Select Committee on European Communities Twenty-Sixth Report


PART 2 ISSUES AND EVIDENCE

THE VALUE OF PATENTS TO UNITED KINGDOM INDUSTRY

  8.    Witnesses were generally of the view that patents were of considerable value to industry in the United Kingdom. They were an incentive to innovation. The Confederation of British Industry (CBI) said that the most obvious beneficiary of the patent system was the pharmaceutical industry. A medicinal product might cost only a few pence to make, but millions of pounds might have been spent in its identification and testing and in obtaining regulatory approval. Without the benefit of the patent monopoly, no pharmaceutical company would be prepared to make the necessary level of investment. While the pharmaceutical industry gave the clearest and strongest example of the benefits of the patent monopoly, all industries benefited in a similar way. Patents were taken out by a wide range of undertakings, from the largest drugs company to small businesses and individual inventors (p 29).

  9.    The Trade Marks Patents and Designs Federation (TMPDF) emphasised the importance to industry of being able to recover the costs of research and development by way of sales as a means of funding the development of the next generation of products: "Industries find it impossible to recover these costs when lax patent regimes permit infringers to pirate inventions and thereby avoid similar development costs, and displace the patentee's goods from the market". There was also a need to maintain an effective patent system in order to secure adequate foreign patent protection under existing international obligations (p 33).

  10.    As regards the position of small and medium-sized enterprises (SMEs) the Chartered Institute of Patent Agents (CIPA) said that the notion that small firms cannot use patents because of the cost of enforcement was a fallacy. The existence of a patent normally tipped the scales against copying by competitors who were usually no more able to afford full scale litigation (p 14). The Law Society pointed to the opportunity patents can give to SMEs to grow rapidly and secure a substantial market share: "For example, the revolutionary construction of the Dyson vacuum cleaner (protected by patents) has enabled its manufacturer to secure over 50% of the UK market in some 4 years" (p 104). CIPA also explained that different industries used patents in different ways. In the electronics and computing industry products might incorporate tens or hundreds of patented inventions. Patent owners licensed patents on a non-exclusive basis and cross licences were common (p 14).

  11.    Professor Cornish said that patenting played a significant role in three ways: while some patents might bring the owners monopoly profits, more frequently a patent gave more limited protection against imitative products and processes embodying the invention; patents gave a reasonably certain legal basis for the transfer of technology to licensees; and, patents provided the relevant industry with early information about new developments (p 87). On the last point the Licensing Executives Society (LES) said that the patent system made a great deal of valuable technical and scientific information publicly available. When properly used, searches of patent databases could result in very significant savings in unnecessary repetition of research (p 17).

  12.    Professor Cornish also pointed out the value of patents in the United Kingdom to persons other than British companies. Patents operated as a stimulus not to researching in a given country but to marketing there. He said: "If there is a valid UK patent, an innovator may provide his product or process to the British user or consumer (albeit at a price) where otherwise he might confine himself to countries where he has adequate protection. It is important to evaluate the patent system with this consumer perspective in mind" (p 87).

THE PRESENT EUROPEAN PATENT SYSTEM

  13.    The EPC was generally regarded as a success. It has served as a pole of attraction for European countries and users of the patent system. It entered into force in 1977, with seven members (Belgium, Germany, France, Luxembourg, the Netherlands, Switzerland and the United Kingdom). There are now 19 Contracting States (all EU members, plus Cyprus, Liechtenstein, Monaco and Switzerland)[3]. The EPO has also established a contractual network extending the protection conferred by European patents to Slovenia, Lithuania, Latvia, Albania, Romania and the former Yugoslav Republic of Macedonia. There has been a constant increase in the number of patent applications filed and grants made. The number of applications has soared from just over 15,000 in the first year and a half of the EPO's operation (1 June 1978 to 31 December 1979) to an estimated 96,000 in 1997. The 40,069 grants made in 1996 represented an increase of around 10,000 in the number granted in 1992 (30,408).[4] Professor Cornish attributed the success of the EPC regime to its convenience for non-EC industry, particularly that of the US and Japan (p 87).

