The signatory States to the Agreement on the Unified Patent Court (UPC) recently met in Brussels to report on the ongoing national ratification processes. With France, Belgium, Denmark and Sweden having deposited their instruments of ratification earlier this year, several member States have expressed their hope to be able to ratify the Agreement in the course of 2015. As we have mentioned before, the Agreement will enter into force for the first group of ratifying States only after at least 13 of the signatory states (including the three where most European patents are registered: France, Germany and United Kingdom) have deposited their ratification, and so there is still a rather long way to go.
Things seem, however, to be slowly progressing and later this month an oral hearing will be held to discuss the newly revised (17th!) draft of the Rules of Procedure of the UPC. This is part of a process by which the signatory States to the Agreement obtained that the Rules of Procedure of the UPC be laid open to comments from interested parties, so that expert judges, lawyers and industry representatives could raise potential issues or propose amendments to certain rules.
Many prospective users had expressed concerns with respect to possible ‘injunction gaps’ in the case of bifurcated proceedings, i.e. in those instances where, by decision of the court, the validity and infringement of the patent are decided separately and, as is often the case, at different times with the infringement case normally being decided first. When this happens and an injunction is granted, a patent owner can prevent a would-be defendant from accessing the market. However, once the validity decision is issued, it may become evident that the defendant was effectively wrongly barred from entering the market if the patent is ultimately found to be invalid. As a result, during this “injunction gap”, a defendant could suffer irrecoverable market losses.
Rules 37(5) and 40 of the newly revised draft seek to address this by providing that, in the case of bifurcation without a stay of the infringement proceedings, the judge hearing the revocation counterclaim in the Central Division “shall endeavour to set a date for the oral hearing on the revocation action prior to the date of the oral hearing of the infringement action.”
This is clearly positive and potentially reassuring, yet it remains to be seen whether this provision will actually be implementable, since a very busy Central Division may not always be able to accelerate proceedings enough.
Another significant amendment which will probably be a subject of discussion later this month relates to the rules on opting out of the UPC system. During a transitional period of seven years (which may be extended to fourteen years) after entry into force of the Agreement on the UPC, owners of European patents will be able to register an opt-out, whereby their patents are taken outside of the exclusive jurisdiction of the new court. Rules 5.7 and 5.9 of the revised draft make it clear that proceedings in respect of a European patent before national courts or the UPC present an absolute bar for opting out of (or opting back into) the UPC system.
By introducing this amendment, the Legal Group has intended to reduce the risk that the UPC and the national courts will deal with the same European patent, one after the other, potentially issuing diverging decisions. Further, this amendment implies that, if an action has been brought before a national court regarding a patent that has been opted out of the UPC system, any future action will also have to be heard by national courts (and not by the UPC). However, certain other interpretative issues that were raised in connection with the applicability of the Agreement to patents granted prior to the entry into force therefore may not have been entirely addressed and so some further discussion may be expected.
The number of amendments introduced at this stage may be relatively small, yet it looks as though the Legal Group has aimed to provide a more balanced system and to increase predictability and legal certainty for prospective users of the system. In the months to come, it will be interesting to see whether this has any positive impact on the ongoing national ratification progress.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.