Five Patent Highlights from Europe in 2022
“The long-awaited introduction of the Unitary Patent and UPC should provide much interest in 2023, with attention likely to focus on the early numbers of applications for unitary effect, the number of European patents opted out, and the volume and nature of cases.”
IPWatchdog’s annual review of patents in Europe focuses on five key developments from 2022 and introduces some trends to look out for in 2023.
1. Are You Ready for the Unitary Patent and UPC?
There is only one place to start a review of the year in Europe, and that is with the preparations for the launch of the Unitary Patent and Unified Patent Court (UPC).
The new system is due to come into force on June 1, 2023, and will be the biggest change to patent protection in Europe since the European Patent Convention was agreed 50 years ago. It will create a new option to obtain a unitary right covering at least 17 (and up to 24) EU Member States and to get a court ruling on patent validity and/or infringement covering all of those states.
As reported on IPWatchdog (Green Light for Unitary Patent and UPC), the year started with Austria depositing its instrument of accession to the Protocol on Provisional Application of the UPC Agreement. That kick-started the provisional application period and the final preparations for setting up the Court.
These preparations have included the appointment of 85 legal and technical judges, confirmation that the Court will start with 13 local divisions and one regional division, and the signing of an agreement on exchanging data between the UPC and European Patent Office.
However, it’s not all been smooth progress. The start date was recently put back by two months from April 1, 2023, to June 1, 2023, to allow more time for users to set up the strong authentication required for accessing the Case Management System. That means the transitional period will start on March 1, 2023, rather than January 1, 2023.
During the transitional period, holders of European patents can opt them out of the jurisdiction of the UPC by making an online application.
The period in which patent applicants can submit early requests for unitary effect as well as requests for delay in issuing the decision to grant a patent at the EPO will start as planned on January 1.
2. The Joy of SEPs
This year has seen more decisions in the UK courts in the dispute between Optis and Apple over standard-essential patents (SEPs). The most recent of these, from the Court of Appeal, concerned the availability of injunctions in cases regarding fair, reasonable and non-discriminatory (FRAND) licensing.
When it’s finally resolved, the litigation should decide issues including the determination of global FRAND licenses, what constitutes hold out/hold up, and potentially Apple’s future in the UK market.
The dispute began back in 2019, when Optis alleged that Apple’s iPhone and iPad devices infringed eight telecoms patents, all of which had been declared essential to 3G and 4G standards by the European Telecommunications Standards Institute (ETSI).
This led to four trials (known as trials A to D) to determine validity, essentiality, and infringement of the patents, as well as a fifth trial (trial E) to determine FRAND, competition law issues and the availability of injunctive relief. The sixth trial (trial F) concerned other issues including Optis’s claim for an unqualified injunction.
At the time of writing, first instance judgments in trials A-D have been handed down, as well as appeal judgments in trials A and B. Appeals in trials C and D are pending. Trial E was held in summer 2022 and the judgment has not yet been published.
In trial F, the Court of Appeal recently upheld an order that Apple must undertake to enter into a license in the form that is determined to be FRAND at trial E or, to the extent that there are appeals in trial E, a license that is finally determined to be FRAND on appeal. As Lord Justice Arnold wrote in the judgment, this order provides for a FRAND injunction “with the modification that the injunction bites unless the implementer undertakes to take a license on terms to be determined to be FRAND rather than unless the implementer takes a license on terms which have already been determined to be FRAND.” (Optis Cellular Technology LLC & Ors v Apple Retail UK Ltd & Ors [2022] EWCA Civ 1411, emphasis added.)
In his judgment, Lord Justice Arnold also said that the appeals in this case “illustrate yet again the dysfunctional nature of the current system for determining SEP/FRAND disputes” and called on organizations such as ETSI to make legally enforceable arbitration of FRAND disputes part of their IPR policies.
3. To SPC Or Not to SPC
The European Commission is gradually moving forward with plans for a unified supplementary protection certificate (SPC) right. In the EU, SPCs provide up to five years of patent extension for regulated pharmaceutical and plant protection products (and an additional six months for pediatric medicines). However, they are granted and administered nationally.
The Commission argues that this situation leads to fragmentation, extra costs and red tape for SPC applicants and owners. It has also contributed to legal uncertainty—demonstrated by the large number of referrals to the CJEU regarding the SPC Regulation. The introduction of the Unitary Patent and UPC (see above) provides an opportunity to consider a unified system, but progress has been slow.
In August this year, the Max Planck Institute for Innovation and Competition (the go-to authority for IP research in Europe) finally published its Study on the options for a unified SPC system in Europe (download here).
