Brexit & the UPC

The impact of Brexit on the UPC

In early 2020, the UK Government confirmed it no longer intends to participate in the UP and UPC.

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Brexit & the UPC

Enough countries have now ratified the UPCA so that the unitary patent and Unified Patent Court systems can come into effect when Germany completes its own ratification procedures. This is currently on hold subject to the outcome of a complaint pending before the Constitutional Court in Germany.

In early 2020, the UK Government confirmed it no longer intends to participate in the UP and UPC.

The UK will now need to withdraw from both the Unified Patent Court and unitary patent agreements.

UK business will still be able to use the Unified Patent Court and unitary patent to protect their inventions within the contracting EU countries. However, in the UK, businesses will only have the option of protecting their inventions using national patents (including patents available from the non-EU European Patent Office) and UK courts.

UK business will still be open to litigation within the Unified Patent Court based on actions they undertake within the contracting EU countries if they infringe existing rights.

EU business will not be able to use the Unified Patent Court and unitary patent to protect their inventions within the UK but will be able to apply for domestic UK rights as they can now, via the UK Intellectual Property Office and the European Patent Office.


The Unified Patent Court


The UPC will be a new court with a new set of procedures and rules that have been negotiated between the participating Member States. The Procedural Rules of the UPC seek to coherently pull together the wide range of legal procedures available to patent litigants around Europe. This is quite a feat given the differences between the common law and civil law traditions across Europe.

The UPC will consist of a Court of First Instance, with Central, Local and Regional divisions, as well as a Court of Appeal and a Registry. The Central Division will deal with revocation actions and declarations of non-infringement. The Local or Regional divisions will deal with infringement, including preliminary injunctions. There are also rules on how the various courts can deal with counterclaims, stays and transfers to another court.

The Central Division will be headquartered in Paris, with sections in a yet to be determined location (pharmaceuticals, chemistry and medical devices) and Munich (mechanical engineering) with Paris dealing with electronic and software cases. As the UK will not be participating, London cannot be a UPC Division.


The opt-out


When the UPC opens for business, unless they are opted-out, granted EPs will be subject to the jurisdiction of the UPC as well as the relevant national courts. This will mean that patentees will be able to enforce EPs in a single action across all Member States that have ratified the UPC Agreement and for which the patent is validated. It will also mean that an EP can be revoked in a single action brought before the UPC’s Central Division. This is in contrast to the current position where an EP is a bundle of national rights, each of which must be revoked in separate actions in the national courts.

Because this is such a fundamental change to European patent litigation, for a transitional period of at least 7 years, patentees will be able to exercise an “opt-out” to take existing, pending and future EPs out of the jurisdiction of UPC for the lifetime of those patents. The opt-out allows patentees to maintain the current position, i.e. any litigation must be before the relevant national court. The Rules of Procedure allow for a “sunrise” period of a few months before the UPC system goes live, in order for patentees to opt-out their existing EPs from the UPC’s jurisdiction before the court opens its doors.


Why opt out?


The decision to opt out granted and pending EPs from the jurisdiction of the UPC will depend on many factors; there is no one size fits all. Patentees shouldn’t assume that opting out will be the best option: there may be advantages to keeping at least some patents within the jurisdiction of the UPC. As details of the Rules and Procedures for the UPC system have crystallised, many patentees are considering a nuanced approach to managing the opt-out (or remaining subject to the UPC’s jurisdiction) for their patent portfolio.


The unitary patent


A unitary patent (UP) will be a single patent offering uniform protection in up to 25 participating Member States of the European Union, obtained via the current application system operated by the European Patent Office (EPO). Initially it is unlikely that a UP will cover all 25 participating Member States.  The exact coverage will depend upon which Member States have ratified the UPC Agreement at the time.

Applicants will not be forced to choose a UP. They will still be able to follow current practice and select individual EP countries in which to validate their EP. Given that not all EPC contracting states will be part of the UP (such as Croatia, Spain, Turkey, Norway) a combination of a UP and additional EP validations will always be needed for maximum coverage. It will not be possible to validate both a UP and individual EPs in countries covered by the UP for the same patent. The UP therefore adds a new layer of choice for patentees obtaining patents via the EPO. The national filing route will also remain an option for some patentees.

If you would like to discuss strategy development or portfolio review, HGF can provide you with assistance and guidance on formulating and advising on plans for the opening of the UPC. Should you have any further questions about the UPC and opt-out please contact our dedicated UPC team on [email protected] or contact our usual attorney to discuss these issues further.

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