|
ICC Policy Statement
European Community
Patent Regulation
Commission
on Intellectual Property, 7 October 2003
Summary
The International Chamber
of Commerce, the world business organization, has always supported the
establishment of a Community Patent system across the EU as being in the
best interests of world business. However, ICC has concluded that the
Community Patent system as currently envisaged does not
unfortunately
generally satisfy all the four main criteria for a Community Patent system
to be acceptable to business. These criteria are:
- fully satisfactory
litigation arrangements;
- low cost for obtaining
and maintaining Community Patents;
- a supervisory body
independent of the European Patent Office to supervise the Community
Patent system administered by the EPO;
- continued co-existence
with existing patent systems.
While the last two
criteria may well be met by the system as finally agreed, the first (and
important) criterion may not be satisfied and the second and equally important
criterion is not met. ICC stresses that the envisaged system must be substantially
improved if the system finally introduced is to be used by world business
to a significant degree.
Introduction
ICC has always campaigned for the provision of strong world-wide cost-effective
non-discriminatory intellectual property systems as being an essential
requirement for the world business community. As part of this campaign,
ICC has supported all efforts to harmonize national intellectual property
laws. Such harmonization is beneficial to world business, for example
by reducing the cost of obtaining intellectual property rights and enforcing
them against infringers. The ICC campaign has been directed in particular
towards the protection of innovative technology by patents and similar
rights. ICC firmly believes that companies which innovate technology should
be able to obtain and enforce quickly, cheaply and without aggravation
the intellectual property rights protecting such technology, but most
importantly the potency of these rights should always be commensurate
with the contribution made by the innovation. Further, a third party wishing
to commercialize its own technology must be able to determine, also quickly
and cheaply and without aggravation, whether it is free to work that technology
as far as intellectual property rights belonging to competitors are concerned.
Therefore, any intellectual property system must, to be acceptable to
world business, maintain a fair balance between these two factors and
any proposals for harmonizing and simplifying intellectual property laws
in Europe or anywhere else will be carefully scrutinized by ICC. This
applies in particular to any proposal to establish a Community Patent
system across the European Union.
The
Community Patent project
ICC firmly supports the establishment of the Community Patent system.
The Community Patent would be a single patent granted with equal effect
throughout each and every EU member state and maintained as a single unit;
in general, such a patent would be litigated as a single unit across the
EU, and infringement and validity decisions would apply equally to all
member states.
In 1997, the Commission
issued its Green Paper on the Community Patent and the European patent
system and ICC commented on the Green
Paper in its Policy Statement dated
5 November 1997 (Document No. 450/855 Rev.; available at http://www.iccwbo.org/home/statements_rules/statements/1997/patent_system.asp).
In that Policy Statement, ICC stated its support for the principle of
the EU having a Community Patent system as being in the best interests
of world business. However, ICC then said that for the Community Patent
system as adopted to be acceptable to world business, and thus be used
to any significant extent by it, the adopted system must satisfy the following
four main criteria: (1) fully satisfactory litigation arrangements; (2)
low obtaining and maintenance costs; (3) a supervisory body independent
from the EPO which should however be asked to administer the Community
Patent system; and (4) continued co-existence with existing systems. In
August 2000, the Commission published its Proposal for a Council Regulation
on the Community patent. In its Policy Statement dated 6 June 2001 (Document
No. 450/926; available at http://www.iccwbo.org/home/statements_rules/statements/2001/community_patent.asp),
ICC concluded that the proposed Regulation did generally satisfy these
four main criteria for an acceptable Community Patent system. ICC then
stressed however that the system as finally adopted by the Council may
prove unacceptable to business if too many compromises are made during
the negotiations; in that case, business may not then use the system to
any significant degree.
Since the publication
of the proposal over three years ago, progress in the Council towards
adoption of the Regulation has been painfully slow but last March the
Council did agree unanimously (as it must) the Common Political Approach
for the Community Patent. Since then, the Greek government, the holders
at that time of the EU Presidency, has published three revised drafts
of the Regulation taking into account the discussions in the Council's
Working Party on Intellectual Property (Patents). Since then, the Italian
Presidency has published one such draft. ICC has been studying the last
of these drafts, i.e. that dated 4 September 2003, to see if the Community
Patent system now envisaged still satisfies the above four criteria.
