Dr. Klaus Grabinski on the rules of the Unified Patent Court – USPTO Fee Reductions – USPTO Patent Eligibility Guidance

Dr. Klaus Grabinski

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Dr. Klaus Grabinski talks with us about the rules of the Unified Patent Court, language issues, training of the judges and many other aspects. We also give you information about the latest USPTO fee reductions for trademarks and the new detailed USPTO Patent Eligibility Guidance in response to the Alice decision of the US Supreme Court.

Happy listening!

IP FRIDAYS

Co-Presenters:

Rolf Claessen and Kenneth Suzan

Episode 19 – January 9, 2015

RC =   Rolf Claessen

KS =    Kenneth Suzan

Hi.  This is Jeannine Percival Wright, the Director of Legal Affairs for Intellectual Property and Litigation with True Religion Brand Jeans in beautiful Los Angeles, California.  You are listening to IP Fridays.  Thanks for the great Podcast guys!

KS:      Hello and welcome to this episode of IP Fridays.  Our names are Ken Suzan and Rolf Claessen and this is THE podcast dedicated to Intellectual Property.  It does not matter where you are from, in-house or private practice, novice or expert, we will help you stay up-to-date with current topics in the fields of trademarks, patents, design and copyright, discover useful tools and much more.

RC:      Welcome to Episode 19.  Ken and I want to wish you a successful and healthy year 2015.  We have a special treat for you today, a Judge of the Federal Supreme Court in Germany, Dr. Klaus Grabinski is making the rules for the Unified Patent Court and will give us a status update, I will tell you about the USPTO which has released a Patent Eligibility Guidance, and Ken will tell you about fee reductions at the USPTO.

But before we jump into all of this, I want to announce the winners of the Christmas mugs that I promised.  One Christmas mug goes to Reg in Los Angeles.  She is writing, “Thanks for a great podcast.  It is a great addition to my weekly lineup.  What’s great about it is that it is international in nature and not purely focused on the USPTO.”  Another Christmas mug goes to Ed and he is writing, “Thank you very much for putting these podcasts together.  I have enjoyed listening to all of them as they are very informative.”  He wants to know more about the interim guidance on subject matter eligibility by the USPTO which I am talking about today and he also wants to know more about patent right enforcement in China which we will talk about in the future.  One mug goes to Ruth in London.  She is our most dedicated and loyal listener.  Ruth you are listening to this and you know who I mean.

I also want to already tease an event that we are hosting.  Both Ken and I will be present at the INTA meeting in San Diego in May and we will be hosting a meet-up so if you want to meet us in person in San Diego, you will get a link in the next episode where you can register for the meet-up.  It will likely be on Tuesday evening.  We want to meet you in person and we will also invite the guests that have been on the show so far.  So, Ken, you wanted to tell us more about the fee reductions at the USPTO.

KS:      Rolf, you will likely pay more for some items in your daily life at the grocery store, convenience store or even when your take your next vacation.  However, in 2015 the United States Patent and Trademark Office is rolling back prices for certain filing fees as long as certain conditions are met.

Effective January 17, 2015, there will be a new type of application that can be filed at the USPTO which carries a new pricing structure.  Known as “TEAS Reduced Fee”, practitioners and trademark applicants should consider this option to take advantage of the $50 fee reduction per class.   This lowers the filing fee for one class of goods or services from $325 to $275.   To obtain this savings, the application must be filed electronically via the Trademark Electronic Application System or “TEAS” application form located at www.uspto.gov and the applicant must authorize that all communications will be via e-mail, and that all responses and other documents required during prosecution of the application will be filed electronically.

For those applicants opting for the TEAS Plus application, where the applicant chooses preset descriptions and identifications of goods and services, the fee reductions continue such that the filing fee is reduced from $275 to $225 per class.  The identifications come from the USPTO’s Acceptable Identification of Goods and Services Manual which is available at www.uspto.gov.

