March 05, 2020

Removal of the UK from the Unified Patent Court system

Following the decision to exit the European Union, the UK Government is taking steps to reinforce the aim of being independent from EU legislation. This will inevitably impact on the participation of the UK in the UPC, as despite not being an EU body, participation in the UPC would mean that decisions are bound by the Court of Justice of the European Union (CJEU). If so, the UK section of the UPC Central Division - the designated hub for patents concerning chemistry, pharmaceuticals and biotechnology - will have to be reallocated. The UK became a signatory of the UPC agreement in 2013, later ratifying the same in 2018, however, this is likely to be rescinded as the UK aim of sovereignty becomes paramount.

The unitary patent system allows for a European Patent with unitary effect enforceable in participating EU-member states, granting patent holders the opportunity to litigate in one Court. Should the UK not partake in the UPC, patent prosecution and enforcement in the UK will not enjoy this benefit. Cross-border litigation, for example, is likely to ascertain higher court fees for IP right holders. The UPC in essence would set precedent for patent rights within the EEA. Without it in force in the UK, it is likely to impact the strategies put forth by companies concerning the protection of their technological and innovative advancements, by way of patents.

In order for the UPC to enter into force, a minimum of 13 countries, including the UK, Germany and France, must ratify the agreement. This was put in place to ensure that UPC countries that had the highest number of effective European patents in the year prior to the signing of the agreement were included. The ratification by Germany is subject to surpassing a constitutional hurdle raised in the German Federal Constitutional Court. The decision on this matter is likely to be passed down within the next few months. In the meantime, continued work is being undertaken to secure arrangements for the UPC on the departure of the UK, and it is hoped that it will enter into force despite these difficulties.

UPDATE as of March 20, 2020

On March 20, 2020, the German Federal Constitutional Court ruled that the UPC Agreement had been unlawfully ratified with an insufficient majority by the German parliament (Bundestag) in March 2017.

As per the Court’s decision, a two-thirds majority was required for the ratification, since the Agreement significantly amended the German constitution, and only 35 members out of 709 were present.

UPDATE as of July 20, 2020

The UK officially announced its withdrawal from the Unified Patent Court (UPC) system in a statement issued on July 20, 2020.

The removal of the UK from the system comes by way of withdrawing its ratification of the Agreement on a Unified Patent Court and the Protocol on Privileges and Immunities of the Unified Patent Court. Furthermore, the UK was also bound by the Protocol to the Agreement on a Unified Patent Court on provisional application. The UK was among the Member States who initially signed the Agreement on 19 February 2013, previously holding membership of the Preparatory Committee.

The decision follows the exit of the UK from the European Union earlier this year. The UPC system is bound by the Court of Justice of The European Union (CJEU), and utilises the EU law. The decision to exit the European Union was implemented to allow for the UK to be a sovereign, independent country. Being bound by the CJEU and European law would prove to be the antithesis of this aim.

The UPC itself now faces a hurdle of enforcement. It was previously maintained that a minimum of 13 countries, including the UK, Germany and France, must ratify the agreement in order for it to become effective.

The withdrawal by the UK is with immediate effect, placing the question of how best to proceed with the UPC in the hands of the remaining participating states, namely Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Romania, Slovakia, Slovenia and Sweden.

Further updates are expected in due course, for more information on the UPC, please click here.

Author: Danielle Carvey