On Thursday 1 October the UPC Preparatory Committee announced that it will complete all of its work by June 2016 and that the UPC will open for business at the start of 2017.
A lot of work has already been done. The Rules of Procedure will be finalised by mid-October this year. The decision on Unitary Patent renewal fees, which was for the so-called “True Top 4” (the sum of the renewal fees payable in the UK, Germany, France and The Netherlands) is not expected to change due to Italy joining and it is now clear that there will be no discount for SMEs. But for many this is a far more attractive cost than under the present system.
The Court case management system is developing quite rapidly, due to the decision to use off-the-shelf software. It has been tested during a first workshop in London, where the participants found that it could still do with some fine-tuning, but that is going to be done this Fall during workshops across the continent.
An important task is the selection, education and training of future UPC judges, as well as decisions on their remuneration. Courses on basic patent law for judges have already been completed last Spring; next will be workshops and seminars on the UPC laws and rules themselves, as well as internships at experienced national patent courts. This process has now started and should be complete by mid-2016.
Last week a protocol was signed in Brussels to enable provisions of the UPC Agreement on organisational, financial and staffing issues to be applied provisionally ahead of the UPCA itself entering into force. The mechanism unfortunately is not self-explanatory, so here is how it works: the UPCA will enter into force 3 months after at least 13 Member States, including the UK, Germany and France having deposited their instruments of ratification (which 8 countries, including France have already done). The Protocol will enter into force when those countries have either ratified, or have informed the ratification depository that their parliaments have approved ratification. The notification of parliamentary approval can of course precede the actual deposition of the instrument of ratification by any desired time span, meaning that the minimum time span between the Protocol entering into force and the UPCA itself entering into force will be 3 months, but it could be considerably longer. For instance, if the Preparatory Committee is ready in June 2016, the Member States may have the Protocol enter into force at that point in time, meaning that the whole UPC organisation will have 6 months to prepare for opening its doors for business.
The Protocol does not deal with the opt-out sunrise register, since that is not an organisational aspect of the court. The opt-out register is defined in Article 83 UPCA and will be kept by the Court Registry. This cannot be started earlier by means of a protocol, since you cannot opt-out from the jurisdiction of a Court that does not yet exist. What will be allowed for however is a notification in advance in a sunrise register that patents to be opted out, including processing the payment of € 80 per patent. This sunrise register will be kept by the UK IPO and does not require a basis in the Protocol. Since this register will be a database that will be accessible online, but without paper documents, it can be transferred to the Court’s Registry by the push of a button, so the actual opt-out register will come into existence at the split second when the Court opens. It is not yet clear when the sunrise register at the UK IPO will open. The software system should be ready by January 2016, so it could be anywhere between then and just a few months before the Court itself opens. A source at the Preparatory Committee said: “2016 is the year to make up your mind and register your opt outs. Or to not opt out of course”. That’s basically what we have been telling our clients: you have to evaluate your portfolio now, so if you want to opt out any EPs, you will be ready to file as soon as the register opens.
Of course, we will be looking out for the Preparatory Committee’s decision on the opening of the opt-out register.
One of the UPCA provisions that could enter into force provisionally under the Protocol is Article 4, which provides that the UPC shall have legal personality in each Contracting Member State and shall enjoy the most extensive legal capacity accorded to legal persons under the national law of that State. This seems rather odd, since the Court as such will not exist before the UPCA enters into force and there is nothing provisional about this. In fact, it is a core provision of the UPCA that affects national sovereignty. It is therefore quite understandable that the UK, when signing the Protocol in Brussels, made a reservation that it will not provisionally apply Article 4 UPCA. In fact, it is expected that activities that require legal personality will be carried out by individual Member States on behalf of the Court-to-be. As an example, the UK is building the sunrise register and the Court case management software.
The Protocol is a clear sign that the whole project has now left the stage of mere drafting of legal documents and is entering into a new phase, in which the actual UPC organisation will be built in order to have everything in place for the start in January 2017. The Preparatory Committee has been saying for some time now that it would only announce a time schedule once it was reasonably confident that this could actually be met. So, it looks like this is the real thing now.
This means that the clock is now ticking. Patent proprietors and applicants should start reviewing their portfolio’s now, develop plans on whether they intend to apply for unitary protection, whether that means they should stall the grant of patents or maybe diversify by filing divisionals, they should make up their minds about opt-out applications to be filed in the near future and they should start reviewing their licence agreements.
At Bird & Bird we have a large international team in place with thorough knowledge of the new UPC system as well as of national patent prosecution and litigation practices across all UPC Member States, ready to assist all clients with the work that lies ahead.