Unified Patent Court Agreement

The Unified Patent Court (UPC) is a common patent court open for participation of member states of the European Union, and created by the "Agreement on a Unified Patent Court" (UPC Agreement or UPCA), which is provisionally applicable since 19 January 2022. Once the UPC Agreement will be in force, the UPC will hear cases regarding infringement and revocation proceedings of European patents (including unitary patents) that are valid in participating member states. A single court ruling will be directly applicable in the member states that have ratified the UPC Agreement. The UPC Agreement was signed as an intergovernmental treaty in February 2013 by 25 states (all EU member states except Spain, Poland and Croatia). It will enter into force on the first day of the fourth month after meeting three predefined conditions. Provisional application of the UPC Agreement was triggered on 19 January 2022 to enable preparation for the proper functioning of the court after entry into force. While the United Kingdom originally ratified the agreement, it withdrew from the UPC in 2020, following Brexit.

The UPC comprises a ''Court of First Instance'', a ''Court of Appeal'' in Luxembourg, an ''Arbitration and Mediation Center'' and a common ''Registry''. The Court of First Instance consists of a central division in Paris (with a thematic section in Munich and possibly a third city as replacement for London), along with 13 local and one regional divisions.

Requesting European patents with unitary effect which apply in all countries where the UPC Agreement is in force upon the grant of European patents will be possible from the entry into force of the Unified Patent Court Agreement.

Background

European patents are granted by the European Patent Office under the 1973 European Patent Convention (EPC). As of October 2022, 39 countries, including all countries of the European Union, are parties to the EPC. After grant, a European patent essentially becomes "a bundle of national patents" (subject, in some countries, to translation requirements in an official language of that country) in all countries separately, after which renewal fees are also due in all countries where the patent applies. Infringement proceedings in one country have essentially no effect in others, which sometimes leads to parallel litigation regarding the same European patent in different countries, with the possibility of having different outcomes out of these national court proceedings. This fragmented situation has been seen as an impediment to the establishment of an internal market within the European Union.

To reduce translation and litigation costs, the European Union has passed legislation regarding European patents with unitary effect. The European Parliament approved the proposed regulation on 11 December 2012 and they entered into force in January 2013. As Spain and Italy objected to the translation requirements, which featured only the three European Patent Convention languages of English, German and French, they did not originally participate in the regulation, which were thus organized as an enhanced cooperation mechanism between member states, but Italy subsequently joined. Registration of unitary effect is to be organised by the European Patent Office and requires less translations and a single renewal fee for the whole territory. The unitary patent will coexist with "regular" European patents.

Unitary patent protection, however, also requires a uniform patent court litigation system. That is provided for with the Unified Patent Court, which is constituted with the Agreement on a Unified Patent Court, signed on 19 February 2013 and which can handle cases related to European patents with and without unitary effect. The Agreement also incorporates many of the provisions of the proposed European Patent Litigation Agreement. The unitary patent provisions will only apply once the Agreement on a Unified Patent Court enters into force.

Locations

Court of First Instance

The Court of First Instance will have a central division with its seat in Paris, and a thematic section in Munich (mechanical engineering cases). The distribution of cases within the central division is set out in Annex II of the UPCA, which forms an integral part of the Agreement. While formally scheduled to hold a thematic section focusing on chemistry cases, including pharmaceuticals, London is not expected to host a section following Brexit. It is not yet clear if another city will replace London or if the workload will be shared between Paris and Munich. Furthermore, participating countries may set up a single or, if conditions regarding minimum case load are met, multiple local divisions of the court. Countries may also set up a ''regional division'', serving as the local division of the group. The agreement does not define which countries would set up local or regional divisions.

Next to the central division, contracting states are free to set up local or regional divisions up to a maximum number. The characteristics of the divisions to be set up and their territorial jurisdiction is shown below:

Of the countries that ratified, Bulgaria, Luxembourg and Malta are not part of a local or regional division, and actions that could normally be brought before the local division of those countries, can be brought before the Central division.

Court of Appeal

The court of Appeal will be located in Luxembourg and will also serve as the registry.

Other activities

Training of judges will take place in Budapest, and Lisbon and Ljubljana will host the seats of a patent mediation and arbitration centre. The training centre for judges and candidate judges was officially opened on 13 March 2014 in Budapest.

