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UK ratifies the Unified Patent Court Agreement

Out-Law News | 27 Apr 2018 | 9:34 am | 3 min. read

Patent lawyers across Europe have welcomed the news that the UK has ratified the Unified Patent Court (UPC) Agreement, but warned that the new system of unitary patent protection and dispute resolution it provides for will need to clear further hurdles before it can become operational.

On Thursday afternoon, the UK government confirmed that the UK has now ratified the UPC Agreement, an international treaty that provides for the creation of a new judicial enforcement framework for resolving disputes over new unitary patents and European patents that are not opted-out from its scope. The announcement came on World Intellectual Property Day.

The move was promised by the government back in November 2016, but the decision by the UK to leave the EU cast doubt on whether the UK would formally ratify or use its potential withdrawal from the new unitary patent and UPC framework as a bargaining chip in the ongoing Brexit negotiations.

In its statement, the government confirmed that there remains uncertainty over the UK's participation in the new UPC system post-Brexit, despite its ratification of the UPC Agreement. The UPC Agreement currently requires countries participating in the new unitary patent and UPC system to be EU members.

"The unique nature of the proposed court means that the UK's future relationship with the Unified Patent Court will be subject to negotiation with European partners as we leave the EU," it said.

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 to ratify the UPC Agreement. France and the UK have now done so, together with a further 14 countries.

However, Germany has not yet ratified the Agreement. There is an ongoing legal challenge to the proposed reforms in Germany before the country's Constitutional Court. The case is listed to be heard this year, although a precise date has yet to be set. Details of the complaint filed emerged last year.

In its statement, the UK government appeared to suggest that it does not believe the new unitary patent and UPC system will take effect until "at least the end of the expected EU exit implementation period in December 2020".

Patent law experts at Pinsent Masons, the law firm behind Out-Law.com, expressed cautious optimism following the announcement.

London-based expert in patent law in the technology sector Deborah Bould said: "The delay to the UK's ratification caused many commentators in the business and legal communities to question the UK's commitment to the unitary patent package. This announcement will be welcomed by many businesses. The proposed new unitary patents offer greater geographical coverage for single applications; renewal fees will be pegged at a cost effective rates equivalent to the fees charged for European patents in the top 4 EU patenting jurisdictions."

"However, there are still two key hurdles to overcome before the new system can become operational. First, the constitutional complaint in Germany. Second, the big question over the UK's participation in the new system post-Brexit. In this regard, there is vigorous academic debate over whether the UPC Agreement will need to be amended, with conflicting opinions on this issue," she said.

Munich-based patent litigator Peter Koch said: "Now that the UK has ratified, the attention will now turn to the constitutional complaint in Germany. The resolution of the case is already eagerly anticipated, but the UK's announcement now means that there will be added pressure on the judges – without the UK's ratification the future of the whole UPC project was not entirely in their hands; now it is."

"Should the UPC project survive the German complaint – and it now appears from the UK government's announcement that we can expect a decision sometime later this year – there is hope for the project to proceed. That is because the people involved in the UPC project from a German perspective would be willing to go a long way to accommodate UK participation post-Brexit," he said.

Paris-based intellectual property lawyer Emmanuel Gougé said: "In France, a large majority within the industry, including MEDEF - the French equivalent of the CBI in the UK - has always been in favour of maintaining the UK in the UPC system, despite Brexit, and certainly sees the UK's ratification as a very positive step."

A further hurdle that needs to be overcome concerns the ratification of the Protocol to the Agreement on a Unified Patent Court on provisional application. 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. During the provisional application phase, businesses will be able to apply to opt out their European patents from the jurisdiction of the UPC.

The Protocol, however, needs to be ratified by at least 13 of the signatories, including the UK, Germany and France, to take effect. At the moment, just 12 countries have completed ratification of the Protocol.