Source: http://ipkitten.blogspot.com/2017/04/the-upc-after-brexit-is-cjeu.html?showComment=1491463506037
Timestamp: 2019-04-23 14:06:57+00:00

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Home / Brexit / CJEU / ratification / UPC Agreement / The UPC after Brexit - is CJEU jurisdiction a deal-breaker?
The UPC after Brexit - is CJEU jurisdiction a deal-breaker?
This Kat posted last week about the current progress of ratification of the UPC Agreement, and with it the likely timetable of the coming into operation of the Unified Patent Court and the Unitary Patent; and fellow Kat Annsley also reported an update received from the UPC taskforce of the UK IPO.
Surely then, it is argued, the UK cannot remain a member of a court system in which the CJEU has jurisdiction. This position is advanced in this article by authors from Dechert LLP and was also the subject of a Twitter discussion between this Kat and Tufty the Cat.
Well, this Kat does not think so, and the key in the passage quoted is “in the UK”. The issue is that currently domestic courts are required to follow CJEU jurisprudence, and after Brexit they will no longer be so bound. But the UPC is not a domestic court. It is an international court. It is not in any jurisdictional sense “in the UK”. Therefore, this Kat considers that this policy statement is simply irrelevant to the matter of the UPC.
The UK has not said that it will not be part of any international court or tribunal in the future. What it has said is that domestic courts should not be bound by the CJEU. If the UK has no issue with being part of an international patent litigation court (which involves entirely ceding jurisdiction to that court in the case of patents litigated there) it is comparatively a minor issue what sources of law that court will recognise or be bound by – the main issue is that a court that is not under exclusive UK control will have competence. There is no reason why Brexit should change that, and this Kat does not see any real incompatibility between the UK’s policy on the judicial independence from the CJEU of its domestic courts, and continued membership of an international court system where CJEU decisions will be binding.
The other point is that national patent law will be unaffected, and no patentee is required to use the UPC, or seek a unitary patent. Despite this Kat’s view that Article 2(2) of the European Patent Convention admits no divergence in law between national patents and European patents, the UK implementation of the UPC Agreement will allow national patent law to develop in a manner different from that of the UPC. So if a patentee wants a UK patent litigated only in a UK court subject only to the UK Supreme Court, then all they need do is apply for one.
In reality, it seems to this Kat no different in principle ceding to the UPC (with its CJEU oversight) jurisdiction over infringement of European patents including in respect of the UK, to ceding to the European Patent Office jurisdiction over the granting of European patents including in respect of the UK. If the EPO Boards of Appeal decide to reject a European patent application or revoke a European patent, then that decision is final and no UK court can get it back for you. In both cases, the matter is outside the remit of UK tribunals.
How numerous are likely to be CJEU referrals by the UPC anyway? As far as this Kat can see, they are likely to be neither less nor more numerous than by national courts currently. Which means – for patents, not very many, for supplementary protection certificates, rather more. So far patents at least, this Kat expects the CJEU involvement to be rather limited.
Only time will tell, and the UK has committed so far only to ratifying the UPC Agreement, not to remaining in the system after Brexit. But the UK Government seems to regard both options as open – the original announcement that the UK would ratify stated “But the decision to proceed with ratification should not be seen as pre-empting the UK's objectives or position in the forthcoming negotiations with the EU”. Indeed to this Kat both outcomes are conceivable – neither is impossible in principle.
I agree with you that Decherts take it too far. Clients have to choose whether they want a UK patent or an UPP subject to the UPC. They have already elected to use the EPC and its extra-territorial law. My difficulty at the moment is advising clients making the decision on grant - those renewal fees will become a tough call for the smaller client who hasn't grown as they had hoped, but if they are successful but subject to competition they will regret not having gone the UPC route. For well established companies it will be simpler and there will be experience of the scope of protection. For university patents its going to be a very hard call so without serious investment at the Chapter II date they might be falling back on UK and USA only.
