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The Unitary Patent And Why We Should Be Worried

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Activism – Wendy Cockcroft

Activism – Wendy Cockcroft

The Unitary Patent hasn’t been getting the attention it deserves. This is because we’re fighting off surveillance, attempts to take over the internet, and three treaties. Oh, and ACTA keeps threatening to come back from the dead in some way, shape or form. Meanwhile, time is running out for fending off the Unitary Patent, which, if we let it through, will bring software patents (and patent trolling) in by the back door.

What it is

The Unitary Patent as a concept is, on face value, a good idea. It provides the ability to enforce or challenge a patent in a single action everywhere in the European Union apart from Italy and Spain, a significant improvement on the situation at present. Currently, patents granted by the European Patent Office (EPO) in Munich must be challenged or defended in national courts. Not only is this expensive, but it can cause confusion when different courts reach different conclusions. – Science|Business

Let’s be honest, we do need to harmonize Europe’s patent laws. The patchwork of laws we have now are only applicable in their respective countries and enforcing them if they are infringed in another country is a nightmare. If you decide to be clever and register your patent in the European Patent Office (EPO) in Munich, Germany, you have to prosecute infringement in a national court. If the infringer is from a different country, the courts there might reach a different decision based on their national laws. It’s expensive, confusing, and needs to be resolved.

What’s the problem?

Another reason for promoting the Unitary Patent, according to EU Internal Market Commissioner Michel Barnier, is

Europe is falling behind the US and China in number of patents granted. “The new rules, once in place, will increase the potential for inventions and innovation within the European Single Market and reassert Europe’s competitiveness,” said Barnier, who believes the first unitary patent will be registered in 2014. – Science|Business

Does anyone apart from me see the problem with this nonsensical statement? He honestly believes that the sky hook potential for innovation is in the patents that are registered, not the inventions themselves. This denies the potential of FOSS (free and open source) as if it didn’t exist. Perhaps they think it’s for amateurs and only professionals spend huge piles of money on paperwork that can easily be overturned by a troll with a big enough war chest; it’s actually cheaper to settle than to fight back.

With all the emphasis going on the patents instead of the products, I foresee even more outsourcing to keep production costs down because, when the patent is the product, who cares where the items it covers is made? We don’t need that nonsense here. Okay, it does actually happen but it’s not as widespread or destructive as it is in the United States. See my rather heated discussion with Policy Officer Stephanie Parry of the Copyright & IP Enforcement Directorate for details. Needless to say, since these people believe that patents themselves are important, there’s no reason to believe they won’t increase their scope until patents on software becomes more common, and trust me, they’re trying to make that happen.

There’s also the matter of the new patent court. It will be hosted in three locations — Munich, Paris and London — the three biggest sources of invention in the EU, each with its own deep-seated legal traditions and patent case-law. The trouble is, it won’t be accountable or under the aegis of the European Court of Justice, so any decisions made there will be final. The policy blog Unitary Patent has some background on the dangers presented by the Unitary Patent proposals as they are now:

On June 29th, 2012, the Heads of State and government of the European Union have proposed [sic] to remove articles 6 to 8 from the regulation on the unitary patent. But, such a removal has been found to not comply with EU law, since these articles were defining the very substance of the rights conferred by unitary patents, namely the definition of direct and indirect infringements, and exceptions to these rights. Without these articles, the regulation would have failed to define the minimal substantive rights attached to the unitary patent, in contradiction with the legal basis in EU treaties which authorizes the EU to create such an unitary patent. Therefore, the European Parliament has rightfully declared this removal unacceptable and has postponed its plenary vote on the project. The confessed purpose of this removal was to avoid any overview by the Court of Justice of the European Union (CJEU) on issues of substantive patent law.

Simplified version: all aspects of patent law pertaining to exceptions and to limiting the scope of the patents will be nullified. Basically, the patent holders’ rights trump all. Thankfully, the European Parliament is having none of it. Nonetheless, the secret meetings continue:

On Monday 12th of November, the Legal Affairs Committee (JURI) of the European Parliament held an extraordinary debate about the unitary patent, which was attended by Michel Barnier, the European Commissioner in charge of internal market. According to our sources, he has welcomed with the compromise found in the Council by the Cypriot Presidency. However, and as April highlighted it, this solution infringes the Union Law, and does not provide any democratic safeguard. These questions have been cleared out, even though the Commission is aware about the likely unlawfulness of this project. – Unitary Patent Blog

The upshot of this is that EU member states are scheduled to discuss draft legislation at a plenary meeting on 10th December.

What can we do?

