As we have previously reported1, the proposal for a
unified patent litigation system2 for the EU in its
current form has met with concern from judges, practitioners and
industry alike. Many commentators, including us, have stated the
system as a whole has not been thought through properly.
Consequently, it risks not serving its purpose of providing a
cost-effective, yet high quality, forum for patent litigation in
When we last reported on the status of the unified patent
system, the sense was that the institutions of the EU, notably the
Commission and the (then) Polish Presidency of the Council, were
hell bent on obtaining agreement on the legislative package by the
end of 2011, and that the EU's "political will" to
secure an agreement without further delay meant the concerns over
the system were falling on deaf ears.
Indeed, the Polish Presidency had signalled its intention to
organise an initialing ceremony in Warsaw for the end of December
where the text of the agreement on the unified court would be
So, where are now?
The short answer is that the initialing ceremony has not
happened. The message from the Council was that the failure to sign
off on the legislative package in December was a result of the
Member States having failed to agree on the location of the Central
Division of the unified court - what has been called in a Council
statement "the last outstanding issue in the patent
package". The Council also reported on the commitment of
the Member States to reaching a final agreement on this point
"by June 2012 at the latest"3.
Whilst the location of the Central Division is, of course, an
important consideration, it is rather bewildering that the
substantive concerns voiced by the actual users of the patent
system remain unacknowledged (publicly, at least) by the EU
institutions having conduct of this most important initiative.
It does seem, however, that the UK Parliament is sitting up and
taking notice of the current state of affairs. The European
Scrutiny Committee of our House of Commons opened an inquiry into
the unified patent court in January of this year.
"The Scrutiny Committee assesses the legal and/or
political importance of draft EU legislation... Ministers should
not vote in the Council of Ministers on proposals which the
Committee has not cleared or which are awaiting
The Scrutiny Committee has held two evidence sessions to date,
first seeking the views of representatives of the legal profession
in Europe on the current proposals, and then requesting that the UK
Government explain its position.
The inquiry is ongoing, but it appears to us that the Scrutiny
Committee is asking itself the right question – how can
it be that the only outstanding issue, according to the Council, is
the location of the Central Division, when so many important
concerns over the substance of the proposed system seemingly remain
Through its evidence to the Scrutiny Committee, it does appear
that the UK Government is engaging with the (now Danish) Presidency
of the Council on some of the most pressing concerns with the
proposed system, namely the possibility of the bifurcation of
infringement and validity proceedings, and the inclusion in the EU
Regulation on the unitary patent right of substantive provisions
regarding infringement (and the spectre of the EU Court of Justice
being asked to interpret those provisions).
Furthermore, the indications from the Scrutiny Committee's
minutes are that the UK Government is taking a position whereby it
will not sign the unified patent court agreement until the Rules of
Procedure for the system have been (close to) finalised. This, if
maintained, is a welcome stance from the UK Government. Given the
apparent refusal of the EU legislature to rethink the overall
architecture of the unified system4, it seems that it may well fall
on the Rules of Procedure to ensure that the worst of the potential
inequities of the proposed system are, at least to some degree,
Finally, the UK Government has suggested, in its evidence to the
Scrutiny Committee, that the June 2012 deadline mentioned above for
sign-off on the legislative package might slip.
In conclusion, we wait to see what progress can be made on the
draft Rules of Procedure for the unified court and hope that, now
the Council's self-imposed deadline of December 2011 for
sign-off on the package has passed, a more circumspect approach
towards the European patent system will now be taken.
1 See here and here.
2 The so-called "patent package" comprises an EU
patents court, and a unitary EU patent right.
3 Press Release following the 20-21 February 2012 meeting
of the Competitiveness Council
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The Finance Act 2012 introduced the UK Patent Box whereby, for accounting periods beginning on or after 1 April 2013, a company may elect for so much of its profits as arise from the exploitation of relevant patents to be brought within the new tax regime which, in broad terms, aims to reduce the effective rate of corporation tax on such profits to 10%.
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