An Opinion, by English barristers Richard Gordon QC and Tom Pascoe, has been published considering the effect of Brexit (i.e. departure from the EU) upon the Unitary Patent (UP) Regulation and the Unified Patent Court (UPC) Agreement. Can the UK remain involved in the UP and UPC system?
In summary, it was concluded that, upon Brexit, the UK may only participate (or continue to participate) in the UP and the UPC by entering into an international agreement with the EU and the participating EU member states.
Such an agreement would only be legally enforceable if appropriate safeguards were put in place to protect EU constitutional principles. The UK would be required to accept the supremacy of EU law in its entirety as regards patent disputes before the UPC. This would include, for example, competition law, fundamental rights arising under the Charter and general principles of EU law, as well as the specific patent rules contained in, for example, the Biotechnology Directive.
However, there would remain a possibility that the Court of Justice of the European Union (CJEU) would, at a later stage, rule that non-member states were precluded from inclusion in the (modified) UPC and UP system.
It would be possible to seek a pre-emptive opinion from the CJEU on the legality of the modified system, but only if the EU became a party to the UPC Agreement.
What if the UK were, before Brexit, to ratify the UPC Agreement in its current form, in order to get the system up and running, and the UK then left the EU without the requisite international agreement being reached?
In that situation, the most likely consequence of Brexit would be that any divisions of the UPC situated in the UK would have to cease operating.
The Opinion of Richard Gordon QC and Tom Pascoe highlights some significant practical difficulties of finding a way forward for the UPC, with these difficulties unlikely to be eased by the political situation in the UK.
For the UK to participate in the UPC and UP system after leaving the EU, it would have to submit to EU law (including future EU law) in its entirety as regards patent disputes before the UPC. In the current political and popular climate in the UK, this would be significant and controversial.
If the UK were to ratify the UPC Agreement now (assuming there was the political will to do so), in order to get the system up and running, the UK's continued participation in the system upon Brexit would depend upon both international agreement being reached regarding the UK's continued participation and the CJEU being satisfied with the legality of the agreement reached. The prospect of such agreement not being reached, or later being declared illegal by the CJEU, and therefore of the UPC "rug being pulled out" from under the London division of the UPC, would weaken the UK's negotiating position in Article 50 negotiations.
On the other hand, while the UK continues not to ratify the UPC Agreement, the system, at least in its current form, cannot come into force. If the EU and the participating member states fail to reach an agreement enabling (or at least attempting to enable) continued UK involvement, there will be no upheaval in the UK patent litigation system upon Brexit, and no UPC operating elsewhere in Europe. This would appear to strengthen the UK's negotiating position in Article 50 negotiations, compared with the scenario in which it had already ratified the UPC Agreement.