Insights: Is there a place for a post-Brexit UK in the Unitary Patent system?

In brief:

• Implementation of the Unitary Patent and Unified Patent Court will be subject to delay and change
• Current procedures for obtaining and enforcing patents throughout Europe will continue for the time being
• Representation rights of UK based European Patent Attorneys are unaffected by Brexit; our representation rights before the EPO (in relation to both European and Unitary Patents) and the UPC are unrelated to membership of the European Union

Following the 23 June 2016 referendum, when the people of the UK voted to leave the EU (Brexit), there have been many questions posed regarding the consequences once the UK formally leaves the EU (which will not be before 2019).

In the field of patents, membership of the European Patent Convention (EPC) is not restricted to EU member states. Brexit will, therefore, have no effect on the ability of UK based European Patent Attorneys to act before the European Patent Office (EPO). This extends to Unitary Patents (UPs) which, as and when the system comes into effect, will be administered by the EPO via the usual application process (with a UP simply being designated at grant when the validation states are chosen). It is therefore business as usual for us regarding representation at the EPO, including in opposition and appeal proceedings.

Conversely, the legal situation regarding the envisaged Unified Patent System as a whole is much less clear, particularly since the present agreement was amended such that the parties to the agreement are exclusively EU member states (following the CJEU’s Opinion 1/09). The UK has been a key driver of the proposed Unitary Patent (UP) and Unified Patent Court (UPC) and was ready to ratify the UPC agreement (UPCA). As currently drafted, without ratification by the UK, the new system will not come into effect.*

In view of this uncertainty the Chartered Institute of Patent Attorneys (CIPA) and others have sought respected counsel’s opinion on the potential UK participation in the UPC after Brexit.

The Opinion addresses the following questions:

Question 1a: Can the UK continue to be part of the Unitary Patent?
Question 1b: Can the UK continue to participate in the UPCA?
Question 1c: Can the UK continue to host the Life Sciences/Chemistry section of the central division?

Question 2: What changes would have to be made to the UPCA?

Question 3: What would the UK have to sign up to?

Question 4: Does it matter whether the UK joins the EEA?

Question 5: Is it possible or desirable to obtain an opinion from the CJEU?

Question 6: What would be the consequences of ‘Brexit’ if the UK ratified the UPCA without amendment.

The three sub-questions of question 1 present the most complicated considerations. Once they are answered the remaining questions are relatively straightforward.

Regarding question 1a the opinion concludes that Brexit will extinguish the UK’s entitlement to participate in the Unitary Patent since the legislation bringing it in is a European Regulation which will cease to apply to the UK after Brexit. Accordingly, in order for the UK to participate in the unitary patent it would have to enter into a new international agreement with the participating EU member states.  Whether such an agreement is possible turns on the same factors as for question 1b.

Regarding question 1b the opinion concludes that there is no “reason of domestic constitutional law why the UK should not be able to subject itself to a legal regime, such as the UPCA” (emphasis added). However, the situation under European law is more complicated, in particular it requires careful interpretation of Opinion 1/09. There are two schools of thought regarding the Opinion. The first, notably held by the European Commission, is that it precludes the participation of non-member states. The second is that the Opinion requires sufficient safeguards to be put in place to protect EU constitutional principles. The opinion notes that the wording of Opinion 1/09 is ambiguous and there is a risk that the CJEU would take the same opinion as the Commission. Additionally, the decision as to whether any international agreement provides the necessary safeguards is a matter of EU law, and is therefore up to the CJEU to decide.

In summary, the opinion considers that it is legally possible for the UK to participate in the UPCA after Brexit. However, it would require a potentially complex International agreement and a favourable ruling from the European Union Courts. In response to question 1c the Opinion states:

“Provided that the UK is able to comply with the three substantive requirements set out in paragraph 72 above, it would be entitled to retain the Life Sciences/Chemistry section of the UPC Central Division in London. Further, subject to appropriate amendments being made to the UPCA, UK citizens could continue to sit as judges in the Court of First Instance and the Court of Appeal.”

The responses to the remaining questions were as follows:

2. In order for the UPCA to include a post-Brexit UK references to member states and the Union would need to be amended.

3.  For the UK to submit itself to proceedings before the UPC it would need to sign up to an appropriate international jurisdiction regime such as the Lugano Convention.

4. The advice is not subject to the UK joining the EEA.

5. “It would only be possible to obtain a pre-emptive opinion from the CJEU on the legality of the UPCA if the Union became a party to the Agreement.”

6.  “If the UK ratified the UPCA, without amendment, and subsequently left the EU, any divisions of the UPC in the UK would have to cease operating. The transitional consequences of this are matters of detail to be negotiated as part of the UK’s exit negotiations.”

In summary, the opinion indicates that the participation of a post Brexit UK in the Unitary Patent system is legally possible. However, it would require complex international agreements between the UK and the member states of the European Union.

It seems highly unlikely that the UK will ratify the UPCA before the Brexit negotiations begin. As a consequence, the UPCA will not come into effect in its current form. Whether the remaining countries will wish to press ahead with the system in amended form without the UK is also questionable. The UK is a key European economy and a key jurisdiction for patent protection and litigation. As already mentioned, the UK has played a pivotal role in bringing the UPCA to this stage. Both the President of the EPO and industry figures are strongly in favour of continued UK participation. It is therefore perhaps more likely that that the UPCA will be revisited at a more fundamental level to allow participation by non-EU member states. In either case, there will be a significant delay before the UPCA comes into effect.

Notwithstanding this, as European Patent Attorneys with an appropriate litigation qualification, if the system does come into effect we will be able to both prosecute European patent applications resulting in a Unitary Patent and represent our clients in the various branches of the UPC (Article 48(2) of the UPCA). We will continue to report on developments in relation to the Unitary Patent and Unified Patent Court and look forward to advising our clients in relation to European and UK patent matters, including Unitary Patents, following the Brexit vote.

*Theoretically, the system could come into effect once the UK is no longer an EU member state.  However, Article 7 of the UPCA requires that a section of the central division shall be based in London.  Without the UK as a member and with UK judges not permitted to sit in the court this seems an extremely unlikely outcome.