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What does a no-deal Brexit mean for the UPC? The UK Government IP Guidance

Brexit deal and UK participation to the UPC

Need any guidance for your IP after Brexit?

Brexit will take place on 29th March 2019. The date is fixed and is not dependant on any agreement between the UK and the EU.  The risk of a “no-deal Brexit” has spurred the publication of governmental guidelines for businesses. This week the UK government notably published  a “Patents if there is no brexit deal” Guidance, which looks specifically at the issues of patents and supplementary protection certificates and those of the Unified Patent Court and the Unitary Patent.

Regarding patents and supplementary protection certificates:

The guidance states that only a few areas of UK patent law rely on EU legislation. Therefore “(t)he relevant EU legislation (or its domestic implementation) will be retained in UK law under the EU Withdrawal Act 2018.”  The existing system will thus remain in place but will operate independently from the EU regime.

Regarding the Unified Patent Court and the Unitary Patent:

After March 2019, the UK government IP Guidance lists three possible scenarii:

  • The UPC has not yet come into force:

The UK legislation “to bring (the UPC) into force will never take effect in the UK“.  After Brexit, patent holders and patent users will thus only be able to rely on the UK patent legislation.

 

  • The UPC has come into force and the UK withdraws from it as well as from the unitary patent:
With regard to the protection of inventions within the territories of the UPC  contracting states:

Patent owners, irrelevantly of their nationality, will be able to benefit from the Unified Patent Court and unitary patent within the contracting EU member states . The unitary patent will not however include the territory of the UK. Patent users, irrelevantly of their nationality, will also be open to litigation before the UPC if they infringe existing rights within the contracting EU  member states.  However, the question of the enforcement of the UPC decision in the UK still needs to be clarified. Finally, as confirmed by the EPO, “Brexit will have no consequence on UK membership of the European Patent Organisation, nor on the effect of European patents in the UK” .

With regard to the protection of inventions within the UK:

Patent owners, irrelevantly of their nationality, will no longer benefit from either the UPC or the unitary patent within the UK. They will nonetheless have the options of applying for a national patent before the UK Intellectual Property Office and for a European Patent before the EPO. UK courts will then have jurisdiction.

 

  • The UPC has come into force and the UK remains part of the UPC and the Unitary patent: 

Patent users and owners, irrelevantly of their nationalities, will benefit from the unitary patent as well as from the jurisdiction of the UPC, both extending to the territory of the UK.

But could the UK actually remain part of the UPC and the Unitary Patent? Any guidance?

The question is important. Indeed, the UPC Agreement has no provision enabling a non EU member state to participate in the UPC system.

No it cannot…

A paper published this month by the Max Planck Institute makes a strong argument against its participation. It lists three reasons:

“– (1) there is no legal basis in primary Union law for courts situated outside the judicial system of the Member States and, consequently, that of  the EU, to cooperate with the CJEU by making references for a preliminary ruling within the scope of Art. 267 TFEU.
– (2) as contracting parties, third countries would have a say in all matters that concern the UPC’s polity and policy, including its reception of Union law and policies, and in particular with regard to the transposition of secondary Union law into the UPCA;
– (3) the fact that the UPCA’s provisions may have to be interpreted in the light of different principles and policies depending on the institution by  which, and the context within which, they are applied may compromise the uniformity of the law embodied therein.“

Yes it can!

Other contributors to the debate have expressed the opposite view. Kevin Mooney, a member of the UPC advisory group, has for example always be a proponent of UK’s participation to the UPC.

In an article to the magazine Juve Mooney declares that he believes that the UK “leaving the EU would not be fatal” to its participation to the UPC.  According to Mooney this should be possible for at least the transitional period. In fact, if the UK and the EU enter a withdrawal agreement that provides for such participation no amendment of the UPCA will be required. This means that “the UK will be in the project for at least two years from March 2019 and will fully participate“.  This would also mean that the Central Division entity  dealing with chemicals, pharmaeuticals and life sciences will remain in London.

However, there is still uncertainty as to the possibility for English judges and lawyers to fully participate to the UPC. Finally, the UK and the EU will need to agree on the UK’s long-term participation to the UPC.

So what still needs to be done for the UPC to come into operation?

