Out-Law News | 02 Mar 2020 | 3:31 pm | 3 min. read
The government's new position on the issue was first reported by IP news magazine IAM. Patent law and life sciences expert Jules Fabre of Pinsent Masons, the law firm behind Out-Law, said the news calls into question whether the UPC project will survive.
No statement on the UK government's announcement is being issued by the UPC Preparatory Committee, but secretariat Eileen Tottle has confirmed to Out-Law that the UPC website will be updated as soon as some more detail on next steps have been decided.
The new UPC system, years in the planning but yet to become operational, 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 (UPs).
An international agreement, the UPC Agreement (UPCA), was adopted in 2013 by 24 of the then 27 EU member states, and Italy subsequently joined in 2015. Spain, Poland and Croatia – which accessed to the EU after the UPC Agreement was signed – do not currently participate.
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.
While 16 countries, including France and the UK, have completed the ratification process, the UPC project has been delayed as a result of an ongoing legal challenge to Germany's ratification process. The case concerns whether German ratification would comply with the country's constitution.
Despite completing ratification of the UPC Agreement, the UK's long-term participation in the new system had been in doubt as the UPC Agreement provides for the supremacy of EU law and jurisdiction of the Court of Justice of the EU (CJEU). The UK government has now said it no longer plans to participate at all.
"I can confirm that the UK will not be seeking involvement in the UP/UPC system," a government spokesperson said, according to IAM. "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."
The UPC system foresees a Europe-wide court system with central, regional and local divisional courts.
The seats for the central division of the UPC were to be spread across London, Paris and Munich – each with their own specialism. The London court was to specialise in resolving patent disputes in the field of life sciences, whereas major technology patent disputes will be heard in Paris. The UPC's central division in Munich will specialise in disputes over patents relating to mechanical engineering. There will also be a UPC Court of Appeal in Luxembourg, while the CJEU is to be the final arbiter on points of EU law in disputes over unitary patents or non-opted out European patents.
Fabre said: "The UPC system without the UK is now less attractive, but the survey conducted by Managing IP in September last year suggested that the industry would still consider the UPC viable and useful without the UK's participation."
If German ratification survives the legal challenge and the UPC goes ahead without the UK this will have a number of impacts on businesses and practitioners, according to Fabre.
The central divisional seat in London will need to be relocated and this is likely to be a politically sensitive decision. Public lobbying had already started in Italy in 2016 after the Brexit vote and Italy was the country with the most European patents in effect in 2012, the year before UPC Agreement was adopted. Relocation to Milan is possible but Amsterdam in the Netherlands has also been viewed as a serious candidate, Fabre said, though, that Paris or Munich could alternatively pick up the London court's competence on pharma patents under the reconfigured framework.
Fabre said if the UPC does go ahead without the UK, this could lead to very interesting cross-border litigation strategies between the UPC territory and the UK. This, he said, could entail UK courts granting cross-border declarations of non-infringement or so-called 'Arrow' declarations in relation to EU counterparts of European patents, or the UPC relying on the long-arm jurisdiction under the recast Brussels I Regulation to exercise jurisdiction in relation to damages arising from infringement of the UK counterpart of a European patent.
Fabre said that UK companies will still be able to litigate before the UPC and that the news of the UK withdrawing from participation in the UPC project does not affect the UK's ongoing participation in the European Patent Convention or the fact that European patents will still be available to register in the UK.
The UPC announcement is the latest step that has been taken by the UK government in diverging from EU position on IP-policy. The government confirmed in January that new EU copyright laws will not be implemented in the UK despite it having previously voted in favour of the reforms.
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