The Unified Patent Court has formally announced that, for the time being, competencies which were originally assigned to the London seat of the UPC central division, will be divided between Munich and Paris. Remarkably, there is no mention of Milan as third seat of the central division.
Only two months ago, a spokesperson for the German Ministry of Justice declared that trilateral talks about redistribution of the competencies between Paris, Munich and Milan were being held and that a decision was expected shortly.
As the UPC writes today: ‘In its meeting of 8 May 2023, the Presidium of the Unified Patent Court decided that, as from 1 June 2023, actions pending before the central division related to patents in IPC section (A) shall be assigned to the seat in Paris while actions related to patents in IPC section (C) shall be assigned to the section in Munich.
The wording of Article 7(2) of the UPC Agreement provides that actions pending before the central division related to these two IPC sections shall be assigned to a section to be located in London. However, after the United Kingdom withdrew its ratification of the Agreement on a Unified Patent Court on 20 July 2020, the Preparatory Committee interpreted Article 7(2) of the UPCA and Annex II thereof, with regard to the allocation of cases to a section of the Central Division in London as having no effect and that the competence for these cases can be dealt with provisionally until a final decision is taken on the creation of another section of the central division. Having also taken into consideration that the Administrative Committee has not yet reached such a final decision and the Agreement will enter into force on 1 June 2023, the Presidium has exercised its managerial power under Article 15(3) of the Statute of the Unified Patent Court in the aforementioned sense.’
Apparently the negotiations over the third seat of the central division have turned out to be more difficult than expected. Since March, various sources have reported that there was an agreement that Milan could replace London, but only if it was willing to leave a considerable share of the London competencies to Munich and Paris. Munich claimed the chemistry and metallurgy cases and Paris wanted jurisdiction over pharmaceutical patents with SPCs – at least 90% of the drugs that have been successful on the market.
In Italy however, restricting the competencies of a Milan central division seat was called unacceptable. Industry and legal representatives sent an open letter to MP Giancarlo Giorgetti, the Italian minister of economy and finance, about the issue. And late April, Minister of justice Carlo Nordio said Italy would not give in. According to a sib.it report, he declared that the resistance ‘against transferring to Milan all the competencies originally assigned to London is strong (…)’, but ‘that he and his team intend to stand their ground just as vigorously.’
The UPC’s announcement of today clearly shows that it has been impossible so far to find a solution which is acceptable to all parties. So for now actions related to patents in the ‘London’ IPC sections (A – human necessities) and (C – chemistry and metallurgy) will go to Paris and Munich, respectively.
________________________
To make sure you do not miss out on regular updates from the Kluwer Patent Blog, please subscribe here.
“the Presidium has exercised its managerial power under Article 15(3) of the Statute of the Unified Patent Court”
The german president is the new law maker.
Just a few questions for the PUP (Pro-UPC Party):
1. “the Preparatory Committee interpreted Article 7(2) of the UPCA and Annex II thereof”: under which legal basis can the Preparatory Committee interpret the UPCA?
2. “the allocation of cases to a section of the Central Division in London as having no effect”: under which legal basis has this allocation no effect? Brexit cannot be a reason, since the EU could still have (and it has) diplomatic offices in London.
3. “the competence for these cases can be dealt with provisionally”: under which legal basis can the competences of the UPC sections be provisionally changed?
4. “the Presidium has exercised its managerial power”: is the Presidium legally valid? The PPA cannot be in force since the UK withdrew its ratification.
5. “the Presidium has exercised its managerial power under Article 15(3) of the Statute”: does this “managerial power” include decisions on the interpretation of the UPCA?
Ouch! The fact that it has proven impossible for the Participating Member States to reach agreement on a new location illustrates precisely why those Member States never gave, nor ever intended to give, the AC the power to pick a new location for a branch of the central division, or to reallocate cases from one branch to another (or others).
It will be interesting to see how this plays out in court. This is because I doubt that I will be alone in viewing the legal basis for the reallocation of cases as being conspicuous by its absence.
Hard to see the basis for this in Art. 15(3) of the Statute:
“3. The Presidium shall be responsible for the management of the Court and shall in particular:
(a) draw up proposals for the amendment of the Rules of Procedure in accordance with Article 41 of the
Agreement and proposals regarding the Financial Regulations of the Court;
(b) prepare the annual budget, the annual accounts and the annual report of the Court and submit them to
the Budget Committee;
(c) establish the guidelines for the training programme for judges and supervise the implementation thereof;
(d) take decisions on the appointment and removal of the Registrar and the Deputy-Registrar;
(e) lay down the rules governing the Registry including the sub-registries;
(f) give an opinion in accordance with Article 83(5) of the Agreement.”
