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Will the Unified Patent Court for Europe Help Or Harm the Electronics Sector in the UK? This Article Was Originally Published on Electronics on July 14, 2014

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Will the Unified Patent Court for Europe Help Or Harm the Electronics Sector in the UK? This Article Was Originally Published on Electronics on July 14, 2014 Intellectual Property Will the Unified Patent Court for Europe help or harm the electronics sector in the UK? This article was originally published on Electronics on July 14, 2014. by James Tumbridge The Unified Patent Court (UPC) is A further concern is the structure of the result of an agreement between the court focusing on technologies 27 European countries to create a in different locations, and as Paris is single patent for Europe (the ‘Unitary the forum for deciding cases related Patent’), with a single court (the UPC) to electronics, the impact on the to handle validity and enforcement UK’s electronics industry is unclear. matters. The creation of the UPC However, many believe that Paris and has spurred a great deal of debate France will benefit from a perception James Tumbridge in political and legal circles, as well that they are the new centre Intellectual Property as within industry, and many have of excellence. +44.20.7847.9583 questioned whether it is going to [email protected] be beneficial to patent holders, or The UPC will be comprised of whether potentially it could be different divisions, each of which James Tumbridge is an intellectual property damaging to certain sectors of the will have its own judges, and litigation partner of Pillsbury Winthrop Shaw UK economy. territorial coverage, and the local/ Pitman’s London office. He has extensive regional divisions will serve different experience in commercial litigation, intellectual Of particular concern has been the functions to the central division. The property and alternative dispute resolution. location of the UPC courts, and Central Division will have exclusive the approach to be adopted, which jurisdiction to determine issues of will ‘split’ infringement actions validity for Unitary Patents, which, from validity actions into separate as set out more fully below, presents proceedings. This is known as significant challenges for patent ‘bifurcation’ and is the system that owners. The Central Division will has been operating in Germany for hear cases from three locations, with many years. In effect, a different court each being responsible for certain will decide if you infringe a patent technologies: London will deal with from the court determining if the pharmaceuticals and chemicals; patent is valid. This approach is not Munich will deal with mechanical one familiar to users of the U.S. and engineering; and Paris will be English patent courts. The risk is responsible for the remaining sectors, that a company could be injuncted including electronics. Regional from selling a product found to divisions will cover multiple jurisdic- infringe, only for the patent some tions that group together; for example, time later to be held invalid (and by a the Nordic countries might form a different court). single regional division, whereas Pillsbury Winthrop Shaw Pittman LLP www.pillsburylaw.com Intellectual Property Will the Unifed atent Court or urope help or harm the electronics sector in the UUK Holland intends to have a local The ‘Split Proceedings’ issue mean that the device must be pulled division just for Holland. The serious risk of an injunction being from the market. While companies granted on an invalid patent, arises like Nokia and Microsoft could in Parties commencing proceedings in because of the fact that the Central the past limit exposure to such a the UPC will need to consider the Division of the UPC will be able to situation, by moving their business court structure, as well as the location determine questions of validity in to other jurisdictions in Europe, the of the defendant, which may have a respect of Unitary Patents. The court impact of injunctions issued by the consequence as to the language used dealing with infringement may well UPC is that they have pan-European in the case. Another consideration is deal with the matter at a far quicker effect. In that case, in Europe, there the timeline for proceedings; the time pace than the Central Division (in is no hiding place. The potential from commencement of proceedings whichever city i.e. London, Munich effect is to drive industry, before in the Central, Regional or Local or Paris) which will proceed at its the borders of Europe. Perhaps if division, to an appeal to the Court own pace. This has been the source the courts, hearing an infringement of Appeal (in Luxembourg), together of considerable concern for patent action, are prepared to suspend the with the possibility of one or more owners in the past. For example infringement case (and so delay the references to the Court of Justice of Nokia and Microsoft, have relocated granting of an injunction), allowing the European Union (CJEU), could their manufacturing and/or distribu- the validity case to be heard, the risk mean the better part of a decade from tion centres outside of Germany, in will be mitigated. However, we are far start to finish. order to avoid injunctions disrupting from certain this will be the case in their businesses based on patents of practice. Sadly, this is where politics The location of the Central Division questionable validity. interfered with sense. As one in house in London, Munich and Paris may lawyer expressed it; “[A] politically also present concerns for specific When an injunction prevents a acceptable UPC arrangement, is not industries. In the legal community, defendant from selling its products, the same as a better system.” This is we have seen a rise in the demand the immediate loss of revenue simply the price we pay for political for a local presence centred on may mean that they cannot afford compromise being required before the locations of the UPC divisions. the ongoing costs of the separate the differing countries of Europe This echoes the demand for a local proceeding to have the claimant’s could decide on the new regime. And presence of legal advisers around patent invalidated. Worse still, the in such situations it is not surprising the European Patent Office, despite crippling effect of the loss of revenue that those negotiating may not fully the fact that qualified legal advisers of the injuncted product may well put understand patents and the economic across Europe are equally able the defendant out of business with impact of an injunction. to assist on respect of European the attendant loss of jobs, and harm patents. It remains to be seen, and to that country’s economy as a whole. Whatever the experience of the new is the source of concern for industry, For claimants relying on question- regime, it makes sense to be thinking whether new ‘centres of excellence’ able patents, simply obtaining an about it before you find yourself using will develop around the UPC injunction may be a victory in itself. it. The big players are ready: Are you? divisions. If they do, London may benefit in pharmaceutical expertise, As electronic devices are rarely single but will it be at the expense of other component devices, the different specialisms? Will we have a brain components that comprise the device drain of expertise in the electronics will invariably be covered by a bundle sector to Paris, possibly to the of patents. An injunction based on detriment of the UK sector? a single one of those patents will Pillsbury Winthrop Shaw Pittman LLP | 1540 Broadway | New York, NY 10036 | +1.877.323.4171 ATTORNEY ADVERTISING. Results depend on a number of factors unique to each matter. Prior results do not guarantee a similar outcome. © 2014 Pillsbury Winthrop Shaw Pittman LLP. All rights reserved. Pillsbury Winthrop Shaw Pittman LLP www.pillsburylaw.com.
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