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Wednesday, June 18, 2008

Oberlandesgericht Düsseldorf: A Bitter Row with Federal Patents Court Over Patent Validity?

On May 29, 2008,

IPEG Blog had

reported on a quite strange decision of Düsseldorf Appeal Court (Oberlandesgericht Düsseldorf):

"[...] The Düsseldorf Appeal Court sets new standards in enforcement of patents of pharmaceutical companies against generic manufacturers by granting a preliminary injunction although the patent has been invalidated in first instance by the Federal Patent Court, in Germany the exclusive court having jurisdiction in patent validity disputes.

The case concerns a patent of Eli Lilly (EP 0 454 436, for Lilly's product Zyprexa) which was declared invalid by the Federal Patent Court in first instance by decision of 4 June 2007. Eli Lilly filed an appeal against this decision to the Federal Supreme Court. After the first instance court decision of the Federal Patent Court generic companies started to distribute generic products falling under the Eli Lilly patent in Germany. [...]"

And, a reader of that blog had issued therupon a quite heated comment, arguing that the Duesseldorf District Appeal Court OLG, with no jurisdiction to consider validity and no scientific education, nevertheless had concluded that the Federal Patents Court BPatG was wrong to find the asserted claim invalid.

Now I've seen the

full text of that decision (I-2 W 47/07). Well, I'm not so sure that this Decision indeed will set any new standards. The judges wrote:

"[...] Auch wenn es keine festen Anforderungen an die Rechtsbeständigkeit gibt, kann sie im allgemeinen nur dann als ausreichend gesichert angesehen werden, wenn die Patentfähigkeit des Antragsschutzrechtes bereits in einem kontradiktorischen Verfahren zumindest durch eine erstinstanzliche Entscheidung anerkannt worden ist. Dagegen wird ein Verfügungsgrund in aller Regel zu verneinen sein, wenn der in einem Einspruchs- oder Nichtigkeitsverfahren (die nachstehend erörterten Grunds&aul;tze gelten in beiden Fällen) entgegengehaltene Stand der Technik beim Verletzungsgericht so starke Zweifel an der Schutzfähigkeit hat aufkommen lassen, dass in einem entsprechenden Hauptsacheverfahren die Verhandlung im Verletzungsrechtsstreit nach § 148 ZPO ausgesetzt werden müsste, um die Entscheidung ¨ber den gegen das Antragsschutzrecht eingelegten Rechtsbehelf abzuwarten. Erst recht gilt das, wenn schon eine erstinstanzliche Entscheidung ergangen ist, die das Patent für nichtig erklärt hat. Auch wenn nach einem solchen Urteil die aus der Erteilung des Schutzrechtes folgende Tatbestandswirkung fortbesteht, bis die Entscheidung in Rechtskraft erwächst, rechtfertigt die von einer sachkundig besetzten und zur Bewertung der Schutzfähigkeit berufenen Instanz getroffene Entscheidung regelmäßig so weitgehende Zweifel an der Rechtsbeständigkeit des Antragsschutzrechtes, dass im Hauptsacheverfahren eine Aussetzungsanordnung geboten ist und dementsprechend auch im Verfügungsverfahren keine Unterlassungsansprüche mehr durchgesetzt werden können, so lange die erstinstanzliche Nichtigkeitsentscheidung Bestand hat. Der Verletzungsrichter, der die begehrte einstweilige Unterlassungsverfügung dennoch erlässt, müsste sich über die sachkundige Beurteilung aus dem Nichtigkeitsverfahren hinweg- und seine eigene Einschätzung an deren Stelle setzen. Das verbietet sich regelmäßig schon deshalb, weil damit - rein faktisch - eine Überprüfung von Nichtigkeitserklärungen des Bundespatentgerichts durch das Verletzungsgericht verbunden wäre, die - wie das Landgericht im angefochtenen Beschluss im Grundsatz zutreffend ausgeführt hat - dem vom Gesetzgeber im Nichtigkeitsberufungsverfahren eingerichteten Instanzenzug und der damit vorgenommenen Kompetenzzuweisung zugunsten des Bundesgerichtshofs zuwider laufen würde. Wer als Schutzrechtsinhaber Verletzer im Wege der einstweiligen Verfügung auf Unterlassung in Anspruch nehmen will, kann dies deshalb grundsätzlich nur tun, wenn er im Wege der Einspruchsbeschwerde oder der Nichtigkeitsberufung die zu seinen Ungunsten ergangene Entscheidung mit Erfolg zu Fall gebracht hat. [...]"

