Brexit: Will it stop the European Unitary Patent before it starts?

BrexitOn 23 June 2016, the British citizens opted for a Brexit. The country’s vote to leave the European Union (EU) may have substantial impact on the new European Unitary Patent. In fact, the new European patent system is now likely to collapse.

The Unitary Patent was supposed to become one of the most essential intellectual property rights in the European Union. Until recently, its entry into force was expected in early 2017. While the traditional “European Patent” is in fact not a single patent, but a bundle of patents that inventors may obtain, via a single application, separately in 38 countries, the Unitary Patent is meant to confer on inventions a uniform patent protection throughout the 26 participating Member States of the EU (all the EU Member States, except Croatia and Spain). There would be a single fee regime and a single court, the Unified Patent Court (UPC). Unlike, the owner of a European bundle of patents, who may, at least theoretically, have to file court actions in 38 countries to enforce his rights, the owner of a Unitary Patent could protect his legal interest within the EU by filing one single action in the UPC. A lot of cost would therefore be saved.

Why does 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 number of patent applications in Europe. In addition, 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 central division.

In France, the Assemblée Nationale approved the UPC Agreement of 19 February 2013 as early as 13 February 2014, and the ratification followed a month later. However, the UK has not ratified the Treaty yet, and one should rule out that it will do so after the referendum on 23 June 2016.

As the UK indeed voted for Brexit, the Unitary Patent system will now have to be re-negotiated altogether. The Unitary Patent Regulation states that the Unitary Patent cannot start before the UPC Agreement has been ratified by 13 participating Member States, including the three Member States in which the highest number of European Patents had effect in 2011, i.e. France, Germany and the UK. That alone means that the Unitary Patent must be put on hold now the Brexit referendum has been approved. Indeed, as a non-member of the EU, the UK will not be able to further participate in the Unitary Patent. Without the UK, with its market size and its reputation for patent litigation, the Unitary Patent will lose substantial value.

As a consequence of the Brexit, London will most likely 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, can no longer apply to become judges at the UPC.

After the Brexit vote, the remaining Member States will have to re-negotiate the Unitary Patent system. They will have to consider whether a Unitary Patent excluding the UK would make sense at all. Patent applicants could of course file one national 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, assuming the Brexit does not destroy it entirely.

In theory, the UK could ratify the UPC Agreement even after the Brexit vote on 23 June 2016. The UK would then participate in the Unitary Patent during the two-year 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. First, it would be entirely unclear what protection Unitary Patents would enjoy in the UK after the Brexit came into force. Secondly, opening a UPC section in London and closing it again a few months later would be poor practice. In addition, even if Brussels and London agreed for the UK to play an associated role in the Unitary Patent system after the Brexit, the UK could not host a real judicial power. That also means that English judges, located at the UPC sections in Paris and Munich, would have to be removed from office after the Brexit came into force.

 

The Author

Dr. Boris Uphoff

Dr. Boris Uphoff is a partner with McDermott Will & Emery. Dr. Boris Uphoff focuses his practice on intellectual property, commercial litigation and alternative dispute resolution. He has litigation experience in all major German courts and assists clients in cross-border disputes. Boris represents German and international clients in patent infringement litigation and in contentious matters relating to trademarks and unfair competition law. Boris frequently represents clients in international arbitrations. He also acts as arbitrator in large commercial disputes. Boris regularly writes articles for legal and commercial publications such as Betriebs-Berater and Handelsblatt. For more information and to contact Dr. Uphoff please visit his firm profile page.

Dr. Boris Uphoff

Laura Morelli leads the McDermott Will & Emery Paris Intellectual Property Practice. She advises French and foreign companies in a wide variety of sectors, including the chemical, energy, fashion, food processing, media, perfume, pharmaceutical and technology industries. Laura assists her clients, as advisor and as litigation counsel, and has significant experience in mediation in intellectual property matters before the Centre for Mediation and Arbitration of Paris. For more information and to contact Laura please visit her firm profile page.

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Discuss this

There are currently 3 Comments comments.

  1. Anon July 4, 2016 9:21 am

    My apologies if I have missed the substantive points, but I am not seeing exactly why the “In theory, the UK could ratify the UPC Agreement even after the Brexit vote on 23 June 2016.” line is dismissed out of hand.

    There appears to be a LOT of conflation between leaving the EU as a political-sovereign merging and STILL being involved with transnational IP protection which directly on its face does NOT require joining any such EU political-sovereign merging.

    I do recognize that the path towards a single true Unitary Patent is more complicated, but I just do not see the reasons for a fait accompli as is being so emotionally advocated in this article.

  2. Anonymous July 5, 2016 5:14 am

    “Will it stop the European Unitary Patent before it starts?”

    No, it won’t, but it’ll certainly delay it. 2017 now seems off the table. The UK could still ratify, but I suspect that, given the mess in which the DisUK Government currently finds itself, the UPC comes rather far down the list of priorities.

    My money’s on 2020 and the London Central Division court to be in The Hague.

  3. Mark Richardson July 5, 2016 2:29 pm

    The article states “Patent applicants could of course file one national patent for the UK and a Unitary Patent for the rest of the EU”.

    Not sure if this was intended by the authors but the reference to “national patent” suggests a UK direct filed patent.

    It should however be noted that even if the UK doesn’t take part in the unitary patent system it WILL still be part of the European Patent Convention and so it will still be possible, post-Brexit, to obtain patent protection in the UK via the normal EP route.

    Brexit will have no impact on the EPC (or for that matter the PCT) as it relates to the UK.

    As far as the unitary patent system is concerned it should be noted that this system will, if the system proceeds, effectively be a sort of “super validation” option open to applicants when their European patent proceeds to grant. This “super validation” option will provide unitary protection in the EU member states participating in the unitary patent scheme.

    Countries outside of the unitary patent scheme (e.g. Spain which is an EU member state but which is not taking part in the unitary patent scheme, or Switzerland which is not an EU member state) may still be protected via the current, traditional validation selection.

    Further details on the potential impact of Brexit on IP can be found on the IPcopy blog at https://ipcopy.wordpress.com/brexit-ip/