The launch of the Unified Patent Court (UPC) is imminent. The UK is now in a position to ratify the UPC Agreement, having passed the legislation in March 2016 needed to implement the UPC and Unitary Patent (UP) in national law. Germany started its ratification process in February 2016.
If the UK and Germany plus two additional countries complete ratification by autumn 2016 then the UPC should be open for business early 2017. This article looks at the language rules that apply when prosecuting Unitary Patents and litigating in the UPC. It also considers how these rules might affect strategy.
The issue of language has been the subject of much debate in the UPC negotiations. It was Spain and Italy’s objection to the tri-language regime of English, French and German for translating Unitary Patents (UP) that meant negotiations broke down in 2010. This led the EU to use the 'enhanced cooperation' process, which enabled Spain and Italy to be excluded from the unitary patent system. Spain and Italy subsequently filed complaints with the CJEU about the use of the enhanced co-operation process and Spain filed a further complaint in 2011 challenging the legality of the UP and its language regime.
Both challenges were dismissed by the CJEU. While the CJEU acknowledged that the Spanish language was treated differently, it held that this was appropriate in order to achieve a cost efficient system. In 2015 Italy joined the UP system and became the twenty sixth member of the enhanced cooperation, although it is still opposed to the language regime. Spain remains outside the UP system.
The rules about language are set out in the Language Regulation (for the prosecution of patents) and in the UPC Agreement (for issues before the courts).
In accordance with standard EPO procedure, claims for a UP must be filed in English, French and German, with the specification in one of those languages. There is a transitional period of up to 12 years during which translations will be required in order to have a granted EP validated as a UP. French and German language patents must be translated into English, while English language patents must be translated into any official language of the EU.
A compensation scheme is provided for SMEs, natural persons, non-profit organisations, universities and public research organisations within EU member states. Under the scheme, the costs of translating applications filed in an official language of the EU other than English, French or German will be reimbursed up to a ceiling. Once the transitional period has expired there will no longer be a translation requirement for UPs after grant.
The intention is that, in time, machine translation will be used to provide all translations of UPs that might be required. Patent Translate, the EPO’s machine translation program, is being developed with Google. Once Patent Translate can provide high quality translations into all the official languages of the EU member states, the transitional period will end and no translation will be needed when seeking to validate an EP as a UP.
The UPC will have a common Court of Appeal seated in Luxembourg and a decentralised Court of First Instance with local, regional and central divisions located in member states. The central division will have its formal seat in Paris with specialist divisions in London and Munich dealing with cases concerning specific patent classifications (London: human necessities, chemistry and metallurgy; Munich: mechanical engineering, lighting, heating, weapons and blasting).
Any participating member state may host up to four local divisions or two or more member states may group together to form a regional division. A number of local divisions are being established including one in London, one in Paris and four local divisions in Germany. Italy, the Netherlands and Belgium will also each host local divisions, with further local divisions planned in Austria, Denmark, Finland and Ireland. So far only one regional division has been established, the Nordic-Baltic division made up of Estonia, Latvia, Lithuania and Sweden, located in Stockholm and operating in English only.
In the main, revocation actions will be heard by the central division, with the local and regional divisions hearing infringement actions where an infringing act takes place or a defendant is based. The local and regional divisions can also hear revocation counterclaims or they can elect to send these to the central division. In contrast, if a revocation action is pending at the central division, then the patentee can only bring an action for infringement at the central division. The central division can also hear infringement actions in cases where the action could have been brought in a member state’s local or regional division but that state does not have such a division.
The language of proceedings in the Court of First Instance will be either the local language of the member state hosting the local division or the official language(s) designated by the member states sharing a regional division. It will be possible for member states to designate one or more of the official languages of the EPO, (ie English, German or French), in addition to or instead of the official language of the member state(s) as the language of proceedings of their local or regional division, subject to approval by the competent panel.
There is some scope for switching languages. Parties can, with the court’s approval, mutually agree to use the language of the patent instead of the local or official language. Additionally, on the basis of fairness and taking into account all the relevant circumstances of the case, the judges can choose to conduct the proceedings in the language of the patent with the consent of the parties.
The general rule at the central division is that proceedings will be conducted in the language in which the patent was granted by the EPO (ie English, French or German). The majority of patents granted by the EPO are in English (anecdotally 70%), so it seems likely that most proceedings at the central division will be in English. The language of proceedings in the Court of Appeal will be the language of the proceedings when the case was heard at the Court of First Instance. The table below summarises the courts and their applicable languages.
Click here to view table.
Deciding where to sue
In the main, the party initiating infringement proceedings chooses not only the forum but also which of the languages available at the relevant division will be applied. The language that the claimant chooses to initiate proceedings will become the language of proceedings at both first instance and on appeal. If the defendant wishes to bring a revocation counterclaim then this would need to be initiated in the same local or regional division as the main claim and in the same language.
However, if the proceedings are bifurcated and the revocation counterclaim is brought before the central division, then the counterclaim will need to be in the language of the patent, so potentially requiring the translation of documents used in national proceedings.
In contrast, a potential infringer instigating a revocation action or a declaration of non-infringement will have no option but to go to the central division where the language will be that of the patent as chosen by the patentee on filing.
A defendant who is not familiar with the language of the claim is likely to be at a disadvantage, although there are some measures in the UPC system to address this:
- A court can take into account when determining damages that the infringer may have been acting in good faith prior to receiving a translation into his language and the court could accept that the alleged infringer possibly did not know or did not have reasonable grounds to assume that he was infringing.
- The patentee must provide, at its own expense, a translation of the patent into the language of the state in which the alleged infringement took place or the state in which the alleged infringer is domiciled.
- The requirement that every document submitted during proceedings must be translated into the language of the proceedings at the expense of the party submitting the document can be dispensed with by the court to the extent that it deems appropriate.
- At the request of one of the parties and to the extent deemed appropriate, any division of the Court of First Instance or Court of Appeal shall provide interpretation facilities to assist parties at oral proceedings.
- The ‘small local operator’ provision protects locally operating defendants. Where infringement has occurred only in the EU member state in which the defendant is domiciled, so that the case could only be brought there, the defendant's national language must be used unless overruled by a pre-existing divisional court’s language choice. For example, litigation in the Nordic-Baltic division will always be in English, so it will not be possible to sue a defendant in his national language in that division.
One concern that was raised in the UPC negotiations related to whether all judges in the local divisions would be confident conducting oral proceedings or delivering decisions in a language that is not their mother tongue. To address this issue the latest draft of the UPC rules gives the Judge Rapporteur the option to order the use of the official national language of the division for oral proceedings and drafting orders or decisions, even if the claimant had chosen to use an additional language of the EPO as the language of proceedings.
In such circumstance each order and decision must be accompanied with a certified translation for the purposes of enforcement. For example, the Judge Rapporteur at the local division in Copenhagen might order that Danish is used for drafting orders and decisions (with certified translations in English), even though the Danish division has English as an additional language.
Despite the above measures, there is scope for the party instigating infringement proceedings to forum shop based on language choice. When choosing the patent language it is worth keeping in mind that, in a number of circumstances, this will be the language of proceedings. The fact that currently there are a number of local divisions and so far only one regional division will likely increase the number of infringement cases eligible to be brought at the central division (in the language of the patent) on the basis that the state in which the action could have been brought does not have a local or regional division.
This article was published in World IP Review in March 2016.