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A broad alliance of technology companies, including Google(s goog), Apple(s aapl), Microsoft(s msft) and Samsung, has asked European authorities to fix the rules for an EU-wide Unified Patent Court ahead of its launch, in order to fend off patent trolls.
These tech giants are no strangers to patent wars — their global skirmishes have touched on Europe on a number of occasions. But this isn’t about such titanic conflicts – it’s about so-called trolls; companies that don’t actually make anything themselves, but that rather buy up patents and use them to turn practicing tech firms (particularly small, defenseless ones) into cash machines.
These bullying tactics are all too familiar in the U.S., largely because the U.S. allows relatively abstract concepts to be patented. In the European Union, software patents are not granted quite so freely, but the big tech firms still worry about the rules that will apply under a new patent regime that will launch in 2014.
Europe has been trying to unify its patent system for a good three decades, largely on the basis of cost – it is crazily expensive to get a patent that applies everywhere in Europe, because it means applying in dozens of countries, many with their own languages.
At the end of last year, the European Parliament finally approved an EU-wide patent system. Part of this will involve the ability to apply once and win patent protection everywhere in the EU, but another major strand is the creation of a Unified Patent Court (UPC), which will do away with the need for parallel patent litigation in different national courts. The UPC will however comprise multiple courts itself.
It’s the UPC’s rules that Microsoft, Apple, Samsung, Google, HP(s hpq), BlackBerry(s bbry), Cisco(s csco), Deutsche Telekom, Intel(s intc), Yahoo(s yhoo) and others (it really is quite the roster) are worried about. Specifically two things:
- Bifurcation: Under the UPC Agreement, different courts will be able to judge on two strands of a case, namely the validity of the patent and whether or not it was infringed. The tech companies are worried that the holder of a low-quality, over-general patent might be able to win a quick infringement ruling in a friendly jurisdiction, before the other court has established whether the patent is rubbish.
- Injunctions: The companies also think the rules aren’t clear enough about the threshold for injunctions, particularly as an injunction could now apply across the whole EU, rather than just in one country.
As Google explained in a blog post on Thursday:
“The economic impact of patent troll litigation [in the U.S.] has been enormous, draining an estimated $29 billion in direct costs from productive enterprises in 2011 alone. Over the years Google has faced down hundreds of patent claims, mostly from patent trolls, but only after paying millions of dollars in legal fees.
“Europe now has a clear opportunity to adopt rules that limit the risk of fostering patent trolling in Europe. Patent trolls have no real business interests to defend. So, at the very least, trolls should have to prove their patents are actually valid and consumer harms should be considered before giving trolls blocking orders that would impact 500 million Europeans.”
These are valid concerns. As we have seen in Germany with the Apple-Motorola battle in particular, patent disputes have led to popular products being removed from store shelves, albeit very briefly. That kind of disruption could be hugely magnified once one patent ruling applies across the EU, so it’s very important to get this stuff right before the system lurches into action.
I’ve asked the office of Michel Barnier, the internal market commissioner who has shepherded the creation of the UPC, for comment on the tech firms’ concerns, and will add it in as and when I receive it.