The Unified Patent Court – on the move again?

Yesterday (10 September 2020) the UPC Preparatory Committee met (albeit virtually) for the first time since March 2017.  On the agenda were the issues triggered by the formal withdrawal of the UK from the UPC system and the events in Germany in relation to challenges to Germany’s participation.

The note of the meeting on the Committee’s website (here) states that the Committee took note of the “good progress” being made in Germany with regard to the legislation needed for the German ratification of the Unified Patent Court Agreement and the Protocol on Provisional Application.

The Committee also took note of the call from European Industry for a swift entry into operation of the Unitary Patent System.

“Against this backdrop issues concerning the effects of the UK withdrawal were discussed as well as appropriate ways forward. Good progress was made and the Committee is confident that pragmatic and legally sound solutions will be found that will enable the unitary patent system to be functional in a near future“.

The Italian Ministry of Foreign Affairs reported that the replacement of London as the life sciences seat of the central division was considered at yesterday’s meeting and a recommendation adopted that Munich and Paris divide the workload that would have gone to London as a temporary arrangement, so that the determination of this seat’s final location would not delay the start of the UPC system. The report also states that the procedure to amend the agreement to change the location of the London seat can now be commenced.

Once Germany has ratified the UPC Agreement, the hope is that the UPC could be formally established (and the unitary patent system also come into effect) in 2021. The start of the UPC would allow the EPO to start to grant unitary patents (European patents with unitary effect) which can only be enforced via the UPC.

Italy has formally submitted its proposal for Milan to host the life sciences seat of the central division court of the UPC on a permanent basis.  The Italian Minister of Foreign Affairs (Di Maio) was satisfied with the outcome of the meeting and Italy’s proposal was well received.

See also this post by Sebastian Moore, one of our European patent specialists, with more information and comment about the benefits of Milan hosting the life sciences seat of the UPC central division.

Authors

Sebastian Moore
Sebastian Moore
Partner, Milan & London
+39 02 3602 1398; +44 20 7466 2331
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

The UK will not participate in the UPC confirms IP Minister responding to House of Lords’ letter

IP Minister Amanda Solloway has written to the House of Lords in response to their letter formally requesting confirmation that the UK would not be participating in the UPC. This request by the House of Lords followed a response given by the Government in February to a parliamentary question (recorded on Hansard) which said this was the case (see our post here); no formal statement had otherwise been made.

The IP minister’s response was confirmatory – the UK will not take part in the UPC system. See the extract from her letter (of 24 March) below:

As you will be aware the Government published our approach to negotiations with the EU on 27th February. This set out our vision for future cooperation between legally autonomous sovereign equals. It ruled out any obligation for our laws to be aligned with the EU’s, or for the EU’s institutions to have any jurisdiction in the UK. That explicitly included the Court of Justice of the EU.

Continued participation in the Unified Patent Court would mean ceding jurisdiction over key patent disputes in the UK to a court that is bound to apply and respect the supremacy of EU law, including judgments of the CJEU. Participating in such a system would be incompatible with our overall approach to future relations with the EU that I have set out above.

Consequently, the Government will not be seeking the UK’s continued participation in the Unitary Patent and Unified Patent Court.”

Background

The House of Lords EU Justice Sub-Committee took evidence of the impact of the UK’s non-participation in the UPC at a session on 10 March at which Daniel Alexander QC (leading patent barrister) and Julia Florence (then President of CIPA) spoke.  Subsequently the Committee wrote to the IP Minister to request formal confirmation of the UK’s intentions in relation to the UPC.

The future of the UPC

On 20 March, the German Constitutional Court released its decision by which it found, by a 5:3 majority, that the Act by which Germany was to accede to the UPC Agreement was void, because it was not passed with the required parliamentary majority. Without Germany’s ratification, the UPC Agreement cannot come into force. This decision, along with the UK’s formal withdrawal as well as the uncertainties arising from Brexit, has thrown the future of the UPC into some doubt (see our post  What’s next for the UPC project? Our analysis following the German Federal Constitutional Court decision). 

Author

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

What’s next for the UPC project? Our analysis following the German Federal Constitutional Court decision

The Bundesverfassungsgericht (the German Federal Constitutional Court) has released its long-awaited ruling on the complaint against the German ratification of the UPC Agreement. It has found, by 5:3 majority, that the Act by which Germany was to accede to the UPC Agreement is void, because it was not passed with the required parliamentary majority. Without Germany’s ratification, the UPC Agreement cannot come into force. What is likely to happen next, and when?

