Unitary Patents: Good News from Europe

I must apologize for the long silence since my last post. The reason I have not been blogging recently is that I have been busy with litigation which will have important consequences not just for my client but for everybody who is party to an intellectual property infringement action in the UK.  If the case goes a certain way it will break new ground and will almost certainly have an impact outside as well as within this country. The hearing took place on 20 Dec 2012 and judgment has been reserved. I will tell you all about this case just as soon as I can.

Probably the most important news for inventors while I have been offline was the adoption by the European Parliament on 11 Dec 2012 of legislation for a unitary patent.    Readers who want an overview should read the European Parliament's press release and the welcome to the resolution by the European Patent Office.  For those who want more detail there are some good frequently asked questions.   Those who want to read the legislation for themselves will find the resolutions on the creation of the unitary patent, a unified patent court and ancillary legislation through these links.

The reason why this legislation is important is that it will become considerably cheaper and easier for inventors to obtain a single patent for all the member states of the European Union except Spain and Italy and to enforce that patent through a new patent court sitting in London, Paris and Munich which will have jurisdiction in all those countries.  

At present inventors have the choice of applying to the European Patent Office for a European patent designating one or more of those 25 countries or to each national intellectual property office for a national patent either directly or through the Patent Co-operation Treaty. Either way that is expensive costing an average of €36,000 according to the European Commission compared to a fraction of those costs for patent protection in the USA, China, Japan or South Korea.   If a European or national patent is infringed the patentee has to sue in every member state in which the infringement occurs which in common law countries, such as the UK and Ireland, can be very expensive indeed.

The new legislation should reduce the cost of patent prosecution - the application for a patent and its examination by the European or national patent office - from €36,000 to about €4,725 according to the European Commission, and the cost of enforcement from millions of pounds to tens of thousands of euro.   With the development of new IP insurance and litigation funding packages universities, small and medium enterprises and indeed individual inventors will find it easier to hold their own against multinational companies and other competitors.

The landscape has already changed considerably for such IP owners in England since Professor Kingston wrote "Enforcing Small Firms Patent Rights". The cost of enforcement was reduced dramatically by the new Patent County Court Rules and the introduction of a small claims track for intellectual property disputes.   It has also been possible to get authoritative advisory opinions from patent examiners on whether UK and European patents are valid and whether they have been infringed for £200 since 2005.  The unitary patent will begin to level the playing field internationally.

Over the next few weeks I will be writing a lot about the unitary patent and its likely impact for my clients.   If you wan to learn more about this topic give me a ring on +44 161 850 0080 or send me an an email through my contact page. You can also follow me on Facebook, Linkedin, twitter or Xing.

Soon there will be a Remedy if Someone steals your Idea

For many years the UK has lagged behind its competitors in the number of European patent applications. With 6,464 applications in 2011 it has actually slipped a place from 7th in 2009 to 8th in 2011 behind the USA (59,688), Japan (47,404), Germany (33,181), China (16,946), South Korea (13,254), France (12,107) and Switzerland (7,786).

I have long argued that there is a correlation between the number of patent applications and the relative cost of intellectual property enforcement (see "New Patents County Court Rules" IP/IT Update 31 Oct 2010 and "Why IP Yorkshire" IP Yorkshire 10 Sept 2008). Until the new Patent County Court Rules were introduced on 1 Oct 2010 England and Wales was arguably the most expensive and difficult country for a small business to enforce its intellectual property rights in the developed world.

Now that situation is about to be reversed.   From 1 Oct 2012 England will actually be one of the least expensive and least risky places in the world to bring small IP infringement claims.   On that day The Civil Procedure (Amendment No.2) Rules 2012 (SI 2012 No 2208) come into force. Rule 10 of those Rules will amend CPR Part 63  to permit small IP claims to be brought in the Patents County Court.  This seemingly insignificant rule change is potentially of enormous importance for our country's economic future as I have stressed in "Small IP Claims" (NIPC website 8 May 2012), "Enforcing Small IP Claims: Sullivan v Bristol Film Studios" IP/IT Update 7 May 2012 and "The New Small IP Claims Jurisdiction" IP/IT Update 5 March 2012.

The new rules will allow claims for infringement of copyright, design right, trade mark and most other intellectual property rights including breach of confidence relating to trade secrets and passing off to be allocated to a new small claims track provided that the value of the claim does not exceed £5,000 and the parties agree.  If the parties do not agree the court will allocate the case to the small claims track or multitrack as it thinks appropriate.  The significance of allocating a case to the small claims track is that a simplified procedure applies and there is a limit to the costs that the successful party can recover from the other side. It is possible - though I would stress not always prudent - for a party to represent him or herself in that tribunal.

