Brexit and the Unitary Patent: where are we now?

The webinar, produced in association with RWS Inovia, is just over an hour long and you can view and listen to it in full on our webinar page.

As part of the discussion, we invited the audience to answer some questions about their attitudes to the Unitary Patent with and without the UK involved. Here are the results (though of course they are not scientific).

The first question was: Do you plan to use or recommend the Unitary Patent if it does come in? and the responses were:

• Selectively only: 70%

• Not initially: 21%

• For all my European applications: 6%

• No: 3%

The second question was: Would you use or recommend the Unitary Patent if the UK was not involved? and the answers were slightly different:

• Selectively only: 64%

• Not initially: 14%

• No: 18%

• For all my European applications: 4%

This confirms that the Unitary Patent is somewhat less appealing without the UK - with a rather larger percentage of people replying "No, I will not use it" - but not as much as you might think.

In fact, more than two-thirds of our audience said they would still use it either for all European applications or selectively even without the UK involved.

So is a Unitary Patent and UPC without the UK a realistic possibility? The answer is probably yes - but not yet.

On the European level, enthusiasm for the new patent system appears to remain strong. The Italian Senate has just approved ratification, meaning Italy could become the 12th of the 13 required states to sign. Meanwhile, reports from Germany suggest that companies such as Siemens and Bayer back the system even without the UK.

On the other hand, in the UK, things are much less certain. Remember that Article 89 says the UK is one of three countries that must ratify the UPC Agreement, and that London is due to host part of the central division. So what happens following the vote to leave the EU will determine whether or not the UPC and Unitary Patent can go ahead in its current form.

Recognising the inevitably delay caused by the referendum vote, the UPC Preparatory Committee this week confirmed that it is putting the appointment of judges on hold. 

Given the gradual and continuing development of government policy since the Brexit referendum in June, it would be rash to predict what the UK will do on something as specific as the UPC. However, some things have become clearer over the past few weeks.

First, Prime Minister Theresa May has said that she will trigger Article 50, which begins the process of leaving the EU, by the end of March next year. This would mean the UK is likely to leave the Union by spring 2019.

Second, the broad direction of government policy seems to be in favour of a so-called hard rather than soft Brexit. This makes it less likely that the UK would seek to remain in the single market, for example by joining the EEA, or that it would accept rulings by the European courts.

Third, there is growing pressure for Parliament to be able to scrutinise and vote on the details of the negotiation and even the decision to invoke Article 50 itself (this is the subject of litigation which has been taking place over the past week). If this happens, everything could be delayed.

Based on the information in the public domain now (including the latest legal and procedural developments, and speeches by EPO officials) as well as conversations with various practitioners, we've identified six possible outcomes, and how likely they are to happen.

Name	Description	Likelihood
Starting gun	UK ratifies UPCA before it leaves the EU in spring 2019. This would get the system up and running soon while delaying the difficult decisions about what to do post-Brexit.	Increasingly unlikely in current political environment.
Stalemate	UK does not ratify UPCA but does not explicitly say it will not do so either. Given the UK veto in Article 89, the other member states cannot go ahead until the UK leaves the EU (expected in spring 2019).	Effectively where we are now and for the foreseeable future.
Stop-and-go	UK states it will definitely not ratify UPCA. This would enable the other participating member states to revise UPCA and go ahead with the system without the UK. There would be further discussions about fees and court locations. This outcome apparently appeals to some in industry.	Unlikely now, but could become increasingly likely as negotiations develop during 2017.
Staying in	As part of Brexit negotiations, UK states intention to remain part of UPCA after leaving the EU. This would mean the UK accepting some EU jurisprudence, and could also open up the Agreement to other non-EU member states such as Switzerland. Parts of Agreement would require re-drafting.	Legally possible according to some, but unlikely in current political climate.
Start again	Member states decide that keeping the UK involved cannot be achieved within UPCA, so decide instead to launch new initiative for EU and non-EU states, possibly building on the work done for the European Patent Litigation Agreement (EPLA). Many IP practitioners support this, but it would take many years to agree and would face political opposition.	Unlikely at the moment, but may become more likely as time goes on.
Status quo	No agreement: it becomes clear the UK will not ratify and there is insufficient political will to resolve the outstanding issues. The UPCA fails to come into force and no realistic alternatives are proposed. The existing system of national European patent validations and enforcement continues.	The most likely outcome?

Readers may be able to think of other possibilities, or variations on these, and we would welcome any comments. As negotiations develop and (we hope) the mist clears, we will reconsider the likelihood of each of these outcomes in future posts.