The Status of the European Unified Patent Court for IP Attorneys

Overview

The point of the proposed Unified Patent Court (UPC) is to replace the patchwork litigation process now required in Europe to enforce or invalidate a patent.  As a reminder, almost all patent rights in Europe are granted by the European Patent Office (EPO). The EPO is a central examining office that examines and grants patents that have legal effect in all EU states and other states as well, including Switzerland, Turkey, and the UK. 

Despite that fact that the patent in each country is the same patent granted from the EPO, litigation in Europe still requires a party to litigate in each country the issues of validity and infringement. It is more than burdensome.

The UPC is supposed to change this. It will hear patent infringement and invalidity cases and render one decision that will have effect in all states that ratified the UPC treaty. Currently these states are Germany, France, Italy, the Netherlands, Austria, Belgium, Bulgaria, Denmark, Estonia, Latvia, Lithuania, Luxembourg, Malta, Portugal, Slovenia, Finland, Sweden. We are waiting on several others, including Ireland and Greece, to ratify. Spain, Poland and Croatia have said they will not join. If the UPC becomes operational, when it renders a decision that decision will have effect in Germany, France, Italy, the Netherlands, Austria, Belgium, Bulgaria, Denmark, Estonia, Latvia, Lithuania, Luxembourg, Malta, Portugal, Slovenia, Finland, Sweden. From a GDP point of view, Germany, France, Italy, the Netherlands and Austria add up to about $10 Trillion. This is a huge market.

Current Status

The UPC started in earnest decades ago, but by 2013 it was finally negotiated as an agreement and signed by 24 EU countries. However, since that 2013 signing, the UPC has been plagued by delays, as big projects often are. The delays arise from many issues, but the larger ones were the 2016 Brexit referendum which required that the UK negotiate a withdrawal from the UPC and two constitutional cases in Germany that required the German President to wait on court rulings before Germany could sign the UPC treaty.

However, those delays are over and as of today, the UPC has been signed and ratified by the necessary EU countries to come into effect and be a patent court. 

With the treaties ratified, the EU now seem to be controlling the roll-out of the UPC so that the UPC comes into existence in a sensible manner.  To this end, it is said that Germany is withholding its delivery of the German ratified treaty to the EU.  The EU is likely supportive of this move by Germany as the terms of the UPC treaty state that the UPC must be open to accept cases within four months of ratification. No one believes the needed infrastructure will be in place to allow the UPC to accept cases in just four months. 

The lack of infrastructure for the UPC is in part because there has been no mechanism to reliably provide the funds needed to build that infrastructure.  That infrastructure, which includes essential items like money to interview and hire judges, is provided pursuant to a separate treaty, the Protocol on Provisional Application of the UPC Agreement (PPA). Although given an innocuous name the PPA is in many cases where the rubber meets the road. The PPA brings into existence the administrative, clerical and financial organization required to make the UPC operational. The PPA allows for hiring clerks, IT personnel, and judges as well as to rent facilities to hold hearings.  So, the PPA is very important. 

The PPA is in force

On Wednesday, 19 January 2022 the PPA came into force and the infrastructure for the UPC can be out into place. The UPC committee, an informal body that has shepherded the UPC and PPA through these years of delay, announced that it expects the UPC court to open by the end of this year or early 2023.

Further delay is very possible

The UPC has been plagued by delay and the path forward although relatively clear has some bumps often noted by pundits. However, the real delays to date, such as Brexit and a successful German constitutional challenged based on a parliamentary procedural violation, arose unexpectedly and without ever being flagged as possible issues by the pundits. As there is always time for the unexpected to occur, there may be more unexpected delay. The UPC will not sneak up on any US attorney. 

Going forward for US attorneys

By beginning of the second quarter 2022 US attorneys should check in the progress being made under the PPA, including hiring judges and other matters. If the PPA and UPC seem to be moving forward as Spring proceeds, the US attorney should then consider how the UPC will change patent law for their clients. Given that the UPC will cover a $10 Trillion market and offer a litigation forum that should be very inexpensive as compared to US litigation costs, the likelihood is that the UPC will be a very significant and lasting change.