The Unified Patent Court is nigh

Written on 4 Feb 2016

Anyone interested in research and patents in the EU will be aware of the proposed new Unified Patent Court (UPC) (see our previous article here). Now, more than three years after it was agreed upon, we can finally look ahead with confidence at the UPC opening in the (relatively) near future. Owners and users of technology should start thinking now about what the new system will mean for them and what they need to do to prepare.

Where are we now with the UPC?

When the agreement constituting the UPC was agreed in December 2012, the proposed start date for the court to begin deciding cases was 2014. But few, if any, can have taken that ambitious proposal seriously. A new international court needs not only legal jurisdiction but also rules, judges, buildings and computer systems to enable it to function.

Three years and much debate later, a formal opening of the court in 2017 looks credible. A second challenge by Spain to the constitutionality of the court within the EU was rejected by the Court of Justice of the European Union in May 2015. Italy has withdrawn its opposition and will now participate, though Spain will not. In December 2015, the European Patent Office announced that it had finished its preparations and was ready and able to begin granting patents with unitary effect.

The official date for the UPC to open remains, optimistically, 2016, but experience of large scale projects even on a national basis tends to teach one that implementation takes longer (and costs more) than expected. Nevertheless, with some of the most challenging aspects completed, a 2017 start may well be achieved. 

We look below at some of the key issues that have been or need to be finalised before the UPC can open.

Rules of Procedure

The Rules of Procedure went through no less than 18 drafts in the Preparatory Committee, involving controversies, consultations and public hearings. The final form was approved in October 2015 (see here). We now have somewhere to start in assessing what the process of using the new court may feel like.

The process is fundamentally a written procedure, rather than the English system of substantial testing of evidence through a lengthy trial. The procedure also envisages a single comprehensive case management hearing (which itself may be conducted by telephone or video conference rather than in person), rather than a potentially open-ended series of applications as the case progresses.  

Ambiguities remain, however. The role of judge-rapporteur is not one that many practitioners from any jurisdiction will recognise. The judge-rapporteur will run the docket from the interim (case management) hearing onward and has sole power to permit or exclude issues, evidence or witnesses. The role therefore carries enormous power to dictate the process and evidence which will lead the action towards the ultimate trial.

Clearly, the individual judges who take on this role will have considerable influence, at least in the early years of the court, before common understandings as to the interpretation and application of the rules begin to emerge. Nevertheless, it is now possible to provide parties with a reasonable degree of guidance on the stages their case will go through. 

Judges

The appointment and training of judges for the new court remains a significant challenge. The terms on which the judges will be appointed have not yet been announced, so it has not been possible to begin recruiting.

A preliminary exercise, providing basic patent law training to a number of potential candidates from countries which have limited national patent expertise, was carried out in 2015. There will therefore, as a minimum, be qualified candidates from all of the EU Member States. But how the judges will be selected, how many there will be, and how far the existing patents judges of the national courts will be able to participate while also holding down their day jobs, all remain to be worked out. To have a cohort of appointed and trained judges ready to start deliberating on 1 January 2017 will be a significant challenge. 

Physical infrastructure

Whilst the procedure and judiciary are obviously critical to establishing the UPC, ultimately, the court cannot begin to function until all of the necessary court buildings are operational.

The local and regional divisions will take substantial resources to set up. Progress has been made on this front:

  • the UK has identified premises at Aldwych in the City of London;
  • premises near Munich Airport are believed to be earmarked for the German component of the Central Division; and
  • Sweden is working on preparing premises in Stockholm to be the seat of the Nordic-Baltic regional division.

But there remains a question as to the home of the Central Division itself, in Paris. It is believed that the new court will sit in the old Justice Hall, once the courts currently occupying it have moved to their new home. However, that relocation project has already taken considerably longer than scheduled and there is no guarantee that the revamped building will be ready in time for the UPC to begin work at the beginning of 2017. 

IT infrastructure

The UK undertook to design and procure the IT systems, which will of course be common to all divisions of the court, and ran a pilot test in 2014. A subsequent tender took place and work is ongoing.

Given previous experience of major public IT projects in the UK going over budget and time, however, practitioners will await with interest confirmation that both hardware and software systems are fully operational and ready to use.  

What should businesses be doing now?

One of the key issues facing technology owners and users in the EU is what to do about an existing patent portfolio. As we have previously discussed (see here), European patents will fall under the jurisdiction of the UPC unless they are opted out. Opting out gives the patentee control of which court may hear any dispute, including the option to opt in if it appears advantageous in order to enforce across the EU.

Looking further ahead, patent applicants will need to decide what to do about future European patent grants. They will have to choose whether to register the patent at grant as either having unitary effect, or operating as a ‘traditional’ European patent (essentially, a bundle of national patents). If they choose the latter route, they will face the separate question, raised above, as to whether or not to opt the patent out of the UPC’s jurisdiction.

Looking at it from the reverse perspective, businesses will need to consider what to do about competitors’ existing portfolios. The converse logic might suggest planning to file a revocation action against a patent of concern centrally, before the patent is opted out. But technology users should beware of the risk that inexperienced judges may see such an attack as an admission of infringement.  

To address this, the new system permits a technology user to file a protective letter, explaining its non-infringement arguments in anticipation of any claim being brought against it. Where a patent has not yet been granted, it may be worth filing third party observations against any pending applications, to get the benefit of a centralised attack without the potentially negative repercussions.

Alternatively, filing a national revocation action after grant but before the patentee opts the patent into the UPC means the same patchwork approach as at present can be applied, reducing if not eliminating the risk of being found to infringe, and injuncted, in all EU Member States. 

Whether the UPC will actually be up and running this year or next, businesses need to begin working out their UPC strategies now.