The jurisprudence of the Court of Justice for the European Union is not excluding the possibility to allow a non-EU Member State forming part of the UPCA. This is one of the conclusions in ‘EU Patent and Brexit’, a research paper which was requested by the European Parliament’s Committee on Legal Affairs and commissioned, overseen and published by the Policy Department for Citizens’ Rights and Constitutional Affairs. The report was published on 5 November 2019.
As the abstract clarifies: ‘This In-depth Analysis resumes the possible scenarios concerning several Intellectual Property provisions of EU and international law in the event of a withdrawal of the United Kingdom with or without a proper withdrawal agreement. It tries to clarify the question how Brexit may affect the entry into force of the new European Patent with Unitary effect (EPUE), especially, if the Unified Patent Court Agreement (UPCA) can enter into force, even in case the UK has withdrawn from the EU. What would be the necessary steps to be taken by the EU in order to ensure the functioning of the future European Unitary patent and in case the UPC Agreement would have to be revised because of Brexit.’
The responsible research administrator is Dr Udo BUX of the EP’s Policy Department for Citizens’ Rights and Constitutional Affairs, although it is not clear whether he is also the author of the report. After setting out the history and components of the Unitary Patent system, the report’s third chapter discusses the question: ‘Can the UK become and stay a member of the UPC?’ and explains the position of the UK Government, the European Council, the European Parliament and the CJEU.
Among others the report tells: ‘The position of the European Council and the contracting Member States of the UPCA on the possibility to cooperate with the UK in the framework of the UPCA is not known. One can only guess that the willingness of the Heads of State and Government will depend on the outcome of the negotiations on the Brexit. (…)
An argument against the legal possibility for the UK to be a Member of the UPCA could be the purpose of it: the 1st recital of the UPCA makes clear that the UPCA is an instrument for the benefit of the Internal Market: “CONSIDERING that cooperation amongst the Member States of the European Union in the field of patents contributes significantly to the integration process in Europe, in particular to the establishment of an internal market within the European Union characterised by the free movement of goods and services and the creation of a system ensuring that competition in the internal market is not distorted;” (…) According to Recital 14 UPCA membership seems to be limited to EU countries. Also, the 2012 Patent package was a purely EU project, for the benefit of EU Member States and of the Internal Market and originally under the TFEU (although the UPCA happened to become an international agreement).’
About the point of view of the CJEU, particularly Opinion 1/09, the report states: ‘It is partly read so that membership of the new system is open only to EU Member States. On the other hand, there is an increase in the number of votes that want to show a right-dogmatic way of facilitating the participation of the United Kingdom (and possibly other non-EU countries in the future as well).’
The report concludes: ‘There are various scenarios for the UPCA in the case of a Brexit. It is clear that the UPCA would come in force immediately, once Germany has ratified. (…) It is also understood that a solution for the London section has to be found in case of the UK has left the UPCA – before or after its entry into force.
In case that the UK would wish to stay inside the UPCA, this pledge would have to be respected by EU Member States. On the other hand it is highly questionable that the UK itself would accept the arrangements of Article 20 and Article 21 of the UPCA which foresee the primacy of EU Law and its application being ensured by the possibility of preliminary rulings pursuant to Art. 267 TFEU, as the end of the jurisdiction of the CJEU in the UK was one of the main intentions of the whole Brexit process.
Maintaining the UK within the UPCA would need innovative legal solutions, as the UPC is an international court applying EU law – and the reason for Brexit was all about not applying EU law any more. All EU actors are of the opinion that the CJEU would have the final say about interpretation of existing EU Law, that the primacy of EU law has to be respected and that the CJEU is the ultimate guardian of EU intellectual property law. On the other hand, the jurisprudence of the CJEU is not expressly excluding the possibility to allow a non-EU Member State forming part of the UPCA.’
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Astonishing! Despite representing by far the most lightweight analysis that I have ever seen of the impact of Brexit upon the UPC, the report is presented as an “in-depth” analysis.
It adds nothing to the discussion to state that “the jurisprudence of the CJEU is not EXPRESSLY excluding the possibility to allow a non-EU Member State forming part of the UPCA”. This merely reflects the fact that the CJEU has never been asked to opine on that point. Therefore, at a very minimum, any serious legal analysis would have gone on to consider whether there are any other reasons (such as the sections of Opinion 1/09 dedicated to discussion of the Principle of Sincere Cooperation) to interpret Opinion 1/09 as IMPLICITLY excluding the participation of a non-EU Member State.
The absence of any such discussion means that a more appropriate description of the report is a representation of currently prevailing POLITICAL (as opposed to legal) views within the European Parliament. Nevertheless, I have no doubt that the conclusions in the report will be relied upon by supporters of the UPC as representing some sort of conclusive evidence of the absence of barriers to the UK’s continued participation. Forgive me if I remain unconvinced.
The “paper” issued by the Policy Department for Citizens’ Rights and Constitutional Affairs is quite interesting, but it does not really correspond to historical facts, and some of the statements it contains are simply incorrect.
The story of a Unitary Patent started quite early after the creation of what was then called the Common Market. As patents are monopolies, they can hinder free circulation of goods between member states. There exist a few drafts of a European Patent Convention, but at the time it was only opened to members of the CM. Some problems were apparent: forum shopping, language, important countries in IP were not at the time member of the CM.
