March 6, 2018
Europe’s patent system is looking uncertain. Plans for a Unified Patent Court (UPC) have been thrown into doubt after the German Constitutional Court agreed to hear a case about the legitimacy of the proposed court – and part of the complaint against it appears to relate to Brexit.
The intention behind the UPC is for it to act as a patent court for all European Union member states. As such, it will have exclusive competence over European patents and European patents with unitary effect, and will form part of the judicial system of contracting member states. It will not have competence in respect of national patents.
In February 2013, an Agreement on a Unified Patent Court was signed as an intergovernmental treaty by all member states with the exception of Croatia, Portugal and Spain. At the date of writing, only Portugal and Spain have yet to sign. Originally due to be in place by 2015, the UPC has faced various hold-ups and obstacles. Last year, only days before ratification was at last expected, the German Constitutional Court put the brakes on by agreeing to hear the legal challenge.
The actual complaint brought before the German Constitutional Court is unpublished but its essence is that the UPC would break German law. An information request by a German Intellectual Property lawyer has elicited the information that one strand of the complaint concerns Brexit and the UK’s planned withdrawal from the EU.
[bctt tweet=”The Brexit connection stems from the fact that the terms of the UPC require France, Germany and the UK to ratify the proposed approach” username=”ProsperityLLP”]
The Brexit connection stems from the fact that the terms of the UPC require France, Germany and the UK to ratify the proposed approach, with the reason for this being that these states represent the largest number of patents filed. The effect of UK’s forthcoming withdrawal from the EU is unclear. Although indications from Westminster are that the UK government still plans to ratify the UPC and that support for it remains strong in government circles, this has not been enough to stifle concerns in Germany.
If it is ratified, what will be the effect of the UPC in the UK?
Many in Westminster regard the existing European patent system as costly, fragmented and tricky for businesses to negotiate. It is often necessary to maintain several patent rights, each covering separate countries and each of which must be enforced in separate national courts. The UPC offers a workaround that will enable businesses to enforce or challenge patents in multiple countries with a single court action. According to Lord Henley, the Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy, in the House of Lords, “…independent research shows that around a quarter of all patent cases heard in United Kingdom courts were also litigated in other European jurisdictions between the same parties…”
British businesses will retain the option to choose national patents and to litigate in national courts. However, it appears that the UK government recognises the wisdom in allowing businesses to use the UPC as an alternative. Although Lord Henley goes on to state that “[the UK government’s] commitment to proceed with preparations to ratify the international agreement that sets up the United Patent Court…that commitment should not be seen as pre-empting the negotiations on leaving the EU”, it remains to be seen whether the German Constitutional Court agrees. For now, the matter is very much one of “watch this space”.
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