Wednesday, 28 September 2016

Decisions, decisions, decisions.....

The UK government has many decisions ahead of it including the BIG one, of when (or whether) to trigger Article 50: and a small one, of whether to ratify the UPC.

It is near certain that consideration of whether to ratify the UPC will not factor highly in the decision of whether or not to trigger Article 50: however the decision of whether or not to trigger Article 50 will affect the outcome of ratification.

Some of the concerns about  ratification address hypothetical circumstances of any post-Brexit arrangement being found illegal, and there being no satisfactory solution. Legal certainty does not exist in a politically uncertain world, but it needs to be dealt with.

Both UK Counsel opinion referred to in this post and opinions of others, [for example the position paper  of the Deutscher Anwaltverein (DAV)], consider this legally feasible.

Politically therefore, the question may resolve to, “What decision should the UK make to maximise the chances of a good outcome from a UK perspective?”

The chart below shows a decision tree on the (seemingly reasonable) assumptions that:-
  • If the UK triggers Article 50 before ratification no form of arrangement that permits continued UK participation will be developed [simply because politically that would be extremely messy and would require goodwill that may be missing – see part IV of the DAV position paper].
  • If the UK ratifies before triggering Article 50 an arrangement that permits continued UK participation could be developed if desired [See UK Counsel opinion and part I of the DAV position paper].
  • The decision to trigger Article 50 is independent of UK ratification of the UPC (because in the scale of things, we are small beer) so the probabilities for triggering Article 50 are identical on both sides of the chart at the value “x”.
  • If Article 50 is triggered after UK ratification of the UPC, with no ongoing UK participation in the UPC post-withdrawal, the probability of no transitional provisions preserving rights is assumed to be close to 0. It is in no government’s interests for rights to be lost.

In the chart, if Article 50 is triggered, the probability of an arrangement permitting ongoing UK participation in the UPC (if wanted) is “y” and the probability of this being found legal by the CJEU is “z”.

As can be calculated the probability of a good outcome (a functioning UPC including the UK as a member) is:-
  • if UK does not ratify before the decision of whether to trigger Article 50 = (1-x)
  • if the UK ratifies before the decision of whether to trigger Article 50  = (1-x) +x.y.z

Regardless of the values of x, y and z (which must all be positive and less than 1) – the probability of a good outcome if the UK ratifies before triggering Article 50 is greater than if the UK does not ratify. 

If Brexit means Brexit and x=1 the difference is between having a chance and no chance.

A sheer self-interested calculation should tell the UK government to ratify now.   

Saturday, 17 September 2016

Should the UK ratify UPC (yes): can it continue post-Brexit (yes)

We are in a critical position concerning the unified patent court and unitary patent.

Netherlands has deposited its instrument of ratification, and agreement to ratification has passed the  Italian Chamber of Deputies. There is thus considerable momentum towards getting the Court established, and the question that is being asked is whether the UK and Germany (necessary signatories for the agreement to come into effect) will ratify.

Even on UK departure from the EU, continued participation by the UK is both legally feasible and practically desirable provided there is good will from the rest of the EU: and this is confirmed by the recently published opinion of Richard Gordon QC and Tom Pascoe of Brick Court Chambers a copy of which is available here.

In summary, this opinion states that for the UK to continue post-Brexit a number of criteria would need to be met. None of the legal criteria are insuperable.

In summary, quoting the main conclusions:-

The UK may only continue to participate in the unitary patent by entering into an international agreement with the EU and Member States.

Such an agreement is not necessary for the UK to ratify now: only for the UK to remain a participant post-Brexit. With appropriate political will and legal care, this is feasible.

It would be constitutionally possible for the UK to continue to participate in the UPCA after ‘Brexit’, so long as it signs up to all of the provisions of the Agreement which protect EU constitutional principles.

Were the UK to enter an EEA type agreement, this would be necessary in any case. If the UK were part of an international agreement it could withdraw at any time if this posed a practical problem.

