Brexit and the German constitutional challenge

Brexit is getting closer everyday and its consequences for the UPC have become tangible: it is now unlikely that the UK will still be a member of the UPC after 31st October 2019. It also is unlikely that the UK will become a member state of the UPC before Brexit; Germany’s ratification before the end of next month being highly improbable.

So what has been happening in the UK with regard to the UPC?

In August, Jo Johnson was reappointed as IP Minister. He had already held the position from July 2016 to January 2018. It is under his tenure that the UK ratified the UPC Agreement and declared it intended to participate to the UPC after Brexit.

Some had interpreted this re-appointment as a strong signal of the government support for the UK’s involment in the UPC. However Jo Johnson resigned as MP and minister on 05th September, citing “unresolvable tension between family loyalty and the national interest’.

Thus, now that the UK Government seems to be aiming for a no-deal Brexit the possibility of the UK remaining a member of the UPC is very slim. Indeed, had the UK agreed to the EU withdrawal agreement, the UK and the EU would have had until 31 december 2020 to negotiate the UK’s continued participation to the UPC.

Hence, although the UKIPO declared the following to Managing IP:

it is difficult to see how the UK government could, after Brexit, justify to be subjected to the decisions of the Court of Justice of the European Union.

Moreover, commentators agree on the fact that there is still a strong incentive for the UPC to exist even without the UK’s participation. The UPC member states will thus probably push for its entry into force despite the fact that the UK is not participating.

Managing IP has actually launched this week a survey for in-houses “to find out whether a European harmonised patent system would still be attractive to patent-focused businesses without the UK as a participant” . It asks 2 questions:

“1. Would the UPC and unitary patent system still be attractive to you and your business without the UK as a participant? 2. Why do you think the UPC and unitary patent project is still attractive OR unattractive without the UK? “

And what about Germany?

Despite passing the legislation enabling the ratification of the UPC Agreement, Germany has yet to ratify it. The ratification is stalled by the constitutional challenge of the very legislation allowing the ratification of the UPC Agreement . The German constitutional court has however schedulled the challenge for a hearing this year.

In August, the German Federal Government has had also to answer questions from the German Free Democratic Party about the UPC. The questions concerned the impact of Brexit and Germany’s annual budget for the UPC. The German Federal Government was asked about the money it has spent to contribute to support the development of the UPC. With regard to the impact of Brexit, the German Federal Government responded the following:

“The issue of the withdrawal of the United Kingdom from the European Union (so-called Brexit) and its implications for European patent reform play an important role in the further implementation process of the Unified Patent Court. The real and legal implications of withdrawing from the Treaty must be examined and agreed at European level. This opinion is currently not finalized, not least because significant factors of the expected exit are not yet known.” (p.2 response to questions 1 & 2, )

Regarding future budgets, the Federal Government confirmed its ongoing commitment to the creation of a unified patent system in Europe. It declared:

“The Federal Government has always insisted on the creation of a unified patent system in Europe and thus also on the Unified Patent Court. This commitment will continue. The Federal Government therefore takes the necessary budgetary measures to fulfill the financial obligations arising from ratification” (p.4, response to questions 7 & 8)

The UPC into action before Brexit no longer possible?

The coming into existence of the UPC before Brexit does not seem probable. It is in fact, on the one hand, unlikely the German constitutional court decide upon the constitutionality of the ratification legislation before Brexit and, on the other hand, one can doubt that Germany would sign the UPC Agreement without knowing the overall impact of Brexit on the UPC.

The coming into action of the UPC will thus depend on the Member states’ ability to commit, notably financially, to the project once the UK will have left the EU. Indeed, the UPC Agreement does not require the UK to be a participating member state for it to come into force; but only provides that “this Agreement should enter into force on 1 January 2014 or on the first day of the fourth month after the 13th deposit, provided that the Contracting Member States that will have deposited their instruments of ratification or accession 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, or on the first day of the fourth month after the date of entry into force of the amendments to Regulation (EU) No 1215/20121 concerning its relationship with this Agreement, whichever is the latest”.

26 March 201827 March 2018

What should you know about the Unitary Patent?

The Unitary Patent should soon add a new level of protection for patent owners in Europe. This post therefore presents the essential characteristics of the Unitary Patent, and how it differs from the current patenting system.

What is the current patenting system in Europe?

In Europe, it is currently possible to apply for a patent through the national, international, and European routes.

Under the national route, applicants can apply for a patent in one country at a time. The applicant must file the application at the IP offices in the countries where she seeks protection. The national route leads to national rights and confers protection at national level.

