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Wednesday, 20 January 2016

BREAKING NEWS - Draft UK Legislation on Unitary Patent and Unified Patents Court

The Intellectual Property Act 2014 contained enabling legislation to allow the Government to make the necessary changes to national law in order to accommodate the Unitary Patent and Unified Patents Court by means of a Statutory Instrument (SI), which passes through Parliament in a simplified procedure.

The Government, through the UK Intellectual Property Office,  launched a consultation prior to drafting this SI, as reported by the IPKat here.  Now, the IPKat has just learned, the Government response to the consultation has been published, and you can read it here.  This explains the approach adopted when amending the UK legislation.

Also, the draft Statutory Instrument has also just been published, and you can read it here.  It takes the approach of amending certain sections of the Patents Act 1977, specifying which sections of the Patents Act will apply to Unitary Patents (and also which ones will not), and also incorporates in the Patents Acts by reference some Articles of the UPC Agreement.  This has the effect of making the SI admirably brief, but to work out its effect it is necessary to sit down with all three documents, which this Kat has not done yet.  One or more Kats may come back to this in due course.  In the meantime, the draft SI itself contains at the end an Explanatory Note that gives some indication.

From an initial review, this Kat has noticed that the Government response to the consultation indicates that double patenting as between a Unitary Patent and a UK patent will be prohibited in the same way as currently between a European Patent and a UK patent (the UK IPO will launch proceedings to revoke the UK patent if they relate to the same invention). So patentees will not be able to hedge their bets between two patents, one enforceable in UK courts, and one enforceable at the Unified Patent Court.

The draft SI now needs to receive approval from both Houses of Parliament.  Usually, this can be achieved quite quickly, and once the SI is approved, the UK will be in a position to ratify the UPC Agreement.  The SI will not however come into force until the UPC agreement itself does.


Anonymous said...

Pseudonoymouse says

UK should not ratify until it is clear the rule of law applies within the EPO.

The EU cannot and should not subcontract to an organisation that appears to flout laws on Human Rights.

Confused cat said...

Specifically eliminating (as proposed in the draft SI) the application of Section 77(1) of the UK Patents Act to EPs having unitary effect seems a bit odd. I had always thought that Section 77(1) was there to put Article 64(1) EPC into effect under UK law.

Does this mean that Article 64(1) EPC does not apply to European patents having unitary effect? That would seem to be an odd conclusion, as an EP having unitary effect is just a plain old EP underneath it all.

Am I missing something here? I am fully aware of Article 149a, but cannot see how that overcomes the problem regarding Article 64(1) EPC.

If Article 149a does not solve the problem, then how on earth can a Contracting State to the EPC ever determine the rights conferred by an EP – whether unitary or not – using any law other than its own national law?

Given that the UP Regulation applies a single national law to EPs that will take effect in multiple territories, then can we conclude from the above that Article 64(1) EPC, the UP Regulation and the UPC Agreement together require, with respect to the rights conferred by an EP, complete harmonisation of national laws in the territories that ratify the UPC Agreement?

Meldrew said...

The SI represents a somewhat interesting approach to conforming to International and EU obligations, as I have commented at "UK decides on Brexit from EPC and EU".

In particular, sections 2(3)/(4) of the SI firstly amend section 60 of the Patents Act 1977 to exempt certain matters from infringement, and then disapply one of those exemptions from national patents. The effect is that a national patent will have a broader scope than a European patent (see also page 1 of impact assessment). This is clearly in breach of Article 64 EPC.

The powers given by the Intellectual Property Act 2014, to amend primary legislation through use of secondary legislation, are somewhat unusual, and such powers should be used cautiously, and not in a manner to bring the UK into breach of a treaty that they have held to since 1978, and which is at the heart of both the UPC and Unitary Patent.

Hopefully, if the SI is passed, a correction will follow promptly to ensure compliance with the EPC.

Anonymous said...

Game over?? Yer man at the EPO was put there to make this happen. Cant wait to hear his triumphant diatribe in his next blog on news of this ( he will probably take the credit for helping perfidious Albion "see the right way to go)

At least now - finally! (and its just a question of time before the UK ratify) - the focus can lift from the EPO and how wonderfully it is being managed (not) to patent attorneys and the issues you will have in making this work.

