Can Unified Patent Court and national laws of infringement diverge? An IPKat dialogue

This moggy has previously posted his view that when the signatories to the UPC Agreement ratify the Agreement, they will have to conform their national law of patent infringement to that specified in the UPCA (Articles 25 to 30), not only for Unitary patents and Classical European patents, but also for national patents.  The law must conform for Unitary patents and Classical European patents because that is what ratifying a treaty means, and the law must conform for national patents because Article 2 EPC says that:

The European patent shall, in each of the Contracting States for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that State, unless this Convention provides otherwise.

He has previously considered whether this introduces harmonisation of the law of patent infringement “by the back door” (he thinks yes), although maybe the UK has found a sneaky way to make a divergent law seem compatible with the UPC text.

It has to be said that there is a substantial body of views that disagrees with this Kat.  Of course he thinks those views are incorrect.  However, with law, as with grammar, if enough people subscribe to the “wrong” view, especially if this includes those responsible for implementing and ratifying the UPC, it can become “right”.

Therefore, he was very glad to receive this masterful analysis from Donal Kelly, senior associate at FR Kelly, where our own dear Kat David Brophy resides.  In the below, I shall put my words in red, and Donal’s in blue, and the connecting language of this blog in black.  I hope that will make this easer to follow.

The background is that Ireland has just implemented a Bolar provision that on the face of it diverges from Article 27 UPCA (of which Donal gave advance notice here).  As Donal now writes:

I thought you might like to know that the Intellectual Property (Miscellaneous Provisions) Act 2014, amending the Patents Act 1992 and giving effect to the Singapore Treaty on the law of Trademarks, has now been enacted in Ireland. The Act also makes a small number of technical amendments to the Competition and Consumer Protection Act 2014. 

Primarily, the Act limits the extent of the rights conferred by a patent in Ireland by exempting from patent infringement acts done in conducting studies, tests, experiments and trials (including clinical trials and field trials) with a view to applying for a marketing authorisation in order to sell or supply a medicinal product for human or veterinary use.

The ambit of the exemption is broad insofar as the acts done can be to satisfy the application requirements for marketing authorisation “or similar instrument (howsoever described) that is required by the law of the State or of any other state”; and includes “any other act done” which is required as a consequence of those acts. 

Indeed, the exemptions form part of a new (additional) legal dispensation alongside existing exemptions relating to acts necessary to apply for a marketing authorisation for a medicinal product for human use under Directive 2001/83/EC or a veterinary medicinal product under Directive 2001/82/EC.

In this regard, the Act appears to be diverging from the limitations of the effects of a patent under Article 27 UPCA. However, I am (still thus far) of the opinion that these Irish exemption provisions will not be in direct conflict with the UPCA provisions, but the divergence does appear to require patent proprietors to carefully consider under which provisions their “classical” European Patents are to be litigated, possibly by availing of the Article 83.3 UPCA opt-out from jurisdiction of the UPC.

Earlier, Donal had provided a detailed view of why there is no problem for national courts to apply a “national” law of infringement, while the UPC applies one based on the relevant provisions of the UPC.  He writes as follows:

I don’t see that national law and the UPCA will be in direct conflict because I think national law and the UPCA will have mutually exclusive application – there does not appear to be any provision in either the UPCA or the UPR that requires national law to be harmonised with the UPCA. If you are prepared to take a short trip with me and your EU Pet Passport is up to date, my thoughts regarding Bolar-type exemptions in the new European patent system meander something like this:

First, to Brussels (I) – since registration or validity is not at issue in our consideration of Bolar-type exemptions, the UPC should have exclusive competence as specified in Article 32 UPCA. On to Rome (II) where the applicable law is determined by the country for which the protection was sought which, for European Patents in the exclusive jurisdiction of the UPC, should be the UPCA – Even though Article 24 UPCA allows the UPC to base decisions on EU law, the UPCA, the EPC, binding international agreements applicable to patents, and national law; we need only turn to national law if the unitary right does not govern Bolar-type exemptions, but the UPCA does so at Article 27. Back to Brussels to visit the Unitary Patent Regulation, Article 5 of which states that any exemptions from infringement are defined by the national law applied to the UP – I don’t know that any country (at least not the UK or Ireland) has (yet) applied any national laws to the UP, so the applicable law should still be the UPCA. 

