Date: 13 September 2016
By Hugh Dunlop
The Unified Patents Court is to be a new patents court for European patents and for new "unitary" European patents, established by agreement among 25 EU member states including the UK.
The Cameron government was at the fore in pressing for the unitary patent and the new court. It was agreed by negotiation that a section of the Central Division of the new court would be in London. This is explicit in the Unified Patents Court Agreement1.
Now that the UK electorate have voted to leave the EU, a hiatus is created. The court cannot open for business without ratification b y the UK, and the other participating states cannot bypass the UK while the UK remains a member of the EU.
A burning question among IP practitioners in Europe is whether it might yet be politically possible for the new UK government to proceed with the project and yet leave the EU. Surprisingly, this may not be such a major dichotomy.
Britain will remain in the EPC
Britain has been a member of the European Patent Convention since its inception in 1973 and will remain a member. The EPC is not an EU institution and extends to ten non-EU states such as Turkey, Norway and Switzerland. Membership of the EPC merely cedes to the European Patent Office the administrative task of granting patents that will be recognized and enforced by the courts of the Member States. It is a convenient and efficient arrangement that benefits businesses across the extended European region and has no bearing on free movement of goods, capital or people. There is no suggestion that the UK referendum has any bearing on this arrangement continuing.
The EPC also includes the basis for the unitary patent. It provides that its members may agree amongst themselves that a patent granted by the EPO may have a unitary character throughout their territories2. The manner by which a group of such states has emerged is under the "enhanced co-operation" provisions introduced in the 1997 Treaty of Amsterdam, when the EU enlarged from 12 states to 15 states, and under a decision of the EU Council to permit such a co-operation, followed by two Regulations3 (one from the Parliament and the Council and the other from the Council) putting in place the necessary legislation.
Essential to a unitary patent is a Unified Patent Court (UPC) that will uphold such patents in the territories of the participating members, but (with one fairly minor exception discussed below), it is not essential that the participating states be EU states. It merely happens to be the case that the court and the unitary patent have emerged under the auspices of the EU, where there has been the political will and the means to make it a reality.
If the UK now exits from the EU and in so doing also exits from the unitary patent and the UPC, it is estimated that a unitary patent will be 30% diminished in value. Patent holders would have to enforce their UK patents before the UK courts and could enforce their unitary patents before divisions of the new court in France or Germany or elsewhere, but in practice, the German local divisions of the court would be popular, as are the present Landesgericht courts in Germany. The system would be very similar to the status quo. The entire project would be vastly diminished in value. Indeed, the project would introduce more courts and more uncertainty for considerably reduced positive benefit.
The program is in an advanced stage. The IT systems are ready (designed and tested under contract from the UKIPO) and a protocol has been agreed to allow staff to be hired and trained. All that remains is for a small number of states, including the UK and Germany, to ratify the agreement and it will come into effect for the whole of the EU (except Spain and Poland who have opted out).
The official UK position is that the UPC is merely one of many issues that need to be negotiated by the incoming UK government in its overall trade negotiations with the EU4. The official position of the UPC Preparatory Committee is that "pending more clarity about different possible scenarios, work dedicated to the technical implementation should continue to progress as envisaged, in accordance with the mandate of the Committee5." This includes pressing ahead with the recruitment of judges for the new court.
A question for the new UK government is whether to ratify the agreement while still a member of the EU and thereby allow the court to get on with its program and allow UK lawyers and patent attorneys to be registered to act before the court. As matters stand, once registered, a patent attorney cannot be removed from the register other than on disciplinary grounds. Under this scenario, even if the UK were to eventually leave the EU and there were no new agreement on continued membership of the unitary patent and the UPC, such UK lawyers and patent attorneys could yet remain on the register and appear before the court anywhere in Europe, noting that the court would have jurisdiction over not just the EU part of a European patent, but over "traditional" European patents within its jurisdiction.
In the grand scheme of all the issues that need to be negotiated in the course of the UK's exit from the EU, merely ratifying the agreement as it stands would be a small and unlikely step forward if it had to be followed by a much larger step back. But there need not necessarily be any exit from the UPC upon exit from the EU.
1 Art. 7(2) UPCA)
2 Article 142(1) EPC – "Unitary patents": Any group of Contracting States, which has provided by a special agreement that a European patent granted for those States has a unitary character throughout their territories, may provide that a European patent may only be granted jointly in respect of all those States.
3 Regulations 1257/2012 and 1260/2012 of 17 December 2012
4 Speech by Baroness Neville-Rolfe, UK minister for Intellectual Property to UNION on 29 June 2016
5 17th meeting of the Preparatory Committee, 30 June 2016, Stockholm