  14.    Witnesses pointed out the value and advantages in the present system of a grant of a European Patent by the EPO. In particular it provided flexibility and potential costs savings. Patent protection could be sought for one or more Member States. Applicants could obtain protection throughout Europe using the EPC, at significant cost saving compared to having to file for national patents in each country. The TMPDF said: "From the point of view of the patentee, the European route for patent protection is both more consistent and more financially efficient than the national route" (p 34).

  15.    The BioIndustry Association (BIA) said that the savings in costs would typically be achieved by designating four countries. The BIA also noted that a European Patent gave rise to patent rights having a higher presumption of validity than rights granted by non-examining national patent offices (p 27). In addition to savings and other advantages relating to the application for patents, the Intellectual Property Lawyers Association (IPLA) pointed out that the EPC system also provided an opportunity for parties to oppose the grant of patents, if opposition was launched within nine months of grant (p 102).

  16.    LES, however, said that there were difficulties with the present system and improvements should be made. The EPO's procedures needed to be improved: "they need to be speeded up, made more rigorous (particularly as regards the way in which evidence is adduced), and made more open" (p 17). Zeneca said that the procedure was, notwithstanding recent fee reductions, still expensive. The costs associated with filing translations of the full specification for national phase entry were also unnecessarily burdensome (p 37). The Law Society described the current difficulty in achieving consistency in the application of the EPC: "National courts struggle to reconcile their decision with those of the Boards of Appeal of the EPO, and they may reach different decisions on identical facts while purporting to be applying the Protocol to Article 69 of the EPC in infringement actions. These problems emphasise the need for judicial arrangements which will promote consistency" (p 106).

  17.    There was general agreement that even if there were a Community patent current national and European systems should remain and that the market should be allowed to decide their fate. The British Retail Consortium (BRC) said that the patent system must continue to provided a flexible and cost effective system for all including SMEs and others who do not require Community-wide patent protection: "Any Community patent must co-exist with national offices and the EPO" (p 85). Mr Terry Johnson, a patent agent, said that national patent offices catered "for the fact that economically it is often the case that industry, whether big or small in economic terms, often requires protection in only certain territories... It is the lack of a commercial need (in a particular country) which results in a failure to patent there, and not the reverse, namely that no patent results in a lack of a commercial need (or technology base) in the particular country" (p 90). CIPA believed that it was essential that the choice of obtaining national patents (either by separate national applications or as a European patent obtained under the EPC) should remain if a unitary system were introduced (p 14). Professor Cornish, however, questioned whether there was sufficient justification for continuing the national patent systems after another decade or so. It would depend on how efficient and fair the European system could become (p 87).

POTENTIAL ADVANTAGES AND DISADVANTAGES OF A COMMUNITY PATENT

  18.    The Intellectual Property Institute (IPI) agreed with the arguments in the Green Paper in favour of a unitary patent system in the Community. Innovation would be stimulated if it was possible to secure and maintain, at modest cost, a single, reliable, high quality patent having uniform effect throughout the whole Community. Consumers would benefit from improved or cheaper products. In addition employment and prosperity would be stimulated (p 1). For CIPA, Mr Gold said: "Instead of a multiplicity of patents to watch over and administer, you have one single patent covering a very large market of 300 million-plus people, and serving a market which is increasingly integrated". In place of myriad rules and regulations there should be simplicity and lack of complexity (Q 69). Judge Brinkhof said that the creation of Community patents would contribute to the realization of the internal market (fair competition and the free movement of goods) (p 51). Professor Cornish said: "Within a common market, the major intellectual property rights should be granted for the whole territory on a common legal basis". He referred to the US and Australia which operated as free trading units and granted patents for the whole country (p 87).

  19.    In terms of the main advantages of a Community unitary patent, a number of witnesses identified potential costs savings, both at the application stage and when the patents were being enforced; reduced complexity; and greater consistency in the application of European patent law in the different Member States. LES, however, stressed that these were "theoretical" benefits (p 17).

