IP: home advantage

After decades of failed attempts to introduce a new European Unitary Community Patent (UCP) regime, the last few months have seen a surge towards achieving this goal. With the Polish Presidency of the Council of the European Union determined to deliver before handing the reins to Denmark in January 2012, an agreement could be reached within weeks.

While Spain and Italy have opted to stay out, this is the first time there has been a realistic prospect of a unitary European patent system. However, the penalty for the haste could be a system that falls short. In particular, it may not go far enough in offering access to justice, and may even duplicate some of the existing faults in the current European Patent (EP) system, which it is intended to replace and radically overhaul.

The main disadvantage of the EP system is that it does not allow pan-European enforcement. For example, actions for infringement or validity challenges must be raised on a country-by-country basis. This adds to cost and complexity, results in “forum shopping”, and often leads to inconsistent decisions on essentially the same patent in different jurisdictions.

The UCP is intended to be a vast improvement on this system, by offering a new Community Patent Court (CPC) to enforce rights on a pan-European basis.

Unanswered concerns

Significant concerns remain over the new UCP regime. For example, the costs may be too high for some SMEs, and procedures to be used by the CPC do not appear fully thought through. These important issues appear to have been largely ignored, with more attention focused on which country should host the Central Unitary Community Patent court (CUCPC). With Paris, Munich and London the main contenders, the Scottish Government has not yet grasped the opportunity for Scotland. Much of our economy is vested in the intellectual property arena and if not trying for the CUCPC, we should be pushing for a local division of the CPC and even a regional division to be established here, covering the whole of the UK and Ireland.

Whatever the outcome for the UPC, in the interim we are left with the current system. In that context there is a perception that all UK and EU (UK) patents must be or are best litigated in London, whether in the High Court or newly revamped Patents or IP County Court (“PCC”).

In my view, as a Scottish patent litigator, this is a fallacy.

Home advantage

The High Court is known for its gold-plated approach, but also its high legal costs. So far, the PCC has been a success and offers a more viable option for smaller businesses, with fixed costs recoverable up to £50,000 for the merits stage and £25,000 for quantum – but notably no cap on the parties’ own legal costs. Also, complex cases may still be transferred back to the High Court. Thus the PCC does not offer a guarantee that overall costs will be reasonable or affordable. In addition, for geographical jurisdictional reasons, neither London venue may in some cases be competent or optimum.

While the London court venues are important and cannot be ignored by Scottish businesses, there is every reason to consider the option of using the Scottish Court of Session. It offers a hands-on commercial approach to case management by designated IP judges, and in many cases has concurrent jurisdiction with the two London courts and, sometimes, even exclusive jurisdiction. The Court of Session can also be used to great tactical effect, for example by pre-empting actions about to be taken in London courts against a Scottish business for alleged IP infringement. This can take bigger, aggressive patentees or IP holders, more accustomed to the London courts, by surprise and out of their comfort zone.

Ideally every Scottish, UK and EU (UK) patent/IP holder/prospective defendant should have Scotland on its list of potential venues, and take local advice on whether it is an appropriate option for a particular case.

Whether the UCP comes into being or not, the current system will be with us for the foreseeable future. Scottish SMEs and larger local businesses would do well to consider fighting their patent and IP battles on home territory.