On 23 June 2016, the British citizens will hold their referendum on the country’s membership in the European Union. Should they vote for the UK to leave the EU (the so-called ‘Brexit’), the new European unitary patent system is likely to collapse before it started.
At the moment, most patentees who seek protection in Europe use the “European patent” system – which in fact does not provide for a single patent but for a bundle of patents that may be obtained separately in 38 countries. The European patent has nothing to do with the European Union.
That is where the difference to the unitary patent lies: The unitary patent is supposed to become the most essential intellectual property right in the European Union. The unitary patent would grant uniform patent protection throughout the participating 25 member states of the European Union, based on one application alone. There would be a single fee regime and a single court, the Unified Patent Court (UPC). Different from the owner of a European bundle patent who may have to file court actions in 38 countries to enforce his right, the owner of a unitary patent could protect his legal interest within the European Union by filing one action in the UPC. A lot of cost would be saved.
Why would Brexit vote put the unitary patent at risk?
France, Germany and the UK are the three dominant players in the European patent world. They are the three countries with the highest numbers of patent applications in Europe. French, German and English are the only three languages in which a unitary patent may be prosecuted. And Paris, Munich and London are the three locations of the UPC’s central division.
In France, the Assemblée Nationale approved of the Unitary Patent Court Treaty as early as on 13 February 2014, and the ratification followed a month later. The UK has not ratified the Treaty yet, and one should rule out that it will do so before the referendum on 23 June 2016. “Should the UK indeed vote for Brexit, the most likely scenario is that the unitary patent system would have to be re-negotiated altogether”, explains Boris Uphoff, partner in the international law firm McDermott Will & Emery. “First, the Unitary Patent Regulation states that the unitary patent cannot start before the Unitary Patent Court Treaty has been ratified by the UK. That alone means that the unitary patent were to be put on hold in case of Brexit vote. As a non-member of the EU, the UK could not participate in the unitary patent as a EU intellectual property right”, believes Uphoff. “Without the UK with its market size and its reputation for patent litigation, the unitary patent would lose substantial value”, adds Laura Morelli, counsel in McDermott’s Paris office.
In case of Brexit, London would have to be given up as a location for the UPC. English judges, who are known to be among the most experienced patent practitioners in the EU, could not apply to become judges at the UPC.
If there indeed was a vote for Britain to leave the EU, the remaining member states of the EU would have to re-negotiate the unitary patent. They would have to consider whether a unitary patent excluding the UK would make sense at all. Patent applicants could of course file one patent for the UK and a unitary patent for the rest of the EU, but such a double-application would defeat the cost saving effect of the new unitary patent system which Brexit would likely destroy.
In theory, the UK could ratify the Unitary Patent Treaty even after the Brexit vote on 23 June 2016. The UK would then participate in the unitary patent during the two-years interim period that the Lisbon Treaty provides for member states who decide to leave the EU. In practice, the UK joining the unitary patent system while already walking towards the EU’s exit door would not be feasible, Uphoff and Morelli explain. First, it would be entirely unclear what protection unitary patents would enjoy in the UK after Brexit comes into force. Secondly, opening a UPC section in London and closing it again a few months later would be poor practice. Even if Brussels and London agreed for the UK to play an associated role in the unitary patent system after Brexit, the UK could not host judicial power. That also means that English judges located at the UPC’s sections in Paris and Munich would have to be removed from office after Brexit came into force.
If the UK was to refuse to ratify the European Patent Court Treaty after the exit vote on June 23 2016, the Treaty would also need to be renegotiated so that UK ratification is no longer required for the Treaty’s entry into force. Without such renegotiation, this requirement would only cease to apply when the UK has in fact left the EU.
As recent polls suggest, the UK referendum on 23 June 2016 will be a head to head race between Brexit supporters and those favouring a continued membership of the UK in the European Union. Brexit would mean a dramatic impact on the European patent world.
UPDATED Wednesday, May 4, 2016 at 11:56 am ET.