April 1, 2020
Europe has been waiting for Germany’s Constitutional Court decision relating to Germany’s ratification of the Agreement on the Unified Patent Court, but the latest turn of events will delay its implementation, a prediction being by at least five years. Attempts have been made to realise a common European patent since 1975. According to European Patent Attorney Marjut Honkasalo, companies strategically planning their operations around the unitary patent system should put those plans on the back burner for the time being.
The Agreement on the Unified Patent Court (UPCA) was hit by a further delay when the German Constitutional Court published in February 2020 its decision that a law for approving ratification of UPCA requires 2/3 majority, not simply a majority reached. Without Germany's ratification of the Agreement, the system will not come into force
"The vote on the law to ratify the Agreement took place in the German Parliament late in the evening, which meant that, due to the low number of representatives present, the required majority was missed by only a few votes", says Marjut Honkasalo, European Patent Attorney.
The law may go once again to the German Parliament. It is now unclear whether Germany will attempt to sign up to the Agreement again or when the German Parliament would reconsider the Agreement. A possibility remains of the Agreement being amended, to e.g. replace London as the location of the seat of the central division. Any amendment may cause a need for renewing the already made ratifications.
“The Agreement may even be abandoned, one reason being that UK’s government announced at the beginning of March that they will not participate to the UPC. The UPC and the unitary patent has been at the 'nearly’ stage for years. Now, the only thing that can be said with any degree of certainty is that nothing is going to happen any time soon”, says Honkasalo.
For companies waiting for the unitary patent system, the delay in the ratification of the UPC does not warrant further action unless they have planned their IP protection specifically around the implementation of the proposed system.
"The situation isn’t going to change from the perspective of businesses. Any intentions to delay prosecution of patent applications in hopes of geographically broader and cheaper coverage of the unitary patent, should now be shelved. The ratification of the Agreement is delayed to such an extent that consideration of which patents let to stay in the UPC or what to opt out form the UPC is for the time being not necessary," Honkasalo continues.
Substantial savings possible through a unitary patent system
Attempts have been made to realise a common European patent system since 1975. In 2010, politicians gave up the “EU patent” and soon after started the so called “enhanced cooperation” to create the current system waiting to come into force. In the enhanced cooperation, each member state is free to decide on their participation in the system. Although not all the countries that have signed the Agreement have gone on to ratify it, there are enough countries to establish a unitary patent system after Germany’s ratification.
"In 2013, a separate patent court agreement was signed, assumed to be swiftly ratified by the EU member states. At the time, it was thought that the system would be operational by 2014. Then came Brexit, which this year took the UK out of the UPC and shook things up," Honkasalo explains.
"While the Agreement could secure the requisite majority in the current German Parliament, it is impossible to say how long it will take for the matter to be considered again. The situation is complicated further given the current coronavirus pandemic, as the Parliament has more important issues on its list."
Hope remains for the UPC
The delay in the UPC raises a number of questions about the future of the system.
"One of the most recent disputes concerns the location of the London seats of the central court. In the Agreement, Paris, Munich, and London are named as location. But why would the court be located in a country whose matters the court cannot even decide upon?”
Hope that the UPC will be implemented has not yet been lost. In spite of everything, the Preparatory Committee of the UPC has announced it will continue its work and the development of the Court in order to ensure the system is fully up and running within six months of its final approval.
"The unitary patent would provide patent protection for more than 13 European countries at the same cost as the coverage currently available in only three or four countries. A truly convenient and cost-effective unitary patent covering most EU countries will be possible only if and when the Agreement, and thereby the system, comes into force", Honkasalo notes.