Following the UK’s announcement that it intends to proceed with the ratification process, despite on-going negotiations to leave the EU, it has been announced that the UPC is expected to enter force in December 2017. This will be preceded by the start of the preliminary phase in May 2017 and the opening of the sunrise period for opt-outs in September 2017.
News & Commentary
Newsflashes & key events
UK Government to ratify UPC Agreement
A number of UK associations have commissioned a report on the UK’s position in relation to the UPC after the country leaves the EU. Although on the brink of entering force, commencement of the UPC has been paused following the 23 June referendum result. The Opinion concludes that while the UK could be a member of the UPC after leaving the EU, this would require additional legislation and amendment of the Agreement. It therefore seems unlikely the UPC will enter force in its current form (which requires the UK to start), and a new agreement will have to be reached.
A conference in Paris on 6 July heard views on the future of the UPC from a number of leading figures including UK and French IP organisations, and Alexander Ramsey, chairman of the UPC preparatory committee.
In some good news to counter the doom-and-gloom of the last week, the Netherlands’ Senate has ratified the UPC Agreement.
52% of the UK voted in favour of leaving the EU. What does that mean for the Unitary Patent System?
The German Federal Ministry of Justice and Consumer Protection published a new draft bill on 5 February 2016 to amend the Act on International Patent Agreements in view of the UPC Agreement. The Ministry’s first draft is at a very early stage of the legislative process and it has not been approved by the federal government, much less passed by the legislative branch, yet. The most interesting part of these complex amendments is the planned changes to the existing rules of double patenting.
Opt-out fee reduced to zero
The Preparatory Committee has published the Rules on Court fees and Recoverable Costs for the UPC (subject to “legal scrubbing”). A significant change is that the opt-out fee has been reduced to zero (from €80), so the only cost of opting out patents is now the administrative burden.
The Committee has confirmed that Court fees will consist of a fixed fee element (eg. €11,000 for an infringement action) and for claims over €750,000, an additional value-based element calculated by reference to the value of the action (eg. €26,000 for a €4m claim). Some claims and applications will only attract fixed fees (eg. €20,000 for revocation claims).
The Committee has also agreed a scale of ceilings for recoverable costs (ranging from €38,000 to €2m depending on the value of the action). Guidelines for assessing the value of the action have also been published which suggest that, “The most practicable method, in most cases, will be a valuation based on an appropriate licence fee. ”
UK Government takes steps to ratify UPC Agreement
The UK Government sought views on the legislative changes required in the UK to implement the UPC Agreement and comply with the Unitary Patent Regulation. It has now published a report analysing the responses to that consultation and outlining the Government’s intended direction. “The Government intends to bring forward legislation to implement the UPC Agreement in January 2016.”
The UPC will only enter force once 13 states, including the UK, France, and Germany, have ratified the Agreement.
As of November 2015, 8 states have completed the ratification process :- Austria, Belgium, Denmark, France, Luxembourg, Malta, Portugal, and Sweden. Finland also appear on-track to ratify following a recommendation from a Finnish working group that the Agreement should be ratified and amendments made to national patent law.
The UK, Germany, the Netherlands, Italy, and Hungary have all also made positive noises about early ratification and so we appear to be at the point of knowing the extent of the Court’s jurisdiction for early cases. However, there are also mutterings that Germany will withhold their ratification, either to be last or until the UK’s referendum on EU membership. The former would be understandable, in order to ensure the Court only enters force once all practical arrangements are in place, the latter less so and could lead to significant delay.
UPC Preparatory Committee adopts 18th draft Rules of Procedure
The UPC Preparatory Committee has formally adopted the 18th draft Rules of Procedure (the first version of which was released in July 2015). The Committee released a press release today, with the following direction, “Those interested in the Court’s operation should familiarise themselves with the text.” The 18th draft is expressed to be subject to final adaptations including the (yet to be finalised) schedule of court fees which will be incorporated as Annex I to the Rules.
Protocol on the UPC
Representatives of member states have signed a protocol agreeing that certain aspects of the UPC can enter force early. This will allow IT systems, training of judges, and the registration of opt-outs to be implemented before the Court comes into full operation.
