UK: Brexit: What Now For The Unified Patent Court?

European Union countries have spent over forty years attempting to establish, in one form or another, a unitary patent that would take effect across multiple EU countries and a common court for patent disputes. The historical proposals foundered for various reasons, including the failure of sufficient states to ratify the relevant agreement, language disputes, and the proposed system being held by the Court of Justice of the EU (CJEU) to be incompatible with EU law. Then, in 2013 it looked like the deadlock had been broken when 25 of the EU states signed the Unified Patent Court Agreement (UPCA) and two related EU regulations to provide for a new Unified Patent Court (UPC) and a unitary patent that would take effect in all participating countries. Even this latest attempt had to be forced through by means of the EU "enhanced cooperation" mechanism, which allowed the 25 EU states to proceed despite the objections of Spain and Italy.

To enter into force the UPCA must be ratified by 13 countries, including Germany, France and the UK. To date 10 countries have ratified, including France. Ratification by Germany and the UK and at least one other country was widely expected to take place in the autumn of 2016, meaning that the new system would have started at the beginning of 2017. The UK, for example, had already enacted the necessary domestic legislation to prepare for the UPC and had taken out a lease on the building that was proposed to house the local division and the London branch of the central division of the new court.

However, the UK's referendum on its EU membership on 23 June 2016 and the result in favour of withdrawal from the EU means that it is highly questionable whether the UPC and unitary patent will now happen, at least in their current form. But first of all, it should be noted that withdrawal from the EU with have no effect at all on the UK's status as a contracting state to the European Patent Convention (EPC): European Patents covering the UK will continue to be granted by the European Patent Office just as before.

So far as the future of the UPC is concerned, there are a number of possibilities. Optimists can point to the fact that, for the time being, the UK remains a full EU member and it therefore could, in theory, ratify the UPCA before it leaves the EU. If Germany and one other signatory state also ratify the UPCA, it will come into force four months later. Transitional arrangements could then be made for the UK's withdrawal – as the system presupposes that all participating countries are EU members. The London branch of the central division could be dissolved, with its work being split between the other branches of the central division, namely Paris and Munich, or the London branch could be moved to another country, such as Italy or the Netherlands. However, the UK Government does not currently appear to favour ratification. In particular, it would need to be satisfied that it was more in the UK's interests to have a functioning UPC without the UK than no UPC at all.

The very optimistic can hope that a way may yet be found that would enable the UK to participate in the UPC from outside the EU. Given that the present constitution of the UPC requires the court to recognise the supremacy of EU law it is hard to see how this would be politically acceptable to the UK. It might be possible to conceive of a revised structure that would allow the UK (and perhaps other EPC but non-EU countries, such as Norway and Switzerland) to participate in a common patent court system but the CJEU would need to be satisfied that any revised system was compatible with EU law. Even if such a revision could be done, it will take a considerable amount of time, as it will no doubt depend on the terms of the UK's future relationship with the EU and that will take at least two years to determine.

The two most likely scenarios are accordingly either that the UPC and unitary patent will simply fail to take effect for want of ratification by the requisite number of countries, just like the Community Patent Convention in the 1970s, or the remaining UPC countries will negotiate a new UPC Agreement that writes out the UK. The latter option, if it happens, will again take some considerable time and threatens to re-open disagreements over issues such as the location of the central division of the court and the language rules. It is also unclear whether a European unitary patent that did not cover the UK would be commercially attractive.

For the foreseeable future it is therefore back to business as usual.

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