Like it or loath it, the unitary European patent train is running down the tracks. We have a section of our website dedicated to the topic at http://www.jenkins.eu/unitary-patent/ and our Hugh Dunlop is publishing a book on the subject through the Chartered Institute of Patent Attorneys. Here we give a brief update.
In December 2012 there were 25 European Union member states requesting participation. Croatia, which joined the EU on 1 July 2013 is also expected to participate. Italy is not among the participating states, but Italy has signed the Court Agreement, so that national Italian patents granted through the EPO can come under the jurisdiction of the Unified Court, and the government of Italy has subsequently indicated its intention to participate in the Unitary Patent too.
Spain has declined from the outset.
Poland has reconsidered on economic grounds and has not signed the Court Agreement (it may yet do so). If Poland delays until after the first unitary patents are registered, those patents will not extend to Poland.
The effect is that there are three concentric circles within the European patent system; the outermost ring, consisting of countries that are EPC Member States but not EU Member States (including Norway, Turkey, and Switzerland); the middle ring consisting of countries that are EPC Member States and EU Member States (all EU Member States are also EPC States) but not members of the Court Agreement (Spain and Poland) or have yet to participate in enhanced co-operation (Italy), and the innermost circle consisting of countries which are EPC, EU and Court Agreement Member States.
Challenges to the Regulations
Spain and Italy filed complaints with the Court of Justice of the European Union (CJEU cases C-272/11 and C-295/11 respectively), objecting to the scheme on various grounds including misuse of Council powers and detriment to the internal market and distortion of competition. The CJEU rejected these complaints on 16 April 2013.
Spain has filed two new complaints, which are pending under cases C-146/13 and C-147/13, complaining of a "misapplication of theMeroni case law" in the delegation of administrative tasks to the EPO, including the setting and distributing of renewal fees. This refers to joined Cases 9 and 10/56 Meroni v. ECSC High Authority [1957/58] ECR133, which established certain principles by which European agencies may be entrusted with exercise of specific powers. Spain is objecting that the system for setting renewal fees and for determining the share of distribution of those fees is not subject to the necessary EU supervision.
A decision in Spain's favour could have wider repercussions on other European agencies. It would introduce a very cumbersome extra level of responsibility if the CJEU were to require that the Commission involve itself directly in the supervision of decisions of all its agencies.
As of September 2013, only Austria has formally ratified (it deposited its instrument of ratification on 8 August 2013). A minimum of 13 states must ratify before the system can begin, including Germany, France and the UK. This is not expected until 2015.
The Brussels Spanner
A potential spanner in the works is the need to amend the "Brussels Regulation" on Jurisdiction (Regulation (EU) 1215/2012). UPC Agreement cannot come into force until this regulation has been amended to accommodate it. But this may not be a straightforward matter and will require another vote by the European Parliament and the Council. (Ironically it was amended for other reasons just days after the Parliament voted through the Unitary Patent). Moreover, it may give Spain a new ground for objection, because, according to Case C‑370/12 Thomas Pringle v Government of Ireland, 27 Nov. 2012, it is a consequence of Art. 3.2 TFEU that "Member States are prohibited from concluding an agreement between themselves which might affect common rules or alter their scope."
The UPC Agreement comes into force on the first day of the fourth month after all these requirements are met.
The Maltese Spanner
Even after it all comes into place, another possible spanner in the works is the "Maltese problem". Malta (an EU country) is a relative a late-comer to the EPC, having joined on 1 March 2007. So European patents that issue on applications filed before 1 March 2007 will not extend to Malta - i.e. will not extend to the whole of the EU. Protection cannot be extended to Malta and there is no provision whereby such a patent can have unitary effect. The Maltese problem has extended to Croatia, which joined the EPC on 1 January 2008 and is now an EU country. European patent applications filed before 2008 do not designate Croatia (and only a handful will have been extended to Croatia as a former extension state). A large proportion of European patents currently being granted date back to before 2008, and this is likely to be the case when the Unitary patent comes into effect.
A preparatory committee has been established and key tasks in the timeline are:
Finalizing the Rules of Procedure of the Court
Financial provisions including setting of the court fees
Facilities in Luxembourg and
Development of the necessary IT systems.
This critical but unenviable last task has been assigned to the UK.
The Rules Committee has published its 15th draft Rules of Procedure of the Unified Patents Court and is due to conclude its work and finalize the rules in July 2014.
Local and Regional Divisions
Various states are in discussions to form regional courts:
England & Wales, France, Belgium, Italy and the Netherlands are expected to have their own Local Divisions (one each).
Germany is planning to have four local divisions.
Sweden, Finland, Denmark and the Baltic states are planning a Regional Division.
Bulgaria, Rumania, Greece, Cyprus and Slovenia are planning a Regional Division.
Malta and Luxembourg are planning to have no local or regional division, leaving jurisdiction with the Central Division.
Ireland and Portugal would prefer to participate in a Regional Division (to share costs) but no clear plan has yet emerged.
Scotland has expressed eagerness to have its own Local Division.
There is provision for a proprietor of or an applicant for a European patent to opt out from the jurisdiction of the Court in relation to European patents (not Unitary patents). This option applies to a European patent applied for prior to the end of the transitional period. The opt-out is to be notified to the Registry of the Unified Patent Court, located in Luxembourg. There will be a Court fee for opting out. This is attracting criticism, as many applicants feel aggrieved at the need to pay a fee to stay in the existing court system, which is the system they signed up for when applying for a European patent. The opposing pressure from the preparatory committee will be that opt-out fees may be the only initial source of income for the Court.
Many companies large and small are keeping a close eye on the timetable, particularly with a view to:
Opting out is not possible if an action has already been brought before the Unified Court (UPC Agreement Article 83(3)), and there is a loop-hole in the Agreement, because the opt-out does not take effect until it is registered (Article 83(3) last sentence), which inevitably involves an administrative delay. Thus, if a third party can apply to revoke a patent centrally before the proprietor's opt-out is entered on the Court Register, that is tough luck on the proprietor. The Rules Committee does not believe it has the power to plug this gap. It cannot, for example, delay the date of effect of a revocation action nor bring forward the date of effect of an opt-out. Both are enshrined in the Agreement.
There are many other curious anomalies and no doubt more will emerge. One that is being debated in the blogs is that Article 33(1) of the Agreement seems to create the exclusive competence for actions concerning the infringement and validity of supplementary protection certificates, regardless on whether the certificate is based on a Unitary Patent or the national validation of a European patent. Thus, in the case of a national patent as basis for the certificate, national courts would continue to be competent for litigation concerning the patent, whereas the UPC would be competent for litigation concerning the certificate. This can hardly have been intended.