Analysis: The European Unified Patent Court – is it finally within reach?
William Fry partners Colette Brady and Laura Scott examine when the Unified Patent Court (UPC) could become a reality.
The creation of a single European patent with unitary effect across participating EU member states (Unified Patent/UP) and a new court system to enforce and defend such patents (Unified Patent Court/UPC) has been decades in the making.
The UPC system will only be implemented once the UPC Agreement comes into force. This requires ratification of the agreement by Germany, France, and Italy (as the countries from which most European patents originate) and ten other member states.
The last German constitutional challenge successfully brought in 2020 was primarily concerned with the procedure employed by the German parliament in ratifying the agreement. While the German parliament subsequently corrected this procedural formality, ratification was again delayed by a fresh constitutional challenge this year.
This recent challenge argued that the UPC would constitute an unlawful transfer of power to a supranational body and that the means of election of UPC judges would unduly impair the right to self-governance enshrined in Article 20 of the German constitution. The German Constitutional Court rejected these arguments, and confirmed the primacy of European Union law within the German legal system.
This decision finally clears the way for Germany to proceed with ratification of the agreement. The necessary German legislation permitting such ratification entered into force on 12 August. However, it is anticipated that Germany will not deposit the instrument of ratification with the General Secretariat of the Council of the EU (thus triggering the four-month countdown to the formal commencement date of the UPC Agreement) until it is clear that the new UPC system is, in fact, ready to open.
While Ireland has pledged to ratify the agreement, it has yet to hold the referendum to amend the Constitution of Ireland, required to proceed with ratification. Although the Government Legislative Programme for Spring 2021 signalled a potential referendum and constitutional amendment, no further details are currently available.
Following the German Constitutional Court ruling, the Irish business representative group IBEC called on the government to take “prompt” action to ratify the agreement without delay to ensure that “Ireland does not miss out”.
There is a potential opportunity for Ireland to apply to host the chemical, pharmaceutical and life sciences central division of the UPC. Originally, Paris, Munich and London were identified as the locations for the three central divisions, but since the UK’s withdrawal, another contracting member state will need to fill this role.
Ireland’s strong record in the pharmaceutical and life sciences sector makes it an ideal location for this division of the UPC. However, Ireland will face competition should it apply. The Italian government has already proposed that Milan hold this division, and it has been reported that Netherlands and France are similarly interested.
When will we see the UPC in operation?
Whilst the end may be in sight, two more states still need to ratify the Protocol on the Provisional Application of the Agreement so that a budget becomes available and the preparatory work for the operation of the UPC can commence. Once the preparatory phase begins, judges have to be recruited and trained, the UPC Rules of Procedure have to be finalised, and IT systems put in place.
The head of UPC Preparatory Committee, recently stated: “If everything runs smoothly, we can expect a functioning UPC late in 2022, or possibly early 2023”.