  20.    The TMPDF contrasted the potential advantages of an effective Community system with the arrangements under the EPC: "A major disadvantage at present is the enormous cost, since, in addition to the EPO's very large fees, the patent when granted has to be transferred to the national systems, involving heavy translation costs and sometimes large administrative fees. A separate agent has to be employed for each State from the grant stage, adding greatly to costs. Subsequently, annual maintenance fees, which in some States are very high, have to be paid in each State, with associated administrative costs. If there is subsequent litigation, this will proceed independently in each State concerned, with further high costs, uncertainty and delay and the possibility that results will be inconsistent" (p 35). The TMPDF regarded a number of elements of the proposal for a Community patent as particularly important. First of all came costs. Mr Blakemore said: "We feel that the aggregate fees which we would have to pay for such a patent ought to be no more than three times the corresponding national fees that might be payable for present forms of patent. We would also expect to enjoy lower translation costs and lower attorney fees". Secondly, the patent should cover the whole of the Community. Finally, there should be legal certainty in relation to the enforcement of the patent (QQ 110-111).

  21.    The CBI said that any disadvantages would depend upon the need for any particular patentee to have Europe-wide protection, and the speed, cost and quality of the decisions in litigation (p 30). CIPA said that a potential disadvantage of a Community patent would be that an inexperienced national court might be able to declare the patent invalid across the EU (p 15). This "all eggs in one basket" problem was, in the Law Society's view, the main disadvantage (p 105). Zeneca also identified the potential demise of the EPC and national patent systems (p 38).

DEFECTS IN THE COMMUNITY PATENT SYSTEM IN THE LUXEMBOURG CONVENTION

  22.    The CBI said that the Luxembourg Convention had serious defects (p 30). There was general agreement that the Green Paper had correctly identified the two main problems, translation costs and the absence of adequate judicial arrangements. LES described the Convention as "unworkable" for these two main reasons (p 17). The IPI said the system in the Convention was "inadequate: too uncertain, too slow and too costly and the risks of poor judgments are too great" (p 2). The general reaction of witnesses was if the Luxembourg Convention was to enter into force (i.e. if all necessary ratifications were made) it would not be used. CIPA said: "The legal provisions are unsatisfactory and no advantage in cost is readily apparent" (p 15).

 (a) Translation Costs

  23.    Under the Luxembourg Convention (Article 30) the entire patent specification would have to be translated into the languages of all the Member States. A Community patent granted in the Community of Fifteen would thus require ten translations. The CBI described the cost of translations as "probably the greatest disadvantage of the Luxembourg Convention" (p 31). The TMPDF said: "The translation requirements alone are very onerous, involving the invalidation of the whole patent if even only one translation is missing three months from the mention of grant in the Official Bulletin. This alone is sufficient to ensure that the system of the 1989 Luxembourg Convention would be very little used" (p 35).

  24.    Under the current EPC system there is no need to translate the whole specification at the outset. Applications are accepted in any one of the three official languages of the EPO—English, French or German. On the first publication of the application (after an official search into the prior technical literature, but before any technical examination), it is necessary to provide translations of the claims in the other two official languages. When the patent is granted, the claims finally allowed must be translated into the other official languages. However, at this stage, it is also open to EPC countries to require translation of the whole specification into national languages and all EPC States except Germany, Luxembourg and the United Kingdom have insisted on this.

  25.    In the view of LES, the translation question was a far greater problem for patents than for trade marks. The words and terms used in the specification and claims, and how they were understood by the ordinary skilled addressee, determined the scope of protection, and validity, of the patent. Expert (and therefore expensive) translators would be needed to ensure consistency of meaning and application in different jurisdictions (p 18).

  26.    Witnesses were generally agreed that translation costs were a major problem. Zeneca produced a table setting out the comparative costs under the existing and proposed regimes, as well as in the United States and Japan.[5] The EPO had also prepared a study.[6] CIPA described translation costs at grant as a significant contributor to the high cost of obtaining patent protection throughout the EU. Mr Lees said that they were a particular problem for SMEs, who might find their costs doubled. Costs were an overriding factor for SMEs under the present European regime: "If they require countries like Austria and Sweden, where the charges are very high, that is hard lines. They prefer to take the countries where for one translation into French, for example, you can have three or four countries" (p 15, Q 78).

