Innovation Insights

Brexit to create more confusion and cost around patents

Posted by Hejab Azam on Jan 3, 2017 9:54:35 AM
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Traditionally, patents have had to be filed in each individual member state, a system which involves many different requirements for the various member states. It includes a need to translate patents into the official language of specific member states, paying renewal fees for each patent where the patent is valid, and other legal fees. 

This has fueled the desire to significantly simplify the system. As such, there have been many discussions surrounding the idea of a Unitary Patent Court (UPC). If ratified, the Unitary Patent Protection (UPP) would make it possible to get unitary effect for a European patent in 28 EU member states with just one request. Under the current arrangements, patent protection is gained by filing through the national patent office of the member state in which you wish to file or through the European Patent Office (EPO) into individual member states. With the UPC, on the other hand, you would only need to file once to have protection in all participating member states.

However, the specter of Brexit threatens to derail the steps towards this advancement. For the past 43 years, the UK has been a member of the EU, and this has had a huge impact on the UK's legal system. Directives and regulations are set at EU level and affect all member states of the European Union. Currently there are 28 Member States in the EU which all share the benefit of the European courts and laws. Meanwhile, Article 50 of the Lisbon Treaty, which the UK is in the process of enacting states: “any member stated may decide to withdraw from the union in accordance with its own constitution requirements."

It means that, although Britain has voted to leave the EU, it will actually only take place once Article 50 is triggered. After this point, it will take up to 2 years (and according to some commentators, maybe longer) for the transition to happen. At the end of the process, the UK will no longer be part of the EU. This means it will also no longer be eligible to be part of the UPC, as you have to be a EU member state. In order to file a patent, you would have to do it through the European Patent Office. This is also the same for EU Member States wishing to file in the UK who would have to file a separate application with the EPO.

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Thirteen countries have to ratify the UPC in order for it to come into play and it must include three EU member states in which European patents have had most effect in the year preceding the year when the agreement was signed. Currently, those three countries would be the UK, Germany and France. After the UK is out of the equation, it would be replaced by Italy. It is therefore not the case that Brexit should completely prevent the UPC itself but it does add huge amounts of uncertainty for a considerable period of time, and that complicates matters. 

As a result of the UK leaving the EU, there are many different possible scenarios for future patenting activity, the most likely being:

  • Patent applications will be filed through the EPO as usual, with the UK not being a member of the UPC
  • The UK, despite its intention to ratify the UPC agreement, may decide not to, in which case another country would have to ratify the agreement to ensure that 13 countries have agreed to it. If this does not happen then the UPC cannot go ahead.
  • Additionally, as with many legal matters, there are loopholes that can be found. According to Article 142 of EPC, “ Any group of Contracting States, which has provided by a special agreement that a European patent granted for those States has a unitary character throughout their territories, may provide that a European patent may only be granted jointly in respect of all those States.”

It means that an agreement may be reached between member states that have ratified the UPC. This could be in the form of a protocol of the UPCA, which would agree that the unitary effect of a European patent would extend to the UK. This agreement would be binding on the Member States who would be participating in the UPC. Although EU Law would bind the EU Member States, the UK would have an agreement on the basis of international law.

As it stands today, the UK remains an EU Member State. Even after article 50 is triggered, it will take a couple of years for it to come into effect. The UK intends to ratify the UPC. They are also currently negotiating access to the European Single market and it is possible that they may try to amend the UPC agreement, which would extent to states in Europe outside of the EU including the UK, and hopefully countries in the European Economic Area like Switzerland and Norway. This would mean a unitary patent system for most European countries without needing to be a member of the EU. In the meantime, however, it is necessary to consider the fact that IP strategies will have to take into account a higher level of uncertainty and the potential cost risk factors that come as a result of that.

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Topics: Legal