Ratification of the UPC Agreement:

Germany must ratifiy the UPC Agreement. The German constitutional court however needs to decide whether the ratifying German legislation is compatible with the German constitution. According to Mooney the decision should be rendered before the end of 2018.

Case management system:

The electronic case management system is still in working progress.  This system is key to the functioning of the Court, which will be a paperless court. However as explained by Mooney, the tailoring of the case management system to the UPC Rules of Procedure is sensitive. Indeed, there are more than 300 rules of procedure which must now be fitted in a binary computer system.

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Could there be a Unitary Supplementary Protection Certificate?

Supplementary Protection Certificate

A Unitary Supplementary Protection Certificate to complement the Unitary Patent?

A few countries have recently geared up for the ratification of the UPC Agreement. Although the date of its entry into force is yet unknown it is hoped that the Unified Patent Court will start its operation before the UK leaves the EU. This means that the Unitary Patent may also become available before March 2019. Indeed, EU Regulations No 1257/2012 and No 1260/2012 entered into force on 20 January 2013 will apply from the date of entry into force of the UPC Agreement. However, the issue of the Unitary Supplementary Protection Certificate still has to be resolved.

In 2015, the EU Commission announced that as part of the Single Market Strategy,  an initiative of the European Commission’s plan to unlock the full potential of the Single Market,  the Commission would ‘consult, consider and propose further measures, as appropriate, to improve the patent system in Europe, notably for pharmaceutical and other industries whose products are subject to regulated market authorisations’. The Strategy thus aimed at exploring a recalibration of certain aspects of patent and supplementary protection certificate protection. According to the EU Commission, this could comprise the following three elements: (1) the creation of a European Supplementary Protection Certificate title, (2) an update of the scope of EU patent research exemptions, and (3) the introduction of an SPC manufacturing waiver.

The promised consultation process finally took place between 12 October 2017 to 4 January 2018 and a total of 231 replies were provided. Its outcomes are summarised in the “Summary of the replies to the public consultation on Supplementary Protection Certificates and patent research exemption for sectors whose products are subject to regulated market authorisations”

It transpires from it that a “very large majority of the respondents across all categories favour the creation of a unitary Supplementary Protection Certificate”, extending unitary patents when such patent rights expire.

Regarding the benefits of a unitary Supplementary Protection Certificate the participants declared the following:

“ (I)t could boost the value of investments, that it would reduce red tape relating to registration and to litigation, that it would provide uniform protection across the Union as well as legal certainty, that it would reduce maintenance costs, that it would offer a specialised court, and that it would make licensing easier. A large majority of generics/biosimilars (‘G/B’) manufacturers, including SMEs, share these views.

One Member State considered that it would also simplify and enhance the efficiency of the SPC application process.

Opinions diverge regarding the practicalities for implementing such a new title. While some respondents favour the grant of that title by a virtual office composed of national experts working on behalf of an EU agency, others prefer either to entrust the EPO with this task, or to set up a new EU agency to do so.

Amongst SMEs manufacturing G/Bs, half of them favour the grant of unitary SPCs by a new EU agency, while the other half favour the EPO for this purpose.”

Concerning the languages to be used for a unitary Supplementary Protection Certificate:

“(A) clear majority favoured the EPO language regime (English, French, German), which is the regime that is applicable to the EU unitary patent. However, SMEs manufacturing generics and biosimilars prefer the five language regime of the EUIPO (English, French, German, Italian and Spanish), whilst one of these favours the EPO regime.

Respondents also mostly considered that national marketing authorisations should be able to be used (in addition to EU marketing authorisations) as a basis for getting a unitary SPC, even though the latter would then not be enforceable in those Member States where no marketing authorisation would have been granted (through mutual recognition or decentralisation procedure).“

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Bulgaria and Romania are gearing up for their ratification of the UPC Agreement

Brexit and the German constitutional challenge

The Unified Patent Court is getting closer to its entry into operation. Indeed after the UK’s ratification, Bulgaria and Romania are gearing up.

Bulgaria:

It has been reported that the Bulgarian parliament has adopted a bill to ratify the Protocol on Provisional Application . The  Parliament will now send the law to Bulgaria’s President who must issue a decree for promulgation, which in turn will be published in the State Gazette.

Romania:

In Romania, the government published its legislative programme for the rest of 2018. It reportedly aims at ratifying the UPC Agreement and its Protocol on Provisional Application by September 2018.

