The UK will not take part in the UPC

Brexit deal and UK participation to the UPC

The suspens is over:

The UK will not be a member of the UPC and will not deliver Unitary Patents.

The UK’s negotiating objectives, i.e its overall goals for the next phase of Brexit, published last week in fact declares:

It is a vision of a relationship based on friendly cooperation between sovereign equals, with both parties respecting one another’s legal autonomy and right to manage their own resources as they see fit. Whatever happens, the Government will not negotiate any arrangement in which the UK does not have control of its own laws and political life. That means that we will not agree to any obligations for our laws to be aligned with the EU’s, or for the EU’s institutions, including the Court of Justice, to have any jurisdiction in the UK.

Moreover, as reported by JUVE Patent « A press office for the Cabinet Office confirmed (…) « I can confirm that the UK will not be seeking involvement in the UP/UPC system. Participating in a court that applies EU law and bound by the CJEU is inconsistent with our aims of becoming an independent self-governing nation.”

Surprise..!

Although this does not come entirely as a surprise, the UK government had nonetheless sent encouraging messages regarding the country’s participation to the UPC system after Brexit.

Its successive IP ministers had issued statements reiterating their commitment to the court; surveys had showed an overwhelming support across all industries for the UK’s participation; and the UPC’s Central division in London had already been arranged. Last but not least, the UK gouvernement had ratified in 2018 the UPC Agreement as well as the Protocol on Privileges and Immunities. These were interpreted as strong signals of the UK’s continuing participation to the UPC.

On the other hand, the raison d’être of Brexit seemed to go directly against Opinion 1/09 of the CJEU, which makes clear that the UPC Agreement requires member states to respect the primacy of EU law as well as the jurisdiction of the CJEU.

Politics thus prevailed.

Reacting to the news Alexander Ramsay, head of the UPC Preparatory Committee declared « (e)ver since the Brexit referendum in 2016 we were aware that something like this could happen, so the decision of the UK government does not come as a total surprise.”

What about the UK’s ratification of the UPC Agreement?

The next step for the UK government is now to seek to rescind its ratification of the Unified Patent Court Agreement. However, as Ramsay explains, “(t)here are no provisions in the UPC agreement for the case of a member state that has ratified the agreement to drop out. It’s therefore very likely that the UK will have to launch a procedure under the Vienna Convention on the law of treaties.”

It will be interesting to see how the UK government intends to proceed.

What is the UPC next challenge?

The next challenge for the UPC is to move forward without the UK.

To be continued…

The EU Parliament publishes a in-depth analysis on the UPC and Brexit

Brexit deal and UK participation to the UPC

In November the EU parliament published “an in-depth analysis” on the UPC and Brexit as requested by its Committee on Legal Affairs.

The paper “tries to clarify the question how Brexit may affect the entry into force of the new European Parent with Unitary effect (EPUE), especially, if the Unified Patent Court Agreement (UPCA) can enter into force, even in case the UK has withdrawn from the EU. What would be the necessary steps to be taken by the EU in order to ensure the functioning of the future European Unitary patent and in case the UPC Agreement would have to be revised because of Brexit.”

What clarifications does the EU Parliament Committee on Legal Affairs bring about Brexit and the UPC?

The EU Parliament’s analysis first summarises the history of the UPC and unitary patent and explains the content of the Unitary patent protection and the Language regime regulations.

The Policy Department for Citizens’ rights and Constitutional Affairs then looks specifically at whether “the UK can become and stay a member of the UPC” by confronting the positions of the UK government, European Council, EU Parliament and the CJEU.

It condenses them as follows:

The UK government:

“It seems that the government is aware that if the UK leaves the EU without a deal this might have implications on the UK patent system and supplementary protection certificate, the UPC and the EPUE and correspondence addresses and confidentiality for UK patents.

Thus “If the UPC is ratified and comes into force, there will be actions that UK and EU businesses, organizations and individuals may need to consider. The UK will explore whether it would be possible to remain within the UPC unitary patent systems in a ‘no deal’ scenario. In the event that the UPC and EPUE come into force and the UK needs to withdraw from one or both systems, businesses will not be able to use the Unified Patent Court and unitary patent to protect their inventions within the UK.”

The European Council:

The position of the European Council and the contracting Member States of the UPCA on the possibility to cooperate with the UK in the framework of the UPCA is not known.

