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How a unified European patent system changes global IP litigation

11/21/2012 COMMENTS (0)

On Monday night, the European Council reached final agreement on the European Union's plan to unify Europe's patent system and patent courts. The centralized system isn't quite a done deal. The European Parliament is scheduled to vote on unification next month, and Spain and Italy are challenging the legality of the implementation plan. But it's looking more and more likely that in April 2014, the European Union will institute a centralized patent approval system and a centralized patent court, with judges trained to apply a uniform -- but yet-to-be-developed -- body of patent law.

The big question for patent litigators, of course, is whether the unified European patent courts will favor Germany's generally patent-friendly laws or the United Kingdom's more skeptical view of the rights of patent holders. In recent years, patent owners and their IP counsel have learned to take advantage of German courts' low bar for injunctions to gain leverage in global patent disputes. Will a unified European patent system put an end to the Germany strategy?

According to patent lawyer Charles Larsen of Ropes & Gray, who is also a UK solicitor, the answer to that question will lie in what procedures the unified courts adopt over the next year and a half. Larsen said that by instituting a unified patent system, the European Union intended not only to show its ability to streamline legal and political processes and increase the EU's economic influence but also "to mitigate forum shopping as a tactic." By centralizing standards, he said, the EU wants to eliminate the uncertainty (and cost) of litigating patent validity and injunctions in several different countries whose courts might yield inconsistent results.

But it's not clear what the centralized law will be, according to Larsen. And already, he said, patent holders are expressing fear that if Germany's patent-friendly standards are adopted across the European Union, the EU could become a haven for patent trolls wielding the power of easy injunctions. Just as the courts of the United States generally became friendlier to patent holders after Congress created the Federal Circuit Court of Appeals to apply patent laws uniformly, Larsen said, there is concern that the EU's centralization will favor IP plaintiffs.

On the other hand, he said, companies with weak patents will have to be concerned about the impact of a single invalidity ruling across the entire EU. "There's more at stake for patents now," Larsen said. "Companies will have to make sure their European patents are good and enforceable."

There will be a lot more to come on the centralized EU patent system over the next year. If you're an IP lawyer, it's time to start paying attention.

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