So where do we stand?

Regarding the UPC Agreement: At present, 16 countries have ratified the UPC Agreement (Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Sweden, and the UK). However, the UPC Agreement will enter into force when the UK, France, Germany and 10 other countries will have ratified the Agreement. This means that only Germany’s ratification, on hold  due to a pending constitutional complaint, is now required.

Regarding the Protocol on Provisional Application: The PPA allows some provisions of the UPC Agreement to come into force early. This in order to allow for final preparations for the start of the UPC system, such as the recruitment of judges.  However under Article 3 of the Protocol, its entry into force will only arise a “the day after 13 Signatory States of the Agreement on a Unified Patent Court including Germany, France and the United Kingdom, have either ratified, or informed the depositary that they have received parliamentary approval to ratify, the Agreement on a Unified Patent Court“. So far, the UK, France and 8 other countries (Belgium, Denmark, Estonia, Finland, Italy, Luxembourg, the Netherlands and Sweden) have fulfilled those requirements. Therefore, the PPA will come into force when Germany  and two other countries have done so.

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Five countries have now ratified the Protocol on Privileges and Immunities

Brexit and the German constitutional challenge

During the first quarter of 2018 four countries  (France, Luxembourg, Italy, UK) ratified the Protocol on Privileges and Immunities. This means that there is now a total of five ratifying countries.

The Protocol guarantees that the Unified Patent Court will benefit from privileges and immunities, necessary for the exercise of its functions. It provides notably for:

  • the inviolability of the premises of the Court, as well as those of archives and documents (Articles 3 & 4)
  • the immunity of the Court, its property, assets and funds (Article 5)
  • the immunity of  representatives of a state party (Article 6)
  • the privileges and immunities of the judges, registar and staff (Articles 9 & 10)

These guaranties will apply uniformely to all participating member states .

However, according to article 18, the Protocol will come into effect “30 days after the date on which the last of the four state parties – France, Germany, Luxemburg and the United Kingdom – has deposited its instrument of ratification“.  Germany’s ratification will thus trigger its entry into force -as well as the entry into force of the UPC.

 

 

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The UK ratifies the UPC Agreement and the Protocol on Privileges and Immunities

UK ratifies the UPC Agreement

The UK government announced on 26th April 2018 that the UK had ratified the UPC Agreement.

This ratification is particularly significant. Indeed, the UK is one of the three member states, with France and Germany, whose ratification is mandatory for the Agreement to come into force.

However, the UK’s ratification comes after the Brexit referendum in June 2016, which jeopardised the UK’s participation to the UPC. Indeed, before the UK leaves the EU, it must secure its participation to the UPC  by way of international agreements and amendments of the UPC Agreement.

The UK’s ratification of the UPC also raises the question of the UK’s respect of EU law. Article 20 of the UPC Agreement in fact states that ” (t)he Court shall apply Union law in its entirety and shall respect its primacy“.

Regarding these issues, the UK government declares laconically  that “(t)he unique nature of the proposed court means that the UK’s future relationship with the Unified Patent Court will be subject to negotiation with European partners as we leave the EU.“ 

The UK also ratified the Protocol on Privileges and Immunities

On 26th April 2018 the UK also ratified the Protocol on Privileges and Immunities. This protocol will entitle the Unified Patent Court to benefit from privileges and immunities necessary for the Court to exercise its functions. So far 5 countries have ratified it.

What does these ratifications mean for the UPC?

The UK’s ratifications are strong indicators of its long term commitment to the UPC. The UK’s participation to the UPC is good news as it will ensure the atractivity of the Court. This ratification may also speed up the entry into operation of the Court, regularly postponed since the signature of the UPC Agreement.

Therefore, the entry into force of the UPC Agreement now only requires Germany’s ratification. The latter however is on hold.  In fact, the German constitutional court must decide whether the German law passed to allow ratification is constitutional.

 

See here for more posts on Bexit and the UPC.

See here for more posts on Germany’s ratification.

 

 

 

 

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UPC: Luxembourg ratifies the Protocol on Privileges and Immunities

UK ratifies the UPC Agreement

Luxembourg has become the third country to ratify the Protocol on Privileges and Immunities of the Unified Patent Court on 5th April 2018.

