The UK government has just announced it is still proceeding with preparations to ratify the Unified Patent Court (UPC) Agreement. This is slightly surprising as it involves conceding jurisdiction regarding European patents covering the UK to a European court system, whereas sovereignty was one of the key issues which led to the Brexit result in the referendum earlier this year.
The UPC Agreement, which was signed by most European Union (EU) countries in 2013, will set up a European Court, called the Unified Patent Court (UPC) that will hear cases involving infringement of European patents and proposed Unitary Patents. However, before the Unitary Patent System and UPC can take effect, the UPC Agreement needs to be ratified by at least 13 EU member states, including the three countries in which the most European patents had effect in 2012. These three counties are UK, Germany and France. So far, 11 member states, including France, have ratified the agreement and so only the UK and Germany need to ratify for the UPC system to proceed. However, the Brexit result cast doubt on whether the UK would ratify, and whether the UPC system would take effect in its current form in the near future.
The announcement by the UK government, does not constitute actual ratification, and it may take some months before the ratification process is complete. It is, however, a signal that the UK still wants to be involved in free trade in goods and services with the EU during and after the Brexit process. Germany is proceeding with the legislative steps for ratification of the UPC Agreement, and it is possible that both UK and Germany could ratify in the first half of 2017, which would pave the way for the UPC and Unitary Patents to take effect in late 2017 or early 2018. If, however, the UK deposits its official intention to leave the EU before Germany ratifies the UPC Agreement, this may delay ratification by Germany, and even provoke European constitutional challenges to the UK being part of the UPC system by other EU member states. In this regard, Italy and Spain initially refused to sign the UPC, but now Italy has ratified the agreement and signalled its wish for one of the main Unitary Patent Courts to be located in Italy, instead of London, following the Brexit vote.
Although a lot of uncertainty regarding the UPC still exists, it is possible that the system could take effect by late 2017. Then owners of European patents and pending applications will have the option of their patents being subject to the UPC system for infringement and validity, or opting out of the UPC system. In the latter case, a granted European patent will become a bundle of national patents, which require validation in individual European countries where protection is required.
If you have existing European patents and/or pending applications, it is probably a good time to review your patent portfolio before the UPC system takes effect to give sufficient time to opt-out of the system if you do not want your patents to be subject to the UPC system. Some factors to consider including:
- whether a competitor is likely to launch a central attack on the validity of your patents before the UPC;
- the strength and value of your patents;
- the relevance of your patents to your commercial activates in various European countries;
- any licences granted under your patents in Europe.
If you are intending to apply for patent rights in Europe, there are currently two options:
- Filing a European patent application; or
- Filing national patent applications in individual European countries.
Both of these options will still be available regardless of whether or not the UPC and Unitary Patent System takes effect, because the European Patent System is not an EU patent system. There are currently 38 members of the European Patent Organisation, including 10 countries which are not part of the EU, such as Switzerland, Norway and Turkey.
When the Brexit process is eventually concluded, it will still be possible to obtain a European patent designating the UK or a separate UK national patent.
Your patent strategy for obtaining patent protection in the UK and Europe should be reviewed at regular intervals. For example, if the UK is the main European market of interest for your products which are only marketed in a few other European countries, it may be better to file national patent applications in the UK and the few other European countries of interest, rather than a European Patent application. This will avoid a central attack on the European Patent by post-grant opposition at the European Patent Office, and also at the Unified Patents Court when the UPC Agreement and Unitary Patent System eventually takes effect.