What US companies need to know about European patent reform
Managing IP is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX
Copyright © Legal Benchmarking Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

What US companies need to know about European patent reform

Managing IP hosted forums on the Unitary Patent and UPC in San Jose and New York last month. Here are some of the takeaways for IP owners in the United States

It is going to happen

Bose

For IP owners and their advisers in jurisdictions thousands of miles away from Paris, Munich and Germany, the Unitary Patent and the Unified Patent Court may be rather abstract propositions that seem a long way off – in terms of both geography and time. But they will happen, warned Alexandra BrodieofWragge Lawrence Graham & Co. “Even if you decide not to join, you need to make a conscious decision,” she said.

US companies need to think about the implications - now

In-house speakers from US companies were frank about their need to understand more about what European patent reform will mean for their businesses. “I like the idea of the UPC,” said Leah Poynter, director of IP litigation at Cisco, “but it is not at the forefront of our thinking like it should be.”

Consider whether you can afford an injunction

Some speakers in San Jose stressed the importance of being able to post a bond in the event that they persuade judges in the Unified Patent Court system to grant an EU-wide injunction. “The UPC is likely to offer real cost efficiencies,” said Katy Motiey, chief legal officer of Spansion. “But you need to consider the cost implications of getting an injunction – a plaintiff may need to pony up a serious amount of money. It will change your strategy if you can’t enforce the injunction.”

Trolls are looking at their trans-Atlantic options

Catherine Lacavera

The prospect of EU-wide injunctions could see a flurry of lawsuits being filed at the UPC by non-practising entities once the Court is open for business. No-one is quite sure how the new system will be used by patent trolls (or, indeed, what kinds of plaintiffs should be regarded as trolls), but a number of the speakers noted that trolls thrive when they can leverage legal uncertainty. As yet unanswered questions about costs, and the likelihood of bifurcation and the chances of being granted an injunction will all add to uncertainty in the run up to, and in the early years, of the Court’s operation.

Subroto Bose, IP counsel of Altera Corporation (above right), noted that many of the NPEs his company has dealt with have bought portfolios of patents that include some European patents as well as the US ones that they assert before the US courts. “They might have got the EU patents cheap,” he said. “Now they might put them to play at the UPC. They don’t have much to lose and they’ll see what happens to them.”

The degree to which the UPC requires plaintiffs to front-load their cases will have an impact on the numbers of lawsuits filed by NPEs, suggested some of the speakers. William Cook of Marks & Clark compared China – where cases need to be ready to go before the plaintiff files a lawsuit and where judgment is often reached within six months – with the UK, where front-loading is almost non-existent. “A plaintiff can say ‘here’s my product, your product infringes it and I want an injunction’ and file it in about 30 minutes,” he said. The level of preparation plaintiffs will be required to make before the UPC could deter trolls.

“Hearing about front-loading is encouraging,” said Isaac Peterson, director of litigation and IP at Netflix. “Anything to avoid the havoc wreaked by NPEs in the US is helpful.”

Forum shopping may resemble US practice

“The promise of a harmonised, one-stop shop system is wonderful,” said Catherine Lacavera (above left), director of litigation at Google. “I have been incredibly impressed with the thoughtfulness of the building work that has gone into it. But forum shopping between courts in the system is inevitable.”

You can read more of the takeaways from Managing IP’s events on the UPC and the Unitary Patent in Paris and Munich in September.



more from across site and ros bottom lb

More from across our site

The new head of Phillips Ormonde Fitzpatrick outlines his vision for the firm and explains why D&I measures need constant work
Based on surveys covering more than 25,000 in-house lawyers, the series provides insights into what law firms must score highly on when pitching to in-house counsel
We provide a rundown of Managing IP’s news and analysis from the week, and review what’s been happening elsewhere in IP
Tony Nguyen, who returned to Fish & Richardson this month after a year travelling overseas, tells Managing IP how and why he took the plunge
Tom Treutler, who previously managed the Vietnamese office of Tilleke & Gibbins, has joined East IP
Counsel discuss upcoming AI and data privacy legislation and what they’ve learned since Chile joined the Madrid Protocol
INTA has postponed its planned Annual Meeting in Dubai, but the organisation should think carefully about whether it wants to go there at all
The firm has named its new managing director after its former Asia head resigned earlier this year
As law firms explore how best to support clients at the UPC, members of the UPCLA network believe they have found the best of both worlds
The Industry Patent Quality Charter hosted a conference in which it discussed the importance of granting high-quality patents
Gift this article