Brexit? ,,,,,,,those people in Davos this week will not let this happen. Too much to lose.

Confused cat said...

If the concerns that Meldrew and I have voiced are legitimate, and I do not (yet) see any reasons why they are not, then what would that mean? How could the UK be allowed to make the draft SI law, thereby violating its obligations under the EPC?

Sadly, the conclusion that I have reached is that there would be very little anyone (save the collective will of the UK parliament) could do to "fix" the situation.

The Unified Patent Court might ultimately note that the national law of the UK does not comply with the EPC, but what could they do about that? Would they have the ability to ignore the written letter of UK national law and instead simply refer to the provisions of the UKPCA?

That might be an option (albeit one that could raise other concerns) for matters concerning infringement of unitary EPs (or not opted-out EPs). However, the UPC could not rule on the law applicable to national patents (or opted-out EPs) and so could not bring UK law fully into compliance with the EPC.

The UK courts, on the other hand, would be forced to apply the UK Patents Act as amended by the SI - even if they were certain that it did not comply with the EPC. Only amendment of the Patents Act by parliament could rectify the situation.

However, that is the position under UK law. I would wager that the position could be different in other EPC Contracting States having different legal systems. This could make it very tricky indeed for countries such as Germany to amend their national law such that it is compliant with both the EPC and the UPCA.

Meldrew said...

Confused cat

This matter is unlikely to excite Parliament - now. IP legislation stirs up more trouble than most, and I suspect that is why the unusual approach of allowing secondary legislation to amend primary legislation was adopted.

However, the UP Regulation requires "The participating Member States shall ensure compliance with this Regulation in fulfilling their international obligations undertaken in the EPC and shall cooperate to that end" which implies that the participating Member States should meet their EPC obligations unless contrary to the regulation.

Of course, the UPC would have no jurisdiction in the matter of determining whether applying different law to a national patent than to a unitary patent or European patent was a breach of its obligations by the UK: but the CJEU would.

I have now noted some more problems with the SI which I am posting here and which mirrors discussions in IpKat last year here.

What a shambles.

Darren Smyth said...

Dear Confused Cat and Meldrew

Thank you for your comments. As well as the piece linked to by Meldrew in the previous comment, there is a piece I wrote ages ago which I think is on the same issue that Confused Cat is raising.

I do not believe that the current SI is compliant with the EPC. As well as Article 64(1) EPC there is also Article 2(2), which again reiterates that a European patent and national patent must have the same effect.

As I argued in the above-linked post, I think the effect of the EPC and UPCA together mandate complete harmonisation of infringement law (to that of the UPCA). If less is done by any country, then I think they are in breach.

What the effect of a non-compliant SI is, I do not know. I imagine a judge could be persuaded to apply the EPC and UPCA directly, to conclude that the law of infringement for a national patent was other than the black letter law.

Best wishes


Meldrew said...


"I imagine a judge could be persuaded to apply the EPC and UPCA directly, to conclude that the law of infringement for a national patent was other than the black letter law".

That would be a bold judge, to decide that a provision clearly meant to be applied in a particular way, and stated as such in the explanatory texts available to the legislature, should be applied in a different way. We do have bold judges - but equally we have judges who might not be so bold.

I had naively thought that the UPC and UP was a great opportunity for reducing complexity.

Instead, in place of one law governing infringement in the UK, there will be three laws [the law applied by the UPC to unitary patents and European patents (UK); the law applied by the UK courts in relation to European patents (UK); and the law applied by the UK courts in relation to national patents].

If each member state adopted similar eccentricities as to what did or did not constitute infringement, this would mean that the number of laws to be considered in respect of patent infringement in Europe would increase from the current N (N being the number of participating states) to 2N+1.

This is not simplification.

Darren Smyth said...

Dear Meldrew

We definitely have increasing complexity. In the comments on my earlier post that I linked above, you will see it stated that in the Netherlands they will leave their patent law unchanged and rely on treaties being self-enacting. The judge will apparently have to guess what law to apply, as I understand that explanation. France has also apparently ratified without changing its black letter law, although I don't know under what legal theory. UPC judges will have to work out what the national law relating to the unitary patent is in respect of the country whose law applies, so that has possibility for even more chaos if the ratification is not clear, as it seems not to be.

