(a)
Translation Costs
23. Under the Luxembourg Convention
(Article 30) the entire patent specification would have to be
translated into the languages of all the Member States. A Community
patent granted in the Community of Fifteen would thus require
ten translations. The CBI described the cost of translations as
"probably the greatest disadvantage of the Luxembourg Convention"
(p 31). The TMPDF said: "The translation requirements alone
are very onerous, involving the invalidation of the whole patent
if even only one translation is missing three months from the
mention of grant in the Official Bulletin. This alone is sufficient
to ensure that the system of the 1989 Luxembourg Convention would
be very little used" (p 35).
24. Under the current EPC system there
is no need to translate the whole specification at the outset.
Applications are accepted in any one of the three official languages
of the EPO—English, French or German. On the first publication
of the application (after an official search into the prior technical
literature, but before any technical examination), it is necessary
to provide translations of the claims in the other two official
languages. When the patent is granted, the claims finally allowed
must be translated into the other official languages. However,
at this stage, it is also open to EPC countries to require translation
of the whole specification into national languages and all EPC
States except Germany, Luxembourg and the United Kingdom have
insisted on this.
25. In the view of LES, the translation
question was a far greater problem for patents than for trade
marks. The words and terms used in the specification and claims,
and how they were understood by the ordinary skilled addressee,
determined the scope of protection, and validity, of the patent.
Expert (and therefore expensive) translators would be needed to
ensure consistency of meaning and application in different jurisdictions
(p 18).
26. Witnesses were generally agreed
that translation costs were a major problem. Zeneca produced a
table setting out the comparative costs under the existing and
proposed regimes, as well as in the United States and Japan.[5]
The EPO had also prepared a study.[6]
CIPA described translation costs at grant as a significant contributor
to the high cost of obtaining patent protection throughout the
EU. Mr Lees said that they were a particular problem for SMEs,
who might find their costs doubled. Costs were an overriding factor
for SMEs under the present European regime: "If they require
countries like Austria and Sweden, where the charges are very
high, that is hard lines. They prefer to take the countries where
for one translation into French, for example, you can have three
or four countries" (p 15, Q 78).
27. The BIA acknowledged that the present
EPC system had not solved the problem of translation costs. But
the problem had been ameliorated by, firstly, deferring translation
costs from the time of filing to the time of grant and, secondly,
dispensing with translation costs in the event of a patent application
being unsuccessful (p 27).
28. Witnesses agreed that a Community
patent system which required full translation in all languages
would not be used (p 18). The CBI said that the only way for a
Community patent to succeed would be if the specification needed
only to be translated into a small number of languages (p 31).
29. It was acknowledged, however, that
there was, in the words of the BIA, "a tension between the
desirability of having a patent system which is not unduly burdened
by the cost of translation and the essential unfairness of companies
and individuals in European countries being subject to patent
rights which are framed in a language they cannot understand"
(p 27). Mr Terry Johnson considered it to be essential that the
whole text of any Community patent be translated into the official
language of each Member State: "It must be remembered that
an applicant for a patent is seeking to establish a legal right
which will curtail the activities of third parties ... such applicant
has an obligation to inform at his own expense all those who will
be affected by that right in a language which they can understand"
(p 90). Lord Justice Aldous said: "Any cut back in translation
must be weighed against the need and right of the individual to
know what he is prevented from doing by a monopoly granted by
the State/Community created Patent Office. Surely a person must
have the right to read in his own language what he may not do.
If so, at least the abstract and claims need to be translated"
(p 78).
30. Jacob and Laddie JJ disagreed:
" To those who say an individual has a basic right to know
what the subject of a monopoly is in his own language, large industry
at least is saying this is impractical. Moreover since validity
depends upon the prior art and that art is likely to be in English
(or some other foreign language) the position that a man can ascertain
his rights simply reading material in his own language has long
been sold. Even under the present system translations are only
provided late in the day—yet if a patent is granted rights
operate from the date of publication just in the language of the
original application (French, German or English)" (p 53).
