Tag: UPC Agreement

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The UPC is dead (thanks to Germany’s constit. court), long live the UPC!

Germany's constitutional court

The German constitutional decision:

In March 2017 a lawyer asked Germany’s constitutional court to decide whether the German Parliament had passed the legislation ratifying the UPC Agreement with the appropriate quorum .

In March of this year the court, finally, ruled that the Bundestag should have passed the ratification bill with a two-thirds majority of all the German MPs. This quorum is in fact required whenever a piece of legislation substantially amends the German constitution. Instead, only 35 out of 709 MPs approved it.

The German constitutional court however considered that the UPC Agreement allowed the transfer of sovereign rights to a supranational court, the UPC. This therefore amounted to a constitutional amendment and required the legislation enabling the ratification of the UPC Agreement to be passed by the German parliament with a two-third majority of MPs.

This means that Germany must now pass, with the specified quorum, a new law allowing the ratification of the UPC Agreement. With the current worldwide health crisis this may not however be a priority for the German government.

So what now?

Germany’s ratification is necessary for the UPC to go ahead. According to JUVE Patents, the German Federal justice minister Christine Lambrecht announced soon after the German constitutional court published its decision that she “will continue (her) efforts to ensure that we can provide European innovative industry with a unitary European patent with a European Patent Court. The Federal Government will carefully evaluate the decision of the Federal Constitutional Court and examine possibilities to remedy the identified lack of form before the end of this legislative period.”

Although the direction that will take the UPC is uncertain it seems that Germany’s political will still exists at the moment. However, the longer the ratification procees takes the harder it will be for the Court to overcome the rise of euro-scepticism and the growing reluctance of some member states to integrate further legal and economic areas.

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How are trade secrets protected under the UPC Agreement?

TRADE SECRETS under the UPC Agreement

How are trade secrets protected at national level within the EU?

The protection of trade secrets is an essential guarantee for the protection of intellectual property. However, until recently, EU Member States offered very different levels of protection for confidential information. Directive EU 2016/943 adopted in June 2016 thus aimed at harmonizing national legislations.

Indeed, as highlighted by the directive, “there is a higher risk for businesses in Member States with comparatively lower levels of protection, due to the fact that trade secrets may be stolen or otherwise unlawfully acquired more easily. This leads to inefficient allocation of capital to growth-enhancing innovation within the internal market because of the higher expenditure on protective measures to compensate for the insufficient legal protection in some Member States. It also favours the activity of unfair competitors who, subsequent to the unlawful acquisition of trade secrets, could spread goods resulting from such acquisition across the internal market. Differences in legislative regimes also facilitate the importation of goods from third countries into the Union through entry points with weaker protection, when the design, production or marketing of those goods rely on stolen or otherwise unlawfully acquired trade secrets. On the whole, such differences hinder the proper functioning of the internal market.”
All industries should thus benefit from the homogenization of trade secrets at EU level .

Although, while the directive transposition deadline was set for 6th June 2018, EU Member States have actually implemented it at different paces. Companies have however already seized the opportunity to rely on it. In France for example, the Paris Court of Appeal held on 9th October 2018 the first French decision relying on the transposition of the directive (see the decision below). In this case LGE had asked the Court to order Conversant Wireless to present confidential evidence, who opposed it. The Paris Court of Appeal granted LGE‘s request, considering that the confidentiality conditions provided by article L. 153-1 of the French Code of commerce, which transposes EU directive 2016/943, would adequately protect the trade secrets contained in the confidential evidence at stake.

The protection of trade secrets and confidential information is a problem that will similarly arise before the UPC.

How will trade secrets be protected by the UPC?

The UPC Agreement provides for different measures to protect confidential information, at articles 45, 52, 58, 59 and 60.

