alexander harguth principal, munich red-flag issues for technology companies operating in europe
TRANSCRIPT
Alexander Harguth
Principal, Munich
“Red-Flag Issues for Technology Companies Operating in Europe”
• Enforcement in numerous national courts
• Differences between national court systems: Procedural law/speed
• Different qualifications and experience of judges
• Multiplication of costs: Court fees/Local attorneys
• Expensive post-grant translation regime
Today’s European System
US System • Less expensive patent
granting system • One Judicial System for a
market of 305Mio residents
• Unique aspect of patent disputes: Nearly all appeals are made to the Court of Appeals for the Federal Circuit
Germany=MN+WI (km2), Population: MN+WI=10M, Germany=83M
• Community Patent (European Union Patent)
• Single Patent Court for the whole European Market (501Mio residents)
Status of the Initiative Language Approach Timeline: When does it happen?
Steps Towards Unified Patent System
Steps Towards Unified European Patent System (Legal Elements)
1) COUNCIL REGULATION on EU Patent
2) COUNCIL REGULATION on Translation Arrangements for the EU Patent
EU = 27 EU Countries
37 EPC Countries =
27 EU + 10 Non EU
3) EU joins EPC
4) AGREEMENT on the European and EU Patent Court
Enhanced Cooperation (Art 20 Treaty of Lisbon) 1. Member States which wish to establish enhanced cooperationenhanced cooperation
between themselves within the framework of the Union's non-exclusive competences may make use of its institutions and exercise those competences by applying the relevant provisions of the Treaties … Enhanced cooperation shall aim to further the objectives of the Union, protect its interests and reinforce its integration process …
2. The decision authorising enhanced cooperation shall be adopted by the Council as a last resort, when it has when it has established that the objectives of such cooperation cannot be established that the objectives of such cooperation cannot be attained within a reasonable perioattained within a reasonable period by the Union as a whole, and provided that at least nine Memberprovided that at least nine Member States participate in it. […]
3. All members of the Council may participate in its deliberations, but only members of the Council representing the Member States participating in enhanced cooperation shall take part in the vote. […]
Enhanced Cooperation to sidestep blocking members
Limited Number of Participants, but at least 9 EU States
Low thresholds: Only qualified majority in the EU Parliament and Council, only participating Member States would be allowed to vote in the Council.
Legal Risk? Would be historically the second time that this side door of « enhanced cooperation » will be used. On July 14, 2010 some EU countries agreed to simplify divorce rules for couples of different nationalities.
Enhanced Cooperation• Between (at least): Germany, UK, France, Sweden, Ireland, the Netherlands, Estonia, Slovenia, Czech Republic = Market: 255 Million people
• Later participation of non- co-operation members is possible: Member State which wishes to participate in an enhanced cooperation in progress may join it at a later time
• Court of 1st Instance with Divisions in Contracting States• Court of Appeal (where?) • Exclusive competence for EU Patents and EPs • But during transitional period (7 years) lawsuits based on EP can still be file in national courts
Future: European and European Union Patents Court (EEUPC)
• “London Agreement”Entered into force on May 1, 2008 = Cost reduction through a cost-attractive post-grant translation regime:
• States with national language = one of EPO’s official languages (France, Germany, LI, LU, MC, CH, UK): No translation necessary!
• States with national language # EPO’s official languages:
• Translation of claims, Spec in English: Netherlands, Sweden, DK,
• Many states are not yet party to the London Agreement
• “Enforcement Directive”Aimed at a more efficient and standardized enforcement in Europe
• “European ITC Proceedings”
Recent Steps Towards Unified European Patent System
Idea: Leverage of rendered decisions for negotiation of settlement agreement with an European-wide/international
coverage!
Status Quo: Court Cases per Country
0
200
400
600
800
1000
1200
1400
1600
Cases
Germany France UKNL
(Source: JUVE Rechtsmarkt 04/10, page 79)
Reasons for Forum Selection
DC Mannheim
Federal Patent Court
DC Düsseldorf
• Quality of the judiciary? Is the forum patentee-friendly?
