Paris, 14th May 2018 - The Unitary Patent Court (UPC) agreement needs to be ratified by at least 13 signatory countries including three mandatory signatories: the UK, France and Germany.

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.

France was the first of the three mandatory ratifying countries to ratify the agreement in 2014.

The UK government finally ratified the UPC Agreement on the World Intellectual Property Day, 26 April 2018, less than one year before leaving the EU (March 2019).

In Germany, the situation is a bit more complex as a case against the UPC agreement is currently pending before the Federal Constitutional Court. A claim challenging the UPC ratification has indeed been brought on various grounds, including an allegation of a breach of the requirement for a qualified majority in the Bundestag and Bundesrat, criticisms of the administration of the UPC and the extent of the independence of the judges, and an allegation of incompatibility with EU law. The constitutional complaint should initially be considered this year with two options:

1) The complaint is dismissed, and the German ratification can thus be finalized without delay. The UPC agreement would then come into force four months after Germany's ratification.

2) The Constitutional Court decides to hear the complaint or that a reference to the CJEU is necessary, either of which would involve significant further delay of at least a couple of years. The Constitutional Court may in the meantime indicate whether Germany could or could not ratify. Clearly, in this scenario, there could be a substantial delay for the UPC to start and the UPC would then start after Brexit is effective (March 2019).

Further instruments called the Protocol on Provisional Application (PPA) and the Protocol on Privileges and Immunities (PPI) must also receive the necessary number of ratifications and signatures.

The PPA allows various provisions of the Agreement to come into force early, and in this `provisional application phase' final preparations for the start of the UPC system, such as recruitment of judges, can be completed. Under Article 3, the PPA will come into force the day after France, Germany, the UK and 10 other countries have ratified, or informed the depositary that they have parliamentary approval to ratify the Agreement; and have consented to be bound by the PPA (or by the provisional application of the relevant provisions of the Agreement). The UK fulfilled those requirements in July 2017 and France and eight other countries (Belgium, Denmark, Estonia, Finland, Italy, Luxembourg, the Netherlands and Sweden) have also done so. Other countries, such as Bulgaria, Latvia, Lithuania and Slovenia, are close to completing the procedure. It was contemplated to let 6 months to European patent owners to file their "opt-outs" before the UPC agreement comes into force.

The PPI will enter into force 30 days after the last of Luxembourg, France, Germany and the UK have deposited their instruments of ratification, approval or accession with the EU Council's General Secretariat (Article 18 PPI). Luxembourg, which is hosting the UPC's Court of Appeal and Registry, deposited its instrument of approval on 3 April 2018 and France, which is hosting in Paris the seat of the UPC's central division, deposited its instrument of ratification on 14 February 2018 and UK deposited its instrument of ratification on 26 April 2018. Therefore, only Germany, which is hosting in Munich the other section of the central division, must now do so.

Let us now try to simply illustrate the above considerations...

The complaint is dismissed, and the German ratification can be done before September 2018: the UPC agreement will come into force early 2019, before Brexit

The complaint is dismissed, but the German ratification cannot be finalized before September 2018: postponement of UPC to be expected

Germany will probably postpone a ratification which will give a UPC agreement coming into force after Brexit (March 2019).

 

Will the UK be part of the Unitary Patent System after Brexit? The UK's future relationship with the Unified Patent Court will be subject to negotiation with European partners as they leave the EU. Now the UK Government has ratified the UPC Agreement, it seems clear that the UK wishes to be part of the Unitary Patent System after Brexit, and to maintain a branch of the Unified Patent Court in London. Some amendment to the UPC Agreement will however be necessary to enable such a scenario.