This is piece of Out-Law’s series of news and insights from Pinsent Masons experts on the impact of the UK’s EU referendum. Watch our video on the issues facing businesses and sign up to receive our ‘What next?’ checklist.

Patent law specialist Deborah Bould of Pinsent Masons, the law firm behind Out-Law.com, said that it would stare “politically unrealistic” to expect the UK to pass legislation giving effect to the UPC Agreement if its participation in the UPC and unitary patent system was not guaranteed to persist following the state leaves the EU.

Bould was commenting following Benoît Battistelli, president of the European Patent Office (EPO), suggested that if the UK ratified the UPC Agreement priorto leaving the EU it could be allowed to persist its participate in the fresh system following its exit from the trading bloc. He suggested, though, that continued participation post-Brexit would be subject to the outcome of negotiation between the UK and EU countries.

The European Patent Litigators Association (EPLIT) has separately encouraged the UK government to “seize the necessary steps to ratify the UPC Agreement as soon as possible”.

“It seems politically unrealistic to suggest that the UK ratifies the UPC Agreement now, to aid get the unitary patent system off the ground, and then tries to negotiate to stay in as piece of the UK’s exit terms,” Bould said. “This gives the UK no certainty about the future. For example, the London seat of the UPC Central Division focussing on life sciences could be wound up on Brexit. The system is currently limited to member states. It is a humiliation as the EPO could instead be leading an approach to negotiate a revised UPC Agreement allowing participation of the UK post-Brexit and potentially opening the system up to EPC contracting states more generally.” 

In a blog on the EPO website Battistelli said the UPC and unitary patent reforms should proceed with or without the UK’s participation.

“In the best case scenario, the UK could goaway ahead as soon as possible with the ratification of the UPC Agreement,” Battistelli said. “This would grant the UK afterwards, in its EU exit negotiations, to obtain its continuous participation both in the Unified Patent Court and the unitary patent. With the UK having brought the system into operation by ratification and having participated in the system from the beginning, it is possible that member states may grant the continued participation of the UK, even following the ‘Brexit’ takes effect.”

“There are of course other scenarios; as more and more ratifications takeplace, member states will consider how to ensure the timely delivery of the UP-UPC, even if that regrettably means going ahead without the UK. There seems to be a clear feeling in the international user community that the system would remain sufficiently attractive for numerous. It would be regrettable to goaway out a major patent state such as the UK, a state that can aid to shape the future of the system in a business and user-friendly approach. But it is entirely up to the UK authorities to determine whether they crave to participate in the Unified Patent Court and in the unitary patent or not,” he said.

In its letter to UK minister for intellectual property Baroness Neville-Rolfe (2-sheet / 78KB PDF), EPLIT said the future of the UPC was “uncertain” in light of the UK’s vote to goaway the EU. A postpone to the operation of the fresh patent system is undesirable, it said.

It said: “Article 89 of the UPC Agreement requires that, for the UPC to come into force, the UK, as single of the three countries where the highest number of European patents are in effect, ratifies the UPC Agreement. If the UK does not ratify the UPC, this will likely require a renegotiation of the UPC Agreement and lead to a significant postpone of the whole project, if only because without a UK ratification the system can only enter into force following the UK has formally left the EU. In EPLIT’s opinion, such a postpone will be to the detriment of inventors and businesses in the UK and elsewhere.”

“A ratification of the UPC Agreement by the UK will denote that the system can enter into force without much postpone. Should the UK decide to goaway the EU following ratification, the UK may be capable to persist to participate in the UPC and EPLIT certainly hopes it will. EPLIT is also of the view that the system is much more attractive if the UK continues to participate in it. However, even if this were legally or politically not possible, EPLIT silent believes that entire users of the European patent system will be better off if the UK ratifies the UPC Agreement in the inthevicinity future so that this important development of the patent system in Europe will not possess been jeopardised,” it said.

Unitary patent protection was expected to be available to businesses from next year.  below the fresh system companies will be capable to obtain patent protection for their inventions in participating countries through a single patent application to the European Patent Office (EPO) and without having to further validate the patent in each of the individual countries.

Unitary patent protection will only apply in those states which sign and ratify the UPC Agreement as well as adopt the unitary patent regulations. Ratification of the Agreement would handover legal recognition to the fresh UPC as a judicial forum for settling disputes concerning the validity and alleged infringement of fresh unitary patents, as well as European patents unless they are opted out.

The UPC Agreement needs to be officially ratified by at least 13 EU countries, with that number including France, Germany and, as it stands, the UK, for the Agreement to seize effect. Currently 10 countries, including France, possess ratified the Agreement, and Italy has signalled its intention to do so too. Draft legislation has also been prepared in the UK and Germany to handover recognition to the fresh unitary patent and UPC regime.

Emmanuel Gougé of Pinsent Masons said that the UPC Agreement would almost certainly possess to be amended to accommodate UK participation in the fresh patent regime if the UK does not ratify the Agreement priorto exiting the EU, should the UK be willing to be piece of the UPC system.

“Amending the UPC Agreement to grant non-EU member states to participate would possess implications for the timeframe for the reforms,” Gougé said. “This is because the amended Agreement may require to be re-ratified by countries that possess already adopted laws to handover it effect, as well as in other countries yet to ratify. In some cases, such as with Denmark, the re-ratification process could involve a fresh referendum to be held on the issue.”

“The UK’s participation in the fresh patent system is a major piece of its attraction, and its involvement was a factor in the decision that London should host a branch of the Central Division of the UPC. That said, subject to a possible amendment of Article 89 of the UPC Agreement, the Agreement is worded in a way which makes it legally possible for the UPC framework to persist without UK involvement,” he said.

“There is an argument that UK ratification pre-Brexit would not contradict the spirit of Brexit but instead complement the view that the UK can cooperate with EU neighbours without being an EU member. This is grounded in the fact that the UPC Agrement is an international treaty and not EU law and that the patent reforms were agreed in a system of enhanced cooperation between some, but not entire, EU countries,” Gougé said.

A simulation earlier this year of an injunction hearing below the UPC, organised by  Pinsent Masons, highlighted some of the issues businesses will require to consider when deciding whether to engage with the UPC.