The Protocol will entitle the Unified Patent Court to benefit from privileges and immunities necessary for the Court to exercise its functions.

France ratified the Protocol in February 2018 while the Netherlands deposited its instrument of ratification in January 2017. Luxembourg’s ratification is nonetheless particularly significant. Indeed, the Protocol can only enter into force once ratified by France, Germany, the UK and Luxembourg.

However while both the UK and Germany have passed laws allowing ratification of the Protocol,  the Brexit deal and a complaint before Germany’s constitutional court have slowed down their ratifications. The Protocol’s entry into force is thus on hold until both issues have been settled.

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Encouraging steps towards opening of Unified Patent Court

Encouraging steps by participating member states towards the entry into force of the UPC Agreement

Since the Brexit referendum the future of the UPC has been in jeopardy and, despite the optimistic schedules published by the UPC Preparatory Committee, its opening is still uncertain. Recently however, member states have taken encouraging steps.  The UPC may thus soon become a reality.

 

Key steps in Belgium:

The Parliament amended its legislation to accomodate the Unitary Patent and the Unified Patent Court. This amendment brings some Belgian patent law exceptions in line with those in the UPC Agreement. They inlcude notably the plant variety protection,  the “Bolar” type exceptions and the use of information obtained under Directive 2009/24. Similarly,  Belgium will carry out a linguistic check of other patent law exceptions to ensure coherence. Finally,  it will introduce a provision enabling patent owners to benefit from the protection of a European Patent -without unitary effect. Patent owners will thus enjoy some protection even if their request for a unitary patent is rejected.

 

Key steps in Germany:

The challenge, of the legislation allowing for the ratification of the UPC agreement, before the German constitutional court has progressed.  The German Bundestag and Federal government as well as by the German Federal Bar Association (BRAK) and Bar Association (DAV), the European Patent Lawyers Association (EPLAW), the German Association for the Protection of Intellectual Property (GRUR) and the European Patent Litigators Association (EPLIT) have in fact all filled statements.

 

Key step in the UK:

 The Unified Patent Court (Immunities and Privileges) Order 2018 was made on 8th February 2018 after both houses of Parliament approved it. It confers legal capacity to the Unified Patent Court and grants immunities and privileges to its representatives (Judges, Registrar, Deputy-Registrar and staff). This comes after the Scottish statutory instrument  which was approved by the Scottish Parliament in October 2017 and was made by the Privy Council in December 2017. This statutory instrument was the last step for the UK to complete before ratifying the UPC Agreement.

 

Key steps in France:

 The French Senate adopted on 20th Decembre 2017 the bill authorising the ratification of the UPC Protocol on Privileges and Immunities, after it was adopted by the National Assembly on 4th October 2017. The law authorising such ratification was subsquently passed on 30th December 2017 and the Protocol was eventually ratified on 14th February 2018.

 

Key steps in Italy:

Italian parliament passed two laws at the end of 2017. On 25th October 2017, a law allowed the Italian government to amend the Italian Intellectual Property Code and align it with the Unified Patent Court Agreement, which Italy ratified in 2016 .  Italian Law n°163 therefore provides that  “where unitary effect is requested for a European patent and the request is revoked or withdrawn, the term for filing an Italian translation with the Italian Patent and Trademark Office will run from the date of receipt of the communication of the final revocation or refusal of unitary effect, or from the date of receipt by the European office of the withdrawal request“.  On 4th December 2017, a law allowed for Italy’s ratification of the UPC Protocol on Privileges and Immunities.

 

Key step in Latvia:

Latvia deposited its instrument of ratification of the UPC Agreement on 11th January 2018. It become thereby the first participating country to ratify the UPC Agreement in 2018.

 

Key step in Luxembourg:

Luxembourg is preparing the ratification of the UPC Agreement. The Luxembourg’s Council of State gave its consent for the bill ratifying the UPC Protocol on Privileges and Immunities in February 2018. The law was published in Luxembourg official journal and will come into force on 18th March 2018. It is especially important for Luxembourg to ratify this Protocol. Indeed, its ratification -as well as those of France, the UK and Germany- is necessary for the Protocol to come into force.

 

 

 

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What does “good ratification progress” mean?

Brexit and the German constitutional challenge

The Preparatory Committee latest update:

The Preparatory Committee published a short update on the UPC’s latest developments and the good ratification progress.

