UPC getting closer – just a ”Brexit” referendum away?

In AWA Blog, Uncategorized

When the UK prime minister David Cameron won the 2015 general election he, due to demands from his own Conservative MP party and other parties, promised to hold a referendum on whether Great Britain was to stay or exit the EU membership. This referendum will take place on 23 June, 2016.
A current poll by YouGov® EU referendum tracker (17 May, 2016) indicate that 44% of the voters wants to stay in the EU, 40 % wants to leave and 12% are still not certain about how to vote.

The UK has for a long time been one of the three Contracting Member states that most patentees decide to validate their patents in. They are as such a very important piece of the puzzle for the Agreements on a Patent with Unitary effect and the Unified patent court to be able to enter into force. If the UK decides to stay, their preparations for ratifying the Agreements have also come a long way. For instance, the Houses of Parliament have approved draft legislation to amend the UK Patents Act to give effect to the Agreements of the UPC and the Unitary Patent. They have also made amendments to the Patent Rules, which will come into force when the UPC agreement comes into force. It is thus very likely that the current time schedule of early 2017 will stand for the entry into force of the UPC. It is not likely that the ratification will be completed before the referendum.

However, if the UK decides to leave the EU, the UPC and Unitary Patent system cannot start until the UK no longer is a member of the EU, unless the UPC Agreements is amended. The reason for this is that a non-EU member state cannot hold a position in the UPC regime. Italy will take the UK’s place as one of the three mandatory states, since it was the fourth most popular country for validation in 2012 (“in the year preceding the year in which the signature of the Agreement takes place”).

Further, the central division of the UPC, which is set out to be placed in London, will likely have to relocate. This means that the UPC Agreement will have to be amended, and possibly ratified again by the Contracting member states that have already ratified. The language regime that stipulates that the central division proceedings, for instance revocation actions, shall be in the language of the patent is not likely to change, and about 70% of the cases will still be held in English.

The Lisbon Treaty (Article 50) governs the membership of the EU and it states that “Any member state may decide to withdraw from the Union in accordance with its own constitutional requirements.” However, a withdrawal from the EU is still a complex situation and any country desiring to leave will for instance have to negotiate with each of the other 27 states about the terms of departure, a process that can last for up to two years. The European council and the parliament in Strasbourg will then have to ratify the severance terms. In reality the “exit” may take more than two years.

With all of this taken into account, it is extremely difficult to predict when the UPC and the Patent with Unitary Effect may enter into force should we face a Brexit. In worst case, a delay of several years may be expected, unless a rapid re-negotiation and re-drafting of the current Agreements for the UPC and the Unitary Patent package can take place and be ratified accordingly.

Sofia Willquist, European Patent Attorney

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