Business Law & Compliance

Europe comes one step closer to a Unitary Patent System

7 min read

24 November 2014

The Court of Justice of the European Union (CJEU) announced an opinion giving a green light to the long-standing aim to create a unitary patent and unified patent litigation system. Although such opinions are not binding on the court, which is expected to issue its final judgment in the middle of next year, news of the opinion of Advocate General Bot will be a huge boost to the chances of the project becoming a reality.

The so-called ‘UPC system’ (consisting of a ‘unitary patent’, i.e. a single patent covering many different EU states including UK, France and Germany, and a single multi-national ‘Unified Patent Court’) aims to simplify the current disjointed country-by-country arrangements for patent enforcement in Europe. 

The UPC is quite a revolutionary concept because it promises to be the first court having the power to adjudicate on the private rights of parties at a pan-European level. At present European courts do not try cases, whereas this court would sit in judgment of disputes normally tried in England by High Court judges. However, its legality has been challenged by Spain (for a second time – the first challenge was dismissed by the CJEU last year). 

The AG’s opinion recommends dismissal of the challenge, and in the light of this, the CJEU may be expected to follow suit and dismiss this challenge too. 

Language Issue

During discussions about the new patent system spanning over a decade, Spain and Italy objected to their languages being relegated to fourth behind English, French and German, with Spain even proposing an English-only system instead. When it became clear that agreement with Spain and Italy was impossible, most of the rest of the EU decided to go ahead without them using a process called “enhanced cooperation”. 

The first court challenge by Italy and Spain was to the legality of the process and was dismissed by the CJEU in April 2013. However, the second challenge by Spain alone was only started in March 2013 and a decision is not expected until mid-2015. The AG’s opinion is followed in about 80 per cent of cases, and it is for that reason that the opinion which recommends dismissal of the second challenge is such good news for proponents of the system. It appears that the AG accepts that the language arrangements are discriminatory, but that this is acceptable when creating a system which aims to be cost effective.

What next?

Notwithstanding the second Spanish challenge, work has continued to make the new system a reality. Several European countries have already ratified the legal agreement to create the new Unified Patent Court. There are three countries (UK, France and Germany) who must ratify before the new system can come into effect. Of those, France has already done so, and the UK is well on the way to following suit. 

Germany appears to be a little slower, being cautious about the cost of the new system, but appears still to be committed to the project. The latest official estimate for the system coming into effect is ‘not before the end of 2015’, and whilst even 2016 seems optimistic. It is probably practical issues such as the readiness of the IT system which will determine the date of start up, rather than any lack of political will.

Might Spain join in the new system?

Many believe that if the second Spanish challenge is indeed dismissed, Spain might reconsider its position and join in the system. The two other countries who are currently not fully engaged in the new system are Italy and Poland. Despite Italy joining in the first legal challenge, even before judgment went against it, it had already partly joined the new system by signing up to the court agreement, and is almost certain to sign up to the unitary patent part of the system too. Poland may similarly sign up to the court agreement, albeit perhaps not until the new system has settled down in a few years from now. If those countries (and new EU entrant, Croatia) all join in the system, then it will become an EU-wide system, which was always the hope.

Will industry welcome this opinion?

For obvious reasons, industry generally welcomes the concept of cheaper centralised patent enforcement in the EU, but at the same time, in the UK especially, it has been cautious about the new system due to concerns as to how it will operate in practice. There are real ambiguities in some respects, including the extent to which the CJEU would be involved in the interpretation of patent law, and one of the most important achievements in agreeing the new arrangements was (at the insistence of David Cameron) that the role of the CJEU be limited so as to avoid delays by repeated references to the CJEU. 

One particularly encouraging aspect of the AG’s opinion, however, is the implication that the CJEU may not play an active part in construing the UPC agreement (and therefore patent law). If the CJEU follows this aspect of the AG’s opinion, then industry will be much less concerned at the possibility of delays in enforcing patents potentially caused by CJEU involvement in the day-to-day aspects of patent enforcement. The UPC promises to be an expert and efficient court, and once the initial gremlins are ironed out, Europe should have a much more cost-effective patent system. If so, it may even pave the way for more international disputes to be adjudicated by international courts which can only be good news.”

Alan Johnson is a partner at Bristows.

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