The government of Ireland has reaffirmed that the country will participate in the Unitary Patent system. A referendum will be held next year or in 2024. The Irish Department of Enterprise, Trade and Employment announced this in a report on its website yesterday.
The Tánaiste [the Irish vice-premier, Leo Varadkar] said: “A single Unitary Patent and Unified Patent Court is good for business and for SMEs. It will save money and time and give all parties more certainty. We will consider the other referenda we have coming up and see how best to fit this one in. It won’t be a standalone referendum, so it won’t be held this year anyway but could be next year or concurrent with the Local and European Elections in 2024. It’s important to prepare. I’m conscious that it will need a good public information campaign to explain its significance and that takes time, resources and planning.”
Ireland has been a signatory to the Unified Patent Court Agreement since 2013, but it is one of the few member states where a referendum is required before it can fully participate in the Unitary Patent project. Such referendum should have been held years ago, but was put on hold because of the Brexit vote and the constitutional complaints against the UPCA in Germany, which have delayed the start of the system by years.
Pressure
Since it became clear that all hurdles were out of the way, and particularly since the entry into force of the period of provisional application of the UPCA on 19 January 2022, lobby groups have pressured the Irish government to take action.
Following publication of the European Patent Office (EPO)’s Patent Index in April, Ibec, a group that represents Irish business, wrote: “The EPO Patent Index 2022 confirms that Europe is quickly becoming a global hub of IP activity. Demand for European patents is at record levels, and this is ahead of the commencement of the new unified patent system (including the Unitary Patent and the Unified Patent Court) in Europe. This will create a simpler and more efficient mechanism for obtaining and enforcing patents in Europe. It is truly pan-European, and it provides a degree of levelling up for smaller countries, allowing those with ambition to seize on the opportunities it presents. Competitor countries are already in the new patent system, so Ireland could fall further behind.
Ireland is uniquely positioned to establish itself on the international stage as a patent enforcement hotspot. Doing so would yield very substantial gains for the wider Irish economy. The urgency for Ireland to set out its timetable for its ratification of the Unified Patent Court Agreement has never been greater. It is on course to start later this year. Other countries are already positioning themselves as hubs for end-to-end IP activities, including enforcement. We must not miss out.”
Common law country
Last November, Irish law firm Matheson elaborated on the important role Ireland can play in the UP system now that the United Kingdom is no longer a member state: ‘Ireland’s position as an English-speaking, common law country may weigh heavily in its favour should the Irish Government decide to make a bid to host the life sciences section of the Central Division. Cases before the Central Division must be conducted in the language in which the patent concerned was granted, and 55-60% of patent specifications filed at the European Patent Office are written in English.
Additionally, Ireland’s common law status could act as a bridge to important third-country common law systems such as the United States and Australia. According to IBEC, securing a Dublin seat of the Central Division would increase Ireland’s GDP and national income, adding €314 million and €1.25 billion to the Irish economy annually. Irish-based firms in the chemical, pharmaceutical, medical technology and life science sectors could grow by a further 1% and 4% per annum.
This opportunity is also significant for Ireland to retain its reputation as a key global hub for life sciences (nine of the top ten pharmaceutical companies are located here), and attract major RD&I investment associated with increased patenting activities by Irish-based firms in the life sciences sector. However, in order to avail of these benefits, Ireland must proceed with ratifying the UPC Agreement without delay and actively campaign to secure the life sciences Central Division seat.’
Germany
Apparently, the Irish government is now seriously looking at options to join the Unitary Patent system as soon as possible. If the Irish people support ratification, a local Irish division will be established in Dublin. And as long as there is no clarity about the controversial relocation of the life sciences section of the central division, which was originally planned for London, who knows what is possible in this respect.
It is clear however that the Irish will be too late to join the 17 member states who will be part of the UP system from the very start. Germany is expected to deposit its instrument of ratification of the UPCA in the upcoming months, perhaps as soon as in July, triggering the entry into force of the UPCA – which means the court will open its doors – on the first day of the fourth month after this deposit. The German deposit will also mark the start of the sunrise period during which it will be possible to opt out existing European patents from the jurisdiction of the Court.
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There are some interesting statements presented as fact but for which there is ZERO evidence. In particular:
“A single Unitary Patent and Unified Patent Court is good for business and for SMEs”.
“It will save money and time and give all parties more certainty”.
Economic studies conducted by other countries (such as Poland) might be an interesting starting point for assessing the validity of the second statement. At the very least, a robust and independent economic study that is specific to Ireland is required to fill in the gaps.
Regarding the second statement, I think that previous threads on this blog make it clear that, for the average litigant, the UPC will NOT save money and will most certainly NOT give any parties more certainty. With regard to saving time, this is perhaps something that will be achieved in the long run – though likely not in the short term, especially given the huge range of challenges that actions launched before the UPC could face (eg challenges to the UPC’s jurisdiction).
In short: evidence is required, as otherwise the above-mentioned statements are at best nothing more than unfounded speculation (and, at worst, outright lies).
