Draft UK legislation to facilitate introduction of the UPC regime


On 10 June 2014, the UK government published draft legislation to give effect to the UPC Agreement (UPCA) and EU legislation on the unitary patent.  The changes are intended to come into force only when the UPCA itself enters into force.  The draft legislation takes the form of a draft Statutory Instrument (SI) to be made under the authority of s.17 Intellectual Property Act 2014, and is open for consultation for 12 weeks until 2 September.  In this item we look briefly at the major changes and issues on which interested parties may wish to lobby.  In subsequent commentary items which will follow, we will look at certain of the points in greater detail.

The legislation is mainly directed to recognising the UPC as a UK court, by giving the UPC exclusive jurisdiction over unitary patents and, subject to transitional provisions, “classical” European patents designating the UK.  However, the legislators have recognised that it is desirable that there is only a single set of legal provisions governing patent infringement and validity, whether patents are litigated in the UK Patents Courts or in the UPC.  Therefore, UK national law provisions are brought into line with the UPC provisions, notably by proposing amendments to s.60 Patents Act 1977.  In this regard, it will be interesting to see whether other countries follow suit and similarly amend their national laws.  Since the changes are made to s.60, which applies to all UK patents, whether “classical” European (UK) patents or purely national patents, they will apply to all patents litigated in the UK once the UPCA comes into force.  It is not clear at first sight whether the amendments will definitely apply without any retrospective effect in the sense of how they affect pending UK actions.  Although the IPO notes that: “when a UK court considers a case of infringement they would apply the infringement law which applied on the date of the infringing act” this still raises issues of the scope of injunctions in particular.  Also, the consultation (question 17) specifically requests views on when the new infringement provisions should apply.

New defences to infringement

Among the proposed changes to UK national law are the addition of two new defences to infringement equivalent to those provided in Article 27(c) and 27(k) UPCA.  The first provision relates to the relatively narrow use of biological material from plants, but the second provision appears thus far to have escaped the attention of commentators on the UPC.  It introduces an interoperability and decompilation defence in accordance with Articles 5 and 6 of the Copyright Directive 2009/24/EC.  Quite how this provision will apply to patent cases is difficult to say.  Though it will probably relate only to computer implemented invention patents, it is possible it could have some wider effect.

Other notable points arising from the SI where existing Patents Act provisions are to apply to unitary patents are as follows:

  1. Threats provisions.  The threats provisions of the Patents Act are extended to unitary patents.  At first blush this may seem unsurprising and unobjectionable.  However, there are at least two troubling ramifications:
  • First, when threat actions are started, the usual defence is that there is infringement of a valid claim, together with a counterclaim for infringement.  A counterclaim for infringement will be impossible, but the defence could (and indeed should) in principle be tried.  If so, will this mean that the UK Court must decide the merits of infringement and validity, or should the case be stayed pending any equivalent UPC action?  If not stayed (or if there were no equivalent UPC action) what if the UK Court decided the patent was invalid?  It would not have jurisdiction to revoke a unitary patent, but could it give a declaration of invalidity?  What effect (legal or persuasive) would this have inside and outside the UK?
  • Second, the consultation paper (paragraph 83) asserts that to be actionable, the threat itself must be made in the UK because s.132 Patents Act limits the Act to the UK territory.  However, given the unitary nature of the unitary patent, by implication any threat of infringement would seem to be made everywhere within the unitary territory.  Further, the proposed amendments refer to threats of infringement proceedings in the UPC, which is, in effect, a UK court, and certainly the UPC can order relief in respect of the UK.  Hence, is a threat (as defined by s.70) made by a German company against a French company that it is infringing a unitary patent, actionable in the UK under these provisions?  Would it make a difference if the threat were made against a French customer of a UK supplier such that the person aggrieved was within the UK Court’s jurisdiction, it being argued that the threat was made against them, and in substance made in the UK?
  1. Patent Office opinions.  Patent Office opinions (from the UK IPO) will be available for unitary patents.  This service is highly regarded and useful to SMEs especially.  This provision is therefore to be welcomed.  However, it will, perhaps be interesting to see if a tactic equivalent to that which has (imaginatively) been used in EPO oppositions becomes established, that is to obtain a quick Patent Office opinion and submit this in UPC proceedings.
  2. UPC transitional period.  Finally, and perhaps most intriguingly, the legislators have, in effect, given the first interpretation of the highly ambiguous provisions of Article 83 UPCA in paragraph 2 of the proposed new Schedule A4 to the Patents Act.  The now conventional reading of Article 83 is that Article 83(1) permits, during the UPC transitional period, actions still to be commenced in national courts even if “classical” European patents have not been opted out of the UPC.  The consultation paper (the Technical Review and Call for Evidence) at paragraph 44 states that the draft legislation “replicates the UPC transitional period to make it clear on the face of the UK legislation how it works”.  This is done in paragraph 2 of Schedule A4, but by replicating the literal wording of Article 83, it effectively interprets these provisions.  It does so in two ways.
  • First, of the types of national proceedings possible, it permits only infringement and revocation actions to be commenced in the UK courts, but not declarations of non-infringement.  This follows the actual language of Article 83(1), even though some commentators believe that the omission of declarations of non-infringement was unintentional and should be read in by implication.  This will mean that anyone wishing to “clear the way” for the UK (e.g. because it trades only in the UK) by seeking a declaration of non-infringement, will have to apply to the UPC.  Depending on the subject matter, this could mean having to bring an action in the London, Paris or Munich branch of the Central Division, and depending on the language of the patent, the case would be heard in English, French or German.  (For example an electronics patent applied for in German would be litigated in Paris in German.)  If, however, the same entity wished to clear the way by a revocation action against the same patent, it could do so by bringing that action in the UK Patents Court, the Intellectual Property Enterprise Court or in the UK IPO in English.
  • Second, the provisions make no mention (doubtless because none is explicit in Article 83) of any prohibition on bringing such proceedings if there is already an action pending in the UPC on the same patent.  This would appear to mean, therefore, that the owner of a European (UK) patent not opted out, could, for example, bring UPC proceedings against a company trading throughout the UPC zone, but also subsequent UK national proceedings against the UK subsidiary.  Likewise, a defendant to UPC infringement proceedings could potentially defend the UPC proceedings by counterclaiming for revocation, but also bring a revocation action, perhaps thorough a local subsidiary or straw man, at least in the UK.  In either set of circumstances, one is left with parallel proceedings and potentially complex jurisdictional questions to resolve if the evil of having two sets of proceedings on the same subject matter is to be avoided.

These last issues highlight the need for clarification of the Article 83 provisions, a topic which is the subject of a specific question in the consultation (question 2 of the consultation paper).  Of all the issues outstanding on the operation of the new UPC system, this is the one on which there is greatest uncertainty.  What is more, the uncertainty relates only to those patents not opted out.  Patentees who opt their patent out know exactly where they stand with only national proceedings being possible.  By comparison those who do not opt out will have immense uncertainty as to what will happen if there are the sorts of parallel proceedings exemplified above, including the spectre of references to the CJEU under the newly recast Brussels Convention Regulation.  This is, therefore, an issue to which we will return in subsequent commentary.

Other commentary