For trademark renewals, the savings continue when a TEAS renewal application is filed.  The filing fee for renewals will be reduced from $400 to $300 per class.  That is a savings of $100 per class.

The fee reductions are being put into place this year because the USPTO has increased their efficiency levels and have developed what they call an “operating reserve” in light of these department efficiencies.

The USPTO hopes that these fee reductions will encourage additional trademark and service mark filings in 2015 and beyond.

There is a helpful chart summarizing the new filing fees at http://www.uspto.gov/trademarks/teas/Reduced_Fees_Info.jsp   A link to this Webpage is located in the Show Notes.

RC:      So if you want to know more about this, go to IPFridays.com/trademarkfeereductions.

ROLF CLAESSEN’S INTERVIEW WITIH DR. KLAUS GRABINSKI:

Here is the interview with Dr. Klaus Grabinski who is a judge at the German Federal Supreme Court and is making the rules for the Unified Patent Court.

RC:      I am very excited to be joined by Dr. Klaus Grabinski today.  He is appointed as a Judge in the Federal Supreme Court at the Bundesgerichtshof in 2009 and he is currently a member of the 10^th Civil Division (X. Zivilsenat).  Before that, he was a Presiding Judge at the District Court in Düsseldorf, where we actually met.  I had the chance and fortune to be one of his trainees for two months and so welcome to the show.

KG:     Thank you very much.  It is my great pleasure to contribute to this program and it is also of course a pleasure to speak to you again after so long of a time.

RC:      Maybe you can tell our listeners a little bit more about yourself?

KG:     Well, as you already mentioned, I am a judge at the Federal Court of Justice which is the Supreme Court of Germany with regard to civil and criminal law matters where I spend a bit more than half of my time dealing with patent cases, revocation cases, as well as infringement cases.  I am now, for about three or four years, a member of the Drafting Committee that is dealing with the drafting of the rules and procedure of the future Unitary Patent Court.

RC:      Since you are currently working on the rules of the Unified Patent Court, maybe you can give our listeners who may be copyright or trademark practitioners a brief summary of what the European Patent with Unitary Effect actually is and what the Unified Patent Court is and maybe you can also summarize the benefits that people are expecting from these new entities?

KG:     Please let me start with a short look upon the current situation.  You know we do have in Europe National Patents and we have the European Patents.  European Patents essentially means you have one stop for the granting of the patent, meaning you can file an application with the European Patent Office and when you are successful and the patent has been granted what you essentially get is a bundle of patents meaning you get protection like a National Patent in the contracting states you designated.  The problem here is that when you want to enforce the patent, you have to go to the Court of each of the contracting states to which you want enforced on the patent which resulted in the past in a number of parallel infringement litigations, namely in Germany, in the UK, in the Netherlands, in France, etc. and so some people thought that this is costing a lot of money and a lot of time and sometimes also results in different decisions and so there was kind of a demand for a one-stop system not only on the prosecution side, but also on the infringement – the enforcement – side.  This is essentially the idea of having one Court for a number of European states with regards to infringement litigation.

RC:      Right and maybe just to briefly bring our listeners up-to-date with the European Patent with Unitary Effect, currently the situation is the way that after the granting of the patent you would have to validate in each national state (member state) and in the future it might be possible to actually validate the patent in most of the European countries as one entity.  At the moment, just Italy and Spain are not playing with us but the rest of the member states joined this new effort, basically.

KG:     Yes, you are right.  We will essentially have two kinds of European patents.  The so-called classic bundle patent which still exists and this bond patent during the transitional period can be enforced before the National Court or alternatively before the new Unified Patent Court, unless the patent owner opted out.  There will be an opportunity for opting out of the patent and the consequence of this opt-out would be that the patent will still stay exclusively with the National Court as the situation is right now.  But the new Court will also deal not only with the bundle patent and the classic European Patent, but also with this new patent you mentioned, the so-called European Patent which will give unitary protection to all member states and with regard to this new patent, the unified patent the new Court will be the only Court also during the transitional period with regards to infringement litigation and I am speaking of infringement litigation which also includes a revocation action or consequence of revocation.

