London unitary patent court seat for life science disputes is confirmed

Out-Law News | 02 Jul 2012 | 11:56 am | 3 min. read

A new unitary patent court (UPC) will be based in London after agreement was reached between EU leaders to divide responsibility for overseeing unitary patent disputes under the proposed new system of protection.

Plans to create a new unitary patent system had stalled on the issue of where a central divisional court should be located. However, a compromise was reached at a meeting of the European Council late last week. As a result, disputes over unitary patents related to chemistry, including in pharmaceutical products, will be overseen in London.

"Given the highly specialised nature of patent litigation and the need to maintain high quality standards, thematic clusters will be created in two sections of the Central Division, one in London (chemistry, including pharmaceuticals, classification C, human necessities, classification A), the other in Munich (mechanical engineering, classification F)," the European Council said in a statement. (16-page / 165KB PDF)

The remainder of disputes that could be heard at a central divisional court under the proposed new unitary patent regime will be heard in Paris, it added.

The European Council is an official body within the structure of the EU that gathers leaders of member states and the European Commission to determine general political policies and priorities for the trading bloc.

Prime Minister David Cameron said that the UK would benefit from having London as a main unitary patent court (UPC) seat.

"A vital part of the Court covering the pharmaceutical and life sciences industries, in which Britain excels, will be coming to London," Cameron said in a statement. "This brings millions of pounds and hundreds of jobs. And I secured the changes to the nature of the patent system that businesses were demanding."

Various plans to establish a cheaper and more efficient way for inventors to gain patent protection across Europe have been in circulation for years.

In recent months 25 EU countries have moved closer to establishing a new framework around how that system would operate, however. If introduced, inventors would only have to apply once in order to obtain patent protection across the 25 countries, if their application was approved. Italy and Spain have objected to the plans.

Whilst issues relating to the terms of unitary patent protection and the language regime for the application and approval procedures for that protection had been agreed upon by the remaining member states, there had been a lack of consensus on the workings of a new court system for oversight of the regime.

Under the proposed framework local, regional and central divisional UPCs will give inventors access to the judicial process without them having to incur huge travel and translation costs. However, plans for the courts to separate issues of patent validity from patent infringement had led to criticism in the UK, as had plans to allow questions stemming from cases to be referred to the European Court of Justice (ECJ). The ECJ currently has no oversight of patent law.

In May the European Scrutiny Committee at the House of Commons warned that small UK businesses would lose out as a result of how the UPC system would operate. It said though that locating the central division UPC in London would limit that adverse impact.

Currently in the UK issues over patent validity and patent infringement are considered together when raised in court proceedings.

The European Council has outlined how the central divisional court will feed into the proposed new framework.

"Concerning actions to be brought to the central division, it was agreed that parties will have the choice to bring an infringement action before the central division if the defendant is domiciled outside the European Union," it said. "Furthermore if a revocation action is already pending before the central division the patent holder should have the possibility to bring an infringement action to the central division."

"There will be no possibility for the defendant to request a transfer of an infringement case from a local division to the central division if the defendant is domiciled within the European Union," the Council said.

UK Business Secretary Vince Cable said the agreement would help improve economic growth.

"This is a major success for the UK and for businesses," he said. "The deal means for the first time a single patent will be valid across 25 European countries."

"The reduced translation costs and simplified enforcement regime will help to support innovative companies and make an important contribution to growth across Europe. We have listened to our stakeholders, lobbied hard and secured some important decisions in the UK’s favour," Cable said.

"The key changes to the design of the system will safeguard against delays and uncertainty in settling patent disputes. This was a key concern raised by UK stakeholders. This agreement should provide a significant boost to UK and European innovative businesses at a time when new sources of economic growth are important," he added.

EU Commissioner for the Internal Market Michel Barnier said that the agreement on the European patent reforms "paves the way for the European Parliament to vote" on the proposals.

"Europe is falling behind the US and China in number of patents granted," Barnier said. "The new rules, once in place, will increase the potential for inventions and innovation within the European Single Market and reassert Europe's competitiveness. It is my hope and firm determination that the first unitary patent will be registered in 2014."