This is despite the fact that: “(a)lthough the draft withdrawal agreement of November 2018 is silent about Patents, both parties have agreed, together with the draft withdrawal agreement, a (non-binding) political declaration setting out the framework for the future relationship between the European Union and the United Kingdom.

Point 44 of this agreement in fact specifically provides that both sides “should provide for the protection and enforcement of intellectual property rights to stimulate innovation, creativity and economic activity, going beyond the standards of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights and the World Intellectual Property Organisation conventions where relevant.“

Moreover, in point 47 of this agreement the parties agreed “that the Parties should establish a mechanism for cooperation and exchange of information on intellectual property issues of mutual interest, such as respective approaches and processes regarding trademarks, designs and patents.”

The European Parliament:

The EU Parliament identifies the following issues to the participation of the UK to the UPC after Brexit:

– the fact that the UK is not a member of the EU;

– the underlying EU intellectual property law, constantly changing

– the role of the CJEU as last instance for litigations.”

Indeed, “from the point of view of the legislator (EP) it (the UPC) is a patent court designed for EU member states, to create and rule on patents in EU member states, which comes under CJEU jurisdiction on questions of EU law.”

Furthermore, It is clear that the UPCA will apply and interpret EU patent law in its up to date version in force, not only in the version of the day when the UK has left the EU. ”

These questions are especially relevant in the context of Brexit as “the UK has to ask itself (…): Can we participate in a UPC which relies on and refers to the CJEU? One of the main reasons , if not the primordial reason for Brexit was that the UK wanted to take back control of laws and bring an end to the jurisdiction of the CJEU in Britain and that those laws will be interpreted by judges not in Luxembourg”.

The Court of Justice of the European Union:

In 2009 the CJEU was asked by the European Council to rule on whether non- EU member states could take part in the UPC. Indeed, at the time, the version of the draft UPCA allowed non EU member states to be a party to the UPCA.

The CJEU however considered this initial version of the UPCA in breach of EU law because the agreement as it was drafted at the time conferred “on an international court which is outside the institutional and judicial framework of the European Union an exclusive jurisdiction to hear … actions brought by individuals in the field of the Community patent and to interpret and apply European Union law in that field.”

This would then “deprive courts of Member States of their powers in relation to the interpretation and application of European Union law and the Court of its powers to reply, by preliminary ruling, to questions referred by those courts and, consequently, would alter the essential character of the powers which the Treaties confer on the institutions of the European Union and on the Member States and which are indispensable to the preservation of the very nature of European”

Thus although the CJEU held that the then draft version of the UPCA was in violation of EU law it did not expressly say that non EU member states could not take part in the UPC.

Member states nonetheless amended the final draft of the UPCA, which now provides explicitly “this Agreement should be open to accession by any Member State of the European Union; Member States which have decided not to participate in the enhanced cooperation in the area of the creation of unitary patent protection may participate in this Agreement in respect of European patents granted for their respective territory.”

This was despite the fact that EU member states were actually in favour of the UPC being open to non EU members. Indeed “(w)hen the Council put the question to the CJEU: “Is the envisaged agreement creating a Unified Patent Litigation System compatible with the provisions of the Treaty establishing the European Community?” most member states were in favour: The UK, during the hearing procedure before the CJEU, considered that the essential character of the CJEU’s powers was preserved within the litigation system provided for by the envisaged agreement (to be regarded as a mixed agreement), “since neither the exclusive jurisdiction of the Court nor the binding effect of its decisions are called into question”. The UK therefore pleaded that the draft agreement was compatible with the Treaties.

So what is the EU Parliament Committee on Legal Affairs’ conclusion as to the UK’s participation to the UPC after Brexit?

Although not clear-cut the EU Parliament Committee on Legal Affairs’ conclusion does not rule out the UK’s participation to the UPC after Brexit as “it seems not per se legally impossible that the UK can stay within the UPCA, even when not an EU Member State.

The Committee is also keen to highlight that even if the UK were to withdraw from the UPC “this would not hinder the UPCA coming into force.” Indeed “(t)he three Member States with the most of patents in force (UK excluded) are Germany, France and the Netherlands.” Moreover “(i)t is also understood that a solution for the London section has to be found in case of the UK has left the UPCA – before or after its entry into force. In case that the UK would wish to stay inside the UPCA, this pledge would have to be respected by EU Member States.

What was the UPC Preparatory Committee’s response?