31. The Green Paper canvassed a number
of possible solutions restricting translation at certain stages,
including the so-called "package solution". This had
three main features: publication, at the same time as publication
of the application or as soon as possible thereafter, of an enhanced
abstract in the language of the proceedings and, subsequently,
of translations into the languages of all the Member States; translation
of the patent claims only at the time the patent is granted; translation
of the full patent specification before any action is brought
by the patentee with a view to enforcing the patent rights.
32. The Patent Office explained that
the proposal that the translation be restricted to an enhanced
abstract had been devised by the EPO. From the point of view of
patent professionals that would probably be sufficient (Q 264).
The I.P.Bar Association (IPBA) did not believe that requiring
translation only of an abstract of an invention and leaving all
matters of translation to be determined only when a dispute arose
was an acceptable solution: "Merely having a translation
of the abstract cannot give a full flavour of the description
and must lead to uncertainty as to whether the abstract is a fair
synthesis of invention. Equally any interested rival of the patentee
must obtain a full translation before deciding a course of action
and it is inherently likely that that translation will not coincide
with any subsequent official translation obtained by the patentee
and again uncertainty will result. Further the scope for dispute
as to an accurate translation once the patentee is aware of the
alleged infringement is obvious" (p 100). The Patent Office
acknowledged that there were problems with the proposal (Q 263).
33. A number of witnesses proposed
that any Community system should use a single working language,
English. The idea was that applicants might file in their own
language, but thereafter all procedures would be in English (QQ
133, 261). The CBI said that European industry had indicated strongly
that it wished to see the Community patent operate in English
only with no translation of the specification: "They take
that position on the grounds that English is spoken by all industry
in Europe; that it is the language of technology; that the majority
of any prior art which would be relied on to attack a patent will
be in English; and that it is the language in which most, probably
all, international companies conduct their activities" (p
31).The TMPDF did not think that the EPO would have any difficulty
in switching to working in English alone (Q 160).
34. Witnesses emphasised that it was
not simply British industry but also European industry which was
urging standardising on English. A number of witnesses, including
the CBI, referred to the evidence given at the Commission's hearing
on the Green Paper in Luxembourg (Q 137). For CIPA, Mr Gold said:
"It was remarkable that the European industrial groupings,
with German and French spokespersons, were saying, "We are
not talking about the language of Molière or Goethe or
Shakespeare. We are talking about technical and legal jargon ...
this is not a cultural issue, this is a technological, research
and development issue, and de facto English is the language"
(Q 83). Witnesses pointed to the wide spread use of English in
the scientific field and in applications for European patents.
The Patent Office said that in the European context about 70%
of all applications were made in English, 20% in German and 10%
in French (Q 261). Both the TMPDF and CIPA also said that
in practice translations were not used (Q 82, 163).
35. The Association of the British
Pharmaceutical Industry (ABPI) gave a further reason for the sole
use of English: it would be helpful to SMEs (EFPIA p 79). The
Patent Office identified a contrary argument. Some Member States
might argue that there was a problem, in particular for small
firms, who might find themselves the object of infringement proceedings
in respect of a patent which they had not been able to read in
their own language (Q 263).
36. Though there was general agreement
that one language, English, was the preferred solution, witnesses
also recognised the political difficulties inherent in such a
solution. Professor Cornish said: "there seems no way which
the British can press the case for it without inflaming national
susceptibilities" (p 89). Referring to the Commission's hearing
in Luxembourg, Mr Hartnack (Patent Office) said: "The difficulty
is that that view on the part of European industry was not shared
by government representatives at the conference, and it is my
view that it remains an obstacle" (Q 261). Judge Brinkhof
did not believe the English only solution to be viable: "
It is not industry which decides but the Parliaments. I think
Parliament will say every citizen has the right to know what he
can and cannot do and he has to base his conduct on texts in his
own language". He considered it more feasible to see whether
the extent of translations could be limited in some way (Q 239).
