Unified Patent Court Inching Closer to Realization

On April 26, 2018, which was designated World Intellectual Property Day, the United Kingdom ratified the Unified Patent Court (UPC) Agreement. The UPC is a single patent court that will have jurisdiction in all European Union member states that ratify the UPC Agreement, thereby enabling parties in a patent dispute to obtain a single judgment that addresses cross-border infringement activities.

The U.K.’s Enthusiastic Ratification

Although there is still some doubt as to whether the UPC will become effective prior to Brexit — or if the U.K. will be permitted to remain in the UPC system after Brexit — this latest move makes it clear that the U.K. is resolved to remain a participant in the UPC post-Brexit. In making this announcement, U.K. Minister for Intellectual Property Sam Gyimah stated that “[r]atification of this important Agreement demonstrates that internationally, as well as at home, the U.K. is committed to strong intellectual property protections. This will help to foster innovation and creativity, bringing our modern and ambitious Industrial Strategy to life.”    

Post-Brexit Complications

While it is generally believed that EU countries also want the U.K. to remain involved in the UPC Agreement, the timing of the UPC’s effective date could complicate that vision. Moreover, regardless of when the UPC Agreement becomes effective—before or after Brexit—the Court of Justice of the EU (CJEU) will likely decide at some time in the future whether it is lawful for the U.K. to remain in the UPC.  Such a decision may hinge upon whether the U.K. and the UPC Agreement acknowledge the primacy of EU law with respect to patents.

Germany Still Weighing Constitutional Challenge

The U.K.’s ratification now shifts the burden to Germany to complete the UPC ratification process, because Germany is the only remaining mandatory member state required to do so. The U.K., Germany and France are the three mandatory member states, and France signed onto the Agreement before the U.K.’s ratification, leaving the fate of the UPC in Germany’s hands.  

But before Germany can ratify, it must resolve a pending constitutional challenge to the UPC brought in the German Federal Constitutional Court. The challenge raises multiple constitutional questions, for example: does the administration of the UPC comply with the independence of the UPC judges? And would member states’ deference to such a court be incompatible with EU law? The German constitutional complaint is anticipated to be considered later this year. If the case is dismissed at that stage, the UPC can be expected to commence in 2019. However, it is possible that the German Federal Constitutional Court will decide that further review by it or the CJEU is necessary. In that case, a significant further delay is possible, thereby further complicating the U.K.’s post-Brexit involvement. Nevertheless, in the meantime, the U.K. appears to be moving forward in anticipation of being a permanent member state of the UPC.