German legislation for UPC ratification comes into force
The German legislation to ratify the European Unified Patent Court (UPC) Agreement has come into force following the failure of interim injunction applications in two complaints that had previously blocked it.
The legislation was published in the Federal Law Gazette on Thursday, August 12, and took effect a day later.
The UPC project has faced significant hurdles in recent years, particularly after the UK confirmed it would no longer participate in the wake of Brexit.
In November 2020, the Bundestag approved a ratification bill on the UPC Agreement, after the German government submitted new draft legislation to ratify it.
Failure of constitutional complaints
But in January 2021, it looked as if the project could stall again when Düsseldorf-based lawyer Ingve Stjerna filed one of two complaints against the proposed law, following the partial success of his first complaint filed in 2017. The Foundation for a Free Information Infrastructure lodged the other complaint.
However, in July, Germany’s Federal Constitutional Court held that the complaints were inadmissible as the filings had failed to sufficiently assert and substantiate a possible violation of fundamental rights.
German ratification of the UPC Agreement and the conclusion of the Protocol for its Provisional Application (PPA) phase are required for the long awaited delivery of the UPC.
Alongside Germany's approval, the consent of two other countries is necessary to trigger the UPC’s PPA phase.
According to a report by law firm Bristows, two other countries have indicated that they are in a position to consent to the PPA relatively quickly.
Andy Bowler, partner at Bristows and joint head of the firm’s patent litigation department, said: “The German legislation, following the constitutional court’s previous decision not to impose an interim stay on the German parliament’s ratification of the UPC Agreement, means that the new court can now start navigating the final necessary stages before it comes into existence.”
But he warned: “There is still a fair bit of work to do, such as diplomatic efforts to have the PPA ratified by at least two more member states, the recruiting and training of around 100 judges, and finalising the computerised filing system. This means that the court might be open for business in quarter one of 2023 but it could well be later than that.”
Deposit of instrument of ratification
A key issue is that although Germany can ratify the UPC Agreement, it cannot “deposit” the instrument of ratification with the General Secretariat of the Council of the EU until some point during the PPA phase when it is clear when the court will be ready to open.
The UPC Agreement will enter into force on the first day of the fourth month after Germany has deposited the instrument of ratification.
Rudolf Teschemacher, senior consultant at law firm Bardehle Pagenberg, explained: “The German government is now empowered to deposit its instrument of ratification of the UPC Agreement and the PPA. Germany is expected not to deposit its instrument of ratification until it is foreseeable that the preparatory work can be terminated in good time.”
During the PPA phase, the final preparations for the establishment of the court—including the recruitment of judges—can take place.
It is expected that this phase is likely to last at least six to eight months, while the UPC preparatory committee has confirmed that it will release a timeline and plan for the start of the phase and its delivery.
Problems remain
Commenting on these preparations, Teschemacher pointed out that the committee still faced significant challenges around judicial appointments. “One of the main tasks is the selection and the appointment of the future judges of the UPC. The original application period dates back to 2014 and the preparatory committee launched a top-up campaign in 2019. It remains to be seen whether these preparations provided an appropriate basis for the appointments to be made.”
The training of the future judges also pose problems, according to Teschemacher. “The [training] programmes stopped soon after they started in 2014. Since then, not much has been heard of any further activities.”
According to Leythem Wall, president of the European Patent Litigators Association and director at Oxon IP, Brexit could also present potential future delays as the London section of the UPC Central Division was originally designated to handle pharmaceutical, chemical and medical device cases.
“There needs to be a decision taken as to whether there will be a replacement city, eg, The Hague, Brussels or Milan, or whether cases that would have been handled in London will instead be distributed between the central divisions in Paris and Munich,” he explained. “Some commentators speculate that this means that the UPC Agreement will need to be amended, and this will require another round of signatures from all the countries—which could mean further delays.”
However, Wouter Pors, partner at Bird & Bird, noted that while delays may be likely, it is “now certain” the UPC will become functional by the end of 2022 or early 2023 and warned that this will present a significant workload for IP lawyers.
“It’s good news that the German ratification act was published and came into force on Friday, August 13, because this means that there are no further obstacles for the UPC Agreement," he said, adding: “Companies really need to start preparing. For instance, the options to enforce a patent against indirect infringement will increase, since the UPC member states are [defined as] a single territory under the agreement.”
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