Most read 2019: UPC report creates ‘point of legal difficulty’ for UK membership
Attorneys say ambiguity persists after a European Parliament report said UK membership of the UPC is a legal possibility after Brexit if the EU’s highest court maintains some jurisdiction over patent law
After Managing IP broke the news yesterday that Justice Huber of the German Federal Constitutional Court said he will issue his ruling on the Unified Patent Court Agreement (UPCA) complaint in early 2020, the question remains of whether the UK can participate in the common patent project.
And a report from the European Parliament’s Think Tank this month might have made it harder for the UK to become a UPC member – assuming that Brexit goes ahead on January 31 and the constitutional judgment comes after that – or at least to stay as one.
The report said that while membership is still technically possible, UK involvement would mean surrendering some sovereignty to the Court of Justice of the EU (CJEU) in patent related cases.
Although the UK government has not made a statement on the country’s potential involvement after Brexit, in-house and private practice counsel say UPC membership would contradict the intentions of the Leave campaign to ‘reclaim sovereignty’ and control over the markets from the EU.
“The report from the European Parliament is not a complete analysis of if it is possible for the UK to join the UPC and there might be legal solutions for the UK to remain after Brexit,” says Jules Fabre, legal director at Pinsent Masons and former senior counsel at Teva in Paris. “But the caveat is that the CJEU would keep some jurisdiction over patent law in the UK.”
“In the end, everyone agrees that it is mostly a political decision and if there is political will, a legal solution will be found.”
The head of IP for a European pharma innovator adds that the European Parliament’s report also raises a point of legal difficulty for the UK’s UPC membership after Brexit.
He explains there while there are some legal experts who say membership is possible if the political will is there, a second group of experts have now been given extra ammunition to argue that UK cannot stay with the UPC because it is not part of the EU and cannot make a reference to the CJEU.
“I do not know which is correct,” he says. “The main argument right now is that the UK needs to get away from the CJEU to be independent, and, from that point of view, joining the UPC is counter intuitive. It would be very difficult to provide a political argument to remain as a member,” he says.
The assistant general counsel for a UK-based pharma company says that UK businesses have always expressed an interest in being a member of the UPC, regardless of the outcome of Brexit. A recent poll from Patent Strategy of in-house counsel in European and US businesses backed up this argument.
For him the “nagging legal issues” are “nit-picky questions” around the role of the CJEU.
“When push comes to shove, it’s a political question. What is interesting here is that it leaves the answer in the realm of politics. The report is not saying legally that it is impossible for the UK to join, all it does is explore the legal possibilities.
“I think one should read this report as a political statement,” he says.
Where there is a political will, there is a way
With so much political uncertainty around the future of Brexit, IP departments in the UK are bracing themselves for multiple scenarios. Claude Kaplan, head of IP commercialisation at Benchmark Holdings in London, says involvement in the UPC would be an enormous advantage for UK-based businesses because they could save on litigation costs and have an easier time enforcing their IP.
“At the end of the day, like any other business, I am going to make a simple decision based on two factors: money and the cost of going down one path over the other. The value of the UPC is that you get a cheaper prosecution and renewal fees. The other value is the ease of enforcement,” he says.
“The lack of clarity is the worst thing for us. We don’t know what’s happening and that is a real pain in the backside. We are trying to make a decision on only partial data. If we knew which way it was going, we could make a decision.”
A UK patent strategist in the telecoms industry tells Patent Strategy that if Brexit occurs before the UPC is ratified, it could jeopardise the UK’s involvement.
“There are also questions of how effective the UPC would be without the UK as one of its three main members. The UPC may never take off and the existing European system may remain the preferred method,” he says.
In-house IP teams are also worried that exclusion from the UPC would mean that UK patent attorneys would not be allowed to represent their clients unless they have a European qualification.
According to the assistant managing counsel at a US-based pharma company, the UK is one of the strongest IP communities in Europe, and exclusion from the UPC would be a loss for British IP experts and judges.
“I’m sure UK lawyers would be very keen to be part of the UPC, but even if the project went ahead without the UK, I still see us as being a big destination for IP litigation. People want to sue,” he says.
The head of IP for a European pharma company agrees, and says that while his primary concern is for UK companies who wish to have access to the UPC after Brexit, his second is whether UK legal professionals will be able to represent their clients.
“My feelings are that large innovative companies are represented by UK lawyers before the EPO, for instance, and those who are involved in litigation in the UK have a lot at stake,” he says.
He adds that the continued uncertainty around the UPC could have the unintentional consequence of making other potential members less inclined to join the system, should it ever be ratified.
“As a client and a future user of the system all this speculation makes us much more careful and this may turn our attention to opt out, and I say this as a rights holder. As a defendant, it might bring additional arguments and raise criticisms that the UPC isn’t stable enough without UK involvement,” he says.
With an election only a few weeks away the course of Brexit remains uncertain. What is clear, however, is that UK involvement in the UPC would appear to contradict the motivation behind leaving the European Union.
Those hopeful that the UK remains part of any UPC system can perhaps cross their fingers that UK voters remain oblivious to IP law and turn a blind eye if a future pro-Brexit government ratifies membership to the UPC.
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