I don't necessarily disagree with the main points, although I am not sure how politically wise such a somewhat sophisticated argument would be; voters excited about leaving the "hated" ECJ would surely not share your analysis and might get upset about this notwithstanding the fact that they are not the target audience of patent law. However, the point that "no patentee is required to use the UPC" is rather vulnerable to the counter-argument that patent law is not just and not even primarily concerned with the patentee-state relationship, but foremost with the relationship between third parties and the patentee. The patentee who applies for a unitary patent does force third parties to submit to the UPC - and thus ECJ - jurisdiction.
That's too narrow an interpretation. The quote says "... the jurisdiction of the CJEU in the UK". That means the ability of the CJEU to apply law that has an effect on matters taking place in the UK. In making a decision on for example, a matter of infringement of a European patent in respect the UK, the UPC is absolutely acting as a domestic court and thus the CJEU is exercising jurisdiction in the UK. There is an inconsistency here and the more likely explanation is that the government is in a mess, not that it has a cunning plan.
Decherts seems to be echoing an absolutist stance already advocated by Martin Howe QC, of "Lawyers for Brexit" on this very topic.
I think they are wrong. There is nothing improper with it being written into the rules for the UPC to be denied the right to make rulings in breach of the constitutional provisions of any of its member states, and for a mechanism to exist to determine what those provisions might be. Even if in practice it is just for the majority of the member states - i.e. the EU member states.
“The Government has been clear that in leaving the EU we will bring an end to the jurisdiction of the CJEU in the UK."
"What it has said is that domestic courts should not be bound by the CJEU."
Unfortunately, this just doesn't follow. Nowhere in the statement of the government does it limit the exception to the jurisdiction of the CJEU to "domestic courts". Rather the statement is that "we will bring an end to the jurisdiction of the CJEU in the UK". This statement simply isn't compatible with UK membership of the UPC. Take the very simple example of a UK person or company infringing a unitary patent by actions that are only carried out in the UK. In that case the UK will still very much be under the jurisdiction of the CJEU.
Agree with Anonymous at 14:14. The CJEU's role is mostly a red herring both legally and politically. The UPC clearly cant be issuing remedies to be enforced in EU countries that are contrary to EU law and the CJEU is there to prevent that. Unless an invention relates to the Biotech directive the CJEU will have very little influence on what happens can or cant be done in the UK.
The political angle is also a overplayed- Carswell's early day motion didn't get any other backers. What happens to the UK in the UPC will be wrapped up with the big Art 50 deal. When the Art 50 deal is completed -what happens to the UPC isn't going to be a primary talking point with those that hate the EU.
"If the UPC were truly part of the Union legal order, it would already be subject to these obligations without them needing to be spelled out in the Agreement. Whilst Article 1 of the UPCA and Article 71a of the Brussels Regulation designate the UPC as a “court common to a number of Member States”, we do not consider that such secondary legislation is capable of converting the UPC’s fundamental status as an international court into that of a court which is part of the national legal order"
The main focus of the CJEU's Opinion 1/09 was upon the question of supremacy of EU law (and the mechanisms for ensuring that supremacy). The main mechanisms by which supremacy of EU law is enforced in a particular country are membership of the EU and the ability of national courts to make references to the CJEU.
Think about it: how could an "international court" refer questions to the CJEU if that court is not a court common to the EU Member States?
Remember that the ability to refer questions to the CJEU is restricted by Article 267 TFEU to "any court or tribunal of a Member State".
If I am missing something, then I would be glad to hear what it is. Otherwise, it seems that the UK most definitely cannot participate in the UPC post-Brexit... unless, of course, no one is bothered about compliance of the UPC Agreement with EU law.
This point also provides an answer to Darren's question regarding how frequently the UPC will refer questions to the CJEU. That is, the ability of UPC to refer questions to the CJEU presupposes that the UPC will be bound by the provisions of Article 267 TFEU. The upshot of this is that the UPC Court of Appeal will have no choice but to refer questions to the CJEU when the decision of the Court hinges upon a provision of EU legislation that has no clear and unambiguous interpretation.
"Think about it: how could an "international court" refer questions to the CJEU if that court is not a court common to the EU Member States?"
I think Gordon and Pascoe's conclusion is that is can because it has the legal fiction of being considered a court common to the EU Member States for the purposes that matter. See the definition in Brussels .