RC:      Right.  In the beginning of November, in Trier there was an oral hearing on the 17^th so quite a few alterations in the version of the rules and hopefully the final draft of the rules for the Unified Patent Court (“UPC”) so can you give our listeners a brief summary of this particular meeting?

KG:     Yes.  As you already mentioned there were already a number of drafts before and the draft of the Rules of Procedure which was the basis for the Trier public hearing was the so-called “17^th Draft” and you may raise the question why do they need so many drafts but maybe as a kind of explanation in this regard this is the I think the first example where you have a Rules of Procedure that are not only inspired by the Civil Law or Common Law but that are a kind of merger between the Civil and the Common Law Procedural Law and so to get it to results also in view of a very particular litigation which is the patent litigation it took quite an effort and that is the reason we are now talking about the 17^th Draft.  As you broadly mentioned, the 17^th Draft has been the basis for this oral hearing and all stockholders could attend and comment on this draft.  The public hearing essentially dealt with four main issues, controversial issues to some extent, and the first one was the so-called “opt-out.”  I already mentioned this.  You can opt out of the European Patent from the new Court if you wanted to stay with the National Courts and there are a few technical issues I already discussed earlier.

The second issue was the language regime before the new Court, the Unified Patent Court, in particular, before these local and regional divisions.

The third point was the injunctive relief as you probably know, injunctive relief will be a matter of discretion under the agreement on the Unified Patent Court which is different from the situation we have at least in Germany right now where the Court has no discretion.  Once infringement has been established, the Court has to issue an injunctive order unless there are some reasons with regard to good faith but which is really very, very exceptional.  But with the new Court, it is a discretion but still even though it is discretion, which was also mentioned in Trier, and probably there are some indications that the new Court will follow in the practice of the English Courts which, even though they have discretion in deciding on injunctive relief, most of the time they issue an injunctive order once infringement has been established and this was largely discussed in Trier.

The fourth point is about procedural appeal, which was also a controversially discussed issue, meaning whether all procedural orders and decisions in all of the Courts can be appealed – and the current 17^th Draft provides in this regard that procedural decisions can be appealed when a relief for an appeal has been granted and if no relief for appeal has been granted by the Court in the first instance, then the party concerned may issue a regret for a discretionary review on which the so called standing judge of the Court of Appeal will decide and only if he supports the discretionary review then the wait is over for a procedural appeal and now is not allowing discretionary review then this issue will not go through the Court of Appeal.  So these four issues were largely discussed in Trier and in addition to this also a number of more technical issues.

RC:      Right and I heard there were some discussions about the language that can be used by the Regional Courts.

KG:     Yes, the principle with regard to language of proceedings before the Local or Regional Courts is that the language is the official language of the participating member state that is hosting the Local or the Regional Division.  However, it is also provided for in the agreement that in addition or instead of this language, it can be one of three official languages of the bureau meaning German, English and French and so there is now a lot of discussion going on whether Local Divisions should at least in addition to the official language also should add one of the EPO languages and, of course, most of the times it is discussed that English should be an additional language to the local language and what was discussed in Trier is whether this second language, the EPO language, can also be restricted only to a particular part of the proceeding meaning that for example, English as a second language, can be only used for the written pleadings or only for the oral hearings which could result in a situation in which the plaintiff could use English for example in a local division in Germany but one defendant would use German and the Court would also use German as a language and discussion in Trier was essentially about whether this is a good way to deal with the proceedings and what was discussed for example was a situation before the EPO Board of Appeals where some of the people attending the public hearing were mentioning that also one language is used but also a second or third of the EPO official languages.

RC:      That is interesting to see that some other languages besides English might play an important role in the system.  What in your opinion would be the major obstacles that still need to be overcome for the system to really work?

