A glimpse of the UPC

With the Brexit situation and the constitutional complaint in Germany, we have gotten accustomed to the Unified Patent Court (UPC) being somewhat on the back burner of our daily preoccupations.

But who knows. If and once the above serious roadblocks are removed, it may still see the light of day sooner rather than later. We should thus still be prepared for what comes next.

And is there any more pleasant way to get prepared than to get a glimpse of the future Parisian seat of the court? So far very little information had leaked. But courtesy of my colleague Patrick Marollé, we now have more details.

Indeed, Patrick had the privilege to attend the 5th France-China conference on law and Justice yesterday. And one of the highlights of this meeting with Chinese judges was a visit to the building which will host the UPC if/when it is open for business.

It turns out that the UPC will be located on the Quai de la Mégisserie.

The main advantage of this location is that it is as central as can be, a few steps away from Châtelet-Les Halles, the main hub of the Paris public transportation system. Quite appropriately, the building overlooks the Ile de la Cité and more particularly the Cour de cassation.

As an important note, Patrick has been told that this is in fact a provisional location for the first years once the court opens. As more cases start coming in, the court may move, possibly across the river, to the Palais de justice on the Ile de la Cité.

In fact, there should be plenty of room available in this historical complex, now that the Paris Tribunal de grande instance has moved to its new building in the Batignolles neighborhood.

So here are a few snapshots, that you can compare with those of the other UPC sites already made public. Looks like they will all be very different. But I would say you probably can’t compete with the view from the Quai de la Mégisserie…

There it is.
Looking at the UPC building from the Cour de cassation, across the river.
A closer view on the building.
Yes, it does still feel a little bit empty.

No need to stay an extra night to see the Eiffel tower, you can enjoy the view from the court.

Notre-Dame… Still standing.

Getting ready

Little by little, everything seems to finally come into place for the kick off of the UPC – pending the outcome of the constitutional complaint in Germany.

A major step has now been taken in France, with a modification of the Code de la propriété intellectuelle (CPI) to make national law ready for the UPC, by way of an executive order dated May 9.

And one of the most important amendments thus introduced… well in fact has little do with the UPC, and everything to do with this very French debate on the statute of limitations applicable to patent nullity actions.

Indeed, a new article L. 615-8-1 is introduced, per which the statute of imitations is simply not applicable to patent nullity actions. So, back to the situation that everyone took for granted ten years ago, and back into line with the practice of other European countries. Very good news indeed.

But, there is a but, or actually two.

First, this new provision will only come into force when the UPC agreement comes into force – since the overall purpose of the order is the application of the UPC agreement. Second, the new provision will not be applicable to nullity actions which are already time-barred at the time the provision comes into force.

So you can still expect a lot of discussion for a few more years on how the statute of limitations should be applied and how the limitation period should be computed, before this really becomes history.

Waiting for the entry into force.

Now, back to the other, truly UPC-related provisions. One important aspect is how double protection by a French patent and a European patent for the same invention is handled.

The current situation is that, when a French patent and a European patent granted to the same inventor or successor in title cover the same invention and have the same priority date, the French patent ceases to be in force at the expiry of the 9-month European opposition period (if no opposition is filed) or when the opposition proceedings are closed, the patent being “maintained” (either in amended form or as granted).

Under the new version of article L 614-13 CPI, this remains the case, but only for European patents that have been opted out from the exclusive competence of the UPC (under article 83 of the Agreement). For non-opted out European patents (including of course unitary patents) on the contrary, there will no longer be any such so-called substitution. Thus, applicants will be able to secure both a national patent, enforceable in front of our national courts, and a European patent enforceable in front of the UPC, for the same invention. This is of course primarily of interest for French applicants who do their first filings at the INPI and then file at the EPO. But of course foreign applicants could also use this tool, for super-important inventions, by filing at the EPO and then in France, or simultaneously at the EPO and in France.

Now, what happens if a European patent is opted out at a late stage, for instance after the 9-month opposition period? The answer provided in the new law is that double protection then ends at the time of the opt out, i.e. the French patent ceases to be in force on the date of the opt out.

By the way, any substitution is irreversible. If a European patent is invalidated or lapses or if the opt out is withdrawn after a substitution has taken place, the corresponding French patent does not come back to life.