Regardless of their conclusion I don't currently follow the logic that the UPC being a court common to member sates is a problem- rather it would seem to make the UK staying in more straight forward. If the court is also common to a non-EU UK then it doesn't stop being also common to the EU states. Do you think it has to be a court ONLY to member states and if so on what basis?
For non-unitary patents that doesn't seem to be any reason for the UPC to refer to the ECJ any more than English or German courts do on patent cases. There is no new EU patent law.
For unitary patents Article 5(3) of Regulation 1257/2012 seems pretty straight forward to me. It refers to national law in relation to UPs. The only national law on UPs is from the ratification of the UPCA into national law, therefore it is a reference to the UPCA.
1) the UPC is strictly reserved to member states of the EU. There is not much which can be said more. Any attempt to change this , for instance by the Administrative Committee amending the UPCA, is doomed to fail as any possible amendments can only have the aim to bring the UPCA in line with an international treaty relating to patents or Union law. Not only the preamble makes reference to Union Law, but as well the Art. 5, 20, 21, 27,31, 32, 84 and 85 (the list does not pretend to be exhaustive) refer directly or indirectly to Union Law. And a non-EU member can participate? Sorry but the time for April's fool jokes is over.
Nice try to claim the UPC is an international court but it is an EU court, which is why it is under the CJEU. We could try and get round many hurdles by creating 'international bodies' in this way, but I doubt it will wash. The EMA for example may be one such body we could do with not leaving.
"the UPC is an international court but it is an EU court, which is why it is under the CJEU. "
It is "under" the CJEU in the same way as the English courts and UK Supreme Court are at present. Are you suggesting that the English Court are EU courts even when deciding on national law. Do you consider the Miller Art 50 judgement to be the work of an "EU" court. Seems a strange catogorisation to me.
Reading all of this reminds me of the final scene of "The Bridge On The River Kwai".
I always like to remark that according to Art. 1 the UPC not only shall be a court common to EU Member States (only, of course), but also that it is subject to the same obligations under Union law as ANY national court of the Contracting Member States, which means that by ratifying this agreement the UK confirms in writing that ALL UK national courts shall be subject to EU law.
Take a(nother) look at the CJEU's Opinion 1/09. An interesting paragraph of that Opinion is as follows.
"It must be emphasised that the situation of the PC envisaged by the draft agreement would differ from that of the Benelux Court of Justice which was the subject of Case C 337/95 Parfums Christian Dior  ECR I 6013, paragraphs 21 to 23. Since the Benelux Court is a court common to a number of Member States, situated, consequently, within the judicial system of the European Union, its decisions are subject to mechanisms capable of ensuring the full effectiveness of the rules of the European Union".
So let's get this straight. A mere "legal fiction" of the UPC being "a court common to a number of Member States" is not enough. Instead, the character of the court must be such that "its decisions are subject to mechanisms capable of ensuring the full effectiveness of the rules of the European Union". For the UPC post-Brexit, the only phrase that springs to mind is "epic fail" when it comes to this criterion.
And think again about Article 5(3) of the UPR. Are you really so sure that it will be that simple? Have you appreciated how the differing constitutional arrangements of the Participating Member States will lead to variations in the extent to which the provisions of the UPC Agreement are incorporated into national law? I thought not.
"The other point is that national patent law will be unaffected, and no patentee is required to use the UPC, or seek a unitary patent."
No, but any technical activity in the UK is within its jurisdiction to determine whether or not the activity is legal, and it will have to apply the jurisprudence of the CJEU, not the UKSC in so doing. It will have to power to compel compensation to be paid to another entity if not, following that law. So, in the languages of the media, "British businesses and individuals remain subject to jurisdiction of an EU court." Can't see this flying politically, once Percy the Plumber starts getting threats of UPC litigation in respect of allegedly infringing fixtures or spare parts ordered and supplied from China.
"Dear UK lawyers, the reality is that Brexit has thrown you out of a system you hoped to make a lot of money with. It is sad for you, but unavoidable and any contortions trying to be in with being in are in vain. "
I believe this comment contains the problem with the UPC, but only points it out in respect of UK lawyers. The problem, irrespective of Brexit, is that this is a lawyer-led white elephant.