Asked about the conclusion of this analysis, Alexander Ramsay -Head of the UPC Preparatory Committee- highlights the fact that, although not mentioned by the EU Parliament Legal Affairs Committee “there is a simplified mechanism in the Agreement for consensus amendments”. Such amendment could then allow the UK to remain a member of the UPC.

Ramsay also points out that the European industry has expressed its preference for a UPC that would be inclusive of the UK.

He thus concludes by saying that although the UK‘s participation to the UPC is a political decision which depends on negotiations between EU member states and the UK, he still believes that the UK will be a part of it.

Brexit and the German constitutional challenge

Brexit and the German constitutional challenge

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”.

The Italian government to ask for London UPC Central Division to be transferred to Milan?

Italian Foreign Affairs confirm Milan candidacy for UPC Central Division

The Italian Foreign Ministry confirmed that the city of Milan and the Lombardy region wish to host the UPC Central Division for human necessities, chemistry and metallurgy that is -for now- located in London, were the UK not be a participating member after Brexit.

The Italian Foreign Minister indicates that the city of Milan and the Lombardy region will thus to that effect submit their candidacy to the Italian government.

Is the UK’s participation to the UPC any more certain after the Brexit deal?

Brexit deal and UK participation to the UPC

The UK government and the European Union  signed the Brexit deal on 25th November 2018. Although the UK parliament still needs to approve the deal, the “Political Declaration setting out the Framework for the Future Relationship between the European Union and the United Kingdom” calls regarding intellectual  property for “the protection and enforcement of intellectual property rights to stimulate innovation, creativity and economic activity“. It also urges the parties to “establish a mechanism for cooperation and exchange of information on intellectual property issues of mutual interest, such as respective approaches and processes regarding trademarks, designs and patents“.

However, the agreement itself does not contain any provision regarding patents. This means that although the UK has ratified the UPC agreement and published statements confirming its commitment to the UPC, the UK’s participation to the UPC after Brexit is still very uncertain. This uncertainty has indeed been hotly debated (see Brexit IP Guidance, An Inquiry onto the effect of Brexit on the UPC, More on Brexit from the AIPPIUK IPO update on Brexit,  The Patents Order 2016)  since the Brexit vote, but recently the debate has reached a peak with the publication of a long study (182 pages) published by the Max Planck Institute, which has attracted many criticisms.

What does the Max Planck Institute article say about the UK participation to the UPC?

The article published by the Max Planck Institute  argues strongly against the UK’s participation to the UPC. Its authors, Hanns Ullrich and Matthias Lamping, declare that:

  • Opening the UPCA to accession by third countries would render the Agreement incompatible with the Treaties.
  • It would entail a threat to the autonomy and effectiveness of EU law and, ultimately, to the EU’s control over the conditions of innovation and its legal protection within the Internal Market.
  • (…) it is not the safeguards incorporated into the UPCA in the aftermath of Opinion 1/09301 that ensure the compatibility of the UPC’s judicial system with the Treaties but rather the limitation of contracting parties to EU Member States, because that is what makes those safeguards applicable as a matter of Union law, regardless of whether they are incorporated into the UPCA or not.
  • (…) what is needed is the development of a flexible arrangement on the protection and enforcement of patents that properly fits into the framework of the future UK–EU relationship, adequately caters to both sides’ interests in a patent policy and practice of their own and is well balanced so as to be generally acceptable rather than primarily desirable for some particular stakeholders. As regards the European Union’s own system of patent protection, every effort should be undertaken to complete it in respect of both its substance and adhesion by all Member States with a view to make it a true success of genuine economic and sociopolitical integration. The authors argue therefore that the UK’s participation to the UPC could geopardize this new dynamic.
  • While the UK intends to explore staying on board, the EU might draw a different conclusion from Brexit. As it stands, opening the UPCA to accession by third countries would render the Agreement incompatible with the Treaties.

The researchers also question what the UK would gain by participating to the UPC as the UK would have “to delegate  jurisdiction over its patents to the UPC” and  “accept that all cases brought before the court are decided in the light of the “letter and spirit of the Treaties””. Indeed, acording to Ulrich and Lamping, for it to participate the UK would have to agree with the fact that “the EU could amend the UPCA anytime through the “backdoor”of secondary Union law” and that the “UK would have to accept that the EU is in full control of post-grant patent law”. The UK had however adopted a very different position throughout the Brexit negotiations. This may thus compromise the UK’s participation to the UPC.

 

How was the article received?

