New draft Patents Order brings UPC system another step closer

The Unified Patent Court (UPC) is expected to open in 2017, once Germany, France, the UK, and ten other EU Member States have ratified the UPC Agreement. The UK Government has now published the legislation which will allow the UPC to interact as it should with UK law once everything is up and running. This paper points out some of the provisions to watch out for.

Unitary Patent

A new Schedule A3 will be added to the Patents Act 1977 dealing with Unitary Patents. UK Courts will not have jurisdiction to deal with patent infringement or revocation actions for Unitary Patents, however they will have jurisdiction in some other respects, for example, the Crown will be able to use the invention covered by a Unitary Patent without the proprietor’s consent, on payment of compensation to the proprietor.

More substantially, perhaps, section 128B of the Patents Act, and with it, Schedule 4A, on Supplementary Protection Certificates shall also be extended to Unitary Patents. It will be possible to get a UK supplementary protection certificate (SPC) on the basis of a Unitary Patent. In due course, there will be provision for unitary SPCs for unitary patents, but these are unlikely to be available by the time the new system begins.

According to Article 7 of the Unitary Patent Regulation, when a Unitary Patent falls to be treated as an object of property (for example, if it is to be transferred or mortgaged), it will be treated as if it were a national patent of the country of the first named applicant for the patent (provided that that country participates in the UPC, otherwise it will be treated as if it were a German national patent).

Unified Patent Court

For the first seven years of the UPC’s life there will be a transitional period, during which the UK Courts will have concurrent jurisdiction with the UPC over non-opted out European Patents designating the UK. Which court will actually hear a particular case will be determined in accordance with the Brussels Regulation, which has already been amended to provide for the UPC.

The most important part of the Brussels Regulation for these purposes is that if there are two cases, one before a UK court and the other before the UPC, which have the same parties, the same facts, and the same causes of action, the court first seised of the dispute will have jurisdiction to hear the case. The court which was second (or third or fourth) seised has to decline jurisdiction. It is important to remember that, according to the Court of Justice’s interpretation of the Brussels Regulation (such as in Case C-406/92 The Tatry), an action for a declaration of non-infringement (for example) will be treated as the same cause of action as an infringement action.

In cases where there are different parties, facts, or causes of action, a court second seised may stay an action in favour of the other court if the actions are so closely related that, if the second-seised court doesn’t stay, it is likely that the two different courts will give irreconcilable judgments.

Once the transitional period has finished, the UPC will have exclusive jurisdiction over both Unitary Patents and European Patents designating the UK (provided the latter had not been opted-out during the transitional period) in respect of infringement and revocation actions. This means that the jurisdiction of the UK IPO over patent validity and infringement will come to an end. Nevertheless, the UK IPO will still be able to provide non-binding opinions in relation to both European Patents (UK) and Unitary Patents.

New defences to infringement

In line with the UPC Agreement, there are two new defences to patent infringement introduced into domestic patent law:

• Using biological material for the purposes of breeding, or discovering and developing other plant varieties shall not constitute patent infringement. This exception will be available in respect of all types of patents. (Section 2(3)(j) of the Patents Act once it is amended.)
• For European Patents designating the UK, and for Unitary Patents, a parallel exception in patent law is created which already exists in copyright law. It is not an infringement of the copyright in software to decompile a piece of software in order to make it interoperable with another piece of software. Similarly, once the Patents Order 2016 takes effect, it will not be an infringement of a software patent to decompile a patented piece of software for the purposes of making it interoperable. (Section 2(3)(k) of the Patents Act, once amended).
  • Whilst very unlikely to come up in practice, it is worth noting that this exception will not apply to GB national patents granted by the UK IPO.

Threats

The threats provisions of the Patents Act 1977 have not been extended to Unitary Patents. The Government is working separately with the Law Commission to reform the law on threats for all IP rights and legislation on this will be proposed, it is expected, during 2016.

Enforcement

The UPC will not have the power to enforce its own judgments: this will be left to the national courts and authorities. Section 4 of Schedule 4A of the Patents Act will provide that, for the purposes of enforcement proceedings, a judgment of the UPC will have the same effect as if it had been a judgment of the High Court.