Sarah Turner, of counsel, Hogan Lovells

Opinion: Patently obvious: EU patent court should be in London

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  • Whilst it would make buiness sense to locate the Court in London, the UK's negotiating position has been hopelessly undermined in the recent Eurozone summit. The best outcome we can hope for now is that the Central Division is located in Paris, just a quick hop away on the Eurostar. If it goes to Germany then the UK's illustrious tradition of high quality patent litigation will become little more than a footnote in history.

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  • "The English courts are already the chosen forum for many European patent ­disputes. The quality and relative speed of well-reasoned decisions, as well as the use of court procedures such as cross-examination and disclosure, are much respected throughout the world. "
    English Courts are all, but NOT the chosen forum!
    Here are some stats re patent cases per year
    Cases: 85 (UK), 700 (DE), 300 (FR)
    Source: http://www.ecap-project.org/archive/fileadmin/ecapII/pdf/en/activities/national/thailand/20050719_20/holzer_patent_litigation_europe1.pdf
    You can not seriously say that the English courts are the chosen Forum, as the number of patent cases brought before German courts is about 8 times higher!

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  • You have to look behind the stats, I'm afraid.
    For example, assume someone sues for the infringement of 5 different patents in the UK, and the defendant counterclaims for revocation of each patent in defence. This would all take place within a single action in the UK.
    However, in the German Courts, as a separate action is commenced for each patent, and as revocation proceedings are separated from infringement proceedings in Germany (i.e. bifurcated), each revocation action would also be counted as a further separate action.
    Therefore, in the above example, there would be only 1 action in the UK, but 10 separate actions in Germany. The validity of comparing the raw number of German actions with the raw number of UK actions is therefore questionable.
    On average, there are probably 2-3 patents in suit in each UK action, and infringement and validity are both in suit about 75% of the time. As a rough rule of thumb, therefore, if you multiply the UK figure by 4 you will obtain a metric which is comparable to the number of German actions, given the differences between the two systems.
    Further, the German system structurally favours patentees, as defendants to infringement actions cannot make a counterclaim for revocation. Patentees are therefore more likely to assert dubious patents in Germany than they are in the UK, to the detriment of the freedom to operate in many industries, particularly in the telecoms and electronics fields.

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  • "However, in the German Courts, as a separate action is commenced for each patent, and as revocation proceedings are separated from infringement proceedings in Germany (i.e. bifurcated), each revocation action would also be counted as a further separate action."
    This is simply wrong! The stats above are only related to infringement actions brought before an ordinary court. The above stats do NOT contain revocation actions brought before a completely different court, namely the German Federal Patent Court.
    The reason why English courts are NOT the chosen forum is simple: Costs!
    In the UK, the average costs for infringement proceedings before a first instance court is
    € 150.000 to €1.500.000 and before a second instance court €150.000 to €1.000.000. In Germany the respective costs are €50.000 (first instance) and €90.000 (second instance).
    These numbers are taken from a published document of the European Commission named „Enhancing the patent system in Europe“. Is this document also a "lie"?
    Finally, I want to quote Stefan Luginbuehl (PhD) a Suisse (not German!) lawyer working at the EPO, in particular page 39 of his book "European Patent Law - Towards a Uniform Interpretation":
    "It is no secret that most internationally active companies would first pick Germany as the best jurisdiction for patent litigation. As mentioned above, more than half of all patent disputes in Europe are dealt with before German Courts, and this tendency is increasing. The reason for this phenomenon is commonly explained as a combination of efficiency, relatively low costs, and quality of decisions."
    Is Dr. Luginbuehl also a liar?

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  • What a pity contributors are not willing to identify themselves... The statistics and comments from Luginbuehl shoudl already be known to the IP branch of the legal profession. If they are in denial about this there is a serious problem. The real issue is High Court practice and procedure. The English way has become overly complex as can be seen by looking at trial length which on a like-for-like basis has grown 300% in less than 2 generations. Factor cost increases (lawyer charges) have grown faster than RPI over the same period and some might suggest that the profession itself has driven this work off-shore. It is probbaly too late to get the IP work back but it is to be hoped the Bar, the Law Society and govenment will at least start to look at whether and how High Court procedure and practice can be streamlined without compromising justice. What next the loss of Commercial Court work?

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  • Is identification really that necessary... isn't it quite obvious from their arguments that this is a German and an English lawyer? I do not think many people deny the figures themselves it is the context they are put in that causes debate. Clearly, as the English lawyer has already said, cases are dealt with in bulk with multiple patents in suit and validity being considered together. Although I am unfamiliar with these sources and new to IP Litigation, common sense would surely dictate that an average cost per case would be higher in the UK based on the consolidation of these two actions. Also, wouldn’t the way the procedure is set out in the UK make it practically impossible to separate costs of infringement and validity in the UK (It is not as if there is a separate costs schedule for each action). So I am not sure how a valid comparison could be drawn in this instance. I also have some doubts on whether the stats which the German Lawyer refers to being based on infringement alone. I have seen the slides in that presentation and there is no reference to infringement alone being considered. But as I say this is just an outsider’s opinion …

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  • "I also have some doubts on whether the stats which the German Lawyer refers to being based on infringement alone. I have seen the slides in that presentation and there is no reference to infringement alone being considered. But as I say this is just an outsider’s opinion "

    And what about the citation from Dr. Luginbuehl's book? Wait, here is another one. In Dr. Luginbuehl's book (cf. page 27) mentioned above it is also stated that:
    "... the speed of proceedings have led to the fact that more than 50 per cent of all patent INFRINGEMENT cases in Europe are heard by German courts."

    As a basis for this "allegation" Dr. Luginbuehl cites four documents including document 12786/02 of the EU Council. This document and Dr. Luginbuehl are both referring only to infrinegment proceedings. However, I am sure that no numbers at all would convince you. As Ashley Balls already stated: "i(I)f they are in denial about this there is a serious problem."

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