The
four criteria
1. Fully satisfactory litigation arrangements
Many regard the litigation arrangements as the most important issue, being
a key make or break issue for the Community Patent project. World business
will not, in ICC's view, use the Community Patent system to a significant
degree unless these arrangements are fully satisfactory. ICC has said
it "favours a single unitary patent court for the whole of the EU
which would make EU-wide decisions on both validity and infringement of
unitary patents". The Commission's proposed Regulation suggested
this litigation arrangement with the establishment of the new Community
Intellectual Property Court, and so ICC supported it. The revised draft
Regulation also proposes a central court system and ICC can support this.
However, ICC cannot support all the proposals in this area.
Proceedings for infringement
and revocation of patents are two of the most complex areas of civil proceedings.
Therefore, most EU member states have instituted special courts for these
proceedings or at least have specialized judges wh
o handle them. Counsel
arguing these cases are also usually specialised in this field. This means
that a high level of competence and experience with regard to patent litigation,
both within the judiciary and the legal profession, already exists today
on a national level.
Under a Community
Patent system, infringement and validity disputes can be settled in one
decision for all of the EU. Therefore, the risks of inconsistent judgements
in different member states are avoided and the costs involved in parallel
national litigation can be reduced. However, for a Community Patent system
to be successful, the proceedings must be efficient and reasonably quick,
but more important the decisions must be of a high quality.
Patent litigation
puts high demands on a court system. The judges must not only be familiar
with the highly specialized field of patent law but they must themselves
have certain technical expertise or be assisted by technical judges. In
the national systems, these demands have been met as the legal systems
have had time to develop as patent litigation has become more and more
complex.
The complexity of
court patent proceedings and the difficulty of deciding the questions
before courts put special demands on courts. If the Community Patent is
to be attractive to the users, they must know beforehand that the courts
are allocated sufficient resources to deal with infringement and revocation
proceedings in an efficient manner. For example, sometimes EPO oppositions
are not finally decided until after the patent has expired.
For the proceedings
to run relatively smoothly and quickly is not only a question of judicial
resources; efficient procedural rules are also necessary. Therefore, the
procedural rules on a national level have often been specially drafted
to suit this field of law. Finally, the rules of procedures on a national
level are often closely related to the basic rules of law protected under
state constitutions. Under the legal systems of most member states, infringement
may in certain cases constitute a criminal offence. However, this may
not apply with the Community Patent.
The revised Regulation
proposes a central first instance court, the Community Patent Court, perhaps
consisting of seven judges, sitting in sections of three judges. If there
are each year say 100 cases (perhaps an underestimate), each section would
then have to prepare and decide up to 50 cases a year. This is not feasible.
A more complex pharmaceutical patent infringement case could require one
month for a full final hearing. Before a final hearing is held the court
will often be required to settle several procedural questions as well.
That the CPC as currently envisaged should be able to handle 100 cases
a year and at the same time maintain the quality of the proceedings is
not realistic. The question must be addressed, as it is a fundamental
factor for the system's attractiveness to the users. The time required
for EPO oppositions can be taken as a starting point for a further study
into the resources needed for dealing with patent litigation.
The revised Regulation
does not envisage any regional chambers although the Commission's Working
Document of 30 August 2002 on the planned Community Patent
jurisdiction
did do this. By having only a central chamber, the resources and experiences
embodied by the national courts and legal profession are neglected. Probably
only the major member states will be able to maintain a national competence
in this area if most of the litigation is moved to a central chamber of
the CPC. Setting up regional chambers may perhaps help to achieve a workable
cost-efficient system.
Further, the revised
Regulation provides (Recital 7c) that the proceedings should be conducted
in the official language of the member state where the defendant is domiciled.
The plaintiff must thus find a representative, who can conduct proceedings
in the defendant's language, and this will often mean that the plaintiff's
first language is not his representative's first language. Also the CPC
judges will in many cases not know the language of the proceedings and
will have to rely on interpreters. The costs for travelling, translations
etc and the time needed for all this will make the Community Patent unattractive.
The language regime in the CPC should be changed.
