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

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.

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