If a party challenges the allocation of a case to Paris/Munich (and lets face it, someone will), it will surely also raise the question of whether the judges of the Presidium have to be recused from hearing that case. Could get messy.
(g) the President can invent new rules, and decide whatever he wants, the italians liking it or not, this Court is about inventions after all;
Hard to see? No.
IMPOSSIBLE to see? Yes.
We can all agree that the stars are aligned for the UPC to create a vast amount of fundamental case law very early, thereby creating legal certainty on a broad amount of fundamental non-patent related subjects!
Fun!
Can’t see or won’t see? Division of the work load between the courts is just a management issue. That the division was written into the international agreement is a mere detail.
@ LightBlue
That you are a staunch supporter of the UPC is nothing new.
What is new, is that for you the rule of law does not appear very important. Otherwise you would not come with such an incredible comment. What good is it for a treaty ratified by a series of parliaments to be simply “adapted” to take into account some mere managerial workload distribution? Claiming that the division [was] written into the international agreement is a mere detail is a scandal on its own.
That the presidium is in charge of the management is nothing bad as such. I would however claim that the distribution of work depends to a large extent from the choice of the parties as forum shopping is not excluded by the UPC. I cannot see how the presidium could change this. What will be the next move of the presidium which has no competence whatsoever to interpret the UPCA.
As far as the distribution of tasks at the central division is concerned, this distribution has been subject to very harsh negotiations between UK, France and Germany. This distribution has been cast in stone, sorry in the treaty. It is clear that the three countries did not trust each other and the only solution was to bring it directly in the treaty. Nobody expected that the UK would leave the EU, but this was the will of British voters. Now this fact should be swept under the carpet in order not to disappoint the hope of a series of people for the big buck.
There would have been ample time to amend the UPCA. The UPC supporters refused to do so. This is not a surprise, but it boils down now to simply ignore the rule of law. This is by no means acceptable. I do not wish a European integration based on such a shaky grounds.
@LightBlue,
Do you work in the senior management of the EPO? To my knowledge, it is only members of that management that, to date, have dared to suggest that provisions of primary legislation can be overridden (or “creatively” interpreted) by rules that, at best, represent secondary legislation.
The rest of us live in a world where an international treaty is interpreted according to the principles of the VCLT. On this point, I am pretty sure that the principles of the VCLT do not permit a crystal-clear provision in an international treaty to be viewed as a “mere detail” that can effectively be ignored.
It is really going from bad to worse at the UPC.
Whilst it is acquired that the Statute of the court is part of the UPCA, what is the legal basis allowing the Presidium of the UPC to interpret the Agreement?
As the “withdrawal” of the UK is anything but certain, it is not even certain that Art 7(2) UPCA is moot. It is clear that without the participation of the UK, there is no reason to have a section of the central (sic) division in London. From a pragmatic point of view one can thus consider that Art 7(2) UPCA cannot have any effect. The problem is that Art 7(2) UPCA is part of treaty in which not a single iota has been altered.
All contracting states to the UPCA are also contracting states to the VCLT. As there are no provisions to the contrary in the UPCA, interpretation of the UPCA has thus to be done according to the VCLT.
According to the VCLT, interpretation of a treaty is of the competence of the parties to the treaty, i.e. by the contracting states. Any interpretation according to the treaty has thus to be carried out by representatives of the contracting states. The members of the Presidium are manifestly not representatives of the contracting states, and yet they decided to interpret the UPCA!
It is worth remembering that the “Preparatory Committee” (chaired by the now Registrar) had announced a common declaration under Art 31 VCLT with the aim of replacing UK by IT in order for the PPA and PPI to enter into force. 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. The legal basis allowing the depository to decide on the entry in force of the PPA and the PPI and hence of the UPC appears lacking. Simply receiving the ratifications cannot be equated with a right to decide whether some legal texts are in force or not.
First we had the “Depository” ignoring the rule of law, now we have judges blatantly ignoring the rule of law.
It becomes embarrassing to see judges of a court, claiming to be independent, to behave as they do and go to such extremes. I would not bet one cent on such a kind of independence. The members of the Presidium have behaved as willing servants of the French and German governments.
One wonders whether it was not the German government which twisted the arm of the Presidium as it has not yet deposited its ratification. Without this deposit the UPC cannot enter into force at the beginning of June.
Once the UK has apparently left the UPCA, it was clear that France and Germany would not let go files in classes A and C of the IPC to another country. That the negotiations over the third seat of the central division have turned out to be more difficult than expected is a nice euphemism.