Article 45 allows the UPC to arrange for private proceedings, and article 52 provides that the UPC may, with the agreement of the parties, dispense with the oral hearing. Article 58 grants the Court the power to order the prohibition or restriction of the collection and use of evidence, while articles 59 and 60 subject the Court’s power to present and preserve evidence as well as inspect premises, subject to the protection of confidential information.

However, the UPC Agreement also contains provisions that may be more challenging for the protection of trade secrets.

Article 10 for example states that the register shall be public (though article 45 provides for private proceedings) . Article 80 adds that the Court may, at the request of the applicant, order the display or publication of the decision.

But what about Non-Disclosure Agreements?

The UPC Agreement does not say anything about Non-Disclosure Agreements. The UPC Rules of Procedure on the other hand specify when the parties can request such agreements.

Hence, when the UPC must give an order “to produce evidence” (Rule n°190), “on the application for preserving evidence” (Rule n°196), or “for inspection” (Rule n°199), measures to preserve the confidentiality of the information at stake can be granted by the Court. Such measures restrict the disclosure of the information “to certain named persons only and be subject to appropriate terms of non-disclosure“.

Rule n°190 for example states: “Where a party has presented reasonably available and plausible evidence in support of its claims and has, in substantiating those claims, specified evidence which lies in the control of the other party or a third party, the Court may on a reasoned request by the party specifying such evidence, order that other party or third party to produce such evidence. For the protection of confidential information the Court may order that the evidence be disclosed to certain named persons only and be subject to appropriate terms of non-disclosure. “ (Emphasis added)

Rule n°105, 115, 197 and 262 also provide for the Court to adapt respectively the interview conference, oral hearing, order to preserve evience and public access to the register. These guarantee that the information is kept “to the extent necessary, confidential in the interests of one or both parties or third parties or in the general interests of justice or public order“.

Rule n°105 for example provides:

” 1. The interim conference should, where practicable, be held by telephone conference or by video conference. 2. On request by a party, subject to paragraph 1 and the approval of the judge-rapporteur, the interim conference may be held in Court. If the interim conference is held in Court, it shall be open to the public unless the Court decides to make it, to the extent necessary, confidential in the interests of one or both parties or third parties or in the general interests of justice or public order. “

The UPC Agreement and the UPC Rules of Procedure thus, in a similar way than EU member states, transpose the EU directive 2016/943. The UPC Agreement is thus drafted to guarantee that trade secrets are not stolen or otherwise unlawfully acquired. Nonetheless, it will now be for the UPC to apply its discretion and decide consistently when to use the measures provided for in the UPC Agreement and in the UPC Rules of Procedure.

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Supplementary Protection Certificates, European Patents, and Unitary Patents: How is it going to work after the entry into force of the UPC?

Supplementary Protection Certificates ensure the recovery of high investments necessary over a long development period to bring a successful innovative product to the market. SPCs in particular are critical for the agrochemical, pharmaceutical and medical devices industries which rely heavily on industrial protection through patents and SPCs. Existing SPCs complement national or European patents to ensure an extra period – up to five years – of protection for patent holders, to offset the time required to obtain marketing authorisation for their patented products.

The entry into force of the UPC will however bring major changes to SPCs as well as European Patents.  This post therefore looks at the provisions in the UPCA and the Rules of Procedure which deal with SPCs; the impact of these provisions on SPCs, European Patents and Unitary Patents; the issues raised by these changes; and finally the project of a unitary SPC.

I. The provisions concerning the SPC in the Unified Patent Court Agreement (UPCA) and the Rules of Procedure: 

A.  The UPCA:

  • Article 2 (h) “Supplementary protection certificate” means a supplementary protection certificate granted under Regulation (EC) No 469/20091 or under Regulation (EC) No 1610/962“

 

  • Article 3 ” This Agreement shall apply to (b) supplementary protection certificate issued for a product protected by a patent“

 

  • Article 30  “A supplementary protection certificate shall confer the same rights as conferred by the patent and shall be subject to the same limitations and the same obligations“

 

  • Article 32 “The Court shall have exclusive competence in respect of:(a) actions for actual or threatened infringements of patents and supplementary protection certificates and related defences, including counterclaims concerning licences; (b) actions for declarations of non-infringement of patents and supplementary protection certificates; (d) actions for revocation of patents and for declaration of invalidity of supplementary protection certificates; (e) counterclaims for revocation of patents and for declaration of invalidity of supplementary protection certificates”.