Another amendment relates to the prohibition to transfer, or to grant rights on, a French patent or application independently from a European patent or application, for the same invention, having the same priority date, and filed by the same inventor or successor in title.

This prohibition remains in place for all non-opted out European patents (including unitary patents), as well as opted out European patents (before the substitution takes place). In addition, the recordal of a transfer at the French national patent register is only effective if a parallel recordal has taken place at the European national patent register.

Next topic, a particular procedural rule in connection with patent litigation.

Currently, if a French patent is asserted and there is a corresponding European patent or application, the court stays the proceedings as of right until the substitution takes place, or until the European patent or application disappears (by way of a withdrawal, refusal, revocation, etc.) before any substitution takes place. This rule will remain in place but solely for opted out European patents. When a non-opted out European patent / application is present, an action based on the French patent will be able to proceed independently of the fate of the European patent / application. It remains to be seen how this will play out in practice. The court will still have the possibility to order a stay anyway, under the general rules of civil procedure, if they deem that a stay is appropriate for a good administration of justice.

On a few other aspects, French law has been harmonized with the UPC Agreement.

This is especially the case regarding the wording used to define the acts of infringement and exhaustion of rights. Besides, non-exclusive licensees will now be allowed to assert a patent if this is expressly authorized by the license agreement, and provided that the patent proprietor is given prior notice. This is a new possibility under French law, which mirrors article 47(3) of the UPC Agreement.

The limitation period for infringement damages remains five years but the starting point will now be the date on which the applicant became aware, or had reasonable grounds to become aware, of the last fact justifying the action, in keeping with article 72 of the Agreement. In the current version of article L. 615-8 CPI, the starting point is “the facts” on which the action is based. The effect of this significant modification will be twofold: right holders will in some cases be able to claim more damages; and more complex debates regarding the determination of the starting point of the limitation period can be expected, as the new definition is more fuzzy than the traditional one.

Last but not least, new article L. 615-18 CPI clarifies that the UPC shall have exclusive jurisdiction over unitary patents and non-opted out traditional European patents.

So, now that the rules of the game are known, all readers can start looking for potential loopholes or ambiguities, and imagining unusual scenarios. Isn’t this what new laws are primarily for?

The name of the game

All French readers of this blog probably know the “Journées FNDE“. For the foreign readership who may not be aware of this traditional gathering, FNDE stands for Fédération Nationale pour le Droit de l’Entreprise; and the “days” in question, two in number, are dedicated to a review of recent French patent case law (as well as recent case law of the Boards of appeal of the EPO) by a panel of distinguished academics and practitioners. In short, this is a must-attend event for the national patent profession.

Last week, I was part of the audience for the second day of the event, the traditional subject of which is the exploitation of patent rights. I am not going to report on the various decisions that were commented upon during the day. In fact, and although I would hate to sound boastful, many of them were already discussed on this blog.

What I would like to report on instead is the excellent introductory presentation made by Pierre Véron. As an expert in Unified Patent Court (UPC) matters, he provided some insightful update on this – always – hot topic.

One focus of his intervention was the adaptation of French law in view of the (likely, imminent, possible) [delete as appropriate] entry into force of the AUPC (Agreement on a Unified Patent Court). It turns out that the ministry of justice has – finally! – issued drafts of a decree and a bill (“ordonnance”) intended to modify the Code de la propriété intellectuelle (CPI).

Of course, the drafts are subject to changes before they are adopted, but here is where we currently stand.

First, and most interestingly, the question of double protection by a European patent and a French patent.

The current rule (article L. 614-13) is that a French patent covering an invention for which a European patent has been granted to the same inventor or successor in title with the same filing or priority date ceases to be in effect at the expiry of the opposition time limit or, if an opposition is filed, at the date on which the opposition proceedings are closed with the maintenance of the patent.

In short, double protection is currently prohibited. According to the draft, the new rule will continue to prohibit double protection only if the European patent is opted out of the exclusive jurisdiction of the UPC (pursuant to Art. 83(3) AUPC).

On the other hand, a French patent and a European patent on the same invention to the same inventor or successor in title, with the same filing or priority date, will be allowed to coexist if the European patent is subjected to the jurisdiction of the UPC. This will concern all so-called unitary patents (European patents with a unitary effect) as well as traditional European patents that have not been opted out.