We can thus expect, that once the negotiations over the third seat have come to a conclusion, the AC will amend the UPCA under Art 87(2) UPCA as in the meantime the UPC will somehow have entered into force. Reminder: Mr Steenbeek wanted the AC to amend the UPCA under Art 87(2) UPCA at 8.00, the day the UPC opens at 9.00. This idea seems to have been dropped for an even crazier one.
Whether a court deciding itself how the treaty by which it was founded, and whether Art 87(2) has been correctly applied when it comes to amending again the competence of the same court, is actually a court according to Art 6(1) ECHR remains to be seen. More than strong doubts are permitted.
That Italy has the feeling of being taken for a ride does not come as a surprise. should Italy ever have thought that France and Germany would give up the domains allocated to London after very harsh negotiations and a compromise like the EU knows many, it was at least naïve.
It is interesting to see what sb.it reported the following from a meeting in Italy: “More than one of the legal experts speaking at the event warned of the practical difficulties, legal uncertainty and confusion that would be caused by fragmenting the competencies originally assigned by the UPC Agreement to its third central division”.
Even if the Presidium had decided about the final allocation of duties by taking into account Italy’s wishes, the solution would have remained legally dodgy as the presidium has no competence to amend the UPCA..
Should the persistent ignorance of the rule of law by all the promoters/supporters, and now by the judges of the UPC, end up in a major fiasco would not be surprising. After all decisions of the “central” division as envisaged will have to be enforced. And this is a different matter.
With all those legal niceties, the number of opt-outs can be expected to increase. Which proprietor will want to have his patent scrutinised by a court behaving like this?
I suppose that all those working hard to force the UPC through are fortified in their convictions by the course of history, which teaches us that some of those whose modus operandi was to run roughshod over the Rule of Law, who were once vilified as terrorists, will turn out to be the admired statesmen of tomorrow.
Does the end justify the means? Not always.
“All contracting states to the UPCA are also contracting states to the VCLT. ”
France is not, still, no idea if that makes any difference..
France is not a member of the VCLT but invented this:
fait accompli
noun [ C ] UK /ˌfet ə.kɒmˈpliː/ US /ˌfeɪt ə.kɑːmˈpliː/ plural faits accomplis UK/ˌfet ə.kɒmˈpliː/ US/ˌfeɪt ə.kɑːmˈpliː/
something that has already happened or been done and cannot be changed:
The policy change was presented to us as a fait accompli, without consultation or discussion.
Another open issue is whether the UPCA is in line with the CJEU‘s Miles decision https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A62009CJ0196 That question should be answered in the course of the first referral for preliminary ruling to the CJEU by the UPC.
Yes, it makes a difference! The rules of the VCLT only apply to the UPCA to the extent they are part of customary international law. That is certainly true for the rules of the VCLT on interpreting treaties but I am not sure whether the provisions of the VCLT on the termination of treaties also form part of customary international law. That means it is not entirely clear which rules apply to the UK‘s withdrawal from the UPCA. In my understanding that has not been clarified so far, much less whether the UK effectively withdrew from the UPCA.
PS If the UK was still a Contracting Member State to the UPCA, the UPCA could be in violation of the CJEU‘s AETR decision. That would be an interesting topic for a referral for preliminary ruling to the CJEU! See http://ipgeek.blogspot.com/2007/02/negative-opinion-on-powers-of-eu-member.html
I think it is a political move to add pressure on the Italian goverment to accept milan as a centeral division with less compentencies. At the end of the day the provisional situation could last for years and potentially could become permanent. I hate to say it but might is right and Italy has no might vis-à-vis German or France.
All Italy has to do though is raise an objection under A87(3) UPCA to stymie any decision lessening the competencies of the third central division court.
“All Italy has to do though is raise an objection under A87(3) UPCA to stymie any decision lessening the competencies of the third central division court.”
It is not a decision of the Administrative committee as such, it is a decision of the President:
“3. A decision of the Administrative Committee taken on the basis of paragraphs 1 and 2 shall not take effect if a Contracting Member State declares within twelve months”
The President thinks he has the power to do so because he is “responsible for the management of the Court, not limited to the subject matters explicitly mentioned under Article 15(3) UPCA;”
https://www.unified-patent-court.org/sites/default/files/upc_documents/final-_decision-of-presidium_distribution-of-ipc-sections-a-and-c-within-the-central-division-en.pdf
There is no item in the list of art15(3) UPCA, so the President decided that “management of the Court” was enough to take such decision.
Amazing.
Who has been talking about Art 87(3) UPCA? First Art 87(2) UPCA has to come into play.
