Out-Law News 3 min. read

BREXIT: Triggering of article 50 makes UK's ratification of new Unified Patent Court more uncertain, says expert

It has become "more politically difficult" for the UK government to pass legislation endorsing a new Unified Patent Court (UPC) in Europe as a result of the formal step the UK has now taken to notify its exit from the EU, an intellectual property (IP) law expert has said.

Christopher Sharp of Pinsent Masons, the law firm behind Out-Law.com, said the triggering of article 50 of the Treaty on European Union by the UK government on Wednesday makes it less certain that the UK will formally ratify the UPC Agreement.

Sharp said many were surprised in November when the government announced that it intended to move forward with plans to ratify the UPC Agreement.

"In signing up to the UPC Agreement and associated new system of unitary patent protection, the move would mean that the Court of Justice of the EU (CJEU) would be the ultimate arbiter of the interpretation and application of EU law in relation to disputes involving new unitary patents and European patents which businesses do not opt out from the new UPC framework," Sharp said. "However, prime minister Theresa May, and the government as a whole in its Brexit white paper, has explicitly stated that moving the UK away from the jurisdiction of the CJEU is a central ambition in exiting from EU membership."

Sharp said that the two positions are not easily reconciled. The UPC Agreement is clear about the supremacy of EU law and involvement of the CJEU in the UPC system, he said. Redrafting the Agreement is unlikely to prove a realistic or attractive option either, he said.

"There have been extremely intensive efforts made over the past 10 to 15 years to establish a new unitary patent system in the EU whereby businesses can make a single registration for patent protection that automatically applies throughout participating countries," Sharp said. "There have been notable setbacks along the way, including an EU ruling which ultimately led to the formation of the UPC Agreement which provides for a new judicial system through which disputes over the validity and alleged infringement of patents can be resolved."

"The process has slowly moved forward over the last few years to the point where the last major hurdles to the operation of the new unitary patent and UPC system are the ratification of the UPC Agreement by the UK and Germany. The Brexit referendum outcome placed UK ratification, and the entire unitary patent and UPC system, in major doubt, but those concerns were set aside to an extent with the government's November announcement. However, the apparent contradiction between the jurisdiction of the CJEU under the UPC Agreement, and the government's stated position on the CJEU's jurisdiction in post-Brexit UK, has never been addressed properly."

"With the triggering of article 50, it has overnight become more politically difficult for the UK government to move forward with ratification and maintain its stance on the CJEU's jurisdiction. There is also now a danger that the UK's ratification will form part of the negotiations that are soon to commence on the terms of the UK's exit from EU membership. There is surely no prospect of the UPC Agreement being amended to reflect the UK's position on the CJEU, given the steps already been taken by other EU countries to ratify the Agreement and the years of negotiations that have led to this point," he said.

"The most likely way for the UK to see through its commitment to ratify is for it to accept the CJEU's role in the UPC system and exclude patents from measures to disengage the country from the jurisdiction of the EU court. However, this will be politically difficult in a climate in which Brexit negotiations have now been triggered, and is only likely to become more problematic for the government the longer it waits to ratify," Sharp said.

In a statement the UK's Intellectual Property Office (IPO) said: "The UK remains a signatory state of the Unified Patent Court at present. On 28 November, the UK government confirmed its intention to proceed with arrangements to ratify the Unified Patent Court Agreement. Preparations for ratification are progressing and we expect to be ready to begin the period of provisional application in the spring."

Sharp said that the provisional application period will involve establishing the UPC as a legal entity and resolving logistical issues such as the employment of staff and installation of IT systems. It will also allow for applications from businesses to opt out their European patents from the jurisdiction of the UPC to be filed.

Earlier this year, the UPC Preparatory Committee, which is tasked with laying the foundations for the new judicial system to take effect, said September 2017 is the timescale envisaged for the start of the sunrise-period for the possibility to opt out European patents. At the time, the UPC Preparatory Committee also said that it was aiming for the UPC to be operational in December this year.

Sharp said the timescales envisaged are tight and that the longer it takes the UK, and Germany, to ratify the UPC Agreement, the more likely it is that the new system will be further delayed. German lawmakers took steps towards ratification of the Agreement earlier this month, but it had previously been envisaged that Germany would follow the UK in ratifying the Agreement and thereby trigger the start of the provisional application period and the last steps towards operation of the new unitary patent and UPC system, Sharp said.

The UPC Agreement requires the consent of at least 13 EU countries, including the three with the most valid European patents in 2012: Germany, France and the UK. France has already voted to ratify the agreement.

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