Kevin O’Sullivan (Dublin City University)
Since the foundation of the EEC in the 1950s, European policymakers have pursued the goal of a unified patent for the single market and a dedicated Unified Patent Court (UPC) to resolve disputes surrounding the revocation and infringement of patents. That goal – repeatedly frustrated for decades due to concerns of supra-nationalism – is soon to become a reality. On the 17th of February 2023, Germany ratified the Agreement on a Unified Patent Court, satisfying the conditionality of the Agreement for the UPC becoming fully operational, which will now occur on the 1st of June 2023. This blog explains the concept and purpose of the unitary patent and the unified patent court and comments on the post-Brexit opportunity for Ireland and the challenge for the pending Irish ratification of this new European patent system.
What is the Unitary Patent?
The Unitary Patent is intended to give unitary effect to patents issued by the European Patents Office (EPO) for the single market. Prior to coming into force, the EPO granted the ‘European’ Patent under the European Patent Convention (EPC) 1973 with no unitary effect. An international agreement with 39 contracting states, the European patent under the EPC is treated as a bundle of patents enforceable in each contracting state separately, made up of EU Member States and non-member States. A compromise arising from failed negotiations surrounding a Community Patent Convention in the 1960s, the non-unitary effect of patents under the EPC has long been seen as a considerable barrier to greater integration of the single market in the area of innovation and patents. In 2012, following over a decade of negotiations, the solution was the Council and Parliament Regulation on the creation of a unitary patent. By way of Article 9, the application process for a ‘European Patent’ will remain the same and administered by the EPO, with the option to request unitary effect across the participating EU Member States. German ratification of the Agreement on a Unified Patent Court means this long-held goal of a unitary patent is about to be realised – over half a century since it was first conceived.
How will the Unified Patent Court Work?
The unitary patent will only work if it has a centralised court that can adjudicate on matters of revocation or infringement and is capable of providing relief in the case of the latter. The UPC will therefore have exclusive jurisdiction over unitary patents but also European patents under the EPC, subject to transitional arrangements, including opt-outs for those that already hold such patents and do not wish to come under the jurisdiction of the UPC. The institutional structure of the UPC comprises a Court of First Instance consisting of a central, regional and local division and a Court of Appeal. Judges will be selected from participating states and will comprise both legally qualified judges and technical qualified with expertise in patent litigation. The Court is intended as a one-stop shop for Member States that have signed up the unitary system to adjudicate on matters falling within its jurisdiction and to remove the need to pursue proceedings in multiple jurisdictions, as is currently the case under the EPC.
Ongoing Uncertainty
The UPC was not born out of consensus among the Member States. Rather, the new unitary system came about through use of the enhanced cooperation mechanism, with Spain challenging the Regulation on the creation of a unitary patent in annulment proceedings before the Court of Justice. That challenge failed with the Court accepting that the legal basis for the regulation under Art.118 of the Treaty on the Functioning of the European Union was sound in mandating for measures to protect intellectual property and for the setting up of Union wide arrangements for authorisation, coordination and supervision. Moreover, the Court ruled that uniformity was achieved by Art. 3 of the 2012 Regulation which establishes unitary effect creating the unitary patent, along with Arts.5 and 7 which determine that the designate national law in question, i.e. the Member State in which the dispute arises, shall be applied in the territory of all contracting states. Concerns have been raised that this approach overlooks considerable divergences that exist in how Member States’ courts apply and interpret their respective national laws when it comes to resolving revocation and infringement proceedings. The Agreement on a Unified Patent Court requires the UPC to designate the applicable national law that will be applied in the territory of all participating states, draw on international law and apply Union law in its entirety. It remains unclear how the Court will resolve these divergences. Moreover, the Agreement on a Unified Patent Court is an international treaty between participating Member States – the EU is not a party to the Agreement. Although the UPC may refer questions to the Court of Justice on matters of EU law where they arise, the basis of the Agreement is international and not EU law, with interpretation of the Agreement itself falling outside the jurisdiction of the Court of Justice.
This uncertainty is further compounded by the relationship between the new UPC and the EPO which remains responsible for the grant of patents – both European and unitary – and has well established criteria for patentability, i.e. conditions for granting either patent. Tension between the EPO and national courts as to the scope of these criteria has long been a feature of the EPC system. Under the UPC the concern is that there is nothing to align the criteria of the EPO and the UPC at the grant stage, i.e. the EPO decision to grant the patent, and post-grant stages, i.e. the UPC resolving disputes, such as revocation proceedings. Integrated into the newly minted unitary patent system then is the potential for old problems of fragmentation that were a feature of the non-unitary system to emerge and undo the very purpose of the uniform patent package. Nevertheless, over time it is likely these issues will be ironed out as the UPC develops its own jurisprudence and follows the trend in recent years of national courts aligning their evaluative criteria with those of the EPO whose administrative decisions have taken on the shape of quasi case law. In short, the uncertainties are present but the advantages of the UPC underpin it as a vehicle for enhancing the competitiveness of the European economy and those of the participating Member States.
Ireland and the Unified Patent System
This brings us to Ireland, who has yet to ratify the Agreement on a Unified Patent Court. In 2014, the Irish Government approved Irish participation in the new unitary system, reaffirming its commitment in the summer of 2022. Ratification of the Agreement itself however will require a constitutional referendum as a result of Art 34(1) of the Irish constitution. While national patents will be under the jurisdiction of the Irish courts, jurisdiction for non-opted-out European patents and the unitary patent must be transferred to the international court of the UPC by way of an amendment to Article 29 of the Constitution. With the withdrawal of the United Kingdom from the unified patent system as a result of Brexit, the obvious benefit for Ireland of ratification would be the competitive advantage of being the only English speaking and common law participating state within the new system. Indeed, as the clock continues to tick on the need for ratification, Irish industry stakeholders have sounded the alarm that opportunities are already being missed as time moves on. As recently as December 2022, the Joint Committee on Enterprise, Trade and Employment advocated for a referendum to take place as soon as possible in light of these industry voices – who resonate all the louder now following German ratification. Nevertheless, any referendum must now take place against the backdrop of a cost of living crisis, a housing crisis and an electorate that may question the priority of ratification against the backdrop of these social issues. Be this as it may, the clock continues to tick and Europe’s unitary patent system is about to launch with Irish ratification pending and its ultimate participation looking uncertain. Surely it is time for the Irish Government to act and engage with the electorate on this matter sooner rather than later.
Kevin is an Assistant Professor in Private and Intellectual Property Law at the School of Law and Government, DCU. His research focusses on contemporary issues in European intellectual property law with a particular focus on intellectual property in the digital economy.
Photo Credits: European Union 2023
The views expressed in this blog reflect the position of the author and not necessarily that of the Brexit Institute Blog.