Less than two weeks after the European Court of Justice rejected two appeals submitted by Spain against implementing the regulation for enhanced cooperation for the institution of unitary patent protection,(1) Italy decided to change its 2012 position and endorse the European unitary patent. On May 13 2015 the Interministerial Committee for European Affairs – chaired in Rome by Undersecretary for European Affairs Sandro Gozi – approved enhanced cooperation and the parliamentary iter to ratify the Agreement on the Institution of the Unified Patent Court, for which an expert committee appointed by the Ministry of Economic Development had already drafted the text. At the end of the meeting Gozi pointed out a contradiction in the Italian position: "We are the only ones in the EU that entered the agreement on jurisdiction without having accepted the regulatory scheme, namely the unitary patent, that said jurisdiction is supposed to enforce."
Officially, Italy's 2012 position was justified by the fact that the Italian language had not been chosen as an official language, together with French, German and English. However, unofficially, the pressure from professional lobbies that wanted to defend the status quo – deemed to be economically convenient – played an important role for a long time. Instead, the new patent would provide advantages for the Italian manufacturing industry (whose main associations have always supported the unitary patent and the Unified Patent Court) and the advantages would be greater for small and medium-sized enterprises, which are the heart of Italy's industrial fabric and suffer more proportionally due to the costs of patent registration and judicial protection against counterfeiting. The new system would avoid the cost of translating patents granted in official languages, which is estimated to cost between €180 million and €270 million per year. Italian companies incur 20% of this fee.
Authoritative European sources have said that Italian endorsement of the unitary patent will help significantly to keep the costs of patent registration and maintenance at a competitive level. If the unitary patent is not endorsed, Italy will lose the corresponding portion of related taxes and may run the risk that the accounts of the Patent and Trademark Office – which plays an important role in the fight against counterfeiting and the financial support given to the internationalisation of Italian industry – will not be balanced. Companies and law firms will therefore face new challenges. The enforcement strategies of patent owners will change when the unitary patent system enters into force, as will the defensive strategies of those suspected of counterfeiting.
The reduction of patenting costs, and also judicial protection costs, will most likely free up resources to defend innovation, allowing patent holders to react more strongly to the violation of their rights. If patent holders base judicial disputes for counterfeiting on the criteria of larger markets, it will be more convenient with the new mechanism to prosecute in the producing states. Italy may become a competitive venue for counterfeiting claims, especially if – despite having more than 400 new proceedings per year – it chooses to have a single local seat of the Unified Patent Court, located in Milan.
The solution to the problem of bifurcation provided by the last version of the rules of procedure allows most of the concerns that the system had initially created to be resolved, especially because the liability of the plaintiff will be taken into account in claims based on patents subsequently declared void due to prior art that could not have been ignored by the owner. The possibility, as acknowledged by the rules of procedure, to enforce – if not contrary to reasons of expediency – the nullity or counterfeiting of more than one patent in a sole dispute is a critical issue for many sectors (eg, television and telecoms, where the counterfeited products will often include a great number of patents), but is also a means for dependent patents to avoid the duplication of procedural activities and the increase of costs, which will have a significant impact on the strategies that the parties adopt.
Similarly, defence strategies are influenced by the conditions that the rules of procedure clarified – the nullity action and a subordinated action for declaration of non-infringement may be filed and discussed together for procedural economy reasons. However, according to the Unified Patent Court, the legal interest for a declaration of non-infringement appears to be less compelling than the existing Italian procedural system, where it plays the role of presenting the risk of measures being taken inaudita altera parte (ie, not having heard the other party).
Protective letters with unitary effects (automatically extended to all divisions – central, regional and local) have a duration of six renewable months, which a party that is afraid of being sued for counterfeiting may send to protect itself within EU borders from the risk of urgent measures being adopted without having its reasons heard. Protective letters play an important role in the defensive strategies of parties that are afraid of being accused of counterfeiting.
This provides a great advantage for small and medium-sized enterprises, which are no longer obliged to act first by means of a declaration of non-infringement and nullity – often filed with separate actions. Further, it reduces:
- the costs and multiple expenses faced in the language of the state in which proceedings are held; and
- the strength of the party that enjoys greater economic means.
Further, the new system will allow patents that do not meet patent requirements, notwithstanding the granting of the same, to be more easily invalidated with a single proceeding.
The Unified Patent Court will bring the illusion of an Italian road for patent litigation from a substantial law point of view to a definitive end and will also remove what remains of the idea that validity and counterfeiting (the latter in particular with regard to equivalence) will be assessed pursuant to different criteria than those resulting from the European Patent Convention and, for equivalence, from its executive protocol – to which the legal system has fully adhered from a regulatory point of view. Further progress in terms of certainty of the law is likely to be the most important result of the unitary patent system – both for patent holders and those accused of counterfeiting.
For further information on this topic please contact Cesare Galli at IP Law Galli by telephone (+39 02 5412 3094) or email (firstname.lastname@example.org). The IP Law Galli website can be accessed at www.iplawgalli.it.