Apple and 13 other companies warn that EU patent shakeup may encourage patent trolls
Seemingly not a week goes by without hearing some new story about a patent troll mysteriously emerging out of the woodwork, with questionable second-hand patents in hand, and suing a smorgasbord of tech companies for patent infringement. While the Obama Administration has taken steps to potentially reduce the drain on the tech economy stemming from frivolous patent lawsuits, there's no denying that patent trolls are still able to earn ill-gotten fortunes in patent troll-friendly courts around the country.
Now, Apple and 13 other companies recently signed their name to a letter sent to European officials expressing their concern that the patent troll problem may soon sprout up in Europe in light of plans to implement a unified patent system across most of Europe. Some of the other companies signing off on the letter include Cisco, Deutsche Telekom AG, Google, Intel, Microsoft, Hewlett-Packard and Samsung.
As it stands now, individual European countries typically have their own unique patent rules, procedures and regulations; which helps explain why Samsung and Apple currently have patent infringement cases pending in places like the Netherlands, Germany, France, the UK and Italy.
So while a unified patent system may operate to improve efficiency in some respects (reduced cost in obtaining patents, for example), the aforementioned companies worry that the plan in its current form may actually serve to benefit patent trolls in the long run.
For instance, the current draft of the rules of procedure for a Unified Patent Court (UPC) details a two-court system wherein one court would rule whether or not a party is guilty of infringement while another would rule on the validity of the asserted patent.
The letter highlights how this bifurcation of duties might potentially lend itself to mischief:
This could, in some cases, allow plaintiffs to obtain a quick infringement ruling, along with an injunction barring products from most of the European market, before any determination of whether the patent in question is actually valid. Given the drastic impact of such an injunction on the defendant, unprincipled plaintiffs would be able to extract substantial royalties (through settlements or verdicts) from European and other companies based on low-quality, and potentially invalid patents.
Consequently, the proposed patent system, the letter argues, "could undermine rather than promote innovation in Europe."
Naturally, the signed parties ask that a framework be put in place wherein injunctions would be put on hold until a "decision on patent validity has been reached."
The signed parties also take umbrage with the fact that there are no guidelines regarding the rigidity with which injunctions will be handed down. If injunctions are handed out too freely, the letter reads, the result would be particularly harmful as rulings from the UPC would "extend beyond a single country to most of Europe." As a result, patent trolls operating under a UPC could abuse the system and force settlements from company's fearing adverse rulings that would have ramifications across a number of European countries.
The letter concludes:
We believe that these concerns can and should be addressed through targeted changes to the proposed UPC rules of procedure. Several of the undersigned organizations will recommend specific changes to the proposed rules to the Preparatory Committee, which is responsible for establishing and implementing the UPC. These changes will include guidance to the judiciary on how to handle bifurcated proceedings when validity is raised, when to issue a stay of an infringement action and when to issue injunctions. Adoption of these amendments will allow operating companies to focus on innovation instead of litigation, thereby fostering economic growth and prosperity in Europe.
Lastly, it's worth noting that not every European country is on board with a Unified Patent Court. The New York Times relays that Spain, Poland and Italy have all expressed concerns and reservations with the idea.
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