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Is the EU Considering the Relocation of the London UPC Central Division?

The EU is considering the relocation of the London UPC Central Division.

Could Michel Barnier push for relocation of the UPC Division based in London? 

It is reported that in a meeting about the Brexit negotiations, Michel Barnier, current chief negotiator for the EU, mentioned that Brussels is reviewing whether London can keep its Central Division of the Unified Patent Court after Brexit.

This relocation could be motivated by the fact that the European Medicine Agency (as well as the European Banking Authority), whose mission is to evaluate European medicinal products  will be relocated on the territory of the EU, as indicated by the European Council decision on the “Procedure leading up to a decision on the relocation of the European Medicines Agency and the European Banking Authority“.

As the third UPC central division will be competent for pharmaceuticals, chemistry and metallurgy, this potential relocation seems to indicate that the EU is trying to achieve a coherent EU framework for those industries.

However, if it actually takes place, this relocation will be particularly significant. Indeed, the United Kingdom accounts for 11% of extra-EU exports of medicinal and pharmaceutical products and is thus considered as one of the European leaders in this industry. Furthermore, it should be considered against the fact that the UK is currently taking the final steps towards the ratification of the UPC Agreement and has notified its approval to the Protocol to the Agreement on the Unified Patent Court on provisional application a few days ago. This potential relocation project therefore begs the question of whether it could jeopardise the UK’s participation to the Unitary patent package and its ability to contribute to the UPC case law on issues of particular interests for its economy.

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Update on the Opt-out Process and the Case Management System: a Letter from the UPC Chairman

UK ratifies the UPC Agreement

The UPC Chairman answers the questions of the British IP Federation about the opt-out proceedings.

On June 13th, the British IP Federation, which represents the view of UK industry in IP policy and practice, wrote an open letter to the Chairman of the Preparatory Committee of the Unified Patent Court (UPC) Mr Alexander Ramsay asking him to clarify the opt-out process during the sunrise period (3 months before the entry into force of the UPC Agreement).

Six days ago, the IP Federation published on its website the reply from the chairman. In his response, Mr Ramsay addressed the following points:

  1. The Chairman clarified the meaning of rule 12 of the Draft Rules on the European Patent Litigation Certificate. This rule does not prevent a European Patent Attorney (EPA) with an existing alternative qualification to register during the sunrise period as a UPC Representative.
  1. The IP Federation had concerns that the massive influx of registrations as UPC representatives at the start of the sunrise period could create delay. But, the chairman stated that arrangements had been made to manage the expected large number of applications.
  1. All users, including staff members, will have to register on the Case Management System (CMS) if they want to make applications to opt out. There will be a two-stage authentication procedure to register, first as a user, then as a UPC representative on the CMS. The details of this procedure will be published in the near future on the UPC Website.
  1. The formalities staff will be able to prepare the opt-out applications for EPAs or representatives to file. However, the formalities staff will have to use their own user ID if they want to register the opt-out on behalf of the EPA or representative. Any user that lodges the application will be responsible for its content and must provide her user identity. Besides, a mandate will be required for any user that is not a qualifying EPA or a UPC representative.
  1. The proprietor of a patent will not need a mandate to opt it out. If the proprietor is a company, any member of the staff who is not a UPC representative will need to file a mandate. This is why the Preparatory Committee is considering the creation of a general mandate to authorize multiple opt-out applications by a particular user over a period.
  1. Application Programming Interfaces (APIs) are provided by the UPC IT team in the developer section of the UPC website to enable companies to integrate the CMS to their IT systems. Also, a user-friendly guidance through the APIs and a list of third-party companies specialized in services for integration with the CMS will be published on the UPC website as soon as possible.

The Chairman did not specify any date for the start of the sunrise period.

Changes coming to the Case Management System.

On a side note, on July 5th the UPC IT team released an update to the CMS. The goal is to fine-tune different processes on the site like the opt-out application process or the procedure of patent selection. A new API was also made public on the UPC website.

A few days later, the UPC IT Working Group Coordinator Dario Pizzolante announced in a statement that a new version of the CMS specifically designed for the opt-out procedure during the sunrise period will be released in August. He also added that in the future the changes made to the CMS will not be released continuously but instead in larger updates. The IT team is currently working on the adaptation of the CMS to the rules of procedure and on the authentication mechanism. Besides, the team has been receiving feedbacks from multiple workshops since the creation of the temporary website.