As far as I understand, a similar rule has been adopted in Germany. As this is viewed as a useful tool for the German patent system in general and for German businesses in particular, it was felt that a similar rule was needed in France in an attempt to be on an equal footing with our neighbors.

An inventor armed with his French patent and his European patent.

In the current state of affairs, French applicants will benefit the most from the new rule, since the filing of a French application as a priority application followed by the filing of a direct EP or Euro-PCT application is a common strategy for them.

However, foreign applicants should also consider filing both at the EPO and nationally in France (and e.g. Germany), at least for their important cases. Thus, they would not put all of their eggs in the same basket, and would be able to assert their IP both at the UPC and in front of national courts. The additional cost involved by this strategy would remain moderate as patent prosecution in France is quite inexpensive – while on the other hand requesting the unitary effect for the European patent would reduce the overall cost of renewal fees across Europe.

Another significant change in the law, according to the draft, is the period of limitation for infringement claims. Under current article L. 615-8 CPI, “infringement actions […] are time barred five years from the facts on which they rely“. This should be replaced by five years from the date on which the right owner became aware or should have become aware of the acts of infringement.

Again, this will harmonize French patent law with the AUPC (article 72), and also, oddly enough, with the general statute of limitations under French law (article 2224 of the Code civil).

This change will obviously be favorable to all right holders.

Apparently the draft is silent on another, much more controversial period of limitation, namely the one affecting nullity claims according to recent case law (discussed at length in a number of earlier posts). Admittedly, this issue is unrelated to the UPC.

Nevertheless, could there be a glimmer of hope that this issue will be addressed in the final version of the bill?

Among the other, more minor changes in the law, the definition of the acts of infringement is going to be slightly modified in order to be harmonized with the wording used in the AUPC. Therefore, the notion of “mise dans le commerce” will be replaced by “mise sur le marché“. According to Pierre Véron, the meaning is the same (“placing on the market” in English) and this change in wording will be inconsequential.

Pierre Véron then drew our attention to the dog that did not bark, i.e. what is not in the draft. Namely, the draft does not define what is the substantive law applicable to European patents in front of French courts during the transitional regime – i.e. French law or the AUPC. According to the interpretative note issued by the Preparatory Committee, competent national courts have to apply the applicable national law, and not the AUPC.

Yet, courts will not be bound by this interpretative note, so that an explicit provision in the statute could be helpful to avoid complex legal disputes. That said, it is probably only in very specific cases that which substantive law is applied would really make a difference – the Bolar exemption being an often quoted example.

Apart from this discussion on the adaptation of French law, Pierre Véron also updated us on pending challenges to the UPC – and in particular the German constitutional complaint. However, there may not be much to say on this topic, except “wait and see“. Let’s not underestimate how unpredictable and chaotic life sometimes is.

The one point that got me thinking, though, is the interaction between the Brexit timing and the possible entry into force of the UPC. According to Pierre Véron, if the Agreement can enter into force before the the UK officially leaves the EU (which may primarily depend on the fate and timing of the German complaint), then everything should be fine.

He said the Agreement would simply have to be slightly modified in order for the UK to stay in the system, for example by stating in article 2 that “Member State means a Member State of the European Union at the date of the entry into force of the Agreement” instead of “Member State means a Member State of the European Union” (period) in the current version. He added that this modification would be straightforward as it could be directly made by the Administrative Committee.

On the other hand, if the UK leaves the EU before the Agreement enters into force, then everything gets more complicated as a new Agreement would likely have to be signed in order for the UK to stay in the system – and this means a new diplomatic conference.

After hearing this, I read again article 87 AUPC on the revision of the Agreement, in order to see what the Administrative Committee can and cannot do in terms of altering the Agreement.

Paragraph 1 reads as follows:

Either seven years after the entry into force of this Agreement or once 2000 infringement cases have been decided by the Court, whichever is the later point in time, and if necessary at regular intervals thereafter, a broad consultation with the users of the patent system shall be carried out by the Administrative Committee on the functioning, efficiency and cost-effectiveness of the Court and on the trust and confidence of users of the patent system in the quality of the Court’s decisions. On the basis of this consultation and an opinion of the Court, the Administrative Committee may decide to revise this Agreement with a view to improving the functioning of the Court.