 

  • Article 83 “(1) During a transitional period of seven years after the date of entry into force of this Agreement, an action for infringement or for revocation of a European patent or an action for infringement or for declaration of invalidity of a supplementary protection certificate issued for a product protected by a European patent may still be brought before national courts or other competent national authorities. (2) An action pending before a national court at the end of the transitional period shall not be affected by the expiry of this period. (3) Unless an action has already been brought before the Court, a proprietor of or an applicant for a European patent granted or applied for prior to the end of the transitional period under paragraph 1 and, where applicable, paragraph 5, as well as a holder of a supplementary protection certificate issued for a product protected by a European patent, shall have the possibility to opt out from the exclusive competence of the Court. To this end they shall notify their opt-out to the Registry by the latest one month before expiry of the transitional period. The opt-out shall take effect upon its entry into the register. (4) Unless an action has already been brought before a national court, proprietors of or applicants for European patents or holders of supplementary protection certificates issued for a product protected by a European patent who made use of the opt-out in accordance with paragraph 3 shall be entitled to withdraw their opt-out at any moment. In this event they shall notify the Registry accordingly. The withdrawal of the opt-out shall take effect upon its entry into the register. (5) Five years after the entry into force of this Agreement, the Administrative Committee shall carry out a broad consultation with the users of the patent system and a survey on the number of European patents and supplementary protection certificates issued for products protected by European patents with respect to which actions for infringement or for revocation or declaration of invalidity are still brought before the national courts pursuant to paragraph 1, the reasons for this and the implications thereof. On the basis of this consultation and an opinion of the Court, the Administrative Committee may decide to prolong the transitional period by up to seven years.“

 

B. The Rules of Procedure:

  • Rule 2:” 1. Subject to paragraph 2, in these Rules with the exception of Rule 5 the expression “patent” and “proprietor” shall whenever appropriate include, respectively, a supplementary protection certificate as defined in Article 2(h) of the Agreement and granted in respect of the patent and the holder of such certificate. 2. References in these Rules to the language in which the patent was granted shall mean that language and not the language in which a supplementary protection certificate in respect of the patent was granted.“

 