There’s a 60% discount for small and micro entities (see point 8 of the Rules on Court fees https://www.unified-patent-court.org/sites/default/files/agreed_and_final_r370_subject_to_legal_scrubbing_to_secretariat.p)
so a revocation action can cost as little as 8000 EUR for SMEs.
It will also make enforcement easier for Irish SMEs as they will be able to use a single Irish practitioner to take action in Ireland to enforce their rights in multiple important jurisdictions such as Germany, France, etc.
The discount is 40% (you pay 60%) and is not for SMEs, since medium sized entities pay 100% (M is for medium, not micro).
A study has been done in Ireland by IBEC – which represents SMEs on the benifits of the UPC to Irish business:
https://www.ibec.ie/-/media/documents/media-press-release/unified-patent-court—the-irish-business-case.pdf
This is just an advertisement leaflet, really.
When you check IBEC’s website/about, the term SME does not appear even once.
The European Association of SMEs in Europe includes only one member and this is ISME (Irish Small and Medium Enterprises Association): https://www.smeunited.eu/members?country=217
As they state on their website, ISME is the only independent business association for Irish SMEs (https://www.isme.ie/)
We need something more than an advertising leaflet in case of a nation-wide referendum on the UPC.
Interesting. However, I have a few comments.
Firstly, IBEC does not represent just SMEs. It also represents large businesses. From the outside, it is therefore difficult to assess the extent to which IBEC’s report represents a genuine (and representative) reflection of the views of SMEs in Ireland.
Secondly, IBEC’s report is long on buzzwords and aims / hopes / ambitions but extremely short on objective evidence. In particular, a robust economic impact assessment is missing. Indeed, the report makes no attempt to project the economic impact on SMEs in Ireland under different (UPC and non-UPC) scenarios.
A big problem with touting the UPC’s supposed benefits is an apparent assumption that SMEs will all want to validate and litigate in multiple jurisdictions. Such an assumption is completely unjustified, especially as many SMEs only operate in one jurisdiction (or, at most, a small number of jurisdictions). Also, the UK will be a relatively important market for many SMEs in Ireland … and the advent of the UPC will do nothing to reduce either validation or litigation costs in that territory.
Also, another big problem with the UPC will be its unpredictability (and perhaps instability), which will endure well beyond the short term. I have discussed reasons for this in previous threads relating to the UPC. Such unpredictability might, for example, stem from challenges to the UPC’s jurisdiction and/or uncertainties connected with references to the CJEU. All of this is likely to put an upwards pressure on what will already be enormous costs for any action before the UPC (which costs include not only the eye-watering court fees but also the costs for representation, and possibly also the costs for the other side). Bearing in mind the absence of a well-functioning litigation insurance market, litigation at the UPC will therefore be something to be studiously avoided for all but the bravest (or most unwary) of SMEs.
There is much more to say on this subject. For a start, I suggest that you also consider the points made by Dimitris Xenos below. There are good reasons why PL and CZ decided not to ratify. Whilst the situation may be different for Ireland, I think that the citizens of Ireland deserve to know PRECISELY how the UPC might affect both their economy (and, in particular, their SMEs) and their democracy.
“A single Unitary Patent and Unified Patent Court is good for business and for SMEs.”
It’s too expensive to litigate, 20.000EUR court fees for a revocation action to do business in its own country, how much is it in front of Irish courts?
It is abundantly clear that the Irish government has fallen for the arguments presented by the proponents of the UPC.
As barely 6% of patents are held by SMEs (less than 20% of the patents belong to SMEs in the whole EPC contracting states) and the like, and only 30% of the patents are held by companies having their seat in a UPCA contracting state, it is difficult to see how the UPC system is by itself “good for business and for SMEs.”
Not only Poland, but also the Czech Republic has decided not to ratify the UPC because it could become a danger for its industry.
Other smaller countries like Portugal and Slovenia have accepted to ratify as they were promised “arbitration centres”!
I would link the acceptation of the UPCA by Ireland with the fact it has thrown its hat in the ring for replacing London as seat for the section of the central division dealing with life sciences.
I have read some pleas along the line: Ireland is the last country left in the UPC with a common law system, so this section should come to Ireland.
Ireland’s European patenting activity depends on SMEs by 44.1% (Eurostat, Patent Statistics, 2006, p. 36).
As the EU Commission admitted in 2015 (SWD/2015/0202 final): the cost of patent litigation under the UPC ‘hits SMEs disproportionately hard’, p. 71.
I hope the Irish will do an impact assessment study to examine the real cost of the unitary patent system, as other countries, like Poland and Czechia did in the past, https://twitter.com/dimitris_xenos/status/1542211188016254981; http://uil.arhiv-spletisc.gov.si/uploads/media/UPP-Analiza-PL.pdf (with Microsoft Edge browser). .
In addition, they have to undertake a constitutional law enquiry, since for the first time in history, individuals and companies will be sued abroad and dragged into super expensive trials by alien courts operating completely outside democratic control.