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Thursday, 15 December 2016

Mini UPC Update: UK signs Protocol on Privileges & Immunities

Mini Kat for a mini UPC update...
Yesterday, the UK's deputy permanent representative to the EU, Shan Morgan, signed the Protocol on Privileges and Immunities of the Unified Patent Court.  The Protocol is necessary for the UPC and its judges to carry out their activities.  The UK was the final remaining compulsory signatory to the Protocol to sign. The others - France, Germany and Luxembourg - signed the Protocol on 29 June 2016 (soon after the referendum). The UK still needs to pass national legislation to implement the Protocol before it can ratify.  This will be done by way of a statutory instrument (SI).  The UK's signature of the Protocol will be recorded on the Council's website shortly.

The current understanding is that the UK will ratify the UPC Agreement by March/April 2017, followed by a transitional period before the Court's doors open in Fall 2017.  

"But, if 2017 is anything like 2016, who can predict..." muses Merpel.  

13 comments:

Anonymous said...

This is so unreal! How can they ratify an agreement that depends on EU membership??? Would the EY really go ahead with spending money on this stillborn part of the UPC? What do they think they are doing???

Anonymous said...

My guess is that no one actually read the UPC article in detail and that therefore no decision maker is really aware of Art. 20 and Art. 21 of the UPC agreement. We should not forget that politicians often are no lawyers and get a lot of knowledge via Powerpoint from their staffers who might be general lawyers but no IP experts.

At least this is my explanation for what is going on.

My second theory is that Italy was heavily lobbying that the seat of the court is going to Milan rather than London and the UK government felt that it is necessary to stop this at least for the time being by indicating that they will ratify.

Kant said...

Anon - quite simple: so as not to block the UPC for other EU member states. Since the UK will be out of the EU, it does not really care what the other EU states get up to and if they want their UPC system, let them have it.

Irreconcilable cynic said...

@Anon 13:27

To me, it would appear to be a tactical exercise in frustration, something that successive UK governments have been very good at ever since the UK became a member of the EU - pre-23/06/2016 : we want in, but we don't really want to play in the same schoolyard as everyone else - post-23/06 : now we want out, and we'll be damned if anyone else is going to grab the main venue court (glares at Italy and Germany alike) and take it away from London until we've hammered out "the best deal possible" for the rest of the exit proceedings. It thus gives the UK government another iron to put in the fire and keep warm while both the EU and UK (ir)responsible ministers bluster about principled positions. Sometimes cynicism really is the mother of all diplomacy. It really all makes perfect sense.

Anonymous said...

What seems unreal to me is the reaction to all this by other commentators on IPKAT. First some intelligent people seemed to be in denial and now some see to be in an unnecessary state of confusion.

The UK Government's actions have been rational and sensible. The processes for amending the UPCA to keep the UK in post-Brexit are mostly straight forward (Art 87) and everyone's motivations to do so become even stronger if the court in its current form has been running successfully for over a year pre-Brexit.

Keeping the UK in the UP may be a little trickier, but provided that the UK has a plan B in place to allow conversion of UP into UK patents there shouldn't be much downside to trying to keep it in.

Proof of the pudding said...

Well, it looks like there was some truth in the well-informed rumours that I heard:
http://ipkitten.blogspot.co.uk/2016/12/will-uk-industry-suffer-from.html?showComment=1481284766354#c8489500711255308227

What you make of this will, I guess, depend upon which side of the UPC fence that you sit.

With the UK legal profession being the principal beneficiary of the move to ratify, I guess that the government decided that it may as well benefit from the extra tax revenue that will come its way from the bumper profits that will be generated by UK lawyers. Set against that, the (very obvious) disadvantages for "industry" probably looked a bit less concrete.

It's just a shame that the system has now been set up so that no one in their right mind (or at least no one who wants patent protection in the UK) will seek to obtain unitary patents... which, coupled with all of the opt-outs that will be filed, could make the workload of the UPC very light indeed!

Furet Rouge said...

