Weekly take: Milan court is UPC elephant in the room
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Weekly take: Milan court is UPC elephant in the room

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The issue of the Unified Patent Court’s third central division needs resolving before IP owners can fully embrace Europe’s new era

We are two weeks into the sunrise period for the Unified Patent Court. It's been a long time coming so excitement is rightly building as intellectual property owners begin to hone their patent strategies.

At the start of this month, it was reported that 199 European patents and pending applications had been opted out in the first three days of the sunrise period.

After an earlier period of turmoil in which IT issues wreaked havoc and the sunrise was delayed, it’s a welcome relief to be in a relative state of calm – though perhaps not if you are an IP owner that has yet to decide what to do with your patents.

But a news story this week reminded me that while businesses are looking ahead to a new era of patent protection in Europe, there is still a large animal with a reputation for remembering the past that is pacing the room.

What should happen to the court’s third central division of the UPC, if there is to be one at all?

The Italian city of Milan is now the only contender to host the vacant third seat, which was originally assigned to London before the UK quit the UPC project in 2020. The other two divisions are in Paris and Munich.

UPC organisers have so far declined to comment on what will become of the third central division seat but stress that the issue will not delay the court’s scheduled opening on June 1.

A spokesperson for Germany’s Ministry of Justice confirmed to Managing IP this week that trilateral discussions with Italy and France are ongoing and that a decision was expected “shortly”.

The establishment of a Milan division would require an amendment to the UPC Agreement (UPCA), which still references London, the spokesperson added. They noted that Munich and Paris would temporarily assume central division responsibilities if there was no deal by June 1.

It was already known that an amendment to the UPCA was required. But could it really be as simple as striking out London and writing in Milan? Possibly not. Presumably it would require approval from all contracting member states, for a start.

I certainly don’t profess to be an expert in treaties, but I could see a scenario in which the UPCA was challenged on the basis that the original agreement was not adhered to. This could certainly be the case if responsibilities for central division work were temporarily divided between Munich and Paris.

But even if swapping Milan for London or leaving the agreement as it is does prove relatively straightforward, there are other potential stumbling blocks.

Legal wrangling

Managing IP spoke to Italian lawyers this week who fear that France could be making a “landgrab” for pharmaceutical cases that would have been heard in London.

According to reports in the Italian press, France and Germany have proposed that the Paris division should hear cases involving pharmaceutical patents for which a supplementary protection certificate (SPC) is in effect.

That would leave the proposed Milan division, if it were to get the nod, with only non-SPC pharma cases – and presumably far fewer cases than it would have handled had it taken on all the life sciences matters originally intended for London.

If it is not merely the name of a city that needs to be changed but also the competencies of that court, then further UPCA amendments may be needed.

Ominously, that could mean yet more negotiations and wrangling over legal texts.

Multi-jurisdictional legal agreements are fraught with difficulty and often require many changes, drafts and discussions. Indeed, this one has already been years in the making.

I’m not suggesting it will take years to resolve this issue, but it may not be as easy as it first seems, and parties should be prepared for that.

Three to two?

The idea that Munich and Paris could temporarily assume all central division responsibilities if no deal had been reached by June 1 is also intriguing.

It seems to me that this is an entirely possible scenario, though when it comes to the UPC you can't rule anything out.

Could we then have a situation where cases that would have gone to Milan start life in Paris, leaving the Milan court short of work if and when it does come into being?

Would Italy formally challenge a decision to move more responsibilities to Paris?

Could Milan pull out, or be shunted out, from hosting a central division?

These are all unknowns, and could well be easily fixed, but patent owners will appreciate clarity as soon as practically possible.

With a project as big as the UPC, and one that has been in the pipeline for so long, it is inevitable there will be questions along the way.

But the relationship between the three main seats – if indeed there are to be three – is a major question that all interested parties will want answers to before they start bringing their disputes to the court.

The court might be due to open on June 1, but there’s still a rather large animal in the way.

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