Operation

Composition of panels of judges

The system would include both legally qualified and technically qualified judges, who would sit in panels of three (Court of First Instance) or five (Court of Appeal) judges. Local divisions may ask (on their own or on the request of one of the parties) to have an extra technically-qualified judge added.Art. 8(2) UPCA

An overview of the composition of the panels of judges is as follows:

^A Of different nationalities

^B When dealing with actions under Article 32(1)(i) UPCA (actions concerning decisions of the EPO regarding the administration of the unitary patents)

^C Upon request of one of the parties (or the panel)

Proceedings before the Court

The proceedings before the Court will comprise three consecutive parts: a written procedure, an interim procedure, and an oral procedure.

Appeal procedure

Appeals against decisions of the Court of First Instance may be brought before the Court of Appeal "within two months of the date of the notification of the decision". In addition, appeals against certain orders (such as an order to produce evidence) issued by the Court of First Instance may also be brought before the Court of Appeal but within a shorter term, i.e. "15 calendar days of the notification of the order to the applicant". Appeals may be brought on both points of law and questions of facts.

The Court of Appeal may refer cases of exceptional importance to the full Court (i.e., the Court of Appeal sitting as a full Court), in order to ensure "unity and consistency of the case law of the Court".

Language of the proceedings

Proceedings before a local or regional division will generally take place in the local language of the local or regional division, in an official language of the EPO (English, German or French) if the local or regional division has designated such a language, or in the language in which the patent was granted (English, German or French) if the parties and the panel all agree. Before the central division, proceedings will take place in the language in which the patent was granted (English, German or French). The proceedings before the Court of Appeal will generally proceed in the language used before the Court of First Instance, or in the language in which the patent was granted (English, German or French) if the parties all agree.

Court fees

To finance its budget, the UPC's own financial revenues will notably comprise Court fees, which have been fixed by the UPC's Administrative Committee.

Governance

Three committees are to be constituted "to ensure the effective implementation and operation" of the Agreement:
* An Administrative Committee, composed of one representative of each Contracting Member State
:Established upon provisional application, it held its inaugural meeting in February 2022. It is headed by Johannes Karcher (ad interim).
* A Budget Committee, also composed of one representative of each Contracting Member State
* An Advisory Committee, comprising “patent judges and practitioners in patent law and patent litigation with the highest recognised competence”
:Amongst others tasked with the advising on selection of judges.

A preparatory committee was established enabling entry into force when the required number of ratifications is reached. The committee held its first meeting in March 2013 and was initially headed by Paul van Beukering and later by Alexander Ramsay.

Judges

The list of appointed UPC judges was published on 19 October 2022 and contains 34 legally qualified judges and 51 technically qualified judges. Klaus Grabinski (Germany) will be the president of the Court of Appeal, while Florence Butin (France) will be the president of the Court of First Instance.

Sources of law and applicable law

Article 24 of the Agreement specifies the sources of law that the Court shall base its decisions on:
* European Union law, including the two EU regulations on the unitary patent
* The Agreement on a Unified Patent Court
* The European Patent Convention
* Other international agreements applicable to patents and binding on all member states
* National law

For the evaluation of which national law applies, regulations governing private international law (of which the Rome I and Rome II regulations form the cornerstone) that are part of EU law as well as multilateral agreements are leading.

As for other courts in the European Union, the UPC may request, or in the case of the UPC Court of Appeal must request, the Court of Justice of the European Union (CJEU) to give a preliminary ruling on matters relating to European Union law, and the decisions of the CJEU are then binding on the UPC.

Substantive law on patent infringement

Art. 25 UPCA defines what constitutes a direct infringement of a patent under the Agreement, and Art. 26 defines what constitutes an indirect infringement thereof.

The Agreement also establishes several bases for the use of patented information without permission of the patent holder. Those bases are applicable to European patents, both with and without unitary effect. The exceptions, given in Article 27, include the following:
* private and non-commercial use
* breeding of patented material
* use on airplanes and ships of third states while temporarily in the territory of a participating member state
* decompiling software covered by patented information

Art. 28 UPCA further provides that prior use rights (and rights derived from a prior personal possession of the patented invention) governed under the national law of a Contracting Member State may be invoked as a defense against an alleged patent infringement before the UPC but only for the Contracting Member State(s) concerned by the prior use.

Competence

The Unified Patent Court (UPC) would have competence to hear actions regarding European patents with unitary effect and other European patents in force where normally a national court of the countries for which the agreement is applicable. In the case of European patents without unitary effect, during a seven-year transitional period (which the Administrative Council may prolong by up to seven years), actions may also be brought before national courts, and proprietors of patents may opt out from the exclusive competence of the UPC. Decisions of the UPC will generally cover the full territory of the UPCA Contracting Member States in which the European patent has effect, but may (eg in actions regarding infringement) also have effect in other states where the European patent has effect.