The Max Planck Institute article was widely criticised, most notably by the fictional lawyer from How to Kill a Mocking Bird,  Atticus Finch. The anonymous writer behind that pseudonym formulated the following remonstrances :

  • (T)he studies overlook some important precedents in EU law and policy which results in parts of the studies being based on wrong assumptions. In fact “extension of EU instruments to third countries is something quite frequent ” and “the problems the authors see with such an extension can easily be solved as other examples of extensions of EU instruments to third countries show”.
  • The authors also do not seem to fully recognize the economic needs of European and of UK companies as “(w)hen stating that the mere loss of an option for business to get patent protection in the UK (by means of a Unitary Patent) does not negatively affect businesses they do not seem to fully acknowledge that this will render patent protection more complex and costly for all companies who need patent protection in the UK”
  • It is further somewhat astonishing that the authors argue an extension of the Unitary Patent to the UK is not in the UK’s own interest since the UK allegedly needs policy space with respect to framing its patent law.
  • (T)he authors do not put forward any new arguments regarding the alleged incompatibility of the UK’s participation with Union law and with Opinion 1/09 of the CJEU.” Moreover, “(p)arts of the arguments against the UK participation are based on the wrong assumption that the UK could block any alignment of the UPC Agreement with Union law, which is not the case”.

Other professionals defended a similar position, such as A. Ohly and R. Streinz (“Can the UK stay in the UPC system after Brexit?”, GRUR Intl. 2017, 1) R. Gordon and T. Pascoe (“Re The effect of “Brexit” on the Unitary Patent Regulation and the Unified Patent Court Agreement”)  and M. Leistner and P. Simon (“Auswirkungen des Brexit auf das europäische Patentsystem”, GRUR Intl. 2017, 825).

W. Tilmann, for example,  in the German Association for the Protection of Intellectual Property magazine rebunks the Max Planck study in terms similar to those of Atticus Finch:

  • He highlights the fact that although the authors argue against the UK’s participation to the UPCA they do not “give more details on possible improvements of the unitary patent and the UPCA which would be possible to realise without the UK participating” to support their views. Tilmann notes for example that while the UPC is often said to be missing “prior use right, protection of published patent applications, novelty depriving prior rights and compulsory licences“, it is doubtful that their provisions by Member States “liberated from the UK’s participation” would “offset the loss of UK’s participation and make the horizon for inventors and industry on the continent look brighter”.
  • Tilmann also criticises the lack of information regarding the legal effect of a Brexit agreement that would not contain “any rule on the UK remaining as a contracting State of the UPCA” and argues that the authors’ answer that “the UPCA would automatically change from a common court of Member States to an “ordinary” international court” is not satisfying.
  • In the second part of its article Tilmann looks at the question of the entitlement of the UPC to refer question to the CJEU after the Transition Period. He notes that the end of the Transition Period will give rise to a special situation “characterized by the UPC being supported by 24 CMS, fully integrated into the relationship between the CJEU and the national courts, and one contracting State having been a CMS when it pledged to respect Union law (…) and all obligations out of the Agreement as if it were a CMS.” This for him shows that the UPC is well integrated in the “CJEU-national courts system” and contradicts the Max Plank Institute research fellows’ theory that “the UPC will not be able to refer Union law questions to the CJEU once the UK has left the Union by Brexit.
  • Finally, in the third part of the article, Tilmann rebutes the “second major argument of the authors against the UK’s participation in the UPCA”  according to which“the UK would have a veto power against further amendments (…) of the UPCA (...) The Brexit would put the UK in a stronger position than at present.” Tilmann however notes that the UK will have no power regarding Union law as “with the exception of horizontal effect of not implemented all Union law is immediately to be applied by the UPC without a change of the UPCA being necessary“.  Tilmann also rebates the argument put forward by Ullrich and Lamping regarding the fact the “UK could have a veto power against a change of the UPCA following a change of Union law, not only from the position of the UK (after Brexit) as a contracting State but also from Art.87(3) UPCA (declaration not to be bound by a change of the UPCA law by the Administrative Committee)” as “this provision does not apply in the case of a change of Union law” which therefore leaves the UK without any veto power regarding Union law.

 

Has the UPC commented yet on the UK’s participation?

On 19th December 2018 the UPC published a short statement which reads: “2018 has been a year of mixed highs and lows. This year has seen two more Signatory States ratify the Unified Patent Court Agreement, namely Latvia and the UK which means there are now 16 ratifications in total of the Agreement, well over the number required. We still await the outcome of the complaint pending before the Constitutional Court in Germany before the project can move into the next phase, the period of provisional application.

