Scotland needs own division of the European Unified Patent Court to protect researchers and innovators, says legal expert

Out-Law News | 24 Apr 2014 | 10:08 am | 3 min. read

Scotland should have its own division of the planned European Unified Patent Court (UPC), a legal expert has said, after the European Parliament backed proposals to complete the legal framework for a Europe-wide unitary patent.

Ready access to a UPC courthouse, which would rule on unitary patent disputes, and lawyers expert at practising within the jurisdiction, would be important factors in helping Scottish innovators protect their patent rights, said Jim Cormack of Pinsent Masons, the law firm behind Out-Law.com.

"Given that Scotland is a country known for research and innovation in a variety of sectors, it is important to have a division of the UPC in Scotland as a means of securing patent rights," said Edinburgh-based Cormack. "It is also important for practical reasons. For example, if you wanted to access the court urgently to secure an interim interdict – or an injunction as it is known in England - you do not have to travel and would have qualified and expert lawyers readily accessible."

Cormack made his comments after MEPs voted in favour of proposals to finalise the legal framework for a Europe-wide patent protection. The unitary patent protection is a precursor to the creation of the UPC, which is to be established in 25 of the 28 EU member states and will specialise in patent disputes. It is expected to be adopted by the European Council later this year, before it can become law.

The European Commission announced plans to overhaul the patent system across Europe in 2011, describing the current system as complex, expensive and "widely recognised as a hindrance to innovation in Europe". Traditionally the European Patent Office (EPO) has examined patent applications and can grant European patents if the relevant conditions are met. However for a granted patent to be effective in a member state, the inventor has to request validation in each country where patent protection is sought. According to the Commission, in 2011 the process cost approximately €32 000 for patent protection across the EU members states, compared to an average cost of €1,850 for a US patent at the time. In addition, maintaining the patent requires the payment of annual renewal fees country by country. The Commission believes the UPC system will cut costs to patent holders significantly.

The UPC system will see local, regional and central divisional courts hear disputes about the validity and infringement of unitary patents. Once granted, innovators will soon be able to obtain a unitary patent for their inventions that will apply across 25 of the EU's member states. Italy and Spain have objected to the plans and Croatia, a new joiner to the EU last year, has not yet signed up to participate in the unitary patent regime.

Under the new framework, businesses will be able to obtain unitary patent protection across all of the participating countries by filing just a single patent application at the European Patent Office (EPO). A complex range of legislation, agreements and rules needed to make the new regime operational has either already been created or are in the process of being finalised.

According to the European Commission, the new system will avoid innovators having to fight multiple litigation cases in up to 28 different EU member states national courts and so cut costs and lead to swift decisions on the validity or infringement of patents.

After MEPs backed the proposals, European Union justice commissioner Vivian Reding, said: "In order to boost innovation in Europe, businesses and entrepreneurs must know that they can have a swift decision on the validity of patents. Removing bureaucratic obstacles, extra costs and the legal uncertainty will make the EU's Single Market an even more attractive place to do business." Reding added that the UPC would particularly benefit small and medium sized enterprises and individuals.

The UPC proposals are currently undergoing ratification in the 25 EU member states which have opted in to it.  In the UK provision for the establishment of the UPC has been made within the Intellectual Property Bill 2013-2014, which has been passed by the House of Lords and is now awaiting Royal Assent before becoming law.

According to Cormack, solicitors and counsel in Scotland have been united in promoting the establishment of the UPC in Scotland, specifically within the Intellectual Property Bill.

On the third reading of the debate on the bill in March this year, the UK Government's position was that one of the UK's local divisions would be in Scotland, in the form of the Court of Session, provided that there is a demand for the services of a local division there.  

"It is one thing to have intellectual property rights, but another thing to enforce it," said Cormack. "The value of a granted patent is only as great as the willingness and ability of the patent owner to take legal action against infringement should the need arise. Ready access to effective legal remedies at a proportionate cost is clearly hugely important in that regard, particularly in an economy where that takes place at SME level."

The preparatory committee for the UK UPC said last month that it may not be operational until 2016, rather than 2015 as it had hoped. This is because a number of issues have yet to be ironed out, including the cost of renewing unified patents and the circumstances in which preliminary injunctions will be awarded by the regional divisional courts.