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Update on the UPC timetable: a message from UPC Preparatory Committee Chairman

Brexit and the German constitutional challenge

On 7th June 2017 the Preparatory Committee announced through a statement a delay in the start of the Period of provisional application and in the entry into force of the UPC Agreement. No new timetable was announced, but the committee expressed its will to publish one in the foreseeable future.

Yesterday the chairman of the Preparatory Committee Alexander Ramsay released a message on the UPC website.

The Preparatory Committee is still waiting on two different national procedures:

  • The ratification of the UPC Agreement, which requires the deposit of 13 instruments of ratification, including Germany, France and the United Kingdom.
  • The approval of the Protocol on Provisional Application (PPA) by 13 Member States that have already signed the UPC Agreement and whose Governments have received Parliamentary approval to ratify the UPC Agreement.

On one hand, the chairman noted that the ratification process has progressed in both Estonia and the United Kingdom. Estonia indeed passed the necessary legislation to ratify the UPC Agreement and the UPC Order on Privileges and Immunities was placed before the British Parliament on 26th June.

But on the other hand, three  Member States, including Germany and the UK, still need to approve the PPA to start the provisional application period.

The chairman insisted on the recent delay of the German ratification bill by the Federal Constitutional Court due to a recently complaint. In fact, the German Constitutional Court received a complaint in April 2017 challenging the constitutionality of the legislation enabling the ratification of the UPC Agreement. The grounds and the source of the complaint remain unknown to the public. However, the Court considered this complaint justified enough to request the Federal President not to sign the bill and examine the complaint before ratification.

Considering the above, the chairman concluded it is currently difficult to maintain a definitive starting date for the period of provisional application. According to him, the provisional application period should start during the autumn 2017 followed by the sunrise period for the opt-out procedure in early 2018. Around three months later, the UPC Agreement should enter into force and the UPC should become operational.

This announcement is consistent with the timetable that was expected by most experts. The UPCBlog team will follow any update on a more detailed timetable.

 

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German Federal Constitutional Court stops German ratification bill

Germany's constitutional court

The ratification of the UPC Agreement might be facing another delay.

According to a report from a German newspaper (the Frankfurter Allgemeine Zeitung), the German Federal Constitutional Court (the Bundesverfassungsgericht) asked the Federal President to suspend the signature of the legislation implementing the Unitary Patent Package voted on 31st March by the German Parliament  necessary -together with the German executive’s and its publication in the German Federal Law Gazette- for it to become legislation.

The German Constitutional Court in fact received a complaint in April 2017 (2 BvR 739/17), from a currently unknown source, challenging the constitutionality of the legislation enabling the ratification of the UPC agreement.  Although the grounds remain unknown to the public, the Court considered this complaint justified enough to request the Federal President not to sign the bill and examine the complaint before ratification.

The Constitutional Court spokesperson confirmed that the President had indeed agreed, as a preliminary measure, to delay signing the bill.

It is however difficult to say whether this unexpected event will slow down, again, the ratification process of the UPC agreement. In fact, Germany still has time to deposit its instruments of ratification by September 2017, thus allowing the UPC to be launched by the beginning of 2018.

 

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EU Competitiveness Council call for the UPC to be brought into operation as quickly as possible

EU commissioner Elżbieta Bieńkowska at EU competitiveness Council 29-05-17

EU Commission calls on contracting member states to intensify efforts:

During the EU Competitiveness Council that took place on 29th and 30th May “(s)everal delegations and the Commission called on member states to intensify their efforts so as to bring this major reform into operation as quickly as possible.”  

Similarly, in anticipation of this meeting the Association of European Chambers of Commerce and Industry and the British Chambers of Commerce had addressed a letter to the UK government and a press release to this effect. In both communications the chambers urge the Government to “do everything within its powers to facilitate the completion of the complex and lengthy ratification process, regardless of the general election and Article 50 negotiations”. The chambers also encouraged the UK government “to continue to play a constructive and active role in ensuring that the Unitary Patent becomes a reality as soon as possible.”

The provisional application phase start date originally planned for “end of spring 2017”: 

Indeed, the Preparatory Committee had recently set the end of May as its target date for the beginning of the provisional application phase. However, as highlighted by the EU commissioner Elżbieta Bieńkowska at the last EU competitiveness council, this target date has not been met. This means that the possibility for the UPC to become operational by the end of 2017 is looking bleak.