No procedural rules
have yet been suggested. These must be decided before the Community Patent
system comes into force. The rules on for example hearing of witnesses,
time limits, and to what extent the proceedings shall be oral or in writing,
are of fundamental importance. These are also questions that affect the
individual's right to a fair trial and which in most states are ultimately
governed by their constitutions. It would for many member states be unacceptable
that the CPC itself decides on these questions.
The Community Patent
litigation system is thus not ready for adoption. ICC thinks it undesirable
to rush such an important development as the Community Patent and thereby
risking that it becomes unattractive and consequently not used. The resources
given to the CPC must be sufficient to ensure fast and reliable judgements,
the language regime must be acceptable to the users and the procedural
rules must be acceptable to patentees and counsel of different legal systems.
These issues must be resolved before the Community Patent is launched.
Finally, ICC objects
to the transitional provision for jurisdiction on Community Patents. According
to Article 53a of the revised Regulation, the CPC need not open its doors
until 1 January 2010. Up to that date, any Community Patent disputes will
be decided by national courts at both first and second instance. This
transitional provision increases the risk of development of inconsistent
jurisprudence and conflicting procedures between the various national
courts.
2.
Cost of obtaining and maintaining Community Patents
The cost of obtaining and maintaining a Community Patent must be low,
i.e. about the same as, or even less than, the cost of obtaining and maintaining
a US Patent, or otherwise world business, particularly SMEs, will not
use to any significant extent a Community Patent system. The Commission
originally had this objective but this has long since been forgotten.
To achieve acceptable costs, the translation regime cost for the Community
Patent and the official fees, especially the renewal fees, levied to obtain
and maintain it must be low.
ICC has already said
that the translation regime must involve the proprietor in much lower
translation costs than that of the Luxembourg Convention (which of course
never came into force). The Commission suggested in its proposed Regulation
in 2000 that a Community Patent application (i.e. a European Application
designating all EU member states) be prosecuted to grant in one of the
three EPO official languages and then, apart from translating the claims
on grant into the other two official languages, the proprietor need not
file any further translations, at least until he wishes to litigate his
Community Patent. The cost of obtaining a Community Patent would under
this regime have been much lower than the cost of obtaining and validating
a European Patent designating all EU member states. The Commission proposed
in Articles 11(2) and 44(3) of its proposed Regulation that the quid pro
quo for this reduced translation regime should be reduced damages for
infringement for an infringer who is ignorant of the language of the Community
Patent.
However, the member
states rejected the Commission's suggestion and instead have insisted
on a much more expensive regime for users. Thus, the proprietor of a Community
Patent on grant must file at the EPO within two years of grant translations
of all the claims into all the EU official languages. The Commission says
(press release on 7 March 2003) that the cost of this language regime
for a Community Patent with three pages of claims would be €4,845,
i.e. about 50% of the translation costs for the Commission's average European
Patent (with 17 pages of description and 3 pages of claims and designating
8 EU member states) at €10,200. The cost of this language regime
is quite high and its cost could be even higher if the Commission's estimate
of the cost of translating claims at €85/language/page proves too
low. Certainly, some think this cost could be say €150/language/page
in which case the agreed language regime's cost would be only slightly
below that for the Commission's average European Patent. Unless the official
fees for the Community Patent turn out to be very low, the total obtaining
and maintenance costs for the Community Patent are going to be way above
the corresponding costs for a US or Japanese Patent at €10,330 and
€16,450, respectively (see page 11 of the Commission's proposed Regulation
of 2000). In fact, they may not be that much lower than those for the
average European Patent. ICC supports the provision that the proprietor
has two years to file the claims translation.
Turning now to official
fees, ICC has said that the official fees, including the renewal fees,
should be no higher than is necessary for the EPO to administer the Community
Patent system and that a national patent office should only receive any
money from the EPO in payment for services rendered to it by that national
patent office on the Community Patent system. ICC remains firm on this
principle which the Commission did apparently once support. However, the
member states have insisted that much official fee money be remitted by
the EPO to the member states. Article 60(1a) of the revised Regulation
requires that 50% of the renewal fees paid to the EPO to maintain Community
Patents will be paid to national patent offices according to a distribution
key still to be decided. Recital 5a says the renewal fees for a Community
Patent must not exceed the l
evel of the corresponding renewal fees for
the average European Patent. On the Commission's own figures (press release
of 7 March), the total obtaining and maintenance costs for the Community
Patent will be €23,145 as compared to €28,500 for the average
European Patent and to €10,330 and €16,450 for, respectively,
a US Patent and a Japanese Patent.
