UPC commencement postponed – Preparatory Committee announces that 1 December 2017 start date cannot be maintained

Latest UPC developments:

• UPC Preparatory Committee announces that 1 December 2017 start date for UPC has been postponed (7 June 2017)
• Private challenge to the UPC system made before German Constitutional Court delays progress of Gernan UPCA ratification
• UPC Protocol on Provisional Application requires further ratification before practical arrangements can begin to be made for the UPC
• Meeting of EU Competitiveness Council acknowledges delays in ratification (May)
• Final draft of UPC Rules approved by UPC Preparatory Committee (April)

UPC commencement postponed – UPC Preparatory Committee announces that 1 December 2017 start date for UPC has been postponed

In January we reported the UK IP Minister Jo Johnson's enthusiastic support for the UPC and ratification of the UPC Agreement (UPCA) whilst the UK is still a member of the EU. Without this, the UPC system would have to wait for the UK to leave, before the next most patent designated EU state at the date of signature of the UPCA (which would be Italy) could fulfil the role as third mandatory ratifier (after France and Germany). The UPC Preparatory Committee announced earlier this year that it was still confident of a 1 December 2017 start date, as long as the expected final ratifications were in place. This was a significant caveat given the Brexit situation and the need for further ratification of the UPC Protocol on Provisional Application (the Protocol) by UPC participating states before the practical arrangements can begin to be made for the new courts, such as the appointment of judges. The timetable looked even more hopeful when, subsequently, the UK general election was announced for June, creating a delay in the progress of any UK ratification. Now, with the current uncertainties around the outcome of the election result, further delay to UK ratification appears inevitable.

On 7 June, the UPC Preparatory Committee announced that the December start date could no longer be maintained.  The Preparatory Committee says that it is monitoring UPCA ratification and participation in the Protocol continuously in order to be able to establish a timetable for a start date as soon as possible. Since that annoucnement, German press articles suggest that there has been a private challenge before the German Constitutional Court conccernting the UPC system in light of whcih the Court has requested that the approved bills for ratification of the UPCA are not signed for the moment, such that ratifcation by Germany cannot be completed. The nature of this challenge, and there fore the length of any delay it may cause, is currently unclear.

UPC Protocol on Provisional Application: Before final ratification of the UPCA, participation in the Protocol is needed in order that UPC judges can be appointed and the practical arrangements put in place for the new courts.  This will allow the provisional application of the institutional, financial and administrative provisions of the UPCA and will enable the necessary legal and practical arrangements to be made in contemplation of the establishment of the UPC. However, for the Protocol to come into effect, 13 signatory states - which have signed the UPCA (and which must include France, UK and Germany) and have either ratified the UPCA or informed the depositary that they have received parliamentary approval to ratify the UPCA - must have either signed and ratified, accepted or approved the Protocol (in accordance with Article 2(2) of the Protocol) or declared by unilateral declaration or in any other manner that they consider themselves bound by the provisional application of the articles of the UPCA mentioned in Article 1 of the Protocol. These Articles cover, inter alia, the establishment of the UPC, the Registry, the Mediation and Arbitration Centre, the training and appointment of judges, 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. The UK has signed the Protocol, along with the other 2 mandatory signatories, and the Protocol is close to coming into effect, although a few more signatories and ratifications are needed. The Council of the EU has a page listing signatories to the Protocol. The UK will still need to pass legislation (via statutory instrument) to ratify the Protocol as will some other signatories.

At its May meeting, the EU Competitiveness Council acknowledged that there were a few countries holding up the Protocol but that it could be done before the summer break and if so the UPC might still be on track for a December opening. The Preparatory Committee's announcement on 7 June indicates that this is not now expected to happen.

UK ratification of the UPCA: The UK's representative at the Competitive Council meeting in May noted that the UK's ratification of the UPCA itself would not occur until the next Parliament, but that the intention of the then Government was to ratify it. If the UK ratifies the UPCA, without amendment, and subsequently leaves the EU, any divisions of the UPC in the UK will have to cease operating. The transitional consequences of this are matters of detail to be negotiated as part of the UK’s exit negotiations. If the UK cannot continue to take part in the UPC beyond Brexit, it will become one of the European jurisdictions where separate patent protection will need to continue to be sought following the introduction of the new UPC/UP system.

For a detailed insight into what this would mean for the UPC and intellectual property rights in general, in the UK and across Europe, please see our briefing following the Government's announcement on ratification here.

The latest version of the Draft Rules of Procedure of the UPC were published on the UPC Preparatory Committee website on 10 April 2017 here. It is understood that these are the final version, although a finalised format has not been published.

For more on the UPC and unitary patent system, see our Hub here: www.hsf.com/upc.