Brexit and the Unified Patent Court and unitary patent
16 November 2016
The UK has "confirmed it is proceeding with preparations to ratify the Unified Patent Court Agreement". These preparations will continue over the coming months. This announcement raises a number of questions about the unitary patent (UP) and Unified Patent Court (UPC).
1. Will the UK actually ratify?
The announcement suggests that the UK will, and it could be viewed as a lack of goodwill by the UK if it did not come good on ratification fairly quickly, which may be harmful to the UK's position in negotiating an exit from the EU.
On the other hand, the political situation is unprecedented and things may change. Some issues in this regard:
The UK cannot ratify the UPC Agreement without Parliamentary approval of some related UK law. While this is likely, it is not 100% certain that Parliament will give the necessary approval.
It is also unclear how and to what extent UK ratification fits in with the Government's plans for the Brexit negotiations – the UK Government press release on ratification certainly mentioned that wider situation, meaning the UK Government could be intending to hold back formal ratification until those negotiations commence.
It may also hold off until there is more clarity as to whether and how the UK can participate in the UPC (and maybe UP) post Brexit.
2. If the UK ratifies, when will the system start?
The UPC Preparatory Committee has announced important provisional dates for the unitary patent (UP) and Unified Patent Court (UPC) roll out in 2017. Key dates are:
- March 2017: final Preparatory Committee meeting
- May 2017: provisional application phase (PAP) starts (this is not the sunrise-period for opt outs)
- September 2017: sunrise-period starts
- December 2017: UP and UPC commence
The committee notes that this schedule is "conditional and provided with the clear disclaimer that there are a number of factors that will dictate whether it is achievable."
3. If the UPC starts (with the UK), what happens between then and the time when the UK leaves the EU?
The UPC should operate as planned, and UPs will be available as soon as the system commences. UPC judgments will cover the UK and UPs will be effective in the UK.
If this has not been sorted out beforehand, work will continue on the mechanics and legal requirements for the UK's potential continued participation in the UPC post Brexit, including whether this is possible.
4. What happens to the UPC when the UK leaves the EU?
This is not clear. There is a large body of support among industry and, we believe, the remaining EU member states, for the UK to remain in the UPC post Brexit. Opinions suggest that this is possible, legally, but there is a real element of uncertainty in this regard and it seems it will be difficult to find a mechanism to obtain legal certainty from the CJEU. This is an area that will have to be explored, urgently, in the period before the UK actually leaves the EU. Until clarified, the position of the UK in the UPC post Brexit will be very uncertain.
If the UK has to leave the UPC when it leaves the EU, UK judges will no doubt have to cease working in the UPC, and the UK local division will close. In addition, the London branch of the Central Division will no doubt be closed, and its work moved elsewhere.
In addition, the effect of judgments in past and pending cases, as regards their effect in the UK, will have to be addressed in the negotiations on the UK leaving the EU, if the UK also leaves the UPC.
5. What happens to the UP coverage in the UK when the UK leaves the EU?
This is not clear. It may be possible to extend the UP Regulation to a non EU member state by some sort of bi-partite accession agreement although this is unclear. While the UPC is an "international" court, and not an EU court, the UP is certainly an EU right. Whether the UK can sign up to that, as a non EU member state, legally or politically speaking, is not clear.
If the UK cannot remain in the UP system post Brexit, then any existing UPs will cease to cover the UK. This will cause problems for those users whose patent coverage in the UK is based on UP protection. The UK Government will have to enact some form of legislation to convert such rights into UK national patents.
6. Should I opt my conventional European patents out of the UPC?
If you were already planning to opt out, the new uncertainties that arise from the UK's situation perhaps provide further reason to do that. However, the main reason users were contemplating opting conventional EPs out was to reduce the risk of central revocation of valuable patents. This is principally a concern of the pharmaceutical sector since that is the sector in which most revocation actions are commenced. This is not affected by the current situation. Another reason to opt out was to avoid possible procedural complexities that exist while national courts and the UPC share jurisdiction, although that is a decision that can be taken later, when litigation is contemplated. Again, that is not affected by the UK's situation.
If you were not planning to opt out, the UK's situation does not obviously affect that decision either. It is important to remember that, during the transitional period, national courts share jurisdiction with the UPC and therefore can be used for infringement proceedings, regardless of the opt out. (Although as noted in the previous paragraph, it may be sensible to opt out before a national infringement action is commenced).
7. Should I choose a UP?
In our view, not while there is any uncertainty about the UK's continued participation in the UP & UPC project, and therefore uncertainty as regards the geographic scope of UPs post Brexit. This assumes the UK is a market you wish to protect.
8. Will you be able to represent me in the UPC?
Yes. The rules regarding representation before the UPC will allow suitably qualified solicitors and European patent attorneys to represent clients before the UPC, regardless of the UK leaving the EU and even the UPC.
9. Will you be able to obtain UPs on my behalf?
Yes. The UP will be a choice at grant of a European patent, and our ability to make this election for you is entirely unaffected by Brexit.
10. What should I be doing now?
Reviving your plans for the commencement of the UPC, including opt-out preparations, economic analysis of UP protection (which will be affected, we think, by the risk to UP protection in the UK) and licensing review.
If you would like to discuss what steps you need to take in preparation for this new regime and what patent filing strategies you should have in place, please do get in touch. We will provide regular updates to ensure you are kept informed.