Would Brexit mean the end of the Unitary Patent and the Unified Patent Court?

May 2016

In short, no; but if the UK votes to leave the European Union on 23 June 2016, what impact will this have on European patents and in particular on the imminent introduction of the Unitary Patent (UP) and the Unified Patent Court (UPC)?

In terms of obtaining patents through the European Patent Office, leaving the EU would have no impact. The UK is a signatory to the European Patent Convention and this is separate to membership of the EU. Therefore applicants would still be able to obtain patent protection for the UK through the EPO in exactly the same way as they do today. UK based European Patent Attorneys will continue to be able to prosecute European patents for clients before the EPO covering all designations (including UPs) as is the current practice.

What will happen with the UP and the UPC? It is clear that if the UK leaves the EU, a UP will not extend to the UK and the UPC’s jurisdiction will not cover to the UK; only EU countries can be part of the system. Patentees wanting protection in the UK will have to validate their patent filed at the EPO separately for the UK. Furthermore, UK based European Patent Attorneys will be eligable to represent clients in proceedings before the UPC.

Will Brexit stop the UP and UPC?

More fundamental is the question of whether the UK leaving the EU would bring an end to the whole UP and UPC project. In all likelihood it will not. With 10 countries now having ratified and a number of other countries set to ratify in the coming months the political will in Europe seems supportive of the new UP and UPC regime.

The system can only come into effect when ratified by 13 countries which must include the three EU Member states in which the most European patents have effect in the year preceding year in which the agreement was signed. (Article 89 UPC agreement). As it currently stands these three countries are the UK, Germany and France. If the UK were no longer an EU country, the three EU member states required to ratify would become Germany, France and Italy. Italy’s legislation for ratification is well progressed and it is likely to ratify shortly after the UK’s EU referendum. The only issue would be whether the time lag between a vote to leave and an actual exit from the EU by the UK would delay the introduction of the new system by a considerable time.

Location of the Court

More problematic is the location of one of the seats of the Central Division of the UPC in London. Article 7(2) of the UPC agreement specifies the three locations for the Central Division as Paris, Munich and London. London has jurisdiction over “Human Necessities” which covers amongst other things the chemistry and pharmaceutical sectors. As the Central Division’s locations are specified in the agreement, the UK exiting the EU would not alter the situation. The remaining EU countries would have a choice; either a) to amend the UPC agreement and specify another location for the Human Necessities seat of the Central Division (which would clearly be burdensome and cause further delay) or b) keep London as a seat for the Central Division even though it would have no jurisdiction over patents the UK and UK nationals would no longer be eligible to sit as judges in the new Court. Neither are particularly attractive options but as an interim measure at least (given that a lease has been signed on court premises in London) London may well remain as a seat for the UPC Central Division.

Will the UP and UPC be attractive without the UK's participation?

Without a doubt the UP and UPC will be worse off without the UK. As one of the main countries for patent filing and patent litigation in Europe most commentators see the inclusion of the UK as central to the success of the new regime. If a UP will not extend to the UK, it will be a less attractive option on validation of an EP. Most patentees will see the UK as an integral part of their European patent protection and an exit from the EU will not change this. Therefore most applicants who would opt for a UP would need to have a separate validation for the UK if a UP did not cover the UK.

Further, if the jurisdiction of the UPC does not extend to the UK, the promise of an EU wide injunction looks rather hollow. Patentees will still want to enforce their patents in the UK regardless of membership of the EU.  National proceedings would therefore be needed in addition to proceedings before the UPC to enforce or revoke a patent across Europe. There have also been concerns that the UPC will be a weaker court without the influence of the highly respected patent judges from the UK shaping its jurisprudence.

Would exit from the EU make the opt-out decision easier?

The introduction of the UPC will impact on all owners of EP patents as, unless opted out, they will be subject to the jurisdiction of the UPC. See our briefing note on the opt-out. If the UK exits the EU, the UK designation of EPs would not be subject to the jurisdiction of the UPC and would not need to be opted out.  As is currently the case, any revocation action would need to be brought at a national level. If the UK designation is safe from central revocation, this may give EP patent owners the confidence to allow other designations of the EP to remain within the jurisdiction of the UPC. This might be good news for patent owners who are uncertain about whether or not to exercise the opt-out. For example if an EP has been validated in the UK, Germany and France, the patent owner may be more inclined not to exercise the opt-out, knowing that the UK designation would in any event not come within the ambit of a central attack to validity at the UPC.

Whatever happens on 23 June 2016, now is the time to ensure that your patents in Europe are UPC Ready.