The update highlights the consequences of the German constitutional court review of Germany’s legislation allowing the ratification of the UPC Agreement. This action has in fact led to the postponement of Germany’s ratification until further notice by the German constitutional court. In turn, this new uncertainty has seriously jeopardised the timetable for the start of operations of the UPC and made it difficult to predict a new timeline.

The Preparatory Committee on the other hand underlines the good progress made by participating Member States with the ratification of the UPC Agreement. In fact, 14 countries have so far deposited their instruments of ratification. Hence, according to the Preparatory Committee, it is likely that 20 countries will have ratified the UPC Agreement by the time the UPC starts operating.

Why is “good ratification progress” good news for patent users?

The number of countries that will have ratified the UPC Agreement will be higher than the original estimations . This is good news for patent owners.

The EU Directive 1257/2012 and the UPC Agreement in fact both state that the territorial scope of the unitary patent and the UPC’s decisions will correspond to the territory of the Member States participating to the unitary patent package and having ratified the UPC Agreement. Article 3 of EU Directive 1257/2012  more specifically states that “(a) European patent with unitary effect (…) shall provide uniform protection and shall have equal effect in all the participating Member States. It may only be limited, transferred or revoked, or lapse, in respect of all the participating Member States.”  Similarly, article 54 of the UPC Agreement, provides that the territorial scope of the UPC’s decisions covers “the territory of those Contracting Member States for which the European patent has effect“.

This means that the more Member States ratify the UPC Agreement the larger the territorial scope of the Unitary Patent and the UPC is. Hence, from 2018, an inventor applying for a unitary patent or the owner of a non-opted out European patent will benefit from a protection extending to 20 countries . Likewise, a patent owner initiating an infringement action may be able to obtain a declaration of infringement in those 20 countries. The alleged infringer of that patent on the other hand may obtain its revocation in all those participating Member States.

Beyond the minimum required number of countries that must ratify the UPC Agreement for it to enter into force, the number of ratifications of the UPC Agreement will also importantly determine the territorial jurisdiction of the court and the territorial scope of the Unitary Patent.

So, which are the 14 countries that have ratified so far the UPC Agreement ?

Austria (2013), France (2014), Sweden (2014), Belgium (2014), Denmark (2014), Malta (2014), Luxembourg (2015), Portugal (2015), Finland (2016), Bulgaria (2016), Netherlands (2016), Italy (2017), Estonia (2017), Lithuania (2017).

The territorial scope of the UPC and the unitary Patent therefore looks like that:

Ratification progress map

(Green: Countries that have ratified / Pink: Countries that have not ratified yet / Brown: Countries not participating to the UPC)

Despite their ratification of the UPC Agreement, some of these countries however have not signed the protocols necessary for the entry into force of the UPC:

What about the 11 countries that still have not ratified the UPC Agreement?

The following countries have not ratified yet the UPC Agreement, however, most have made progress towards their participation to the UPC.

The UK: In October 2015 the UK signed the Protocol to the Agreement on a Unified Patent Court on provisional application. Since (on 26th October 2017) the Scottish Parliament debated and approved the draft International Organisations (Immunities and Privileges) (Scotland) Amendment (N°2) Order 2017 which will give effect to the Protocol on Privileges and Immunities of the Unified Patent Court. This Order amends the Scottish International Organisations (Immunities and Privileges) (Scotland) Order 2009 .

This is however only the first out of the two orders required for the UK to sign the Protocol on Privileges and Immunities. In fact both the UK and the Scottish Parliaments must review and amend their respective legislation. The UK Unitary patent Court (Immunities and Privileges) Order 2017 was laid before the UK Parliament on 26th June 2017 and is now awaiting debate before the UK Parliament.

The UK Parliament is on recess until 9th October 2017 and will thus only consider this statutory instrument from this date. As to ratification of the UPC Agreement the UK government undertook to ratify it before it leaves the European Union and reaffirmed its commitment to the UPC (see here). The UK Government has not however disclosed any date for ratification .

