On February 19th 2013, the Treaty establishing the new European Unified Patent Court (UPC) was signed by most EU member states. This heralds big, and potentially alarming, changes for business in the UK and Europe, especially since the new system applies retrospectively to existing patent rights.

Alan Johnson, who has been deeply involved in the evolution of the Unitary Patent and UPC, summarises some of the key issues below:

• What are the benefits for business?
  “In the long run a single system for litigating patents in Europe – one case for most of the EU. Once you understand the system as it applies to the UK, you know how it works for Germany, France, etc”
• What are the con’s?
  “Risk: as a defendant from non-practising entities, and of finding yourself sued in a division of the Court outside your home state, in a foreign language. (Any division in any country can grant a pan-European injunction)Complexity: of transitional provisions lasting many years when the new and old systems exist side-by-side
  Uncertainty: as to how the new Court will operate
  And Cost: it will be a self-funding court system but the court fees have yet to be set.”
• Which industries could this affect?
  “All – but especially significant for pharma and TMT.Pharma will be especially concerned at a single decision potentially affecting its patents covering many jurisdictions.

  TMT will be prone to a big increase in litigation by patent-holding companies.”

• How soon does business need to react?
  “If we are to believe the Commission’s time-line, the system could be up and running by this time next year. Even though that’s  unlikely (due to the need to ratify the treaty in multiple jurisdictions) it is still urgent to devise a strategy and understand what can be done.”
• What should we look out for coming up?
  “In December 2012, Poland apparently decided it would not sign the agreement  because of the potential cost. Will others do likewise? More likely, will other countries simply not ratify, risking a patchwork system?If an EU Referendum were to take place in the UK and the vote be to withdraw from the EU, we could waste tens or even hundreds of millions setting up a system from which we might subsequently be forced to withdraw.”