UPC - Still a Question of Wait and See

Posted on 27 April 2018

UPS - Still a Question of Wait and See

On World IP Day, the UK Government announced that it had taken steps to ratify the Unified Patent Court Agreement. The Brexit vote and political fallout, together with an outstanding constitutional challenge in Germany, has had a significant impact on the timing of the project. At present, it is still not possible to say with certainty when the UPC will open its doors for business, or when the first Unitary Patents will be granted.

For the project to commence, 13 Member States must ratify the UPC Agreement, with the mandatory ratifying states being France, the UK and Germany. As enough Member States (including France) have ratified, and the UK has also now done so, it is only ratification in Germany that is needed. If the challenge before the Federal Constitutional Court in Germany is rejected, it may therefore be sometime in 2019 that the new regime is up and running.

Clearly, there is another important consideration, which is the impact, and timing, of the UK's planned withdrawal from the EU on 30 March 2019, including any agreed transition period (a transition period has been agreed in principle until 31 December 2020). The generally accepted viewpoint is that, as an international agreement, the UK may be able to continue to participate in the UPC post-Brexit. This is provided that it enters into a suitable agreement with the EU27 which safeguards EU constitutional principles - which would require the possibility of references to the CJEU on relevant points of Union law. However, it appears less likely that a Unitary Patent would continue to extend to the UK post-Brexit, although there would likely be a mechanism in place to preserve any such rights in the UK post-Brexit.

It is therefore important to keep an eye on the timing of the project and particularly the situation with ratification in Germany. Many holders of existing standard European Patents will be planning to opt their patents out of the UPC's jurisdiction (if they do not, the UPC will share non-exclusive jurisdiction over those patents with the relevant national courts during a transitional period). There will be a 'sunrise period' to allow them to do so before the UPC opens. Once opted out, a European Patent will be outside the UPC's jurisdiction for the remainder of its term, although the opt-out can be withdrawn.

As there will likely be a substantial amount of due diligence for patent holders to carry out, particularly where there are multiple owners, including of Supplementary Protection Certificates, the process of reviewing patent portfolios will need to be in place in good time. However, for now, it remains a question of monitoring developments in Germany.