  • Rule 5: “Rule 5 – Lodging of an Application to opt out and withdrawal of an opt-out 1. The proprietor of a European patent (including a European patent that has expired) or the applicant for a published application for a European patent (hereinafter in this Rule 5 an “application”) who wishes to opt out that patent or application from the exclusive competence of the Court in accordance with Article 83(3) of the Agreement shall lodge an Application (hereinafter in this Rule 5 an “Application to opt out”) with the Registry. (a) Where the patent or application is owned by two or more proprietors or applicants, all proprietors or applicants shall lodge the Application to opt out. Where the person lodging an Application to opt out is not recorded as the proprietor or applicant in the registers referred to in Rule 8.5(a) and (b), respectively, the person shall lodge a declaration pursuant to paragraph 3(e). (b) The Application to opt out shall be made in respect of all of the Contracting Member States for which the European patent has been granted or which have been designated in the application. 2. An Application to opt out or an Application to withdraw an opt-out pursuant to paragraph 8 (hereinafter in this Rule 5 an “Application to withdraw”) shall extend to any supplementary protection certificate based on the European patent. (a) Where any such supplementary protection certificate has been granted at the date of lodging the Application to opt out or the Application to withdraw, the holder of the supplementary protection certificate shall, if different from the proprietor of the patent, lodge the Application to opt out or the Application to withdraw together with the proprietor. (b) Where any such supplementary protection certificate is granted subsequent to lodging the Application to opt out, the opt-out shall take effect automatically on grant of said supplementary protection certificate. (c) Paragraphs 7 and 9 shall apply mutatis mutandis. For the purposes of paragraphs 7 and 9, reference to actions (i) in respect of a European patent shall apply to all supplementary protection certificates based on that European patent, and (ii) in respect of a supplementary protection certificate shall apply to the European patent on which such supplementary protection certificate is based and (iii) in respect of a supplementary protection certificate shall apply to all other supplementary protection certificates based on the same European patent. (d) For the avoidance of doubt, it is not possible to opt out supplementary protection certificates, whether granted by the authorities of a Contracting Member State or otherwise, based on a European patent with unitary effect. 3. The Application to opt out shall contain: – 22 – (a) the name of the proprietor or applicant for the European patent or application and of the holder of any supplementary protection certificate based on the European patent in question, and all relevant postal and, where applicable, electronic addresses; (b) where such proprietor, applicant or holder have appointed a representative, the name and postal address and electronic address for service of the representative; (c) details of the patent and/or application including the number; (d) details of any supplementary protection certificate granted based on the patent concerned, including the number; and (e) for the purposes of paragraph 1(a), a Declaration of proprietorship that the person lodging the Application to opt out is the proprietor or applicant pursuant to Rule 8.5 and entitled to lodge the Application to opt out. 4. Rule 8 shall not apply to Applications to opt out and to Applications to withdraw made pursuant to this Rule 5. Where a representative is appointed, such a representative may include professional representatives and legal practitioners as defined in Article 134 EPC in addition to those referred to in Article 48 of the Agreement. 5. The applicant for an opt-out shall pay the fixed fee in accordance with Part 6. The Application to opt out shall not be entered in the register until the fixed fee has been paid. One fixed fee shall be payable in respect of each European patent or application for which an Application to opt out has been filed, including any supplementary protection certificate based on said patent or application. 6. Subject to paragraph 5 the Registrar shall as soon as practicable enter the Application to opt out in the register. Subject to paragraph 7, the opt-out which meets the requirements laid down in this Rule shall be regarded as effective from the date of entry in the register. If the requirements are missing or incorrectly recorded, a correction may be lodged with the Registry. The date of entry of the correction shall be noted in the register. The opt-out shall be effective from the date of correction. 7. In the event that an action has been commenced before the Court in respect of a patent and/or an application contained in an Application to opt out prior to the date of entry of the Application to opt out in the register or prior to the date of correction pursuant to paragraph 6, the Application to opt out shall be ineffective in respect of the patent and/or application in question, irrespective of whether the action is pending or has been concluded. 8. A proprietor of a patent or an application the subject of an opt-out pursuant to this Rule may lodge an Application to withdraw in respect of the patent or application, but not in respect of different Contracting Member States for which the European patent has been granted or which have been designated in the application. The Application to withdraw shall contain the particulars in accordance with paragraph 3 and shall be accompanied by the fixed fee in accordance with Part 6; paragraph 5 shall apply mutatis mutandis. Subject to the receipt of the fixed fee the Registrar shall as soon as practicable enter the Application to withdraw in the register and the withdrawal shall be regarded as effective from the date of entry in the register. Paragraphs 1(a) and 6 shall apply mutatis mutandis. 9. In the event that an action has been commenced before a court of a Contracting Member State in a matter over which the Court also has jurisdiction pursuant to Article 32 of the Agreement in respect of a patent or application contained in an Application to withdraw, prior – 23 – to the entry of the Application to withdraw in the register or any time before the date pursuant to paragraph 6, the Application to withdraw shall be ineffective in respect of the patent or application in question, irrespective of whether the action is pending or has been concluded. 10. Where an application for a European patent subject to an opt-out pursuant to this Rule proceeds to grant as a European patent with unitary effect, the proprietor shall notify the Registry. The opt-out shall be deemed to have been withdrawn in respect of the Contracting Member States covered by the European patent with unitary effect at the date of the registration of the unitary effect and the Registrar shall as soon as practicable enter the withdrawal in the register in respect of such Contracting Member States. No fee shall be payable pursuant to paragraph 8. 11. A patent or application the subject of an Application to withdraw which has been entered on the register may not thereafter be the subject of a further Application to opt out. 12. The Registrar shall as soon as practicable notify the European Patent Office and the national patent office of any Contracting Member States concerned of the entries in the register pursuant to paragraphs 6 and 8. 13. Applications accepted by the Registry before the entry into force of the Agreement shall be treated as entered on the register on the date of entry into force of the Agreement. Relation with Agreement: Article 83(3) and (4) “