Under the international route, the Patent Cooperation Treaty (PCT) provides a unified procedure for 152 different contracting states. A PCT application allows patent holders to simultaneously seek patent protection in a large number of countries by filing a single “international” patent application. It is not necessary to file several separate national or regional patent applications. The granting of patents remains however under the control of the national or regional patent offices.

Under the European route, applicants are granted European patents for some or all of the contracting states to the European Patent Convention (EPC) and to the current extension states (Bosnia and Herzegovina, Montenegro). A European patent is a bundle of national patents. It has the effect of and is subjected to the same conditions as a national patent granted by that state. This is true for each of the contracting states for which it is granted.

What is a Unitary Patent?

A European patent with unitary effect or Unitary Patent is a new type of European patent, to which unitary effect is given. The Unitary Patent is not a new intellectual property title but a new legal characteristic given to an already existing title: the European patent.

The Unitary Patent will be granted by the EPO under the rules and procedures of the EPC. It will co-exist with the current patent system. Patent proprietors will be able to choose between European patents, national patents and Unitary Patents.

It will not be possible to obtain a European patent and a Unitary patent for the same invention.

Which legal instruments created the Unitary Patent?

In March 2011, the Council of the European Union issued a decision authorising enhanced cooperation for the creation of a unitary patent protection.

Enhanced co-operation is a mechanism set out in the Lisbon Treaty. It allows 9 or more EU member states to establish advanced integration or cooperation in any area within the EU structures, without the other member states being involved.

The Unitary Patent package consists of:

Regulation (EU) N°1257/2012 dated 17th December 2012 implementing the enhanced cooperation in the area of the creation of the unitary patent protection.

Regulation (EU) N°1260/2012 dated 17th December 2012 implementing the enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements.

The Agreement on a Unified Patent Court (UPC Agreement), an agreement between EU countries to set up a single and specialized patent jurisdiction. This Agreement must still be ratified by most Member States. The UPC Agreement will enter into force on the first day of the 4th month after the deposit of the 13th instrument of ratification, including the ratification of Germany, France and the United Kingdom. These 3 countries were indeed the 3 Contracting Member States in which the highest number of European patents had effect in 2012. Currently 15 Member States including France have ratified the UPC Agreement.

What are the goals of the Unitary Patent?

The Unitary Patent aims at:

Reducing the current cost of patenting. Patenting an invention in Europe can be costly, as once granted, a European patent can only be enforced at national level. This may also entail translating it into the official language of the country concerned and paying validation and annual renewal fees in multiple states. The Unitary Patent on the contrary will offer simpler and cheaper translation requirements. It will also be subject to a single set of renewal fees. This will allow for a reduced patenting cost.

Improving legal certainty and reducing litigation costs. Patents on inventions with a high market value are frequently the subject of litigation. Due to the lack of a unified litigation system, this leads to parallel lawsuits in different countries and divergent outcomes. The Unitary Patent will be under the exclusive competence of the Unified Patent Court. It will thus depend only on a single set of rules. This should guarantee a unified application of the law and prevent any parallel and discordant law suit. Finally, the decisions of the UPC, will have authority in all participating Member States.

When will it be possible to apply for a Unitary Patent?

Patent holder will be able to request unitary effect for any European patent granted on or after the date of entry into force of the UPC Agreement. It will however not be possible to request unitary effect for patents granted before that date.

In which countries will the Unitary Patent be available?

The Unitary Patent will be available in the participating Member States that have signed and ratified the UPC Agreement.

26 countries (all EU Member States besides Spain and Croatia) have adopted the European Regulations. 25 countries (all EU member states except Spain, Croatia and Poland) signed the UPC Agreement. However, only 15 Member States have so far ratified the UPC Agreement.

The Unitary Patent will be available for the territories of the Member States that have ratified the UPC Agreement. Hence although the Unitary Patent may one day be available for 26 countries, it will start off with less countries. The Unitary Patent will however cover the territory of at least 17 countries (ie the 15 member states that have already ratified the UPC Agreement + UK and Germany). The extension of the Unitary Patent’s territorial coverage will thus be progressive as the rest of the Member States will ratify the agreement over time.

Renewal fees:

To maintain a Unitary Patent, the patent holder will have to pay an annual renewal fee directly to the EPO.

The Select Committee endorsed in December 2015 the True Top 4 proposal for the renewal fees applicable to the Unitary Patent. The True Top 4 corresponds to the total sum of the renewal fees currently paid for the four most frequently validated countries. These are: Germany, France, UK and the Netherlands. The True Top 4 gives also special consideration to the situation of the SMEs.