  27.    The BIA acknowledged that the present EPC system had not solved the problem of translation costs. But the problem had been ameliorated by, firstly, deferring translation costs from the time of filing to the time of grant and, secondly, dispensing with translation costs in the event of a patent application being unsuccessful (p 27).

  28.    Witnesses agreed that a Community patent system which required full translation in all languages would not be used (p 18). The CBI said that the only way for a Community patent to succeed would be if the specification needed only to be translated into a small number of languages (p 31).

  29.    It was acknowledged, however, that there was, in the words of the BIA, "a tension between the desirability of having a patent system which is not unduly burdened by the cost of translation and the essential unfairness of companies and individuals in European countries being subject to patent rights which are framed in a language they cannot understand" (p 27). Mr Terry Johnson considered it to be essential that the whole text of any Community patent be translated into the official language of each Member State: "It must be remembered that an applicant for a patent is seeking to establish a legal right which will curtail the activities of third parties ... such applicant has an obligation to inform at his own expense all those who will be affected by that right in a language which they can understand" (p 90). Lord Justice Aldous said: "Any cut back in translation must be weighed against the need and right of the individual to know what he is prevented from doing by a monopoly granted by the State/Community created Patent Office. Surely a person must have the right to read in his own language what he may not do. If so, at least the abstract and claims need to be translated" (p 78).

  30.    Jacob and Laddie JJ disagreed: " To those who say an individual has a basic right to know what the subject of a monopoly is in his own language, large industry at least is saying this is impractical. Moreover since validity depends upon the prior art and that art is likely to be in English (or some other foreign language) the position that a man can ascertain his rights simply reading material in his own language has long been sold. Even under the present system translations are only provided late in the day—yet if a patent is granted rights operate from the date of publication just in the language of the original application (French, German or English)" (p 53).

  31.    The Green Paper canvassed a number of possible solutions restricting translation at certain stages, including the so-called "package solution". This had three main features: publication, at the same time as publication of the application or as soon as possible thereafter, of an enhanced abstract in the language of the proceedings and, subsequently, of translations into the languages of all the Member States; translation of the patent claims only at the time the patent is granted; translation of the full patent specification before any action is brought by the patentee with a view to enforcing the patent rights.

  32.    The Patent Office explained that the proposal that the translation be restricted to an enhanced abstract had been devised by the EPO. From the point of view of patent professionals that would probably be sufficient (Q 264). The I.P.Bar Association (IPBA) did not believe that requiring translation only of an abstract of an invention and leaving all matters of translation to be determined only when a dispute arose was an acceptable solution: "Merely having a translation of the abstract cannot give a full flavour of the description and must lead to uncertainty as to whether the abstract is a fair synthesis of invention. Equally any interested rival of the patentee must obtain a full translation before deciding a course of action and it is inherently likely that that translation will not coincide with any subsequent official translation obtained by the patentee and again uncertainty will result. Further the scope for dispute as to an accurate translation once the patentee is aware of the alleged infringement is obvious" (p 100). The Patent Office acknowledged that there were problems with the proposal (Q 263).

  33.    A number of witnesses proposed that any Community system should use a single working language, English. The idea was that applicants might file in their own language, but thereafter all procedures would be in English (QQ 133, 261). The CBI said that European industry had indicated strongly that it wished to see the Community patent operate in English only with no translation of the specification: "They take that position on the grounds that English is spoken by all industry in Europe; that it is the language of technology; that the majority of any prior art which would be relied on to attack a patent will be in English; and that it is the language in which most, probably all, international companies conduct their activities" (p 31).The TMPDF did not think that the EPO would have any difficulty in switching to working in English alone (Q 160).

  34.    Witnesses emphasised that it was not simply British industry but also European industry which was urging standardising on English. A number of witnesses, including the CBI, referred to the evidence given at the Commission's hearing on the Green Paper in Luxembourg (Q 137). For CIPA, Mr Gold said: "It was remarkable that the European industrial groupings, with German and French spokespersons, were saying, "We are not talking about the language of Molière or Goethe or Shakespeare. We are talking about technical and legal jargon ... this is not a cultural issue, this is a technological, research and development issue, and de facto English is the language" (Q 83). Witnesses pointed to the wide spread use of English in the scientific field and in applications for European patents. The Patent Office said that in the European context about 70% of all applications were made in English, 20% in German and 10% in French (Q 261). Both the TMPDF and CIPA also said that in practice translations were not used (Q 82, 163).