The UPC also highlighted its progress regarding the technical and operational preparations which are “allowing for the project to move at pace in the event of a positive outcome from the German Constitutional Court”.  In addition, the UPC Chairman holds regular meetings with the Executive Group and the operational team  to review the status of the project. Similarly the recruitment of judges is going on and “(t)hose that have applied for judicial positions in the Unified Patent Court are being contacted separately”.

Therefore, although the UPC is silent on the UK’s participation it seems nevertheless to put all its focus on its coming into function and on the growing number of ratifications.

What does a no-deal Brexit mean for the UPC? The UK Government IP Guidance

Brexit deal and UK participation to the UPC

Need any guidance for your IP after Brexit?

Brexit will take place on 29th March 2019. The date is fixed and is not dependant on any agreement between the UK and the EU.  The risk of a “no-deal Brexit” has spurred the publication of governmental guidelines for businesses. This week the UK government notably published  a “Patents if there is no brexit deal” Guidance, which looks specifically at the issues of patents and supplementary protection certificates and those of the Unified Patent Court and the Unitary Patent.

Regarding patents and supplementary protection certificates:

So what still needs to be done for the UPC to come into operation?

Ratification of the UPC Agreement:

Germany must ratifiy the UPC Agreement. The German constitutional court however needs to decide whether the ratifying German legislation is compatible with the German constitution. According to Mooney the decision should be rendered before the end of 2018.

Case management system:

The electronic case management system is still in working progress.  This system is key to the functioning of the Court, which will be a paperless court. However as explained by Mooney, the tailoring of the case management system to the UPC Rules of Procedure is sensitive. Indeed, there are more than 300 rules of procedure which must now be fitted in a binary computer system.

The UK ratifies the UPC Agreement and the Protocol on Privileges and Immunities

UK ratifies the UPC Agreement

The UK government announced on 26th April 2018 that the UK had ratified the UPC Agreement.

This ratification is particularly significant. Indeed, the UK is one of the three member states, with France and Germany, whose ratification is mandatory for the Agreement to come into force.

However, the UK’s ratification comes after the Brexit referendum in June 2016, which jeopardised the UK’s participation to the UPC. Indeed, before the UK leaves the EU, it must secure its participation to the UPC  by way of international agreements and amendments of the UPC Agreement.

The UK’s ratification of the UPC also raises the question of the UK’s respect of EU law. Article 20 of the UPC Agreement in fact states that ” (t)he Court shall apply Union law in its entirety and shall respect its primacy“.

Regarding these issues, the UK government declares laconically  that “(t)he unique nature of the proposed court means that the UK’s future relationship with the Unified Patent Court will be subject to negotiation with European partners as we leave the EU. 

The UK also ratified the Protocol on Privileges and Immunities

On 26th April 2018 the UK also ratified the Protocol on Privileges and Immunities. This protocol will entitle the Unified Patent Court to benefit from privileges and immunities necessary for the Court to exercise its functions. So far 5 countries have ratified it.

What does these ratifications mean for the UPC?

The UK’s ratifications are strong indicators of its long term commitment to the UPC. The UK’s participation to the UPC is good news as it will ensure the atractivity of the Court. This ratification may also speed up the entry into operation of the Court, regularly postponed since the signature of the UPC Agreement.

Therefore, the entry into force of the UPC Agreement now only requires Germany’s ratification. The latter however is on hold.  In fact, the German constitutional court must decide whether the German law passed to allow ratification is constitutional.

 

See here for more posts on Bexit and the UPC.

See here for more posts on Germany’s ratification.

 

 

 

 

Is the EU Considering the Relocation of the London UPC Central Division?

The EU is considering the relocation of the London UPC Central Division.

Could Michel Barnier push for relocation of the UPC Division based in London? 

It is reported that in a meeting about the Brexit negotiations, Michel Barnier, current chief negotiator for the EU, mentioned that Brussels is reviewing whether London can keep its Central Division of the Unified Patent Court after Brexit.

This relocation could be motivated by the fact that the European Medicine Agency (as well as the European Banking Authority), whose mission is to evaluate European medicinal products  will be relocated on the territory of the EU, as indicated by the European Council decision on the “Procedure leading up to a decision on the relocation of the European Medicines Agency and the European Banking Authority“.

