Since the 1970’s the EU member states have aimed towards the creation of a single patent that covers all the member states. Below we will see how the Unitary Patent System was developed and which is the current state of the project.
Why is a unitary European patent desirable?
Unitary patent would make it possible for applicants to protect their invention in all participating countries by submitting a single patent application and without the need to validate the patent in each country once it is granted.
Thus, unitary patent protection would make the existing European system simpler and more affordable for inventors by eliminating complex validation requirements and by drastically limit expensive translation requirements in participating countries. This could stimulate research, development, and investment in innovation.
Finally, the unitary patent system would allow more effective litigation of patents across Europe through an Agreement creating a Unified Patent Court.
When did the project start?
The original proposals in the 1970’s for the European Patent Convention (EPC), which came into effect in 1978 and has been an undeniable success, were intended to proceed in parallel with those for a Community Patent Convention, i.e. a Convention directed to a unified enforcement process in all EU states, to replace the nationally litigated rights of each member state.
In 2004 the Council finally failed to agree on the details of a Regulation on the Community patent, inter alia due to difficulties relating to the languages into which the whole or parts of Community Patents would have to be translated.
The Unitary Patent Package
In 2010 the European Commission revived the idea of a single patent for the European Union and proposed an alternative approach to adopt a regulation to create a community-wide patent and a system for litigating such patents.
During 2012 the heads of government of the European Union reached agreement on the last remaining issue delaying adoption of the so-called “European Patent Package”, allowing the approval on December of that same year of a regulation for creating a Unitary European Patent to cover all EU member countries (except Spain and Italy who have opted out of the system) as well as a separate regulation relating to the languages to be used.
On February 2013, most member states of the EU (the exceptions were Spain and Poland) signed an agreement to create a European patent court system that would have jurisdiction over all patents issued by the European Patent Office (EPO) having effect within the participating countries irrespective of whether such patents are new unitary patents or part of the traditional bundle arising from a European patent application.
Both the regulations and the treaty were to come into effect when the latest had been ratified by thirteen of the signatory states, as long as Germany, France and the United Kingdom were part of those thirteen.
What has happened after the legislation was approved in 2013?
The approval was a great achievement but soon problems started to appear…
Already in March 2013 the Regulations were challenged by Spain. It took a couple of years until the European Court of Justice decided to reject Spain’s complaints on May 2015.
Soon after this decision, Italy announced that it had changed its mind and intended to become a participant of the unitary patent system. At that time, 8 countries, including France had ratified the UPC agreement. Therefore, it seemed that everything was again on the good track.
Moving forward 3 countries ratified during 2016, another 3 did it on 2017 and 2 more, the UK being one of those, did it before April 2018 (even though the Brexit referendum in the UK had been favourable to those advocating for leaving the EU). The momentum seemed to be there….
However, this started to change again in July 2017.the date when the Hungarian government filed a complaint asking the country’s Constitutional Court to evaluate whether the UPC Agreement was compatible with the Fundamental Law. Not very good news! However, also not too worrying for the fate of the Package as it could still enter into force without the participation of Hungary should the Constitutional Court rule against it.
A more severe obstacle arose in March 2017 when an individual filed a complaint with Germany’s Constitutional Court asking the Court to review whether the UPC is compatible with the country’s Constitution. The Constitutional Court then asked Germany’s President to withhold the signature of the implementing legislation for the Unitary Patent Package while the Court evaluated the complaint.
Meanwhile, in June 2018 Hungary’s Constitutional Court decided that the Agreement was not constitutional because it would deprive the Hungarian courts from having competence for judicial review on domestic legal disputes of individuals. So Hungary was gone!
In February 2020 another severe drawback took place when a UK Government spoke person declared:
“The UK will not be seeking involvement in the unitary patent/UPC system. Participating in a court that applies EU law and bound by the Court of Justice of the European Union (CJEU) is inconsistent with our aims of becoming an independent self-governing nation”
So, the UK was also gone!
The German chapter
As explained above, it is mandatory for Germany to ratify the Regulations and the Agreement in order for them to enter into force. Without Germany, the system would be dead.
On 20 of March of 2020 the German Constitutional Court issued a non-appealable decision upholding the complaint against the German ratification of the Agreement on a Unified Patent Court. The main reason for the decision was that, since the UPC amends the German Constitution in substantive terms, it would have been necessary that the act of approval of the Regulations had been passed by at least a two-thirds majority in the German Parliament. However, the act of approval was passed unanimously by the Parliament in a session where only about 35 members were present.
The re-run of the vote occurred on 26 of November 26 of 2020, and the Lower House of the German Parliament (Bundestag) approved the act of ratification of the Agreement on a Unified Patent Court – this time yes – fulfilling the two-thirds requirement. The Upper House (Bundesrat) also gave its approval on 18 of December of 2020. It should be stressed that for Germany’s ratification process to be completed, laws must be signed by the German Government and the Federal President (Frank-Walter Steinmeier).
However, on the same day that the Bundesrat completed the parliamentary ratification procedure approving the bill unanimously, two constitutional appeals were filed against ratification of the UPCA (2 BvR 2216/20 and 2 BvR 2217/20). This forced the Bundespräsident, Frank-Walter Steinmeier, to wait for its resolution before enacting the bill.
On 13 of January of 2021 the Committee of Legal Affairs and Consumer Protection of the German Bundestag formally recommended to issue an opinion on the main points of dispute proceedings 2 BvR 2216/20 and 2 BvR 2217/20 at the Federal Constitutional Court and to ask the President to appoint a lawyer.
On 9 of July of 2021, the German Constitutional Court rejected the two applications for preliminary injuctions included in the two appeals referred to above and unblocked the situation. After that, the Federal Government has been able to deposit its ratification of the UPC Protocol on Provisional Application (PPA) on 27 of September.
As we have seen, it is necessary for 13 signatory states to approve the Protocol of Provisional Application (PPP) for it to enter into force. In Slovenia, the legislation that ratified the PPA came into force on 24 September 2021 when it was published in its Official Gazette. Therefore, only one country would be missing and, apparently, Austria would be the one that would complete the list, but for this the approval of the two legislative chambers is necessary, so it is expected that the approval will occur at the end of 2021.
From there, the preparatory committee composed of representatives of all the Signatory States to the UPC Agreement will be responsible for defining:
- Legal framework
- Financial aspects
- Information technology
- Facilities, and
- Human resources & Training
Among other work streams, the committee needs to conduct the process to select the judges of the UPC. It is quite clear that the system without the UK is much less attractive, as it involves not only the absence of the second largest economy in Europe but also the loss of the great experience of British judges, who were a great asset to the future Unified Patent Court. A great opportunity lost after the decision of the Anglo-Saxon country not to participate in the system.
In any case, only when the above-mentioned matters are resolved, the Bundespräsident, Frank-Walter Steinmeier, will ratify the UPC Agreement, which will allow the system to enter into force on the first day of the fourth month after ratification.
Therefore, the UPC Agreement is expected to enter into force at the end of 2022.
We will be watching and informing of the next updates.