22/07/2016
It is now a little over a month since the majority of those voting in the UK referendum advised the UK Government that they wished to leave the European Union – they wanted Brexit.
In that time, we have had a change in Prime Minister, and many of the implications of the decision and the way forward have been discussed. However, there has not been very much clarity on the effect that Brexit will have on the Unitary Patent and Unified Patent Court.
The idea of the Unitary Patent is to provide a single validation of a European patent to give a single right covering all participating European Union (EU) countries. The Unified Patent Court (UPC) is intended to be a single court with jurisdiction for all Unitary Patent matters and for conventional national validations of European patents in participating EU countries. The UPC would be in place of the current national courts that have jurisdiction only for one country.
It seems, at the very least, that there will be some delay before the first Unitary Patents will issue and the UPC hears its first case following the Brexit decision. Why is this?
Before the first Unitary Patent can be granted, and before the UPC can open its doors, it is necessary for the Agreement on a Unified Patent Court to be ratified. Without this, the system cannot begin. The Agreement requires ratification by a minimum of thirteen member states of the EU, which must include the three EU countries in which the highest number of European patents had effect in the previous year. While the UK remains a member of the EU, the UK will be one of these three countries. Therefore, at least while the UK remains a member of the EU – which it looks like being until at least 2019 – the current Agreement requires UK ratification.
There appears no legal reason why the UK could not ratify the Agreement now or at any time while they remain in the EU. Some would like the UK to ratify the Agreement. However, I think that it is unlikely that the UK will ratify the Agreement in the near future.
Patent litigation was not a key feature of any of the political debates in the run up to the referendum. However, we must not forget that an objective of any government is to get re-elected. On the one hand carrying out the wishes of those voting to leave the EU, and on the other hand transferring jurisdiction of patent litigation to a central European court may not achieve that aim.
Furthermore, the Brexit timetable is unlikely to allow time to create additional legislation to allow some form of conversion of Unitary Patents that have been granted covering the UK into separate national UK patent rights. There would also be the issue of what happens to cases pending before the UPC on the day the UK leaves the EU. For this reason, ratifying the Agreement in the short term does not appear to me to be likely.
It is possible that the UK will ratify the Agreement shortly before it leaves the EU. This would allow the granting of the first Unitary Patents after the UK has left the EU, and so these would not cover the UK. The UPC could also open after the UK leaves, so there would be no UK patent litigation under its jurisdiction. However, this is still a few years off.
This would also raise the question as to whether the other EU countries would be happy with the UPC having a seat of the Central Division in London when the UK is not part of the system. The Agreement does require there to be a London seat of the Central Division (although it must be noted that it does not require the seat to be in London, UK, and therefore it could be in London, the small village in Burgundy, France).
Of course, once the UK has left the EU, there will no longer be the requirement for the UK to ratify the Agreement. This is because the UK will cease to be a member state of the EU, and therefore can no longer be one of the three member states in which the greatest number of European patents had effect in the previous year. Therefore, at that time, the ratification requirement could be met by thirteen countries, including France, Germany and Italy (or possibly the Netherlands). This still would not address the requirement for a seat of the Central Division of the UPC in London.
There has been some suggestion that the UK could continue to participate in the Unitary Patent and the UPC. Given the Brexit timetable, it seems unlikely that there will be time to negotiate a way in which the UK can continue to be part of the Unitary Patent and UPC system. I think that a more relevant issue is whether there would be the motivation to do so in view of the electorate wishing to leave the EU.
Of course, the other alternative is that the Agreement could be re-negotiated – for example to no longer require the UK to ratify the Agreement, and to remove the requirement for a seat of the Central Division to be in London. However, the current Agreement dates from January 2013, and in the three years since, the Agreement has only been ratified by ten countries. The chances of the Agreement being amended and receiving the necessary ratifications in the next two years seems slim – even without the time that will be required for other Brexit discussions.
It might even be possible to come up with a new proposal – perhaps one that does not even involve the EU. However, I suspect that this would take even longer than renegotiating the current Agreement.
I therefore think that even if the Unitary Patent and UPC is not dead, it is at least going to be resting for the next few years.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
