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By Peter Leung
June 24 — The U.K.'s June 23 vote to leave the European Union clouds a decades-old dream of creating one patent court for most of Europe.
The goal of creating a Unified Patent Court covering most of the EU—some 40 years in the making—required the U.K. to be one of the ratifying countries. But the U.K.'s dramatic vote muddies that path, possibly exacerbating existing concerns about the proposed UPC system and enhancing the value of the old European patent system as a potentially safer option for those seeking intellectual property protection for their inventions.
At the very least, the Brexit makes it likely that the opening of the UPC—which had been expected in early 2017—will be delayed, along with the proposed accompanying European Patent with unitary effect, known as the Unitary Patent (30 WIPR 7, 3/1/16).
A “significant delay” is likely, given that the U.K. was expected to play a major role in the new court, Sally Shorthose, an IP partner with Bird & Bird in London, told Bloomberg BNA. Now, its departure from the EU creates a host of legal and logistical complications.
As proposed, the UPC would function as a common patent court for the EU's member states, hearing infringement and other proceedings for European patents. It was created by a 2013 treaty that was signed by 25 out of 28 members states, including the U.K. Only Croatia, Poland and Spain did not sign the agreement.
Today, patent rights and enforcement in Europe are largely national in nature. The closest thing to an existing pan-European patent is the European patent administered by the Munich-based European Patent Office and then validated in member countries of an applicant's choosing.
The result is that patent holders get a collection of national patent rights on a country-by-country basis. Under the UPC, the Unitary Patent would be a singular right covering all the countries that ratify the UPC-creating agreement.
One issue with the U.K.'s EU withdrawal is that it may force a renegotiation of the underlying treaty, which requires all participating countries to belong to the EU. Also, the court and Unitary Patent were to come into effect after ratification by 13 countries, including the “big three” of France, Germany and the U.K.
There could be options for the U.K. to still participate in ratification.
Since the U.K. has a two-year window to negotiate its withdrawal from the EU, it could arguably ratify the UPC agreement and then withdraw from the system, although it seems unlikely that the U.K. would want to sink money and time into helping to create a system it would abandon just a couple of years later. Another possibility is that the U.K. negotiates a status where it becomes a non-EU participant in the UPC system.
A further complication is that a UPC special division, tasked to hear cases involving chemistry and the life sciences, is to be seated in London. There are also U.K. judges who have already been picked for the court.
In addition to the obvious legal and logistical issues created by a Brexit, the overall usefulness of the UPC and Unitary Patent system will be undermined if the U.K. doesn't participate, Shorthose said. The U.K. is the EU's second largest economy, and a patent right that doesn't include it is significantly less valuable. Given already existing concerns about how a new and untried system will function, the U.K.'s absence could discourage patent filers from trying the new system.
Interestingly, the existing European patent system would be unaffected by a Brexit. That system is governed by a separate agreement, the European Patent Convention, which has both EU and non-EU members. Presumably, the UK would continue as a non-EU member.
Ravi Srinivasan, a patent partner at JA Kemp in London, told Bloomberg BNA that the European patent is an important option for rights holders to consider, especially given the Brexit vote. He also points out that the EPC gives practitioners the right to have offices in Munich, where the EPO is located, so the U.K.'s withdrawal won't affect the ability of practitioners to appear before the office.
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