I won't give a full translation now - in the essence, the judges of the Düsseldorf Court (OLG) are simply saying that, as a general rule, the judges in an infringement suit should not dare to override a decision of the Federal Patents Court in a Nullity or Opposition case. So far they absolutely comply with the German tradition of practising patent law.

But - what has happened in this particular case?

The Düsseldorf judges continue:

"[...] Eine Ausnahme von dem prinzipiellen Vorrang der erstinstanzlichen Einspruchs- oder Nichtigkeitsentscheidung ist von Verfassungs wegen (Art. 2 Abs. 1 GG i.V.m. dem Rechtsstaatsprinzip) allerdings dort zwingend geboten, wo der Widerruf oder die Nichtigerklärung evident unrichtig ist und das selbst nicht fachkundig besetzte Verletzungsgericht diese Unrichtigkeit verlässlich erkennen kann, weil ihm die auftretenden technischen Fragen in Anbetracht des Sachvortrages der Parteien zugänglich sind und von ihm auf der Grundlage ausreichender Erfahrung in der Beurteilung technischer und patentrechtlicher Sachverhalte abschließend beantwortet werden können. [...]"

They are citing the German consitution, arguing that an infringement Court shall be free to ignore a prior decision of the Federal Patents Court if that decision was evidently incorrect, provided that this can clearly be recognised by the infringement Court on the basis of the presentation of facts and evidence as presented by the parties and also on the basis of the judge's own experiences in assessing technical matters. And:

"[...] Es ist jedoch mit Sicherheit zu erwarten, dass das Nichtigkeitsurteil im Berufungsverfahren keinen Bestand haben wird, wobei es nicht einmal darauf ankommt, dass die Beweislast für den mangelnden Rechtsbestand des Verfügungspatents bei den Nichtigkeitsklägerinnen liegt, weshalb jeder Zweifel darüber, ob der Stand der Technik die patentgeschützte Verbindung offenbart oder nahegelegt hat, zur Abweisung der Nichtigkeitsklage und zur Aufrechterhaltung des Verfügungspatents führt (vgl. BGH GRUR 1984, 339, 340 - Überlappungsnaht; Mitt 1999 362 - Herzklappenprothese). Denn die im Verfahren befindlichen Entgegenhaltungen lassen die sichere Feststellung zu, dass die Verbindung Olanzapin für einen Durchschnittsfachmann nur mit Hilfe erfinderischer Überlegungen aufzufinden war. [...]"

Hence, the Düsseldorf judges have concluded that, in this very particular case and only in view of the very particular mertis of the case, the Federal Patents Court must have been wrong, and they think that it is for sure that there is novelty and inventive step for the claims asserted.

What follows is a lengthy discussion of the reasons given by the Federal Patents Court. Step by step the Düsseldorf judges are presenting arguments in order to demonstrate that the decision of the Federal Patents Court must not only be wrong, but is evidently wrong from its very basic assumptions about the subject-matter as claimed in relation to prior art in the light of applicable case law.

As I am not a chemist, I'll refrain from commenting the technical aspect of the dispute here.

Obviously the Düsseldorf judges are playing at high stakes; if their arguing should finally be disproved by the Federal Supreme Court (Bundesgerichtshof, BGH) they might have made fools of themselves. And, I do not expect that many other judges sitting over infringement cases will be encouraged to go the same way: The risks to be confuted are immense. I am inclined to say that this case is a singularity, a very rare exception from the German way of separating the infringement judgement, on the one hand, from the validity judgement, on the other hand. I don't believe that it represents any shift of paradigms. In its essence the row appears to be something like a serious dispute among judges ow two Courts on the correct interpreatation of a particular piece of prior art within a legal framework set by case law of the Federal Supreme Court.

Maybe that in this particular case the judges had felt that they indeed had obtained an outstanding technical understanding of the subject-matter in question, resulting in a belief to the effect that it was their duty to stand up against some arguing of the Federal Patents Court that in their view could not be left unchallenged.

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Tuesday, June 10, 2008

Ms Neelie Kroes: "Standards Are The Foundation Of Interoperability".

Ms Neelie Kroes, European Commissioner for Competition Policy: "Being open about standards" at the occasion of the

OpenForum Europe - Breakfast seminar, Brussels, 10th June 2008:

"[...] Standards are the foundation of interoperability.

