A business manager confronted with high costs of patent litigation in the European Union

2011-06-02T03:25:00.000-07:00

                   A business manager will be looking at ways to increase the profit of his company thereby seeking ways to curb amongst others legal costs including cost of patent litigation. Patent costs are high on the agenda nowadays. Furthermore for a business manager it is difficult to accept that the outcome of patent litigation is uncertain even in one country let alone in more countries of the European Union where he would have to initiate or defend his company in parallel litigation proceedings. He may have to experience that the outcome of litigation in different member states of the European Union where parallel actions have been initiated concerning one and the same European patent can be different and even contradictory . There are differences on how national courts in the member states deal with questions on e.g equivalence, contributory infringement, prior use rights and claim construction. This difference between decisions of courts in the European Union on the same European patent is very confusing to the users of patent litigation, being multinational companies and undermines the trust in the patent legal system. The business manager spends on behalf of his company and/or share holders of the company a considerable amount of money on payment of fees of the attorney(s)-at-law and the patent attorney(s) and therefore relies on his IP counsels that they will resolve the patent dispute. He will probably not (fully) read the decisions made by the courts and if he does it will be difficult for him, not being a lawyer or patent attorney, to understand the legal jargon and reasoning. However what is crystal clear to him are the fees specified in the invoices of his IP counsels. It can be expected that in The Netherlands and elsewhere in the European Union business managers will be looking for alternative less expensive and less time-consuming modes of patent dispute resolution. For advisers in the field of alternative dispute resolution (ADR) the business manager could turn to WIPO, the World Intellectual Property Organization. However the department of WIPO providing ADR services may not be the ideal advisor to turn to for advice on the negotiation of a tailor-made licence agreement. That business manager may find a complete package of services for settlement negotiations leading to the conclusion of a licence agreement with attorneys at law and/or patent attorneys specialised in intellectual property licensing. A business manager is not like an attorney at law or a patent attorney concerned that ADR does not produce case law or a level of legal certainty, i.e. jurisprudence. As a patent attorney I agree that ADR does not result in case law and will not contribute to legal certainty. However just assume for the sake of argument that you, a patent attorney, attorney at law or judge would be the business manager, what would be important to you? What is important for the business manager is that he can go on with his business activities as soon as possible not being hampered by a threatening or an ongoing patent litigation. Patent litigation is not his bread and butter which however is for yourself. We are all human and thus have our own agendas, which fact may blur our argument as IP counsels in this debate. We are not willing to accept that the emperor may be naked. Why would a business manager decide to litigate if there is a fair chance that he may be able to close a deal with the other party when he knows that patent litigation can take many years demanding on the business side a lot of unproductive energy, time and money. He may have saved his business by concluding a settlement agreement. In particular businesses which are sensitive to the development of fashion the marketing of a particular (fancy) product covered by the patent, which may be infringed, will last for a limited number of years. For example a company which markets products in the field of snow and/or water skiing and wind and kite surfing and/or sailing, may renew its products every five years. The novel products may not be covered anymore by the patent concerned. The well-informed business manager will think that in case parties for one reason or another at a later stage end up in litigation, so be it. He will find another solution at the time advised or not by his IP counsels. Therefore I consider it important for Europe in order to become more attractive for investors within or outside the European Union that European Patent Attorneys change their mind-set and make a serious effort to dovetail into the business. This means trying to think as a business manager and not only focus on the legal aspects of the case. This change of mind-set will no doubt enable the European Patent Attorneys to better advice and assist their clients.

                       The Hague, 2 June 2011
                       Jowi Burger
                       (c) 2011 JowiIPS Intellectual Property Services

Business manager & High Patent Litgation Costs

A business manager confronted with high costs of patent litigation in the European Union