In theory, the Consitutional Court’s objection could simply be overcome by getting the required parliamentary majority for the Act on a second attempt. The Bundestag (the German federal parliament) is still sitting, despite the ongoing Covid-19 crisis. Further, on 26 March 2020, the Federal Justice Minister at the Bundestag said that the Federal Government “will carefully evaluate the decision of the Federal Constitutional Court and examine possibilities to remedy the identified lack of form before the end of this legislative period” (that period runs until approximately October to December 2021).

However, there are a number of reasons that the path is unlikely to be as smooth, or as quick, as this.

First, the UK Government has recently confirmed that, following Brexit, the UK will no longer participate in the UPC system. At a minimum, this means the UPC Agreement will need to be amended, because London is currently expressly named in the Agreement as one of the sites of the Central division. More fundamentally, it may mean that other participating countries are now less keen to press ahead with the UPC project, either in its current form or at all. Striking a legal and procedural balance in the UPC system was the product of years of negotiations between participating countries. With the UK now outside the system, there are some who feel that the compromise reached should also be adjusted.

Second, the Constitutional Court decision explicitly leaves one question open – namely whether Articles 20 and 21 of the UPC Agreement, which grant EU law primacy over national law, are permissible in their current form. They did not need take a decision on this issue given their decision on the parliamentary majority, but we understand that it could still be pursued in future if the necessary majority is obtained from the Bundestag.  That could lead to another long delay.

In our view, the most likely next step is for the signatories of the Agreement to meet to decide whether to press ahead with the UPC project at all, in light of Brexit and the Constitutional Court’s decision. If they do wish to press ahead, a decision will need to be taken on the new location for London’s part of the Central division. The UPC Agreement will then need to be amended to reflect this new location (and any other renegotiations).  It makes sense to do that before the UPC Agreement is reconsidered by the Bundestag, but it means that there is still a lot of uncertainty as to whether, and in what form, the project will go ahead.

What is clear is that the UPC project is not likely to come into fruition any time soon. Much of Europe is of course now occupied dealing with the escalating Covid-19 crisis. Even if the signatories of the Agreement could resolve the open questions quickly, the UPC project is unlikely to be on high on the Bundestag’s agenda in the short term.

Overall, we don’t envisage the UPC coming into fruition in the near term, and it is possible it never will.

See here for more on the latest news on the Unified Patent Court and Unitary Patent.

Contacts

Sophie Rich
Sophie Rich
Partner
+44 20 7466 294
Emily Bottle
Emily Bottle
Senior Associate
+39 02 0068 1364

No plain sailing for the UPC – German Court Upholds Constitutional Challenge

The Bundesverfassungsgericht (German Federal Constitutional Court) has this morning announced that it has found (by a majority decision) that the Act of the Bundestag which sought to approve and implement the Unified Patent Court in Germany is void. The Court indicated that the Act would amend the German constitution in substantive terms, but had not been approved in the Bundestag with the two-thirds majority necessary for such amendments.

In its press release, the Court stated that “in order to safeguard their right to influence the process of European integration by democratic means, this, in principle, also entails the right of citizens that sovereign powers be conferred only in the ways provided for by the Basic Law. An act of approval to an international treaty that has been adopted in violation thereof cannot provide democratic legitimation for the exercise of public authority by the EU or any other international institution supplementary to or otherwise closely tied to the EU.”

https://www.bundesverfassungsgericht.de/SharedDocs/Pressemitteilungen/EN/2020/bvg20-020.html

The decision leads to further uncertainty as to if and when the UPC will come into effect. It does not appear, however, that the reasoning precludes the UPC being adopted by Germany in a constitutionally correct manner. More analysis will follow.

See here for more on the latest news on the Unified Patent Court and Unitary Patent.

Contacts

Sophie Rich
Sophie Rich
Partner
+44 20 7466 294
Andrew Wells
Andrew Wells
Senior Associate
+44 20 7466 2929

German Federal Consitutional Court to announce UPC decision this Friday 20 March 2020

The German Federal Constitutional Court, which is handling a case objecting to the ratification of the UPCA by Germany, has announced that it will hand down its decision this Friday, 20 March 2019, without a further oral hearing.