"The problem, irrespective of Brexit, is that this is a lawyer-led white elephant".
Whilst I suspect that it may be correct to say that the UPC was started by lawyers, I am not 100% sure that they remain in the driving seat.
UK private practice lawyers (other than suitably qualified patent attorneys) are unlikely to have rights of audience before the UPC post-Brexit... though no doubt there will be lobbying aimed at UK solicitors and barristers being granted such rights.
Also, I have not met an "in-house" attorney yet who is a real fan of the UPC. Witness, for example, the position advocated by the IP Federation (ie don't ratify until we're sure how this can all work post-Brexit).
I will concede that some UK patent attorneys are (as individuals) quite pro-UPC, but I have met many who are not... and many more who do not really have strong views either way. I will also concede that (for reasons that I cannot quite fathom), CIPA has been lobbying for the UK to press ahead with ratification. However, I have reason to believe that this is not why the project is going ahead.
From what I have observed, the principal reason behind the Member States pressing ahead with the UPC (despite the hugely unwelcome extra dollop of uncertainty that this will bring for European industries) is the "political capitol" that has been invested in the project.
From the perspective of the EU Member States, the UPC is a flagship for "enhanced cooperation". They need this to work so that there is an example of a new way to deal with the increasing difficulty of securing unanimous agreement on important EU projects.
From the perspective of the UK, I suspect that pressing ahead was a way for Lucy to "save face", avoid having to answer awkward questions about the time and money spent on a project that turned into a lame duck, and avoid having to deal with the threat of the other Member States to "go it alone".
When you look at it this way, it kind of makes sense. I mean, idiotic "white elephant" projects are far more often brought to life by politicians for reasons of vanity than they are by professionals who might actually know what they are doing.
Funnily enough, there was a programme on UK Terrestrial TV a few days ago which produced evidence that, not only was the Titanic made of second-rate steel plate, but that it also set sail with an uncontrollable fire raging in one of its coal bunkers that had seriously weakened its structure.
Further to proof of the pudding's post of 10:32, I also find it unfathomable quite why CIPA have lobbied so hard for the UPC since the Brexit referendum. They certainly haven't been representing the somewhat mixed opinions of the UK profession in this matter.
CIPA steers I the direction of its council, and is unable to hear the shouts of 'iceberg' from those of its members who can see it, i.e. those with a true understanding of their client's interests and in-house patent attorneys.
"The steel used in constructing the RMS Titanic was probably the best plain carbon ship plate available in the period of 1909 to 1911, but it would not be acceptable at the present time for any construction purposes and particularly not for ship construction. Whether a ship constructed of modern steel would have suffered as much damage as the Titanic in a similar accident seems problematic. Navigational aides exist now that did not exist in 1912; hence, icebergs would be sighted at a much greater distance, allowing more time for evasive action. If the Titanic had not collided with the iceberg, it could have had a career of more than 20 years as the Olympic had. It was built of similar steel, in the same shipyard, and from the same design. The only difference was a big iceberg. "
Quite frankly, the opinion of this author whose firm is heavily invested in the UPC is as biased and thus irrelvant as that of the other UPC proponents. They are all in vain trying to cherrypick from the apparent mess something to suit their needs and further their agenda. Whether it's Tilmann, Mooney, Hoyng or now Mr Smyth.
An inevitable part of their story always is the remark "How numerous are likely to be CJEU referrals by the UPC anyway?" Quite frankly, as it has been pointed out elsewhere (bit.ly/2k0nOCV), in the end it may well be that CJEU involvement will not be as limited as now alleged. Of course, this allegation likewise serves the purpose of trying to paint the UPC picture that everything will be fine and coherent, but in reality it is not. The stage has already been set for allowing the CJEU to assume interpretation competence also with regard to interpreting material patent law, some unwary commentators have clearly said so, Mr Tilmann being amongst them. The main purpose of the 'compromise' on Articles 6 to 8 apparently was to hide this CJEU competence for later, until it can be 'activated'.
