Daniels in the lions' den: can they avert a disaster of Biblical proportions?

Last Friday, while this Kat was at the LIDC Conference in Oxford, he was raging against the monstrous abuse of monopoly which resulted from the laws currently in place to protect the London Olympics and Paralympics in 2012 against anything that might be regarded as a whiff of competition.  Commenting on the (admittedly entertaining and well-presented) talk by the affable, unflappable Farisha Constable, LOCOG Brand Protection Manager, he said this:

"Usually when I, as a great enthusiast for IP rights, speak at a competition law conference, I feel like Daniel being thrown into the lions' den. However today, for once, I feel that I am on the side of the lions and that it is Farisha who is being thrown to them".   

By total coincidence, while the Kat was citing Daniel v Lions at the LIDC Conference, a whole group of Daniels was being cast to the lions the other end of Europe, in the lovely city of Warsaw.  The cause of this was the Academy of European Law's conference, The Future Unified Patent Litigation System in the European Union, "organised in the framework of the Polish EU Presidency of the EU Council" which was billed as providing

"... a platform for discussion on the new draft agreement on a Unified Patent Court presented by the Hungarian Presidency on 14 June 2011".

What, perchance was to be discussed on this platform? The programme explained:

"The objective of the conference is to analyse how issues raised by the Court of Justice of the European Union in its Opinion 1/09 on the previous version of the agreement regarding compatibility with EU law were addressed, as well as to promote an exchange of views between courts and practitioners on the functioning of the European Patent Court".

The event commanded an all-star line-up of speakers.  In case you were wondering, they were

• Margot Fröhlinger, Director, DG Internal Market and Services, European Commission, Brussels
• Dr Klaus Grabinski, Federal Supreme Court (Bundesgerichtshof) Karlsruhe
• Professor Sir Robin Jacob, University College London 
• Marcin Korolec, Undersecretary of State, Ministry of Economy, Warsaw
• Eurico Marques dos Reis, Judge of the Court of Appeal, Lisbon
• Kevin Mooney, Partner and Head of Intellectual Property, Simmons & Simmons, London
• David Rosenberg, Industry Affairs Manager, Corporate IP Department, GlaxoSmithKline, Brentford
• Thierry Sueur, Vice President, Intellectual Property and Vice President, European & International Affairs, Air Liquide (tbc)
• Maciej Szpunar, Undersecretary of State, Ministry of Foreign Affairs, Warsaw
• Professor Winfried Tilmann, Of Counsel, Hogan Lovells International, Dusseldorf
• Vincent Tilman, Senior Advisor European Affairs, Eurochambres, Brussels
• Robert van Peursem, Judge, The Hague District Court
• Pierre Véron, Avocat, Véron&Associés, Paris

Unbeknownst to the cast, and to the 80 or so participants, there was also an envoy from the Republic of Katland, who sent back this report:

"The purpose of the conference, declared the Polish Minister opening proceedings, was to "look at the Court from the point of view of users - the Judges, lawyers and entrepreneurs". [Is 'entrepreneurs' a euphemism for 'litigants'? If so, the needs of plaintiffs -- who make the decision to go to court -- and defendants, who have little option to go when sued, may reflect different points of view. In any event, why are judges and lawyers listed ahead of the litigants? This reflects a poorly-focused mind-set, say Merpel] Unfortunately, this message had clearly not reached Winfried Tilmann who, speaking next, immediately informed the conference that "there was no political will in Council or in Parliament to re-open [the December 2009] package deal". He concluded with the dark warning that speakers should "resist the temptation to fight old battles". Plainly precisely nothing of consequence was up for discussion in his opinion, which begged the question: what actually was the point of the conference?

A succession of speakers then largely toed the Tilmann line. Unsurprisingly, perhaps, these were led by the German speakers such as Judge Klaus Grabinski. But French support too came from Thierry Sueur. While he sensibly urged that the Court be allowed to decide the language of proceedings, he implored Poland not to be afraid to push the Court agreement through, saying "let's not look for perfection" [Heaven forfend that one should even consider such a thing, adds Merpel. No-one really wants a perfect patent litigation system, do they?].

Then at last, (likening himself to Daniel entering the lions' den) Kevin Mooney pointed out a few of the fundamental flaws in the proposed arrangements, notably that no-one had explained how the Court was supposed to be funded, following withdrawal of the Commission's financial support (so central to the 2009 draft) consequent upon the ECJ's March 2011 opinion.