Standards may, of course, be proprietary or non-proprietary. Much excellent technical development has been driven by non-proprietary standards - the internet is awash with acronyms for non-proprietary standards: HTTP, HTML and XML.

Many standards bodies express a preference for non-proprietary standards. Non-proprietary standards avoid the need for licence agreements and royalties. They avoid the need to ask permission if you want to use or develop the technology - follow-on innovation may be easier. They avoid subjecting the future development of the standard and the technology to the commercial interests of the technology's originator.

Of course, proprietary technology development is vital to reward R&D investment and innovation that would otherwise not be made. The patent system is a tremendously effective mechanism to create incentives to innovate, and reward successful innovation.

Proprietary technology is at the heart of Europe's success in second and third generation mobile technologies, for example. Intellectual property protection for technology will always be necessary to give just rewards for investment in R&D. There will always be an important place for proprietary technology and formal proprietary standards.

Standards may also emerge, de facto, from markets: a particular operating system for example, or a particular document format.

Standards emerging from the market can be a good thing if they emerge as a response to consumers' expressed preferences. But they may also be problematic, having none of the safeguards of disclosure that standards bodies typically require.

The patent system, too, has some inherent safeguards:
Disclosure: helps avoid unintentional infringements, and makes it easier to innovate around the patent.
In some exceptional circumstances, patent systems even provide for compulsory licensing.
And of course, patents are limited in time.
However, it is now common to hear criticism of how the patent system is used:
There are so many patents, whose scope is sometimes less than crystal clear, that it can be harder to know what patents read on a particular technology.
There are also concerns that patents are now often used strategically and no longer primarily to protect innovation.
In addition, the growing importance of software means that copyright and, in particular, trade secret protection is often just as important as patents, if not more so, in technology markets. But:
Laws on copyright and trade secrets rightly do not require disclosure of software source code before protection is granted.
Trade secrets are not limited in time - and in effect, as far as technology is concerned, neither is copyright.
And of course copyrights and trade secrets may not be technologically innovative.
Where interoperability information is protected as a trade secret, there may be a lot of truth in the saying that the information is valuable because it is secret, rather than being secret because it is valuable.

This raises the possibility of perpetual exclusion, based on technology which is not even innovative.

Clearly we can do better.

Having worked in business for much of my life, in government for part of it, and now serving as the Commissioner for Competition, these considerations draw me to a simple conclusion.

We need an approach to standards that is based:
on evidence;
on economics; and
on experience.

It is simplistic to assume that because some intellectual property protection is good, that such protection should therefore be absolute in all circumstances.

It is simplistic to assume that because standardisation sometimes brings benefits, more standardisation will bring more benefits.

It is simplistic to assume that if the best approach is sometimes to base a standard on proprietary technology, then that is always the best approach.

And it is simplistic to assume that we can fix on a standard today, without paying attention to the risk of being locked-in tomorrow.

So what does this mean in practice?

First, we should only standardise when there are demonstrable benefits, and we should not rush to standardise on a particular technology too early.

Second, I fail to see the interest of customers in including proprietary technology in standards when there are no clear and demonstrable benefits over non-proprietary alternatives.

Third, standardisation agreements should be based on the merits of the technologies involved. Allowing companies to sit around a table and agree technical developments for their industry is not something that the competition rules would usually allow. So when it is allowed we have to look carefully at how it is done.

If voting in the standard-setting context is influenced less by the technical merits of the technology but rather by side agreements, inducements, package deals, reciprocal agreements, or commercial pressure ... then these risk falling foul of the competition rules.

In addition, if we are to include proprietary technology in a standard, then ex ante disclosure may help those involved make a properly informed decision. Competition law should not stand in the way.

This will almost always entail ex ante disclosure of the existence of essential patents. And it may increasingly entail ex ante disclosure of maximum royalty rates. Both can increase the effectiveness of the standard setting process, lead to more competitive solutions and reduce the risk of later antitrust problems. Standards bodies could very often require disclosure without fear of competition law intervention.

Standards bodies do important work in difficult circumstances. But like all of us their rules need to keep pace with the changing commercial environment. If they need help in tightening up their rules to avoid being manipulated by narrow commercial interests, or to design the right ex ante rules, then they have my support. My door is always open.

Fourth, if we extend intellectual property protection for technology, then we should only do so when it is justified under intellectual property principles, i.e. on the basis of evidence that such extension will lead to more innovations and will therefore promote consumer welfare.

