Tag: UPC Agreement

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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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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)

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The Protocol to the Agreement on a Unified Patent Court on provisional application

protocol to the agreement on unified patent court on provisional application

What is the “Protocol to the Agreement on a Unified Patent Court on provisional application”?

On 1st October 2015, the member states representatives signed the “Protocol to the Agreement on a Unified Patent Court on provisional application”.

This protocol allows some parts of the UPCA to be applied before the UPC enters into force. It concerns  “article 1-2, 4-5, 6(1), 7, 10-19, 35 (1, 3 and 4), 36-41 and 71(3) of the Agreement on a Unified Patent Court and Article 1-7(1), 7(5), 9-18, 20(1), 22-28, 30, 32 and 33 of the Statute of the Unified Patent Court“. The Protocol will allow  “final decisions on the practical set up of the Court” to enter into application, such as the “recruitment of judges and testing of IT systems“, or the early registration of opt-out demands.

When will it enter into force? 

According to Article 3 the Protocol will only enter into force after 13 states, that have already signed and ratified the UPCA, approve the Protocol. The member states can do so either by signing ratifying or approving it.

On 21st March 2017,  the UK, Sweden, France, Germany, Luxembourg, Denmark, Slovenia, Hungary, Italy and Romania had signed the protocol. Out of these 10 countries only France, Sweden, Denmark, Luxembourg and Italy have ratified the UPCA. This means that 8 further ratifying countries will need to approve the Protocol before it can enter into force.

 

You can view the protocol below:

 

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You can view the signing ceremony here

 

 

 

 

 

 

 

 

 

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The UPC to become operational in December 2017: The new timetable for the UPC start of operation

The Preparatory Committee published a new timetable for the UPC’s start of operation, indicating that:

  • The Provisional Application Phase would start at the end of Spring 2017 (presumably in May). It will allow for judicial interviews to take place and appointments to be confirmed.

 

  • The possibility to opt-out European patents will start in early September.

 

  • The UPCA would enter into force in December 2017.

 

  • The UPC would thus become operational in December 2017 too.

 

The Preparatory Committee however warns that this timetable is “conditional and provided with the clear disclaimer that there are a number of factors that will dictate whether it is achievable. The most important factors in meeting these dates is the necessary ratifications of the UPCA and accession to the Protocol on Provisional Application.”

It is expected that the next meeting of the Committee which will take place in March gives more details and updates as to whether the UPC will effectively become operational in 2017.

 

More on the Provisional Application Phase:

On 1st October 2015 a protocol to the UPCA was signed by some member states to allow  “final decisions on the practical set up of the Court” to enter into application such as the “recruitment of judges and testing of IT systems“, or the very much talked-about early registration of opt-out demands. The protocol aims at permitting a smoother set up of the court.

It will enter into force after 13 states, that have already signed and ratified the UPCA, approve the protocol either by signing or approving it. So far 9 Member States have signed it (Germany, Denmark, France, UK, Hungary, Luxembourg, Romenia, Slovenia, Sweden) . The UK has however entered a reservation, stating that it “shall not provisionally apply Article 4 of the Agreement on a Unified Patent Court.”

As a reminder, Article 4 provides that ” (1) The Court shall have legal personality in each Contracting Member State and shall enjoy the most extensive legal capacity accorded to legal persons under the national law of that State. (2) The Court shall be represented by the President of the Court of Appeal who shall be elected in accordance with the Statute.”

For more information see our posts on the Protocol on provisional application of the Unified Patent Court Agreement here and its update here.

 

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What future for the UPC now that the UK has voted to leave the EU?

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

On Wednesday (06/07/16) the Union pour la Juridiction Unifiée des Brevets (Union for the Unified Patent Jurisdiction) organised in Paris a conference on the consequences of the Brexit for the UPC. (See the recorded video below)  The participants,  Thierry Sueur, chairman of the IP Committee of the MEDEF -the French business federation- representing the European industry, Professor Winfried Tilmann from Hogan Lovells, Rowan Freeland from Simmons&Simmons, and Alexander Ramsay, chairman of the UPC Preparatory Committee, outlined  the legal and political consequences of the Brexit on the UPC and the immediate next steps for the Preparatory and Advisory Committee in this regard.

