Until June 23, the UK was a driving force in creating the European Patent with Unitary Effect (“Unitary Patent”), a new breed of “Super Patent” which can instantly grant or revoke a robust set of associated patent rights in 24 of the 28 EU member countries who signed up to it on 19 February 2013.
The radical new patent is part of a complete overhaul of patent law, framed in the Unified Patent Court Agreement which includes a new set of courts under the auspices of the Unified Patent Court (“UPC”). In addition to managing the Unitary Patent, the UPC has been given exclusive jurisdiction over European Patents, without unitary effect, in the 24 signatory Member States. Indeed for its signatories, the new Unitary Patent is seen as overcoming the shortcomings of the rather puny European Patent which relies heavily on 37 national and extension countries’ patent laws, so inevitably is of variable quality and financial value. Morocco is part of the European Patents system. So far, all hail the new. Well apart from Spain and Poland, the main countries that chose to opt out of the brave new Unified Patent Court regime. However following the Brexit vote there is suddenly a question mark over not just the UK’s participation in the UPC, but also whether the absence of the UK could be a fatal blow? Is this another example of the over-weaning ambition of the EU? Or is the patent revolution coming irrespective of Brexit?
Patents can be regarded as the lifeblood of many familiar industry names. The LG Group, Samsung, Philips, Panasonic and Hitachi are just a handful of the famous industry names jostling with the pharmaceutical giants for a top twenty spot in the European Patent Office’s (“EPO”’s) applications chart, 2015. Knowing that one court judgment can revoke a patent overnight in 24 EU markets must make even bold multinationals nervous when considering the market value of their top patents. And it gives a great deal of power and responsibility to the judges of the new courts.
The need for judicial quality, in direct correlation to the financial gains and risks embodied in the Unitary Patent, plays directly in the UK’s favour for Brexit negotiations. British judges in this area are highly esteemed by their European counterparts. But UK patent experts are questioning whether the UK can remain a signed up member of the Unified Patent Court Agreement? Technically the agreement is not open to states outside the European Union.
An experienced patent lawyer, commenting on the basis of anonymity, believes the UK patent landscape has changed decisively post Brexit: “The Unified Patent Court [in the UK] and Unitary Patent [in the UK] will almost certainly now not go ahead. There is some talk of them still happening, with various permutations being suggested, but I think it is unlikely as it would be politically odd to sign up to a European court with such wide powers so soon after the vote”.
Alexander Ramsay, Chairman of the UPC Preparatory Committee is slightly more optimistic “For the time being the United Kingdom remains a Member State of the European Union and a Signatory State of the Unified Patent Court Agreement and an integral player in its preparation”. However he concedes, the referendum result raises questions “…in particular as regards its possible impact on the UK participation and on the UK ratification of the Agreement”.
Regarding the other 23 EU signatories, Ramsay is more upbeat. He confirmed the preparatory work for the patent system, including judicial appointments, should be finished by the end of Autumn this year and the working assumption was that “this would enable the system to enter into effect late Spring 2017” subject to ratification by 13 Signatory States which must include the three top patent-owning Member States which are France (already ratified), the UK and Germany. Indeed prior to the Brexit vote, Mr.Ramsay’s team had already secured its London base for one of its Central Division Courts at Aldgate Tower (see photo).
For Unitary Patent fans, a future scenario is that Germany will hit the “pause” button on ratifying the Unified Patent Court Agreement. As the EU country with by far the most patents granted in 2015 at 14,122 compared to France with 5,433 and the UK with 2,097, it is inconceivable that the new patent regime will launch without German ratification. A pause will push back the Spring 2017 Unitary Patents “go live” date, but will give the UK’s Brexit negotiators a chance to see if any compromise can be salvaged. (Yet another reason for Chancellor Merkel to urge that Article 50 is triggered early in 2017). It will be an interesting signal, and probably one of failure by the negotiators to find a compromise, if Germany does ratify the new Unified Patent Court Agreement early in the Brexit negotiations next year.
In any event, it is hard to see the new regime coming into effect until the UK has actually left the EU.
For patent owners there is some reassurance. The UK national patent system will continue unaffected by Brexit. National patent laws remain the same, even in countries committed to the new regime.
Finally, it remains to be seen should the new patent regime go live, if it will stand up to the high quality legal standards industry will demand and be embraced.
For now, logically, there should be a boost in UK national patent registrations and even European Patent registrations linked to the UK, until it is clear whether the Court at Aldgate Tower will hear any Unitary Patent cases.
Additional reporting on patent law provided by Tom Carver, partner and solicitor at JA Kemp, a Patent and Trade Mark Attorney firm.