  35.    The Association of the British Pharmaceutical Industry (ABPI) gave a further reason for the sole use of English: it would be helpful to SMEs (EFPIA p 79). The Patent Office identified a contrary argument. Some Member States might argue that there was a problem, in particular for small firms, who might find themselves the object of infringement proceedings in respect of a patent which they had not been able to read in their own language (Q 263).

  36.    Though there was general agreement that one language, English, was the preferred solution, witnesses also recognised the political difficulties inherent in such a solution. Professor Cornish said: "there seems no way which the British can press the case for it without inflaming national susceptibilities" (p 89). Referring to the Commission's hearing in Luxembourg, Mr Hartnack (Patent Office) said: "The difficulty is that that view on the part of European industry was not shared by government representatives at the conference, and it is my view that it remains an obstacle" (Q 261). Judge Brinkhof did not believe the English only solution to be viable: " It is not industry which decides but the Parliaments. I think Parliament will say every citizen has the right to know what he can and cannot do and he has to base his conduct on texts in his own language". He considered it more feasible to see whether the extent of translations could be limited in some way (Q 239).

  37.    The BIA sought to make a special case for the bioscience industry : whatever solution to the translation problem was found, all biotechnology-related European patents should be translated in full upon grant into English. Mr Sheard explained that "pre-eminent among the emerging technologies biotechnology has the claim of being almost exclusively based in the English language". He added: "aside from the fact of English pre-eminence, the high value products of biotechnology which are often health care mean that the bioscience industry ... tends to apply widely throughout Europe, so the translation costs do hit it" (p 27, QQ 174, 175).

  38.    The Patent Office said that a first step towards reducing costs might be to revert to the position when the EPC was signed in 1973, which was a three-language solution. Some further sort of compromise on the language issue might be needed beyond that (QQ 264, 266)). The BRC, while supporting the use of one language, English, could accept as an alternative the use of English, French and German (p 85). The TMPDF said that they could live with such a restricted regime but were not hopeful that it would secure political agreement.The EPO practice (English, French and German) was not an apt precedent. The three languages were only used for the procedure for granting the patent. The applicant still had to face the prospect of translation into the language of every country designated (QQ 141-2,159-60). Mr Sheard (BIA) said: "The European Patent Convention only requires the translation of claims. It is the national statutes that require the translation of whole specifications, so really the present position is not three full translations" (Q 164).

  39.    For CIPA, Mr Gold said that they could accept English and French (Q 84). CIPA's preferred solution was, however, "translation on demand". Mr Lees explained: "The intention of this is to meet the point about specifications gathering dust. That you would only get a translation if you requested it ... you pay a fee on request - not necessarily a very large fee - but nevertheless some kind of deterrent: and that the costs of producing the translation are borne out of the renewal fee income, which is quite large overall and some of which we understand is not spent within the intellectual property system" (Q 85).

  40.    Witnesses also pointed to the potential implications of enlargement. Mr Blakemore (TMPDF) said: "as the Community expands the number of languages, of course, will increase substantially and the translation costs in the end would completely swamp the system" (Q 140). Mr Nott (CBI) expressed concern that as the Community expanded the argument for having a single language or a limited number of languages would become more difficult to maintain (Q 162). The Patent Office thought that market forces might come into play here. The applicant States would face a hard choice if they wanted to encourage technology transfer. If translations were required parties using, for example, the EPO regime, might not designate the new State. As a result those States would lose the not inconsiderable fee income generated on renewals and would not get the technology transfer (Q 266).

