UPC & UP – Never Say Never! (2017-02-14)

The dream of a unitary patent (UP) having effect throughout the EU, and a unified patent court (the UPC) for suing infringers was about to come true.  The wake-up call came in the form of a referendum, in which the UK voted to leave the EU - to Brexit.  Since the UPC still had to be ratified by at least the UK and Germany, the UPC and UP suddenly seemed doomed – why would the UK go ahead with an EU initiative while Brexiting? – and the UPC implementation was paused for almost six months.  Then late last year, it was announced that the UK would ratify the treaty to establish the UPC, and this is now expected to be done in March.

As far as the UK is concerned, it is helpful to consider the UP and UPC as quite separate things.  The UPC will be an international court which happens to have a division partly based in London.  The requirement for it to respect the primacy of EU law should not necessarily be at odds with Brexit, since the UPC will in no sense be a domestic UK court.  Although there is a view that it may be wise for the UK and EU to enter into a new agreement over the UPC, some senior lawyers believe that no further agreement is needed beyond the UK ratifying the treaty.  The position of the unitary patent is different: it was never intended to extend to non-EU states, and if it did, it would fall within the exclusive competence of the UPC, and outside the jurisdiction of national domestic courts.  Commentators seem to agree that a new UK-EP agreement would be necessary for the UP to extend to the UK (and it is not clear that the UK authorities want this to happen).  It should be noted that some commentators question whether the UP would succeed if it did not extend to the UK.

 Although the UK and Germany have not yet ratified the UPC treaty, it seems possible that the central division courts could open around December this year, including the court based in London.  Key legislation has already been passed in the UK, including certain changes to the Patents Act.  The protocol granting the necessary privileges and immunities for London-based court staff to function within an international body has already been signed, and the court premises in Aldgate Towers have been almost fully kitted out.

The final draft of the Rules of Procedure should be adopted in March, and provisional application of the UPC treaty should start in May or June.  This will allow a formally constituted Administration Committee – including UK representatives – to appoint directors of key functions such as Human Resources and judges, to implement rules of procedure, and to carry out other essential preparations before the UPC treaty comes into force.  There is still much to do: a case management system will be implemented, judges and staff will undergo training, roles and responsibilities need to be agreed, a preliminary budget has to be prepared, and (most importantly) staff pension plans, salaries and benefits need to be finalised. 

 In the run-up to full UPC implementation, owners of European patents will need to decide whether to opt out any of their existing European patents from the UPC’s jurisdiction.  There will be a ‘sunrise period’ for registering any existing patents that are not to fall under the UPC’s jurisdiction, which may start in about September.  Only the proprietor of a patent can authorise its opt-out, and since the current proprietor is not always formally registered as such, identifying them in each case will require due diligence.  In other words, all patent proprietors who are entitled to be registered as such for all designations must be identified, which may involve investigating a chain of assignments of a given European patent, even within a given group of companies (although there is provision for bulk opt-outs).  The pros and cons of opting out are not considered here, and we would be pleased to discuss this on a case-by-case basis.

The UPC may be up and running this time next year.  Owners of European patents and applications would be well-advised to consider how this may affect their patent strategy in Europe.  Specifically, the time for deciding on whether to opt patents out of the UPC is fast approaching. 

Whatever the challenges and uncertainties that lie ahead, these events undoubtedly mark the beginning of a new era for protecting inventions in Europe.

Further information on the UPC and UP can be found on the websites of the Unified Patent Court (http://www.unified-patent-court.org/) and the European Patent Office (http://www.epo.org/law-practice/unitary.html).  We acknowledge Laura Starrs of the UKIPO and Kevin Mooney, speaking at a seminar hosted by the Chartered Institute of Patent Attorneys (CIPA) on 31st January 2017, as the source of much of the information provided in this article.  Please note that this information in not to be considered as legal advice, and we would be pleased to provide advice on a case-by-case basis, taking into account the particular circumstances of each case.