5 Enforcement of patent rights |
|Draft Agreement on a Unified Patent Court and draft Statute
|Department||Business, Innovation and Skills
|Basis of consideration||Minister's letter of 2 December 2011
|Previous Committee Report||HC 428-xli (2009-10), chapter 2 (9 November 2009)
|To be discussed in Council||5 December
|Committee's assessment||Legally and politically important
|Committee's decision||Not cleared; further information requested
Background and previous scrutiny
5.1 The background to this proposal is set out in our earlier
Report. In the conclusion,
we said as follows:
"We note that negotiations on the draft agreement are at
an early stage. So rather than asking further questions now, we
would be grateful for an update on the negotiations when the details
of how the UPC will operate in practice for EU and European patents
become clearer, such update to cover whether the concerns raised
by the Minister above have been allayed. We would also be grateful
for a summary of the views of UK industry on the UPC. In the meantime,
the draft agreement on the UPC, document (c), remains under scrutiny".
The views of the Chartered Institute of Patent Attorneys
5.2 The Chairman of the Committee received a letter from the Chartered
Institute of Patent Attorneys, dated 30 November 2011, saying:
"The Chartered Institute of Patent Attorneys has written
to the Prime Minister and Baroness Wilcox, Minister for Intellectual
Property, urging the government not to sign the draft agreement
on a unitary European patent, to be discussed at the Competitiveness
Council meeting in Brussels on Monday (5 December). CIPA's position
on this is shared by most of British industry.
"The attached position paper explains why the
draft agreement, in its current form, would be bad for the UK
and both British and other European businesses. I also attach
a letter from CIPA's President, Tim Roberts, published in today's
"It appears that there is inappropriate pressure
being exerted on government representatives to sign this agreement
next week, so that it will happen during the Polish presidency.
There is no other reason at all why signature should not be delayed
by a few weeks, until all parties agree that the current remaining
problems have been satisfactorily solved."
5.3 The attachment reads as follows:
"We support the idea of a Unitary European Patent.
But only if it is an improvement on the present system. What is
currently being discussed is not. It would be worse, not better.
It can and must be improved.
"The amendments we must have are:
a) Deletion of Clauses 6-8 of the Regulation.
The CJEU must not decide European patent infringement law. They
are not suited to it.
b) Non-exclusive jurisdiction. There must be
a right to litigate EPO-issued national patents in existing national
courts. This is vital for SMEs.
c) German property law not to apply automatically
to Unified Patents of extra-EU applicants.
d) Transitional provisions. Five years is quite
inadequate. There must be a continuing right for patentees to
opt out. Also, because the system may not work as planned, and
will be difficult to amend, there must be a clear right and mechanism
for countries to leave it.
e) Sensible provision for SPCs.
"Also, there are two features currently included
which must be retained and clarified:
f) Clear rights for EPAs to represent in the
Court, possibly with extra qualification.
g) Proper privilege for advisors. Legal professional
privilege and litigation privilege needs to be recognised for
all patent attorneys on patent prosecution files.
"These are the key issues, but there are other
amendments needed. The Government should not sign up until all
the documents are ready, including the rules of court procedure."
The Minister's letter of 2 December 2011
5.4 The Parliamentary Secretary for Business, Innovation
and Skills (Baroness Wilcox) writes as follows:
"Thank you for your consideration of the Explanatory
Memorandum submitted on 21 September. I am writing in response
to the conclusions of the Committee's meeting on 9 November, to
give an update on negotiations and a summary of stakeholder positions
as expressed to my Department.
"As the draft Agreement is not an EU legislative
proposal, nor is the EU as such able to become party, the Presidency
has been conducting discussions in a specially convened group,
the Friends of the Presidency. This group is supported by the
Council secretariat, and the Commission attends in an observer
capacity, assisted by a representative of the European Patent
Office. More recently negotiations have moved into COREPER.
"The Presidency has been focussing on ensuring
that the draft Agreement is legally sound in relation to Opinion
1/09 of the Court of Justice of the EU, and the existing EU acquis.
They have been less inclined to take on board amendments of a
technical nature, given that the substance of the Agreement was
discussed in Council working groups before the Council conclusions
of December 2009. The previous version of the Agreement was the
subject of EM 7928/09 which has cleared scrutiny.
"The Presidency is now hoping for consensus
to be reached on some political aspects before an initialling
ceremony in Warsaw on 22 December. We expect that any initialling
will be provisional, and on the basis that outstanding issues
will be addressed satisfactorily before a Diplomatic Conference
in June 2012 at which the Agreement will be adopted and signed.
It will then be subject to ratification by national governments
according to their usual procedures.
"We have been consulting stakeholders primarily
through the Intellectual Property Office's European patent reform
consultation group, which last met on 29 November. This includes
representatives of industry, the legal and patent attorney professions
and the judiciary, as well as Government officials. In relation
to the text in document 11355/11 a small group of representatives
has suggested over 100 amendments, while recognising that issues
would need to be focussed for discussions with the Presidency.
"The main points identified by this stakeholder
group were set out in a 'Concerns of Principles' document and
subsequently prioritised as follows:
- Appropriate transitional provisions, with a wide-ranging
review before the transitional arrangements end, and including
the possibility for patentees not only to opt back into the jurisdiction
for existing patents but also to opt out for patent applications
made during the transition period
- The possibility to initiate actions for infringement
and interlocutory relief before the central division
- Simplified language arrangements
- Clarity and finalisation of the Rules of Procedure
to ensure uniform quality of judgments
- Inclusion of provisions on infringement of the
unitary patent in the Court Agreement rather than in the unitary
- Technical issues including future provision for
supplementary protection certificates with unitary effect.
