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After yesterday’s post about the Rules of Procedure consultation comments from the IP Federation comes news of Bird & Bird’s own response.
The full submission can be accessed here. Highlights of the submission were detailed in the email that popped into IPcopy’s Inbox a few minutes ago and these are reproduced below.
• The first thing that patent owners will need to do is to decide whether they want to opt out their traditional European patents from the jurisdiction of the UPC. We have proposed a number of improvements to the opt-out/opt-in system of Rule 5 to make this as smooth as possible.
• The language regime in the current rules is too complicated. We propose that the plaintiff can choose from the languages designated by the division of his choice. This only requires deleting Rule 14.2
• The rules for orders to produce or preserve evidence should contain checks and balances to safeguard the confidentiality of trade secrets and commercial information. Such information should only be disclosed to the applicant after a proper evaluation by the Court and these orders should only be granted if the applicant has carefully and sufficiently substantiated his claims. To achieve this, we have proposed a number of improvements to Rules 190 – 196.
• Amicus curiae briefs, which are letters to the court expressing views on legal issues, will be an important tool for ngo’s and companies to assist the Court in the proper development of its case law. Bird & Bird fully supports EPLAW’s proposal for a new Rule 318 on this.
• There should be case management that ensures expedient litigation and coordination of cases that are related. To that end, we have suggested improvements to Rules 25 and 70 and a new Rule 340a on the coordination of simultaneous actions.
We’re sure more submissions will be made public in the near future. Will details of all the submissions be made public on the Rules Committee website we wonder?
Mark Richardson 1 October 2013
IPcopy 
I know this blog has helped popularise the notion of hardwired bifurcation but I j cant presently follow the logic of Bird and Bird’s submission that rule 25.3 is incompatible with Art 47.5.
The UPCA Art 32.1 list the various type of proceeding that the UPC has competence for. Infringement (a), Revocation (d) and Counterclaims for revocation (e) are all listed as separate proceedings. This can be contrasted with, for example, counterclaims concerning licences are listed together with infringement actions
Art 33.3 a+b confirm that the counterclaim for revocation is a separate proceeding to the action for infringement rather than a part of it and can of course be heard by a different court.
Art 47.5 specifies that i. invalidity cannot be part of an action for infringement IF the patentee is not a party.
and ii. the defendant wanting to question validity must file proceedings against the patentee
Rule 25.3 states that the defendant file a countercliam for revocation (i.e new proceedings) which must bring in the patentee as a party. Consequently it does not violate i as the invalidity is part of the countercliam proceedings not the action for infringement . It does not violate ii/ as the proceedings are served on the patentee.
Is the worry simply that Art 47.5 second sentence explicitly uses the word “action” and Art 32.1 (e) does not use the word “action”? That the counterclaim is served on the patentee by the Registry rather than directly by the defendant? Those both seem very minor to me.
Thanks Anon for your comment. I have tweeted your thoughts at Bird & Bird’s IP Twitter profile so hopefully we’ll get some feedback from them.
I’m sure IPcopy will be taking a look at the various submissions in due couse so we’ll keep you thoughts in mind when we review them.
With regard to Rule 25.3 of the Rules of Procedure and Article 47(5) of the UPC Agreement my views are as follows.
The fact that Article 32 mentions counterclaims for revocation in a separate heading under (e) does not make it separate proceedings. The nature of a counterclaim is that it cannot exist without a claim. If there is no claim for infringement, a claim for revocation can only be brought directly against the proprietor before the Central Division under Article 31(1)(d), as provided in 33(4). In that case, the proprietor is always a party to the proceedings. Counterclaims for revocation on the other hand fall under 33(3).
47(5) refers to contesting the validity of a patent in an action brought by a licensee. This provision is intended to protect the proprietor. The action which a licensee can bring and which may trigger contesting the validity of the patent is an infringement action under Artcile 32(a) in conjunction with Article 47(2) or (3). (Validity is not decided in a counterclaim in an action for a provisional injunction under 32(1)(c), but at best prima facie assessed as a defence.)
In my view, the idea has been, as in many existing patent laws, that the validity of the patent should not be at stake – and certainly not with erga omnes effect – if the proprietor does not take part in the proceedings. If a third party wants to challenge the validity of the patent, he should involve the proprietor directly.
However, Rule 25.3 provides that the Registry will automatically serve the counterclaim for revocation on the proprietor, who by such service shall become a party to the proceedings. It does not even require a request from the defendant to do so. Thus, this automatic service by the Registry would render Article 47(5) completely mute.