Actions may concern inter alia patent infringement, revocation, declarations of non-infringement, and establishments of damages. The proceedings may include a counterclaim from the defendant. The UPC competence covers supplementary protection certificates (SPC) issued for a product protected by a European patent with or without unitary effect.

The existing competences of the European Patent Office (EPO) remain unchanged. An opposition procedure dealing with the validity of the patent but not with infringement may still be brought before the EPO during a nine-month period after the grant of the patent. Decisions by the European Patent Office are valid throughout the territory in which the European patent is valid, which may thus encompass 38 countries. Furthermore, countries may still grant their own national patents, independently of the EPO. Such patents are not litigated in the Unified Patent Court.

Legal basis: The Agreement on a Unified Patent Court

The ''Agreement on a Unified Patent Court'' establishes the court as a court of the member states. As a court established by treaty participating in the interoperation of European Union law, it bears similarities to the Benelux Court of Justice. An initial proposal, which shared many similarities with the proposed European Patent Litigation Agreement and included non-EU countries, was found to be incompatible with EU law by the Court of Justice of the European Union, as it would lead to a court not falling fully within the legal system of the European Union, thus being without the possibility to ask prejudicial questions to the EU court of justice. As a result, the court was established by an intergovernmental treaty between the participating states outside the framework of the EU but open only to members of the EU.

Signatures

The agreement was signed on 19 February 2013 in Brussels by 24 states, including all states participating in the enhanced cooperation measures except Bulgaria and Poland, while Italy, which did not join the enhanced cooperation measures, did sign the UPC agreement. It is open to any member state of the European Union (whether they participated in the unitary patent or not), but it is not to other parties to the European Patent Convention. Bulgaria signed the agreement on 5 March after it had finalised its internal procedures. Meanwhile, Poland decided to wait to see how the new patent system works before joining because of concerns that it would harm its economy. While Italy did not originally participate in the unitary patent regulations, it formally joined them in September 2015. Regardless of the outcome of that process, becoming a party to the UPC agreement will allow the court to handle European patents in force in the country. Spain and Croatia (the latter would accede to the EU in July 2013) are the only EU member states not participating in either the UPC or the unitary patent, but both countries may accede to the unitary patent system at any time.

Entry into force

The agreement will enter into force for the first group of ratifiers on the first day of the fourth month after all of these three conditions have been met:

Thus, the entry into force will be triggered when Germany will deposit its instrument of ratification of the UPC Agreement.

For signatories ratifying or acceding after the entry into force of the agreement, their membership takes effect on the first day of the fourth month after the member state deposits its instrument of ratification or accession.

Activities before entry into force

For operations of the Unified Patent Court to commence, the agreement shall have entered into force, and practical arrangements have to be made. To that end, five working groups of the Preparatory Committee have been established to conduct the preparatory work. Preselection of candidate UPC judges took place in 2014, with the first training activities taking place in 2015.

Rules regarding representation before the court were provisionally approved in September 2015. They include the requirements for the ''European Patent Litigation Certificate'' (for which academic courses will be accredited) as well as equivalent certificates that will be accepted during a transition period. Patent attorneys with a law degree are exempted from the EPLC.

;Provisional application
Discussions on a ''Protocol to the Agreement on a Unified Patent Court on Provisional Application'' were closed in September 2015. The protocol was signed by eight states on 7 October 2015: Denmark, Germany, Hungary, France, Luxembourg, Slovenia, Sweden and the United Kingdom. Provisional application allows the hiring of judges and moving to the court premises. Provisional application started on 19 January 2022 after 13 states (including Germany, France and the United Kingdom) ratified the Unified Patent Court Agreement or indicated to have finished their parliamentary process.

;Adoption of formal rules
In its inaugural meeting in February 2022, the Administrative Committee approved the Rules on the European Patent Litigation Certificate and other appropriate qualifications, UPC Service and Staff Regulations and Financial Regulations.

;Select committee
Beside the completion of the work of the Preparatory Committee, the EPO Select Committee performs preparatory work for implementation of the unitary patent, to be "completed in due time before the entry into operation of the UPC", as unitary patent regulations apply from the date that the UPC agreement enters into force. As of June 2015, the Select Committee expected to complete its work in Autumn 2015.

