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Unitary Patent and UPC: a progress report

Kingsley Egbuonu, London

The next six months will be key to the success of the Unitary Patent and UPC project. Managing IP provides an update on the latest developments

UPC iconThe Chairs of the Preparatory Committee (responsible for the implementation of the UPC) and the Select Committee (responsible for the implementation of the Unitary Patent) have provided the EU Council with a progress report (4th progress report) on the implementation of the Unitary Patent system.

The report summarises the work of both committees since September 2014, and shows that important decisions will have to be made between now and December so that the hope of seeing an operational UPC in 2016 can be realised.

Seven down, six to go

Seven contracting member states have deposited their instrument of ratification of the Agreement, Luxembourg being the latest.

Six more (including Germany and the UK) are now needed to bring the UPC into existence. The recent announcement that Italy will now join the Enhanced Cooperation on the Unitary Patent is a boost for the system.

The UK referendum on EU membership may well come after it has ratified, so the system should be able to continue without the UK in the event of an exit. Germany and the UK could choose to ratify when preparation for the UPC is near completion.

Show us the money

The Select Committee met last week to discuss the adjustments to the level of renewal fees submitted by the EPO. According to a document (SC/18/15) seen by Managing IP, the proposed fees are the equivalent of the sum of the national renewal fees payable (from year 2 to year 20) in the leading four or five countries (true TOP4 or true TOP5 respectively) in which European patents are most often validated.

The proposal retains the 25% fee reduction (from years 2 to 10 of the life of their patents) for patentees such as SMEs and universities, and a 15% reduction in fees payable for patents endorsed licence of right.

Over 20 years, the total cost for the true TOP4 would be €35,555, while true TOP5 would be €41, 955 - though the latter comes down to €40,403 for SMEs after the fee reductions.

The adjustments this time have taken into account criticism of an earlier proposal, such as the inclusion of the EPO’s internal renewal fees, and should provide some costs savings to patentees.

There were also discussions on how to distribute the renewal fees between participating member states.

Rules, Rules and more Rules

EPO logoA consolidated version of the draft Rules relating to the Unitary Patent Protection (this deals with how the EPO will administer it) is now available on the EPO’s website. The Select Committee last week also held its first preliminary discussions on the provisions of the draft Rules for the Unitary Patent fees.

Team 1 of the Legal Group of the Preparatory Committee will meet with an Expert Group to discuss the 17th draft Rules of Procedure of the UPC, a final draft of which will be submitted to the Preparatory Committee this summer for adoption.

The draft Rules on the European Patent Litigation Certificate have been revised, and a final draft is ready for adoption by the Preparatory Committee by way of written procedure.

The Preparatory Committee has adopted the Rules for the Administrative Committee and Budget Committee, and concluded discussions on the draft of the Rules on Legal Aid.

Judicial training and appointment

GavelOut of more than 1,300 applications received from would-be judges, a shortlist of 341 technically qualified judges were considered eligible; and for legally qualified judges, 170 were considered eligible while 184 were considered eligible subject to training.

The first stage of the training programme for these candidates has taken place. The second stage is an internship at the national patent courts of contracting member states with significant patent litigation. Four contracting member states have offered to host these candidates.

The final stage of the training will focus on the application of the Rules of Procedure and judgecraft (general judicial skills), which is expected to be undertaken this autumn.

Machine translation

Language was the underlying issue in the legal challenge to the Unitary Patent Regulations and Enhanced Cooperation. To ensure the system works (e.g. for prosecution and litigation purposes), it is right for all patents to be available in many EU languages.

The EPO says its machine translation programme is ready, meaning translations from and into English, French and German are available for all EU official languages. The quality and consistency of these translations remains to be seen.

Court costs

The Financial Regulations for the UPC have been approved by the Preparatory Committee. Last month the Committee launched a public consultation on court fees and recoverable costs. The deadline for response is July 31.

The view of the Committee is that the proposed fee levels are the lowest taking into account the financial sustainability of the UPC.

Staff recruitment and IT system

The Preparatory Committee is working on how to staff the branches of the UPC, and we should expect a remuneration scheme and staff regulations.

The UK IPO is responsible for the IT aspects of the UPC. A tender for the procurement of the UPC’s IT system was published last year, and contracts were expected to be awarded last month, with work commencing on June 1. However we understand that successful suppliers will now be notified this month and testing of the system will start in the autumn.

We also understand that the IT system can be used for registering opt outs and collecting the appropriate fees before the UPC legally comes into existence.

Provisional application

Sunrise photoOne of the concerns raised over the implementation of the UPC is whether the provisional period (sunrise period) will be enough time for the court to become fully operational, especially its IT system, and for patentees to opt out if they wish to do so. The good news is that the Preparatory Committee expects the IT system to be ready by the end of this year.

The Committee is working on a protocol which would allow for the provisional application of certain parts of the UPC Agreement during a six-month period before the Agreement comes into force. This is to ensure a smooth transition and operation of the court; for example, it should enable the court to legally enter into and/or fulfil contractual obligations such as hiring staff. Discussions on this protocol are expected to conclude this autumn.

What next

The Select Committee will be meeting at the end of this month, when a decision on the financial and budgetary aspects of the implementation of the Unitary Patent (such as renewal fees and its distribution) will be made.

The Preparatory Committee has meetings scheduled for July 10, and in October and December.

Implementation is still expected in 2016 at the earliest, or more likely some time in 2017.


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