It is generally thought that the German court is likely to reject the objector’s case. If this is the outcome on Friday, all eyes will turn to the question of what the next steps are, now that the UK has left the EU and the UK Government has confirmed that the UK will not participate in the UPC system.

See here for more on the latest news on the Unified Patent Court and Unitary Patent.

UK will not be a part of the UPC – government confirms

The UK Prime Minister’s Office has confirmed (27.02.20) that the UK will not be participating in the UPC system saying: “Participating in a court that applies EU law and bound by the CJEU is inconsistent with our aims of becoming an independent self-governing nation.”

Perhaps not surprising, given the wider signs emerging from Downing Street of late and whilst it may be a negotiating tactic, we wouldn’t bet on it. It will be interesting now to see what happens next with the UPC project, post this UK government announcement. All eyes will now turn to Germany and the approach they intend to take. What is certainly clear is that the UPC will be less attractive to business without the UK’s participation in it.

Meanwhile, HSF’s EU-wide patent litigation practice stands ready to manage multi-jurisdictional patent litigation as it always has, whether the UK is part of the UPC or not.

See here for the latest news on the Unified Patent Court and Unitary Patent.

Contacts

Sophie Rich
Sophie Rich
Partner
+44 20 7466 294
Emily Bottle
Emily Bottle
Senior Associate
+39 02 0068 1364

RATIFICATION OF THE UPC AGREEMENT IN SIGHT? GERMAN CONSTITUTIONAL DECISION LIKELY EARLY IN 2020

As those with an interest in patents will be aware, the Unified Patent Court is still not a reality. The final ratification of the Unified Patent Court Agreement (“UPCA”) required for the agreement to come into effect, is that of Germany (over 13 states having ratified including the UK and France, which, along with Germany, were the three states which were required to have ratified along with at least ten more, before the UPCA could come into force – see here for ratification details). Without the UPC established to enforce them, unitary patents cannot be granted.  Germany’s ratification has yet to be received.

The outcome is still awaited of the constitutional case objecting to a ratification of the UPCA by Germany, which was listed to be decided in 2019.  In a recent interview, Judge Huber of the German Federal Constitutional Court (which is the court due to decide the case) denied that the delay had anything to do with Brexit, rather that other important cases were also waiting to be decided and took precedence. He suggested that the case might be decided in the early part of 2020.

It is generally thought that the German court is likely to reject the objector’s case, but only once this is determined can the German government make a decision on whether to ratify the UPCA. Indications are that all administrative preparation to ratify had been made in readiness, however the issue of Brexit is also key, in governmental terms at least. In July 2019, in a response to a Brief Enquiry, the Federal Government stated that the consequences of Brexit were as yet unknown (and by implication were delaying ratification), but also reasserted the current Federal Government’s commitment to the unitary patent and UPC project.

For more on the Unified Patent Court (UPC) and unitary patent (UP) system, see our UPC hub here: www.hsf.com/upc

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

Preparations for the UPC continue despite an “unpredictable environment”

The UPC Preparatory Committee has issued a “Status of the Unified Patent Court Project” statement and review of 2018, confirming that there are now 16 states which have ratified the UPC, and that German ratification is still awaited (dependent on the outcome of the complaint pending before the Constitutional Court in Germany) before the project can move into provisional application phase. This latter phase is allows the courts to be prepared and judges to be appointed.

 

Despite the current, somewhat unpredictable environment, the technical and operational preparations are continuing allowing for the project to move at pace in the event of a positive outcome from the German Constitutional Court“.

The press release says nothing more than was already known, but it does confirm that the status of the project is constantly being reviewed, stating that the Chairman of the UPC Preparatory Committee “continues to meet with the Executive Group and the operational team on a monthly basis” and noting that those that have applied for judicial positions in the Unified Patent Court are being contacted separately.

Author

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

Italy moves the unitary patent a step closer

The Italian Government approved a draft Bill on 21 November 2018 aimed at adapting the Italian IP Code to the Unitary Patent Regulation (EU 1257/2012) and the Unified Patent Court (UPC) Agreement. The next step before the Bill is passed will be for the Italian Parliament to give its favourable opinion.

The draft Bill will essentially amend the Industrial Property Code in Italy to incorporate unitary patent protection and the jurisdiction of the UPC.

