24 March 2020

Is Europe's unified patent court dead in the water - or can it be revived?

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Germany's Federal Constitutional Court has scuppered long-held plans for the UPC, at least for now

The demise of plans for a European patent court is bad for clients, but could be better news for London

Is the ambitious plan to create a unified European patent court dead in the water, or might it be revived at some point in a post-coronavirus future?

This is the question European lawyers are attempting to answer following the German Federal Constitutional Court’s ruling on Friday that the country’s ratification of the Unified Patent Court (UPC) Agreement was unconstitutional as it had not received the required two-thirds majority in the Bundestag’s second chamber.

There is widespread agreement that the decision — combined with the recent statement by the UK government that it is pulling out of the UPC because of Brexit — are huge blows, delaying the project at least until the impact of the Covid-19 pandemic has subsided.

Simon Cohen, who heads the international patents and life sciences groups at Taylor Wessing, said the ruling was a disappointing irony given the coronavirus crisis, which has underlined the importance of international cooperation.

"The death of UPC is a backward step which will consolidate the silos of innovation rather than increasing cooperation and globalisation of science," he said.

Although few believe the UK will change its mind for the foreseeable future, it is possible Germany may come back on board at some point.

Narrow constitutional point

German patent attorney Markus Herzog, of Weickmann & Weickmann, was encouraged the German federal court had rejected all the other complaints raised by the complainant, upholding the application only on a narrow constitutional point. 

 “The main issue now is likely to be whether or when member states of the European Union will agree on a new location for the branch office of the central chamber of the Unified Patent Court, initially allocated to London,” he said. “The coronavirus crisis will prove to be a more serious obstacle than today’s decision from Karlsruhe.”

Hogan Lovells German IP of counsel Winfried Tilmann said that policy makers and European businesses would continue to push for the introduction of an effective unified patent system in Europe.

“The idea of a unified European law with a single court will continue to be viable and even point the way forward for other areas of law," he said.

Mark Shillito, global head of IP at Herbert Smith Freehills, agreed, saying while there would be further uncertainty, the decision did not preclude the UPC being adopted by Germany in a constitutionally correct manner, although it was unlikely to be priority at the current time.

Project delayed for years

However, for Michael Edenborough QC, an IP barrister at Serle Court, it will take years for the project to be revived.

“Without the UK and Germany, who are the largest patent jurisdictions in Europe, the UPC becomes an almost worthless shell of the dream of a pan-European patent court system. The other countries have neither the volume of cases, nor expertise, to maintain a useful system.

“For the time being at least, the UPC is dead in the water. Any resolution of the German, and even the UK, objections will likely take years.”

Opportunity for London

This could be good news for London, given that the UK’s decision to pull out of the project had raised fears that its position as a major centre for patent disputes was under threat.

Law Society of England & Wales president, Simon Davis said the German ruling had bought London  valuable time to make an investment in its own international IP dispute resolution offering, saying he confidently expected the UK could maintain a very substantial share of high-value patent litigation.

 “There is a crucially important window of opportunity to make this investment before the UPC is off and running,” he said.

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