Justin Koo LLB, LLM
PhD student, Dickson Poon School of Law, King’s College London
Introducing the UPC
According to the European Commission, the Unified Patent Court (UPC) is one of the primary aspects of the ‘patent package’ that was given the go ahead by Member States and the European Parliament on the 11th December 2012. Included within this ‘patent package’ are two Regulations that were adopted on the 17th December 2012. The next aspect comprises of the international Agreement on a Unified Patent Court that was signed on the 19th February 2013. The final phase is the establishment of a single and specialised patent jurisdiction. However, the focus of this article is limited to the signing of the international Agreement that paves the way for the establishment of the UPC.
With that in mind, it is useful to note briefly the historical background of this continuing movement. The journey, or rather, the struggle toward unitary patent protection in the EU has been ongoing for at least the last thirty years. As a result the receipt of twenty-four signatures for the Agreement on a Unified Patent Court has been marked with importance although it was anticipated that at bare minimum, the thirteen signatures required would have been obtained. The Republic of Ireland’s Minister for Jobs, Enterprise and Innovation who commenced the proceedings at which the Agreement was signed echoed this sentiment:
“I think this is a very significant occasion. I know that this has been a product of work over many years – indeed over almost 40 years from when the idea was first nurtured as a concept… We are very fortunate to be here to sign on behalf of our Member States this important piece of new architecture within the European Union.
What is certain is that the perceived implications of developing the UPC from a preliminary perspective are seen as positive not just to the development of the patent law system within the EU, but more importantly continuing the furtherance of the single market.
What they signed up for
For now, it is important to outline the specifics of what the Member States signed up for on the 19th February 2013. As already pointed out, twenty-four countries had signed the Agreement. It is expected that Bulgaria will also sign shortly. However, Poland has opted for a ‘wait and see’ policy before it signs, given their uncertainty over the effects that joining may have on their economy. They argue that the comparative costs of joining the UPC may not be beneficial to them given that their country is not a very innovative one. Thus the cost benefits marketed by the EU in using the UPC may simply not be realised in Poland. On the other hand Spain has chosen not to partake in any way or form because the Spanish language had not been included as one of the official languages of the UPC. Notwithstanding that the Agreement has been signed, it is still to be ratified by France, Germany, Ireland and the UK. In the instance of the UK, “CIPA, the IPFed and other professional bodies have written to the IP Minister Lord Younger calling for a proper, evidence-based economic impact assessment…before Parliament is asked to ratify the UPC Agreement.” Hence, it may be some time before the UK ratifies the Agreement.
In terms of structure, the UPC will be divided into two main parts. Firstly there is the Court of First Instance that will have its centre in Paris with additional ‘thematic’ branches in London and Munich. Secondly the Court of Appeal will be based in Luxembourg and also house the Registry. In addition to these major institutions, each Member State will also have at least one local division.
But what does the UPC mean for the EU as a whole? In short, it means the centralisation of ‘EU Patent’ litigation given that Regulation 1257/2012 of the ‘patent package’ gives the European Patent Office (EPO) the power to grant EU Patents. The UPC acts as the central court for resolving patent disputes in the EU concerning the aforementioned EU Patents, meaning it will no longer be necessary for EU Patent holders to contest patent claims for infringement or revocation on a country-by-country basis. Furthermore the decisions of the UPC will be binding throughout the Member States that have signed on. More generally the advantages of having the UPC and the ‘patent package’ as a whole include:
- One stop shop for patent application and litigation
- Cost effectiveness
- No need for translations once the patent is in English, French or German
- Central administration being more efficient avoiding duplication of cases in multiple Member States
- Expert judges
- Furtherance of the single market
Problems so far…
Despite the many perceived advantages of the UPC there will inevitably be problems that arise in relation to its scope or operation. One such problem that has been raised at this preliminary point is under Article 83 of the Agreement on a Unified Patent Court where there is some disagreement on the interpretation of Article 83. In essence, Article 83 entitled “Transitional regime” is about facilitating the move toward the UPC. Under Article 83(1) a seven year transitional period is given whereby a European Patent claim can be brought before national courts instead of the UPC. However, after the seven year transitional period, the UPC will have exclusive competence over EU Patent claims. This is not disputed. Where it becomes unclear is under Articles 83(3) and 83(4), creating confusion with its opt-out clause. Some preliminary debate has already led to diverging interpretations of what happens if the patentee opts out. On the one hand, Article 83(3) can be seen as a means of extending the seven year transition period so that even after this period has expired, the UPC will not have exclusive competence. On the other, a patentee that has opted out can bring his claim under a national court or alternatively opt back in via Article 83(4) and still bring a claim under the UPC. It is the possibility of opting back in that is the real source of confusion because of the potential for absurd results especially where third parties become involved. For example consider the following hypothetical fact pattern:
A PATENTEE opts out of the UPC under Article 83(3) and then licenses the patent to an EXCLUSIVE LICENSEE. The EXCLUSIVE LICENSEE then brings an infringement claim against a THIRD PARTY and uses the UPC by opting in under Article 83(4). The THIRD PARTY wants to counterclaim the invalidity of the patent and subsequently for the revocation of the patent.
Given the construct of Article 83(3) and 83(4) it is open to the interpretation where the THIRD PARTY can file his counterclaim. Two possible scenarios arise:
1) On a liberal interpretation of Article 83 the THIRD PARTY can choose where to file the counterclaim. That is at the UPC or at the national courts. This interpretation in effect would ignore the fact that the PATENTEE has opted out. More generally it would mean that the UPC retains non-exclusive competence even if a patentee opts out under Article 83(3).
2) Alternatively on another interpretation, if Article 83 is construed more rigidly and the fact that the THIRD PARTY cannot counterclaim for revocation against the EXCLUSIVE LICENSEE is considered then the THIRD PARTY must file a separate claim for revocation in the national courts because the PATENTEE has opted out. Therefore the UPC has no competence. This interpretation would undermine the very rationale of the UPC in centrally administrating EU Patents.
However, given the infancy of the UPC debates, no conclusive answer has yet been proffered. As such the outcome remains to be seen. It may be some time before we see the UPC in practical effect given that it does not enter into force until France, Germany and the UK have ratified the Agreement. It is estimated that the UPC should come on stream some time in 2014. But until then the discussion continues…
 Regulation (EU) No 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection
Council Regulation (EU) No 1260/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements
 It is an international agreement because it was signed outside the scope of the EU – Council of the European Union, ‘Unitary patent protection: a big leap towards innovation for EU companies’ (Brussels, 17 December 2012) 17824/12
 Council of the European Union, ‘Signing of the Unified Patent Court Agreement’ (Brussels, 19 February 2013) 6590/13
 The London cluster focus will be chemistry including pharmaceuticals.
 The Munich cluster focus will be on mechanical engineering.
 ‘EU Patent’ capitalised for sake of clarity in referring to the subject of the UPC claims rather than ‘patents’ in general
 Article 3 of Regulation 1257/2012.
 EU Focus, ‘Unitary patent regime finally agreed’ (2013) EU Focus 1, 1-2