The EU Commissioner pointed out that even the protocol on provisional application could not be implemented yet. In fact, it still lacks the ratification of three contracting member states having already ratified the UPC Agreement. This means that the provisional application phase is being delayed. In the Commissioner’s view this is particularly troublesome. She argues that if the provisional application phase is delayed beyond the summer break the UPC will not become operational in 2017.

The Commissioner however also specifically pointed out that the UK has still not ratified the UPCA. This is of course due to the general elections that will take place in June 2017. The UK minister has nonetheless declared that the UK still wished to participate in the UPC and will ratify the UPCA.

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A short update on the UPC next milestones:

UK ratifies the UPC Agreement

Although the entry into force of the UPC Agreement will be delayed by the UK’s general elections, the time is opportune to do a short update of the next milestones before the UPC becomes operational:

As soon as the required number of member states signatories to the Provisional Application Protocol is met, the provisional application phase will start.

The Protocol will enter into force after 13 states, that have already signed and ratified the UPC Agreement, approve the Protocol. So far 14 states have signed it or declared being bound by it. However, only 8 of them have already ratified the UPC Agreement. The Protocol will allow for some institutional, organisational and financial provisions of the UPC Agreement to be implemented before the Agreement enters into force. It will notably allow for the Court to have legal personality. It will also allow for the Administrative and Advisory Committees to make necessary preparations before the entry into force.

During the provisional application phase:

The Administrative Committee must appoint judges form the shortlist published by the Advisory Committee.

The Administrative Committee must also ensure that the IT and Case Management System are finalised and tested. This should ensure that they are ready for the Court opening.

The Budget Committee must approve the Court’s budget endorsed by the Preparatory Committee in its 17th Meeting (July 2016).

The EU Commission will be requested to give its opinion on the compatibility of the Rules of Procedure with European Union Law.

Once the compatibility is confirmed, the Rules of Procedure will be adopted by the Administrative Committee of the UPC.

Between July and September 2017:

The UK and Germany, two of the three contracting member states upon which the entry into force of the UPC Agreement is conditional must ratify the said Agreement. The UPC Agreement has already been ratified by 12 contracting member states, including France. It will however only enter into force once 13 contracting Member States, including France, Germany and the UK ratify it.

In September 2017 -or after the UK and Germany ratify the UPC Agreement- the sunrise period for opt-outs will start.

This will give approximately three months to businesses to make any adjustments to their IP strategies. During this time patent owners will be able to register their opt-outs through the UPC Case Management System. It might also be possible for patent owners to apply to the EPO for unitary effect. This however still has to be confirmed by the EPO.

Finally, in February-March 2018 the UPC should become operational. (See our post on how the UK’s late ratification of the UPC Agreement will delay the start of the UPC)

 

 

 

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No ratification of the UPC Agreement by the UK before the general elections

The EU is considering the relocation of the London UPC Central Division.

There will be no ratification of the UPC Agreement by the UK before the general elections:

The UK’s ratification of the UPC Agreement will have to wait for after the election of the next government. In fact, the UK parliament was dissolved at the end of April, 25 working days before the general elections. It was also dissolved before ratifying the UPC Agreement. This is likely to have a major impact on the starting date of the UPC. Indeed, it was initially announced that all necessary instruments of ratification would need to be deposited by the end of May. This was in order for the UPC to become operational in December 2017.

The Patent (European Patent with Unitary Effect and unified Patent Court) Order 2016 N°.388:

The UK has already amended the Patent Act 1977 through secondary legislation. The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 N°388, passed in March 2016, implements the UPC Agreement. It also defines its jurisdiction, the transitional provisions, necessary modifications, and conditions of enforcement of the Agreement.

Therefore the UK only needs to pass an order to implement the Privileges and Immunities Protocol, which it signed in December 2016:

  • The UK and Scottish parliaments must first approve this order.
  • The Privy Council will then give its the final assent.
  • Once this legislation has been passed, the UK will be able to formally ratify the UPC Agreement.

It is however uncertain when the UK parliament will examine the ratification bill. Indeed, depending on the Government’s priorities, it will present the bill to the Parliament either before or after the summer recess. This means that the UK’s ratification of the UPC Agreement could either take place between June and July or after September.

What consequences will a late ratification by the UK have on when the UPC will become operational? 

This new postponement of the UK’s ratification also raises questions as to Germany’s ratification. German parliament has in fact recently approved the ratification and amendment bills. Germany was thus expected to trigger the start of the UPC by depositing its instrument of ratification in August, after the UK had done so. However if the UK does not ratify the UPC Agreement by this date, Germany may postpone the submission of its instrument of ratification. This could potentially slow down again the start of operation of the UPC; not to mention the German general elections on 24 September 2017 which might also delay it further.