After an opening by Pierre Véron who reflected on the shock of the Brexit news (shared by the audience), Thierry Sueur highlighted the position of the European Industry which is demanding that the ratification process continues in order for the UPC to come live, and he thus pleaded for the UK to ratify the UPCA and its protocol. According to him, ratification by the UK would in fact allow the UPC to meet its opening deadline in Spring 2017 and would leave the door open for the UK to take part in the UPC and the Unitary Patent package.

Professor Winfried Tilmann then addressed the question of whether the UK can still take part in the UPC. First Professor Tilmann argued that there were strong political arguments to justify the UK’s ratification. In fact, the UK is still and until the end of the two-year period after its notification of withdrawal under article 50 of the Lisbon Treaty, a member of the EU and, as both houses of British parliament have already started working on ratifying the UPCA, the ratification could therefore be quite straightforward.  He also noted that the UPCA is an international treaty that does not derive from EU law, and that although the UPC shall be a court common to the Contracting Member States -and thus subject to the same obligations under Union law as any national court of the Contracting Member States- it is not a court of the EU -contrary to the ECJ. This would thus mean that the UK local and central divisions could remain in London, and that UK practitioners and judges could take part in the UPC.

Regarding the legal factors involved in considering whether the UK could leave the EU but still be a contracting member state under the UPCA, article 84 of the UPCA appears to be an obstacle. In fact it provides that only EU member states may ratify the UPCA. According to Professor Tilmann, this condition implies, that countries which ratify the UPCA remain EU member states. Therefore if the UK leaves the EU pursuant to article 62, 65, and 67 of the Vienna Convention on the Law of Treaties, both the UK and the other signatories of the UPCA, would have the right to cancel the contractual relationship between the UK and themselves.  Article 84 would thus need to be amended to allow the UK to be a signatory to the UPCA even after leaving the EU. Such a change is possible for Contracting Member States on the basis of article 149a(1)(a) of the European Patent Convention and would not require them to re-ratify an amended UPCA. The amendments to the UPCA could in fact be included in the Brexit agreement which would in turn  have the quality of Union law and “pursuant to article 87(2) UPCA, the Administrative Committee has the power to change the UPCA in order to bring it in line with Union law”.

However it is important to note that, were the UK to leave the EU after ratifying the amended UPCA,  it would be bound by the ECJ’s decisions and by its interpretation of EU law as the UPC has the obligation to refer questions on EU law to the ECJ. The UK would also be jointly and severally liable for damages with other contracting member states as provided by the UPCA. Finally, during the transitional period, national UK courts would also be bound by the UPCA within the same remit as stated above.

The legal consequences of the UK leaving the EU would nonetheless be wider than those faced for the UK’s participation to the UPC. In fact the unitary effect would also need to be extended to the UK by agreement under article 142 (1) EPC. This would result into a Unitary patent deriving its effects from EU law when applying within the territory of the EU, and a Unitary patent deriving its effects from international law when applying to the UK.

Rowan Freeland then explored what would happen were the Contracting Member States to “exclude the UK of the UPCA” before it leaving the EU, in order to pursue the implementation of the UPC and Unitary Patent. According to him, re-negotiations of the UPCA to exclude the UK would be possible, but would require a new ratification of the newly amended UPCA. This would in turn require Denmark to organise a new referendum for the ratification of the new UPCA. Rowan Freeland however highlighted that 50% of all European Patents are validated in the UK, France and Germany. Therefore if the UK were not to take part in the UPC and the Unitary patent, a smaller number of users than expected might potentially be interested in the UPC and the Unitary patent. This reasoning would extend to the unitary patent “top 4” renewal fees which is based on the cost of renewal in the four EU countries that have registered the most patents. Indeed, if the Unitary patent effect is not extended to the UK, and if the latter is not part of the UPC the savings achieved by opting for the Unitary patent would decrease.

Finally, despite the general uncertainty, Alexander Ramsay tried to be reassuring and explained that for the moment the Preparatory Committee was working as normal and that the recruitment process was still ongoing. As the chairman of the Preparatory Committee, he emphasized that member states are encouraged to actively pursue their efforts for ratification in order not to delay the coming live of the court, whenever that may be. Alexander Ramsay explained that no contingency plan had yet been drafted as the political situation is very unclear. The Preparatory Committee will therefore need to have more elements of information on the position of the UK and on how the other contracting member states wish to proceed, before devising new options for the UPC and Unitary patent. Alexander Ramsay however was positive and seemed to believe that the project of the UPC and Unitary patent will survive Brexit and come live anyway.

