What to Know in the Lead-Up to Brexit and the Unitary Patent System

With a “no-deal” Brexit set to take place this Friday (though discussions are underway to grant an extension as of the time of writing) and the Unitary Patent system set to take effect sometime this year, EU patent applicants who want protection in the UK should be aware of the many moving parts to consider.

Patent applicants who wish to file for a European patent and receive patent protection in the United Kingdom (UK) should consider whether they want the European patent to have “unitary” effect and be mindful of the UK’s participation in the Unitary Patent system.

The UK European Union membership referendum, known commonly as “Brexit,” took place on June 23, 2016. The referendum resulted in a majority of votes in favor of leaving the European Union (EU). A “no-deal” Brexit is set to occur on April 12, 2019 absent a “new deal” between the UK and EU leaders or an extension, which is expected to be agreed.

Status Quo for EU Patents Post-Brexit

For those who wish to file a patent in the UK, the process will remain the same, regardless of Brexit. A patent application can be filed directly through the UK Intellectual Property Office (UKIPO) or through a Patent Cooperation Treaty (PCT) application that enters the UK as a national stage application. For those who wish to obtain patent rights in multiple European countries, including the UK, a European Patent application can be filed through the European Patent Office (EPO). The EPO has legal basis through the European Patent Convention, an international treaty that is independent of the EU. Because the European Patent Convention is independent of the EU, and the UK is a party to the European Patent Convention, European Patents and the rights that they provide patent holders will not be affected by Brexit. As the process goes, when a European Patent is granted, one must “validate” the patent in each of the participating European Patent Convention states where coverage is desired. The validation step can include filing fees of the national patent offices and translation costs, where translations are required.

A European Patent currently provides a bundle of national patent rights among the contracting states. The bundle of rights is not “unitary,” in that the bundle is formed from individual national patent rights that are independently enforceable and revocable from one contracting state to another, using the contracting states’ respective national courts. As such, proceedings to enforce and revoke a patent in multiple countries can be costly, time consuming, and result in legal uncertainty. Accordingly, the EU has led an effort to provide a “unitary” patent system that can provide for enforcement and revocation of Unitary Patents by a Unified Patent Court. Maintenance fees for Unitary Patents would also be centralized at the EPO whereas under the present patchwork of rights, they are paid individually.

Brexit Will Affect the Unitary Patent System

A Unitary Patent system consisting of Unitary Patents and governed by a Unified Patent Court is likely to take effect in 2019. The initiation of the Unitary Patent system is currently held up by a challenge brought before the Federal Constitutional Court of Germany. Under the Unitary Patent system, when a European Patent is granted, an applicant can simply make a request that the European Patent have “unitary” effect. This results in a Unitary Patent that has “unitary” effect in states participating in the Unified Patent Court Agreement (UPCA). To receive coverage in the non-UPCA states, the patent seeker can still proceed in the traditional manner with national validations at grant.

The Unified Patent Court, which is a proposed common patent court, will have jurisdiction over infringement and revocation proceedings, with a single court ruling being directly applicable throughout those UPCA states. Currently, the UPCA only covers EU states, meaning that EPC states that are not EU states will not be covered by the Unitary Patent. As a member of the EU, the UK previously ratified the Unified Patent Court Agreement (UPCA) and would have participated in the new and not-yet implemented Unitary Patent system if not for Brexit. It is unclear whether the UK will participate in the Unitary Patent system after Brexit, although there appears to be willingness on all sides to allow the UK to participate. Thus, if the UK exits the EU and wishes to participate in the Unified Patent Court, then an amendment to the UPCA may be necessary. If the UK does end up participating in the Unitary Patent system, then we can assume that the UK would be treated as just another participating member. In such a case, when the applicant registers the European Patent as a Unitary Patent (through the above mentioned request), then enforcement and revocation proceedings of that patent in the Unified Patent Court would have effect in the participating EU member states of the UPCA, including the UK.

Considerations for EU Applicants

If the UK does not participate in the Unitary Patent system, and an applicant registers a granted European Patent as a Unitary Patent, then this protection would not cover the UK. In order to have coverage in the UK, the granted European patent must be validated in the UK.

In addition, in the lead up to Brexit and the introduction of the Unitary Patent system, European patentees should also consider whether or not to “opt out” of the Unified Patent Court jurisdiction. For a transitional period of seven years, which may be prolonged by up to a further seven years, actions for infringement or for revocation of ‘classic’ European Patents may still be brought before national courts. Before the end of the transitional period, a European Patent owner or applicant will be able to “opt out” of the UPC’s jurisdiction for the entire lifetime of the patent, unless an action has already been brought before the UPC.

In deciding whether or not to ‘opt out’ or whether or not to request “unitary” effect for a granted European patent, stakeholders should consider the benefits and possible risks to their patent rights. On one hand, the Unitary Patent system centralizes maintenance fees and potentially reduces litigation costs of European Patents. On the other hand, the system makes it easier to challenge and revoke a patent because a revocation in the Unified Patent Court would take effect across the participating territories. Therefore, patent applicants who wish to file for a European Patent and receive patent protection in the UK should consider whether they want the European Patent to have “unitary” effect and be mindful of the UK’s participation in the Unitary Patent system.