Ratification

In October 2013, European Council President Herman Van Rompuy stated that the "dream of a single patent still isn't fully fulfilled", and he "urged the EU's member states to ratify the agreement". However, the 2016 Brexit referendum result has cast doubt on the future of the UPC. A list of signatory countries is shown below including the status of ratification.

;Notes

Ratification notes

;Denmark
The Ministry of Justice in Denmark issued its opinion in May 2013 that a referendum, or five-sixths majority in the Folketing was necessary for Denmark to ratify the agreement because of its constitutional requirements on the transfer of sovereignty. The Danish People's Party and Red-Green Alliance, which controlled enough seats in the Folketing (22 and 12 respectively, or a little more than one sixth of the 179 seats) to block ratification without referendum, stated that a referendum should be held. The People's Party said that it would support the UPC if the governing parties promise to hold a referendum on the proposed EU Banking Union or to increase restrictions on the distribution of welfare benefits to foreign nationals in Denmark. After a parliamentary agreement could not be reached, a UPC referendum was held, together with the EP election, on 25 May 2014. The Danish constitution states that the referendum defaults to a yes result unless at least 30% of all eligible to vote and more than 50℅ if the votes cast vote no.EU Information Centre of the Folketing:
Folkeafstemning om den fælles patentdomstol
' (in Danish), March 2014. Accessed: 8 May 2014. The referendum resulted in 62.5% yes votes, leading to the approval of the ratification act, with a deposit of the instrument of ratification on 20 June 2014.

;Germany
In June 2017, Ingve Stjerna, a German lawyer, submitted a constitutional complaint against the German Unified Patent Court Agreement Act. Upon receiving the complaint, the Federal Constitutional Court asked German President Frank-Walter Steinmeier not to sign the law. Steinmeier complied and the ratification was then suspended. The complaint alleged a violation of the right to democracy, "democratic deficits and deficits in rule of law with regard to the regulatory powers of the organs of the UPC", "perceived lack of an independent judiciary under the UPC" and nonconformance of the UPC with EU law. It was believed that the last ground of the complaint, the alleged incompatibility of the UPC Agreement with EU law, might lead the Federal Constitutional Court to refer one or more questions to the Court of Justice of the European Union (CJEU), "which would mean a further delay of at least 15-24 months". Stjerna refrained from publicly commenting on the substance of the complaint. He nevertheless indicated to the ''JUVE'' magazine that "he has received neither the support of third parties nor financial backing". The complaint was upheld on 20 March 2020 with regards to the unconstitutionality of the parliamentary procedure approving the agreement in the ''Bundestag''. The German government introduced a new bill to ratify the agreement, with the required two-thirds majority, to Parliament in June 2020.

In December 2020, after the new bill had been approved by both the ''Bundestag'' and the ''Bundesrat'', two new constitutional complaints (cases 2 BvR 2216/20 and 2 BvR 2217/20) were filed against the new bill. These complaints led the Federal Constitutional Court to ask the German President not to sign the law. However, they were ruled inadmissible by the court in July 2021.

;Hungary
Following a request for interpretation by the government the Constitutional Court of Hungary ruled that the UPC was incompatible with the Constitution of Hungary, and as such it would require amending to ratify.

;Ireland
Ireland initially scheduled a referendum on a constitutional amendment, required to ratify the agreement, for the autumn of 2013, but it was subsequently postponed to an unscheduled date after the 2014 European Parliament election. The Irish minister responsible for the matter, Richard Bruton, confirmed in May 2014 that a constitutional referendum would be held but that the timing had not been decided by the government. The Irish government later revealed in its legislation programme that it has planned to publish the required "Amendment of the Constitution" bill in 2015 to amend Article 29 of the Constitution to recognise the Agreement on a Unified Patent Court, and after parliamentary approval will be put to a referendum. In May 2015, the Irish Minister for Children and Youth Affairs stated that his government did not plan for holding any referendums during the remainder of its legislative term and so the Irish referendum and the ratification of the UPC would be postponed to after April 2016.

;Netherlands
In the Netherlands, European patents apply to the whole Kingdom, except for Aruba. The ratification by the Netherlands in 2016 however only applied to the European part of the Kingdom. On the request of Curaçao and Sint Maarten, and after a positive advice by the European Commission, approval for Curaçao and Sint Maarten as well as Bonaire, Sint Eustatius and Saba is currently undergoging a parliamentary approval procedure, after which the government plans to extend the application to these territories.