37. The BIA sought to make a special
case for the bioscience industry : whatever solution to the translation
problem was found, all biotechnology-related European patents
should be translated in full upon grant into English. Mr Sheard
explained that "pre-eminent among the emerging technologies
biotechnology has the claim of being almost exclusively based
in the English language". He added: "aside from the
fact of English pre-eminence, the high value products of biotechnology
which are often health care mean that the bioscience industry
... tends to apply widely throughout Europe, so the translation
costs do hit it" (p 27, QQ 174, 175).
38. The Patent Office said that a first
step towards reducing costs might be to revert to the position
when the EPC was signed in 1973, which was a three-language solution.
Some further sort of compromise on the language issue might be
needed beyond that (QQ 264, 266)). The BRC, while supporting the
use of one language, English, could accept as an alternative the
use of English, French and German (p 85). The TMPDF said that
they could live with such a restricted regime but were not hopeful
that it would secure political agreement.The EPO practice (English,
French and German) was not an apt precedent. The three languages
were only used for the procedure for granting the patent. The
applicant still had to face the prospect of translation into the
language of every country designated (QQ 141-2,159-60). Mr Sheard
(BIA) said: "The European Patent Convention only requires
the translation of claims. It is the national statutes that require
the translation of whole specifications, so really the present
position is not three full translations" (Q 164).
39. For CIPA, Mr Gold said that they
could accept English and French (Q 84). CIPA's preferred solution
was, however, "translation on demand". Mr Lees explained:
"The intention of this is to meet the point about specifications
gathering dust. That you would only get a translation if you requested
it ... you pay a fee on request - not necessarily a very large
fee - but nevertheless some kind of deterrent: and that the costs
of producing the translation are borne out of the renewal fee
income, which is quite large overall and some of which we understand
is not spent within the intellectual property system" (Q
85).
40. Witnesses also pointed to the potential
implications of enlargement. Mr Blakemore (TMPDF) said: "as
the Community expands the number of languages, of course, will
increase substantially and the translation costs in the end would
completely swamp the system" (Q 140). Mr Nott (CBI) expressed
concern that as the Community expanded the argument for having
a single language or a limited number of languages would become
more difficult to maintain (Q 162). The Patent Office thought
that market forces might come into play here. The applicant States
would face a hard choice if they wanted to encourage technology
transfer. If translations were required parties using, for example,
the EPO regime, might not designate the new State. As a result
those States would lose the not inconsiderable fee income generated
on renewals and would not get the technology transfer (Q 266).
(b)
Judicial Arrangements
41. Jacob and Laddie JJ considered
the existing arrangements for the litigation of patents in Europe
to be unsatisfactory for three reasons. First, there was no central
unified system. The need for parallel suits in a number of jurisdictions
with the possibilities of different and conflicting results in
different countries was a problem. Second, the courts of some
Member States (notably the Netherlands but also Germany and France)
were asserting cross-border jurisdiction. This had already given
rise to practical difficulties. Third, the position under the
1968 Brussels Convention on jurisdiction and enforcement of judgments
was unsatisfactory. In particular, the main rule that a plaintiff
must sue in the defendant's home State was subverted by the possibility
of suing any seller of infringing goods, thus in practice giving
the plaintiff a wide choice of jurisdiction. Potential defendants
also had opportunities to forum shop, by starting actions for
declarations for non-infringement and revocation suits in a court
of their choice (where the proceedings might be protracted) and
then relying on Article 21 of the Brussels Convention ( which
requires a court to decline jurisdiction when the same action
is pending before the court of another Member State) to say that
the court of their choice is first seised of the dispute. This
tactic has become known as "the Italian torpedo"(p 53,
QQ 208-9).