The Internet Freedom Movement has a campaign on at the moment to get people to contact their MEPs and ask them to vote against the Unitary Patent proposals and reject the patent court. We don’t need another court and the proposals are against EU law and the interests of the European people. Get involved and help us fight it off. The all@europarl link Rick provided for the ACTA fight had to be disabled after it got spammed when we’d finished using it, so I’ve used the information he provided to get the list of the MEPs email addresses and made a list of them in the campaign post. As I’ve already sent my message, I can confirm that they all work and I’ve pruned the ones that don’t. Please help us fight this off. We don’t want patent wars in Europe and we don’t want excuses to tighten the already onerous copyright laws.

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About The Author: Wendy Cockcroft

Manchester-based web designer, writer, and political activist. Front-end development in PHP-based applications, particularly WordPress, is a speciality. Wendy writes fiction and blogs on political issues. She also writes for Techdirt and the Internet Freedom Movement, where she campaigns for digital rights.

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Contributors take own responsibility for their comments.

22

  1. 1
    Balder

    Heated discussion link is broken! Just thought I should tell you. Have a good day! :)

  2. 2
    Anonymous

    before sacking this complete prat, the first thing to do is find out how he got the job and who gave it to him. they should be sacked, swiftly followed by him. when will all these people in positions of power realise that the more patents there are, the more companies existing companies are able to use the courts to protect their own little world, the harder it is for anyone to bring new inventions to the market? why can they not see that the inventions etc we have and use atm are only there because people weren’t inhibited by others making ridiculous claims, threatening law suits and preventing innovation and progress? this guy sounds to me as if he has an arm belonging to to the US entertainment industry thrust firmly up his back, operating his mouth (and perhaps his brain too) whilst throwing some ‘brown envelopes’ at him!

  3. 3
    Anonymous

    This is a bit difficult to follow. Unitary patent is a good thing as the investment in a startup company will be safer to a lower cost, which gives more investments into new idéas. There will be more challanges to the market leader The EU will benefit from this. Nobody believes that the number of patents by itself is a goal.

    • 3.1
      Anyone

      patents are not needed for innovation, in fact, patents stifle innovation
      it’s easy to see, if all the money wasted on patent lawyers and lawsuits would actually go into research it would of course be much better

      • 3.1.1
        Rutros

        On the contrary they are. It depend on the industry. Who will invest the necessary 1 billion under 10 years if a competitor can copy for 10 million in 6 months.

        I think the purpose of the unitary system was to lower these legal costs!

        • Anyone

          for example Google invests millions into Android, despite it being open source
          they also have to invest billions into patents to protect themselves from trolls, if they could invest that money into developing Android as well it would be even better

          and patents hurt consumers
          just look at Apple’s trolling, forbidding their competition to sell better products just because of some bogus patents on round corners

    • 3.2
      Scary Devil Monastery

      You should read the rest of it. Particularly the passages where they discuss how to abolish the ability to exempt. “Fair use”? Not under the unitary patent.

      “Legal use” – no such thing, in practice, if i interpret it correctly. Indeed, the first drafts of the unitary patent would allow a patent holder to license manufacture to a company and then extort additional money from the end-consumer trying to use the device utilizing the patented idea.

      On top of that, software patents are back with this monstrosity.

  4. 4
    rutros

    This is difficult and complex to follow.
    Unitary patent is a good thing as it lowers the cost for protection for small companies and start-ups in their challenges to the market leaders. Both regarding cost for patent as well as for infringement. This will increase venture capital going into these innovations to benefit for the EU. Nobody actually sees the number of patent itself as a goal.

    Software companies do not need this kind of protection as the time to market and investment cost in R/D is much lower than in hardware industries. Is the problem that you fear that we will have software patent as these courts by them self may start granting software patents?

    Does the new regulation mean that EU no longer have the legislation power to set up the laws the courts have to follow like the member states had before?

    Or is this a part of Falkvinges crusade against all patents?

    • 4.1
      Jan H. Hansen

      Let me make it simple for you.
      Patens are bad. More patens are worse.

      - SME’s don’t use patents.
      - Your post assumes tickle down mumbo jumbo works which it doesn’t.
      - Even pharma with highest R/D costs and frequent poster child for patents aren’t a clear cut case.
      - Patents being abused for private misappropriation of public knowledge.
      - Granted patents are often so obscure, incomplete or misleading that public disclosure is not accomplished in violation of fundamental contract between society and patentee.

      • 4.1.1
        tim

        On the contrary, SME’s do use patents. They offer the best opportunity to prevent large companies eating their lunch. Pharma innovation is based on patents. If you want to prevent a new drug or technique being developed, publish it without patenting it. Another system might work as well, but here the precautionary principle comes into play – before introducing the new system, you must prove that it will work as well as the old one (and also, in theory, that even if it does, that it will have no disadvantages). Private misappropriation of public knowledge? Examples, please – you can’t patent what’s old. Patents are sometimes obscure (intentionally or through incompetence) and can get revoked in as a result (as the Canadian patent on Viagra did).

