Unified Patents Court – News Update

Since it became clear that Brexit would mean that London was not able to take its place as the Life Sciences base for the UPC, there has been much speculation about the potential location, within the central division, for hearing of cases that would have gone to the London court.

The UPC Agreement – the founding treaty underpinning the new court – provides that: the court shall comprise a Court of First Instance, a Court of Appeal and a Registry (article 6); the Court of First Instance shall comprise a central division as well as local and regional divisions (article 7(1)); the central division shall have its seat in Paris, with sections in London and Munich (article 7(2)); and the cases before the central division “shall be distributed in accordance with Annex II, which shall form an integral part of this Agreement” (article 7(2)).

Annex II states:

DISTRIBUTION OF CASES WITHIN THE CENTRAL DIVISION

LONDON Section	PARIS Seat	MUNICH Section
(A) Human necessities (C) Chemistry, metallurgy	President’s Office (B) Performing operations, transporting (D) Textiles, paper (E) Fixed constructions (G) Physics (H) Electricity	(F) Mechanical engineering, lighting, heating, weapons, blasting

In view of the plain text of the treaty (the word “shall” being used four times; the word “may” being absent), there would seem to be no legislative basis in the UPC Agreement for the reallocation of the London cases, even to Paris, the seat of the central division. Amendment to the treaty, or at least agreement to treat the treaty as amended by the ratifying countries, is needed in order to reallocate the London cases.

How should the reallocation be done? Should it be to move the physical location of the court, to a city in another participating country? Or should the cases be absorbed into the Paris and/or Munich caseloads?

The original basis for the allocation was a numerical calculation of the level of patent activity in the year before the treaty was first signed. Similarly, article 89 provides that the treaty will enter into force on the first day of the fourth month after the deposit of the thirteenth instrument of ratification or accession, but this must include “the three Member States in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place”. This was Germany, France and the UK.

The fourth on the list was Milan, which might have expected to get the third court as a matter of right, when the UK’s involvement ended. However, it was never going to be as simple as that. The fact that amendment would be needed opened the door for other claimants for the position. The Hague expressed an interest, based on the considerable experience of the Dutch courts in patent litigation. More recently the option of Dublin was raised, reflecting the possible attraction to American business of having one of the three central division courts in a common law, English speaking jurisdiction.

However, news leaking from recent deliberations by the Preparatory Committee suggest that all the “pretenders” may, at least initially, be disappointed. The plan under consideration is that, to start with, there will in fact be only two courts in the Central Division – Paris and Munich. The Life Sciences cases planned for London would effectively be shared between the other two centres.

Yet on the face of the UPC Agreement, this would still need amendment, in order to prevent the new court from breaching its own founding instrument and, therefore, international law and EU law.

The reason the UPC Agreement was structured as it presently stands was to ensure compliance with principles of EU constitutional law, in light of the CJEU’s reasoning in Opinion 1/09 (on the legality of an earlier proposal, which was planned to involved some EEA countries). As the CJEU noted in Opinion 1/09, under article 4(3) of the TEU, Member States’ duty of sincere cooperation includes a duty to ensure the application of, and respect for, Union law within their territories. For the UPC to forge ahead without straightening out the legal questions apparent on the face of the treaty as a consequence of UK’s departure would be to risk the compliance of the new regime with the institutional and judicial framework of the EU – the very thing the CJEU counselled against in Opinion 1/09.

The English phrase “more haste, less speed” has equivalents in many other European languages. Its origins lie in Latin (festina lente), and before that ancient Greek. A civic institution as commendable as the UPC is worth the time investment to strengthen its legislative foundations.

In the meantime, we are interested in the views of patentees, potential litigants, and lawyers who could be involved in the new court. What do you think? Do we need a third base? Do we even need two bases? If we do have a third base, where should it be? Is there any merit in the Dublin case? Do you prefer Milan or the Hague? Let us know what you think. We will take a snap shot of current opinion and report back to you.