Unified Patent Court (Immunities and Privileges) Order 2017

Baroness Wilcox Excerpts

Wednesday 6th December 2017 Grand Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley)]

My Lords, the draft order was laid before the House on 26 June. It confers legal status on the Unified Patent Court, as well as providing a limited set of privileges and immunities to the court, its judges and its staff. They are necessary to ensure the effective and proper functioning of the court, and were agreed in the international agreement establishing the Unified Patent Court and its Protocol on Privileges and Immunities.

In its current form, the patent system across Europe is fragmented and expensive. Businesses must maintain a bundle of patent rights, each covering a single country. They must also enforce each patent separately in the national courts of each country. That is costly and burdensome. The Unified Patent Court will offer a way for innovative businesses to enforce or challenge patents in up to 26 European countries with a single court action. That ability to obtain a single judgment is potentially significant and valuable for patent-intensive industries. For example, independent research shows that around a quarter of all patent cases heard in United Kingdom courts were also litigated in other European jurisdictions between the same parties. That is why a single Unified Patent Court is so welcome.

Even better, an important division of the court dealing with disputes in the field of pharmaceuticals and the life sciences will be based here in the United Kingdom. This cements the United Kingdom’s global reputation as a place to resolve commercial legal disputes and reflects this country’s strong role in this important field. It will also generate considerable work for, and help to enhance the global competitiveness of, the United Kingdom legal services sector.

British businesses will still be able to choose national patents and litigation in national courts should they wish, but they will now have the option to use this new court structure, with all the benefits I have described. Being part of this international court will allow us to ensure that it meets the needs of our own innovative businesses, which will be able to use it in the other contracting states. That is why the Government are carrying out their commitment to proceed with preparations to ratify the international agreement that sets up the Unified Patent Court. That commitment should not be seen as pre-empting the negotiations on leaving the EU. Although the UPC is not an EU institution, our future relationship with the UPC will be the subject of negotiations as we leave the EU. Our efforts will be focused on getting the best deal possible.

The Unified Patent Court was established by an international agreement which the United Kingdom signed on 19 February 2013. The Protocol on Privileges and Immunities was adopted in June 2016 and the UK signed it on 15 December 2016. A preparatory committee of the signatory countries to the UPC agreement was established in 2013 and is nearing completion of the work needed to bring the court into operation. The main steps towards UK ratification have already been completed. The changes to our patent law to implement the UPC agreement were made by an affirmative order which was approved by both Houses in 2016.

The draft order is part of the UK’s ratification process. It confers legal capacity on the Unified Patent Court and gives effect to the Protocol on Privileges and Immunities. The draft order provides for immunity from legal process for the court—with some exceptions—and its judges, registrar and deputy registrar. This immunity is also provided for the representatives and staff of the court, but is restricted to the exercise of their official functions. This immunity can be waived by the UPC. The judges and staff of the court will be exempt from national taxation on their salaries and from national insurance once the court applies its own equivalent tax and puts in place its own social security and health system. However, neither exemption will apply to court staff who are British nationals or permanent UK residents. Finally, the draft order provides that the court is exempt from direct taxation in relation to its official activities, as is the case for other international organisations based here, such as the International Maritime Organization.

The draft order applies to the whole of the United Kingdom but some provisions do not extend to or apply in Scotland. Articles 1(3) and 1(4) clarify which provisions do not apply there. A separate order was passed in the Scottish Parliament in October this year which dealt with provisions within its legislative competence.

The draft order confers only those privileges and immunities on the new court, its judges and staff that are necessary for the organisation to conduct effectively its official activities. They are in line with those offered to officers in other international organisations of which the United Kingdom is already a member. Innovative businesses have waited for more than 40 years for a patent system that helps them protect their inventions across Europe in a streamlined and cost-effective way. Moreover, the Government’s industrial strategy emphasises our commitment to fostering innovative businesses. The Unified Patent Court will be integral in achieving that goal. The draft order will enable the Government to be in a position to ratify the UPC agreement and make the court a reality. I commend the draft order to the Committee.

[Baroness Wilcox (Con)]

I stand here as a part of history. When I was Minister for Intellectual Property, we went to the European Community to try to get it to understand that the Chinese and Americans could have patents overnight but we were still, after 40 years, having to translate over and again the members of the European Community at that time. We worked very hard during that time. I thought we had eventually got there but it sort of floundered for a while. I am delighted to see it written down that we are going to ratify the Unified Patent Court.

Intellectual property is very important for us. It is an area in which we are recognised worldwide as doing the right thing. We have allowed the French, the Germans and the rest of them to choose which bits they would like to have a go at. At the end of the day we have come up with something that works very well. Given that we are working so hard on Brexit—I work on the European Union Select Committee, which is looking at all the Brexit paperwork—it is important that we are actually seeing something coming through. It is nice and clear, we can all hear it; we are all going to do it. This is one thing that is not going to cause us any difficulty over the next few months.

[Baroness Neville-Rolfe (Con)]

I congratulate my noble friend Lady Wilcox on her contribution to intellectual property. I was honoured to succeed her in an area where Britain is very strong. Obviously, that was a delight. I was intimately involved in the Unified Patent Court discussions in both Brussels and Luxembourg last year—after, as has been said, many, many years of discussion on its establishment and its location here in London, and the other centres. I want simply to welcome it and to congratulate the Minister and the Intellectual Property Office, which is headquartered in Newport. I wish them well in finding a sensible deal for patents in the Brexit negotiations. I have one point of clarification, which I think the Minister touched on: when does the patent court in London actually open its doors?