Unitary Patent Presentation

Everything You Always Wanted to Know About The Unitary Patent (But Were Afraid to Ask)

Patents ≠ Innovation

swpat caricature
Let us start by deconstructing a common belief about patents. Patents do not always equal innovation. In the field of software, we have experienced that patents are actually used as weapons of economic war, they hinder innovation, and create a potential threat on every vendor, developer and user of software.

A shared concern

A patent isn’t innovation. It’s the right to block someone else from innovating.

Patents are government-granted monopolies. We have them to reward innovation, but that’s not happening here.

Kent Walker, Google Senior Vice President
& General Counsel

We are not the only ones to say this. Actually, the vast majority of software professionals are opposed to software patents.

U.S. Experience

If software patents were really doing their job, you would expect that they would encourage more innovation, and they didn't in fact, there's evidence suggesting just the opposite.

Eric Maskin,

In the United States, the observations of the effects of software patents in the last twenty years show how detrimental they are to the economy. Most software firms still do not patent, most software patents are obtained by a few large firms, and the risk of litigation from software patents continues to increase dramatically.

Be Careful With Patent Policy!

handle with care
These particular concerns about software patents mean that, globally, patent policy has to be taken carefully. A bad patent policy could be disastrous for innovative economy as well as for fundamental rights and freedoms.

European Patent Law

The following in particular shall not be regarded as inventions […] programs for computers

Article 52.2 of the
European Patent Convention (EPC)

Fortunately, in the European patent law, software is explicitly excluded from patentability. It is important to note that in Europe, patent law is governed by the European Patent Convention (EPC), a multilateral treaty that led to the creation of the European Patent Office (EPO). Thus, the EPC is not European Union law and the EPO is not a European Union agency.

A Sophistry to Nevertheless Grant Software Patents

A [computer-implemented invention] (even in the form of a computer program) that can provide a [“further technical effect” which must go beyond the inherent technical interactions between hardware and software] can be patentable […]. In this case, it would be recognised as providing a technical solution to a technical problem.

Unfortunately, against the spirit and the letter of this law, the EPO has started in the '80s to grant patents on software, arguing that the law does only prevent patentability of software as such, but that some software has actually technical effects, and shouldn't be regarded as “software as such”, and is therefore patentable.

A Resulting Minefield

patented webshop
The result of these dubious practices is that we have now, in Europe, tens of thousands very strong monopoly rights. Not covering the source code of software – that is what copyright is for. But over the very functionalities of software, over algorithms — that is mathematics –, over data processing ideas.

The Failure of the Software Patents Directive

swpat naval battle
But it could have been worse! In 2005, thanks to a massive grass-roots effort, the European Parliament has rejected a directive aiming to legalize the EPO's practices of granting software patents. After this rejection, even if the EPO continues to grant software patents, courts are still free to declare them invalid.

The Failure of the European Patent Litigation Agreement (EPLA)

judge epla
The next attempt was to replace national patent courts with a unified central court, governed by the EPO. Fortunately, this attempt has also failed, mainly because it would have been contrary to the EU Treaties for Member States to build up such a court on their own, without the EU being part of the project.

A Systemic Issue

EPO bubble burst
These failures have highlighted that the issue is actually systemic. The EPO is functioning inside some kind of a bubble for the sole interest of a “patent microcosm”, composed by patent lawyers and patent departments of some — mainly non-EU – big firms. And as usual with bubbles, the EPO is geared toward an unlimited expansion of its bubble. The more patents it grants, the wealthier the EPO.

A Call to Legislators

When judiciary-driven legal development meets its limits, it is time for the legislator to take over.

Enlarged Board of Appeal
of the European Patent Office

So there is a need to refocus the European patent system in the interests of the European economy and society as a whole. Actually, even the highest internal quasi-judicial body of the EPO – the Enlarged Board of Appeal — has called for the only way to achieve this: Legislators should act.

A Bundle of National Patents

bundle of national patents
Indeed, the EU has been working for decades to reform the patent system. Currently, once granted by the EPO, a European patent comes finally into existence as a bundle of national patents in each country designated by the patent applicant. And each of these national patents has to be translated and is subject to some fees to each and every national patent office.

Enforcement Before National Jurisdictions

multiple jurisdictions
Besides, to prevent alleged infringements of a European patent, or conversely to invalidate such a patent, one has to file lawsuits before each and every national jurisdiction.

The EU Patent and The Unified Patent Jurisdiction

EU patent unified jurisdiction
So the EU wants to set up a new patent title that would have unitary effect throughout the whole Union and that would be enforceable before a unified patent court.