It is important to stress that not every intellectual property right can be enforced in the small claims track. In particular, claims for the infringement of a patent, registered design, registered Community design, design right in a semiconductor topography or plant breeder's rights will still have to be allocated to the multitrack. However, there is nothing to stop the court from re-allocating such a case to the small claims track as the Court of Appeal suggested in Sullivan (see my case note "Enforcing Small IP Claims: Sullivan v Bristol Film Studios") or giving directions similar to those that would be made in the small claims track.

I said above that while it is possible for a party to represent himself before the Patents County Court it is not always prudent to do so. That is because rule 10 (c) provides for most of the rules of CPR Part 63 to apply to the small claims track.  Some of these rules are quite technical as is the substantive law.  In my career at the Bar I have seen several cases in which a litigant in person has proceeded to judgment only to have it set aside at great expense because of an avoidable procedural defect.  For those who are prepared to write their own letters to the court and other side and serve their own documents my chambers will provide fixed fee oral and written representation. For those who are not, I have arranged with JWK Solicitors who have lots of experience of small claims litigation as well as expertise in IP to offer fixed fee litigation. Anyone who wants to learn more of those services should call me on 0800 862 0055 or contact me through Facebook, Linkedin, twitter or Xing, or through my contact page.

Finally, I am giving a talk on the new rules and my new fixed fee enforcement services to Sheffield Inventors Club at Sheffield Central Library in Surrey Street on Monday 1 Oct 2012 between 18:00 and 20:00. Anyone wishing to attend should contact Lynne Hinchcliffe on  0114 273 4712. There will be no charge for the talk but space is limited and recent events have been very well attended.

Investing wisely in IP - my 6-Point Plan for any Business

A patent, copyright, trade mark, registered design or other IP right is nothing more than a right to bring a law suit. Its purpose is to protect the income generated by an intellectual asset, that is to say, a brand, design, technology or creative work.   Such protection does not come cheap.   According to research commissioned by the EPO, it costs €32,000 to obtain a typical European patent and maintain it for 10 years.   That is an awful lot of money to spend considering that most patents are never worked.   Enforcement is even more expensive. IPAC (HM government’s high level advisory committee on intellectual property) estimates that a patent infringement action costs £1 million in the High Court.  That explains why I have seen far more businesses fail from having too much IP than from having too little in my 32 years at the English bar.  

Yet there are circumstances in which a business needs to protect its investment in branding, design, technology or creative works. How does a businessman or woman recognize such circumstances and how does he or she choose the optimum legal protection.   Here is a simple 6-point plan that can apply to just about any business.

1.   Choose a period in which you expect your business to develop.   This can be any period of your choosing which will probably depend on the nature of your business and products and services.   For a company in the fashion or novelties business this could be a matter of months or even weeks.   For a pharmaceutical company it could be decades.

2.   Identify the main income streams that you expect to develop in that period.   IP is intended to protect income streams,   If your invention is never going to earn money whether directly or indirectkly through sale or licensing why waste thousands of pounds on patenting it?  Similarly, if you have no sales in country X and are never likely to have any why seek intellectual property proteciton there? You may want tpo protect yourself in country X it it has a sufficient industrial base to allow a competitor to set up there but, if not, why bother?       

3.   Consider potential threats to each of those income streams.   Competition from competing products or services may be one but there may be others such as changing patterns of demand or the general economic situation.

4.   List possible counter-measures to those threats.   Most of these will be commercial rather than legal such as cutting your prices or developing new products or services but for some threats such as plagiarism you may actually need some legal protection such as a patent or design registration.

5.   If any of those counter-measurers is an IP right, choose the most appropriate one for your business.   There is usually a choice. For instance, one way of protecting a new product or process is simply to keep it under wraps and seek to rely on the law of confidence to prevent unauthorized use or disclosure. The other is to proclaim it to the world in exchange for a temporary monopoly of the manufacture, sale and use of the product or use of the process (otherwise known as a “patent”). Where the technology has only a short shelf-life, a 20-year monopoly is otiose.   On the other hand, if you are a drug company which has invested millions in R & D in a new product and waited years for approval from drug licensing authorities you need patent protection in every country of the world of you are to see an adequate return on your investment.

6.   Ensure that there is adequate funding for enforcement proceedings.    Unless you can afford hundreds of thousands of pounds on litigation and can risk at least as much again if you lose your case with equanimity you should think of IP insurance.   Though these articles need to be updated you can start with two articles that I wrote in September 2005: “IP Insurance. Does it Work” (IP/IT Update) and “IP Insurance” (NIPC Inventors Club).

These and other tips are all set out in my presentation to Leeds Inventors Club “So you think you want a Patent?” which I gave on 18 April 2008.   I also discuss them in my book “Enforcing Intellectual property Rights” which appeared earlier this month.