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effect (EPUE), especially, if the Unified Patent Court Agreement (UPCA) can enter into force, even in case the UK has withdrawn from the EU.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.