THE UNIFIED PATENT COURT (UPC) - OPEN FOR BUSINESS IN 2018?

The post below was first published on our Intellectual Property blog

At the start of 2017 the expectation was that the UPC Agreement would achieve the required ratification levels and that the UK could well ratify in advance of Brexit in order to become a full participant, even given the question marks that arose about the ability of a non-EU jurisdiction to be part of the new unitary and European patent enforcement system. Now, at the start of 2018, things are still uncertain.

Despite the IP Minister's announcement in November 2016 that the UK would ratify, no ratification was forthcoming, although the UK has drawn closer to ratification as a result of the International Organisations (Immunities and Privileges) (Scotland) Amendment (No 2) Order 2017 being approved by the Scottish Parliament on 25 October 2017. This order will confer certain privileges and immunities on the UPC and its judges and other staff. The equivalent statutory instrument, the Unified Patents Court (Immunities and Privileges Order) 2017 was laid before the House of Commons on 26 June 2017 and following approval by both chambers of the Westminster parliament (including the House of Lords in December 2017), it is waiting approval by the Privy Council, along with the Scottish order. Representative bodies of IP practitioners joined together shortly before Christmas 2017 to send a note to the Government on the key areas that need addressing prior to Brexit, including ratification of the UPC Agreement (see our post on this here).

Elsewhere in the EU three more states ratified the UPCA in 2017: Italy, Estonia and Lithuania, and Latvia on 11 January 2018. This brings the total number of ratifying states to 15 more than the 13 required, but still missing two of the mandatory ratification states other than France: Germany and the UK (while it is still in the EU).

However, with France ratifying the Protocol on Privileges and Immunities at the end of December 2017 and Belgium adopting legislation in December to implement the UPC, the EU looks poised to commence the new court system as soon as possible once the UK leaves the EU. This will be possible only once Germany has ratified. Italy will take the place of the UK as the third mandatory ratifier after France and Germany, and has already ratified as mentioned above.

German ratification is dependent on the outcome of the challenge being mounted in the German Federal Constitutional Court (FCC) regarding the constitutionality of the law passed by German Parliament on the UPC's implementation. The German court has asked for observations on the case and had previously set a deadline for any comment by end of October 2017 – though it has been reported that this has now been extended to the end of the year. The FCC will then determine whether or not to dismiss the complaint, a process which is expected to take until at least April 2018. If the complaint is dismissed, Germany will be able to ratify the UPCA soon after. There has, however, been talk of the possibility of the case being referred to the Court of Justice of the EU (CJEU), which would cause substantial delay to the case being decided and ultimately to Germany's ratification.

The Preparatory Committee of the UPC published a "Summing up and looking forward" press release on 21 December 2017 detailing the "provisional application" phase and how this will work. It is essentially a pilot phase which will be allowed to come about if sufficient signatory states agree to the Protocol on the Agreement on a Unified Patent Court on Provisional Application. The protocol means that the State Parties agree to apply the institutional, organisational and financial parts of the UPCA provisionally before the UPCA enters into force. Once the Protocol enters into force, the organisation (as such) will therefore be created and acquire legal personality. The Administrative Committee, the Budget Committee and the Advisory Committee will be established at the start of provisional application and will then take over the responsibility of the preparations from the Preparatory Committee.

During the provisional application phase the organisation will be able to conclude necessary agreements with third parties and formalise all the preparatory work done by the Preparatory Committee. One area that cannot be conducted before the provisional application phase is the completion of the recruitment of the judges. This is obviously a significant difficulty for the committee. Only once the judges are appointed the two Presidents can be elected, the Presidium can be set up and the Registrar and the Deputy Registrar can be appointed.

However, for the Protocol on Provisional Application to come into effect, 13 signatory states - which have signed the UPCA (and which must include France, UK and Germany) and have ratified the UPCA or informed the depositary that they have received parliamentary approval to ratify the UPCA - must have signed and ratified, accepted or approved the Protocol (in accordance with Article 2(2) of the Protocol) or declared themselves bound by Article 1 of the Protocol. These cover, inter alia, the establishment of the UPC, the Registry, the Mediation and Arbitration Centre, the training and appointment of judges, and the provisions allowing for the UPC Statute and Rules, legal aid, remuneration of judges, the setting up of local or regional divisions, and the establishment of the pool of judges.

Now that the UK has signed the Protocol, along with the other 2 mandatory signatories, the Protocol is close to coming into effect, although a few more signatories and ratifications are needed.  The UK will still need to pass legislation (via statutory instrument) to ratify the Protocol as will some other signatories.

The UPC Preparatory Committee says it has assessed that the (even once sufficient ratification of the Protocol has taken place) the provisional application phase needs to be a period of between six to eight months in order to have time to put everything in place and prepare for the Court to be operational.

For more on the UPC see our dedicated UPC hub at www.hsf.com/upc.

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