The Unitary Patent and Unified Patent Court system – an update

On 20 July 2020, the UK formally withdrew from the UP/UPC system.

Today, by means of a Note Verbale, the United Kingdom of Great Britain and Northern Ireland has withdrawn its ratification of the Agreement on a Unified Patent Court and the Protocol on Privileges and Immunities of the Unified Patent Court (dated 23 April 2018) in respect of the United Kingdom of Great Britain and Northern Ireland and the Isle of Man, and its consent to be bound by the Protocol to the Agreement on a Unified Patent Court on provisional application (dated on 6 July 2017) (collectively “the Agreements”).

In view of the United Kingdom’s withdrawal from the European Union, the United Kingdom no longer wishes to be a party to the Unified Patent Court system. Participating in a court that applies EU law and is bound by the CJEU would be inconsistent with the Government’s aims of becoming an independent self-governing nation.

- Amanda Solloway, Science Minister, 20 July 2020 (CLICK HERE for full statement)

The UK Government had announced, on 27 February 2020, that it no longer wished to participate in the Unitary Patent System intended to provide a single court of patent litigation across the EU. It has now been formally confirmed that the UK will not be participating in the UPC.

The UPC system has yet to enter into force, because of a successful constitutional challenge to its ratification by Germany. This means that the withdrawal of the UK’s ratification will have no immediate impact on the UPC.

The UPC System had been set up to be somewhat separate from the EU, with its own sui generis legal system, but the fact that the United Patent Court is required to respect EU law, with a route of appeal to the CJEU, is apparently seen as being incompatible with the UK Government’s decision to separate the UK from the EU’s legal order.

Is the UPC system still attractive?

Without participation from the UK, the UPC System is undoubtedly less attractive to users. However, many patent holders, especially those who validate broadly, may still find the system beneficial if and when it eventually comes into force. The EU and most EU member states appear to remain politically committed to the project.

How will the UK’s non-participation change the UPC?

One-third of the UPC Central Division (Chemicals and Life Sciences) is currently mandated to be in London. With formal confirmation of the UK’s non-participation, that cannot remain the case and the court will need to be relocated. UK judges will not be participating the UPC Court System. The loss of their experiences and common law traditions will undoubtedly change the character of the court. The UK’s non-participation may also blow a hole in the finances of the court, which is supposed to be self-financing.

When will the UPC happen?

The problem here is the apparent incompatibility of the UPC arrangements with the Constitution of Germany. The German Constitutional Court reached a decision on 20 March 2020 that the UPC is not compatible with the German Constitution. It was held that the UPC contravenes the democratic rights of the German people under Article 38 Basic Law, because it was not passed with the parliamentary majority required by Article 23 Basic Law.

On 5 May 2020, Patrick Breyer raised the following questions to the European Commission:

• Can the Commission confirm that Germany no longer has the right to ratify the UPCA?

• Is the Commission going to advise the German Government not to ratify the UPCA as it stands?

• If Germany ratified the UPCA in its existing form, would the Commission launch an infringement procedure against it?

An answer was given on 15 July 2020, on behalf of the European Commission, to the effect that the Commission would welcome a swift ratification of the Unified Patent Court Agreement – in its present form - by Germany. The full answer provided by the Commission can be found here: https://www.europarl.europa.eu/doceo/document/E-9-2020-002729-ASW_EN.html.

It is possible that the system might still move forward, with or without Germany. However, a system lacking both British and German participation would be unattractive to remaining participants. It is possible that future attempts to capture some of the benefits of the UPC System such as central renewal fee collection might in due course be pursued, including by Germany, the UK, and other non-EU, EPC contracting states, but we are not at that point yet.

My personal view is that the UPC is unlikely to launch in 2020, or possibly not even in 2021, particularly in view of the challenges faced in Germany, and given that the formal withdrawal of the UK will mean new arrangements have to be made for the court that would have been based in the UK.

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Abel + Imray continues to be a European firm and is well placed to support clients from our UK and Spanish offices. Specifically, the entitlement of our Patent Attorneys to act as representatives before the UPC derives from their status as Representatives before the EPO and that status is unaffected by the UK leaving the EU, because the EPO is not an EU entity.

Get in touch if you would like to discuss your IP portfolio, strategy or any other related matter.