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UPC: UK gives green light to ratification, but what will happen post-Brexit?

Posted on 29 November 2016

UPC: UK gives green light to ratification, but what will happen post-Brexit?

The Government has announced that it is proceeding with its plans to ratify the Unified Patent Court (UPC) Agreement. The UPC can only get up and running, and the Unitary Patent will only be available, if the UPC Agreement is ratified in at least 13 EU Member States. These 13 Member States must presently include France, Germany and the UK. With 11 Member States (including France) having already ratified, the UK's surprise announcement means that plans for the new regime are back on track. Whilst no timetable has been given, it appears that, barring any significant issues (for example, in relation to the timing of German ratification), the new system will be in effect from 2017 (most likely towards the end of 2017).

In her statement, the Minister of State for IP, Baroness Neville Rolfe said the following:

"…for as long as we are members of the EU, the UK will continue to play a full and active role. We will seek the best deal possible as we negotiate a new agreement with the European Union. We want that deal to reflect the kind of mature, cooperative relationship that close friends and allies enjoy. We want it to involve free trade, in goods and services. We want it to give British companies the maximum freedom to trade with and operate in the Single Market – and let European businesses do the same in the UK." 

However, having given these positive indications, the Minister's statement went on to sound a cautionary note:

" … the decision to proceed with ratification should not be seen as pre-empting the UK's objectives or position in the forthcoming negotiations with the EU".

Accordingly, whilst the UK's decision to ratify means that the UPC/Unitary Patent project can continue without further substantial delay, it is much less clear as to what will happen post-Brexit. The issue that remains unresolved is whether, as a non-EU Member State, the UK will be able to participate in the UPC or whether it will have to withdraw. Further, if it did have to withdraw (for example, in around 2019, depending upon when the Article 50 notification is given), it is also uncertain as to what this would mean in terms of already granted Unitary Patents, ongoing actions in the UPC, and the continued hosting of the life sciences section of the Central Division in London.

As we discussed in our September update, an Opinion from constitutional law counsel suggests that the UK could participate in the regime post-Brexit, if it enters into a new international agreement with the participating EU Member States (although there may need to be a pre-emptive opinion from the European Court of Justice on the legality of such an agreement). However, and significantly, such an agreement would have to provide for certain EU constitutional principles to be safeguarded, i.e., supremacy of EU law, responsibility for infringements of EU law, and uniformity through preliminary references to the European Court of Justice. It remains unclear whether this will be politically acceptable.

We will continue to monitor developments in relation to the UPC and Unitary Patent. In the meantime, businesses should be aware that, as it now appears more likely that the new regime will be in effect from 2017, they should be focussed on their opt-out strategies for their standard European Patents portfolio. We will report on the proposed sunrise period for opt-outs when this information is published.

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