Back in the heady days of early 2016, preparations for the new European unitary patent system were progressing well, and the grant of the first unitary patent did not seem far away. Since then, various obstacles to this new system have arisen and progress seems to have ground to a halt. In this article, Zack Mummery will provide an overview of the current status of the UPC system and what we might expect to happen in the coming year.
Progress towards ratification
For the new unitary patent system to come into force, the Agreement on a Unified Patent Court (UPC Agreement) must be ratified by 13 EU states including UK, France and Germany.
Additionally, before the UPC can come into force the Protocol on Provisional Applications (PPA) must also be ratified or consented to by 13 EU states including the UK, France and Germany. The PPA enables certain provisions of the UPC Agreement to come into force early, for example it enables judges to be recruited and court IT systems to be tested.
The following countries have ratified the Agreement on a Unified Patent Court:
France, UK, Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal and Sweden.
The following countries have consented to or ratified the PPA:
Belgium, Bulgaria, Denmark, Estonia, Finland, Italy, France, UK, Luxembourg, The Netherlands, and Sweden. Austria has recently signed the PPA, but has not yet ratified it. Austrian ratification is expected to occur fairly quickly.
This means that once Germany and Austria (or Germany and another country) ratify the PPA, then a provisional phase of the UPC can begin. This is expected to last for 6 to 8 months. It is intended that Germany would finally deposit its instrument of ratification of the UPC Agreement three months before the end of the provisional period to allow the UPC Agreement to commence immediately after the end of the provisional period.
Ratification of the UPC Agreement and consent to the PPA by Germany is still needed in order for the UPC system to come into effect. The relevant German legislation enabling ratification of the UPC Agreement has been passed by German parliament; however, the legislation still requires signature from the German president and publication in the Federal Law Gazette before the legislation comes into force.
German constitutional challenge
In 2017, an action was lodged in the German courts challenging the constitutionality of the German legislation enabling ratification of the UPC Agreement. The German president will not sign the relevant domestic legislation to enable ratification of the UPC Agreement unless this challenge is dismissed.
This constitutional challenge has been pending since 2017 and many commentators were expecting the German courts to decide on this by the end of 2018. It seems possible that this will be decided in 2019.
Assuming that the constitutional challenge is dismissed, this will mean that Germany would be in a position to ratify the UPC Agreement and the PPA, which would pave the way for the new system to come into force.
If the German constitutional challenge can be overcome, then the new UPC system could in theory be in place fairly quickly. However, there is one further complication that could cause further delay or perhaps even halt the project in its current form completely.
Brexit and the UPC
As ever the elephant in the room is Brexit and the subsequent relationship between the UK and the UPC. There is uncertainty as to whether the UK could be part of the new system if it leaves the EU. In the case of there being a transition period such as that proposed in the EU Withdrawal Agreement negotiated between the UK and the EU, it would seem that the UK could potentially participate in the UPC during the transition period. However, after such a transition period ends or in the case of exit without an agreement, there is uncertainty as to whether the UK could be involved.
Given the uncertainty, it may be the case that Germany could hold off ratification until the possibility of UK participation is clarified. If the UK is able to negotiate an extension to Article 50, then there may just be time for the new system to come into place before the UK leaves the EU. In this case, it could be easier for the UK to remain involved in the new system in the long term.
Unfortunately, while the German constitutional challenge remains pending and Brexit uncertainty continues, the future of the European unitary patent regime remains uncertain. Watch this space for further developments.
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.