The UK’s Minister for Intellectual Property, Sam Gyimah MP, confirmed on 26 April that the UK has ratified the Unified Patent Court (UPC) agreement. This represents a key milestone in the implementation of the Unitary Patent, as the UK is one of three mandatory signatories required for the agreement to come into force. Of the other two, France, has already ratified; however, Germany, is yet to do so, as a result of a case currently pending in its Federal Constitutional Court.
A total of 16 countries have now ratified the agreement, namely: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Sweden, the UK and France (one of the three mandatory ratifying countries).
The UK’s ratification follows an announcement by the government in 2016 that it planned to ratify the agreement and to set up a divisional court in London despite fears Brexit would halt negotiations.
Nonetheless, constitutional challenges to the UPC agreement at Germany’s Federal Constitutional Court have also delayed the timeframe with an official communication in December 2017 stating that it “is now difficult to predict any timeline”.
What is likely to happen? The Constitutional Court invited German public institutions for comments on the challenge up until late December 2017. As things stand, 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 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.