Brexit, the UK's snap general election and challenges at Germany's Constitutional Court have further delayed the timetable for the introduction of the Unified Patent Court (UPC). Preparatory Committee 'hopeful' that it will enter into force in early 2018, but further delays could well occur.
The UPC system looked to have taken another step forward early in 2017 when Italy deposited its instrument of ratification of the UPC agreement A total of 12 countries have now ratified the agreement, namely: Austria, Belgium, Bulgaria, Denmark, Finland, Luxembourg, Malta, the Netherlands, Portugal, Sweden, and France (one of the three mandatory ratifying countries). The UK and Germany are the two other mandatory ratifying countries.
The UK government announced plans last November to ratify the agreement and 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 (EPO) was pushing for an entry into force of the New UPC system by 1 December 2017.
However, the UK's snap general election along with constitutional challenges to the European Patent Convention in Germany have delayed ratification in both countries. As a result, the UPC's implementation is now scheduled for early 2018, but further delays could well occur.
There is ongoing uncertainty over whether the UK can even continue to participate in the new system post-Brexit, as the UPC agreement requires participatory countries to be EU members. In addition, the UK’s courts would be required to accept judgements by the Court of Justice of the European Union (CJEU). Germany, meanwhile, has general elections scheduled for September 2017, and must also overcome challenges filed at its Federal Constitutional Court questioning the compatibility of the European Patent Convention with the German constitution.
In addition, under plans, prior the Brexit vote, the UK was to host a specialist divisional court (competent for hearing cases in specific fields of technology according to the IPC: A, C - Chemistry and Life Sciences), as well as a Local Division. It seemed likely that these courts will no longer be located in the UK now that Article 50 has been triggered. All these barriers will need to be overcome before the UPC can come into effect.
Provisional application phase also delayed
The six-month 'provisional application phase', which was planned for the end of May 2017, has also been delayed. This phase is aimed at ensuring a smooth transition into the operational phase and will come into force when 13 of the 25 participating states approve the Protocol to the Agreement on a Unified Patent Court on provisional application, and ratify or receive parliamentary approval to ratify the UPCA. This 13 must include France, Germany and the UK (the UK government has already laid the orders implementing the Protocol at Westminster).
Importantly for European Patent (EP) holders, the provisional application phase includes a sunrise period, which begins three months before the launch of the UPC. During this sunrise period, EP holders – as well as applicants and registrants of associated supplementary protection certificates (SPCs) – will be able to opt those patents out of the UPC system before it becomes operative. (See our FAQ: Do I have to bring my dispute before the Unified Patent Court?)
Worth the wait?
Although the timing for the implementation of the court system has slipped somewhat (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 will 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.