12 The Brussels I Regulation and
the Unified Patent Court
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12974/13
COM(13) 554
| Draft Regulation amending Regulation (EU) No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters
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| Legal base | Articles 67(4) and 81(2) TFEU; QMV; co-decision
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| Document originated | 26 July 2013
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| Deposited in Parliament | 12 August 2013
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| Department | Ministry of Justice
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| Basis of consideration | EM of 15 August 2013
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| Previous Committee Report | None; but see The Unified Patent Court: help or hindrance? (Sixty-fifth Report of Session 2010-12; HC 1799)
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| Discussion in Council | No date set
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| Committee's assessment | Legally important
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| Committee's decision | Not cleared; further information requested
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The document
12.1 The proposals intend to amend EU Regulation No. 1215/2012
— the Brussels I (recast) Regulation — by adding the
Unified Patent Court (UPC) to the list of judicial bodies which
fall under the jurisdiction of the Regulation; by clarifying the
operation of the rules on jurisdiction in relation to the UPC;
by clarifying the operation of the rules about parallel proceedings
in relation to the UPC; and by clarifying the operation of the
rules on recognition and enforcement in the context of the relationship
between contracting and non-contracting Member States to the UPC.
12.2 The Brussels I Regulation sets out rules
relating to the international jurisdiction of courts of the Member
States of the EU in civil and commercial matters. It covers, among
other things, litigation in the area of intellectual property,
including patents. The recast of the Regulation comes into force
in January 2015.
12.3 In December 2012, an agreement known as
the "Patent package" was reached among Member States.
The package consists of the Unitary Patent Regulations and an
international Agreement, the UPC Agreement, on which the Committee
conducted in-depth scrutiny.[32]
Currently individuals or businesses seeking to protect their inventions
across Europe can either apply separately to each national patent
office for a national patent or they can apply to the European
Patent Office (EPO) for a "bundle" of national patents;
one for each country specified. The process is typically subject
to costly translation provisions and, in some countries, additional
validation charges apply before the EPO-granted patent can take
effect.
12.4 Once the Unitary Patent Regulations apply,
an individual or a business will have the option of obtaining
a European Patent with "unitary effect" which will have
uniform effect across 25 Member States of the EU. Instead of having
to take or defend patent actions in individual countries, the
new regime will offer what in effect will be a "one-stop
shop", thus providing cost advantages and reducing administrative
burdens significantly. The UPC will eventually have exclusive
competence for infringement and validity of unitary patents and
European "bundle" rights. This means that the UPC will
eventually replace national courts' jurisdiction for European
bundle patents after a transitional period of seven years (extendable
up to 14 years). The UPC will not have jurisdiction over national
rights patents by national patent offices.
12.5 One of the reasons for the present proposal
is that the coming into effect of the UPC is linked to the recast
Brussels I Regulation. The Agreement which sets up the UPC cannot
come into effect before the amendments to the recast Brussels
I Regulation, which regulates the relationship between the two
instruments. The present proposal will ensure compliance between
the UPC Agreement and the recast Brussels I Regulation, thus enabling
the creation of the UPC.
12.6 An amendment to the Brussels I Regulation
will also be necessary to reflect the recently agreed Protocol
involving the Benelux Court of Justice. This Protocol allows for
the jurisdictional competence of the court to include specific
matters which come within the scope of the Brussels I Regulation,
in this case, intellectual property litigation. The amendment
will be needed to ensure that the Benelux Court can be considered
as a court of the Member State under the terms of the Brussels
I Regulation, ensuring that the Regulation applies fully to the
Benelux Court.
12.7 Ratification by the UK is a pre-requisite
for the UPC Agreement to come into force.
The Government's view
12.8 In an Explanatory Memorandum dated 15 August
2013 the Secretary of State for Justice (Chris Grayling) says
that an effective patent litigation system is an important element
in removing trade barriers between EU Member States and supporting
growth for Europe. The Patent Package will establish a single
patent covering participating countries, providing UK businesses
with an alternative and cheaper option to protect their inventions
across the EU. It could provide savings of up to £20,000
per patent in translation costs alone, while a single court system
will save businesses the expense of having to enforce patents
in more than one State.
12.9 Creating a business-friendly patents regime
for Europe is also a part of the Government's growth strategy
and it was a key recommendation from the 2011 Hargreaves review
of Intellectual Property and Growth.
12.10 The UPC will be a court common to the participating
Member States of the UPC Agreement and will comprise a Court of
First Instance (CFI) and a Court of Appeal (CoA). The Court of
First Instance will consist of a central division and a number
of local and/or regional divisions, hosted by Member States or
groups of Member States. The seat of the central division will
be in Paris but with specialist technology sections set up in
London and Munich according to subject matter. The Court of Appeal
will have its seat in Luxembourg.
12.11 The UPC Agreement also sets out the internal
competence of each division of the UPC. For example, actions for
infringement of a unitary patent may be brought before a local
division in which the infringement is alleged to have occurs.
An action where the validity of a unitary patent is challenged
would be brought before the Central Division or one of its technical
sections.
12.12 Thus a defendant in an action before the
UPC may find themselves before a division which is not located
in their country of domicile in the way that may be expected on
the basis of Article 4(1) of the Brussels I Regulation.
12.13 Under the terms of the Agreement, the UK
will pay for the facilities in its own territory, and contribute
to the funding of the court until it becomes self-funding through
the collection of court fees. The Government estimates that costs
to the UK could be of the order of £10 million a year until
the court becomes self-funding. The detail of the funding and
financial arrangements will be discussed further between participating
Member States before the UK completes ratification of the UPC
Agreement.
12.14 The Minister says it is essential that
the UPC sits within the legal framework of the EU because it will
have competence over the unitary patent which is established by
two EU Regulations. It is for this reason that Article 31 of the
UPC Agreement makes an explicit reference to the Brussels I Regulation.
The proposed amendment is intended to ensure the UPC is explicitly
included as a court within the meaning of the Brussels I Regulation
and that there is no conflict with the provisions setting out
the internal competency of the UPC as provided for in the UPC
Agreement.
12.15 The proposed amendment seeks to complete
uniform jurisdiction rules in relation to third-State defendants
(those domiciled in a country which is not a participating Member
States of the UPC). In principle this may be a desirable outcome
although it may not be strictly necessary for the operation of
the Unified Patent Court. Further consideration of the details
of this amendment will be given as discussions on the proposal's
progress.
12.16 During a transitional period of seven years
(extendable up to 14 years), actions for infringement and validity
of European "bundle" patents may be brought before the
UPC or national courts. Therefore the proposal also seeks to ensure
the transitional regime of the UPC Agreement is accounted for
within the Brussels I Regulation.
12.17 The UPC Agreement stipulates that enforcement
of the Court's decisions will be a matter for national law. Thus
it is necessary that the Brussels I Regulation recognises the
judgement of the UPC as suggested in the current proposal.
Conclusion
12.18 We thank the Minister for his Explanatory
Memorandum. We scrutinised the Unified Patent Court in detail
last year,[33]
and so limit ourselves on these consequential amendments to the
Brussels I Regulation to asking the Minister to write to us no
later than a month before the conclusion of the first reading
negotiations with a further update, when we shall consider clearing
the document. Until then, it remains under scrutiny.
32 See headnote. Back
33
See headnote. Back
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