UPC & unitary patent end of year update
After months of silence on the Unified Patent Court (UPC) and unitary patent (UP), we have seen some interesting news and developments in recent weeks.
European Parliament UPC & UP analysis
First, on 05 November, the European Parliament issued an in-depth analysis on the possible scenarios for the future of the UPC and UP in the event that the UK leaves the EU with or without a withdrawal agreement. In particular, this analysis tried to clarify the question of how Brexit may affect the entry into force of the UPC Agreement (UPCA) including what amendments to the agreement would be required in order for the system to continue without the UK, and whether the UK could in fact remain a part of the system even after leaving the EU. The cautious conclusion of the analysis is that:
it seems not per se legally impossible that the UK can stay within the UPCA, even when not an EU member state.
This conclusion seems to align with the UK’s ratification of the UPCA on 26 April 2018 in that there is a political will to remain part of the system. In addition, there is a general feeling in the profession that the attraction of the UPC and UP may be negatively impacted by the UK not being part of it.
Currently the only legal step preventing the UPC and UP from coming into effect is the ratification of the UPCA by Germany, and this is being held up by the constitutional challenge lodged on 31 March 2017 (discussed further below). Both France and the UK have ratified, along with 14 other EU member states.
Consequently if the constitutional challenge is dismissed and Germany ratifies before the UK leaves the EU, there is a possibility that the UPC and UP would come into effect before Brexit. In view of the timelines involved, this situation seems, however, unlikely.
More likely is that the UK will leave the EU, and there will then need to be a decision on whether the UPC and UP can come into effect when/if Germany ratifies. The European Parliament analysis explains how the UPCA will need to be amended (and approved by all parties) to remove the mention of one of the UPC Central Divisions being in London, but if the UK voluntarily withdraws from the agreement, it could be possible for the UPC and UP to come into effect because the three remaining member states with the highest number of patents (France, Germany, and The Netherlands) would have ratified.
Regardless of the order and outcome of these significant events – namely Brexit, the German constitutional challenge and German ratification - continued UK involvement in the UPC and UP will depend on political negotiations and acceptance of EU law supremacy and CJEU decisions if the UK remains a part of the system. There would also need to be discussion about the UK’s membership to the single market because the UPCA is an instrument for the benefit thereof, and yet the current withdrawal agreement involves the UK leaving the single market (although this of course may change following the UK election and future negotiations of any withdrawal agreement).
The analysis by the European Parliament summarises the position with its comment: “What happens to the agreement is hard to predict”. Unfortunately we just have to wait and see.
German constitutional court complaint
The second development relates to the German constitutional challenge. On 20 November 2019, the judge overseeing this challenge denied any rumours that the court has been delaying the decision until the outcome of Brexit is clear. The judge also confirmed that he intends to decide the case in the first quarter of 2020. Given that Brexit is currently scheduled for the end of January 2020, the start of 2020 should be an interesting one for those awaiting more information on the UPC and UP.