On Monday, 28 November 2016, the UK announced that it will proceed with its preparations to ratify the Unified Patent Court Agreement, notwithstanding the Brexit vote taken on 23 June 2016.1 This decision, surprising to many, resolves concerns that the Brexit vote would ultimately derail Europe’s decade-long effort to unify its patent litigation system. By ratifying the agreement, the UK will retain its London seat in the Central Division of the Court2 along with branches in Paris and Munich, and permit the court to start operating even before the Brexit process concludes. This signals a strong commitment by the UK government to participate in the Europe-wide patent process, notwithstanding the implications of Brexit.
By the terms of the agreement,3 article 89 states "the new patent court will go live within four months after at least 13 member states have ratified the agreement", those countries including the UK, France and Germany. To date, 11 countries have ratified;4 only the UK and Germany remain to ratify in order for the court to start. This court resembles the U.S. Federal Circuit and will have a comparable level of control over the enforcement of patent rights in a similarly sized market.
The Unified Patent Court will provide patent owners with a new venue for enforcing European patent rights and potentially a new era – where patent rights will be litigated in one tribunal, to achieve one judgment, even a Europe-wide injunction that will apply in all member states of the agreement. For the first time in history, this court would be permitted to provide an EU-wide injunction, a potentially powerful weapon for patent owners.
The implications of this Court will also reach far beyond litigation – companies will need to prepare their patent portfolios to face the complexities of European tribunals, prepare to face much more complex risk in freedom to operate and due diligence, and integrate the provisions of the new agreement into licensing, M&A and other transactions.
This decision follows a recent opinion provided to the UK government5 that the UK, in its current status as an EU member state, is permitted to ratify the agreement and then can determine the future of that role as part of its Brexit negotiations.