The Prospect of the Unitary Patent in 2013 – Some Thoughts on Ratification (update)

Campaign poster in Dublin during the Lisbon treaty referendum in 2009

As  recently reported on this blog, the Unitary Patent Project of the European Union has been driven some big steps forward during December last year. The crucial dates were:

• 10 Dec 2012: The European Council endorses the EU Unitary Patent Package.
• 11 Dec 2012: The Advocate General of the CJEU hands down his opinion to dismiss the appeals of Spain (C-274/11) and Italy (IC-295/11) against enhanced cooperation in the field of unitary patent protection.
• 11 Dec 2012: The European Parliament approves the EU Unitary Patent Package.
• 17 Dec 2012: The European Council approves the EU Unitary Patent Package.

The texts finally adopted and approved by the competent EU institutions are the following:

• Proposal for a regulation implementing enhanced cooperation in the area of the creation of unitary patent protection, Regulation EU 1257/2012 (cf. consolidated text of 17/12/12 (PE-CONS 72/1/11); texts adopted on 11/12/12; cf decision-making monitor and procedure file),
• Proposal for a regulation implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements, Regulation EU 1260/2012 (cf. consolidated text of 12/12/12 (18855/2/11 REV 2); texts adopted on 11/12/12; cf. decision-making monitor and procedure file),
• Resolution on jurisdictional system for patent disputes (cf. latest draft agreement of 14/11/12; texts adopted on 11/12/12; cf. procedure file).

While the political class is celebrating its ultimate success (e.g. Commissioner Michel Barnier, the Council Presidency, the EU Parliament, and the EPO with its President Benoît Battistelli), the political driving forces predict (and expect) even more ambitious progress on the final meters of implementing the new post-grant patent infrastructure in (some parts of) Europe:

• 18 Feb 2013 – Signature of the UPC Agreement and start of the ratification process (UPC will enter into force upon 13 ratifications, including mandatory ratifications in UK, France and Germany, cf. Art. 59 UPC Agrmnt),
• 01 Nov 2013 – Full ratification of UPC Agreement expected,
• 01 Apr 2014 – Issuance of first unitary patents by EPO and Unified Patent Court ready to receive first cases.

The project, however, is not at all cut and dried and there certainly is no automatism leading to its implementation within the 25 EU member states that originally supported enhanced cooperation. In fact, there are more challenges ahead than one may expect, especially with respect to the national ratification processes, which are required as the UPC Agreement, as an international treaty, will transfer statutory legal rights (i.e. national patent jurisdiction) to the European level.

Most probably, the UPC Agreement will be properly signed by the 25 contracting states as expected on 18 Feb 2013 (i.e. at the Competitiveness Council Meeting announced for this day by the incoming Irish Presidency), unless one or the other state has difficulties in properly authorising the secretary/minister in charge in case the head of state be prevented for some reason.

National egoisms. But let there be no doubt that, firstly, the national ratification processes will be heavily influenced by particular interest groups and “power arithmetics” so that national egoisms will again have an impact on the future EU patent system. And it’s wise to assume that such impact may range from delays of only a couple of weeks to even endangerment of the whole project and its final implementation.

Critical contracting states. And, secondly, back in March 2011 “enhanced cooperation in the area of the creation of unitary patent protection” was authorised at a time when nobody could really say how exactly the new European patent jurisdiction system will look like. Now, as the UPC Agreement is to be signed and ratified, some of the 25 contracting states may rethink whether or not the proposed system will really suit the needs of their national economy and whether it will really result in the promised cost cuts, e.g. by up to 80%, as lately announced here and here (see also this earlier posting).

In this regard, it may be worthwhile remembering that in the beginning phase of the enhanced cooperation process it were not only Spain and Italy that were regarded as “brakeman”, but e.g. also Poland (see here or here), a country who traditionally is rather reserved towards IP issues, as was proved in 2004 when Poland withdrew its support of the controversial Software Patent Directive and once again when Poland abandoned ratification of the ACTA treaty in early 2012.

It may also be worthwhile remembering that in the public debate during the decisive 3057th Competitiveness Council Meeting on 10 December 2010 many delegations took a critical position even though they agreed on utilising enhanced cooperation in the end. Countries like Poland, Romania, Greece, Portugal, the Czeck Republic, and Hungary felt uncomfortable with the fact that the new EU patent would not be effective for the whole EU territory and partly considered this a severe setback for European unity that would only be justifiable by an efficient court system that serves the needs of European economy and especially SMEs. The parliaments of those and other countries may now want to verify whether the quality of the UPC Agreement really compensates for the apparent drawbacks of the enhanced cooperation mechanism.

Reluctant parliaments will certainly be able to find argumentative support among the significant concerns that have been raised by industry, academics and practitioners.