Finally, if standards develop through customer preferences, most of the time, we should do nothing.

That stance may surprise you. But it is often wise to resist the impulse to regulate. If the proprietary technology initially appears to harm consumers more than it helps them, often the market will find a way out of the problem.

Of course, although I am a great believer in the market finding the right result, I am not naive. Sometimes intervention will be necessary.

When a market develops in such a way that a particular proprietary technology becomes a de facto standard, then the owner of that technology may have such power over the market that it can lock-in its customers and exclude its competitors.

Where a technology owner exploits that power, then a competition authority or a regulator may need to intervene. It is far from an ideal situation, but that it is less than ideal does not absolve a competition authority of its obligations to protect the competitive process and consumers.

In essence the competition authority has to recreate the conditions of competition that would have emerged from a properly carried out standardisation process.

There seem to me to be two possibilities and, depending on the case, either or both may be necessary.

First, the de facto standard could be subject to the same requirements as more formal standards:
ensuring the disclosure of necessary information allowing interoperability with the standard;
ensuring that other market participants get some assurance that the information is complete and accurate, and providing them with some means of redress if it is not;
ensuring that the rates charged for such information are fair, and are based on the inherent value of the interoperability information (rather than the information's value as a gatekeeper).
In addition, where equivalent open standards exist, we could also consider requiring the dominant company to support those too.

Better, much better, than trying to sort out these problems, is preventing them from arising. And we all have a responsibility to ensure that this type of perpetual lock-in does not happen, and, where it does happen, we have a responsibility to minimise the damage.

Here I am not speaking of my role as the Competition Commissioner, but as a purchaser of technology.

What can purchasers do? Quite a lot.

Look at Apple. Over the last couple of years there have been some calls to regulate Apple - in particular to ensure some interoperability between competing music stores and its iPod music players, and between competing music players and music from the iTunes store.

The issue arose because first, the music labels insisted that Apple used digital rights management technology, and then second, Apple's iPod was a tremendous success. But now the major labels have licensed other music stores to provide music in MP3 format, a format that can play on the iPod and on other players. So pressure from consumers, and possibly concern from the major labels about over-reliance on Apple, looks to have led to a timely market-based solution.

This is important. If consumers can avoid lock-in to a single vendor, by exercising influence through purchasing behaviour, they may be wise to do so.

As purchasers, we need to be smart when we buy technology. We need to be aware of the long term costs of lock-in: you are often locked-in to subsequent generations of that technology. There can also be spill-over effects where you get locked in to other products and services provided by that vendor.

That is just bad purchasing.

And that is why the Commission has committed that:
for all future IT developments and procurement procedures, the Commission shall promote the use of products that support open, well-documented standards. Interoperability is a critical issue for the Commission, and usage of well-established open standards is a key factor to achieve and endorse it.
This policy, adopted last year, needs to be implemented with vigour.

There is much to learn from other public bodies such as Munich - and I am delighted to have the Mayor of Munich here this morning to tell us about his experience. But Munich is not alone: there is also the German Foreign Ministry, and the French Gendarmerie. The Dutch Government and Parliament are also moving towards open standards.

The Commission must do its part. It must not rely on one vendor, it must not accept closed standards, and it must refuse to become locked into a particular technology - jeopardizing maintenance of full control over the information in its possession.

This view is born from a hard headed understanding of how markets work - it is not a call for revolution, but for an intelligent and achievable evolution.

But there is more to this than ensuring our commercial decisions are taken in full knowledge of their long term effects. There is a democratic issue as well.

When open alternatives are available, no citizen or company should be forced or encouraged to use a particular company's technology to access government information.

No citizen or company should be forced or encouraged to choose a closed technology over an open one, through a government having made that choice first.

These democratic principles are important. And an argument is particularly compelling when it is supported both by democratic principles and by sound economics.

I know a smart business decision when I see one - choosing open standards is a very smart business decision indeed."

In the first place, this - of course - addresses Microsoft and their desparate efforts to see their

OOXML specification raised to be an ISO standard.

However, I'm also afraid not everybody acquainted with patents has understood that message to its full extent. The relationship of the patent system, on the one hand, and the world of open standards has not yet been worked out fully. And, there is still some risk that the baby will be thrown out with the bath water as soon as the political debate on this issue starts: Some folks e.g. from

FFII supporters' grassroots movement might well be tempted to do so. Nevertheless, it is a class of problems that must be dealt with in a competent and sensible manner, and the organisational strength of the anti-patent moralists' movement appears to be on a low for the time being.

