Latest developments on the EU patent – where do we stand now ?

1. Latestdevelopmentsonthe EU patent – wheredowe stand now? András Jókúti Deputy Head Legal and International Department HungarianIntellectualProperty Office Ankara, 25 January 2011

2. Once upon a time… • Community patent • The Luxemburg Convention (signed in 1975, reviewed in 1989) has never entered into force • Commission proposal for a Regulation on the Community patent (2000) has failed in 2004 (but: Common Political Agreement in 2003 as a reference point) • European patent litigation • The 1989 version of CPCwas complemented by a Protocol on litigation:national courts would have had first instance jurisdiction in Community patent litigation; centralised appeal court • ComPat 2000: judicial panels of the ECJ (Art. 229a + 225a EC); appeal: CFI + designated national courts in a transitional period • European Patent Litigation Agreement (EPLA): optional (only for European patents) • Public hearing on the future of the European patent system (2006) • COM communication („one stop shop” system, 3 options for litigation)

3. Key documents on the agenda of EU decision making in 2009 • EU patent (formerly: Community patent) • Re-drafted proposal for a Regulation (April 2009) – „general approach” of December 2009 (without the language arrangements) • Cost-benefit assessment + follow-up in 2010 • Level and distribution of maintenance fees • „worksharing” document • Europen patent litigation • Draft Agreement (latest version: March 2009) • Draft Statute • List of topics for the Rules of Procedure • Cost-benefit assessment • Commission recommendation (in view of a negotiating mandate) • Request for the opinion of the ECJ [Art. 218 (11) TFEU] • Draft rules of Procedure • Council conclusions (SE PRES, 3 Dec 2009) • [Draft EPC revision]

4. Key patent issues in the EU in 2010-2011 Proposal for a Regulation on the translation arrangements for the EU patent (Siamese twin of the EU patent Regulation) + BE PRES elements Due to the failure to reach consensus on the language issue: Proposal for a Decision authorising enhanced cooperation in the area of the creation of unitary patent system (DK LU NL SI SE LT DE FI EE FR + IE PL UK BE AT) New legislative proposals needed in the enhanced cooperation context (two Regulations) Expected ECJ opinion on the litigation agreement (unfavourable AG opinion) Related issues: renewal fees, enhanced partnership, EPOrg context

5. Revisited project of the Community (EU/unitary) patent • Unitary IP title for the whole territory concerned • Equal effect in all (participating) Member States • Grant, transfer, revocation only in respect of the whole EU (area of cooperation) - licensing agreements may of course deviate from that • Harmonious co-existence with national and „traditional” European patents • Special European patent • Granted by EPO • EU (participating Member States) as „designated Contracting party” or agreement between EU and EPO • pre-grant phase regulated by EPC • Enforcement: EEUPC Agreement (specialised court system)

6. Main issues relating to the language arrangements of the EU/unitary patent • Language of filing • Required translations for the processing of the application (and the bearing of related costs) • Required translations before grant (for publication purposes) or for „validation” purposes • Concerned parts of the patent documents (claims or the whole specification) • Languages • Deadline to file translations • Legal effects • of the filing of translations • of the errors in translations • Required translations in the case of a dispute (and the bearing of related costs)

7. Proposals relating to the language arrangements of the EU/unitary patent • Possible models apart from the COM proposal • CPA 2003 (claims into national languages) • „London-like” (claims into national languages, description into chosen EPO language) • English only (with variants regarding the pre-grant phase) • Other variants • COM proposal on the language arrangements • application: in any (EU) language (the costs of translation to an EPO language for EU/participating MS/EPC CP applicants are compensated) • upon grant, no further translation required (claims: EN+DE+FR, description: EN or DE or FR) • COM-EPO cooperation programme for machine translations („on demand” downloadable, no legal effect, for information purposes only) • in case of a dispute, the patentee provides the full translation • Additional elements by BE PRES • single procedure for EU and European patents (incl. provisional prot.) • transitional arrangements: as long as high quality machine translations are not available, „manual” EN translation has to be filed • transitional arrangements: for patents granted in EN, one additional translation to an EU language is required (no legal effect) • protection of bona fide third parties (damages)