2nd year:	35 EUR	12th year:	1, 775 EUR
3rd year:	105 EUR	13th year:	2, 105 EUR
4th year:	145 EUR	14th year:	2, 455 EUR
5th year:	315 EUR	15th year:	2, 830 EUR
6th year:	475 EUR	16th year:	3, 240 EUR
7th year:	630 EUR	17th year:	3, 640 EUR
8th year:	815 EUR	18th year:	4, 055 EUR
9th year:	990 EUR	19th year:	4, 455 EUR
10th year:	1, 175 EUR	20th year:	4, 855 EUR
11th year:	1, 560 EUR

For more informations on the Unitary Patent check the Unitary Patent section of the blog.

16 November 20176 September 2019

What will the UPC be competent for?

What will be the competence of the UPC?

As a general rule: The UPC will have exclusive competence in respect of civil litigation on matters relating to European patents and Unitary Patents. The UPC will consequently also have exclusive competence on Supplementary Protection Certificates issued for a product covered by a European patent and a Unitary Patent.

More specifically: The Court will be exclusively competent for actual or threatened infringements and related defences, and actions for declaration of non-infringement. The UPC will also be competent for actions for provisional and protective measures, injunctions, actions for revocation and counterclaims for revocation.

However, during at least 7 years after the entry into force of the UPC Agreement, national courts will share jurisdiction with the UPC over actions for infringement and revocation of the national part of a European patent. These 7 years correspond to the transitional period.

What about the Court of Justice of the European Union?

The UPC will have the same obligation as any national court to request preliminary rulings from the Court of Justice of the European Union.

In fact, the UPC is a court common to EU Contracting Member States and as such, it must follow, apply and ensure the uniform interpretation of European Union law.

However, national courts will remain competent for actions that do not come within the exclusive competence of the UPC. The UPC will thus be incompetent with regard to national patents or supplementary protection certificates granted for a national patent.

What will be its relationship with the EPO?

The UPC will have exclusive competence to annul or alter the decisions of the EPO (Article 32 UPC Agreement) if the EPO misuses its power or infringes:

Regulation (EU) N° 1257/2012;
Regulation (EU) N°1260/2012;
Any of the implementing rule of the EPO “for carrying out the administrative tasks referred to in article 9(1) of Regulation (EU) N°1257/2012;
An essential procedural requirement.

Nonetheless, oppositions at the EPO will still be possible. The parties however must first inform the UPC of any pending revocation, limitation or opposition proceedings before the EPO. The Court may then:

stay its proceedings when a rapid decision may be expected from the EPO.
request that opposition proceedings before the European Patent Office be accelerated in accordance with the proceedings of the European Patent Office, (Rule 298 of the Rules of Procedure of the UPC)

16 November 20176 September 2019

Four key points to understand the Unified Patent Court

(1) Which courts currently have jurisdiction over European patents?

Currently, national courts of the contracting states of the European Patent Convention (EPC) are competent to decide on the infringement and validity of the national part of European patents.

This gives rise to a number of difficulties when a patent proprietor wishes to enforce a European patent, or when a third-party seeks the revocation of a European patent, in several countries.

Patent proprietors indeed risk facing diverging decisions between the different national courts of the EPC contracting states. Patent proprietors also face high costs and legal uncertainty over the fate of their patents.

At present, forum shopping is inevitable. Parties in fact seek to take advantage of differences in the national courts’ interpretation of harmonised European patent law, the level of damages awarded, the national procedural laws, and litigation pace.

(2) What is the Unified Patent Court?

The Unified Patent Court Agreement (UPC Agreement) will create a specialised patent court, the Unified Patent Court (UPC).

The Unified Patent Court will have exclusive competence over European patents and European patents with unitary effect. The territorial jurisdiction of the UPC will extend to the 25 participating Member States (every European Union Member States besides Spain, Croatia and Poland).

This means that the rulings of the court will be simultaneously valid in all participating Member States.

The UPC will thus create a uniform and foreseeable patent environment within the European Union.

(3) Which legal instruments created the UPC?

Two Europeans regulations created the UPC:

Regulation (EU) N°1257/2012 dated 17th December 2012 implementing the enhanced cooperation in the area of the creation of the unitary patent protection.
Regulation (EU) N°1260/2012 dated 17th December 2012 implementing the enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements.

These two regulations will apply from the entry into force of the UPC Agreement.

(4) How much will users of the court need to pay for each action before the UPC?

To learn about the different court fees see our detailed review.

3 November 201722 March 2018

What are the consequences of an opt-out?

§. Once an opt-out has been notified to the UPC registry and registered:

If it was granted for a European patent application, the opt-out will automatically apply to the European patent in question.

The opt-out will be valid in all Contracting Member States where this patent produces legal effects. There is no need to notify the opt-out separately for the relevant Contracting Member States.