42. Under the Luxembourg Convention
infringement and validity questions would be separated, the former
being for national courts to determine while the latter were to
be dealt with by a special revocation division within the EPO
with appeals to a revocation board. That regime was amended by
the 1989 Agreement. Certain national courts with appropriate experience
would be deemed Community patent courts in order to hear claims
for infringement of a Community patent and counterclaims for its
revocation. Separate proceedings to revoke the patent might still
be brought before a revocation division of the EPO. Superimposed
on these national courts and EPO there was to be a new court,
the Common Appeal Court (COPAC), constituted by judges experienced
in patent law from each Member State. Appeals from a national
court of first instance would go to a national court of second
instance which would be obliged to refer to COPAC all questions
concerning the effect of the patent (i.e. the substantive
question of whether it had been infringed) and its validity. COPAC's
decisions on these matters would be final. The national court
of second instance would be left to apply the COPAC decision but
would itself determine any question on available remedies, the
persons liable, enforcement, limitation periods and so on. As
regards the relationship with the European Court of Justice, COPAC
could request the Court of Justice to give a preliminary ruling
where there was a risk of inconsistent interpretation between
the CPC and the EC Treaty. The Commission or a Member State would,
where it considered there was such an inconsistency following
a decision of COPAC, also be able to seek a ruling from the Court
of Justice.
43. Most witnesses considered the judicial
arrangements under the Luxembourg Convention to be unsatisfactory.
Judge Brinkhof said: "they are the fruits of too many compromises
and reflect a certain distrust vis-a-vis national courts
... the arrangements are neither fish, flesh, nor a good red herring!"
(p 52). For CIPA, Mr Gold drew attention to the lack of harmonisation
of enforcement procedures in the national courts (Q 71). But not
all witnesses condemned the Luxembourg Convention. IPLA considered
the concerns expressed about the judicial arrangements in enforcement
proceedings might be exaggerated given the check of a Community
Patents Court of Appeal: "in fact in practice the less sophisticated
local jurisdictions are likely, in our experience, to be more
favourable to the plaintiff patentee on the question of validity
than are those that are less impressed by the mere fact that a
patent has been prosecuted to grant" (p 103). That concerned
Sir Hugh Laddie: " the bee in my bonnet is that if you do
not know enough about patents you could work on the assumption
that they are all valid because they have a stamp on them, and
I am afraid to say that patent offices end up by giving patents
out in many cases, not all cases, when the patent is invalid and
if you end up litigating in front of a court with no experience,
you will end up having unjustified monopolies and unjustified
monopolies mean that you close down parts of European industry
for no good reason" (Q 216). Mr Hartnack (Patent Office)
said that in his experience the problem was the reluctance of
one or two national courts in Europe to declare that one of their
nationals had infringed (Q 272).
44. The Green Paper sought views on
an arrangement whereby actions for revocation of Community patents
would fall within the exclusive jurisdiction of the EPO, with
appeals to the Court of First Instance (CFI) and from there, on
points of law only, to the Court of Justice. Thus, contrary to
the provisions of the Luxembourg Convention, national courts would
not, in infringement proceedings, have jurisdiction for counterclaims
for revocation of Community patents.
45. Witnesses did not support the idea
that the EPO should have exclusive jurisdiction for all revocation
proceedings (e.g. CIPA p 13). The existing dispute resolution
mechanisms were criticised. The IPBA said that the EPO had not
proved itself to be effective in achieving speed or certainty.
Whilst the primary concern was over delay, a secondary complaint
related to problems over fact-finding (the EPO did not have the
mechanism to act as a fact finding tribunal, which was particularly
important where the validity of a patent was put in issue on the
ground of prior use which could occur on a worldwide basis). The
EPO was failing to serve the needs of the patent community. The
IPBA said: "We cannot emphasise forcefully enough our grave
concern at the suggestion made in the Green Paper that this body
should be entrusted with this responsibility" (p 99).