Following this lead, the touch-paper was well and truly lit by Judge Robert van Peursem, with a typically Dutch piece of plain speaking. Deeply critical of the proposals, he saw no reason to stick with the 2009 Council conclusions, saying it was not just a case of mending some details. He said that the "politicians should start to listen to the users" [If only! They scarcely listen even to one another ...]. Expressing strong support for the "excellent" British "Concerns of Principle" paper [on which click here] and the equivalent Swedish paper, he implored the Commission to "listen to those expert voices sincerely, not politely, or not at all". So strong was his condemnation of the proposals, that he declared that he "would seriously consider to decline to take part in this system as it stands", saying also that he spoke for the majority of his first instance colleagues.

Never a man to be outshone, Sir Robin Jacob described all amendments to the litigation proposals since the EPLA proposal as retrograde, and warned of the dangers of creating the "patent equivalent of the Euro". He said that if he were a user he would certainly opt out.

Noble support for the Daniel cause came next from David Rosenberg, who declared himself a wholehearted supporter of a unitary court, but only if it was better than the present system -- which this was not. He observed that it was important to get it right for innovation, not for politicians. It was not just a political project and if it had to take more time, so be it. This was not a case of following the advice of Macbeth (right) that " If it were done when 'tis done, then 'twere well It were done quickly": That, he pointed out, was said in relation to the killing of a king, whereas for this project, a more apt exhortation would be "when it is done, it should be done right".

So what did Margot Fröhlinger make of all this in her speech? Dishearteningly she said that some aspects of the agreement such as bifurcation and composition of panels "could not be improved". She was "surprised" at the criticism. This envoy from Katland was not alone in his surprise at her surprise. Robert van Peursem pointed out that he had made precisely the same observations at five different conferences [This just goes to show how foolish it is for members of the IP community to believe that their expertise and experience have any value in a world of convenience and expediency]. It was impossible to put any questions to Margot Fröhlinger, however, to ask her if having now heard these criticisms, she would listen, or whether she would follow the Tilmann line. Instead, the subsequent "debate" consisted mainly of a series of attacks on the Daniels by various of the faithful lions. Thierry Sueur described the dissenting speakers as "isolated" (a suggestion strongly rebutted by Robert van Peursem) and astonishingly responded to Sir Robin Jacob's plea not to "do a Euro" by describing the Euro as a "great success". This perhaps summed up the attitude of some: that criticism (no matter how constructive) is quite simply heretical to the political project that the unified court has become, and those heretics deserve to be thrown to the lions.

But it was not all doom and gloom for those who would like to see a good agreement, not just an agreement at any cost. Reassuringly, the German view was far from universally supportive. Speaking from the floor, having curiously been deprived of a speaker's platform, Jochen Pagenberg voiced support for more debate on the issues, including revisiting exclusivity in purely domestic disputes and suggested a transitional period of 15 years or more. Even Margot Fröhlinger appeared to concede that the transitional and opt-out arrangements could in fact be considered further.

Daniel waited patiently to be eaten while the lions debated the benefits of bifurcation and pondered as to whether they should dine alone, in pairs or in panels of three ... 

So what will the next steps be? Almost certainly some decisions will never be overturned. The bifurcated system is here to stay. So too is the panel system of permanent local panels of two local judges and one guest judge. This combination will almost certainly lead to forum-shopping among the divisions of the Court. But other issues may yet be revisited: the transitional arrangements in particular. If improvement here could be negotiated, together with a concession that the Central Division could be used by patentees commencing infringement cases, that would make a considerable difference. Let us hope that the political imperative to do a deal - any deal - does not in Sir Robin Jacob's words leave us in 15 years' time with a system which is more expensive than the present one. Whatever the outcome, however, the Daniels deserve a great deal of thanks for their efforts in Warsaw. The lions certainly know now, if they did not know it before, that they are in for a fight to reach a better agreement".

The altar of expediency

Before Europe's patent practitioners burn the old books
on patent litigation, let's all be sure that we are happy
with the contents of the new ones ...

That Unified Patent Court which has so divided opinion in Europe has been very much in the IPKat's mind in recent days.  The problem is that, while most people are either enthusiastic or at least accepting of the idea of having a Unified Patent Court for the European Union's 27 Member States, many experts are anxious about the actual details and a simple Kat could be forgiven that everyone seems to want a different one.

Anyway, the Draft agreement on a Unified Patent Court and draft Statute of 14 June 2011 has now been examined, weighed, measured, pondered, praised, criticised, printed out and converted into fleets of paper darts -- and there is no doubt that there are some serious problems which remain to be resolved.

