On 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.