 

 

II. So how is it going to work?

A.  SPCs granted on top of European Patents:

As with European Patents (EP) themselves, SPCs referencing the European Patent as the basic patent will, under Article 3 of the UPC agreement, be subject to the UPC’s exclusive jurisdiction. Under article 83 UPCA, it will however be possible during the transitional period (currently 7 renewable years) to opt out of the UPC’s exclusive jurisdiction European Patents and their corresponding SPC.

 During the transitional period:

(i) SPCs granted on top of European Patents which are opted-out: 

  • If an EP has been opted out, and an SPC granted subsequently, the SPC is automatically opted out, and this opt out lasts for the whole life of the SPC. 
  • If an SPC has been granted before an application to opt out an EP is filed, the proprietor(s) of both the EP and (if different) the SPC must register the opt out.  In order for an opt out to be valid, all relevant proprietors must, in fact, participate in the opting out process.  In the 18th Draft Rules of Procedure, Rule 8.4 has been amended, and the proprietor is now defined as “the person shown in the Register for unitary patent protection as the proprietor shall be treated as such”.
  • If the EP has expired, and only the SPC remains in force at the time of the opt-out, the SPC proprietors and the expired EP proprietors will both need to register the opt-out.

Consequences of the Opt-out: if an SPC and its underlying EP are opted out, only national litigation in relation to those rights will be possible.

(ii). SPCs granted on top of European Patents which are not opted-out:

Under Article 83(1), if the European patent has not been opted-out, the patent and its corresponding SPC will be prima facie under the exclusive jurisdiction of the UPC. However actions for infringement or revocation may still be brought before national courts.

 

 After the transitional period:

(i) At the end of the transitional regime, the UPC will be the sole court to be competent in case of litigation concerning:

  • All European Patents not opted-out
  • All SPCs granted on top of European Patents not opted-out

(ii) National Jurisdictions will be competent in case of litigation concerning:

  • All European Patents opted-out
  • All SPCs granted on top of European Patents opted-out

 

B. SPCs granted on top of European Patent with unitary effect (or Unitary Patent):

European patents with unitary effect will not have the possibility to be opted-out. They will be under the exclusive jurisdiction of the UPC during and after the transitional period. This will therefore also be true for their corresponding SPCs.

However, despite being based on Unitary Patents, valid in 25 Member states, SPCs will not have the same territorial scope as Unitary Patents. Instead, the same system which exists at present for SPCs based on national or European Patents will apply, and individual national applications will have to be made.
III. Uncertainties: 

 There are quite a few grey areas concerning the interaction between the Unitary Patent, national patents and SPCs, notably:

  • For European Patents (opted-out or not), it is uncertain whether the corresponding SPCs, which are national titles, can benefit from Art. 34 UPCA, which states that the decisions of the Court shall cover the territory of those contracting Member States for which the European patent has effect, and be applied by the patentee in all 25 Member States.

