The European Commission would welcome a swift ratification of the Unified Patent Court Agreement by Germany. Commissioner Thierry Breton for the Internal Market has written this in answer to questions of MEP Patrick Breyer.

Breyer, member of the European Parliament for the German Pirate Party, asked the European Commission on 5 May 2020 to confirm that, due to the Brexit, Germany no longer has the right to ratify the UPCA. Breyer argued: “According to EU case law (Court of Justice of the European Union Case 22/70), Member States must not enter into agreements with third countries that affect EU rules or alter their scope. The UK is now considered a ‘third country’ under Article 216 of the Treaty on the Functioning of the European Union. While the EU may jointly assume obligations with the UK with respect to patent litigation, Member States no longer have a right to do so.” See also this earlier blogpost.

The European Commission however, doesn’t agree. In a letter of 15 July 2020, Thierry Breton wrote:

“The unitary patent will be an effective tool for businesses to protect their inventions on the European market at a competitive price, and the Unified Patent Court will offer the possibility for these businesses to enforce their patents at a European Union level, thereby enhancing legal certainty and reducing costs. It will further boost innovation in Europe, which will be key for the economic recovery following the COVID pandemic.

The Commission is of the view that the withdrawal of the United Kingdom from the European Union does not affect the ratification process of the Unified Patent Court Agreement in Germany. The United Kingdom signed and ratified the United Patent Court Agreement when it was still an EU Member State and in its capacity of Member State. The United Kingdom has ceased to be an EU Member State and, therefore, will not participate in the unitary patent system after the end of the transition period, given that participation in that system, including the Unified Patent Court Agreement, is only open to EU Member States.

The Commission would welcome a swift ratification of the Unified Patent Court Agreement by Germany.”

In the meantime, Breyer sent similar questions to the European Council as well on 8 June 2020, according to a report by SIB.it. These questions “are still awaiting an answer”.

Last March, the German Federal Constitutional Court declared void the German ratification of the UPCA on formal grounds, but soon after the German government declared it will repeat and complete the ratification process in the proper way as soon as possible. Some observers think this could be before the end of this year.


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6 comments

  1. Time for Boris to pull the plug and send its notification to the secretariat of the Council of the EU.

    That’s what Mr Tillman was suggesting in its previous interview.

  2. Talk about deja vu.

    In the UK, in the run up to BREXIT, HMG flying on auto-pilot, deposited its instrument of accession to the UPCA. Now, the EU Commission, another craft flying on auto-pilot, happily announces that it would “welcome” ratification of the UPCA by Germany.

    Sometimes the ship, sailing on its pre-set course, is so enormous that it takes years to change course. Somebody on the bridge has first to issue an authoritative command. Those underlings who are responsible for Press Releases have no authority to do anything else but state what course the ocean-going liner is proceeding along.

  3. Well, the only way to describe that response is that is uses carefully selected language to make statements that, whilst not strictly untrue, are highly misleading.

    Most misleading of all is the statement that “participation in that system, including the Unified Patent Court Agreement, is only open to EU Member States”. The trouble with this is that termination the UK’s membership of the EU does NOT automatically terminate the UK’s participation in the UPC Agreement. Whilst Mr Tilmann has (rather dubiously, in my opinion) suggested that a notification from the UK would serve to terminate its participation in the UPCA, not even he has suggested any plausible mechanism under the Vienna Convention for AUTOMATIC termination of the UK’s participation at the end of the transitional period.

    There has certainly not been any “notification” from the UK to the other Participating Member States of the UPCA. Thus, the problem with the UPCA remains that the UK will be (and, arguably, already is) a “third country” under EU law. In this sense, Mr Breton’s response simply does not address the legal issue underlying Mr Breyer’s question. Whilst extremely disappointing, this is hardly surprising … given the level of “political” support for the UPCA at the EU level.

    It remains to be seen whether national courts (such as the BVerfG) will be persuaded by such misleading responses. In my experience, courts tend not to be so easily misled. Also, given that Germany is proposing to ratify the UPCA by relying upon arguments that happen to work very nicely for their legal profession (by effectively dividing between Munich and Paris cases that would have gone to London), it remains to be seen whether the other Participating Member States (such as Italy) can be persuaded that this is acceptable. Whilst various carrots and sticks will no doubt be deployed, I doubt that it will be so easy to persuade all of the PMSs.

    Finally, I have my doubts about Jan’s suggestion that the UK should formally withdraw from the UPCA. Recent years have seen many highly dubious (and sometimes contradictory) legal theories wheeled out to keep the UPCA “alive”. In this respect, I have no doubt that Mr Tilmann would find some way of arguing the UK’s formal withdrawal would not prevent the UPCA from coming into force. No doubt he would also concoct some arguments for salvaging the associated Protocols (on Provisional Application and Privileges and Immunities), regardless of the fact that those explicitly call for ratification by the UK…

  4. The last thing the EU Commission wants is to re-open the can of worms that it created by not providing robust entry and exit of membership of the system, and by not really providing a flexible mechanism relating to the seat of the courts, instead relying, as usual, on a political compromise (one might be so unkind to say, “as usual”). The statement from a French commissioner is therefore totally unsurprising, given that France was the first country/major user of the UPC system to ratify. I do find that the comms unit adding on a Covid-crisis hanger as some sort of justification crass in the extreme, as it clearly indicates that the Commission will use anything it can to try and justify its position.

    It would be nice, for once, if the legal issues surrounding the UPC (and there are several) could actually be sorted out before the whole things gets ratified and dragged screaming into existence, but of course, that would take another umpteen years of negotiating and horsetrading…

  5. One can only agree with Concerned Observer when he says that Mr Breton “uses carefully selected language to make statements that, whilst not strictly untrue, are highly misleading”, I would simply add that Mr. Breton has a devil’s brass. One could also say that he takes his desires for reality.

