Germany gives Unified Patent Court project fresh impetus

Patent litigation specialist Dr. Michael Schneider of Pinsent Masons, the law firm behind Out-Law, welcomed the development but said that it does not mean an immediate start for the new court system, which he estimates will happen in early 2022 if the remaining steps go to plan.

Schneider was commenting after the Bundestag passed the federal government's draft law required for Germany to ratify the UPC Agreement. Germany had previously ratified the UPC Agreement in 2017, but that ratification was deemed void by the country's Federal Constitutional Court in March this year.

The UPC Agreement is an overarching international agreement that provides for the establishment of the UPC judicial framework. This new UPC system foresees a Europe-wide court system to ensure that businesses have a streamlined process for litigating European patents through a single court – including new unitary patents. The UPC Agreement dictates that, for the new UPC system to take effect, at least 13 EU countries, including the three with the most European patents in effect in 2012 – Germany, France and the UK, must pass national legislation ratifying the UPC Agreement.

French ratification came early in the process and the UK also completed its ratification prior to exiting the EU. In total, 15 EU countries have ratified the UPC Agreement to-date. However, the constitutional law challenge in Germany, together with Brexit in the UK, cast doubt on the future of the proposed new UPC and unitary patent regimes. In March this year, the UK government said it would no longer seek to participate in the UPC system.

However, late last month the European Commission outlined its intention to "support a rapid roll out of the unitary patent system" in 2021, giving renewed emphasis to the project.

In its intellectual property action plan, the Commission described the absence of German ratification of the UPC Agreement as "the main missing step in ensuring the launch of the unitary patent system". It said Brexit "is not expected to hamper the launch of the unitary patent system".

The Commission said that, once the ratification process is complete, it will "work together with the European Patent Office (EPO) and member states to make the unitary patent system operational among the contracting member states", of which there are 25, and encourage the two remaining EU countries yet to sign the UPC Agreement, Spain and Croatia, to do so.

The proposed new law in Germany is still to be presented to the Bundesrat, Germany's second parliamentary house for law making, for a second time for a final vote. This vote is expected to take place on 18 December.

The UPC Preparatory Committee has said that two more signatories of the UPC Agreement, beyond Germany, will need to "agree to be bound by the Protocol on Provisional Application in order for the project to move into its final phase". The Protocol provides for the establishment of the UPC as a legal entity and allows for logistical issues such as the employment of staff and installation of IT systems to be addressed before the new framework becomes operational. The Protocol, however, needs to be ratified by at least 13 of the signatories to take effect.

Schneider said: "It is to be hoped that last week‘s vote and confirmation of German commitment to the UPC project will provide the final impetus necessary to deliver the new court system. Many businesses, patent authorities, and the legal profession have been ready to go for years, and the more harmonised approach to enforcement available through the new UPC system will welcomed by many European inventors. However, businesses are encouraged to review the pros and cons of subjecting their European patents to the UPC regime before opting in. Potential further constitutional challenges in Germany should not be allowed to delay the entry into force again."