Just days after the announcement of a gender equality referendum in Ireland, which will be held in November, representatives of Irish industry urged the government to hold a referendum on ratification of the Unified Patent Court Agreement on the same date. However, it seems likely this will not take place before the start of next year.
The Irish Business and Employers Confederation (IBEC) and the Association of Patent and Trade Mark Attorneys (APTMA) called for the UPCA referendum in an report published on 14 March 2023. Ireland is legally required to hold a referendum to ratify the UPCA.
‘Tríona Walshe, Chair of the UPC Committee of APTMA, outlined: “We urge Government to hold the necessary referendum this November to ensure that Irish businesses have the same strategic competitive advantage available under the new UPC system as those businesses in European countries which are already part of the new UPC system. We welcomed the support of Joint Oireachtas Committee on Enterprise, Trade and Employment for ‘expediting the timing of the referendum on this important issue’, which would provide the necessary certainty and for preparatory plans to be put in place.
“Companies clearly recognise the urgency at stake. Four out of five companies responding to a joint Ibec-APTMA survey stated that the referendum must take place 2023. Successful ratification will allow Ireland to fully participate in the new pan-European patent system. A new local division of the court is to be established in Dublin, which will support the further expansion of the patent-intensive sectors across the country, creating jobs, benefitting SMEs, and boosting Ireland’s innovation performance.”
Aidan Sweeney, Ibec Head of Enterprise & Regulatory Affairs said: “Last week’s announcement by Government to hold a referendum on gender equality in November 2023 opens the real possibility for the referendum on the Unified Patent Court to be run alongside it. May 2024 was the latest indicative date for the UPC referendum because at the time it was the only set polling date, and it wasn’t going to be run as a stand-alone issue. Now that another vote will be put to the people earlier, the referendum on the UPC must be included.
“Ireland stands to gain significantly through participating in this specialist pan-European court system. A conservative estimate of the value add to the Irish economy for our participation in the UPC could be worth as much as €1.663bn per annum. However, much of the opportunity is dependent on Ireland’s participation in a timely fashion. Establishing a well-run and attractive Local Division that is ready to go shortly after the UPC starts operating will be key to competing for patent litigation to be heard before the Irish-based court.”
Last year, the Irish government announced a referendum on the UPCA would be held in 2023 or 2024.
The call for a UPCA referendum was discussed last week in Irish Parliament, however, and it became clear there is little chance the referendum will be held this year. In answer to a question of Fine Gael politician David Stanton, deputy prime minister Micheál Martin said: ‘I agree with Deputy Stanton that it would make sense to passing legislation and then hold a referendum on the Unified Patent Court. I do not have the exact timelines in respect of this matter. I am always cautious about holding two or three referendums on the same day. (…) We are holding referendums in November, but there is no reason that would could not hold a referendum on this matter in early 2024. We could just take it on, notwithstanding concerns about whether it would pass or whether people understand the complexities relating to the Unified Patent Court.’
Last year, Ibec and APTMA published a survey of Irish business about the Unitary Patent System, which included the following conclusions:
• Over three quarters (78%) of companies indicated that they were likely to increase their patenting activity due to Ireland’s participation in the Unitary Patent and the Unified Patent Court.
• Approximately 83% small and micro enterprises said they were very likely to increase their patenting activity on the back of the new system.
• 80% of respondents stated that the referendum ratifying the UPC Agreement should take place in 2023.
• Activities to raise awareness of, and to educate companies across the Irish enterprise base on, the new Unitary Patent System will be required.
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20.000EUR of court fees for small irish companies, leave business to big business.
Guess how much it costs to appear in Court in Ireland.
Can we see the questions that were posed in the Ibec / APTMA survey, as well as the explanatory material supporting the survey (ie the material describing the Unitary Patent Package, including its pros and cons)?
Personally, I find it surprising that many “small and micro enterprises” would have a view on patenting, let alone an educated view on the potential impact of an international court on their own patenting activities. On the other hand, I wonder what the “83% small and micro enterprises” might think about the potential impact of the UPC upon their freedom to operate. Unless and until the Irish government conducts its own economic analysis, we shall never know.
@LightBlue (March 15, 2023 at 11:22 am)
Apparently, you are of the view that “the Brexit treaty could be considered an international treaty relating to Union law”.
