Engineering news
Companies in Britain could expect a “rough ride” in the new European patent court, which is set to be slower and more costly than existing arrangements, a leading law firm has warned.
The EU is establishing a 'Unified Patent Court' (UPC) that is intended to overcome a “fragmented market for patents and the significant variations between national court systems” that are supposedly “detrimental to innovation”. The court could be established as early as next year and is expected to be approved for the UK by business secretary Vince Cable before the next election.
But critics have said the existing arrangements, including the 1973 European Patent Convention for filing and protecting patents in Europe, are superior. Their effectiveness has been forgotten in the rush to design a new system, said James Tumbridge, partner – IP and litigation, at Pillsbury Winthrop Shaw Pittman. He said: “There's a huge misconception that this is a new system where you have a cheap way of obtaining a single patent for the first time, which is infuriating – we've had that since the 1970s.”
Under the terms of the convention a company can emerge with a set of patents for different European countries after filing for a patent just once. Meanwhile, speed of litigation over patents in the UK is among the quickest in the world, Tumbridge said. “Typically it takes 12 months for a case to come to trial, which compares favourably with Canada and the US, where it can be as long as six years.”
He added: “If you actually go all the way to the Supreme Court in the UK, it's rare for it to take more than three years, so you can go through all the levels of court in three years.” Typically only 10% of patent cases are litigated in separate European countries, and unless you routinely litigate in at least three countries on the same patent, the new system is expected to be more expensive, said Tumbridge. Another concern is the quality of judges in the early years on the new court: not all the new judges will come with experience of IP law, he said. Only “big ticket, big money” cases he had worked on – such as for a world-leading cancer drug – had required litigation in several European countries.
The patent convention is a multilateral treaty which instituted the European Patent Organisation and provided an autonomous legal system according to which numerous European patents are granted. The UPC courts, meanwhile, are expected to split infringement actions from validity actions into separate proceedings. This system, known as ‘bifurcation’, means that in effect, a different court can decide if you infringe a patent from the court determining if the patent is valid. So in practice, a company could be injuncted from selling a product, only for the patent it had infringed to be held invalid some time later and by a different court. This is because injunction proceedings typically go through the courts much more quickly than validation ones. It means, for example, that companies could choose not to locate their distribution or manufacturing centres in Europe to circumvent bifurcation, Tumbridge said.
But in a survey of businesses in Europe last month, law firm Allen & Overy found that three-quarters of those responsible for preparing for the new system expected it to be “positive” for their companies. Only 15% expected the UPC to have a negative impact on their firms, said the survey.
But Tumbridge said: “Everyone in Europe does it differently, and everyone thinks their system is the best, so there is some horse trading going on.
“The theory is good, the central system makes sense – but what is politically acceptable is not better than the current arrangement. With the UPC, I think we are going to get a system that is no better than reasonable, and in some respects worse. It's going to be more costly, and slower.”