    • 4.2
      printersMate

      “Nobody actually sees the number of patent itself as a goal.”

      Unfortunately management types, and many politicians, desire a number that supposedly measures what they are interested in. For innovation, patents is the number that they have chosen. This results in applications for patents on every new idea in a company. Like all such measure, the result is activity to increase the number, often by applying for patents for every little step in a development process.

      Lots of patents in a market result in the incumbents entering into cross licensing deals, and efforts to gain more patents as a self defense mechanism. This makes it very difficult for new players to enter a market.

      The protection that a patent offers a startuo disappears if they are trying to enter such market where the incumbents have lots of patents. To build a product results in infringement of the incumbents patents, while they presumably do not infringe on the new product.. This protects the incumbents as they can force the newcomer out of the market, and then acquire a license or the patent if they wish to implement the idea.

      Finally remember that a patent is a license to sue, and therefore defense of a patent quires the funds to be able to afford the lawyers.

      • 4.2.1
        rutros

        Please observe that I talked about goal not an indicator on innovation activities on a political level. I remember that one local R/D manager in US really put that as an internal target for his team, but that quickly come to an end, when his superior discovered all the extra costs.

        It is true that in markets where there are no standards and the about 10 years old free technology is not accurate, his could happen. Normally voluntary agreement is made with cross licensing, where the R&D costs are divided as we see so many examples of in the telecom industry
        . Sometimes blocking is handled by a mandatory license by the competition authorities. And I agree, this possibility should expand.
        However even more challenging for startup is the cost advantage of the market leader, which may kill the intruder by price dumping
        It is true that a private person in principle cannot fight the big one in court. However in the US this service is offered by law firms, which acts without upfront cost but take percentage of the gain. I don’t like this, but the unitary patent is one step to cut the difference between SME and big companies.
        Anyhow patent is a commercial right and last year even the US start to follow the international rules, that the patent belongs to the applicants and not to the inventor.

        Finally People think that the cost of the patent system is sky high because the numbers in the US settlement is so high, but this is not the case. In EU patent attorneys is registered and the total number is about 10 000. This is to be compared to the number of R&D staff in EU which is about 3 000 000. The direct impact on the R/D resources is marginal. (0,33%)

        • printersMate

          First, For the politicians the only indicator of innovation that they can see is the number of patents issued. The more removed someone is from actual development the more attractive the number of patents is as measure of innovation.
          Secondly in the US contingency (no upfront costs)) lawyers are not usually available for patent cases, as each side usually bears its own costs. This has the unfortunate effect that a large company can force a competitor out of business by bringing a patent case and losing. In practice this means that ion the US .
          patent trolls can extract license fees from companies by offering a settlement that is less than the cost of fighting them through the courts..
          Finally patents hinder innovation by preventing further development of techniques by people other than the patent holder. Why carry out development if someone else can take your profits, or stop your production? In the US the gaining of patents has largely become a means of self protection against other patent holding companies. This is the same logic as the cold war, mutually assured destruction,.

  5. [...] The Unitary Patent hasn’t been getting the attention it deserves. This is because we’re fighting off surveillance, attempts to take over the internet, and three treaties.   Oh, and ACTA keeps threatening to come back from the dead in some way, shape or form.   Meanwhile, time is running out for fending off the Unitary Patent, which, if we let it through, will bring software patents (and patent trolling) in by the back door.   What it is:   Click headline to read more and access hot links–  [...]

  6. 5
    Rutros

    I am not so sure as you are, probably depending on practical experience. I have invested in more than 10 SME, which should not have a dollar to spend on R/D without the patent protection. In the stock market there are 1000s of them. All depends on the time to market/upfront investment cost and the risk level of the project

    Studies show that more than 80% of the modern medicines should not have been developed if there were no patent protection on the market. Even without patent, market exclusivity is granted for Orphan drugs in order to attract investment capital.

    Yes, Software, do not need patent and what proof is that to the rest of the industry. The IT today are in a very good shape, because of Moore´s law. Every 18 month means half the price/double performance. This means that every new generation has very high margins at introduction, which will pay the FoU bill. Who think this will last for ever?

    • 5.1
      Belorn

      Investing based on patents is rather interesting. A patent is only valuable based on its legal merits (except when patent trolling/extortion). One a patent enter a court case, the chanse that the patent will be put into question is somewhere around 99%-100%. We thus has a very good way to messure how valid patent in general is once it being granted. After all, its the most valued patents that companies use when sueing each other.

      Whats the number then? around 95% of all issued patents in 2011 in the US was initial issued on invald ground. 75% of all patents should have never, ever, been issues as all their claims is found to be invalid, that number is steady increasing.

