The German National Assembly (Bundestag) has now adopted the law for ratifying the Unified Patent Court Agreement (UPCA) with the required majority. As a next step, the Bundesrat, the second chamber, has to approve the law. As the Bundesrat did not have any objections previously, it is likely that the law will pass with the required majority. The next session of the Bundesrat is planned for 18 December 2020, however the schedule of the session is not yet fixed. After the vote of the Bundesrat, the government and the president have formally to sign the law.
It is also likely that a new constitutional complaint will be raised against this law, because the Federal Constitutional Court did not rule on all substantive grounds of the previous complaint in its decision of 13 February 2020, and the FFII (Foundation for a Free Information Infrastructure) announced to do this. This may affect the timeline of the final ratification by Germany.
Overall, in addition to Germany, Belgium*, Bulgaria, Denmark, Estonia*, France, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands*, Austria, Portugal, Finland* and Sweden have now ratified the UPCA, raising the bar to 15 States originally wishing to implement the UPCA. Some of them (*) made Declarations and/or Reservations with respect to the UPC Agreement.
While the UK is not part of the European Union any longer (since 31st January 2020), the British government made clear in February 2020 that the UK will not be seeking involvement in the Unified patent system since “participating in a court that applies EU law and is bound by the ECJ is inconsistent with the aims of becoming an independent self-governing nation”.
Consequently, the UK notified the secretariat of the European Council it withdraws its ratification of the Unified Patent Court Agreement on 20 July 2020.
The UPCA will enter into force only the first day after the fourth month after the 13th ratification including the three Member States in which the highest number of European patents had effect in 2012. The ratification of UK being withdrawn, France, Germany and Italy appear now to represent these three member states. France (on March 14, 2014) and Italy (on February 10, 2017) already ratified the UPCA.
In order to bring the UPC fully operational upon the entry into force of the UPCA, a Protocol to the Agreement on a Unified Patent Court on provisional application was signed by 13 (including UK) of the Signatory States of the UPCA.
The provisional application concerns only the institutional, organizational and financial provisions of the UPCA, for example the recruitment of judges, testing of IT systems, but also the so-called “Sunrise” period for early registration of opt-out demands. This Protocol shall enter into force the day after 13 Signatory States of the UPCA have ratified, so giving less than 4 months for the UPC to be fully operational and allowing opt-out demands in these Signatory States.
Up to now, only seven Signatory States have ratified or declared to be bound by this Protocol. UK withdrew its consent. It should be noted here that the entry into force of this Protocol should include the ratification of UPCA notably by namely Germany, France and the United Kingdom.
This raises the question of the drafting and signature of a new Protocol or at least an amendment of the recitation of UK in the Protocol to be legally valid.
More generally, thorny questions impact the entry into operation of the Unified Patent System:
- To which extent and by which legal route would it be necessary to amend the UPC package (the two regulations and the international agreement) agreed in 2012 ?
- Where would the London section of the UPC be relocated ? The debate seems to remain open between Italy, the Netherlands, Austria and Ireland, whereas Paris and Munich have both indicated they would be ready to host the section temporarily or permanently.
- What would be the third Member State required to ratify the UPC Agreement in place of the UK ?
In this context, the UPC Preparatory Committee is reported to be examining and defining pragmatic and legally sound solutions to enable the unitary patent system to be functional in a near future.
The entry in force of the UPCA will coincide with the possibility of registering, at the European Patent Office, European Patents with a unitary effect over the states which have ratified the UPCA. Following the announcement of the ratification of the UPCA by the Bundestag, the European Patent Office has immediately reminded that it will be ready to grant the first European Patents with unitary effect as soon as the UPC is ready to start. These unitary patents will be litigated exclusively at the UPC.
The withdrawal of UK from the EU implies that the unitary effect will not extend to the UK (UK will have to be designated and validated as a not participating EPC contracting state such as Switzerland or Turkey). However, it is not clear at this stage if the European Patent Office plans to decrease the cost of the annual renewal fees which will be due for maintaining in force the unitary patent, given the reduced territory it will cover.
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