Table of Contents

The European Unitary Patent System: On the ‘Unconstitutional’ Misuse of Conflict-of-Law Rules

Josef Drexl, Max Planck Institute for Innovation and Competition, Ludwig Maximilian University of Munich

Exploring the Opaqueness of the Patent System - Evidence from a Natural Experiment

Dietmar Harhoff, Max Planck Institute for Innovation and Competition, Ludwig-Maximilians-Universität München, Centre for Economic Policy Research (CEPR)
Sebastian Stoll, Max Planck Institute for Innovation and Competition

The Role of Enforcement in Delineating the Scope of IP Rights

Reto Hilty, Max Planck Institute for Innovation and Competition, University of Zurich, Ludwig Maximilian University of Munich

Languages, Fees and the International Scope of Patenting

Dietmar Harhoff, Max Planck Institute for Innovation and Competition, Ludwig-Maximilians-Universität München, Centre for Economic Policy Research (CEPR)
Karin Hoisl, Max Planck Institute for Innovation and Competition, Munich School of Management, Ludwig-Maximilians-University, Copenhagen Business School, Department of Innovation and Organizational Economics
Bruno van Pottelsberghe de la Potterie, Free University of Brussels - Solvay Business School, Université Libre de Bruxelles (ULB) - Department of Applied Economics (DULBEA), Centre for Economic Policy Research (CEPR)
Charlotte Vandeput, Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management, Université Libre de Bruxelles (ULB)


MAX PLANCK INSTITUTE FOR INNOVATION & COMPETITION
RESEARCH PAPER SERIES

"The European Unitary Patent System: On the ‘Unconstitutional’ Misuse of Conflict-of-Law Rules" Free Download
Max Planck Institute for Innovation & Competition Research Paper No. 15-01

JOSEF DREXL, Max Planck Institute for Innovation and Competition, Ludwig Maximilian University of Munich
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On 18 November 2014, Advocate General Bot delivered his opinion on the Spanish action against Regulation No. 1257/2012 on Unitary Patent Protection. Among other things, Spain claims that the Regulation is not capable of guaranteeing unitary patent protection as required by Article 118(1) TFEU since, pursuant to the conflict-of-law rule contained in Article 5(3), it leaves this question to the national law of the participating Member States. AG Bot rejected this claim by arguing that, under the EU principle of sincere cooperation, the participating Member States are under an obligation to ratify the Unified Patent Court (UPC) Agreement, which contains uniform rules on the scope of such patents. The legislative history shows that most of the substantive patent law provisions that were included in the Commission Proposal for the UPP Regulation were ultimately transferred to the UPC Agreement as part of a political compromise that attempts to exclude the jurisdiction of the Court of Justice of the EU (CJEU) for these rules. Hence, following the reasoning of AG Bot, the conflict-of-law rule of Article 5(3) is not designed to solve a conflict of laws, but only aims to insulate the UPC Agreement against claims that its uniform substantive patent law provisions are nevertheless part of EU law and, therefore, ought to be interpreted by the CJEU. This, however, gives rise to three constitutional concerns that are not addressed by AG Bot, namely, (1) a conflict with the principle of democracy as a fundamental value of the Union, (2) a circumvention of the fundamental rights of the European Union, which would otherwise guide the interpretation of the substantive patent law provisions, and (3) a curtailment of effective judicial control as an expression of the rule of law. In sum, the opinion of AG Bot comes as a clear disappointment and should not be followed by the CJEU.

"Exploring the Opaqueness of the Patent System - Evidence from a Natural Experiment" Free Download
Max Planck Institute for Innovation & Competition Research Paper No. 15-02

