First Brexit, then the UK and German general elections and now a case pending in the German Federal Constitutional Court have delayed the implementation date of the Unitary Patent and Unified Patent Court (UPC). Is this Europe-wide right ever going to come into being?

A total of 14 countries have now ratified the UPC agreement, namely: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Sweden, and France (one of the three mandatory ratifying countries). The UK government also announced plans last year to ratify the agreement and to set up a divisional court in London despite fears Brexit would halt negotiations. In view of this, and in view of the UK’s intention to ratify the treaty, the European Patent Office was pushing for an entry into force of the new UPC system by 1 December 2017.

The surprise announcement of a UK general election for 8 June delayed the passage of the UK legislation through parliament and thus also the UPC System. As things currently stand, however, the UK says it is ready to ratify and could do so any day now, but the Brexit negotiations seem to be taking priority and so it is difficult to give a true estimate of when this will take place.

In the meantime, constitutional challenges to the UPC agreement at Germany’s Federal Constitutional Court have also delayed the timeframe with the latest official communication stating that, at present, it: “is now difficult to predict any timeline”.

What is likely to happen?

The Constitutional Court has invited German public institutions for comments on the challenge up until late December 2017. Consequently, there are now two potential scenarios and consequences for the UPC:

  1. The Constitutional Court can decide not to accept the challenge, e.g. because they see no prospects of success: then the way would be free for the German government to finalise the ratification procedure thus allowing the UPC to start before the summer of 2018, or
  2. The Constitutional Court decides to hear the complaint. This will likely take quite some time, meaning it may be months or years before a final decision is made. The Court may indicate whether Germany in the meantime could or could not ratify. Clearly, in this scenario, there could be a substantial delay for the UPC to start.

What should businesses do?

Although the timing for the implementation of the court system continues to slip (the process was originally expected to be completed in 2014, if not sooner), the implications of the Unitary Patent right and associated patent court system is rightly on the minds of IP counsel throughout Europe and beyond.

With a marketplace of more than 500 million consumers, Europe is a major economic power, and one of the world’s largest importers and exporters of goods and services. Business owners know that if they are to trade successfully in Europe, they first need to ensure they’ve appropriately protected their IP rights in the territory. However, with 28 member states to cover, along with a number of important surrounding countries such as Switzerland, this has the potential to be an expensive exercise.

Once implemented, the new pan-European Unitary Patent right should provide businesses from within and outside the EU with an important new tool to protect their innovations throughout the participating member states and to enhance their success in what is already a highly competitive and inventive marketplace.