Posted on 26/9/2013

An open letter to Europe

With only a few days left before the 1 October deadline for public submissions, a coalition of worldwide multinationals including Apple, Samsung, Microsoft, Blackberry and Google, have last night sent an open letter commenting on the proposed rules of procedure for the new Unified Patent Court in Europe.

They state that, as a group of global innovators and users of the European Patent System, they depend on effective patent systems worldwide.  As a result, they have felt compelled to express their concerns.  Indeed, these concerns have been voiced before by others in the patent profession.

The first controversial issue is that of ‘bifurcation’, or more simply the ability of a patent court to find a patent to be infringed, without simultaneously establishing the validity of that patent.  There is concern in the industry that if the Unified Patent Court allows for ‘bifurcation’, then defendants can be prohibited from selling a product on the basis that it infringes a patent which is in fact invalid.  Even if the patent is later found to be invalid, the time lapse could kill off the defendant’s market thus rendering the product useless.  Apple et al make this point strongly in their letter and state that:

“By enabling this unbalanced patent system, the proposed new patent system could undermine, rather than promote, innovation in Europe, as producing companies could develop strategies to avoid European jurisdictions in fear of an unfair litigation system being too advantageous for patent proprietors. Such strategies could include divesting resources from Europe, thus driving genuine innovation elsewhere.  And any significant increase in litigation costs would undoubtedly consume company resources which could be better spent on innovation and growth. Manufacturing companies in Europe should not be placed at a competitive disadvantage compared to companies that manufacture in other regions where patent jurisdiction is more balanced.”

Whilst there are proposed rules that attempt to lessen any time lag between an infringement decision and a decision on patent validity, the application of these rules is as yet untested (as the Unified Patent Court is not yet active), and thus concerns remain.

The second controversial issue concerns injunctions.  The current wording of the rules of procedure allows for discretion when requiring evidence in support of injunctions, such that the possibility exists of very little evidence being required.  This causes concern as the scope of a Europe-wide injunction is broad, and therefore its potential use arguably should be more carefully regulated.  On this topic, Apple et al have stated that:

“A rule that does not offer sufficient guidelines on when to grant injunctions will create strong incentives for abusive behaviors and harm the innovation that the patent system is designed to promote.”

It remains to be seen whether any changes will be made to the Unitary Patent Court’s rules of procedure based upon Apple et al’s open letter, or indeed the public consultation in general.  Regardless of whether any changes are made, however, the Unitary Patent will soon become a reality.

The full text of the open letter can be found here.  If you would like to know more about the Unitary Patent, please contact Wilson Gunn.

Wilson Gunn