KG:     I think that the legal obstacles that still have to be overcome and the practical or material obstacles that have to be overcome.  Let’s start with the legal points.  The agreement provides that the whole system is ready for start when 13 of the participating member states have ratified the agreement exactly and including the three big ones where most of the applications were filed in the past.  Currently we are at a stage where five of the participating member states have rectified the agreement including France as one of the big three.  We are waiting for the rest so that the threshold is met.  A lot of other pieces of legislation have to be prepared concerning questions of, for example, legal aide or the provisions dealing with qualification of patent attorneys to be admitted to the Court or examine cases on their own so a lot of other issues have also still to be prepared in this regard and, of course, also the Rules of Procedure are almost finished but not finished yet.

RC:      So you just mentioned some legal obstacles.  Are there any material obstacles?

KG:     Yes.  I think one of the most challenging ones is the setting up of the IP infrastructure for the new Court because this is technically challenging and that it also needs communication between the IP specialists but also from the legal point of view and this has to be set up in a number of contacting member states which we do not know at the moment where the local or the regional divisions will be.  So there’s still a lot of work to be done and I think it has to be really operational when the system is going to start.  We cannot afford to have a non-operational IP system kicking off the whole thing.  So this, I think, is one very essential point.  Another one is, of course, the training of the judges and also the setting up of the building and the personnel below the judges’ level and all these kinds of things.

RC:      Right.  So, this Court will probably handle or people expect the Court to handle quite a lot of patent litigation so where do you see the German Patent Litigation going and will there be the bifurcation system in the future or do you see that going away?

KG:     Currently I do not expect major changes in this regard.  The main problem at the moment with regard to bifurcation is probably that it takes too long to get the decision from the German Patent Court and parallel litigation to parallel infringement litigation before one of the District Courts.  This is a problem that has to be addressed.  Once infringement litigation has been started, you will get in a shorter time also first instance decision in the revocation proceedings then I think by and large the bifurcation system as we have it right now in Germany is a well-functioning system and could continue also in the future.

RC:      So do you see the number of patent litigation cases going down in the near future?  Let’s say for Düsseldorf, Hamburg, Munich or Mannheim and do you see the Unified Patent Court replacing basically the Patent Litigation Courts that are currently being used?  Or do you see that as an additional Court where people would go to court?  Do you see a future for the National Courts, basically?

KG:     I think a number of the stakeholders will lean back for some time and see how things are evolving once the new system has started and when the new system is doing well, then they might be interested also to litigate before the new system.  If the new system is not doing well, at least for the traditional period, of course the National Courts will still be attractive.  There you know what you will get essentially.  So I think for the time being, at least for the first seven years, the transitional period will last seven years –  I think we will see both systems evolving step by step and but of course you still have the National Courts that have in the past proven to be efficient at least in some contracting member states and I think for the time being you will see both systems and only the new system is really going to be a success story then of course you will see at least to some extent a shift from the National Courts to the new system.  Maybe also depending a bit on the kind of case, whether it is cross-border aspect or whether it is only a litigation or infringement that concerns only one country.  Then, of course, it may still makes sense to go national.

RC:      For example, our firm mostly represents medium-sized clients, not really huge corporations, and the medium-sized clients or even the larger corporations see that the German system is quite cost efficient compared to the expected costs of the UPC and it is probably quicker and anyway currently like 2/3rds of all patent litigation cases are handled by German Courts in Europe so my personal expectation is that the German Court system will still have a very good future in patent litigation.

KG:     Yes, basically I would support this theory.  I do not feel that German patent judges will get unemployed in the near future.

RC:      Sure.  So some applicants fear that the judges with nearly no patent experience might cancel their EU patents.  Are these concerns justified?

