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Taking Sides

When the European Patent Lawyers Association (EPLAW) arranged a meeting in Venice to discuss patent litigation reform in October 2005, no one expected the gathering to produce much more than discussion. After all, patent reform has been a controversial subject in the EU for two decades, and political bickering continues to stall progress at the European Commission.

But the conference's participants included 24 patent judges from 10 European countries, whom EPLAW invited to give their input on the controversy. Most observers expected the jurists to keep a low profile. Instead they surprised everyone by demanding the creation of a unified European patent court. Indeed, Lord Justice Jacob, a signatory and one of the U.K.'s most senior IP judges called the judicial lobbying action "thoroughly unusual."

Kevin Mooney of London, head of IP at Simmons & Simmons, attributed the resolution to pent-up frustration. "The lack of progress on patent reform has privately upset European judges for a long time," says Mooney, who is president of EPLAW. "The judges passed the resolution as a prod to industry and politicians to get on with it."

The judges who signed the resolution are an impressive lot: they included the U.K.'s most senior IP judges, Lord Hoffmann and Lord Justice Jacob, as well as members of Germany's Federal Court, the Italian Supreme Court, the Court of First Instance in the Hague, the Tribunal de Grande Instance in Paris and the Commercial Court of Zurich.

But if the convoluted history of patent litigation reform in the EU is any indication, even a resolution backed by such weighty signatures does not guarantee progress.

Patent Headaches

Established by the European Patent Convention of 1973, the European Patent Office (EPO) evaluated most of the patents that currently exist in the EU. Because the EPO operates under a harmonized patent law, the evaluation of patent applications is a unified process.

However, a European patent isn't a unitary patent. Instead, it's a bundle of patents that takes effect as a national patent in each member state. This process creates administrative difficulties because national courts have jurisdiction over patent enforcement within their boundaries. As national courts may construe the patent laws differently, judicial decisions on identical patents sometimes differ from country to country. A patent the EPO grants, then, may be declared valid in one state but invalid in another. The result is a multiplicity of legal proceedings with the attendant high costs and uncertainty (see Sidebar).

An attempt was made 20 years ago to create a unified community patent, but industry stakeholders objected to both the translation requirements and the litigation framework of the 1989 Luxembourg Agreement. In addition, businesses objected to national courts being the tribunals of first instance for infringement and validity litigation due to concerns about the competency of some courts, especially those in Spain and Portugal.

"In some countries, you can end up with judges who have no knowledge or experience in patent law," says Dr. Jochen Pagenberg, a partner at Bardehle Pagenberg Dost Altenburg Geissler in Munich and vice president of EPLAW.

The European Commission did put forward a modified proposal for a community patent in 2000. But lengthy negotiations over the past five years have stalled over the language regime, the role of national patent offices and the jurisdictional arrangements over enforcement.

Fortunately, the EPO had embarked on its own initiative following the passage of the Treaty of Amsterdam in 1999.

EPO Tries Again

The Treaty of Amsterdam allows a minimum of eight consenting EU member states to cooperate on matters within the jurisdiction of the EU. This allowed states that could agree on matters that lacked the unanimity required for formal passage of an EU measure to proceed on their own, so long as their initiative didn't contravene existing EU law.

With this in mind, the EPO created a working party on litigation in 1999. That party was composed of 10 EPO members: UK, Germany, France, Switzerland, Netherlands, Finland, Denmark, Sweden, Monaco and Luxembourg. Three years later, those members came up with the draft European Patent Litigation Agreement (EPLA).

"The EPLA had the aim of avoiding multiple lawsuits involving identical patents," Pagenberg says.

The agreement called for the creation of a European Patent Court (EPC) that would be independent of the EPO. The court would include a tribunal of first instance composed of a central division as well as several regional divisions. A single central court of appeal would be the appellate tribunal.

The regional courts would have to have judges from at least two different countries to help create a uniform jurisprudence.

"The advantage is that anyone suing in any EPC court would have a judgment that was enforceable throughout the signatory nations," Mooney says.

The European Commission wasn't pleased. It stated that EU member states had no power to enter into the EPLA without the blessing of the EU. This position had the effect of stalling the adoption of the EPLA, which remained dormant until the recent Venice conference.

The precise effect the resolution will have, however, remains to be seen.

More Work Ahead

"Let's just say I'm more hopeful about progress on the EPLA than I was before the Venice meeting," Mooney says. "But everything depends on whether the resolution convinces the Commission to have a change of heart on the constitutionality of the agreement."

At press time, the Commission hadn't responded to the resolution.

Christopher Forsyth, an IP partner at Freshfields Bruckhaus Deringer's London office, believes several outcomes are possible. "Depending on how seriously legislators take the judiciary, the resolution may put them under considerable pressure because it emphasizes how anomalous EU patent laws are in an era when laws in other areas are increasingly harmonized," he says. "What you might find is that the EPLA proposal and the publicity surrounding the resolution may drive EU legislators back to breathing life into the community patent proposal."

Whatever the outcome, it seems clear that momentum for reform is building: at press time, five more judges had signed the resolution.

[SIDEBAR]

Conflicting Decisions

The 1989 case of Improver Corporation v. Remington Consumer Products Ltd. is the best-known example of conflicting patent infringement judgments by different European courts.

Improver, the patentee, sought injunctions against Remington in the U.K. and Germany. Improver alleged infringement of a patent for one of its razor products. In both countries the case turned on an interpretation of the same article in the European Patent Convention. But the German courts held that an infringement had occurred, while the U.K. courts reached the opposite conclusion.

The decisions reflected traditional national approaches to issues of patent protection. The English decisions are based on a consideration of the patentee's intent, an approach basic to the interpretation of any document under English law. On the other hand, the German courts made no mention of intent; rather, they concentrated on an analysis of functional equivalence in the competing products.

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Julius Melnitzer

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