Although the atmosphere cannot be described as joyful, the participants (including the UPC Blog) expressed their hopes to see the UPC and the Unitary Patent becoming a reality in the near future and for EU countries to seize this opportunity to bring the union closer through IP.

Below the recorded video of the conference available on YouTube:

https://www.youtube.com/watch?v=p5clCZXqgxk

The documents (presentation slides) of the conference can be found here.

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The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016: Despite the Brexit referendum the UK is getting ready to take part in the UPC.

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

As mentioned a few weeks ago the UK Parliament has been working on secondary legislation to amend the UK Patents Act 1977 to give effect to the UPC Agreement and EU legislation on the Unitary patent.

The final legislation has now been published.  The Statutory Instrument (SI)  (2016 No. 388) was signed on 12 March 2016  without the Parliament needing to amend it. It will however only come into force when the UPC Agreement comes into force (art 1(2) SI) .

This SI is only one of the two SIs required to enable the UK to ratify the UPC Agreement.  The other SI is required to reflect the UPC Protocol on Privileges and Immunities, and is now being drafted following the recent approval of that Protocol by the Preparatory Committee at the February meeting.

Since the UK Brexit referendum is getting closer and has become a subject of much speculation it is interesting to note the opposite dynamics that it has created.  On the one hand, it seems that were the UK to leave the EU, it would no longer  be able to take part in the UPC, as noted in the House of Commons debate on  01/03/2016 on the SI.

On the other hand, the UK government has adopted  a policy  whereby it proceeds on all matters on the basis that the UK will remain in the EU. The UK IPO for example stated that the Brexit referendum will have no effect on the UK’s ratification of the UPCA by mid-2016 and on the opening of the Court at the start of 2017. Indeed the Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 is a tangible proof of the UK government’s willingness to be ready on time for the UPC to meet its opening schedule.

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To align or not to align? The example of the UK Patent (European Patent with Unitary effect and Unified Patent Court) Order 2016:

Brexit and the German constitutional challenge

The ratification process of the UPCA and the entry into force of the UPC have to a certain extent eclipsed the issue of alignment of national laws on the UPCA. Some countries, such as the Netherlands, have already declared that they will fully align by adopting the UPCA as their new national patent law. Others who have already ratified the UPCA, such as Denmark do not plan to change their national law at all.

Arguably, alignment of all national laws on the UPCA would allow for a more efficient use of the system by guaranteeing fairness and predictability. Alignment would in fact stop any “system shopping” whereby users could choose to opt-out from the UPC in order to benefit from the differences in the scope of protection under national patent law. On the other hand it can be argued that aligning all national legislations on the UPCA would go considerably beyond the initial project of the Unified Patent Court and the Unitary Patent. The debate as to the necessity or suitability of alignment will therefore remain open for the next few years until the effects of non alignment become obvious.

The position of the United Kingdom reversely, reflects a middle ground position, with a partial adoption of the UPCA within national legislation.  The publication last week of the fourth report of the Secondary Legislation Scrutiny Committee along with “The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016”  and an address to the House of Lords detailing the position of the Committee on two specific points, gives us a clear idea of the way the UK intends to partially align its national legislation with the UPCA. In January 2016, the Government had already published its response to the public consultation on the secondary legislation implementing the Unitary patent and the UPCA, which indicated that the UK Government strongly supported alignment with the UPCA.

The Explanatory Memorandum prepared by the Intellectual Property Office and the Department for Business, Innovation and Skills clearly explains the extent of the alignment now considered:

“Before the UK can ratify, the Government needs to ensure that its obligations under the UPC Agreement are met in national law. It is also necessary to ensure national law is in compliance with the provisions of the Unitary Patent and Translation Regulations. In particular, this means that the new Unitary Patent should be reflected in the Patents Act as a patent valid in the UK, and that the Unified Patent Court must be given the proper degree of jurisdiction over the appropriate patents. These goals can only be achieved through legislation.”

The IPO however considers that the rights given to owners of Unitary Patents and European Patents to prevent the use of their invention and the exceptions to those rights “are the same as currently provided under UK law, so require only minimal changes to be made“, except in two areas that were highlighted by the government in its public consultation that took place in 2015 and were the object of  given specific attention by the Secondary Legislation Committee and Department of Business Innovation and Skills:

  • The first exception relates to the ability of plant breeders to use patented biological material to create a new plant variety without infringing a patent for that material.  This exception already exists in the patent law of Germany, France and the Netherlands, which are the major countries for plant breeding in Europe. The Department for BIS therefore notes that “the industry in which this exception will operate is therefore familiar with how it works, and the effect it will have on their research and development. Indeed, the industry has urged its introduction and emphasised its importance in allowing UK companies to remain competitive in the field“. The introduction of this change therefore intends to put the UK industry on a level footing with major competitors in other parts of Europe, and will apply to all patents valid in the UK.

