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Background

 

A small number of national patents are granted by the Intellectual Property Office of Ireland but most patents with effect in Ireland are granted by the European Patent Office. Until recently, those European patents have had to be validated separately in individual states and then litigated separately in their national courts. The result of this fragmentation has been to increase the cost of protection and litigation and to risk the nightmare of different outcomes when litigating the same patent in different jurisdictions.

 

To address these problems, the EU’s Unitary Patent package provides for a European patent to be granted with unitary effect (the Unitary Patent), enabled by the creation of a single specialised jurisdiction for patent litigation in the participating EU states (the Unified Patent Court). These two pillars of the system save cost by covering multiple EU states together in streamlined procedures to simplify patent protection and litigation.

The Unified Patent Court

 

The UPC is an entirely new multinational court for pan-European patent litigation that will eventually have exclusive competence over infringement and validity of all European patents, at least insofar as they cover the UPC signatory states. The UPC comprises a Court of First Instance, made up of Local, Regional and Central Divisions located in various EU states, and a Court of Appeal based in Luxembourg.

 

Several EU states, such as the Netherlands, have decided to host their own Local Divisions; others, such as Sweden and the Baltic states, have joined together to share Regional Divisions. The Central Division has sections in Paris, Munich and Milan. In each instance, a single ruling from any of the Divisions applies directly in all EU states that have ratified the UPC Agreement.

 

Infringement actions are brought in the Local or Regional Division of a state in which the infringement takes place or in which at least one defendant has its principal place of business. In isolation, revocation actions and requests for declarations of non-infringement must be brought in the Central Division but a counterclaim for revocation can be heard in a Local or Regional Division that is hearing the related infringement action. Alternatively, the case can be ‘bifurcated’ if the Central Division takes revocation while the Local or Regional Division decides on infringement. It is also possible for the entire case to be transferred to the Central Division to decide on infringement and revocation issues together.

 

Unitary patents do not replace existing national and classical European patents but instead provide an alternative to classical European patent validations to protect an invention in all UPC signatory states. Applicants can choose which patent strategy is best for them and can use existing systems and the new unitary system in different combinations for different inventions. So, the UPC should be regarded as a useful additional tool in a patent lawyer’s toolkit.

 

Why the delay?

 

More than a decade has passed since the then Irish Government agreed, in principle, that Ireland should participate in the UPC and host its own Local Division in Dublin. Following long delays in ratification due to Brexit followed by constitutional challenges in Germany, the UPC finally came into force on 1 June 2023. The new system has made encouraging progress since then. Seventeen EU states have already ratified the UPC Agreement and more are expected to follow. Ireland is one of only six signatory states that have yet to do so.

 

Ireland’s ratification has been delayed further because the UPC Agreement is incompatible with the current Irish Constitution. Specifically, Article 34.1 of the Constitution states that:

 

Justice shall be administered in courts established by law by judges appointed in the manner provided by this Constitution…

 

As Ireland’s ratification of the UPC Agreement will require jurisdiction in patent litigation to be pooled with other EU states by being transferred from the Irish courts to the UPC, the Constitution will require amendment first. Any such amendment to the Constitution, in turn, requires prior approval of the Irish electorate in a referendum.

 

Next steps

 

The current Irish Government has announced that the necessary referendum will take place in June 2024. Helpfully for voter turnout on such a technical question, this date coincides with planned local and European elections.

 

On 15 February 2024, the Government presented the Forty-first Amendment to the Constitution (Agreement on a Unified Patent Court) Bill 2024 to the lower house of the Irish legislature, Dáil Éireann. The Bill sets out a proposal for amendment of the Constitution and if passed by both houses of the legislature, including the upper house Seanad Éireann, the proposal will be put to the planned referendum.

 

The Bill itself is not much lengthier than its title. It simply proposes the following addition to Article 29, Section 4 of the Constitution:

 

The State may ratify the Agreement on a Unified Patent Court done at Brussels on the 19th day of February 2013. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Agreement or prevents laws enacted, acts done or measures adopted by bodies competent under that Agreement from having the force of law in the State.

 

The Bill has attracted wide political support, subject to agreeing the eventual wording of the referendum question. As that wording should hardly be controversial, the Bill is expected to pass without issue so that the referendum can take place as planned.

