15 July 2018

Unified Patent Court and Unitary Patent – an update

The European Patent Office (‘EPO’) has long been competent to grant patents across Europe. This success story of international cooperation is importantly not an EU institution (and counts among its members many non-EU states). The EPO not being part of the EU means Brexit has no impact on the ability of UK Attorneys to represent clients before it.

European patent law presently is a hybrid of regional European law and national law. After grant by the European Patent Office a European patent is treated as a bundle of national rights, separately litigated under distinct  procedure,  with local requirements for translations and renewal fees. Prior to Britain’s referendum on EU Membership, a proposal was well developed to address this across a number of EU states through a package comprising a Unified Patent Court (with jurisdiction across participating states) and a Unitary Patent (i.e. in contrast to the current bundle of national rights).

The benefits of such an approach were meant to include an end to separate renewal fees across Europe to maintain their protection and moreover litigation would no longer be duplicated in various courts (with occasionally varying outcomes). However, unlike the existing European Patent Office, the Unified Patent  Court (UPC) and Unitary Patent (UP) were designed to be available only to EU member states. The UK vote to leave the EU, and the fact the UK is a mandatory ratification jurisdiction of the new agreements put the future of the initiative in doubt.

Where are we now?

The UPC/UP package has not yet come into force. It will do so when ratification of the UPC Agreement by Germany occurs. A significant question is whether this will occur prior to or after the UK leaves the European Union on 29 March 2019. If the system does come into effect prior to that date, then the UK’s departure from the EU will see the UK leave the UPC unless new agreements are reached.

In view of this, the most immediate question is that of the timing of ratification. For the UPC/UP to take effect, ratification must be completed by at least 13 member states including the UK, France and Germany. As at the time of writing, there are 16 ratifications in place, including France and most recently the UK. The hold up now is in Germany.

What is the UK’s position?

If only we knew! In the immediate aftermath of the EU referendum, there was some speculation as to whether the UK intended to continue with this project. This was resolved in November 2016, when the UK government clearly indicated its intention to complete the ratification process. Any doubt was removed when on 26 April 2018, The Minister for Intellectual Property, Sam Gyimah MP, confirmed that the UK had completed its ratification of the agreement.

The UK government is keen to emphasise that the UPC Agreement itself is not an EU instrument. However, it was drafted with the  EU legal structure in mind, and recognises both a role for the CJEU and European Union law. Given the UK’s red line position on not being subject to the CJEU on departure it is difficult to see how the UK will continue in the UPC after Brexit. What we need most at this time is clarity from the UK Government on whether they intend to negotiate for the UK to remain part of the UPC. The challenges to this are primarily political rather than legal.

All eyes on Germany

It had been thought that the UK would hold up the progress  of the UPC/ UP package, but we now find that Germany is where the final piece of the puzzle must be resolved. The German government has been a strong proponent of the system from the outset and the German parliament has passed all necessary legislation to allow ratification. However, a constitutional complaint was made in June 2017 by a private individual to the Federal Constitutional Court of Germany (Bundesverfassungsgericht) and the Court requested that the German government delay ratification until this was resolved. While this case appeared on a list of cases to be handled in 2018, it is not at all certain that a decision will be reached in this time frame.

The clock is ticking

Europe’s best chance of completing the integration of the patent system, started almost 45 years ago with the signing of the European Patent Convention, hangs in the balance. An early decision from the Bundesverfassungsgericht may rescue an initiative that had been thought in deep trouble. If so, patentees will need to bring themselves up to speed with the consequences for their rights in short order. We will of course keep you updated and let you know any action that need be taken.