 

  • The second exception allows someone to use a lawfully-acquired computer program for certain purposes without the permission of the patent owner, and without that use being an infringement of any patent covering that program. This is a narrow exception, intended to assist in the development of independently created programs so they can work correctly with other programs, and which will not be applied to GB national patents, but only to European Patents (UK) and Unitary Patents. This software exception does not currently exist in the patent law of any of the participating Member States, the Department for Business Innovation and Skills therefore considers that “as such, its scope and effect have not been tested in litigation, so the extent of use it may permit is not known. In addition, the exception is unusual because it uses an EU Directive on copyright to define its effect, and it is not clear how that will interact with patent law“. The IT and telecoms sectors having expressed strong concerns and with great uncertainty as to how many patents could be affected,  a cautious approach is recommended for this exception.

It is now to the UK Parliament to vote the Patent (European Patent with Unitary Effect and Unified Patent Court) Order 2016 which will ensure the partial alignment of the UK patent legislation on the provisions set in the UPCA, before it ratifies the latter. The UK’s partial alignment is not of course a position common to all contracting member states but it illustrates the careful balance that contracting member states will need to achieve in order for national laws and the UPCA to create a coherent and fruitful environment for patents.

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UK Government’s response to its consultation on secondary legislation implementing the UPCA: How will the UK legislation be amended to be aligned on the UPCA?

In  June 2014, the UK Government through the Intellectual Property Office opened a consultation to seek views “on the drafting, structure and effect of the draft legislation which will allow for the implementation of the Unified Patent Court Agreement and the associated EU Regulations which introduce the Unitary Patent“.

This week, the UK Government published its response to the consultation and  the draft statutory instrument (SI) which will accommodate the UPC. It has to be noted that, although very short, this statutory instrument is particularly difficult to read as it amends certain sections of the Patents Act 1977, specifies which sections of the Patents Act will apply to Unitary Patents and which ones will not, and incorporates by reference in the Patents Acts some Articles of the UPC Agreement.

The questions listed for the public were:

Questions on changes relating to Jurisdiction

1. The aim of the proposed changes to UK law is to ensure the correct division of competence between UK courts and the UPC, in accordance with the UPC Agreement:a. Do you think these changes achieve this aim? b. Why do you think this?

2. The draft legislation aims to reflect the transitional period set out in the UPC Agreement. a. Does the draft legislation clearly implement the transitional period provisions of the UPC Agreement? b. What, if any, improvements would you suggest?

3. What is your view on the provision of an opinions service for a Unitary Patent? If possible, please provide evidence in support of your views.

4. The proposed changes will mean that UK courts will not have jurisdiction for certain disputes related to EP(UK)s, Unitary Patents or related SPCs. a. What, if any, impact do you think the changes to jurisdiction introduced by the legislation will have on your business? b. What, if any, impact would there be on you as a patent owner, a person wishing to challenge the validity of another’s patents, a patent attorney, lawyer, a translation service provider, or other (please define)? If possible, please provide evidence in support of your views.

5. There will be a section of the central division in London which will deal with revocation cases on life sciences. a. How will the presence of the central division in London affect you? b. Do you anticipate using it? c. If possible, please provide evidence in support of your views.

6. The UK can have a local division which will deal with infringement cases. a. How important is it to your business to have access to a local division of the UPC within the UK and why? b. Is the location within the UK important to you? If possible, please provide evidence in support of your views.

7. Patent owners and applicants will be able to register an opt out of the UPC during the transition period, which will apply for the lifetime of the patent. What factors will influence you in choosing to opt-out or not of the UPC’s jurisdiction?

Questions on changes relating to the Unitary Patent

8. The aim is that UK law is compliant with the Unitary Patent Regulation. a. Are the proposed changes sufficient to ensure compliance of UK law with the Unitary Patent Regulation? b. If not, why not?

9. We propose that all the provisions of the Patents Act 1977 which apply to Unitary Patents should apply in the same way as they apply to EP(UK)s, except where they are expressly modified. What is your view of this approach?