First Problem: Unanimity Required

enhanced cooperation
But Member States of the EU haven't managed to reach an agreement about the linguistic regime of the unitary patent, whereas this issue requires unanimity. So it has been decided to use a procedure called “enhanced cooperation” where an EU regulation has to be voted by the European Parliament and by countries of the Council which are participating in this enhanced cooperation. In the case of the unitary patent, all EU countries are participating but Spain and Italy.

Second Problem: Compliance with EU Treaties

The envisaged agreement […] would deprive courts of Member States of their powers in relation to the interpretation and application of European Union law and the Court of its powers to reply, by preliminary ruling, to questions referred by those courts and, consequently, would alter the essential character of the powers which the Treaties confer on the institutions of the European Union and on the Member States and which are indispensable to the preservation of the very nature of European Union law.

Court of Justice of the European Union

Then, the European Court of Justice (ECJ) smashed the project of a unified patent jurisdiction because it was outside of the judicial and legal framework of the EU, sending the European Commission back to the drawing board.

Third Problem: Bad Example of Unified Patent Court

Bessen swpats lawsuits
Also, a unified and specialized patent jurisdiction suffers from the example of the United States, where the Court of Appeal for the Federal Circuit (CAFC) has shown to behave in an excessively pro-patent direction, broadening the scope of patentable subject matter and endowing patentees with unwarranted power. This ever-growing desire of the CAFC to expand its powers has started to be criticized, not only by economic and legal scholars, but also by the US Supreme Court.

Required Oversight by The European Court of Justice

EPO bubble justice
This implies that whatever patent jurisdiction is set up, its rulings shall be subject to an overview by an independent court, that is able to weight proportionally conflicts between patent law and other legal areas, such as competition law or fundamental rights and freedoms. Actually, since the opinion of the ECJ already mentioned, there is no other choice.

Required Independence of the EU Innovation Policy

good bad patent policies
The EU should also make sure that it has the full decisional power about what should be excluded from patentability, what conversely can be patented and under which requirements. A good patent policy has to be shaped to encourage innovation, while a bad patent policy could lead to a derailed system. This choice cannot be left to the patent microcosm.

The Proposal for a Regulation on The Unitary Patent

Commission proposal
Unfortunately, the Commission's proposal for a regulation on the unitary patent does not follow this path. On the contrary, the proposed regulation does not create an EU patent but just use the traditional patent granted by the EPO, with a special “unitary” flag, meaning that the validity of such a patent should be considered throughout all participating Member States. And the EU would not be part of the agreement setting up a unified patent jurisdiction. Instead, this court would be common to all participating Member States.

An Iffy Legal Basis

Moreover, the Commission's proposal for a regulation on the unitary patent is actually raising questions about the validity of its legal basis. The Spanish and Italian governments have already challenged the decision to operate through the enhanced cooperation procedure before the ECJ. And they have pledged to similarly challenge the regulations implementing this enhanced cooperation.

Amendment Required: Creation of an Actual EU Patent

amendment 118 TFEU
It follows that some amendments to the proposed regulation are required. First it should be made clear that the unitary patent is a patent title of the EU, as stated by the legal basis in the EU Treaties.

Amendment Required: Deletion of References to the European Patent Convention

amendment 142 EPC
Second, references to the provisions of the EPC used to flag the usual EPO patent should be deleted.

Amendment Required: Delegation to EPO and Embodiment of EPC Rules Inside EU Law

amendment delegation to EPO embodiment of EPC
Third, should the unitary patent be granted by the EPO, the EU should explicitly define this delegation of powers. Additionally, rules of the EPC used for granting unitary patents should be deemed to be liable under the same conditions as if such acts were exercised by an EU agency.

Amendment Required: Substantive Patent Law

amendment substantive patent law
Finally, the regulation should clarify provisions of the EPC related to what should be excluded from patentability, what conversely can be patented and under which requirements. This can be done either by planning a separate legislation, clarifying the main provisions inside the regulation on the unitary patent. Or, for the special issue of software patents, by stating directly that they should be excluded.

Conclusion: Adopt Amendments

degree of autonomy to EPO
The bottom line is that the regulation on the unitary patent is all about the degree of autonomy the EU wants to leave to the EPO. The Commission's proposal is obviously too much EPO-centric, expanding the patent bubble. We have proposed a set of amendments that would give back to the EU the necessary democratic control over its innovation policy. Support these amendments!