It does not look like this provision would be relevant to the modification suggested by Pierre Véron. Indeed, the modification does not seem to relate to “improving the functioning of the Court“. Also, paragraph 1 is only applicable after a significant period of time and necessitates a “broad consultation with the users” as a preliminary step.

Then comes paragraph 2:

The Administrative Committee may amend this Agreement to bring it into line with an international treaty relating to patents or Union law.

Could the proposed modification of the AUPC fall under this provision? Would it be considered as bringing the Agreement into line with a potential UK/EU divorce treaty?

One can be skeptical. It could also be considered that expanding the definition of the Member States in the Agreement is a very fundamental alteration. As some have proposed, if past EU member states can be part of the system, why not also non-EU member states, such as e.g. Switzerland?

For the sake of completeness, paragraph 3 of article 87 provides:

A decision of the Administrative Committee taken on the basis of paragraphs 1 and 2 shall not take effect if a Contracting Member State declares within twelve months of the date of the decision, on the basis of its relevant internal decision-making procedures, that it does not wish to be bound by the decision. In this case, a Review Conference of the Contracting Member States shall be convened.

So, even if a revision of the Agreement is decided by the Administrative Committee, it could still be opposed by at least one of the contracting member states, which would then lead to a diplomatic conference.

In summary, this does not look like a piece of cake.

Here are for instance two questions which may come to mind:

  • What if the Administrative Committee revises the Agreement (for example as suggested above) and there is a possible argument that the revision is illegal, i.e. not compliant with article 87? Are there any means of redress and which ones?
  • What if the Agreement enters into force but then the amendment to the Agreement necessary in order for the UK to remain part of the system cannot be made in due time before the Brexit happens? What would then be the fate of pending cases?

In view of the above, there may be a decent argument that an upfront renegotiation of the AUPC before its entry into force would be the best and safest option. If I understood Pierre Véron correctly, it is actually the position of the French government that a renegotiation is necessary – although he added that the government’s reasons for this position are unknown.

Anyway, I would be ready to bet that the above issues will be discussed again at next year’s Journées FNDE.

A day out

Last Monday was a day out for me, or more precisely an opt-out day, according to the title of a conference that I attended. The conference was offered by the UJUB (Union pour la Juridiction Unifiée des Brevets), an association which is itself a gathering of a number of organizations: AACEIPI, AAPI, ACPI, AFEP, AFPPI, AIPPI, APEB, ASPI, etc. – and those are just the ones starting with letter A. So, quite a number of acronyms, in this society dedicated to promoting the future Unified Patent Court (UPC).

On the face of it, it may sound strange to spend an entire day discussing the opt-out, which is a very specific feature of the UPC system, basically addressed in one article of the Agreement and in one rule of the Rules of Procedure. But the truth is there was already a lot to be said on this narrow subject, which makes me think that we could spend many more days collectively diving into the subtleties of all the other UPC provisions. Another reason why the theme of this conference was a good idea is that whether or not to opt out European patents is probably the very first decision that all businesses need to make in view of the upcoming entry into force of the UPC.

The full webcast of the conference (in English) can be found on this website and the slides can be found here. Otherwise, here is a personal summary of the discussions which took place.

Main features of the opt-out.

After a welcome speech by Pierre Gattaz, president of MEDEF (and thus the “boss of bosses” as he is often nicknamed by journalists), the session started with a presentation by Edouard Treppoz, Professor at Université Jean Moulin in Lyon.

He explained that opting out is a possibility offered during the transitional period, per which the owner of a European patent may keep it out of the UPC system. In contrast, there is no opt-in, i.e. no way to make sure that a European patent will be tried by the UPC (and not national courts) – except by giving the European patent unitary effect.

Important features of the opt-out are that:

  • a European patent with unitary effect cannot be opted out;
  • the opt-out is necessarily valid for the entire bundle of national parts of a European patent;
  • also European patent applications can be opted out;
  • the opt-out on a patent extends to any SPC granted based on that patent;
  • if there are several co-owners, all of them must agree to the opt-out;
  • it is possible to withdraw an opt-out, but then it is no longer possible to opt out again.