If the UK and Germany both ratify there is no reason why the Court should not continue working after even a "hard" Brexit (i.e one where no effort is made to amend the UPCA). The Court will go on judging, the Contracting Member States will continue to recognize its judgments. Only the EU institutions might object, but the big problems of Opinion 1/09 will stay solved. The Court will remain obliged to make references to interpret the Biotech Directive (unless only an EP(GB) is involved) and EU citizens can still claim damages in the courts of their own Member State for breaches of EU law by the Court of Appeal, to which the UK will still have to make a proportionate contribution. In any case, there doesn't seem to be a procedural route for the Commission to complain.

Proof of the pudding said...

@Furet

Interesting. Are you suggesting that the UPC might provide judgements not based upon EU law if the action solely concerns an EP(UK)? If so, that would be a bit weird. This is because adding a parallel patent to the dispute, such as the corresponding EP(DE), would then either change the applicable law or oblige the UPC to provide a split judgement (one for the UK validation and another for the DE validation). Can't see that as being a particularly workable scenario!

Still, a more pressing problem will be enforcement of UPC judgements in the UK. At present, the only mechanism for enforcement is the Brussels II Regulation (as amended). Once the UK is no longer an EU Member State, then that Regulation will cease to have effect under UK law. In that event, it will be interesting to see how Parliament reacts when asked to pass legislation that provides for the enforcement of judgements that are based upon provisions that are inconsistent with UK law!

Oh, and in the event of a "hard" Brexit (with no amendment of the UPC), then the UK will no longer be a "Contracting Member State" according to Article 2 of the UPCA. For most practical purposes, this would mean the UK effectively "dropping out" of the UPCA.

This does not really provide for the most stable (or predictable) system, does it?

Furet Rouge said...

The best argument that the UK must drop out after a “hard” UPC Brexit (which is likely to be part of a Brexit softer in other respects) is indeed the definition of a Contracting Member State, but that still requires implying an automatic termination/expulsion provision. The UKIPO’s press release has carefully told us that the UPC isn’t an EU institution, but an international court, suggesting that it doesn’t envisage such an expulsion. It is true that all newly acceding parties have to be Member States, but the UK’s status as an original signatory can’t be changed, and the central division still has to have a branch in London. If the UPC management and judges are content to continue operating it will need an express challenge by the Commission (or theoretically one of the Contracting Member States) to close the London divisions down.

I may be missing something obvious, but the parallel law problem already seems to exist (although it is likely to be swept under the carpet) under the present system. How would a panel consisting of an English judge, a German one and someone else have dealt with the pemetrexed sodium claim in multiple countries? They would be obliged by binding case law to interpret the EP(GB) without recourse to a “doctrine of equivalents”, but to apply such a doctrine to the EP(DE). The FR, IT and ES designations would have to be examined one by one just as Arnold J did. And after Brexit EU law will indeed not as such be part of the law of the UK, but the text of the Biotech Directive will probably survive (along with everything else preserved by the Great “Repeal” Bill). In considering the validity of a “Broccoli”-type claim the UPC will have to resolve the apparent contradiction between the EBA and the recent Commission Notice. This may require a reference to the ECJ for the remaining Member States, but in relation to the UK the Court will arguably be obliged to disregard the Notice and make up its own mind.

Incidentally, the mechanism for enforcement of UPC judgments in the UK is not the Brussels Regulation but Schedule A4 to the Patents Act 1977.

The system seems fairly stable, but I agree that it won't be at all predictable.

Proof of the pudding said...

"I may be missing something obvious, but the parallel law problem already seems to exist (although it is likely to be swept under the carpet) under the present system"

You're not missing anything. And you are right that things have been "swept under the carpet" so far. However, if and when the UPC gets up and running, I doubt that such an approach could continue for too long. It's just too big a problem to ignore.

You are quite correct about the Schedule 4A provisions. Upon reflection, I believe that they will certainly make interesting reading for the High Court post-Brexit!

