The UK government has always championed the new Unified Patent Court (UPC). As part of that support it has worked to set up one of the UPC’s central divisions in London and also ratified the underlying Agreement earlier this year. However, there has been some uncertainty regarding the legal status of the UK’s participation in the UPC after the UK formally leaves the EU in March 2019. A new guidance document from the UK government published for the life science sector suggests how the UK may remain inside the new UPC system during the Brexit transition period. The approach discussed would allow the UPC to come into operation in 2019 or 2020, after which amendments to the system are possible as the rest of the negotiations between the UK and the EU continue.
The new UPC system is yet to become operational pending ratification by Germany. This is currently held up by a constitutional challenge which may be decided at some point during 2019. After the challenge is complete, there will likely be another six months (or more) during which time the Court will prepare to become operational. As a result, it is likely that the Court will not come into operation until after the UK formally leaves the EU in March 2019. The UPC Agreement refers to its participants as EU member states, so some commentators have suggested that the UK’s departure from the EU could remove it from the scope of the UPC and hamper the arrival of the new system.
The UK’s negotiated exit from the EU includes an “implementation period”, during which time the UK continues to be bound by EU law to provide commercial certainty for all parties, as we discussed here. On Monday 20th August, the UK government published new guidance on what the implementation period means for the life science sector. This guidance note mentions that the UK is to be treated as an EU member state for the purposes of international agreements during the implementation period. The UPC Agreement is one such international agreement. As such, if the transitional period is agreed, then the UPC could come into effect in 2019 or 2020 with the UK as a full member.
It appears the UK has already provisionally agreed this general approach with the EU, as set out in the guidance note in the following terms:
“We also reached agreement with the EU at March European Council that the UK is to be treated as a Member State for the purposes of international agreements, including Mutual Recognition Agreements, for the duration of the implementation period. The EU will notify other parties of this approach. This means that there will be no disruption to existing relationships underpinned by international agreements as we move into the implementation period.”
As a result, even after Brexit, it seems that the UK may still meet the membership requirement set out in the UPC Agreement, potentially allowing the arrival of the UPC system in 2019 or 2020. Once the UPC is up and running, it is possible for the UPC Agreement to be amended (e.g. under Article 87 of the UPC agreement) to allow for any changes required once the UK’s final relationship with the EU is confirmed.
The UPC will provide a single court which can revoke and enforce patents across multiple European states in a single sitting. Once the court opens its doors, it will be also possible to request Unitary Patents (UPs) from the EPO covering the participating member states (which again would include the UK based on the current terms of the transition period). For more information about the UPC and UPs please find our resources available here.
For completeness, Brexit has no effect on the current European patent system, as the EPO is not an EU body and is not bound by EU law. As a result, the UK will continue to be covered by the EPO regardless of how Brexit is implemented, in precisely the same way that other non-EU members are already part of the EPO system (such as Turkey and Switzerland). The new development reported here simply sets out a route for the UK to continue to be involved with the future UPC.
While there continues to be a degree of uncertainty, pragmatic solutions continue to be found to preserve the geographical scope of the UPC, which is widely considered to be one of the main advantages of the new system. Our current estimate is that the German challenge might be complete by the end of 2018, potentially allowing the UPC to open its doors during 2019.
Update: 24th September 2018:
Further guidance has been issued by the UK government focusing on the implications for the UP and UPC if there is no Brexit deal:
“If the Unified Patent Court is ratified and comes into force, there will be actions that UK and EU businesses, organisations and individuals may need to consider. The UK will explore whether it would be possible to remain within the Unified Patent Court and unitary patent systems in a ‘no deal’ scenario …
If the Unified Patent Court comes into force and the UK needs to withdraw from both the Unified Patent Court and unitary patent, businesses will no longer be able to use the Unified Patent Court and unitary patent to protect their inventions within the UK. Existing unitary patents will give rise to equivalent UK patent protection to ensure continued protection in the UK.
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 no longer 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 non-EU European Patent Office.”