Therefore, this would mean that if -at best- the UK and Germany deposit their instruments of ratification respectively in July and August 2017, the UPC would become operational in February 2018, after the  6 months necessary to the provisional application.

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What has changed in the new Draft Rules of Procedure?

UPC Q&A

The Preparatory Committee published the new draft rules of procedure. These include the following changes from the draft published in June 2016:

Rule 5, which provides for the lodging of an application to opt-out and the withdrawal of an opt-out, now specifies that the application to opt-out shall contain:

  • The name of each proprietor or applicant for the European patent or application.
  • The name and address of “any person” lodging the opt-out application on behalf of the proprietor or the applicant as well as the mandate for lodging the application to opt-out. This identification requirement is different from the obligation to identify the lawyers and patent attorneys representing the applicant and patent proprietor. It applies to representatives that do not fall within article 48 of the Agreement on the Unified Patent Court. This means that non-EU lawyers and patent attorneys as well as private companies will be able to opt-out on behalf of the patent owner or applicant. It is however unclear whether the obligation to include a mandate applies to all representatives or just “any other person lodging the Application to opt out on behalf of the proprietor or the applicant“. In fact although the new Draft Rules of Procedure mention this obligation  in relation to the latter representative, the UPC Case Management System requires a mandate for “the person lodging this Application on behalf of each proprietor/applicant/holder“, without specifying who is bound by it. The mandate template (see below) does not give any useful information either at to this issue.

Rule 5 also stipulates that the opt-out is deemed to be withdrawn where an application for a European patent subject to an opt-out proceeds to grant as a European patent with unitary effect. The proprietor is thus not anymore under the obligation to notify the Registrar.

Rule 152, which allows for the compensation for representation costs, now provides for the party submitting a claim, counterclaim, application request or appeal (subject to a fixed fee) to assess the value of its action in its first submission. The Administrative Committee will beforehand adopt a scale of ceilings  for recoverable costs by reference to the value of the proceedings. The Court will in any case hear the other party before it grants the other party compensation for its costs.

Rule 209 now states that when an applicant applies for protective measures for a patent which is also the subject of a protective letter, she can withdraw her application. She may also request the Court to order that the application and its contents remain confidential.

Rule 370, which lists court fees for the Court of First Instance and the Court of Appeal, now distinguishes between fixed fees and value-based fees. It also enumerates their corresponding procedures and actions. It details the value assessment of the relevant action, the amount to be paid by small and micro enterprises, and the modalities of reimbursement of fixed and value-based fees.

Finally, Rule 371 and Rule 377 respectively add that :

  • the claimant shall pay the value-based fee shall according to her assessment of the value at the time of lodging the relevant pleading or application. If the judge-rapporteur determines a higher value, the claimant will have to pay the remaining fee within 10 days.
  • any applicant can apply for legal aid. This differs from the previous Draft Rules of Procedure which limited the granting of legal aid to “any natural person who is a citizen of the European Union or a third country national residing lawfully in a Member State of the European Union “.

 

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Template Mandate for UPC representatives Rule 5

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Ratification and amendment bills adopted by both houses of German Parliament

Ratification and amendment bill adopted by German Parliament

The ratification bill allowing the German government to ratify the Unified Patent Court Agreement and the bill amending German law to accommodate the Unitary Patent Package were adopted by both houses of German Parliament.

On 31st March, the German Bundesrat adopted, without any modification, the bill approved and sent by the Bundestag on 9th March 2017 for the ratification of the Unified Patent Court Agreement.  The Bundesrat’s decision states:

“Law resolution Of the German Bundestag

At its 956th meeting on 31 March 2017, the Federal Council (Bundesrat) adopted the Act adopted by the German Bundestag on 9 March 2017 in accordance with Article 23 (1), second sentence, Article 74 (2) in conjunction with paragraph 1 number 25 and 105 (3) of the Basic Law.”

This bill provides for the ratification of the Unified Patent Court. It describes the purpose and functioning of the UPC. It also sets out the cost to be borne by Germany and the anticipated budget of the UPC.

The Bundesrat also examined the second bill which will modify German patent law to accommodate the Unitary Patent Package.  The Bundesrat first examined this bill on 8 July 2017 and decided not to raise objections. It was then adopted by the Bundestag on 9 March 2017 without amendments. The Bundesrat therefore notes that there is no reason to submit the bill to the mediation committee.