Perhaps the most notable part of this development is that while announcing the protocol, the preparatory committee noted that they expect to complete their work by June 2016 with a view to the Court opening in early 2017. Previously, a 2016 opening had been mooted.
This announcement does not have any immediate impact, but starts to firm up the date when Patentees will be able to make active preparations for the Court in the form of registering opt-outs. This is a key decision for Patentees and will impact the status of patent portfolios in Europe. Patentees should be starting to think about whether they will opt-out their European patents sooner rather than later.
On 16 September 2015, Baroness Neville-Rolfe, UK Intellectual Property Minister hosted a reception at Aldgate Tower, the location for the London Division of the UPC.
Following a meeting of the Preparatory Committee, draft rules on the European Patent Litigation Certificate and who has rights in the UPC have been published. These confirm that Patent Attorneys will have the right to conduct litigation, provided they have the required litigation training. During a transitional period of 1 year registration will also be granted to Patent Attorneys who have completed an approved national course. This provision appears to cover most nationally qualified Patent Attorneys.
UK court location announced
The UK Intellectual Property Office (IPO) announces that the London section of the Central Division and UK Local Division of the Unitary Patent Court (UPC) will be located in the Aldgate Tower, central London. Other countries, including Germany and France, are yet to announce their respective Court locations.
Portugal commences ratification process
By presidential decree published in the Diário da República, Portugal becomes the 8th Member State to ratify the UPC Agreement. A total of 13 member states need to ratify the agreement before it comes into force, including both Germany and the UK (France having already ratified).
10th meeting of the UPC Preparatory Committee
18th Draft of Rules of Procedure of the Unified Patent Court published. The Committee also agrees the draft Protocol on Provisional Application of parts of the Agreement on a Unified Patent Court. The draft Protocol will allow the UPC to become “provisionally operational”, especially to allow the recordal of opt-outs of European patents from the jurisdiction of the UPC.
The IPO announces that the UPC Agreement will not be ratified this year, but preparations for ratification will be completed ahead of the UK referendum (scheduled for 2017) on whether the UK should remain in the EU or not.
TOP 4 fees proposal endorsed
The Select Committee of the Administrative Council of the EPO endorses, with the required ¾ majority, the European Patent Office’s “True Top 4” proposal
UK Intellectual Property Office launches a consultation, “seeking views on the drafting, structure and effect of the draft legislation which will allow for the implementation of the Unified Patent Court Agreement and the associated EU Regulations which introduce the Unitary Patent.” The consultation is open until 2 September 2015.
EPO revises its proposal for renewal fees
opt-out fee: €80 per patent
The Preparatory Committee’s consultation document sets the proposed “opt-out” fee at €80 per patent. The same fee applies to a subsequent withdrawal of an opt-out. This fee is not intended to generate profit and is intended to cover administrative costs only. Although the fee is per patent and not per designation, patentees with large portfolios will need to evaluate the cost of excluding their patents from the jurisdiction of the UPC in light of the value of the patents in question. The Preparatory Committee has not given any indication that the fee may be reduced for bulk opt-outs (or withdrawals of opt-outs).
Italy expresses interest in joining the system
Undersecretary for Economic Development Simona Vicari states that “accession to the unitary patent is a priority“, adding that “having an office of the Unified Patent Court in Italy will enable our companies to have an establishment in the country to protect its interests in the Italian language, not to mention that if we adhere to the package now we can still hope to have a say in the system relating to the unitary patent renewal fees and their distribution, and to ask for more support for our SMEs“.
The Preparatory Committee publishes its eagerly anticipated consultation document setting out 2 proposals for Court fees and a scale of recoverable costs.
The Court of Justice of the European Union (“CJEU”) dismisses both of Spain’s challenges to legislation relating to the Unified Patent System. In the first case, Spain objected to the implementation of the European Regulation that creates the “European patent with unitary effect”.
In its second case, Spain challenged the European Regulation that governs the applicable translation arrangements on the basis that the language arrangements are prejudicial to individuals who do not speak English, French or German.
President of the EPO proposes (to the Select Committee) 2 options for renewal fees for European patents with unitary effect. The proposals are designed to be attractive to users whilst also ensuring a balanced EPO budget.