Practically speaking, three primary scenarios will arise:

1. European Patents with unitary effect (UP) – which, based on the above, I think should fall under the exclusive jurisdiction of the UPC and the applicable law should be the UPCA, which defines the Bolar-type exemptions allowable under Article 27.

2. European Patents (EP) not opted out – which should likewise fall under the exclusive jurisdiction of the UPC and Article 27 UPCA. 

3. European Patents (EP) opted out – which is where I think it becomes (even more) complicated:

There is an ongoing debate regarding an opt out from “exclusive” jurisdiction from the UPC but, for the purpose of maintaining sanity, I am of the opinion that an opt out from “exclusive” jurisdiction from the UPC puts the EP bundle of patents in the hands of national courts (unless a claim brought at the UPC causes the UPC to seize jurisdiction, in which case I think we are back to scenario 2 above). So, if a national court has jurisdiction, should the applicable law be the UPCA? – Article 3 UPCA seems to think so (at least as far as UPs, SPCs, EPs, and EPAs are concerned). 

But if we resume our trip to Vienna, we should probably be interpreting Article 3 UPCA as referring exclusively to EPs not opted out and EPAs not opted out, because the whole premise of the UPC and the UPCA was to apply uniform law and interpretation. Allowing national courts to apply and interpret the UPCA would be contrary to this objective. Resultantly, I think the UPCA will not apply (but national law will apply) in the case of EPs opted out, and so the new/proposed Bolar-type exemptions in UK and Irish law will then apply to the respective UK and Irish validated patents. This disparity in exemption provisions between the UPCA and national law will likely become the very basis for forum-shopping-through-opt-out as parties seek to take advantage of the differences between national law and the UPCA.

So, in short, I don’t think either the UK or Irish exemption provisions will ever be in direct conflict with the UPCA and a national court will not have to interpret differences in the exemptions.

There are of course many assumptions made to come to this conclusion, including the definition of an opt out from “exclusive” jurisdiction from the UPC, whether exemptions from infringement are defined by national law or “national law applied to the UP” in the UPR, and that Article 3 UPCA actually does not apply to EPs and EPAs opted out. A consideration of Bolar-type exemptions is also facilitated by the fact that the UPCA has its own exemption provisions – It’s not entirely clear to me, if the UPCA is silent on some other provision, and the UPC (not finding an answer in EU law, the EPC, or binding international agreements applicable to patents) turns to national law, which national law will apply. If the UPC is to determine national provisions on private international law under Article 24 UPCA, the applicable law might differ depending on which provision is to be interpreted, and perhaps we will simply have to wait for the first instance of national law application by the UPC to understand?

Now, our dear readers will not be surprised to know that I do not subscribe to this view.  So I replied setting out why, while following his reasoning, I could not find myself agreeing with it:

The IPKat contemplates the UPCA
Image courtesy of Joe Delaney

Firstly, your view that "these Irish exemption provisions will not be in direct conflict with the UPCA provisions" comes I think because according to your analysis all European patents are either Unitary or not-opted-out Europeans, under the jurisdiction of the UPC, or opted out Europeans under national jurisdiction.  But for the transitional period, not-opted-out Europeans are under joint jurisdiction of national courts and UPC.  So I don't think your statement "Allowing national courts to apply and interpret the UPCA would be contrary to this objective" is compatible with this reality during the transitional period. In this period national courts will have to apply the harmonised law for non-opted out cases. If it were the case that they are supposed to apply national law,  it does not seem correct that the exceptions to infringement could depend only on the forum in which the case is brought.  (From my understanding of Article 83(3) UPCA, I think that it is even possible to opt out while national proceedings [but not UPC] proceedings are pending - if that made a difference to the applicable defences to infringement, it would mean that they could change mid litigation). 