10. What is your view on whether double patenting should be allowed for Unitary Patents?

11. What is your view on extending the groundless threats provisions to threats made in the UK in relation to Unitary Patents?

12. a. What, if any, impacts on your business do you foresee of the proposal to extend the restriction on double patenting to Unitary Patents? b. How might this affect your likelihood of seeking unitary patent protection?

Questions on changes relating to Infringement

13. The proposed changes to infringement include the modification of some provisions to account for the territory of the Unitary Patent and the introduction of two new exceptions. Are the proposed changes sufficient to give effect in UK law to the infringement provisions of the UPC Agreement?

14. We have taken an approach of making only minimal changes to implementing the infringement provisions. This means that the exact wording of the infringement provisions found in the UPC Agreement is not replicated in section 60 of the Patents Act. What do you think the consequences are of this approach?

15. At this stage we have taken two different approaches to the way the two new exceptions to infringement are drafted. For the plant breeders exception, we have copied out the wording as found in the UPC Agreement; whereas the software exception makes a direct reference to the UPC provisions. a. What is your view on which form of words works best? b. Should the same approach be adopted for the two new exceptions or is it preferable to adopt different approaches?

16. a. What is your view of the proposed changes to align the exceptions to infringement in the Patents Act with those of the UPC Agreement? b. Would you be affected by these changes, if so, what impact might this have? 17. When should the new provisions on infringement apply and why?

18. We propose changing section 60(5) of the Patents Act to include an exception from infringement for the use of biological material for the purposes of breeding, or discovering and developing another plant variety. What, if any, would be the impact on your business of doing this?

19. We propose changing section 60(5) of the Patents Act to include an exception from infringement for an act permitted under Articles 5 and 6 of Directive (EC) No 2009/24 on the legal protection of computer programs and the use of information obtained by such an act. What, if any, would be the impact on your business of doing this?

20. a. How might the proposed new exceptions affect your business in terms of licensing of patents relating to biological material or computer programs? b. What evidence can you provide in support of your view?

The UK Government in its response to the consultation clarifies the following points:

  • Comptroller: where actions are under the exclusive competence of the UPC, the Comptroller cannot retain jurisdiction as a tribunal. The Comptroller will provide a non-binding opinions service. The Comptroller’s power to revoke a patent on the basis of an opinion finding a lack of novelty or inventive step will however not apply to Unitary Patents or EP(UK)s which have not been opted out, because the revocation of those patents will be part of the exclusive jurisdiction of the UPC.

  • Enforcement of UPC court orders:  a new section on enforcement will be included in Schedule A4 of the SI to provide for the enforcement of UPC orders and decisions in primary legislation, and therefore make it clear that such orders and decisions are enforceable in the UK.

  • Consequential changes to the Patent Act:  section 130(1) of the Patents Act (Interpretation) adds the UPC to the definition of “court”. It is therefore no longer necessary to amend section 27(2) (General power to amend specification after grant) to make specific reference to the UPC.

  • Double patenting: The government is unchanged in its view that, on balance, the best policy is to prohibit double patenting. The law will be consistent for all European Patents valid in the UK whether they benefit from unitary effect or not.

  • Groundless threats:  The government has considered a number of options to ensure that there is a sufficient link to the UK for any groundless threats action and is considering primary legislation to take forward the Law Commission’s recommendations for reform of the law on groundless threats across patent, trade mark and design law.  The Law Commission specifically recommended that the law on unjustified threats applies to the Unitary Patent and that a new test for a threat of infringement proceedings be provided, to ensure that it only covers alleged threats relating to an act done or which, if done, would be done in the UK.

  • General approach on infringement:  Changes to the Patents Act are only proposed where there are material differences between the Act and the UPCA, this means that for many existing provisions there are no changes to the wording if it is not deemed essential.

  • Proposed alignment of new infringement exceptions :  the new exceptions to infringement were of interest to many of those that responded to the consultation. The UK government is still however of the view that minimal changes are required to implement Articles 25-27 of the UPC Agreement (Art 25: Right to prevent the direct use of the Invention; Art 26: Right to prevent the indirect use of the invention; Art 27: Limitations of the effects of a patent). Consequently, the government intends to only amend section 60 of the Patents Act 1977 (Meaning of Infringement) to the extent that it is necessary to introduce the exceptions to infringement which do not currently exist in UK law.

  • Plant breeding exception: The government believes that the plant breeding exception may bring benefits to the plant breeding industry in the UK. Introducing a new exception to infringement for plant breeding which implements Article 27(c) of the UPC Agreement will produce the most benefits for users and also ensure consistency as it will apply to all patents whether European or national.