And, finally, up to today it appears that EPO is still committed to proprietary standards when it comes to electronic filing. Their

epoline software suite only runs under Microsoft Windows:

[...] 2.4.2 Software requirements

The software is supported on the following operating systems:
Microsoft Windows NT 4.0
Microsoft Windows 2000
Microsoft Windows XP
Microsoft Windows 2003 Server
The following software should already be installed on the target PC (the machine where the eOLF thin client/local installation client is to be installed):
Adobe Reader Version 5.x, 6.x, 7.x, 8.x
Gemplus driver installation package
GemSAFE Libraries 3.2.5 or higher
If the ASOS machine is to be used as a server only (no client installed on the same machine), no software has to be installed beforehand. [...]

To the best of my knowledge, also GemSAFE and Gemplus software are available exclusively for operation under various flavours of Microsoft Windows.

Ah, yes, in a formal sense they have

declared their software suite to be open source. But this might well be considered as being something like a fig leaf. Take, for example, the sources of the epoline client software eOLF V3.20 from

sourceforge.net to be compiled using

Delphi 7: If you attempt to have a full download, you'll be offered something like a file eOLFv3.20src.exe representing a self-extracting archive that only runs on a computer with Microsoft Windows. I nevertheless have bothered to have a look into this kind of archives and, no surprise, I found sources cluttered with entries into various Microsoft APIs. Take, at random and for example only, a source file v7/richedit/RichEdit2.pas clearly indicating a Microsoft Windows strategy:

uses

  Windows, Messages, SysUtils, Classes, Graphics, Controls, Forms, Dialogs,
  StdCtrls, ComCtrls, ComStrs, RichEdit, Langs, WStrList, DB, DBCtrls,
  ActiveX, OleCtnrs, olectrls, ComObj, OleDlg, RichOle, Menus, Printers;

[...]

var
   Storage:IStorage;
   OleObject:IOleObject;
   OleSite:IOleClientSite;
   ReObject:TReObject;
   OleCache:IOLECache;
   Data: TOleUIChangeIcon;

[...]

Borland Delphi produces code for machines running Microsoft Windows only. Kylix, which allowed Delphi code to be ported to Linux relatively easily, discontinued. CrossKylix discontinued and CrossFPC not released and inactive. The above-quoted code lines obviously refer to Microsoft Windows proprietary standards like

OLE or

ActiveX.

Hence, in reality the epoline software by no means appears to be platform independent. I can't see any commitment to open non-proprietary standards. In fact, this looks like more than ten years of programming on the basis of proprietary standards. A case of quite deep vendor lock-in, indeed.

Should, in many years from now and by means of a successfully closed EU Community Patent project deal, the European Commission ever become a majority shareholder in the European Patent Organisation, a successor in Office of Ms Kroes perhaps might wish to talk to the EPO President and to the Administrative Council in order to make sure that open standards get adopted there.

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Monday, June 09, 2008

At Long Last: European Patent Register, Online File Inspection Now Available 24/7.

From the

website of EPO:

"The European Patent Register and the Online File Inspection Facility, Register Plus, is now available 24/7.

The database is updated on a 24 hour cycle, and at any time the visible content will be as at 19.00 the previous evening.

The European Register and Online File Inspection will be unavailable from 05.00 to 05.30 for daily maintenance.

We will keep any other outages to a minimum and we will inform you in advance of any downtime. [...]"

New OHIM Website from July 01, 2008

From

OHIM's website:

"[...] OHIM is launching a new website on 1 July. The site has been designed to be more welcoming while also providing professional users with easy access to the tools they need to register trade marks and designs and to manage their interactions with the office. The front page includes a "professional area" with direct links to MyPage, legal texts and case-law. There is also quick access from every page to OHIM's databases and to the e-filing tools and forms.

The new site, which has been developed after consultation with users, includes better search features, an expanded news service, and access to basic information to help less frequent visitors orient themselves. The content has been rewritten and reorganised, and OHIM will also be introducing interactive elements including user discussions, polling and multimedia. More information will be made available progressively over the coming weeks to help users make the transition to the new website. [...]"

Until then, keep fingers crossed, hoping that the website will not fall victim to some sort of guys who do pay more attention to trendy gorgeous design gimmikcs like flash animations or huge colourful but effectively dysfunctional images than to pure and robust functionality for information-seeking users.