Ratification by popular vote. As most of the 25 contracting states will opt for ratifying the UPC Agreement by a parliamentary vote, some countries — such as Denmark, Ireland, and maybe the UK — may face a legal or even constitutional requirement to ratify the Agreement by a popular vote, i.e. by a public referendum. Such national referendums, however, may always be subject to populistic euroscepticism totally independent of the actual question to be decided and may thus have unpredictable outcomes, as the European Union has painfully experienced in relation with e.g. the European Constitution in 2005, when the people of France and the Netherlands rejected the proposal in national referendums.

Earlier patent related ratification processes. Of course, as compared to the EU Constitution, the proposed European patent litigation system has a much smaller impact on national sovereignty so that only very few contracting states, if any, will ratify the UPC Agreement by a popular vote if not required by national law. But ratifications in the field of patent law have not been overly successful in the past.

For example, the Community Patent Convention (CPC) was signed in 1975 by all EU member states (nine at that time) but never entered into force because it was not ratified by enough countries. In a second attempt, the revised CPC was signed by twelve EU member states in 1989 but only ratified by seven. And finally, the London Agreement was concluded in 2000 and needed mandatory ratifications by France, Germany and the United Kingdom, which could be achieved not until 2008 when France deposited the instrument of ratification after approval of the Constitutional Court of France.

The UK as an element of uncertainty. Far more likely than France being the brakeman also in the UPC ratification process is that the United Kingdom may have difficulties in ratifying the UPC Agreement, at least given the present parliamentary situation in the House of Commons and the more than reserved feelings about Europe in the general public and particularly within the parliamentary group of HM Prime Minister‘s conservative party. There is already going on an intense public debate as to whether or not the UK should leave the EU at all [1, 2, 3, 4].

The UK’s ratification is mandatory for the new EU patent infrastructure to enter into force – such as is that of Germany and France. Therefore, the so called referendum lock recently introduced by the conservative majority “to ensure that in future, no powers can be passed from Britain to Brussels without the consent of the British people in a national referendum” may turn out to be crucial for the prospect of the Unitary Patent, as it may require a popular vote about the UPC Agreement also in the UK, which would definitely be a risky approach that may well be misinterpreted by eurosceptics as a test for a national referendum on the United Kingdom’s EU membership [1, 2]. The high potential of embarrassment that UK eurosceptics may pose on the UPC ratification has been summarised by Joff Wild recently:

Now, if I were a particularly troublesome Eurosceptic Conservative MP I might well start asking how giving up the right of UK courts to be the sole arbiter of disputes concerning patents that are valid in the UK is not a transfer of power. Indeed, I might see an opportunity here to kick up a real fuss and to create problems for a government which I believe is too soft on Europe. If Ireland gets a referendum on this “transfer of judicial powers”, why shouldn’t the UK, especially when the government has said that there will be “no further transfer of sovereignty or powers over the course of the next Parliament”. I might not have a legal leg to stand on, but if I so wished I would probably be able to cause an awful lot of embarrassment and could have an impact on decision-making. Will this happen? Do not rule it out. Europe is a toxic issue in the UK at the moment. Critics will take any stick they can in order to beat it. That stick may just turn out to be the unitary patent system.

This may hold true even more as British eurosceptics might meanwhile feel severely outsmarted by the EU legislation.

We all remember the European Council summit on 28/29 June 2012, where UK Prime Minister David Cameron, in order to appease his Tory allies at home, pushed through (some say in a scandalous and hostile act) that Articles 6 to 8 of the  UPP Regulation be deleted, essentially meaning that substantive EU patent law will not any more be subject to legal order of the Union’s highest court, the European Court of Justice (see here and here).

This political warfare of significant parts of the UK conservatives against the CJEU and the European Union meanwhile turned out to be nothing more than a Pyrrhic victory, as it produced a piece of legislation that was infringing primary EU law. Then, on 19 November 2012, Coreper  introduced a new Article 5a into the UPP Regulation which will most probably be interpreted by the CJEU as an authorisation to decide referral questions of the Unified Patent Court regarding substantive patent law.

Before this background, British Tory eurosceptics might not feel prepared to support the UPC Agreement when it comes to a parliamentary ratification in the House of Commons. And if a popular vote is required in the UK, the outcome will be absolutely unpredictable.

Conclusion. Given all this, it does not sound too realistic that the UPC Agreement will be fully ratified until 01 November 2013, as expected by the EU Council, thus enabling the EPO to issue Unitary Patents as of 01 April 2014. And even if the required 13 ratifications can be achieved within the coming year, it will still be a long journey until the Unitary Patent Package will be effective in the 25 contracting states or even in all 27 EU member states.