English judges already apply the wording of the EPC and CPC directly rather than the black letter law of the Patents Act where the provisions are intended to have the same effect, so I don't think that doing the same to the UPCA is that outrageous.

Opportunity for reducing complexity was sadly missed here.

Best wishes


Meldrew said...

"English judges already apply the wording of the EPC and CPC directly rather than the black letter law of the Patents Act where the provisions are intended to have the same effect"


And arguably (at a pinch and with a following wind) the UPC and UP represent a successor enactment of the CPC.

However it is still a strong statement for a judge to make to Parliament.

"Whatever you did, whatever you said, you didn't mean it"

Take that.

Confused cat said...

"English judges already apply the wording of the EPC and CPC directly rather than the black letter law of the Patents Act where the provisions are intended to have the same effect".

Yes, but only because of Section 130(7), which explicitly states that certain provisions of the Patents Act are intended to have the same effect as corresponding provisions of the EPC (or CPC). I very much doubt that any UK judge would be prepared to say that the UPCA is the same as the CPC - not least because the substantive provisions differ between the two.

Thus, even if a UK judge recognised that the SI (if passed into law) is clearly in breach of the EPC, I do not think that there is anything that they could do about it - apart from wait for Parliament
to rectify the situation. Remember, Section 77 of the UK Patents Act (which relates to Article 64(1) EPC) is not one of the provisions mentioned in Section 130(7) - and so a UK judge would not even have the option of referring directly to the wording of Article 64(1) EPC.

As sad as I am to say this, I think that the inevitable conclusion is that there is nothing stopping the UK from breaching its obligations under the EPC. Indeed, there is an argument that the UK has always been in breach of at least one other provision of the EPC, and has suffered no adverse consequences over the intervening decades - proving that, when it comes to international agreements (as opposed to EU legislation), it is political will (and not the black letter of the law) that really counts in the UK.

I can only hope that the countries that ratify the UPCA will include one that has a legal mechanism for ensuring that it honours all of its obligations under the EPC. Perhaps other IPKat readers can help out here? It is only in such a country that there might be a possibility for there to be any improvement upon what has, so far, been a complete shambles in implementation of the provisions of the UPCA under national law.

As an aside, I note that Darren, Meldrew and I all agree that complete harmonisation of national laws is mandated by the UPCA (and absolutely required to avoid a horrible increase in complexity of the laws). However, that is clearly not happening - and there are no signs of it happening any time soon. I am therefore struck by the complete absence of any dissenting voices, for example from those entrusted by the national governments to implement the UPCA provisions under national law. I would very much appreciate input from such dissenting voices, as otherwise I will be forced to conclude that everyone acknowledges the problem (i.e. breach of obligations under the EPC) but steadfastly refuses to do anything about it.

As much as the unitary patent sounds like a wonderful idea in theory, I am yet to be persuaded that the way that it is currently being implemented will result in anything other than a dog's breakfast. Currently, it seems that advent of the UPC will bring increased complexity, decreased legal certainty and increased costs for anyone seeking to secure / maintain / enforce / revoke patent rights in only a small (<4) number of countries. I can see how the UPC could benefit resource-rich corporations that routinely maintain / enforce / revoke patents across a large number of territories. But who else does it benefit? And what can be done to ensure that it does not end up being a completely regressive measure that only benefits those that already have the resources in place to cope with it?

Sadly, as with the issue of compliance with the EPC, I think that "details" such as these have been much lower down the list of priorities than bulldozing through a measure that politicians clearly have a lot invested in for other reasons. However, as the old saying goes, "act in haste, repent at leisure"!

Anonymous said...

I have no wish to add to the misery illuminated by Confused cat, but it needs to come out into the open.

The EU tries hard to pretend it is already a federal union by introducing functions that belong to such an entity: free passage across internal borders and a common court system. The first has been a failure due to a lack of consideration that external borders then need protecting, and the second because there is no consensus. Naive romanticism has driven the politicians to these premature initiatives. The region is being taken advantage of.

Obviously it could be a good idea to have a common patent for all of the EU states, but it must be based on the foundations of patent law, i.e. identical judicial treatment of all users of the system. By pressing ahead with blinkers the patent obtained in the "enhanced cooperation" is a cripple, due to the open wound that an applicant having his application rejected is prevented from getting the same judicial treatment of his cause as one who has obtained a patent: several instances of appeal.