The European Commission, despite declaring that the articulacy between the unitary patent and the current EU rules on SPCs is a “key challenge to get the end game right ” in its “Staff working document” on a “Single market strategy for Europe”, identifies further issues:

  • The Commission first fears that if SPC users wish to benefit from the unitary patent this “will require multiple administrative procedures in multiple jurisdictions, limiting the full benefits of a unitary system.“
  • The Commission also highlights the problem of  the”patent research exemption” and “Bolar exemption” which are applied by Member States differently. This exemption could lead with the entry into force of the Unitary Patent and UPC to forum shopping. In fact “on the one hand, some Member States do not allow the supply of active pharmaceutical ingredients (APIs) to EU-based generic manufacturers for the purpose of seeking marketing authorisation. On the other hand, in a number of Member States, it is not certain whether testing in the EU by originators and biosimilars can benefit from these exemptions for the purpose of seeking marketing authorisation in the EU and in non-EU countries, or for meeting emerging regulatory requirements such as those related to health technology assessment“.

The European Commission thus announced to be working on a project of Unitary SPC, and on the coherence between the upcoming unitary patent and current EU rules on SPC -in the absent of a unitary SPC title.

 

 

IV. Towards a Unitary SPC? 

The European Commission considers that applying the unitary patent system to SPCs would help optimising the legal framework for industry sectors whose products are subject to regulated market authorisations, and which currently “presents several features not fit for purpose in today’s global economy and in the light of new regulatory requirements“.  The European Commission therefore calls for a Unitary SPC to  “enhance the value, transparency and legal certainty of the protection of medicines and plant protection products; and provide a one stop shop for the granting of SPCs in Europe, and give enhanced certainty to European health authorities, to patients and to generic companies on the status of a regulated product’s IP protection.”

The European Commission’s project is supported notably by the European Crop Protection Association (ECPA), European Federation of Pharmaceutical Industries and Associations (EFPIA) and the International Federation of Animal Health (IFAH). These three organisations published in 2015 a letter in support of a Unitary SPC being granted on the basis of European Patent with unitary effect which they see as “a logical continuation of the Member States’ decision and agreement to create a European Patent with unitary effect“. In this letter the ECPA, EFPIA and the IFAH point out that it will be necessary to designate a body responsible for granting the Unitary SPC for the 25 Member States participating to the enhanced cooperation mechanism.

The Unitary SPC might however be a project for which a political compromise is quickly reached, following the positive valuation for the UPC of a gain of 0.25 % GDP in EU -“which represents the possible net productivity impact resulting from the reduction of validation and maintenance fees in the Member States for patents granted by the European Patent Office”- and a reduction of up to 80% in the cost in administrative costs.

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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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Starting proceedings before the UPC

What should you know about the Unitary Patent?

What should the plaintiff lodge to start proceedings?

Depending on the type of action to be started, the plaintiff shall lodge either:

  • a Statement of claim;
  • a Statement for revocation;
  • a Statement for a declaration of non-infringement;
  • an Application for appropriate compensation under Article 8.1 of Regulation 1257/2012;
  • an Application to annul or alter a decision of the European Patent Office;
  • an Application for obtaining provisional and protective measures and injunctions.

Where should the plaintiff lodge her statement/application?

For First Instance proceedings:

A plaintiff shall lodge her Statement or Application at a sub-registry of the UPC’s Registry. Sub-registries will be set up in all local or regional divisions as well as in central divisions.

The plaintiff may under Article 33 of the UPC Agreement, choose between several divisions . The UPC Agreement in fact provides for the plaintiff to lodge her application either before the local division where the actual or threatened infringement has occurred or the local division where the defendant has its place of residence or place of business. The plaintiff must in any way lodge its application in accordance with the competence of the divisions.

For Appeal proceedings:

Appellants must lodge an Application for leave to appeal against an order of the Court of First Instance .

Appellants must lodge a Statement of appeal to appeal against a decision of the UPC’s Court of First Instance

Appellants must lodge both at the UPC’s Registry located in Luxembourg.

How should the plaintiff lodge the statement/application?

An electronic filing system will be set up to enable plaintiffs to lodge the Statement or Application electronically at the UPC’s Registry.