As the third UPC central division will be competent for pharmaceuticals, chemistry and metallurgy, this potential relocation seems to indicate that the EU is trying to achieve a coherent EU framework for those industries.

However, if it actually takes place, this relocation will be particularly significant. Indeed, the United Kingdom accounts for 11% of extra-EU exports of medicinal and pharmaceutical products and is thus considered as one of the European leaders in this industry. Furthermore, it should be considered against the fact that the UK is currently taking the final steps towards the ratification of the UPC Agreement and has notified its approval to the Protocol to the Agreement on the Unified Patent Court on provisional application a few days ago. This potential relocation project therefore begs the question of whether it could jeopardise the UK’s participation to the Unitary patent package and its ability to contribute to the UPC case law on issues of particular interests for its economy.

The UK Supreme court, IP Federation and Protocol on Privileges and Immunities

The UK Supreme Court announced last week that the UK Government could not trigger article 50 without Parliamentary approval. The ruling was followed by the publication by the UK government of the Brexit bill , for a vote in Parliament next week, while the actual trigger of article 50 is planned for the end of March. However, Theresa May’s speech which preceded the Supreme Court’s ruling has left many wondering about the actual possibility for the UK to remain a member of the UPC once it has left the EU.

In fact, although the UK government expressed its support for the ratification of the UPCA  many questions remain. Indeed, neither Baroness Neville Rolfe’s announcement  nor the intervention of the new Minister of State for Universities, Science, Research and Innovation (Jo Johnson),  clarify whether it is possible for a state which is a Member of the European Union when the UPCA comes into force, to remain a contracting state after it leaves the European Union, whether the UPCA could be amended to allow  for any non-EU members to become UPC members, or what will happen to the London central division if the UK cannot remain a member of the UPC. Mr Johnson only stated that the UK’s 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”.  Overall he highlighted that the aforementioned questions will only be answered by the Brexit negotiations.

However, with the UPC planned to become operational in December 2017,  the question of the continuity of UK’s participation to the UPC once it has left the EU is central for all users of the court and future unitary patent applicants.

In this regard, the UK IP Federation issued two statements . In its first statement dated December 2016, it urges contracting states to “work together to enable the UK to stay in the system after Brexit and to prepare transitional provisions in case this is not possible“. It further calls for  “legal instruments to be developed that enable the UK to remain part of the system or for appropriate reassurances to be provided if this is not thought necessary” and “upon the UK and the other contracting states to work together urgently to provide a legally secure route by which the UK can remain in the UPC after Brexit.”  In case the UK cannot remain part of the UPC after Brexit the IP Federation asks the UK government to “provide assurances that any Unitary Patents will be recognised as UK national patents. The UK and other contracting states will also need to produce transitional arrangements to govern what will happen to ongoing litigation at the UPC and to ensure the continued functioning of the court.”

In its second statement dated January 2017, the signatories which describe themselves as “IP intensive companies in the United Kingdom”  list 7 specific demands and notably that “all accrued and pending intellectual property rights (…) be preserved in the UK post-Brexit;” that “(t)he UK (…) provide(s) for the ability to obtain equivalent UK rights in the UK post-Brexit”, and that once the UPC is established “the involvement of non-EU, European Patent Convention Contracting States (e.g. Switzerland, Norway) in the UPC (…) (is) explored”. 

To the best of our knowledge, these statements have not been publicly answered by the UK government. This is not to say however that the UK is not making progress on the ratification of the UPCA, as showed by the fact that the Protocol on Priviledges and Immunities was laid in Parliament on 20th January 2017 in the form of a Command Paper (government publications presented to parliament) and an explanatory memorandum. This protocol will ensure that the UPC judges benefit from the privileges and immunities necessary to their function and to the operation of the UPC.

 

 

An inquiry into the effect of Brexit on the UPC and UP:

Brexit and the German constitutional challenge

The British government has announced at the Tory Party Conference on Sunday 02nd October that article 50 will be triggered by the end of March 2017. The government also gave details of a “Great Repeal Bill“, which would repeal the 1972 European Communities Act – the law that binds EU law to the British statute book – and  transpose EU legislation into British law in its entirety.

Among the legal issues that the British government will have to handle in the coming months, the UK’s participation to the UPC is of course a major concern for UK and EU IP lawyers.

The UPC Blog has already looked at this issue and its versatile political environment in different posts here.

