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| To some, this bifurcation diagram is a whole lot prettier than what bifurcation of patent litigation can end up looking like.... |
Besides Articles 6 to 8, the issue that can divide some European patent practitioners the most is the issue of bifurcation. During the last Scrutiny Committee session Mr. Feinson admitted that if "we had it our way we would not allow for bifurcation" in the Draft Agreement. This time around, James Clappison MP asked Mr. Feinson to explain the Government's reasoning and their action on this issue. Mr. Feinson explained that bifurcation causes efficiency problems – running two actions instead of one and reaching a decision on infringement of a patent, before the validity of the patent is determined. Mr. Clappison MP stated that this point echoed the concerns that experts, particularly Mr. Henry Carr QC of the IP Bar, highlighted as being extremely problematic for businesses. The Government, Baroness Wilcox explained, is negotiating on the bifurcation point. She explained
"We would obviously prefer not to have this; we don't like it, but the Germans love it."Presently worded, however, bifurcation is only an option: it is not compulsory. Much depends on the drafting of the Rules of the Procedure as to how bifurcation is instituted or applied in proceedings. To mitigate any affects of bifurcation, the panel explained, the Rules would also have to address the timing of the two cases so that one does not encounter a case where a party has been held to have infringed a patent that later is ruled to be invalid.
Mr. Phillips MP was unimpressed with this proposed attempt to mitigate the effects of bifurcation. Following an unsuccessful line of questioning to get Baroness Wilcox to confirm whether the bifurcation point was a red line issue, he stated:
"MR. PHILLIPS: Experience dictates that any reform, in any area of civil procedure, designed to speed up matters such as infringement proceedings, or indeed anything else, never really works. Is that really the only mitigation that the Government is able to suggest if bifurcation goes ahead?
BARONESS WILCOX: I think that we are negotiating, and as the negotiations go forward so we will reflect upon where we are.
NEIL FEINSON: Minister, if I may add, we did actually ask our stakeholders this very question-
BARONESS WILCOX: We did.
NEIL FEINSON: -about what their red lines are, particularly on Articles 6 to 8, bifurcation and a London seat. To a man/woman they said, "Well, we can’t actually give you that answer because this is a package. The issues are interrelated and we need to see the balance of the package against the status quo". That is very much our position. We are not going to draw a line in the sand definitively. We understand that bifurcation is a difficult issue for industry; we understand that Articles 6 to 8 is a difficult issue for industry. We will consult closely with industry in the endgame as to whether the deal is or is not worth doing, but if they themselves are not prepared to say, "This is a red line" or "That is a red line" I don’t think we should be doing so."Mr. Clappison MP stated that, contrary to what Mr. Feinson stated, it was evident from the Committee that on the basis of the evidence received bifurcation was indeed a red line issue and that it was now a matter for the UK Government to take a position and determine whether the issue of bifurcation was or was not a red line issue.
The UK Government's position – does it have one?
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| The AmeriKat getting her teeth into some red lines.... |
"I must admit I remain as puzzled as Mr Phillips about why the Government cannot reveal the strength of its position in any of these areas. I just wonder what the point is of coming to give evidence that we are negotiating. People want to know, when people come to give evidence, what the Minister and the Government are standing for. Standing for negotiations, that we give up everything or we give up nothing, seems to me to be not a very satisfactory way of answering questions at a Select Committee."Further discourse on transition periods (7 years, plus an additional 7 years) and general negotiations followed but, before the Committee moved on, Mr. Connarty MP said he feared that the stakeholders may be faced with a position on the unitary patent package that is "the worst of all positions" because they are not being afforded the guarantees on key issues of concern by the negotiator (i.e. the Government). "They might think they have been sold down the river by the Government if in fact the negotiation proves not to be quite so skillful or as effective as we all hope", he stated.
The Minister countered this criticism stating the stakeholders were conferring closely with the Intellectual Property Office and keeping them informed of their concerns throughout the process. The negotiation was not occurring "in a vacuum" she explained.
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| Any good lawyer will know that color-coding tabs will help the Government earmark essential issues during their negotiations |
"… would love to say to you "Here is where we stand and this is it", but it is a negotiation. This is an open court. This will be reported in the press, and the press is read in other countries than this country. I do not want to totally reveal our position; I don’t think that would be right and proper for us when negotiating."Mr. Phillips MP questioned whether the time had come for the Government to state unequivocally that some issues were earmarked as being essential to the UK, and if no one was willing to agree with them that they would stop negotiating. Baroness Wilcox responded that, to remain competitive with the US and Chinese patent systems, the UK must attempt to progress discussions for a European unitary patent system ["This may be true", says the AmeriKat, "but only if it is better than the system we already have - and the current proposal does not appear to be..."]. She said that if "there is a chance for us to get a single patent, then we will do everything we can to advantage the traders from Great Britain. That is what I am trying to do; that is what my Government is trying to do; and that is what I will continue to do for as long as I am privileged to be in this position."
In closing, the Mr. Cash MP requested that the Minister provide them with a note of the current state of affairs with stakeholders and that she and her team meet with the stakeholders in light of the questions that had been posed by the Committee.
What's next?
The AmeriKat understands that the IPO is holding the next consultation meeting with stakeholders during the first week of April and suspects there will be a degree of discussion on the issues raised during the last Scrutiny Committee session, as requested by its Chairman. In the meantime, the AmeriKat is sure that the Scrutiny Committee is busy drafting various reports on the evidence that they have heard and received since January.
The AmeriKat was again struck by how little we know regarding the negotiation process and the UK Government's position. Although one cannot expect to know every detail of the substance of the Member States' negotiations on the unitary patent package the radio silence as to the progress, where they are taking place, who with and/or deadlines is somewhat disconcerting. The only signs of life on this issue seem to have come from the House of Commons and the European patent profession, including signs of disquiet in Sweden by way of a letter sent to the Confederation of Swedish Industries to their Ministry of Trade on 17 February (here) which stated that they and the Swedish negotiating team wished for Articles 6 to 8 to be deleted from the Proposed Regulation. In addition, and somewhat ironically given last year's push to finalize the unitary patent proposals under the Polish Presidency, there are reports that sections of the patent profession in Poland are also unhappy with the proposals (see report here).
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| Kevin Mooney (Simmons & Simmons) - Chair of the Rules of Procedure Committee |
Although the AmeriKat cannot place her paw on it, she gets a sense of dwindling enthusiasm throughout Europe to see the current unitary patent package through to further negotiations or later fruition. She fears that the latest proposals will be another footnote in the 40-year old history of these negotiations.
The AmeriKat thinks such an outcome would be a shame. There may indeed be problems with the current proposals, (not just Articles 6 to 8, she hastens to add) but the industry and stakeholders are engaged with these issues now and are in a position to resolve them. If a unitary patent is ever going to happen, now is the time.
And least us not forget the poor committee members for the Rules of Procedure and their surely countless Pret A Manger sandwiches they have had to endure during their long weekends of drafting the rules ...