    His reply is beyond comprehension. He denies the mere fact that UK has not yet informed the UPCA member states of its withdrawal of the UPCA. I doubt that the UK will do so in the next months.

    As the UPCA does not provide an exit clause, exit can only be done according to the Vienna Convention on the Law of Treaties (VLCT).

    Mr Tilmann has suggested that a declaration under Art 25(2) VLCT would be enough for UK to withdraw from the UPCA. Serious doubts are allowed, as Art 25(2) VLCT presupposes a provisional application of the UPCA. How is a provisional application possible when UK is still in it, but does not want to participate?

    In the explanatory notes to the new ratification bill, the Ministry of Justice speaks about a common declaration of the UPCA member states under Art 31(3) VLCT. In view of the arduous negotiation which lead to the split of the Central Division over three locations, and the desire of Italy to get the London Section, it borders on political naivety to think that the UPCA member states will agree on the workload of the London Section to be “provisionally” transferred to Paris and Munich.

    If the UK withdraws from the UPCA, Art 56(2) VLCT will apply. According to this article the UK would remain for 12 months member of the UPCA. How does Mr Breton envisage the functioning of the UPCA, with the London Section open when the UK is still in the UPCA, but does not want to participate?

    Contrary to what Jan Van Hoey thinks, Boris has no reason to pull the plug and send any notification to the EU secretariat. By keeping a foot within the UPCA and one foot outside, he is in the advantageous position of paralysing the whole UPCA and the entry in activity of the UPC.

    This gives the UK legal industry time to prepare a system which can enter in direct competition with the UPC. This has been mentioned a few time by members of the UK legal industry and has provoked panic among the supporters of the UPC. They want to be quicker as the Brits and are prepared to take any risk in this endeavour.

    A corrected, not to say a honest version, of Mr Breton’s statement could look like this:

    The UP will only be an effective tool for big businesses lobbying for instance via Business Europe to protect their inventions on the European market at a competitive price, as big business can save the fees they would need to pay if they wanted to validate in all member states of the UPCA, which beside a few exceptions is not the case as the average number of validations in UPCA member states is very modest.

    The UPC will only offer the possibility to these big businesses to enforce their patents at a European Union level with the help of large internationally active lawyers firms as only the big business are in a position to afford the corresponding lawyer fees. The UPC will not enhance legal certainty as it is simply adding another lawyer of case law onto existing case law as it will never be valid for all EU member states.

    The case law of the UPC could even be diverging from the case law of the boards of appeal of the EPO in matters of validity, but we do not care as we think that the role of the boards of appeal of the EPO will dwindle once the UPC has been established and its case law becomes the leading case law in Europe.

    That an opposition procedure before the EPO is way cheaper as a nullity procedure before the UPC is irrelevant as the big businesses we support can afford the costs of proceedings before the UPC. That SMEs would even have difficulty to foot the costs of procedures before the EPO is just an aside. They get some fee reductions and they should be happy with what we give them.

    It might at a glance help reducing costs on the official fee side, but certainly not on the lawyer’s fee side. It will not further boost innovation in Europe, as it opens a single door allowing a centralised attack on European industry as the number of patents granted to companies residing in UPCA member states is only a third of all the patents granted by the EPO. The prime beneficiaries of the UPC are the big businesses represented by Business Europe which have deep enough pockets to foot the bill. US trolls are eagerly waiting to launch frontal attacks on European Industry.

    It will be key for the economic recovery following the COVID pandemic only in the fertile imagination of those wanting to push the UPCA at any cost as it serves their direct interests. Any explanation about the beneficial effect of the UPCA for the recovery following the COVID pandemic has not been justified in the slightest, but we urge you to accept it because we say so.

    We have given up mentioning SMEs as beneficiaries of the UPC as it is a blatant lie which has been clearly demonstrated in academic studies. Now we want to brutally push the UPC through and we do not care about those who will be left behind.

    The Commission knows very well that the withdrawal of the United Kingdom from the European Union does necessarily affect the ratification process of the UPCA in Germany, but we prefer to ignore it as it is against the interest of those lobbying for the UPC, like Business Europe and internationally acting lawyer’s firms.

    The United Kingdom signed and ratified the United Patent Court Agreement when it was still an EU Member State and in its capacity of Member State. The United Kingdom has ceased to be an EU Member State and, therefore, will not participate in the unitary patent system after the end of the transition period, given that participation in that system, including the UPCA, is only open to EU Member States. This is the only point which is true in my statement.

    We prefer to carefully ignore the fate of the London Section of the Central Division that is the presence in a non-UPCA Member State of a jurisdiction refusing to accept supremacy of EU law. We simple hope that the other UPCA member states will swallow without any reaction the trick thought of by distinguished lawyers lobbying for the UPC that is to “provisionally” transfer the duties of the London Section to either Paris or Munich at our convenience.

    The Commission would welcome a swift ratification of the UPCA by Germany, as it would allow us to do what we wanted to do from the beginning that is to create a fait accompli which might be difficult to undo.

    That we take the risk to end up in a total legal mess is irrelevant as our only aim is to have something at hand for the benefit of big businesses represented by Business Europe and the lawyers supporting them.

    That the CJEU might be of different opinion is also irrelevant as we do what we think fit for our allies.

    To sum it up, Mr Patrick Breyer is a spoilsport who should have kept quiet and not bring up embarrassing questions. For this he deserves the reply he got. We do what we want and as a former German chancellor uttered once: basta!

    It might be worth mentioning that the former president of the EPO, Mr Breton and the actual president of Business Europe are good friends, the first two being even in the same French political party. That might explain a lot. It is certainly not forbidden to have good friends, but at this level its leaves a strong unpleasant feeling. No need to expand.

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