Community patent will make legal extortion profitable

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Vrijschrift FFII.nl letter on the community patent to the chairman of the Dutch Parliamentary committee on Economic Affairs./

Original in Dutch (pdf)

Dear mister Hofstra,

The community patent is meant to make patents cheaper and more accessible, and to reach European uniformity. Exploration of the text (1) shows the operation is not neutral. The community patent will introduce retroactive liability and so make legal extortion profitable. It will not be possible to appeal against EPO decisions at an independent court, a violation of the European Convention on Human Rights. Furthermore, EPO's practice will be the community patent's basis, including its objected practice of granting software patents.

In the Netherlands, a violator of a patent becomes liable to damages after being informed he violates a patent. He then has a month to stop the violation. This checks abuse. For instance with software we see that many patents are granted for inventions that produce no or hardly any technical contribution and often are not even new (Advisory Committee on Software Patents). "Independent (re)discovery" and unintentional violation occur often. Retroactive liability would stimulate abuse and extortion. A patent owner could wait and send out notices after a long time. The accused has to pay or go to court, the latter being very expensive. Too expensive often for SMEs. To settle will be the only solution, even if the invention is not a real one. The Dutch system saveguards SMEs to some extend from extortion. Countries like France, Germany and Engeland employ, with differences, the system of damages after being informed about the patent. We should not give up this quality.

Yet, the proposal does change this. Damages will have to be paid in retrospect, dating back to to the patent's applications's publication (art 11). The community patent will make it profitable to apply for broad, vague and trivial patents, and then send out notices after some years. !SMEs will have to pay. The community patent will make legal extortion profitable. This is a turning point we have to steer clear of.

Time limitation on damages will be 10 years, or 5 years in case the owner had knowledge or should have had knowledge of the infringement (art 45). This resembles the US system, but with a longer retroactive period (US: 6 years). Following the US on this point would be bad policy, surpassing the US is totally irresponsible. Ironically, abuse and extortion led to a call for reform in the US, while Europe is in danger of going much to far on this point. In comparison with the Dutch system, the proposal is detrimental for SMEs. This change should be rejected.

No appeal against EPO decisions at an independent court will be possible. This is a violation of the European Convention on Human Rights. This situation already exists with the European Patent. An expansion of this crying abuse to the Community Patent is unacceptable. The trias politica is the basis of our constitutional state. This principle did not reach the European patent system. The proposed EPO reform is insufficient (2) for that matter.

Judges for the Community Patent Court, the court handling infringement cases, will be appointed for a fixed term. It is unclear how long this term will be and whether judges can be reappointed. Reappointing judges does not lead to independent jurisdiction.

The EPO is an executive organisation that has an interest in granting as many patents as possible, and has been its own magistrate and made its own rules for over 30 years. An attempt to codify the objected practice with regards to software patents was forcefully rejected by the European Parliament last July. According to the proposal, this practice will be the basis for the community patent. This uncontrolled case law, together with cheaper and easier application and long retroactive period is a pernicious combination. A extra legal burden for SMEs should be avoided.

At the moment the community patent is stuck on the language problem, providing time to adapt the proposal. Since unanimity is needed in the European Council, the Netherlands can exact changes by rejecting the present text. The state secretary has claimed she wants to raise the standard of EPO's granting practice. The community patent offers an exquisite opportunity.

Yours truly, On behalf of Vrijschrift / FFII,

J.A.M. Wessels

(1) http://wiki.ffii.org/ComPatEn

(2) http://wiki.ffii.org/EPOreformEn

LtrVrijschriftComPat050915En

Community patent will make legal extortion profitable