The new UPC system, years in the planning but yet to become operational, foresees a Europe-wide court system to ensure that businesses have a streamlined process for enforcing patents through a single court where the patents are within the scope of the UPC – including new unitary patents. The UPC is to include central, regional and local divisional courts across Europe.
An international treaty, the UPC Agreement, was adopted in 2013 by 25 of the 28 EU member states. It provides for the creation of the UPC framework.
For the new UPC system to take effect, at least 13 EU countries, including the three with the most European patents in effect in 2012 – Germany, France and the UK, must pass national legislation to ratify the UPC Agreement. France and the UK have already done along with 14 other countries, but Germany's ratification process has been held up by an ongoing legal challenge.
However, in addition to the case before Germany's Constitutional Court, Brexit also poses a risk to the future of the UPC project. This is because, as currently worded, the UPC Agreement only allows for participation in the UPC system by EU member states. The UK is scheduled to exit the EU on 29 March 2019.
The most obvious way by which to secure the UK's continued participation in the UPC project post-Brexit is through an amendment to the UPC Agreement. However, it is unclear whether this option would then require all participating to re-sign and re-ratify the updated Agreement – a process that could take years.
A spokesperson for the UK's Intellectual Property Office (IPO) told Out-Law.com, however, that more than one option to achieve the UK's continued participation could be explored.
In its Brexit white paper (104-page / 772KB PDF), published on Thursday, the government said: "The UK has ratified the Unified Patent Court Agreement and intends to explore staying in the Court and unitary patent system after the UK leaves the EU. The Unified Patent Court has a unique structure as an international court that is a dispute forum for the EU’s unitary patent and for European patents, both of which will be administered by the European Patent Office. The UK will therefore work with other contracting states to make sure the Unified Patent Court Agreement can continue on a firm legal basis."
"Arrangements on future cooperation on IP would provide important protections for right holders, giving them a confident and secure basis from which to operate in and between the UK and the EU," it said.
A timeframe on negotiations on the UPC issue is not yet known, but the IPO's spokesperson said the agreement the UK seeks would "need to reflect the change in the UK's status as we cease to be an EU member state", and would "require negotiations with our European partners".
Patent law expert Victoria Bentley of Pinsent Masons, the law firm behind Out-Law.com, said: "The government's announcement will be welcome news for those businesses eager to see a new unitary patent and UPC system take effect. It confirms that the door for the UK's participation in the UPC remains ajar and infers a willingness on the part of the UK government to find a solution to provide for the UK's continued participation post-Brexit."
"Because of the size of the UK market and its importance for obtaining patent protection, and in light of the aims of the enhanced European patent system, the value of the UK's participation in the UPC is recognised by many of the participating EU member states. It remains to be seen, however, whether a consensus on the way ahead can be achieved. It will also be interesting to see whether a mechanism that allows for the UK's post-Brexit involvement would also lead to other potential participants in the UPC, such as Switzerland and Norway which are EPO contracting states but not members of the EU," she said.