What’s new?

  • Safety net

Under the current system a European patent acquires effect in Italy once an Italian translation of the patent has been filed with the Italian Patent Office within three months of the publication of the patent grant. Once the UPC is in place, holders of European patents will be entitled to apply for their European patents to have unitary effect in all 26 Member States that have participated in the enhanced cooperation to create the unitary patent, within one month of the patent grant being published on the European Patent Bulletin.

There is a degree of uncertainty as to whether the process for applying for unitary effect will take longer than the 3 months, in which case the patentee will have lost out on the chance to validate their patent in Italy.

The draft Bill has therefore introduced a safety net mechanism whereby if an application for unitary effect is rejected or withdrawn, the 3 month term for the validation in Italy will take effect from the date when they receive the rejection or of the withdrawal. This will allow patentees to validate a patent in Italy even if their unitary application is not granted.

  • Experimental use exception

Another important amendment concerns the experimental use exemption. Under the draft Bill, the rights conferred by a patent shall not extend to acts carried out for experimental purposes relating to the subject matter of the patented invention or to the use of biological material for the purpose of breeding, or discovering and developing other plant varieties.

The previous wording of the Italian Industrial Property Code did not include a specification regarding the type of experimental use. In essence, this limitation of the experimental purposes to “the subject matter of the patented invention” could lead to a more restrictive interpretation of the scope of permitted “experimental use” (e.g. limited to experiment “on the patented invention” and not “with the patented invention” in line with Italian case law).

  • Infringement exemption for vessels/aircraft/vehicles

The draft Bill would introduce an exemption for the use of patented inventions on board vessels or in the construction or operation of aircraft or land vehicles or other means of transport of countries of the International Union for the Protection of Industrial Property (Paris Union) or members of the World Trade Organisation, when such vessels or vehicles temporarily or accidentally enter the Italian territory.

  • Transition period

The draft Bill guarantees the application of Italian law to proceedings concerning European patents until the UPC Agreement comes into force and for the duration of its transition period.

The final touches

The remainder of the draft Bill is aimed at removing any inconsistencies with existing provisions governing patents in force in Italy and their application to unitary patents where necessary. If significant changes are not required to it, the draft Bill could be approved in the near future.

The draft Bill rounds off Italy’s preparations for the unitary patent and UPC system, which had been put into motion with the amendment of the Italian Industrial Property Code to incorporate provisions on indirect infringement as required by the UPC Agreement.

 

Contacts

Sebastian Moore
Sebastian Moore
Partner
+44 20 7466 2801
Sara Balice
Sara Balice
Senior Associate
+39 0200681363
Martina Maffei
Martina Maffei
Associate
+39 0200681353

 

HSF Legal Guide to Brexit – an update on provision for intellectual property rights

IP rights which are designated as applying across the EU (EU trade marks, Community plant variety rights, Community registered designs and Community unregistered designs) and those, qualification for which involves activity within the EU (such as database rights), are all at risk of termination in relation to the territory of the UK once the definition ‘EU’ no longer includes the UK. However, the Commission and the UK Government have agreed at negotiator level (as published on 19 March 2018 and subsequently, 19 June 2018) certain sections in the withdrawal agreement including provision of replacement rights for those registered rights thus affected and for the UK Government to provide replacement rights for UK registered rights.

The UK Government’s White Paper detailing its proposal for the future relationship between the UK and the EU (published on 12 July 2018) includes a limited number of proposals relating to intellectual property as follows:

• The UK intends to explore staying in the Unified Patent Court (UPC) and Unitary Patent system post-Brexit. The UK will work with the member states that have signed up to the UPC Agreement to ensure that the UPC Agreement can continue on a firm legal basis;

• Arrangements on future co-operation on intellectual property are recognised as important to provide confidence and security to rights holders operating in and between the UK and the EU;

• The UK will establish its own Geographical Indications (GIs) scheme to provide continuous protection for UK GIs in the UK and protection for new GIs applied for by UK and non-UK applicants

In our detailed briefing, we review the proposals for the treatment and protection of intellectual property rights in the UK at Brexit: see Intellectual Property and Brexit (part of the HSF Brexit Legal Guide 2018).

See also the Herbert Smith Freehills Brexit Hub and Brexit Blog.

Authors

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217