While the precise
level of the official fees has not yet been decided, the cost of the Community
Patent will clearly be too high for world business so this criterion is
not met.
3.
Independent supervisory body
ICC still believes that, while the EPO should administer the Community
Patent system, the supervision (such as financial control) of the system
should be the responsibility of a body independent of the EPO. The Commission's
proposed Regulation and the revised Regulation both envisage this (see
Article 61 in the latter). This criterion is thus still met. However,
ICC again asks for user representation on both the supervisory body and
the body administering the Community Patent system.
4.
Co-existence with existing systems
The Commission indicated (section 2.4.6 on page 18 of the proposed Regulation)
that the Community Patent system should be allowed to co-exist with the
existing two systems for obtaining national patents i.e. by applying to
each national patent office direct or to the EPO for a European Patent
generating a bundle of national patents. Since the EPO will be responsible
for granting Community Patents and indeed up to grant a Community Patent
application will be treated the same as a European Patent application
designating all EU member states, these two systems must surely be fully
interchangeable up to grant. On grant, the proprietor should be free to
chose between a Community Patent and a European Patent designating at
least some of the EU member states (and, if desired, one or more of the
non-EU member states).
In addition, the Community
Patent after grant must in specifically defined situations be convertible
into a European Patent designating the EU member states; one such situation
arises because of the language regime in the revised Regulation which
requires translation after grant of all the claims into all EU official
languages (Article 24a). If this requirement is not satisfied, Article
24b provides for conversion of the Community Patent into a European Patent
designating one or more member states. However, this Article now provides
(perversely) that conversion must be effected within the two year term
for filing the claims translations. This is totally unacceptable to ICC
because conversion will be impossible in the quite likely scenario where
a proprietor does not realize until after the two year term has expired
that a claims translation was not in fact filed in time. The conversion
arrangements will require very careful drafting to avoid producing a conversion
system which is too risky for users. If the claims translations are not
satisfactorily filed within the envisaged two year term, a patentee wishing
to save his Community Patent by conversion to a European Patent should
have a term of say 6 months after that to satisfy national translation
requirements for validating European Patents in those member
states which
have reserved under Article 65 of EPC. Clearly these national requirements
must be changed to accommodate conversion more than two years after grant
of the Community Patent.
Further, the possibility
of applying direct to a national patent office for a national patent must
remain. This system benefits individuals and SMEs. ICC would firmly oppose
any suggestion in the future that anyone should be forced pre-grant to
take a Community Patent rather than a European Patent or a directly obtained
national patent.
The revised Regulation
supports (in Recital 4) the Commission's intention that the three systems
should co-exist. ICC therefore concludes that this criterion is still
generally met. More clarification on the interchangeability between the
Community Patent and the European Patent systems is however required.
ICC would strongly reject any suggestion that any inventor should be precluded
in any way of obtaining a patent under any of the three systems.
Role
of National Patent Offices
Recitals 2b and 2c of the revised Regulation suggest a searching role
for national patent offices provided that adequate quality control arrangements
are put in place. ICC would prefer that, rather than national patent offices
undertaking search work on Community Patents, the EPO should increase
its searching capacity perhaps by opening branch offices in various member
states.
Other
substantive law issues
ICC will now comment on certain of the Articles in the proposed Regulation.
ICC has seen UNICE's letter of 24 July 2003 giving that organisation's
latest comments on the Regulation and ICC generally supports the UNICE
positions.
Article
9a (Government use)
Those member states which have the power under national law to work within
the scope of a national patent when necessary for essential defence or
national security will inevitably insist on having the same power on Community
Patents. However, more safeguards should be introduced into the Article.
The national law must comply with international obligations (such as the
TRIPS Agreement). Government use should be permitted in only the member
state concerned (for example, Germany should not be allowed to authorise
use in France). The CPC, and not national courts, should adjudicate on
any disputes over government use.
Article
10 (Community exhaustion of the rights conferred by the Community patent)
This Article should specify that express consent is required before the
right in a Community Patent can be exhausted and the word "specific"
should be inserted before the word "product" in line 3 of this
Article.