This electronic filing will be available for First Instance and Appeal level.

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What will the UPC be competent for?

What should you know about the Unitary Patent?

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)
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The structure of the Unified Patent Court in 3 points

What should you know about the Unitary Patent?

(1) How will the UPC be structured?

The UPC will comprise a Court of First Instance, a Court of Appeal and a Registry. The Court of Justice of the European Union will hear questions on referral and preliminary rulings on European Union law.

The Court of First Instance will be composed of a central division and several local and regional divisions across the Contracting Member States.

The Court of Appeal will have only one division and, together with the Registry, will be located in Luxembourg.

(2) Where will the Central Division be?

The central division will be divided between three seats: Paris, London and Munich.

LondonParisMunich
Human necessitiesPresident's OfficeMechanical engineering
ChemistryPerforming operations and TransportingLighting
MetallurgyTextiles and PaperHeating
Fixed constructionsWeapons
PhysicsBlasting
Electricity

(3) Where will the Local and Regional Divisions be?

The local divisions will be located in Paris, Munich, Mannheim, Dusseldorf, Hamburg, Milan.

One regional division is announced in Stockholm and will bring together the Baltic states with Sweden.

This list is not exhaustive and more local and regional divisions may be confirmed in the coming months.

Summary Diagram:

 

drawit-diagram-3

 

For the exact locations see our post on the subject.

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Four key points to understand the Unified Patent Court

What should you know about the Unitary Patent?

(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.

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The key dates of the UPC’s timetable: from the entry into force of the UPC Agreement to transitional period

What should you know about the Unitary Patent?

The entry into force of the UPC package follows a complex timetable. The UPC goes in fact through 3 phases and periods before its start of operations.

When will UPC Agreement enter into force?

The UPC Agreement will enter into force on the 1st day of the 4th month after the deposit of the 13th instrument of ratification. The instruments of ratification must include Germany, France and the United Kingdom.

Germany, France and the United Kingdom’s ratification are indeed a prerequisite to the UPC Agreement entry onto force. This is because they were the 3 Contracting Member States in which the highest number of European patents had effect in 2012.

At the end of October 2017, 14 countries had ratified the UPC Agreement: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Italy, Lithuania, Luxembourg, Malta, Netherlands, Portugal, and Sweden. Germany and the UK are currently in the process of ratifying the UPC Agreement.

The Preparatory Committee is thus working under the assumption that the Court will become operational in the first quarter of 2018.

What are the Provisional Application Phase and the Sunrise Period?

The Provisional Application Phase will start when 13 Member States that have already signed the UPC Agreement and whose Governments have received Parliamentary approval to ratify the UPC Agreement, approve the Protocol to the Agreement on a Unified Patent Court.

It will allow for some parts of the UPC Agreement to be applied early. The UPC Committees will be able to take final decisions on the practical set up of the Court. They will -for example- be able to finalise the recruitment of judges and the testing of the IT.

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 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 (See the Opt-out: Essential Guide)

Currently, the Preparatory Committee chairman considers that the Provisional Application Phase should start in autumn 2017. The Sunrise Period could then follow at the beginning of 2018.

What is the transitional period?

The transitional period will last 7 years starting after the entry into force of the UPC Agreement. The UPC Administrative Committee may renew it for a further 7 year. The transitional period is likely to start in the second quarter of 2018. It will then last up to the second quarter of 2025.

During this period the UPC will share jurisdiction with national courts over actions for infringement and 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 regardless of whether the European patent or application concerned will have been the subject of an opt-out.

Patent holders 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. The UPC will have exclusive jurisdiction over Unitary Patents.

If the transitional period is not renewed, the UPC will have perpetual exclusive jurisdiction over Unitary Patents and European patents. Opted out European patents will not come back under the UPC exclusive competence once the transitional period is over.

Summary Diagram:

drawit-diagram-5

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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.