"Additionally others have commented on the quality
of the Patents County Court under recent reforms, particularly
for small businesses, and consider it important that this avenue
continues to be available; there is already provision for disputes
to be taken to national courts rather than the UPC during the
"In recent weeks, following a bid by Germany
for the seat of the central division of the court, industry has
mounted an extensive lobbying campaign for the UK Government to
also bid for the seat of the central division of the Court. The
French Government has bid for Paris to be the seat.
"For the Competitiveness Council on 5 December
the Presidency have signalled their intention to have a political
debate on specific aspects of the Agreement with a view to reaching
a consensus, in particular:
- The location of the seats of various bodies
- The financial contributions from states in relation
to bodies they host
- Possible methods for calculating contributions
from states to costs of the court in the setting-up phase
- Requests to change the language of proceedings
on the grounds of convenience and fairness to the parties
- Additional opportunities to bring actions before
the central division
- Number of ratifications for the Agreement to
enter into force
- Extending the transitional period from that previously
agreed in December 2009
- Ensuring that a broader range of provisions can
be reviewed by the Administrative Committee in order to improve
the functioning, efficiency and cost effectiveness of the UPC
and the quality of its judgments.
"In negotiating with European partners on these
issues we will be seeking the most effective solutions for users
of the patent system, bearing in mind that litigants will have
different requirements depending on whether they are seeking to
defend or challenge patents, and according to their business models.
"How the Presidency concludes the Council of
5 December will depend on the progress of discussions. There will
be no vote as this is not an EU agreement. If a consensus emerges
on the main outstanding points we would expect the Presidency
to conclude that they will invite the 25 participating states
to Warsaw to initial the agreement on 22 December. If the Court
Agreement is finalised in due course, it will of course be subject
to ratification by Parliament.
"If it would be helpful, my officials would
be very pleased to discuss the substance of the draft Agreement,
and the way forward, with the Committee Clerks."
5.5 We note that the Minister's letter was dated
2 December and so could only be considered by the Committee on
7 December, two days after agreement was expected in the Competitiveness
Council. The Minister does not explain her own time constraints
in producing the letter, and so her approach to Parliamentary
scrutiny continues to leave us very concerned. Additionally, having
submitted the draft agreement as a European document for scrutiny,
together with an Explanatory Memorandum, the Minister is silent
on whether she wants us to release it from scrutiny, which displays
a further lack of understanding of the scrutiny procedures.
5.6 We also note that the Minister has not answered
a key question we raised in our previous Report, namely whether
the concerns raised in the Explanatory Memorandum had been allayed.
These concerns included:
- Separate jurisdictions for
related validity and infringements actions on a patent case: the
Minister explained that UK industry generally opposes these actions
being heard separately as it could mean that cases are more expensive
and/or could reach inconsistent decisions.
- UK stakeholders had raised
concerns that the costs of the UPC might be prohibitively high
now that there will not be a contribution from the EU budget to
the setting up costs of the court.
- There were a number of language
issues to be resolved. These include the operational language
of the division, the language of proceedings, the language of
court documents and the language of judgments. Related is the
issue of translation and interpretation. Different solutions could
apply to each. Some Member States had concerns that their nationals
may not be able to use their own language in the UPC, and judgments
may not be available in their language. However, UK industry was
concerned that complex language requirements will create cost
- Patents are highly technical
documents and this can present difficulties for judges if they
do not have the technical know-how to understand the invention.
Some European States use technically-qualified (non legally-qualified)
judges and others, such as the UK, use technical experts to provide
the necessary technical knowledge. UK industry was concerned that
there were currently not enough suitably qualified judges to populate
all of the panels of the Court of First Instance and Court of
Appeals in their local, regional and central divisions.
5.7 The Minister's letter fails to address whether
these concerns have been met. They appear to us to relate to central
issues in the agreement which we would have expected the UK to
wish to resolve in its favour before giving political agreement.
We would be grateful if the Minister could address these at the
5.8 Additionally, the Chartered Institute of Patent
Attorneys letter to us demonstrates real concern that draft agreement
will be disastrous for UK companies. It comments that "inappropriate
pressure" is being placed on governments to sign the agreement.
The attached "CIPA view" begins as follows:
"We support the idea of a Unitary European
Patent. But only if it is an improvement on the present system.
What is currently being discussed is not. It would be worse, not
This is followed by seven proposed amendments
it thinks necessary before the agreement will be beneficial for
5.9 Again, we would be surprised if the UK were
willing to give its agreement to an agreement in the face of such
opposition from a key stakeholder organisation, so we ask the
Minister to address each of the points raised by the Chartered
Institute of Patent Attorneys and say why the agreement as it
stands will benefit UK industry.
5.10 Finally, we note the Minister says that the
Presidency has been "less inclined to take on board amendments
of a technical nature, given that the substance of the Agreement
was discussed in Council working groups before the Council conclusions
of December 2009". We ask the Minister to explain in more
detail what this means; it sounds to us as if the Presidency has
not permitted any substantive negotiations on the detailed provisions
of the text.
5.11 Pending the Minister's replies to the above,
the draft international agreement remains under scrutiny.
44 See headnote. Back
pp. 17-18. Back