UK: Principal Developments Since Signature Of The Unitary Patent Court Agreement - Updated April 2015

Last Updated: 29 April 2015
Article by Ian Wood

The Unified Patent Court Agreement (UPCA) was signed on 19 February 2013 by 24 of the then 27 EU Member States (Bulgaria, Poland and Spain did not sign at that time although Bulgaria signed in March 2013). Croatia joined the EU on 1 July 2013 but has not yet signed the UPCA.

Since the UPCA was signed, there have been significant changes in the position relating to the introduction of the proposed new patent regime (ie the unitary patent itself and the Unified Patent Court ("UPC")), which are noted below.

Overview

The unitary patent is unlikely to become operational until 2017 at the earliest – and even then there are serious obstacles to be overcome.

Advocate General Bot dismisses Spain's UPC challenge

The Court of Justice of the European Union has issued a press release announcing that it is Advocate General Bot's opinion that the CJEU should dismiss Spain's two actions challenging the unitary patent system ("UPS") proposals.

In March 2013 Spain brought two actions before the CJEU challenging the UPS proposals and seeking an annulment of two regulations forming part of the UPS proposals (concerning unitary patent protection and applicable translation arrangements) (Spain's actions followed Spain's and Italy's earlier unsuccessful challenges, dismissed by the CJEU in April 2013).

The Advocate General observed in his opinion that:

"the sole purpose of the contested regulation is to incorporate recognition of unitary effect through a European patent already granted under the Convention. To that end the EU legislature limited itself to stating the nature, conditions for grant and effects of unitary protection, covering only the phase subsequent to the grant of the European patent. The regulation only attributes to European patents an additional characteristic, namely unitary effect, without affecting the procedure regulated by the Convention. The protection conferred is regulated by the uniform implementation provisions of the regulation. That protection brings real benefit in terms of uniformity and hence of integration compared with the situation resulting from the implementation of the rules laid down by the Convention (rules which, in every one of those Contracting States, guarantee protection whose extent is defined by national law)".

The CJEU ruling on the Spanish challenges

The CJEU is expected to rule on the Spanish challenges on 5 May 2015 and if, as is expected, the CJEU rules in accordance with the Advocate General's opinion, Europe will be one step closer to a unitary patent court system – although there are still many hurdles to overcome.

CJEU Press release 18 November 2014

Rules of Procedure for the Unified Patent Court – nearly there

Revised draft Rules of Procedure for the UPC were published on 31 October 2014. The draft Rules were discussed at an oral hearing in Trier Germany on 26 November 2014 and we now await the final version of the rules from the Preparatory Committee.

The latest draft of the Rules includes a number of key amendments including changes relating to opt-in mechanisms, bifurcation, permanent injunctions, appeals, languages and security. Of these, the most interesting amendments of practical relevance relate to opt-out / opt-in mechanisms and bifurcation.

Opt-out (and opt-in) mechanisms

It is intended that proceedings concerning Unitary Patents and European Patents may be brought before the UPC (although proceedings concerning European Patents may alternatively be brought before national courts for a transitional period of seven years). This means that patent owners will have a choice of where to bring proceedings concerning European patents during the transitional period. In addition, patent owners may under the proposed Rules of Procedure "opt-out" a European Patent from the UPC so that all future proceedings will be brought before national courts.

The provisions for opting-out under the 16th draft of the Rules raised a number of questions for patent holders concerning the timing of opt-outs and whether opting out was possible if there was already a patent action pending before the UPC.

The 17th draft of the Rules makes clear that opting-out is not possible if there is an action pending before the UPC (or if there was an action pending and that action has been concluded). Thus, an action brought to the UPC constitutes an absolute bar to an application to opt-out. This amendment to the draft Rules will reduce the risk that the UPC and national courts deal one after the other with the same European Patent and reach diverging decisions.

Further, once a decision to opt-out has been made by a patent holder and an action has been brought before a national court concerning that patent (whether the action is pending or concluded), it will not be possible to withdraw the decision to opt-out (and opt back in to the UPC). Any future action concerning that patent will need to be heard by the national court, not the UPC. Again, the amendment is intended to reduce the risk of diverging decisions. However, an opt-out in relation to a European Patent which is not the subject of an action (pending or concluded) before a national court may be withdrawn by the patent owner during the transitional period.

The fees for opting-out are not yet known and therefore the practical implications of opting out or applying for national rather than European Patents are still not clear.