8. Related issues to the EU/unitary patent • Level and distribution of maintenance fees • after grant, 50% of the maintenance fees of European patents goes to the EPO, the other 50% remains at the NPOs • in the case of EU patents, 50% of the maintenance fees is to be distributed among the NPOs of participating Member States • when determining the level of maintenance fees, the following factors should be taken into account: • the effect of the fee levels on the maintenance rate • the effect of the fee levels on the application quantities (and the origin of the applications), including the consequences thereof • effects on the workload of the EPO and the quality of the examinations • effects on the balance of the European patent system and on innovation (e.g. the expected proportion of „switching” to EU patents) • the territorial scope of the monopoly maintained by paying the fee • effects on the national patent infrastructures (representatives, NPOs) • Worksharing • Models for sharing the work between the EPO and NPOs in a network-based approach • CPA 2003 and EPN as the basis for cooperation • Implementing the enhanced cooperation within the EPOrg context

9. Draft Agreement on the European and European Union Patent Court • Mixed agreement (EU and its Member States on the one side, third EPC contracting parties on the other) to handle patent disputes in Europe • Centralised system - decentralised to a certain extent on first instance (the degree of decentralisation is still to be explored) • The jurisdiction of the EEUPC covers disputes concerning EU/unitary and European patents (and applications), including SPCs given for such patents • Competence for infringement and revocation cases as well (infringement & related claims and defences, direct action for revocation and counterclaim for revocation, declaration of non-infringement, compulsory licenses for EU patents, prior use issues, actions for compensation of „preliminary” license) • The effects of the EEUPC’s decisions would cover the whole territory of EU/participating MS (and the contracting third countries)

10. Key features of the European patent litigation reform I • Partiallydecentralisedfirstinstance(CFI) • local divisions (0-3 per MS, min. 100 cases per yearfor a 2nd one) • regionaldivisions (uponagreement of atleast 2 States) • centraldivision (exclusivejurisdictionforcertaincases) • Centralisedappealinstance(Court of Appeal) • Composition of panels • Number, qualification, „permanence” and nationality of judgessittinginthe panel is dependentoninstance and division • „Split” (handlingcounterclaimsforrevocationwhentheinfringementproceedingswerenotinitiatedbeforethecentraldivision) • proceedingwithbothclaimswith an allocatedtechnicalpooljudge; • referringthecounterclaimtothecentraldivision and suspendorproceedwiththeinfringementproceedings; or • referringthewholecasetothecentraldivision (withtheparties’ agreement) • Representation • lawyers (entitledtoactbeforecourtaccordingtonationalrules) • European patent attorneys („appropriatequalifications”) • other patent attorneys „mayassist” therepresentatives

11. Key features of the European patent litigation reform II • Language of proceedings • national language(s) of the hosting country (central division: language of the patent) • Contracting States may designate an EPO language • parties may agree on the use of the language of the patent (subject to the division’s approval) • with the agreement of the parties (?), the division may decide the same • appeals: language of the first instance proceedings • Interpretation of EU law is reserved for the European Court of Justice • Transitional and final provisions • Entry into force: dependent on ratifications • Within a transitional period of 7 (?) years, proceedings related to European patents may still be initiated before national courts • Holders of European patents granted or applied for prior to the entry into force of the Agreement may opt out from the regime (notification of the Registry)

12. Council conclusions (2009) on an enhanced patent system in Europe • Introduction (necessity, package deal, ECJ opinion) • Main features of the EEUPC • Jurisdiction (infringement and validity of EU and European patents) • CFI + Court of Appeal + Registry • Primacy of EU law and its uniform interpretation • Composition of panels (experience, quality, geographic distribution, training, pool, 50 case per year threshold) • Split • Languages • Transitional period (max. 5 years), opt out • Revision clause (after 6 years or approx. infringement 2000 cases) • Finances (own resources + at least initial EU and 3rd country contribution) • Accession (EFTA and invitation) • EU patent • Renewal fees (level and distribution) • Enhanced partnership

13. Food for thought • Enhanced cooperation: EU patent for a limited number of Member States? • Language regime of the unitary patent protection? • Co-existence of the different layers of national, European and EU/unitary patents (and their interconnections) • Complaints relating to the inefficiency of enforcement of European patents (multiple litigation, forum shopping, fragmentation, legal uncertainty, costs) • The EU patent cannot become reality without an enforcement system with cross-border jurisdiction – but no enhanced cooperation is possible regarding the litigation agreement • A unified European patent litigation system (difficult task: amalgamate EU patent litigation with an enforcement regime of a system extending beyond the EU’s borders – what will the ECJ say?) • EU legal framework is only conceivable if an EU/unitary patent is created • But: supranational forum for national rights?

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