Hand about to bang gavel on sounding block

By now Europe was meant to be operating a new judicial system, with an international Unified Patent Court (UPC) enforcing Unitary Patents that protect innovative products across 26 countries.

The EU agreed to set up the system back in 2012 to simplify Europe’s fragmented patent protection and cut costs for inventors, which are far higher than in the US and elsewhere. Optimists in the European Commission hoped then that the UPC would start working in 2014. But it is still waiting to come into effect, held up by a variety of political and technical obstacles.

Europe’s intellectual property professionals, who generally support the project, say the delay need not be fatal but it is inevitably sapping the morale of those involved in implementing the UPC.

“The preparatory committee is trying to give the impression of continuing momentum,” says Alan Johnson, IP partner at Bristows, the London-based international law firm.

“The time has been useful for developing the UPC’s IT system, for example, and the committee has just issued a ‘top-up’ call for new judges to supplement those from the first judicial recruitment campaign three years ago — some of whom may no longer be interested or too old to be eligible.”

Brexit has been a threat hanging over the UPC/UP system since the UK voted to leave the EU in 2016 but the current cause of delay lies in Germany. A complex complaint filed more than a year ago against German participation in the UPC is still awaiting adjudication by the country’s constitutional court.

Most legal experts expect this challenge to be rejected but the German court has an opaque timetable and no one knows when its decision will be announced. A positive outcome is crucial because the UPC cannot operate until Germany, France and the UK have ratified the agreement.

France and Britain have already signed up. UK ratification last year came as a great relief to the UPC’s advocates, given the uncertainties over the country’s planned departure from the trading bloc. The UK government has said it will seek to remain in the system after leaving the EU but “there are mixed views on whether this is possible”, Mr Johnson said.

The UK Intellectual Property Office has put a lot of effort into the international effort to construct the new system and is keen to remain part of it. A key question is whether the UPC lies within or without the EU — and there is considerable ambiguity about this.

According to the UK body, the unified court “will be bound to follow EU law where relevant to the patent case and will therefore be able to refer questions on the correct interpretation of EU to the CJEU [European Court of Justice]. However, the UPC will remain the final arbiter of the case and not the CJEU.”

Whether that degree of continued UK involvement in the EU’s judicial system would be acceptable to a Brexit-minded UK government, or indeed to the EU member states, is unknown.

At the bare minimum, the UPC Agreement would require revision to permit UK participation as a non-member of the EU, which could be achieved by adding a simple protocol to the existing text.

“This is where political will remains vital,” says Mr Johnson. “With the possible exception of Italy . . . all UPC participating countries appear still to wish the UK to remain a part of the system. So, too, does European and British industry.”

Italian ambivalence may be motivated by the country’s desire for Milan to replace London as the seat of one of the three courts that make up the UPC’s Central Division. Under the current model these will be in Paris, Munich and London.

The London court, for which the UK IPO has found premises in Aldgate, will look after chemicals, pharmaceuticals and life sciences.

Under its distributed system, the UPC will also have a court of appeal in Luxembourg and a network of local and regional courts, mediation and training facilities distributed across Europe. Its judges, who will be paid €11,000 a month for full-time positions (or €12,000 at the court of appeal), will preside over procedures that have been crafted to form a compromise between Europe’s different legal traditions.

The existing European Patent Office (EPO) in Munich will carry on with its present role — searching, examining and granting patents. The applicant can then choose either to have a new unitary patent that provides protection in the UPC’s 26 member states or to register and maintain the patent in each individual country.

The EPO expects inventors who want Europe-wide protection to opt for the new system because costs will be much lower. It estimates that renewal fees for a 20-year unitary patent will amount to €36,000, compared with €170,000 for 26 individual national patents.

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