UK divisions of the UPC would have to cease operating if the UK ratified the UPCA, without amendment, and subsequently left the EU. In those circumstances, it would be necessary to adopt detailed transitional provisions in order to protect accrued rights and to regulate the position of litigants with pending proceedings.

The detail of these provisions need not be very detailed. For example, should such a withdrawal arrangement not be achievable, the UK need only provide that:-
·         no person loses patent rights in the UK through UK withdrawal (e.g. for unitary patents in force at the time of withdrawal it could be provided that a European (UK) comes into existence in its place);
·         the result of litigation concluded before the UPC will be respected;
·         litigation already underway in the UPC at time of withdrawal would be dealt with (most simply by providing that it continue before the UPC and the result be respected (including for any new European (UK) that came into existence)).
In such circumstances it cannot be doubted that the remaining member states would make similar provision to ensure that there was no loss of rights in either direction.

The opinion of course said that nothing was certain (eminent QCs do not become eminent QCs without being prepared to consider they may be wrong - even if this is a low probability); and that the CJEU has the power to find otherwise, although no reason is given why they would find otherwise. Indeed the opinion implies that if the CJEU did find otherwise, the legality of other multilateral agreements might come into doubt (e.g. European Common Aviation Area Agreement, the International Tribunal for the Law of the Sea, and the EFTA Court).

In short, UK participation post-Brexit is eminently feasible, if politically desired. The extent of political desire of course depends on political circumstances.

While the UK is in the EU and honouring its EU obligations, ratifying is both possible and desirable: but this is a dissipating opportunity. The longer the delay, the less goodwill there will be for reaching a solution that includes the UK.

If the UK government is interested in promoting UK industry as a whole, then prompt ratification makes sense, both short term and long term.

Of course, those with a vested interest in complex and expensive litigation (large companies seeking to steamroller smaller ones by pushing up cost; some lawyers who thrive in making matters difficult so as to justify high costs; those whose jobs rely on making matters more difficult than they need be) will oppose this.

Some of these opponents may argue that delay will strengthen the UK’s negotiation position post-Brexit, despite the undoubted case that the longer the delay the less goodwill will be present to reach a conclusion including the UK. This argument for delay is self-serving nonsense. and should not be allowed to impede introduction of a system that will be to the benefit of industry in the UK, Europe at large, and the World.

So yes please HMG - ratify the UPC, and ratify in 2016.

Thursday, 1 September 2016

European Patent Grants - update

In a previous post I commented on the high number of patent grants at the EPO during the first 6 months of 2016.

Patent grant numbers at the EPO continue to rise, with over 9,800 granted in August alone.

On the current basis my best guess for grants during 2016 would be around 93k ± 5k.

Saturday, 25 June 2016

Brexit and IP

In case you have not noticed, there has been a referendum in the UK voting to leave the EU.

This only has effect once an Article 50 TFEU notice is given. It is to be hoped that a reasonable breathing space is given before the Article 50 TFEU procedure commences.

In this respect it should be noted that the referendum is not binding, and the decision has to be made by the UK Government.

The majority for leave was slim 17,410,742 to leave, 16,141,241 to remain.

There are many reports of leave campaigners regretting their decision on the basis that "I didn't think it would happen and just wanted to kick the politicians".

There is a petition to the UK Government seeking a second referendum.

Such petitions are not binding, but it is noteworthy that, at the time of writing, there was around 2.4m signatories and the number is increasing at around 2000 signatories a minute.

On the fanciful hope that this rate of signature continued, by Friday  there would be more signatures for a second referendum than votes for leave. For the current number of signatories, look here.

Regardless of whether this figure is reached, Parliament has a difficult decision ahead of them.

As a Londoner with an internationalist outlook, all I can do is hope that Parliament remembers they are a representative body, and not a body of delegates, and that they think hard before agreeing to an Article 50 TFEU notice.

The prospect of further fissiparous fucking off as Scotland, Northern Ireland and London decide their interests are not those of their fellow countrymen is just too dispiriting.

Not a lot above about statistics (other than counting signatures) or IP (but Brexit would have an effect).

Wednesday, 15 June 2016

How high will the ball bounce?

