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patently important

14 May 2012

Browne Jacobson's Peter Ellis questions if a unified patent court is necessary

The European Parliament believes an efficient patent system in Europe is a necessary prerequisite for boosting growth through innovation and to help European business, and in particular small and medium-sized enterprises (SMEs), to face the economic crisis and global competition. Moreover, the rapporteur welcomed the efforts undertaken by the Council to create a unified patent litigation system between the participating Member States.

Hargreaves noted 38 different patent regimes in Europe with national patents being relied upon and litigated separately in different countries according to the laws of those countries. He said the UK should attach "the highest immediate priority to achieving a unified EU patent court and EU patent system".

The unitary European patent enforced through a unified patent court was the subject of a recent report by the UK European Parliamentary Scrutiny Committee (EPSC), a select committee of the House of Commons.

The chair of the EPSC opened proceedings by describing the matter as "a very important and technical question" but after hearing evidence, the EPSC concluded there is a broadly consistent view that the draft agreement on the Unified Patent Court (UPC) is likely to hinder, rather than help, the enforcement of patents within the European Union. It also called into question whether incorporating a unitary patent regime within the EU will ever be practicable.

The supremacy of the CJEU

The EPSC considered the effects of the draft unitary patent regulation, which would create the legal framework for the unitary patent, and the draft agreement constituting the UPC, which would set up the UPC.

Article 3 (2) of the draft regulation provides that a European patent with unitary effect shall have a unitary character providing uniform protection and will have equal effect in all participating Member States. Itwill be an optional adjunct to traditional national and European patents, currently granted by the European Patent Office (EPO) under the European Patent Convention (EPC) at the patentees request. Articles 6 - 8 of the draft regulation define the rights given to the holder of the unitary patent.

Article 14 of the draft agreement constituting the UPC, imposes an obligation on it to apply the law of the EU as determined where appropriate by the Court of Justice of the European Union (CJEU).

There is a fairly uniform and profound concern over the involvement of the CJEU in ruling upon the infringement and validity of patents. Henry Carr QC pointed out, when giving evidence to the EPSC, that the time taken for the CJEU to make its determinations can be up to two years with serious delays and additional costs for the parties.

Nevertheless, the European institutions are determined to press on with the implementation of the unitary patent. Final agreements are scheduled for completion in June 2012 although the UK Government has recently suggested that the deadline for sign-off on the legislative package might slip.

Structure and function of the UPC

The UPC will have exclusive jurisdiction to deal with disputes concerning the unitary patent. The transitional period for the introduction of the exclusive jurisdiction of the court is seven years, with the possibility of an additional seven years if a review conducted after five years recommends it.

According to the agreement, the UPC will comprise a Court of First Instance with a central division as well as local and regional divisions, a Court of Appeal and a Registry. A local division may be established in a contracting state. A regional division may be established by two or more contracting states.

The agreement further provides at Article 15 for bifurcation or separate determination of validity and infringement which is a cause of further concern as there is no agreement as to its benefits.

It also anticipates the appointment of non-specialist judges to the court because a training framework for judges is proposed "in order to improve and increase available patent litigation expertise and to ensure a broad geographic distribution of such specific knowledge and experience".

The structure proposed for the court when combined with the unitary nature of the patent is at the heart of the concerns identified by the EPSC. Courts comprising non specialist judges in countries which lack experience of patent litigation, will hear and determine questions of validity and infringement of valuable patents and grant injunctions or revocation orders or declarations of invalidity that are operative throughout the EU.

The EPSCs conclusions

The EPSC concluded its report in this way, "The draft agreement on the unified patent court is likely to hinder rather than help the enforcement of patents within the European Union. This will particularly be so for SMEs, the main intended beneficiaries."

However, implementation seems inevitable now. It is unlikely the process will be stopped as preferred by the EPSC but there is still time to consider the location of the Central Division.

The EPSC recommended the government press for the Central Division of the UPC to be in London. It will bring substantial economic benefit to the country by reason of the employment required and the number of visiting litigants and their representatives.

If the unitary patent and unified patent court are introduced, national patents could become an attractive alternative. National courts of contracting states will have jurisdiction in actions relating to both patents which is outside the exclusive jurisdiction of the court. Professor Hargreaves description of the fragmented European scene for patent dispute resolution may be the preferred alternative to the patenting community.

This article was first published in Intellectual Property Magazine

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