6 July 2012: One Court to Rule Them All? – The Unified Patents Court

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Pete Sadler, Patent Attorney for Reddie & Grose LLP

Over the last year or so we have seen a great number of developments towards a unitary European patent right. One of the main stumbling blocks has been the need for a new central European court system competent to rule on patent infringement and validity issues. On 29 June 2012 the European Council published its conclusions on elements of the unitary patent package following a two day summit. In particular, the Council revealed details of how the new Unified Patent Court (UPC) would be implemented.

The participating Member States agreed that the Central Division of the new court should be located in Paris. This is a compromise for the UK and Germany, who had both also bid to host the court. However, citing the “highly specialised nature” of patent litigation and the “need to maintain high quality standards”, two specialised branches of the Central Division were also proposed by the Council. Conveniently, one branch will be located in London, tasked with handling chemical cases, including pharmaceuticals, and the other branch will be located in Munich, dealing with mechanical engineering.

One troublesome issue with the proposed UPC system has been the inclusion in the Proposed Regulation Implementing the Unitary Patent of articles relating to substantive patent law. These are contained in Articles 6 to 8 of the proposed regulation and would fall under the remit of the Court of Justice of the European Union (CJEU), giving the CJEU the final say on how patent law should be interpreted. This is widely regarded by practitioners as an undesirable outcome since the CJEU has no present expertise in patent matters and is not known for its expedient handling of cases in other areas. Inclusion of Articles 6 to 8 is therefore seen by many as incompatible with the goal of delivering a competitive patent system for Europe, consistency and reduced costs.

Promisingly, for those who doubt the CJEU’s suitability in this area, the suggestion of the Council was to remove Articles 6 to 8 of the regulation, leaving open the possibility for these aspects of substantive patent law to be incorporated into the Agreement on the Unified Patent Court. This would place the final say on matters of substantive patent law in the hands of the new Court of Appeal of the UPC, set up by the agreement.

Even though this is a significant step forward, a number of obstacles remain to a unified European Patent becoming a reality. First, the MEPs who brokered the original proposal have strongly objected to the suggested deletion by the Council of Articles 6 to 8, with one MEP threatening to refer the matter to the CJEU as a test case if the Articles are deleted. The European Parliament has postponed the vote on the revised proposal until the matter can be heard by the MEPs of the Legal Affairs Committee, together with Council, Commission and Parliament's Legal Service. The hearing is scheduled for 10 July 2012.

Further, Spain and Italy, who have chosen to remain outside of the agreement on the proposed Unitary Patent system due to dissatisfaction with the proposed languagearrangements, filed a complaint with the CJEU in 2011 calling for a review of the legality of the use of the Enhanced Cooperation Procedure to establish the basis for the Unitary Patent. A decision from the Court of Justice of the European Union is still awaited.

We eagerly await the outcome of the vote on the revised proposal, although at present there could still be much work to do for the Unitary Patent system to come into effect.