This is part of Out-Law's series of news and insights from Pinsent Masons experts on the impact of the UK's EU referendum. Watch our video on the issues facing businesses and sign up to receive our 'What next?' checklist.
Patent law specialist Deborah Bould of Pinsent Masons, the law firm behind Out-Law.com, said that it would seem "politically unrealistic" to expect the UK to pass legislation giving effect to the UPC Agreement if its participation in the UPC and unitary patent system was not guaranteed to continue after the country leaves the EU.
Bould was commenting after Benoît Battistelli, president of the European Patent Office (EPO), suggested that if the UK ratified the UPC Agreement before leaving the EU it could be allowed to continue its participate in the new system after its exit from the trading bloc. He suggested, though, that continued participation post-Brexit would be subject to the outcome of negotiation between the UK and EU countries.
The European Patent Litigators Association (EPLIT) has separately encouraged the UK government to "take the necessary steps to ratify the UPC Agreement as soon as possible".
"It seems politically unrealistic to suggest that the UK ratifies the UPC Agreement now, to help get the unitary patent system off the ground, and then tries to negotiate to stay in as part of the UK’s exit terms," Bould said. "This gives the UK no certainty about the future. For example, the London seat of the UPC Central Division focussing on life sciences could be wound up on Brexit. The system is currently limited to member states. It is a shame as the EPO could instead be leading an approach to negotiate a revised UPC Agreement allowing participation of the UK post-Brexit and potentially opening the system up to EPC contracting states more generally."
In a blog on the EPO website Battistelli said the UPC and unitary patent reforms should proceed with or without the UK's participation.
"In the best case scenario, the UK could go ahead as soon as possible with the ratification of the UPC Agreement," Battistelli said. "This would allow the UK afterwards, in its EU exit negotiations, to obtain its continuous participation both in the Unified Patent Court and the unitary patent. With the UK having brought the system into operation by ratification and having participated in the system from the beginning, it is possible that member states may allow the continued participation of the UK, even after the ‘Brexit’ takes effect."
"There are of course other scenarios; as more and more ratifications occur, member states will consider how to ensure the timely delivery of the UP-UPC, even if that regrettably means going ahead without the UK. There seems to be a clear feeling in the international user community that the system would remain sufficiently attractive for many. It would be regrettable to leave out a major patent country such as the UK, a country that can help to shape the future of the system in a business and user-friendly approach. But it is entirely up to the UK authorities to determine whether they want to participate in the Unified Patent Court and in the unitary patent or not," he said.
In its letter to UK minister for intellectual property Baroness Neville-Rolfe (2-page / 78KB PDF), EPLIT said the future of the UPC was "uncertain" in light of the UK's vote to leave the EU. A delay to the operation of the new patent system is undesirable, it said.
It said: "Article 89 of the UPC Agreement requires that, for the UPC to come into force, the UK, as one of the three countries where the highest number of European patents are in effect, ratifies the UPC Agreement. If the UK does not ratify the UPC, this will likely require a renegotiation of the UPC Agreement and lead to a significant delay of the whole project, if only because without a UK ratification the system can only enter into force after the UK has formally left the EU. In EPLIT’s opinion, such a delay will be to the detriment of inventors and businesses in the UK and elsewhere."
"A ratification of the UPC Agreement by the UK will mean that the system can enter into force without much delay. Should the UK decide to leave the EU after ratification, the UK may be able to continue to participate in the UPC and EPLIT certainly hopes it will. EPLIT is also of the view that the system is much more attractive if the UK continues to participate in it. However, even if this were legally or politically not possible, EPLIT still believes that all users of the European patent system will be better off if the UK ratifies the UPC Agreement in the near future so that this important development of the patent system in Europe will not have been jeopardised," it said.
Unitary patent protection was expected to be available to businesses from next year. Under the new system companies will be able to obtain patent protection for their inventions in participating countries through a single patent application to the European Patent Office (EPO) and without having to further validate the patent in each of the individual countries.
Unitary patent protection will only apply in those states which sign and ratify the UPC Agreement as well as adopt the unitary patent regulations. Ratification of the Agreement would give legal recognition to the new UPC as a judicial forum for settling disputes concerning the validity and alleged infringement of new unitary patents, as well as European patents unless they are opted out.
The UPC Agreement needs to be officially ratified by at least 13 EU countries, with that number including France, Germany and, as it stands, the UK, for the Agreement to take effect. Currently 10 countries, including France, have ratified the Agreement, and Italy has signalled its intention to do so too. Draft legislation has also been prepared in the UK and Germany to give recognition to the new unitary patent and UPC regime.
Emmanuel Gougé of Pinsent Masons said that the UPC Agreement would almost certainly have to be amended to accommodate UK participation in the new patent regime if the UK does not ratify the Agreement before exiting the EU, should the UK be willing to be part of the UPC system.
"Amending the UPC Agreement to allow non-EU member states to participate would have implications for the timeframe for the reforms," Gougé said. "This is because the amended Agreement may need to be re-ratified by countries that have already adopted laws to give it effect, as well as in other countries yet to ratify. In some cases, such as with Denmark, the re-ratification process could involve a new referendum to be held on the issue."
"The UK's participation in the new patent system is a major part of its attraction, and its involvement was a factor in the decision that London should host a branch of the Central Division of the UPC. That said, subject to a possible amendment of Article 89 of the UPC Agreement, the Agreement is worded in a way which makes it legally possible for the UPC framework to continue without UK involvement," he said.
"There is an argument that UK ratification pre-Brexit would not contradict the spirit of Brexit but instead complement the view that the UK can cooperate with EU neighbours without being an EU member. This is grounded in the fact that the UPC Agrement is an international treaty and not EU law and that the patent reforms were agreed in a system of enhanced cooperation between some, but not all, EU countries," Gougé said.
A simulation earlier this year of an injunction hearing under the UPC, organised by Pinsent Masons, highlighted some of the issues businesses will need to consider when deciding whether to engage with the UPC.