;United Kingdom
In the United Kingdom, there is no requirement for a formal law approving of treaties before their ratification, but the Ponsonby Rule is that they are laid before Parliament with an explanatory memorandum, which the government did for the UPC Agreement on 23 June 2013. The Intellectual Property Act 2014 was approved by Parliament and entered into force on 14 May 2014. Section 17 empowers the Secretary of State to make provision by order for giving effect in the United Kingdom to jurisdiction for the Unified Patent Court if a draft of the order has been approved by Parliament. That means that ratification of the UPC agreement will not take place before Parliament's approval of the related implementation orders. The first order, the Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2015, was submitted by the government on 10 June 2014 for a technical review with a 2 September 2014 deadline for replies. The government presented the results of its technical review consultation in March 2015, and on its basis, it began the process to complete the final version of its draft order to Parliament. In June 2015, the UK Intellectual Property Office stated, "It is the Government’s intention for our domestic preparations or ratification of the UPCto be completed by Spring 2016". The Government laid the domestic implementing order before Parliament 21 January 2016. A second Statutory Instrument is needed to endorse the UPC Protocol on Privileges and Immunities, which the UK signed on 14 December 2016. The second Statutory Instrument will need to be finalised and laid before the Westminster and Scottish Parliaments, which will subject the Statutory Instrument to an affirmative procedure in order to complete the ratification of the UPC.

The UK government announced on 27 February 2020 that "the UK will not be seeking involvement in the UP/UPC system. Participating in a court that applies EU law and hat isbound by the CJEU is inconsistent with our aims of becoming an independent self-governing nation."

On 20 July 2020 the UK formally withdrew its ratification of the treaty.

Amendment of the Brussels I regulation

A proposal for amendments of the Brussels I regulation was presented by the European Commission on 26 July 2013, and it needed to be approved by the Council of the European Union and the European Parliament. In a 523–98 vote, the European Parliament approved an amended version of the amendment on 15 April 2014. The same amendment was adopted by the Council of the European Union in an Ecofin Council meeting on 6 May 2014, and it formally entered into force on 30 May 2014 as Regulation 542/2014. Regulation 542/2014 amends the recast Brussels I Regulation 1215/2012, which is applicable from January 2015, and asserts that the Unified Patent Court has jurisdiction within the European Union if a contracting state to the Agreement would have jurisdiction in a matter that is regulated by the Agreement. It also renders the jurisdiction rules applicable in cases between parties in one EU country and parties in a non-EU country, a situation in which national law, rather than EU law, normally applies.

Legal challenges

Spain and Italy both filed individual actions for annulment of the unitary patent regulation with the European Court of Justice (CJEU cases C-274/11 and C-295/11) in May 2011, arguing the use of enhanced cooperation was improper and the introduced trilingual (English, French, German) language regime system for the unitary patent, which they viewed as discriminatory to other EU languages, would be non-compliant with the EU treaties because of distorting competition, causing a misuse of Council powers and functioning detrimental to the internal market. On 16 April 2013, CJEU rejected both complaints.

In March 2013, Spain filed two new actions for annulment (CJEU cases C-146/13 and C-147/13) of (part of) the two unitary patent regulations, arguing that there is a "misapplication of the Meroni case law" in the delegation of administrative tasks to the European Patent Office, as its setting and distributing of renewal fees are not subject to the necessary EU supervision. The cases were subject to court hearing on 1 July 2014. Advocate-General Yves Bot published his opinion on 18 November 2014, suggesting that both actions be dismissed ( and ). If the Spanish complaints had been upheld by the Court, that could have delayed or blocked the introduction of the unitary patent. The court handed down its decisions on 5 May 2015 as and , fully dismissing the Spanish claims.

See also

* European patent law
* Enforcement Directive

Notes

References

External links

*
*
Rules of Procedure of the Unified Patent Court
18th draft, last amended on 15 March 2017
*
Protocol to the Agreement on a Unified Patent Court on provisional application
* Ratification progress with th
depositary (Council of the European Union)
and th
European Commission
* L. McDonagh, 'Exploring perspectives of the Unified Patent Court and the Unitary Patent within the Business and Legal Communities' A Report Commissioned by the Intellectual Property Office (July 2014), available a
UKIPO
* Website of th

* Agreement text o
EUR-Lex
and wikisource

European Commission page on Patents ("Enhancing the patent system in Europe", "Community Patent", etc.)


on the European Patent Office web site

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European Union laws
Patent law of the European Union
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