      In the EU, the numbers are somewhat lower. Around 60% of all patents are invald from the point it being issued to the point someone actually looks at it and question its validity, and around 50% are thrown out in total with no claims whatsoever being valid. 50%. Yes, flipping a coint has a equal precision to determen the validity of a patent than the patent office itself in euro. In us, the coin “win” over the patent office.

      • 5.1.1
        rutros

        This must be some confusion. Only 2% of US granted patent ends up in court. Those, which end up in court is of course the ones that somebody think he could win. The wast majority is not challenged at all.

        Maybe “issued” is interpreted as published and not granted in your figures? In that case you talk about rejection rate?
        Than of course the value in the patent system is not that you can earn money by suing but to get investment money to carry out the development work.

        So in at least 98 times of 100 the flipping coin will favor the granted patent.

        In reality of course a wast majority of the granted patents have no economical value in the end because the risk level was too high.

        • Belorn

          The numbers are those that have been granted by the patent office, but under reexamination (Called Opposition procedure in EU). And while ony 2% end in court, the value of unchallanged patent is the same as the value of an unchallange claim.

          I can claim that I own the right to the swedish language and each time anyone writes in it they should pay me money. So long noone challange that claim, is it then worth money? what if I at a 95% that when someone do challange my claim, I will instantly fold? Want to send some of that investment capital my way?

          It is a very risky investment to base everything on patent. Euro patents are slightly better, but again, statitically, once challanged, a patent issued here will fold 50% of the time. There are a reason why pharma really, really, with vengence hate patent reexaminations in the US, and why a small non-profit orginization has managed on the budget of ~$100k destory around $2B worth of patents. Sadly, those $100k is only enough to take down the tip of the massive amount of invalid patents, and thus only goes after the really really big ones in which the non-profit can be support for.

  7. 6
    rutros

    Belorn; This is little outside the scope of this thread, but you have to learn more about how the patent system works regarding: reexamination- fraud ; Importance of the independent first claim.(max2of them) and that only 4% of pharmaceutical patents reach the market.

    But I am more worried about the lack of feedback on my Question above. Does the unitary patent mean that EU no longer control the patent law in the union. The parliament could no longer stop patent on ever greening or adjust what subject area should be granted or not? If so this is really serious thing.

    • 6.1
      janchou

      yes, the Unitary Patent means that the EU no longer control patent law : patent will be granted by an international organisation, the European patent office, and all legal matters (on delivrance practices, patent validity, …) will be decided by another international law body, the new Unified Jurisdiction, which will make all caselaw.

      Of course, European Parliament will be able to pass legislation on patent law, but caselaw and delivrance practices will be taken out of the EU legal order : there will be little incentive to do so, and the EP will be told each time that it should let the specialists rule on it.

      With the unitary patent, we’re actually creating the exact same system as the one in the US, with a common patent office, and a specialised circuit that’s always trying to expand the scope of patentability, and where the legislative powers seem to be unable to make any decision without their approval.

      So yes, it’s a very serious threat indeed.

  8. 7
    rutros

    I agree that the US court system is a problem. It was not the USPTO, who started to grant software patent and a similar system in EU is a real threat. However the system in US is quite different. The politics is controlled by the law, but in Europe politics control the law.

    “Of course, European Parliament will be able to pass legislation on patent law, but caselaw and delivrance practices will be taken out of the EU legal order : there will be little incentive to do so, and the EP will be told each time that it should let the specialists rule on it. ”

    This is of course an assumption. I agree that patent law is very complex, but it happens all over the world (incl US) that patent laws are changed from time to time. Why should EP act differently?

    There is a risk of the small steps movements of the scope, but this was also the case when there was national laws. Maybe it is easier to make changes on EU level than on national levels, which may open up for the strong industry lobby.

    There have to be strong democratic lobby that stand up against the industry lobby. If they fail, the balance is at risk, not the unitary patent as such.

    Then of course the development of the patent system is taken over by the trade agreements anyhow since decades.

  9. 8

    Several addresses at https://plus.google.com/u/0/115040231829422107651/posts/EmxhJbem2KX , linked above, are out of date.

    When mailing all the addresses there I received automated answers from some of them, saying that the people involved were not at the European Parliament any longer:
    Carl HAGLUND (Finland)
    Estelle GRELIER (France)
    Damien ABAD (France)
    Kader ARIF (France)
    I don’t know who replaces them. I think we should build an updated list for the next time.

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About The Author

Manchester-based web designer, writer, and political activist. Front-end development in PHP-based applications, particularly WordPress, is a speciality. Wendy writes fiction and blogs on political issues. She also writes for Techdirt and the Internet Freedom Movement, where she campaigns for digital rights.

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