Reflections of RIAD on how to improve Legal Certainty for Patentees

The European Commission works on improving the position of EU patentees in order to increase competitiveness of inventions in Europe. On 3 April 2007 the Commission published its Communication “Enhancing the patent system in Europe”. A special chapter of this Communication is dedicated to the deficiencies of patent litigation in Europe: the Commission points out that litigation is too costly, risky and cumbersome in particular when considering the cross-border dimension of patent issues which hinders especially SMEs from fully exploiting and protecting their inventions.

Moreover, the Communication contains some possible measures to support the use of patents, provide the degree of protection needed to optimise investment in innovation and make enforcement more affordable and effective. In this respect the Commission has commissioned two studies to be able to evaluate the feasibility of compulsory patent litigation insurance. The second Study was published in October 2006 and in its forthcoming Communication on the EU Patent Strategy the Commission will deal more in detail with a number of measures described in the present Communication which encompasses the possibility of introducing a compulsory insurance scheme.

RIAD as the representative body of Legal Expenses Insurance has already expressed its concerns that such a mandatory scheme for Patent Litigation Insurance is not feasible (see joint position paper of CEA and RIAD dated 21 December 2006) and should, thus, not be considered further. In response to several contacts with the Commission’s services RIAD now wants to present its reflections about some alternative solutions which could provide more legal certainty and diminish the elevated costs for patent holders. Without wanting to interfere with the purely political and economic questions, RIAD would like to reveal some ideas which are the result of discussions with attorneys specialised on national and international patent law and are mostly based on the experience in a non-EU country (Switzerland).

1. Administrative Measures regarding procedural Aspects of the Registration of Patents

 

As a first step it is essential to reduce the overall administrative costs incurred by registering a patent. These overhead costs are the most burdensome for the patentees and the preliminary obstacle for registering a patent. Therefore, substantial efforts are necessary:

  • To minimise obligations to translate the documentation of patents only into a very limited number of languages.
  • To reduce the costs of registration of patents as well as taxes.

2. Measures to protect the rights of the patentee

As the Commission points out in its Communication “Enhancing the patent system in Europe” the deficiencies and especially the high costs of cross-border litigation present a particular problem and make litigation almost unaffordable for individual inventors as well as for SMEs which face important difficulties to continue their activities when they are unduly accused of infringing patents by big industries.

In Chapter 3.4. “Enforcement of Patent Rights” the Commission hints at some possibilities to ensure that patentees are not prevented from defending and pursuing their rights. RIAD Members are convinced that the only potentially successful way forward must be to reduce the massive over-all costs of patent litigations. To simply transfer the costs to another instance, e.g. insurance companies as described in Chapter 3.4.2., does not solve the problem as such since the costs would continue to pertain and it would be – again – the patentees who would have to carry the burden by paying high insurance premiums. Therefore, the only feasible and sustainable solution can be to implement effective and simple procedures which tackle the most cost producing problems and allow patentees in Europe to adequately enforce their rights also outside the territory of the EU: 

  • Cost could be reduced if a court system was set up which was specialised in patent issues and operated on a national - even better – on a supranational level. Proceedings would be conducted by expert judges who have the technical knowledge to decide a case without the help of a technical expert or the support of a patent attorney. As a reminder, costs for patent litigation skyrocket today because judges need support from external technical experts for their decisions, both parties usually are presented by a legal expert as well as a patent attorney for the technical side of the dispute and in - some cases - parties rely additionally on private experts. Costs add up even further when court fees and – in most cases – enforcement costs of an eventual judgment are also taken into account. This all becomes even more cumbersome if a litigation takes place abroad especially in the USA.

The immediate outcome of a system as described above would be that litigation costs for patentees could be reduced substantially since the expertise would be accumulated and provided within the judicial system and it would not be necessary to buy this expertise externally. Presently, in Switzerland a similar system is in a try-out phrase but there are no concrete results yet to report. However, a well functioning and well reputed system seems to be established in Düsseldorf (Germany). Here, technically oriented and patent specialised judges treat patent cases at a qualitative high level, at lower costs and very efficiently. 

  • Another important measure would be to unify the exequatur procedure for cross-border injunction of judgments. The present situation forces patentees to defend or pursue their patent in every jurisdiction separately. Consequently, it is necessary to pay entire litigation costs separately in every single country. It goes without saying that this presents an unacceptable obstacle to patentees. Thus, the introduction of a unified exequatur procedure would not only make covering litigation costs in every different Member States obsolete but would also shorten the delays for judgments in patent matters to enter into force.  
  • Implementing judicial conciliation procedures – as mentioned in the Commission’s Communication - would also help reducing costs. This conciliation could either kick in before the official filing of the trial or during legal proceedings (so done in some cantons in Switzerland). The idea would be to settle the case amicably and try to solve the problem first by written procedure and – if necessary - subsequently during an oral hearing. Experience has shown that in the course of ongoing proceedings parties very often tend to look and settle for feasible solutions which normally satisfy all sides.