• Predictability (Reliability)
• Reputation of the selected forum?
• Leverage of rendered decisions for negotiation of settlement agreements with an international coverage
• Court is viewed as “pro-plaintiff”?
• Cost-efficiency of the proceedings
• Fast jurisdictions?
• Expected damage awards
• Available discovery means
• Size of the Market
• Costs
“Split System”
Infringement Courts
Invalidation Court
District Courts
Appeal Courts
Federal Patent Court
Federal Supreme Court
Non-technical judges
Technical judges + non-technical judges
Appointed court expert
Accused EmbodimentSimplicity
Prior Art
First Instance Decision (6):Infringement
Start: Nullity suit
Start: Infringement lawsuit
Decision of the Federal Patent Court
Normal Course of the Proceedings
Stay of proceedings?
Requirements:
(1) Nullity proceedings are pending (opposition/nullity complaint)
(2) Forecast: “Is there a considerable probability that the asserted patent claim will be invalidated” (Federal Supreme Court, “Transport Fahrzeuge II”)
Missing Complexity of the Proceedings
• No discovery (interrogatories, depositions, requests for admission, production of documents, electronic discovery)
• No doctrine of willful infringement (treble damages)
• No doctrine of inequitable conduct; no duty to disclose to the PTO
…. And “European ITC Proceedings”?
Fast
Inexpensive
Simple
Typical EU Entry points:
Port of Rotterdam
Airport of Frankfort
Port of Hamburg
Trends: Quantity of Seizures
How to handle counterfeits at tradeshows? The Traditional Means:
• Preliminary injunctions?
(ex parte)• Service through bailiff
• Enforcement if the accused infringer
does not comply with the court order !
• Lawsuit on the merits with service at the tradeshow
• Warning letter?
1st day: ThursdayBeginning of the tradeshow
2nd day: Friday
Identification of counterfeits
3rd day: Saturday
4th day: Sunday
5th day: Monday End of the tradeshow
• Warning letter
• Preliminary injunctions
(ex parte)• Service through bailiff
• Enforcement if the accused infringer does not comply with
the court order !
• Lawsuit on the merits with service at the tradeshow
Efficiency of traditional means
How does it work ?
Application for Border Seizure
• Requirements– Proof of entitlement – Indicate goods to be monitored– Give sufficient information about:
– Original products: Value, packaging, style or character guides, labels, origin, transport means and routes– Potentially infringing products: Origin, place of production, transport routes, involved persons, tracking numbers,
scheduled arrival ...(Contact local authorities in producing countries, private investigator, etc.)
Customs authorities need to be able to identify the infringing products!
• Warrant (Germany: security): Applicant is accepting liability towards customs and other persons involved (declarant/importer...)
• No fee is charged
Data Source
Simple Application Procedure!
Application for action by the customs authorities at the ZRG (Munich)
Grant of the application by the ZRG (Munich)
Provisions of the Customs Offices with the relevant information
Customs actions via German customs
• Efficient
– Online databases
– Online application
– Online updating of information
Detection of infringing goods by customs
• If infringing goods are discovered• Goods are detained and applicant/declarant/importer/holder of goods are
informed
• Right of inspection for the applicant
• If importer does not object within two weeks, goods are destroyed (at the expense of applicant)
• In case of objection, applicant has to initiate legal proceedings within two weeks
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Detention of Goods by Customs
Informing the Patentee and Importer about Detention
Possibility of Inspecting the Detained Goods
Importer Contests the Detention of the Goods
Yes No
Introduction of Court Proceedings
Destruction of Goods
Destruction of goods• Example: November 2006, 117 containers of
counterfeits: Value: 383 Million Euro
• Fiction: … provide those authorities with the written agreement of the declarant, the holder or the owner of the goods to abandon the goods for destruction. With the agreement of the customs authorities, this information may be provided directly to customs by the declarant, the holder or the owner of the goods. This agreement shall be presumed to be accepted when the declarant, the holder or the owner of the goods has not specifically opposed destruction within the prescribed period. This period may be extended by a further ten working days where circumstances warrant it.
Intellectual Property Rights affected
Questions ?