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Guest blog: Why the UK warrants more local divisions in the UPC

Getting accurate numbers about levels of patent litigation across Europe is vital if the UK is to play a full role in the UPC system, say Tim Powell and Penny Gilbert

National governments are now preparing in earnest for the introduction of the Unitary Patent that will give one-stop protection across the EU, and for the Unified Patent Court that will provide the way of enforcing patents on a European-wide basis. The system is projected to go live in 2015, although many commentators consider a 2016 start date more realistic.

In response to concerns about over-centralisation and access to justice, it has been agreed that the UPC will sit as a series of local and regional divisions across the EU. However, each local/regional division will have an international composition of judges and have international jurisdiction. The court also has a Central Division dealing mainly with issues of patent validity and declaratory actions.

There has already been considerable horse-trading over the location of the Central Division. A last-minute compromise was reached whereby the headquarters is in Paris with chambers in London and Munich. Now the focus has switched to the setting up of local and regional divisions. Countries have the right to set up local divisions (but will have to pay for them) or may join together in larger regional divisions if they prefer.

The UK, Germany, France, Holland, Belgium and Italy each intend to set up local divisions. A Scandinavian regional division (including the Baltic states) is planned as are two regional divisions covering Central Europe (including the Czech Republic, Hungary and Slovakia) and Eastern/Southern Europe (including Romania, Bulgaria, Cyprus and Greece). Most divisions apart from France and Italy will work in English, at least as an optional language.

For countries that wish to be seen as centres of innovation in Europe, it is important to remain at the heart of the new European patent project. The influence which any given country may wield in the evolution of the new system will largely depend on two factors: how many cases are heard in that country and the composition of the judicial panels that preside over those cases. Here, it is important that each country accurately assess its existing level of patent litigation. There are two primary reasons for this:

  • First, although every country has the right to set up a local division (if it is prepared to pay for it) a country may only host a second or subsequent local division/s (up to a maximum of four) for every 100 cases commenced in that jurisdiction in each year of the three years immediately preceding the Agreement coming into force.
  • Second, if less than 50 patent cases are commenced in a given country in those years, its judicial panels will have a majority of foreign judges (so for example, a judicial panel in the Belgian division would have one Belgian national and two judges drawn from an international pool).

Of the "big three" European economies, Germany has been the quickest off the mark in positioning itself as a major centre of infringement litigation. Germany considers that it is entitled to four local divisions based on the number of cases filed in Germany. French figures suggest that France may be entitled to at least two local divisions.

Statistics for activity in the patents courts in the UK have been harder to come by. Some estimates (based on historical data up to 2008) have put the number of cases commenced in the UK as lower than 50 a year, which would relegate the UK to the "third division" of countries that would not even have a majority of their own nationals sitting on their local judicial panels. This hardly seems a fair reflection of the prominent role the UK currently plays in international patent litigation.

In view of the lack of up-to-date statistics, Powell Gilbert (with the support of patent judges and the cooperation of other member firms of the IPLA) has carried out a comprehensive survey of court records for 2011 and 2012. This is the first time that court records have been analysed systematically to capture the true level of litigation activity in this sphere. Physical searches were carried out of the files of the High Court, noting parties, numbers of patents in issue and whether validity and infringement were both in issue. Cross checks were carried out with the court diary and online databases to ensure a complete a record as possible. This was combined with recent assessments of Patents County Court activity compiled with the assistance of the Court and an assessment of the number of patent claims filed in Scotland and Northern Ireland. Finally, disputed patent claims filed at the UK IPO were counted.

Patent litigation in the UK

Cases commenced160170
Patents in issue227221
Total “German Equivalent” cases-----This is a range since Helmers and McDonagh (2013) estimate 61.5% of infringement claims (and 40% of revocation claims) have a counterclaim while the IPLA estimates 75% of cases to have counterclaims.327 - 371318 - 362

The results of this survey indicate two things: -

  1. a) existing estimates of activity in the English courts have been too low; and
  2. b) if cases are counted in the same way as in Germany, the recorded claims in the UK increase substantially (it is the practice of the German courts to split patent cases by patent and sometimes by party, as well as treating claims for revocation as separate to any infringement action. This leads to a multiplicity of individual claims).

In summary, this comprehensive survey has found that more than 150 patent cases have been commenced in the UK courts in each of the years 2011 and 2012 (entitling the UK to more than one local division). If statistics are compiled on the same basis as that used in the German courts, the number of individual "claims" exceeds 300, making the UK one of the most active patent jurisdictions in Europe.

Of course, a simple counting of cases only gives part of the picture in assessing the relative prominence of individual jurisdiction for resolving international disputes. In this regard it was noted in a recent comparative study for the Centre for European Economic Research that 26% of claims litigated in the UK are also litigated in other jurisdictions while the proportion of international disputes in Germany is extremely low (only about 2%). Also, the proportion of European (as opposed to national) patents litigated in the UK is much higher than in Germany (81% compared with 42% patents litigated) and approximately half of the claims filed in Germany relate to German utility products rather than patents.

It is inherently difficult to model the likely levels of activity in the various local and regional divisions of the UPC. However, it is clear that the UK is a major jurisdiction for resolving complex, high-value international disputes. The UK has one of the branches of the Central Division of the UPC and with sufficient investment in its local division or divisions can play a prominent role in the new court system.

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