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Unitary Patent in limbo after UK takes its final step away?



United Kingdom

Earlier this week, the UK took its final formal step away from the Unitary Patent system by withdrawing its ratification of the Unitary Patent Court Agreement. Does this mean it's game over for this long awaited patent and court system?

Unitary patent and UPCA: mini refresher!

For those of you who might have missed some of the twist and turns over the Unitary Patent rollercoaster here is a quick reminder…

The Unitary Patent Court Agreement (UPCA) is an international agreement creating a specialised patent court with exclusive jurisdiction for litigation over the "future" Unitary Patents and the longstanding European Patents (granted according to the European Patent Convention).

The UPCA is to come into force once 13 EU member states have ratified it, which must include Germany, France and the UK. France was quick to ratify the UPCA in 2014. In April 2018, the UK government ratified the agreement (see our blog, UK ratifies Unified Patent Court Agreement today). This ratification was made, somewhat surprisingly, after the Brexit referendum, when Theresa May was Prime Minister.

German ratification was delayed by an esoteric legal challenge to the UPCA in the German Federal Constitutional Court, which began in 2017. This finally came to a climax in March of this year when the German court in a crucial judgment declared void the German ratification of the UPCA on formal grounds.

UK's withdrawal: on the cards for a while

Until the General Election in December 2019 and the landslide result for Boris Johnson and the Conservative Party, there were somewhat mixed messages from the UK as to whether it would and could still participate in the UPCA following Brexit. The UPC system, in its current configuration, is open only to EU members, so Brexit means the UK cannot participate after the transition period unless a special agreement is reached with the EU and participating states to permit it to participate as a third country. (See our blog, Unitary Patents and Brexit: where are we?, for further discussion about this possibility.)

Then, in February 2020, we heard from the UK government (during its ongoing negotiations with the EU over a trade deal), what many had been expecting: the UK would not be participating in the UPC system. The key stumbling block for Boris Johnson's Conservative government (in contrast with that of Therea May's government) was that although the UPC will be an international court, it will be applying EU law, the ultimate arbiter of which is the Court of Justice of the European Union (CJEU).

Any faint hope of a last minute turnaround by the UK were dashed when earlier this week (on 20 July), the government took the remaining formal steps relating to its withdrawal from the UPC system, by writing to the Council Secretariat of the UPC to withdraw the UK's ratification of the UPCA and by tabling a parliamentary written statement in the House of Commons stating that, in the light of Brexit, the UK no longer wishes to be a party to the agreement. In her statement Amanda Solloway, The Minister for Science, Research and Innovation, stated:

"… Participating in a court that applies EU law and is bound by the CJEU would be inconsistent with the Government’s aims of becoming an independent self-governing nation…"

The UPC Preparatory Committee describing the news as "disappointing", says that it will be discussing the consequences of the UK withdrawal and agreeing a way forward – it will then make a further announcement (see its statement on the UPC website).

Is it game over for the Unitary Patent?

The combined effect of the UK's withdrawal of its ratification and the German court's decision that its ratification was invalid, would seem on the face of it be enough to signal the death knell for the UPC system. However, over the past few months some green shoots have been emerging.

Although the German court held the approval act to be unconstitutional this was, in simple terms, due to the vote not being approved by the requisite two-thirds majority, ie a procedural issue, not one about the substance of the UPCA. Soon after the court's decision, the German government announced that it would repeat and complete the ratification process in the proper way as soon as possible. This has been encouraged by the European Commission in a letter last week saying that it would "welcome a swift ratification" by Germany.  There are rumours that this could possibly be before the end of the year.

Final word

Proposals for a unitary-style patent in Europe go back more decades than the length of a standard patent. While a few years ago it looked like it was nearly home, its future is once more uncertain.

If Germany does ratify the UPCA and a solution is found for its continuation without the UK (which was of course one of the three countries key to its launch), it is important for UK businesses to remember that even if the UK is outside the system, they could still be open to litigation under the UPC, if they infringe patent rights in countries that are part of the UPC system.

In the meantime, take your seats for the next ride on the Unitary Patent rollercoaster…

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