Unitary patents and the UPC: 3 months on

Unitary patents and the UPC: 3 months on

16 May 2013

When the UPC agreement was signed on 19 February 2013, the Commission was maintaining that the first unitary patents would be granted, and the Court open for business, in early 2014.  However, at the Preparatory Committee’s first meeting in March, the target date was re-set for early 2015.  But now the first half of 2016 seems more realistic. 
 
One reason for a later date is that there is a “chicken and egg” problem with the UPC.  It will not exist as a legal entity until 4 months after the final relevant ratification and, as a strict legal matter, cannot hire judges and other staff nor procure a computer system until it opens for business.  Therefore, some other legal entity must take on these responsibilities and then handover to the UPC on day one of its existence.  This entity, moreover, must commit to paying judicial salaries (and pensions) and to funding the computer procurement (a process likely to take an absolute minimum of 18 months).  But who will own and fund the entity?  Will it be (say) the governments of the UK, France and Germany (the three mandatory states which must ratify the UPC agreement, along with 10 other states)?  How can any of those commit to such an undertaking until it knows that its own legislature will, in fact, ratify, still less with the uncertainty of the ratification by the other two and 10 more?  The UK has said that it will undertake an economic impact assessment before ratification, so how could it sensibly commit to major expenditure and liability beforehand?  The position for Germany (at least) is likely to be the same.  Does this point to a lengthy period of awaiting the requisite numbers of ratifications, with one (or all) of UK, France and Germany holding back from depositing their instruments of ratification to ensure that the UPC does not start automatically four months later, and these governments only then committing to the expenditure required?  Even if not, the practical timings (particularly concerning the creation of the interim legal entity and the subsequent procurement of the computer system) suggest that it will be almost impossible to have the UPC ready to open for business before the second half of 2015.
 
Even disregarding that problem, the likely timetable for UK ratification is now clearer, indicating that the earliest start date for the UPC system would be autumn 2015.  A few days ago, the UK Government published a draft of a new section for the UK Patents Act aimed at starting the ratification process: a Statutory Instrument (SI) will implement further changes to the Patents Act to make it UPC compliant.  After Parliament has approved the SI (unlikely to be before summer 2014), separate Parliamentary approval is required for ratifying the UPC agreement via a “command paper”, unlikely to be presented before April/May 2015.  Adding four months as required by the UPC agreement, this means an earliest start date of autumn 2015 (if the other ratifications have been completed).  This does not take into account the fact that the estimated April / May 2015 date for UK ratification is also the likely time of the next UK general election which, as with the German elections this autumn, may impact upon subsequent events.
 
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