Even in-house lawyers (not patent attorneys, but the other kind, who can call themselves 'patent attorneys' for no sensible reason I can think of) are planning to risk their employers' assets by taking the unitary patent route.
In regards to the 'assertion' "How numerous are likely to be CJEU referrals by the UPC anyway?", was the same question asked by Smythe et al when the SPC regulation was drafted?
Presumably, the fact that a general election has been called will now prevent the ratification of the treaty until after June (if ever).
Parliament to meet for maybe only 7 days before 8th June due to holidays and local elections in May.
There will be plenty of trawling over May's words as to whether Brexit negotiations are delayed, going on or are just not happening anyway at the moment.
Odd decision by Mrs May. I mean, what changed between triggering Article 50 (on 29 March) and yesterday? Certainly nothing relating to any of the "excuses" that she provided yesterday. Perhaps she just hadn't thought things through before now. If so, that hardly inspires confidence!
On a more IP-related note, has the IPO revealed any details on when they now expect the UPC Agreement to be ratified? Seems that a delay of several months (at least) is inevitable.
Maybe like Brexit for Cameron this is all about internal Tory politics?
Re UPC, techrights made me chuckle with his happy cheer for Another Final Nail in the Coffin. How many final nails can there be?
Or perhaps it is not unrelated to police investigations into alleged breaches in spending limits in the last general election? As those investigations relate to about 20 or so Tory seats, findings of wrongdoing in connection with just over a quarter of them, and the by-elections that would follow, could have seen Theresa's current majority wiped out.
Indeed, the more that I think about it, the more that the possibility of by-elections looks like it could have been a decisive factor. For example, it might be hard to persuade people to vote for your candidate if the only reason for the vote is that your party has broken the law. Also, who knows what the timing of the by-elections could have been? With respect to the Brexit negotiations, the timing could have been very poor indeed for Theresa.
The saddest thing about all of this is thinking about how things might have been different if spending limits had not been breached by any party (but particularly the Tory party). Would Cameron have been elected with a majority? Perhaps not. And if not, then most likely there would not have been an EU referendum.
So does that mean that there is a possibility that Brexit is happening as a direct result of criminal acts? I guess we will never know. However, one thing that I am sure of is that it would have been much more sensible for Theresa to call an election before triggering Article 50.
To use an analogy, you would be (rightfully!) alarmed if, shortly after taking off, the pilot of the plane in which you were travelling announced that there will be a vote on who should pilot the plane for the rest of the journey... but that if the result is anyone other than the current pilot, then they will have to somehow board the plane mid-flight, as there is no way that the plane can be stopped.
Despite this, I have no doubt that Theresa and her colleagues will have the bare-faced cheek to argue that it would be dangerous to change leader (or, in my analogy, pilot) at this stage. Such is the way with modern politics.
I have to also admit to feeling sorry for the devolved administrations in Scotland and Northern Ireland. This is because, from their perspective, it is hard not to interpret Theresa's decision as her effectively "giving them the finger". Indeed, Scotland's First Minister has reason to be particularly offended. Having been told that "now is not the time and the reason I say that is because all our energies should be being put into the negotiations with the EU to make sure we get the right deal", she leans that now is in fact the time to instead put a large part of our energies into a vote... just not the one that Holyrood has asked for.
Proof - the expenses issue relates to how the costs for a "battle bus" should be characterised - national campaigning or local expenses, and for your information, Labour are being investigated for exactly the same reasons. To hype this into a reason for calling a general election and more bizzarely influencing the Brexit decision are, quite frankly, ludicrous.
Not "hype", just idle speculation.
Please note that my previous comment did acknowledge that it is not just the Tory party that may have broken the law. The reason for focussing my speculation upon them was simply because they won the election... and then set in motion the course of events with which we are now all too familiar.
You have to admit, though, it is perfectly possible that the benefits of "wiping the slate clean" with regard to potential invalidity of previous election results were an important motivating factor behind Theresa's decision. I'm not saying it's a certainty, merely a possibility... and an interesting one in view of the fact that little else of consequence seemed to have changed between 29 March and 17 April.

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