Is the Unitary Patent back on track? UK signals green light to Unified Patent Court Agreement

Following the Brexit vote on 23 June 2016, chances of UK ratification of the United Patent Court Agreement appeared slim. Since such ratification is required for the entry into force of the Unitary Patent and Unified Patent Court (UPC), this meant that the future of the Unitary Patent was hanging in the balance. On Monday 28 November 2016, the UK government confirmed that it will be proceeding with preparations to ratify the Unified Patent Court Agreement. Whilst this decision certainly brings us a step closer to the Unitary Patent, the required legislation will still have to pass through the UK Parliament. Furthermore, the long-term post-Brexit consequences of the UK government’s decision to ratify remain unclear.

The European Patent Convention, signed in Munich in 1973, set up an autonomous legal system through which innovators may acquire a so-called “European patent”. Contrary to what this term suggests, a European patent does not confer a unitary right upon its holder. Instead, the patent owner is granted a bundle of national patents, each subject to the applicable national patent law rules and procedures. This leads to a number of issues, such as elevated costs due to costly national validation requirements and renewal fees, as well as fragmented patent jurisdiction leading to disparity in the case law. Already in the course of the 1970s, attempts were therefore made to overcome the bundle-like nature of a European patent and negotiations were undertaken to set up a truly unitary patent system. For a long time, these attempts were unsuccessful.

In December 2010, the unitary patent project gathered momentum, when a group of EU member states made a request to the European Commission regarding a possible enhanced cooperation in relation to the envisaged unitary patent protection. Two years later, this resulted in two much-anticipated Regulations in December 2012 (Regulation 1257/2012 and Regulation 1260/2012). In February 2013, these Regulations were supplemented by the Agreement on a Unified Patent Court, which committed the 25 contracting EU member states (all except Spain, Poland and Croatia) to establish a court with exclusive jurisdiction for future Unitary Patents. However, the finish line for the Unitary Patent proved to be further away than initially hoped. Among the obstacles to be overcome were the decision on the UPC’s locations, several legal challenges to the Court of Justice of the European Union, filed by Italy (in 2011) and Spain (together with Italy in 2011 and alone in 2013) as well as the drafting of elaborate rules of procedure, the latter requiring a grand total of 18 drafts.

Furthermore, for the two aforementioned Regulations to come into force, the Agreement on a Unified Patent Court needs to be ratified by 13 EU member states, including at least the United Kingdom, France and Germany, seeing as residents of these three countries own the most European patents.

At the end of November 2016, 11 EU member states have already ratified the UPCA, including Belgium and France. Both Germany and the United Kingdom have yet to ratify.

In the beginning of 2016, it was anticipated that the UPCA would be able to commence its activities in May 2017. However, the chances of that “deadline” being met, grew very slim on 23 June 2016, when the Brexit referendum in United Kingdom resulted in an overall vote of British citizens to leave the European Union.

Following the Brexit vote, several options to move the Unitary Patent project forward were presented by legal scholars and practitioners. Among other things, the question arose whether the Unitary Patent project could be realised without the UK, by amending the UPCA and removing the need for the UK to ratify. In an interesting take on the matter, Richard Gordon QC and Tom Pascoe of Brick Court Chambers, supported herein by CIPA, the IP Federation and the Intellectual Property Lawyers Association, took the position that, from a legal point of view, the impending Brexit does not pose any obstacles for the UK to participate in the Unitary Patent system.

For a long time, it appeared politically highly unlikely that the United Kingdom would ratify the UPCA. However, the UK government surprised friend and foe by signalling its green light to the UPCA’s ratification on 28 November 2016. Over the coming months, the UK will continue with preparations for such ratification and will be working with the UPC Preparatory Committee in a bid to bring the UPC into operation as soon as possible. The UK Government’s decision was eagerly welcomed by the Preparatory Committee. 

The UK Minister of State for Intellectual Property, Baroness Neville Rolfe, explained that the UK wishes to continue to play a full and active role in the European Union for as long as it is an EU member state. Furthermore, Baroness Rolfe expressed the UK government’s wish to provide British companies with the maximum freedom to trade with and operate in the Single Market and, furthermore, let European businesses do the same in the UK. Baroness Rolfe expressly cautioned that the decision to proceed with ratification should not be seen as pre-empting the UK’s objectives or position in the forthcoming negotiations with the EU.

While the UK government’s decision to ratify may give rise to cautious optimism, it naturally does not remove the requirement of parliamentary assent, which means that the ratification of the UPCA will still have to pass through the UK Parliament. Furthermore, questions remain regarding the long-term consequences of the UK’s ratification of the UPCA. After all, such an arrangement begs the question whether or not the UK would then have to withdraw from the UPC upon leaving the EU, thus possibly leading to a web of complex exit or continuation arrangements. Indeed, the Unitary Patent system is widely thought to require all participants to be EU member states, in view of Opinion 1/09 , which was handed down by the Court of Justice of the European Union in 2011. This leaves the UK – and UK companies – without any guarantee of long-term participation to the Unitary Patent system. It could be argued that the UK’s decision to ratify the UPCA indicates that it has no intention of leaving the Unitary Patent system in a post-Brexit scenario. In such a case, watertight measures will have to be taken to avoid severe disruptions of (UK) companies’ business.

In essence, while the end of the long and winding road to the Unitary Patent system might be in sight, there are sure to still be a number of roadblocks along the way.