Unified patent court agreement signed by most EU countries

The unified patent court system would, if the agreement is officially ratified by at least 13 national parliaments which must include the UK, France and Germany, be used for resolving disputes relating to the validity and infringement of new unitary patents. Previously Ministers signed an agreement which would enable businesses to obtain unitary patents, whose protection spans the majority of the EU.

Under the terms of the latest agreement London would be the base for a new central division of the unified patent court and would be responsible for handling disputes relating to pharmaceutical patents. The other central divisional courts will be based in Paris and Munich.

"The decision that London should host this new court shows not only the confidence in our legal sector but also the strength of the UK's intellectual property regime," Business Secretary Vince Cable said in a statement. "Agreement on a unified patent regime is a good result as it will mean defending a patent across Europe will now be much simpler."

"The agreement will help our inventors who can in future spend more time on research and development, producing new ideas and less time filling in forms and defending their patents in court. We estimate benefits to the UK of around £200m a year," he said.

The Council of Ministers said that Ministers from 24 EU countries had signed the unified patent court agreement. It said Poland and Spain had declined to sign the agreement but that Bulgaria is expected to sign the agreement "in the coming days".

"All the necessary decisions (designation of committees, budget, appointment of judges and president, recruitment of staff, facilities, etc.) should be adopted in a timely manner so as to enable the first registration of a European patent title with unitary effect in spring 2014," the Council said.

Recently a committee of MPs warned that the new unified patent court system could be exploited by 'forum shoppers'. Forum shoppers are parties which choose countries to take legal action in based on where they think they would be most likely to win. The European Scrutiny Committee raised concerns about rules that could see matters relating to the validity and infringement of unitary patents being considered in separate court proceedings, a process known as bifurcation.

Patent law specialist Deborah Bould of Pinsent Masons, the law firm behind Out-Law.com said that technology, telecoms and media companies would be likely to share those concerns.

"Forum shopping is a serious concern to all parties who will be using the unified patent court, especially when combined with the potential bifurcation of infringement and validity proceedings," Bould said. "Most consumer electronics devices use multiple technologies which, in turn, are protected by a sea of patents. There is a real risk of patent hold up for technologies not based on standards, like touch screen technology. Proceedings for any single patent can prevent exploitation of the technology as a whole."

"It is inevitable that certain local and regional courts will be subject to more patent proceedings than others and so will have delays in hearing cases,” she said.

"The danger of bifurcation is that a party could be prevented from selling their product across all the 25 contracting Member States by a local or regional division of the unified patent court, whilst they seek to prove that the patent preventing them from engaging in those business activities is invalid before a central division of the court," Bould added.

"The volume of cases before the central division of the unified patent court is likely to make validity proceedings slower than the infringement proceedings. So, in instances where a patent is ultimately found invalid, a party has been unduly prevented from continuing their business activities. Ultimately it is local or regional divisions that will decide whether to bifurcate the proceedings, another area in which forum shopping might occur. Any guidance in the unified patent court’s Rules of Procedure that severely restricts bifurcation would be welcome," she said.

Editor's note 18/08/2014: Bulgaria signed the UPC agreement a few days later than the other countries, on 5 March 2013, taking the number of signatory countries to 25. This story has been left unchanged because it was accurate at the time of publication.