The study considered two options: (1) a PCT model, with a single authority examining a regional application for an SPC by drafting a single examination report, with national patent offices using this to make a decision to grant; and (2) an EPC model, where national offices transfer the decision-making power to a central body, which decides on grant.
It recommended establishing a procedure to grant a European certificate based on an examining body comprising a representative from each national agency; a system of appeals before the EU General Court supplemented by a Board of Appeal within the agency; an option for central attack; and the option for applicants to choose between a bundle of national applications and a single regional application.
The report stated: “The unified procedure would lead to granting a European certificate which in some states has national effect and in other states unitary effect, according to the law applicable to the designated basic patent. In this way it could also serve as a platform for granting unitary certificates for the countries in which the designated basic patent benefits from unitary effect once the unitary patent package becomes applicable.”
The study noted that this proposal is “ambitious” and it is now down to member states to review it. If there is no agreement, the study argued that a more modest PCT-type model would still be an improvement on the status quo.
4. Three Steps Towards AI Clarity
There have been three notable developments this year in the DABUS cases regarding whether an AI can be the inventor of a patent application.
First, in March, as reported on IPWatchdog (German Decision Could Provide an Answer to AI Inventorship), the German Federal Patent Court said that a designation stating that the inventor was Stephen Thaler, who prompted the AI DABUS to create the invention was allowable, but a designation of DABUS as the inventor was not.
Second, in July, the EPO Legal Board of Appeal published its ruling on Thaler’s appeal regarding his European application. (J 0008/20 (Designation of inventor/DABUS).) The Board found that under Article 81 of the EPC, an “inventor” must be a person with legal capacity. It rejected an auxiliary request in which no inventor was identified but which specified that a natural person had the right to the grant of a European patent as the creator and owner of DABUS.
But, consistent with the German court, the Board said it could see no objection to the user or owner of a device involved in an inventive activity designating themselves as the inventor and noting the role of the AI in the specification. Thaler had previously filed a divisional EP application where he was named as the inventor, and DABUS was designated as having invented the subject matter.
Third, in August 2022 the UK Supreme Court granted Thaler’s application to appeal the Court of Appeal judgment regarding the UK patent application. (Thaler v Comptroller-General of Patents, Designs and Trade Marks UKSC 2021/0201.) The appeal will be heard in 2023, with judgment likely before the end of the year.
5. Video Killed the EPO Trip
On November 22, the EPO announced that videoconference would become the default format for oral proceedings in opposition; in-person proceedings would only be conducted under certain circumstances, and when the opposition division permits it.
The decision followed an extended period during which oral proceedings before the EPO in examination, opposition and appeal have been held by Zoom due to the COVID-19 pandemic. The EPO also published a survey, in which 77% of respondents found oral proceedings by videoconference to be good or very good.
The use of oral proceedings has divided opinion among patent practitioners in Europe. Some argue that it cuts down on travel time and expense, enables more people to participate in proceedings, and levels the playing field for parties and representatives wherever they are located. (The European Patent Organization now comprises 39 contracting states, following the accession of Montenegro in October 2022.)
However, others believe that video hearings are a poor substitute for in-person proceedings, they make it harder for parties to present arguments and for examiners to deliver fair and well-reasoned decisions and are not permitted by the EPC.
The Boards of Appeal, which operate independently of the EPO President, are also holding proceedings by videoconference, but have not said whether they will become permanent. As IPWatchdog reported last year, the Enlarged Board of Appeal ruled that parties can be required to take part in appeal proceedings by videoconference during a “general emergency”.
Coming Up in 2023…
The long-awaited introduction of the Unitary Patent and UPC should provide much interest in 2023, with attention likely to focus on the early numbers of applications for unitary effect, as well as the number of European patents opted out and the volume and nature of cases brought before the Court.
At the EPO, decisions are expected from the Enlarged Board of Appeal in Case G 2/21, which concerns plausibility and post-published evidence, and Cases G 1/22 and G 2/22, concerning entitlement to priority. Oral proceedings in G 2/21 were held on 24 November.
As mentioned above, the UK Supreme Court should hear the DABUS case and deliver its judgment in 2023. The UK courts are also likely to continue to be very busy with various SEP cases, including those brought by Optis against Apple and by Nokia against Oppo, as parties continue to test the limits of the law following the Supreme Court’s Unwired Planet decision in 2020.
Finally, on December 7, the EU announced that it has requested the establishment of a World Trade Organization panel on the legality of China restricting holders of SEPs from accessing EU courts to effectively protect and enforce their rights. The dispute concerns anti-suit injunctions issued by Chinese courts since August 2020. A panel is likely to be established on January 30, 2023, and proceedings can take up to 18 months.
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Author: enterlinedesign