Germany: In March 2017 Germany passed a law to ratify the UPC Agreement. In April 2017 a challenge was brought before the German constitutional court arguing that the legislation passed by the German Parliament was unconstitutional. (See our posts on this issue here) This complaint has put a stop to Germany’s ratification process. The German constitutional court has not yet made public when it will consider the complaint. However, the court has extended (last week) its deadline for third parties comments on the issue to 31st December 2017. Germany has nonetheless signed the Protocol to the Agreement on a Unified Patent Court on provisional application in October 2015 and the Protocol on Privileges and Immunities of the Unified Patent Court in June 2016.

Ireland: In Ireland, although the Irish Prime Minister has announced seven referenda in September 2017, none will be on the ratification of the UPC Agreement. Ireland ratification of the UPC Agreement demands however that the Constitution be modified which can only be made through a referendum. The decision of the Irish Prime Minister to delay the organisation of this referendum  therefore postpone Ireland’s ratification to an unknown date. Ireland has also neither signed the Protocol on Privileges and Immunities of the Unified Patent Court nor the Protocol to the Agreement on a Unified Patent Court on provisional application.

Greece: In June 2016, Greece altogether with 11 other Member States signed the Protocol on Privileges and Immunities. Since, the Ministry of Justice consulted in March 2017 the public on the draft legislation to ratify the UPC Agreement (see the consultation here).  The same month Greece signed the Protocol to the Agreement on a Unified Patent Court on provisional application.

Hungary: It was reported that in July 2017, the Hungarian Minister of Justice, acting on behalf of the government, filed a motion with the Constitutional Court of Hungary (No. X / 01514/2017) requesting the Court’s opinion on the compatibility of the UPC Agreement  with the Hungarian Constitution “and on the appropriate mechanism that must be used for its ratification“.  The Hungarian government in fact wishes the Constitutional Court to determine whether the ratification of the UPC Agreement can be operated under the mechanism of transfer of sovereignty that must be used in relation with the EU and international agreements that Hungary sign as an EU member state. The nature of the UPC Agreement is in fact debated since the Brexit. Indeed if the UPC Agreement is an EU agreement, the UK’s participation to the UPC will be subject to amendments made to the UPC Agreement. If on the other hand the UPC Agreement is an international agreement the participation of the UK will be subject to, notably, its acceptance of the authority of the CJEU. Although for reasons related to the Hungarian constitutional order, the Hungarian constitutional court may thus determine this issue before the CJEU or Brexit negotiators reach a their own conclusion.

Slovenia: In October 2015 Slovenia signed the  Protocol to the Agreement on a Unified Patent Court on provisional application, followed in July 2017 by the Protocol on Privileges and Immunities in July 2017. It also passed a law ratifying the UPC Agreement in October 2016. Slovenia however has still not deposited its ratification instrument to the Council of the European Union. This renders it ineffective. Finally, Slovenia will be hosting the Patent Arbitration and Mediation centre in Ljubljana. In that respect Slovenia has registered a declaration by the Council of the European Union stating that “(t)he Republic of Slovenia considers that the Patent Mediation and Arbitration Centre as established by the Agreement on a Unified Patent Court, done at Brussels on 19 February 2013, is part of the Unified Patent Court, and that consequently the provisions of the Protocol on Privileges and Immunities of the Unified Patent Court, done at Brussels on 29 June 2016, apply mutatis mutandis to the Centre.“

Latvia: Latvia has passed a law ratifying the UPC Agreement in April 2017. This law however will only come into force on 1st January 2018. Latvia is planning to take part in the Nordic-Baltic regional division of the UPC with Sweden, Lithuania and Estonia but must first pass a law allowing its participation to this regional division.

The Czech Republic, Cyprus, Slovakia and Romania have not initiated any development towards their participation to the UPC. 

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Ratification of the UPC Agreement: Lithuania becomes 14th country to ratify, but what about the UK and Germany?

UK ratifies the UPC Agreement

14 countries have now ratified the UPC Agreement

Lithuania ratified the UPC Agreement on 24th August. This ratification arises after Estonia ratified the Agreement on 1st August. Lithuania therefore becomes the 14th country to ratify the UPC Agreement, which now only awaits the UK and Germany’s ratification to come into effect.

What about the UK’s ratification? 

The UK is expected to progress towards ratification from September after summer recess. The Brexit talks may however in part determine when the UK will ratify the UPC Agreement. This makes it difficult to predict when the UK government will ratify the UPC Agreement. (See our section on Brexit and the UPC for more on the topic).