This post however focuses specifically on the unequivocal -though not definite- legal answers on the UK’s participation to the UPC and UP brought by two barristers from Brick Court Chambers, Richard Gordon QC and Tom Pascoe, in their opinion on the legal consequences  of Brexit “on the Unitary Patent Regulation and the Unified Patent Court Agreement”. This opinion was commissioned by the IP Federation, the Chartered Institute of Patent Attorneys and the Intellectual Property Lawyers Association who have all expressed their support for the UK’s participation to the UPC after Brexit.  20 UK law firms  (among who Simmons & Simmons, Linklaters, Herbert Smith Freehills, CMS UK, Gowling WLG, Bird & Bird, Collyer Bristow, Browne Jacobson and European IP firms Carpmaels & Ransford and EIP) have also backed this inquiry into UK’s post-Brexit UPC membership.

 

Télécharger (PDF, 264KB)

 

Richard Gordon and Tom Pascoe’s opinion answers six questions:

1a. Can the UK continue to be part of the UP?

“The UK may only continue to participate in the unitary patent by entering into a new international agreement with the participating EU Member States. The permissibility of such an agreement under EU law would turn upon essentially the same matters as the legality of the UK’s continuing participation in the UPCA.”

1b. Can the UK continue to participate in the UPCA?

“It is legally possible for the UK to continue to participate in the UPCA after ‘Brexit’ (although the CJEU’s reasoning in Opinion 1/09 is opaque and there is therefore a risk that the CJEU would find otherwise).”

1c. Can the UK continue to host the Life Sciences/Chemistry section of the central division?

“Provided that it is legally possible for the UK to continue to participate in the UPCA, there is no reason why it cannot continue to host a section of the central division.”

2. What changes would have to be made to the UPCA?

“A number of amendments would have to be made to the Agreement” by way of amendments to the UPCA and separate international agreements. Pascoe and Gordon consider that five amendments need to be made in the UPCA at article 1, 2(c), 21, 29, 84 and 88. An international agreement would also need to be entered into between the UK and the Union for the CJEU to accept preliminary references. Finally the UK will need to consider its options for replacing the Brussels Regulation, with notably the Lugano Convention.

3. What would the UK have to sign up to?

“The UK’s continued participation in the UPCA would require it to submit to EU law in its entirety as regards proceedings before the UPC. It would also need to sign up to an appropriate jurisdiction and enforcement regime (such as the Lugano Convention).”

4. Does it matter whether the UK joins the EEA?

“Our advice does not depend upon whether the UK joins the EEA.”

5. Is it possible or desirable to obtain an opinion from the CJEU?

“It would only be possible to obtain a pre-emptive opinion from the CJEU on the legality of the UPCA if the Union became a party to the Agreement.”

6.What would be the consequences of Brexit if the UK ratifies the UPCA without amendment?

“If the UK ratified the UPCA, without amendment, and subsequently left the EU, any divisions of the UPC in the UK would have to cease operating. The transitional consequences of this are matters of detail to be negotiated as part of the UK’s exit negotiations.”

 

Gordon and Pascoe conclude that after Brexit: the UK may only continue to participate in the unitary patent by entering into an international agreement with the EU and its Member States, and in the UPC so long as it signs the UPCA. On the other hand if the UK ratified the UPCA without amendment while still a member of the EU, the UK divisions of the UPC would have to cease operating once the UK leaves the EU. The authors also highlight the role of the CJEU who might reach different conclusions. However, according to Gordon and Pascoe, it would only be possible to obtain a pre-emptive opinion from the CJEU on the legality of the UPC if the Union became a party to the Agreement.

 

Finally, it is important to point out that the British government’s decision to trigger article 50 is being challenged by the People Challenge group, a group of “concerned British Citizens” (You can read the story behind this case here). A hearing will take place next week to decide whether the government can rely on the royal prerogative or whether an act of Parliament must be passed to allow the government to trigger article 50.

Last week, the People Challenge group were granted the right to publish the Government’s defense documents. The People Challenge group’s skeleton arguments as well as UK Government’s detailed grounds of resistance can be found below.

It is however impossible to say whether, were the Court to decide that only Parliament can invoke article 50, this would have any impact on Brexit and let alone on the UK’s participation to the UPC.

 

  •  The People Challenge group’s skeleton argument:

Télécharger (PDF, Unknown)

 

  • The UK Government’s detailed grounds of resistance :

Télécharger (PDF, 1015KB)