The hockey stick graph is a familiar issue in climatology. A sudden step change in a measured variable indicating something happening in the background. Are we witnessing a hockey stick phenomenon at the EPO?

The graph below shows the number of B1 publications (grants) from the beginning up to 15th June of the stated years 2008-2016.  As can be seen, these have been in the region 21,000 to 30,000 from 2008-2015, but increase dramatically (to over 41,750) in 2016. This looks like a hockey stick graph to me.

Also shown is the total number of grants from 2008 to 2015, which can be seen to roughly reflect what happens in the first part of the year.

Applying some rough and ready guesswork, one can guess a total number of patents granted in 2016 as in the region 88,000 to 102,000 representing an increase of 29-49% in the number of grants over 2015.

What is  happening in the background that explains this sudden increase?

Tuesday, 7 June 2016

But is it appealing?

A proposal to increase the appeal fees at the EPO has received recent comment on IPKat.

It is interesting to see the effect the last big increase in appeal fees (a 50% increase as of 1st April 2014) had on appeal behaviour.

From the Annual Reports of the Boards of Appeal one can derive the following table of appeals filed:-
  2009 2010 2011 2012 2013 2014 2015
ex parte appeals filed 1226 1241 1310 1242 1200 996 864
inter partes appeals filed 1249 1301 1347 1360 1315 1357 1523

This shows that the increase in fees has dramatically affected ex parte appeals, with appeals before the increase averaging at about 1200 a year and in the first full year after the increase amounting to only 864 appeals (a 28% decrease).

The increase in fees has affected inter partes appeals less, with the number of appeals in opposition roughly tracking the number of grants (roughly 2.5% of grants end up with an appeal in opposition).

If a mere 50% increase in appeal fee has resulted in such a drastic change in applicant behaviour, what effect might the huge proposed increase have?

It is to be hoped that the Administrative Council will recognise that an effective appeal system is essential to maintaining quality at the EPO, and will not increase the appeal fee [at all].

Sunday, 13 March 2016

Best year ever, concentration, and the future

It is time for EPO statistics to come out again, and for once (even without PR spin and puff) they include the slightest indication that bad times may be behind us.

Best year ever

The number of applications was the highest ever - but don't get too excited yet.

Years in which the number of applications was not the highest ever were:-

  • 1991-95 [when panic led to a drastic lowering of fees  (yes, prices can go down as well as up)], 
  • 2002 [when dot-com dot-bombed], 
  • 2009, 
  • 2011-2013.

Why not 2010? Well that was the spike in divisional applications when things went mad for a while.

In other words "best year ever" claims should be expected in a time of growth . What had impressed until recently was stagnation in applications.

Similarly grant numbers have gone up. Grants are not keeping pace with applications however.

So we have a slight kick in the number of applications, and in recent years an increase in the number of grants (when demand is static increased efficiency should translate as more grants). What happened to grants in 2000? Strikes.

The Early Certainty from Search program may have something to do with the high grant numbers. This coming year may show whether re-organising Examiner desks has resulted in higher efficiency to grant (or refusal).


I commented in 2014 on how much of the Netherlands’ European patent applications were represented by Philips.

This year Philips account for nearly 34% of the Netherlands patent applications. Looking outside the Netherlands this year's statistics show how concentrated applications are from some countries:-

Country/ region
Total European/ Euro-PCT applications
Top 1 applicant in region
Top 2 applicants in region
% of total
% of total

One would expect the EPC states to be less concentrated, as SMEs file predominantly in their own region rather than abroad.

What is interesting is how much of Korean and Chinese filings depend on so few companies. Korean concentration is understandable given the predominance of the chaebol, but the concentration of Chinese applicants in so few hands (and those in information and communications technology) show how little engagement Chinese industry as a whole has with the rest of the world - at present.

The future

It is still too soon to suggest that the unitary patent had any effect beyond marginal in European applications in 2015: most applicants do not look that far ahead.

However, unless Brexit spoils everything, there is a reasonable expectation that applications could soar over the next 2-3 years.