The Law Society was also strongly opposed to the idea and added:
"The only counterbalance proposed in the Paper, namely that
of the CFI, would be unlikely to be effective on issues of substantive
patent law" (p 105). Jacob and Laddie JJ said: "It is
to be hoped (and expected) that things will improve, but the position
remains that it is essentially a patent office. We do not think
it should be given the ultimate say over validity as is proposed
in the Green Paper" (p 53).
46. The general view of witnesses was
that questions of the validity and infringement of patents should
be tried together (QQ 192, 259). The IPBA explained why this was
necessary: "both aspects require the claim to be construed.
Once the claim has been construed then the questions of validity
and infringement can generally be decided relatively easily. Often
there is a squeeze between infringement and validity in that a
patentee will contend for a wide construction of the claim so
as to render the alleged infringing product an infringement but
will wish to have a narrow construction of the claim when seeking
to distinguish a particular piece of prior art. Having a different
court determine the issues of validity and infringement increases
the scope for abuses of this nature ... Equally, if infringement
proceedings are to be stayed pending determination of validity,
this unnecessarily prolongs the uncertainty" (p 98). Professor
Cornish said that the German division of functions did not have
unanimous support in that country and had in some degree been
modified by case-law. In his view it was "vital that a single
court should be able to consider the parallel issues side-by-side
in order to reach a balanced judgment of the merits overall"
(p 88).
47. In CIPA's view it was vital that
issues of validity were considered together with infringement
(p 13). Other witnesses also favoured such "one-stop shopping"
but, as BIA pointed out, simply giving national courts the power
to decide on infringement and revocation throughout Europe was
not, on its own, the answer (p 29). CIPA said that each Member
State had a different history and judicial system where validity,
enforcement, formality/procedure, timescales, costs and remedies
for patent infringement were handled differently. There was, therefore,
a wide range of effectiveness of patents throughout the EU: "To
run the risk of a patent for the whole of the EU being subject
to a low quality court decision would be wholly unacceptable to
a patentee" (p 15). Moreover, as BIA said, there was little
support for the idea that national courts should have jurisdiction
on revocation while confining the effects of their decision to
the territory of the Member State in which they were located (p
29). Judge Brinkhof saw splitting the issues of infringement and
validity and limiting the territorial scope of decisions of national
courts as being contrary to the unitary character of the Community
patent (p 52).
48. Witnesses wanted a judicial system
in which they could have confidence. Zeneca said: "The Community
needs a harmonized court system which is secure and reliable,
which can deal efficiently with the issues and in which the certainty
of, and confidence in, the judicial process is assured".
Dr Smith said that legal certainty was more important than the
question of translations (p 38, Q 193). Professor Cornish said
that it was difficult to establish patent tribunals in a way which
commanded respect: "The centrality of technological issues
requires judgment either by experts in the particular field or
persons with considerable experience of technology more generally.
Equally, the patent system depends upon an elaborate balance between
courts which apply the law on infringement and validity after
grant and examiners who handle applications in the light of interpretations
of the law. Between them is a symbiotic relationship which requires
experience to appreciate" (p 88).
49. There was general support for some
form of pan-European patents court or courts.
3 All EPC Contracting States are also Parties to the
1970 Patent Cooperation Treaty, an international agreement which
simplifies procedures for patentees wishing to file for patents
in a number of countries by dispensing with the need to file separate
applications in each. The EPO is one of the bodies which may
receive an "international application" designating the
countries in which protection is sought. It may also carry out
an "international search" and an "international
preliminary examination". Back
4
These figures, taken from the annual reports of the EPO, appear
in a paper by Dr Joseph Strauss for Fordham University's Sixth
Annual Conference on International Intellectual Property Law and
Policy 1998. Back
5
The table is reproduced at page of the evidence printed with this
Report. Back
6
The results are described in "The cost of patent protection
in Europe", a paper delivered by Dr. U. Schatz (EPO) to Fordham
University's Sixth Annual Conference on International Intellectual
Property Law and Practice, April 1998. Back