Articles
21 to 24 (Compulsory licences)
ICC believes that responsibility for granting and deciding the terms for
a compulsory licence (and indeed responsibility for deciding the terms
for a licence of right under Article 20)
should generally be given to
the court. The current wording of Article 21(1) and (2) giving to the
CPC the responsibility on granting compulsory licences on Community Patents
is therefore supported. ICC doubts whether it is justified to make an
exception in times of crisis or in other situations of extreme urgency
and give to the Commission the power to grant compulsory licences when
so requested by a member state (Article 21(3a)); however, the conditions
for the grant and the terms of the licence should always be subject to
review by the CPC.
Article 21(3) further
gives the Commission the power to grant a compulsory licence where it
is a necessary remedy to an anti-competitive practice. Is the expression
"authorise the exploitation of a Community patent" as recited
in Article 21(3) intended to have a broader meaning than to "grant
a compulsory licence" as recited in paragraphs (1) and (2), for example
by giving the Commission the power to grant blanket authorisations without
the need for individual applications? ICC would strongly object to such
an extension which would seemingly be contrary to Article 31(a) of the
TRIPS Agreement and which would raise doubts about the full applicability
of the provisions of Article 22 to such authorisations. Further, it would
seem consistent with the EU Treaty that the ECJ, and not the CPC, be competent
to review the terms of a licence in this case. This should be clarified
in the Regulation as should the fact that anti-competitive practices mentioned
in Article 21(3) must be an abuse of a dominant position involving a Community
Patent, within the scope of Article 82 of the EU Treaty.
According to Article
33(2), a compulsory licensee can sue infringers if the patentee declines
to do so. ICC opposes this provision as interfering with the patentee's
discretion to manage his property as he sees fit. Perhaps, the compulsory
licensee should be free to withhold licence royalties while substantial
unchallenged infringement is taking place.
Article 24c (Authentic
text of a Community patent application or of a Community patent)
Paragraph (1) of this Article states that the authentic text of a Community
Patent etc. is the text as granted by the EPO. ICC fully supports this
principle but cannot accept its derogation in paragraph (2). Under this
paragraph, the authentic text for determining infringement etc. would
be the translation of the claims into the language of the member state
where infringement occurs if this translation confers narrower protection
than the language of the proceedings in the EPO. This would result in
some cases with a Community Patent's claims having different scopes in
the various member states thus prejudicing the unitary nature of the Community
Patent. ICC asks that paragraph (2) be deleted.
Article
25 (Renewal fees)
When a Community Patent has lapsed through failure to pay a renewal fee
by the due date, a specific provision is surely required to allow a patentee
to restore his Community Patent under the usual conditions (taking the
UK as an example, see Section 28 of the Patents Act 1977 and Rule 41 of
the Patent Rules 1990). ICC is uncertain whether the reference to "Office
deadline" in Article 27a of the revised Regulation allows such restoration.
Article
27 (Lapse) - Supplementary Protection Certificates
This Article provides that the Community Patent lapses 20 years after
the date of filing of the application on which it was granted. The Regulation
itself must provide clear legal basis for Supplementary Protection Certificates
to be issued on Community Patents. It must be drafted so that the Regulation,
together with Regulations 1768/92 and 1610/96, make it clear that Community
Patents can form the basis for SPCs for pharmaceutical, agrochemical and
biotechnological products. Failure to do this could on its own result
in these industries not using the Community Patent system.
Article
28 (Grounds for invalidity - national prior rights)
Article 28(1)(f) provides that a Community Patent is invalid if its subject
matter is not new having regard to an earlier national patent or application
with an earlier priority date but published after the priority date of
the Community Patent. This version of the whole contents doctrine means
that a Community Patent could be invalidated in its entirety by a national
prior right in just one country in contrast to a European Patent where
in that scenario just the national patent in that country and generated
by the European Patent would be lost. However, under the revision of EPC
agreed at the Diplomatic Conference in 2000, Article 54(4) is being deleted
so in due course a European Patent will be invalidated for all designated
countries by an earlier European Application only designating say one
country. Under these quite draconian regimes for Community Patents and
European Patents, some users may well be dissuaded on this ground alone
from using either system, preferring instead to apply for national patents
directly from national patent offices.