  • Computer programs exceptions: Much consideration has been given to this issue and on balance the government finds that in this instance it may be best to treat the implementation of the exception in two stages. Initially implementation will be for European patents only (encompassing Unitary Patents, as well as bundle patents – whether or not they are opted out of the UPC), with a view to extending the exception to domestic GB patents following a review of its performance in practice.

  • Changes to UK Law to define infringement of the Unitary Patent: sections 60(1) and 60(5)(d)-(f) (Meaning of Infringement) of the draft legislation will need to be amended so that references to the United Kingdom would be taken as referring to the Member States who are party to the UPC Agreement instead. This will ensure that all of the infringement provisions apply correctly for the entire territory covered by the Unitary Patent. The previous approach, which referred only to the UK could in fact have resulted in infringement only being found if the act occurred in the UK.

  • Transitional arrangements: The government has now included provisions in the legislation which take into consideration the transitional arrangement.

The Statutory Instrument will now need to be approved by both Houses in Parliament before the UK can ratify the UPCA; it will however not come into force before the UPCA itself does.

 

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The European Commission’s take on the UPC’s impact on SMEs:

Brexit and the German constitutional challenge

The European Commission published in the last quarter of 2015 a “Staff working document”  analysing Europe’s single market strategy and ways to encourage modernisation and innovation within the EU.  The consolidation of Europe’s intellectual property framework, is -as expected- a pillar of the Commission’s strategy.  The Staff working document,  in Section 3.3.1, looks specifically at the effects of the UPC on the consolidation of Europe’s IP structure, and in particular on SMEs.

The impact of the UPC on the latter has been a hot topic since the start of the Unitary Patent Package and especially since the draft cost guidelines were published (see our post here). In fact, it has been feared that high litigation costs would be detrimental to SMEs, leaving them struggling to enforce their IP rights or defend themselves. The European Commission establishes in this document that if only 17% of all patent technology can be attributed to SMEs, “the cost exposure for IP rights and particularly patent litigation is significant, hits SMEs disproportionately hard and acts as a serious deterrent for SMEs to engage in patenting in the first place“. Under the Unified Patent Court, SMEs may indeed have to pay, the winner’s court fees of up to EUR 220, 000 euros, the winner’s legal costs of up to EUR 3 millions, plus damages.

In order to counter the negative effects of the UPC on SMEs the Commission therefore highlights a few measures:

  • The Commission considers that the development and launch of a European Commercial IP legal costs insurance could negate the risk of legal fee exposure and “lead to more investment by banks and other financial institutions into innovative start-ups and SMEs” thanks to the security of insurance and the possibility to increase the value of IP assets. The commission believes that this litigation insurance market could develop at European level as the scale would be considerably bigger than national level where it failed to grow . This would be launched when the unitary patent comes into effect.
  • COSME funds (European programme for small and medium entreprises), designed to encourage innovative European SMEs will be used to assist the latter in applying for European IP titles including the Unitary Patent.
  • The Horizon 2020  SME instrument will be used to “encourage European ‘disruptive’ innovators to protect their investments with unitary patents so that they exploit them commercially at EU level, rather than at national level where they may not be commercially viable“.

A more accurate analysis of the impact of the UPC on SMEs and response to the challenges that this will raise, will however only be possible once the definite cost guidelines are published scheduled for the coming months.

Furthermore, under Section 3.3.2 of the “Staff working document” the European Commission also voices its concerns regarding the following issues, although not specific to SMEs are essential in securing legal certainty for all UPC users:

  • “The coherence between the upcoming unitary patent and current EU rules on SPC – in the absent of a unitary SPC title – will be important. SPCs are instrumental for industry sectors whose products are subject to regulated market authorizations;
  • The consequences of the rejection of a request for unitary effect, and the revocation of a unitary patent due to defeating national prior art 203 and the possible acceptable conditions to convert such a putative unitary patent into a bundle of national patents;
  • The principle of non-double protection deriving from unitary patent and national patents, except in very limited circumstances; and
  • The possible issues stemming from the obligation to designate all participating Member States for the purpose of obtaining a unitary patent.“

These concerns raised by the Commission seem to be especially important in the light of the new target of 0.25% in EU GDP evaluated by the Commission, which captures 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, subsequently, the increase in the number of non-national patent rights enforced.