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Wednesday, June 04, 2008

UK: Informal Consultation Paper on The Modernisation of the Trade Marks (International Registration) Order.

From the

Consultation Document:

"[...] Currently, the legal framework for the examination of international trade marks designating the UK (international marks (UK)) is a mix of the self standing international provisions in the Madrid Protocol ('the Protocol') and secondary legislation in the Trade Marks (International Registration) Order 1996 (SI 1996 No 714) ('the Order 1996'), made under powers conferred by section 54 of the Trade Mark Act 1994 (as amended, 'the Act'). The Order 1996 has been amended five times, normally in the wake of changes to domestic rules, since 1996. [...]

The UK-IPO now propose to consolidate this instrument, and incorporate changes made to domestic rules (The Trade Mark Rules 2008 ('the Rules') currently subject to consultation) as they apply to international marks (UK). [...]"

The deadline for submitting comments lapses on June 30, 2008.

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Monday, June 02, 2008

Will Community Trade Marks Become Cheaper After All?

From

Saturday's edition of the Financial Times (FT.com):

"[...] A cut in European Union trademark fees could finally be in sight after Brussels said it planned legal changes to tackle a mounting surplus of funds at the EU trademark office this year.

Charlie McCreevy, the internal market commissioner, told a meeting of industry ministers in Brussels that he planned a legislative proposal before the end of the year. [...]"

A bit of the background beomes clear from

Document 9874/08 drawn up by the Council Secretariat. The Document conveyed a Note received from the Portuguese delegation on the abovementioned subject, to be raised under "Any other business" in the meeting of the Competitiveness Council which was held on May 29-30, 2008.

See also my earlier posting

here.

The Note argues that, as a result of the high fees charged for Community trade marks, the Community Office currently has a surplus of more than EUR 300 million which is increasing at the rate of EUR 1 million per week.

The Portuguese arguted that, faced with such wastage, OHIM took the view that fees for Community trade marks should be reduced for the benefit of Community undertakings and citizens.

A similar position was adopted by the Competitiveness Council in Brussels in May 2007 in its conclusions on the Financial Perspectives of OHIM and the further development of the Community trade mark system1. In those conclusions the European Commission was called upon to immediately propose a reduction of the fees for Community trade marks.

Portugal's official position is that the fees for Community trade marks must be unconditionally and unrestrictedly reduced. To date, however, the fees remain unchanged.

See also

Mr Joff Wild's posting on his IAM Blog from which I took a hint towards the FT.com article.

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Further News on EU Patent Politics.

On Wednesday June 11, 2008, the EU Working Party on Intellectual Property (Patents) will have another meeting (see invitation Document

CM 2046/08). The agenda for that day comprises:

Discussion of the Draft Agreement on the European Union Patent Court (9124/08 PI 24 COUR 19): examination of Part III (Articles 22 to 56); and
Draft Council Regulation on the Community Patent: first exchange of views on the revised proposal (9465/08 PI 25)

Said Document 9465/08 conveys a revised proposal for a Council Regulation on the Community patent . Changes to the previous version of the proposal
(

Document 7119/04) have been based on recent discussions in the Working Party on Intellectual Property (Patents). Obviously the word processors used by the EU Commission and by the Slowenian EU Presidency still do not have a redlining function; it is quite tedious to find out where the differences between both versions are. A few remarks so far:

