How EU's Unified Patent Court May Repeat US's Past Mistakes

Back in May, I wrote about a very interesting paper discussing some potential pitfalls of the new Unified Patent Court. Given the magnitude of the change that it and the unitary patent system will bring, it is extraordinary that we still don't really know how things will work out in practice. That makes another paper called " The Unified Patent Court (UPC) in Action - How Will the Design of the UPC Affect Patent Law? " particularly welcome, since, as its title suggests, it explores how the new UPC is likely to shape the contours of patent law in Europe.

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Back in May, I wrote about a very interesting paper discussing some potential pitfalls of the new Unified Patent Court. Given the magnitude of the change that it and the unitary patent system will bring, it is extraordinary that we still don't really know how things will work out in practice. That makes another paper called "The Unified Patent Court (UPC) in Action - How Will the Design of the UPC Affect Patent Law? " particularly welcome, since, as its title suggests, it explores how the new UPC is likely to shape the contours of patent law in Europe.

Here's the main part of the abstract:

The new common judiciary for European patents (UPC) will play a crucial role in the future European patent system. The UPC will be a very specialised court that i.a. recruits judges from specialists’ circles and has as part of its mission to develop a coherent and autonomous body of case law. The article points out that the UPC because of this design will be biased towards technology based values and uniformity at the expense of other values and interests e.g. non-economic public interests, and values associated with diversity.

This is a central concern about the new court: that, being made up of specialist judges there will be a tendency to view patents are something inherently valuable, and to ignore or at least downplay other considerations - for example, that patents may well benefit the patentholders, but have a negative effect on society as a whole. That's particularly the case for software patents, of course, which represent perhaps the biggest threat to the future development of open source. This issue of bias was also touched upon in the paper I wrote about in May; the present one looks at this aspect in detail, and is well-worth reading, even if it is a little dry in places.

It points out that there are likely to be few constraints on the UPC's ability to shape patent law as it wishes:

it must be expected that the UPC will be able to develop patent law in accordance with chosen policy objectives with very little risk of subsequent legislative amendments. Consequently, there is every reason to believe that the UPC will become a central policymaker in the future European patent system. As discussed supra there is a need for judicial control of the EPO and the UPC is designed to satisfy this need. Based on these considerations, it is very likely that the future European patent system will to a large extent be governed by judges.

It underlines the fact that the fear these specialist judges may be inherently biased in favour of patents is no mere theoretical concern: that is precisely what happened when the US took this route with the US Court of Appeals for the Federal Circuit (CAFC):

It has been argued that a specialised or semi-specialised court like the CAFC is more inclined than a court of generalists to identify with the statutory scheme that it is charged with administering, and that when the specialist judges are confronted with the same sorts of litigants and lawyers the judges may simply identify too strongly with them. As a consequence, they will develop a tunnel vision and become overly sympathetic to the policies furthered by the law that they administer or who are susceptible to “capture” by the bar that regularly practices before them. The specialisation may also make judges more vulnerable to lobbyists and their positions susceptible to ideological appointments.

That's certainly what has happened in the US, particularly in the realm of software patents, which have been granted in increasing numbers, and for increasingly trivial ideas. The paper notes that the CAFC's bias in favour of patents and patent holders is more general:

a specialised patent judiciary may e.g. be more sympathetic to the constant call for stronger and more effective enforcement of IP rights than courts with a general jurisdiction, and consequently be more willing to develop special rules and principles for enforcement of patents. It is natural to see eBay v MercExchange as an example of this: The CAFC had applied its “general rule that courts will issue permanent injunctions against patent infringement absent exceptional circumstances”. The U.S. Supreme Court reversed this decision stating that the “well-established principles of equity” under which a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court can grant such relief also applies to disputes arising under the U.S. Patent Act. The U.S. Supreme Court thus based its decision on general principles of equity instead of a special rule developed by the CAFC specifically for patent cases.

Since the new paper appeared, there has been a further US Supreme Court ruling, Alice v. CLS Bank, that has already led to no less than 11 software patents being thrown out by lower courts. Indeed, there is every indication that the era of completely insane software patents is drawing to a close in the US. It is therefore deeply ironic - and rather frustrating - that at precisely the moment when sanity starts to break out in the US, the EU incomprehensibly decides to take exactly the same path of madness that produced so many problems across the Atlantic.

The current paper does not simply analyse potential problems with the UPC, but offers a few suggestions for mitigating them:

in order to deal with the institutional biases, we recommend that the UPC finds ways to systematically include values and interests lying in the court’s blind spots. To counterbalance the strong focus on technology the UPC could thus make sure that the training of the judges includes issues of non-technical nature, and in addition, the UPC should find ways to engage in dialogue with interested circles and not just patent specialists. To support legal creativity and the further dynamic development of substantial patent law the UPC should recognize diversity amongst the judges and the various divisions of the court of first instance as a value. And in the same vein, the UPC should consider national experiences and practices as a pool of knowledge and utilize national experiences to identify common core concepts as best modes.

Those are all good ideas, but it's rather depressing that we must already be thinking of ways to minimise the damage the new UPC is likely to cause Europe's economy in general - and the world of software in particular.

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