All fine and well, but can you explain how this is relevant to the AC’s powers under Article 87 UPCA?
As I understand it, that Article provides the AC with the power to amend the UPCA to bring it into line with “an international treaty relating to patents or Union law”. This revision power is limited to aligning the UPCA with EITHER:
(a) an international treaty relating to patents; OR
(b) Union law.
An “international treaty relating to Union law” is NEITHER of these things, and so hence not relevant to Article 87 UPCA.
Regardless, at no point does the UK’s Withdrawal Agreement mention the UPC Agreement or any element of the Unitary Patent Package. There is also no mention of Milan or of the division of competences between the different seats of the UPC’s central division. In short, there is nothing in that Agreement with which the UPCA can be aligned.
Finally, even if (for the sake of argument) one were to accept that removing London as a seat of the central division is required to “align” the UPCA with EU law, this still leaves some problems. Firstly, as there is no provisional application of Article 87, we must conclude that the UPCA will initially “enter into force” in a form that contravenes EU law. Secondly, replacing London with a location in a UPCA Contracting Member State has NOTHING to do with the division of competences between the different seats of the UPC’s central division.
We are therefore left with a UPCA that will be broken from the start and that cannot (lawfully) be “fixed” in the manner desired by France and Germany.
If you believe that there are sound, legal reasons for disputing these conclusions, then perhaps you might care to answer the questions that I previously posed:
What, if any, are the limits of the (revision) powers of the AC?
In theory, could the AC amend the UPC Agreement to take it out of (complete) alignment with EU law?
If not, what prevents the AC from doing this? Also, why is the AC not also prevented from making other amendments that do not find basis in “an international treaty relating to patents or Union law”?
@Light Blue (March 15, 2023 at 11:22 am)
It can, at a pinch, be argued that the “UK’s Withdrawal Agreement could be considered an international treaty relating to Union law”. The withdrawal of the UK from the EU has a legal basis, i.e. Art 50 TEU.
However, as Concerned Observer has noted, this does not give any power to the AC to amend the UPCA under Art 87(2) UPCA.
Besides the problems further brought forward by Concerned Observer, there is another problem with the UPCA: it does not contain any exit or denunciation clause. This is for instance a major difference between the UPCA and the EPC, as the latter contains a denunciation clause, Art 174 EPC, and even an exclusion clause should a member state not ratify an amendment of the EPC, Art 172(4) EPC.
Nothing of this kind has been foreseen in the UPCA. As all member states of the UPCA have ratified the Vienna Convention on the Law of treaties (VCLT) the latter applies.
Irrespective of the fact that some interpretation was, at a time, foreseen under Art 31 VCLT, this has never happened, and it the depository which decided that the PPA had entered into force. I have never seen a legal basis for this decision. The Secretariat of the Commission, which acts as depository, has never been given the task to interpret the UPCA, cf. Art 84(3). in view of the ´crystal clear statement in Art 7(2) UPCA, there is also nothing to interpret.
As the UPCA does not contain any exit clause, Art 65, 67 and 68 VCLT apply. It thus doubtful whether the UK could unilaterally decide to withdraw its ratification. The withdrawal was by a “Note Verbale”, whereas Art 67(1) VCLT provides that the notification of withdrawal under Art 65(1) must be made in writing. A note verbale is not a written submission. The Commons and the House of Lords have been informed, but there was no vote about the withdrawal of the ratification.
Irrespective of the objections raised by Concerned observer, it is thus more than doubtful that the AC of the UPC has, at all, the legal competence to decide where the third section of the central division will be transferred to, and also what the distribution of work between the three sections, enshrined in Annex II of the UPCA will be.
For all those reasons, the legitimacy of a revision, under Art 87(2) UPCA, of Art 7(2) UPCA by the AC is highly debatable under Art 6(1) ECHR.
That a new local division of the court to be established in Dublin, which will support the further expansion of the patent-intensive sectors across the country, creating jobs, benefitting SMEs, and boosting Ireland’s innovation performance, seems more wishful thinking than facing the hard reality of the UPC.
With a comparable population, Denmark has filed 2 642 applications in 2021 and Ireland 956 (Official figures of the EPO). No need to dwell on the possible development.