Art 87(2) UPCA has not been devised to simply adapt the UPCA to the Brexit!
According to a sound interpretation, for instance according to the VCLT, Art 87(2) UPCA is only applicable if all contracting states have adopted EU law, for instance a decision of the commission and of the EU parliament or a international treaty on patents.
I thus fail to see the applicability of Art 87(2) UPCA when it comes to correcting the effects of Brexit.
But this will not change the “provisional” allocation of the former duties of the London section to Paris and Munich, as has been decided by the presidium.
Italy should withdraw from the UPCA by the end of May so that the UPC cannot start soon.
This move would solve a lot of issues (e.g. CMS and part-time judges) and give Italy the bargaining power to obtain the London section in full.
For the record, the ‘decision’ of the ‘President’ is here:
https://www.unified-patent-court.org/sites/default/files/upc_documents/final-_decision-of-presidium_distribution-of-ipc-sections-a-and-c-within-the-central-division-en.pdf
When the rule of law is even disregarded by judges were will it end?
Having read the decision of the presidium some comments come to mind:
The decision of the presidium mentions Art 87 UPCA. When looking at the PPA, Art 87 is not mentioned in the PPA. How can a decision taken on 08.05.2023 be based on this article, even if the decision enters into force on 01.06.2023.
Furthermore, Art 87 UPCA lies exclusively in the competence of the Administrative Committee of the UPC and not in the competence of the presidium. It is not for the presidium to substitute itself to the Administrative Committee of the UPC, even for the sake of the management of the court under Art 15(3) of the statute.
What is laid down in a treaty is only to be interpreted by the contracting states and certainly not by a unit created under the treaty. If tomorrow other aspects of the treaty displease the presidium, it could, with same legal justification, change the terms of the treaty on its own volition. This is not acceptable.
The decision also mentions the interpretation of Art 7(2) UPCA decided in the meeting on 10.09.2020 of the Preparatory Committee of the UPC. What is the legal basis which entitled the Preparatory Committee to give an interpretation of Art 7(2) and Annex II of the UPCA?
At least when the Preparatory Committee decided in a meeting on 27.10.2021 on the proper interpretation of the PPA, it gave its chairman the mandate to organize a signing ceremony of a common Declaration of the contracting states, foreseen in the margins of a future COREPER meeting. There has never been any signing organised, as otherwise we would have been told about it in loud and clear manner. It is the depository which decided on its own volition that the PPA had entered into force. At least, a semblance of legitimacy was attempted to be given to this interpretation, although there was no mention at the time of the VCLT.
Now the presidium of the UPC comes with a decision of the Preparatory Committee taken a year earlier but without any attempt to give it a semblance of legitimacy.
The members of the presidium should be aware of the VCLT. I fail to see any reference to the VCLT in its decision. This would be a bare minimum to be expected from legally qualified persons. I understand the absence of reference to the VCLT in the presidium’s decision, as the proper application of the latter would only go against of what the presidium have thought it was entitled to decide.
The decision of the presidium is a political decision, and if there one thing in which judges should abstain from, is to take political decisions. On top of it, the presidium assumes a competence that it does not have! This decision will not resist any serious legal scrutiny.
The only possible conclusion is that the central division of the UPC, as it is presently envisaged, is not an independent and impartial tribunal established by law as required by Art 6(1) ECHR.
Seems to see a lot of frustration about the decisions taken around the UPC. However, I am not sure how the comments made here will resolve any of the issues being raised. I may be wrong but a complaint on this blog would not solve any lack of legal basis issue. If the people feel strongly about their opinion, why don’t they share how they will challenge the decisions being taken by the UPC or the praesidium ? Some brave ones have already tried it in Germany by challenging the ratification Bill of the Agreement (UPCA) before the German Federal Constitutional court. They were not successful in the end. They may have lost it on technicalities but is that not part of the legal framework as well ? Who would have standing and could challenge the decision of the Presidium ? This is for me far more interesting to read, the endless complaint about no democracy …. The laws sadly don’t have to be Democratic. A lot of laws are being drafted by representatives (in a democratic world) and voted by them. In rare instances law changes require referendums which seem to be perceived by some in this forum as the key to all democracy. Once those laws pass the bar of constitutionality challenges, they are considered as the law until lifted…. let’s hear it from the experts who can act and what can be done on June 1st to stop the court?
UPC has created a legal vaccuum where the decisions of the administration and its president cannot be challenged in front of a court.
So that they can do whatever they want behind closed doors, like at the EPO.
Who would have standing and could challenge the decision of the Presidium?
