Brexit is getting closer everyday and its consequences for the UPC have become tangible: it is now unlikely that the UK will still be a member of the UPC after 31st October 2019. It also is unlikely that the UK will become a member state of the UPC before Brexit; Germany’s ratification before the end of next month being highly improbable.
So what has been happening in the UK with regard to the UPC?
In August, Jo Johnson was reappointed as IP Minister. He had already held the position from July 2016 to January 2018. It is under his tenure that the UK ratified the UPC Agreement and declared it intended to participate to the UPC after Brexit.
Some had interpreted this re-appointment as a strong signal of the government support for the UK’s involment in the UPC. However Jo Johnson resigned as MP and minister on 05th September, citing “unresolvable tension between family loyalty and the national interest’.
Thus, now that the UK Government seems to be aiming for a no-deal Brexit the possibility of the UK remaining a member of the UPC is very slim. Indeed, had the UK agreed to the EU withdrawal agreement, the UK and the EU would have had until 31 december 2020 to negotiate the UK’s continued participation to the UPC.
Hence, although the UKIPO declared the following to Managing IP:
it is difficult to see how the UK government could, after Brexit, justify to be subjected to the decisions of the Court of Justice of the European Union.
Moreover, commentators agree on the fact that there is still a strong incentive for the UPC to exist even without the UK’s participation. The UPC member states will thus probably push for its entry into force despite the fact that the UK is not participating.
Managing IP has actually launched this week a survey for in-houses “to find out whether a European harmonised patent system would still be attractive to patent-focused businesses without the UK as a participant” . It asks 2 questions:
“1. Would the UPC and unitary patent system still be attractive to you and your business without the UK as a participant? 2. Why do you think the UPC and unitary patent project is still attractive OR unattractive without the UK? “
And what about Germany?
Despite passing the legislation enabling the ratification of the UPC Agreement, Germany has yet to ratify it. The ratification is stalled by the constitutional challenge of the very legislation allowing the ratification of the UPC Agreement . The German constitutional court has however schedulled the challenge for a hearing this year.
In August, the German Federal Government has had also to answer questions from the German Free Democratic Party about the UPC. The questions concerned the impact of Brexit and Germany’s annual budget for the UPC. The German Federal Government was asked about the money it has spent to contribute to support the development of the UPC. With regard to the impact of Brexit, the German Federal Government responded the following:
“The issue of the withdrawal of the United Kingdom from the European Union (so-called Brexit) and its implications for European patent reform play an important role in the further implementation process of the Unified Patent Court. The real and legal implications of withdrawing from the Treaty must be examined and agreed at European level. This opinion is currently not finalized, not least because significant factors of the expected exit are not yet known.” (p.2 response to questions 1 & 2, )
Regarding future budgets, the Federal Government confirmed its ongoing commitment to the creation of a unified patent system in Europe. It declared:
“The Federal Government has always insisted on the creation of a unified patent system in Europe and thus also on the Unified Patent Court. This commitment will continue. The Federal Government therefore takes the necessary budgetary measures to fulfill the financial obligations arising from ratification” (p.4, response to questions 7 & 8)
The UPC into action before Brexit no longer possible?
The coming into existence of the UPC before Brexit does not seem probable. It is in fact, on the one hand, unlikely the German constitutional court decide upon the constitutionality of the ratification legislation before Brexit and, on the other hand, one can doubt that Germany would sign the UPC Agreement without knowing the overall impact of Brexit on the UPC.
The coming into action of the UPC will thus depend on the Member states’ ability to commit, notably financially, to the project once the UK will have left the EU. Indeed, the UPC Agreement does not require the UK to be a participating member state for it to come into force; but only provides that “this Agreement should enter into force on 1 January 2014 or on the first day of the fourth month after the 13th deposit, provided that the Contracting Member States that will have deposited their instruments of ratification or accession include the three States in which the highest number of European patents was in force in the year preceding the year in which the signature of the Agreement takes place, or on the first day of the fourth month after the date of entry into force of the amendments to Regulation (EU) No 1215/20121 concerning its relationship with this Agreement, whichever is the latest”.