In every conference about the UPC there are some “representatives” of SMEs telling how wonderful the UPC will be for them. Whether those people are not mere puppets in the hand of large industries and internationally acting legal firms, remains to be seen. 75% of the patents are filed by large industries and only 20% are filed by SMEs; this puts the picture straight.
Even the strongest supporters/proponents of the UPC have given up the fallacy that the UPC has been set up for the benefit of SMEs. SMEs have been a very convenient fig leaf for lobbyists to hide behind it.
As the time limits foreseen in procedures before the UPC are extremely short, it means that any representative will work under pressure. Further to the already high court fees, there will be higher fees for representation as it is an international procedure, but also extra fees due to the time pressure. To claim that all those costs will be within the financial reach of SMEs can only elicit a faint smile.
There are yet more factors that mean that the UPC will push up costs for (potential) litigants. The most prominent of these is legal uncertainty.
It is well known that changes bringing legal uncertainty also generate fee-earning opportunities for legal advisors. In this respect, the number of legal uncertainties associated with the UPC are far higher than those for any other new legal regime that I have witnessed over my entire career. Either this is extremely bad luck, extremely bad drafting, a deliberate policy or a combination of any two or more of those options. Personally, I think that luck has had nothing to do with it.
I would claim that luck will be on the side of those who set up the system, by making it as complicated as possible.
We should not forget that the rules of procedure have been concocted by a small group of people having co-opted each other!
Just have a look at the language regulations. It is a prime example, although the UPC was meant to simplify the language problems. The contrary is true!
I would add that we are in presence of a series of lucky coincidences, whereby luck means in the end more money for the benefit of some having already deep pockets.
On a more general legal level, the UPC will simply add a further level of case law which simply means more uncertainty!
The UP/UPC system is a prime example of what lobbyism can achieve. Politicians of any colour have simply be lured with the promise that European industry, and especially European SMEs will benefit from the system.
Two figures
– 75% of applications are filed by the big industries, only 25% by SMEs and 5% by universities
– barely a third of the patents granted by the EPO are held by owners residing or having their seat in a UPCA member state! Why do you think the USA wanted the UK to stay in the system in spite of Brexit?
All non-European patent holders are on top offered a single door to attack European patent owners!
It is easy to draw your own conclusions about the real beneficiaries!
If Ireland would think it through, it should come to the the conclusion that the UP/UPC system is as useful for their industry as it would be for Poland and the Czech Republic. Why do you think that they will not ratify? Portugal and Slovenia have ratified because an arbitration center has been promised to them. Do we really need two arbitration centres in Europe?
UPC website just vapourized most of its content:
https://www.stjerna.de/pcupc-documents/?lang=en
Maybe they are too afraid that someone finds out that the rules of the court have been written by the Patent Industry for its own profit.
I would not say that the rules of the court have been written by the Patent Industry for its own profit. The wording Patent Industry is not clear enough.
They have been written by a self-co-opted group of lawyers recruited mainly from large internationally lawyer firms specialised in patent litigation. That they want to see a return on investment goes without saying. Some national judges participated as well. Certain of those are now appointed as judges at the UPC.
The British legal profession was certainly disappointed by the Brexit, as it contributed to a large extent to the rules of procedure.
One document which has apparently disappeared is the announcement by the chair of the preparatory committee of a declaration under Art 31 VCLT about the interpretation of the PAP following the Brexit.
I refer here to the Report of the Preparatory Committee meeting 27 October 2021:
“The Chairman (Mr Ramsay, now registrar of the UPC) presented a draft Declaration on the authentic interpretation of Art. 3 of the PAP-Protocol*, following the United Kingdom’s withdrawal from the Unitary Patent System. In line with public international law, this Declaration will confirm the entry into force of the PAP-Protocol, once the required 13 Member States become bound by said Protocol, recognizing that Art. 3 of the PAP-Protocol is to be interpreted as mirroring Art. 89 of the UPCA**. The delegations supported the approach proposed by the Chairman, hence giving him the mandate to organize a signing ceremony of the Declaration, foreseen in the margins of a future COREPER meeting.”
* “including Germany, France and the United Kingdom”
** “the three Member States in which the highest number of European patents had effect”
Such a declaration has never been thought for and has neither been signed nor published.
On the contrary, the depository declared on its volition that that the PPA and the PPI were in force.
This seems to be an aspect which should better disappear.