 (b) Judicial Arrangements

  41.    Jacob and Laddie JJ considered the existing arrangements for the litigation of patents in Europe to be unsatisfactory for three reasons. First, there was no central unified system. The need for parallel suits in a number of jurisdictions with the possibilities of different and conflicting results in different countries was a problem. Second, the courts of some Member States (notably the Netherlands but also Germany and France) were asserting cross-border jurisdiction. This had already given rise to practical difficulties. Third, the position under the 1968 Brussels Convention on jurisdiction and enforcement of judgments was unsatisfactory. In particular, the main rule that a plaintiff must sue in the defendant's home State was subverted by the possibility of suing any seller of infringing goods, thus in practice giving the plaintiff a wide choice of jurisdiction. Potential defendants also had opportunities to forum shop, by starting actions for declarations for non-infringement and revocation suits in a court of their choice (where the proceedings might be protracted) and then relying on Article 21 of the Brussels Convention ( which requires a court to decline jurisdiction when the same action is pending before the court of another Member State) to say that the court of their choice is first seised of the dispute. This tactic has become known as "the Italian torpedo"(p 53, QQ 208-9).

  42.    Under the Luxembourg Convention infringement and validity questions would be separated, the former being for national courts to determine while the latter were to be dealt with by a special revocation division within the EPO with appeals to a revocation board. That regime was amended by the 1989 Agreement. Certain national courts with appropriate experience would be deemed Community patent courts in order to hear claims for infringement of a Community patent and counterclaims for its revocation. Separate proceedings to revoke the patent might still be brought before a revocation division of the EPO. Superimposed on these national courts and EPO there was to be a new court, the Common Appeal Court (COPAC), constituted by judges experienced in patent law from each Member State. Appeals from a national court of first instance would go to a national court of second instance which would be obliged to refer to COPAC all questions concerning the effect of the patent (i.e. the substantive question of whether it had been infringed) and its validity. COPAC's decisions on these matters would be final. The national court of second instance would be left to apply the COPAC decision but would itself determine any question on available remedies, the persons liable, enforcement, limitation periods and so on. As regards the relationship with the European Court of Justice, COPAC could request the Court of Justice to give a preliminary ruling where there was a risk of inconsistent interpretation between the CPC and the EC Treaty. The Commission or a Member State would, where it considered there was such an inconsistency following a decision of COPAC, also be able to seek a ruling from the Court of Justice.

  43.    Most witnesses considered the judicial arrangements under the Luxembourg Convention to be unsatisfactory. Judge Brinkhof said: "they are the fruits of too many compromises and reflect a certain distrust vis-a-vis national courts ... the arrangements are neither fish, flesh, nor a good red herring!" (p 52). For CIPA, Mr Gold drew attention to the lack of harmonisation of enforcement procedures in the national courts (Q 71). But not all witnesses condemned the Luxembourg Convention. IPLA considered the concerns expressed about the judicial arrangements in enforcement proceedings might be exaggerated given the check of a Community Patents Court of Appeal: "in fact in practice the less sophisticated local jurisdictions are likely, in our experience, to be more favourable to the plaintiff patentee on the question of validity than are those that are less impressed by the mere fact that a patent has been prosecuted to grant" (p 103). That concerned Sir Hugh Laddie: " the bee in my bonnet is that if you do not know enough about patents you could work on the assumption that they are all valid because they have a stamp on them, and I am afraid to say that patent offices end up by giving patents out in many cases, not all cases, when the patent is invalid and if you end up litigating in front of a court with no experience, you will end up having unjustified monopolies and unjustified monopolies mean that you close down parts of European industry for no good reason" (Q 216). Mr Hartnack (Patent Office) said that in his experience the problem was the reluctance of one or two national courts in Europe to declare that one of their nationals had infringed (Q 272).

  44.    The Green Paper sought views on an arrangement whereby actions for revocation of Community patents would fall within the exclusive jurisdiction of the EPO, with appeals to the Court of First Instance (CFI) and from there, on points of law only, to the Court of Justice. Thus, contrary to the provisions of the Luxembourg Convention, national courts would not, in infringement proceedings, have jurisdiction for counterclaims for revocation of Community patents.