Secondly, you stated that "there does not appear to be any provision in either the UPCA or the UPR that requires national law to be harmonised with the UPCA".  I cannot agree with this for two reasons.

A. Article 2 EPC states "The European patent shall, in each of the Contracting States for which it is granted, have the effect of and be subject to the same conditions as a national patent granted by that State, unless this Convention provides otherwise. "  This requires all European patents, unitary or otherwise, opted out or in, to have the same effect as national patents, and hence as each other.  That is the fundamental reason why I don't think that it is possible to have different exceptions to infringement for different types of patent.  I simply do not think that EPC contracting states are permitted to allow a situation to arise where there are two parallel laws. 

B. The UPCA is a treaty.  It is not a law in its own right.  Ratifying a treaty MEANS harmonising law with it:  that is fundamentally what ratification means.  So when the UPCA defines a law of infringement for a European patent, a state which ratifies the UPCA must adopt the same law.  Otherwise it has not ratified it.  In your analysis you state "Article 5 of which states that any exemptions from infringement are defined by the national law applied to the UP – I don’t know that any country (at least not the UK or Ireland) has (yet) applied any national laws to the UP, so the applicable law should still be the UPCA." - the reason (and the only reason) why UK and IE have not applied national laws to the UP is because they have not ratified the UPCA - when they do ratify the UPCA they will have to have such a law, because otherwise they won’t have ratified.  The UPCA is never of itself an "applicable law" - it becomes the law only when and to the extent that it is implemented into national law in the manner that the UPCA requires.  (Just as the EPC did not become a law until states harmonised their law to it and ratified it - for matters governed by the EPC countries are not permitted to have separate or divergent national laws).

Finally, Donal had these words of reply:

1) Will not-opted-out European Patents fall under the joint jurisdiction of the national courts and the UPC, given that Article 32 UPCA bestows “exclusive” competence to the UPC in respect of inter alia actions for infringements and revocation of patents? (again, we must determine the definition of exclusive). 

2) By stipulating that UPC decisions are to be based on EU law (having primacy), the UPCA; the EPC; binding international agreements; and national law; does Article 24 UPCA suggest that UPCA is/will be a source of “applicable law”? – the UPCA will enter into force by ratification by 13 states (including the holy patent trinity) and then become legally binding.

3) If a national law (e.g. Bolar) provision is of differing scope to (but not directly conflicting with) a multinational legal act, does the fact that the multinational provision is already encompassed within the national law provision result in a form of ratification without national amendment – is the national law provision already compliant with the UPCA provision, even if the national law provision includes additional (e.g. exemptions) leading to differing scope, but thereby allowing for harmonised but not identical provisions?

In respect of 1) I queried:

I did just want to come back on point 1) above - I agree that there is joint jurisdiction between national courts and the UPC for non-opted-out patents in the transitional period - Art 32 UPCA says "exclusive" but it is trumped in the transitional period by Art 83 UPCA which additionally gives competence to national courts.  But I would have thought that then it is pretty clear that UPC law would have to be applied (or there would have to be a clear reason why not); although I have already said that don't accept that there can be a difference between the two, which is my main point.

And Donal replied:

I think we both agree that Article 83(1) UPCA gives competence to national courts. I am just of the opinion that the UPC has exclusive competence for UPs and not-opted-out EPs (NOOEPs) and the national court has competence for opted-out EPS (OOEPs) under Article 83(3) UPCA – if there is joint jurisdiction over both NOOEPs and OOEPs, why have an opt out? The EP would be opted in/out once jurisdiction is seized by a first action being filed.

The IPKat thanks Donal again, and hopes that this dialogue may spark some thoughts among our dear readers, and earnestly wishes to see them in the comments below.