On 28 August 2015, Portugal officially ratified the Unified Patent Court Agreement. This makes Portugal the 8th country to ratify the Agreement.
Portugal deposited its ratification instrument in Brussels on 28 August 2015. This leaves Spain - which has so far strongly opposed the UPC - sandwiched between two countries that will participate in the new patent litigation system.
It is not known whether Portugal will participate in a regional (shared) division of the UPC or fund its own local division. A report prepared by the Commission for Foreign Affairs and Portuguese Communities, which looked at the motion to approve the UPC Agreement before it was voted on by the Portugese Parliament, highlighted a need for Portugal to host its own local division.
For the UPC to be implemented, a further 5 countries need to ratify the Agreement including the UK and Germany. So far, Austria, Belgium, Denmark, France, Luxembourg, Malta, Portugal and Sweden have ratified (see dial below).
The UK government announced on 11 August that the UK will ratify the UPC Agreement by Spring 2016 and will locate the UK's Local and Central Divisions of the court in Aldgate, on the boundary between the City and East London.
Meanwhile, the public consultation on the UPC fees closed on 31 July 2015. The consultation document sets out a draft proposal for the court fees, including the fee for opting traditional European patents out of the new court system, the fees payable upon commencing and defending proceedings, and the ceilings on recoverable costs in those proceedings. The fee structure will be based on some fundamental principles including: (i) a fixed court fee will be payable in all cases with an additional value-based fee for certain actions and (ii) after an initial transitional period of 7-14 years, the UPC will be self-funding; its revenue must cover its expenditure. The UPC will compete with national courts during the transitional period. This suggests that, in the early years at least, the fees should not be set so high as to encourage court users to prefer the national courts.
We are expecting the UPC Preparatory Committee to address a number of significant issues raised by the consultation. The key concerns about the current proposal include the following:
- There should be no duplication of value-based fees. Under the current proposal, a case starting with a claim for a declaration of non-infringement which is met by a counterclaim for infringement will attract two value-based fees even though the counterclaim is unlikely to add substantially to the work of the UPC;
- Defences should not attract a value-based fee. As a matter of principle, no party should have to pay a value-based fee to defend itself. Yet the current proposal is that such fees are payable. The only exception is where the defence is patent invalidity which has to be brought by way of counterclaim. We think it would be preferable to have one value-based fee per action to be paid by the claimant.
- The court should determine the value of the litigation at the outset taking into account the submissions of both parties. This should eliminate lengthy satellite disputes and tactical game-playing over the 'true value' of the case, a value which will affect the level of fees that are recoverable by the parties under the proposed cost ceilings.
- Determining the value-based fee during the interim phase (around 9 months into the proceedings) is too late. The valuation should be made at the beginning of the claim so that the parties can budget for the litigation at the outset including calculating the costs recovery ceiling that will apply.
- The UPC should not raise revenue by means of an opt-out fee to be paid by any Patentee who wishes to opt its patents out of the new unified court system. Article 70(1) of the UPC Agreement enables fees to be collected in respect of UPC proceedings. The Agreement does not provide for the payment of fees where proceedings are not yet on foot. There are several other good grounds for arguing that the imposition of an opt-out fee is unlawful. The proposed opt out fee is 80 Euros per patent; the Preparatory Committee has not explained how or why it arrived at this particular figure.