Cable signs Unified Patent Court agreement
UK Business Secretary Vince Cable signed the agreement that establishes the Unified Patent Court (UPC) on Tuesday.
The UP, which the European Parliament approved in December 2012, will harmonise patent laws across the 25 signatory states of the European Union.
It is hoped the UP will help small and medium-sized enterprises by reducing the cost of patent protection by up to 80 percent, as businesses will register their patents just once, rather than in every EU country.
However, Alan Johnson, a partner from law firm Bristows in London, said the cost of renewing existing patents, which has not yet been announced, will be a concern for many companies.
Observing the uncertain future of the UK’s position in the EU, he said: “If an EU referendum were to take place in the UK and the vote be to withdrawn from the EU, we could waste tens or even hundreds of millions setting up a system from which we might subsequently be forced to withdraw.”
He added that the UP system could be risky for businesses locked in patent infringement litigation with non-practising entities (NPEs) outside their home state, adding: “Any division in any country can grant a pan-European injunction.”
He said that the UP would particularly affect the pharmaceuticals, and technology, media and telecommunications (TMT) industries.
“Pharma will be especially concerned at a single decision potentially affecting its patents covering many jurisdictions,” he said.
“TMT will be prone to a big increase in litigation by patent-holding companies.”
David Knight, partner at Field Fisher Waterhouse LLP in London, agreed and likened the situation to putting “all eggs in one basket”, adding that smaller businesses do not necessarily desire patent protection in all EU member states.
He said the establishment of the UP will bring the size of the European IP market closer to the larger US market so an increase in the number of cases brought by NPEs will be expected.
"The uncertainties of any new system and/or the possibility that some courts may become very pro-patentee (as happened in the US) also could encourage NPE litigation," he said.
The UP agreement must be ratified by 13 countries for it to enter into force.
Poland has already confirmed that it will not sign the agreement until it is sure that the UP system will not harm its economy. European Commissioner Michel Barnier said in a conference on Monday that Bulgaria will not sign until it has completed the required internal administrative procedures. Poland and Spain did not sign the agreement. Bulgaria is expected to sign in the coming days.
The Unified Patent Court is due to come into force in January 2014.
