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Brexit creates challenges for the Unified Patent Court

Whilst the UK continues to reel from the seemingly never ending reverberations from Brexit, the impending separation is already causing headaches in the patent community. The Unified Patent Court (UPC) which was due to open its doors in 2017 now finds itself losing one of its biggest stalwarts as the UK looks to extricate itself from its 43 year-old union with the EU.

How will the new system work?

The new patent system will allow members of the EU, rather than having to file separate applications in different member states, to file for one application at the European Patent Office. 

This would then grant immediate protection across Europe. It follows that the UPC would then allow members of the EU to seek redress in a patent court where any rulings made would apply across the entirety of Europe. The court would have a central division in Paris and seats in London, which would focus on pharmaceutical matters, and Munich which would deal with matters concerning mechanical engineering. But Brexit has thrown a spanner in the works and the UK's part in ratifying the UPC is now in question. 

The UK is one of three member states (including Germany and France) who must ratify the agreement before its implementation. Accordingly, the UK's absence from the UPC system will create another hurdle for businesses who are seeking patent protection across the entirety of the EU. 

Making applications as well as undertaking litigation in both the EU and the UK to benefit from the full coverage of patent protection will be both burdensome and expensive for companies to adhere to.

Just to make matters more interesting, only EU member states can participate in the UPC. This was made abundantly clear by the Court of Justice of the European Union, which rejected an earlier proposal that included states outside of the EU. This makes it highly likely that the UK will need to remove itself as part of the UPC so that another member state can take its place. Even this, however, is not without its problems. 

Should Brexit mean Brexit, the UPC's debut for 2017 will be stalled whilst a new member is chosen. Italy and the Netherlands are in pole position, with the former expressing its intention to step up and ratify the UPC. 

But a new agreement will need to be drawn up with decisions made on where the central division and the outlying seats will be moved to. The new agreement will then need to be ratified by all of the members in order for it to take effect. Whilst this may be perturbing news to businesses, given the EU's desire to inject certainty and stability back into Europe, it will be politically expedient for the member states to have any such agreement agreed and ratified swiftly.

How can businesses ensure they will be protected? 

Although this route offers businesses some certainty in uncertain times, caution should be exercised. Businesses will have to bear the brunt of additional compliance as they seek protection across two jurisdictions. The UPC will also no longer be influenced by the UK, which itself will have no place at the table when it comes to deciding on fees and the direction of patent law throughout the largest trading block in the world.

Brexit may give business a tough ride over the next few years as they seek to navigate over unfamiliar terrain in their quest to best protect their patents both in the UK and across the EU. 

But, all is not lost. The UPC, even without the UK, still offers the benefit of covering a jurisdiction comprised of over 350 million people. Businesses should prepare to work in a system that will likely require filing applications in both jurisdictions to best maximise the protection for their patents. 

Contributor: Portia Durand-Henry

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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