The Unified Patent Court (UPC) and Unitary Patent (UP) is a project that has been in gestation for many years; would it finally come to term in 2017? This is the question posed in an informative webinar run by D Young & Co on 14 February.
Chairing the session, patent attorney and partner Kirk Gallagher noted that the project was knocked off course by the Brexit referendum, but now looks as if it will go live in 2017 after all. Richard Willoughby, a solicitor and partner who has been closely involved with the UPC and UP project for some time, brought us up to date. The current status is that the UK has indicated that we will ratify despite the referendum result.
Richard reminded us that the UPC will be the single forum for litigating UPs and non-opted out conventional European Patents (EPs). The “provisional application period” and “transitional period” relate to the UPC, not the UP. The provisional application period is for the start-up of the UPC before litigation can start. The transitional period is the first seven years of the UPC during which EPs can be opted out and jurisdiction will be shared with national courts. So far twelve states have ratified, and one more is needed, but both the UK and Germany must ratify. The court locations are in place, representation rights are settled, the IT system, budget, HR and facilities are in progress. In the UK the UPC/UP timetable has now been revived.
Further legislation is required in the UK; this will be secondary legislation which must be passed by Parliament. After that, the instrument of ratification can be signed (expected in March/April 2017). In Germany, legislation is before the German parliament. Germany is expected to delay until the third quarter of the year, as its ratification signals the countdown to the UPC/UP going live. In May 2017 the provisional application period is expected to begin, in September the “sunrise” period when EPs can be opted out, and in December it is expected that the UPC will open and UPs become available.
Rights holders should revive their UPC/UP planning on the basis of these dates, including planning for opt-outs of conventional EPs and SPCs (Supplementary Protection Certificates that extend the life of pharmaceutical patents in certain circumstances). Issues relating to ownership and licensing should be reviewed. Opt-out may be preferred in the case of very valuable patents, particularly in the pharmaceutical industry, where rights holders may be concerned about possible risks associated with the untried UPC, which will take some time to build up a body of decisions and a level of predictability. Rights holders may be concerned about central revocation or declaration of non-infringement through the UPC, which will then be valid throughout its jurisdiction. If EPs are opted out, they will still be subject to national courts during the transitional period.
Proprietorship should be checked: only actual proprietors can opt out. SPCs must follow the patent in opting out, and vice-versa. Licensees cannot opt out. All proprietors must agree, in the case where there are more than one. So it’s important to make sure that registration details are correct and all parties are aware.
Patent attorney Rachel Bateman, who also specialises in the UPC/UP, now talked us through the position on the Unitary Patent. The UP is a European patent with unitary effect and will be available for European applications (filed on or after 1st March 2007) which grant on or after the entry into force of the UPC Agreement. Benefits of the UP are as follows: central administration (through the EPO), broad coverage (25 participating Member States); a single renewal fee (to the EPO); “limited translation costs”; a central litigation forum. There are significant cost savings with the UP if broad coverage is required, but it is not possible to “drop” states during the life of the UP in order to make cost savings at a later stage.
By December 2017, 18 or 19 states will have ratified. A combination of the UP with EPs will be needed if protection is required for a/ non-ratified participating states, b/ EU states not participating (Poland, Spain); c/ EPO Member States that are not members of the EU (Switzerland). (Since the webinar took place, on 7 March a non-binding motion was adopted in the Spanish Parliament in favour of joining the EPC/UP system).
The decision by the UK to ratify despite the referendum result was surprising, but support can be found from the following: the UPC is not an EU institution but an international treaty organisation, albeit at the present time only open to signature by EU Member States. The UK is a party to the UPC treaty and has been closely involved in the development of the system, and should not be seen to undermine the conditions of a treaty it is a party to. Other parties wanted the UK to stay, and the UK didn’t want the UPC to go ahead without it. Legal opinions think it may be possible for the UK to continue after Brexit.
Before the UK leaves the European Union (possibly March 2019), the UPC can start, it will cover the UK, and the London divisions will open. The UP can start and will cover the UK until it leaves the EU.
After Brexit, it might be possible for the UK to continue in the UPC. If not, the London divisions will close and the UPC will continue without the UK. It is unlikely the UK will be able to continue with the UP, and replacement coverage will be needed for the UK, for example a GB patent?
Our thanks to D Young & Co for this instructive update on the UPC/UP situation. Any errors or omissions in this blog are ours alone. We hope to follow up this post with some thoughts on the translation requirements for the UP and how they compare with the current translation regime.
For further information:
Unified Patent Court at the EPO
Unified Patent Court - its own site
Unitary Patent at the EPO
Slides ©D Young & Co LLP 2017