In the 18 months since we published our last update on the Unified Patent Court (UPC) little has changed. Previously we reported that only the UK and Germany were yet to ratify the UPC Agreement (UPCA) in order for the UPCA to open for business. Whilst the UK has now ratified the agreement, ratification by Germany is still outstanding and with Brexit fast approaching, there is increasing nervousness amongst its supporters that the multi-billion euro project will never come to fruition.
In September the Department for Business, Energy and Industrial Strategy released guidance concerning the consequences of a no-deal Brexit in the patent sphere. As well as covering the current patent regime, the note also considers the potential effects of a no-deal scenario on the unitary patent system. The note envisages two possible scenarios. First, the possibility that Germany does not ratify the UPCA, in which case the domestic legislation to bring the UPC into force will never take effect in the UK. Alternatively, the UPC does come into force once Germany has ratified the UPC Agreement, in which case the UK will seek to remain within the UPC and the unitary patent system. The UK’s ability to do this, however, is affected by whether the UPC comes into effect before or after the UK leaves the EU.
For the UPC to come into effect prior to the Brexit date of 29 March 2019, Germany would have needed to ratify the UPCA by the end of November (the UPCA takes effect the first day of the fourth month after Germany’s ratification). This did not happen and the constitutional challenge to the UPCA is still crawling through the German constitutional court, with no update as to when the hearing or judgment will take place. If the transitional period is agreed as part of a negotiated exit from the EU, then it would be possible for the UPC to come into effect in 2019 or 2020, with the UK as a participating member. This is because the draft UK-EU withdrawal agreement provides for continuity of EU law in the UK during a transition period from 29 March 2019 to 31 December 2020. Although the UPCA is not strictly speaking EU law, it is likely to fall within the scope of the UK-EU withdrawal agreement as an international agreement between member states
In September 2018 the Max Planck Institute for Innovation and Competition in Germany published an opinion on the UK's involvement in the UPC post-Brexit. The two authors believe that the unitary patent cannot be separated from the internal market of the EU and the EU's core principle of integration. They argue this would make it impossible for any non-EU member to be party to the UPC agreement. The opinion is controversial and has been rebutted by some commentators, but would be another barrier to overcome in the inevitable challenge of the UK's membership, should Germany ratify the agreement. An abstract of the 182 page article can be found here.