As the Bundestag passes the legislation to ratify the UPC Agreement, the UPC may finally open its doors in 2022

The Unified Patent Court (UPC) took another step closer to coming into being on November 26 with a Bundestag vote passing the legislation necessary for Germany to ratify the UPC Agreement and the Protocol on Provisional Application with (more than) the two thirds majority found to be required by the German Federal Constitutional Court in its decision rejecting the initial vote on these measures as unconstitutional for lack of sufficient majority (decision dated 13 February 2020, announced 20 March 2020).

German ratification – next steps and any further challenges?

Germany is the last required ratifier of the UPC Agreement (UPCA).  Ratification by at least 13 contracting states is required for the UPCA to enter into force, additionally this must include the “three States in which the highest number of European patents was in force in the year preceding the year in which the signature of the Agreement takes place”. With UK having withdrawn, those three countries are France, Germany and Italy. So far 15 contracting Member States have ratified, including France and Italy (see the ratification table here) so Germany's ratification is the last piece of the jigsaw for the UPCA to come into force.

The legislation will now be submitted to the German upper house (Bundesrat) where approval is expected to take place on December 18. The next steps after that are a countersignature by the Federal Government (a formality) and the signature of the Federal President (so-called “Ausfertigung” or legalization). This is followed by the publication in the Federal Law Gazette, by which the law enters into force, allowing the Federal Government to deposit the ratification of the UPCA and sign the Protocol.

In the first German ratification attempt the Federal President did not sign because a constitutional challenge had been filed after the Bundesrat vote and the Constitutional Court asked the Federal President to delay his signature to await the outcome of the challenge, which in the end was successful based on the majority vote issue.

A “Foundation for a Free Information Infrastructure” (FFII) has following the Bundestag vote started a crowd-funding campaign for a new constitutional challenge. However, unless the FFII or others started preparation a while ago it seems highly unlikely that such a challenge could be filed before the law enters into force. Further, it seems unlikely that the Constitutional Court will once again ask the Federal President to delay his signature.

In addition, even though the Constitutional Court referred in its decision to a number of issues as relevant but either not substantiated enough in the constitutional challenge or not necessary to decide due to the successful majority challenge, it appears unlikely that any further challenge would succeed.

Once the German ratification is deposited, the UPC will commence on the 1^st day of the fourth month after the month of the deposit of instrument of ratification. Germany is expected to delay the deposit of its ratification of the UPCA until the UPC has become fully operational during a period of provisional application as explained further below.

The UPC "Provisional Application" phase

The Protocol on Provisional Application (PPA) provides for a provisional application of the UPCA before the UPCA actually enters into force. As well as ratifying the UPCA, participating states need to sign the PPA, so that the provisional application stage can start.

By signing the PPA, the signatory states agree to apply the institutional, organisational and financial sections of the UPCA provisionally. Once the Protocol enters into force, the UPC organisation (as such) will 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 stage and will then take over the responsibility of the preparations from the UPC Preparatory Committee.

The provisional application stage allows the final preparations to be made for the commencement of the UPC in the certain knowledge that it will actually commence. This allows the employment of judges for example, and the finalisation of court preparations. The UPC rules of procedure also need to be finalised during this period.

There is no prescribed time-frame for the provisional application period, however, it is currently expected that it may take approximately 12 months.

In order for the PPA to enter into force, in addition to Germany, two other UPCA contracting Member States still need to sign the Protocol. It is currently envisaged that this could happen by February 2021.

Thus, assuming that the provisional application starts in February 2021 and that Germany deposits the ratification of the UPCA by February 2022, thereby triggering the prescribed period running up to the commencement of the UPC, the UPC could then open its doors on June 1, 2022.

Support for the UPC from the Commission and the EPO

The day before the Budnestag vote, the Commission released its EU IP action plan: Making the most of the EU’s innovative potential – An intellectual property action plan to support the EU’s recovery and resilience (25 November 2020) - see our blog post here. The Commission considers the unitary patent (UP) and the UPC as key to ensure that innovators have access to "fast, effective and affordable protection tools". The Commission states that once the ratification process is completed, the Commission will work with the EPO and Member States to make the UPC/unitary patent system operational across the contracting EU Member States and will encourage the Member States that have not done so to join the system (Spain, Poland and Croatia).

The EPO President António Campinos responded to the Bundestag vote saying that, the so-called “the Unitary Patent package” (ie the UPC/unitary patent system) “will make Europe even more attractive for innovation and investors - and help with economic recovery in light of the COVID-19 crisis.” He declared that the EPO stands ready to register the first UPs, once the UPCA comes into force. The UPC is the only court in which UPs can be litigated. Campinos expects the UPC to start its work in 2022.

For more on the UPC and unitary patent system see our dedicated hub here.

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