  45.    Witnesses did not support the idea that the EPO should have exclusive jurisdiction for all revocation proceedings (e.g. CIPA p 13). The existing dispute resolution mechanisms were criticised. The IPBA said that the EPO had not proved itself to be effective in achieving speed or certainty. Whilst the primary concern was over delay, a secondary complaint related to problems over fact-finding (the EPO did not have the mechanism to act as a fact finding tribunal, which was particularly important where the validity of a patent was put in issue on the ground of prior use which could occur on a worldwide basis). The EPO was failing to serve the needs of the patent community. The IPBA said: "We cannot emphasise forcefully enough our grave concern at the suggestion made in the Green Paper that this body should be entrusted with this responsibility" (p 99). The Law Society was also strongly opposed to the idea and added: "The only counterbalance proposed in the Paper, namely that of the CFI, would be unlikely to be effective on issues of substantive patent law" (p 105). Jacob and Laddie JJ said: "It is to be hoped (and expected) that things will improve, but the position remains that it is essentially a patent office. We do not think it should be given the ultimate say over validity as is proposed in the Green Paper" (p 53).

  46.    The general view of witnesses was that questions of the validity and infringement of patents should be tried together (QQ 192, 259). The IPBA explained why this was necessary: "both aspects require the claim to be construed. Once the claim has been construed then the questions of validity and infringement can generally be decided relatively easily. Often there is a squeeze between infringement and validity in that a patentee will contend for a wide construction of the claim so as to render the alleged infringing product an infringement but will wish to have a narrow construction of the claim when seeking to distinguish a particular piece of prior art. Having a different court determine the issues of validity and infringement increases the scope for abuses of this nature ... Equally, if infringement proceedings are to be stayed pending determination of validity, this unnecessarily prolongs the uncertainty" (p 98). Professor Cornish said that the German division of functions did not have unanimous support in that country and had in some degree been modified by case-law. In his view it was "vital that a single court should be able to consider the parallel issues side-by-side in order to reach a balanced judgment of the merits overall" (p 88).

  47.    In CIPA's view it was vital that issues of validity were considered together with infringement (p 13). Other witnesses also favoured such "one-stop shopping" but, as BIA pointed out, simply giving national courts the power to decide on infringement and revocation throughout Europe was not, on its own, the answer (p 29). CIPA said that each Member State had a different history and judicial system where validity, enforcement, formality/procedure, timescales, costs and remedies for patent infringement were handled differently. There was, therefore, a wide range of effectiveness of patents throughout the EU: "To run the risk of a patent for the whole of the EU being subject to a low quality court decision would be wholly unacceptable to a patentee" (p 15). Moreover, as BIA said, there was little support for the idea that national courts should have jurisdiction on revocation while confining the effects of their decision to the territory of the Member State in which they were located (p 29). Judge Brinkhof saw splitting the issues of infringement and validity and limiting the territorial scope of decisions of national courts as being contrary to the unitary character of the Community patent (p 52).

  48.    Witnesses wanted a judicial system in which they could have confidence. Zeneca said: "The Community needs a harmonized court system which is secure and reliable, which can deal efficiently with the issues and in which the certainty of, and confidence in, the judicial process is assured". Dr Smith said that legal certainty was more important than the question of translations (p 38, Q 193). Professor Cornish said that it was difficult to establish patent tribunals in a way which commanded respect: "The centrality of technological issues requires judgment either by experts in the particular field or persons with considerable experience of technology more generally. Equally, the patent system depends upon an elaborate balance between courts which apply the law on infringement and validity after grant and examiners who handle applications in the light of interpretations of the law. Between them is a symbiotic relationship which requires experience to appreciate" (p 88).

  49.    There was general support for some form of pan-European patents court or courts.


3   All EPC Contracting States are also Parties to the 1970 Patent Cooperation Treaty, an international agreement which simplifies procedures for patentees wishing to file for patents in a number of countries by dispensing with the need to file separate applications in each. The EPO is one of the bodies which may receive an "international application" designating the countries in which protection is sought. It may also carry out an "international search" and an "international preliminary examination". Back

4   These figures, taken from the annual reports of the EPO, appear in a paper by Dr Joseph Strauss for Fordham University's Sixth Annual Conference on International Intellectual Property Law and Policy 1998. Back

5   The table is reproduced at page of the evidence printed with this Report. Back

6   The results are described in "The cost of patent protection in Europe", a paper delivered by Dr. U. Schatz (EPO) to Fordham University's Sixth Annual Conference on International Intellectual Property Law and Practice, April 1998. Back


 
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