Article
29 (Effects of invalidity)
Article 29(2)(a) apparently provides that an earlier granted injunction
would stand even if the Community Patent is later found invalid while
Article 29(2)(b) seems to envisage at least some repayment, even in the
case of a paid-up licence fee, if the patent is later found invalid. Perhaps,
in such cases, any injunction should be lifted and monies already paid
in respect of past or future actions should not be refunded.
Article
31 (Invalidity action)
This Article amongst others implies (in paragraph (3)) that a Community
Patent can be opposed at the EPO after grant. The Regulation should explicitly
specify that a Community Patent can be opposed in the EPO within the term
laid down by EPC. If a Community Patent is under opposition in the EPO
when proceedings are commenced on it before the CPC, the CPC should have
the discretion to stay proceedings. ICC therefore objects to Article 31(3)
of the revised Regulation which requires the CPC to stay in such situations.
Article
44 (Damages)
Article 44(2) expressly states that damages for patent infringement shall
not be punitive. While ICC does have reservations about the awa
rd of punitive
damages in patent cases, it does feel that a person found liable for infringing
a Community Patent should compensate the patentee by more than he would
have done if he had taken a licence under the patent before being sued;
otherwise Article 44 could be said to be an "infringer's charter".
In Article 44(3) (and
in Article 11(2) relating to damages for infringement between publication
and grant) of its proposed Regulation, the Commission suggested that the
quid pro quo for the reduced translation regime then proposed should be
reduced damages for infringement for an infringer who is ignorant of the
language of the Community Patent. The revised Regulation maintains this
damages regime in for example Article 44(3) but of course only with respect
to infringement committed between grant and the expiry of the term for
filing claim translations as required by Article 24a. Article 44(3) now
provides that "an alleged infringer who has his residence or principal
place of business in a Member State whose official language ……
is not the language in which the patent is granted or in which a translation
of the patent claims has been made public in accordance with Article 24a
or Article 58, is presumed not to have known nor to have reasonable grounds
for knowing that he was infringing the patent. In such a situation, damages
for infringement shall only be due ……from the time he is notified
of a translation of the patent claims in the official language of the
Member State of residence or principal place of business of the alleged
infringer".
ICC has supported
this damages regime in principle but repeats its doubts about its workability
in practice. For individuals and perhaps small enterprises, the CPC will
be able to determine their language capability quite easily (although
in some cases cross-examination of a person's language knowledge, or lack
of it, may be required). However, how is the system going to work for
large multi-national company defendants? What is the language knowledge
of such a company in the country concerned? What about companies based
outside the EU who are alleged to be infringing by importation into the
country in question? Further, for reasons of legal certainty there must
surely be a simple mechanism whereby a patentee can determine the language
capability of a potential defendant. To achieve a more workable system,
the language knowledge presumption should be reversed, i.e. an infringer
based in a country not having the Community Patent's language as an official
language should be presumed to understand that language unless he can
prove the contrary.
Important
conclusion
ICC has concluded that the Community Patent system as envisaged by the
Common Political Approach and the latest revised Regulation dated 4 September
2003 does not unfortunately generally satisfy all the four main criteria
for a Community Patent system to be acceptable to business. These criteria
are:
- fully satisfactory
litigation arrangements;
- low cost for obtaining
and maintaining Community Patents;
- a supervisory
body independent of the European Patent Office to supervise the Comm
unity
Patent system administered by the European Patent Office;
- continued co-existence
with existing patent systems.
While the last two
criteria may well be met by the system as finally agreed, the first (important)
criterion may not be satisfied and the second equally important criterion
is not met. ICC stresses that the envisaged system must be substantially
improved if the system finally introduced is to be used by world business
to a significant degree.
For the Regulation
to be adopted by a unanimous vote in the Council, yet further compromises
may be required. These could render the Regulation as adopted unacceptable
to world business with the result that the Community Patent system would
not be used to any significant degree. This would be a particular danger
if, under the Regulation as adopted, the litigation arrangements prove
unacceptable to world business and/or if the cost of obtaining and maintaining
the Community Patent (especially the translation and official fee regimes)
were much higher than that currently envisaged. Therefore, ICC strongly
urges that such compromises be kept to a minimum, otherwise all involved
in the highly desirable Community Patent project could sadly be wasting
their time.
Document 450/975
7 October 2003
|