What Mr. Treppoz called “preemptive strikes” could lock a European patent in or out of the UPC system, according to a terminology proposed later in the day by Pierre Véron:

  • a European patent which has not been opted out in due time gets “locked in” the UPC system (i.e. can no longer be opted out) if a third party launches an action relating to this patent in front of the UPC;
  • a European patent which has been opted out gets “locked out” of the UPC system (i.e. the opt-out can no longer be withdrawn) if a third party launches an action relating to this patent in front of a national court.

Then came the fun part in Mr. Treppoz’ speech, namely the possible ambiguities of the opt-out provision:

  • Which actions are concerned by an opt-out? Only those actions explicitly mentioned in article 83 of the Agreement, namely infringement actions and revocation actions, or also other actions on which the UPC normally has jurisdiction, such as an action for declaration of non-infringement? Mr. Treppoz thought the latter should be correct, in view of the CJEU case “Ship Tatry” C-406/92.
  • What is the duration of the opt-out? Until the end of the transitional period recited in Article 83 or for the entire lifetime of the patent? Again, the latter should be the right answer.
  • Does the opt-out exclude only the exclusivity of jurisdiction of the UPC, or does it wholly exclude the jurisdiction of the UPC? Mr. Treppoz was again in favor of the latter, in view of the overall context.
  • Last but not least, does the opt-out only relate to the jurisdiction of the UPC, or does it also exclude the application of the Agreement by national courts? The preparatory committee issued an interpretative note supporting the latter solution, i.e. in case of an opt-out national courts have to apply national law and not the Agreement. But Mr. Treppoz firmly disagreed with this approach. To him, it only makes sense if the opt-out is limited to jurisdiction and does not affect substantive patent law to be applied to the patent.

The latter point was certainly the most interesting and challenging one in Mr. Treppoz’ presentation. As a reminder, there are some differences between substantive patent law under the Agreement and national patent laws. The Bolar exemption is probably the most famous one, but reference was also made e.g. to the decompilation and interoperability exception of Article 27(k) of the Agreement.

What a day out should look like.
What a day out should look like.

The position of the industry.

Next up was a panel of three industry in-house patent attorneys and one outside patent attorney discussing opt-out strategies. Among the three industry speakers, one was from a pharmaceutical company (Sanofi), one from a telecom company (Ericsson) and one from an electrical engineering / mechanical engineering company (Robert Bosch).

Many in the audience were eager to learn details about the opt-out strategies of such major players but everyone’s expectations were somewhat quelled as (quite understandably) no precise road-map was unveiled. That said it was quite interesting to note that they all seemed to agree that:

  • some patents will be opted out but not the entire portfolio;
  • exactly which patents will be opted out has not yet been determined;
  • a flexible strategy is required as opposed to a plan set in stone once and for all.

All seemed to generally support the system and expressed the desire to influence UPC case law, while worrying about the risk of central revocation as well as uncertainties regarding e.g. the Bolar exemption, the extent of file wrapper estoppel, and the judges’ experience. Competitors’ behavior was also seen as an important factor in the decision making process.

Robert Bosch’ spokesman was probably the most candid one, as he explained that his company is considering opting out only a minority of European patents, and more precisely the most important ones in the portfolio, i.e. those for which enforcement is contemplated, which are already licensed or for which licensing is contemplated.

Opt-out in practice.

Pierre Véron, Neil Feinson (UKIPO) and Cristiano Morganti (form NetService, the company in charge of setting up the UPC IT system) then came on stage to discuss all practical details of opting out – which can be done only in electronic form with the UPC case management system.

Mr. Véron insisted that:

  • A licensee cannot file an opt-out declaration. Special provisions should be included in license agreements to make sure that there is no bad surprise for the licensee.
  • Patent owners who are not registered as such on patent registers can file an opt-out together with a declaration of proprietorship.
  • The opt-out will be effective immediately as the process is entirely automated so that the declaration instantly appears on the opt-out register. However, if an opt-out declaration is defective because a mistake has been made, the opt-out enters into force when the mistake is corrected.

Some thoughts were offered regarding the sunrise period, i.e. the period of time before the actual entry into force of the Agreement and of the UPC system when it will already be possible to opt patents out – in order to avoid a surge of abovementioned preemptive strikes on day 1 of the UPC. One possibility would be for the sunrise period to start at the time of the 13th ratification of the Agreement which triggers a 3-month clock until entry into force. But the decision has not been made yet.