Why has Germany’s ratification been stopped? 

Germany’s ratification was suspended in June after a complaint was filed before the German Constitutional Court. The Court subsequently asked the Federal President to suspend the signature of the legislation implementing the Unitary Patent Package voted on 31st March by the German Parliament .

In an article dated 16th August, the Kluwer Patent Blog published the following brief description of the complaint sent by the German Federal Constitutional Court in response to their enquiry: (as translated by Kluwer)

“In terms of substance, plaintiff is essentially asserting a breach of the limits to surrendering sovereignty that are derived from the right to democracy (Art. 38 (1), clause 1, Basic Law). Primarily the following violations are asserted:

• breach of the requirement for a qualified majority arising from Art. 23 (1), sentence 3, in conjunction with Art. 79 (2) Basic Law;

• democratic deficits and deficits in rule of law with regard to the regulatory powers of the organs of the UPC;

• the judges of the UPC are not independent nor do they have democratic legitimacy

• breach of the principle of openness towards European law owing to alleged irreconcilability of the UPC with Union law.

The proceedings are pending; a specific date for the decision is presently not foreseeable.”

The complaint therefore raises three issues: 

The first issue concerns the quorum required by German law for the ratification of the UPC Agreement.  The complaint in fact suggests that the law ratifying the UPC Agreement if implemented would amend the German constitution. However any amendment of the German constitution must be passed by a majority of two third of MPs. If the German Constitutional Court finds that this law actually amends the constitution then the German Parliament will have to reexamine it again. The first ratification law was in fact passed with a lesser threshold.

The complaint then raises the questions of the democratic deficit of the UPC and the independence of its judges. These grounds seem to refer to the recurrent criticisms made about the EU and EPO institutions, but it is hard to say more without access to the complaint.

Finally, the last ground points to a breach of EU law either by the legislation allowing the ratification of the UPC Agreement or the UPC Agreement itself. This would indeed render the UPC incompatible with EU law.

However, none of these grounds are self explanatory. A more detailed analysis of the complaint will thus only be possible once the complaint is available to the public.

So what is the impact of this constitutional challenge on Germany’s ratification?

In any case, the German publication “Juve.de” reckons that such a constitutional challenge is unlikely to be examined within less than 4 to 6 months. This complaint would thus postpone Germany’s ratification to January 2018. By a domino effect the start of operation of the UPC would then be postponed to the first quarter of 2018.

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Estonia ratifies the UPC Agreement

UK ratifies the UPC Agreement

Thirteen countries have now ratified the UPC Agreement

Estonia has deposited its instrument of ratification of the UPC Agreement on 1st August 2017. Estonia’s ratification happens after it had notified its consent to the start of the UPC provisional application phase in July.

Estonia thus becomes the 13th country to ratify the Agreement. Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Italy, Luxembourg, Malta, Netherlands, Portugal, Sweden have also ratified the Agreement.

However, the UPC Agreement will only come into effect once 13 member states including France, Germany and the UK have completed their ratification.

So when will the UPC Agreement come into effect? 

Ratification by Germany and the UK has been put on hold. This has thus caused delays in the coming into effect of the UPC Agreement.

Germany’s ratification was suspended by the German constitutional court, after it received a complaint challenging the constitutionality of the German legislation enabling the ratification of the UPC Agreement. As it could take up to six months for the Constitutional Court to examine the complaint, Germany’s ratification could be postponed to 2018.

Similarly, despite the UK ‘s declaration that it would apply the Protocol to the Agreement on a Unified Patent Court on provisional application in July, the UK’s ratification was postponed due to the general elections and summer recess. There are  also two important uncertainties as to the UK’s participation to the UPC:

  • First, whether the UPC Agreement can be amended to allow a non-EU member state to participate in the UPC;
  • Second, whether the London section of the central division of the UPC will need to be relocated after Brexit. This was mentioned by Michel Barnier’s -the EU’s chief Brexit negotiator, and Commissioner for Internal Market and Services in charge of the Unified Patent Court (UPC) dossier at the time of signature in 2013 of the UPC Agreement- during the last round of Brexit talks.

Hence, although Estonia’s ratification is good news for the UPC, the timetable published by the Preparatory Committee announcing the entry into operation of the court in December 2017 seems unlikely.