KG:     I think this is where the future will tell.  The statute, like the agreement, essentially provides two requirements with regard to the selection and appointment of judges.  The one point is that the judges shall have the experience in patent matters and the second point is that a balance composition of the Court, geographically balanced.  I think both aspects are to some extent justified because of course we need experienced judges in the new system otherwise you could not deal with this patent method.  On the other hand, of course this is going to be a Court for not only the two, three, four, five experienced member states but for a number of more member states and they also have to be represented to some extent.  My personal formula would be, and I am thinking of my time as a presiding judge in Düsseldorf where we also had young colleagues who had no experience as part of the judge’s panel  – and in Düsseldorf, where a panel of three judges descides the case, as long as only one less experienced judge I think the system is still working quite well as long as the other two judges are experienced.  Transferring this to the new system I will say we also have a panel of three judges, three legally qualified judges, at least with regard to the local and regional division, as long as you have two experienced judges on the panel, I think it is possible to have a third one that has to gain experience but it would be the other way around, only one experienced judge and two not experienced judges, then I think I would be a bit worried about the future on the system.

RC:      Thank you very much for your valuable time.  This has been extremely helpful to hear from the source, basically, of the rules.  So, thank you very much to be on the show.

KG:     It has been my pleasure.  Thank you very much.

RC:      I really hope you got as much out of this as I did.

Finally, I promised to tell you more about the USPTO Eligibility Guidance for patents following the Alice decision in June.  The USPTO issued this Guidance.  It is a 56 page document, so quite lengthy and replaces the very similar case of our guidelines, so I won’t go through all of these pages.  I will leave this to you.  But in general, the Guidance goes through the various decisions.  In Alice, the Supreme Court made clear that patents can no longer be granted for natural phenomenon and for just abstract ideas and in this Guidance the USPTO gives examples for natural phenomenon such as isolated DNA or a correlation that is the consequence of how a certain compound is metabolized by the body or electromagnetism to transmit signals or a chemical principle underlying the union between fatty elements and water.  As examples for an abstract idea, the USPTO is listing mitigating settlement risks or hedging, creating a contractual relationship using advertising as an exchange of currency or similar abstract ideas.  So in Alice, the Supreme Court developed the idea to grant patents based on such phenomenon or abstract ideas if there is significantly more to the claim and in the Guidance the USPTO defines significantly more as an improvement to another technology or technical field, improvements to a functioning to the computer itself, applying the judicial exception with or by use of a particular machine, effecting a transformation or reduction of a particular article to a different state or thing, adding a specific limitation other than what is well understood as routine and conventional in the field or adding unconventional steps that confine the claim to a particular useful application, citing Mayo or other meaningful limitation beyond generally linking the use of the judicial exception to a particular technology to the environment, citing Alice.

Fellow blogger, Gene Quinn, has an exceptionally well written summary of the Guidance and I am giving you the link here so you can find his summary by going to ipfridays.com/patenteligiblityguidance.

So with this I hope you enjoyed the show and hope you tune in next time.

KS:      That’s it for this episode.  If you liked what you heard, please show us your love by visiting http://ipfridays.com/love  and tweet a link to this show.  We would be so grateful if you would do that.  It would help us out to get the word out.  Also, please subscribe to our podcast at ipfridays.com or on iTunes or Stitcher.com.  If you have a question or want to be featured in one of the upcoming episodes, please send us your feedback at http://ipfridays.com/feedback.  Also, please leave us a review on iTunes.  You can go to http://ipfridays.com/itunes and it will take you right to the correct page on iTunes.  If you want to get mentioned on this podcast or even have comments within the next episode, please leave us your voicemail at http://ipfridays.com/voicemail.

You have been listening to an episode of IP Fridays.  The views expressed by the participants of this program are their own and do not represent the views of nor are they endorsed by their respective law firms.  None of the content should be considered legal advice.  The IP Fridays podcast should not be construed as legal advice or legal opinion on any specific facts or circumstances.  The contents of this podcast are intended for general informational purposes only and you are urged to consult your own lawyer on any specific legal questions.  As always, consult a lawyer or patent or trademark attorney.

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