Practically speaking, people will be able to opt out patents manually on the UPC case management system. Alternatively, it will be possible to opt out large numbers of patents in bulk using a machine interface.

Concerns have been recently expressed regarding the security of the system, especially with respect to possible unauthorized / malicious opt-outs. At present, the system requires a valid email address and a valid cell phone number in order to properly identify users. Other, more sophisticated safeguards can be contemplated but could be too complex and expensive to implement, bearing in mind that the opt-out will finally be free, which apparently implies that it is supposed to cost as little as possible (especially in terms of staffing) for the UPC.

Mr. Morganti attempted a live demonstration of an opt-out on the beta version of the case management system. And guess what… It did not work. Apparently the wifi was to blame. Ahem, if computer systems worked properly we would know it, right? (Sorry for this comment, but I have a score to settle with my own laptop).

Alexander Ramsay, chairman of the Preparatory Committee of the UPC closed the morning session with a speech which was more political than purely technical. At that point of time, the elephant in the room was addressed – namely the Brexit. Mr. Ramsay stated that, while he was convinced that the UK would remain in the EU, if this were not the case then the UPC should nevertheless move forward. He also expressed the view that we would have to find a way to keep the UK on board. A question was asked about whether a plan or timeline was already under preparation in the event of a Brexit, and he answered that there was none that he was willing to share.

Don’t mock the opt-out.

The main event of the afternoon was a mock trial. Two teams of attorneys-at-law and patent attorneys pleaded in front of a judge-rapporteur played by Marie Courboulay, the senior presiding judge of the 3rd chamber of the Paris Tribunal de grande instance (TGI) – an IP-only chamber which in particular handles all patent matters in this country.

The script involved the opt-out of a patent and a claim for revocation of this very patent in front of the UPC. The defendants filed a preliminary objection to the effect that the UPC had no jurisdiction due to the opt-out. The main issue at stake was whether the opt-out had been correctly performed or not. In fact, many problems were noted by the claimant: the secretary who had filled in the form had erroneously ticked the box “no” when answering the question “is the applicant a company/firm“; she had indicated a wrong address for the first patent owner (so that there was allegedly a doubt as to exactly which company was meant); the second patent owner was not mentioned in the initial opt-out and was added only later; and there were discussions as to who was entitled to declare what on behalf of the patent owners.

A lot to deal with indeed. An informal poll after the pleadings showed that the majority of the audience was in favor of finding the opt-out invalid, and this happened to be consistent with Ms. Courboulay’s verdict. She explained that, although most of the errors that had been made could be considered as inconsequential, there was a fundamental issue of representation, since the secretary who filled in and signed the opt-out form was not allowed to act on behalf of the two companies, as a matter of national law.

An interesting outcome and a serious warning to all stakeholders that they should pay close attention to the actual implementation of their opt-out strategy – especially because the opt-out process is purely declaratory, with no actual control or verification by the administration.

By way of conclusion, Ms. Courboulay supported a recently made suggestion per which, during a certain initial period, the judge rapporteur should refer all important matters to the full court so as to allow case law to develop quickly in order to improve legal certainty.


A final debate involved representatives from various associations making up the UJUB meta-association.

Most remarkable were the statistics mentioned by the representative from LES France, which showed huge discrepancies in the current European patent litigation landscape from country from country as well as depending on the field of technology: for instance, the win rate of infringement actions in life sciences in Germany was said to be 80%, whereas that of infringement actions in chemistry in the Netherlands was said to be 18% only. Another example was the higher validity rate in France than in the UK and Germany in the field of electrical engineering and mechanical engineering. This was not directly related to the opt-out theme but very interesting indeed.

Last but not least, a couple of words were said during the day regarding the possible location of the UPC in Paris. Although nothing is official yet, my understanding is that the Palais de justice on the Ile de la cité (where the TGI and the Cour d’appel are currently located, together with countless other courts) would be the winner.

My personal view is that this would be a bad idea. This is a gorgeous historical place, great for sightseeing, but it is uncomfortable. The acoustics in particular are dreadful and I seriously doubt whether the building can be adapted to the requirements of a modern and multinational court such as the UPC. Hopefully there is still time for the authorities to reconsider.