DIETMAR HARHOFF, Max Planck Institute for Innovation and Competition, Ludwig-Maximilians-Universität München, Centre for Economic Policy Research (CEPR)
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SEBASTIAN STOLL, Max Planck Institute for Innovation and Competition
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One of the objectives of patent systems is to disclose information which other agents can build on in further inventions and in their decision-making. While some observers take it as given that real-world patent systems serve this objective, we argue in this article that patent systems are highly opaque and likely to be of limited value as a source of information. We use data from a natural experiment to explore this issue. Requests for accelerated examination used to be publicly observable at the European Patent Office (EPO). Starting in December 2001, the EPO started to treat these requests as confidential information. Using data on acceleration requests which were historically known only to the applicant and the EPO, and later provided to us, we test whether the change in the information regime impacted the actions of applicants and their rivals. We develop a theoretical model of acceleration requests and patent opposition to identify the extent to which the patent system is opaque. We confirm empirically that opposition and acceleration rates of high-value patents change significantly in most technological areas once acceleration requests become unobservable. We interpret these results as evidence that the system is highly opaque in many fields.

"The Role of Enforcement in Delineating the Scope of IP Rights" Free Download
Max Planck Institute for Innovation & Competition Research Paper No. 15-03

RETO HILTY, Max Planck Institute for Innovation and Competition, University of Zurich, Ludwig Maximilian University of Munich
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According to an unbroken paradigm innovation and creation accrue from strong IP protection – the more the better. Increasing doubts from academic research are continuously ignored. Under-protection is the great concern. Over-exclusivity, however, is not a minor relevance. Lacking competitive pressure due to legally over-protected market positions eliminate incentives to invest as well. Hence, not a maximum, but the right degree of IP protection is required.

The current IP system tends to over-exclusivity; never in history was the level of protection reduced with a view to legitimate interests of third parties. As long as enforcement measures were of limited vigour, such overshooting tendencies of IP protection had little impact. With increased attention on enforcement measures, however, the over-protective legal design becomes visible. Such concerns, however, did not yet reach the policy makers, notably not on the EU level.

The lack of a balance IP policy in the EU is mirrored by the Directive 48/2004. By limiting the focus on the right, it mistakes that enforcement without limits risks not fostering, but impairing innovation and creation. The current evaluation of the Directive 48/2004 does not give cause for hope that such imbalances would be eliminated. Improvement opportunities, however, exist. Member States first of all should be obliged to establish remedies against dysfunctional enforcement; notably the denial of injunctive relief must become a common procedural instrument. Beyond that, over-exclusivity should be eliminated by dismantling certain property mechanism and replacing them through liability tools (such as extended grounds to claim for compulsory licensing).

"Languages, Fees and the International Scope of Patenting" Free Download
Max Planck Institute for Innovation & Competition Research Paper No. 15-04

DIETMAR HARHOFF, Max Planck Institute for Innovation and Competition, Ludwig-Maximilians-Universität München, Centre for Economic Policy Research (CEPR)
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KARIN HOISL, Max Planck Institute for Innovation and Competition, Munich School of Management, Ludwig-Maximilians-University, Copenhagen Business School, Department of Innovation and Organizational Economics
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BRUNO VAN POTTELSBERGHE DE LA POTTERIE, Free University of Brussels - Solvay Business School, Université Libre de Bruxelles (ULB) - Department of Applied Economics (DULBEA), Centre for Economic Policy Research (CEPR)
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CHARLOTTE VANDEPUT, Université Libre de Bruxelles (ULB) - Solvay Brussels School of Economics and Management, Université Libre de Bruxelles (ULB)
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This paper analyzes firms’ choices regarding the geographic scope of patent protection within the European patent system. We develop an econometric model at the patent level to quantify the impact of office fees and translation costs on firms’ decision to validate a patent in a particular country once it has been granted by the EPO. These costs have been disregarded in previous studies. The results suggest that both translation costs and fees for validation and renewals have a strong influence on the behavior of applicants.

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About this eJournal

The Max Planck Institute for Innovation and Competition Research Paper Series is a source for research papers authored by the Max Planck Institute for Innovation and Competition academic staff (Eds.: Prof. Josef Drexl, Dir., Prof. Dietmar Harhoff, Exec. Dir., Prof. Reto M. Hilty, Dir.). Papers cover topics on intellectual property law (copyright, patent, trademark law), competition law (law of unfair competition, antitrust law), innovation research and entrepreneurship. To access all the papers in this series please use the following URL: http://www.ssrn.com/link/Max-Planck-Intellectual-RES.html

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