The opt-out will last for the whole life of the patent. It will not be limited to the length of the transitional period.

The proprietor can withdraw the opt-out at any time and decide to opt back in. This opt-in will then be definitive: the patent proprietor will not be able to opt out its European patent again.

It must be noted that opting out will not be possible if an action is already pending before the UPC.

31 October 201722 March 2018

What does it mean to Opt-out a European patent from the jurisdiction of the UPC?

§. What is an “Opt-out”?

The opt-out is the procedure by which proprietors or applicants for a European patent can withdraw their patents from the exclusive competence of the Unified Patent Court.

Only European patents granted or applied for before the end of the transitional period can be opted out. It will thus not be possible to opt-out European patents with unitary effect or Unitary patents.

§. What happens once the patent is opted out?

Once granted the opt-out will take effect in all participating Member States, and the opted out patent will be removed entirely from the jurisdiction of the UPC.

A European patent opted out will thus be under the exclusive competence of national courts. This means that national courts will be the sole jurisdiction before which -for example- actions for infringement or for revocation of the national part of a European patent can be brought.

However, during a 7 year transitional period after the entry into force of the UPC Agreement, the UPC will share jurisdiction with national courts over actions for infringement or revocation of a European patent. Hence, any holder of or applicant for a European patent will be able to initiate actions before national courts. This will be possible regardless of whether the European patent or application concerned has been the subject of an opt-out.

During this period, the UPC will indeed also have exclusive jurisdiction over Unitary patents.

§. When will the opt-out be allowed?

European patent owners will be allowed to opt-out from the start of the sunrise period up to the last month before the end of the transitional period. In other words it will be available from 3 months before the UPC Agreement entry into force to at least 6 years and 11 months after the entry into force of the UPC Agreement.

§. What are the provisional application phase and the sunrise period?

The Provisional Application Phase is scheduled to last for 6 months. The last 3 months, also known as the sunrise period, will specifically allow European patent proprietors to start opting out. The beginning of the Provisional Application Phase is not yet known but could start during the Autumn 2017.

§. What is the transitional period?

The transitional period is a renewable 7 year-period. During this time the UPC will share jurisdiction with national courts over actions for infringement or for revocation of a European patent.

If the UPC Administrative Committee does not extend the transitional period for a further seven years, the UPC will then have perpetual exclusive jurisdiction over Unitary patents and European patents. Opted out European patents will not come back in the UPC exclusive competence once the transitional period is over.

20 May 2014

Unitary Patent ratification process table.

Unitary patent – ratification progress

Member State	Participation in the enhanced cooperation on the unitary patent protection	Signature of the Agreement on a Unified Patent Court	Ratification of the Agreement on a Unified Patent Court
Austria	Yes	19.02.2013	06.08.2013
Belgium	Yes	19.02.2013	06.06.2014
Bulgaria	Yes	05.03.2013
Croatia	No	No
Czech Republic	Yes	19.02.2013
Cyprus	Yes	19.02.2013
Germany	Yes	19.02.2013
Denmark	Yes	19.02.2013	20.06.2014
Estonia	Yes	19.02.2013
Greece	Yes	19.02.2013
Finland	Yes	19.02.2013	19.01.2016
France	Yes	19.02.2013	14.04.2014
Hungary	Yes	19.02.2013
Ireland	Yes	19.02.2013
Italy	Yes	19.02.2013
Latvia	Yes	19.02.2013
Lithuania	Yes	19.02.2013
Luxembourg	Yes	19.02.2013	22.05.2015
Malta	Yes	19.02.2013	09.12.2014
The Netherlands	Yes	19.02.2013
Poland	Yes	No
Portugal	Yes	19.02.2013	28.08.2015
Romania	Yes	19.02.2013
Slovakia	Yes	19.02.2013
Slovenia	Yes	19.02.2013
Spain	No	No
Sweden	Yes	19.02.2013	05.06.2014
United Kingdom	Yes	19.02.2013

Source: Council of the European Union

Portugal: The Portugese Parliament passed on 10/04/2015 a passed a motion brought by the Council of Ministers to approve the Agreement on a Unified Patent Court. The ratification will however only be finalised after the presidential assent will be proclaimed by decree. Portugal will then need to deposit its instrument of ratification in Brussels for it to be effective. Moreover, according to Bristows UPC “the Commission for Foreign Affairs and Portuguese Communities, which studied the motion before it was voted by the full Assembly, highlighted the need for Portugal to establish a local division of the UPC, although the government has not yet formally expressed a view on the subject, and it was generally thought previously that Portugal would not set up a local division.“