In the meantime, the CJEU had dealt with the fractioning of the CM with patents with the famous exhaustion of patents rights within the CM. And the CM, and later the EU lived happily with this. There was, and there is still, no pressing need for an EU unitary patent even if from a theoretical point of view it could prima facie appear interesting.
It is under the pressure of the PCT, that the negotiations were reopened and it ended up with two conventions. The first one, the Munich EPC aimed at a centralised grant procedure open to members and non-members of the CM. The second one, the Luxemburg Convention of 1975, aimed at exercising the rights stemming from a patent granted by the EPO within the EU. This Convention was dead-borne as the problems of forum shopping and of language were not solved.
One wonders why in 2009, “it had become clear that a whatsoever European Patents Court would have to be based on an agreement outside EU regulations, and rather require the ratification by the Member States and take place in full compliance with their respective constitutional requirements”. What was meant here was EPLA, and since EPLA wanted to embrace non-EU members, the only possibility was to “require the ratification by the Member States”.
EPLA was thus the continuation of the EPC, including non EU Member States, but in its famous Opinion 1/09, the CJEU considered that it does not fit in the EU legal system.
Whether the UPCA fits in the EU legal system has never been decided as the draft UPCA was never submitted to the CJEU for opinion. One wonders why? We just have the assurance of its promoters that it does, but this seems a bit short of convincing other people.
The “paper” gives an interesting insight. Without UK, the “three Member States in which the highest number of European patents have effect would be Germany, France and the Netherlands”, and not Italy. What about Italy’s claim for Milan instead of London?
It is also surprising that the European Parliament had to rely on data from Patently.com. Why was it not possible to obtain the data from EPO?
The “paper” seems totally mistaken when it states that “Power of appeal decisions is taken away from EPO and it’s Boards of Appeal (see above 1.) which loses its quasi monopoly, as it will be a Court and finally the Court of Appeal which will review the decisions of the EPO (objections to granted patents. or refusing an application). I have up to now never seen anything so beside the point. I do not expect to find such statements in an “in-depth” analysis.
It is clear that the proponents of the UPC want the number of oppositions to decline, so as to give precedence to the UPC, but in view of alone of the difference in fees, it might not be as simple as that. Here I am thinking of SME’s. With a proper staffing level the Boards of Appeal could deal more swiftly with appeals, especially in opposition. No need to say why the staffing level of the Boards is so appalling…..
The EPO boards of Appeal will conserve their monopoly for deciding refusals of applications and the maintenance or not of patents after an opposition.
The only thing which is certain, is that we will end up with a conflict of case law, as both the Boards of Appeal of the EPO and the UPC have a say when it comes to appreciate the validity of a patent after grant. If an opposition is filed within 9 months of the grant, then the EPO is competent, after this it will be the UPCA. If a declaration of non-infringement is requested before the EPC and at the same time an opposition is pending or filed, the UPC can stay the proceedings, but is not obliged to do so. It could well be that the UPC decides on validity in a way contrary to the case law of the Enlarged Board. What is then left with the “certainty” so important to the managers of the EPO?
Compared with this problem, the problems linked with Brexit are nearly irrelevant. The only thing one can agree with the “paper” is that once the UK has left the EU, it cannot participate any longer in the UPC, unless it accepts the primacy of EU law and decisions taken by the CJEU as last instance. Has the drafter asked the UK PMs opinion on this point?
I would agree that the “paper” mentions that Opinion 1/09 “is partly read so that membership of the new system is open only to EU Member States. On the other hand, there is an increase in the number of votes that want to show a right-dogmatic way of facilitating the participation of the United Kingdom (and possibly other non-EU countries in the future as well)”, but this is not what the paper actually says.
When properly reading the “paper”, I fail to read in Point 3.4 that the “CJEU Opinion 1/09 doesn’t exclude non-EU member states from UPC”. I rather read “Although the CJEU did not expressly say that the UPCA may only be lawfully entered into between EU Member States ….and its consideration 14 now provides explicitly: “…this Agreement should be open to accession by any Member State of the European Union…. By making that clear, the contracting states might have removed any legal doubts concerning the compatibility of the Agreement with the TEU and TFEU (see also Art. 2 lit b) of the Agreement=EPLA).” What else has to be said?
That according to Annex 1 of the “paper”, there are around 520 000 EPO patents from EU origin ranked by number currently in force is an interesting figure. Another also interesting figure would have been the number of EPO patents from non-EU origin ranked by number currently in force. When one sees that, according to official figures of the EPO, patents granted by the EPO to EU members are barely a third of all the patents granted by the EPO, one wonders how the UP and the UPCA is benefiting to European Industry in general and European SMEs in particular.
The drafter of the present blog is for sure a strong proponent of the continued participation of UK in the UPC, for whatever reason, but this is not a reason to make statements which are only in favour of its point of view. A more objective reading of the “paper” would be welcomed. After all the “paper” has made clear that there are many legal hurdles to the post Brexit participation of UK in the UPC. It is too easy to merely claim that “if there is will, there is a way” to quote another heavy proponent of the UPC.
Techrights: FINGERS OFF!!! Directly or indirectly!