Bifurcation

While the UPCA envisaged a bifurcation of validity and infringement issues (with perhaps a counterclaim for revocation referred to the Central Division of the UPC and the infringement action being dealt with by the Regional Division, the amended Rules provide that the proceedings before the Central Division may be accelerated in order that the revocation claim might be heard prior to the infringement hearing. Synchronisation of division calendars will however remain at the discretion of the judge and it is not the case that all Central Division proceedings will be accelerated. As a result of the amendment, the risk of bifurcation is less of an issue because revocation should be addressed before infringement is heard by the court.

The proposals in general do little to indicate that 2017 remains a realistic start date for the UPC.

Amendments to "Brussels I Regulation"

EU Council Regulation No.44/2001 on jurisdiction and the recognition and enforcement of judgments in the European Union (the so-called "Brussels I Regulation") required amendment for the UPC Agreement to be able to come into effect. Although EU Regulation 1215/2012 on jurisdiction and the recognition and enforcement of judgments in the European Union was adopted on 12 December 2012, this did not contain the necessary provisions.

However, on 30 July 2013, the European Commission ("EC") published its proposal for amendments to the Brussels I Regulation; this provided clarification on certain matters: that the Unified Patent Court and the Benelux Court of Justice are 'courts' within the meaning of the Brussels I Regulation, the operation of the rules on jurisdiction, the application of the rules on lis pendens and the operation of the rules on recognition and enforcement.

EU Regulation 542/2014, which incorporates the proposals for amendment, has now been formally adopted and will apply from 10 January 2015.

Signatories to the UPCA

Bulgaria signed the UPCA on 5 March 2013. However, Poland and Spain still have not signed the UPCA.

Croatia joined the EU on 1 July 2013 but has not yet signed the UPCA.

This will have no impact on the overall introduction of the new regime.

Progress on ratification of the UPC

Agreement Austria, France, Sweden, Belgium, Malta, Luxembourg and Denmark have now ratified the UPCA. Thirteen European Union Member States (specifically including Germany and the UK) must ratify the UPCA for the unitary patent to take effect.

(Recently, an action was filed in the Belgian Constitutional Court by several claimants challenging the decision by Belgium to ratify the UPCA. The challenge indicates the potential difficulties for Member States in ratifying the UPCA.)

In the UK, legislation authorising ratification of the UPCA was included in the Intellectual Property Act 2014 (which received Royal Assent on 14 May 2014). Ratification is expected during 2015.

European Commission - Ratification table

Timetable

On 18 March 2014, the fifth meeting of the Preparatory Committee for the Unified Patent Court agreed that the court would not be operational until the end of 2015 at the earliest. However, this date is optimistic bearing in mind the obstacles to be overcome.

Divisions and Judges Sweden, Lithuania, Latvia and Estonia have agreed on the creation of a regional division of the UPC. This is the first agreement by a group of member states who are signatories to the UPCA to set up a regional division; there is expected to be at least one more, for the Benelux countries (ie., Belgium, Netherlands and Luxembourg).

A dedicated training centre for judges for the UPC was officially opened on 13 March 2014 in Budapest. Following the UPC Preparatory Committee's call for expressions of interest in becoming judges of the UPC, a list of potential candidate judges was approved in July 2014. Formal applications will follow in due course. The target date for appointment of judges is not yet known.

See here for latest news.

EPO and UP IPO studies

The European Patent Office ("EPO") has published the results of a study on the effects (advantages and disadvantages) of the UPC regime.

The main concerns raised relate to the level of fees for the Unitary Patent itself, which have not yet been decided, and the costs (also unknown) and procedural uncertainties of the UPC.

ESAB statement, 30 April 2014

On 19 March 2015, the UK Intellectual Property Office ("UK IPO") published a study examining the volume of litigation at the UP Patents Court and Intellectual Property Enterprise Court. The report states that UK businesses face difficult decisions – should they or should they not seek to obtain unitary patent protection; and whether or not to opt-out their existing European Patent portfolios from the UPC's jurisdiction?

UP IPO Study

Consultation on implementation of the UPCA

The UK IPO launched a consultation in June 2014 on the drafting, structure and effect of the UK's draft secondary legislation concerning implementation of the UPC Agreement. Secondary legislation (most commonly in the form of statutory instrument) allows the UK government to make changes to UK law using powers conferred by Act of Parliament.

The IPO asked for evidence on the way that the proposals will work in practice in order to gauge economic impact and to assist with decisions on the details of proposed legislation relating to the unitary patent system.

A summary of responses to the consultation was published in March 2015. A full government response is expected to be published before the legislation is laid before Parliament.

Secondary legislation implementing the Unified Patent Court

Technical Review and Call for Evidence - Summary of Responses

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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