This bill provides for the new European Patent with unitary effect to be incorporated into the German legal order:

  • It defines the situations which allow for the protection of an invention by a national patent and a European patent or a European patent with unitary effect.
  • It sets “a new compulsory enforcement rule (…) to enable the decisions and orders of the Unified Patent Court to be enforced without difficulty in Germany“.
  • A new compulsory enforcement rule will be introduced to enable the decisions and orders of the Unified Patent Court to be enforced without difficulty.
  • Finally, the German Patent and Trademark Office will be required to indicate in its register whether the patent has unitary effect of not.

Now that both Parliament houses have adopted the bills, the German executive and President must sign them. The bills must then be published in the German Federal Law Gazette to become legislation.

 

For a quick overview of the bills and official texts click on the following links:

Gesetzesbeschluss des Deutschen Bundestages  (dated 10/03/17)

Beschluss des Bundesrates (dated 31/03/17)

Explanatory note (dated 31/03/17)

Official page of the Federal Council meeting n°956

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The European Parliament Legal Affairs Committee on the UPC state of affairs

EU Parliament legal affairs committee UPC

The European Parliament Committee on legal affairs organised a session last week on the Unitary Patent Package. Benoit Batistelli the President of the EPO, Mr Tokarski from the EU Commission Directorate-General for “Internal Market, Industry, Entrepreneurship and SMEs”, and Mr Bernhard Rapkay EU MP of the Socialist and Democrats group, presented the UPC state of affairs.

Ratification of the Unified Patent Court Agreement and Protocol for the provisional application of the Agreement for the Unified Patent Court Agreement: 

Mr Batistelli gave an update on the state of ratification. He indicated that:

  • Germany should be ratifying the UPCA in the coming weeks.
  • the UK has publicly committed itself to ratifying the UPCA before leaving the EU. In fact, Jo Johnson, the new UK Intellectual Property minister confirmed to President Batistelli that the UK government is committed “to finalize the national ratification of the UPC treaty in order for the Court to be operational on 1st December 2017”. This will enable the EPO to deliver the first Unitary Patent at the same time.

The EPO’s President also clarified the impact of Brexit on the UPC. He explained that the Unified Patent Court Agreement cannot come into force unless it is ratified by 13 states. These 13 states must include France, Germany, and the United Kingdom. Therefore for the UPC to come live at the date announced by the Preparatory Committee, the UK must ratify the UPCA before it leaves the EU. If it does not, Italy could become the third state upon whose ratification the UPC would become operational. Italy is in fact ranked fourth in the EU for patent filings, just after the UK.

Mr Tokarsky explained that everything is ready at technical level. However participating member states need to ratify the Protocol on the provisional application of the Agreement on the Unified Patent Court. Mr Tokarsky particularly insisted for the states that already have parliamentary approval to actually ratify the Protocol. He also highlighted that the necessary ratification must take place before the next Competitiveness Council meeting on 29th May. Indeed the UPC requires a minimum of six months to get ready and become operational.

Mr Tokarksy also expressed the Commission’s hopes all EU countries which participated to the enhanced cooperation ratify the UPCA. Similarly the EU commission wishes for most participating member states to ratify the Unified Patent Court Agreement by the end of 2017. To that effect, the EU Commissioner called all states to complete their ratification without further delays. Mr Tokarsky likewise appealed to all EU institutions, and more specifically the EU Parliament, to encourage states to work in that direction.

Mr Rapkay a contrario delivered a less optimistic speech and cast doubts as to a quick ratification by the UK.

The Unitary Patent Package and SMEs: 

This committee meeting was also an opportunity for the EPO and the EU Commission to underline their commitment to SMEs. Mr Batistelli insisted that the UPC would be very beneficial to SMEs across the EU. It will in fact simplify proceedings and allow for an EU wide enforcement of the court’s decisions, including injunctions. He also highlighted that the cost (around 5,000 euros for 10 years) and the increased legal certainty brought by the Unitary Patent will allow SMEs to better protect their intellectual property rights. Additionally, Mr Takarsky explained that the EU commission is now developing a specific strategy for SMEs to develop their IP rights as reflected in the EU annual report 2016.

The video of the Legal Affairs Committee:

http://www.europarl.europa.eu/news/en/news-room/20170317IPR67572/committee-on-legal-affairs-meeting-23032017-(am)