What is the current status of the UPC and Unitary Patent (August 2017 update)?

July/August 2017

When, in January 2017, the UPC Preparatory Committee stated that it was working towards a timetable in which the UPC would open in December 2017, it was clear that this timing was conditional on a number of factors. However, there were two events that the Committee could not have anticipated. First, there has been the effect of the snap general election in the UK. This is likely to delay the opening of the UPC and the start of the Unitary Patent until February 2018, at the earliest. Second, there is now the request of the German Federal Constitutional Court – Bundesverfassungsgericht ("BVerfG") – addressed to the German President, to stay the signing of two of the bills necessary before the UPC system can be ratified in Germany.

This article explains the current status of the UPC and the Unitary Patent system and the context of these latest developments.

Ratifying the UPC Agreement

Before it can come into force, a minimum of 13 countries (out of the 25 contracting states) are needed to ratify the UPC Agreement, by depositing their relevant national instruments at the depository of the Council of the European Union. So far, 13 have ratified the UPC Agreement (, most recently Estonia, see here), but these do not currently include Germany and the UK, which are mandatory.

It is expected that either the UK or (more likely) Germany will be the last to deposit their ratification instrument at the European Council, timed in such a way as to make sure that the UPC and its Registry are completely ready. The UPC and the Unitary Patent will then come into force on the first day of the fourth month after this deposit. In Germany, the bills necessary for ratification of the UPC Agreement have been approved by the Bundestag and the Bundesrat (but see the BVerfG request, below). Without any other delays, if the UK ratification can be deposited until this autumn then the earliest the UPC and the Unitary Patent could come into force and open for business would be February or March 2018.

In the UK, the Intellectual Property Act 2014 makes provision for the Secretary of State to ratify the UPC Agreement and contains enabling legislation to allow the Government to make the necessary changes to national law using a Statutory Instrument ("SI") – this is SI (2016 No. 388), which was signed on 12 March 2016. However, this SI is only one of two required to enable the UK to complete ratification of the UPC Agreement. The other is required to implement the UPC Protocol on Privileges and Immunities ("PPI"). Ratification of the UPC Agreement by the UK will not be completed until the SI legislating for the PPI is in place. Germany also needs to ratify the PPI (again, see below) as do a number of other countries.

The Protocol on Privileges and Immunities (PPI)

The PPI is necessary to give the UPC the privileges and immunities it needs to operate, such as certain immunities from suit for its judges and staff, special tax arrangements and the protection of the court's documents and assets. As well as the UK, the PPI must be ratified by France, Germany, Luxembourg (where the three sections of the central division will be located and the Court of Appeal, respectively).

To date, although they have signed, the ratifications of these countries are all outstanding (see here), although Germany has got as far as passing its bill for this purpose through the Bundestag and Bundesrat. In the UK, the implementing legislation for the PPI must be approved in both the UK Parliament and the Scottish Parliament. The procedure that will be used for the PPI orders is the 'Affirmative Procedure'. This means the Order for the UK will be debated in both Houses in Westminster (in Committee rather than on the floor of the chamber) and a separate affirmative order is also to be debated in the Scottish Parliament. The UK Houses of Parliament have 40 days in which to consider the Order. The affirmative procedure in Scotland takes 56 days. However, with the UK Parliament being dissolved for the snap General Election in May and June, the laying down of the Order for the PPI was delayed until 26 June. With recesses for the summer holidays and the political party conference season to follow, the likelihood is that the very earliest the PPI could be approved in the UK is the autumn of 2017.

Protocol on Provisional Application of the UPC (PPA)

There is yet another instrument that needs to be approved before the UPC can come into force. This is the Protocol on Provisional Application of the UPC ("PPA"), which enables a provisional period to begin before the full opening of the court.1

As stated above, the PPA establishes a provisional period in advance of the full opening of the UPC, in order for it to be fully set up in advance of the first day of operation. This includes final steps in the practical set up of the Court, such as the recruitment of judges and testing of IT systems. Importantly, it also brings the Registry into being, allowing for early registration of European patent opt-outs (the 'sunrise period'). The provisional protocol does not come into force until the day after 13 contracting Member States to the UPC Agreement have either ratified the UPC Agreement or have informed the depository that they have received parliamentary approval to ratify the UPC Agreement. It is not only dependent on this, but also on these same 13 also having either signed the Provisional Protocol or declared that they consider themselves bound by it.

Of the countries that have deposited their instrument of ratification of the UPC Agreement or informed the depository that they have the necessary approval, not all have signed the PPA or declared themselves bound by it (see here). European Commissioner Elzbieta Bienkowska stated in a press conference after the meeting of the EU Competitiveness Council on 29 and 30 May 2017 that the approval of three more countries, including Germany, is required to the PPA before the provisional period can begin. This was confirmed by the Chairman of the UPC Preparatory Committee, Alexander Ramsay, on 27 June 2017, although Estonia has subsequently given its consent to be bound by the PPA.

What has happened in Germany?

It is in this context that there has been another development; the BVerfG has requested the Office of the President of the Federal Republic of Germany (the "Presidential Office") not to sign the laws on the ratification of the Unitary Patent System, which had only recently been approved by both houses of the German parliament. Behind this request (which is not published yet) is an apparent constitutional complaint lodged by an unknown private individual challenging the constitutionality of the German laws on the ratification of the UPC Agreement. The request suggests that the BVerfG holds this challenge not to be prima facie without merit. However, this does not necessarily mean that the BVerfG has conducted a more substantial assessment of its merits yet.

As the Presidential Office has agreed to meet this request by postponing the signing of the laws until the BVerfG has reached a decision in the above-mentioned expedited proceedings, and given that Germany is one of the three member states whose ratification is mandatory, the ratification of the UPC and Unitary Patent in Germany will be delayed by at least a few months.

If the BVerfG comes to the conclusion that the constitutional complaint is successful, the delay is likely to be even more substantial, and a way forward for the UPC and Unitary Patent project will need to be sought.

Taking into consideration all the above factors, in his update of 27 June, Alexander Ramsay states:

"Under the current circumstances it is difficult to maintain a definitive starting date for the period of provisional application. However, I am hopeful the situation regarding the constitutional complaint in Germany will be resolved rather quickly and therefore I am hopeful that the period of provisional application can start during the autumn 2017 which would mean that the sunrise period for the opt out procedure would start early 2018 followed by the entry into force of the UPCA and the UPC becoming operational."

By this assessment, the UPC and Unitary Patent would be coming into force in the summer of 2018. However, given earlier attempts to be more specific and the unpredictable events that have followed, this time Ramsay adds that the Preparatory Committee will provide a more detailed timetable on its website as soon as the picture is clearer.

If you have any questions on this article or would like to propose a subject to be addressed by Synapse please contact us.

1For further discussion on the PPI and PPA, see the February 2017 edition of Synapse.

What is the current status of the UPC and Unitary Patent?

Paul England

Paul is a senior associate and professional support lawyer in the patents group based in our London office.

Britta Bröker

Britta is a Knowledge Management Lawyer based in Hamburg.

"an apparent constitutional complaint lodged by an unknown private individual challenging the constitutionality of the German laws on the ratification of the UPC Agreement."