The UPC and Brexit

The entry into force of the UPC system can hardly be discussed without mentioning Brexit and the issue of the UK leaving the European Union. Below follows a brief discussion of the UPC and the effect of Brexit on the UPC.

First of all, it should be noted that Brexit will not affect the grant of traditional European patents with effect for the UK. European patents are granted by the EPO, which is not a part of the EU system and which already grants patents with effect for non-EU member states such as Switzerland, Norway, Iceland, Turkey, and Albania.

However, it is uncertain how the UPC and the unitary patent will function in relation to the UK. In November 2016, the UK announced its intention to ratify the UPC Agreement. This gives rise to some legal challenges post-Brexit.

The unitary patent

The unitary patent is governed by two EU regulations (Regulations (EU) Nos 1257/2012 and 1260/2012, see the collection of resources here); and with the current rules, they will no longer apply in the UK post-Brexit. A solution needs to be found to this problem in order to ensure that the unitary patent may be granted with effect for the UK.

One solution could be to make the two EU regulations applicable in the UK by virtue of an international treaty. Such a solution has been used in other contexts, for example for the important Brussels I Regulation, which regulates the relationship between the national courts of the EU member states, including in particular their jurisdiction and their obligation to recognise and enforce each other's judgments.

The Brussels I Regulation does not apply directly to Denmark due to the Danish opt-out on justice affairs. De facto, however, it does apply in Denmark due to an international agreement (a so-called parallel agreement) between Denmark and the European Union. A similar solution might be possible for the two EU regulations on the unitary patent.

The UPC Agreement

The UPC Agreement also poses challenges for UK participation post-Brexit. The UPC Agreement was drafted on the assumption that only EU member states would be eligible to participate. In article 2(b) of the UPC Agreement, "Member State" is defined as "a Member State of the European Union", and the term is also used in this sense in the central articles of the UPC Agreement concerning signature, ratification, accession, and entry into force (articles 84-85 and 89).

In this context it is crucial that the UK is one of the three countries required to ratify the UPC Agreement under article 89 before it can enter into force.

The UK may formally ratify the UPC Agreement without difficulty while the country is still an EU member state, but what happens when the UK leaves the European Union? Will the decisions of the UPC then be illegal? What about pending actions? Those questions were the subject of a legal opinion by English barristers Richard Gordon QC and Tom Pascoe, which concludes that the UK may remain a member of the UPC Agreement, even after leaving the European Union, subject to certain conditions.

On an earlier occasion, however, the European Commission concluded based on an opinion from the Court of Justice of the European Union that UPC participation was subject to EU membership.

Whichever conclusion is correct, it would be a good idea to clarify the questions about the UK's participation before the new patent system enters into force so as to obtain assurance that the system and its decisions are legal. It is absolutely preferable to have the UK participate in the system. For one thing, the system will benefit from the experienced UK patent judges. For another, the users of the system will benefit from the UPC's decisions also extending to the UK.

For more details about the UK's participation, see our newsletter on this subject:
"Brexit: Can the UK remain a member of the Unified Patent Court in future?"

See also Sture Rygaard and Peter Nørgaard's article in the magazine Danish Biotech (Dansk Biotek) on the effect of Brexit on the UPC:
"Brexit and the challenges of UK accession to the UPC"

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