By relying on a subsupplier whose only interest is to administer patent fees and twisting the EPC an unlucky applicant will not even have the independent evaluation by the Boards of Appeal, because the appeals system is being cropped under the eyes of the EPO governing body, the AC.

It is completely unreasonable that what purports to be a patent with unitary effect is not based on a patent application with equal treatment.

The harmonisation of the patent laws of the member states, where there has until now been equal treatment according to local patent laws, will lead to a system where the inequality will be manifest. The UPC/UP system does not contain one iota of promise that it will turn out otherwise.

The only fair way to resolve this is to revise the EPC in order to enable submission of a rejection to the normal appeal possibilities.
The decision to try for a UP should be made early, at the time of application. UP applications should have examination by the EPO*), appeal to the BoA, and be able to continue in the UPC if the BoA result is unsatisfactory. Maybe the reason it has not developed this way is that it was considered undesirable to revise the EPC. It is a can of worms, but inevitable if the rule of law is to apply. We shall need to put the UPC/UP system on hold until all of that has been sorted out. There are still a few countries left who can ensure that.

Otherwise we shall end up with a patent system that is worse than the US system. On the other hand, if the Patent Prosecution Highway develops such that all US grants will automatically become EP grants, it will not matter, provided deadlines are suitably adjusted. Go the American way will be the order of the day!

George Brock-Nannestad

*) although no good has come of having the EPO act as a self-governing monopolistic Collossus. But it is there and functional to some degree. It is incomprehensible that the EPO as a mere subsupplier on this shaky foundation is permitted to promote the UPC/UP system so vigorously.

TreatyNotifier said...

Darren (and Meldrew), a small specification from the Netherlands. We still don't know how implementation is planned as the draft legislation has not been put before parliament. The advice of the Council of State (Raad van State) is in, and normally will lead to some changes, but also that is only published after the legislation is laid before parliament.

However, we have the draft draft legislation used for the consultation, which is -surprisingly- candid about direct effect of the treaty (in its draft draft explanatory memorandum). In 3.2 they explain that articles 25-32 have no direct effect, but don't need implementation in Dutch law, as the Dutch judge will not need to apply them. That's quite clear although the legal basis in the UPCA is unclear. It seems however consistent with the UK approach regarding non-unitary patents! What's helping a bit is that the infringement provisions are partly harmonised in the proposed national and the UPCA legislation.

[the point that I find most diverging is the difference between the territories where EPC is extended to, but which are non-EU (Isle of Man, Curacao etc). Interpretations are differing so much, I spent two blog posts on it.

Meldrew said...

Treaty Notifier

Thank you for the information.

At least we can talk about how the Agreement and Regulation should be transposed into national law, even if the participating states don't appear to be talking to each other.

It will be a shame if we end up with 28 different and conflicting transpositions into national law. So much for simplification. The CJEU may be busy sorting this lot out.

Confused cat said...

OK, I am now getting seriously concerned that there is not even one person out there who is prepared to even try to persuade Darren, Meldrew and me that the fatal flaws that we believe we have spotted in connection with Article 64(1) EPC are not so fatal after all.

What on earth is going on? Are all of the Member States that are ratifying the UPCA banking on the fact that there will be no court that is competent to rule on issues relating to breach of obligations under the EPC?

The more I think about it, the more I am convinced that there could well be fundamental incompatibilities between the UPCA and the EPC, for example in connection with the issue of territorial effect (both for indirect infringement and for dependent territories).

For example, how can a national patent have the same effect as a unitary patent when it comes to the indirect infringement provisions of Article 26 UPCA (which refers to effect of the patent in "the territory of the Contracting Member States")?

Also, as Article 3 of Regulation 1257/2012 only refers to a unitary patent having effect "in the participating Member States", how can that effect extend to dependent territories of those Member States? If it cannot, then that would be another instance in which a national patent would confer different rights (in this instance, rights differing in their territorial scope) to a (unitary) European patent in respect of the same Contracting Member State to the EPC.

My knowledge of international law is not good enough to determine what the consequence would be if the UPCA were found to be in conflict with the EPC. However, as it is of much longer standing and has more signatories, my (uninformed) view is that the EPC really should take precedence.

