Successive failures show lack of direction for IP litigation system

Portugal
Two years after the enactment of the IP Rights Enforcement Law, practitioners and civil courts are applying the provisions of the new law (for further details please see "IP Rights Enforcement Law enters into force - at last" and "New IP Rights Enforcement Law - encouraging first results"). Among other things, the law provides a roadmap for creating 'chambers' dedicated to IP litigation. However, the law has not been fully implemented, except in some experimental jurisdictions. In Porto and Lisbon, Portugal's two main cities, competence in the field of industrial property is still concentrated in the commercial courts. As these courts also have competence over insolvency cases, proceedings and decisions involving industrial property rights suffer from considerable delays.

To add more confusion, last year the government approved the creation of a new IP court near Lisbon which would have jurisdiction over all matters involving IP rights, thereby abandoning the decentralisation process envisaged by the law. This new court, a curious scheme which is unique in the world, would also hear all pending civil and commercial cases (eg, all pending copyright, trademark, patent and design cases). Without great enthusiasm, the Parliament approved the general terms of the government's proposal, leaving the details to a specialised commission. The law creating this new court will be approved only after the commission has examined the proposal (for further details please see "Pioneering IP court is created").

However, the new court received criticism from all sectors, including magistrates' organisations (trade unions and the General Council of Magistrates, a self-governing body) and industry bodies, such as collecting societies or neighbouring rights associations, which are often involved in litigation and know the relevant issues from the inside.
 
The government never explained the reasons for this strange proposal, but argued - in very rare declarations - that its mission was to free the commercial courts from the huge amount of pending cases. However, practitioners argued that the creation of the new IP court will not solve the problems faced by the commercial courts of Lisbon and Porto - rather, it will spread the problems to other IP rights. Further, the IP court will introduce a new problem, as a unique line of jurisprudence could be very dangerous for IP rights owners. Finally, it is feared that the IP court will be incapable of dealing with such a large number of cases, as it is thought that it will be composed of only three judges.
 
In November 2010 the secretary of state for justice resigned from the government. He was a great supporter of the new IP court, even though he never explained the reasons for his choice. Therefore, the Portuguese system seems to be a succession of failures:
  • the system currently in place (ie, the concentration of a significant number of patent, trademark and design cases in the commercial courts of Lisbon and Porto) does not work;
  • the judicial organisation law has never been improved; and
  • the new IP court is a bad solution, which is not based on a successful experience elsewhere in the world.
Finally, an arbitration centre dedicated to IP issues, which was created by the Ministry of Justice, is proving to be another failure, with very few cases being filed. This structure, which was created mainly to hear domain name cases, significantly extended its competence - its failure was thus predictable. Other small arbitration centres created by law schools do not play any role in IP matters.
 
It thus seems that the Portuguese government has no clear direction or strategy in this field. Nevertheless, over the past two years, IP rights owners have been in a better position thanks to the protection afforded by the IP Rights Enforcement Law. Arguably, the best thing to do would be to introduce small and specific reforms to let the courts work normally, and move away from ideas that are too innovative.

Manuel Lopes Rocha, PLMJ - AM Pereira Sáragga Leal Oliveira Martins Júdice E Associados - Sociedade De Advogados - RL, Lisbon

Get unlimited access to all WTR content