An interesting question indeed. The sphere of international law is where democratic and legal accountability goes to die. An international organisation having a founding treaty and being subject to overriding legal principles is all very well, but this means nothing if those running the organisation pay no attention to any of this and the signatories to the treaty take no corrective actions (or, as seems to be the case with both the EPO and the UPC, are complicit in flagrant breaches of the rule of law).
One might think that when the breaches of the rule of law involve fundamental human rights (such as the Art 6 ECHR right to an independent and impartial tribunal established by law) then other courts, and eventually the ECtHR, might be persuaded to take action. But there are likely insurmountable hurdles even in those circumstances.
Firstly, one would need to persuade a national court to take the case. This is not so easy when the matter concerns an international treaty, and actions taken by (members of) an international organisation … which will be afforded immunities that may well act as an impervious shield.
And even if one overcomes that hurdle, one would need to win the case … most likely at all levels of the court system of the country in which the action was taken. This is not only a costly exercise but is also one fraught with risks of “political” decision-making, due to the understandable nervousness that the judges of one national court might feel when contemplating striking down (or seriously damaging) an entire international organisation.
Then, as a last resort, there is the ECtHR … which, as an international organisation itself, has proven to be remarkably resistant to taking any appeals relating to claims against international organisations (let alone reaching decisions that favour the claimants).
The potential glimmer of hope with respect to the UPC is its ties to EU law. This might just provide a hook that can be used to drag the UPC back into the realm of the rule of law. How this can be achieved is an open question. The UPC is founded upon so many legal inconsistencies, contradictions and black holes that it is hard to know where to start. Whilst some approaches may well fail, for reasons such as those discussed above, there could be a cumulative effect from the use of multiple approaches … as it is difficult to see any coherent and plausible legal narrative emerging in defence of the UPC.
I think Italy will wake up and will seriously consider a referendum for remain or leave this useless UE as UK did.
@ Puzzled
I can only agree with you that a complaint on this blog will not solve any issue of lack of legal basis.
In order to go to court, you have to show a legitimate interest in the case. A German citizen, has, as a brave one, challenged the first ratification decision. He had a legitimate interest to do so and that the ratification with around 35% was set aside. Two thirds of the members was required. This was acquired in a second ballot. It should not be forgotten, that some judges of the Federal Constitutional Court were against the complaint raised by a single citizen, but it was a minority opinion.
All the proponents of the UPC were claiming loud and clear that the first complaint will be dismissed at once. They were quite surprised when this was not the case. Having seen a change in the head of the GFCC, it was no surprise that the second complaint was dismissed.
One way to challenge the decision would be for a proprietor or infringer to challenge a decision taken by a court which is not a court according to Art 6(1) ECHR. Such a party has a legitimate interest to act before a court. It is manifest that the first party losing at the UPC will try to challenge the legitimacy of it and the decision it has taken. After all, once taken by the UPC its decisions have to be enforced and this is where problems of legitimacy of the UPC will appear.
The purpose of the comments here is to make clear that, contrary to what the proponents of the UPC claim, now helped by judges of this court, that the solution of the Brexit problem they have chosen is not a solution resting on a legal sound basis.
The only legally sound basis would have been to renegotiate the UPCA and delete any reference to the UK. In the meantime some problems of the UP/UPC system had become apparent and a new ratification would not only take time, but it was not sure that it would be successful. The perspective of the big buck for some of the actors, e.g. internationally active litigation lawyer firms, but also judges, would have vanished.
A referendum is not a solution either as often the answer has little relation with the actual question. If I am not wrong, some countries need a referendum in order to ratify an international treaty. In Denmark the referendum has been carried out. In Ireland it has still to come.
It is however interesting to note that the UPCA has never been checked by constitutional experts in one or more contracting states. One wonders why.
The parliaments have ratified, but they have not ratified that the court itself decides to ignore the crystal clear statements in the treaty. Art 31 VCLT gives very little room for interpretation.
@Puzzled
I doubt that anything of real substance will be revealed before the hammer drops. As you know, certain lawyers follow the UPC saga in depth for more than a decade now and have certainly identified a number of legally actionable points. Procedurally, this will happen just like the first constitutional complaint. Before it hit, few even knew that this possibility existed and the legal issues raised had not been heard of. You remember the sheer panic of “Team UPC” after the constitutional complaint became public and, for a lack of understanding, their desperate attempts to disqualify its contents? They didn’t see that one coming, the won’t see the next one either.
The comparison with the EPO is interesting. The situation is however different in that, thanks to the Cooperation Budget, the Administrative Council of the EPO is simply rubber stamping anything coming from the 10th floor.
At the UPC, judges and administration cooperate in order to negate the rule of law. This is actually not acceptable