The Unitary Patent and Unified Patent Court - where are we now?

Over the last few weeks, this moggy has been scampering between several conferences and events about Brexit and Intellectual Property, and the progress of the Unitary Patent and Unified Patent Court.  At other events, these topics have loomed over the proceedings.

Back in the days before it was announced that Tim Moss would be the new Chief Executive of the UK IPO and he was happily in charge of Companies House, CIPA held a seminar on "The UPC: Where we are and why".  Laura Starrs, head of the IPO's hastily re-convened UPC Task Force, set out what the UK needs to do before being able to formally ratify the UPC Agreement.  All of the legislation to implement the provisions of the UPC Agreement itself into UK law were complete long ago in the heady era before the fateful referendum of 23 June 2016.  The legislative basis was provided in the IP Act 2014, and the detailed provisions are enshrined in the snappily-named The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 (analysed in painful detail by this Kat here), which was made on 12 March 2016.

It starts with the Isle of Man
It however remained to extend this legislation to the Isle of Man.  The Isle of Man is not part of the United Kingdom, but the Patents Act extends there, and apparently the Isle of Man wished to be included in the new system.  Laura Starrs was back in action at the MIP International Patent Forum on 8 and 9 March to inform this moggy that The Patents (Isle of Man) (Amendment) Order 2017 was made in Privy Council on 15th February (under the provisions of section 132(2) of the Patents Act 1977) and laid as a negative resolution of Parliament on 22 February (as required by section 124(2) of the Patents Act 1977), during which period either House of Parliament could in principle object (apparently by means of a "prayer").  Astute observers of the minutiae of UK constitutional matters will know that the Order must sit for 40 days, but it seems unlikely that anyone will object to this territorial extension.

But there is more to be done by the UK
More significant is the Protocol on Privileges and Immunities. This is required for the UPC to sit in London as an international organisation, and the Protocol was signed on 14 December 2016 in Brussels, shortly after Baroness Neville-Rolfe (the then IP Minister - the position is now occupied by Jo Johnson) announced at Competitiveness Council meeting that UK would proceed to ratify UPCA.  It was laid before Parliament on 20 January 2017.  21 sitting days (days when both Houses are sitting) are required before a treaty can be ratified, but this period has now passed.  The (then) only UKIP MP Douglas Carswell did put forward a motion that the Protocol on Privileges and Immunities not be ratified, but this attracted no support.

However, before the Protocol on Privileges and Immunities can be ratified, secondary legislation is needed in both the Westminster and Scottish Parliaments to give effect to the Protocol under both English and Scottish law.  This is apparently in draft and should be appearing soon.

The UPC Task Force is expecting ratification of the UPC Agreement in "Spring".  Rumours that it might be before the Article 50 notification was sent have turned out to be over-optimistic.

But what about Germany?
Germany has of course still not ratified either, and parliamentary consent to ratification is apparently hoped for in May 2017 (which would allow the provisional application of the UPC to begin, provided enough countries have signed the Protocol allowing provisional application of the Agreement by then, and so enable judges to be appointed and other preparations to be completed).  Germany has long been of the view that it should be the last to ratify the Agreement and so determine the timing of its coming into force (being the first day of the fourth month after the deposit of its instrument of ratification, provided the UK has already ratified by then).  The Preparatory Committee hopes that German ratification will occur in September 2017, allowing the sunrise period to begin (when opt-outs from the UPC jurisdiction can be filed), leading to the Court opening in December. Merpel always expects some slippage, so maybe early 2018 is more realistic for the Court opening.  That also sets the date for when unitary patents can be obtained - if the grant date is after the UPC Agreement comes into force, then unitary effect can be registered for a European patent.

There was a rumour that Germany might be seeking to delay ratification in order to include the UPC as an aspect of the Brexit negotiations, but Merpel has not been able to establish any serious basis for them.

But will anyone want to use it?
This is the crux of the matter.  At an event on Brexit and IP convened by IPAN, there was some doubt about the attractiveness of a new patent and litigation system whose membership was, from the very beginning, in doubt.  Those interested in the effect of Brexit on IP should look out for IPAN's forthcoming report: “IP, Brexit and beyond – a blue-print for action in IP”, which will be based on the event.  Similar concerns were voiced at the MIP International Patent Forum.

On the one hand, some voices, especially from industry, have criticised the Government for taking the UK into UPC/UP system without the question of continuing membership being resolved.  On the other hand it was argued that there was never going to be any guarantee of the situation post-Brexit, and the alternative would have been for the UK to be definitely out of the system, which nobody really wanted as an ultimate outcome.  The latter view accepts short term uncertainty for a chance of a better long-term result.

This Kat believes that there must be a very high degree of confidence that if the UK leaves the Unitary Patent system, there will be provided a mechanism by which existing unitary patents can revert to having national effect in the UK as an EP(UK).  Such a mechanism is actually easier to provide than to provide continuing protection in the UK after Brexit for EU trade marks and designs (the issues of which are admirably set out by CITMA) and plant variety rights (as this Kat is reminded to mention after the IPAN event).  For patents, it would only be necessary to provide that a Unitary Patent revert to the status it had, with respect to the UK, before the unitary effect was requested.  But with all the uncertainties inherent in a new system and a new court, is the additional certainty of what happens after Brexit one variable too far?  Will potential users simply decline to request unitary effect and opt out their patents?  For patentees with a significant presence in the UK, this may well be the case.  But readers are invited to give their own opinions.

If the UK is peripheral to the operations of a company, then the question of whether the UK is in or out of the scope of the unitary patent is simply the quantum of possible damage in an infringement action, so there must be at least some patentees who will not care much either way.  But will they be enough to get the system off to a reasonable start?  There will be likely at least a year of uncertainty between the UPC opening, and the question of the continuing participation of the UK being resolved.  If there are no enough users of the system, it may not be financially viable and then again its future would be open to doubt.  Here again, readers will doubtless have their views.