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.

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