The amended text of the recitals now emphasises that a cost effective, legally secure Community patent will in particular benefit Small and Medium-Sized Enterprises (SMEs) and would be complementary to the Small Business Act for Europe. The creation of such a unitary title should make access to the patent system easier, less costly and less risky, in particular for SMEs. Moreover, it is stressed in the amended text that the availability of a unitary title providing for equal protection throughout the entire territory of the European Union will enhance and help raise effectiveness of the fight against counterfeiting and patent infringement to the benefit of inventors, businesses and society at large. A complete geographical coverage without any loopholes will ensure effective patent protection at all external borders of the EU and will help to prevent the entry of counterfeit products into the European Single Market on the basis of Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights.
Again in the recitals, the amended text makes cleat that the EPO will play a central role in the administration of Community patents and will alone be responsible for examination of applications and the grant of Community patents. Nevertheless, the topic of a European Patent network is conceptually introduced: the paper assures that all National Patent Offices will likewise have an important role to play, inter alia by giving advise and support to potential applicants for Community patents, in particular SMEs, by receiving applications, by forwarding applications to the EPO, and by disseminating patent information. National Patent Offices shall be compensated for these activities. In particular, applications for Community Patents can be filed directly with the EPO or via the National Patent Office of a Member State. In order to facilitate access to the patent system, in particular for SMEs, in those Member States who do not have a language in common with one of the EPO's languages, it should be possible for applicants to file an application in the working language of the National Patent Office, where this is an official language of the EU. When the applicant files in a non-EPO language he/she shall designate one of the official EPO languages as language of proceedings. The costs related to translations shall be borne by the system ('mutualisation of costs'). The level of procedural fees for processing an application for a Community Patent shall be the same regardless of where the application is filed and will be related to costs for handling the Community Patent.
It is further anticipated in the recitals that the EPO should also be entrusted with the task of administering the Community patent in the post-grant stage, for example, as regards the collection, distribution of annual fees to National Patent Offices and the management of the Register of Community Patents.
To the extent that this Regulation does not provide otherwise the substantive law applicable to the Community patent, for example as regards patentability, the scope of patent protection and the limitation of the effects of the patent, will be governed by the pertinent provisions of the Munich Convention and national law where this complies with Community law.
The Community patent shall constitute a third option. Applicants shall remain free to apply instead for a national or a European patent. The amended Regulation is without prejudice to the right of the Member States to grant national patents and shall not replace Member States' laws on patents or European patent law as established by the Munich Convention.
It is further stipulated in the recitals that the renewal fee for a Community Patent must not exceed the level of the corresponding renewal fees for an average European Patent and will be progressive throughout the life of the Community Patent. Renewal fees for Community Patents will be payable to the EPO, which will keep not more than 50 percent to cover its costs. The remaining amount will be distributed among the National Patent Offices of the Member States in accordance with a distribution key. The key for distribution shall reflect a basket of fair, equitable and relevant criteria, which should relate to patent activities and the size of the market. They should also apply balancing factors, in particular where Member States do not have an official language in common with the EPO and where Member States have a disproportionately low level of patent activities and there is a need for promotion of innovation. The Council shall agree on the relevant criteria for the level of renewal fees and for the fixing of the distribution key. A Select Committee of the Administrative Council of the EPO shall, once the Community patent enters into force, implement these criteria and fix both the level of the renewal fees and the precise distribution key for their allocation.
Art. 2 Para. 1 now makes explicitly clear that the Community patent is a patent designating the Community which is granted by the EPO under the provisions of the Munich Convention. Para. 4 states that the provisions of the Munich Convention shall apply to the Community patent to the extent that this Regulation does not provide for specific rules.
Concerning Licences pf Right, Article 20 now states that on written request by one of the parties, the Community Patent Court shall determine the appropriate compensation or review it if circumstances have arisen or become known which render the compensation determined obviously inappropriate.
Apparently provisions for providing compulsory licenses as given by Art. 20 and 21 of the original version have been scrapped. However, this might be covered by Recital 6 stating that Any negative effects of a monopoly created by a Community patent should be prevented through a system of compulsory licences. This is without prejudice to the application of Community competition law by the Commission or national authorities. However, the European Union Patent Court should be entrusted with the grant of compulsory licences in situations not falling under Community competition law.
Article 24a now says that applications for a Community patent shall be filed in one of the languages referred to in the Munich Convention. However, applicants may instead choose to submit their application in one of the official languages of their Member States, which shall be an official language of the EU. In the latter case the application shall be translated into one of the official languages of the EPO which should be designated by the applicant as language of proceedings. The translation costs concerned shall be borne by the system.

Obviously certain financial provisions are made in order to make sure that national patent Offices will not have to suffer should the EU Community Patent later become a huge success comparable to the EU Community Trade Mark administrated by OHIM. There appears to be, however, no sound justification for such measure beyond national egoism of EU Member States.

And, there might be some background behind the complete shift of the issue of compulsory licences to the field of competition law which deserves a broader discussion.

Also, Article 24a seems to be a bit odd. The crux appears to be that the translation costs concerned shall be borne by the system. Wow! Does that mean that EPO will refund the applicant's translators bills? I am in doubt: I am afraid that in plaintext this means that someone from within the European Patent Network will do the translation work, free of charge for the applicant. In the effect this might mean that the applicant will lose control of the translation process and its quality characteristics.

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