On the one hand there will be a provision of an international treaty (Article 64(1) EPC) stating that a UK and an EP(UK) must have equivalent effect. On the other hand, UK law will incorporate references to another international treaty (the UPCA) that will force non-compliance with the EPC (unless you believe the nonsense that is being peddled regarding the effects of Art. 149a EPC).

Now, it is true that conflict between the UPCA and the EPC will arise regardless of Brexit. However, once the UK is no longer an EU Member State, it will be arguable that it can no longer validly participate in the UPCA (as it would no longer meet the criteria for participation). No doubt there could be much debate on this issue. But what is the High Court to do if asked to act upon a provision of UK law that refers to an international treaty that arguably no longer applies to the UK... especially if there is a direct conflict with the UK's obligations under another (undoubtedly valid) international treaty of much longer standing?

This could be made all the more interesting if the patent in question is granted (and alleged infringement commences) before the UPCA comes into force. The reason for this is that the UPCA would appear to have retroactive effect with regard to the selection of the applicable law. The UK High Court might then be asked to enforce a decision of the UPC finding liability on the part of the infringer where such liability would not at any time (including when the relevant acts commenced) have been found under UK patent law.

With these kind of scenarios in mind, it is clear that the alleged "stability" of the system will be in name only. That is, it will only carry on because of the absence of any provisions enabling national courts and the UPC to rule upon invalidity of provisions of the UPP (or conflict of those provisions with other laws, or principles of EU law). Of course, the CJEU will have the ability to rule upon the validity of the EU law parts of the UPP...

Proof of the pudding said...

TM has now ruled out the CJEU having "direct" legal authority in the UK. Does this mean that the unitary patent project has just been killed (despite the UK, rather bizarrely, having previously indicated its willingness to proceed)?

And if not dead, is the UPP mortally wounded? It is now crystal-clear that the UK will no longer be an EU Member State, most likely by 2019. But the current wording of the UPC Agreement and the UP Regulations rather heavily rely upon all "Participating" Member States being EU Members. This affects pretty much every founding principle of the UPP, including issues such as unitary effect / character, legal personality of the UPC and scope / enforcement of decisions of the UPC... and there are no signs yet of any plans to "fix" those problems.

Based upon current signs, it seems that the political will is to press on regardless. But placing such a huge gamble on the system being able to survive Brexit seems absurd. The UK may feel that it will gain influence by getting the UPC up and running before Brexit... but it will then become a hostage to fortune with regard to the inevitable challenge at the CJEU, alleging non-compliance of the UPP with EU law. At that point, the UK will have no representation at the CJEU. So what will the UK then do if the EU Member States decide to kick out the non-EU country in order to preserve the system?

Proof of the pudding said...

Revisiting the Gordon and Pascoe opinion, I am struck by the following passage.

"If the UPC were truly part of the Union legal order, it would already be subject to these obligations without them needing to be spelled out in the Agreement. Whilst Article 1 of the UPCA and Article 71a of the Brussels Regulation designate the UPC as a “court common to a number of Member States”, we do not consider that such secondary legislation is capable of converting the UPC’s fundamental status as an international court into that of a court which is part of the national legal order"

Upon reflection, I struggle to understand the argument that is being put forward here. In what way is Article 1 of the UPCA "secondary" legislation? The UPCA is, after all, the very instrument that establishes the UPC. Are Gordon and Pascoe therefore suggesting that we should view Article 1 of the UPCA as mere "window dressing", for the sake of appearances (ie the appearance of complying with Opinion 1/09)?

Proof of the pudding said...

I forgot to add that Article 21 UPCA is also relevant.

"As a court common to the Contracting Member States and as part of their judicial system, the Court shall cooperate with the Court of Justice of the European Union to ensure the correct application and uniform interpretation of Union law, as any national court, in accordance with Article 267 TFEU in particular. Decisions of the Court of Justice of the European Union shall be binding on the Court".

This seems to at least try to place the UPCA firmly within the Union legal order. It is a shame, therefore, that Gordon and Pascoe did not explain why, in their view, Article 21 UPCA also represents mere "window dressing".

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