It is a much more interesting question as to what would happen if Regulation 1257/2012 were found to conflict with the EPC (e.g. for the reasons discussed above relating to territorial effect). I know that the EU tends to prefer its own laws over everything else, but I cannot see how an EU Regulation could validly require Member States to breach their obligations under a much older Treaty to which they (and various other countries) are signatories. Perhaps the CJEU could be asked to rule on that point?

Again, I would be open to persuasion that everything is just fine and dandy as it is, and that there are no fundamental conflicts between the UP package and the EPC. However, the complete mess that is being made (by different approaches to implementation being taken in different countries) leads me to suspect that the Member States have yet to wake up to the seriously thorny issues must be addressed if the UPC is to have any chance of long-term survival.

Confused cat said...

Competence of national courts to ask the CJEU to rule on possible invalidity of Regulation 1257/2012 (e.g. due to possible non-compliance with Article 64(1) EPC):

"15. Although the courts and tribunals of the Member States may reject pleas raised before them challenging the validity of acts of an institution, body, office or agency of the Union, the Court of Justice has exclusive jurisdiction to declare such an act invalid.

16. All national courts or tribunals must therefore submit a request for a preliminary ruling to the Court when they have doubts about the validity of such an act, stating the reasons for which they consider that the act may be invalid".

(See 2012/C 338/01, which is available at

TreatyNotifier said...

Confused cat, the possibility to invalidate EU regulations should have a reason in EU law. And as the EPC itself is not EU law (although lots of its implementation is), there are no reasons to invalidate regulations that contradict it. Furthermore, if there had been such a "loophole", I trust Spain would have employed the possibility in its attempt to block the unitary patent.

Another court that we are certainly going to hear from before entry into force of the agreement is the Bundesverfassungsgericht. Given the "unitary patents are bad, because software patents are bad"discussion, we can be sure to expect a legal challenge there. The check against the German constitution, which states that treaties should be respected and are part of federal law. I have no idea if they can block approval of a treaty (by Germany) because it is inconsistent with other treaty obligations

Furthermore, what may be an easy fix to the territorial scope of the regulation is an agreement like this one:

Meldrew said...

Treaty Notifier

Article 1(2) UP Regulation

"2. This Regulation constitutes a special agreement within the meaning of Article 142 of the Convention on the Grant of European Patents of 5 October 1973, as revised on 17 December 1991 and on 29 November 2000 (hereinafter ‘EPC’)."

Article9(2) UP Regulation

"2. The participating Member States shall ensure compliance with this Regulation in fulfilling their international obligations undertaken in the EPC and shall cooperate to that end. "

To me, this provides an arguable case that failing to comply with the EPC is failure to comply with the UP Regulation.

The principle of equal national and European protection is about as central to the EPC as you can get.

When the EPC is at the heart of the Regulation, ripping it out and trampling on it is not healthy for the Regulation.

As for Spain, I doubt that the question of different protection between national and European patents would have been considered, since the plain language meaning of the UPC Agreement does not appear to contemplate this EPC heresy.

TreatyNotifier said...

Meldrew, you're touching on a different point. The Unitary Patent Regulation will IMO probably not be invalidated as incompliant with EPC, as only EU law is taken into account, and I -still- think if it was worth the try, the Spanish would have tried.

However, the implementation of the regulation by the Member States might be incompliant. And it is certainly thinkable that the commission will start non-compliance procedures regarding the implementation in certain member states at some point. But that is a bit different from the invalidation procedure that confused kat highlighted...

Anonymous said...

I think that the system will be sufficiently financially attractive and simple that this will in the most part over-ride the 'dogs dinner' aspects. Indeed, our patent attorney pedantry is mere chicken feed in comparison to the will and budgets of a company. Like any large M&A exercise, if it makes tax and profit sense, then that is what matters most -- let the attorneys sort out the dog's dinner: that is what they are paid to do and what they make their careers our of.

Confused cat said...

@Anon 18 April: you may be correct in that, ultimately, the courts will arrive at solutions that serve to untangle - to a greater or lesser extent - the Gordian knot created by the interplay between the relevant laws (including the UPCA, the EPC, national laws and TFEU).

However, the problem as I see it is that the necessary solutions are far from obvious at this time. This means that the manner in which the UPCA has been drafted, as well as how it is being implemented (differently) by the various Member States, has generated a completely unacceptable level of uncertainty - both for patentees and third parties.

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