A counterclaim cannot be heard by a different court and not even by a different division of the UPC; that’s also in the nature of a counterclaim. Of course, such a counterclaim may be bifurcated to the Central Division under Article 33(3)(b), but that is a totally different issue at which our comments on Rule 25.3 are not aimed.
Rule 25.3 does not say that the defendant should file a counterclaim for revocation by way of separate proceedings and it does not say that the defendant to this end should bring in the proprietor.
This means that the proprietor can be dragged into validity proceedings in a rather indirect way if his licensee brings an action against a third party, for which at least an exclusive licensee in general will not even need permission from the proprietor. Therefore we have suggested some solutions to this issue.
Wouter Pors
Wouter
Thank you for your helpful reply. it makes Bird & Bird’s logic easier to follow for me.
I agree that 25.3 more readily fits Ar 47.5 (second sentence) if the counterclaim is served on the proprietor directly by the defendant.
Otherwise I remain unconvinced. I suspect the reason may be my English background (I’m almost entirely ignorant on Dutch litigation) and the difference that may make to the intention of Art 47.5.
I agree entirely that Art 47.5 is intended to stop decision on validity being made without the proprietor being present but don’t agree that its intended to block counterclaims being filed in those circumstances.
In England Section 74 of the UK Patent Acts set sout proceedings in which validity of patent may be
put in issue and these include 1/a defence to an infringement action 2/revocation and 3/declaration for non-infringement. Section 74(5) contrasts defences with counterclaims. So in England invalidity not need be contested via a counterclaim for revocation but can instead be a defence to infringement without revocation. That is of course very rare since you may as well try to revoke the patent. More common I belive is to raise invalidity in a DNI (via a Gillette defence) since DNIs can be filed for planned hypothetical products when a full blow revocation action might be overkill, .
There is nothing that I can see in the UPCA itself which rules out invalidity being used as a defence to infringement (either in an infringement action or a DNI action) without a revocation counterclaim (or separate revocation action in the case of a DNI).
So from an English perspective I see 47.5 as intending to stop this kind of defence and not to stop counterclaims for revocation being filed.
Now on my reading, the draft rules do indeed render that moot in relation to infringement because rule 25.1 appears to insist on a counterclaim for revocation always being filed if an invalidity defence is made. This will presumably mean that if the counterclaim is bifurcated the infringement court will not be interested in deciding on the invalidity defence.
In relation to DNIs things seem less clear to me as Rule 62 doesn’t mention whether validity can be contested as part of a DNI as it can in England. Consequently Art 47.5 may still have teeth in preventing that being done where the other party is a licencee.
Regarding the semantics of whether a counterclaim for revocation is an additional/separate action/proceedings from an action for infringement, I still think it is. Just because filing a counterclaim is conditional (Rule 33.3) on an infringement action does not mean it forms part of the action and the wording of the bifurcation sections you refer to suggest to me that it is considered a separate entity from the infringment action and not a part of it that is carved out.
Dear Anonymous,
You should of course bear in mind that both the UPC Agreement and the Rules of Procedure have been drafted by a mix of common law and civil law people and thus they are a kind of mixture of legal cultures from at least the UK, Germany, France and the Netherlands (for the members of the Rules of Procedure drafting committee see http://www.unified-patent-court.org/consultations). I think the continental view generally is that a counterclaim is not a separate action. This also explains why a number of submissions criticize charging a court fee for such counterclaims.
I think in all of these countries you could indeed bring just a validity defence without filing a counterclaim for revocation. In fact, in preliminary injunction proceedings, you basically cannot do any more than that, since there is nothing preliminary about the revocation of a patent.
Article 47(5) may indeed not be intended to block counterclaims, but I do think the automatic way in which the proprietor is now dragged into the action by Rule 25.3 goes too far.
This was also discussed extensively at the AIPPI ExCo in Helsinki last month, resulting in the following AIPPI comment being submitted to the Preparatory Committee:
“If an exclusive licensee starts an infringement action and the defendant brings a counterclaim
for invalidity, such counterclaim is served on the patent owner. Rule 25.3 now provides that
the patent owner thereby becomes a party to the proceedings, regardless of whether he
appears in court. This rule does not sufficiently protect the position of defaulting defendants
as protected under the Brussels Regulation and must therefore be modified. The rule should
prescribe that before a patentee becomes a party, there must be an application to join the
patentee which must be served upon the patentee.”
(see http://www.aippi.org, online publications, position papers)
So, what both AIPPI and Bird & Bird are asking for is an improvement of the Rules of Procedure with regard to this issue.
Wouter Pors