Here in the United Kingdom, the grandly-named EU Patent Reform Consultation Group (concerning which see CIPA, August 2011, pages 488-490) formed a sub-group to examine the Draft Agreement.  The sub-group did not consist of a bunch of conscripts who had been dragged from the drinking houses of Holborn, sobered up and then instructed to moan about the Draft Agreement; rather, it was a select gathering of some of the finest patent experts on this part of the planet -- academics, practitioners, patent owners and even a blogger -- most of whom are, it may gratifyingly be said, friends of the IPKat even if, as indicated, none of them has [recently, says Merpel] been dragged from any of the drinking houses of Holborn.

What points have been troubling the sub-group? Here are some of them, in no particular order (though you can read them all for yourself in full in the sub-group's Concerns of Principle paper, here):

• Momentum towards political adoption this year is dangerous. It appears that the Commission and the Presidency of the European Union expect to secure adoption of the Draft in political terms by the end  of 2011 [that's 100 days from now] and hope for a diplomatic conference to get it signed up under the Danish Presidency during the first six months of 2012 [the London Olympics start on 27 July ...]. This isn't a huge amount of time, given the number of weekends and holidays between now and then and the fact that the various problems posed by the task of creating a workable Unified Patent Court system have to be solved by people, not by calendars.

• There is clearly still much that is unsatisfactory about the substance of the proposal as it stands. Annoyingly for the practitioners who will have to work with the system if it is to confer any genuine benefit and not be a disaster, some of the substantive points which trouble them relate to matters that have already been agreed at political level, of which the most significant in this Kat's opinion is the requirement to have two national judges in the proposed local divisions. Given that this has been agreed at the political level, it will be a difficult subject to revisit -- but it's easier to revisit it now than to live with it until the end of time, which may be the earliest that the proposed system can expect to be changed once it has been put into operation. Other substantive points are more technical, as enthusiastic readers will see if they care to peruse Sections 15 and 17 of the Concerns of Principle paper.  

• The drafting of the Draft is none too felicitous, since many bits of it are in need of clarification. The sub-group's marked-up copy testifies to this, since it bears over 100 corrections or amendments: a sure indication of the fact that there is still a lot to do.
  
  
• Costs, costs, costs ... Those silly litigants will keep ask about them.  Does it really matter to them? Surely not. Can't they see that it doesn't matter how much it will cost them, so long as they remember that the Unified Patent Court is the most politically expedient compromise that money can buy? On a less emotive note, a complaint that is made about many national systems, including that of England and Wales, is that patent litigation is too expensive. A related complaint is that it is often difficult to gain a reliable notion of how much it is likely to cost.. Patent litigation is an exercise in risk management, and this requires more guidance about the likely cost, but there is frustratingly little clarity on this topic. While it might be unrealistic to start with a consideration of what litigants are prepared to spend and then work backwards towards a system that literally fits the bill, the exercise would help draw attention to the importance of adequate provisions for costs.
  
  
• The provisions giving the Unified Patent Court exclusive jurisdiction over European patents, which you will find in Articles 3 and 58, have struck fear into the heart of many a robust corporation. Not every litigant is happy to risk its very existence in an untried and untested court, untrammeled by practice and precedent, and the case in favour of extending the ability to opt out is strong.  Also, there is an old saying that the proof of the pudding is in the eating.  If the court is good, it will be used. If it is not, one should not be forced to use it -- a point made in Section 5 of the Concerns of Principle.

The IPKat is convinced that the sub-group's work proves convincingly that a large number of issues need to be addressed and reiterates that the mere fact that this means reopening issues that many would see as agreed is no reason for not addressing them.  To do so otherwise would be analogous to refusing to check the map when you're heading in the wrong direction because you've achieved prior consensus as to which was the right road to take.  Merpel bets that there must be other countries whose patent experts are having, or have had, similar thoughts, and she hopes that they will make their anxieties and their preferences known too.

The IPKat's favourite means of resolving disputes:
much cheaper than litigation; much quicker too --
and a lot more fun! (Photo by Cathcat).

While some folk may maintain that the occasionally irreverent and sometimes humorous comments made by a pair of fictional Kats do not deserve to be taken seriously, this blog urges readers not to confuse the medium with the message.  The Unified Patent Court is an important project with potentially almost unimaginably important consequences for Europe's hard-pressed economies, innovative industries and manufacturing sectors.  It has taken Europe several centuries of organic evolution to develop the system which we have today, centuries of trial and error, experiment and improvement, measured and deliberate thought and a shared sense of what it is we are trying to achieve. Let us not throw it all away in a matter of months for the sake of speed, a frail, vulnerable and beautiful ideal sacrificed on the altar of expediency.