seat by the European Council at its meeting on 28-29 June 2012.
It is apparent that the political actors in the EU Council and the Polish and Danish Council Presidencies have meanwhile completely stopped to listen to expert advice and now try force a breakthrough by some purely political decision on the seat of the central division of the Unified Patent Court, as for a couple of months now the official line of argumentation is that all problems but the seat of the central division are solved (see e.g. Commission President José Manuel Barroso's press release).

Now, as the matter has finally reached the top flight of EU decision-making (see here), Angela Merkel and all of her colleagues on EU level are now poised to undertake a final approach to find a political solution at the the European Council on June 28 and 29, 2012, where, however, the Patent issue will only be a side aspect as fire-fighting the financial crisis will bind most resources. 

Up to now, the political game of power went so that Paris, presented as a compromise candidate for the opposing London and Munich bits, was initially rejected but recently declared favorite, while the  Italian change of attitude to support the Unified Patent Court (but not the Unitary Patent!) if the Central Division is awarded to Milan will not make things easier (see here). It now is a mere fight for prestige and money (“Billions at stake”) but not so much on European interests and perspectives (see here and here).

Of course, national interest always played a prominent role in the turbulent history of the European Union (official version here) and the present issue is another striking proof for the deficiencies of the EU policy-making process, since complicated substantive arguments as to the merits have been dismissed at a certain point and a purely political question became decisive for the whole project

There is no doubt that winning the seat would be a tremendous victory for the respective government and an enormous economical boost for the respective country (see estimate as to the financial benefits for the hosting city/country) so that the seat issue is a perfect pledge and leverage for even more important negotiations such as the measures to take for stemming the European sovereign-dept crisis. It can easily be imagined that Paris or Berlin is awarded with the seat in order to soothe François Hollande's left-winged post-election reform impetus or Angela Merkel’s strict saving agenda, respectively.

The epic and painful process of drafting and implementing a unified European patent infrastructure discloses frightening mechanisms and structural deficiencies of the European policy-making process that may endanger stability and acceptance of and confidence in the European Union as a whole, particularly before the background of the severe financial and depths crisis that shakes the Union like nothing else before. 

According to my understanding, four major problems can be identified (see details here) that prevent EU politicians from finding a reasonable solution satisfying the needs of the European innovative economy:
  • Ignorance as to users and experts and their mostly well-founded observations; 
  • A striking lack of transparency preventing public involvement; 
  • An information policy that disguises more than it discloses; and 
  • National egoisms, inappropriate horse-trading and power games. 
These disturbing shortcomings of the EU legislative process were also summarized in a somewhat desperate e-mail that prominent IP litigator and former legal expert consultant to the EU Commission Jochen Pagenberg sent to EU Council President Herman Van Rompuy (see also this article). In the e-mail, the following issues were addressed:
  • Abandonment of the original goals (patent litigation system working in practice and attractive to its users) occurred behind closed doors in an unprecedented process of legislation, as the papers of the “patent package” had never seen the light of a public discussion; 
  • Matter has been handled by the instances in Brussels over the last six months in such an undemocratic behavior that few people in Europe would have imagined; 
  • Council hides legislative texts from public discussion because they fear that otherwise users and members of national parliaments would learn about negative impacts of the project and therefore would oppose and refuse ratification; 
  • Many additional flaws have found their way into the texts as a result of political compromises which again have never been discussed with users. 
Perhaps the most striking issue is the EU’s tendency to lock away documents offering substantial content that may, however, provoke discussions and objections among stakeholders (see e.g. intransparent wheeling and dealing, EU locks away documents, something to hide), which is not what one may expect of democratic institutions like the EU Council and its Presidency.

But there is still hope as driven by the financial crisis, some politicians in charge realize that the solution might be to dare more European integration, not less, as German Chancellor Angela Merkel sketched at this year’s World Economic Forum 2012 in Davos:
Europe must be a political union, where the European Commission looks more like a government, the European Parliament is stronger and the Council is a kind of its second chamber, and the EU Court of Justice is the supreme court with powers to supervise the implementation of public budgets in individual countries.
Singing the same tune, the President of the European Economic Social Committee (EESC), Mr. Staffan Nilson, added that
  • we need deeper European integration, in which responsibilities are shared, risks mutualised and resources jointly leveraged to create debt instruments and a growth model which is credible, coherent and sustainable. 
  • we need a Europe of true solidarity and respect for all citizens. 
  • we need a Europe of democracy, both representative and participatory. 
No doubt, this would surely be the right approach to both rescue the European project and establish an efficient and accepted unified patent infrastructure. The question only is whether such insight does not come far too late to save anything, as the confidence of markets in the European currency and of potential uses in a European unified patent infrastructure will not be endless.

(Photo 2010 by Katuslampan via Flickr under a CC license)