 

Anyone familiar with recent referenda in Ireland - not to mention the UK! - will know that their outcomes can be unpredictable. In general, though, the Irish electorate has been in favour of the EU project. Also, it is to be hoped that the UPC will attract less misinformation than more emotive subjects and that its benefits will be easier for voters to understand. As the UPC enjoys cross-party support, it would be a major surprise if the planned referendum rejects Ireland’s ratification.

 

If the referendum is successful, the Attorney General's office stands ready to draft enabling legislation. Once that legislation is enacted, Ireland will be free to ratify the UPC Agreement and so to become the eighteenth participating member of the UPC. Unitary Patents obtained from ratification onwards will then extend automatically to Ireland.

 

The Government has also re-stated its objective to establish a Local Division of the UPC in Ireland. Indeed, officials are already working through preparatory issues such as provisions for establishing the Local Division and a physical site for that new court. The enabling legislation will authorise a Minister to allocate a budget and to assign staff to the new court.

 

Who will benefit from Ireland’s participation in the UPC?

 

The broad objective of the UPC is to offer its various users accessible, cost-effective and efficient routes to patent protection and dispute resolution across most of the European single market. Users of the UPC will be based not only in EU states such as Ireland; they will also be based outside the EU.

 

Ireland’s ratification of the UPC Agreement will be important for the competitiveness of its businesses, especially small and medium enterprises (SMEs); for its competitiveness on a national level; and more generally for supporting Irish science and R&D.

 

Benefits for Irish businesses

 

Easier and less expensive patent protection in Europe will fulfil a key part of the Government’s export strategy by helping Irish businesses to export more widely across Europe. Lowering costs is particularly relevant to SMEs, giving growing Irish businesses a level playing field on which to compete with businesses elsewhere in Europe. Irish businesses will be able to patent once and, if necessary, litigate once, encouraging them to develop new technologies because they can protect them more effectively. Also, the proposed Local Division of the UPC in Ireland could help Irish patent owners to enforce their European patent rights on home ground.

 

Benefits for national competitiveness

 

Ireland’s track record for attracting foreign direct investment has been instrumental in developing its globally-significant Tech, Pharma, Bioscience and MedTech sectors. However, its continued success in attracting such investment cannot be taken for granted against a background of intense competition from abroad, including other EU states that have already ratified the UPC Agreement.

 

Participation in the UPC will enhance Ireland’s reputation as an attractive base for multinational companies and for their R&D activity, whether they are already established in Ireland or are deciding where to invest. When debating the relevant Bill in Dáil Éireann on 29 February 2024, Minister of State, Neale Richmond, said:

 

“Intellectual property protections are one of the factors that investors cite when making investment decisions. Our participation in the Unified Patent Court represents for Ireland an opportunity to enhance the credibility of our messages to inward investors, namely, that Ireland is an attractive location for high-tech and research, development and innovation activities; that the Government recognises the value of intellectual property to enterprise; that it is committed to providing a supportive environment for the development of IP and for protecting and enforcing IP; and that Ireland is a serious competitor for IP-based foreign investment.”

 

Attracting IP litigation to Ireland

 

Ireland’s competitiveness on the international stage extends into the intellectual property (IP) arena itself. Whilst the UK is no longer a participant in the UPC, it contributed greatly to the design of the UPC before Brexit and so has left a common-law mark on the system. With the UK’s departure from the EU, Ireland has picked up the baton as the leading English-speaking EU state with a common-law tradition. Possibly, therefore, a Local Division in Dublin will be more receptive than others to exploit aspects of the UPC system influenced by common law, such as disclosure of documents, reliance on expert reports and cross-examination of witnesses.

 

An Irish Local Division of the UPC will be a gateway to attract European patent litigation that might otherwise be taken elsewhere, especially from English-speaking states with common-law traditions of their own – notably the UK and the US. Indeed, patent litigation practices based in the UK and elsewhere have opened offices in Dublin in anticipation of UPC involvement, adding to the expertise of patent attorneys and other IP lawyers already based in Ireland.

 

Keltie has been operating in Ireland since 2016 and is an established part of the Irish IP scene. Keltie’s European patent attorneys include UPC Representatives based in Ireland and the UK.

 

Sean Cummings is a European patent, trade mark and design attorney and a UPC Representative. He is a Partner in Keltie LLP and Director of the firm’s Irish offices, representing Keltie clients in all EU IP matters.

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