Before the European patent system can grow in terms of having an EU unitary patent and a European Unified Patent Court (UPC), it may have to improve in some fundamental respects. Of course, improvements could also happen simultaneously with expansion, as part of the same package of measures. But if improvements were postponed indefinitely, prior expansion could have unintended negative consequences.
There are two key areas of concern:
the impact of the future UPC's rules of procedure on the tech industry, particularly companies that have to defend themselves against patents that wouldn't survive an invalidity challenge, and
the human rights conflict at the European Patent Office (EPO), which has recently escalated because EPO staff won a ruling form a Dutch appeals court but the Dutch government won't allow it to be enforced against the EPO for immunity reasons.
While industry concerns over UPC rules and a labor conflict at the EPO are undoubtedly separate issues, they involve essentially the same policy makers at the national governments that run the EPO and will run the UPC. This is a rather critical perspective but one might even say that both issues share the same root cause: due to the highly specialized nature of patent law, top-level policy makers defer too much to the experts who presumably are knowledgeable about the law (I don't have any reason to doubt that part) but, unfortunately, have an agenda of their own. It's the agenda of a system that has gotten out of control and of people whose careers benefit from expansion, rather than improvement, of the system. The net effect is that top-level decision-makers, such as national government ministers, put the fox in charge of the hen house, which appears to be a convenient choíce but inevitably results in institutionalized excess. I've said it before: this is a structural problem; any mistakes made by the people in charge are, at best, secondary.
The victims of this structural problem are the EPO staff on the one hand (I don't have a position on their compensation or anything like that, but I do believe that they should be protected in accordance with contemporary human rights standards) and, if things go wrong with the UPC, industry on the other hand.
Here's the latest with respect to industry and staff concerns:
A broadbased tech industry coalition that includes companies that are or used to be embroiled in litigation with each other (such as Microsoft and, through Motorola and now also Kyocera, Google) has previously raised concerns over the proposed UPC rules of procedure. I reported on a mid-November hearing and, previously, open letters published in September 2013 and February 2014.
A few days ago I discovered the UPC Industry Coalition's new, official website. It contains some video recordings of industry players voicing their concern and a pretty good infographic, which explains how the "injunction gap" (an issue I highlighted in my analysis of 222 smartphone patent assertions last October) allows holders of patents that should never have been granted in the first place to get leverage over defendants. The infographic states that "[a] majority -- about 67-75% -- of patents are wholly or partially invalid" (which various studies have shown, and in connection with smartphone patents it's even worse) but doesn't mention something that I'd like to add here: if a settlement occurs before the invalidity of the patent-in-suit has been established in court, it's not just bad for "Company A" but will also hurt the rest of the industry, which will face the same dilemma.
The website lists 16 signatories, some of which are industry associations that actually represents many companies. Compared to the groups that signed the aforementioned open letters, Apple is notably absent but I presume it still supports most if not all of the coalition's positions. It appears to me that a key objective was to have a stronger European component (European companies, European industry associations) than before, so maybe some U.S.-based supporters were purposely left out. For example, the videos all feature CEOs of European small and medium-sized enterprises (SMEs), which is a smart choice for political reasons. Just speculating, as I sometimes do (and sometimes refuse to do, depending on issue/context).
I recently pointed to an article by Germany-based patent litigator Dr. Björn-Ingve Stjerna on the legal proceedings surrounding the Unitary Patent and the UPC. That document has meanwhile been updated.
The EPO staff union (SUEPO) added a news item yesterday on questions posed by a Dutch member of the European Parliament (Dennis de Jong, a socialist) to the European Commission. His parliamentary group, GUE/NGL, is far more interested in workers' rights than in strengthening intellectual property proection, but that inclination does not diminish (not in the slightest) the legitimacy of his well-stated questions, which I'd like to show you:
Question for written answer E-002507/2015
to the Commission
Rule 130
Dennis de Jong (GUE/NGL)Subject: Rights of staff and ethical standards at the European Patent Office
Reports are emerging of an unpleasant working environment and staff intimidation at the European Patent Office (EPO). Further information can be found on the EPO Staff Union website. Because of the importance of the EPO for EU patents legislation, the Commission cannot afford to ignore the problem.
1. Does the Commission still intend to work together with the EPO on the single European patent?
2. If so, what guarantees have been or will be given to the Commission regarding respect for the trade union and other rights of EPO staff?
In addition to the rights of staff members, a number of ethical issues are also arising within the EPO, including the recruitment and dismissal of senior officials. For example EPO President, Benoît Battistelli, has succeeded in dissolving the Audit Committee and replacing a number of executives with a team of his own choice that is suspected of corruption [related footnote: "See for example the ZAMP affair and controversies surrounding other questionable practices." with a link to a TechRights article]
3. What guarantees has the Commission obtained to satisfy it regarding the integrity of the EPO?
There's also a document from another European (but not EU) parliament, the Parliamentary Assembly of the Council of Europe (a diplomatic non-EU body whose members include many non-EU member states and which places particular emphasis on human rights matters) from 2013. The paper argued that international organizations such as the UN, the World Bank and the EU should protect the human rights of employees of international bodies enjoying immunity under national law. I understand from SUEPO's website that this report was adopted by the parliamentary assembly.
This morning, the IPKat blog published its latest story (I also recommend the previous ones) on the EPO labor dispute.
These issues were not created by the EU. However, the EU institutions should take a closer look at the current situation before the EPO starts to grant the EU unitary patent (which could become such a large part of the EPO's "business" that the EPO would effectively be an EU subcontractor -- by far the largest one, of course -- more than anything else) and before the procedural rules are set for the UPC on a basis that could have very negative effects on European SMEs.
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