IPcopy was very interested to read AmeriKat’s excellent post on IPKat about the joint letter that Apple, Google and Samung (amongst others) have sent to the Member States of the European Union, Members of the European Parliament, the European Commission and the Preparatory Committee of the Unified Patent Court. The letter which was sent to the New York Times (see NY Times article here) notes that “an effective and balanced unitary patent system has the potential to decrease the costs of obtaining patent protection, increase European competitiveness, and support the long-term growth of innovative industries in Europe and abroad”.

The letter then goes on however to raise two major concerns with the Rules of Procedure (15th Draft here), namely bifurcation and injunctions.

IPcopy notes that the issues of bifurcation and injunctions were also raised at the recent ‘UPC Rules of Procedure Consultation Event for Stakeholders’, jointly hosted by Bristows LLP, the IPO, CIPA and the IP Federation. Our post on that event can be found here where these issues and more are discussed in greater detail.

A few observations spring to mind reading the NY Times letter.

Firstly, the court procedure at the UPC means that in any action brought before the court each party’s infringement and validity positions will be fully disclosed to each other and to the court during the first six months’ written pleadings phase. The UPC is therefore different to the German system in this respect where completely separate infringement proceedings may be kicked off before the defendant has time to start their own validity action. IPcopy wonders whether the courts of the UPC will bifurcate that often when that decision whether to bifurcate or not will only be made once the pleadings phase is over. IPcopy also notes the effect of Rules 37 and 118(3) of the Rules of Procedure under which infringement actions may be stayed pending any revocation decision. Rule 118(3) also allows the court to make decisions under the condition that the patent is not subsequently held to be invalid (or partially invalid).

Secondly, the unified patent court will be a “loser pays” costs court (Chapter 5 of the Rules of Procedure). IPcopy suggests that such a system will tend to keep more spurious PAE actions to a minimum.

And finally, the $29 billion figure for PAE related litigation damage in the US derives from a paper published by Boston University professors James Bessen and Michael Meurer. The conclusions drawn in that paper were eye-catching and provocative enough to be re-quoted in nearly every article that seeks to look at the issue of patent trolls (even the White House isn’t immune to regurgitating this figure – see page 9 of the White House Patent Report!). However, if you look a little closer (for example, here, here, here or here) you’ll see evidence that the Bessen & Meurer paper may be flawed with figures that are based on a biased sample, and a dodgy definition of NPE (non-practising entity) among other issues.

IPcopy hopes to see further reponses to the consultation on the rules of procedure, the closing date for which is 1 October 2013, in due course.

Mark Richardson  26 September 2013